BUSINESS PLAN

BEE KEEPING AND HONEY PRODUCTION

PRESENTED BY: KASAIT NOEL

CENTRE CODE: 578001

INDEX NO: 5780013112

CENTRE NAME: THE ELDORET NATIONAL POLYTECHNIC

COURSE: DIPLOMA IN PROJECT MANAGEMENT

COURSE CODE: 2922/108

SUPERVISOR: ELIZABETH WALIOLI

PRESENTED TO: THE KENYA NATIONAL EXAMINATION

COUNCIL IN PARTIAL FULFILLMENT FOR THE AWARD OF
DIPLOMA IN PROJECT MANAGEMENT

EXAMINATION SERIES: JANUARY 2022

DECLARATION
I hereby declare that this business plan is my original work and has never been presented
before to the Kenya National Examination Council with other person before.

Name: KASAIT NOEL

Signature…………………….. Date…………………………

Supervisor’s Name: ELIZABETH WALIOLI

Signature…………………………. Date…......................

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 DEDICATION

I dedicate this work to my beloved parents for the entire support they provided to me
throughout my studies. May God bless you all.

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 ACKNOWLEDGEMENT
I like to acknowledge the value help from my supervisor MADAM ELIZABETH
WALIOLI who read material and keep close guidance during my writing of the business
plan. Also not forgetting my classmates and friends in College. May God bless all!

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 Table of Content
DEDICATION.............................................................................................iii
ACKNOWLEDGEMENT...........................................................................iv
1.0 EXECUTIVE SUMMARY.....................................................................1
1.1 BUSINESS DESCRIPTION.........................................................................................1
1.3 MANAGEMENT AND ORGANIZATION PLAN......................................................1
1.4 OPERATION AND PRODUCTION PLAN.................................................................1
1.5 FINANCIAL PLAN......................................................................................................2
CHAPTER ONE............................................................................................3
1.0 BUSINESS DESCRIPTION...................................................................3
1.1 BACKGROUND OF THE OWNER.............................................................................3
1.2 BUSINESS NAME........................................................................................................3
1.5 TYPES OF BUSINESS.................................................................................................4
1.6 PRODUCTS/SERVICES..............................................................................................5
1.8 INDUSTRY...................................................................................................................7
1.9 GOALS OF THE BUSINESS.......................................................................................8
1.10 ENTRY AND GROWTH STRATEGY......................................................................8
CHAPTER TWO........................................................................................10
2.0 MARKETING PLAN...........................................................................10
2.1 CUSTOMERS.............................................................................................................10
2.2 MARKET SHARE......................................................................................................10
2.3 COMPETITION..........................................................................................................11
2.4 METHODS OF PROMOTION AND ADVERTISING..............................................11
2.5 PRICING STRATEGY...............................................................................................12
2.6 SELLS TACTICS........................................................................................................12
2.7 DISTRIBUTION STRATEGY...................................................................................13
CHAPTER THREE....................................................................................14
3.0 ORGANIZATIONAL/MANAGEMENT PLAN................................14
3.1MANAGEMENT TEAM.............................................................................................14
Fig 4.1 Organizational Structure........................................................................................14
3.1.1 KEY MANAGEMENT PERSONNEL....................................................................15
3.2 OTHER PERSONNEL................................................................................................17
3.3RECRUITMENT, TRAINING AND PROMOTION..................................................18
3.3.1 RECRUITMENT......................................................................................................18
3.4 REMUNERATION AND INCENTIVES FOR PERSONNEL..................................18
3.5 LICENSES, PERMITS AND BY-LAWS...................................................................19
3.6 OTHER SUPPORT SERVICES..................................................................................19
CHAPTER FOUR.......................................................................................21
4.0 OPERATIONAL/PRODUCTION PLAN...................................................................21
4.1PRODUCTION FACILITIES AND CAPACITY........................................................21
4.2 PRODUCTION STRATEGY......................................................................................21
4.3PRODUCTION PROCESS..........................................................................................23
4.4 REGULATIONS AFFECTING OPERATIONS........................................................24
CHAPTER FIVE.........................................................................................25
5.0 FINANCIAL ANALYSIS...........................................................................................25
5.1 PREOPERATIONAL COSTS.....................................................................................25
5.2PROFORMA BALANCE SHEET...............................................................................26

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5.3 WORKING CAPITAL................................................................................................27
5.4 PROJECTED CASH FLOW FOR YEAR 1...............................................................26
5.5 INCOME STATEMENTS...........................................................................................28
5.6 BREAK EVEN POINT...............................................................................................29
5.7 PROFITABILITY RATIOS........................................................................................29
5.8 DESIRED FINANCING.............................................................................................30
5.9 PROPOSED CAPITALIZATION...............................................................................30

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 1.0 EXECUTIVE SUMMARY

1.1 BUSINESS DESCRIPTION

The purpose of the Bee Keeping farm is to provide a five year operating plan on the
existing 100 hive beekeeping business focusing on maintaining honey production,
diversifying into other honey products such as pollen and bee stock, reducing debt and
building equity in the farm and building off-farm investments.

1.2 MARKETING PLAN

The business highlights the 100 hive beekeeping operation production of honey,
establishing markets for selling the honey, providing good line equipment in good
operation condition, providing good facilities for handling honey and bees, family
operating business and payments of debt such as loans or payment of equipment’s. The
business will diversify into pollen, comb honey, candles and bee stock sales, increase
selling of honey to the locals, and improve packaging and promotion of its activities.

