BUSINESS PLAN

NJERIFRANCIS COMPUTER REPAIR

NAME OF PRESENTER: NJERI GLADYS WANGECHI

ADDRESS : 362 OLKALOU
PHONE NUMBER : 0712324943
INDEX NO : 5520011062
COURSE : DIPLOMA IN INFORMATION
COMMUNICATION TECHNOLOGY
COURSE CODE : 2920/107
NAME OF INSTITUTE : RIFT VALLEY INSTITUTE
OF SCIENCE AND TECHNOLOGY
COLLEGE CODE : 522001
DEPARTMENT : INFORMATION COMMUNICATION
AND TECHNOLOGY
PRESENTED TO : KENYA NATIONAL EXAMINATION
COUNCILS
SUPERVISOR : MADAM FELISTER TEGUT
EXAM SERIES : NOVEMBER 2021
DEDICATION
To all my family members you have given me great support financially and physically
I am grateful, lecturers and my classmates I also appreciate you with passion and love.

DECLARATION

I declare that this business plan is my original work and has never been presented to
Kenya Examination Council for any award.

Candidate Name : NJERI GLADYS WANGECHI

Sign ……………………
Date ……………………

This business is being submitted to Kenya national examination council as a partial

fulfillment for the award of a diploma: information communication technology

Supervisor …MADAM FELISTER TEGUT………………..

Date………………….

3
ACKNOWLEDGEMENT
The author of this business plan wishes to express his warm congratulations to the
following missives: - MADAM FELISTER TEGUT (the business plan supervisor) for
her guidance and commitment towards successful completion of this business plan
My beloved members who provided me with financial support throughout the whole
course
All those who positively responded and provided useful information without
reservation
May the almighty God bless them all.

TABLE OF CONTENT
DEDICATION......................................................................................................................ii
DECLARATION.................................................................................................................iii
ACKNOWLEDGEMENT..................................................................................................iv
EXECUTIVE SUMMARY..................................................................................................1

4
 BUSINESS DESCRIPTION............................................................................................1
MARKETING PLAN.......................................................................................................1
ORGANIZATION PLAN................................................................................................1
OPERATIONAL PLAN...................................................................................................1
FINANCIAL PLAN..........................................................................................................1
CHAPTER ONE.........................................................................................................................2
1.0 BUSINESS DESCRIPTION..........................................................................................2
1.1 THE SPONSOR..............................................................................................................2
1.2 PURPOSE........................................................................................................................2
1.2.0 BUSINESS NAME.......................................................................................................2
1.3 BUSINESS CONTACTS.................................................................................................2
1.4 BUSINESS LOCATION................................................................................................3
1.4.2 SECURITY..................................................................................................................3
ELECTRICITY AND WATER..........................................................................................3
THE MARKET.....................................................................................................................3
INFRASTRUCTURE...........................................................................................................3
1.5 FORM OF BUSINESS OWNERSHIP.........................................................................3
TYPE OF BUSINESS..........................................................................................................4
PRODUCTION AND SERVICES......................................................................................4
1.5.1 SERVICES AVAILABLE..........................................................................................4
JUSTIFICATION OF OPPORTUNITY............................................................................4
THE INDUSTRY..................................................................................................................5
LONG TERMS GOALS......................................................................................................5
SHORT TERM GOALS......................................................................................................5
CHAPTER TWO
2.0 MARKET PLAN............................................................................................................6
2.1 CUSTOMERS.................................................................................................................6
2.1.1 INSTITUTIONAL CUSTOMERS............................................................................6
2.1.2 INDIVIDUAL CUSTOMERS....................................................................................6
2.1.3 COMMERCIAL..........................................................................................................6
These types of customers are from medium and high income earners .entrepreneur has high
hopes with these customers as they will be purchasing large quality of products and
services...................................................................................................................................6
2.2 MARKET SHARE.........................................................................................................7
WORKING...........................................................................................................................8
REPRESENTATION ON A PIE –CHART.......................................................................9
2.2.1 GROWTH OF MARKET...........................................................................................9
2.2.3 SALES TACTICS........................................................................................................9
2.2.4 MAINTAINING AND INCREASING MARKET SHARE....................................9
2.3 COMPETITION.............................................................................................................9
AUDIO ELECTRONICS...................................................................................................10
2.4 PRICING STRATEGY................................................................................................11
2.5 SALES TACTICS.........................................................................................................11
2.6 ADVERTISING AND PROMOTION........................................................................12
2.7 DISTRIBUTION STRATEGY...................................................................................12
2.7.1 DISTRIBUTION PROBLEMS................................................................................13
CHAPTER THREE..................................................................................................................14
3.0 ORGANIZATION AND MANAGEMENT...............................................................14
INTRODUCTION..............................................................................................................14
3.1 BUSINESS MANAGER AND QUALIFICATIONS.................................................14
SALARIES..........................................................................................................................15
3.2 OTHER PERSONNEL AN DUTIES.........................................................................15
3.2.1 TECHNICIAN...........................................................................................................15
SALARY..............................................................................................................................15
3.2.2 SALES PERSON.......................................................................................................15
3.3.2 TRAINING.................................................................................................................16
3.4 APPRAISING EMPLOYEES.....................................................................................16
5
 3.4.1 FOR MATE................................................................................................................16
3.4.2 SUMMATIVE EVALUATION................................................................................16
3.4.3 WATCHMAN............................................................................................................16
3.5 RECRUITMENT TRAINING AND PROMOTION................................................17
3.5.1 RECRUITMENT.......................................................................................................17
3.6.2 COMPETITIVE SALARIES...................................................................................18
3.6.3 INCENTIVES............................................................................................................18
3.7 LICENSE PERMIT AND BY-LAWS LICENSE......................................................18
PERMITS............................................................................................................................19
BY-LAWS...........................................................................................................................19
3.8 SUPPORT SERVICES................................................................................................19
BANKING...........................................................................................................................20
INSURANCE......................................................................................................................20
LAWYER OR ADVOCATE.............................................................................................20
3.9 OTHER SUPPORTIVE SERVICES..........................................................................21
CHAPTER FOUR....................................................................................................................22
4.0 OPERATIONAL PLAN..............................................................................................22
4.1 PRODUCTION FACILITIES AND CAPACITIES.................................................22
4.1.1 REPAIR AND MAINTANANCE............................................................................23
4.1.2 WORKSHOP LAYOUT...........................................................................................23
4.2 OPERATIONAL STRATEGY...................................................................................23
4.3 OPERATION PROCESS............................................................................................24
4.3.1 EXACT PREMISES STEP.......................................................................................24
CHAPTER FIVE......................................................................................................................26
5.0 FINANCIAL PLAN.....................................................................................................26
5.2 ESTIMATION OF WORKING CAPITAL...............................................................26
5.3.0 CASH FLOW PROJECTIONS FOR THE YEAR 1 (2018...................................27
5.3.1 CASH FLOW PROJECTIONS YEAR 2 (2019......................................................28
5.3.2 CASH FLOW PROJECTIONS YEAR 3 (2020......................................................30
5.4 TIMES COMPUTER REPAIR ENTERPRISES......................................................31
PROFOMA INCOME STATEMENT FOR YEARS 2018 -2020..................................31
5.5.0 TIMES COMPUTER REPAIR ENTERPRISES...................................................32
PROFOMA BALANCE SHEET FOR YEAR 2018........................................................32
5.5.1 TIMES COMPUTER REPAIR ENTERPRISES...................................................33
PROFOMA BALANCE SHEET FOR YEAR 2019........................................................33
5.5.2 TIMES COMPUTER REPAIR ENTERPRISES...................................................34
PROFOMA BALANCE SHEET FOR YEAR 2020........................................................34
5.6 BREAK EVEN POINTS..............................................................................................35
5.6.1 BREAK EVEN POINTS YEAR 2018.....................................................................35
5.6.2 BREAK EVEN POINT FOR YEAR 2 (2019..........................................................36
5.6.3 BREAK EVEN POINT FOR YEAR 3 (2020.........................................................37
5.7 EXPECTED PROFITABILTY RATIOS..................................................................38
APPENDIXES....................................................................................................................40

