GARVEY’S DELIVERY

NAME: OMBUI CAROL KWAMBOKA

INDEX NO: 5091010014

COURSE: CRAFT CERTIFICATE FOOD AND BEVERAGE PRODUCTION

SERVICES

COURSE CODE: 1802/101

ADM NO: EVC/CHRM 081/21

CENTER NAME: ELGON VIEW COLLEGE

SUBMITTED TO: KENYA NATIONAL EXAMINATION COUNCIL AS A PARTIAL

FULFILLMENT FOR THE AWARD OF CRAFT CERTIFICATE FOOD AND

BEVERAGE PRODUCTION

SUPERVISOR: MR. JOSIAH

EXAMINATION SERIES: NOVEMBER 2021

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DECLARATION AND RECOMMENDATION
I OMBUI CAROL KWAMBOKA, declare that this business plan is the work of my hands and
the thoughts of my mind and it has never been presented anywhere else for the award of
certification

NAME: OMBUI CAROL KWAMBOKA

DATE………………………………

SIGN………………………………

RECOMMENDATION BY THE SUPERVISOR

This business plan Has been submitted for examination with my approval as the supervisor of
Nehema institute of science and technology.

SUPERVISOR: MR. JOSIAH

SIGN………………………………

DATE:………………………………

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DEDICATION
I would like to dedicate this work to my parents for their great support both morally and
financially during the whole period of my research. I also dedicate to my brothers, sisters and
friends for their support during this time. Not forgetting my supervisor Mr. Josiah for his
valuable contribution towards my business plan. May the almighty father grant them peace,
strength and blessings throughout their lives.

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ACKNOWLEDGEMENT
I take this opportunity to express my sincere gratitude to thank the entrepreneurship project tutor
for his affairs in business plan. Furthermore, I would like to thank the administration for their
hospitality and the encouragement they gave me during my course period. Special thanks go to
my mother for the financial support which she made for me to go through my college studies.

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Table of Contents
DECLARATION...........................................................................................................................ii

DEDICATION..............................................................................................................................iii

ACKNOWLEDGEMENT...........................................................................................................iv

EXECUTIVE SUMMARY...........................................................................................................x

CHAPTER ONE............................................................................................................................1

1.0. BUSINESS DESCRIPTION PLAN...............................................................................1

1.1. Business name...................................................................................................................1

1.2. Location and address.........................................................................................................1

1.3. Form and the type of ownership.......................................................................................2

1.4. Products and services........................................................................................................2

1.5. Justification of opportunity...............................................................................................2

1.6. Industry.............................................................................................................................2

1.6.1. Business industry............................................................................................................2

1.6.2. The size of the business in the industry..........................................................................3

1.6.3. Technology used in the industry....................................................................................3

1.7. Goals of business..............................................................................................................3

1.7.1. General objectives..........................................................................................................3

1.7.2. Garveys delivery core values.........................................................................................4

1.8. Entry and growth strategy.................................................................................................5

CHAPTER TWO...........................................................................................................................6

2.0. MARKET PLAN.............................................................................................................6

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

2.1.1. Potential customers.........................................................................................................6

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 2.1.2. Individual customers......................................................................................................6

2.1.3. Institutional customers...................................................................................................6

2.1.4. Industrial customers.......................................................................................................6

2.1.5. Demographic factors of potential customers..................................................................6

2.2. Market share......................................................................................................................7

2.3. Competition.......................................................................................................................8

2.4. Methods of promotion and advertising.............................................................................9

2.4.1. Advertisement................................................................................................................9

2.5. Pricing strategy...............................................................................................................10

2.5.1. Cost plus pricing policy................................................................................................10

2.5.2. Demand driven pricing policy......................................................................................10

2.5.3. Psychological pricing policy........................................................................................10

2.5.4. Price skimming pricing policy.....................................................................................10

2.5.5. Lose leader pricing policy............................................................................................10

2.5.6. Competitive pricing policy...........................................................................................11

2.6. Sales and tactics..............................................................................................................11

2.6.1. Selling tactics...............................................................................................................11

2.6.2. Credit facilities.............................................................................................................11

2.6.3. Credit factors consideration..........................................................................................11

2.6.4. Repayment mode..........................................................................................................12

2.6.5. Discount facilities.........................................................................................................12

2.7. Distribution strategy........................................................................................................12

2.7.1. Zero level......................................................................................................................12

2.7.2. One level.......................................................................................................................12

2.7.3. Two level......................................................................................................................13

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 2.7.4. Three level....................................................................................................................13

2.7.5. Five level......................................................................................................................13

CHAPTER THREE.....................................................................................................................14

3.0. ORGANIZATION STRUCTURE...............................................................................14

3.1. Managers and qualifications...........................................................................................14

3.2. Personnel, number and duties.........................................................................................15

3.2.1. Owner manager............................................................................................................15

