COVER PAGE

GLANITER EMELITE AGROVET

P.O BOX 137
TELL NO:
JUNE, 2024.
PRESENTED BY:
INDEX NO:
INSTITUTION: MULLY COLLEGE
PRESENTED TO: KNEC IN PARTIAL FULFILLMENT OF REQUIREMENT FOR AN
AWARD OF CERTIFICATE IN GENERAL AGRICULTURE
EXAM SERIES: JULLY, 2024.
DECLARATION
I hereby declare that this business plan has been submitted to MULLY COLLEGE with my
approval as the supervisor.
Name:
Signature:
Date:
DEDICATION
This business plan is dedicated to God, my family and friends for strength and decisional support
in my studies.
ACKNOWLEGEMENT
Many glory to almighty God for life, wisdom and strength during this time of writing this. Lots
of appreciations to my supervisor who has been the coach in guiding and learning of this
business plan. Great love to my family for great support and also friends the decisions and
financial support.
Contents
COVER PAGE................................................................................................................................................1
DECLARATION..............................................................................................................................................2
DEDICATION................................................................................................................................................3
ACKNOWLEGEMENT....................................................................................................................................4
EXECUTIVE SUMMARY.................................................................................................................................6
CHAPTER ONE..............................................................................................................................................7
1.0 BUSINESS DESCRIPTION..............................................................................................................7
1.1 BUSINESS NAME............................................................................................................................7
1.2 BUSINESS LOCATION AND ADDRESS.......................................................................................7
1.3 BUSINESS OWNERSHIP................................................................................................................7
1.4 TYPE OF BUSINESS.......................................................................................................................7
1.5 PRODUCT /SERVCES.....................................................................................................................8
1.6 INDUSTIRY......................................................................................................................................8
1.7 BUSINESS OBJECTIVES................................................................................................................8
1.8. ENTRY AND GROWTH STRATEGY...........................................................................................8
1.9 JUSTFICATION OF THE OPPORTUNITY....................................................................................9
CHAPTER TWO.............................................................................................................................................9
2.1 MARKETING PLAN........................................................................................................................9
2.2 CUSTOMERS...................................................................................................................................9
2.3 THE MARKET SHARE....................................................................................................................9
2.4 COMPETITORS.............................................................................................................................10
2.5 PRICING STRATEGY...................................................................................................................10
2.6 SALES STRATEGY.......................................................................................................................11
2.7 ADVERTISING AND PROMOTION............................................................................................11
2.8 DISTRIBUTION STRATEGY........................................................................................................11
CHAPTER THREE........................................................................................................................................11
3.0 ORGANISATION AND MANAGEMENT PLAN.........................................................................11
3.1 ORGANIZATIONAL STRUCTURE..............................................................................................12
3.1MANAGEMENT TEAM.................................................................................................................12
 3.3 RECRUITMENT, TRAINING AND PROMOTION......................................................................13
3.3.1 RECRUITMENT......................................................................................................................13
3.3.2 TRAINING...............................................................................................................................13
3.3.3. PROMOTION.........................................................................................................................13
3.4 REMUNERATION AND INCENTIVE..........................................................................................13
3.4.1. REMUNERATION.................................................................................................................13
3.4.2 INCENTIVES...........................................................................................................................14
3.5. LICENSES PERMIT......................................................................................................................14
3.6. SUPPORT SERVICES...................................................................................................................14
CHAPTER FOUR..........................................................................................................................................14
4.0 OPERATION AND PRODUCTION PLAN...................................................................................14
4.1 PRODUCTION FACILITIES AND CAPACITY...........................................................................15
4.1.1 Production facilities..................................................................................................................15
4.2. Production cost...............................................................................................................................16
Direct materials.................................................................................................................................16
Direct labor........................................................................................................................................16
Variable expenses..............................................................................................................................17
Fixed overhead/expenses...................................................................................................................17
4.3. PRODUCTION STRATEGY.........................................................................................................18
4.2 PRODUCTION PROCESS.............................................................................................................18
4.5. Regulations affecting the operations...............................................................................................18
CHAPTER FIVE............................................................................................................................................18
5.0. Financial plan.................................................................................................................................18
5.1. Preoperational cost.........................................................................................................................18
5.2. Estimation of working capital.......................................................................................................19
5.3. Cash flow projection.......................................................................................................................19
5.4. Proforma income statement............................................................................................................21
5.5. Proforma balance sheet...................................................................................................................22
5.5. Break even analysis........................................................................................................................23
5.7. Profitability ratios...........................................................................................................................24
5.8. Desired financing............................................................................................................................24
5.9. Proposed capitalization...................................................................................................................25
6.0. Appendix........................................................................................................................................25
EXECUTIVE SUMMARY
Glaniter Emelite is a retail Agrovet that will be located at Embu town which will be dealing with
all the animal and agricultural resources. Its main objectives are to provide goods at affordable
price and of best quality and expand my business and have branches in other towns.

