THE KISII NATIONAL PPOLYTECHNIC

BUSINESS PLAN

BUSINESS NAME : STEPHEN ELECTRICAL AND ELECTRONICS

PRESENTOR. : STEPHEN OGALO OGOLA

COURSE CODE. : 0202

SUPERVISOR : MR. VINCENT GETANDA

INDEX : 703101/

PRESENTED TO: THE KENYA NATIONAL EXAMINATION COUNCIL IN PARTIAL

FULFILMENT Of CERTIFICATE IN ELECTRICAL AND ELECTRONIC

INSTALLATION

SERIES :NOVEMBER SERIES

i
DECLARATION.
This is my original presentation which I am presenting to the Kenya National Examination
Council without referring from elsewhere.

NAME: STEPHEN OGALO OGOLA

SIGNATURE DATE

Checked and approved

By:

SUPERVISOR: MR. VINCENT GETANDA

SIGNATURE DATE

ii
DEDICATION
I Stephen ogalo ogola Electrical and Electronic engineering student do provide this business plan
as my original work to The Kisii National Polytechnic ,I do say thanks to my Business plan
teacher Mr Getanda for giving me an idea to start a such business and my mother Annah for her
support while starting my shop .May God bless you abundantly.

iii
ACKNOWLEDGMENT
Once again I would like to give thanks and appreciate Mr Vincent Getanda who impacted the
knowledge and idea of building a business plan, may God bless you and to the my mother who
actually saw it wise to give a support towards this plan and gathering information pertaining this
project.

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 Table of Contents

DECLARATION....................................................................................................................................ii

DEDICATION.......................................................................................................................................iii

ACKNOWLEDGMENT........................................................................................................................iv

EXCUTIVE SUMMARY........................................................................................................................1

1.0 BUSINESS DESCRIPTION..............................................................................................................3

1.1 NAME OF THE BUSINESS.............................................................................................................3

1.2 LOCATION AND ADDRESS..........................................................................................................3

BUSINESS MAP LOCATION...............................................................................................................4

1.3 OWNERSHIP AND REGISTRATION.............................................................................................6

1.4 TYPE OF THE BUSINESS...............................................................................................................6

1.5 PRODUCT AND SERVICES...........................................................................................................6

1.6 INDUSTRY.......................................................................................................................................7

1.7 JUSTIFICATION..............................................................................................................................7

1.8. GOALS OF THE BUSINESS..........................................................................................................7

CHAPTER TWO.........................................................................................................................................9

2.0 MARKET PLAN...............................................................................................................................9

2.1 MARKETING OBJECTIVES...........................................................................................................9

2.2 CUSTOMERS...................................................................................................................................9

2.3 MARKET SHARES AND SEGMENTS.........................................................................................10

2.4 COMPETITORS.............................................................................................................................10

2.5 PRICING STRATEGY....................................................................................................................10

2.6 PROMOTION STRATEGY............................................................................................................10

2.7 DISTRIBUTION STRATEGY........................................................................................................11

2.8 SALES TACTICS...........................................................................................................................11

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 2.9 forecast............................................................................................................................................11

CHAPTER THREE...................................................................................................................................12

3.0. ORGANIZATION AND MANAGEMENT...................................................................................12

3.1 KEY MANAGEMENT PERSONNEL............................................................................................12

3.2 OTHER PERSONNEL....................................................................................................................13

3.3 RECRUITMENT TRAINING PROMOTION................................................................................14

3.4 RE-NUMERATION AND INCENTIVE.........................................................................................15

3.5 MOTIVATION................................................................................................................................16

3.6 LEGAL REQUIREMENT...............................................................................................................16

3.7 SUPPORT AND SERVICE.............................................................................................................16

CHAPTER FOUR.....................................................................................................................................17

4.0 PRODUCTION AND OPERATION PLAN...................................................................................17

4.1 FACILITIES AND EQUIPMENT...................................................................................................18

4.3 PRODUCTION STRATEGY..........................................................................................................19

4.4 PRODUCTION PROCESS.............................................................................................................19

4.5 OTHER EXPENSES.......................................................................................................................19

4.6 REGULATION AFFECTING THE BUSINESS OPERATION.....................................................20

CHAPTER FIVE.....................................................................................................................................21

5.0 FINANCIAL PLAN........................................................................................................................21

5.1 PRE-OPERATIONAL COST..........................................................................................................21

5.4 PERFORMANCE INCOME STATEMENT...................................................................................23

5.5 BALANCE SHEET.........................................................................................................................24

5.6 BREAK EVEN POINT...................................................................................................................24

APPENDIX...........................................................................................................................................26

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EXCUTIVE SUMMARY
Chapter One:

Business Description

The name of the proposed business Stephen electricals which will be dealing with all electrical
equipment’s , services and consultation services. Business location will be also considered.

