INSTITUTION: MILELE AFRICAN INSTITUTE OF RESEARCH AND

DEVELOPMENT TECHNOLOGY.

NAME OF THE BUSINESS: ATO RITE HR SOLUTIONS.

NAME OF THE STUDENT: EKIRU DELQUEEN NANGIRO.

REGISTRATION NUMBER: 36612115077

COURSE CODE: 2926

COURSE UNDERTAKEN: DIPLOMA IN HUMAN RESOURCE MANAGEMENT.

SUPERVISED BY: Mr. BENARD

PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL FOR

THE FULFILMENT OF AWARD OF DIPLOMA IN
HUMAN RESOURCE MANAGEMENT.

DATE OF SUBMISSION: NOVEMBER 2023

DECLARATION

DECLARATION BY THE STUDENT

This business plan project is my original work and has not been presented to any institution
for academic purpose.
Name: EKIRU DELQUEEN NANGIRO
Signature: ___________
Date: ___________

DECLARATION BY THE SUPERVISOR

This business plan project has been submitted for examination with my approval as the
university supervisor.
Name: Mr. BENARD MUTHUI
Signature: ___________
Date: ___________

i
ACKNOWLEDGEMENT

I want to express my gratitude to …………….who supported and assisted me in creating this

business plan. I acknowledge the divine guidance of God, whose wisdom and blessings have
been my foundation.

ii
DEDICATION

In dedication to the person who has profoundly inspired and encouraged me throughout my
journey, I honor my parents…………. Their belief in my potential has been a driving force in
my life, and I am thankful for their unwavering support

iii
Table of Contents
DECLARATION........................................................................................................................i
ACKNOWLEDGEMENT.........................................................................................................ii
DEDICATION.........................................................................................................................iii
Executive summary.................................................................................................................vii
CHAPTER ONE.......................................................................................................................1
1.0 Business description.......................................................................................................1
1.1 Business Name.............................................................................................................1
1.1.1 Vision and Mission Statement................................................................................1
1.2 Business Location and Address.................................................................................1
1.3 Form of Business Ownership.....................................................................................2
1.4 Type of Business..........................................................................................................2
1.5 Product(s)/Service(s)...................................................................................................2
1.6 Justification of Business Opportunity.......................................................................2
1.7 Industry Analysis........................................................................................................2
1.8 Business Goals/Objectives..........................................................................................3
1.9 Entry and Growth Strategy.......................................................................................3
CHAPTER TWO.......................................................................................................................3
2.0 Marketing Plan...............................................................................................................3
2.1 Customers....................................................................................................................3
2.2 Market Share...............................................................................................................4
2.3 Competition Analysis..................................................................................................4
2.4 Advertising and Sales Promotion..............................................................................5
2.5 Pricing Strategy...........................................................................................................5
2.6 Sales Tactics.................................................................................................................5
2.7 Distribution Strategy..................................................................................................6
CHAPTER THREE..................................................................................................................6
3.0 Organization and Management Plan............................................................................6
3.1 Business Manager and Qualifications.......................................................................6
3.2 Key Personnel..............................................................................................................7
3.4 Recruitment, Training, and Promotion....................................................................8
3.5 Remunerations and Incentives..................................................................................8
3.6 Licenses, Permits, and By-Laws................................................................................8
3.7 Support Services.........................................................................................................9
CHAPTER FOUR...................................................................................................................10
4.0 Operational/Production Plan......................................................................................10
4.1 Operational/Production Facilities...........................................................................10
4.1.2 Business Premises Layout.....................................................................................10
4.2 Operational/Production Strategy............................................................................11
4.3 Production/Operational Process..............................................................................12
Screening and Assessment................................................................................................12
4.4 Government Regulations Affecting Operations/Production Process...................12
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 Business Licensing..........................................................................................................13
CHAPTER FIVE................................................................................................................14
5.1 Pre-operational cost..................................................................................................14
5.2 Working capital estimations....................................................................................14
5.3 Projected Cash Flow Statements...............................................................................1
Projected Cash Flow Statement for year 1.....................................................................1
Projected Cash Flow Statement for year 2.....................................................................2
Projected Cash Flow statement for year 3......................................................................3
Pro-forma Income statements..........................................................................................1
5.5 Pro-forma statement of financial position...........................................................1
5.6 Break-even point calculation................................................................................2
5.7 Profitability ratio analysis....................................................................................3
5.8 Desired financing........................................................................................................4
5.9 Proposed capitalization..............................................................................................4

v
Executive summary
Chapter 1: Business Description

In Chapter One of the business plan, the business is introduced as a sole proprietorship
aiming to aid job seekers with employment opportunities in Lodwar and the surrounding
areas. The vision and mission statements emphasize the agency's commitment to becoming a
leading recruitment agency in the region by providing efficient and reliable services to both
job seekers and employers. The business will be located in Lodwar along Kakuma Road, with
a specific address and contact information provided. Ekiru Delqueen Nang’iro is the sole
proprietor and founder, responsible for all aspects of the business. The agency's primary
service is job placement, spanning various industries, and it will also offer career counseling
and resume writing services. The business opportunity is justified by the high demand for job
placement services, limited competition, a growing job market, a strong network, and a
passion for helping others. An industry analysis highlights the growth and potential in the
local recruitment industry, along with challenges and opportunities. SMART business goals
outline targets for profitability, sales volume, market share, business growth, and business
image. The entry and growth strategy involve an online presence, partnerships, a referral
program, and community engagement to establish and expand the agency's presence in the
market.

