BUSINESS NAME: PATRICK'S QUEEN CAKEBEKARY

TITLE OF THE PROJECT: BUSINESS PLAN

PRESENTED BY: PATRICK KIPYEGON

INDEX: 5411011877

COURSENAME: CERTIFICATE IN FOOD AND BEVERAGE

INSTITUTION: OL’LESSOS TECHNICAL TRAINING

INSTITUTE

INSTITUTION CODE:541101

PAPER CODE: 1802/205

PRESENTED TO: KENYA NATIONAL EXAMINATION

COUNCIL IN PARTIAL FULFILMENT FOR THE AWARD OF

CERTIFICATE IN FOOD AND BEVERAGE

SUPERVISOR: SISTER CONSOLATA

SERIES: NOVEMBER SERIES 2021

i
DECLARATION

I declare that this is my own work and it has notbeen submitted by anybody else to any
examination body for any award.

NAME: PATRICK KIPYEGON

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

DATE: ................................................................................................

This property has been submitted with my approval as the supervisor

NAME: SISTER CONSOLATA

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

DATE: .......................................................................................................

ii
DEDICATION
Dedicated to my lovely parents, my brothers and friends who gave me support during the
preparation of this project.

iii
ACKNOWLEDGEMENT
I acknowledge the support of my supervisor for his supervision and correction and guidance
towards the completion of this project.

I also acknowledge my friends for the advice they gave during this work and the warm
accommodation they gave.

Of all are my parents, aunt, cousins, sisters and brothers who helped me financially during the
course of my work. Sincerely I thank all of the above working team, but above all, I thank the
almighty God for his grace and guidance.

iv
Table of Contents
DEDICATION............................................................................................................................................iii
ACKNOWLEDGEMENT..............................................................................................................................iv
CHAPTER ONE.......................................................................................................................................1
1.0. BUSINESS DESCRIPTION....................................................................................................................1
1.1. BUSINESS NAME...............................................................................................................................1
1.2. BUSINESS LOCATION........................................................................................................................1
1.3. FORM OF OWNERSHIP.....................................................................................................................2
1.4. PRODUCTS AND SERVICES................................................................................................................2
1.5. JUSTIFICATION OF THE BUSINESS OPPORTUNITY.............................................................................2
1.6. GROWTH STRATEGIES......................................................................................................................2
1.9. ENTRY AND GROWTH STRATEGY...........................................................................................................3
CHAPTER TWO......................................................................................................................................4
2.0 MARKET ANALYSIS..............................................................................................................................4
2.1 THE POTENTIAL CUSTOMERS.............................................................................................................4
2.1.1 THE COMMERCIAL CUSTOMERS......................................................................................................4
2.1.2 DOMESTIC CUSTOMERS..................................................................................................................4
2.1.3 INSTITUTIONAL CUSTOMERS...........................................................................................................4
2.2 MARKET SHARE..................................................................................................................................4
2.3 COMPETITION.....................................................................................................................................5
2.4 METHOD OF ADVERTISING AND PROMOTION...................................................................................6
2.5 PRICING STRATEGY.............................................................................................................................6
2.6 SALESTACTICS.....................................................................................................................................7
2.7 DISTRIBUTION STRATEGY...................................................................................................................7
CHAPTER THREE...................................................................................................................................8
3.0 ORGANISATION AND MANAGEMENT PLAN.......................................................................................8

3.1 ORGANISATION CHART.......................................................................................................................8

3.1.2 DUTIES OF THE MANAGEMENT TEAM.............................................................................................8
3.2 OTHER PERSONALS AND THEIR DUTIES..............................................................................................9