Chapter Two

Market Plan

The market share of the business will be 15% and will get a return on capital employed of 48%
within the firs t 3 yrs. The business will experience more income which will explain and plan
some business

The business will have those categories of customers such as institutions and schools, residential
customers and private companies Also the business will face competition from other related
business in the area like Chrispine electricals

The business will employ sale tactics in order to capture many customers i.e. through displays.

Chapter Three

Organizational And Management Plan

In the chapter it consists management objectives, the general personnel their duty and
responsibilities, the organization chart of the business, recruitment,

training and promotion tactics, renumeration and incentives i.e. gifts, certificate of good
performance and motivation, legal requirements and supportive services to ensure the
firm/business operation is insured.

1
Chapter Four

Production Operation

In this chapter it consist the description of various machinery and equipment, their purpose
facility and capacity it also shows the production /operation strategy, expenses and regulations
affecting operations like safety regulations, environmental and government regulations

Chapter Five

Financial Plan

In this chapter we find the pre-operational cost of the firm, estimation of working capital, the
cash flow charts, performance at trading profit and loss account, balance sheet, breakeven point,
chart financial ratios, sources and use of funds and this will enable the owner /manager whether
is driving into profit making. Gaining of loss making / loosing

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CHAPTER ONE

1.0 BUSINESS DESCRIPTION

The Stephen electrical and electrics shop will be a sole proprietorship kind of business. The
manager will be Non other than Stephen who upon shall be the owner of the business. The
business will employ ten employees as the working staff of the business, the assistant manager,
the sales person, auditor, secretary, cleaner and the driver. The target of the business will be
colleges, universities, government departments and the residents around the area. Aim of the
business will be; offering best services and be the best supplier within the country and the world
around.

1.1 NAME OF THE BUSINESS

The name of the business will be The Stephen ELECTRICAL AND ELECTRONICS. Where the
Base name is derived from the owners name STEPHEN

The business shall be of all the electrical tools, equipment and appliances.

1.2 LOCATION AND ADDRESS

THE STEPHEN ELECTRICAL AND ELECTRONICS

P.O. BOX 015, 3000 MIGORI

TEL.NO. 0768470068

E-MAIL: Stephenmartial55@gmail.com

BUSINESS LOGO

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 BUSINESS MAP LOCATION
THE STEPHEN ELECTRICALS WILL BE SITUATED AT MIGORI ALONG NYARONGI ROAD AND LOCATED OPPOSITE
SHIVLING SUPERMARKET NEXT TO MIGORI MAIN STAGE .

KISII - MOGORI ROAD

Stephen Electrical shop

Migori Town
NYARONGI ROAD

SHIVLING SUPERMARKET

4
Choice of the location

1. There is availability of security in the area

2. High demand of electrical materials

3. it’s a strategical location.

4. There is no stiff competition.

5
1.3 OWNERSHIP AND REGISTRATION
The Stephen Electrical and Electronics will be a sole proprietorship type of business which will
be owned and managed by STEPHEN as the managing director and millicent as the patron of
the business. It will be registered under Homabay county government and it shall obtain a KRA
pin from The Kenya Revenue Authority.

1.4 TYPE OF THE BUSINESS.

It will be a sole proprietor form of business which will be dealing with Electrical tools and
equipment .