1.3 MANAGEMENT AND ORGANIZATION PLAN

The organization will be headed by the board of directors who will mainly serve as the
advisory committee but all the affairs of the organization will be under the executive
director who is the business proprietor assisted by the operations and marketing managers
who form the key business managers.

1.4 OPERATION AND PRODUCTION PLAN

The capacity in this case will refer to the number of personnel required to work at the
farm. The farm structure proposed will be used to determine just how many personnel
will be required. 10 employees will be required for the farm to be assumed to be working
at optimal levels for the first 3 years or at capacity. This will include the manager and
employees of the farm
1.5 FINANCIAL PLAN

We estimate that approximately 60% of Bee Keeping farm annual revenue will be

generated by a combination of potential customers, admissions, programming, retail
sales, and related activities. The remainder of our funding will be generated by: The
writing of proposals to secure grants from foundations. The solicitation of
individuals, corporations, and small businesses. An annual large-scale benefit concert,
family benefits, and special events. A variety of small scale fundraising activities.

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 CHAPTER ONE

1.0 BUSINESS DESCRIPTION

1.1 BACKGROUND OF THE OWNER

The business description covers the business name and where it is located. It indicates the
form of ownership and the main sponsor(s). The type of business conducted and specific
products or services provided are highlighted. The business goals are spelt out with entry
and growth strategy clearly stated.

1.2 BUSINESS NAME

The business will be called Bee Keeping., The owner of the business will be. KASAIT
NOEL. The name is considered suitable for the business as it is easy to remember, unique
and relevant to the type of business being operated.

2.3 BUSINESS LOCATION AND ADDRESS

The farm is located in Nakuru area along Nakuru-Nairobi Road; the area is in Nakuru
County due to its accessibility. The location is suitable because the place is hot conducive
for keeping bees and its access to its customers.
The postal address
Bee Keeping farm
P.O Box 337,
Nakuru

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Figure 2.1 Business location

Nakuru
center

Nakuru-Nairobi road

Bee keeping
farm

2.4 FORM OF OWNERSHIP

The farm is a sole proprietorship which includes a manager, assistance manager,
accountant and honey specialist’s collectors.
The sole proprietorship form of ownership is chosen because of the small size of the
business on inception. The following justifies the chosen business;

a. To operate the business will only require a trading license, (few legal formalities)
b. The business will only require the sole trader to manage it.
c. The owner gets all the profit.
d. Requires less capital to start.

1.5 TYPES OF BUSINESS

This type of business is offer good quality and designed furniture. The entrepreneur
specialized to making honey as the major product which can sell to his customers who
can buy at very fair price. The business has no competition compared to other business
and has aimed to expand on to generate more income and will be known.

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1.6 PRODUCTS/SERVICES

The farm is product offering. The products provided by bees include;

Honey
Is a sweet food made by bees using nectar from flowers? The variety produced by honey
bees (the genus Apis) is the one most commonly referred to and is the type of honey
collected by beekeepers and consumed by humans. Honey produced by other bees and
insects has distinctly different properties.
Honey is the major food reserve of Apismellifera and the primary carbohydrate in the
bee‘s diet; it is produced and stored in the honeycomb for consumption by the adult
colony during periods of nectar dearth. Honey consists primarily of simple sugars, water,
Minerals and nitrogenous compounds. Concentrated sugars account for 95 to 99% of
honey‘s dry weight. The majority of the sugars found in honey are fructose and glucose,
which represent 85 to 95% of its total sugars. The predominance of these simple sugars
especially fructose gives honey most of its nutritional and physical characteristics. The
small amount of additional sugars namely disaccharides (sucrose, maltose and is
maltose), trisaccharides, and oligosaccharides provide information about botanical origin
and, depending upon their relative abundance, adulteration. Botanical origin is important
in giving different honeys their unique color, flavor, and pharmacological properties.
Depending on its botanical origin honey is classified, in broad terms, as either polyfloral
or unifloral. On the world market, unifloral varieties—honey produced from the nectar
of a single plant species—typically have a higher value.
Bee Pollen
Pollen is the male reproductive portion of a flower and is rich in proteins, vitamins, and
minerals. It is collected by honeybees during foraging trips and transported back to the
hive in the form of small pellets, carried in pollen baskets found on each hind leg of the
honeybee. Pollen is stored and used as a protein source by a segment of the colony, in a
partially fermented form known as beebread‘. Young worker (nurse) bees consume
beebread for the production of royal jelly which is then used in larval development,
queen rearing, and feeding the adult queen. Bee pollen differs qualitatively from the fine
powdery pollen on flowers. For better adhesion during transport the honeybee mixes a
small amount of nectar or honey in with the pollen. Therefore, bee pollen collected

