BUSINESS PLAN

FOR

CYNJEP LAND CONSULTANCY

FIRM

P.O Box 18396 – 00100

Nairobi – Kenya
Northern Bypass.

By

JEPKEMEI CYNTHIA MELI

Reg No:
Presented to

Bachelor of Science in Land Administration

November, 2017
.
TABLE OF CONTENTS

DECLARATION.........................................................................................................................1
ACKNOWLEDGEMENT...........................................................................................................3
DEDICATION............................................................................................................................4
TABLE OF CONTENTS............................................................................................................5
EXECUTIVE SUMMARY.........................................................................................................6

CHAPTER ONE
BUSINESS DESCRIPTION ....................................................................................... 1

1.1 Business Name ......................................................................................................... 1

1.1.1 Vision & Mission Statement ......................................................................... 1
1.2 Business Location and Address ............................................................................... 1
1.3 Form of Business Ownership................................................................................... 1
1.4 Type of Business ...................................................................................................... 1
1.5 Product(s)/Service(s)................................................................................................ 2
1.6 Justification of Business Opportunity ...................................................................... 2
1.7 Industry Analysis..................................................................................................... 3
1.8 Business Goals/Objectives ....................................................................................... 4
1.9 Entry and Growth Strategy...................................................................................... 4
CHAPTER TWO
MARKETING PLAN.................................................................................................. 6

2.1 Customers ................................................................................................................ 6

2.2 Market Share ............................................................................................................ 6
2.3 Competition Analysis............................................................................................... 7
2.4 Advertising and Sales Promotion............................................................................. 9
2.5 Pricing Strategy ...................................................................................................... 10
2.6 Sales Tactics........................................................................................................... 10
2.7 Distribution Strategy .............................................................................................. 11
CHAPTER THREE
ORGANIZATION AND MANAGEMENT PLAN................................................. 12

3.1 Business Manager and Qualifications.................................................................... 12

3.2 Key Personnel........................................................................................................ 13

3.3 Recruitment, Training and Promotion ................................................................... 13

3.4 Remunerations and Incentives ............................................................................... 14

3.6 Support Services
OPERATIONAL/PRODUCTION PLAN ............................................................... 16

4.1 Operational/Production Facilities.......................................................................... 16

4.2 Operational/Production Strategy ............................................................................ 17
4.3 Production/Operational Process............................................................................. 19
4.4 Government Regulations Affecting Operations/Production Process ..................... 20

CHAPTER FIVE
FINANCIAL PLAN ................................................................................................... 21

5.1 Pre-Operational Costs............................................................................................ 21

5.2 Working Capital Estimation .................................................................................. 22
5.3 Projected Cash Flow Statements ............................................................................ 23
5.4 Pro-Forma Income Statement................................................................................ 26
5.5 Pro-Forma Statement of Financial Position........................................................... 27

5.6 Break-Even Point Calculation................................................................................ 28

5.7 Profitability Ratio Analysis.................................................................................... 30
5.8 Desired Financing.................................................................................................. 31
5.9 Proposed Capitalization......................................................................................... 31
APPENDIX 1.............................................................................................................. 32
DECLARATION
I hereby declare that this Business plan is my original work and has not been
presented in any other university for examination or award of any other degree

Signature:…………………………………Date: …………………………………
Jepkemei Cynthia Meli Reg No. 111/05015

Supervisor Approval.

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

ACKNOWLEDGEMENT
I thank the Almighty God for granting me strength to develop the plan. I also
acknowledge my friends and my sisters for the ideas.

To my supervisor ………………. I say thanks for great advice and guidance

throughout the writing.
DEDICATION

I dedicate this business plan to my lovely sisters your discussions, ideas and
support was key in achieving this plan. May it be realized in the near M future?

EXECUTIVE SUMMARY

The name of this business is CYNJEP land consultancy firm and its vision is “To provide
effective and efficient land services that ensure real-time solutions for land problems in

Kenya”. It is located in Nairobi city along Northern Bypass, Neema Plaza, and 2 nd floor Room
21.

The Business address is

CYNJEP LAND CONSULTANTS

Post Office Box 18396 - 00100,
Email: info@cynjeplandconsultancts.com
Telephone: 0726087465 www.cynjeplandconsultants.com
CYNJEP land consultancy firm is a sole proprietorship business. The main objective is to
provide effective and efficient consultancy services to matters related to land. This is achieved
by offering advisory services to clients on issues relating to land registration, land valuation,
land use, transfer and sale of land hence connecting the clients to right pathway to resolving
land matters. Some of our products include: Developing sale agreements for client
selling/buying land; Consultancy services on contracts for sale and bank credit financing;
Provide land intelligence; and Consultancy on conveyancing.

