BLOSSOM POULTRY FARM

PO BOX 60 MOGOGOSIEK
TEL NO: 0791353116

TITTLE OF THE DOCUMENT

BUSINESS PLAN BLOSSOM POULTRY FARM
PRESENTED BY: KIPKORIR JACOB BETT
INDEX NUMBER:
SUPERVISOR: MADAM FANCY KIOS
PRESENTED TO: THE KENYA NATIONAL EXAMINATION
COUNCIL IN PARTIAL FULFILLMENT FOR THE AWARD OF
CERTIFICATE IN GENERAL AGRICULTURE.
EXAM SERIES: JULY 2024
CENTRE: KIPKABUS TECHNICAL TRAINING
INSTITUTE PO BOX 10882-30100 ELDORET.
 DECLARATION
I hereby declare that this project is purely the true copy of my original research

work and that no part of it has been copied from elsewhere. This work is

presented to the Kenya national examination as part of the requirements for the

award of certificate in general agriculture.

NAME: ………………………………………………………………….

SIGNATURE……………………………….....Date……………………

The business plan has been submitted to the Kenya examination council (KNEC)

with my approval as the supervisor.

NAME: ………………………………………………………………….……

SIGNATURE……………………………DATE……………………………

i
DEDICATION
I would like to dedicate this project to my loving and caring parents who gave me

financial as well as moral support throughout my course.

Special thanks to my brothers, sisters, classmates and my friends for their support.

May God bless you in every good work.

ii
ACKNOWLEDGEMENT

First and foremost, my sincere thanks go to MADAM FANCY KIOS my supervisor for

his guidance, support and encouragement throughout the span of carrying out my

project work. I am equally indebted to my lecturers for their dedication to

ensuring that I get quality education.

Once again, I am greatly indebted to my parents for their financial support,

encouragement and prayers that have brought me this far. I would also like to

thank all my colleagues, friends and relatives, for their encouragement and

practical support during my entire certificate program.

I wish also to thank the Kipkabus Technical and Vocatioal College for their support

in form of reference textbooks, which greatly contributed to the success of this

entrepreneurship project.

Thanks a lot and God bless you.

iii
TABLE OF CONTENTS

DECLARATION I
DEDICATION II
ACKNOWLEDGEMENT III
CHAPTER ONE__________________________________________________1
1.0 EXECUTIVE SUMMARY_______________________________________1
1.1 BUSINESS DESCRIPTION______________________________________1
1.2 MARKETING PLAN____________________________________________1
1.3 ORGANIZATIONAL AND MANAGEMENT PLAN____________________1
1.4 PRODUCTION AND OPERATION PLAN__________________________1
1.5 FINANCIAL PLAN_____________________________________________2
CHAPTER TWO_________________________________________________3
2.0 BUSINESS DESCRIPTION______________________________________3
2.1 BUSINESS NAME ADRESS_____________________________________3
2.2 CAPITAL INVESTMENT________________________________________3
2.3. BUSINESS LOCATION________________________________________4
A SKETCH MAP FOR BLOSSOM POULTRY FARM_____________________5
2.4. BUSINESS OWNERSHIP______________________________________6
2.4.1 PROPRIETORS PROFILE_____________________________________6
2.5 TYPE OF BUSINESS____________________________________________6
2.5.1 PRODUCTION DESCRIPTION_________________________________6
2.6. JUSTIFICATION OF OPPORTUNITY______________________________6
2.7 INDUSTRY___________________________________________________7
2.8 BUSINESS GOAL OBJECTIVE___________________________________7
2.9 ENTRY AND GROWTH STRATEGY______________________________7
2.9.1 ENTRY STRATEGY__________________________________________7
2.9.2 GROWTH STRATEGY_______________________________________8

iv
2.9.3 THE STRENGTH, WEAKNESS, OPPORTUNITIES AND____________8
CHAPTER THREE________________________________________________9
3.0 MARKETING PLAN: MARKETING OBJECTIVES___________________9
3.1 POTENTIAL CUSTOMERS______________________________________9
3.2 MARKET SHARE____________________________________________10
3.3 COMPETITION______________________________________________12
3.5.0 ADVERTISING AND PROMOTION STRATEGIES_________________16
3.5.1 ADVERTISING_____________________________________________16
.3.5.PROMOTION_______________________________________________18
3.6 SALE TACTICS______________________________________________18
3.7 DISTRIBUTION STRATEGY____________________________________19
CHAPTER FOUR________________________________________________20
4.0 ORGANIZATIONAL AND MANAGEMENT PLAN__________________20
ORGANIZATIONAL AND MANAGEMENT OBJECTIVES_______________20
4.1 ORGANIZATIONAL FLOW CHART______________________________21
BLOSSOM POULTRY FARM ORGANIZATIONAL CHART AFTER 2-3 YEARS IN
OPERATION____________________________________________________22
4.2. MANAGEMENT PERSONNEL, DUTIES AND RESPONSIBILITIES____22
4.3 OTHER PERSONNEL_________________________________________23
4.4.0 RECRUITMENT, TRAINING AND PROMOTION__________________23
4.4.1 RECRUITMENT____________________________________________24
4.4.2 TRAINING________________________________________________24
4.4.5 REMUNERATION AND INCENTIVES___________________________24
4.5.1 REMUNERATION___________________________________________24
4.5.2 INCENTIVES_______________________________________________25
4.6.0 LEGAL REGULATION_______________________________________25
4.7 SUPPORTIVE SERVICES______________________________________25
CHAPTER FIVE_________________________________________________27
5.0. PRODUCTION AND OPERATIONAL STRATEGY__________________27
5.1 PRODUCT DESIGN DEVELOPMENT____________________________27
5.2 MONTHLY MATERIAL REQUIREMENT__________________________27

