lOMoARcPSD|6109995

OMoARcPSD|610999

JAYBIE
BAKERY

P.O. BOX 69-20406,

MLIPUKO.

TEL:+254710049664

E-MAIL:jaybiebakery@yahoo.com

NAME OF THE OWNER: JAMES BRIAN OMUSOLO

INDEX NUMBER 31515101080

COURSE : DIPLOMA IN INFORMATION COMMUNICATION TECHNOLOGY

PRESENTED TO : THE KENYA NATIONAL EXAMINATIONS COUNCIL

IN PARTIAL FULFILLMENT FOR THE REWARD OF DIPLOMA IN

INFORMATION COMMUNICATION TECHNOLOGY

SUPERVISOR : MR. MASILA TITO

EXAM SERIES : NOVEMBER/DECEMBER 2017

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TABLE OF CONTENTS
CHAPTER ONE
1.1 Declaration.................................................................................................................................4
1.2 Dedication..................................................................................................................................5
1.3 Acknowledgement....................................................................................................................6

EXECUTIVE SUMMARY............................................................................................................7

CHAPTER TWO
2.0 BUSINESS DESCRIPTION.....................................................................................................8

2.1 BUSINESS NAME...................................................................................................................9

2.2 BUSINESS LOCATION AND ADDRESS.............................................................................9

2.3 FORM OF BUSINESS OWNERSHIP...................................................................................11

2.4 TYPE OF BUSINESS............................................................................................................11

2.5 PRODUCTS AND SERVICES..............................................................................................11

2.6 JUSTIFICATION OF THE OPPORTUNITY.......................................................................12

2.7 THE INDUSTRY....................................................................................................................13

2.8 OBJECTIVE OF THE BUSINESS........................................................................................13

2.9 ENTRY STRATEGY.............................................................................................................14

2.10 GROWTH STRATEGY.......................................................................................................14

CHAPTER THREE
3.0 MARKETING PLAN.............................................................................................................15

3.1 CLASSIFY CUSTOMERS.....................................................................................................15

3.2 MARKET SHARE.................................................................................................................16

3.3 COMPETITION.....................................................................................................................17

3.4 METHODS OF SALES AND PROMOTION.......................................................................18

3.5 PRICING STRATEGY...........................................................................................................18

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3.6 SELLS TACTICS OR STRATEGY.......................................................................................19
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3.7 DISTRIBUTION STRATEGY...............................................................................................19

CHAPTER FOUR
4.0 ORGANIZATIONAL STRUCTURE....................................................................................20

4.1 BUSINESS EMPLOYEES AND QUALIFICATIONS.........................................................21

4.2 PERSONNEL NUMBER AND THEIR DUTIES.................................................................22

4.3 RECRUITMENT, TRAINING AND PROMOTIONS..........................................................24

4.4 RENUMERATION AND INCENTIVES..............................................................................24

CHAPTER FIVE
5.1 PRODUCTION FACILITIES AND CAPACITY.................................................................26

5.2 PRODUCTION STRATEGY................................................................................................28

5.3 REGULATIONS AFFECTING OPERATIONS..................................................................29

CHAPTER SIX
6.1 OPERATIONAL COST........................................................................................................30

6.2 CAPITAL REQUIREMENTS...............................................................................................31

6.3 TRADING PROFIT AND LOSS ACCOUNT.......................................................................31

6.4 PERFORMANCE BALANCE SHEET.................................................................................32

APPENDIX...................................................................................................................................35
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DECLARATION
I strongly agree openly that this is original work one of my own and has never been presented
elsewhere either in KNEC or any place.

Name : JAMES BRIAN OMUSOLO

Signature:

Date : 16th June 2017

This project has been presented with the approval of my supervisor.

Name : MR. MASILA TITO

Signature:

Date :

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DEDICATION
I dedicate this project to my brothers, sisters, parents, friends and lecturers who assisted me by
giving me most of the encouragements up to this end where I enjoy the success of the project.
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ACKNOWLEDGEMENT
I thank and acknowledge the help of my parent who really helped me to the successful of my
project and also my friends and brothers who encouraged in a unique way though there were
challenges and without forgetting my father spiritually who is GOD for the favor and
promises.