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during hive management differs slightly in nutritional value from floral pollen and is
typically sweet in taste.
Royal jelly
Royal jelly is a pasty substance produced in the hypo pharyngeal gland of young worker
bees. It is extremely rich in proteins and fatty acids and is fed directly to the queen or
young larva as it is secreted. The amount of royal jelly fed during the early larval stage
determines whether the larva will develop into a queen or worker bee. The high fertility
and long-life span of the queen bee is attributed to a diet of royal jelly. The principle
constituents of royal jelly are water, protein, sugars, lipids, and mineral salts. Proteins
and sugars account for the largest fraction of dry weight. Proteins represent nearly 75%
of nitrogenous substances and all amino acids essential to human health are present.
Glucose and fructose account for nearly 90% of sugar content in most royal jelly and are
found in similar proportions as that of honey. Many of the biological properties of royal
jelly are attributed to its high lipid content; including a number of uncommon free fatty
acids.
Propolis
Propolis is a resinous substance collected by bees from the buds of trees and other
botanical sources, notably from injured areas of plants. It is dark in color, rich in volatile
oils, and has a waxy, glue-like consistency. Propolis is an effective antiseptic and has
been proven to kill bacteria. Propolis is used by honeybees to weatherproof the hive and
for other sanitation purposes; including sealing cracks to prevent the growth of bacteria
and fungi. It is commonly used as an ingredient in toothpaste, soaps, and ointments. For
commercial production, a slotted plastic frame is placed over the top super in the hive.
Propolis is scrapped from the frame once bees have filled in the screen.
Beeswax
Is a natural wax produced in the bee hive of honey bees of the genus Apis. It is
mainly esters of fatty acids and various long chain alcohols. Typically, for a honey bee
keeper, 10 pounds of honey yields 1 pound of wax. Beeswax is mainly used to make
honeycomb foundation for reuse by the bees. Purified and bleached beeswax is used in
the production of food, cosmetics, and pharmaceuticals: Beeswax is used as a coating for
cheese, to protect the food as it ages. As a food additive, beeswax is known as E901

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(glazing agent). As a skin care product, a German study found beeswax to be superior to
similar "barrier creams" (usually mineral oil based creams, such as petroleum jelly),
when used according to its protocol. Beeswax is an ingredient in moustache wax, as well
as hair pomades. Beeswax is an ingredient in surgical bone wax.

2.7 JUSTIFICATION OF OPPORTUNITY

The farm was chosen by the proprietor due to a number of reasons. These reasons were
that strategically placed the organization hence ensuring its success. Some of these
reasons included;

i. The people living around are in demand of honey.

ii. Focusing on maintaining honey production.
iii. Diversifying into other hive products such as pollen, bee stock etc.
iv. Reducing debt and building equity in the farm and building off-farm investments.

1.8 INDUSTRY

The business lies in the supply of honey and its products. There is no competitor known
that can offer the unique art experience for honey provided by the business. Through our
singular focus on visual honey supplier, we are positioned as a premier source of
products of honey in the area.

A key strategy for the business is expansion of selling of honey to other towns, revenue
by extending a value proposition to our target market in the form of comprehensive
membership benefits. Trends in the industry sales are estimated to continue growing in
the long-term as the public becomes more aware of the importance of honey in human
life.

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1.9 GOALS OF THE BUSINESS

2.9.1 GOALS
i. To open another farm of bee keeping in the region.
ii. To pay off loan to banks.
iii. To set retirement funds
2.9.2 OBJECTIVES
i. To diversify production pollen.
ii. To wax craft so as to make candle and bars.

iii. To build another bee hives for honey comb so as to produce a lot of honey.

1.10 ENTRY AND GROWTH STRATEGY

While at present we are offering only other company’s adventure vacations, we have
protected our position in a number of ways.

2.10.1 ENTRY PLAN

First, we have a two-year of selling honey to the locals and selling candles to churches
and people. This contract is dependent on Eldoret traders achieving sales of at least 250
vacation packages a year. We intend to negotiate similar agreements with future
suppliers, although sales targets with them will be lower to reflect their relative market
position.
Second, we intend to maintain a high service element to our business, extending our
range of value added services such as transport of goods and taking of honey to the
customers and knowing customers satisfaction and continually updating our client
database. In this way, we will seek to build up a high level of repeat business. Customer
loyalty is vital to our profitable growth.
Risks Associated with Growth
 Losing touch with customers
 Loss of clientele to other providers
 Quality of services diminished
 New businesses

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2.10.2 GROWTH PLAN
The risks facing the expansion of Bee keeping Farm can be summed up in one word:
competition. In order to sustain our position in the area as the premier Nakuru county
honey business, Bee Keeping farm needs to outshine our competition. By maintaining our
focus on superior product knowledge and outstanding customer service, we will be able
to uphold our position in the industry, thereby retaining current clients and attracting new
clients.

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 CHAPTER TWO

2.0 MARKETING PLAN

2.1 CUSTOMERS

The farm targets customers around the region, the company which manufacture honey,
wax for shop and other potential customers of bee products as well as the business that
sell bee products around the area and near the farm by distributing the customers, the
beekeeping industry is essential to the environment for pollination services and for the
pure natural hive products - honey, pollen, etc. Bee keepers are independent and
individualistic. Most beekeepers come to the industry to enjoy the satisfying and
interesting work with bees.
Honey and bee products have experienced low prices over the past few years. There is
very little generic marketing of honey and little coordinated consumer education. There is
also no quota or restriction on production. Although most beekeepers focus on honey,
some have expanded into alternate products and into value-added and specially packaged
honey products. Other hive products (pollen, comb honey) are gaining customer
recognition.
Current outlets (farm gate and contracted retail shelf space) can handle all the honey we
can produce.