Glaniter Emelite Agrovet will be a sole proprietorship, I will be the owner and the manager of
the business with the help of few employees who will help me in sale and marketing. . It should
be started by starting of February, 2027.

It will start with an estimation of 2,158,000 with support from bank loan, friends and savings.
The business will be operating under agricultural industries and will be selling things like Seeds,
fertilizers, pesticides, herbicides, veterinary implements and others.
CHAPTER ONE
1.0 BUSINESS DESCRIPTION.

After a field research I decided that people living in Embu town where getting their animal and
agricultural resources from towns such as: chuka and many other places, therefore I came up
with an idea of starting an Agrovet in Embu town, which will be operating it will be called
Glaniter Emelite Agrovet dealing with all the animal and agricultural resources.

1.1 BUSINESS NAME.

My business name is Glaniter Emelite Agrovet. The origin of the business name is from my
name. I choose this name because it is simple unique and easy to offer directions to customers.
My motto is providing the best quality and quantity agricultural and animal resources. .My
mission is being the best supplier of agricultural and animal resources all over the country.

1.2 BUSINESS LOCATION AND ADDRESS

It will be located at Embu town, Kirinyaga County. The designated business shall contain and
operate with the following address;

GLANITER EMELITE AGROVET

P.O BOX 137
EMBU
Email no: glaniteremelite@gmail.com
Tell no: 07xxx

1.3 BUSINESS OWNERSHIP

Glaniter Emelite Agrovet will be a sole proprietorship I will be the owner and the manager of the
business with the help of few employees who will help me in sale and marketing. I choose a sole
proprietorship because, it is easy to make decision will enjoy the profit alone.

1.4 TYPE OF BUSINESS

Glaniter Emelite Agrovet will be selling in retail. I will be offering high products to my
customers only. The retail Agrovet store will be a specialized retail outlet that caters to the needs
of farmers, livestock owners, and agricultural enthusiasts by offering a wide range of agricultural
inputs, animal health products, and related services. Will play a crucial role in supporting
agricultural production, providing farmers with essential resources and expertise to maximize
yields, enhance livestock health, and improve overall farm efficiency.
1.5 PRODUCT /SERVCES

Will offer a diverse range of products and services tailored to the needs of their target market,
which may include:

Seeds, fertilizers, pesticides, herbicides, growth regulators, and other crop protection products
are commonly stocked to help farmers optimize crop yield and quality.

Veterinary medicines, vaccines, dewormers, supplements, and hygiene products are available to
help maintain the health and well-being of livestock, ensuring optimal productivity and disease
prevention.

Farming implements, machinery, irrigation systems, animal husbandry equipment, and other
tools necessary for efficient farm operations are often offered.

Consultancy services on crop management, soil health, pest and disease control, livestock
nutrition, breeding practices, and sustainable farming techniques.