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EXECUTIVE SUMMARY
The business has been involved with the production for the past five years. The organization
started as a small shop thereby because of the good quality products many of the items has
been praised and have attained a special notoriety for the desserts. After years of requests for
our flavored whipped creamed toppings, we have decided to pursue marketing these products
from restaurants to the bakery level.

The flavored toppings have been used in most products produced in large quantities whereby
the estimated shelf life of the products is 21 days at refrigeration temperatures and up to six
months when frozen. Special attention has been given to developing an attractive label that
will stress the gourmet nature of the products.

Distribution of the products to the customers is done on a daily basis depending on the
customers’ order and need by use of the vehicles purchased in the business.

Financial analysis shows that the organization will have both a positive cash flow and profit in
the first year being 10.88%. The business is projected to expand to greater level whereby
leading to accompany level because the products being produced are so unique and of good
quality attracting more customers.
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CHAPTER II
2.0: BUSINESS DESCRIPTION
Jaybie bakery is a confectionery organization in Mlipuko town; that sells high-end baked goods
to retail and wholesale customers. The company also offers cake decorating classes from
Monteil, the leading food crafting company in the industry. The organization rests on
experience, business skills, relationships and enthusiasm.

RETAIL
The retail portion of the business services walk-in customers Monday through Saturday from
10am to 6pm. The products offered at the retail location includes: cakes, cupcakes, cookies,
pies and beverages the-at either pre-made or made to order. In addition to providing high
quality products, our retail location will also serve as the venue for decorating classes.

WHOLESALE
Our wholesale customer consists of cafes and coffee shops, restraints and hotels and local
street market. We are preferred channel providing cakes, cupcakes, cookies and pies for the
county clubs, wedding planners, caterers and other channels to take advantage of seasonal
demands for confections.

CLASSES
We offer more than just a cake decorating class – Jaybie bakery represents an “experience.”
The students are provided with the instructor, hands-on experience, basic understanding of
the basis in baking and decorating and design know-how.

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2.1 : BUSINESS NAME

The name of the business is “JAYBIE BAKERY” derived from my first and second name as they
appear because most of my friends used to call me that name that why I decided to be that way
and it’s so unique among all other bakeries that I have ever heard of.

2.2 : BUSINESS LOCATION AND ADDRESS

It’s located along Mauzo road, ZiaraStreet, plot number: 6449886-72 past Musto Petrol station
on Moghe plaza opposite Talas Supermarket. Land registration number 649-8649BH9 and the
location is 100 by 300 feet with the 22,700 square foot buildings. The raw materials are easily
reachable because its only five kilometer from the bakery in addition to that, the site is
furnished with the large second hand equipment needed for the operation thus unnecessary to
purchase large and expensive machinery.

The postal address is:

P.O. BOX 69-20406,

MLIPUKO.

+254710049664

jaybiebakery@yahoo.com
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MLIPUKO TOWN ARIEL VIEW

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2.3 : FORM OF BUSINESS OWNERSHIP

Jaybie bakery is a limited liability company in order to blend characteristics of a corporation
and sole proprietorship and take advantage of flow through income taxation.

2.4 : TYPE OF BUSINESS

The business belongs to me because I was the founder that is the Manager. The initial capital
was one hundred thousand (Ksh.100,000) where I started as a small bakery supplying the
products to the mere retail shops, hotels, cafes and supermarkets but as time went by, it has
expanded reaching to an extent where I only contribute 20% from my basic salary to finance
the business.

2.5 : PRODUCTS AND

SERVICES RETAIL
Jaybie bakery sells a wide range of high-quality cakes, cupcakes, cookies and treats whereby
each item is made from scratch using all natural ingredients sourced from largely local
suppliers. These supplies involve no preservatives to provide for high-end and divine flavor and
taste. It’s important that our items not only taste delicious but also look appealing and
attractive to the eye because we add the extra little touch to every product, whether it is a
sparkling sugar daisy on a chocolate cupcake or a buttery harvest leaf on a thanksgiving
pumpkin pie. Our location is designed in a way that customers are able to enjoy a setting that is
a pleasant as the product they are consuming.
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WHOLESALE
The products that our wholesale customers order are of very high quality. Just as with the retail
portion of the business, the products are the wholesale are made with quality ingredients and
properly prepared. While a few of the products will be the same at the retail and wholesale
locations, certain items will be specifically made for particular wholesalers depending on
customer orders. The bakery also manages delivery to wholesale customers.

