CHARLOTTE TATOO SHOP

P. O BOX 112-30100, ELDORET

TEL: 0792634901
EMAIL: charlottetatooshop@gmail.com

PRESENTED BY: HELLEN CHARLOTTE

INDEX NUMBER:

DEPARTMENT: LIBERAL STUDIES

COURSE: CERTIFICATE IN SOCIAL WORK

COURSE CODE:

SUPERVISED BY: MR. ONYANGO

PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL IN PARTIAL

FULFULLMENT OF THE REQUIREMENT FOR THE AWARD OF CERTIFICATE
IN SOCIAL WORK

SEREIES :
DECLARATION

I hereby declare that this business plan is my original work. I also affirm that it has not been
presented to this institution or any other college for academic purposes, or for any other
purpose.

NAME: HELLEN CHARLOTTE

Signature Date

This business plan has been submitted to Kenya National Examination Council with my
permission as the trainee’s supervisors

Supervisors Name: MR. ONYANGO

Signature Date

i
DEDICATION

I dedicate this business plan to my family; who gave me a reason to push forward.

ii
ACKNOWLEDGEMENT

I am very grateful to the almighty God for giving me good health, guidance, and the strength
to do my business plan work.

I acknowledge the Eldoret National Polytechnic for giving me the opportunity to study within
the premises. I also take this chance to appreciate

My sincere thanks also go to my parents and siblings for their moral, social and financial
support during writing of the business plan.

I also appreciate my friends and colleagues for their corrections and support.

Thanks to my business plan supervisor, Mr. Onyango for guidance and support during the
business plan.

May God Bless you all.

iii
TABLE OF CONTENTS
DECLARATION........................................................................................................................i
DEDICATION...........................................................................................................................ii
ACKNOWLEDGEMENT........................................................................................................iii
EXECUTIVE SUMMARY.................................................................................................vi
CHAPTER ONE: INTRODUCTION................................................................................1
1.1 BUSINESS DESCRIPTION................................................................................................1
1.2 BUSINESS LOCATION AND ADDRESS.........................................................................1
1.3 BUSINESS OWNERSHIP...................................................................................................2
1.4 TYPE OF BUSINESS..........................................................................................................3
1.5 JUSTIFICATION OF THE BUSINESS..............................................................................3
1.6 PRODUCTS.........................................................................................................................3
1.7 INDUSTRY..........................................................................................................................4
1.8 ENTRY AND GROWTH OPPORTUNITIES....................................................................4
1.8.1 Entry...........................................................................................................................4
1.8.2 Growth.......................................................................................................................4
1.9 GOALS OF THE BUSINESS..............................................................................................5
CHAPTER TWO: MARKETING PLAN..........................................................................6
2.1 MARKETING AREA..........................................................................................................6
2.2 CUSTOMERS......................................................................................................................6
2.2.1 Industry Customers....................................................................................................6
2.2.2 Commercial Customers..............................................................................................6
2.2.3 Final Customers.........................................................................................................6
2.3 COMPETITORS..................................................................................................................7
2.4 MARKETING SHARE........................................................................................................8
2.5 PROMOTION......................................................................................................................9
2.6 DISTRIBUTION STRATEGY..........................................................................................10
CHAPTER THREE: ORGANIZATION AND MANAGEMENT PLAN....................11
3.1 ORGANIZATION CHART...............................................................................................11
3.2 KEY MANAGEMENT AND ROLES..............................................................................12
3.3 PERSONNEL QUALIFICATION AND RESPONSIBILITIES.......................................12
3.4 RECRUITMENT, TRAINING AND PROMOTIONAL PROGRAM.............................13

iv
3.5 LICENSES, PERMITS AND BI-LAWS...........................................................................15
3.6 SUPPORTIVE PROFESSIONAL SERVICES.................................................................15
3.7 REMUNERATION AND INCENTIVES:........................................................................16
CHAPTER FOUR: FACILITIES AND OPERATIONAL PLAN................................18
4.1 FACILITIES AND CAPACITIES.....................................................................................18
4.2 FACILITIES......................................................................................................................19
4.3 REGULATIONS AFFECTING THE BUSINESS OPERATIONS..................................21
4.4 POTENTIAL CHALLENGES...........................................................................................21
CHAPTER FIVE: FINANCIAL PLAN...........................................................................23
5.1 PRE.OPERATION COST...............................................................................................23
5.2 WORKING CAPITAL....................................................................................................24
5.3 PROJECTED CASH FLOWS STATEMENT.................................................................25
5.3.1 PROFORMA CASH FLOW FOR CHARLOTTE TATTOO SHOP FOR YEAR 1.. .25
5.3.2 PROFOMA CASH FLOW FOR CHARLOTTE TATTOO SHOP FOR YEAR 2......26
5.3.3 PROFOM CASH FLOW FOR CHARLOTTE TATTOO SHOP FOR YEAR 3.........27
5.4 CHARLOTTE TATTOO SHOP BALANCE SHEET FOR THE YEAR ENDING 31 ST
DECEMBER............................................................................................................................28
5.5 PROFIT AND LOSS ACCOUNT.....................................................................................29
5.6 PROFITABILITY RATIO..............................................................................................30
5.7 PROPOSED CAPITALIZATION...................................................................................32