2.2 MARKET SHARE

There is few known farm of bee keeping in the Nakuru County that offers the unique
honey providers of Bee Keeping farm.
In a much broader sense, the farm competition is not limited to places offering honey and
bee wax. There are many external activities in which the customers can choose to buy.
Given free time and disposable income, customers may choose among a variety of honey
products including royal jelly, candles, and Propolis. Customers will recognize the
benefit of farm with a singular focus, as a means of providing balance, as an opportunity
to enrich their customers’ satisfaction and their awareness.

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2.3 COMPETITION

There is no competitor we know of that can offer the unique honey products experience
for customers provided by Bee Keeping farm. Through our singular focus on visual arts
targeted to potential customers, we are positioned as a premier source of arts honey
products for the entire Nakuru area.
Alternatives come from such Nakuru area farms as the Niger Farm, and the Riverside
farm, however, these farms do not have the singular focus of providing a rich high quality
of honey. There are several area farms where customers can buy honey. Local examples
include the Kabobo Farm and Musal Farm; Bee Keeping farm intends to establish
cooperative relationships with these farms with the expectation that increased awareness
in these types of honey product selling.

2.4 METHODS OF PROMOTION AND ADVERTISING

A key strategy for  Bee Keeping farm is profit growth as a mechanism to drive recurring
revenue. By extending a value proposition to our target market in the form of
comprehensive profit benefits, we expect to quickly expand our market. Our market plan
is structured to allow members to determine the frequency of customers to the farm and
the degree of participation in special marketing. Our diverse and calendar of programs
and events, coupled with the uniqueness will deliver high member retention rates. 
Closely related to the market, but anticipated to be a larger source of revenue, are fees
from general customers. Through a grassroots approach, we will continually
communicate the compelling influence and value that attendance at Bee Keeping farm
will deliver to its customers. Targeted advertising and networking throughout a very
active local community will allow us to focus on continually bringing first time new
customers.
On-site marketing for workshops and special events represents an economical and
effective way to generate revenue. By reaching customers, people who have already
made the initial step to engage in our experience, we anticipate a high degree of interest
and participation in revenue producing activities such as selling among our local
customers. 

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We recognize that a strong Internet presence is an opportunity to extend our
market reach in a manner consistent with our mission. Initially, our direct marketing
efforts will be locally focused, but we will rely upon a dynamic and informative website
to support our efforts, while broadcasting our message to a much larger audience. The
goal of our site is to create interest, inform and entertain visitors, facilitate requests for
membership, renewals and registrations, and generate additional revenue. We will direct
visitors to our site through consistent references in all of our marketing materials and the
strategic placement of links to our site from other related websites.          
We are planning direct mail and telemarketing campaigns, and will offer general
informational on it outreach to all interested groups. Additionally, we are developing a
prospect database of persons who may be interested in making a financial contribution
and/or giving their time as volunteers.

2.5 PRICING STRATEGY

Being a business, selling price or in this case the cost of offering the products will be
calculated at 3 times the daily expenditure for the cost centre. This will enable the
business make a third of the savings and use two thirds of the income on loan repayment
and managing daily expenditures.
The exact pricing will therefore dependent on the service being offered though most
products will be offered at costs affordable to the locals. There will be no credit terms
allowed though discounts will be offered to members who make prepayments for
services. This will ensure that the business meets its targeted monthly income as defined
in the financial plan.

2.6 SELLS TACTICS

In terms of selling, entrepreneur go ahead by selling its products indirectly, it means that
the location of Bee keeping will be based at it someplace where it’s product will be sold,
it entrepreneur had already taken them but it is still under business.
Due to the selection place where business will capture the customers the entrepreneur
distributors will employ individuals to sell the honey in the bottles to individual
customers. This will enable entrepreneur to market its business even for those people who

12
are leaving in remote areas to be aware of the beehive business because its products is of
good quality and its price is negotiable.

2.7 DISTRIBUTION STRATEGY

The entrepreneur decided to utilize its distribution channel which is it supplying honey to
schools, wholesale shops and retail shops. The owner will have to employ individuals
who will distribute the honey by dropping them in the shops, schools and other corner
stops where the farm has been selling the honey to. This method of selling it products
indirectly will minimize competition and business will be in a position of earning much
money as compared to other honey making farms which are barriers of company to its
business.

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 CHAPTER THREE

3.0 ORGANIZATIONAL/MANAGEMENT PLAN

3.1MANAGEMENT TEAM

The management explains how the business will be coordinated to accomplish its
objectives. It shows the organization structure of the business and identifies key
management personnel and other personnel expected to be employed. It also indicates the
expected compensation plans for the employees.
Organizational Structure
The organization will be headed by the board of directors who will mainly serve as the
advisory committee but all the affairs of the organization will be under the executive
director who is the business proprietor assisted by the operations and marketing managers
who form the key business managers.

Fig 4.1 Organizational Structure

Manager

Operations Manager Marketing Manager

Coordinator

Honey checker Store Keeper

Collector of honey

Cleaner

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3.1.1 KEY MANAGEMENT PERSONNEL

Manager
Qualifications:
(i) Diploma in agriculture science
(ii) Diploma in Business Administration would be an added advantage.

Responsibilities:
(i) Advice and report to the board on operations of the business.
(ii) Carry out executive roles of the company.
(iii) Oversee daily organizational operations.
(iv) Project planning, and special events management.
(v) Working closely with each program coordinator.
(vi) Other roles include personnel management (recruitment, hiring,
training, evaluation and termination of staff) and together with the
Operations Director, develop and manage the annual budget for board
approval including necessary revisions.