v
5.3 MONTHLY LABOUR REQUIREMENTS___________________________28

5.3.1 BLOSSOM POULTRY FARM MONTHLY PRODUCTION COSTS_____29

5.3.2 PRODUCTION PROCESS____________________________________29
5.4.0 REGULATIONS AFFECTING OPERATION_______________________31
CHAPTER SIX__________________________________________________32
6.0 FINANCIAL PLAN____________________________________________32
6.1 PRE- OPERATIONAL EXPENSES________________________________32
6.2 BLOSSOM POULTRY FARM WORKING CAPITAL 33
6.3.1 BLOSSOM POURTY PROFOMA CASHFLOW, FOR THE YEAR ENDED 31ST
DEC. 34
6 3.2 BLOSSOM PROFOMA CASH FLOW FOR THE YEAR ENDED 31 DEC 2020
35
6.3.3 BLOSSOM PROFOMA CASH FLOW FOR THE YEAR ENDED 31 DEC 2021
36
6.4 BLOSSOM PROFOMA INCOME STATEMENT FOR THE YEAR ENDED 31ST
DECEMBER 2022,2023,________________________________________37
6.5 PROFOMA BALANCE SHEET FOR THE YEARS ENDING DECEMBER 2022
AND 2023. 38
BLOSSOM ENTERPRISE BREAK-EVEN POINT FOR THE YEAR, 2021 AND 2022
39
6.6 BREAK-EVEN POINT_________________________________________40
6.7 PROFITABILITY, RATIOS FOR BLOSSOM POULTRY FARM FOR THE
YEARS ENDING 31ST DECEMBER 2022 AND 2023___________________40
6.8 DESIRED FINANCING FOR BLOSSOM POULTRY FARM___________41
6.9 PROPOSED CAPITALIZATION FOR THE PROPOSED BUSINESS_____41

vi
 CHAPTER ONE

1.0 EXECUTIVE SUMMARY

The sole proprietorship for the business that I decided to start

is poultry farm because it is cheap to maintain.

1.1 BUSINESS DESCRIPTION

BLOSSOM POULTRY FARM is the name of this business, it deals with rearing
of poultry both broilers and layers and selling their products. It will be located
near Mogogosiek Tea Factory . This business is entirely a sole proprietorship
form of business and it will start with a capital of investment of four
hundred thousand shillings. (400,000).

1.2 MARKETING PLAN.

The firm aims at maximizing profits through intensive marketing of products. The
firm’s potential customers consist of institutions, hotels, and restaurants, shops
and kiosk around the business premises, and lastly the local community. It will
control a sizable than the competitors and this is achieved by increasing
advertising and sales promotions.

1.3 ORGANIZATIONAL AND MANAGEMENT PLAN.

The proprietor of the business will be the manager and will control all the activities
of the enterprise. The enterprise will employ a competent and productive labor
force consisting of the poultry attendant, cashier, sales agent and finally casuals.
Recruitment and promotions will be done on merit and experience.
The firm payment scheme will be done in comparison with the market rates.

1.4 PRODUCTION AND OPERATION PLAN

BLOSSOM poultry farm will be rearing at least eight hundred

broilers and two hundred layers at any given time, the business
1
will provide

2
quality products of eggs and meat to its potential customers. The
business will strictly follow the production process so as to avoid
delays in production, the firm will also come up with attractive products
design especially packaging of products and hygiene.

1.5 FINANCIAL PLAN.

Financial plan displays the costs in need for effective operation of the
business. Including the total costs, there will be pre operational cost which
has to be made before commencement of the business
The table below shows the financial cost for three years.

Particulars 2022 2023

Working capital 236,000 642,000
Break even points 699,175 1,130,967
Pre-operation 137,500 980,000
cost
Net profit 73,125 119,610
Variable cost 250,350 662,700
Return on equity 39% 21%
Return on 18% 30%
investment

3
 CHAPTER TWO

2.0 BUSINESS DESCRIPTION

The proposed business is called BLOSSOM POULTRY FARM, rearing both capons for
meat layers for eggs. The business will be providing quality products and aim at
satisfying customers and maximizing profits. The business will start its operation
by rearing two hundred broilers.

2.1 BUSINESS NAME ADDRESS

The intended business will be known as BLOSSOM POULTRY FARM the proprietor
choose this name because it is a business which is blooming and fast growing
ADDRESS
The business address will be;
BLOSSOM POULTRY FARM
PO BOX 60
MOGOGOSIEK
TEL; 0791353116

2.2 CAPITAL INVESTMENT

The proposed business will require a capital base of approximately four hundred
thousand shillings (400; 000) at the commencement,
The business will raise the above capital from the following sources.
SOURCE AMOUNT KSHS.

Personal savings 200,000

Bank loan 150,000

Relatives 30,000

Friends 20,000

4
Totals 400,000

The proprietor contemplate borrowing a total of ksh.50, 000 from friends and
relatives, these amounts is refundable in future date depending on the agreement
between the borrower and the lenders. Bank loan amounting to Kshs. 150,000 will
be borrowed from equity bank-Eldoret branch. This bank offer loan at annual
interest of 15% per annum and will be paid in installments for a period of thirty
months.

2.3.BUSINESS LOCATION
The proposed business will be located at MOGOGOSIEK center next to
Mogogosiek Tea Factory along Litein-Silibwet road.
The proprietor chose the location since the place has got accessibility road
network which will enable easy transportation of products to the market. This
place has got also high demand for poultry products thus providing market for the
products. The presence of electricity and plenty of clean piped water and
availability of manpower from the surrounding also make this location preferable.

5
A SKETCH MAP FOR BLOSSOM POULTRY FARM

TO SILIBWET TO LITEIN

BLOSSOM
POULTRY MOGOGOSIEK TEA
FARM FACTORY

S
O
I
M
E
T

2.4.BUSINESS OWNERSHIP
The intended business will be purely a sole proprietorship business in that

6
 It will be owned, financial and managed by the proprietor alone
The proprietor is looking forward to enjoying all the profits earned and also
making business decision independently

2.4.1 PROPRIETOR’S PROFILE

The proprietor will be the owner of the business the proprietor’s name is
BLOSSOM POULTY
The proprietor has got knowledge in poultry keeping. Academic qualification; he is
undertaking certificate in poultry farming

2.5 TYPE OF BUSINESS

The intended business will be extractive it will be dealing with rearing chicken for
meat and eggs and selling them to customers and also the chicken alive. The
proprietor chose this type of business since it is simple to operate and cheap as
compared to manufacturing business

2.5.1 PRODUCTION DESCRIPTION

The proposed business will be offering the following products:
a) Eggs-they should be of high quality and hygiene
b) Meat-the meat should be properly packed and of high quality
c) Chicken-the proprietor will be selling chicken to the customers. They should be
healthy and of high quality and of needed weights.
d) Chicken droppings-this will be sold to potential customers for manure
e) Chicken feathers-this should be sold to local youth making locally Manufactured
mattresses

2.6. JUSTIFICATION OF OPPORTUNITY

The intended business will be striving at providing employment opportunities to
dozens of the people around the community the jobs are those of sales agents,
cashier, watchmen and casuals such as cleaners and transporters.
The business also aims at narrowing the shortages of poultry product in the market

7
region and satisfying demands of the potential customers.
The proposed business will also promote use of chicken droppings as manure and
thus increasing usage of natural manure which is environmentally safe and
friendly.