6
 EXECUTIVE SUMMARY
This chapter covers a brief summary of what is composed in six chapter of this
projected business .these include business description marketing planning,
organizational
Plan, operational plan and financial
BUSINESS DESCRIPTION
This chapter explains about the mission statement, business name, location site and
address i.e. also explain about business ownership, type of business, industry goals
production services and growth strategy.
MARKETING PLAN
This chapter discusses potential customers of the proposed business of which are:-
institutional, individual and commercial customer’s .the market shares and
competition in which covers success and failure of these competitors and how they
remain competition .this chapter discuss about means of business promotion and
advertisement.
It also covers the pricing strategy sales tactics and distribution strategy.
ORGANIZATION PLAN
This chapter describes the organisation flow chart which involves the management
team like manager, technicians and sales persons .their qualifications and respective
duties of which the manager team is discussed in details showing how it should be re
–credited, trained remunerated and promoted depending either entry qualifications
and experience in relation to specific department ability .it also tries to explain the
importance of license and supportive measures for the business success.
OPERATIONAL PLAN
This chapter includes discussion of production facilities and their capacities and that
shall facilitates the services for the starting the business the chapter explains the
processes of services and regulations affecting the business operation.
FINANCIAL PLAN
This chapter shows the pre-operational costs working capital projected cash flow
statement for three years profoma income statement and profoma balance sheet of
three years.

7
CHAPTER ONE
1.0 BUSINESS DESCRIPTION
1.1 THE SPONSOR
The particular of the sponsor are as follows:-
Names:-NJERI GLADYS
Age: - 22 years
Marital status: - single
Experience:-has an extensive knowledge of management and marketing of product
after working in a computer repair shop owned by my mother for two years.
Academic background:-the entrepreneur is a holder of K.C.S.E certificate
1.2 PURPOSE
Dedicated towards achieving the highest level of customers satisfaction by stocking
the latest electric cables and repair services offered to customer at affordable price
-.the entrepreneur should be in position to maximize his profit to help expanding his
enterprises.
1.2.0 BUSINESS NAME NJERI FRANCIS COMPUTER REPAIR. The name of the enterprises was
chosen according to its improving technology every day the enterprises will be changing with
change in technology for example changing the brand of computers
1.3 BUSINESS CONTACTS
The contacts of the enterprises will be
NJERI FRANCIS COMPUTER REPAIR
P.O BOX 362,
OLKALOU
Tel no:-0712324943
E-mail:-njeri@gmail.com

1.4 BUSINESS LOCATION

The business will be located in OLKALOU town at tower one
Some of the reasons that led to choice of the business location are as follows:-
1.4.1 ACCESSIBILITY
The location is centrally with high traffic flow of people this will make easy contacts
customers s they pass by and make good sales
1.4.2 SECURITY
The security has improved following the government zero tolerance to crime

8
The area has an efficient supply of electricity and water
THE MARKET
The area is highly populated with most people who are building therefore making the
location a good spot for the sales
INFRASTRUCTURE
The area has a good network of roads.
1.5 FORM OF BUSINESS OWNERSHIP
The business will be a sole proprietorship .the owner will be responsible of all the
marketing decisions .he will partially funds the starting of the business .the rest of the
capital will be from parent, donations and the balance will be a bank loan borrowed
from Barclays bank at an interest rate of 18% p.a
This summary is illustrated in table below:-
Name Amount(kshs) % contributions
Owner’s equity 130,000.00 19%

Donation 38,140.00 6%

Bank loans 504,000.00 75%

Total 672,140.00 100%

The business will be registered under communication commission of Kenya as

2,500.00
TYPE OF BUSINESS
The enterprises are mainly interested in delivering of products to their homestead like
cables
PRODUCTION AND SERVICES
1.7.1 PRODUCTS AVAILABLE
 Cables testers
 Data recovery software
 ATX power supply tester
 Multi tester
 USB network adapter
 Circuit breaker
 Distribution boards

9
  cable lugs
1.7.2 SERVICES AVAILABLE
 repair of computer
 sale of computers and phones
 Delivering of goods to customers

The business will be small scale enterprises

JUSTIFICATION OF OPPORTUNITY
The enterprise is geared towards capitalizing on government policies to facilitate the
development of the country .with enough resources and good management as well as
marketing skills .