Operations Director
Qualifications:
(i) Undergraduate degree in business management.
(ii) Diploma in human resource management.

Responsibilities:
(i) Assisting in personnel management
(ii) Development of administrative standards and procedures related to
personnel and staff development,
(iii) Supervision of staff.
(iv) Serve as liaison between staff and other members,
(v) Coordinate with the Executive Director to oversee activities including
grant applications, management of grants, special projects, fiscal
management, together with the manager,

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 (vi) Develop and manage the annual budget for board approval including
necessary revisions.
(vii) Oversee the preparation of the annual report of activities as well
as fiscal reports. Manage network finances and reporting, including
museum store coordinate work on annual audits.
(viii) Define priorities for all supervised staff.

Marketing Director
Qualifications:
(i) Undergraduate degree in Business Administration (BCOM, BA)
marketing option.
(ii) Diploma in marketing will be an added advantage.

Responsibilities:
(i) Coordinate all marketing activities including establish the marketing
budget with the executive director.
(ii) Create and implement marketing plan.
(iii) Develop marketing materials.
(iv) Advertising placement, membership management including establish
and maintain member and prospective member databases; 
(v) Produce renewal notices, special member mailings, publication and
distribution of the quarterly newsletter, website maintenance, direct
fundraising activities, coordinate volunteers, coordinate solicitation of
corporate and in-kind donations.

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3.2 OTHER PERSONNEL

Other Employees
Number of Employees 5
Job Titles: Store Responsibilities and Duties: Qualifications
Manager (i) Sales, retail display (i) Diploma in business
(ii) Balancing cash intake management / Accounting
and finance options.
(ii) 2 years’ work experience in
an office clerical duty in a
busy organization.
Job Titles: Honey Responsibilities and Duties: Qualifications:
Coordinator (i) Plans and executes the (i) Diploma in agriculture
honey collecting and science
making sure the work is (ii) 2 years’ work experience in
done related field in recognized
institutions.
Job Titles: Collector of Responsibilities and Duties: Qualifications:
honey (i) Collection of honey Qualifications:
when it is ready (i) Diploma in agriculture
science
(ii) 1 years’ work experience in
related field in recognized
institutions.
Job Titles: Cleaner Responsibilities and Duties: Qualifications:
(i) Making sure the bees are (i) Higher Diploma in cleaning
in good environment and sanitation
(ii) Make sure the store is (ii) Diploma in Environment.
clean and away from
bees

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3.3RECRUITMENT, TRAINING AND PROMOTION

3.3.1 RECRUITMENT

The business will be advertising the business through posters, public places and
newspapers (Saturday Nation). This will enable those people who have the potential and
capability of getting employed by the Beekeeping farm.

4.3.2 TRAINING
Workers will be given orientation before carrying out their duties because the expected to
know the actual tire they are supposed to be expected in the morning and it time to leave.
This will assist them when carrying out their duties and attain work properly without
expecting any correction because he is well trained. The employees will also be given a
chance of attending seminars and other on job training services

4.3.3 PROMOTION
Promotion of the employees in their jobs will be based on experienced and level of
education.

3.4 REMUNERATION AND INCENTIVES FOR PERSONNEL

The employees will be remunerated as follows.

Table 4.4 Remuneration
Personnel Plan
Year 1 Year 2 Year 3
Manager Kshs 10,000 Kshs 12000 Kshs 15000
Coordinator Kshs 6000 Kshs9,000 Kshs9,000
Store keeper Kshs 7000 Kshs 7000 Kshs 7000
Cleaner Kshs 6000 Kshs 6000 Kshs 6000
Honey collector Kshs 7000 Kshs 7500 Kshs 8000

Total People 6 6 6

Total Payroll Kshs 36000 Kshs 41500 Kshs 45000

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Employee will have a salary increase at the end of every year as indicated in the table
above to serve as an incentive to ensure that employees continue serving the organization
faithfully for the period of time that they will be working.
Management shall receive additional incentives of house and medical allowances of up to
10% of their total income per year.

3.5 LICENSES, PERMITS AND BY-LAWS

4.5.1 LICENSE
The business will be licensed by the Nakuru county council.
The business will be given a trading license showing that it is under production industry.
These licenses are supposed to be renewed after a year with a fee of 1200/=

4.5.2 PERMITS
The business will be expected to be given business permit from Nakuru county council
which it has been already fixed with a certain amount 4,000. This amount of money
should be paid in order to run regularly the business.

4.5.3 BY-LAWS
The business is supposed to be run as by the laws of the town council which cannot be
disturbed by other things which may arise. This means that the business should be
operated at a well located area and suitable to its position. The entrepreneur will be
expected to follow this law so as to run the business effectively.

3.6 OTHER SUPPORT SERVICES

4.6.1 BANKING SERVICES

The entrepreneur will open an account for the business so that his money will get save.
The account opening intends to handle all the finances of the business, therefore the
entrepreneur chose Kenya Commercial Bank to save and budget for his money well.

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4.6.2 INSURANCE SERVICES
The entrepreneur will have an insurance of his business for safety in case of any theft or
fire outbreak which may occur at any particular time. This will be APR insurance body.

4.6.3 LEGAL SERVICES

For the proper running of the business the owner intends to attain a legal adviser to
handle all the legal cases for the business.

