Duncan-Kogo-Business-Plan 11

lOMoARcPSD|28022144
Duncan Kogo Business Plan
COUNSELING PSYCHOLOGY (Technical University of Kenya)
Studocu is not sponsored or endorsed by any college or university

Downloaded by SAM MACHARIA (machariasam115@gmail.com)
lOMoARcPSD|28022144
RYAN’S DIGITAL & ELECTRONIC STORE
TITLE : BUSINESS PLAN
PRESENTER : DUNCAN KIPKOSGEI KOGO
INDEX NUMBER : 2018BE130553
CENTRE NAME : KENYA TECHNICAL TRAINERS COLLEGE

lOMoARcPSD|28022144
TABLE OF CONTENTS
DEDICATION.................................................................................................................................v
ACKNOWLEDGEMENT..............................................................................................................vi
EXECUTIVE SUMMARY...........................................................................................................vii
CHAPTER ONE..............................................................................................................................1
1.0 BUSINESS DESCRIPTION.................................................................................................1
1.1 DETAILS OF THE OWNER.................................................................................................1
1.2 BUSINESS VENTURE.........................................................................................................2
1.3 PRODUCT/SERVICES.........................................................................................................4
1.4 ENTRY..................................................................................................................................6
1.5 GROWTH PLAN..................................................................................................................7
CHAPTER TWO.............................................................................................................................8
2.0 MARKETING PLAN................................................................................................................8
2.1 POTENTIAL CUSTOMERS.................................................................................................8
2.2 COMPETITION....................................................................................................................9
2.3 PRICING.............................................................................................................................11
2.4 SALES TACTIC..................................................................................................................12
2.6 DISTRIBUTION STRATEGY............................................................................................13
CHAPTER THREE.......................................................................................................................14
3.1 ORGANIZATIONAL AND MANAGEMENT PLAN...........................................................14
3.3 OTHER PERSONNEL...................................................................................................17
3.4 RECRUITMENT TRAINING AND PROMOTION..........................................................18
3.5 REMUNERATION AND INCENTIVES.......................................................................19
3.6 OTHER PERSONNEL........................................................................................................20
3.7 RECRUITMENT TRAINING AND PROMOTION..........................................................20
3.8 SUPPORT SERVICES.........................................................................................................21
CHAPTER FOUR.........................................................................................................................22
4.0 OPERATIONAL PLAN......................................................................................................22
4.1 PRODUCTION OR SERVICES FACILITIES...................................................................22
4.02 PRODUCTION AND SERVICE COST............................................................................25
4.3 PRODUCTION /SERVICES PROCESS.............................................................................26

lOMoARcPSD|28022144
4.4 COMPLYING WITH OPERATIONAL REQUIREMENT.................................................26

CHAPTER FIVE...........................................................................................................................29
5.0 FINANCIAL PLAN................................................................................................................29
5.01 PRE-OPERATONAL COST.............................................................................................29
5.2 WORKING CAPITAL.........................................................................................................30
5.3 PROFORMA BALANCE SHEET......................................................................................31
5.4 PROFORMA INCOME STATEMENT...............................................................................34
5.5 PROPOSED CASHFLOW STATEMENT OF RYAN’S DIGITAL & ELECTRONIC
STORE AS AT 31ST DEC, 2018.................................................................................................35
5.06 BREAK EVEN CALCULATION.....................................................................................37
5.8 CAPITALIZATION.............................................................................................................39
5.09 PROFITABILITY..............................................................................................................40
APPENDIX....................................................................................................................................41

lOMoARcPSD|28022144
DECLARATION
I hereby declare that this business plan is my personal work and no one has ever presented the
same work to Kenya National Examination Council. All rights reserved, and no part of this plan
may be reproduced, stored or transmitted without any permission.
CANDIDATE NAME: DUNCAN KIPKOSGEI KOGO

DATE: ...........................................................
SIGNATURE: ................................................
SUPERVISOR’S NAME
DATE: ............................................................
SIGNATURE.................................................

lOMoARcPSD|28022144
DEDICATION
I dedicate my work to my family and friends. A special feeling of gratitude to my parents ,they
are my strong pillar, my source of inspiration and always offered the support towards the
completion of this business plan.
Additionally, I would like to dedicate this work and give special thanks to my lovely sister Tracy
Kogo for her continued support and words of encouragement and ensuring that I give all it takes
for me succeed. I also dedicate this work to friends who have supported me throughout the
process.
Lastly, I dedicate this work to my supervisor for the guidelines and extraordinary support in this
work.