1.6 INDUSTIRY.

My business will be operating under agricultural industries. Since it will be dealing with
agricultural and animal resources, insufficient staffs create problem with job and also morale.
Therefore forecasting is a crucial function which contributes to the successful operation of the
Agrovet business.

1.7 BUSINESS OBJECTIVES.

My objectives are as follows:

1. To have a market share of 30%

2. To provide goods of the best quality

3. To provide goods at affordable price

4. To expand my business and have branches in other town’s .e.g. Thika

5. To maintain good relationship with my suppliers and farmers.

1.8. ENTRY AND GROWTH STRATEGY

Advertising the business to be known by people through putting posters and billboards and use
of local television stations and ensuring that I have the required documents such as trading
license .I will be offering after sale services such as offering discount so as to attract customers.

The business will be preferred to start as of February, 2027.

1.9 JUSTFICATION OF THE OPPORTUNITY

The business will be successful because it will be located in the area with high population. There
will be also good security which will ensure that the business is well secured and the employees
and customers will be secured while operating the business. It will be operated by qualified staff
who will relate well with the customers so as to satisfy the customers at a profit.

CHAPTER TWO
2.1 MARKETING PLAN

The business will carry out marketing survey in order to analyze its intended market and describe
the market opportunity as they open in the market and challenges that will be met as the entrance
to the market is tied to the market strategies, tactics and policies required will be developed to
exploit the market opportunities. Market goals are maximization of profits, the pricing strategies
will aim to middle customers and lower customers to provide affordable prices this will attract
more customers hence making more sales to satisfy customers' needs that is by providing variety
of goods and services of high quality.

2.2 CUSTOMERS

The customers in my business will include retailers, individual customers, since in Embu has a
large open market and most of the farmers are targeted to buy firm inputs like fertilizers and
CAN 1717.

2.3 THE MARKET SHARE.

Embu town has various Agrovet shops two major and other small shops among this Glaniter
Emelite Agrovet has 25% of the market share. Some of this competitors are within the area and
others are located at the outside of the market, the competitor share 75% of the market share the
population in the area is estimated 70000 people therefore the market share is:

25/100*70000=17500

DawaFam 50/100 *70000=35000

Wakulimavet 30/100*70000=21000

Others 20/100*7000=14000
2.4 COMPETITORS

Competitors, location, %share, strength, weakness, coping strategy

DAWAFAM

Embu

50%

Well equipped with new modern technology.

No space for expansion of business.

It's in a credible site easily accessible.

WAKULIMAVET

Embu

30%

A good site.

Very few customers.

It has good security and fast browse.

Others

Embu

20%

A good site with good security.

Not very familiar like others.

Good allocation and easy for expansion.

2.5 PRICING STRATEGY.

The price of the product will be set in the way that majority of the customers will be attracted.
Products will be of reasonable prices offering of discounts to enhance prompt payment. When
fixing prices the following factors will be considered: The buying price of the product and legal
charges.
2.6 SALES STRATEGY.

The business will use direct and individual selling methods, selling face to face to customers this
method will enhance good relation with suppliers and customers and customers will be able to
buy extra quality products. The customers who will buy goods in large will be negotiating of the
prices to products which will not be fixed in prices. enterprise will be offering 2.5% trade
discount to its potential customers 4.5% to customers who buy the prices will be negotiable to
some items especially the large items the price will be fixed and the price will be labelled on
them.

2.7 ADVERTISING AND PROMOTION.

Advertising will help the farmers know that a new Agrovet has been established. There will be
calendars showing about the business at the top while at the bottom showing calendar itself.
There will also use of sign boards to direct customers where Agrovet will be located.

Promotion act as an incentive to the customers and through the business will attract more
customers and sales per day. The various methods to be undertaken includes: Use of business
cards and also sticker's .They will be showing the name of the Agrovet and also the location
address .There will be also issue of trade discount. It will be given to customers who buy in large
quantities on credit so as to enhance immediate payment.