v
 EXECUTIVE SUMMARY
BUSINESS DESCRIPTION
This business will operate under the name CHARLOTTE TATOO SHOP and will be situated
in Eldoret along Eldoret-Kisumu Highway. It will operate as a sole proprietor by Hellen
Charlotte as the Proprietor. The Proposed Business’ address will be P.O Box 112-30100,
Eldoret; and will use owner’s phone number 0792634901 for communication. It will
commence on 1st January, 2023. The main activity of the business will offering tattoo services
for clients. The business will enter the market through collection of all legal documents; pay
the initial rent and furnishing the room as well as creating awareness by putting posters
through promotional techniques
MARKETING PLAN
The business potential customers will include young adults, adults and Celebrities around
Eldoret town and Uasin Gishu at large. The business will face two major competitors namely;
Legend Tatoo Salon and Eddie Nails and Tatoo Shop.
ORGANIZATIONAL AND MANAGEMENT PLAN
The business will be managed by various personnel, in their various sections. The owner will
be the overall boss assisted by the deputy manager who will also check on the shortcomings
of the enterprise and give solutions in absence of the general manager. All the accounts will
be under the cashier who will control credits, keep books of accounts and receive payments
and information on behalf of the business. The business shall rely on the supportive services
for its successful operations such as Banking, Insurance among others
OPERATIONAL PLAN
This business will need tattoo chairs, lights, mirrors, tool box, trash bins, sharps container and
other equipment. There will be regulations affecting the running of the business both from the
Government such as on safety and Health regulations and internal regulations, which will
affect the workers such as rules and regulations on matters of working safety environment
and time.
FINANCIAL PLAN
The business requires a capital of three hundred thousand Shillings [300,000]. The
entrepreneur will raise three hundred thousand Shillings [100,000], in form of owners’
equity. The remaining two hundred thousand Shillings [200,000] will be raised from friends
and family and also borrowed from cooperative bank of Kenya.

vi
 CHAPTER ONE: INTRODUCTION

1.1 BUSINESS DESCRIPTION

The business name will be CHARLOTTE TATOO SHOP it was derived from the owner’s
second name. The owner decided to choose that name because it is attractive and easy to
remember. The business will be operated and managed by Hellen Chrlotte as the owner; the
business will commence its operations in the year 1 st January 2023. The business will be
involved in artistic tattoo services.

1.2 BUSINESS NAME, LOCATION AND ADDRESS

Location

CHARLOTTE TATOO SHOP shall be located in Eldoret along Eldoret-Kisumu highway a

few meters from the Stabex Petrol Station, in the tallest flat painted blue in the ground floor,
the 1st room on your right as shown in the map below.

Legend Tattoo Salon

Eldoret – Kisumu Highway

CHARLOTTE TATOO SHOP

STABEX Station

Eddie Nails and Tattoo Shop

KQ Bar and Restaurant

1
Address

The business will operate under the following address

CHARLOTTE TATOO SHOP

P.O.BOX 112-30100, ELDORET

Tel.0792634901

1.3 BUSINESS OWNERSHIP

The business will operate under the name Charlotte Tatoo Shop. At the start up stage it shall
be only one branch but more branches will be opened two years after opening of the business.

 Availability of capital from the existing business

 Increased demand for art tattoos
 High rate of growth of Tatoo Industry

The business will be operated and managed by Hellen Charlotte; the business will commence
its operations in the year 1st January 2023. This will be possible because the owner will have
accumulated enough capital, will have acquired enough entrepreneur skills and also will have
discovered there is unemployment in Kenya, hence creating employment.