THE INDUSTRY
The enterprise fall under the technology industry from research conducted by the
entrepreneur, it shows that this is a very competitive sector
1.9.1 GOALS OF THE BUSINESS
LONG TERMS GOALS
 Opening branches country wide
 Maximization of profit
 Build up my own premises within 5 years
 Introduction of mobile phones for sale and laptops
SHORT TERM GOALS
 Creating employment
 Capturing 10% of the market within the first year
 Satisfy customer needs

10
CHAPTER TWO
2.0 MARKET PLAN
Market survey is necessary in order to have an in depth analysis of the intended
market .this will enable the entrepreneur describes the market opportunities and
challenges .entrepreneur can develop market strategies ,tactics and policies required to
exploit the market opportunity.
2.1 CUSTOMERS
A good market plan enables the entrepreneur to know his customers their requirement
purchasing power what they lack in market and determines how best to reach and
accomplish their needs.
The potential customers will include
a) Institution customers
b) Individual customers
Commercial customers
2.1.1 INSTITUTIONAL CUSTOMERS
The following will be customers under this category Rift valley institute of science
and technology located 1.5 km from the enterprise premises entrepreneur will target
on the institute

2.1.2 INDIVIDUAL CUSTOMERS

This class includes high income earners and lower income earners young people and
middle aged people who are working classes .this category consists of regular
customers who despite little purchases are brand loyalist
This category includes people working in small scale and large scale enterprises in
OLKALOU town and people from private firms and local residence example:
 Casual labourers within RURII town
 Coca cola company employees
 Schools from surrounding for example Hezta secondary school
2.1.3 COMMERCIAL
These are customers who intensions will to buy products .these will include retail
shop on computers.
These types of customers are from medium and high income earners .entrepreneur has high hopes with
these customers as they will be purchasing large quality of products and services.

11
2.2 MARKET SHARE
The proprietor has conducted adequate market survey which helped to examine the
market share .the business will utilize the gathered information to capture a big
market share the estimated number of customers will be 5000 per day. customers are
to be shared among the three competitors .The business will get the biggest share with
1800 customers which is 36% of the total customers ,followed by Microsoft
enterprises with 1500 customers which is 30 %.audio enterprise 900 customers which
is 18% and frank repairs with 800 customers which is 16% of the total customers .
The proprietor to capture 36% of the market share has declined to:-
Use modern machine such as computer for high services to those of the competitors
Stock high quality services and spare parts.
Offer high quality services and offer after sale services
Table below shows requirement of the targeted market share compared to that of other
competitors

Share of customers percentage degrees

Peter enterprise 1800 36 129.6
Microsoft enterprises 1500 30 108
Audio enterprises 900 18 64.8
Jambo electronics 800 16 57.6

100 360

12
WORKING
Peter enterprises
36 *360 =129.60°
100

Audio electronic

18 *360 =64.80°
100

Microsoft electronic

30 *360 =108°
100

Jambo electronic

16 *360 =57.6°
100

2.2.1 GROWTH OF MARKET

13
The market is expected to grow considering high demands of computers in both
learning and homes not forgeting offices to each and every individual in the
community this is following the government pressure for in
description ,industrialization .
2.2.2 SALES TACTICS
Peak sales are expected at end months and beginning of the month .this is because the
employed individuals will have taken their salaries and also farmers get their money
towards the end months low sales are expected in the mid month and will be
commensurate by the expensive services offered .the enterprises will therefore aim at
achieving maximum sales during end months by attracting as many customers as
possible.
2.2.3 MAINTAINING AND INCREASING MARKET SHARE
Due to the high quality services and products offered by the entrepreneur will offer
credit services on regular customers who are also subjects to 5% discount if they pay
cash because of different preferences among the customers, the business will stock
different makes of cables, electronics and spare parts to suit this choices.
2.3 COMPETITION
The main competitors are
MICROSOFT ELECTRONICS
Located opposite COCOA pub about 100m proposed site of location
Strength
Has been the first firm on electronic and repair to be established in the town .it has an
advantage of:-
 Has been located at a strategic location
 High mechanized and experienced workers
 Familiarity thus has its loyal customers

Weakness
 High prices of the goods and services
 Their services are slow, keeping customers long waiting
 It’s poorly stocked because of mismanagement
Threats
 Loss of market share and high competition
Opportunity

14
  Loss of market share
AUDIO ELECTRONICS
 Located opposite equity bank about 50m from the proposed site.
Strength
 Has subsidized prices which are strategically placed to fight its main
competitors
 Well established
Threats
 Limited space and competition
Opportunity
 16% of the market share
Weakness
 Has a bad relation with customers
 Delay services
JAMBO ELECTRONICS
 Located at the back street near Majengo slums about 200 m from the proposed
site

Strength
 It’s famous
 Has market experience after being to market for 10 years
Weakness
 Poorly located in the places where low traffic is
 Low market share
Threats
 Loss of market share
Opportunity
 Target low income earners
2.4 PRICING STRATEGY
The pricing of commodities will be affected by these factors:
a) Demand

15
 b) Supply
c) Discount to be offered
d) Competition considering competition prices
Government policy for example taxation quotas
The entrepreneur wishes to sell his product and services at affordable prices
So as to avoid exploitation of customers by the competitor’s .the selling price of the
product will be calculated as follows.
Selling price =transport + buying price +tax + profit – discount
Discount of 10% will be offered for services amounting to kshs 1,000 and above.
Services will be charged as per cost of spare part used plus the labor used.
2.5 SALES TACTICS
Credit facilities will be offered to stable customers
After sale services offered to products sold for a specified period of time.
Offering cash discount to encourage cash payment of good and services by the
customers.
Hire personnel who are fluent in their conversation language and experienced in the
field of sales

