BUSINESS PLAN

PRESENTED BY: OGENDO SHARON

ATIENO
COURSE: DIPLOMA IN ELECTRICAL
INDEX: 7411050857
COURSE CODE: EET/220J19
INSTITUTION: THE KISUMU NATIONAL
POLYTECHNIC
PRESENTED TO: THE KENYA NATIONAL
EXAMINATION COUNCIL FOR THE
AWARD OF DIPLOMA IN ELECTRICAL
(POWER OPTION)
SUPERVISOR: MR.REAGAN OTINA
PRESENTATION: JULY SERIES
TABLE OF CONTENTS
DECLEARATION…………………………………………………………………………………………………i
DEDICATION…………………………………………………………………………………………………….ii
ACKNOWLEDGEMENT…………………………………………………………………………………….iii

SYNOPSIS:
1.0EXECUTIVE
SUMMARY…………………………………………………………………………………..………………….1
1.1BUSINESS
DESCRIPTION…………………………………………………………………………………………1
1.2MARKET
PLAN……………………………………………………………………………………………………..1
1.3ORGANISATION PLAN……………………….……………………………………………………2
1.4PRODUCTION/OPERATION PLAN……………………………………………………………2
1.5FINANCIAL PLAN………………………………..………………………………………………….2
1.6APPENDIX……………..……………………………………………………………………………….2
CHAPTER ONE:
2.0BUSINESS
DESCRIPTION………………………………………………………………………………………………3
2.1THE
SPONSOR…………..………………………………………………………………………………3
2.2NATURE OF THE
BUSINESS……………………………………………………………………………………………3
2.21 BUSINESS NAME AND ADDRESS….………………………………………………………3
2.2.2 BUSINESS
PURPOSE……………………………………………………………………………………………………4
2.2.3 FORM OF BUSINESS OWNERSHIP …………………..…………………………………4
2.24 BUSINESS
LOCATION……………………………..……………………………………………………………………4
2.3 THE INDUSTRY…….…………………………………………………………………………………………4
2.3.1 INDUSTRY SIZE…………………………………………………….……………………………………..4
2.3.2 INDUSTRY CHARACTERISTICS………………………………………………………………………4
2.3.3 INDUSTRY TRENDS………………………………………………………………………………………5
2.3.4 INDUSTRY OUTLOOK……………………………………………………………………………………5
2.4 PRODUCTS/SERVICES…………………………………………………………………………………....5
2.5.0 BUSINESS GOALS/OBJECTIVES…………….……………………………………………………….5
2.5.1 SHORT TERM GOALS/OBJECTIVES…….………………………………………………………….5
2.5.2 LONG TERM GOALS/OBJECTIVES………………………………………………………………….5
2.6 JUSTIFICATION OF BUSINESS OPPORTUNITY…………………………………………………5
2.7 ENTRY AND GROWTH STRATEGY…………………………………………………………………….6
2.7.1 ENTRY STRATEGY…………………………………………………………………………………………6
2.7.2 GROWTH STRATEGY…………………………………………………………………………………….6
CHAPTER TWO:
3.0MARKETING PLAN…………………………………………………………………………………………..7
3.1.0 POTENTIAL CUSTOMERS……………………………………………………………………………..7
3.2.0 COMPETITION……………………………………………………………………………………………..7
3.3.0 MARKET SHARE/SIZE………………………………………..………………………………………….9
3.4.0 PRICING STRATEGY AND POLICY……………………………………………………..…………10
3.5.0 SALES TACTICS……………………………………………………………………………………………10
3.6.0 ADVERTISING AND PRICING STRATEGY………………………………………………………10
3.6.1 ADVERTISING PROGRAM……………………………………………………………………………10
3.6.2 PROMOTIONAL PROGRAM………………………………………………………………………..10
3.7 DISTRIBUTION STRATEGY……………………………………………………………..………………11
3.8 CUSTOMER SERVICES……………………………………………………………………………..…….11
CHAPTER THREE:
4.0ORGANIZATION AND MANAGEMENT PLAN…………………………………………………12
4.1.0 Organization Structure………………………………………………………………………..…….12
4.1.1 Organization Chart………………………………………………………………………..…………..12
4.2.0 KEY MANAGEMENT PERSONNEL………………………………………………………………..13
4.3.0 Other
Personnel……………………………………………………………………………………………………………14
4.4.0 RECRUITMENT, TRAINING AND PROMOTION…………………………………………….16
4.4.1 Recruitment policy……………………………………………………………………………..……..16
4.4.2 Training policy……………………………………………………………………………………………16
4.4.3 Promotion policy……………………………………………………………………………………….16
4.5 REMUNERATION AND INCENTIVES PROGRAMS………………………………….………..16
4.5.1 Remunerations policy………………………………………………………………………..………16
4.5.2 Incentive
programs………………………………………………………………………………………….………………..16
4.6.0 LEGAL
REQUIREMENTS………………………………………………………………….……………………………..19
4.6.1 Licensing/permit requirements…………………………………….……………………………19
4.6.2 Compliances………………………………………………………………………………………………19
4.7 SUPPORT SERVICES……………………………………………………………………………………….19