lOMoARcPSD|28022144
ACKNOWLEDGEMENT
My deepest gratitude goes to Almighty God for the good health, wisdom, knowledge and
understanding throughout time.
I would like to express my appreciation to my parents for their kind co-operation and
encouragement which helped me in completion of this business plan.
I am highly indebted to my supervisor for their guidance and constant supervision as well as for
providing necessary information regarding this business plan and also for their support in
completing the project.

lOMoARcPSD|28022144
EXECUTIVE SUMMARY
1.1 Business Description
Ryan’s Digital and Electronic Store (RDE Store) is small business will deal with electronic
devices including computers, laptops, TVs and its accessories. The RDE Store has identified
objectives and key factors that will be instrumental to the success of this business:
i. Our Objectives
Objectives
i. To create a service-based company whose goal is to exceed customer’s expectation
i. To become profitable within one year.
ii. To use this business as a successful model for future ventures.
ii. Mission
To provide the customers with quality brand-name products, computers and networking
solutions, reliable and professional technical support, and unparalleled customer service
to earn a fair profit for our employee-owners by embracing sound ethical business
practices.
iii. Keys to Success

i. Offer every customer 100% satisfaction.
ii. Design and sell valuable electronic products.
iii. Design and employ strict financial controls.
iv. Provide clients with a wide selection of computer products and services including
computer diagnosis and repair, networking
v. Provide an easily accessible location for customers convenience
1.2 Management
This business will be owned by Duncan K. Kogo who will take hands-on management roles.
The business will have few employees with positions below;
Manager- Duncan will take on a wide range of functions including business development,
product procurement, management, and sales.
Customer Service agents- They will assist customers calling about our products.
Additionally, at times the employees may help Duncan with other activities.
1.3 Target Market
Our market research showed that majority of the population in Kenya are aged between 19-
60 years (the standard age for a college student or an employed Kenyan). Most of these
people use computers and TVs either at work or at their homes. Therefore, tis business will
target consumers, small businesses and home offices.
vii

lOMoARcPSD|28022144
1.4 Competitive Advantages
While there are currently many businesses offering computer services in Eldoret town, all are
in the middle of the town and their prices are higher. This business will therefore offer
affordable prices and allow bargain sale for our clients. Additionally, it will ensure valuable
products are readily available for clients and they will be coached on use of purchased
product and ensure employees implement good customer relation.
1.4 Financial Plans

Based on the size of our market and our defined market area, our sales projections for the
first year are Ksh. 340,000. The salary for each of the co-owners will be Ksh. 10,000. On
startup we will have two customer service agents to provide services to customers in RDE
Store.
The following subtopics help present the financial plan for RDE Store.
Important Assumptions
Below are the key underlying assumptions of our financial plan:
i. We assume access to the start-up funding necessary to provide adequate initial capitalization
and establish our business.
ii. We assume continued steady economic growth in Eldoret town.
iii. We assume continued usage of compatible computers, laptops and other electronics
accessories in the home and at work.
i. Business Description.
ii. Operating and Entry Plan
viii

lOMoARcPSD|28022144
The business will operate on 12-hour system hence deliver the services conveniently. . It
will operate by controlling prices and allow bargain sales. . With the help of the storekeeper,
the salesperson will easily deliver the services to the customers.
Signposts will be elected erected at various strategic points to advertise and help our
customers to locate our store. .
iii. Target Market
The business will target the local customers who will benefit from electronic devices
including TVs, Computers, Radios, DVD players, Laptops and its accessories. industries
will Furthermore, contractors will also be sale customers because they engage in building
and construction often.
iv. Competitive Advantage
The business will operate on affordable prices, ensure quality products are available for our
customers, ensure good customer service is implemented and ensure easier delivery services
hence register high profit. Additionally, the business will offer coaching on how to use the
purchased products hence appropriate advisory services.
ix

lOMoARcPSD|28022144
v. Management
For the business to run smoothly and successful, goals and objectives of the business will be
set and ensured that they are all implemented. The management team consists of the
manager, Duncan K. Kogo who holds Diploma in Business Management, a Salesperson with
Certificate in Sales and Marketing and a storekeeper with little background in store record
keeping. The manager will ensure he delegate duties to his employees and ensure stock is
always available. The salesperson will take charge when the manager is absent.
vi. Financial Plan
The following subtopics help present the financial plan for Eagle Computers.
Important Assumptions
The key underlying assumptions of our financial plan shown in the following general assumption
table are:
iv. We assume access to the start-up funding necessary to provide adequate initial capitalization
and establish our business.
v. We assume continued steady economic growth in Eldoret town.
vi. We assume continued usage of compatible computers and other electronics in the home and
at work.
Break-even Analysis
For our break-even analysis, we assume running costs which include our full payroll, rent and
utilities, and an estimation of other running costs.
We will monitor gross margins very closely, and maintain them at or above 50% by taking
advantage of all promotions and discounts offered by our manufacturers and by our higher-profit
revenue generators of computer and other electronic service.