2.6 ADVERTISING AND PROMOTION

Advertising and promotion is very crucial for a new business it helps the new
business to penetrate and gain acceptance in the market cheap methods are to be used
by the entrepreneur to minimize the cost of advertisement and promotions.
Advertisements
Through local vernacular radio stations
In the radio stations where the language used will reach a number of customers
Advertisement be through Kameme ,Coro Inooro fm radios stations will serve a good
number of customers the cost of advertising is 4 shillings per word.
Posters and leaflets
They will be given to customers who attend the premises as willing customers. They
will include:-
 Name of business
 Location of business
 Product and services offered
 Promotion

16
  Giving free samples
 Offering after sale service
 Supporting community based projects
Effectiveness of the advertisement will be measured by
 Increasing income
 Increasing number of customers
 Consistence busy working days

2.7 DISTRIBUTION STRATEGY

Manufacture representative

Times enterprises

Retailers Customers

Customers

The proprietor will buy his product from manufacturer representative then sell to
retailers or directly to customers
Repair and maintenance will be conducted within the premises workshops
Transport in and out of the enterprises will be by road transport
Thus will cost the proprietor about 15,000 per month.
2.7.1 DISTRIBUTION PROBLEMS
 Lack of timely delivery
 Failure of customers to pay on time
 Shortage of repair and maintenance material
To elevate the above problems the proprietor will ensure transport arrangement are
made on time, repair and maintenance are bought in large quantity and prizes are
revived to avoid the late payment

CHAPTER THREE

17
3.0 ORGANIZATION AND MANAGEMENT
INTRODUCTION
Human labor is mandatory for any production of operational work .the labor force
should be well trained and have the technical skills and self drive to maximize
efficiency in any production unit .the proprietor will employ people in order to
achieve his objectives.

Manager

Technicians Sales person

Watchman Driver
enterprises

3.1 BUSINESS MANAGER AND QUALIFICATIONS

The business is a sole proprietorship this implies that the proprietor is the general
manager of the business
Qualities of manager
 Should have a strong employing and management styles
 Be executive in interpersonal and influential skills
 A thorough understanding of the repair and maintenance sector
 Administrative competent
 The manager will also be owner of the business
Academic qualification
By the time of the implementation of the plan manager will have undergone 3 years
training in sales and marketing and will have acquired fundamental business

18
knowledge form entrepreneur class offered during his training also has one year
working experience in related field.
Duties and responsibilities
a) Supervision:-The manager will oversee the smooth running of the operation in
the enterprise
b) Planning :-the manger will be charged with the respective of making
appropriate decision in the enterprise
Promotion –the manager will be responsible for carrying out personal selling has a
role of finance the business
c) Selling prices of goods and services:-the manager will be responsible of
deciding on which price of commodities will be charged .the prices will vary
at different times depending on already determined factor.
d) Recruitment:-The manager will be responsible for the clerking of the already
selected application for various vacancies.
SALARIES
The manager will earn kshs 10,000 net salary plus a house allowance kshs 2,000 per
month.
3.2 OTHER PERSONNEL AN DUTIES
The business will engage three other workers as detailed below
3.2.1 TECHNICIAN
Duties and responsibilities
Ensure proper repair and maintenance of the computers brought to the enterprise,
verification of the quality spare parts
Give advisory services about certain computer accessories.
Qualification
 Should have a certificate or a diploma in electronics
 Should be computer literate
SALARY
Proposed salary will be kshs 7,000 plus kshs 800 house allowance
3.2.2 SALES PERSON
The post will be occupied by a trust worth hardworking and should be a female.
Duties and responsibilities
 Selling of computers and accessories
 Writing cash and sales receipts

19
  Maintaining cleanliness within the business.
3.3.1 TRAINING
Employees will undergo training while working to keep up within the rapidly
changing technology .training will be funded by the enterprises .
3.3.2 PROMOTIONS
In the enterprises promotion of personnel will be in terms of salaries increment .this
will be based on discipline.
 Employees must adhere to the rules and regulations ,accountability
 Employees should be accountable to all their duties .
 Amount and the rate of customer’s turnover
 Employees should be awarded a promotion of amount of work done increases
hence increases in profit in every financial year
Seniority
Long servicing employees will be subjected to promotion due to this familiarity in the
field of work.
3.4 APPRAISING EMPLOYEES
3.4.1 FOR MATE
This will be done half a year .The person emitted to carry out this is the manager .He
will supervise award marks, remarks and recommendations about the performance of
every employee and keep record of it.
3.4.2 SUMMATIVE EVALUATION
It will be done in annual basis .this will involve putting together the data obtained in
the formative evaluation and analyze to determine the productivity of each worker
 Courtesy
 Handwork
 Duration of performing their duties
 Punctuality of the employees
Qualifications
 Should hold a certificate in o-level
 Computer literate
3.4.3 WATCHMAN
Duties and responsibilities
 Safeguarding the business
 Maintaining order

20
  Watching over customers properties
 Receiving and directing customers in the premises
Qualification
 O-level certificate
 From a recognized security company
 Have an experienced of not less than five years
3.5 RECRUITMENT TRAINING AND PROMOTION
3.5.1 RECRUITMENT
This is the section of the best people who have the required knowledge and skills in
operating the business where recruiting the employees the owner will put in account
things like education level ,experience ,ability and health status of employee’s .the
business will advertise through posters in the region around the town. The manger
will short list these candidates who he thinks can perform the best. The short listed
candidates who he invited for interview are expected to have the following
characteristics:
 Ambitious
 Hardworking
 Ability to learn fast
 Technical skills
 Creative
Letters of who pass the interview will be sent to them showing the date to report for
the work.