CHAPTER FOUR:
5.0PRODUCTION/OPERATIONPLAN……………………………………..……………………………19
5.1.0 PRODUCTION FACILITIES AND CAPACITIES…………………………………………………19
5.1.1 Machinery Tools and Equipment……………………………………………………………….20
5.1.2 Repair and Maintenance………………………………………………………………………….21
5.1.3 Layout of Business Premises………………………………………………………….…………21
5.2.0 PRODUCT/SERVICES DESIGN AND DEVELOPMENT……………………………………22
5.2.1 Quality Control…………………………………………………………………………..…………….23
5.3.0 PRODUCTION/OPERATION STARTEGY………………………………………………………23
5.3.1 Material Requirement………………………………………………………………………………23
5.3.2 Labor Requirement…………………………………………………………………………………..24
5.3.3 Product Cost…………………………………………………………………………………………….25
5.4.0 PRODUCTION PROCESS…………………………………………………………………………….26
5.5.0 REGULATIONS AFFECTING PRODUCTION OPERATIONS…………………………….28
CHAPTER FIVE:
6.0FINANCIAL PLAN……………………………………………………………………………………………28
6.1PRE-OPERATIONAL COST…………………………………………………….……………….28
6.2WORKING CAPITAL………………………………………………….…………………………..29
6.3.0 CASH INFLOW STATEMENT…………………………………..………………………….30
6.3.1 CASH OUTFLOW STATEMENT…………………………………….…………………….31
6.4 PRO-FORMA BALANCE SHEET…………………………………………………..…………32
6.5 BREAKEVEN POINT CALCULATION………………………………………………….…..33
6.6 PROFITABILITY RATIOS………………………………………………………………….…….35
6.7 APPENDIX…………………………………………………………………………………………..36