1.4 TYPE OF BUSINESS

The business will run under Sole Proprietorship at the start up stage because of the following:

 It is easy to raise capital from personal savings

 Decision making is easy
 Easy to control and manage the business
 The secrets of business are kept
 The owner enjoys all the benefits alone
 The owner becomes the boss of the business, and an employee
 The owner has direct contact with customers and gets their views about the
business

2
1.5 JUSTIFICATION OF THE BUSINESS

The researches carried on the area justify the suitability of the area for the intended type of
the business. This is due to the following reasons;

i. Market: There are customers and tattoo services market in the area
ii. Demand: There is increased demand in the area because of high population of the
young adults
iii. Availability of social amenities e.g. lounges, Clubs, Institutions e.t.c.
iv. Good transport and communication network

1.6 PRODUCTS

Charlotte Tatoo Shop will offering a service of art tattooing in the professionally equipped

tattoo parlor by appointment (online/phone call/in the parlor) or by the walk-in option if there

will be an artist with an empty spot. Also, designer items from partners and with the symbols

of the studio brand itself will be sold in the salon. The client will have an opportunity to get

additional services of painkiller and healing film application for an extra payment listed. The

client will be able to choose the sketch to be applied either by artist-offered options or from

their Ideas. After the session, the client will get instructions on the self-care treatment of the

tattoo healing that is fully in the responsibility of the client to be done correctly. Artists are

responsible only for the quality of the tattoo-making process, i.e. ink application.

1.7 INDUSTRY

Charlotte Tattoo Shop falls under Tattoo industry tattoo service is still not fully researched by
serious institutions. It will be a medium sized and will cater for the demand for the
population within the Eldoret as well as the neighboring locations. In the future, opportunities
are being considered to include items such as piercing, permanent makeup, and laser tattoo
removal in the list of services. As the business expands the techniques that will be used will
be both labour intensive and capital intensive. The business intends to employ more workers
to help increase on business expansion growth.

3
1.8 ENTRY AND GROWTH OPPORTUNITIES

1.8.1 Entry

The business will enter the market through the following; Collecting all legal documents like
licenses, Paying the initial rent and furnishing the rooms as well as writing the name of the
business and what it offers on the doors. Creating awareness; this will be made possible by
putting posters in some strategic areas indicating the location and variety of products offered.
Pricing; the business shall offer attractive packages than its competitors to attract more
customers and Attraction market; this will be achieved through promotional techniques e.g.
free samples.

1.8.2 Growth

Growth will be developed on demand on tattooing services. Because of the brand loyalty
tendency, the entrance to the market is easier than maintaining the business established
(difficulties with attracting profitable potential clients with tattoos made already loyal to their
artists) This fact brings us to the conclusion of the advantageous aspect of Charlotte Tattoo
shop opening, taking into account the existing client base of the artist who will be the director
of the new parlor.

1.9 GOALS OF THE BUSINESS

The business aims to provide quality and affordable services to the community around who
have interest in the job. The business also has some set of formulated objectives which
include: To provide the highest quality service, To achieve an artistic result in the form of an
exclusive tattoo at prices affordable to the average resident of Eldoret and To improve the
general level of tattoo art and attitude to it.

1.9.1 Short-term Goals

Maintain quality services while charging the best prices to maximize profits using all means
possible. Job creation by employing the unemployed youths in the region

4
1.9.2 Long-term Goals

Opening more branches within and outside Eldoret town, employ specialists ranging from
dermatologists and others who will advise on skin issues so as to improve customer
confidence and maximize on earning profits as we expand on business growth.

5
 CHAPTER TWO: MARKETING PLAN

2.1 INTRODUCTION

The main market of our service are people with a desire to express themselves through image
elements, including tattooing, with a predominance of people interested in fashion trends and
the development of artistic tattoos. This choice was made in view of the concept of creating a
brand image of a highly professional studio with its recognizable style and affordable prices.
At startup the business shall target the market within Eldoret town and later go to open a
branches in other cities such as Kapsabet, Bungoma, Kakamega and even Webuye.

2.2 CUSTOMERS

The target customers for the business will be 18-38 years old people living in or visiting
Eldoret Region, interested in art tattoo, following fashion trends, and caring about the quality
of the service they get.

2.2.1 Commercial Customers

These will include customers such as other tattoo shops who desire to be developed and
furnished with new tattooing images and designs for their clients.

2.2.2 l Institutional Customers

These clients will include institutions who desire temporary tattooing for their functions for
entertainment purposes.

2.2.3 Individual Customers

These are the walk-in customers or those on order who the final customers being tattooed.