v
3.3 RECRUITMENT, TRAINING AND PROMOTION.......................................................................................10
3.3.0 RECRUITMENT...................................................................................................................................10
3.3.1 TRAINING.......................................................................................................................................10
3.3.2 PROMOTION..................................................................................................................................10
3.4 REMUNARATION/INCENTIVES..........................................................................................................10
3.4.1 INCENTIVES....................................................................................................................................10
3.5 LEGAL STRUCTURE............................................................................................................................11
CHAPTER FOUR...................................................................................................................................12
4.0 OPERATIONAL/PRODUCTION PLAN..................................................................................................12
4.1 PRODUCTION FACILITIES AND CAPACITY..........................................................................................12
4.2 PRODUCTION STRATEGY..................................................................................................................12
4.3 FACILITIES/EQUIPMENTS..................................................................................................................13
4.4 PRODUCTION PROCESS....................................................................................................................13
4.5 FLOW CHART OF THE FOOD.............................................................................................................14
4.6 REGULATION AFFECTING PRODUCTION...........................................................................................14
CHAPTER FIVE.....................................................................................................................................15
5.0 FINANCIAL PLAN...............................................................................................................................15
5.1 COSTS INCURED BEFORE THE START OF THE BUSINESS PREMISE....................................................15
5.2 ESTIMATION OF WORKING CAPITAL.................................................................................................16
5.3THE PROJECTED CASH FLOW STATEMENT FOR 2022........................................................................18
THE PROJECTED CASH FLOW STATEMENT FOR 2023.............................................................................19
THE PROJECTED CASH FLOW STATEMENT FOR 2024.............................................................................21
5.4 BREAK EVEN POINTS.........................................................................................................................22
5.5 PROFITABILITY RATIO.......................................................................................................................23
5.6 DESIRED FINANCING.........................................................................................................................24
5.7 PROPOSED CAPITALIZATION.............................................................................................................24

vi
EXECUTIVE SUMMARY

1.1 BUSINESS DESCRIPTION

It shows business description name of the business and map. Identify the business station, type of
the business, its justification, the product and services its justification visibility and industry.

1.2 MARKETNG PLAN

Shows the market potential customer, the expected market share, its completion products and
service strategy, sales tactics, advertising and promotion and its distribution.

1.3 MARKETING AND ORGANIZATIONAL PLAN

The section contains flow chart which shows the required employees, qualifications, duties and
responsibilities of each recruitee, motivation, controlling, promoting, organizing, directing,
training and salaries will be dealt with.

1.4 PRODUCTION AND OPERATIONAL PLAN

In this section, deals with the description of all tools and equipment which shall be purchased for
use and how they will be rearranged to make the premise presentable.

The business layout production capacity production facilities production strategies one dealt
within the chapter, wages of every equipment will be indicated.

1.5. FINANCIAL PLAN

This will indicate the finance that shall be used to purchase assets or payments pre-operational
tasks, working capital, ratios, loan and other financial statements of the business are indicated.

vii
CHAPTER ONE

1 BUSINESS DESCRIPTION
The proposed business will be all about catering within various clienteles from different places.
The owner of the business will be Patrick; he has qualified in Certificate in Food and Beverage
sector, which is professionally skilled in production of Queen Cakes. The business will start its
operation in the month of January 2022. The business will offer quality queen cakes.

1.1 BUSINESS NAME

Patrick's Queen Cake’s Bakery will be the name of the business where Patrick is the name of the
sole proprietor.

1.2 BUSINESS LOCATION

The main business will be located in Kericho town but specifically at hostels routes

The proprietor chose this place since it is centrally located and it can be accessed by many, both
travellers and mostly the students within various schools.

The proprietor also chose the place since it is near the booking office and the proprietor will
ensure that the travellers are well fed before taking off the journey.

The address of the business will be;

PATRICK’S QUEENCAKES BAKERY,

P.O BOX 200,

KERICHO.

PATRICK’S BAKERY RVIST TOWN

SHOPS
CAMPUS
S

From Bomet To Nakuru

IMMANUEL
1 AGC CHURCH
 1.3 FORM OF OWNERSHIP
The proprietor will be operating on the sole proprietorship i.e. under one person management.
This is because it would be easy in decision making, enjoying profit alone and enjoying being
own boss.

1.4 PRODUCTS AND SERVICES

The business will be dealing with only Queen Cakes baking. The cakes will be well baked,
presented and wellsold to all customers. The proprietor will employ trained personnel to help him
run the business, starting from the receptionist and chefs who value and are honest to all. The
business will only offer take away queen cakes.

1.5 JUSTIFICATION OF THE BUSINESS OPPORTUNITY

The proprietor decided to open this business since he had realised there was a ready market and
there was no any other proprietor who could satisfy the customers need in the area and to the
students within, he also noted that his employee's living standards has raised since they earn their
monthly income.

1.6 GROWTH STRATEGIES

I) short term goals

a Ensures customers satisfaction

b Provide good quality food
II) Long term goals
a Ensure growth and development of Kericho
b Open branches in different parts to earn more profit
c To create employment opportunities to others.