2.7 INDUSTRY
The proposed business ‘‘BLOSSOM POULTRY FARM” fall under the poultry industry.
The business is now a medium size and is industry and its present growth
suggesting future prosperity.
The business is capital intensive at the start of the business but as it grows it
shifts from capital to labor intensive since more people will be required in
transporting and marketing the products.
The business is affected by seasonal factors such as changes in weather which bring
about diseases such as “Asian flu” and also which increases the cost of lighting
during cold season. The degree of competition in the industry is currently lower as
compared to other businesses such as crop farming; this makes the business more
viable and profitable

2.8 BUSINESS GOAL OBJECTIVE

The proposed business aim at attaining various objectives namely, short term and
long term
The business short term objectives are to make profit through high sales of its
product. Another short-term goal is to provide employment to the members of the
community thus reducing poverty. The business long term goal is to control a
sizable market share within a time span of 5 years through intensive marketing to
its potential customers. It also aims at providing a fair but aggressive competition
within the market.

2.9 ENTRY AND GROWTH STRATEGY

2.9.1 ENTRY STRATEGY

Blossom poultry farm will require the following necessities in order to start its
operations;
8
 i) Office premise
ii) Trading license from Bomet County council
iii) Business premise
iv) food and poison act
v) permit from the ministry of health

2.9.2 GROWTH STRATEGY

The basic requirement to enable the business to grow faster is the presence of
enough capital to enable financing of its activities such as buying of chicken,
feeds, chicks, equipment, marketing and so on. for the business to grow there
should be a massive advertising to create awareness amongst the potential
customers .This advertising should be made through local radio station and posters
and also through the use of television and sales agents.
Proper management skills also should be involved i.e.
Keeping the proper and accurate records to overcome the problem of poor record
keeping
Improved technology also to be used especially as the business is picking up.

2.9.3 THE STRENGTH, WEAKNESS, OPPORTUNITIES AND

THREATS ANALYSIS TABLE

STRENGTHS WEAKNESS OPPORTUNIT THREATS

Y
i) strategi i) difficulty in i) availability i) Outbreak
cally located handling of room for of
transportation further infectious
ii) employment and storage expansion of Diseases.
efficient of products business ii) government
qualified policies
personnel ii) charging
technology
iii)competition

9
 CHAPTER THREE

3.0 MARKETING PLAN: MARKETING OBJECTIVES

BLOSSOM POULTRY FARM will be intensifying its marketing by coming up with
effective strategies:
The strategies will include identifying potential customers and categories such as
retailers, wholesalers, and also if they are regular, weekly, or monthly.

3.1 POTENTIAL CUSTOMERS

The proposed customers will be categorized as given below.
i) LOCAL COMMUNITY
This includes area residents and the business community around the business.
They will comprise of neighbors who will be buying the eggs, live poultry and
chickens and meat for their own consumption. This business will also sell chicken
products to the district commissioner’s office Mogogosiek and konoin sub county
offices at Mogogosiek center.
ii)INSTITUTIONS AROUND MOGOGOSIEK TEA FACTORY
The business will be supplying its products especially eggs and meat to institutions
such as, Mogogosiek Tea Factory, Kimori academy, Saseta girl's school.
iii) HOTELS AND RESTAURANTS
The business will supply eggs and chicken to 82 hotel and Settlers Inn hotel. It will also
target to lure more hotels within the town such as Pacific hotel and Diplomat hotel;
the proposed business will be serving U and ME restaurant which is located around the
business premise.
iv) Blossom poultry farm will be supplying its products to large and small shops .
These include supplying eggs to Litein town and retailers all these customers are
located around the business premises
The business will also deliver the products to various kiosks in the area and in Litein
town .these kiosks include Bidii kiosk, Kamwangi kiosk and Umoja kiosk.
The proposed business will be aiming at delivering high quality products, hygiene
will also be a priority, and therefore, the products should be properly packaged.
The eggs should be clean, tasted and packed in attractive egg strays, whereas the

10
meat kept fresh and packed in clean plastic bags.
The enterprise will also deliver its products in time and to the right place to avoid
damages and delaying the potential customers need.
The enterprise will also consider supplying its products at reasonable prices and
right quality at all times.

vi) GUESTS AND VISITORS

vii) Blossom poultry farm will sell its products to the regular quests
and visitors who visit the area most regularly when they are
carrying out their daily activities.
This is because the enterprise is known well over the entire area being the best
firm which produces excellent poultry products in the area

3.2 MARKET SHARE

Blossom enterprise is expected to control a sizable market share especially in and
around Mogogosiek centre. the market share the firm expected to control is about
60% in the first year of operation and a rise of about 20-25% in the next year. The
business potential competitors are: Maisha bora, Adels poultry keepers and local
poultry farmers
The competitors will capture 40% of the current market share, but also the
proposed business increase in size, managerial skills and increased advertising and
promotion. The competitor’s share of the market is expected to decrease by 20-
25%

11
TABLE SHOWING MARKET SHARE ON THE FIRST YEAR OF OPERATION
BUSINESS ESTEEMED PERCENTAGE OF
NAME CUSTOMERS MARKET SHARE
BLOSSOM
POULTRY
FARM
3,000 60%

MAISHA
BORA 1,000 20%

ADELS 750 15%

POULTRY

LOCAL 250 5%
FARMERS
TOTAL 5,000 100%

PIE CHART SHOWING MARKET SHARE IN THE FIRST YEAR OF OPERATION

ADELSI
POULTRY LOCAL
15% FARMERS
5%

BLOSSOM
MAISHA
BORA POULTRY
20% FARM
60%

TABLE SHOWING MARKET SHARE FOR TWO OR THREE YEARS

BUSINESS NAME ESTIMATED PERCENTAGE OF
CUSTOMERS SHARE

12
 Blossom poultry farm 5,600 80%

Chamtany enterprise 700 10%

Adels poultry 490 7%

Local farmers 210 3%

TOTALS 7,000 100%

PIE CHART SHOWING MARKET SHARE TWO OR THREE YEARS

Adels Local
poultry farmers
7% 3%

Chamtany
entreprise
10%

BLOSSOM
POULTRY
FARM
80%

3.3 COMPETITION
The proposed business will experience direct competition from its rivals who will
also be evicting for the control of the market share and striving to get many
customers as possible. The competition is expected to be below since the proposed
business will be providing quality products and intensity on sale promotions as well
13
as employing