1.5 PRODUCT AND SERVICES.

Business will be dealing with the selling of electrical and electronics products such as:

1. Meter Box 8. Water heaters

2. Main switch 9. PVC conduit

3. Consumer control unit 10. Tranking

4. Circuit breakers 11. Sockets

5. Switches 12. Cable clips

6. Lamp holders 13. Patrest boxes and other electrical

equipment.
7. Fire alarms
14. Cooker sockets/switches and others

Types of Cables and there sizes

1. 1.5 mm² single core 5. 10 mm² single core

2. 2.5 mm² single core 6. Lamp holders

3. 1.5 mm² sheathed 7. Motors

4. 2.5 mm² sheathed 8. Generators.

6
1.6 INDUSTRY.
The business fall under industrial products where it offers quality services as they are given by
the manufacturer.

The industry assemble electrical accessories in medium sizes.

The employees who will be working in The Base Electrical Enterprise shall be well skilled
personal and attained the required grades and qualifications to be an electrician.

1.7 JUSTIFICATION
I Stephen together with My wife Felister we decided to start and run this form of business
because of the high demand from the surrounding and the availability of the market for the
equipment.

1.8. GOALS OF THE BUSINESS

The aim of the business will be to create market. This will be achieved by expanding the
enterprise, open up some branches and improving the economy of the area by creating
employment to the surrounding customers and residents.

The business will aim at selling high quality accessories at reasonable prices. The business will
offer welfare to employees, it will supply goods and services of high quality such that to satisfy
their wants.

The business will ensure consistence supply of the products so as to meet the customers’
requirements. Business will work with the government in formulating the policies in the society.

7
Entry and Growth strategy.

The Stephen Electrical And Electronics intend to venture into the business by Octobers 2022
through the following steps:

 Should employ the required number of employees.

 Should hire the building.
 Should purchase the required tools and equipment’s
 Should be registered and this can be proven by having a license.

Public awareness of The Stephen Electrical And Electronics will be done through the posters,
advertisement through radios, magazines and televisions.

The arrangement will be made between the county government and domari electrical and
electronics. There will be posters all over Nyandarua County and through the newspaper. The
employees will be interviewed and recruited.

There will be 6% discount on goods and services worth two thousand shillings and above, 3%
discount on goods worth six thousand shillings and above.

The business requires to be advertised for public or customers awareness. This can done through
mass media, written billboards and launching ceremony. During launching, some hand-outs
inform of posters will be given as a means of communication to reach far away customers.

When the business matures, it makes more profit which enable opening of many branches and
get known all over as one of the most reliable electrical shop countrywide thus gaining
customers’ confidence all over.

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 CHAPTER TWO

2.0 MARKET PLAN

The market plan will enable us to do market research on the challenges that the business are
likely to face and develop market strategy and tactics required to exploit them hence in order to
venture into that business for the future prosperity of the business.

2.1 MARKETING OBJECTIVES

This is the aim of the business and what the business aim to achieve. It will enable one to look
into various ways in order to come up with a good objective which will enable him to succeed on
by;

I} market share

The business will run for at least 65% depending on the surrounding customers and will enable it
to prosper and ventures into other various part of the area.

ii) Sales Turnover

For the first one year, The Stephen Electrcal And Electronics will realize a turnover of 1.5
million and this will be due to supply of commodities with high quality and quantity to various
areas.

2.2 CUSTOMERS
The Stephen Electrical And Electronics will supply its materials to various customers. These
are;

I) Local schools around.

ii) Hospitals around.

iii) Individuals around.

The Stephen Electrical And Electronics will follow its strategies to surprise and to maintain
his customers,

a) After sales service for a bulky goods by delivering.

9
b) Installation at a fair price.

c) Selling the materials at affordable price and attract more customers.

2.3 MARKET SHARES AND SEGMENTS

The business will depends on various customers whereby it will have commercial and industrial
customers. With the technicians who will buy from the shop, most of them being at the middle
age between 21-55 years and most of them will come from the jua kali sector.

2.4 COMPETITORS
Before starting the business, we have to form a strategy on how to beat our competitors in the
market. The main competition enterprises are;

I) Ronaldo electricals

ii) Nancy electrical technologies

In order to rise above the, the business will

a) Offer transportation

b) Supply materials at required time .Sell goods and services of high and modern standards.
d) Give offer to customers.

2.5 PRICING STRATEGY

The Stephen Electricals And Electronics on pricing competition will enable enterprise to fix its
price. The law of demand and its substitutes determine the price of the materials in the enterprise.