CLASSES
The students that take the decorating courses are provided with the engaging, exciting and
authentic experiences. Our trainers teach students the very basics of how to frost a cake in
Discover Cake Decorating to make edible yet delicate carnations. As the business grows,
unique specialized classes are offered covering baking techniques and more advanced sugar
and pastry classes.

2.6 JUSTIFICATION OF THE OPPORTUNITY

This business originated because people in the surrounding region in the olden days used to
enjoy the cake from one of the companies but due to bad organization it failed an idea came to
my mind and I started the business in order the peoples demand and fulfillment of their needs.
I stood in order to fill the left gap in order to satisfy the local demand thus it has really brought
impact to the whole county and bordering places by form of employment opportunities and
also the economy to rise.

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2.7 : THE INDUSTRY

The bakery covers a total area of about 3 hectares of land whereby comparing of offices and
other buildings. We have improvised our business whereby almost all the work was done
manually but now there is use of computer for easy access of information and communication
with the supplier and customer and also the machines are being used to reduce the workload.

WORK PLAN
4:00AM-Start baking

8:00AM-Bakery opens

Leave for farmers

market 6:00PM-Bakery

closes

2.8 : OBJECTIVES OF THE BUSINESS

Our aim is to bring and create employment opportunities, to improve the people’s living
standards of the community and the entire county in general. We provide confection products
and services by retailing and wholesaling tasty treats and hosting treats design classes. The
bakery is dedicated to providing high quality deserts to a variety of customers and we are also
concentrating on the high end market of products as we maintain the focused differentiation
strategic position in the food and education industries. We are also intending to generate
profit to provide a fare return to our investors and to expand to the business into other
surrounding communities.
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2.9 : ENTRY STRATEGY

Our committee decided to lower down the prices of our products so that we could attract
more customers through open day and special event offers that really motivate and attract
more customers. We have been using the word of mouth and public perception which has
been immensely important in both aspects. Customers must first understand that our products
are made with quality ingredients and thus taste better than many of our competitors. The
former students spread word of mouth in two ways; experiencing the enjoyment of the class
and encouraging others to take the class and encouraging others to take the class and also
developing a trust and relationship with Jaybie Bakery and therefore recommending the
business to others. The bakery will advertise in cooperating with other businesses thereby
recommending our partnering businesses to customers for example wedding planners and
photographers. Our wholesale customers will be promoting and advertising our product
branding order to develop further business for themselves through their menu, display case,
Jaybie Bakery logo among others.

2.10 : GROWTH STRATEGY

For our bakery to be the way it’s today it required much reinforcement in different
departments whereby we recruited and employed new qualified personnel who had a lot of
experience.
Created more space for expansion where the building was enlarged and extra resources put in
place because had raised so high and also more vehicles were increased in the stock to enhance
faster delivery and distribution of products to customers’ shortest time possible. The untrained
staff was all taken to be trained on most concepts and operating the new purchased
computerized instruments and equipment. In the past time there were no activities such as the
workers being motivated but we had to introduce them in order to increase their morale of
working and their salaries boosted that really encouraged and motivated them.

CHAPTER III
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MARKETING PLAN
3.0: MARKETING PLAN
The company expects to use a variety of marketing tools including web advertising, affiliate
programs, public relations and key strategic alliances to drive traffic. The company believes that
it is extremely important to use word of mouth marketing campaigns especially in the early
phases of the launch. The company has also been placing banners ads with major portal sites to
increase awareness whereby it automatically serves when someone any keyword during a web
search. This effort will focus on both online as well as print media in many towns. We have
been offering new viewers debates and free subscriptions as an added advantage to purchase
from the sitewww.jaybiebakery.ac.ke.

