EVERLYNE’S FOOD SUPPLEMENT AND COMMERCIAL FORMULAS

P.O.BOX 410-129101

HOMABAY

DOCUMENT NAME: BUSINESS PLAN

BUSINESS NAME: EVERLYNE'S FOOD SUPPLEMENTS AND COMMERCIAL

FORMULAS

COURSE CODE: 2426

PAPER CODE: 307

INDEX NUMBER:7411050987

COURSE: DIPLOMA IN NUTRITION AND DIETETICS MANAGEMENT

SUPERVISOR: NAOMI NYAKWARA

PRESENTED TO: THE KENYA NATIONAL EXAMINATION COUNCIL IN PARTIAL

FULFILMENT FOR THE AWARD OF DIPLOMA IN NUTRITION AND DIETETICS
MANAGEMENT.

CENTRE NAME: THE KISUMU NATIONAL POLYTECHNICH

EXAM SERIES: JULY 2022

1
Contents
DECLARATION.............................................................................................................................................iii
ACKNOWLEDGMENT...........................................................................................................................iv
DEDICATION.............................................................................................................................................v
EXECUTIVE SUMMARY................................................................................................................................vi
BUSINESS DESCRIPTION..........................................................................................................................vi
MARKET PLAN.........................................................................................................................................vi
ORGANISATION AND MANAGEMENT.....................................................................................................vi
OPERATION PLAN...................................................................................................................................vi
CHAPTER ONE..............................................................................................................................................1
BUSINESS DESCRIPTION...........................................................................................................................1
1.1. BUSINESS NAME:..........................................................................................................................1
1.2. BUSINESS LOCATION AND ADDRESS.............................................................................................1
1.3. BUSINESS OWNERSHIP.................................................................................................................2
1.4. TYPE OF BUSINESS........................................................................................................................2
1.5. PRODUCT AND SERVICE................................................................................................................2
1.6. INDUSTRY......................................................................................................................................2
1.7. JUSTIFICATION AND OPPORTUNITIE.............................................................................................2
1.8. GOALS OF THE BUSINESS..............................................................................................................3
1.9.1 ENTRY.........................................................................................................................................3
1.9.2 GROWTH STRATEGY...................................................................................................................3
CHAPTER TWO.............................................................................................................................................4
2.0 MARKET PLAN....................................................................................................................................4
2.1 CUSTOMERS...................................................................................................................................4
2.2 MARKET SHARE..................................................................................................................................4
2.3 COMPETITION................................................................................................................................6
2.4 PROMOTION AND ADVERTISEMENT..................................................................................................6
2.4.1 Use of posters.............................................................................................................................6
2.4.2 Face to face.................................................................................................................................7
2.5 PRICING STRATEGY........................................................................................................................7
2.6 SALE TACTICS.................................................................................................................................7

i
 2.7 DISTRIBUTION STRATEGY...............................................................................................................7
CHAPTER THREE..........................................................................................................................................8
3.1 ORGANISATION AND MANAGEMENT PLAN.......................................................................................8
3.2 Organisation structure...................................................................................................................8
3.2 PERSONNEL, DUTIES AND QUALIFICATIONS......................................................................................9
3.3 RECRUITMENT, TRAINING AND PROMOTION..............................................................................11
3.4 REMUNERATION AND INCENTIVES..............................................................................................11
3.5 LICENCING, PERMIT AND BY LAWS..............................................................................................12
3.6 SUPPORT SERVICES......................................................................................................................12
CHAPTER FOUR..........................................................................................................................................13
4.1 OPERATION PRODUCTION PLAN......................................................................................................13
4.2 PRODUCTION FACILITIES AND CAPACITY.........................................................................................13
4.3 PRODUCTION STRATEGY..................................................................................................................13
4.4 PRODUCTION PROCESS....................................................................................................................14
4.5 GOVERNMENT REGULATIONS.........................................................................................................14
CHAPTER FIVE............................................................................................................................................15
5.0 FINANCIAL PLAN..............................................................................................................................15
5.1 Pre-operational cost....................................................................................................................15
5.2 WORKING CAPITAL......................................................................................................................16
5.3 CASH FLOW STATEMENT.............................................................................................................17
5.4 INCOME STATEMENT...................................................................................................................18
5.5 BALANCE SHEET...........................................................................................................................19
5.6 BREAK-EVEN LEVEL..........................................................................................................................20
5.7 PROFITABILITY RATIO.......................................................................................................................21
5.8 DESIRED FINANCING........................................................................................................................22
5.9 PROPOSED CAPITALIZATION............................................................................................................23
6.0 POTENTIAL RISK...............................................................................................................................23

ii
DECLARATION
I sincerely declare that this work is my own and has not been submitted before.