2
1.9. ENTRY AND GROWTH STRATEGY
The entry strategies will be to satisfy customers by being honest, keeping time to all ordered
foods, courtesy to ensure that all customers are satisfied with the products.

The growth strategies would be there depending on the attendance of the customers. It would
operate on a 24 hours basis. There will also be advertisements in the radio stations both local and
international stations.

The proprietor will also borrow loans from banks to help him improve the Patrick's Bakery.

The easiest way of getting to his sector is mainly advertised in newspapers mainly The Standard
in order to market his business well.

3
CHAPTER TWO

2.0 MARKET ANALYSIS

PATRICK'S QUEEN CAKES BAKERY will need to identify its customers and show its
products how they are going to be marketed.

The business will create employment to the idle youths in the society since there is scarcity of
opportunities in the government firms. The business will receive and attend to three classes of
customer; institutional customers, commercial customers and domestic customers.

2.1 THE POTENTIAL CUSTOMERS

2.1.1 THE COMMERCIAL CUSTOMERS

Those are customers from towns and employees from within who will be given a discount for the
queen cakes they buy.

2.1.2 DOMESTIC CUSTOMERS

These are types of customers which include passers-by e.g. pedestrians, travellers of all kind of
people who will be coming. The business will require quality products at a reasonable price in
order to attract customers and satisfy all of them.

2.1.3 INSTITUTIONAL CUSTOMERS

These are customers from different institutions from different kind of surrounding universities,
colleges, secondaries and primaries.

2.2 MARKET SHARE

Under this, the proprietor after estimating the number of people or the demography of the town,
the approximated population was found to be around 7,000 people. The likely number of people
that will be visiting the Bakery will be around 5800 as the customers. This is around 75%.

The business will be at a position of selling his products approximately 50% of the product per
day i.e. the total number of buyers will be around 75% of the total population.

4
2.3 COMPETITION
The business expects stiff competition producing the same products to satisfy their customers.
The competitors are just within the trading centre, they are two.

In terms of the business comparison, the proprietor will have 75% of the customers, 3Cafe hotel
will have 15% of the customers and Tea hotel will have 10% of customer. The proprietor will
win the number of customers due to the weakness mentioned below.

Firm Strength Weakness

Tea hotel Offer good services Dirty environment

3Cafe1 hotel Quality products Shortage in staff

2.4 METHOD OF ADVERTISING AND PROMOTION

In terms of promotion and advertisements services, the proprietor will offer free sample to
customers and in terms of advertisements, there will be posters, bill boards and even the radio
stations both local and other international languages to reach as many customers as possible.

The advertisement and promotion will be once in a month for the free samples and the
advertisement in the radio stations will be twice a week.

In terms of cost, the radio advertisement will be ksh. 500 per day and in a week, it will be ksh.
1000, while during the free sample and other promotion which was to be done once a month will
cost ksh. 20,000 per month

2.5 PRICING STRATEGY

The proprietor will sell his products at a reasonable price than other competitors i order to attract
more customers and also to get the targeted price.

The products offered by Patrick's Queen cakes Bakery will be priced according to the cost and
profit margin on the considering these:

a Raw material cost

b Production/Labour cost
c Overhead cost

5
The pricing will also depend on the occasion e.g. birthday parties among others where the
products will have to be produced in large amount since demand is high.

The proprietor will also give discount to regular customers and this will help him attract more
customers.

2.6 SALESTACTICS
The proprietor will ensure that there will be one qualified person who will be hired to ensure that
production of queen cakes are carried out effectively.

Also he has to offer discounts to his customers in order to attract more.

2.7 DISTRIBUTION STRATEGY

The channel of distribution will only be basing on baking of queen cakes. The products that
would be produced within the bakery will be distributed and transported through

Manufacturer→ Wholesalers→ Retailers→ Customers

The proprietor will also help in transporting his products to the customers in different places i.e.
those who will buy in bulk. The shops around the bakery will also benefit since the products from
the proprietor will also reach them. The proprietor will also motivate his employees by paying
them well and giving promotion.

6
CHAPTER THREE

3.0 ORGANISATION AND MANAGEMENT PLAN

PATRICK'S QUEEN CAKES BAKERY will offer quality and quantity products. The
bakery will be managed by the proprietor PATRICK who is from Ol’lessos Technical
Training Institute. The proprietor will be in charge of all the work done in the bakery,
assign the staffs and doing recruitment of all staff by interviewing applicants.