3.6 REMUNERATION AND INCENTIVES

3.6.1 The following is a chart of salaries of the employees

21
 Position Monthly salary Annual salary
Manager 10,000 120,000
Technician 7,000 84,000
Sales person 4,500 54,000
Driver 4,000 42,000
Watchman 3,500 41,000
Total 29,000 347,000

No single employee will be paid less than the minimum required rate set .the salaries
will be established through a grading system based on jobs evaluated and will be
founded on the principle of equal pay for work of equal value .
3.6.2 COMPETITIVE SALARIES
The enterprise will pay its employers competitively to ensure it retain the best
workers in the industry hence it will offer the best quality of services .
3.6.3 INCENTIVES
The enterprise will fund 50% in the employee’s refreshment course
Ensure employees enjoy benefits like:-
 Maternity leave for three months
 End months leave 2 days
 Normal leave every year 5 days
 Transport to their homes in case of late working hours
 Overtime with pay
 Observing public holidays
 Employees will be provided with calendars every year provided by the firm in
order to develop the sense of belonging and pride to be associated with the
firm
3.7 LICENSE PERMIT AND BY-LAWS LICENSE
The enterprise will be issued with several licenses which shall be needed for smooth
starting and learning of the business
These are analyzed in the table below:-
License Source Cost(kshs )
Trade license Communication commission of Kenya 2,000
Registration license Communication commission of Kenya 1,500
Other license Nyandarua municipal council (nmc) 2,000

22
PERMITS
These will be obtained from health officer at a rate of ksh. 150.these will enable the
business to be justified as healthy for human to stay and work .
BY-LAWS
In the electronic industry there several laws set by the internsitional.electrical and
electric engineer (IEEE)
As well as the local government the business will follow the laws to the letter to avoid
obstruction during its operation these may include collection of revenue or increase in
wage as per the desire of council
3.8 SUPPORT SERVICES
In order for business to move effectively it will require various support services these
include:-
 Banking
 Insurance
 Lawyers /advocate
 Postal services and telephone
 Auditing

BANKING
The business will be offered services by equity building society –Nyandarua branch
and co-operative bank
Equity building society Nyandarua branch

23
P.O. box 18862
Tel 0723468229
Co-operative bank of Kenya
P.O. box 7286
Nyandarua
Tel : 0726892472
They will assist in some of these services
 Providing working cash for the business in form of loan
 Offer advice on tax matters
 Providing safe places for keeping extra cash
 Assist business on investments problems
INSURANCE
There are many risks the business and the workers are exposed to. These risks may
cause great financial losses examples include:-
 Theft
 Fire
 Accident
Through all these risks must be insured against the business will take insurance care
from.
Blue shield
Insurance
P.O.BOX 2682,
Nyandarua
tel:062-4627
LAWYER OR ADVOCATE
The legal services will be hired when need arises .the services will e provided by:-
Sheria advocates
P.o.box 46264
Nyandarua
Tel :0726894729

3.9 OTHER SUPPORTIVE SERVICES

Advertising services
The following will serve as the advertising agent to the enterprise

24
 Inooro fm radio
 Posters
 Weekly publication papers

25
CHAPTER FOUR
4.0 OPERATIONAL PLAN
Green valley mobile enterprise requires a production to minimize losses and maximize profits .the
plan helps to leave the business smoothly without confusion .
4.1 PRODUCTION FACILITIES AND CAPACITIES
In order to realize maximum output the enterprise will employ the use of the following tools and
equipment’s their capacity and their unit cost is also indicated
Item Source Quantity Cost Total cost
(kshs) (kshs )
Cash books Josmica enterprises 1 100 100
Digital meter African enterprises 3 300 900
Gloves Watani computers 2 200 400
Soldering African digitals 3 100 300
Gun African electronics 1 288 2880
Calculators Josmica enterprise 2 1000 2000
Files Wamica hardware 5 40 200
bench Furniture’s smarts 1 1500 1500
Stationery Furniture’s smarts - 6000 6000
Cabinets Furniture’s smarts 1 1500 1500
Office chair Furniture’s smart 2 1000 1000
Telephone Telecom 1 1000 5000
Typewriter kenslives 1 5000 7000
Total 28,780

Some of the tools and equipment are not required instantly for example
telephone ,typewriter ,grinding machine transport van and signal gyrators .therefore the proprietor
will have them when their need is necessary .the enterprise will extensively depend on particular
suppliers as indicated above .this is because the link and god will develop so that they can offer
after sale services e.g. transportation and maintenance for six months after purchases and offer
training facilities to the employees .also he will be sometimes be supplied items on credit .he will
stick to those supplied unless he is in short of stock of particulars items and needed urgently hence
he will buy it from nearby dealers .
4.1.1 REPAIR AND MAINTENANCE
The proprietor will employ one technician for efficient repair and maintenance .he will be
responsible for all repairs and maintenance work for any computer repair brought to the premises.
Proprietor will be helping the technician where necessary as he is final to release the item attained
Spare parts will be readily available and will be provided by J.M kariuki .the cost of services
provided will depend on the agreement between the proprietor and the customers.
4.1.2 WORKSHOP LAYOUT
The business will incorporate the following :-
 Manager’s office
 Reception
 Workshop
 Sales room
 Store
Where all items are under one roof

Manager’s
office

Corridor

Reception Sales Workshop

room
Store

4.2 OPERATIONAL STRATEGY

The enterprise shall stock k all the items required in order to achieve customers satisfaction ,special
orders shall be made for items example spare parts unavailable but urgently required delivery of
orders to respective individual and institutions shall be the mandate of the enterprise and for retail
purposes carriage paper bags bearing the log of the enterprise will be given to every customer after
a purchase.
The enterprise shall also print some stickers which will be stack to every phone in order to mark
bearing to the enterprise logo and the owner’s identity .
All the competitors enterprise don’t operate on Sundays and public holidays customers are forced to
wait until weekday
 The entrepreneur will operate on Sundays and public holidays from 10.00 to 4.30 pm impacting
more purchases and purchasing hours to their customers .
4.3 OPERATION PROCESS
Operation commences when the order is placed to the manufacturer representative .
After purchasing the goods they will be transported to the proprietor after purchasing the goods they
will b transported to the proprietor premises by uses of a vehicle or a motor bike .
4.3.1 EXACT PREMISES STEP
Step 1
Ordering of goods in relation to demand of the customers
Step 2
Delivery of goods to the proprietor premises which will be accompanied by cross checking of
Supplied goods and entering the stock in order to monitor sales trends .
Step 3
Goods are neatly arranged and displayed on shelves in a systematic order and their new prices are
determined according to changes in buying price .goods are then sold to potential customers
accompanied by receipts issued for the goods bought.