Our clients range from individuals, groups, cooperate institutions, companies and the county
and national government.

We realize that marketing is essential in growing the venture. Strategies to ensure we reach
out to our clients have been developed. They include hosting of mobile offices to other urban
areas outside Nairobi County quarterly every year. Advertising plans have also been identified
to create awareness to the public in which the venture targets to enjoy a market share of 40%.
The marketing plan is aimed at ensuring that needs of our clients are met by the products we
offer and that clients access the services with ease and in time.
Organization of the business entails of the consultants and the support staff. The owner of the
business will be The General Manager and full-time consultant and other consultants i.e. the
surveyors, planners, valuers, environmentalists and socialists would be sourced where need
be. The support staffs include a Secretary General and an Administrator. Operation permit
for the business will be acquired from the County Council offices and an incorporation license
from the Institution of Surveyors of Kenya. Banking services will be provided by Kenya
Commercial Bank – Moi Avenue Nairobi Branch.

The venture will seek to simply operations to access of our consultancy services and products
at the main office. The application of open office policy and warm welcome by our staff will
enhance timely access and response our clients‟ needs. Relevant communication and delivery
of services will seek to satisfy the expectations of the clients.

The financial plans show the growth and life of the venture. Projections are based on the
industry analysis. The success of the venture is determined by delivery of relevant services
and products to our clients and innovations in our products to meet current needs in the
market. The initial start-up capital will cost Kshs 500,000.00. This will be sourced from
personal savings, contributions from friends and family members. Further details and financial
projections are covered in chapter five of this document.

CHAPTER ONE BUSINESS DESCRIPTION

1.1 Business Name
The name of this business is Land-Administration Consultancy Firm.
1.1.1 Vision
To provide effective and efficient land services that ensure real-time solutions for land
problems in Kenya.

Mission Statement

To provide relevant solutions to matters land through advising our clients on the best modern
concepts and technologies to use, and providing services in land registration transfer and
conveyancing.
 1.2 Business Location and Address
Land-Administration Consultancy Firm is located in Nairobi county long Northern Bypass,
Neema Plaza, 2nd floor Room 21, Post Office Box 18396 – 00100, Email:
info@cynjeplandconsultants.com, Telephone: 0727342508 www.cynjeplandconsultants.com

1.3 Form of Business Ownership

The CYNJEP land Consultancy Firm is a sole proprietorship business. This venture will take
an investment of Kshs.500, 000.00 in form of shares with a portion of this coming from my
personal savings. The remaining money will be sourced from friends and families.

1.4 Type of Business and commencement date

This business is concerned with offering advisory services to clients on issues relating to land
registration, transfer and sale of land hence connecting the clients to right pathway to
resolving land matters. This is achieved through our products and services.

The business is set to open on 1st of January 2021

1.5 Product(s)/Service(s)

i. We offer the following services to our clients;

ii. Check the authenticity of land ownership documents.

iii. Facilitating official search for land to establish the legal ownership details for the land.

iv. Developing sale agreements for client selling/buying land.

v. Consultancy services on contracts for sale and bank credit financing
vi. Provide land intelligence
vii. Consultancy on conveyancing.

viii. Facilitating registration of titles of sub-divided land previously owned by one person or
many people.

ix. Consultation advisory on land adjudication and resettlement ix) Policy advisory on

x. Modern approach to managing land using modern information technology systems.

1.6 Justification of Business Opportunity
Land is an emotive agenda in our country Kenya. Majority if not all Kenyans desire to own a
plot or a parcel of land somewhere in the country side and where possible to have a house in
the urban centers. The current trend is the rise of the booming industry of real estate. In the
media there are many advertisements on companies and Sacco’s selling plots and houses all
over Kenya. At the same time there are many brokers who are engaged in the land transactions
and they are increasing each day.
Recently, there have been numerous cases of land grabbing by the popularly known „private
developers‟ are causing the political divides to throw blames to one another. The grabbed land
in many instances has ended up being sold as plots to innocent citizens whom later fall victims
of the saga. An example is the case of Syokimau land saga. It happened that some unknown
people grabbed land belonging to the Jomo Kenyatta International Airport and sold to
innocent citizens who developed the estate.

Before long, the Airport management raised issues over the estate and demolitions happened
living the plot owners in tears despite having titles for the plots. Other incidents include the
grabbed land at Langat Primary School which was rescued through government intervention
and the Lamu land saga whose case is ongoing; these are among many disputes relating to
land experienced recently.
This business is meant to provide the best advice on land matters and
corresponding relevant services to prevent further emotional and financial
damages to the many people willing to do transactions related to land. Reliable
advisory and services will save them who fall victims to conmen/women. The
venture also seeks offer advisory services to the government and other relevant
bodies in matters relating to land and its management in the modern era.