3.2.2. Assistant manager.........................................................................................................15

3.2.3. Other personnel............................................................................................................16

3.2.4. Representative sales.....................................................................................................17

3.2.5. Security officers...........................................................................................................18

3.4. Recruitment, training and promotion..............................................................................19

3.4.1. Recruitment..............................................................................................................19

3.4.2. Training....................................................................................................................19

3.4.3. Promotion................................................................................................................19

3.5. Licenses, permits by – laws............................................................................................19

3.6. Support services..............................................................................................................20

3.6.1. Supportive staff........................................................................................................20

3.6.2. Legal advisor...........................................................................................................20

3.6.3. External auditor.......................................................................................................20

3.6.4. Business consultants................................................................................................20

3.6.5. Supportive services..................................................................................................20

3.6.6. Banking services......................................................................................................20

3.6.7. Water services..........................................................................................................20

3.6.8. Electricity services...................................................................................................21

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 3.6.9. Health services.........................................................................................................21

3.6.10. Security services......................................................................................................21

3.6.11. Communication service...........................................................................................21

3.6.12. Transport services....................................................................................................21

3.6.13. Refrigeration services..............................................................................................21

CHAPTER FOUR.......................................................................................................................22

4.0. PRODUCTION PLAN.................................................................................................22

4.2. Products development process........................................................................................22

4.3. Production of operational facilities and capacity................................................................23

4.3.1. Equipment’s their quality and use................................................................................23

4.4. Business consumable materials per year.........................................................................23

4.5. Cost of production...........................................................................................................24

4.5.1. Variable cost............................................................................................................24

4.6. Fixed cost........................................................................................................................24

4.7. Business premise layout/production or service strategy.................................................24

CHAPTER FIVE.........................................................................................................................26

5.0. FINANCIAL PLAN......................................................................................................26

5.1. Pre-operational cost.........................................................................................................26

5.2. Estimation of working capital.........................................................................................27

5.3. Preparation of cash flow projection................................................................................27

5.3.1. Projected cash flow for Garveys delivery for the year ending 31st December 2023....27

5.3.2. Projected balance sheet for Garveys delivery the year ending 31st Dec 2021, 2022,
2023........................................................................................................................................29

5.3.3. Projected cash flow statement for the year ending 31st Dec 2022................................30

5.4. Preparation of pro-forma income statement and balance sheet......................................31

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 5.4.1. Derived financing.........................................................................................................32

5.4.2. Capitalization................................................................................................................32

5.5. Calculation of break-even point......................................................................................32

5.5.1. Sales year 1...................................................................................................................32

5.6. Calculation of profitability rations..................................................................................33

5.6.1. Gross profit percentage................................................................................................33

5.6.2. Return of equity (R.O.E)..............................................................................................34

5.6.3. Return on investments (R.O.I).....................................................................................34

5.6.4. Acid test ratio...............................................................................................................34

5.6.5. Business risks and uncertainties...................................................................................34

5.6.6. Solutions to risk and uncertainties................................................................................35

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EXECUTIVE SUMMARY

BUSINESS DESCRIPTION
Garveys delivery (about food delivery services) is the proposed name of the business and the
business will be dealing with food service and productions where food will be cooked and
flavored and delivered to different destinations.
MARKETING PLAN
Garveys delivery will be serving customers around the enterprise. It will provide foods to trader
supermarket located just after the Shop. The Garveys delivery will also provide food to
customers including Kitale Polytechnic, Kitale teachers training college amongst others. Finally,
the enterprise will provide transport services to customers and it will also provide credit facilities
to its loyal customers.
ORGANIZATIONAL PLAN
It shows organizational structure of the business from top management to the lowest
management. The business shall be hiring trained workers through organizing interviews. The
company will set up the targeted qualifications and standards of workers by looking at their
documents and experience. The managing director should have a degree in food and beverage
production services from a well-known university. The business will have the managing director,
assistant managing director, security officers and store keeper.
OPERATIONAL/PRODUCTION PLAN
Garveys delivery will require facilities to be used during the production process. The facilities
include well planned kitchen and store.
FINANCIAL PLAN
This shows how finance shall be acquired and used in the business. The financial plan shows the
cash flows, income statement, balance sheet, breakeven calculations and profitability ratios

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CHAPTER ONE

1.0. Business description plan

1.1. Business name

Garveys delivery shall be the name of the business which shall deal with the selling of foods and
fruits like;

- Fried chicken and wet fry

- Stewed fish, wet and dry fish
- Ugali
- Rice
- Fruits like, banana, mangos and fruit salad

The business offers the following services

- Advisory services
- Packaging services
- Customer transport services

1.2. Location and address

Garveys delivery is located along Kitale-Eldoret road next to Aturkan hotel

Contact address:

GARVEYS DELIVERY

P.O BOX 40,

KITALE

TELEPHONE: 0741594016

EMAIL: Garveysdelivery@gmail.com

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 1.3. Form and the type of ownership

1.4. Products and services

Garveys delivery shall be the name of the business which shall deal with selling of foods and
fruits like;

- Chicken wet fry, stew etc.