………………………….. ……………………… ………………………

Name signature. Date

INDEX NUMBER 7411050987

By supervisor

This business plan has been submitted with an approval of the supervisor

........................ ................... ..................

Name. Signature. Date

iii
ACKNOWLEDGMENT

I would like to express my gratitude to my trainer, mother, sisters and brothers for their moral,
social and financial support.

iv
DEDICATION

I humbly dedicate this project to my mother, sisters and brothers who encouraged me during the
long period it took me to finalize this business plan.

Table of contents

v
EXECUTIVE SUMMARY
BUSINESS DESCRIPTION

The name of the business is Everlyne's food supplements and commercial formula. It will be
located at Nyalkinyi Homabay sub county, Homabay County. It is a sole proprietorship which
will specialize in Nutrition supplements and commercial formula. The entrepreneur finds the
opportunity justifying due to ready market from the individuals and institutions within and
outside Homabay. The business is a health industry aimed at improving health and living
standards of the people and to maximize profits.

MARKET PLAN

The customers will be institution, individuals and commercial. Producing higher quality service
and having proper pricing strategy will capture the market share.

On pricing strategy, prices set for different items will be lower favorable compared to those of
competitors. And to this, the business will ensure less operational cost is maintained. Discount
will be offered depending on the quality and quantity of the commodity one buys.

ORGANISATION AND MANAGEMENT

The business owner will be the business general manager having acquired managerial skills from
recognized institution and working experience on such business. The business will have seven
employees including the manager. All employees will be on permanent terms of employment and
are entitled to a basic salary of which will increase annually based on performance. The manager
will conduct recruitment, training of employees will be on the job and outside in other
established premises. Promotion will be after expansion of the business and will depend on a
year of service. License and permit will be acquired from the county trade office in Homabay
County.

OPERATION PLAN

This business will require various equipment and machinery in operation i.e. refrigerator,
computer, furniture, shelves and many more. The business service will run from Monday to

vi
Saturday as from 8: 00am to 6:00pm. Regulations affecting operations include having trade
license, maintaining health standard and safety regulations.

FINANCIAL PLAN

Financial statement is a brief statement that requires financial calculations for the business. The
business will desired financing to be inclusive of the pre operational costs which covers the cost
of equipment and machinery, legal procedures, advertisement and many more. Everlyne's food
supplements and commercial formula will uphold the financial management policies. The capital
will be required to commence the business will be approximately 500,000.

vii
CHAPTER ONE
BUSINESS DESCRIPTION

1.1. BUSINESS NAME:

The proposed business will be Everlyne's food supplements and commercial formula derived
from my name to enable the customers to remember or recall.

1.2. BUSINESS LOCATION AND ADDRESS

The proposed business will be located along Homabay - kendo bay road; approximately 1km
from Homabay town. The site is next to Homabay county teaching and referral hospital and
Nyalkinyi dispensary. The business is located in the area due to good infrastructure, availability
of electricity, water and many more.

The address of the business will be as follows;

Everlyne's food supplements and commercial formula,

P.O Box 410-129101,

Homabay

Tel. Number. 0799768790

Email: everlynealuoch21@gmail.com

NYALKINYI
DISPENSA
RY

HOMABAY
KINDUBAY TOWN
KISUMU –HOMABAY
Y
EVELYN’NS FOOD
SUPPLEMENTS
&COMMERCIAL
FORMULA

1
1.3. BUSINESS OWNERSHIP

The business will be sole- proprietorship. The owner being one person will be able to enjoy all
the profit, the process of decision making is easy, come into direct contact with customers hence
understanding their needs and able to satisfy them.