1.7 Industry Analysis

The proposed venture will run under Lands. In steering the country towards
achieving the vision 2030, the private sector operations are of greater stake.
According to the Economic Survey report of 2014, Real estate, renting and
business services contribute 4.1% of the Gross Domestic Product. The trend
from previous years shows that the sector has been declining; however this
could change for better and grow in the years to come. This has been enhanced
by the establishment of Kenya Investment Authority. Starting a business in
Kenya has been made easier and registration procedures clarified to the public
(KNBS, 2014). This venture will offer consultancy services to real estate sector
and other land related industry.

1.8 Business Goals/Objectives

The main objective of this business venture is to provide relevant consultancy
services to matters related to land. The goals include both short term and long
term from the time of its establishment and the future ahead.

Short term
i) To offer services to individuals visiting the venture daily during the week.
This is in a range of 1-20 people. This is aimed to be achieved within the first
year.

ii) Offer land services i.e. surveying, valuation etc. to clients online via the
social media, the website and on telephone line. This is aimed to happen within
the first year.

Long term
i) Open more branches in others cities in Kenya. This is estimated to happen
after three years of establishment depending on the venture growth.
ii) Provide consultancy services to cooperate institutions and companies. This is
targeted to happen in and after the three years of establishment.
iii) Provide consultancy services i.e. surveying, valuation to the county and
national government. This is aimed to be achieved after five years or more upon
establishment.

1.9 Entry and Growth Strategy Market Entry

The business will advertise on various platforms to create awareness to the public
and enhance access to its premises and contact channels by target clients;

a) TV and Radio in the first three months and more depending on the budget.
b) The dailies and on bill boards.
c) Posters on commonly visited advertisement boards.
d) Using hand flyers and brochures.
e) Opening social media pages and forums and advertise.
Growth Strategy
The growth of the venture will be through savings on profits and income in the
first three years and further support finance from capital ventures. These funds
will be used to expand space of operation, hire more personnel and open new
branches. Other mechanisms will include;

- Offering free advice and charging the service for the first three months.

- Quarterly hosting mobile offices in major urban towns to reach clients outside
Nairobi.

- Conducting annual review of the business and market analysis to improve

service delivery to our clients.

CHAPTER TWO MARKETING PLAN

2.1 Customers
The CYNJEP land Consultancy Firm clients will range from individuals,
corporate groups, companies, the county governments and the national
government all within the republic of Kenya who need to are in need of land
related advisory and services.

Individual persons who require our services include the high, middle and low
income earners and trends in the industry show that due to the desire to finish
land related transactions, clients borrow or save towards the needed cost.
2.2 Market Share
The land sector has a number of consultancy firms. The current trend of
everyone rushing to own a plot, there is a greater market which is shared
among the various firms. The main competitors are Fortress Consulting,
Geoscan Consultants, Regal Real Estate Consultants, Rubyland Limited and
surrounding Law firms. This venture aims to meet 30% of the market and the
remaining 70% will be shared among the competitors. The pie-chart below
represents this in relation to other competitors.

2.3 Competition Analysis

There are four main competitors

1. GEOSCAN CONSULTANTS COMPANY LIMITED
P.O. Box 38799-00600
NAIROBI KENYA
It was established in 1998 and offers specialist consultancy on all aspects of
works surveying, construction works and environmental management to
government departments, private individuals, parastatals, development
agencies, non-governmental and community based organizations. It is located
in Harambee Avenue NHC House, 2nd floor Room213A which is within the
central business district of the city.

Strengths and weaknesses

This company is strong in offering surveying services and has a boost from
experience of the years of its existence. It has minimum experience on services
involving land adjudication, registration and conveyancing.

2. REGAL REAL ESTATE CONSULTANTS

Parklands
Nairobi, Kenya.
It is a professional firm in Kenya specializing in property Management,
Valuation, Real Estate Agency and Investment. It is located in the out scats of
the central business district of the city.

Strengths and Weaknesses

This firm deals majorly with the sale of apartments, property management and
valuation. It operates under the provisions of the Valuers Act Cap 532 and
therefore limited to the Act. Other services in the industry it is not capable of
delivering including conveyancing, surveying and advisory on land
registration.
3. FORTRESS CONSULTING
Theo vision international Compound Galana
Road Nairobi.

It is real estate firm specializing in Real Estate consultancy. It has been in the
market for some time. It aims at satisfying the people on matters involving real
estate. This firm is located at upper hill along Galana road in the out scats of
the Nairobi central business district.

Strengths and Weaknesses

The company is majorly involved in sale of property within the country. It
therefore has limited experience on land registration and surveying which
limits its scope of consultancy in line with land and ownership.