- Fish wet fry, dry and stewed
- Ugali
- Rice
- Fruits like mangoes, bananas, passion fruits

The business will offer the following services;

- Advisory services
- Packaging services
- Customer transport services

1.5. Justification of opportunity

The reason to why the owner manager chooses the location of Garveys delivery are

- Near to transport network

- Security
- Availability of land
- Readily available market
- The knowledge I have on the business
- It will be different from the existing business

1.6. Industry

1.6.1. Business industry

Garveys delivery is under food production industry in hospitality

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 1.6.2. The size of the business in the industry
There are various businesses in the world like a micro-business has a zero to nine employees,
small business has ten to fifty employees, medium business has fifty to one hundred employees
and larger business has one hundred and above employees

For a business to qualify a large, factors considered are stock integrated services, the size of the
business presents the state of the art equipment and the organizational structure, and however the
Garveys delivery is to fall under micro-business enterprise

1.6.3. Technology used in the industry

The following types of technologies is used by various industries simple technology

This is whereby human efforts are widely used in the study daily operation that is half manually
and half machinery or use of tools and equipment’s

Intermediate

This is whereby both human and machinery are used in the daily operations

Advanced technology

This type of technology involves the use of machines instead of people to carry out business
activities machines are set and left to work i.e. activities are completely mechanized, however,
Garveys delivery will fall under intermediate technology

Activities that Garveys delivery will employ manually include, backing cakes and packaging.
Garveys delivery will employ the following machinery, computer to offer sale receipts and to
keep records and a pick-up to offer transport services

1.7. Goals of business

The objective will be to offer quality and affordable foods to the entire county and beyond

1.7.1. General objectives

- The business will work to improve the living standards of the people in Kitale by at least
a good percentage in the fourth coming years of operation

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 - To make an improved sale within one year
- To utilize at least 100 of local services, resources in the second tear of service
- To increase sales by half percentage in the fifth year
- To increase revenue by 15% in the third year

1.7.2. Garveys delivery core values

- Improvement
- Honesty
- Integrity
- Innovation
- Accountability
- Transparency
- Commitment
- Professionalism
- Business statements

Vision

To become a cutting edge in providing service in the production and marketing of tasty food of
different variety

Mission

Realize maximum returns on our investments for benefit of stakeholders and employees and to
be environmental friendly.

To have at least 50% of the customers within the County

Business related services

- Helping farmers to achieve success and how to cater for their products to minimize losses
- Providing quality durable equipment
- To business optimized solution

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 1.8. Entry and growth strategy
- Since the sponsor is the initiator and the manager of the business, she shall have to use
the following methods in order to create awareness to the public about her enterprise
- The sponsor intends to create her enterprise awareness by telling her friends about the
business that will have to others.
- As the business grows, she shall use mass media to advertise her enterprise, this entails,
radio, television and magazines
- She intends to hold public meetings like Barazas
- Use of social media i.e. Facebook, what sap etc.

On growth strategy the business shall;

- Concentrate on offering high quality products

- Due to increase in demand, the enterprise shall open new branches in Kitale town and
Webuye at the end of the second year
- Most skilled personnel will be employed for aster work
- Computers will also be introduced for effective and efficient work
- Through the interview in modern technology by offering good juice, this will give the
business acceptance to the potential clients
- The business will ensure its growth by
 Involving experts for assistance
 Acquiring legal permits
 Advertising in social media networks
 Offering training at seminars to the employers

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CHAPTER TWO

2.0. Market plan

Marketing plan is important for the success of Garveys delivery and because of these, the
sponsor shall meet the customers product demand, market challenges like competition and
marketing is defeated to achieve the goals

2.1. Customers

2.1.1. Potential customers

Garveys delivery shall classify customers into three categories namely;

 Individual customers
 Institutional customers
 Industrial customers

2.1.2. Individual customers

The business shall target individual customers from Kitale in Trans-nzoia County, Khetias
supermarket, Kitale High school, St Joseph high school, Kitale polytechnic amongst others.
Garveys delivery will also target customers around the location

2.1.3. Institutional customers

The sponsor will target the institutional around which include schools like Kitale, St Anne’s
Nzoia and institutions like Kitale polytechnic training institute where the products will be used
on daily basis. Garveys delivery will also target hotels like tourist hotel and Aturkan hotel in
Kitale own

2.1.4. Industrial customers

The sponsor of Garveys delivery will sell high quality products of food productions

2.1.5. Demographic factors of potential customers

1. Education level

The level of education varies; there are illiterate people, class eight leavers. Form four leavers or
dropouts, certificate, diploma, degree and PhD graduates. Due to this, the business is going to
vary of supply of products and services according to existing technology