3.1 : CLASSIFY

CUSTOMERS RETAIL
The market segmentation for the retail is divided into two physiological groups: celebrators
and soccer moms. The group represents people sharing similar behavioral patterns and
reasons for supporting Jaybie Bakery. These groups purchase either pre-made or made-to-
order products. Celebrators are people that have reasons to do just that, celebrate: Birthday,
anniversaries, graduation, valentine’s day and Christmas among the most occasions of many
holidays or special occasions that family and loved ones celebrate encompassing a variety of
people including the young, middle aged, old and both men and women. Soccer moms
encompass not just moms but all family members and it serves as a place where family feels
both welcome and comfortable.

WHOLESALE
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Our wholesale customers will be successful businesses in the food industry and we are focusing
our attention in the following customers and expand to a broader list as the company grows.

CAFES RESTRAUNTS MARKET

AND AND HOTELS
COFFEE
SHOPS
Broadway cafe Acoma Front street

Hummingbird café War bonnet 64 Junction

Jupiter coffee house Derby Bus stage

Park street café Land of favor Street 004

Jailhouse coffee shop Glory centre 96 Highway

Season cafe Joy king mansion Middle centre

In addition we also focus on seasonal wholesale customers for example summer weddings,
holidays and other photographers, caterers.

3.2 : MARKET SHARE

Our organization has some of the projects that are income generating that is through leasing
of our equipments and our qualified person being requested by other companies for
motivational talks and workshops.

3.3 : COMPETITION

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Nationwide, supermarket chains dominate the baked goods market in Mlipuko town. These
grocery stores are locally owned, operated and their products are of poor quality often mass
produced at an outside location and simply baked in the actual store. The ingredients are
processed thus lowering the quality and taste of the product in order to sell the item at a lower
cost. Town Talk Bakery is a locally owned bakery specializing in donuts, cakes and other treats
are also sold at this location but are not made with high quality ingredients. The cake choices
are very limited and icing is made with shortening and low quality for a low cost. Jaybie Bakery
is set apart from the competition in four main ways:

➢ Each of our products contains extra detail to set it apart from the
competition. We ensure that our products appeal to the eye as well
as to the stomach.
➢ The sky is the limit when developing a pastry design and we cater
to the wants and needs of our customers in every way possible.
➢ Customers’ service is our number one priority where we ensure that
each customer is treated with kindness, respect and warm welcome
on each visit.
➢ In an era where food is becoming chemistry, we focus on raw, natural
and sometimes organic and local ingredients to create its product.
Thus our products taste better and better for you.

3.4 : METHODS OF SALES PROMOTION

AND ADVERTISING
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Word of mouth and public perception are immensely important in both aspects of the business.
Customers must understand that our products are made with high quality ingredients and thus
taste better than many of our competitors. The word of mouth will be created when someone
experiences for example a cake at a party. The cake will be enjoyed by many and thus the word
of mouth seed for the bakery aspect of the portion will be created. The students who had
passed in our company earlier on will spread word of mouth in two ways: experiencing the
enjoyment of the class and encouraging others to take the class and also developing a trust and
relationship with Jaybie Bakery and therefore recommending the business to others. We
branded our vehicles and designed posters in different forms, adverts on television or the
electronic and print media that is Facebook, Google+, and OLX among others. We designed also
business cards that we have been distributing in different occasions that we have really seen
the impact on our business and brochures has been a helpful tool and also on newspapers.

3.5 : PRICING STRATEGY

Due to high quality of ingredients made from scratch products carefully and at times
customized decorated goods, the pricing will be slightly higher than that of the typical grocery
store bakery. The table below illustrates the initial mark-up of the bakery products based on
the cost of goods sold. Depending on the detail of special orders, the margin may increase for
that specific item.

ITEM MARGIN
Cookies 3X
Cakes 4X
Cupcakes 4X
Pies 4X
Wedding cakes 5X
Beverages 5X
3.6 : SELLS TACTICS OR STRATEGY
The company has entered into many strategic relationships in order to quickly build credibility
as well as traffic to its brand web site. This includes partnerships with major search engines,
magazine publishers, high retailers and international community Web sites. Our layout and

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design is user friendly and cutting edge in the eyes of our audience to attract repeat users. We
have a strong branding message that will extend to all aspects of the site and truly provide the
best experience for our customers. Since we started marketing, we have employed a number
of selling methods for example personal selling whereby nearer customers come on the bakery
and in the whole town there are agents who help us in the marketing the products and we
have been motivating them by giving them allowances and commissions among others.