4. RUBYLAND LIMITED
View Park Towers,
11th Floor Nairobi.
The company mission is to preserve and maintain human habitations i.e.
ensuring every place where humans dwell is taken care of property
maintenance; corrective a key component of property management as it
enhances the economic life of a property. It is located within the central
business district along the university way. Current projects include private
feasibility studies for sites in Nairobi, Kiambu and marketing of Marionettes in
Sosian Estate.

Strengths and Weaknesses

Rubyland focus on conducting feasibility studies of land and marketing/sale of
properties within the country. It is possible that the company has minimal
experience on land adjudication, land registration and surveying.

Competitive advantage of Land-solutions Consultants

Location of this venture is at the central business district in premises commonly
known by persons getting into the city Centre. The location is central in
comparison to other competitors who are situated in the out scats of the CBD.
The products and services offered by our professionals cut across the real
estate, surveying, conveyancing and land registration. This enables quality and
one stop solutions for land matters. There is the provision to acquire part-time
professionals to provide other relevant land related services such as valuation
and environmental assessment when needed. This will ensure our clients of
total advisory and solutions.

2.4 Advertising and Sales Promotion

Land-solutions consultancy will use the following methods to advertise to its
customers;

a) TV and Radio in the first three months and more depending on the budget.
KTN, NTV, K24, Citizen TV and Classic 105 FM which are highly tuned
Television and radio station.

b) The Daily Nation, The Standard and People Daily newspapers and on bill
boards along main roads.

c) Posters on commonly visited advertisement boards.

d) Using hand flyers and brochures.
e) Opening facebook page, twitter handle, instagram account and advertise on
these platforms.

Promotion for the products and services will be done as follow;

- Offering free advice and charging the service for the first three months. -
Quarterly hosting mobile offices in major urban towns to reach clients outside
Nairobi.

2.5 Pricing Strategy

Pricing of our consultancy products and services is influenced by the
government policies in the country, existing professional fees, cost of labor
where applicable and competition with other members in the industry. The
consultation fees are determined using the magic formula.

Labor Costs + Overheads + Profit = Daily Fee Revenue.

This venture being new in the market it will grant all our clients 5% discount
on all services for the first three months. This is to attract customers and build
the business within the market.
2.6 Sales Tactics
Our primary sales will be through our advertisement platforms. Clients we
receive we will work towards meeting their needs and walking with them at
every step to create a good relationship that would enhance possible referrals.
They will be contacted through mail and using a mobile short text service sms
to inform them when the product is ready. Hand flyers will be available to
clients free of charge to inform them more on what we do.

We will establish a website where we will be listing our services and products.
On the site we will have our contact details which will be open during the
working hours. Our social sites will be open and active to any clients who seek
to receive our services. Monthly we will be publishing educative contents in
line with our services to inform the public on trends and knowledge in the land
sector. This is aimed at enabling possible clients to decide on seeking our
services.

We look forward to having annual quarterly mobile offices in major towns

where we will seek to reach out more clients outside Nairobi. During these
open days, clients will have discounted services and will receive free education
on matters relating to land. This will add the number of clients and at the same
time opening up our market to a bigger extend.

2.7 Distribution Strategy

In ensuring that our services and products reach our clients, this venture will
employ direct distribution channel. This is by directly serving our clients who
visit our premises and also via our online contact platforms.

Challenges
We anticipate a few challenges in distributing our products and services:
a) A challenge in not being able to reach out our clients who are far away one-
on-one.

b) We expect to face challenges of website hackers.

c) Communicating with clients online we expect a challenge in establishing real
clients and persons posing as clients but with ill motives.

Solutions
a) We will allow comments and recommendations from our clients and where
possible visit the areas where we are highly invited to go.

b) Our website will be hosted by highly qualified IT Company which will shield
us from possible hackers.

c) We will seek to grant best customer relation to all who contact us and they
must follow or terms and conditions before they are served.
CHAPTER THREE ORGANIZATION AND MANAGEMENT PLAN
3.1 Business Manager and Qualifications
The owner of the business will be the manager. The manager is required to be a
Master’s Degree holder in Land Administration, a degree in Leadership and
Management is an added advantage; has to be a registered Land Manager by
Institution of Surveyors of Kenya (ISK) Land Management Chapter. The
manager needs to have a minimum 5 years of experience in Land
Administration and Management in Kenya. The manager is the overseer of the
business and the full-time consultant. He will supervise the rest of the
personnel in the business that is answerable to him.

CYNJEP land Consultants will have one department at the start and this would
increase accordingly in line with growth of the business - Administration
Department. The department will be supervised by the Manager who is the
overall head of the business.
 Manager

Administrator

General Secretary General Administrator

3.2 Key Personnel

The business will require the following personnel to enhance its operations and
effectiveness in service delivery.