Chapter 2: Marketing Plan

In Chapter 2 of Ato Rites HR solutions business plan, customer profiles are outlined, with a
focus on businesses and organizations in Lodwar and nearby areas, including government
agencies, non-profits, and private companies. Their income levels vary, but their buying
behaviors are driven by the need for qualified employees. Market share is addressed,
acknowledging competition from other recruitment agencies in Lodwar and the aim to
establish trust and capture a significant portion of the local market. A pie chart diagram is
suggested to visually represent market share. The competition analysis emphasizes the
analysis of major competitors' strengths and weaknesses, with Ato's competitive advantage
lying in tailored solutions. Strategies to cope with competition include building strong client
relationships, competitive pricing, and more. Advertising and sales promotion methods
encompass both traditional and digital channels, while pricing factors include market
demand, competitor pricing, cost of operations, and value proposition. Cost-based and value-
based pricing approaches are considered. Sales tactics focus on superior customer care,
effective customer relations, and selling techniques. The distribution strategy includes online
platforms, in-person meetings, and referral programs.

Chapter 3: Organization and Management plan

In Chapter three of Ato Rites HR Solutions business plan details the organization and
management plan. The business operates as a sole proprietorship, with the Owner/Manager
responsible for overall management, necessitating qualifications in Human Resource
Management and experience in the recruitment industry.
vi
Key personnel include the Owner/Manager, Recruitment Expert, FinanceAccountant, and
Secretary, each with specific responsibilities and qualifications. The chapter also outlines
licensing, permits, and compliance with industry-specific regulations, along with support
services such as banking, insurance, legal, technical, and management consultancy services
provided by local firms and organizations.

Chapter 4: Operational/Production plan

In Chapter four of the business plan the operational and production plan are outlined. It
begins with a list of operational facilities, including machines, tools, and equipment, such as
computers, printers, and internet routers, along with their quantities and costs, totaling Ksh
352,000. The business premises layout is described, emphasizing areas for reception, office,
interview room and storage to facilitate efficient workflow.

The chapter highlights government regulations relevant to the agency's operations, including
compliance with the Employment Act, labor laws, and business registration requirements. It
then presents the operational strategy, understanding the local job market, and cost
minimization strategies to ensure efficient supervision and maximum profitability.

Monthly operational costs are detailed, including raw materials, labor, and overhead costs,
totaling Ksh 215,500. The production process involves client consultation, candidate
sourcing, screening, presentation, interview coordination, job offer, and post-placement
follow-up, all geared towards customer satisfaction and continuous improvement.

Lastly, the chapter mentions government regulations affecting the operational process, such
as taxation, statutory deductions, minimum wage, occupational health and safety, and labor
laws, which the company must adhere to in its operations.

Chapter 5: Financial plan

Pre-operational Cost: The initial costs before starting operations amount to 133,000 Kshs,
including rent, electricity, water, legal fees, insurance, database and software expenses, and
advertising and marketing. Working Capital Estimations: Working capital for the first three
months totals 182,000 Kshs, and the grand total for the year is 546000 Kshs, covering
expenses such as rent, salaries, office supplies, marketing, and more.
Projected Cash Flow Statements: These statements detail your expected cash inflow and
outflow for the first three years. They include elements like cash sales, debtors, loan
repayments, and taxes, providing a comprehensive view of your financial performance.
Proforma Income Statement: This statement presents your anticipated income and expenses
for the years 2023, 2024, and 2025. It calculates gross profit, expenses, and net profit after
tax, offering insights into your profitability over these years
Break-even Point Calculation: The break-even point is estimated for both years, 2024 and
2025, based on fixed costs and variable costs. It's projected that you would need to make
sales of approximately 22417528 kshs in 2024 and 20638160 kshs in 2025 to cover your
costs.
Profitability Ratio Analysis: This section provides ratios to assess your business's
profitability, including Gross Profit Ratio, Net Profit Ratio, Return on Assets (ROA), Return
on Equity (ROE), and Return on Investment (ROI) for the years 20243, 2024, and 2025.

vii
Desired Financing: Your desired financing includes pre-operational costs, working capital,
and contingency funds, totaling 714,000 Kshs. This amount represents the capital you wish to
secure for your business.
Proposed Capitalization: The proposed capitalization shows the total investment in your
business, consisting of owner's equity and a bank loan, amounting to 1,000,000 Kshs.

viii
 CHAPTER ONE
1.0 Business description
1.1 Business Name
Ato Rites HR Solution is a sole proprietorship business that aims to connect job seekers with
employment opportunities in Lodwar and its surrounding areas. The name of the proposed
business means transparency which enlight the empowerment of the knowledge of human
resource management among the community to promote development.
1.1.1 Vision and Mission Statement
Vision Statement: To be the leading provider of skilled and reliable manpower solutions in
Lodwar, and beyond, contributing to the growth and development of businesses and the
community.
Mission Statement: Ato Rites HR Solution is dedicated to delivering high-quality workforce
solutions that meet the unique needs of our clients. We aim to empower individuals by
providing employment opportunities while fostering economic growth and sustainability in
Lodwar.
1.2 Business Location and Address
Ato Rites HR Solution is located in Lodwar along Kakuma Road. Our physical address is as
follows: Dekiru Building, 2nd Floor, Room A12. The postal address is P.O. Box 000-001,
Lodwar Town. Contact information includes a telephone number (+254 59111111), email
address (atoriteshr@gmail.com), and website (www.atoriteshr.com).
Map of the location of the company

ATO HR
SOLUTIONS

KCB BANK

KAKUMA ROAD

LODWAR
BUS
TERMINUS

LODWAR
HOSPITAL

1
1.3 Form of Business Ownership

Ato Rites HR Solution operates as a sole proprietorship, which means that it is owned and
managed by a single individual, Ekiru Delaqueen Naang’iro. The initial investment for the
business is 600,000 Kshs sourced from personal savings. As the sole proprietor, I will be
responsible for all aspects of the business, including management, operations, and decision-
making.