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 2. Income

The income of potential customers varies where lower average income is approximately thirty
thousand shillings and the highest ranges from and to a good percentage of people. This makes
the people around to have a ready and high purchasing power thus the business will have a ready
market

3. Gender

The potential customers will be both male and female however there shall be a very good large
percentage of men as competitive business men

4. Religion

The majorities are Christians who takes a good percentage and the remaining percent are
Muslims and other religions. Most of the Christians are from Pentecostal churches and 61% of
the total residents, peasants take 39% of the total population which leads to growth of the
business because foods produced is rich in both nutrients which when Christians occasions like
conferences, seminars and sporting activities are held, the demand will be high thus increasing
the Shop’s income

5. Age

The age varies and is from 16 years and above which encourages high sales. Most of the people
are adults who are literate and know the importance in human health

6. Tribe

The region consist of many tribes, the major tribe being Luhyia which is up to 70%, Kikuyu at
19%, Luo at 10% and other tribes share the remaining percentage

This has a great impression on the purchasing volume and thus uplifting the business by high
purchasing power.

2.2. Market share

Garveys delivery target a population of at least good percent of people of Kitale which shall take
at least 65% of the total percentage and the rest left for competition of 30%

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This market share is expected to improve 70% after the business have gained popularity

A small percentage of people will be expected to go slowly since there are illiterate people who
take it slowly by catching up the trends in new business technologies

Garveys delivery on the other hand, will also train people to start their small business after
Blessed to grow and multiply, therefore, it became the branches of the emerging small enterprise
under the support of Garveys delivery

2.3. Competition
Potential competitors

They are potential entrepreneurs that offer similar products and service to the existing market.
Garveys delivery shall experience competition from two competitors, namely travel paradise and
bonus Shop

a. Travellers paradise

Strength;

- Has many customers

- It has high capital advantage
- Has political strength
- It is commonly know

Weakness

- Has poor management from my research

- I lacks entrepreneurial skills
- There is no business networking
- The pricing policy is poor

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 b. Bonus Shop hotel

Strength

- High political advantage

- High sales due to popularity
- Access to industries by transportation means

Weakness

- Inadequate pricing policy

- Low pricing techniques
- Inadequate management skills

2.4. Methods of promotion and advertising

2.4.1. Advertisement
Garveys delivery shall inform the public about its existence. This shall help in making the
enterprise increase. This shall use the following advertisement strategies;

- Word of mouth, the owner manager will have to tell people about her enterprise verbally
- Use of billboards
- Use of business sign posts
- Use of leaflets
- By attending public activities where the manager announces the existence of the business
and what it offers
- By the use of mass media e.g. radio, television, newspaper, magazines and journal as the
business expands

Also;

- Through public relations

- Through direct response advertising i.e. email text message or computer
- The business will use the following mode of communication to convey the information to
customers

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 - Customers promotion offering free samples
- Events, exhibition and conferences

2.5. Pricing strategy

The business manager will simply both direct and indirect it will be selling services directly to
the customers while indirect it will make use of agent who will be selling services to consumers
on behalf of the business absence

It will also be given discounts when they buy in large qualities. Those who will come to buy
eggs several will be offered with transportation cost will be given all several will be offered with
transportation cost

2.5.1. Cost plus pricing policy

Garveys delivery shall put into consideration; production cost before setting the price, selling of
the commodity will comprise cost of production plus profit objective. The enterprise considers
that cost to offer the product or service is affordable and percentage for profit. “The higher the
demand, the high the price”

2.5.2. Demand driven pricing policy

Garveys delivery will set prices basing on demand, the higher, the higher the price and when the
demand is low, it adjusts the price.

2.5.3. Psychological pricing policy

This is where an enterprise sets a psychological figure whereby it appears cheap on the mind of
customers. For instance, instead of the manager charging Ksh. 600 for a product it shall instead
charge Ksh 599

2.5.4. Price skimming pricing policy

The other manager will set its price for the products lower than the competitors’ price in order to
make at least a lot of sales.

2.5.5. Lose leader pricing policy

Garveys delivery has to increase sales volume and make more sales for more profit by reducing
the product price.

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 2.5.6. Competitive pricing policy
Due to prevailing competition, the manager considers the price set by her competitors before
selling her price for a particular product. However, the pricing policy that will run throughout the
season is the cost plus.

