BUSINESS PLAN

BUSINESS NAME: DANO ELECTRONICS ENTREPRISE SHOP

BUSINESS ADRESS: P. O. BOX 1-40100 AHERO.

PRESENTED BY: AMBET DANIEL OWINO.

CENTER CODE: 741105

INDEX NO.: 7411050126

SUBMITTED TO: THE KENYA NATIONAL EXAMINATION COUNCIL IN

PARTIAL FULFILLMENT FOR THE AWARD IN CRAFT
CERTIFICATE INELECTRICAL AND ELECTRONICS
ENGENEERING.

INSTITUTION: THE KISUMU NATIONAL POLYTECHNIC.

EXAM SERIES: MARCH 2023.

SUPERVISOR: MR EVANS ONYANGO.

Table of Contents

i
DECLARATION..........................................................................................................................................i
DEDICATION............................................................................................................................................ii
ACKNOWLEDGEMENT..........................................................................................................................iii
EXCUTIVE SUMMARY...........................................................................................................................iv
CHAPTER ONE..........................................................................................................................................1
1.0 BUSINESS DESCRIPTION..............................................................................................................1
1.1 BUSINESS NAME............................................................................................................................1
1.2 BUSINESS LOCATION...................................................................................................................1
1. 3 FORM OF OWNERSHIP.................................................................................................................2
1.4 TYPE OF BUSINESS.......................................................................................................................2
1.5 PRODUCTS AND SERVICES.........................................................................................................3
1.6 JUSTIFICATION OF OPPORTUNITIES.........................................................................................3
1.7 INDUSTRY.......................................................................................................................................3
1.8 GOALS/OBJECTIVES.....................................................................................................................4
1.9 ENTRY AND GROWTH PLAN.......................................................................................................4
CHAPTER TWO.........................................................................................................................................5
2.0 MARKETING PLAN........................................................................................................................5
2.1 CUSTOMER IDENTIFICATION.....................................................................................................5
2.2 MARKET SHARE............................................................................................................................5
2.3 COMPETITION ANALYSIS................................................................................................................6
2.4 ADVERTISING AND PROMOTION STRATEGY...................................................................6
2.5 PRICING STRATEGY................................................................................................................6
2.6 SALES TACTICS.......................................................................................................................7
CHAPTER THREE.....................................................................................................................................8
3.0 ORGANISATIONAL PLAN AND MANAGEMENT PLAN.....................................................8
3.1 ORGANIZATIONAL STRUCTURE..........................................................................................8
3.2 BUSINESS MANAGEMENT AND QUALIFICATIONS..........................................................9
3.3 PERSONELL NUMBER AND DUTIES....................................................................................9
3.4 RECRUITMENT, TRAINING AND PROMOTION................................................................10
3.5 REMUNERATION AND INCENTIVES..................................................................................10
3.6 LICENSING PERMITS AND BY-LAWS................................................................................11
3.7 SUPPORT SERVICES..............................................................................................................11
CHAPTER FOUR.....................................................................................................................................13
4.1 OPERETION PLAN..................................................................................................................13
4.2 Product or Service Design and Development.............................................................................13
4.3 Operation Facility and Capacity................................................................................................13
4.4 PRODUCTION STRATEGY....................................................................................................13
4.5 PRODUCTION PROCESS.......................................................................................................13
4.6 REGULATIONS AFFECTING OPERATIONS.......................................................................13
4.7 EQUIPMENT AND MATERIALS...........................................................................................14
CHAPTER FIVE.......................................................................................................................................15
5.1 FINANCIAL PLAN..................................................................................................................15
5.2 PRE-OPERATIONAL COST....................................................................................................15
5.3 WORKING CAPITAL..............................................................................................................15
5.4 CASH FLOW FOR VIMO ELECTRONICS ENTERPRISE SHOP.........................................16
5.5 PREPERATION OF PROFORMER INVOICE STATEMENTS AND BALANCE SHEET....18
5.6 CALCULATION OF BREAK-EVEN POINT..........................................................................20
5.7 DESIGNED FINANCING.........................................................................................................21
APPENDIX...............................................................................................................................................23
 DECLARATION
I declare that the information contained in this document is my own original work that has
never been presented anywhere for academic award. I therefore submit it to the Kenya
National Examination Council (KNEC) partial fulfillment for the award of Certificate in
Electrical Engineering.

NAME: AMBET DANIEL OWINO

SIGNATURE: ……………………………….

DATE: …………………………………………

Declaration by Supervisor

Signature………………………….