1.4 Type of Business

Ato Rites HR Solution Limited is primarily engaged in the business of providing skilled and
unskilled labor solutions to various industries and businesses in Lodwar. We specialize in
recruiting, training, and deploying workers to meet the workforce needs of our clients.
1.5 Product(s)/Service(s)

Our core products and services include:

Labor Recruitment: We source, screen, and select skilled and unskilled labor for businesses
in various sectors, including agriculture, construction, hospitality, and more.
Workforce Training: We provide training and upskilling programs to prepare job seekers for
employment, enhancing their employability.
Temporary and Permanent Placements: We offer both temporary and permanent staffing
solutions to match the diverse needs of our clients.
Payroll and HR Services: We provide payroll management and human resource services to
assist businesses in managing their workforce effectively.

1.6 Justification of Business Opportunity

Several factors justify the establishment of Ato Rites HR Solution as follows:

Growing Demand for Labor: Lodwar is experiencing increased economic activity, leading to
a rising demand for skilled and unskilled labor in various industries.
Unemployment Challenge: There is a significant pool of unemployed individuals in Lodwar
who can benefit from job placement services, addressing the issue of unemployment.
Supporting Local Businesses: Our services will help local businesses find the right
workforce, improve their efficiency, and contribute to their growth.
1.7 Industry Analysis

The staffing industry in Lodwar is a vital part of the local economy, connecting job seekers
with employment opportunities and supporting businesses in their growth.
Industry classification: The recruitment industry falls under the services sector, specifically in
the labor market services sub-sector.
Industry performance: The staffing industry in Lodwar has experienced steady growth in
recent years, driven by the increasing population and the demand for skilled and unskilled
workers. The industry's growth rate is estimated at 7% per year, making it a promising sector
for business development.

2
Key players: The main players in the local recruitment industry are a mix of established
agencies and small, independent firms. Ato Rites HR Solution aims to differentiate itself by
providing personalized services and a deep understanding of the local job market.
Challenges and opportunities: The recruitment industry in Lodwar Town faces challenges
such as a lack of formal training for recruiters and the need to adapt to the changing digital
landscape. However, there are also opportunities for growth, such as the increasing demand
for digital platform work and the government's support for employment initiatives.

1.8 Business Goals/Objectives

SMART Business Goals:

Profitability: Achieve a net profit margin of 15% within the first year of operation.
Sales Volume: Place a minimum of 60 job seekers in suitable employment within the first
one year.
Market Share: Capture 20% of the local recruitment market within the first one year.
Business Growth: Expand services to include executive recruitment and international job
placements within two years.
Business Image: Establish a reputation for professionalism and reliability through efficient
service delivery
1.9 Entry and Growth Strategy
Our entry and growth strategy includes the following key elements:

Local Networking: Establish strong relationships with local businesses, government agencies,
and educational institutions to gain credibility and access to a pool of job seekers and job
openings.
Digital Presence: Develop a user-friendly website and leverage social media platforms to
reach a wider audience and provide online services.
Quality Service: Provide exceptional customer service to both job seekers and businesses to
build a positive reputation and secure repeat business.
Continuous Improvement: Stay updated with industry trends, technology, and employment
laws to adapt and grow in a competitive market.
Community Engagement: Engage in community outreach programs, such as job fairs and
skill development workshops, to address unemployment and contribute to local development.

3
 CHAPTER TWO
2.0 Marketing Plan
2.1 Customers:
Our target customers for Ato Rites HR Solution Services include:
Local businesses in Lodwar looking for qualified and reliable employees.
Job seekers in Lodwar Town seeking employment opportunities and career guidance.
Non-profit organizations and government agencies with staffing needs.
Start-up businesses looking for cost-effective staffing solutions.
Individuals seeking temporary or part-time employment.
2.2 Market Share:
Recognizing Competition: There are other recruitment agencies, such as Beever HR Consult ,
Vuuma Hiring Company and Vegas Company Limited, competing for the same customers in
Lodwar Town.
Estimating Market Share: Estimating the exact market share the company will capture is
challenging. However, the agency aims to establish itself as a trusted and reliable resource for
both employers and job seekers.
Pie Chart Diagram: A pie chart can be used to illustrate the estimated market share of the
company as well as the market share of its major competitors.

Market Share

Beever HR Vuuma Hiring Ato Rites Vegas Company

2.3 Competition Analysis:

The staffing and recruitment industry in Lodwar Town faces competition from both
established and emerging staffing agencies. Ato Rites HR Solution will analyze its major
competitors, such as Beever HR,Vuuma Hiring and Vegas Company, to identify their
shortcomings.
Competitive Advantage: Our competitive advantage lies in our commitment to find the best
candidates in the market, not just the best candidates on the market. By understanding the
4
specific needs of its clients and the local market, the agency can provide tailored solutions
that set it apart from its competitors.
This analysis will help the agency understand how it can provide better services and attract
more customers.To gain a competitive edge, we will:
Differentiate ourselves through personalized service and local market expertise.
Offer competitive pricing structures.
Build strong relationships with local businesses and candidates.
Continuously adapt to changing market dynamics and demands.
2.4 Advertising and Sales Promotion

Our advertising and sales promotion strategies will include:

Creating an informative and user-friendly website to showcase our services and job listings.
This will aid interested parties to navigate easily in our website with minimal difficulties.
Special offers: Providing discounted rates or additional services for a limited time to attract
new clients and encourage repeat business.
Partnerships with local businesses: Collaborating with other businesses in Lodwar to offer
exclusive discounts or benefits to their employees, creating a win-win situation for both
parties.
Utilizing social media platforms to engage with our target audience and promote job
opportunities.
Collaborating with local media outlets for advertisements and press releases.
Implementing referral programs for both clients and candidates.
2.5 Pricing Strategy:
Our pricing strategy will be competitive and flexible, tailored to the specific needs of our
clients. The factors that will influence the pricing include:
Market demand: The level of demand for recruitment services in Lodwar will affect the
pricing. If the demand is high, the agency can set higher prices, and if the demand is low, the
agency may need to offer competitive prices to attract clients.
Competitor pricing: The prices charged by other recruitment agencies in the area will also be
a factor in setting the pricing. Ato Rites HR Solution will need to consider the market rates
and ensure their prices are competitive.
Cost of operations: The agency's operational costs, such as advertising, office rent, and
employee salaries, will be taken into account when setting prices. The agency needs to cover
its expenses while still offering competitive rates.
Value proposition: Ato Rites HR Solution will focus on providing high-quality services,
personalized attention to clients, and efficient recruitment processes. This value proposition
may justify slightly higher prices compared to competitors.
The company will also consider the value-based pricing approach, where the price is set
based on the perceived value of the service to the client. If the agency can demonstrate the
value it provides in terms of finding the right candidates for its clients, it may be able to
justify higher prices.
By offering competitive prices while maintaining a focus on quality and value, Ato Rites HR
Solution aims to increase its revenue and profitability while providing the best value to its
clients.

2.6 Sales Tactics:

Our sales tactics will focus on building and maintaining strong relationships with clients and
candidates. This will include:
5
Personalized consultations to understand client staffing requirements.
Conducting thorough candidate assessments to match the right individuals with job
opportunities.
Providing ongoing support and communication to both clients and candidates throughout the
hiring process.
Conducting follow-up evaluations to ensure client satisfaction and candidate success.

2.7 Distribution Strategy

As a service-oriented business, our distribution strategy primarily involves connecting

candidates with job opportunities and assisting businesses in fulfilling their staffing needs.
This will be achieved through:
Maintaining a comprehensive online platform for job listings and applications.
Hosting in-person interviews, skills assessments, and onboarding processes for candidates.
Collaborating with local businesses to understand their staffing requirements and provide
suitable candidates.
Establishing strategic partnerships with local educational institutions and community
organizations to source talent.
Our marketing plan outlines our approach to target customers, competition, advertising,
pricing, sales tactics, and distribution strategy. By focusing on these key elements, Ato Rites
HR Solution aims to establish a strong presence and reputation in Lodwar Town staffing and
recruitment mark

6
 CHAPTER THREE

3.0 Organization and Management Plan

3.1 Business Manager and Qualifications

Business Manager: The business manager of Ato Rites HR Solution is Ekiru Delqueen
Nang’iro who is the sole proprietor of the company and possesses a strong background in
human resource management.
Qualifications sought for this role include academic and professional credentials in Human
Resource Management and a substantial background in the recruitment industry, ideally with
a focus on both local and foreign recruitment which the individual allocated the position is
highly qualified.
The primary responsibilities of the Manager involve overseeing the entire staff recruitment
process, commencing with candidate sourcing and concluding with job placement, ensuring a
seamless fit between candidates and suitable job opportunities.
The Owner/Manager assumes responsibility for several essential functions. These include
Client Acquisition and Relationship Management, involving identifying potential clients,
comprehending their recruitment requirements, and maintaining strong ties with existing
clients. The Owner/Manager also manages Candidate Sourcing and Screening, ensuring that
prospective job seekers align with the prerequisites of available job opportunities. Lastly,
overseeing Job Matching and Placement is crucial, as the Owner/Manager facilitates the
process to achieve successful matches between job seekers and employers.
Organization chart

MANAGER

RECRUITMENT ACCOUNTANT SECRETARY

OFFICER

3.2 Key Personnel

As a sole proprietorship, Ato Rites HR Solution is primarily managed by the business
manager. However, we will collaborate with key personnel and partners to support various
aspects of our operations:
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Manager: The owner of Ato Rites HR Solution will be responsible for the overall
management and direction of the business. Key duties and responsibilities include developing
and implementing business strategies, managing finances, and overseeing day-to-day
operations.
Recruitment Officer: The recruitment specialist will be responsible for sourcing, screening,
and interviewing potential candidates for job openings. They should have a degree in human
resources or a related field, as well as experience in recruitment. Key duties and
responsibilities include developing job descriptions, posting job openings, and negotiating job
offers.
Accountant: He/she will be responsible for financial reporting, compliance, and managing
expenses and cash flow. Risk management and providing financial insights for decision-
making are key roles, along with overseeing vendor contracts, payroll, and audits.

3.3 Other Personnel

Secretary: The secretary will be responsible for managing the administrative functions of the
business. They should have a degree in business administration or a related field, as well as
experience in office management. Key duties and responsibilities include managing the office
budget, maintaining office equipment, and overseeing administrative staff.
3.4 Recruitment, Training, and Promotion

Recruitment: We will use a rigorous recruitment process to ensure we attract and retain
qualified staff. This includes advertising job openings, conducting interviews, and performing
background checks.
Training: We are committed to providing continuous training to our team to keep them
updated on industry trends and regulations. Training will cover areas such as recruitment best
practices, customer service, and technology integration.
Promotion: As we grow, we aim to promote from within when suitable opportunities arise.
Performance-based promotions will be encouraged to recognize and reward dedication and
excellence among our team members.
3.5 Remunerations and Incentives
SN JOB TITLE BASIC ALLOWANCES(ksh) TOTAL
SALARY(ksh) MONTHLY
SALARY(ksh)
1 Manager 45500 3500 49000
2 Recruitment 26000 2500 28500
expert
3 Accountant 25000 2500 27500
4 Secretary 14000 1500 15500
TOTAL 120,500
We will offer competitive remuneration packages to attract and retain top talent in the
following ways:
Base Salary: Competitive salaries commensurate with industry standards and experience.
Performance Bonuses: Performance-based bonuses to reward outstanding performance and
achievement of key performance indicators (KPIs).
Health and Benefits: Provision of health insurance and other benefits to ensure the well-being
of our employees.