14
 qualified staff and experienced management. The proposed business will also
research on the strengths and weaknesses so as to take advantage of weaknesses
and look for ways of counterattacking their strengths.
The proposed firm will also ensure that they are attracting and retaining their
customers through good customer care like delivering the product on time,
honesty to its customers, reasonable price and also transport services
i) Chamtany enterprice.
This is a poultry firm located at the outskirts of Mogogosiek centre, although the
location of this firm is strategic, the proposed business will use intensive sale
promotions and advertisement so as to mitigate the competition from
a) Chamtany enterprise which is estimated to be 20%.
b) ii) Adels poultry keeper
The enterprise specializes in keeping layers (egg laying chicken),thus it will offer
less competition ,also the location of this firm is not strategic thus making it less
competitive .it is estimated that it will control about 15% of the market share in
the first year of operation and 7% in the next 2-3 years of operation
c) iii) Local farmers
These farmers are expected to present less direct competition to the enterprise,
this is because they lack managerial skills further more they are not business
oriented. These local farmers are also expected to offer indirect competition to
the proposed business in the form of producing milk and vegetable to the market.
These products with poultry products since they can be used for the same purpose
The local farmers are expected to compete for 5% market share in the first year
and 3% (estimate in the next two or three years of operation)
COMPETITORS ANALYSIS TABLE
Business Ag products prices location staff managemen ownership
e t
Blossom High fair strategi Experienced Sole
poultry Ne Quality c , skilled proprietorshi
farm w motivated p
and
trained

15
 Chamtany High
entreprise
3yr quality Expen Strategi motivated experienc partnership
s sive c ed
Adels Medium Expen Not Few
Poultry 2yr quality sive strategi untrained unskilled partnership
s c and
motivated
Local Low
farmers - quality unsta - untrained unskilled Sole
ble proprietorshi
p

PRICING STRATEGY
The proposed business will also have to consider many factors before setting the
prices of its products.
The proposed business will first consider prevailing market conditions this include
the existing market prices for eggs, meat and other products such as fertilizers
compared to manure.
The firm will also consider the competitors prices of the same products. The
proposed business will also set prices which will enable increase its sales thus
increasing the profits from the sales.
The enterprises will also consider setting prices based on the cost of production
and operation is that the higher the operation cost the higher the prices of the
products but the prices should be reasonable competitive and more competitive
and more affordable to customers.
The enterprise will set prices of a single egg at Kshs. 10.00, which is the existing
market price constant and regular customers will have a price reduction of shs.
1.00 Per egg, thus they will buy an egg at shs.9.00
The price of shops and wholesalers and super markets will be Kshs. 210.00per
crate of eggs, whereas for institutions a crate of eggs will cost Kshs. 250
The prices of live (un slaughtered) chicken will be at variable price of shs.300-350
depending on the market conditions.

16
 As for the chicken the price will be based on kilograms, for the hotel
A kilogram of chicken meat will cost Kshs. 180, two kilograms will cost kshs.350,
whereas half kilogram will be sold at Kshs.100’and shs.60 for quarter kilogram.
The prices set by the enterprise will vary according to its customers demand,
market prices and competitor’s charges in price strategies

BLOSSOM POULTRY FARM PRICE LIST

Item quantity Retail Wholesal General Regular Institute
price e price price customer
s
Eggs Per egg Shs. Shs 10 Shs. 10 Shs. 9 -
10
Crate Shs 210 Shs Shs 270 Shs.250
Shs. 210
210
Chicken 2 kgs Shs. Shs Shs. - Shs.350
Meat 1 kgs 350 350 350 - Shs. 180
1/2kgs Shs Shs Shs. - Shs.
1/4kgs 180 180 180 - 100
Shs Shs Shs. Shs.
100 100 100 60
Shs 60 Shs 60 Shs.
60

Poultry 1 Shs. - Shs. Shs. 270 -

300 300
Dropping
manure 10kgs Shs. 200 Shs. Shs. - -
200 200

17
 3.5.0 ADVERTISING AND PROMOTION STRATEGIES.

3.5.1 Blossom enterprise will make various advertisements with the

aim of achieving the following:
 To inform potential customers of the benefits or purchasing products from Ben's
enterprise.
 To inform potential customers of existence, location and the kind of products the
business is offering.
 To increase the market share by wooing customers from competitors to buy from
the firm.
 To inform the customers of any changes in price, discount being offered by the
business, opening of new branches and offer sale services provided,
The proposed business will choose best but affordable method of advertising.
These methods should be achievable, realistic and efficient; the proposed business
will use the following advertising method:
a) Sign post
The business should use large and attractive sign post in the junction between
Litein- Silibwet road. This signpost is aimed at capturing the attention of the many
commuters passing though this route.
The signpost should be clear and visible within a range of 50m and should be
painted in such a way that it attracts the eyes of the customers.
The estimated cost of this signpost is Ksh 1200.
b) Stickers
The business will print one thousand stickers which will be showing the location of
the business, prices of the products, products being offered by the enterprise, the
address and telephone numbers of the proprietor.
The cost of printing such sticker is one shilling per sticker bringing to a total of
Ksh 1000, these stickers will be stickled in matatu flying within Litein-Silibwet
route, and also those operating within kapkoros-Koiwa route.
c) The business will use the radio stations like Sayare in advertising twice in a week.

18
This advertisement should be made using the local language and in Kiswahili.
This strategy is aimed at reaching out to a considerable number of potential
customers who are at home, and also it will enable the business to gather for the
communication to both illiterate and literate. As well, the estimated cost of this
mode of advertisement is Ksh 1000 per month.
d) The business will also use posters in advertising the products, these posters
should be placed in market stalls entrance especially in Mogogosiek market.
It should be posted in electricity poles, kiosk, shops and institution gates so as to
sensitize the general public of the existence of the products, their quality and
prizes being offered by the business. This advertising method will cost the business
at least Ksh 18000 per year

3.5. PROMOTION
The proposed firm should consider using few cut effective sales promotion which
will include:
i) Price cuts –the business will consider reducing prices of products to regular
customers. This price reduction should be realistic and ensure profitability of the
firm is maintained, for example, the price of eggs should be reduced by 50 cent
per single egg, and may be twenty shillings per kilogram of chicken meat bought
ii) The business will also print cheap caps and calendars which will be given to the
regular customers
iii) Public relation –The business will communicate information on an
organization`s Products, policies and action to target audience or customers The
main objectives is to target and positive attitude towards the business and its
products .public relation is a long term promotion strategy .public relation also
seek to find out the customer’s opinion on firms products and current trends in
the market so as to correct any inconvenience in time concerning the product’s
office. At anytime the order is received.
The business will also be hiring boda boda operators to transport smaller
quantities of products (e.g. egg and meat) to nearby kiosk and shops.
The estimated total cost of distribution of the products to the market is two
thousand shillings per week, totaling to Ksh 8000 per month.