lOMoARcPSD|28022144
Projected Profit and Loss
There are two important assumptions with our Projected Profit and Loss statement:
i. Our revenue is based on minimum estimated averages against highest expense

expectations.
ii. Our major expense of rent is fixed for the next three years.
Projected Cash Flow
Our projected cash flow includes planned borrowing to increase our capital and thereby ensure a
positive cash balance while our business is becoming established. Though the cash flow is
negative on and off throughout the year, we will maintain a healthy cash balance, which steadily
increases in both the second and third years.
Projected Balance Sheet
Our Projected Balance Sheet shows we will not have any difficulty meeting our debt obligations
as long as our revenue projections are met.
viii) Critical Risk, Problem and Solution
The major risk is upcoming of new products, which will render the existing in stock to be
outdated.
Also the fluctuation of prices from time to time. This will discourage more customers
Alternatively, the business will always move with technology to ensure delivery of upcoming
products
Also the business will stock huge products to ensure stable prices
xi

lOMoARcPSD|28022144
CHAPTER ONE
2.0 BUSINESS DESCRIPTION

RDE Stores will sell and service computers and its accessories. It will also offer custom-
built computers, networking solutions, and in-store computer stations where customers can
buy time to browse the Internet, check e-mail, and download their digital photos from their
camera memory cards onto discs. RDE Stores will be located along Kenya – Uganda
highway in Eldoret town.
2.1 DETAILS OF THE OWNER

The Ryan’s Digital and Electronic Store will be formed and privately owned by Duncan K.
Kogo. Duncan has three years’ experience in the computer shop in Nairobi. He was a co-
owner of Saruk Computers in Nairobi until he moved out of Nairobi and lived in Eldoret.
Duncan is a computer technician and also has skills in management and retail experience.
2.2 Start-up SummaryThe start-up costs are to be financed by the direct owner investment. The
cost, expense, and investment details are included in the following tables and chart
Business License and legal
Rent
Rental deposit
Display shelves
Installed security system

lOMoARcPSD|28022144
from ea

lOMoARcPSD|28022144
2.3 LEGAL FORMS OF OWNERSHIP

The proposed business will be owned and operated by one person therefore classified as sole
proprietorship in the legal business structure. For this business to run smoothly the owner needs a
good idea, a lot of determination and an endless supply of energy for the hard work ahead.
Unlike the other forms of business structure, sole proprietorship is simple and inexpensive to
create and operate and the owner reports profit or loss on his or her personal tax return.
The amount contributed and invested is as follows.

The business needs four million shillings for it to operate
Main contribution Amount
Personal saving 2,000,000
Family saving 500000
Private organization 1000000
Friends and relatives 500000
Total 4000000

lOMoARcPSD|28022144
3.0 Products and Services
Most people today use computers and digital TVs either at work or at home. It is important that
people have a quality resource for buying and servicing those computers. RDE Stores will
provide its clients with just such a quality resource - a one-stop shop for computers, digital TVs,
CCTV cameras, surge protectors and laptops.
RDE Stores will offer a variety of computers which covers customers preference and this will
include computer models for instance HP, Dell, Lenovo, ASUS and TOSHIBA.
Additionally, it will make available the CCTV cameras ranging from consumers to big
businesses, and help in installation of these cameras.
RDE Stores will also offer surge protectors that protects all circuits of a house from a surge in
current emanating from outside the building. These products will protect consumers and their
sensitive electric and electronic appliances from power surges or transient voltage.
Lastly it will also offer the following products and services with excellent customer service in a
friendly, professional, and pleasant environment:
i. Ready-to-Sell Computers - We will sell new and used computer systems in various price
ranges that are already built and ready to be used.
ii. Custom-Built Computers - We will build and sell computer systems that are custom-
designed according to the customer's preferences.
iii. Service and Repairs -We will do full-service computer diagnosis and repairs with an
emphasis on quality work within an expedient turn-around time.
iv. Upgrades - We will offer customers the latest technology available to upgrade the
computers they already own.
v. Networking - We will offer full networking solutions for both home and office, including
wireless networking.
vi. Free installations- we will offer free installations of CCTV cameras to our clients

lOMoARcPSD|28022144

lOMoARcPSD|28022144
3.1 Entry Plan
RDE Stores has developed a targeted strategy that allows them to quickly gain market
penetration. This business will operate on 12-hour system hence deliver products and services
conveniently. It will also run by controlling prices, offering promotions and ensuring valuable
products are readily available at discounted costs.
We will establish ourselves in the market through word-of-mouth referrals from our satisfied
clients and various forms of advertising.
The signposts will be erected at various strategic points to also help advertise and help for
customers to locate our store.