SYNOPSIS
1. EXECUTIVE SUMMARY
1.1Business Description
This chapter describes and outline the business’ name, owner of the business and
its location.it also shows the reasons as why the business will be started, that is
business goals.it will describe the products and services that will be offered for
sales, the industry category where the business belongs to e.g. trade, service or
transport.
Furthermore, it will explain why the owner found it necessary to start the
business as well as the justification of opportunity.
1.2Marketing Plan
The chapter shows the potential customers who will be served by the business.
It describes the market share at the entry time in future.
It describes the competition, whether fair or stiff. Here, how the business will sale
products to its customers is explained as well as the pricing strategy and policy.
Apart from these, it shows portrait and the entry and promotion strategy the
business will use, e.g. advertisements. Distribution of products of customers will
be explained too.
1.3Organization and Management
This chapter describes the organization structure of the proposed business. This
shows the management i.e. the key personnel other employees.
The remuneration policy and incentives are indicated.
The legal requirements the business will abide to are also touched. This will
enable the business to be approved as a legal enterprise and hence security.
1.4Production/Operation Plan
This chapter will give a description of how the products of the business will be
manufactured as well as service delivery.
The break-down of the equipment, materials and other costs which will be
incurred as well elaborated.
The plan indicates the requirements for providing services of customers.
1.5 Financial plan
The chapter shows the pre-operational costs that will be incurred in the business.
It determines the financial requirements of the business e.g. working capital, pro-
forma balance sheet.
It also provide the sources of funds and their uses.
1.6 Appendices
This chapter highlights any supportive material used to reinforce the texts in
discussion within the main chapters of the business plan.
CHAPTER ONE
2.0BUSINESS DESCRIPTION
2.1THE SPONSOR
The owner of Joy’s Restaurant will be Joyce Mercy Were, who is a twenty-three-
year-old single Kenyan lady living in Bungoma.
The owner is currently persuading Diploma in Cooperative Management at The
Kisumu National Polytechnic.
The owner has worked in a family restaurant for more than five years hence
acquired full experience in managing such a business.
The business will start with a capital of 800,000.
2.2NATURE OF THE BUSINESS
2.2.1 Business Name and Address
The name of the business will be Joy’s Restaurant
The name is derived from my name. I considered it attractive and though
different consultants especially from my family members and friends I found that
am famous therefore it is suitable and simple.
The business shall have the following contacts:
JOY’S RESTAURANT
P.O BOX 588,
BUNGOMA.
E.MAIL:joicewere@yahoo.com
TEL: 0796918328.
2.2.2 Business purpose
The intended business will be a mordant restaurant of medium size but the
proprietor wishes to expand it in future after learning and analyzing the profit
margin and customer’s behaviors.
The core business is to provide unique and relaxing experience similar to that at
home.
2.2.3 Form of business ownership
The business will be a sole proprietorship.
I prefer this form of ownership because;
 Privacy is enhanced since the owner has all the assets of the business.
 New ideas can be easily implemented easily without consultants.
 All profits will be enjoyed by the manager.
 The business will ensure job security to the owner.
 The business requires an affordable capital.

2.2.4 Business Location

The business will be located at Kandy shopping center, in Bungoma.
The location is suitable since its located centrally, surrounded by severally offices,
commercial centers, and learning institutions, which will give a bigger percentage
of customers.
2.3The Industry
My business shall fall under service industry where by it deals with restaurant
services and its food products.
2.3.1 The Industry Size
The size of the business is large regionally and this indicates how competition is
stiff, hence higher national income since the profit margin realized at a period are
encouraging.
The product volume is higher in the industry.
2.3.2 Industry characteristics
The business will experience factors such as inflation; this is persistence increase
in food products which might demoralize the business.
2.3.3 Industry Trends
Internationally, research has proved how much the industry is putting things in
place to ensure performance based on modern cooking technologies and
equipment hence making work easier.
2.3.4 Industry Outlook
There are future prospects for technological development within the industry that
would favor human labor hence making production effective.
There will be change in government regulations which will be favor business
operations within the industry.
2.4.0 PRODUCTS/SERVICES
The restaurant will be charged with its products and services moderately.
It will offer roasted chicken, pork, chips, fried fish, smoked meat alongside general
salads.
Some accompaniments of creamed cakes and coffee will be all in menu.
We will offer special selections including higher options and smaller portions for
children’s menu, this will provide a distinctive feature off my products.
Due to my experience in the family restaurant, I will offer quality services.
2.5.0 BUSINESS GOALS/OBJECTIVES
2.5.1 Short-term goals and objectives
a) To retain 20-30 customers per day within six months
 b) To maximize production hence increase profit margin
c) To reduce poverty by providing jobs to the unemployed customers.
2.5.2 Long-term goals and objectives
a) T create more branches of the business in various towns
b) To purchase land for expansion of the business to accommodate more
customers
c) To create a unique word of mouth marketing which is a powerful ally when
dealing with customers.
2.6 JUSTIFICATION OF BUSINESS OPPORTUNITY
Following my experience in catering industry, I did a research by scanning the
environment of the market area before starting the business. I realized the
restaurant will encourage families, students who will come to serve a fresh meal
after the day’s fatigue.
2.7.0 ENTRY AND GROWTH STRATEGY
2.7.1 Entry Strategy
My business will announce its entry through advertisements and posters.
Advertisements will be done daily over the radios stations and television channels
reachable.
Joy’s Restaurant will position itself as premier restaurant by providing quality
meals at reasonable prices.
The customers will enjoy the quiet surrounding with wooden tables with nice
table clothes. The business will provide a relaxed atmosphere accompanied by
worm smiles to customers upon their arrival.
2.7.2 Growth Strategy
The business will expand its premises to allow maximum accommodation of
customers upon their increase. This will see to it that profit is maximized.
Besides that, new foods will be made available as the customer need will go
beyond my scope of product and services.
CHAPTER TWO
 3.0MARKETING PLAN
This is the way the business will penetrate the market in order to outdo its
competitors.
3.1POTENTIAL CUSTOMERS
Both institutional and commercial customers will be served by the business.
Institutional customers consists of colleges and universities within Kanduyi
municipality. These customers will come for leisure and enjoyment.
The commercial customers includes the residents of Kanduyi and other dealers.
Children will lead to high profit because they will always come to swim in the
swimming pools.
3.2COMPETITION
The feasibility study carried out shows that there are few restaurants around
hence fair competition.
My competitors include;
 The New Generation Restaurant(opposite Joy’s Restaurant)
 Sarasa Restaurant(located a few kilometers away)
 Salmond view Restaurant(five kilometers away)
I have set a strategy to ensure my business achieve a competitive advert age by
providing a cool atmosphere that will attract many customers.
The study shows the following:
Business name Strengths Weaknesses
Joy’s Restaurant  Division of work  Poor transport
according to areas facilities.
of specialization
hence more
production.
 Involves large
scale production.
 More advanced in
technology.
Sarasa Restaurant  Qualified  Located in poor
personnel infrastructure.
 Good transport
facilities
 Use modern
technology
Salmond view Restaurant  Promotion of  Does not operate
workers daily
 Skilled personnel
 Good
infrastructure
New Generation  Has good  New in the market
Restaurant communication Does not advertise its
channel business.
 Respectful staff
 Uses modern
technology
3.3MARKET SHAPE/SIZE
The business target (5,000) in a month.
It’s intended to get 49% of the population of customers. Other competitors will
share the remaining customers.
The pie chart below shows the market share:
Key
Joy’s Restaurant-49%
Salmond view-23%
The New Generation Restaurant-20%
Others-8%
Market Share
 Sales