2.6 PROMOTION STRATEGY

The Stephen Electrical And Electronics will use the following ways to inform the public and
promote the business.

a) Free sample- this will be done by giving free gifts on top of the product bought and thus can
enable the business to have more customers.

d) Personal selling- this is the selling of the product directly through interaction between seller
and buyer.

10
c) Advertising- this will done using the electronics media, TVS, radios etc.

d) Posters

2.7 DISTRIBUTION STRATEGY

The business will use its motor vehicle and motorcycle to transport and distribute the electrical
materials to the customers in order to avail the materials at required time. Other materials will be
sold to customers in small quantities. For example electrical tools SS, tester.

2.8 SALES TACTICS

The business will employ the following tactics to sell its products to the customer;

 -It will employ sales man to sell materials to the most needed products by the market
share to an effort of having a stock.
 -It will have the workers who are groomed and they shall be in uniform at all working
hours and this uniform shall have a budge on it to indicate the section each and every
worker will be playing.

2.9 forecast
The business will have the following aims;

I) to expand the business by opening branches.

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 CHAPTER THREE

3.0. ORGANIZATION AND MANAGEMENT.

3.1 KEY MANAGEMENT PERSONNEL

a) MANAGER

Qualifications

i. Should have a diploma in electrical engineering.

ii. Should be a computer literate.
iii. Should be of 35 years and above.
iv. Should have a five year experience.

Duties and Responsibilities

i. Supervise the business transaction and operation.

ii. - Carrying out long term and short term planning of the business.
iii. Recruit the required personnel/staff

Assistant Manager

QUALIFICATION

 Diploma in Business Administration

Duties and Responsibilities

i. -Supervising the staff

ii. -Maintaining Administration Records
iii. -Controlling office facilities

Account Clerk

A holder of Diploma in electrical from the recognized institution

Duties;

i. -Preparing and writing account statements

ii. -preparing the cheque
iii. -To pay workers

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 3.2 OTHER PERSONNEL
SUPERVISOR

Qualifications

i. Should have a diploma in electrical engineering and required experience.

ii. Should be of 25 years and above.

Duties and Responsibilities

i. Supervise all operations of the business.

ii. Analyze and report sales performance.
iii. Generate new ideas on how to run the business.

SECRETARY

Qualifications

- Should be at least a stage two and above with basic knowledge of book keeping and office
practice.

- Should also be a computer literate.

Duties and Responsibilities

i. Responsible for book keeping and office records.

ii. To handle office issues
iii. Receive and make calls on behalf of the business organization.

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3.3 RECRUITMENT TRAINING PROMOTION
The manager will be the one recruiting employees since he will be a professional and at the same
time the owner of the business. The business will be hiring laborers to perform work that
require effort. Job opportunities will be advertised through the newspapers and posters showing
various job prescription qualification and requirement needed.

Applicant will send their letters prior to the interview day to enable the manager to go through
the documents hence short list the qualified one for the interview. Then the successful
candidates will be given appointment letters and shall be oriented on the day of reporting.

The manager will cater for the management team training by inviting specialist and professionals
from recognized firms to train the workforce.

The employees shall be promoted according to their job group and performance, how their work
output

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3.4 RE-NUMERATION AND INCENTIVE
The business shall be offering salaries and allowances. The salaries shall be rank according to the number of hours worked at the post.

The allowances to be given includes; medical and travelling allowances.

REMURATION

NO POSITION NO.OF SALARIES PM SALARIES PA(KSHS)

(KSHS)
1 Manager 1 50,000/= 600,000/=
2 Cashier 1 30,000/= 360,000/=
3 Human resource 2 40,000/= 480,000/=
4 Accountant 2 50,000/= 600,000/=
5 Technical personnel 1 30,000/= 360,000/=
6 Sales person 1 7,000/= 84,000/=
7 Watch man 5 25,000/= 300,000/=
8 Storekeeper 3 15,000/= 180,000/=

9 Cleaner 4 24,000/= 288,000/=

10 Technician 1 25,000/= 300,000/=

TOTAL 21 296,000/= 3,552,000/=

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3.5 MOTIVATION
The business will give incentives to motive employees as yearly bonus, they will be provided with lunch
and medical allowance monthly at every month. All these will be done to motivate their morale and also
the manager and others will adopt respect to all employees’ recognition of individual workers and
making decision to employees.