lOMoARcPSD|28022144
CHAPTER TWO
4.0 MARKETING PLAN
4.1 Potential Customers
Our target market consists of consumers, small businesses and home offices. Our sales and
marketing strategy will consist of offering a wide selection of quality products and services, a
friendly pleasant atmosphere and a convenient location with easier accessibility.
These three potential customers have been chosen because they understand the concept of
service and support and are much more likely to pay for products when the offering is clearly
stated. Additionally, they typically want to have many electronic devices especially for business
and entertainment therefore we will provide laptops, home theatre systems, TVs, CCTV camears
and surge protectors.
The total target of market plan in RDE Stores is to bring up its product and services near to
customers. It will also ensure sufficient supply of goods to customer and to make sure the
products are readily available.
4.2 Competition
RDE Stores has developed a targeted strategy that allows them to leverage their competitive
edge and quickly gain market penetration. Our competitive edge is a combination of our wide
range of products and services, outstanding location, and our interaction with our clients. By
building a business based on long-standing relationships with satisfied clients, we simultaneously
build defenses against competition. The longer the relationship stands, the more we help our
clients understand what we offer them and why they should both stay with RDE Stores and refer
us to others.
The marketing strategy will concentrate on the ability to offer utmost, inexpensive and quality
products to our customers. We will establish ourselves through advertisements for instance
creating Facebook Page where we will post our products and services, print brochures and use
word-of-mouth referrals from our satisfied clients.

lOMoARcPSD|28022144
Number of competitors Products
RYAN’s digital electronic shop 4/6
Sideways electronic shop 1/6
Mawingu electronic shop 3/6
Keepleft electronic shop 4/6
The overall strength and weakness in our business and competitors

Number of competitors Strength Weakness
RYAN’s digital electronic Known well by Poor ways of marketing
shop the customers No room for expansion

lOMoARcPSD|28022144
Low prices Low income

Financially stable
Sideway electronics shop Good customer relation Low quality products and
Cheaper than other shops services
Good channels of Poor skill
marketing Poor infrastructure
Have more room for Poor remuneration
expansion Far from town
Mawingu electronic shop Good customer relation Aim at high prices

Good marketing plans Insufficient room for
Online marketing expansion
Quality products Low income due to high
pricing
Keepleft electronic shop Good customer caring Poor skills from worker
Has electronic means of Poor marketing strategies
payment Sells of high prices
Quality products
More customers

lOMoARcPSD|28022144
4.3 Pricing Strategy
To simplify our billing to clients we will need to reflect the value we provide versus our
competitors, match what the market will truly pay for and maximize our profits. RDE Stores
will offer cost-effective products and services that will provide ongoing revenue streams.
RDE Stores will offer credit depending on customers, how long they have been our customers
and the payment history. The customers that have been purchasing products in our store in bulk
and for a long period will be considered.
Our store generally cares about our customers and are always looking for ways to offer them the
best value for money. One method we use is a discount system. We will have an automatic
discount system for every product and we will be open to negotiating discounts for customer
who are willing to share their experience of using RDE products.
2.4 SALES TACTIC

4.3 Sales Strategy
Our umbrella sale strategy is to sell products to our clients as the best resource for their computer
needs, enhancing their lives with our quality, latest-technology products, the convenience of our
one-stop shop, affordable pricing and the reliable professional service we offer.
The main purpose will be to create awareness, persuade customers and make them trust our
products and services through advertising techniques posters, signposts and online
advertisement. Through these advertisement mode customers will be made aware of the products
we deal with.
10

lOMoARcPSD|28022144
We will sell our products through each employee's expertise, courtesy and warmth, creating a
trusting impression on all customers, and establishing loyalty and return visits. We will ensure
each visit to our stores is a professional and pleasant experience, so that customers can always
depend on our brand of service when they arrive.
11

lOMoARcPSD|28022144
4.4 DISTRIBUTION STRATEGY
The business will plan to eliminate all the distribution channels in its initial stages of operation.
Therefore, it will utilize the talents and skills of its customer service agents to sell directly to
target customers rather than hiring a distribution company. This decision saves our business a lot
of money.
When need be, we will use middlemen because they are quite very cheap than contacting a
distribution company.
12

lOMoARcPSD|28022144
CHAPTER THREE
5.0 ORGANIZATIONAL AND MANAGEMENT PLAN

5.1 Organizational Chart/Structure
MANAGER
SECRETARY TECHNICIAN SALESMAN DRIVER
GENERAL WATCHMEN
SUPERVISOR
MANAGER
Customer Service Agent 1 Customer Service Agent 2
Customers Middlemen
Customers
13