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

3.4PRICING STRATEGY AND POLICY

The business will sell the products at affordable prices so as to overcome
competition from the other restaurants.
The prices will be set depending on demand of each meal.
3.5SALES TACTICS
The business will try as much as possible to avoid credit sales. The business with
accept both cash payment and payment through M-pesa pay bill.
In order to attract more customers, the enterprise will serve delicious, high
quality, and healthy meals.
3.6.0 ADVERTISING AND PROMOTION STRATEGY
3.6.1 Advertising Program
The business will advertise its products on regular basis so as to make the public
aware of it.
This will be done over the most reachable radio stations and television channels.
Furthermore billboards will be erected at different junctions in Bungoma.
The approximate cost of advertising will be twenty thousand (SH.20,000).
3.6.2 Promotional Program
The business intends to make high sales through using window displays and cash
discount.
Discounts will be offered to potential customers who will order a variety of meals.
Incentives will be given to regular customers.
Besides, promotional tours will be offered to employees upon an increase in
profit.
The business will also participate in creation of environmental conservation
awareness programs by painting parks in the city.
The likely cost of each program will be fifty thousand shillings (sh.50,000).
The business will realize its effectiveness through profit made in a given period of
time and consistent increase in number of customers.
3.7DISTRIBUTION STRATEGY
The business will directly deliver its products to the potential customers since
road transport is the cheapest and readily available means.
The restaurant will target great events e.g. weddings, birthday’s even get-
togethers where it reaches out to their places and offer them unique services and
quality meals.
The distribution process will cost sh.200,000.
In case of bad weather conditions or impassible roads the restaurant will liaise
with the country government to remedy the situation so as to avoid risks.
3.8CUSTOMER SERVICE
The restaurant will ensure that once the customers arrive they will be greeted
with warm smiles just like they were at home and directed to their seats of
choice. After relaxing orders will be taken instantly to the kitchen and meals will
be made ready. We will make sure the employees are mindful to the customers
especially by appropriate use of word of mouth.
The restaurant will ensure that the meals are served in clean presentable dishes
to encourage the customers to take their meals to their own pleasure.