19
The challenges expected in the course of distribution of the products is the
breakages of eggs during transportation due to careless driving.
The products such as meat may also become perishable due to delay on the road.
The proprietor shall therefore insist on careful driving and handling of the
products, he should also encourage the distributors to ensure that unnecessary
delay are avoided at all cost.
Iv) Advertising –The proposed business will promote its products through advertising
through the mass media such as Radio station like SAYARE radio station
The cost to be incurred in promotion is expected to be Ksh 2000 per year

3.6 SALE TACTICS

The firms selling methods will include both direct and indirect method.
The direct selling will be offered to those customers who will be offered to those
customers who will be purchasing directly from the premise, and also kiosks and
shops surrounding or near the enterprise such as Muguri shop Kamwangi kiosk and
Golden shop.
The selling tactics will enable the proprietor to come in contact with his clients
and also will make him unaware of the needs and requirements of each client at
first hand.
The enterprises will also apply indirect selling tactics on those customers who
need special attention such as hotel and institutions in within the town. Also when
proprietor is constrained by the time he will use sale agent to sale the business
products.
The business will employ college students on attachment for this purpose (indirect
selling).by doing this the attachees will benefit the business in reducing the cost
of employing sales staff who will be expensive to maintain and pay, and also
benefit the attaches in gaining experience.
This sales team should be motivated by assigning a more qualified staff to
supervise their work and to guide them in their job.

3.7 DISTRIBUTION STRATEGY

So as to ensure that products reach the market in time and to avoid damages

20
and wastages, the enterprise will be hiring pick up vehicle to transport and supply
its products to the hotel s and institutions within the town and its
environment .This mode of transport will also help in supplying products to far
institution such as soy girls high school and the district commissioner.

CHAPTER FOUR
4.0 ORGANIZATIONAL AND MANAGEMENT PLAN

ORGANIZATIONAL AND MANAGEMENT OBJECTIVES

Blossom poultry farm management will come up with the following

objectives which will enable it run smoothly, effectively and achieve its goals
successfully. The firm objectives will include;

i) To ensure that proper quality and quantity of products is maintained at any

given time of operation so as to enable the business clients diligence and
offer quality services to the customers.
ii) The enterprise will aim to ensure that its staff comprise of experienced and
trained staff so as to enable them discharge their duties with due diligence and
other quality services to the customers.
iii) To ensure that the line of authority is well structured and clearly
communicated, this will enable each staff to know and understand his or her
duties therefore enhancing performance in the business.
iv) To enable reduction of unemployment in the community through hiring
casuals and laborers thus eradicating idleness and promoting community
development in and around the area

21
4.1 ORGANIZATIONAL FLOW CHART

MANAGER
MANAGER

POULTRY ATTENDANT

After two or three years of operation the enterprise will employ sales agent and a
cashier who will be assisting the proprietor in running the business activities.

BLOSSOM POULTRY FARM ORGANIZATIONAL CHART AFTER 2-3 YEARS IN

OPERATION

22
 MANAGER

CASHIER

POULTRY ATTENDANT SALE AGENT CASUALS

4.2.MANAGEMENT PERSONNEL, DUTIES AND RESPONSIBILITIES

A MANAGER
The enterprise will be managed by its proprietor who will be responsible for
managing the business and its operations.
DUTIES AND RESPONSIBILITIES
The manager will be responsible for the following duties:
i) He will be responsible for overall, planning co-ordination
and Implementation of ideas policies and business strategies
ii) The manager will also be the overall financier of the business
iii) He will be considered with the maintaining of the proper books of
accounts, Preparation of cash budget and safe storage of books and
documents.
iv) He will be the one authorizing and purchasing on behalf of the enterprise
v) The manager will also be responsible in decision making and bearing
profits Earned and losses incurred by the business.

4.3 OTHER PERSONNEL

The proposed business will employ other personnel after the first two or
three Years. These personnel will include:
a) CASHIER
Qualifications
i) The cashier should be a holder of diploma in accountancy
23
 ii) He should be honest and competent
iii)He should be hardworking, punctual and organized
b) SALES REPRESENTATIVES
The proprietor will employ two sales representatives
QUALIFICATIONS
i) They should be holders of diploma in sales and marketing
ii) They should possess good communication skills
iii)They should be honest and hardworking
iv) They should be friendly to
customers DUTIES AND RESPONSIBILITIES
i) They will help in marketing the products of the business
ii) These representatives will also be concerned in doing
market Survey and Analyzing on behalf of the proprietor
iii)They will be responsible in reporting on the feedback
of Customers To the management

c) CASUALS
These casuals will be required to possess any concrete academic
qualifications but they should be honest and hard working their duties will be
general cleaning of the premise, repairing and painting of the premise and general
cleaning of the premise and general maintenance in the business premise. These
casuals will be two in number.

4.4.0 RECRUITMENT, TRAINING AND PROMOTION

So that the enterprise succeeds in the poultry business as well as outlined plan for
starting will be put in place. The business will ensure that its staff is well
maintained and motivated so that labor turnover is avoided. The staff will be
employed on merit and experience and should be well paid.

4.4.1 RECRUITMENT

24
At the start of the business, the enterprise will recruit a poultry attendant, this
post will be advertised in local newspapers and the applicant will be subjected to
interviews and employing the one who will have done well in this interview,
After two to three years of operation the proprietor should recruit the cashier and
sales representative and also the casuals. Their recruitment will be based on merit
and academic qualification, the sources of the sales representative is Eldoret
polytechnic, business departments, and the cashier head by the proprietor.

4.4.2 TRAINING
The proposed business will not conduct any training in the first two years of
operation since the business is expected to have employed qualified staff.

4.4.5 RENUMERATION AND INCENTIVES

4.5.1 RENUMERATION
The firm will be closely monitoring the salaries and wages in the labor markets
and also the standard rates and adjusting its wages and remuneration schemes to
match and avoid under or offer payment of the employees.

BLOSS POULTRY ENTERPRISE: RENUMERATION TABLE

Basic Allowance Gross

Position Number salary (Ksh) pay (Ksh)
(Ksh)
Manager 1 10,000 2,000 12,000

Cashier 1 5,000 1,000 6000

Sales agents 2 10,000 2,500 12,500

Poultry
attendant 1 8,000 500 8,500

Casuals 2 1,000 - 1,000

25
 TOTALS 34,000 6,000 40,000

4.5.2 INCENTIVES
BLOSSOM ENTERPRISE will motivate its staff, offer a few incentives, the
business will provide uniforms to its employs, the cashier will be given a one
month paid annual leave, and for the others, and the enterprise will organize
for them an annual party at the end of the year. It is estimated to cost the
business about Ksh (12,000).