lOMoARcPSD|28022144
i. Manager
The proposed business will have one manager who owns the business. He will have the
following duties and responsibilities:
i. Hire, train and guide store employees in delivering excellent customer service.
ii. Assign rules and responsibilities to employees for operational effectiveness.
iii. Develop action plans for the team to meet operational and organizational objectives.
iv. Adhere to employee wage and hourly laws.
v. Obtain customer feedback and make appropriate business developments or changes to

meet customer needs.
vi. Monitor and manage store staffs by regularly conducting performance assessments,
providing feedback, and setting challenging goals to improve operational
performance.
vii. Identify and address issues in store performance.
viii. Develop strategic and operational plans for managing execution and measuring
results of store.
ix. Schedule regular meetings to discuss about business development opportunities and
any issues.
x. Communicate clearly with all employees to ensure effective store operations.
xi. Maintain store environment clean, safe and inviting for customers.
i.
ii. Customers Service agents
14

lOMoARcPSD|28022144
Duties and Responsibilities

i. Answers incoming customer calls regarding billing issues, product problems,
service questions and general client concerns
ii. Responsible for maintaining a high level of professionalism with clients and
working to establish a positive rapport with every caller
iii. Update customer information in the customer service database during and after
each call
iv. Work with the management team to stay updated on product knowledge and be
informed of any changes in company policies
v. Impact the company’s bottom line by problem solving and turning frustrated
clients into repeat customers
iii. Middlemen
Duties and Responsibilities
i. Help customer service agents to assemble
electronics for transportation
ii. Ensure the products reach the customers
iii. Report any incidence that may occur when
transporting products
iv. Report when the products are safely delivered
to our customers
5.2 OTHER PERSONNEL

Cleaner
This is the person in charge of cleanliness in the premises and duties is as follows '
15

lOMoARcPSD|28022144
i Cleaning the floor

ii. Cleaning the dusts from the product
iii. Preparing tea for the staffs
iv Acts also as a messenger and the remuneration will be 6000 per month
3.4 RECRUITMENT TRAINING AND PROMOTION

The business will recruit the high skilled and qualified personnel and those who has good
sociability and oriented ones the recruitment will be advertised through posters and notices the
application letter from the interested and qualified personnel will be received and suitable
personnel will be shortlisted to come for interview which will be carried out to attain the best and
qualified applicant which after wards will be trained to work for the business
The business plan for training its employees is that they will take a group of its employees for
seminar and field like exhibition to equip them with modern skills
The business will promote employees by giving them off duties allowance like housing medical
and better working condition
16

lOMoARcPSD|28022144
3.5 REMUNERATION AND

INCENTIVES Remuneration
The salary will depend on job title including allowance to off duties workers
Position number Remuneration
Manager 1 30000
*—
Secretary 1 20000
General 1 18000
Supervisor 1 18000
Technician 2 17000
Salesmen 2 15000
17

lOMoARcPSD|28022144
Driver 2 12000
Watchmen 1 8000
Cleaner 1 6000
Incentives
The owner of the business will ensure that employees receive monthly payment at the right time
18

lOMoARcPSD|28022144
• The watchman should be 18 years and above and knowing atleast to speak in Kiswahili
the business will give a remuneration of 8000 per month
3.6 OTHER PERSONNEL
Cleaner
This is the person in charge of cleanliness in the premises and duties is as follows '
i. Cleaning the floor

ii. Cleaning the dusts from the product
iii. Preparing tea for the staffs
iv.Acts also as a messenger and the remuneration will be 6000 per month
3.7 RECRUITMENT TRAINING AND PROMOTION
The business will recruit the high skilled and qualified personnel and those who has good
sociability and oriented ones the recruitment will be advertised through posters and notices the
application letter from the interested and qualified personnel will be received and suitable
personnel will be shortlisted to come for interview which will be carried out to attain the best and
qualified applicant which after wards will be trained to work for the business
The business plan for training its employees is that they will take a group of its employees for
seminar and field like exhibition to equip them with modern skills
The business will promote employees by giving them off duties allowance like housing medical
and better working condition
19

lOMoARcPSD|28022144
The incentives shall be given to the management team by the manager who is the owner this
shall be done whenever the business has calculate more resource which will be of importance in
promoting work force of the member involved in the operation of the business.
The business will give the following incentives
i. Better working condition

ii. Housing allowance
iii. Giving off duty allowance
iv Medical allowance
v Transportation facilities
vi. License permits and by-laws legal requirement
3.8 SUPPORT SERVICES