2.3 COMPETITORS

There are two main competitors who are really active and take 70% of the market share and
are located in Eldoret town, but since they opened (after four years of operation) they have
never improved/opened other branches.

6
2.3.1 SWOT Analysis

COMPETITO STRENGTH WEAKNESS OPPORTUNITY THREATS

R

Legend Tattoo  It’s widely  Lack  Capitalize on Lack of enough

Salon known enough customer base capital to fund
 They have facilities since it has the project.
established  Some been on
good Employees market longer
customer steal from than any other
base customers competitor
 Offer a bit
higher
prices.

Eddie Nails and  It is highly  Have no  Operating As the market

Tattoo Shop stocked specific closest to a receives new
 Use direct working college competitors
channel of hours. It institution Eddie nails
distribution may be hence tends to get
 Has a opened or improve scared of the
personal car closed any services for market
for personal time. better market
selling  Offer
substandard
customer
services

Charlotte  Highly  Limited  Expansion in  Changes in

Tattoo Shop Experienced startup costs the online regulations
owner- marketing can impact
operator  Acquisition of the business
 Limited additional  Products

7
 Startup Risk funds for already
 High Gross capital being sold
Margins  Ability to by major
develop mores competitors
branches  Increase of
price on
inputs can
cause price
upward

2.4 MARKETING SHARE

Charlotte Tattoo Shop will occupy 40% at the start up with a vision of increasing its market
share up to 60%. This will be achieved through proper marketing mix, which includes;

 Proper pricing
 Efficient and reliable tattoo artist
 Providing high quality services

This will be done with an aim of maintaining and improving market share, meeting
competition, maximizing profits, achieving targets return on investment and for survival.

The influence of Charlotte Tatoo Shop, the market shares will be as following in the charts
below.

8
 Market share at Startup

Unexploited
10%

Competitors
Charlotte Tattoo 50%
Shop
40%

Competitors Charlotte Tattoo Shop Unexploited

MARKET SHARE WITH TIME

Charlotte Tattoo Shop Eddie Nails & Tattoo Shop Legend Tattoo Salon

Legend Tattoo Salon

15%

Eddie Nails & Tattoo

Shop
25% Charlotte Tattoo
Shop
60%

2.5 PROMOTION

This will be done purposely to create awareness to the customers of the new Tattoo Shop in
the area. It will include:

 Offering best prices

9
  Offering of Unique Services
 Education on those who have no ideas on the product and services

This will be achieved through:

Personal selling

This will be done by being directly in contact with customers and concaving them that our
services are only the best in terms of quality, tests and preferences. The customer will give
views.

Advertising

This will be done through sign posts placed in different places showing our services and the
variety of other services offered. It will also show location of the business.

2.6 DISTRIBUTION STRATEGY

Since the business is a direct form of service for which consumers have to communicate with
the Charlotte face-to-face, the main distribution channel for Charlotte will be from Supplier
through Charlotte to customer.

PRODUCER CHARLOTTE/CUSTOMERS

SUPPLIERS CHARLOTTE CUSTOMERS

TATTOO SHOP

10
 CHAPTER THREE: ORGANIZATION AND MANAGEMENT PLAN

INTRODUCTION

In the organization of a business, several individuals with certain qualifications that suit the
business shall be employed to take responsibilities in the hayrack manner. Those in the top
position will guide and control those below them in operating the business.

3.1 ORGANIZATION CHART

At the start up, the business will take the organization structure style as shown in the chart
below:

Managing Director

Cashier Cleaner/Messenger Watchman Tattoo Technician

Management Technology

The business managers shall perform the following duties

i. Making decisions
ii. Making policies
iii. Planning
iv. Directing and controlling business operations
v. Determining salaries
vi. Employing, recruiting, promoting and demoting employees

11
3.2 KEY MANAGEMENT AND ROLES

BUSINESS MANAGER

The business managers shall be controlling all business operations and activities.

Duties and responsibilities:

 Creates, communicates, and implements the organization’s vision, mission, and

overall direction – i.e. leading the development and implementation of the overall
organization’s strategy.
 Responsible for providing direction for the business
 Responsible for signing checks and documents on behalf of the company
 Evaluates the success of the organization

3.3 OTHER BUSINESS PERSONNEL

The proposed business will have employee being assigned different job titles according to
their qualifications, duties and responsibilities:

TATTOO ARTIST

Qualification

 At least diploma in Designing.

 An experience in tattooing not less than 2 years required.