Step 4
On repair work, client will consult the manager who will online the material required and the cost
estimation .the repair will be carried within the premises.

The block of operation process is shown below

Ordering goods

Delivery of goods
Obtaining material and resource required

Pricing Repair and maintenance

selling
4.4 GOVERNMENT REGULATION THAT AFFECT OPERATIONS
Several government regulations have to be put in place and are unexpectedly monitored by
government agent from time to time .
Some are so essential that the business cannot start its operation without having fulfilled them .they
include:-
a) Trade license and permits
For every trading year the enterprise will require trading license and a working permit which are
provided by the local authority.
b) Value added tax (vat )
Goods and services transported in the business will be subjected to a 1.5 % V.A.T which is a stated
set as government regulation
c) Taxes
As per the Kenya revenue authority the enterprise will be expected to pay the various taxes as the
regulations.
d) Factories act .cap 514
This is provision of safety measures to each worker this act safeguards the welfare of the workers.
e) Insurance cover
CHAPTER FIVE

5.0 FINANCIAL PLAN

NJERI FRANCIS COMPUTER REPAIR will require finances to cater for purchases of equipment, tools,machines and
furniture required for the business to start the financial plan analysis is forecasting for future enterprises expenditure and
income (revenue).
5.1 OPERATIONAL COST
ITEM COST (KSHS)
Pre-operational cost 300,000
Motor vehicle 253,000
Tools and equipment 18,000
Furniture research 6,000
Fixture and fittings 25,000
Stationery 11,000
Electricity 6,000
Telephone 3,000
Rent 2,000
Insurance 5,000
Advertisement 38,000
Stock research 6,000
Licenses 3,000
Totals 676,000

5.2 ESTIMATION OF WORKING CAPITAL

ITEM 1St YEAR 2ND YEAR 3RD YEAR
Current asset :stock 125,791 389,862 181,431
Debtors 237,400 428,179 618,958
Cash in hand 66,440 73,400 74,880
Cash at bank 100,000 150,000 180,000
Total current asset
529,631 1,041,441 1055269
Current liabilities :creditors 80,600 145,379 210,158
Working capital 499,031 896,062 1,446,037
Cash inflow Jan Feb Mar April May June July Aug Sep Oct Nov Dec Total
Opening b\f 29930 59400 93650 77200 89640 84640 87450 96520 103220 126050 145800 973570
Sales 207150 209000 211800 21104 212030 215170 216830 220540 540190 256980 272940 297300 2770970
Creditors sales 55110 43500 10000 10440 33000 40900 45600 80190 64701 41800 405301
Total cash inflow 207150 238930 325530 329010 299230 315280 334470 348890 382370 420370 463691 484900 4145781

Cash out flow

Purchases 59600 65300 71130 756990 76300 80400 83000 789700 99420 107600 118860 120430 1045430
Creditors sales 65469 61210 18000 34000 44940 46880 62790 69500 82561 78960 564305

Rent 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000
Insurance 1100 1100 1100 1100 1100 1100 1100 1100 1100 1100 1100 1100 13200
License and 3000 3000 6000
permit
Advertisement 800 940 1150 1050 930 879 810 780 1220 1100 1450 1870 12979
Salaries 56000 56000 56000 56000 56000 56000 56000 56000 56000 56000 56000 56000 672000
Medical 22400 22400 22400 22400 22400 22400 22400 22400 22400 22400 22400 22400 268800
allowances
Telephone and 200 240 210 270 250 300 310 290 260 20 210 210 3030
postage
Loans payment 10500 10500 10500 10500 10500 10500 10500 10500 10500 10500 10500 10500 126000
Loan interest 5040 5040 5040 5040 5040 5040 5040 5040 5040 5040 5040 5040 60480
Stationery 700 900 1200 600 800 950 590 650 900 1000 250 1100 10630
Water and 360 720 816 650 630 580 670 720 690 780 830 810 8456
electricity
Fuel and oil 11200 10450 10980 11100 17480 12130 12120 21200 12830 13350 13950 14300 146000

Repair and 4120 3940 3910 4200 4130 4370 4530 4110 3960 3730 3680 3740 48440
maintenance
Total cash 177700 179530 251900 209560 230640 247020 25370 270110 294320 317891 315460 31546 3009831
outflow
Balance c/d 296880 59400 93650 77200 89670 84640 87450 96520 103220 126000 145800 166440 1139950

5.3.0 CASH FLOW PROJECTIONS FOR THE YEAR 1 (2020)

5.3.1 CASH FLOW PROJECTIONS YEAR 2 (2021)

Total cash inflow 490900 491900 506590 579420 587080 507300 574640 512210 576570 503260 520260 55910 6153330
Cash out flow
Purchases 77110 7999 84000 84690 83980 76690 82280 81050 76400 57240 46720 56263 881373
Creditors 125000 12224980 130590 136000 127300 133800 131280 129640 137610 135000 146710 152908 1610918
Rent 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000
Insurance 1100 1100 1100 1100 1100 1100 1100 1100 1100 1100 1100 1100 13200
License and 3000 3000 6000
permit
Advertisement 1800 12150 1900 1100 2080 2100 1910 1730 1650 1820 2400 2680 23320
Salaries 56000 56000 56000 56000 56000 56000 56000 56000 56000 56000 56000 56000 672000
Medical 22400 22400 22400 22400 22400 22400 22400 22400 22400 22400 22400 22400 268800
allowances
Telephone and 290 380 500 640 700 750 690 800 890 750 900 1200 8470
postage
Loans payment 10500 10500 10500 10500 10500 10500 10500 10500 10500 10500 10500 10500 126000
Loan interest 5040 5040 5040 5040 5040 5040 5040 5040 5040 5040 5040 5040 60480
Stationery 1200 1250 1450 1450 1400 1240 1140 1520 1400 1750 1480 1900 17030
Water and 850 1000 960 960 1070 990 1100 1300 1350 1500 1350 1710 14400
electricity
Fuel and oil 13580 13720 14150 14150 15000 15370 14630 15000 15300 15890 16190 16209 179952