CHAPTER THREE
4.0ORGANIZATION AND MANAGEMENT PLAN
4.1ORGANIZATION STRUCTURE
Joy’s Restaurant expects at least fifteen workers.
I will personally select each candidate following an interview for qualified staff.
Each worker will be rated and elevated according to pre-defined set of standards
for each position
The chart below shows the structure.
Kitchen manager

General Manager

Cashier

Bookkeeper Sales agent

Ass. Manager

Catering employee

Dish washer

Security
 4.2KEY MANAGEMENT PERSONNEL
The management of the business will be as follows; the manager who is the
owner of the business. It will include the assistant manager, cashier who will act
as the serves, the bookkeeper, catering employee, dishwasher’s sales agent and
the security guards.
General Manager
The manager of Joy’s restaurant will be Joyce Mercy who is the owner.
Qualifications
a) Degree in catering industry
b) Work experience of collective years in catering industry.
Responsibilities
a) Managing business finances.
b) Formulating rules and regulation to govern the business.
c) Making business orders from various sources.
d) Recruiting the subordinate staff and assigning duties.
e) Setting up prices for the product and services.
Assistant Manager
The holder of this position will work on behalf of the general manager.
Qualifications
a) Should have at least a diploma in catering management.
b) Aged between 25yrs to 30yrs.
c) Have at least work experience of 5 years.
Responsibilities
a) Supervising other employees to ensure they perform their duties.
b) Forward issues concerning business to the manager.
c) Forwarding complains from the workers to the manager.
Kitchen Manager
The holder of this position will manage and drive all kitchen activities.
Qualifications
a) Have at least work experience of two to three years.
b) Good communication skills.
c) Should be honest and hard working
Responsibilities
Supervising the catering employees to ensure they prepare quality meals.
Forward issues i.e. food shortage to the manager.
Making duty roster to employees.
4.3OTHER PERSONNEL
Cashier
Qualifications
Should be holder of diploma in Accountancy
Should have certificate in accountancy
Responsibilities
Keeps cash collection daily in business book of accounts.
Keeps financial records for future reference.
Sales Agent
Qualifications
Should have good communication skills.
Responsibilities
Selling products to customers
Bookkeepers
Qualifications
Should be a holder of diploma in accountancy
Should have certificate in IT
Responsibilities
Preparing payroll
Catering employees
Qualifications
Should be a holder of diploma in catering
Should be steady, neat, presentable and hardworking.
Responsibilities
Preparing meals of quality as provided on time.
Dish washers
Qualifications
Should have a minimum grade of D+.
Must be neat, presentable and hardworking.
Responsibilities
Ensuring that clean utensils are provided on time.
Cleaning the restaurant after service.
Security guards
Qualifications
K.C.S.E certificate with a mean grade of D+.
Must have a contract with a security form.
Must be 30 to 35 years and work experience of at least 2years.
Responsibilities
Inspecting those who enter the restaurant
Monitoring the activities around the restaurant.
4.4RECRUITMENT, TRAINING AND PROMOTION
Recruitment
The business will recruit qualified persons. This will be done by setting posters at
strategic places which will communicate the post of staff. After application of
applicants will be interviewed, the interview will have been chaired by the
manager who will consider some qualified former staff and retain them.
Training
The business will provide our employee with the most current training programs
regarding safe food handling and worker protection.
Promotion
The employee will be promoted based on the following policies;
a) Academic qualifications
b) Competence and hardworking
c) Their experience in the industry
d) An attitude of gratitude and good conduct in them.
4.5REMUNERATION AND INCENTIVE
Remuneration policy
The salary scale for the employee will be as follows: all the Joy’s restaurant
employees will get their salaries at the end of every month without delay and this
will encourage industrial action like strikes and will encourage higher output.
Below is the proposed salary payment:
Title Number Monthly salary Annual salary
General manager 1 70,000 840,000
Assistant manager 1 50,000 600,000
Kitchen manager 1 35,000 420,000
Cashier 1 10,000 120,000
Sales agent 1 6,000 72,000
Bookkeeper 1 3,000 36,000
Dishwasher 3 3,500 42,000
 Catering 5 7,500 90,000
employees
Security guard 2 3,000 36,000
Cleaners 3 2,500 30,000
Total 190,500 2,286,000