The business will be dealing with huge amount of money and therefore banking services will be
from
Co-operative bank
P.o Box 34056
Molo
The business will have to higher accountant to assist in auditing and monitor the activities of the
business as the business grow will have to higher a qualified business advisor to assist in
management and ways of upgrading the business
The business will obtain its postal services from Molo poster where they will send and receive
letters from the customers
Other services like legal requirement associations with business it shall be obtained from
Momany and advocate company
P.O. box 34068
Molo
20

lOMoARcPSD|28022144
CHAPTER FOUR
4.0 OPERATIONAL PLAN
4.1 PRODUCTION OR SERVICES FACILITIES

The management of RYAN’s digital electronic shop will achieve its goods by provision of high
quality production and services in order to attract more customer to the business
The business will use the most essential machines to facilitate production and operation in the
business
Computers
Computers will be used for record keeping and sources of information to the business that can
benefit the business
Telephone
Telephone shall be used for communication within the business premises and link up with
partner like supplies and the customers.
Store
Store is a place where most essential records will be kept repairing of worn out part and also
keeping the products /equipment before selling them.
Furniture
Furniture's such as computer tables and shelves tools are required in the business.
Electronic Calculator
This will be used for calculation for instance where addition and multiplication are necessary
Stationeries
These includes receipts books counter book and files will be used to keep record in account
Offices
The business will operate under three offices the manager office where records organization shall
be made general supervisors office where records are kept and the store keeper office where the
records of products and supplies are kept.
21

lOMoARcPSD|28022144
Workshop
This is a place where main operation will take place that is repair work and production display of
ready made electrical and electronic goods shall be put a display for sale it shall have different
compartment to accommodate any available appliance and spare parts
Organizational Layout
Secretary’s office Reception Stores
General Supervisors
Office
Manager’s Office Workshop Toilets
22

lOMoARcPSD|28022144
Products
Items Supplies Quantity Unit price Total cost
Pvc cable Pemwa 300 metres 150 per m 45000
Socket outlets Pemwa 30 sockets 70 per socket 2100
CCTV cameras Flamingo 50 diff types 4000 to 3000 60000
Digital TVS Rikel technologies 10 2000 and below 200000
Laptops Rikel technologies 7 35000 and 245000

below
Computer Rikel technologies 10 19000 each 190000
Circuit breaker Pemwa 30 pieces 120 per piece 36000
Total 574,700
23

lOMoARcPSD|28022144
4.02 PRODUCTION AND SERVICE COST

The cost of production was dependant upon the materials used in the product and the service cost
will depend upon the quality of services provided in the business.
Monthly operation
Item Cost
Material 574700
Transportation 20000
Labour 126000
Total cost 720700
Overhead expenses
Electricity bill cost 3,000
Water bill cost 1,000
Total 4,000
24

lOMoARcPSD|28022144
4.3 PRODUCTION /SERVICES PROCESS

This involve the procedure that shall be involved in daily operation of RYAN’s digital electronic
shop the business should be both product and services providing shop
Recording the appliances from the supplies by checking the condition of the production and
comparing the price with the previous one
Recording the appliance from the customer who want their products to be repaired
This is achieved by doing a random check and test record book and giving the client a receipt
after making a down payment and carrying out diagnosis on the appliance
Registering the appliance in the record book and giving the client a receipt a receipt after making
a down payment and carrying out diagnosis on the appliance and repairing after a fault has been
located
4.4 COMPLYING WITH OPERATIONAL REQUIREMENT

The business will have to strictly adhere to rules and regulation laid down by the government of
Kenya to ensure smooth running of the business operation
All legal requirement will be observed for the business to be legal this will include registration
free to be paid at the register of business molo town council on annual basis
The regulations include
Trade license
The cost of license will be 55000 annually before commencing the operation of the business
registration has to be done under local county council of Molo or trade license which is
renewable annually from the ministry of trade and industry local industry.
25

lOMoARcPSD|28022144
Taxes
The cost of taxes will be 22000 annually the business shall remit taxes as it is required by the
legal act record of Kenya revenue authority.
Permits
The cost of permits will be 117000 annually
The electrical shop will require a permit from the town council upon payment of 3500 for
registration of the business the amount is paid annually therefore the trade permits has renewed
yearly basis.
Insurance
The business will be insured to the insurance companies that deal with the business insurance
cover for protection of theft fire and destruction of natural calamities.
The insurance will be offered by NEEMA INSURANCE BROOKER which is reliable and
prompt in its compensation programs
The business will get its approved letter from molo law court comprising the legal requirement
of association and it shall be obtained
From
Momanyi and advocate company
P O box 34060;
Molo.
26

lOMoARcPSD|28022144
TYPES OF REQUIREMENT
Cost
1. Trade license annually 55000

2. Trade taxes annually 220000
3. Trade permits annually 117000
4. Trade insurance annually 150000
5. Approvals 20000
552000
27