3.1 ORGANISATION CHART

GENERAL
MANAGER

ASSISTANT
MANAGER

CHEFS

ACCOUNTANT

SECURITY MAN DISTRIBUTORS

3.1.2 DUTIES OF THE MANAGEMENT TEAM

a The management team will be in charge of directing staffs
b Organising the staffs

7
 c Will have the future plans for the shop.

3.2 OTHER PERSONALS AND THEIR DUTIES

Titles No. Qualifications Duties Salary per
month

General 1 Diploma holder in food and Assigning duties to all 25,000

manager beverages staffs
Assistant 1 Certificate or diploma holder in Performs all duties as the 10,000
manager food and beverage general manager on off
duties basis
Accountant 1 A holder of CPA I and work Control all finances of the 8,000
experience of at least 2 years business.
Manages finances, payment
of salary for employees,
financial statements of
every month to get a profit
Chefs 2 Be a certificate or a diploma Responsible for only pastry 7,000
holder in food and beverages productionspecifically
production queen cakes.
Distributors 3 Holds a certificate or diploma in Distribution andmarketing 6,000
sales and marketing of Queen cakes to the
market
Security 1 A Kenyan citizen aged 20 years Keeps the security of 4,000
and above and a holder of KCPE customers and the workers
or KCSE certificate as well

The proprietor will get the worker from different pastry shops and hotels he will be visiting and
bringing them to the firm.

8
3.3 RECRUITMENT, TRAINING AND PROMOTION

3.3.0 RECRUITMENT
The advertisement will be through local daily posters which are placed at the strategic points
within the town. Where it is the way of informing the public about the vacant positions in the
sector. The advertisement will target only the senior employees well skilled informing them of
date, time of interview and the qualifications required.

3.3.1 TRAINING
Upon qualification, the staff will be trained and this will take a period of one week. The training
will run on afternoon basis due to the presence of the trainer of who will only get his time in the
afternoon. The training will be carried out at a price of 15,000. It will be carried out by a friend to
the proprietor who works in a five star hotel in Naivasha.

3.3.2 PROMOTION
Promotion will be done depending on how long the worker/employee has worked in the bakery
and the nature of the work you give. The proprietor will also develop an appraisal on a monthly
basis where all employees would be weighed and upon found low in your work, reduction will be
done.

3.4 REMUNARATION/INCENTIVES
In every 3 months of the year, the employees with the highest number of sales or who shall have
worked best will be rewarded i.e. through promotion, present or increment of salary.
Employees will be paid according to the academic qualification and competence to work
performance.
Meals and allowances will be 500 per extra hour worked for.

3.4.1 INCENTIVES
On motivational basis, employees will be offered the following:
a Providing with payment
b Providing tea break and lunch
c Provision of loans when they are in need

9
3.5 LEGAL STRUCTURE
SERVICES COMPANY ADDRESS TELEPHONE

Legal Esther and George ltd P.O BOX 125, 0748840737

KERICHO

Postal Kenya Postal P.O BOX 77,KERICHO 0740902499

Corporation

Banking Equity Bank P.O BOX 007, 07905221139

KERICHO

Insurance Jubilee Insurance P.O BOX 550, 0713142526

KERICHO

10
CHAPTER FOUR

4.0 OPERATIONAL/PRODUCTION PLAN

Operation plan are the activities that makes the products and services given to satisfy customers
wants, needs and services.

4.1 PRODUCTION FACILITIES AND CAPACITY

The products and facilities, capacities will be of great importance to the enterprise because the
enterprise will need the machinery to operate.
Table below shows various facilities and equipment for smooth running of the business.

Machine Quality Unit cost Total cost(ksh)

Large equipment 15,000 15,000
Refrigerator 1 12,000 12,000
Ovens 2 8,000 16,000
Cooker 1 15,000 15,000
Storage cupboard 1 15,000 15,000
Mechanicals
Dish washer 1 700 700
Small utensils
Knives 20 20 400
Cups 30 5 150
Balloon whisky 1 40 40
Sufurias 4 200 800
Rates 20
Totals 75,040

All the above listed machine/equipment shall be owned by the business. The condition of
facilities shall be new for good working.

4.2 PRODUCTION STRATEGY

Production strategy has two important factors to be considered. These factors are;
 Cost production
 Quality of production in relation to customers’ needs.