The deduction will include:

1. NSSF Ksh 200 per month.
2. NHIF Ksh 300 per month.
3. PAYE Ksh 460 per month.
Incentive program
The manager has arranged the incentive in order to motivate the employees.
There will be salary incentive annually.
They will provide training program to the employees.
A bonus will be offered to the employees on a yearly basis depending on the
sales.
There will be advanced salaries in case of emergencies.
All staff will be allowed to access meals of their own pleasure at reasonable times.
Any employee who will be regarded as the most clean will be awarded.
The incentive program will ensure great satisfaction to the employees and it will
motivate them to work hard and provide high output as well as high profit
margins.
4.6LEGAL REQUIREMENTS.
The license will be obtained from relevant authorities. That is the industrialization
firms at a cost of ksh 10,000 per month. The business will be very compliant to
the law in that it will manage its resources regardless of the state of economy
anticipation.
4.7SURPPORT SERVICES
Banking services
The proprietor intends to open an account with the cooperative bank of Kenya so
as to access loans at any given time to make sure that the business is operating
smoothly.
Insurance services
For compensatory factors the insurance cover for the business will be provided by
AMACO insurance at annual premium of ksh 70,000.
Water
Bungoma water and Sewerage Company will ensure steady supply of water in the
restaurant.
Electricity
Since Joy’s Restaurant has a mission of providing a quaint atmosphere, the Kenya
Power and Lighting Company will provide electricity at all time, this will give our
customer’s an opportunity to enjoy unlimited Wi-Fi.
CHAPTER FIVE
7.0OPERATION AND PRODUCTION
This chapter will describe the production facilities strategies of production and
the regulations to the government policies which affect the business.
5.1 PRODUCTION FACILITIES AND CAPACITIES
The machinery, tools and equipment’s that Joy’s restaurant will require to begin
production are as follows:
ITEM DATE NO.REQUIRED COST INSTALLATION TOTAL
REQUIRED (SH. ) COST
Overall 3.11.2019 12 1200 200 1,400
table
Table 3.11.2019 12 200 50 8,000
clothes
Fireproof 5.1.2020 1 7000 1000 3,500
safe
 Cash 6.3.2020 2 3000 500 4,000
register
Blender 2.12.2019 5 3500 500 29,000
Stainless 11.4.2020 2 27000 2,000 1,400
steel
freezer
Work table 2.11.2019 2 1300 100 19,000
Cooker 26.11.2019 2 18000 1000 4,300
Bowl sink 26.11.2019 3 4000 300
Microwave 30.12.2019 2 15000 1500 16,500
Fridge 15.2.2020 1 37000 3500 40,500
Wood café 1.1.2021 50 400 50 450
chair
Commercial 2.2.2021 4 20,000 4000 24,000
dishwasher

Repair and maintenance

After a survey in the market I have met some electronic shop which carry out
repair and maintenance, quality carpenter who will maintain the restaurant’s
tools and equipment. They will do this by providing the spare parts.
Layout of business premises
Joy’s restaurant will be fifty setter, leased (with a deposit of sh.10,000)
restaurant.
The tools and equipment’s will be properly placed to ensure smooth operation.
The business will move to larger premises upon the increase in number of
customers and hence profit margin. The customers will be motivated to shift from
the new best restaurant.
Other equipment
Item Date Quantity Unit cost(sh.) Total(sh.)
Telephone 3.11.2019 1 3,000 3,000
Office 4.11.2019 3 40,000 120,000
computer
 Funs 5.2.2020 4 7,500 30,000
Woofer 6.3.2020 1 5,000 5,000
Office staff 3.11.2019 2 300 600
Television 6.3.2020 3 17,000 51,000