8
Employee Recognition: Regular recognition and appreciation programs to motivate and
acknowledge exceptional contributions.

3.6 Licenses, Permits, and By-Laws

We will ensure full compliance with all relevant licenses, permits, and by-laws required to
operate a staffing and employment agency in Lodwar. This includes adhering to labor laws,
tax regulations, and any other legal requirements.
Securing a local business permit is one of the crucial step. To achieve this, you should contact
the local government or county council office in Lodwar to learn about specific licensing
requirements tailored to businesses operating in the area.

Furthermore, understanding and adhering to industry-specific regulations are imperative. For

recruitment agencies like Ato Rites HR Solution these regulations often encompass ethical
practices, fee structures, and interactions with clients. Compliance with these industry-
specific regulations and standards is essential for smooth operations.

Given that recruitment agencies may fall under employment agency regulations in Kenya, it
is essential to become familiar with the Employment Act and other relevant labor laws that
may apply to the agency's operations. Compliance with regulations related to job seeker
rights, fee transparency, and the ethical conduct of recruitment services is crucial.

Developing internal policies and procedures tailored to the recruitment agency, even as a sole
proprietorship, is another critical aspect. These internal policies should address various areas,
including client relationships, candidate screening procedures, and data privacy. Ensuring
that these internal policies align with local, national, and industry-specific regulations is
essential.

Registering for tax purposes with the Kenya Revenue Authority (KRA) is a necessary step. It
is vital to understand the tax obligations associated with the business structure and industry.
As a sole proprietor, you may need to report business income and expenses on your personal
tax return. Maintaining accurate financial records is crucial for facilitating tax compliance.

Considering liability insurance is advisable, particularly when dealing with sensitive client
and candidate information. This type of insurance can protect the business from potential
legal claims and liabilities.

Developing clear and legally sound client contracts is a must. These contracts should outline
the terms of the recruitment services, including fees, guarantees, and obligations, all while
ensuring adherence to applicable laws and regulations.

It is important to determine if there are any additional permits or permissions required for
specific business activities. Consulting with local authorities and relevant agencies is crucial
for identifying and securing any necessary permits to operate the business approprietly.

3.7 Support Services

To facilitate smooth operations, Ato Rites HR Solution will utilize various support services,
including:

9
IT Services: To maintain our website, database, and digital platforms. We will require
technical support for our computer systems, software, and network infrastructure. We will
outsource these services to Tech Solutions, a local IT company located at Lodwar, to ensure
the smooth operation of our business.
Insurance Services: To protect our business and employees, we will outsource insurance
services from Sanlam Insurance Company, located at Lodwar. They will provide us with
comprehensive insurance coverage.

Transportation Services: For candidate interviews and on-site client visits.

Legal Services: For contract review and compliance. In order to ensure compliance with local
laws and regulations, we will seek legal advice and services from Zippy& Associates, a law
firm located at Lodwar. They will assist us with drafting contracts, reviewing legal
documents, and providing general legal guidance.
Financial Services: For accounting, tax, and financial planing

CHAPTER FOUR
4.0 Operational/Production Plan
4.1 Operational/Production Facilities
SN FACILITY CAPACIT QUANTITY COST(ksh TOTAL SOURCE
Y ) COST(ksh
10
 )
MACHINES
1 Computers 1TB storage 2 each 50000 100,000 Shell
and laptops Electronics
2 Printers and Large 2 35000 70000 Vegan
scanners Technologies
3 Internet Large 1 9000 9000 Bbn sasa
routers
Sub Total 179000
Total and
equipment
1 Recruitment 1 60000 40000 Biashara
software Master’s
2 Office N/A N/A 25000 25000 Patmat
Supplies stationery
3 Office N/A 2 5000 10000 Pi Telecoms
Telephones
Sub total 75000
Furniture
and fittings
1 Filling 5 drawer 2 12500 25000 Viva
cabinets Ventures
2 Desk and 1.5m 4 14500 58000 Zeke
chairs enterprises
3 Office N/A N/A 15000 15000 Kalasha
Decors Interiors
Sub total 105000
GRAND 352000
TOTAL
4.1.2 Business Premises Layout

INTERVIEW ROOM IT R STORAGE

OFFICE SPACE MEETING SPACE RECEPTION

Business Premises Layout: Ato Rites HR Solutions business premises are located in Lodwar.
The layout of our operational facilities is designed to support the efficient functioning of our
staffing and employment agency. It includes:
Reception Area: A welcoming space for client meetings and candidate interviews.
Office Space: Dedicated workstations for administrative tasks, document management, and
client consultations.
Meeting Room: For confidential discussions and presentations.
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Interview Room: Equipped with necessary tools for candidate assessments and interviews.
Storage: Secure storage for client and employee records.
Technology Infrastructure: High-speed internet, computers, and software to support our
digital operations.
As a recruitment company, we will be required to comply with various government
regulations related to employment, labor, and business operations. These regulations may
include:

Employment Act: This act outlines the minimum requirements for employment contracts,
working hours, and wages for employees
Labor Laws: These laws govern the relationship between employers and employees,
including issues related to discrimination, harassment, and termination

4.2 Operational/Production Strategy

Our operational strategy is focused on providing efficient staffing and employment agency
services. Key elements of our strategy include:
Technology Integration: Utilizing modern technology for candidate sourcing, job matching,
and HR management.
Quality Assurance: Implementing rigorous screening and verification processes to ensure the
suitability of candidates.
Client-Centric Approach: Tailoring our services to meet the unique needs and requirements
of our clients.
Adaptability: Remaining flexible and responsive to changing market conditions and client
demands.
Continuous Improvement: Regularly assessing and enhancing our operational processes to
maintain efficiency and effectiveness.