Date……………………………….

i
 DEDICATION
I dedicate this business plan to Mr. Evans Onyango for his support throughout my research
and planning of the business plan, I also dedicate this to my family members and friends for
their ideas and support during the preparation of this document.

ii
 ACKNOWLEDGEMENT
I gratefully acknowledge The Kisumu National Polytechnic and the Electrical and Electronic
Engineering Department for providing me the opportunity and the environment to initiate and
complete my business plan.

I also extend my gratitude to my family for their financial and moral support throughout my
studies.

iii
 EXCUTIVE SUMMARY
DANO ELECTRONICS ENTREPRISE SHOP is expected to start its operation on 10th January
2023. My proposed business shall be located opposite Ahero Total Petrol Station along Kisumu-
Nairobi road with its official address of 1-40100 Ahero. Since the form of the business is a sole
proprietorship, the manager of the business will be the owner with the help of other individuals
who will be hired to assist in running the business. The business will operate with initial capital
of 55,000. The capital will be raised through personal savings, loans from financial institutions,
inheritance, ploughing back profit and getting goods on hire purchase. DANO Electronics
Entreprise Shop is a small retail shop dealing with electrical and electronic materials. Since the
business will be in a developing town of Ahero, there will be a good opportunity for the business
to flourish.

iv
 CHAPTER ONE

1.0 BUSINESS DESCRIPTION

Dano as a small business deals with both sales of electronics items and providing electrical services to
clients. Providing knowledge and skills will also be part of my plan so as to help youth get knowledge that
I would have gotten.
A successful business must be planned well by considering the demand and type of commodities that I
want to handle or sell to my clients
As an entrepreneur what I must consider first is knowing the demand, acquire skills which I would have
gotten already, business gap and transport network to my business premise. I chose Ahero as my suitable
place since it has all the quality items, good population, energy supply and access roads.

I would have achieved more than 50% clients buying items from my shop and also the once that I will be
providing services for. I have always dreamed of becoming an expert in repair of electronic items and also
proving services. My wish is to start my business after four years to enable me accumulate a good capital.

1.1 BUSINESS NAME

Dano electronics enterprise mainly deal with both electrical and electronics gargets and also offering electrical
services. I chose the name mainly because it spells out my name Daniel Owino and electronics, being that
most items in the shop mainly use electricity to operate as an electrical engineer and an entrepreneur as per the
time offering services will be given the second priority since I have the knowledge and skills. I have always
dreamt of becoming an expert in electrical appliances both knowing their uses, how they work, their function
and also to know how to do maintenance on them.

1.2 BUSINESS LOCATION AND ADDRESS

In the modern world electricity has become the main source of energy hence many countries down to
counties, town and even some parts in rural areas are having electricity. For this reason, my business DANO
enterprise has decided to locate itself in Ahero town (urban area) opposite Ahero Petrol Station along
Kisumu-Nairobi highway. Postal address being 1-40100 Ahero telephone number 0714508722.

1
 MIGORI
BRIDGE

MIGORI – SIRARE HIGHWAY

AHERO
MARKET

1. 3 FORM OF OWNERSHIP
Dano enterprise as a sole proprietorship business, I being the owner and the founder. I will be part of large
and growing electrical and electronics gargets and for this reason I will take part in being the main source
of finance. I will be required to invest a total of 200000 for adequate items and tools.

My main source of finance will be from my initial savings, little support from friends and relatives and also
acquire loan from bank if at all the money wouldn’t be enough.
Advantages of this form of ownership are as follows:

 Early and quick decision making.

 Early to run and manage.
 Low initial capital.
 Enjoyed the profit alone.

Disadvantages of this form of business.

 My failure means failure of the business.

 Due to low capitals, this is slow growth.
 A sole trader is overworked and has no time for recreation.

1.4 TYPE OF BUSINESS.

The Dano enterprise as an electrical and electronics shop too will be dealing mainly with sales of both
electrical and electronics products, repair of electronic items and offering electrical installation services too.

1.5 PRODUCT AND SERVICES

My business will mainly deal with electronics and electrical items based on my collage knowledge and skills I
would have taught my employees on how to handle them and also provide services by doing maintenance on
them more so the speakers and microphones. Dano electrical shop contains items such as.
2
 • Sockets
• Chargers
• Radios and television
• Electronic components
• Pvc cables
• Saddles
• Tower clips
• Pliers
• Bending spring
• Bulbs
• Bulb holder

1.6 JUSTIFICATION OF OPPORTUNITY

Since am pursuing Electrical and Electronics Engineering, I choose electronics shop because of long interest
and passion in electrical field since my early childhood. I was also motivated by my family members and since
it’s a self-employment job which earns good profit.