4.6.0 LEGAL REGULATION

In order to comply with the law of the country, the proposed business will be
expected to obtain the following legal documents
a) Trade license
This license is required for any new business to start operation. The proprietor
will obtain this document at the cost of (Ksh 2,000) from the Kenya revenue
Authority
b) The business will also obtain a food and poison act licensee from
the Ministry of health in the town

4.7 SUPPORTIVE SERVICES

i) Banking services: This service will be obtained from Equity bank Litein branch,
the business is expected to gain access to services e.g. Loan advices and Automatic
teller machine (ATM) from the bank. The business will also open a current account
from this bank and it will enable the business to deposit its funds for safe keeping
and also easy and quick with drawings of funds. The bank charges will be Shs 200
per month.
ii) Veterinary services-the business will seek services of the district tertiary
officer; stationed at the ministry of agriculture, Konoin Sub-County headquarters
at Mogogo shop town. This officer will advise the management on the prevention of
poultry diseases, safe disinfections and handling disinfectants. The officer will

26
offer vaccination of

27
poultry incase of any break out of disease
The business is expected to spend about two thousand shillings (kshs.2000) for the
service offered by the tertiary officer.
The services of Kenya power and lightning company will be of great help in
lighting. This electricity will be estimated to be at shillings three hundred per
month (kshs.300) Telephone services provided by telecommunication. The
telephone charges are estimated to be five hundred shillings per month.

CHAPTER FIVE

5.0.PRODUCTION AND OPERATIONAL STRATEGY

5.1 PRODUCT DESIGN DEVELOPMENT

BLOSSOM POULTRY enterprise will concentrate on product packaging designs, the
firm will use smartly designed to accommodate the shapes of the meat and it
should be transparent and clean so as to enable the customers be attracted to buy
the products.

5.2 MONTHLY MATERIAL REQUIREMENT.

28
 The business will require the following materials on a monthly basis
a) Chicken feeds
i) Chicken mash
ii) Growers marsh
iii)Layers mash
iv) Broilers mash
v) Broilers finishers
vi) Glucose and vitamins

b) Insecticides
i) Pesticides
c) Disinfectants

TABLE SHOWING MATERIAL REQUIREMENT FOR BLOSSOM POULTRY FARM

MATERIALS QUANTITY UNIT COST Kshs TOTAL COST
Kshs
1)Poultry feeds
i) chicken 8 bags 1,800 14,400
mash 8 bags 1800 14,400
ii)growers 6 bags 2000 12,000
mash 6 bags 1500 6,000
iii) layers
mash 4 bags 1500 6,000
iv)broilers

29
 mash 20 kgs 500 1,000
v) broilers
finishers
vi) glucose
and
vitamins
2) Insecticides 2 packets 100 200
3) Disinfectants 2 packets 200 400
4) Miscellaneous - 2000 -

Totals - - 54,400

5.3 MONTHLY LABOUR REQUIREMENTS

The enterprise requires two direct labor workers namely the manager and the
poultry attendant, the costs Kshs. 20,500, per month.
The firm also requires indirect workers who are estimated to be five in number
and this will cost the firm a total labor cost of Kshs 40,000.

5.3.1 BLOSSOM POULTRY FARM MONTHLY PRODUCTION COSTS

The proposed business estimated monthly production cost will be Kshs 94,400
being the total sum of materials and production labour costs.
PARTICULARS AMOUNT Kshs
Discounts(sale promotions) 250
Advertising 1,250
Electricity 300

30
 Bank charges 200
Bank loan interest 1000
Rent officer 5000
Telephone charges 500
Sales and distribution 8000
Miscellaneous 1200
0

5.3.2 PRODUCTION PROCESS

The production process is divided into six stages namely
i) House preparation
ii) Purchasing and receiving of chicks
iii)Brooding
iv) Sorting and feeding
v) Harvesting
vi) Marketing
a) House preparation
This involves chicken house preparation, starting with terminal disinfection of
poultry house, removal of cobwebs, sweeping of litter, cleaning of equipment such
as feeders using soaps or omo and drying them in the sun.
The house is then spread with sawdust on the floor, the water, driving system
sanitized and then all the equipment should be arranged in order and lastly no
person should step inside the house unless having been disinfected so as to avoid
contamination
b) Purchasing and receiving of chicks
In this stage the chicks are purchased from recognized dealers when they are one
day old. The chicks are packed in boxes containing 100chicks each, the required
temperature is 37.5 they should be handled with great care to avoid suffocation
and contamination.
c) Brooding
In this stage the chicks are brooded together in specially designed room temperature

31
ranging from 31-32 degrees centigrade. They are regulated by lighting heat or
jiko. The chicks should be fed with at least 50 chicks per feeder, clean water.
Should also be provided, a dose of glucose liquid and vitamins also should be given
to the chicks so as to facilitate fast growth.
The challenges at this stage is high mortality which might be caused by
overheating, wind or contamination, starvation suffocation due to poor ventilation
and chilling due to cold
The brooding space should be 0.3 feet for
chick. The following are common diseases at
this stage
i) Empathies or chilling of chicks
ii) Newcastle virus
iii)Salmonella
iv) Gumboro disease
These diseases are prevented through hygiene and vaccination of chicks, and
by providing ventilation
d) Sorting and feeding
This stage involves separating broilers (capons)at the start of third week and
even transferred to separate houses and fed with grower’s mash on the first four
weeks, followed by layers mash on the sixth week onwards for layers. The broilers
feed on broilers mash on the first four weeks after separating with layers then
broilers finishing mash onwards

e) Harvesting
After six weeks the broilers are ready for slaughtering (harvesting) whereas the
layers start laying eggs.
To ensure proper growth of poultry the firm should ensure that they are being
given all the required food, water and vitamins to avoid fewer kilos for the
broilers and delayed lying of eggs by layers.
THE TABLE SHOWING PRODUCTION PROCESS

32
5.4.0 REGULATIONS AFFECTING OPERATION
The enterprise will be affected by the safety and health regulations since it
required that slaughtering and handling of poultry meat be done by persons having
health certificates .there is also an environmental challenge in disposal of waste
from poultry slaughtering process, since they need to be disposed in proper places
so as to avoid contamination of water and air pollution

CHAPTER SIX

33
 6.0 FINANCIAL PLAN

The manager of the proposed business will ensure that the finances are handled by
the right person who should be trustworthy and honest. The manager will be
concerned with the circulation of food, incomes and expenditure of the business in
the first year of operation; whereas the cashier will take over in the next two years
of operation.