5.2 PRODUCT/SERVICE DESIGN AND DEVELOPMENT

5.2.1 Product Design and Development
Our products will be of high quality, resembling the home-style meals.
The meals will be prepared with quality ingredients and will be of affordable
prices.
We will ensure we make use of the modern technology. To ensure flexibility in the
restaurant, the restaurant will be equipped with modern machines e.g.
microwave, heaters and the POS system, which will aid in operation.
Service design and development
We will provide quality services to the customers as they will walk in they will be
greeted with warm smiles and asked for seating preference. Our restaurant layout
will allow customers to make orders which will automatically be printed to a
requisition printer. This will direct the cook to place the ordered meals under
heating lamps upon waiting completion of order.
Quality control
Because of my years of experience in the restaurant I have established
relationships with qualified suppliers who will provide quality product at
reasonable prices. I will also put into practice proper use of sound management
procedures that will control costs and friendly customers.
5.3 PRODUCTION/OPERATION STARTEGY
Material requirements
Some of the materials I will need for production of goods are as follows:
ITEM FREQUENCY SOURCE QUALITY UNIT TOTAL(KSH)
REQUIRED COST(KSH)
 Milk Daily Bungoma 20 liters 50 100
dairies
Eggs Weekly Magnet 10 crates 300 3000
distributors
Tomatoes Weekly Ukulima 2 crates 1200 2400
Sacco

In addition, to the qualified supplier I have met, I have put things in place so that
in case of any shortcoming, the restaurant will be apposition to maintain its
operations.
I have done this by starting other project such as poultry farming and dairy
farming.
I have bought a business van that will aid in transportation.
Labor Requirement
Personnel Number Qualifications Duties
General manager 1 At least 10 years Managing
of work business finance
experience
Assistant manager 1 At least diploma Supervisor for
in catering other employees
management
Cashier 1 A holder of Keeping financial
diploma in records
accountancy
Kitchen manager 1 Work experience Making duty
of 2 or 3 years roasters for
catering
employees
Bookkeeper 1 A holder of Preparing payrolls
diploma in
accountancy
Catering 5 A diploma holder Preparing meals
employees in catering proving the menu
Security guard 2 KCSE certificate Inspections during
with minimum entry and exit
grade of D+
Dish washers 3 Must be neat, Keeping utensils
presentable and clean
hardworking
Cleaners 3 Must be neat and Cleaning
hardworking restaurant

Total cost of labor per month

No of direct worker’s x cost per hour = 3 x 500 x 180 = 270,000
No of indirect worker’s x cost per hour = 15 x 100 x 180 = 540,000
Total cost of labor production = 810,000
Production cost
Expenses Cost(sh.)
Graphic logo and name creation 2,000
Lease deposit 50,000
Contingency 10,000
Working capital 250,000
Building improvement 100,000
Outdoor sign 5,000
TOTAL 450,000
OVERHEAD COST(SH.)
Electricity 6,000
Rent 25,000
Telephone 2,500
Insurance 50,000
Water 2,000
TOTAL 85,500

5.4 PRODUCTION PROCESS

The restaurant will be operating during week days as follows:
Monday 9:00am-9:00pm
Tuesday 9:00am-9:00pm
Wednesday 9:00am-9:00pm
Thursday 9:00am-9:00pm
Friday 9:00am-10:00pm
Saturday 9:00am-10:00pm
Sunday 12:00pm-5:00pm

The workers will report for work at 6:30am every morning except on Sunday so
that they prepare the meals by 9:00am.
Fire extinguishers will be installed to prevent losses in case of any fire outbreak.
5.5 REGULATIONS AFFECTING PRODUCTION/OPERATION
Trade license
The license will be obtained from Bungoma municipal council.
This will enable the restaurant to operate peacefully and legally.
Trade Mark
The trade mark will be labelled: “Joy’s Restaurant”.
This will prevent illegal operation of other businesses by using the name.
Insurance
The business will ensure itself with AMACO INSURANCE COMPANY, so that any
loss is compensated under its terms and principles.
Statutory Deductions
The management will ensure that ach employee is entitled to authorize bodies’
i.e. NSSF, NHIF, whose rates are determined by the government.