2.6. Sales and tactics

2.6.1. Selling tactics

- It entails methods of used to attract more customers thus selling more
- It plays a vital role in the marketing industry. The enterprise will use the following selling
tactics to attract more customers
- The owner manager shall ensure that is original product
- The enterprise will maintain high standard of hygiene
- The enterprise will always offer discount where necessary
- The enterprise will offer credit facilities
- Good display shall be put in front of the business enterprise
- He enterprise shall have a good packaging and branding

2.6.2. Credit facilities

The Garveys delivery will offer following credit facilities

- Credit cards
- Term loans
- Committed facilities
- Letters of credit
- Revolving facility

2.6.3. Credit factors consideration

Garveys delivery considers the following factors for one to qualify for a credit facility

- Citizenship
- Suitable income
- The items allowed for credit

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 - Right time for payment
- Credit risk, define the amount of the risk the business is willing to accept

2.6.4. Repayment mode

Garveys delivery considers the following terms when offering credit

- No extra charges when paying within the duration time required

- Occupation
- Age
- Repayment period
- Relation with the enterprise
- Intended purpose for a credit facility
- Income source

2.6.5. Discount facilities

Various types of discount facilities including

a. Trade discount – it is given to regular customer’s example 5% discount

b. B. bulk discount – it is given to people who buy plenty, example 3% discount
c. Value discount – it is given when the customers buys a highly valued item for example
7% discount

2.7. Distribution strategy

Entails how the business product can reach its potential customers, various channels exist in
business that goods can follow to reach customers.

They include:

2.7.1. Zero level

The product is moved from the producer to the ultimate customer

Producer Ultimate customer

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 2.7.2. One level
The retailer buys goods from the producer and sells the ultimate customers

Producer Retailer Ultimate customer

2.7.3. Two level

Where, goods move from the producer to wholesalers to retailer to ultimate customers

Producer Wholesaler Retailer Ultimate customer

2.7.4. Three level

Goods move from producer to stock host to wholesalers to retailer customer

Producer Agent Wholesaler Retailer Ultimate customer

2.7.5. Five level

Goods will be sold directly to customers and in one level distribution; the produce shall sell it to
retailers who will then sell it to ultimate customers

Producer Go down Wholesaler Retailer Ultimate customer

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CHAPTER THREE

3.0. Organization structure

Garveys delivery shall be a sole proprietor business organization that shall be managed by the
owner who shall employ other personnel

For any business organization to perform well there should be proper communication and
coordination of various department hence enhancing efficient running to the business

The employer should perform well and they shall be required to perform well and they shall be
required to perform duties assigned to them basing on their department
Owner’s manager

Assistant manager

Waiter/ waitress Room attendant Sales representative

Storekeepers Security officer Drivers

3.1. Managers and qualifications

Garveys delivery key management team is as follows;

1. Owner manager
2. Assistant manager

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 3.2. Personnel, number and duties

3.2.1. Owner manager

Job title: owner manager

Section: management

Answerable: none

Authority: full

Duties, responsibilities of the owner manager

- Providing payments for the employees

- Budgeting for the business
- The owner manager will be head of the business
- The owner manager will be responsible for recruitment of the staff
- Will assign duties to the employees
- Planning for he business

Qualification

a. Physical qualification – N/A

b. Academic qualification
- Certificate in catering and accommodation
- Computer literate

Remuneration

The owner manager is to receive monthly drawing up to and not exceeding Ksh 5,000

3.2.2. Assistant manager

Job title: assistant manager

Section: management

Answerable: owner manager

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Authority: partial

Duties and responsibilities of the assistant manager

- Offers close supervision to the employees

- Will be the head of the training personnel
- She will take responsibilities of the owner manager when absent
- Prepare the partial budget of the business
- Shall be in charge of discipline of workers

Qualifications

a. Physical qualification – N/A

b. B. academic qualification
- Should have at least a certificate in accounts
- Should speak fluent English and Swahili
- Computer literate

Remuneration

The assistant manager is to be paid a monthly salary

3.2.3. Other personnel

Room attendants 1 and 2

Job title: room attendant

Sector: managing the accommodation department

Answerable: assistant manager

Authority: null

Duties and responsibilities of room attendant

- Assisting customers in room reservation

- Decorating the rooms

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 - Making requisitions pertaining room requirement
- Advising the management on customer’s taste

Qualifications

Physical qualification – N/A

Academic qualification

- Should have one-year experience in hotel catering management

- Should be aged between 18 – 37 years

Remuneration

The room attendants shall receive a monthly salary f Ks 4,400 each, plus overtime

3.2.4. Representative sales

Job title: sale representative

Section: marketing

Answerable: owner manger

Authority: null

Duties and responsibilities of the representative sales

- Distribution of products to customers

- Shall been charge of sales
- Shall perform monthly and annual report of financial matter
- Shall be in charge of promotion and advertisement

Qualifications

a. Physical qualifications

Should be of sound mind

b. Academic qualification

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 - Should have certificate in sales and marketing
- Computer literate

Remuneration

- Sales representatives is to receive a monthly salary of Ksh 4,000

3.2.5. Security officers

Job title: security officer

Section: security

Answerable: assistant manager

Authority: null

Duties and responsibilities of the security guard

- Provide protection to the enterprise against robbery

- Take guard of all products in storage at night
- Opens and closes the gate

Qualification

a. Physical qualification

Should be physically fit

b. Academic qualification
- Be a holder of K.C.S.E certificate
- Have trained in an approved security Shop
- Should speak fluent Swahili