Secretary General. He/she is required to have done and passed K.A.T.C I and
II from a recognized government institution. He/she also needs to hold a
certificate in secretarial course. Any experience in secretarial duties and
accountancy will be an added advantage. Key duties and responsibilities will
be: Keeping books of account; preparation of invoice to clients; recording
minutes during meetings; and recording client’s requests for services.

Administrator. He/she needs to have a certificate/diploma front office

management. He/she need to be fluent in speaking English and Swahili and
good customer relations. Key duties and responsibilities include: general office
management; Receiving calls from clients and giving feedback; and in charge
of the reception.

3.3 Recruitment, Training and Promotion Recruitment

The vacant position/s will be advertised in the Daily Nation newspaper. The
notice will indicate the minimum academic requirements, skills and experience.
It will also contain channel of application, relevant contact details and the
deadline for application.

Upon lapse of the deadline, the manager will shortlist qualified applications
and the persons will be contacted to inform them of the date to appear for
interview. Successful candidates will be given letters of admission with a date
of reporting to work.

Training
All new staff will receive orientation training to induct them into the operations
of the business. Thereafter they will be deployed in their work stations.
Biannually all staff will be trained in an organized forum by experts in the
industry to boost their skills and improve the business operations.
Promotion
All employees will have an opportunity to be promoted as the business grows.
Promotions will be done with consideration of the years of experience at the
business and accruing performance record. Performance appraisals will be
done annually and promotions considered after every three years and where
necessary in line with the growth of the business.
3.4 Remunerations and Incentives
JOB TITLE BASIC ALLOWANCES TOTAL
SALARY MONTHLY
SALARY
1
General 15,000 Transport – 25,000
Manager 3,000
Medical – 1,500
House – 5,000
Airtime - 500
2 Secretary 5,000 Transport – 11,250
General 2,000
Medical – 1,000
House – 3,000
Airtime - 250
 3
Administrator 4,000 Transport – 10,250
2,000
Medical – 1,000
House – 3,000
Airtime - 250
TOTAL 46500

3.5 Licenses, Permits and By-Laws Licenses

A Certificate of incorporation will be acquired from Institution of Surveyors of
Kenya as Land management consulting firm.

Permits
Business permit will be acquired from Nairobi county Council at a cost of Kshs.
5,000 renewable annually.
By-laws
The following by-laws apply to businesses within Nairobi City County area of
jurisdiction.

i) Any person carrying out business must obtain a business permit by 31st of
March of current trading year or may be guilty or an offense.

ii) Any person authorized by the Town Clerk may enter your premises at any
time to inspect or inquire if the conditions attached to the permit are being
observed.

3.6 Support Services

The business will source the support services as follows;
Banking Services
The business will open a savings account with Kenya Commercial Bank– Moi
Avenue Nairobi Branch, to bank and save the finances for the business.

Postal Services
GPO
Post Office Box 18396– 00100
Insurance Services
Land-administration Consultancy firm will be insured against fire and theft
with APA Insurance Company.

CHAPTER FOUR

OPERATIONAL/PRODUCTION PLAN
4.1 Operational/Production Facilities

SN FACILITY QUANTITY COST/UNI TOTAL

REQUIRED T COST
1 Desktop 3 15,000 45,000
Computer
2 Tables 2 4,500 9,000
Category I 1 6,000 6,000
Category II
3 Printer 2 15,000 30,000

4 Chairs 1 2,500 2,500

Grade A 2 1,800 3,600
Grade B
5 Water 2 6,000 12,000
Dispenser

6 Shelves 3 1,500 4,500

7 Books of 3 1,000 3,000

Account
8 Rubber Stamp 2 2,000 4,000

GRAND
TOTAL
119,600

The business premises layout

The office layout will have three rooms. The front room will be the reception
and waiting area and adjacent room will be for the secretary/accountant and
the back room will be for the manager.

4.2 Operational/Production Strategy

The business in working towards minimization of costs, near the entrance there
will be placed a sign board for the name of the business to help direct the
clients. At the front street of the building there will be placed an overhead
hanging board will the name of the business, the floor and room number. This
will be for attracting clients to the business as well as directing those searching
for the business office.