Repair and 3900 4180 4100 4930 4200 4500 4100 4450 4210 4670 4100 4500 52290
maintenance
Total cash 323870 329410 334690 334690 333500 335180 338570 332270 331300 315200 317460 336410 3964240
outflow
Net cash 167030 167490 171900 178050 175800 171900 176070 179990 185200 190060 202800 223400 2189090
Total cash inflow 490900 491900 506590 579420 587080 507300 574640 512210 576570 503260 520260 55910 6153330
Cash out flow
Purchases 77110 7999 84000 84690 83980 76690 82280 81050 76400 57240 46720 56263 881373
Creditors 125000 12224980 130590 136000 127300 133800 131280 129640 137610 135000 146710 152908 1610918
Rent 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000
Insurance 1100 1100 1100 1100 1100 1100 1100 1100 1100 1100 1100 1100 13200
License and 3000 3000 6000
permit
Advertisement 1800 12150 1900 1100 2080 2100 1910 1730 1650 1820 2400 2680 23320
Salaries 56000 56000 56000 56000 56000 56000 56000 56000 56000 56000 56000 56000 672000
Medical 22400 22400 22400 22400 22400 22400 22400 22400 22400 22400 22400 22400 268800
allowances
Telephone and 290 380 500 640 700 750 690 800 890 750 900 1200 8470
postage
Loans payment 10500 10500 10500 10500 10500 10500 10500 10500 10500 10500 10500 10500 126000
Loan interest 5040 5040 5040 5040 5040 5040 5040 5040 5040 5040 5040 5040 60480
Stationery 1200 1250 1450 1450 1400 1240 1140 1520 1400 1750 1480 1900 17030
Water and 850 1000 960 960 1070 990 1100 1300 1350 1500 1350 1710 14400
electricity
Fuel and oil 13580 13720 14150 14150 15000 15370 14630 15000 15300 15890 16190 16209 179952

Repair and 3900 4180 4100 4930 4200 4500 4100 4450 4210 4670 4100 4500 52290
maintenance
Total cash 323870 329410 334690 334690 333500 335180 338570 332270 331300 315200 317460 336410 3964240
outflow
Net cash 167030 167490 171900 178050 175800 171900 176070 179990 185200 190060 202800 223400 2189090

Jan Feb Mar April May June July Aug Sep Oct Nov Dec Total
Cash inflow
Opening b\f 234400 231400 235300 237000 240600 244360 264560 545900 245150 246700 250400 252890 2889660

Sales 316500 317650 308500 319850 320000 321300 320900 320500 322150 325000 325100 328500 3855050
Debtors 40650 40800 49950 41600 41200 41600 41100 40300 40900 41200 41000 4400 492100
Total cash inflow 580550 589850 594750 594800 601800 607260 608560 606700 608200 612900 616500 622790 7247710

Cash out flow

Purchases 152900 154600 158250 160950 162400 163900 166000 167400 164000 163750 164900 168500 1947550
Creditors 68360 75310 74360 71060 69510 71260 68520 68220 72470 73130 74370 74370 860270

Rent 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000
Insurance 1100 1100 1100 1100 1100 1100 1100 1100 1100 1100 1100 1100 13200

License and 3000 3000 6000

permit
Advertisement 2600 2500 2700 2650 2800 2400 2750 2800 2550 2600 2500 2400 31200

Salaries 56000 56000 56000 56000 56000 56000 56000 56000 56000 56000 56000 56000 672000
Medical 22400 22400 22400 22400 22400 22400 22400 22400 22400 22400 22400 22400 268800
allowances
Telephone and 1300 1350 1000 1400 1500 1350 1450 1600 1250 1550 1400 1200 16600
postage
Loans payment 10500 10500 10500 10500 10500 10500 10500 10500 10500 10500 10500 10500 126000

Loan interest 5040 5040 5040 5040 5040 5040 5040 5040 5040 5040 5040 5040 60480

Stationery 1700 1900 1500 1600 1400 1800 1500 1650 1600 1650 1700 1850 29000
Water and 1650 1700 1950 1800 2000 1900 1850 1750 1600 1700 1850 1900 21400
electricity
Fuel and oil 16200 16050 16300 16450 16250 16500 16100 1720 1720 1600 1350 16540 165040

Repair and 4400 4100 4450 4430 4500 4550 4450 4370 4990 4200 4500 4100 52960
maintenance
Total cash 349150 354530 352750 357250 357440 350700 362660 361550 36500 362500 363610 367990 4316650
outflow
Net cash 231400 235300 237000 240600 244360 264560 245900 245900 245150 246700 250400 252400 2931050

5.3.2 CASH FLOW PROJECTIONS YEAR 3 (2022)

5.4 GREEN VALLEY COMPUTER REPAIR ENTERPRISES
PROFOMA INCOME STATEMENT FOR YEARS 2018-2019
Items 1st Jan 2020 1st Jan 2021 1st Jan 2022
Sales 3,176,271 4,021,200 4,348,000
Less cost of goods sold 1,522,986 2,234,220 2,415,245
Gross profit 1,653,285 1,786,980 1,932,805
Less expenses
Rent 24,000 24,000 24,000
License 6,000 13,200 13,200
Insurance 13,200 6,000 6,000
Medical allowance 268,800 268,800 268,800
Postage and telephone 3,030 8,470 16,550
Loan interest \loan 60,480 60,480 60,480
Stationery 10,680 17,030 20,100
Water and electricity 8,450 14,400 196,040
Fuel and oil 146,090 179,959 196,040
Repair and maintenance 48,440 52,290 52,960
Salaries 672,000 672,000 672,000
Advertisement 12,970 23,320 31,300
Depreciation
Motor vehicle 30,000 30,000 30,000
Tools 20,240 20,240 20,240
Furniture 1,080 1,080 1,080
Equipment 315 315 315
Fixtures and fittings 1,750 1,750 1,750
Total expenses 1,327,481 1,393,334 1,436,215
Net profit 325,804 393,646 496,590