Duties and responsibilities:

 Providing consultations to potential clients reached directly or through the studio

administrator about design, time spots available, and pricing;
 Filling their individual online schedules in;

12
  Performing tattooing by appointment or walk-in (will be “on duty” scheduled);
 Cleaning and sterilizing their individual workplaces and materials;
 Updating the administrator on materials need;
 Cleaning common area according to “on duty” schedule.

CASHIER

Qualification

 K.A.T.C holder
 Should be hardworking and discipline.

Duties and responsibilities:

 Performs cash management, general ledger accounting, and financial reporting

 Responsible for developing and managing financial systems and policies
 Responsible for administering payrolls
 Ensures compliance with taxation legislation
 Handles all financial transactions for the organization

WATCHMAN

Qualification

 Trained in recognized institution

 Must be 25-35 years and
 Fluent in English and Kiswahili.

Duties and responsibilities

 Ensures security

13
  Perform any other duty that may be assigned by the supervisor

 Directs the customers to the enterprise and should recognize if they are the right
people.

CLEANER

Qualification

 At least a KCPE holder

Duties and responsibilities

 Cleaning business premises

 Prepare tea for the company
 Act as an office messenger

3.4 RECRUITMENT, TRAINING AND PROMOTIONAL PROGRAM

Training

Training will familiarize the workers with the job and give them all the basic skills like
communication, public relations, and technical skills in order to have the knowledge of the
product and how to maintain the facilities available. It will also enable them to:

 Have confidence and enthusiasm when dealing with customers.

 Learn from the competitors mistakes in order to help in correcting our
mistakes.
 Borrow ideas from others especially sales representatives, distributors,
customers suppliers and competitors
 Use competitors as their lever

The business managers will do this training within business premises. The employees will
also be allowed to attend seminars for more skills outside the business premises

14
Recruitment

This will be done to identify the right and qualified workforce for the business. It will be
done in different ways like:

 Interviewing both oral and written

 Looking at the certificate on application to know the level of education
 Age
 Size of the family (dependants)
 Sex
 Physical examination and medical examination of the person
This is also aimed at evaluating the performance of the employee resulting to promotion of
the best and demotion of some who did not do well.
This process is also aimed at improving the productivity of the business.

Promotion

Workers and any other employee in the business who will work hard towards the success of
the business shall be rewarded, promoted and given other priorities depending on how much
the work was done; and to promote encouragement to the rest who are not rewarded. An end
of year party shall be held in the premises. The best potential customer shall also be invited to
the party.

3.5 LICENSES, PERMITS AND BI-LAWS

This allows the business to operate within the town center. It will be obtained at Eldoret City
Council licensing office. Before getting a license the business will be registered at Sheria
house in Kenyatta Avenue. After registration, the business will get a license @ Ksh. 8000 and
is renewed on a yearly basis.

15
3.6 REMUNERATION AND INCENTIVES:

The business shall use the following remunerations:

(a) Allowances

All employees will enjoy transport and medical allowances Ksh. 1000 for each employee and
this will cater for their transport back home as well as their medical status.

(b) Salary schedule:

The salaries shall vary with one’s position and responsibilities as shown in the table below:

s/n personnel Monthly pay without Allowance[Ksh] Net pay [Ksh]

allowance[Ksh]
1 M/Director 13,000 1,000 14000
2 Tatoo Artist 10,000 1,000 11000
3 Mkt. Manager 8,000 1,000 9000
4 Cashier 6,000 1,000 7000
5 Massager-2 10,000 2,000 12000
6 Cleaner 5,000 1,000 6000
Watchman 4,000 1,000 5000
TOTAL 64000

(c) Incentives

The employee shall enjoy the following incentives in the business as a way of motivating
them.

(d) Off duties and leave

Each employee except the watchman and cleaner shall be given off duties every two weeks a
day (once in two weeks) one person at a time. In case of sickness one shall get sick-off. Each
person will go a two weeks paid leave in a year. They will also not work on holidays.

(e) Parties

16
There shall be an annual party for the employees and the best customer at the end of the year
will be awarded and even the most frequent potential customer.