2.8 DISTRIBUTION STRATEGY.

Some products to reach the customer there is are middle-men involved; wholesalers and
distributors. The business will also sell direct to customers, the mode of transport will be use of
van for customers who are within the market.

Producer Customer

CHAPTER THREE
3.0 ORGANISATION AND MANAGEMENT PLAN

The organizational will be showing the extent of how the managers will be managing the
business, allocating duties, controlling, arranging salaries and arranging training for the worker.
3.1 ORGANIZATIONAL STRUCTURE

CASHIER/MANAGER

SALESPERSON

WATCHMAN

3.1MANAGEMENT TEAM.

Being a sole proprietorship form of business it is under the management of myself who is the
owner. The proprietor is qualified in business skills. She has the following roles controlling the
business, planning the activities, setting the selling prices, paying the employees and allowing
credits. She has a degree in business management and a two year experience hence, she is
qualified thus she will be enjoying the profits alone although she will be the one paying all the
expenses.

The business has a total of four employees including the manager. They are as follows:

MANAGER

 Have knowledge in business skills

 Make decisions
 Paying the suppliers

CASIER

 Handle customer transactions

 Cash management
 Facilitates communication and teamwork
 Maintains compliance and record keeping
 Ensures inventory control

SALESPERSON

 Two year experience

 Have a certificate in sales and marketing
 22 year of age
 Have good public relation
 Making sales explore new markets
 Collecting customers claims

WATCHMAN
  Physical fit
 Two years' experience in field work
 At least KCSE certificate
 Offering security
 Directing customers

3.3 RECRUITMENT, TRAINING AND PROMOTION.

3.3.1 RECRUITMENT

This will be by academic qualification and experience. Whenever position falls vacant business
will advertise the post and candidate applied to the management then the applicants will be
interviewed the candidates who qualifies will be placed in the respective position.

3.3.2 TRAINING
It will be done for three months to inform about the rules and regulations of the business. It will
also equip for more skills. Employees will be travelled to other sector dealing with advertising to
gain more knowledge and interact with them.

3.3.3. PROMOTION
Promotion will be awarded to people with good performance in their work services, how they
interact with others, communicate and respect others.
This will encourage them for more production spirit and motivation in the work business.
It will be involved awarding my employees gifts and giving them off days and off times.

3.4 REMUNERATION AND INCENTIVE

3.4.1. REMUNERATION
My employees salary will consider from the top managers because is how big tasks they have to
manage the business. They will be paid after month.
They table shows their salaries:-

Post Amount
MANAGER 40,000
CASHIER 40,000
 SALESPERSON 20,000
WATCHMAN 10,000
Total 110000

3.4.2 INCENTIVES

The employees work for 10 hours per day. They are expected to work under minimum
supervision there is a fed break that is 30 minutes and lunch break of one hour, they are offered
leaves annually, day offs, sick leaves as a way of motivating them.

3.5. LICENSES PERMIT

The business will acquire its license from county ward office of Embu town at a total cost of
10,000.

License required Source Cost

Trade license Ministry of trade and 5,000
industrialization
Operating license Thika municipal council 5,000

3.6. SUPPORT SERVICES

Supportive series include:-
i. Banking services
ii. NSSF
iii. Insurance
iv. Legal services

CHAPTER FOUR
4.0 OPERATION AND PRODUCTION PLAN

Glaniter Emelite Agrovet is a shop that will be dealing with already manufactured goods but
from different companies they will be supplied as per the request of the proprietor from the
manufacturer.
4.1 PRODUCTION FACILITIES AND CAPACITY.
4.1.1 Production facilities.

The business requires the following facilities for it effective running. They include: calculators,
telephones, benches, shelves and weighing scale. They will be bought as new items and at the
same time.