Remuneration

- The security officer is to receive a monthly salary of Ksh 2,000

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3.4. Recruitment, training and promotion

3.4.1. Recruitment
The owner manager shall recruit employees by advertising the job. The application Is received
within the dateline, those who merit are shortlisted then the interview Is done and those who
qualify are chosen. The manager shall also use the recruitment agents

3.4.2. Training
Garveys delivery shall offer training like induction which is the training on job by assigning a
competent supervisor or person. The employee is equipped with knowledge related to the
production activities to help chances of profit making due to maximum output

3.4.3. Promotion
Garveys delivery is to base on the following
- Performance
- Effectiveness
- Good time management
- Leadership oriented - competence
- Good personality value

3.5. Licenses, permits by – laws

Garveys delivery will have business permits to be able to run the enterprise legally. The permits
are authorized by the local government to be able to run the business. Kitale municipal council
charges its permits as per the kind of business the Enterprise is engaged in. the business will part
with KS. 9,500 for the permit as it’s renewed every year.
The, government also require local Shops to register with the Kenya revenue authority (KRA) to
be able to pay their takes more promptly.
For the Shop to compete with the tendering with their established Shops, it’s required to apply
for the valued added Tax (VAT) KRA PIN doesn’t change its online services, since all their
registration is done through their website service.
Therefore, no costs incurred for the registration with KRA. The Shop will have a certificate of
incorporation provided by the registration of companies as a requirement by the local
government to be able to apply for the business permit.

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3.6. Support services

3.6.1. Supportive staff

Garveys delivery is hot able to employ all people on board as it is expensive, therefore, it goes in
for supportive staff to solve of the business problems

The supportive staff is brought in the business on part time basis and their payment is
commensurate to work done

3.6.2. Legal advisor

Garveys delivery is to have Mr. Makokha and company advocate

P.O Box 65,

Transnzoia

3.6.3. External auditor

District auditor from Transnzoia is to assist on issues of money in the business

3.6.4. Business consultants

The business will consult other business in hospitality in running business

3.6.5. Supportive services

Garveys delivery will bring in supportive services on part time basis

3.6.6. Banking services

Garveys delivery business shall have baking for saving, withdrawal and acquiring loan. The
business shall have its services from co-operative bank, Kitale branch

3.6.7. Water services

Garveys delivery shall have water services from;

Nzoia water supply,

P.O Box 1080,

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Kitale

3.6.8. Electricity services

The business shall receive electricity services from Kenya Power Company Limited, Kitale
town.

KPLC,

P.O Box 105,

KITALE

3.6.9. Health services

In case of sickness, Garveys delivery will seek medication from Kitale district referral hospital

P.O Box 150,

Kitale

3.6.10. Security services

In case of robbery or any external attack, Garveys delivery shall have its security services from
administration police within the locality.

National police service

P.O Box 175,

Kitale

3.6.11. Communication service

The enterprise shall have Kitale portal services to facilitate communication to and from the
enterprise.

3.6.12. Transport services

The business shall receive transport services form both Motorcycle and public cars services

3.6.13. Refrigeration services

The business shall get refrigeration services from the county confectionaries

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CHAPTER FOUR
4.0. Production plan

Production plan is a crucial part of the business plan and acts a pillar of the work. It entails major
procedures and strategic plans to be used in manufacturing products and services of the business.
It shows all procurement. It helps the owner manager of the business to come up with clear
programs and materials to ensure effective and efficient way of designing and assessing the
product in order to suit the customer’s needs. The chapter holds other parts in position acts as
focusing point and helps the owner manager to enter into financial plan with an ease.

4.1. Design of the business product

Garveys delivery shall consider needs and shall be much competent in designing its products and
services in which it will capture the attention of its customers

4.2. Products development process

This shows how to prepare the product for sale until it reaches the ultimate customers. Garveys
delivery shall use the following process in production

Stage 1: buying of fruits

Stage 2: sampling juice

Stage 3: deserts

Stage 4: refrigeration

Stage 5: packaging in the department from the Shop

22
Stage 6: weighing

Stage 7: grading of fruit juice that can be served as accompaniments for the food

Stage 8: selling

4.3. Production of operational facilities and capacity

4.3.1. Equipment’s their quality and use

Item Equipment’s Unit cost Quantity Total cost Purchased from

(Ksh) (Ksh)
1. Blender 4,000 2 2,000 Trider supermarket
2. Weighing machine 1,000 1 1,000 Trider supermarket
3. Dust coat 600 8 4,800 Trider supermarket
4. Napkins 400 8 3,200 Trider supermarket
5. Knives 50 20 1,000 Trider supermarket
6. Bowls 30 20 780 Trider supermarket
7. Fridge 10,000 2 20,000 Trider supermarket
8. Freezer 8,000 1 8,000 Trider supermarket
Grand total 20,080 80,700