lOMoARcPSD|28022144
CHAPTER FIVE
5.0 FINANCIAL PLAN
5.01 PRE-OPERATONAL COST

ITEMS COST
Transportation 20000
Market research 1000
Meeting people 15000
Photocopying 17500
Telephone 48000
Furniture 48000
Computer 25000
Total 546500
This is the part of the financial plan which accounts for the time before the business start.
28

lOMoARcPSD|28022144
5.2 WORKING CAPITAL

These are the material needed for everyday running of the business for the business to run
smoothly there must be goods and services cash in hand, cash at bank, debtors and creditors.
ITEMS COST
Stock purchased 534700
Debtors 15000
Total 875700
29

lOMoARcPSD|28022144
5.3 PROFORMA BALANCE SHEET

Assets
CURRENT ASSET Amount in Kshs. As at 31st December
Stock of raw materials 104700
Stock of finished products 430000
Debtors 15000
Cash in hand 150000
Cash at bank 176000
Total current assets 860700
30

lOMoARcPSD|28022144
FIXED ASSETS
FIXED ASSET Amount in Kshs. As at 31st December
Machinery and equipment 200000
Accumulated depreciation (less 1%) 2000
Vehicles 800000
Furniture and fittings 48000
Land and building 3000000
Accumulated appreciation (add 1%) 300000
Total 4067520
31

lOMoARcPSD|28022144
LIABILITIES
Current Liabilities Cost
Creditors 50000
Networking capital 5000
Owners equity 65000
Bank overdraft 300000
Total current liabilities 355000
Long term liabilities
Bank loan 2000000
Total long term liabilities 2000000
Owners Equity
Liabilities 2355000
Equity 65000
Total 2420000
32

lOMoARcPSD|28022144
5.4 PROFORMA INCOME STATEMENT

YEAR ENDING 31ST DEC. 2018
ITEM AMOUNT
Cost of goods sold 508000
Cost of services 165000
Purchase 584700
Gross profit = Sale – purchase
773000 – 584700
= 188300
33

lOMoARcPSD|28022144
5.5 PROPOSED CASHFLOW STATEMENT OF RYAN’S DIGITAL ELECTRONIC AS AT 31ST DEC, 2018
years Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Total
B
Beginning cash
a
Add cash flow-
a
Add cash charges
c
Cash receipt
t
Total cash payment
c 2 1 7 6 1 1 1 2 6
Creditors 500 0000 000 500 5000 1000 2000 000 6000
P 1 5 3 7 1 2 2 2
Purchase 534 700 60000 0000 5000 5000 05000 65000 000000 690000
Wages 1 1 1 1 1 1 1 1 1 1 1 1
26000 26000 26000 120000 26000 26000 26000 26000 26000 26000 26000 26000 512000
t 1 5 7 7 7 7 7 8 1 8
ransport 6000 000 500 500 500 550 800 000 7000 3850
s 1 2 1 3 1 1 1 1 1 1
tationery 6500 5000 8000 0000 2000 0000 3000 4000 5000 53500
i 1 1 8 9 8 9 1 1 1 1 9 8 9
nterest 0000 1000 000 000 500 000 200 100 2000 1000 500 000 8300
e 8 9 1 6 7 6 7 6 9 1 8 6 9
lectricity 00 00 200 00 50 50 00 70 00 000 50 00 620
1 2 1 1 1 2 1 1 1 2 2 2 3
Water 500 000 500 600 800 000 5000 400 700 100 000 000 4600
4 2 1 6 3 4 2 4
Telephone 000 000 000 000 600 000 0600 3200
3 4 2 2 1
Advertisement 40000 6000 0000 5000 5000 66000
34

lOMoARcPSD|28022144
EXPENSES AMOUNT
Repair maintenance 4000
Waees 126000
Water bill 1000
Electricity bill 3000
Telephone 7500
Transport 20000
Advertising 5000
Taxes 20000
Depreciation 7000
Interest 109000
Total expenses 302500
Net pay before tax=total
expenses -tax =302500-
20000 =282500
Tax profit =4.5%
282500/100*4.5=12700
Net profit after tax
282500-12700
=269800
35

lOMoARcPSD|28022144
5.06 BREAK EVEN CALCULATION

ITEM
Fixed cost
Rent 12000
Wages 126000
Variable costs
Creditors 50000
Purchase 534700
Water 11000
Telephone 5000
Airtime 7000
Advertisement 20000
Electricity 30000
Postages 5000
Stationery 200000
Interest 109000
Repair and maintenance 12000
Transport 12000
Total variable cost 994200
Total contribution margin=sales -total variable cost