Equipment Use No. Required Total

Weighing scales Used for 50,000
weighing
animals, such as
livestock, to
monitor growth,
administer
medications
accurately, and
manage feed
rations.
Animals Tools used for 200,000
tasks related to
husbandry tools
animal care and
management,
such as
dehorners,
castration tools,
hoof trimmers,
and obstetrical
instruments.
Personal 50,000
protective
equipment’s
Soil treatment Equipment used 200,000
for treating seeds
equipment
with fungicides,
insecticides, and
other treatments
to protect against
pests and
diseases before
planting.
Total 500000
4.2. Production cost
Direct materials
Type of material Source Quantity Cost
containers, bags, Spellman and walker 10 50,000
labels, and seals
vaccines, antibiotics, N/a 1 100,000
dewormers
Grains, forages, N/a 1 50,000
protein sources,
Reagents, test kits, N/a 1 50,000
and consumables
Total 250000

Direct labor

Post Amount
MANAGER 40,000
CASHIER 40,000
SALESPERSON 20,000
WATCHMAN 10,000
Total 110000

Cost of production per month

Direct labor cost
No. of director workers *cost per hour *no. of hours
9*10070*12
=110,000.
Monthly production expenses will be:

Variable expenses
Expenses Amount
Salaries 90,000
Insurance 2,000
Sundry expenses 5,000
Telephone charges 1,000
Electricity 5,000
License 7,000
Tax 10,000

Total 120000

Fixed overhead/expenses
Expenses Amount
Land 100,000
Building 300,000
Machines 500,000
Vehicles 500,000
Furniture 100,000
Total 1500000
4.3. PRODUCTION STRATEGY

Glaniter Emelite Agrovet shop will provide excellent customer service and technical support to
assist customers with product selection, usage guidelines, and troubleshooting. Build long-term
relationships with customers through personalized service and ongoing communication.

4.2 PRODUCTION PROCESS.

RAW MATERIAL SOURCING

INSPECTION

PACKAGING

STORAGE

DISTRIBUTION

4.5. Regulations affecting the operations

The hygienic condition will be in a place in order to take care of computers and other
equipment’s within the offices. In case of damages from employees, they will have to be
accountable of 20% of the amount damaged.

CHAPTER FIVE
5.0. Financial plan
5.1. Preoperational cost
Preoperational cost is any expense or cost incurred during the startup or information of a new
business. This helps prevent firms from deducting cost that are unrelated to business.
Item Cost
Registration permit and 10,000
certificate
Trade license 7,000
Advertising 6,000
Tax 10,000
 Electricity 5,000
Total 38000

5.2. Estimation of working capital

Working capital entails the amount of the company requires to finance the day to day operation.
Item 2027 2028
Current assets 250,000 310,000
Stock of raw materials 1,020,000 1,740,000
Debtors 300,000 400,000
Cash at bank 150,000 250,000
Cash at hand 1,720,000 2,700,000
Total current assets

Less: Current liabilities

Creditors (1,800,000) (1,500,000)
Short term loan (300,000) (400,000)
Total working capital (620,000) (800,000)

5.3. Cash flow projection

Cash flow is the net balance of cash moving into and out of a business at a specific point in time.