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 CHAPTER FOUR

4.0 OPERATIONAL/PRODUCTION PLAN

4.1PRODUCTION FACILITIES AND CAPACITY

Bee keeping is a business which requires different type of facilities which will include
the following;
Equipment / Mode of Quantity Amount
Resources Acquisition (Kshs)
Timber(4ft) Brought 100 5,000
Bee hives Constructed 300 10,000
Store Constructed 1 12,000
Total 27,000

To acquire all this assets the following costs will be involved. Selling of honey and other
products costing Kshs. 2000 each month

4.2 PRODUCTION STRATEGY

 The farm will invest in human resource meaning it will hire competent
personnel to manage the farm. The activities of the organization are structured
in a way that the company could effectively operate if it has the right
personnel who understand children and their needs. For this reason, hiring in
the company will use a competence approach where all personnel hired will
have to prove ability to perform a task as this is forms the basis of effective
organization management.

 The capacity in this case will refer to the number of personnel required to
work at the farm. The farm structure proposed will be used to determine just
how many personnel will be required. 10 employees will be required for the
farm to be assumed to be working at optimal levels for the first 3 years or at
capacity. This will include the manager and employees of the farm

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  Other overheads that may be involved in operations of the farm will include
electricity, water cost and advertising costs. The table below summarizes costs
that the organization will incur during its operations.
Table 5.1 Production Strategy (Costs)
Start-up Funding
Start-up Expenses to Fund 20,000
Start-up Assets to Fund 10,000
Total Funding Required 30,000

Assets
Non-cash Assets from Start-up 10,000
Cash Requirements from Start-up 5,000
Additional Cash Raised 0
Cash Balance on Starting Date 5,000
Total Assets 20,000

Capital
Planned Investment
Founding family 20,000
Grants 3,000
Additional Investment Requirement 0
Total Planned Investment 23,000

Loss at Start-up (Start-up Expenses) (15,000)

Total Capital 8,000

Total Capital and Liabilities 25,000

Total Funding 33,000

22
Table 5.2 Other Expenses
Start-up

Requirements

Start-up Expenses
Machines 1,500
Water 1,100
Electricity 1,200
Insurance 1,000
Permit of selling 10,000
Total Start-up Expenses 14,800

4.3PRODUCTION PROCESS

 Production Steps - The production processes will mainly involve the integration
of all resources at the center to be able to render the services required. That is, the
human resource manpower and the children who will use the materials and other
facilities at the center to acquire knowledge.

 Main Features on offer: Our offerings will include a diverse range of changing
market on a rotated calendar basis, ensuring a fresh experience for even the most
frequent visitors. A key strategy for the museum is membership growth as a
means to drive recurring revenue. By extending a value proposition to our target
market in the form of comprehensive membership benefits, we expect to quickly
expand our membership.

 Features Affecting Production Process - Membership fees from general

admissions. Targeted advertising and networking throughout a very active local
community will allow us to focus on continually bringing first time attendees to
the Museum. Once inside, we will rely upon the dynamic environment and our
staff to spark interest in our programs and workshops. Print advertising during our
first year will be limited. We plan to distribute flyers through local community

23
 groups and specific customers that directly reach our initial target market. As we
expand our presence in the Soy Area, we will scale our advertising accordingly.

 Plans of minimizing impacts of external factors.

On-site marketing for workshops and special events is an economical and effective way
to generate revenue. By reaching attendees, we anticipate a high degree of interest and
participation in activities such as workshops and special events.

4.4 REGULATIONS AFFECTING OPERATIONS.

4.4.1 HEALTH REGULATIONS

The entrepreneur suggested having sure basic regulations which are the leak matters
which each member who is within the organization has to follow because is by law of
bee farm.
These regulations are:
1) Don’t smoke
ii) Safety regulations
Basing to the work which is done in bee farm to have safety material for example glove
approach also and even fire extinguisher in case of any fire break down. Gloves are going
to assist when handling and removal of honey combs

4.4.2 SAFETY
The safety measures of the employees will came first for everyone in Bee Keeping, bees
are violent animals therefore aprons and other safety clothes and mask will be provided
by the management.

4.4.3 ENVIRONMENTAL REGULATION

In promoting good environment whereby everyone is comfortable in the business and its
surroundings the business will ensure there are a lot of trees and flowers together with
water for the bees, also the compound shall be fenced to keep away the intruders and the
danger posters shall be put near the bee hives.

24
 CHAPTER FIVE

5.0 FINANCIAL ANALYSIS

The ratio of sales to inquiries of the bee keeping goods sold to date, while operating
within the outdoor honey selling, has been one in three. For the purposes of our sales
forecast, we are assuming that only one in five inquiries will actually result in a honey
ordered. This is a very conservative estimate.

However, the number of new inquiries generated by our promotional activity will also
build up during the year, gradually overtaking inquiries from the honey selling. This is a
trend we expect to continue. Based on the projection below, we are forecasting to sell
1000 kilos of honey next year.