3.6 LEGAL REQUIREMENT

The business will require trading license from the government trading office at Ksh 6,000/= and the
workshop permit from county council at Kshs 5,000.

3.7 SUPPORT AND SERVICE

The supply enterprise will get various support to assist the workshop to achieve their objective support
services include:

Bank

The business will require services from cooperative bank of Kenya in borrowing money for long term
and short term loans whenever there is a financial need.

Cooperative Bank

HOMABAY Branch

P.O. BOX 354-40222

HOMABAY

Insurance Company

The business shall be insured against various risks which may arise within the business such break
down, fire, theft and road accident during transportation of goods.

INVESCO ASURANCE CO L.T.D

P.O. BOX 613,

HOMABAY

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 CHAPTER FOUR

4.0 PRODUCTION AND OPERATION PLAN

The business is in program of giving out product of good quality and quantity to all customers in order
to attract many of them therefore enhancing good competitive to other surrounding businesses

The operational process of the business shall be effective in order to run its daily activities effectively.
Trained and qualified personnel shall be employed to provide appropriate operation. The daily basis
operation of which all workers will to comply and strictly follow are;

 -The business start operating as from 8.30 AM and a lunch break is given from 12.30 TO 1.30
PM.
 -The working hours after lunch shall be extended until 5.30pm when the business shall be closed
.
 -The manager shall allow his employees to attend seminars and tours in relation to their
department. The gained skills shall be used to improve the business

17
4.1 FACILITIES AND EQUIPMENT
The business will hire some equipment and at the same time purchase those which are essential for smooth and effective operation of
the business.

NO FACILITY DESCRIPTION PURPOSE SUPPLIERS QWNERS QUANTITY UNIT TOTAL

HIP

1 Computer Permanent Keeping the MARCKRINE Owned 3 65,000 195,ooo

records of the
products and
names of the
employees

2 CCU 4 way with circuit Power control KEVIN Owned 150 2,500 375,000
breaker

3 Steel rule Standard Drawing in IANN Owned 60 200 12,00

cables

4 Meter box Standard To show the NOUVELL Owned 150 500 75,000
562 among
units of
power
consumed

5 PVC cables Standard For drawing STEVEEN Owned 562 5,600 3,147,200
in cables to
supply power

6 Switch Standard To control STANLEY Owned 150 300 45,000

the
installation

18
The business will offer free transport to customers who will buy goods in bulk

4.3 PRODUCTION STRATEGY

The business will use the following strategies in order to realize high profit and minimize the operational
cost;

A) product Quality-Business will be supplying quality products and services so that to gain customers
confidence and hence attract more customers.

b) Attraction strategy will also be used, to attract more customers to the excellent communication skills
and who have capability to develop and maintain good customer relation.

c) Timing Strategy-enterprise will be buying products form manufacturer at a timely intervals, such
products are gotten when the demand low hence prices are low and when it comes on high demand, they
will sell them at a higher profit margin.

4.4 PRODUCTION PROCESS

After making identification, manufacturer to supply the enterprise with the products, the accounting will
place orders for particular products either by personal contacts or sending the orders. Then the
accountants will make the necessary arrangements for payment terms.

4.5 OTHER EXPENSES

NO DESCRIPTION MONTHLY YEARLY

1 Electricity 1,500 18,000

2 Water 1,000 12,000

3 Licenses 3,000 36,000

4 Insurance 500 6,000

5 Transport 2,500 30,000

6 Advertisement 1,500 18,000

8 Rent 15,000 180,000

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4.6 REGULATION AFFECTING THE BUSINESS OPERATION
Licenses

This is an operational document which allows the business to operate and it is from the local authority
under local government (county government). It gives freedom for one to carry out a business in an area.

Laws

All rules and regulations should be adhered to according to the act of Kenyan laws regarding business
operation, employers and employees.

Safety Regulations

For provision of safety of the staff of the enterprise, dust coat and gloves shall be provided to use when
handling sharp appliances which are dangerous.

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 CHAPTER FIVE

5.0 FINANCIAL PLAN

The business capital will be obtained from personal saving, lending institution, borrowing from friends
and inheritance.