GLANITER EMELITE AGROVET

CASHFLOW SYSTEM
FOR THE PERIOD OF 2027

Jan. Feb.
Mar Apri May Jun July Aug. Sep. Oct. Nov. Dec.
ch. l. . e. .
Sales 340, 350, 360, 370, 380, 390, 400, 410, 420, 430, 440, 450,
000 000 000 000 000 000 000 000 000 000 000 000
Debto 60,0 60,0 70,0 70,0 80,0 80,0 90,0 90,0 100, 100, 110, 110,
rs 00 00 00 00 00 00 00 00 000 000 000 000
T. C 4000 4100 4300 4400 4600 4700 4900 5000 5200 5300 5500 5600
inflo 00 00 00 00 00 00 00 00 00 00 00 00
w
Purch 250, 255, 260, 265, 270, 275, 280, 285, 290, 295, 300, 305,
ases 000 000 000 000 000 000 000 000 000 000 000 000
Salari 90,0 90,0 90,0 90,0 90,0 90,0 90,0 90,0 90,0 90,0 90,0 90,0
es 00 00 00 00 00 00 00 00 00 00 00 00
T. 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00
charg 0 0 0 0 0 0 0 0 0 0 0 0
es
Electr 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00
icity 0 0 0 0 0 0 0 0 0 0 0 0
Sundr 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00
y E. 0 0 0 0 0 0 0 0 0 0 0 0
Insura 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,00
nce 0 0 0 0 0 0 0 0 0 0 0 0
Tax 10,0 10,0 10,0 10,0 10,0 10,0 10,0 10,0 10,0 10,0 10,0 10,0
00 00 00 00 00 00 00 00 00 00 00 00
Licen 7,00 7,00 7,00 7,00 7,00 7,00 7,00 7,00 7,00 7,00 7,00 7,00
se 0 0 0 0 0 0 0 0 0 0 0 0
T. 370, 375, 380, 385, 390, 395, 400, 405, 410, 415, 420, 425,
Outfl 000 000 000 000 000 000 000 000 000 000 000 000
ow
Profit 30,0 35,0 50,0 55,0 70,0 75,0 90,0 95,0 110, 115, 130, 135,
00 00 00 00 00 00 00 00 000 000 000 000

GLANITER EMELITE AGROVET

CASHFLOW STATEMENT
FOR THE PERIOD OF 2028
Jan. Feb. Mar Apri May Jun July Aug. Sep. Oct. Nov. Dec.
ch. l. . e
Sales 460, 470, 480, 490, 500, 510, 520, 530, 540, 550, 560, 570,
000 000 000 000 000 000 000 000 000 000 000 000
Debto 120, 120, 130, 130, 140, 140, 150, 150, 160, 160, 170, 170,
rs 000 000 000 000 000 000 000 000 000 000 000 000
T.C 5800 5900 6100 6200 6400 6500 6700 6800 7000 7100 7300 7400
inflo 00 00 00 00 00 00 00 00 00 00 00 00
w
Purch 310, 315, 320, 325, 330, 335, 340, 345, 350, 355, 360, 365,
ases 000 000 000 000 000 000 000 000 000 000 000 000
Salari 90,0 90,0 90,0 90,0 90,0 90,0 90,0 90,0 90,0 90,0 90,0 90,0
es 00 00 00 00 00 00 00 00 00 00 00 00
T. 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00
Charg 0 0 0 0 0 0 0 0 0 0 0 0
es
Electr 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00
icity 0 0 0 0 0 0 0 0 0 0 0 0
Sundr 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00
y E. 0 0 0 0 0 0 0 0 0 0 0 0
Insura 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,00
nce 0 0 0 0 0 0 0 0 0 0 0 0
Tax 10,0 10,0 10,0 10,0 10,0 10,0 10,0 10,0 10,0 10,0 10,0 10,0
00 00 00 00 00 00 00 00 00 00 00 00
Licen 7,00 7,00 7,00 7,00 7,00 7,00 7,00 7,00 7,00 7,00 7,00 7,00
se 0 0 0 0 0 0 0 0 0 0 0 0
T. 430, 435, 440, 445, 450, 455, 460, 465, 470, 475, 480, 485,
Outfl 000 000 000 000 000 000 000 000 000 000 000 000
ow
Profit 150, 155, 170, 175, 190, 195, 210, 215, 230, 235, 250, 255,
000 000 000 000 000 000 000 000 000 000 000 000
5.4. Proforma income statement

GLANITER EMELITE AGROVET

PROFOMER INCOME STATEMENT
FOR THE PERIOD ENDED DEC 2027

SALES 4,740,000
Less :Cost of goods sold
Opening stock 250,000
Add purchases 3,330,000
Less: closing stock 305,000 (3,275,000)
Gross profit 1,465,000
Less: Expenses
Salary 1,080,000
Telephone charges 12,000
Electricity 60,000
Sundry expenses 60,000
Insurance 24,000
Tax 120,000
License 84,000 (1,440,000)
Net profit 25,000