The following are various items of monthly production costs the business will
experience:

a) Monthly Cost of operational materials

Item Amount (Kshs)

Printing 1,000
Papers ( 2
reams)
Stationery (Pens, Files, Staples, 2,000
Books)

Total cost of materials 3,000

b) Monthly Cost Of Labour

Job title Total monthly salary

Manager 25,000
General Secretary 11,250
General Administrator 10,250

Total cost of labour 46,500

c) Monthly Overheads costs
Item Amount (Kshs)
Electricity bill 3,000

Telephone Services 3,000

Internet service 5,000

Rent 20,000

Advertising Cost 5,000

Water 1,000

Total overheads costs 37,000

d) Total cost of production per month

Item Amount (Kshs)

Cost of operational 4,000

materials 2,000

Cost of labour 46,500

Overheads costs 37,000

Total cost of 86,500

4.3 Production/Operational Process

Operational process at the office will involve four steps.

i) Reception

When a customer enters the premises, he/she will first be welcomed by the
receptionist. The client will be asked to briefly state the particular
service/product they need. In the event they want to go back there will be free
business brochures they can pick to read. Next the client will be given a note
directing the accountant to receive consultation fee from the client. The
receptionist will thereafter record personal details and the request on the Client
Request Book then advice the client to pay a standard consultation fee at
accounts desk.

ii) Payment of Consultation fee

The accountant will receive payment and issue a receipt to the client and direct
them to a waiting seat. The accountant will prepare a Request form and deliver to
the manager, then direct the client to proceed to the manager room. The form will
be indicating the service sought.

iii) Consultation
This will be done by the manager to the client. The client will be welcomed and
exchange of greetings done. Following is the discussion of the service the
client has come for and agreement on way forward done. Charges for the
service will be also stated and negotiated where applicable and the manger will
give the client a service form to take to the account for processing of an
invoice. In the event the client is not ready to receive any further service, the
manager will give to them company brochure and invite them again. 20

iv) Payment of Service

At the accounts desk the client will deliver the service form and be issued with
an invoice for the service. The client will be required to deposit 60% of the
service cost to start the process for the service requested and upon completion
pay the remaining 40%. For all payments received the client will be issued with
a receipt.
4.4 Government Regulations Affecting Operations/Production Process
The following are government laws and regulations that the business will adhere
to:

i) Tax Laws and Trade Laws

ii) Banking and Credit Laws

iii) Bankruptcy and Collateral

Laws

iv) Commercial and Company

Laws
 v) Labour Laws
vi) Civil Procedure Codes

CHAPTER FIVE

FINANCIAL PLAN

This chapter simply outlines how the finances will be utilized, analyzed and sourced.

1.1 5.1 PRE-OPERATIONAL COSTS

Item Amount (Kshs)

License and Business Permit 30,000

Rent 20,000

Electricity Bill 3,000

Telephone Installation 10,000

Computer Networking 5,000

Internet Service Connection 10,000

 Advertisement 20,000

Total pre-operational costs 98,000

1.2 5.2 WORKING CAPITAL ESTIMATION

The table below illustrates the working capital estimate for the first three months of
the business operation.

Item
1st month 2nd month 3rd month
Amount Amount Amount
(Kshs) (Kshs) (Kshs)

Salaries 46,500 46,500 46,500

Rent 20,000 20,000 20,000

Electricity Bill 3,000 3,000 3,000

Pre-occupational Costs 78,000 - -

Telephone Services 3,000 3,000 3,000

Internet service 5,000 5,000 5,000

Advertising Cost 5,000 5,000 5,000

Printing Papers ( 2 reams) 1,000 1,000 1,000

Stationery (Pens, Files, Staples, Books) 2,000 2,000 2,000

Water 1,000 1,000 1,000

Fixed Assets (Computers, furniture e.tc) 116,600 - -

Total working capital 281,100 86,500 86,500

GRAND
TOTAL 454,100
 1.3 5.3 PROJECTED CASH FLOW STATEMENTS

Projected Cash Flow Statements for the first three years of operation, 2016, 2017 and 2018.

Particulars Jan Feb Mar April May June July Aug. Sep Oct Nov Dec Total
CASH IN FLOW

Opening Balance
or balance b/f - 442,500 426,000 438,500 556,000 688,500 730,000 790,000 863,500 1,118,000 1,233,500 1,280,000

2,000,00
Cash sales 80,000 120,000 140,000 140,000 160,000 180,000 200,000 220,000 200,000 280,000 180,000 100,000
0
Owner’s equity 500,000 - - - 100,000 - - - 150,000 - - - 750,000

Any other source 100,000 100,000 50,000

- - - - - - - - - 250,000
(specify) (Friends) (Friends) (Friends)

TOTAL CASH

IN FLOW 680,000 562,500 566,000 678,500 816,000 868,500 930,000 1,010,000 1,263,500 1,398,000 1,413,500 1,380,000

CASH OUT FLOW

Pre-operational
costs 78,000 - - - - - - - - - - - 78,000
Salaries and 46,500 46,500 46,500 46,500 46,500 46,500 46,500 46,500 46,500 46,500 46,500 46,500 558,000
wages
Rent 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 240,000
Electricity 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 36,000

Water 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000

Stationery 2,000 2,000 2,000 2,000 1,000 2,000 2,000 2,000 2,000 2,000 1,000 - 20,000