3.7 : DISTRIBUTION STRATEGY

We have developed a number of ways of distributing our products that is retail products may
be picked up at the retail location by the customers or delivered for a nominal fee depending
on the distance. Wholesale products are delivered to the wholesale locations with the fee
included in the product pricing and the customers will come to the retail location for the
classes.

CHAPTER IV
ORGANIZATIONAL PLAN
ORGANIZATIONAL
STRUCTURE
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BOARD OF
DIRECTORS
MMAANN
AAGGEER
R BAKER

SUPPLIER

TECHNICIAN

RETAILER

DDEECCOO
RRAATTOO
RR
MESSANGER

CLEANING

The organization developed policies for the staff development in order to achieve efficient
production of good and efficient performance of services. I am the manager of the business
that is the eye of organization. The organization has by now employed thirty one employees in
different departments, Head baker and four assistants, Head supplier and four deputies, head
technician with two assistants, one messenger, head cleaning officer assisted by four assistants
and four drivers.

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4.1 : BUSINESS EMPLOYEES AND QUALIFICATIONS

TITLE AGE QUALIFICATIONS

{Years}
BAKER 25-35 Diploma/Certificate in catering
SUPPLIER 28-40 Diploma/Certificate in Supply Chain Management
TECHNICIAN 30-51 Diploma/Certificate in Electrical Engineering
RETAILER 18-30 Certificate in business Management
DECORATOR 30-50 Degree/Diploma in Catering
MESSANGER 26-38 Diploma/Certificate in Human Resource
CLEANING 18-35 Diploma/Certificate in Health
OFFICER
DRIVER 20-40 Certificate and Driving License

4.2 : PERSONNEL NUMBER AND THEIR DUTIES

HEAD BAKER
One head and four deputies.
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ROLES
✓ Keep records of all the bakers.
✓ Organize all the equipment needed in the bakery.
✓ Request required essentials.
✓ Raise issues concerning other bakers to the board governors.
✓ Follow recipes and produce quality products.

HEAD SUPPLIER
✓ Keep records of all the products sold and the amount collected.
✓ In charge of all the suppliers.
✓ Prepares duty roster of the suppliers who had and when to supply the already
processed products.
✓ Assign all the tenders received and organization.

TECHNICIAN
✓ Ensures all equipment and machines used are functioning.
✓ Repair all the damaged machines.
✓ Orders required equipment in the bakery.

RETAILER
• Sells the already processed products at the bakery shop.
• Serves all the casual customers.

DECORATOR
o Teach students on cake decorating basics and essentials.
o Orders the required essentials in class.
o Organize class timetable, duty roster and workshops for the students.

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MESSANGER
▪ Collects information concerning the organization.
▪ Delivers information from the bakery to other organizations.
▪ In charge of the business permits and licenses.
▪ Updates the organization on the new equipment and technology on market.

DRIVER
• Deliver products to other stations.
• Distribute products to the wholesalers.
• Transport products and ingredients needed in the bakery.
• Transport staff members to and from the bakery.

CLEANING OFFICER
❖ Ensures all the offices are clean.
❖ Clean all pit latrines.

4.3 : RECRUITMENT, TRAINING AND PROMOTIONS

When we were starting our business, we had just few workers but due to time we have and
forced to employ other workers. Over time and again we have been offered support some
of the advisory team members from other older bakeries who come and advise our staff
members. All staff takes one day safe food handling course and other food safety programs.
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Our wholesale customers are promoting and do advertising of our product brand in order to
develop further business for themselves. We have offers of specific offer days that is during
holidays where we reduce our prices and the staff members get some chances whereby
they end up getting promotions.