GLANITER EMELITE AGROVET

PROFORMA INCOME STATEMENT
FOR THE PERIOD ENDED DEC 2028

SALES 6,180,000
Less: cost of goods
Opening stock 310,000
Add purchases 4,050,000
Less closing stock 365,000 (3,995,000)
Gross Profit 2,185,000
Less: Expenses
Salary 1,080,000
Telephone 12,000
 Electricity 60,000
Sundry expenses 60,000
Insurance 24,000
Tax 120,000
License 84,000 (1,440,000)
Net profit 745,000

5.5. Proforma balance sheet

GLANITER EMELITE AGROVET
BALANCE SHEET
AS AT 31st DEC 2027
Fixed assets
Land and building 400,000
Machines 500,000
Vehicle 500,000
Furniture 100,000
Total fixed assets 1,500,000
Current assets
Stock 250,000
Debtors 1,020,000
Cash at bank 300,000
Cash at hand 150,000
Total 1,720,000
Current liabilities
Creditors (800,000)
Short term loan (300,000)
Working capital 620,000
Capital employed 2,120,000
Financed by
Equity capital 2,095,000
Net profit 25,000
2,120,000
 GLANITER EMELITE AGROVET
BALANCE SHEET
AS AT 31st DEC 2028

Fixed assets
Land and building 400,000
Machines 500,000
Vehicle 500,000
Furniture 100,000
Total fixed assets 1,500,000
Current assets
Stock 310,000
Debtors 1,740,000
Cash at bank 400,000
Cash at hand 250,000
Total assets 2,700,000
Less: current liabilities
Creditors (1,500,000)
Short term loan (400,000)
Working capital 800,000
Capital employed 2,300,000

Financed by
Equity capital 1,555,000
Add Net profit 745,000
2,300,000

5.5. Break even analysis

Breakeven point=fixed cost/ (sales-variable cost)
2027 2028
1,500,000/ (4,740,000-120,000) 1,500,000/ (6,180,000-120,000)
=0.32 =0.25

Contribution margin =sales - variable cost

2027 2028
4,740,000-120,000 6,180,000-120,000
 =4,620,000 =6,060,000

Contribution sales ratio = (contribution margin/sales)*100

2027 2028
(4,620,000/4,740,000)*100 (6,060,000/6,180,000)*100
=97.47% =98.06%

5.7. Profitability ratios

I).Gross profit ratios= (gross profit/sales)*100

2027 2028
(1,465,000/4,740,000)*100 (2,185,000/6,180,000)*100
=30.91% =35.36%

ii).Return on equity ratio = (net profit/owners’ equity)*100

2027 2028
(25,000/2,095,000)*100 (7,450,000/1,555,000)*100
=1.19% =47.91%
iii).Net profit after tax =Net profit – 30% of net profit
2027 2028
25,000 – (30%*25,000) 745,000 – (30%*25,000)
=17,500 =521,000
iv).Return on profit ratios = net profit/total assets
2027 2028
25,000/3,220,000 745,000/4,200,000
=0.0078 =0.18

v).Current ratio = current assets/ current liabilities

2027 2028
1,720,000/1,100,000 2,700,000/1,900,000
=1.56 =1.42

5.8. Desired financing

This is the estimation of the amount you intend to use in your business.
ITEM AMOUNT
Preoperational cost 38,000
Working capital 620,000
Fixed assets
Land and building 400,000
Furniture 100,000
Vehicle 500,000
Machines 500,000
Total desired 2,158,000
financing
5.9. Proposed capitalization
The estimated capital will be about 2,158,000.
SOURCE AMOUNT
Owners’ equity 458,000
Family and friends 700,000
Bank loan and 1,000,000
investments

6.0. Appendix
This will be the road map to business location of Embu town.

GLANITER
EMILITE
AGROVET