CHAPTER FIVE
6.0 FINANCIAL PLAN
 6.1 PRE-OPERATIONAL COSTS
ITEMS COSTS
Machinery tools and equipment 500,000
Renovation of business premises 150,000
Market research 70,000
Licensing requirements 30,000
Installations 30,000
Legal fees 20,000
TOTAL 800,000

6.2 WORKING CAPITAL

PARTICULARS YEAR 2019 YEAR 2020 YEAR 2021
Current assets
Stock 105,800 1105,800 105,800
Cash-in-hand 300,457 458,259 560,444
Cash at bank 939,000 2,619,198 735,000
Debtors 12,000 42,900 15,300
Pre-paid rent 25,000 20,000 18,000
Pre-paid insurance 2,000 2,000 2,000
Total current 1,384,257 3,248,157 6,436,544
assets

Current liabilities
Loans 400,000 250,000 300,000
Bank overdraft 39,000 60,000 42,500
Creditors 23,500 27,000 96,450
Bills payables 2,000 1,500 3,000
Total current 464,500 338,500 441,950
liabilities
Working Capital 919,757 2,909,657 5,994,594
Requirements(Total
CA-Total CL)
 6.3 INCOME STATEMENT
PROFORMA INCOME STATEMENT
PARTICULARS Year 2019 Year 2020 Year 2021
(KES) (KES) (KES)
Sales 1,597,900 1,757,100 1,983,950
Less: purchase 489,150 539,700 635,400
costs
Gross profit 2,087,050 2,296,800 2,619,350
Less: expenses
Wages 670,000 670,800 670,800
Rent 120,000 120,000 120,000
Water 2,900 2,680 3,530
Telephone 10,000 16,850 17,950
Electricity 15,000 20,360 24,950
Advertising 12,700 27,000 18,500
Stationery 10,500 19,700 27,000
Postage 1,400 2,000 4,500
Transport 5,400 5,400 5,400
Depreciation 30,000 10,000 20,000
Loan plus interest 316,300 338,400 422,400
Repair and 4,000 16,500 10,500
maintenance
Sundries 8,700 15,600 28,900
Total expenses 1,247,600 1,314,070 1,423,030
Net profit before 839,450 982,730 1,196,320
tax
Less: provision for 83,945 98,273 119,632
tax (10%)
Net profit 755,505 884,457 1,076,688

6.4 BALANCE SHEET

JOY’S RESTAURANT PROFORMA BALANCE SHEET AS AT 31ST DECEMBER 2020
ASSETS COSTS
Current Assets
Cash 250,436
Debtors 446,700
Stock 12,000
Total Current Assets 709,136

Non-current Assets
Machinery 368,000
Accumulated depreciation 30,000
Vehicle 1,256,000
Accumulated depreciation 40,000
Furniture and fittings 140,000
Accumulated depreciation 20,000
Total non-current assets 1,854,000
TOTAL ASSETS 2,563,136
LIABILITIES
Current liabilities
Creditors 23,500
Bank overdraft 40,000
Total C.L 63,500
Long-term liabilities
Bank loan 400,000
Owner’s equity 3,698,336
Total liabilities and equity 4,161,836

6.5 BREAK EVEN CALCULATION

Operating expenses
FIXED COSTS AMOUNT
Salaries and wages 670,800
Premises 120,000
Insurance 16,300
License 10,000
Equipment 2,415,500
Loan interest 30,000
Loan payment 50,000
Total 3,312,600

VARIABLE COST AMOUNT

Purchases 489,150
Transport 116,200
Water 2,900
Electricity 11,500
stationery 11,400
Telephone 15,000
Total 645,150

i) Total contribution margin = 1,597,900 – 645,150

=sh.952,750
ii) Contribution margin percentage = 952,750 x 100%
1,597,900
=59.63%
iii) Total fixed cost
= KES 3,312,600
iv) Breakeven level of sales in shillings
=fixed cost
Contribution margin percentage
=3,312,600
59.6
= KES 55,580.54
v) Breakeven level in units
= contribution level =952,750
Fixed cost 3,312,600
= 0.22876
6.6 PROFITABLILITY RATIOS
Gross profit percentage = gross profit x 100%
Sales
=2,087,050 x 100%
1,597,900
=130.61%
6.6 APPENDICES
To Nairobi Joy’s Restaurant
Location map

Tesia supermarket