4.3.2. Repair and maintenance

Any breakdown will be attended to immediately to do away with delays in order to ensure
efficient running of all operations of fruit juices other production of food stuffs

4.4. Business consumable materials per year

Item Equipments Unit cost Quantity Total cost Supplier

(Ksh) (Ksh)
1. Chicken 3,000 20 60,000 Kitale Poultry
2. Oil 50 20 2,500 Trider super

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 Total 8,050 62,500

4.5. Cost of production

Variable cost is cost that enters increase or decrease with the level of production, the owner
manager to consider the variable cost in the business.

4.5.1. Variable cost

Item Equipment Cost per week (Ksh) Cost per month (Ksh) Cost per year (Ksh)
1 Water 500 2,000 24,000
2 Electricity 300 1,200 14,400
3 Transport 1,000 4,000 48,000
4 Fuel 500 2,000 2,400
5 Advertisement 800 3,200 38,400
6 Cost of materials 2,000 8,000 96,000
Total 5,500 22,000 264,000

4.6. Fixed cost

Fixed cost is cost that do not change with the level of production

Item Equipment Cost per month(Ksh) Cost per month(Ksh) Cost per year(Ksh)
1 License 1,000 4,000 48,000
2 Rent 1,000 4,000 48,000
3 Salaries 3,000 12,000 144,000
4 Insurance 500 2,000 24,000
5 Total and equipment 2,000 8,000 96,000
Total 7,500 30,000 360,000
Grand total 360,000

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 4.7. Business premise layout/production or service strategy
Garveys delivery shall have a ground plan ensuring and measuring is by 10cm on the compound.
It has the following sections; security room, sales representatives, assistant manager, owner
manager, Jacklines’ attendant 1, attendant 2 and storekeeper.

3 4
1 2

8 7 6 5

1. Security
2. Sore room
3. Blessed attendant 1 room
4. Blessed attendant 2 room

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 5. Owner manager office
6. Assistant manager office
7. Sales representative office
8. Door
9. Door

CHAPTER FIVE

5.0. Financial plan

This is a very crucial work of Garveys delivery because it shows the direction and operation
taken in the business for production process for a given time. It involves budgeting and entails
the following statements

a. Pro-forma income statement

b. Projected cash flow statements
c. A balance sheet

5.1. Pre-operational cost

Garveys delivery shall inquire the following expense before its operation

Item Equipment’s Cost (Ksh)

1 License and permits 5,000
2 Transport 4,000
3 Insurance 1,000
5 Electricity 1,200
6 Rent 1,000
7 Tools and equipment 20,000
8 Documentation 2,000
9 Labor 2,000
10 Telephone 1,000
11 Water 2.,000
12 Stationery 1,600
13 Furniture fittings 7,200

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 14 Miscellaneous 15,000
15 Contingency 6,920
Grand total 76,120

5.2. Estimation of working capital

Item Equipment 1st year cost per(Ksh) 2nd year cost(Ksh) 3rd year cost per(Ksh)
1 Stock of finished goods 8,000 8,800 9,200
2 Working program 6,000 6,600 6,900
3 Debtors 8,000 8,800 9,200
4 Cash at hand 30,000 3,300 34,500
5 Cash in bank 20,000 2,200 23,000
6 Stock of raw materials 2,500 2,750 2,875
7 Miscellaneous 2,000 2,200 2,300
Grand total 76,500 84,150 87,795

5.3. Preparation of cash flow projection

5.3.1. Projected cash flow for Garveys delivery for the year ending 31st December 2023

Item Jan – march April - July – Sep Oct – Dec Total

June
Cash in flow - - - - -
Sales 191130 191130 191130 191130 764520
Cash in bank 8625 8000 9250 8625 34500
Debtors 2300 2000 2600 2300 9200
Total cash in flow 207805 2086880 207980 208555 831220
Cash out flow - - - - -
Salary 10350 10350 10350 10350 41400

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Electricity 4140 4000 1250 4140 16560
Insurance 6900 6900 6900 6900 27600
Advertisement 11040 11000 11080 11040 44160
Transport 13050 13000 13100 13050 52200
Rent 13100 13100 13100 13100 55200
Tools and 27600 27000 28200 27600 110400
equipment
Stationery 5520 5000 5000 6560 22080
License 1437.5 1437.5 1437.5 1437.5 5750
Telephone 1150 1300 1550 1150 4600
Water 2875 2875 2875 2875 11500
Labor 43125 43125 43125 43125 17250
Miscellaneous 8625 8625 8625 8625 345000
Total out flow 110000 108900 110360 11090 440200
Net income 97805 97980 97620 97465 391020