The objectives of financial planning should be:

i) To ensure that finances are handled safely by right persons so as to avoid
misappropriation and frauds
ii) To ensure proper records and books are kept so as to provide evidence and
references when required.
iii) To ensure that the profit maximization goal of the business is achieved through
increased sales and decreased expenditure based on financial ratios

6.1 PRE- OPERATIONAL EXPENSES

The enterprise will incur the following expenses in acquisition of facilities,
equipment and assets and other valuable services prior to its commencement of
operation

TABLE SHOWING PRE-OPERATIONAL COSTS FOR BEN'S POULTRY

FARM

PARTICULARS COSTS (Kshs)

Business registration fee 2,000
Telephone connection 2,000
License and permits 4,000
6.2 Furniture and fittings 5,000
Equipment tools 19,500
Stock 100,000
Miscellaneous 5,000
Totals 137,250
BLOSSOM POULTRY FARM WORKING CAPITAL
The estimated working capital for the business for the first three years of its
34
operations is shown below
TABLE SHOWING WORKING CAPITAL
PARTICULARS 2020 2021

CURRENT ASSETS
Cash in hand 127,900 300,000
Cash at hand 250,000 562,000
Debtor 185,000 325,000
Stock 150,000 150,000
TOTAL CURRENT ASSETS 712,000 1,337,000
CURRENT LIABILITIES
creditors 70,000 240,000
bank loan - -
TOTAL CURRENT
LIABILITIES 70,000 240,000

WORKING CAPITALS 642,000 1,097,300

35
6.3.1 BLOSSOM POULTRY FARM PROFOMA CASHFLOW, FOR THE YEAR ENDED 31st DEC 2022
PARTICIPANTS JAN FEB MAR APR MAY JUN JUL AUG SEP OCTO NOV DEC TOTALS

CASH IN FLOW SHS SHS SHS SHS SHS SHS SHS SHS SHS SHS SHS SHS SHS
123,87
Beginning cash 400,000 230,000 204,00 173,850 148,090 109,520 78,820 46,770 53,820 64,220 73,220 0 1,706,380
180,00
Sales - 10,000 15,000 20000 15000 25000 20000 55,000 65,000 60,000 85000 0 550,000
Debtors - - - 5000 - - 5000 10000 40,000 16,000 25,000 10,000 75,000
313,87
TOTAL INFLOWS 400,000 240,000 219,200 198850 163090 134520 103820 111,770 122,820 140,220 183,220 0 2,331,380
CASH OUTFLOW - -
Pre- operational cost 137,250 - - - - - - - - - - - 137,250
Purchases 5,000 5,000 7,500 10000 7000 13000 10000 15000 10,000 15000 10,000 20,000 127,500
Creditors - - - - 5000 2000 5000 - 4,000 5000 3,000 5,000 29,000
Salaries & wages 20,500 20,500 20,500 20500 20500 20500 20000 20500 20,000 20500 20,500 20,500 246,000
Rent 5,000 5,000 5,000 5000 5000 5000 5000 5000 5,000 5000 5,000 5000 60,000
Advertisement 1,250 1,250 1,000 1200 1250 700 1200 1100 1,250 2000 1,200 1,600 15,000
Electricity 200 200 100 400 500 300 200 300 200 300 400 500 3,600
Loan payment - - 5,000 5000 5000 5000 5000 5000 5000 5000 5,000 5,000 50,000
Loan interest - 1,000 1,000 1000 1000 1000 1000 1000 1,000 1000 1,000 1,000 10,000
Bank charges 200 200 200 200 2000 200 200 200 200 200 200 200 2400
Telephone 500 400 550 380 420 500 600 700 450 400 320 750 6000
Distribution cost - 2,000 3,000 5000 3000 5000 4000 7,000 6,000 8000 10,000 10,000 63000
Maintenance 100 250 200 300 450 300 600 800 700 900 1,000 1650 7250
Discount allowed - - 100 280 250 200 250 350 300 200 200 670 3000
Miscellaneous - 1,000 1,000 1500 4000 200 3500 1,000 4000 3500 1,500 2000 25000
TOTA OUT FLOW 170,000 35,800 45,350 50760 53570 55700 57,050 57,950 58,600 67,000 59,350 73,870 785,000

36
 BLOSSOM POULTRY FARM PROFOMA CASH FLOW FOR THE YEAR ENDED 31 DECEMBER 2022
PARTICIPANTS JAN FEB MAR APR MAY JUN JUL AUG SEP OCTO NOV DEC TOTALS

Beginning cash 240,000 220,500 208,800 189,450 178,350 162,850 152,600 155,270 269,550 267,100 304,800 316,100 1,565,370
Sales 60,000 75,000 70,000 76,000 84,000 90,000 100,000 180,000 120,000 130,000 125,000 190,000 1,300,000
Debtors - 5,000 10,000 16,000 14,000 20,000 10,000 40,000 15,000 30,000 20,000 5,000 185,000
TOTAL INFLOWS 300,000 300,500 288,800 281,450 276,350 272,850 262,600 375,270 404,550 427,100 449,800 511,100 3,050,370
CASH OUTFLOW
Purchases 10,000 25,000 30,000 25,000 35,000 35,000 30,000 26,000 34,000 40,000 45,000 50,000 385,000
Creditors 5,000 - 5,000 10,000 7,000 13,000 - - 16,000 4,000 5,000 5,000 70,000
Salaries & wages 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 480,000
Rent 5,000 5,000 5,000 5000 5000 5000 5000 5000 5,000 5000 5,000 5000 60,000
Advertisement 2,500 2,500 - - 20,000 - - 4,000 - - 6,000 - 17,000
Electricity 600 700 600 600 500 400 500 700 600 500 600 500 6,800
Loan payment 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000
Loan interest 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000
Bank charges 200 200 200 200 2000 200 200 200 200 200 200 200 2400
Telephone 600 600 700 550 650 700 550 600 750 800 800 600 8,200
Distribution cost 7,000 10,000 10,000 10,000 14,000 18,000 20,000 16,000 25,000 20,000 20,000 20,000 190,000
Maintenance 200 400 400 300 650 400 500 600 900 800 900 800 6,850
Discount allowed 400 300 450 450 500 550 580 620 - - 700 300 3000
Miscellaneous 2,000 1,000 1,000 5000 2000 1,000 4,000 6,000 9,000 5000 35,000 4,500 44,000

37
TOTAL OUT FLOW 7900 91,700 99,350 103,100 113,500 120,250 107,330 105,720 137,450 122,300 133,700 133,200 1,347,00
NET CASH 220,500 208,800 189,450 178,350 1162,850 152,600 155,270 269,550 267,100 304,800 316,100 377,900 1,703,270