5.1 PREOPERATIONAL COSTS

This are costs that this business will incur before the business becomes operational.
ITEM AMOUNT
Legal (Incorp., Permits, License) 1,500
Consulting Services 1,100
Leasehold Improvements 14,000
Stationery/Office Supplies 500
Advertising/Promotion 1,200
Website Design 1,700
Insurance 1,000
Rent 3,500
Security Deposit 7,000
Utilities (During Build out) 1,300
Signage 1,400
Other (Water and Electricity) 800
Total 35,000

25
5.2PROFORMA BALANCE SHEET

ITEM Opening Date …. End of Year 1 End of Year 2

Assets
Current Assets 14,000 15.000 16,000
Cash at hand + 10,000
3,000 13,000
Bank -
Debtors 10,000
9,000 19,000
-
Stock of Finished
-
Goods -
-
Stock of Work in
-
Progress -
-
-
Stock of Raw -
Materials -
-
Total Current
35,000 35,000
Fixed Assets 35,000
Machinery and
10,000 10,000
Equipment 10,000
Accumulated
Depreciation -
35,00
Total Fixed Assets 48,000 54,000
Liabilities 35,000 14,000 10,000
Current Liabilities 10,000 5,000 4,000
Creditors 4,000 4,000 -
Total Current
Long-term 35,000 35,000 35,000
Profit 111,900 120,000 150,000
Others - - -
TOTAL 49,000 23,000 14,000
LIABILITIES

26
5.3 WORKING CAPITAL

As at 2015
Item Year 1 Year 2 Year 3
Stock of raw Materials 7,000 12,000 5000
- - -
Stock of Materials in Progress

Stock of finished Goods

- - -
Debtors
20,000 7,000 10,000
Cash at Hand and in Bank

Creditors
10,000 5,000 15,000
Total 37,000 24,000 30,000

Assumptions
Assuming all the proposed financing is availed at the beginning of every trading year and
no other expenses are incurred.

27
5.4 PROJECTED CASH FLOW FOR YEAR 1

Particulars Jan Feb March April May June July Aug Sept Oct Nov Dec Total
Bal B/F 200000 44500 68500 100000 73300 100800 92800 88400 129000 14200 55200 158050 1124750
Cash Sales 60000 65000 70000 80000 100000 100000 70000 100000 80000 100000 100000 90000 1015000
Loan 50000 40000 20000 10000 5000 2000 1000 10000 10000 50000 15000 168000
Debits 20000 25000 30000 40000 50000 60000 70000 100000 90000 70000 90000 5000 695000
Total Received 330000 174500 188500 230000 228300 262300 233800 288400 309000 194200 295200 268050 3002750
Cash Outflow
Cash Purchases 50000 40000 50000 30000 45000 30000 20000 30000 40000 30000 35000 20000 379500
Creditors Paid 60000 50000 50000 40000 30000 60000 30000 40000 30000 20000 40000 20000 470000
Wages/Salaries 70000 70000 70000 70000 70000 70000 70000 70000 75000 70000 70000 70000 845000
Rent 10000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 21000
Telephone 1000 1000 500 1000 800 1000 500 500 1000 500 500 500 88000
Water 500 500 500 500 500 700 400 400 500 500 550 500 6050
Electricity 500 500 500 500 700 500 500 500 500 500 600 500 6300
Stationary 5000 5000 5000 5000 5000 5000 30000
Transport 3000 3000 3000 3000 3500 4000 3000 3000 3000 2000 3000 2000 35500
Postage 1000 1000 1000 1000 1000 5000
Repair 1000 1000 1000 1000 1000 1000 6000
Insurance 8000 8000 8000 8000 8000 8000 9000 8000 8000 7000 8000 8000 96000
Drawings 500 500 1000 200 12000
Interest 1000 1000 1000 1000 4000
Taxes 2000 2000 2000 2000 2000 2000 4000 5000 2000 2000 2000 2000 29000
Total Payments 285500 106000 192000 156700 127500 170000 145400 159400 167000 139000 137150 132000 1954150
Net Cash flow 44500 68500 -3500 73300 100800 92800 88400 12900 142000 55200 158050 136050 10486000
PROJECTED CASH FLOW FOR YEAR 2

Particulars Jan Feb March April May June July Aug Sept Oct Nov Dec Total
Bal B/F 104860 892100 570100 513100 456600 430900 427000 144200 22500 26500 95300 235600 4752500
0
Cash Sales 50000 60000 70000 70000 80000 85000 90000 100000 10000 120000 140000 90000 96500
Loan 10000 5000 3000 5000 100000 20000 30000 10000 93000
Debtors 20000 30000 40000 45000 45000 50000 60000 70000 80000 90000 45000 30000 605000
Total Received 112860 987100 683100 633100 581600 575900 577000 154200 145500 236500 280300 255600 6238500
0
Cash Outflow
Cash Purchases 70000 80000 50000 60000 50000 40000 300000 20000 10000 30000 40000
78000030000
Creditors Paid 50000 40000 90000
Wages/Salaries 80000 60000 70000 70000 70000 75000 75000 75000 75000 75000 80000 70000 875000
Rent 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 120000
Telephone 1000 900 1000 1000 1000 1000 900 800 700 1000 1000 1000 11300
Water 500 500 600 600 600 600 500 500 400 700 700 600 6800
Electricity 500 600 600 500 400 700 800 700 500 500 600 700 7100
Stationery 500 500 500 600 700 800 3600
Transport 3000 5000 3000 2000 2000 6000 5000 4000 2000 3000 3000 4000 41000
Postage 2000 2000 2000 4000 3000 2000 15000
Repair 1000 1000 200 600 200 300 700 1000 600 500 6100
Insurance 8000 8000 8000 8500 8000 8000 8000 8000 8000 8000 8000 8000 96500
Interest 4000 2000 1000 1500 4000 3000 15500
Rates 10000 10000 8000 12000 6000 8000 8000 8000 8000 8000 8000 7000 101000
Total Payments 236500 417000 170000 176500 150700 143900 432800 128700 119000 141200 154700 134800 2168900
Net Cash Flow 892100 570100 513100 456600 430900 427000 144200 22500 26500 95300 125600 120800 4069600