4.4 : RENUMERATION AND INCENTIVES

Job Numbe Monthl Other Benefits TOTAL

category r y (KSH)
salary
Baking Hous Electri Water Trans
e city port
Head 1 20,000 2,000 1,500 1,000 500 =25,000
Assistants 4 17,000 2,000 1,500 1,000 500 =22,000*4
=113,000

Supplier
Head 1 18,000 2,000 1,500 1,000 500 =23,000
Assistants 4 16,000 2,000 1,500 1,000 500 =21,000*4
=107,000

Technician
Head 1 21,000 2,000 1,500 1,000 500 =26,000
Deputy 2 19,000 2,000 1,500 1,000 500 =24,000*2
=74,000
Retailer
Senior 1 14,000 2,000 1,500 1,000 500 =19,000
Junior 1 14,000 2,000 1,500 1,000 500 =19,000
=38,000

Decorator
Head 1 20,000 2,000 1,500 1,000 500 =25,000
Assistants 5 19,000 2,000 1,500 1,000 500 =24,000*5
=145,000

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Messenger 1 19,000 2,000 1,500 1,000 500 =20,000

=20,000

Cleaning
Head 1 16,000 2,000 1,500 1,000 500 =21,000
Deputy 4 15,000 2,000 1,500 1,000 500 =20,000*4
=101,000

Drivers 4 19,000 2,000 1,500 1,000 500 24,000*4

=96,000

=Ksh.549,000

TOTAL

CHAPTER V
PRODUCTION PLAN
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5.1 : PRODUCTION FACILITIES AND CAPACITIES

In our bakery we use quality material in order to produce good product at the end using the
advanced technology reliable with no side effects to the customers. As we started the
organization man power was the only technology but due to the time e improved to a
modern that reduced delays in production thus improving the efficiency. As we started
using modern machines we used to lease from other companies but due to the high cost
incurred, we were forced to purchase our own and also we had to employ qualified
personnel who are the technicians. The machines we are using, their spare parts are locally
available thus reducing funds that could have been used to travel distant places. Because
the number of customer rose at a higher rate and the demand increased we had to buy
machines that were powerful and experience that were able and efficient in conducting and
performing the task more powerful.

EQUIPMENT NUMBER COST TOTAL

Oven 5 Ksh.26,000 Ksh.130,000

Proofer 4 Ksh.12,000 Ksh.48,000

Refrigerator 5 Ksh.24,000 Ksh.120,000

Mixer 6 Ksh.28,000 Ksh.168,000

Shelves 8 Ksh.2,500 Ksh.20,000
Showcase 10 Ksh.3,000 Ksh.30,000
Furniture 12 Ksh.4,000 Ksh.48,000

Ksh.564,000

FLOOR PLAN

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1: SHELVING AREA
2: RACK AREA
3: COOLER
4: CASH REGISTER

5.2 : PRODUCTION STRATEGY

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The bakery can decide whether to use premixed or self mixed ingredients. Special
suppliers or flour companies will provide you with a premix which includes all ingredients
needed to make the products which include flour, yeast, milk, salt, sugar, water, cooking
oil.

TYPE OFRAW FREQUENCY SOURCE QUALITY COST TOTAL

MATERIAL

Flour Daily Flour Mill Shop 20 sacks 4,000 Ksh.80,000

Yeast Daily Flour Mill Shop 10 sachets 130 Ksh.1,300
Milk Daily Free Harvest 100 litres 100 Ksh.10,000
Salt Daily Jooiz Supermarket 5 packets 200 Ksh.1,000
Sugar Daily Tek sugar company 2 sacks 10,00 Ksh.20,000
0
Water Daily Borehole point 200 litres 100 Ksh.20,000
Cooking Oil Daily Zion company 80 litres 100 Ksh.8,000
Food color Daily Flour Mill shop 10 sachets 120 Ksh.1,200
Eggs Daily Dion poultry Farm 5 crates 250 Ksh.750
Ksh.

The raw materials are always available in the whole year. Since we have our own vehicles
which are normally used to transport the materials we do not incur more on transportation
cost thus saving funds. At the end of every month the organization uses approximately
Ksh.600, 000 to pay the workers. By now the organization has a lot of equipment that
generate a lot of money through leasing to other companies and outsourcing some services
by our qualified personnel in the organization.

The production labor cost per month amounts to Ksh. 4.3M that is Ksh. 4,300,000 while the
total money that the organization uses per month is;

OVERHEAD AMOUNT
Rent Ksh.40,000
Security Ksh.60,000
Water Ksh.10,000
Ksh.110,000
TOTAL

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The organization also incurs a lot of capital by paying to the government rules and
regulations including permits, taxes and licenses.