11
The cakes shall be baked on demand, on the expected demand of a certain period, queen cakes
does not require a lot of time in preparation. Some cakesneeds a lot of time with high attention on
it and avoid wastage. The service of the business shall be as fast as possible so as to improve the
standard of service provided in business.

4.3 FACILITIES/EQUIPMENTS
The table below shows the cost of products approximate per every month; of facilities or
equipment used in production.

Asset Number Cost Total cost Conditions Ownership Description

Pans 3 300 9,000 New Owned 10%
Ovens 2 20,000 40,000 New Owned 40%
Telephone 2 45,000 10,000 New Owned 15%
Refrigerator 15,000 15,000 New Owned 5%
Baking tins 2 200 400 New Owned 30%
Bowls 4 60 240 New Owned 5%
Plates 10 30 300 New Owned 10%
Cups 20 30 600 New Owned 15%
Cutleries 15 30 450 New Owned 5%
Flatware 10 40 400 New Owned 15%
Cashbooks 2 50 100 New Owned 5%
Receipt 1 60 60 New Owned 5%
books

4.4 PRODUCTION PROCESS

Business shall be operating on daily basis except on Sunday. This will ensure that efficiency and
standard satisfaction to the customers.

12
4.5 FLOW CHART OF THE FOOD

4.6 REGULATION AFFECTING PRODUCTION

I Public health license
This will be obtained from the public health office and it will cost 1,500 per year.
II Government license
The government license will be obtained from District Commissioners office and it will
cost 2,000 per year.
III Local County Council License.
The local council will be obtained from the county council office and it will cost 2,500
per year. The business will also pay a local tax of 200 per year.
IV Health regulation Act
Business premise will be ventilated to enable good circulation of fresh air in the room.
Employees will be working with a specified work under a given duration in a day. This is

13
 to avoid over working. No smoking; notice will be placed in the premise especially where
foods are handled e.g. in the store, kitchen and during transportation.
V Trade relation Act
The business will comply with trade regulation Act where each business must pay taxes to
the government.

CHAPTER FIVE

5.0 FINANCIAL PLAN

Financial plan provides financial information of business enterprise which will take place within
a given period of time.

5.1 COSTS INCURED BEFORE THE START OF THE BUSINESS PREMISE

ITEMS AMOUNT (KSH)

Premise 20,000

Tools and equipment 78,300

Rent 8,000

14
Electricity 4,000

Market survey 1,500

Water 6,000

Advertisement and promotion 5,000

License and registration 10,000

Insurance 10,000

Transport 70,000

Totals 212,800

5.2 ESTIMATION OF WORKING CAPITAL

This is the amount of money required to sustain the business in day to day operations. The money
required for the first two years will be acquired from relatives, friends and loans from financial
institutions and investments.

Working capital═ Current Asset-Current liabilities

ITEM AMOUNT
CURRENT ASSETS YEAR 1(2022) YEAR 2(2023)
Stock(raw materials) 110,200 120,000
Cash at hand 50,000 60,000
Cash at bank 120,000 150,000
Debtors 20,000 150,000
15
Total current assets 300,000 480,000
Current liability
Creditors 150,000 120,000
Actual 80,000 62,000
Total current asset 230,000 182,000

Current asset 300,200 480,000

Less
Liabilities 230,000 182,000
Working capital 70,200 298,000

16
 5.3THE PROJECTED CASH FLOW STATEMENT FOR 2022
PARTICULARS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
Opening cash 150,000 59,500 35,000 705,500 736,000 847,000 973,000 929,000 137,850 259,000 135,300 166,750 5,133,900
Sales 5000 50,000 750,000 105,000 200,000 200,500 300,000 405,000 200,000 50,000 40,000 300,000 2,605,500

Total inflow 155,000 109,500 785,000 810,500 936,000 1,047,500 1,273,000 1,334,000 459,000 187,850 175,300 466,750 7,739,400
EXPENSES
Salary 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 720,000
Rent 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 96,000
Transport 500 500 500 500 500 500 500 500 500 500 500 500 6,000
Advertisements 2,000 1,000 1,000 1,000 500 1,000 500 1,500 2,000 2,000 2,000 2,000 16,500
License 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 36,000
Water 1,000 600 750 700 680 600 370 400 420 410 400 380 6,710
Furniture 20,000 10,000 5,000 - 1,500 - - - 5,000 1,000 - 20,000 62,500
Purchase 6000 6000 40,000 8,000 9,000 6,000 8,000 6,000 6,000 6,000 6,000 6,000 113,000
Electricity 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000
Total outflow 101,500 90,100 119,250 82,200 84,180 80,100 81,370 80,400 85,920 81,910 80,900 100,880 1,068,710