1.7 INDUSTRY
The business will mainly deal with production through modification of items before being sold i.e. old items
will be recycled to make other new modern gadgets.

1.8 GOALS OF BUSINESS

1.8.1 The goals or objectives of the business are to;

I. Grow gradually with time

II. Creation of employment
III. Make profit
IV. Expand to other counties
V. Become a successful engineer.

1.9 ENTRY AND GROWTH PLAN

1.9.1 ENTRY PLAN

This business entry plan is by offering quality and high standard products and services at affordable cost.

Every business person wants his /her business to grow faster and since my business is not familiar and
known I would prefer to treat my clients in a unique way that makes them to come back if they in need of a
product or a service.

3
The following ways will be used to attract my clients back:

i) Buy two products and get one free

ii) Introducing free packaging of items
iii) Giving out discounts for first timers
iv) Offering after sell services.

1.9.2 GROWTH PLAN

My growth plan will be majorly based on the following approaches:

 By applying for contracts/tenders from public and private institutions.

 By offering sales of my products to all institution within the area.
 Applying for more capital from financial institutions to boost my business.
 Advertising my services through posters or through social media.

4
 CHAPTER TWO
2.0 MARKETING PLAN
I’ll advice my employees that the keep on sending the good message of our high quality products and
services that we offer. We will also advertise all the products and services that we offer through posters and
talk to people on one on one basis about the business.

2.1 CUSTOMERS
The business is targeting various customers such as Sub-county Government offices, both public and private
institutions and the general public.

Good customer relation must be maintained as we listen to the demands and ask them if the service we offer to
them is of the standard they expected.

For me to cop up with competition, I will offer discount to my customers and also provide after sale services
to them.

2.2 MARKET SHARE

The market shared by other electronics firms is 50% in the market. The competition is stiff.

15%

35%

DANO
TEFA
KALOS

50%

2.3 COMPETITION
It’s obvious that electricity is widely used hence its items must be needed, for this reason many businesses
like Tefa and Kalos electronics shop would have jumped in before mine. The little research done it has been
realized that Tefa electronics seem to be known more than Kalo's electronics shop but when it comes to
5
 selling of their items to the customers;

i) Teffa electronics offer after sale services but they don’t give out discount to their customers.
ii) Kalo's shop even though it is not known it offers discount but no after sale services.

All these competitors are located at the same town, direction and same street. Since have made new entry in
the market, I will do my best to offer my customers all the items they need so as to reach Tefa and kalos
level. Offering discount and after sale services will be my first priority.

2.4 METHOD OF PROMOTION AND ADVERTISING

2.4.1Advertising

This enables business to be well known to the potential customers. The advertisement will be
through;
I. Posters, sign boards and business cards.
II. Advertising through local radio services.
III. Publishing local magazine.
2.4.2 Promotion strategy

Promotion strategy will be done through:

I. Offering discounts to client who buys items in bulk and to my daily client who keep on
coming daily.
II. Holding of trade fairs.
III. Providing enough package and storage facilities to customers.
IV. Providing goods on hire purchase to customers.

2.5 PRICING STRATEGY

For a new business to grow well one has to consider the following factors.

i. living standards of people around.

ii. Transport network
iii. proper communication skills
iv. Cost of renting an apartment.

6
Out of all this factors, I will be able to set my price well without favoring anyone and I will also try to get
information about a particular item from my neighboring shops and do comparison to avoid much loss.

2.6 SALES TACTICS

Transport services will be offered at free cost to clients who buys items in bulk and this method will offer me
better market than my competitors. Major promotion where when you buy items above 6000 your offered a
bonus on top of the items bought. Promotional messages will be sent to our customer through their mobile
handsets alerting them on our big sales periods.

2.6.2 DISTRIBUTION STRATEGY

I will go for intensive distribution because once my customer has ordered certain commodities from my
shop I will have to distribute them according to his or her want for this reason the amount of money to be
used may be high and the time too can be limited.

CHAPTER THREE
3.0 ORGANISATIONAL PLAN AND MANAGEMENT PLAN
As sole proprietorship business, DANO is managed by one person and with assistance of few employees. As
the manager I’ll take in providing all the required equipment such as protective gears to my employees so as
to make the business run smoothly.