=4341120-
994200
=3346920 =ksh
3346920
Contribution margin percentage contribution margin /sales* 100
=3346920/4341120*100 =77.10%
36

lOMoARcPSD|28022144
Total Fixed Cost
Items Amount ksh
Purchase 584700
Salaries 126000
Total 710700
BREAK EVEN LEVEL
Break even level=fixed cost/contribution margin
=710700/77.10
=9217.90
= Ksh 9217.90
Break even level Break even level =total sales-cost of sales
=434.1120-3346920
=994200
Contribution ratio %=contribution margin /total cost
=3346920/4341120*100 =77.10%
37

lOMoARcPSD|28022144
Breakeven turnover
Break even turn over =fixed cost /contribution margin
= 710700/77.10%
=0.2
Break even units
Break even unit =contribution margin/fixed cost
=3346920/710700
=4.70
5.7 DESIRED FINANCING

Item Amount
Profit operation cost 55000
Working capital 534700
Fixed assets 4067520
Total desired financing 4757220
5.8 CAPITALIZATION
Item Amount
Total investment 3000000
Owners contribution 2000000
Borrowed funds 1000000
Total capitalization 4000000
38

lOMoARcPSD|28022144
5.09 PROFITABILITY
Gross profit % = Gross profit/Sales = 255000/534700 * 100
= 28.9%
28.90%
Return on equity
Return on equity = Net profit after tax/owners equity
255000/20000000 * 100
= 12.75%
Return on investment
= Net profit after tax/Total investment
255000/30000000 * 100
= 8.5%
39

lOMoARcPSD|28022144
APPENDIX
RYAN’S DIGITAL
ELECTRONICS
40

Duncan-Kogo-Business-Plan 11

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Duncan-Kogo-Business-Plan 11

Uploaded by

Copyright:

Available Formats

lOMoARcPSD|28022144

Duncan Kogo Business Plan

COUNSELING PSYCHOLOGY (Technical University of Kenya)

Studocu is not sponsored or endorsed by any college or university

RYAN’S DIGITAL & ELECTRONIC STORE

TITLE : BUSINESS PLAN

PRESENTER : DUNCAN KIPKOSGEI KOGO

INDEX NUMBER : 2018BE130553

CENTRE NAME : KENYA TECHNICAL TRAINERS COLLEGE

Downloaded by SAM MACHARIA (machariasam115@gmail.com)

Downloaded by SAM MACHARIA (machariasam115@gmail.com)

4.4 COMPLYING WITH OPERATIONAL REQUIREMENT.................................................26

Downloaded by SAM MACHARIA (machariasam115@gmail.com)

CANDIDATE NAME: DUNCAN KIPKOSGEI KOGO

Downloaded by SAM MACHARIA (machariasam115@gmail.com)

Downloaded by SAM MACHARIA (machariasam115@gmail.com)

Downloaded by SAM MACHARIA (machariasam115@gmail.com)

iii. Keys to Success

Downloaded by SAM MACHARIA (machariasam115@gmail.com)

1.4 Competitive Advantages

1.4 Financial Plans

ii. Operating and Entry Plan

Downloaded by SAM MACHARIA (machariasam115@gmail.com)

iii. Target Market

iv. Competitive Advantage

Downloaded by SAM MACHARIA (machariasam115@gmail.com)

vi. Financial Plan

v. We assume continued steady economic growth in Eldoret town.

Downloaded by SAM MACHARIA (machariasam115@gmail.com)

Projected Profit and Loss

i. Our revenue is based on minimum estimated averages against highest expense

Projected Cash Flow

Projected Balance Sheet

viii) Critical Risk, Problem and Solution

Downloaded by SAM MACHARIA (machariasam115@gmail.com)

2.0 BUSINESS DESCRIPTION

2.1 DETAILS OF THE OWNER

Business License and legal

Installed security system

Downloaded by SAM MACHARIA (machariasam115@gmail.com)

Downloaded by SAM MACHARIA (machariasam115@gmail.com)

2.3 LEGAL FORMS OF OWNERSHIP

The amount contributed and invested is as follows.

Personal saving 2,000,000

Family saving 500000

Private organization 1000000

Friends and relatives 500000

Downloaded by SAM MACHARIA (machariasam115@gmail.com)

3.0 Products and Services

Downloaded by SAM MACHARIA (machariasam115@gmail.com)

Downloaded by SAM MACHARIA (machariasam115@gmail.com)

3.1 Entry Plan

Downloaded by SAM MACHARIA (machariasam115@gmail.com)

4.0 MARKETING PLAN

4.1 Potential Customers

Downloaded by SAM MACHARIA (machariasam115@gmail.com)

Number of competitors Products

RYAN’s digital electronic shop 4/6

Sideways electronic shop 1/6

Mawingu electronic shop 3/6

Keepleft electronic shop 4/6

The overall strength and weakness in our business and competitors