Closing balance 59,500 35,000 705,500 736,000 847,000 973,000 929,000 137,850 259,000 135,300 166,750 192,950 6,670,690

17
 THE PROJECTED CASH FLOW STATEMENT FOR 2023
PARTICULARS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

OPENING 150,000 204,000 246,000 61,000 109,500 139,350 129,350 67850 67850 67850 77850 17850 700,600
STOCK

Sales 5,000 60,000 750,000 105,000 200,000 200,500 300,000 405,000 200,000 50,000 40,000 300,000 2705500

Stock available 212000 264000 286000 141000 199500 199500 219350 189350 127850 127850 137850 77850 159000

EXPENSES 37000 24500 39500 1500 9000 14500 16000 15000 20500 15500 25500 35500 101000

Gross profit 42000 42000 525000 73500 14000 140350 210000 283500 140000 250000 28000 66850 720000

Ending stock 204000 246000 61000 109500 139500 139500 129350 67850 67850 77850 17850 44700 570000

Purchases 60000 60000 40000 80000 90000 60000 80000 60000 60000 60000 60000 60000 770,000

Cost stock 8000 18000 225000 31500 60000 601500 90000 121500 60000 50000 120000 33150 857500

Net profit 4500 17500 485500 72000 50000 125850 194000 268500 119500 234500 254500 31350 139000

18
 1769500

19
 THE PROJECTED CASH FLOW STATEMENT FOR 2024
PARTICULARS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
OPENING 30,000 29000 10000 70000 10000 79000 76000 11000 805000 43000 20000 43000 116000
STOCK
Sales 40000 40000 40000 5000 4000 8022 8000 1000 15000 50000 40000 300000 2705500
Total inflow 200000 15000 74000 810000 940000 104500 985000 125000 180000 150000 120000 180000 540000
0
EXPENSES
Salary 60000 60000 60000 60000 60000 60000 60000 60000 60000 60000 60000 60000 720000
Rent 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 96000
Transport 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000
Advertisement 2000 1000 1000 1000 500 1000 500 1500 2000 2000 2000 2000 16500
License 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000
Water 2000 600 750 700 680 600 370 400 420 410 400 380 6710

Furniture 1000 1000 4000 - 1000 - - - 4000 2000 - 20000 65000

Purchase 120000 10000 30000 7000 9000 7000 5000 8000 7000 6000 4000 5000 30000

Electricity 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000
Total outflow 87600 78500 79500 76500 10000 8500 60000 80500 60500 95500 65000 55000 800500
27622050
Closing balance 29000 10000 70000 10000 79000 76000 11000 805000 43000 20000 43000 182000

20
5.4 BREAK EVEN POINTS
ITEMS AMOUNT(KSH)
Sales 230,000
Fixed
Salaries 30,000
License 800
Insurance 10,000
Water 3,000
Rent 2,000
Total 45,800
Rent 5,000
Transport 3,000
Water and electricity 6,000
Telephone 2,000
Total 16,000

Breakeven point═ Variable Costx100

Sales

═11,000x100
230,000
═4.78%

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5.5 PROFITABILITY RATIO

1 Profitability ratio═ Net profitx100

Sales
═85000x100
82,000
═103.7%

2 Quick Ratio═ Cash+ Debtorsx100%

Sales
3650+4520 x 100%
26,200 x
═31.18%

Acid ratio═Cash x100

Current liability
═300000x100
85000
═352.9%
Cost of goods sold x100
Average stock
═ 80,600 x100
98,000
═82.2%

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5.6 DESIRED FINANCING
The money required to run the business

PARTICULARS AMOUNT(KSH)
Preoperational cost 559,000
Personal expenses 100,000
Operational cost 500,000

5.7 PROPOSED CAPITALIZATION

The proposed will want to invest the following project;

PARTICULARS AMOUNT(KSH)
Building 300,000
Business van 430,000
Raw material 30,000
TOTALS 760,000

23