Telephone 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 36,000

Internet Service 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000

Advertising 25,000 20,000 5,000 - - 5,000 - - 5,000 - - - 60,000

Insurance 30,000 - - - - - - - - - - - 30,000

Taxes @30% 24,000 36,000 42,000 42,000 48,000 54,000 60,000 66,000 60,000 84,000 54,000 30,000 600,000

TOTAL CASH OUT 237,500 136,500 127,500 122,500 127,500 138,500 140,500 146,500 145,500 164,500 133,500 108,500
FLOW

NET CASH FOR THE 442,500 426,000 438,500 556,000 688,500 730,000 790,000 863,500 1,118,000 1,233,500 1,280,000 1,271,500
MONTH
Assumptions made: Tax is 30% of total sales.

Particulars Jan Feb Mar April May June July Aug. Sep Oct Nov Dec Total

CASH IN FLOW

Opening
Balance
or balance b/f 1,271,500 1,255,575 1,328,650 1,366,225 1,564,800 1,620,375 730,000 790,000 863,500 1,118,000 1,233,500 1,280,000

Cash sales 150,000 225,000 210,000 190,000 200,000 220,000 270,000 250,000 225,000 250,000 190,000 120,000 2,500,000
Owner’s equity - - - - - - - - - -
150,000 100,000 250,000

TOTAL
CASH IN 1,421,500 1,480,575 1,538,650 1,706,225 1,764,800 1,840,375 930,000 1,010,000 1,263,500 1,398,000 1,413,500 1,400,000
FLOW

CASH OUT FLOW

Salaries and
wages 48,825 48,825 48,825 48,825 48,825 48,825 48,825 48,825 48,825 48,825 48,825 48,825 585,900
Rent 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 252,000

Electricity 3,150 3,150 3,150 3,150 3,150 3,150 3,150 3,150 3,150 3,150 3,150 3,150 37,800
Water 1,050 1,050 1,050 1,050 1,050 1,050 1,050 1,050 1,050 1,050 1,050 1,050 12,600

Stationery 2,000 2,000 2,000 2,000 1,000 2,000 2,000 2,000 2,000 2,000 1,000 1000 21,000

Telephone 3,150 3,150 3,150 3,150 3,150 3,150 3,150 3,150 3,150 3,150 3,150 3,150 37,800
Internet
Service 5,250 5,250 5,250 5,250 5,250 5,250 5,250 5,250 5,250 5,250 5,250 5,250 63,000
- - - - - -
Advertising 5,000 25,000 1,000 5,000 25,000 2,000 63,000

- - - - - - - - - - -
Insurance 31,500 31,500

Taxes @30% 45,000 67,500 63,000 57,000 60,000 66,000 81,000 75,000 67,500 75,000 57,000 36,000 750,000
TOTAL CASH 165,925 151,925 172,425 141,425 144,425 155,425 165,425 159,425 151,925 159,425 142,425 119,425
OUT FLOW
NET CASH FOR
THE
 MONTH 1,255,575 1,328,650 1,366,225 1,564,800 1,620,375 730,000 790,000 863,500 1,118,000 1,233,500 1,280,000 1,280,575

Assumptions made: Tax is 30% of total sales.

Particulars Jan Feb Mar April May June July Aug. Sep Oct Nov Dec Total

CASH IN
FLOW
Opening
Balance or 1,280,575 1,245,598 1,297,196 1,382,693 1,479,791 1,659,888 1,768,731 1,911,328 1,965,874 2,094,471 1,233,500 1,280,000
balance b/f

Cash sales 160,000 215,000 300,000 280,000 400,000 310,000 345,000 255,000 325,000 200,000 190,000 145,000 3,125,000

TOTAL
CASH IN 1,440,575 1,460,598 1,597,196 1,662,693 1,879,791 1,969,888 2,113,731 2,166,328 2,290,874 2,294,471 1,413,500 1,425,000
FLOW

CASH OUT
FLOW
Salaries and
wages 58,333 58,333 58,333 58,333 58,334 58,334 58,334 58,334 58,334 58,334 58,334 58,334 700,000

Rent 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 300,000

Electricity 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 45,000

Water 1,000 1,000 1,000 1,000 1,500 1,500 1,000 1,000 1,000 1,000 1,000 1,230 13,230

Stationery 2,000 2,000 2,500 2,000 1,500 2,000 2,000 2,000 2,000 2,000 1,000 1,050 22,050

Telephone 3,307 3,307 3,308 3,307 3,308 3,308 3,307 3,308 3,307 3,307 3,308 3,308 36,690
Internet
Service 5,512 5,512 5,512 5,512 5,512 5,515 5,512 5,512 5,512 5,515 5,512 5,512 66,150