27
Particulars Jan Feb march April May June July Aug Sept Oct Nov Dec Total
Bal B/F 406960 395060 395110 394650 399440 407530 413870 419610 424930 411710 414070 414670 4897610
0 0 0 0 0 0 0 0 0 0 0 0 0
Cash Sales 50000 60000 70000 80000 90000 100000 120000 140000 13000 90000 70000 80000 963000
Loan 10000 5000 15000 20000 30000 40000 50000 25000 10000 50000 20000 255000
Debtors 30000 60000 70000 80000 75000 65000 50000 40000 30000 20000 80000 75000 685000
Total 415960 407560 410610 412650 418940 428030 435870 440110 430230 427710 429070 432170 5080910
Received 0 0 0 0 0 0 0 0 0 0 0 0 0
Cash Outflow
Cash 40000 30000 70000 45000 20000 15000 25000 30000 60000 25000 30000 30000 420000
Purchases
Creditors Paid 20000 20000 15000 10000 10000 5000 20000 25000 30000 20000 20000 20000 215000
Wages/ 50000 50000 50000 55000 60000 60000 70000 70000 70000 65000 62000 80000 742000
Salaries
Rent 1000 10000 10000 10000 10000 10000 10000 12000 10000 10000 10000 15000 127000
Telephone 500 500 600 600 600 600 600 300 400 500 400 400 6000
Water 400 400 400 400 400 400 400 400 400 400 400 400 4800
Electricity 600 600 600 600 600 600 600 600 600 600 600 600 7200
Stationery 1000 1000 1000 1000 500 600 5100
Transport 2000 2000 2000 2000 1500 1500 1500 1500 1500 1500 1000 1000 100000
Postage 500 1000 500 2000 500 500 500 5500
Repair 1000 1000 1000 500 200 600 800 900 700 600 7300
Insurance 80000 7000 6000 5000 5000 5000 5000 6000 6000 7000 7000 8000 86700
Taxes 3000 3000 3000 3000 4000 5000 5000 5000 5000 5000 5000 5000 51000
Total 209000 124500 159600 132100 114100 141600 162600 151800 185200 136400 144000 166900 1827800
Payments

28
 PROJECTED CASH FLOWFOR YEAR 3

Net Cash 395060 395110 394650 399440 407530 413870 419610 424930 411710 414070 414670 397980 4888630
Flow 0 0 0 0 0 0 0 0 0 0 0 0 0

29
5.5 INCOME STATEMENTS

Item Year 1 Year 2 Year 3

Sales 135,000 145,000 200,000

111,000 60,000 100000

Cost of Goods Sold
Gross Profit 24,000 85000 100000

Expenses
170,000
Wage/ Salaries 170,000 170,000
42,000
Rent 42,000
42,000
4,800
Water 4,800
4,800
4,800
Telephone 4,800
4,800
3475
Electricity 3475
3475
1800
Advertising 1700
1526
1800
Postage 1500
1075
1500
Stationery 1600
1452
5000
Transport 7500
6800
600
Repairs 500
1095
1000
Interest 1000
1000
Total Expenses 252,600 237,875 236,775
Profit Before Tax 111,900 120,000 150,000
Tax Provisions 10% 10% 10%
(- %)
Net Profit After 100,710 108,000 135,000
Tax
5.6 BREAK EVEN POINT

1. Contribution Margin = Total Sales - Variable Costs

= 99,808

2. Contribution Margin = Contribution Margin X 100

Total Sales
70,000 * 100 = 70.13%
99,808

3. Total Fixed Costs (Expenses for Year 1) = Kshs252,600

4. Break – Even Point (Sales ) = Fixed Costs X 100

Contribution Margin & % Age

252,600 = 36.01
70.13 * 100

5.7 PROFITABILITY RATIOS

Ratio Type Working Formula Year 1 Year 2 Year 3

Gross Profit Gross P * 100 111,900 * 100 120,000 * 100 150,000 * 100
135000
145,000 200,000
Ratio Total Sales (82.9%)
(82.7%) (75%)

Return on Net Profit after tax * 100 100,710 *100 108,000 * 100 135,000 * 100
Owners’ Equity 35,000 (287%)
35,000 (308.5%) 35,000 (385.7%)
Equity
Return on Net Profit after Tax *100 100,710 * 100 108,000 * 100 135,000 * 100
Total Investment 70,000
Investment 70,000 (154%) 70,000
(143.9%)
(192.8%)

29
5.8 DESIRED FINANCING

Item Amount
Pre-operational Costs 35,000
Working Capital 42,000
Fixed Assets 14,000
Others (Specify) -
Total Financial Requirements 91,000

5.9 PROPOSED CAPITALIZATION

Item Amount
Pre-operational Costs 35,000
Working Capital 30,000
Fixed Assets 5,000
Others (Specify) -
Total Investment 70,000

30