38
 BLOSSOM POULTRY FARM PROFOMA CASH FLOW FOR THE YEAR ENDED 31 DECEMBER 2023
JAN FEB MAR APR MAY JUN JUL AUG SEP OCTO NOV DEC

h 377,900 461,400 563,300 586,100 630,500 636,800 646,950 708,300 702,500 800,700 834,200 891,100
180,000 195,000 160,000 185,000 170,000 165,000 190,000 95,000 250,000 170,000 230,000 110,000
10,000 30,000 15,000 25,000 17,000 23,000 50,000 70,000 10,000 30,000 5,000 40,000
ed - 5,000 - 5,000 2,000 - - 4,000 - 2,000 2000 -
1,071,20
S 567,900 691,400 738,300 801,100 819,500 824,800 886,950 877,300 962,500 1,002,700 0 1,041,100
W
20,000 50,000 600,000 50,000 70,000 70,000 60,000 75,000 75,000 80,000 90,000 100,000

10,000 5,000 20,000 40,000 30,000 10,000 50,000 30,000 15,000 15,000 10,000 5,000
es 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000
5,000 5,000 5,000 5000 5000 5000 5000 5000 5,000 5000 5,000 5000
1000 - 3,000 - - 4,000 2,000 - 5,000 - 5,000 -

700 700 600 1000 500 750 850 700 800 800 900 700
5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 - - - -
1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 - - - -
300 300 300 300 3000 300 300 300 300 300 300 300
1,000 1,100 1,200 1,000 900 800 1,000 1,100 1,200 1,300 1,400 1000
st 20,000 18,000 15,000 25,000 25,000 35,000 10,000 15,000 18,000 20,000 25,000 24,000
500 - 600 800 - - 500 700 - 600 1,000 800
ed 400 300 450 450 500 550 580 620 - - 700 300
2,000 2,000 500 1500 5000 6,000 3,000 1,000 1,500 5,500 1,500 2,000
OW 106,500 128,100 152,200 170,600 182,700 177,850 178,650 174,800 161,800 168,500 180,100 178,800
461,4 00 563,,300 586,100 630,500 636,800 646,950 708,300 702,500 800,700 834,200 891,100 826,300

BLOSSOM POULTRY FARM PROFOMA INCOME STATEMENT FOR THE YEAR ENDED 31st
DECEMBER 2022 AND 2023

PARTICULARS 2020 2021

39
 Kshs Kshs

Sales 1,300,000 2,100,000

Less cost of
sales 100,000 150,000
Opening stock 385,000 800,000
Add purchases (150,000) (150,000)
Less closing 965,000 1,300,000
stock 20,000
Gross profit
Add discount
received
Expenses 480,000 480,000
Salaries and 60,000 60,000
wages
Rent 17,000 20,000
Advertisement 6,800 9,000
expenses 12,000 8,000
electricity 2,400 3,600
Interest on loan 8,200 13,000
Bank charges
Telephone 190,000 250,000
Salaries
distribution 6,850 5,500
Maintenance and 4,850 - 31,500
repair 44,000 880,600
Discount allowed 832,100
miscellaneous 439,000
Total expenses 132,900 (43,940)
Net profit before (13,290)
Less 10% tax
Net profit after 395,460
tax. 119,610
ASSUMPTION
i) Tax rate maintained at rate of 10%
ii) Net profit after tax increased at the rate of 38.8% in the second year and by 69.9% in
the third year

40
6.4 PROFOMA BALANCE SHEET FOR THE YEARS ENDING DECEMBER 2022
AND 2023

PARTICULARS 2022 2023

FIXED ASSETS Kshs Kshs
Tool and
equipment 25,000 30,000
Furniture and
fittings 10,000 15,000
Refrigerator - 30,000

TOTAL FIXED 35,000 75,000

ASSETS
CURRENTASSET
S 250,000 562,000
Cash at bank 127,900 300,000
Cash at hand 150,000 150,000
stock 185,000 325,000
debtors
TOTAL CURRENT 712,900 1,337,300
ASSETS
747,900 1,412,300
TOTAL ASSETS

CURRENT LIAB. 70,000 240,000

Creditors
TOTAL CURRENT 70,000 240,000
LIABILITIES

LONG TERM - -
LIAB. 558,290 776,840
Bank loan 119,610 395,460
Equity
NET PROFIT 747,900 1,412,300

TOTAL
LIABILITIES

41
BLOSSOM POULTRY FARM ENTERPRISE BREAK-EVEN POINT FOR THE
YEAR,2020 AND 2021
FIX ED COST 2021 2022
Salaries 480,000 480,000
Rent 60,000 60,000
Interest on loan 12,000 8,000
bank charges 2,400 3,600
TOTAL VARIABLE 554,400 551,600
COST
VARIABLE COST 2020 2021

Purchases 385,000 800,000

Advertising 17,000 20,000
Electricity 6,800 9,000
Telephone 8,200 13,000
salaries 190,000 250,000
distribution
Repair and 6,850 5,500
maintenance 4,850 -
Discount allowed 44,000 31,500
Miscellaneous
TOTAL VARIABLE 662,700 1,119,000
COST
TOTAL COSTS 1,217,100 1,670,600

42
6.5 BREAK-EVEN POINT

PARTICULAR 2022 2023 2024

=381,400 =554,400 =551,600
1-(250-350) 1-(662,700) 1-
Break-even 550,000 1,300,000 (1,119,000)
= = 381,400 = 554,400 551,600
Fixed cost =551600
1-(vc) 0.5455 0.4902
Sales 0.4671
=699,175 1,130,967
1,180,903

6.6 PROFITABILITY, RATIOS FOR BLOSSOM POULTRY FARM FOR THE

YEARS ENDING 31st 2022 AND 2023.

Working formulae
Ratio type 2022 2023
Gross profit Gross profit x 100 965,000 x 1,300,000
margin Total sales 100 x100
1,300,000 2,100,000

= 74% = 62%
Return on Profit after tax X 119,610x100 395,460x100
equity 100 558,290 776,840
(R O E) Owners equity = 21% = 51%

43
 Return on Profit after tax X 119,610x100 395,460x100
investment 100 400,000 400,000
Total investment
= 30% = 98%

6.7 DESIRED FINANCING FOR BLOSSOM POULTRY FARM

The desired financing for the business will be shown below

PARTICULARS 2022 2023

Pre-operational - -
cost
642,000 1,097,300
Working capital
TOTAL 642,000 1,097,300

6.8 PROPOSED CAPITALIZATION FOR THE PROPOSED BUSINESS

ITEM AMOUNT(KSHS)

Owners contribution 200,000

Borrowing (friends and 50,000

relatives) 150,000

Bank loan

Total investment 400,000

44