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5.3.2. Projected balance sheet for Garveys delivery the year ending 31st Dec 2021, 2022,
2023
Item Year 2021 Year 2022 Year 2023
Current assets - - -
Cash in hand 300 33000 34500
Cash in bank 20000 22000 23000
Debtors 8000 8800 9200
Working progress 6000 6600 6900
Stock of raw materials 2500 2700 2875
Stock of finished goods 8000 8800 9200
Total current assets 74500 81950 85675
Tools and Equipments 96000 105600 110400
Vehicle 48000 52800 552000
Furniture fitting 72000 7920 8250
Loss depreciation 66480 66480 66480
Total fixed 84720 99840 107370
current liabilities - - -
Bills 10000 11000 11500
Electricity 14400 15800 16560
Others 40560 13620 -
Rent 48000 52800 55200
Total current liabilities 72400 79640 83260
Long term liabilities - - -
Loan owner 20,000 22000 23000
Equity 7000 77000 80500
Family and relatives 1000000 110000 115000
Net profit 1000000 11000 115000
Loss drawing 5000 5000 5000

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 5.3.3. Projected cash flow statement for the year ending 31st Dec 2022
Item Jan – march April - July – Sep Oct – Dec Total
June
Cash in flow - - - - -
Sales 182820 182820 182820 182820 731280
Cash in hand 8000 8500 8200 8250 33000
Cash in bank 5500 5500 6000 5000 22000
Debtors 2200 2000 24000 2000 8800
Total cash in flow 198520 198820 199470 198070 795080
Cash out flow - - - - -
Salary 9900 9900 9900 9900 39600
Electricity 7920 7920 7920 7920 15540
Insurance 6600 6000 7200 6600 26400
Advertisement 10560 1000 11120 10560 42240
Transport 13200 13400 1300 13200 52000
Rent 13200 13200 13200 13200 52800
Tools and 26400 2600 26800 26400 105600
equipment
Stationery 5280 5280 5280 5280 2120
License 1375 1375 1375 1375 5500
Telephone 1100 1200 1000 1100 4400
Water 2750 2750 2000 3500 11000
Labor 4125 4000 4250 4125 16500
Miscellaneous 8250 8500 8250 8250 33000
Total out flow 110660 100525 111295 111410 426800
Net income 87860 98295 88175 86660 368280

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 5.4. Preparation of pro-forma income statement and balance sheet
Dec 2021, 2022, 2023

Item Year 1 Year 2 Year 3

Revenue from
Sales 666500 7311280 764520
Cost of products 332400 365640 382260
Gross profit 332400 365640 382260
Salary 36000 39600 41400
Electricity 14400 18840 16560
Insurance 24000 26400 27600
Working program 50000 55000 57500
Advertisement 35400 42240 44160
Transport 4800 52800 55200
Rent 48000 52800 55200
Tools and 96000 105600 110400
Equipments
Stationery 192000 21120 22080
License 500 5500 5750
Telephone 4000 4400 4600
Water bill 15000 16500 172000
Miscellaneous 30000 33000 34500
Contingency 5% 19500 21450 22425
Total net profit 409500 503250 526125
2552300 228030 238395

Long term liability 195,000, 215,000, 225,000

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Grand total liability

2021 year 1 2022 year 2 2023 year 3

267400 294640 308260
308260 308260 308260

5.4.1. Derived financing

Item Cost (Ksh)
Pre-operational cost 76120
Working capital 76500
Total 152620

5.4.2. Capitalization
Item Amount(Ksh)
Owners’ equity 70000
Friends and relatives 10000
Loan 20000
Total 100000

5.5. Calculation of break-even point

5.5.1. Sales year 1

Item Cost (Ksh)
Water 24000
Electricity 14400
Transport 48000
Stationery 192000
Fuel 24000
Advertisement 38400

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 Cost of material 96000
Total 264000

5.5.1.1. Total contribution margin

Sales total variable cost

664800 – 264000

= Ksh 400800

5.5.1.2. Contribution margin percentage

400800
664800

= 60.898

5.5.1.3. Total fixed cost

Item Cost (Ksh)

License 48000
Rent 4800
Salary 144000
Tools and Equipments 96000
Total 360000
5.6. Calculation of
profitability rations

5.6.1. Gross profit percentage

332400
664800

= 508

5.6.2. Return of equity (R.O.E)

332400
33
332400
 = 321.867

5.6.3. Return on investments (R.O.I)

223300
664800

= 33.897

5.6.4. Acid test ratio

74500
72400

5.6.5. Business risks and uncertainties

 robbery
 price change
 accident
 stiff competition
 sickness
 death
 pest and diseases attack
 fire outbreak
 drought and flood

5.6.6. Solutions to risk and uncertainties

- insurance cover for the business
- contracting with marketing agencies

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- security intensity
- control of pests and diseases
- production of quality products to fetch more market

35