Monthly Cost of Raw materials

Item Amount (Kshs)

Job board account subscriptions 3000
Advertising expenses 12000
Background check services 5000
Reference inquiry service 5000
Internet and communication 8000
expenses
Total cost of materials 33000

Monthly Cost of Labor

Job title Total monthly salary(ksh)
Manager 49000
Recruitment expert 28500
Accountant 27500
Secretary 16500
Total cost of labour 121500

Monthly Overheads costs

12
 Item Amount (Kshs)
Rent 25000
Utilities 7000
Office supplies 12000
Insurance 5000
Aadvertising expenses 12000
Total overheads costs 61000

Total cost of production per month

Item Amount (Kshs)

Cost of raw materials 33000
Cost of labor 121500
Overheads costs 61000
Total cost of production/operation 215,500

4.3 Production/Operational Process

Our production/operational process involves several key stages:

Client Consultation: We meet with businesses to understand their staffing needs, job descriptions,
and company culture.
Candidate Sourcing: We actively source and advertise job openings to attract potential candidates.
Screening and Assessment: We conduct interviews, skills assessments, and background checks to
vet candidates.
Matchmaking: We match qualified candidates with suitable job openings, ensuring a good fit for
both parties.
Placement: Once the client approves the candidate, we facilitate the hiring process.
Workforce Management: For long-term placements, we offer ongoing workforce management
services, including payroll and HR consulting.
Monitoring and Feedback: We maintain regular communication with both clients and candidates to
ensure satisfaction and address any concerns.

4.4 Government Regulations Affecting Operations/Production Process

We are committed to complying with all relevant government regulations affecting our operations
and production processes. Key regulations include:

Labor Laws: Adhering to labor laws governing employment, wages, and working conditions in Kenya.
Taxation: Complying with tax regulations, including income tax and VAT, and ensuring accurate
record-keeping.
Data Protection: Safeguarding personal data in accordance with data protection laws.
Business Licensing: Ensuring our business is licensed and up to date with all necessary permits
and licenses.
Employment Regulations: Complying with regulations related to employment contracts, employee
rights, and workplace safety.

13
Ato Rites HR Solution will maintain a proactive approach to staying updated on changes in
government regulations to ensure full compliance at all times.

CHAPTER FIVE
5.0 Financial plan

14
5.1 Pre-operational cost
Item Amount (Kshs)
Rent 25000
Electricity 6000
Water 5000
Legal fees 5000
Insurance 5000
Database and software expenses 60000
Advertising and marketing 12000
Total pre-operational costs 118000

5.2 Working capital estimations

Item 1st month 2nd month 3rd month
Amount Amount Amount
(Kshs) (Kshs) (Kshs)
Rent 25000 25000 25000
Salaries 121500 121500 121500
Office supplies 15000 15000 15000
Marketing expenses 12000 12000 12000
Internet and phone expenses 8000 8000 8000
Total working capital 181500 181500 181500
GRAND 544500
TOTAL

15
 5.3 Projected Cash Flow Statements
Projected Cash Flow Statement for year 1
Particulars Jan Feb Mar April May June July Aug Sep Oct Nov Dec Total
Cashinflow
balance b/f 0 904229 871190 897062 915173 1001851 925525 872097 904697 1067454 1188447 1203142 12,583,657
Owner’s equity 600000 600000
Bank loan 400000 400000
Cash sales 500000 500000 600000 600000 700000 500000 500000 600000 800000 800000 700000 600000 8,400,000
Debtors 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 480000
Anyother 50000 50000 20000 20000 30000 30000 30000 30000 30000 40000 40000 30000 370,000.
source
TOTAL 1590000 1494229 1531190 1557062 1685173 1571851 1495525 1542097 1774607 1947454 1968447 1873142 19,868,569
Cashoutflow
Pre-operational
Purchases 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 120000
Creditors 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 48000
Salaries 121500 121500 121500 121500 121500 121500 121500 121500 121500 121500 121500 121500 1458000
Rent 25000 25000 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 300000
Electricity 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 72000
Water 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 500 60000
Internet 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000
Mail 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000
Transport 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 60000
Advertising 12000 12000 12000 12000 12000 12000 12000 12000 12000 12000 12000 12000 144000
Insurance 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 60000
Loan repay 33333 33333 33333 33333 33333 33333 33333 33333 33333 33333 33333 33333 399996
Interest on loan 2488 2488 2488 2488 2488 2488 2488 2488 2488 2488 2488 2488 29856
(14% p.a)
Taxes (30%) 417450 388718 399807 407568 446001 412005 389107 403079 472832 524686 530984 502392 5,404,729
TOTAL (c.o.f) 685771 623039 634128 641889 680322 646326 623428 637400 707153 759007 765305 736713 8,849,011.
NET cash p.m 904229 871190 897062 915173 1001851 925525 872097 904697 1067454 1188447 1203142 1136429 12,409,123.
1
Projected Cash Flow Statement for year 2
Particulars Jan Feb Mar April May June July Aug Sep Oct Nov Dec Tota
CASH IN FLOW
balance b/f 113642 105835 100369 103543 105750 114310 106302 100696 103772 139375 144848 141678 13,56
9 1 6 8 7 5 4 7 7 9 2 8 .
Owner’s equity 0
Bank loan 0
Cash sales 500000 500000 600000 600000 700000 500000 500000 600000 800000 800000 700000 600000 8,100
Debtors 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 4800
Any other source 30000 30000 30000 30000 30000 30000 30000 30000 30000 30000 30000 30000 3600
(specify)
TOTAL c.n.f 170642 162835 167369 170543 182750 171310 163302 167696 190772 226375 221848 208678 22,46
9 1 6 8 7 5 4 7 7 9 2 8 .
Cash out flow
Pre-operational
Purchases 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 1200
Creditors 0 0 0 0 0 0 0 0 0 0 0 0 0
Salaries 121500 121500 121500 121500 121500 121500 121500 121500 121500 121500 121500 121500 1458
Rent 25000 25000 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 3000
Electricity 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 7200
Water 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 500 6000
Internet 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3600
Mail 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2400
Transport 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 6000
Advertising 12000 12000 12000 12000 12000 12000 12000 12000 12000 12000 12000 12000 1440
Insurance 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 6000
Loan repay 0 0 0 0 0 0 0 0 0 0 0 0 0
Interestonloan(14 0 0 0 0 0 0 0 0 0 0 0 0 0
% p.a)
Taxes (30%) 453578 430155 443758 453431 489902 455558 431557 444740 513968 620777 607194 567686 7,785
1
2
 TOTAL c.o.f 648078 624655 638258 647931 684402 650081 626057 639240 708468 815277 801694 762186 8,255
NET cash p.m 105835 100369 103543 105750 114310 106302 100696 103772 139375 144848 141678 132460 13,14
1 6 8 7 5 4 7 7 9 2 8 2 .
Projected Cash Flow statement for year 3