1,653,285 1,786,980 1,932,85

5.5.0 NJERI FRANCIS COMPUTER REPAIR
PROFOMA BALANCE SHEET FOR YEAR 2020
FIXED ASSET S
FIXED ASSETS DEC 2020
Motor vehicle 270,000
Tools 232,760
Furniture 16,920
Equipment 5,985
Fixtures and fittings 23,550
Total fixed assets
548,915
Current assets
Stock 125,791
Debtors 237,400
Cash in hands 64,440
Cash in bank 100,000

Less current liabilities

529,631

Creditors 80,000

449,631

Financed by
Capital owners equity
Donations
Bank loans
Net profit before taxation
Net profit after taxation 5%

130,000
38,142
504,000
 325,504
997,946
309,229

5.5.1 TIMES COMPUTER REPAIR ENTERPRISES

PROFOMA BALANCE SHEET FOR YEAR 2020
FIXED ASSET S
FIXED ASSETS DEC 2020
Motor vehicle 240,000
Tools 212,520
Furniture 15,840
Equipment 5,670
Fixtures and fittings 21,500
Total fixed assets
495,550
Current assets
Stock 389,862
Debtors 428,179
Cash in hands 73,400
Cash in bank 150,000

Less current liabilities

1,041,441

Creditors 145,379 896,062

1,391,592

Financed by
Capital owners’ equity
Donations
Bank loans
Net profit before taxation
Net profit after taxation 5%

455,804
38,142
504,000
393,646
1,391,592
373,963

5.5.2 TIMES COMPUTER REPAIR ENTERPRISES

PROFOMA BALANCE SHEET FOR YEAR 2020
FIXED ASSET S
FIXED ASSETS DEC 2020
Motor vehicle 210,000
Tools 192,250
Furniture 14,760
Equipment 5,355
Fixtures and fittings 19,750
Total fixed assets
442,145
Current assets
Stock 782,487
Debtors 618,958
Cash in hands 74,800
Cash in bank 180,000

Less current liabilities

Financed by
Capital owners equity
Donations
Bank loans
Net profit before taxation
Net profit after taxation 5%
1,656,195
210,158 1,446,037

1,888,182

849,450
38,142
496,590
393,646
1,888,182
471,761

5.6 BREAK EVEN POINTS

5.6.1 BREAK EVEN POINTS YEAR 2020
Fixed Assets Amounts Variable cost Amounts
Rent 24,000 Advertisement 12,970
Insurance 13,200 Postage &telephone 3,030
License & result 6,000 Stationeries 10,630
 Salaries 672,000 Fuel & oil 8,450
Medical allowances 268,800 Water & electricity 146,090
Loan interest 60,480 Repair &maintenance 48,440
Depreciation 53,385
Total
Total 229,616

1,077,865

Total contribution = sales – variable cost

= 3,176,271-229,616
=2,546,655
Contribution margin percentage

= contribution margin * 100

Sales

=2,546,655 * 100
3,176,271

=92.77%
Break even 1st year
= fixed cost * 100
Contribution margin %

=1,097,865 *100
92.77

=1,183,427

5.6.2 BREAK EVEN POINT FOR YEAR 2 (2020)

variable cost amount(kshs)
Advertisement 23,320
Postage and telephones 8,470
 Stationery 17,030
Water and electricity 14,450
Fuel and oil 179,957
Repair and maintenance 52,290
Total 295,469

Total contribution = sales – variable cost

= 4,021-295,469
=3,725,731
Contribution margin percentage

= contribution margin * 100

Sales

=3,725,731* 100
404,200

=92.65%
Break even 2nd year
= fixed cost * 100
Contribution margin %

=1,097,865 *100
92.65

=1,184,960

5.6.3 BREAK EVEN POINT FOR YEAR 3 (2020

variable cost amount(kshs)

Advertisement 31,300
Postage and telephones 16,550
 Stationery 20,100
Water and electricity 21,400
Fuel and oil 196,040
Repair and maintenance 52,960
Total 338,358

Total contribution = sales – variable cost

= 4,348,050-338,358
=4,009,700
Contribution margin percentage

= contribution margin * 100

Sales

=4,009,700* 100
4,348,050

=92.22%

Break even 3rd year

= fixed cost * 100
Contribution margin %

=1,097,865 *100
92.22

=1,190,485

5.7 EXPECTED PROFITABILITY RATIOS

Gross profit ratios
= g.p * 100
Sales
Year 1 (2015)

= 1,653,285 * 100
3,176,271

=52%
Year 2 (2016)

= 1,932,805 * 100
4,021,200

=44%

Year 3(2017 )
= 1,932,805 * 100
4,348,980

=44%
Net profit ratio
Year 1 (2015)

= 325,804 * 100
3,176,271

=10%
Year 2 (2016)

= 393,446 * 100
4,021,200

=10%

Year 3(2017 )
 = 496,590 * 100
4,348,050

=11%

5.8 DESIRED FINANCING amount(kshs )

Pre operational cost 672,142
Add working capital 449,031
1,121,173

5.9 PROPOSED CAPITALIZATION amount (kshs )

Owners contribution 130,000
Donation 449,031
Loans from Barclays bank of Kenya 504,000
672,000
APPENDIXES
APPENDIX 1
LOAN APPLICATION LETTER
GLADYS NJERI
P.O.BOX 362,
OLKALOU
A\C NO 99/5402/66727
NYANDARUA BRANCH

THE MANAGER,
BARCLAYS BANK OF KENYA
NYANDARUA BRANCH ,
P.O.BOX 362 .
NYANDARUA.
Dear sir /madam
RE:APPLICATION FOR A BANK LOAN
I am a diploma holder in information communication technology. I intend to start a
business in Olkalou town .the name of the business will be “RUBBY COMPUTER
REP[AIR AND MAINTENANCE”
Dealing with sales and repair of computers being an account holder of your bank ,I
am kindly requesting for a loan of 504,000 which will be payable in monthly installment
without any delay.
Our positive consideration will be highly appreciated.
Yours faithfully
………………………
Appendix II
MAP OF BUSINESS

Kenyatta avenue

Gakere road

Main Vision mobile

Highway
Eco-bank

Samrat
supermarket

To NAKURU