1.4. TYPE OF BUSINESS

The major activity of the business will be selling of food supplements and commercial formula
i.e. IFAS, Peadisure ,Nutriflex, threptin and many more. The reason why I ventured into this
business is because of the good and attractive place though there is stiff competition in the area.
The business will therefore purchase goods from the manufacturer in large amount in order to
enable efficient supply of commodities to the customers.

1.5. PRODUCT AND SERVICE

The firm will specialize in selling of commercial formula and food supplements. The main
feature of the product offered by the business will be selling of high quality food supplements
and commercial formula and at affordable prices that both employed and non-employed
customers can afford. The commodities will be well packed and with a lot of care and hygiene
also being observed. The business will also offer credit and after sales services i.e. transport to
the customers who purchases goods in large quantity in order to attract more customers.

1.6. INDUSTRY

The business will operate and specialize in health industry. It will therefore help patients who
have different medical conditions i.e. Diabetic Kidney problems and many more.

1.7. JUSTIFICATION AND OPPORTUNITIES

The business will ensure that quality products and services are provided to customers by
attending to them personally or being around to the business most of the time. The motivational
factor towards venturing the business is high demand of food given supplements and commercial
formula, good infrastructure, availability of power and water.

2
1.8. GOALS OF THE BUSINESS

1.8.1. SHORT TERM GOALS

1. To improve employees relations in the business.

2. To provide quality services to each customer.

3. To sustain and increase the number of customers.

1.8.2. LONG TERM GOALS

1. To expand the business.

2. To start business in various places

3. To maintain good cash flow.

4. To create good relations with other business in the region.

1.9.1 ENTRY

Since the business is new in the area, the owner will make sure that the advertisement are made
through media i.e. radio stations, through sign post which will be majorly used to show direction
and also to lias with the Homabay teaching and referral hospital to refer the patients to the
business. The pricing will be favorable and will draw many customers to the business.

1.9.2 GROWTH STRATEGY

The business will increase the volume of products and of high quality. It will also offer discount
to customers on different commodities.

The business will also ensure there is enough stock to meet customer needs. The business will
also use the profit to increase the stock and expand the business.

3
CHAPTER TWO
2.0 MARKET PLAN

This chapter deals with market analysis of the product being sold in the firm and its operation to
run effectively so as to achieve the goals of the business.

2.1 CUSTOMERS

The business will have three categories of customers:

a) Domestic customers: they are customers who buy products and use them directly

b) Commercial customers: these are customers who buy the product from the business for resale

c) Institutional customers: these belong to certainly institution e.g. hospitals

2.1.1 Characteristics of customers

The product will be sold to all ages of people

The product will be sold to both male and female

The product will be sold to all people i.e. employed and unemployed

2.2 MARKET SHARE

The intended business intends to capture at least 45% of the population of approximately 5000.
The expected customers will be 2000 which is 20% of the population

20/100×5000= 1000 people

4
2.2.1 Market share before entry

Competition Customers Percentage

Bilashaka food 5000 65

supplements
and commercial
formula

Waraka food 6000 35

supplements
and commercial
formula

Total 11000 100

2.2.2 Market share after entry

Bilashaka food 5000 25

supplements and
commercial formula

Waraka food 6000 35

supplements and
commercial formula

Everlyne's 8000 40

Total 19000 100

5
2.3 COMPETITION

The potential competitors to the business are Bila Shaka and waraka food supplements and
commercial formula. They have been in the field for two years. Bila Shaka shop is
approximately 300 meters away while Waraka shop is 600metres away. Everlyne's food
supplements and commercial formula will ensure that the product offered are of high quality.

2.3.1 Strength of the competitors

Bila Shaka and waraka food supplements and commercial formula have been in the market for a
long period of time hence attracted more customers.

2.3.2 Competitors weakness

Bilashaka and waraka food supplements and commercial formula does not offer other services
such as after sales service, discount and credit. They are also bit far from the targeted area i.e.
hospitals

2.3.3 Copping with the Competitors

Offering credit and discount to customers

Offering after sales service to those customers who buy large amount of products

Ensuring there is enough stock in the business

2.4 PROMOTION AND ADVERTISEMENT

Advertisement will be done to inform the customer about the type, quality and available products
being sold. Promotion will be done to customers by selling the product at a lower price for a
given period of time in order to attract more customers to the business.