3.7 OTHER SUPPORTIVE SERVICES

The business shall rely on the following supportive services for its successful operations:

i. Banking

The business shall bank its money with cooperative bank of Kenya at the Uganda road
Highway, Po Box 46 – 30100, Eldoret. This will provide security of the business money and
it earns some interest.

ii. Advertising

At the start up the business will not afford to advertise using radios and television but will use
sign posts for advertisement. As the business grows, it will use KASS because it is the
cheapest and reaches many locals within the area.

iii. Insurance

When the business will have grown, it will insure its premises and assets, storks and other
equipment against fire and theft risk. This will give the business security and hope of
continuity in case of break of this risk. The business will insure with AMACO Insurance
Company, PO Box 313 - 30100 Eldoret next to the Eldoret Hospital in Uganda road.

iv. Electricity

Electricity will be supplied and managed by the Kenya Power and lighting Company. The
bill is paid according to the amount of electricity used. The bill will be paid through the
branches of Kenya Power and Lighting Company. Then business shall pay its bills at the
Stima Plaza, PO Box 30099 – 30100, Eldoret.

v. Water

The ELDOWAS shall cater for water supply in the premises. This shall be paid also
according to the water usage. Then bill shall be paid through ELDOWAS.

17
 CHAPTER FOUR: FACILITIES AND OPERATIONAL PLAN

4.1 FACILITIES AND CAPACITIES

The studio will be located in a rented space. The repair and purchase of the necessary
equipment will be done with the financing of the founder. The following equipment and
stationeries shall be used for running the business.

s/n Equipment Qty Supplier

1 Cartridge grips 3 Royal House Enterprises
2 Couches 2 Royal House Enterprises

3 Artists' chairs Royal House Enterprises

Armrests 2 Royal House Enterprises

Lamps 4 Royal House Enterprises

Clients' chairs 1 Royal House Enterprises

Flat screens 2 Digital Electronics

Cosmetic 1 Royal House Enterprises
trolley
Laptop 1 Futuretech Computers
Irradiators 1 Royal House Enterprises

4.2 FACILITIES

I. Capital

The business source of finance will be from three sources

Personal savings 100,000 33.3%

Friends and family 100,000 33.3%
Bank loan 100,000 33.3%
 Total 300,000 100%

18
 II. Labor

The business will have a capacity of 8 laborers at the start up at a cost of kshs. 160000. They
will be providing both skilled and unskilled labor. They will also have the following skill

 Communication skills in order to transfer information in a networking area.

 Managerial skills in order to control business resources e.g. machine, money, and
other materials.
 Entrepreneurial skills in order to evaluate risk and be able to generate ideas.
 Technical skills. This will help them to have knowledge of the product and its
maintenance

Unskilled laborers will be used for loading and unloading bags, cleaning stores and business
premises. The worker will be motivated through; being paid on time as well as overtime
hours.

III. Materials

Materials will include; receipt book, files, pens, etc. packaging material will also be used
during operation. This will cost the business Ksh. 96,038 at the start up. The materials will be
well managed to cut down costs of production.

IV. Social amenities:

The business will depend upon the following social amenities for the proper running of its
operations:

 Phone: There will be owners phone at the cashiers’ office and the cost will be
catered for by the owner until when the business will pick up to afford to pay its
own phone [landline], and pay for its bills.
 Water: This will be supplied by the ELDOWAS and the bills will be paid monthly
according to the amount used. it is well treated water
 Hospital: There are three hospitals surrounding the business premises. They
include; Elgon View Hospital, Racecourse Hospital and Racecourse Health
Centre

19
  Schools: There are many schools in the area including colleges and secondary
schools beside primary schools.
V. Premises

The business will operate in Eldoret town three. Business premises measures 10 meters wide
and 12 meters as length. The rooms will be divided into 4 rooms as shown below

5m 1m 6m

1m OFFICE OFFICE 4M
RECEPTION

1M
TEA ROOM TATOOING CHAMBERS

5M

4M 1M 7M

VI. Technology

The tattoo shop will have an official website hosted by Oracle company with the

purchased .co.ke domain, which will be created on the basis of the existing website of the

shop founder. Online payment service “Charlotte” will be connected to the account of a legal

entity for the possibility of prepayment for a tattoo session and the purchase of branded

goods (no charges for setup and support services; commissions from 2.8% when paying by

card up to 5% for payments with epay and Online Banking). Website hosting services will be

billed annually in the amount of Kshs. 1800.

A printer, laptop, and telephone will be purchased for the salon.

4.3 REGULATIONS AFFECTING THE BUSINESS OPERATIONS

External regulations (Government)

20
  The business must have a trading license
 The business must have a required permits
 Each employee must have an identification card to show that he/she is an employee
with your business
 The business must have a record showing all their facilities and equipment, stock and
their source.
Internal regulations:
 All the employees must report at seven (7:00 am) in the morning as the business
opens.
 Any employee must have permission from the manager wherever not at work.
 Any problem or proposal facing workers must be reported and handled immediately
by the personal manager.
 Any misconduct should be punishable e.g. stealing from customer; the employee will
be given a compulsory leave without pay and later on sacked. For minor cases like
breakages, one should be cautioned.