Advertising 5,000 - 25,100 - 1,000 5,000 - 25,050 - 3,000 2,000 - 66,150

- - - - - - - - - - -
Insurance 33,075 33,075
Taxes @30% 48,000 64,500 90,000 84,000 120,000 93,000 103,500 76,500 97,500 60,000 57,000 43,500 937,500

TOTAL CASH
194,977 163,402 214,503 182,902 219,903 201,157 202,403 200,454 196,403 161,906 156,904 141,684
OUT FLOW
NET CASH
FOR THE 1,245,598 1,297,196 1,382,693 1,479,791 1,659,888 1,768,731 1,911,328 1,965,874 2,094,471 1,233,500 1,280,000 1,283,316
MONTH
Assumptions made: Tax is 30% of total sales.
 1.4 5.4 PRO-FORMA INCOME STATEMENT

Pro-forma Income statements of Land-solutions Consultants for the years ending 30 th Dec.

Particulars 30th Dec 2016 30th Dec 2017 30th Dec 2018

Sales 2,000,000 2,500,000 3,125,000

Less Cost of Sales - - -

Gross Profit 2,000,000 2,500,000 3,125,000

Expenses

Salaries and wages

558,000 585,900 700,000

Rent
240,000 252,000 300,000

Electricity
36,000 37,800 45,000

Water
12,000 12,600 13,230

Stationery
20,000 21,000 22,050

Internet Service
60,000 63,000 66,150

Telephone
36,000 37,800 39,690

Advertising
60,000 63,000 66,150

Insurance
30,000 31,500 33,075
Taxes
66,960 70,308 84,000

Total Expenses 1,118,960 1,174,908 1,369,345

Net profit before Tax 881,040 1,325,092 1,755,655

Tax (30% of Income) 264,312 397,528 526,697

Net Profit after tax 616,728 927,564 1,228,958

Assumptions made:

i) Sales grow @ 1.25 % per annum ii) Expenses grow @

1.05% per annum iii) Tax for income is 30%

1.5 5.5 PRO-FORMA STATEMENT OF FINANCIAL POSITION

The following is a Pro-forma Statement of Financial Position for Land-Solutions Consultants as start of
business, end of year 1 and end of year 2.

ASSETS Start End of year 1 End of year 2

Current Assets

Cash in Bank 100,000 616,728 927,564

Stationery 2,000 20,000 21,000

Total Current Assets 102,000 636,728 948,564

Fixed Assets

Furniture 25,600 22,400 19,600

Depreciation 12.5% 3,200 2,800

Computers & Printers 75,000 63,750 54,188

Depreciation 15% 11,250 9,562.5

Total Fixed Assets 100,600 86,150 73,788

TOTAL ASSETS 202,600 722,878 1,022,352

LIABILITIES

Current Liabilities

Total Current Liabilities

Long-term Liabilities

Owner’s equity 102,600 750,000 -

Friends Support 100,000 250,000 -

Retained earnings - 616,728 927,564

Total Long-term liabilities 202,600 1,616,728 927,564

TOTAL LIABILITIES & 202,600 1,616,728 927,564

EQUITY
Assumptions:

- Furniture depreciation rate is 12.5% annually

- Computers & Printers depreciation rate is 15% annually

1.6 5.6 BREAK-EVEN POINT CALCULATION

Break-Even point = Fixed cost

Percentage contribution margin

1.7 Variable costs

VARIABLE COST YEAR 1

Salaries & Wages 558,000

Telephone 36,000

Advertisement 60,000

Stationery 20,000

TOTAL 674,000

Contribution margin = total sales - variable cost

= 2,000,000 – 674,000

= 1,326,000

Percentage contribution margin = Contribution margin x 100%

Total sales

= 1,326,000 x 100%

2,000,000
= 66.3%
1.8

Fixed Costs

FIXED COST YEAR 1

Rent 240,000

Insurance 30,000

Electricity 36,000

Internet Service 60,000

License and Permits 30,000

Total 396,000

Break-even point = Fixed cost

Percentage contribution margin

= 396,000
1.9

66.3%

= 597,285.07
1.10
5.7 PROFITABILITY RATIO ANALYSIS
1.11

5.8 DESIRED FINANCING

This simply shows the amount you would wish to have for investment if everything worked out
as planned.

Item Amount (Kshs)

Pre-operational Costs 100,000

Working capital 500,000

Contingency funds 400,000

Total Desired Financing 1,000,000

1.11 5.9 PROPOSED CAPITALIZATION

The following is the proposed total amount invested in the business

Source Amount (Kshs)

Owner’s equity 750,000

Friends contribution 250,000

Total Investment 1,000,000

CHAPTER 1 : APPENDIX 1