Methods of advertisement

2.4.1 Use of posters

Posters will be posted within the whole region covered by the business and its surrounding. This
will indicate the name of the business, location and the product being offered by the business.
6
2.4.2 Face to face

This method is intended to create awareness to the general public on the existence of a business.
This will be done by employees talking to people and institution

2.5 PRICING STRATEGY

The intended business will ensure that the firm lies within the limits of other competitors prices
i.e. the price should be close to the competitors prices, that is my price will be slightly lower than
my competitors but within the limit of an aim of making profit. If the demand is high, the price
will rise and vice versa.

2.6 SALE TACTICS

The sales tactics will plan a vital role in improving on the targeted business sales to generate
more profit. Tactics include;

2.6.1 after sale service

The business will offer after sales service i.e. transportation to its customers who will purchase
the commodities in bulk

2.6.2 Credit services

The business will offer credit services to regular customers in order to attract and keep them.
Since the commodities sold are for emergency, the credit services may help and save life of a
person.

2.7 DISTRIBUTION STRATEGY

The product my firm will be distributed through direct channel. Those who are near the business
will come to the premise personally while those who are far will place order through telephone,
the business will pack and transport the ordered products to the respective customers

The obstacle by the intended business will be arranging and putting the product correctly and
hygienically to avoid damages during transportation and distribution to avoid damages which
may lead to loses to the business.
7
CHAPTER THREE
3.1 ORGANISATION AND MANAGEMENT PLAN

Organization and management plan is a process in which work is divided from the top to the
bottom level.

3.2 Organisation structure

Human resource Account clerk sales man Watchman cleaner

MANAGER

SUPERVISOR

HUMANRESOUR
CE MANAGER

ACOUNT WATCHMAN CLEANER SALES’ MAN

CLERK

8
3.2 PERSONNEL, DUTIES AND QUALIFICATIONS
MANAGER

Qualifications

Above 23years of age

Good communication skills

Diploma in Nutrition and dietetics management

Duties

Delegate duties to the employees

Provide capital for expanding business

Authorize the payment of salaries and wages to the employees

SUPERVISOR

Qualifications

Should be 25years of age and above

Good communication skills

Duties

Ensure work is done efficiently

Represents the owner of business in an organization

HUMAN RESOURCE MANAGER

Qualifications

Should have a diploma in human resource management

Should be 25years of age and above

9
ACCOUNT CLERK

Qualifications

Should be good in accounting

Good communication skills

Should have a working experience

Duties

Collect and bank business money

Keep records for future use

Prepare salary and wages of the employees

Prepare annual financial statements and forward to the manager

SALESMAN

Qualifications

Good interpersonal relationships with people

Diploma/certificate holder in sales and marketing

Good communication skills

Duties

Transport the product to the customer

Look up for readily available market

Conduct promotion and advertisement of the product

CLEANER

Qualifications
10
Should be well fit for the job

Age 24years and above

Duties

Make sure cleanliness of the premise

3.3 RECRUITMENT, TRAINING AND PROMOTION

The business will advertise the Job vacancy to the public by the use of radio and posting papers
in the street. The candidate given information will attend the interview for the appropriate
choosing of the best employees to be employed. Training will be done through sending
employees for further studies and organize seminar for the training of the employees. After the
business has expanded, the employees will be promoted according to how they perform,
commitment, punctually and hardworking.

3.4 REMUNERATION AND INCENTIVES

Remuneration is the reward given to the employees by the employer for the service rendered as
per term of contract. It includes salaries, wages and other benefits. It is given to workers to
encourage them and add morale in them to continue doing a good work. Employees’ salaries will
be increased by 5% for every annual.

The table below shows the allowance and salaries of employees.

Position No.of employees Allowance Salary Total

Manager 1 2000 30,000 32,000

Supervisor 1 1500 25,000 26,500

Human resources manager 1 1000 24,000 25,000

Account clerk 2 500 20,000 41,000

Salesman 4 500 15,000 80,000

Watchman 2 200 5000 10,200

Cleaner 3 200 4000 25,200

11
3.5 LICENCING, PERMIT AND BY LAWS

The business will obtain a health certificate and occupation certificate from the public health to
enable its smooth running. The business will obtain the approval of its building plans from the
county government authority which will ensure there is proper plan, provision of sanitation and
ventilation services.