4.4 POTENTIAL CHALLENGES

 Conflicts within the work team, which will be resolved in accordance with the set of
rules of the business;
 Distrust on the part of customers due to rumors about the poor quality of our services,
which will be stopped using competent information from the source;
 Negative attitude at the level of culture and religion, which the business director
cannot control, but will try to reduce the number of conflicts to a minimum;
 Difficulties in finding specialists with a good portfolio, as experienced artists usually
do not change their place of work;
 Incorrect client behavior, which the employees will try to avoid as much as possible
through discussion in accordance with the rules of the salon;
 Seasonality due to lower demand in September, October, and February will be
overcome with the help of marketing strategies.

21
 CHAPTER FIVE: FINANCIAL PLAN

This involves determining the course of action to achieve desired results. It ensures economic
operations, improves motivation, and facilitates control by reducing uncertainties.

5.1 PRE.OPERATION COST

Item Ksh

Rent 6000

Insurance 30000

Water bills 400

Electricity 600

Purchases 100000

Furniture and fittings 5650

License 8000

Machine and equipment 16000

Safety clothing 1040

Advertisement 4000

Stationeries 1433

Miscellaneous 18607

Total 191730

22
5.2 WORKING CAPITAL

Current assets 2023 2024 2025

Cash at hand 150000 650000 1570600

Stock 82000 90000 100000

Debtors 102000 98000 100000

Total current assets 334000 838100 1770600

Current liabilities

Bank loans 100000 80000 50,000

Creditors 40000 30000 20,000

Total current 1400000 110000 70,000

liabilities

WC=CA-CL 294000 728100 1650600

23
 5.3 PROJECTED CASH FLOWS STATEMENT

5.3.1 PROFORMA CASH FLOW FOR CHARLOTTE TATTOO SHOP FOR YEAR 1
Receipts JAN FEB MAR APR MAY JUN JULY AUG SEP OCT NOV DEC TOTAL
Capital 300000 300000
Debtors 9000 8000 7000 10000 8000 9000 8000 9000 80000 8000 9000 9000 102000
Sales 80000 90000 80000 80000 90000 80000 90000 80000 80000 8000 80000 80000 1000000
Total Receipts 389000 98000 87000 90000 98000 89000 98000 89000 88000 88000 89000 89000 1362000
Purchase 100000 100000
License 5000 5000
Transport 700 700 700 2100
Insurance 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 18000
Telephone 400 400 400 400 1600
Electricity 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 30000
Water 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000
Rent 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 72000
Maintenance 500 500 500 500 500 500 500 500 500 500 500 500 6000
Salaries 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 480000
Total payment 158600 53600 52900 52900 52900 52900 52900 52900 52900 52900 52900 53600 717100
Net profit 230400 44400 34100 37100 45100 36100 45100 36100 35100 35100 36100 35400 650100
B/d 230400 274800 308900 346100 391100 427200 427300 508100 543500 578600 614700 650100

24
5.3.2 PROFOMA CASH FLOW FOR CHARLOTTE TATTOO SHOP FOR YEAR 2

Receipts JAN FEB MAR APR MAY JUN JULY AUG SEP OCT NOV DEC TOTAL
B/C 650100 650100
Debtors 8000 7000 8000 9000 9000 9000 9000 8000 8000 7000 8000 8000 98000
Sales 90000 80000 80000 90000 80000 80000 90000 80000 70000 80000 80000 90000 990000
Total receipts 748100 87000 88000 99000 89000 89000 99000 88000 78000 87000 88000 98000 1738100
Purchase 100000 100000
License 5000 5000
Transport 700 700 700 2100
Telephone 400 400 400 400 1600
Electricity 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 30000
Water 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 30000
Rent 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 96000
Maintenance 500 500 500 500 500 500 500 500 500 500 500 500 6000
Salaries 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 480000
Total payment 154600 54600 53900 53900 53900 53900 53900 53900 53900 53900 53900 54600 750700
Net profit 593500 32400 34100 45100 35100 35100 45100 34100 24100 33100 34100 44100 989900
B/d 593500 625900 660000 705100 740200 775300 820400 854500 878600 911700 945800 989900