5.1 PRE-OPERATIONAL COST

ITEMS COST- KSHS. PER MONTH

Opening Stock 150,000/=

Allowances 300,000/=

Labor 100,000/=

Premises 50,000/=

Rent 30,000/=

Salary 200,000/=

21
PERIOD JAN FEB MARCH APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC TOTAL
Opening 657,730 743237 772687 863437 1084937 19050 320250 422270 696160 732780 835445 955195 8208883
balance

Cash at hand 15015 50000 30000 60000 50500 60200 72700 77770 79890 90500 90500 98500 740725

Cash at bank 89000 50000 70000 90500 110500 90300 90000 95000 89680 92500 90500 8600 1043980

Sales(cash) 347500 300000 285000 275000 250000 105000 235000 255000 90500 100500 199700 105200 2648400

Sales(credit) 52300 79500 69500 75000 10000 100500 98000 92500 93600 93950 99550 87500 1041900

Total cash 1161545 7197737 1227187 1363937 350000 625550 816000 1048245 1049245 110330 1315695 1332395 1858451
flow

Cash 201000 210000 155500 130000 145000 138000 125000 180000 185500 192500 200000 199000 2061000
purchase

Credit 159400 150000 70000 85000 120000 10000 98000 108550 70000 8550 96000 99500 1164450
purchase

Electricity 8050 8250 10500 9450 10800 8025 6000 7825 9000 9000 9570 102820

Salaries 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 600000

Insurance 5700 - 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 35700

Total cash 431458 425050 363750 297000 330950 305300 288025 352085 317050 264885 360500 367000 4085053
out flow

Net cash 730087 772687 863437 108497 19050 320250 527975 696160 732780 835445 955195 965395 8503398

Cash carried 730087 772687 862437 108497 19050 320250 527975 696160 732780 835445 955195 965395 8503398
forward

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5.4 PERFORMANCE INCOME STATEMENT
THE STEPHEN ELECTRICAL TRADING AND LOSS ACCOUNT AS 31ST DEC 2021

CR KSHS DR KSHS

Purchase credit 725,000 Sales credit 683,000

Purchase cash 1,810,000 Sales cash 1,353,000

2,535,000 Net sales 2,036,000

Less closing stock 1,170,000

Cost of goods sold

GROSS PROFIT

Net sales 2,036,000

Cost of goods sold 671,000

Gross profit 2,036,000

TOTAL EXPENCES

Electricity 26,000

Water 5,520

Licenses 4,000

TOTAL 35,520 TOTAL GROSS 2,036,000

PROFIT
Gross profit-expenses = 671,000
NET PROFIT
635,480

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5.5 BALANCE SHEET
THE STEPHEN ELETRICAL AND ELECTRONICS Balance sheet as at 31st Dec 2021

ASSETS LIABILITIES

FIXED ASSETS KSHS LONG TERM LIABILITIES KSHS

Furniture and fittings 22,030 Initial capital 500,000

Machinery 69,210 Net Profit 124,560

TOTAL 91,240 TOTAL 624,560

CURRENT ASSETS Drawings 52,990

Stock 267,500 Net Capital 571,570

Cash in hand 180,000 SHORT TERM LIABILITIES

Cash at bank 450,000 Bank Loan 20,000

TOTAL SUM OF ASSETS 897,500 Creditor 8,900

TOTAL 28,900

Total Liabilities 600,470

Owner’s Equity 388,270

Total Sum of Liabilities 988,740

5.6 BREAK EVEN POINT

VARIABLE COST KSHs

Telephone 28,000/=

Electricity 35,000/=

Water 45,850/=

Transport 20,395/=

Renovations 29,750/=
24
Miscellaneous 156,270/=

TOTAL 315,265/=

FIXED COST KSHs

Loan Repayment 80,000

Salaries and Wages 235,000

Rent 50,000

Insurance 62,000

Taxes 15,900

TOTAL 442,900/=

25
APPENDIX
BUSINESS LOGO

BUSINESS MAP LOCATION

KISII-MIGORI ROAD

Stephen electricals shop

Migori Market

NYARONGI ROAD

SHIVLING SUPERMARKET

26