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

Cash in flow
Balance b/f 1324602 1239072 1179201 1137291 1107954 1157418 1052043 978281 996647 1149503 1256503 1261253 14,154,447
Owner’s
equity
Bank loan 0
Cash sales 600000 600000 600000 600000 700000 500000 500000 600000 800000 800000 700000 700000 8,700,000
Debtors 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 480000
TOTAL c.i.f 1964602 1879072 1819201 1777291 1847954 1697418 1592043 1618281 1836647 1989503 1996503 2001253 21,572,447
Cash out flow
Preoperational
Purchases 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 120000
Creditors 0 0 0 0 0 0 0 0 0 0 0 0 0
Salaries 121500 121500 121500 121500 121500 121500 121500 121500 121500 121500 121500 121500 1458000
Rent 25000 25000 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 300000
Electricity 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 72000
Water 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 500 60000
Internet 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000
Mail 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000
Transport 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 60000
Advertising 12000 12000 12000 12000 12000 12000 12000 12000 12000 12000 12000 12000 144000
Insurance 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 60000
Loan repay 0 0 0 0 0 0 0 0 0 0 0 0
Interest on 0 0 0 0 0 0 0 0 0 0 0 0
loan (14% p.a)
3
Taxes (30%) 531030 505371 487410 474837 496036 4508756 419262 427134 492644 538500 540750 542025 7,937,645.
TOTAL c.o.f 725530 699871 681910 669337 690536 645375 613762 621634 687144 733000 735250 736525 8,255,264.
NET cash p.m 1239072 1179201 1137291 1107954 1157418 1052043 978281 996647 1149503 1256503 1261253 1264728 14,732,371.

4
Pro-forma Income statements
Particulars 30th June 2013 30th June 2014 30th June 2014
Sales 8,400,000 8,100,000. 8,700,000
Less Cost of Sales 2382000 2334000 2334000
Gross Profit 6018000 5766000 6366000
Expenses
Purchases 120000 120000 120000
Payment to creditors 48000 0 0
Salaries and wages 1458000 1458000 1458000
Rent 300000 30000 300000
Electricity 72000 72000 72000
Water 60000 60000 60000
Internet 36000 36000 36000
Mail 24000 24000 2400
Transport 60000 60000 60000
Advertising 144000 144000 144000
Insurance 60000 60000 60000
Loan repayment 399996 0 0
Interest on loan 29856 0 0
Taxes 5,404,729 7,785,128 7,937,645.
Any other expenses (specify)

Total Expenses 8,849,011 8,255,264 8,255,264.

Net profit before Tax 16877010 18571052 20133426
Tax (30% of Income) 5,404,729 7,785,128. 7,937,645.
Net Profit after tax 12,409,123. 13,145,329. 14,732,371

5.5 Pro-forma statement of financial position

ASSETS Start END OF YEAR 1 END OF YEAR 2
Current Assets 8,400,000 13,145,329 14,732,371
Cash in flow
Debtors 48000 0 0
Any other source 370000 360000 0

Total Current 8818000 13,505,329 14732371

Assets
Fixed Assests
Item at cost
Depreciation
Total Fixed Assets 544500 544500 544500
TOTAL ASSETS

LIABILITIES
Current Liabilities

Loan 400000 0
Taxes 5,404,729 7,785,128 7,937,645.
Total current 5,804,729 7,785,128 7,937,645.
1
 liabilities
Long term
Liabilities
Owners equity 600000 0
Bank loan 400000 0
Retained earnings 567890 798458 807892
Total Long-term
liabilities
TOTAL 678909 786543 790665
LIABILITIES AND
EQUITY

5.6 Break-even point calculation

Break-Even Point Calculation:

Calculate the Total Fixed Costs (including expenses that do not vary with sales volume):
Pre-operational Costs: Ksh 118,000 (This is the cost incurred before the start of operations)
Total Expenses for each year:
Year 1: Ksh 8,849,011
Year 2: Ksh 8,255,264
Year 3: Ksh 8,255,264
Total Fixed Costs for Year 1: Ksh 118,000 (Pre-operational Costs) + Ksh 8,849,011 = Ksh
8,967,011
Total Fixed Costs for Year 2 and Year 3: Ksh 8,255,264 (Total Expenses for Year 2 and
Year 3)
Calculate the Contribution Margin Percentage: The contribution margin percentage is the
percentage of each sale that contributes to covering fixed costs and generating profit. It's
calculated as:
Contribution Margin Percentage = ((Sales - Variable Costs) / Sales) * 100
we'll assume that the variable costs are 60% of the sales, which is a common assumption in
many business models. You can adjust this assumption based on the actual variable costs in
your business.
Contribution Margin Percentage = ((Sales - 60% * Sales) / Sales) * 100
Calculate the Break-Even Point in Sales:
Break-Even Point (in Sales) = Total Fixed Costs / Contribution Margin Percentage
Break-Even Point Calculation for Year 1:
Total Fixed Costs for Year 1: Ksh 8,967,011 Contribution Margin Percentage (assuming 60%
variable costs): (100% - 60%) = 40%
Break-Even Point (in Sales) = Ksh 8,967,011 / (40%) = Ksh 22,417,528.75
Break-Even Point Calculation for Year 2 and Year 3:
Total Fixed Costs for Year 2 and Year 3: Ksh 8,255,264 Contribution Margin Percentage
(assuming 60% variable costs): (100% - 60%) = 40%
Break-Even Point (in Sales) = Ksh 8,255,264 / (40%) = Ksh 20,638,160.00
So, the break-even point for Year 1 is approximately Ksh 22,417,528.75, and for Year 2 and
Year 3, it's approximately Ksh 20,638,160.00. This is the level of sales at which the business
covers all its costs and neither makes a profit nor incurs a loss
2
5.7 Profitability ratio analysis
1. Gross Profit Margin:
Year 1: (Gross Profit / Sales) * 100 = (Ksh 6,018,000 / Ksh 8,400,000) * 100 ≈ 71.43%
Year 2: (Gross Profit / Sales) * 100 = (Ksh 5,766,000 / Ksh 8,100,000) * 100 ≈ 71.11%
Year 3: (Gross Profit / Sales) * 100 = (Ksh 6,366,000 / Ksh 8,700,000) * 100 ≈ 73.11%
Net Profit Margin:
Year 1: (Net Profit / Sales) * 100 = (Ksh 12,409,123 / Ksh 8,400,000) * 100 ≈ 147.61%
Year 2: (Net Profit / Sales) * 100 = (Ksh 13,145,329 / Ksh 8,100,000) * 100 ≈ 162.17%
Year 3: (Net Profit / Sales) * 100 = (Ksh 14,732,371 / Ksh 8,700,000) * 100 ≈ 169.19%
Return on Assets (ROA):
ROA measures the business's ability to generate profit from its assets.
Year 1: (Net Profit / Total Assets at the beginning of Year 1) * 100 = (Ksh 12,409,123 / Ksh
8,400,000) * 100 ≈ 147.61%
Year 2: (Net Profit / Total Assets at the beginning of Year 2) * 100 = (Ksh 13,145,329 / Ksh
13,145,329) * 100 ≈ 100%
Year 3: (Net Profit / Total Assets at the beginning of Year 3) * 100 = (Ksh 14,732,371 / Ksh
14,732,371) * 100 ≈ 100%
Return on Equity (ROE):
ROE measures the return on the owner's equity investment.
Year 1: (Net Profit / Owner's Equity at the beginning of Year 1) * 100 = (Ksh 12,409,123 /
Ksh 600,000) * 100 ≈ 2068.19%
Year 2: (Net Profit / Owner's Equity at the beginning of Year 2) * 100 = (Ksh 13,145,329 /
Ksh 0) * 100 (Assuming no owner's equity in Year 2)
Year 3: (Net Profit / Owner's Equity at the beginning of Year 3) * 100 = (Ksh 14,732,371 /
Ksh 0) * 100 (Assuming no owner's equity in Year 3)
Return on Investments (ROI):
ROI measures the return on total investments in the business.
Year 1: (Net Profit / Total Investments at the beginning of Year 1) * 100 = (Ksh 12,409,123 /
(Ksh 600,000 + Ksh 400,000)) * 100 ≈ 2579.85%
Year 2: (Net Profit / Total Investments at the beginning of Year 2) * 100 = (Ksh 13,145,329 /
Ksh 400,000) * 100 ≈ 3286.33%
Year 3: (Net Profit / Total Investments at the beginning of Year 3) * 100 = (Ksh 14,732,371 /
Ksh 0) * 100 (Assuming no investments in Year 3)
Liquidity Ratio:
The liquidity ratios measure the company's ability to meet its short-term obligations.
Quick Ratio (Acid-Test Ratio):
Year 1: ((Cash + Debtors) / Current Liabilities) = ((Ksh 48,000) / Ksh 5,804,729) ≈ 0.83%
Year 2 and Year 3: Data for debtors is not available.
Debt Ratio:
Year 1: (Total Liabilities / Total Assets) = (Ksh 5,804,729 / Ksh 8,400,000) ≈ 69.08%
Year 2: (Total Liabilities / Total Assets) = (Ksh 7,785,128 / Ksh 13,145,329) ≈ 59.27%
Year 3: (Total Liabilities / Total Assets) = (Ksh 7,937,645 / Ksh 14,732,371) ≈ 53.82

5.8 Desired financing

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

3
 Item Amount (Kshs)
Pre-operational Costs 133000
Working capital 546000
Contingency funds 35000
Total Desired Financing 714000

5.9 Proposed capitalization

This simply shows the total amount invested in the business

Source Amount (Kshs)

Owner’s equity 600000
Bank loan 400000
Total Investment 1000000

APPENDIX