25
26
 5.3.3 PROFOM CASH FLOW FOR CHARLOTTE TATTOO SHOP FOR YEAR 3
Receipts JAN FEB MAR APR MAY JUN JULY AUG SEP OCT NOV DEC TOTAL
B/C 989900 989900
Debtors 8000 9000 8000 9000 9000 8000 9000 7000 9000 8000 8000 80000 100000
Sales 70000 80000 90000 80000 70000 80000 90000 70000 80000 80000 90000 90000 970000
Total receipts 1067900 89000 98000 89000 79000 88000 99000 77000 89000 88000 98000 98000 2051900
Purchase 105000 105000
License 5000 5000
Insurance 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 18000
Telephone 400 400 400 1200
Electricity 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000
Water 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000
Rent 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 96000
Maintanance 500 500 500 500 500 500 500 500 500 500 500 500 6000
Salaries 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 480000
Total payment 161700 567100 56000 56000 56000 56000 56000 56000 56000 56000 56000 56000 785300
Net profit 906200 32300 42000 33000 23000 32000 43000 21000 33000 32000 42000 41300 1570600
B/d 906200 938500 980500 1013500 1036500 1068500 1111500 1132500 1165500 1197500 1239500 1570600

27
5.4 CHARLOTTE TATTOO SHOP BALANCE SHEET FOR THE YEAR ENDING 31ST
DECEMBER

Particulars 2023 2024 2025

Current assets

Cash at hard 150000 650100 1570600

stock 82000 90000 100000

debtors 102000 98000 100000

Total currents assets 334000 838100 1770600

Fixed assets

Purchases 100000 100000 105000

Depreciation (6%) 2000 2000 5000

After depreciation 98000 98000 100000

Total assets 432000 936100 1870600

Current liabilities

Bank loan 100000 80000 50000

Creditors 40000 20000 20000

Total current liabilities 140000 110000 70000

Retained earnings 2000 526100 1500600

Owners equity 300000 300000 300000

Total liability 432000 936100 1870600

28
5.5 PROFIT AND LOSS ACCOUNT

Particulars 2023 2024 2025

Sales 1000000 990000 970000

Debtors 102000 98000 100000

Gross profit 1102000 1088000 1070000

Expenses

Expenses Year1 Year 2 Year 3

Purchases 100000 100000 105000

Salaries and wages 480000 480000 480000

Insurance 18000 18000 18000

Water 24000 30000 36000

Electricity 30000 30000 36000

Telephone 1600 1600 1200

Rent 72000 96000 96000

License 5000 5000 5000

Maintainance 6000 6000 6000

Transport 2100 2100 2100

Total expenses 717100 750700 785300

Profit before tax 384900 337300 284700

Tax provision 20% 76980 67460 56940

Net profit after tax 307920 269840 227760

29
5.6 PROFITABILITY RATIO

TYPE OF WORKING YEAR 1 YEAR 2 YEAR 3

RATIO FORMULA

Gross profit G. P ×100 1102000× 100 1102000× 100 1070000× 100

=110.2% =109.9 % =110.3 %
Total sales 1000000 1000000 970000
ratio

Return on G. P ×100 307920× 100 269840× 100 227760× 100

=102.6 % =89.9 %
Total sales 300000 300000 300000
equity

= 75.9%

5.7 BREAK EVEN ANALYSIS

Particulars 2023 2024 2025

Variable cost purchase Kshs. Kshs. Kshs.

Purchases 100,000 100000 105000

Water 24000 30000 36000

Electricity 30000 30000 36000

Telephone 1600 1600 1200

Rent 92000 96000 9600

Total variables 247600 257600 272200

30
Fixed cost

Salaries and wages 480000 480000 48000

Insurance 18000 18000 18000

License 5000 5000 5000

Maintenance 6000 6000 6000

Transport 2100 2100 2100

Total fixed cost 511100 511100 511100

Total contribution 1000000- 990000- 970000-

margin 247600=752400 257600=732400 272200=697800

Contribution margin %
CM × 100
= 7524000× 100 732400× 100 697800× 100
Total sales =75.24 % =73.9 % =71.9 %
1000000 9900000 970000

Breakeven of sales 511100× 100 511100× 100 511100× 100

=679.92 =691610.28 =710,848.40
75.24 73.9 % 71.9
¿ cost ×100
contribution margin

31
5.7 PROPOSED CAPITALIZATION

ITEMS AMOUNT

Owners’ Equity 100000

Friends and Family 100000

Bank Loan 100000

TOTAL 300000

32