3.6 SUPPORT SERVICES

3.6.1 Banking services

The business will open a current account with the KCB bank

3.6.1 Insurance

The proposed business will be insured against theft and fire

3.6.2 Electricity and water

The proposed business will register with the K.P.L.C and water company to have proper lighting
in the premise to enable efficiency.

12
CHAPTER FOUR
4.1 OPERATION PRODUCTION PLAN

It will play a role in providing high quality standard product to its esteemed customers. It will
also ensure effective and sufficient use of time management and resources to achieve stipulated
goals.

4.2 PRODUCTION FACILITIES AND CAPACITY

These are materials tools and equipment needed for the business to run efficiently. The business
will have to allocate funds meet the needs.

Equipment and machinery for operation

Item Capacity Unit cost Ksh

Computer 2 40,000 80,000

Refrigerator 2 32,000 64,000

Tables 3 3000 9000

Chairs 5 600 3000

Shelves 3 10,000 30,000

The equipment will be obtained from different persons, the equipment and machine will be
handled with a lot of care in order to reduce breakage and loss to the business

4.3 PRODUCTION STRATEGY

This will require a well-defined and advanced way of delivery of products to the customers. This
will be meant to help employees know how to carry out their duties. The planning location and
the surrounding area is pleasing and conducive environment since there is maximum security.
The chosen location will have advantage in that it will be access to the expected customer’s e.g.
it will be next to the hospitals around. It will also have an access to transportation since it will be
situated near the main road from Homabay to Kendu bay
13
 4.4 PRODUCTION PROCESS

There must be a procedure to be followed in selling of products and services from the
manufacturer to the final user. The manager will be getting her goods from the manufacturer and
selling them to the customers. The business will offer high quality of goods at a fair price to most
customers.

Below is a chart showing business production processes.

ORDER PURCHASE TRANSPORT DELIVERY

DISPLAY DISPATCH STORE STOCK

RECORDING

SELLING

4.5 GOVERNMENT REGULATIONS

a) Health regulations

The business will be kept clean always and good ventilation while the product will be kept clean
and in good temperature.

b) License

This involve trade license and permit legalized and authorize to operate the business. It will
obtain its approval operation from the local government and be issued with a trade license.

c) Safety regulations

To minimize damage, the employees should not run in the business premises. Goods should be
packed and arranged in an orderly manner to avoid damage.
14
 CHAPTER FIVE
5.0 FINANCIAL PLAN

5.1 Pre-operational cost

Item Cost(Kes)

Machinery tools and equipment 30, 000

Renovation of the business premises 15, 000

Market research 12, 000

Licensing requirement 12, 000

Installation 5, 000

Legal fees 4, 000

Total cost 78, 000

15
 5.2 WORKING CAPITAL

Particulars Year 1 Year 2

Current assets (KES) (KES) (KES)

Stock 55, 000 16,000 14,000

Cash in hand 6, 000 12,000 12,000

Cash at bank 7, 000 15,000 5,000

Debtors 4, 000 5,000 15,000

Prepaid rent 20,000 21,000 16,000

Prepaid insurance 4, 000 15,000 7,000

Total current assets 96, 000 84,000 69,000

Current liabilities (KES) (KES) (KES)