PERMITS/LICENCES SOURCE COST

Single business permit County Government Ksh.10,000
Value Added tax National Government Ksh. 5,000
Parking fee County Government Ksh. 3,000
Local taxes County Government Ksh. 2,000
TOTAL Ksh. 12,000

5.3 : REGULATIONS AFFECTING

OPERATIONS HEALTH
In terms of health, the organization has its own medical centre where if someone has an
injury he or she can be given first aid and if serious referred to the nearby county
referral hospital the organization being in charge of the cost to be incurred.

CHAPTER VI
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FINANCIAL PLAN
Deals with the financial aspect of the proposed business.

5.1 : OPERATIONAL COST

ITEM COST
Rent Ksh.40,000

Permits Ksh.20,000

Partitions Ksh.10,000

Installations Ksh.15,000

Utensils Ksh.10,000

TOTAL Ksh.95,000

Operational cost = Ksh.95, 000

5.2 : CAPITAL REQUIREMENT

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Capital requirement for the first three years of the business.

YEAR 1 YEAR 2 YEAR 3

1 Overhead Ksh.1, 320, 000 Ksh.1, 500, 000 Ksh.2, 100, 000
.
2 Permits Ksh.240, 000 Ksh.240, 000 Ksh.240, 000
.
3 Product Ksh.4, 267, 500 Ksh.6, 300, 000 Ksh.8, 450, 000
.

5.3 : TRADING PROFIT AND LOSS ACCOUNT

2015 2016 2017
Sales 10,200,00 15,500,000 30,000,000
Less cost of sales 7,200,000 12,000,000 25,000,000
100,000 6,000,000 10,000,000
Add opening stock
Gross profit 3,000,000 3,500,000 5,000,000
Less operational or 1,320,000 1,200,000 900,000
overhead 480,000 300,000 200,00
expenses Rent
240,000 200,000 150,000
Water
90,000 140,000 200,000
Electricity 50,000 60,000 80,000
Stationery 100,000 70,000 45,000
Transport 34,000 43,000 50,000
Cleaning 44,000 36,000 27,000
Maintenance 9,000 7,000 6,000
Depreciation 694,000 702,000 800,000
Salaries 12,000 9,000 7,000
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Postage 1,680,000 2,300,000 4,100,000

Trading profit(Loss)
5.4 : PERFORMER BALANCE SHEET

JAYBIE BAKERY
BALANCE
SHEET
AS AT 31ST DECEMBER 2016
Fixed Assets:
Premises -Ksh.125, 000

Plant and equipment -Ksh.516, 000

Vehicles -Ksh.3,

500,000

Furniture -Ksh.48, 000

Machinery -Ksh.2, 600, 000

TOTAL =Ksh.6, 789,000

Current Assets
Raw materials -Ksh.1,

707,000 Stock -Ksh.900, 000

Debts -Ksh.900, 000

Bank -Ksh.2, 500, 000

Cash -Ksh.6, 500, 000

 lOMoARcPSD|6109995

TOTAL Ksh.12, 507, 000

32
 lOMoARcPSD|6109995

Current Liabilities
Creditors -Ksh.900, 000

Bank Overdraft -Ksh.700, 000

Bank Loans -Ksh.2, 400, 000

Net Current Assets -Ksh.4, 000, 000

TOTAL ASSETS Ksh.8, 000, 000

Represented by

Capital -Ksh.12, 507, 000

Profit -Ksh.4, 100, 000

Long Term Liabilities

Bank Loans-Ksh.2, 400, 000

Calculate

Gross Profit Margin = Gross Profit*100

Sales

=3,500,000 *100

15,500,000
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=22.58%

Net Profit Margin = Net profit * 100

Sales
=2,300,000*100
15,500,000

=14.84%
Break-even Level of sales = Overhead Expenses * 100
Gross Profit Margin
=1,200,000*100
22.58
=Ksh.5, 314, 438

34
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APPENDIX
Capital : Money invested in the business.

Cash flow : Amount of cash flowing in and out of a business in

a given period.

Income statement : A document showing the progress; shows the

Weakness or strength of the business.

Market share : This is the amount of shares.

Partnership : A type of business owned and managed by a group

of people.

Remuneration and Incentives : Are the rewards or compensation of workers in form

of Salaries and wages.