Bank overdraft 14,000 17,000 8,000

Loan 6,600 5,000 4,500

Creditors 15,000 12,000 15,000

Bill payable 7,000 8,000 6,000

Total current 42,600 42,000 33,500

liabilities

Working capital = Total current assets - Total current liabilities

= 249, 000 - 118, 100

= Sh 130, 900

16
 5.3 CASH FLOW STATEMENT

Project cash flow statement for the year ended 31st Dec, 2024 Month
Particulars Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Beginning 60000 67000 80000 40000 46000 72000 10000 68000 44000 30000 36000 34000
balance
Cash in 12000 80000 50000 56000 58000 53000 72000 66000 34000 79000 20000 26000
hand
Debtors 15000 30000 72000 33000 80000 40000 46000 47000 70000 80000 28000 36000
Add cash 60000 90000 98000 97000 120000 126000 127000 180000 170000 100000 130000 70000
sales
Total cash 255000 267000 300000 226000 304000 291000 255000 361000 318000 289000 214000 168000
receipt
Cash
payment
Purchases 20000 15000 12000 14000 1000 6000 13000 16000 15000 1000 8000 17000
Water 10000 9000 2000 3000 1000 22000 1000 6000 8000 2000 1000 10000
Rent 15000 2000 12000 9000 15000 27000 1000 2000 9000 2000 1000 15000
Telephone 3000 2000 2000 18000 17000 23000 2000 2000 3000 4000 2000 17000
Electricity 4000 3000 14000 19000 26000 6000 3000 14000 2000 6000 3000 20000
Stationary 7000 4000 16000 22000 5000 16000 4000 15000 5000 7000 4000 21000
Advertising 6000 7000 17000 21000 3000 10000 5000 17000 6000 8000 1000 23000
Creditors 15000 5000 20000 20000 12000 18000 6000 18000 20000 22000 18000 18000
Total 80000 47000 95000 126000 80000 128000 35000 90000 68000 52000 38000 141000

Ending balance = Total cash receipt - cash payment

= 3, 246, 000 - 980, 000

17
 = Sh 2, 266, 000

5.4 INCOME STATEMENT

Pro-forma income statement for the year ending 31st Dec, 2024
Particulars Cost for the year

Sales 120, 000

Less purchases 80, 000

Gross profit 40, 000

Expenses

Rent 8, 000

Wages 5, 000

Telephone 4, 000

Advertising 5, 000

Repair and maintenance 6, 000

Stationary 8, 000

Total expenses 36, 000

Net profit before tax = Gross profit - Total expenses

= 40, 000 - 36, 000

= Sh 4, 000

Provision of 10% = 10/100 × 4, 000

= Sh 400

Net profit after tax = 4, 000 - 400

= Sh 3, 600
18
 5.5 BALANCE SHEET

Pro-forma balance sheet as at 31st Dec, 2024 Assets

Current assets Cost in (KES)

Debtors 15, 000

Stock 14, 000

Cash in hand 12, 000

Cash at bank 5, 000

Expenses 6, 000

Total current assets 52, 000

Fixed assets

Machinery and equipment’s 30, 000

Premises 6, 000

Motor vehicle 9, 000

Total fixed assets 45, 000

Total assets 97, 000

Liabilities

Current liabilities

Creditors 15, 000

Expenses outstanding 10, 000

Bank overdraft 8, 000

Total current liabilities 33, 000

19
Non-current liabilities

Bank loan 60, 000

Owner equity 4, 000

Total non-current liabilities 64, 000

Total liabilities 97, 000

5.6 BREAK-EVEN LEVEL

1. Operating expenses
Fixed cost Amount (KES)

Rent 4, 000

Salaries 6, 000

License 8, 000

Total fixed cost 18, 000

Viable cost

Water 5, 000

Electricity 6, 000

Taxes 4, 000

Total viable cost 15, 000

2. Calculate total contribution margin

TCM = sales - total viable cost

= 12, 000 - 15, 000

= Sh 105, 000

20
3. Calculate total contribution margin percentage

= TMC/ sales × 100

= 105, 000/120, 000 × 100

= 87.5%

4. Calculate total fixed cost

= (4, 000+6, 000+8, 000)

= Sh 18, 000

5. Calculate break-even level sales

Break-even = fixed cost/contribution margin%

= 18, 000/87.5%

= 205.245

6. Calculate the break-even in unit

= TMC

Fixed cost
= 105, 000

18, 000

= 5.83

5.7 PROFITABILITY RATIO

1. Calculate gross profit percentage

Gross profit = gross profit/Sales *100%

= 4000/120000*100%

21
 = 33.33%

2. Calculate return on equity

= Net profit (before tax) * 100%

Owner’s equity

= 4000*100%
4000
= Sh 100

3. Calculate return on investment

R.S.T = Net profit after tax* 100%

Total invested capital

= 3600 * 100%
130900
=2.750
5.8 DESIRED FINANCING
Item Amount
Re-opening cost 60,000
Working capital 130,900
Fixed assets 45,000
Total 235,900

5.9 PROPOSED CAPITALIZATION

Item Amount
22
Owner’s contribution 4,000
Borrowed funds 160,000
Total 164,000

6.0 POTENTIAL RISK

Type of risk Contingency measures

Fire Fire extinguisher
Theft Security
Accident Insurance
Flood Building terraces

23