3.1 Organizational structure

MANAGER

ASSISTANT MANAGER

ACCOUNTANT

SALES PERSONS

7
 DRIVER
SECURITY

3.2 BUSINESS MANAGEMENT AND QUALIFICATIONS

The business being a sole proprietorship, I’ll be taking charge in management. The following will be
requirements for employment within the business enterprise:

I. Be a certificate or Diploma holder in Electrical& Electronics engineering.

II. Be a holder in Certificate or Diploma in Accounting
III. Must be a good leader.
IV. Ages between 25-45 years.
V. Must have a valid driving license.
IV. Must be a computer literate.

3.3 PERSONNEL NUMBERS AND DUTIES

Apart from manager and general foreman the company will also require other employees for efficiency in
running of the organization.

Key Personnel.

Since I have taken the top position as a manager, employment of my assistant manager will go for few
qualifications depending on the work in my enterprise. After advertising about my business I will check on
the following qualification for assistant manager and other workers.
i.) He or she must have good managerial skills
ii). He/she must understand how to handle the employee
iii). He or she must understand well the kind of item he will be handling.

Other personnel.

8
Having an accountant, he/she will be required to be computer literate and keep the financial status of the
enterprise up to date.
The driver too will be required to transport bulky goods to doorstep of clients.

3.4 RECRUITMENT, TRAINING AND PROMOTION

3.4.1Recruitment

The organization will announce the vacancies available through various sources and allow for
various applications.

3.4.2Training

After hiring of new personnel, the enterprise will offer relevant training to employees to ensure
achievement of their productivity and competence.

3.4.3Promotion

Promotion of various employees will depend on one’s performance, qualifications and need to do
so.

V.5 REMUNERATION AND INCENTIVES

3.5.1 Remuneration

Remunerations will be done according to employees’ rank and education level.

JOB TITLE EMPLOYEES BASIC ALLOWANCE TOTAL

SALARY

MANAGER 1 12,600 1,500 14,100

ASSISTANT 1 9,800 1,000 10,800

MANAGER

ACCOUNTANT 1 7,000 700 7700

DRIVER 2 5,500 500 6,000

SECURITY 2 5,000 500 5,500

9
3.5.2 INCENTIVES

a) Leaves
Employees will be given a regular time i.e. off from time to time at different times for different
employees

b) Working hours
Working hours will be as from 8am to 6pm during weekdays and weekends as from 8am to 4pm.

V.6 LICENSING PERMITS AND BY-LAWS

3.6.1Licensing

As required by the regulation, license is required to start a business. I will ensure time to time
renewal to avoid inconveniency of the business. The business will apply for license at a cost of
7,500/= annually.

3.6.2Permits

Operations permit will be provided by the County Government of Kisumu to allow easy operation.

3.6.3By-Laws

As law abiding citizen, the business will be registered under its name by the registrar of business at
a cost of 5000/= monthly.

V.7 SUPPORT SERVICES

The business requires other support services as follows:

3.7.1Banking services

Banking services will be provided by Kenya Commercial Bank.

V.7.2 Auditing services

For the purpose of transparency, accountability auditing services will be done by Toyo Auditing
Firms at the end of financial year.

10
 V.7.3 Insurance Services

There are major risks involved in any business such as fire or theft and this may lead to the collapse of the
business. For this reason, insurance cover is important in that it will help the business organization return to its
operation state in case of such risks.

A.A.I insurance company will provide insurance cover.

CHAPTER FOUR
4.1 OPERETION PLAN

4.2 Product or Service Design and Development

4.3 Operation Facility and Capacity

There will be need for machines for efficiency running of the business and for production purpose.

ITEM NO.OF UNIT COST TOTAL SUPLIER

11
 ITEMS

VEHICLE 1 400,000 400,000 YANA

AUTOS

COMPUTER 2 30,000 60,000 HP

FIRNITURE NIL 8,000 8,000 SKYLARK

4.4 PRODUCTION STRATEGY

The manager will provide moral and financial support to help the company gain its market share..

4.5 PRODUCTION PROCESS

The organization will have a properly laid down channel to carry out its production process in terms of cash
flow, labor supply, availability of tools and machinery and supply of materials or transportation of goods.

4.6 REGULATIONS AFFECTING OPERATIONS

Are regulations that may affect the running of business activities such as:

 Employees Act which ensures the business adheres to the employees life and safety.
 Insurance Law.

4.7 EQUIPMENT AND MATERIALS

The services will ensure it produces enough machinery and equipment to help in production services.

The equipment involves;

 Panel boards
 Contactors
 Circuit breakers
 Lightings.
 Double poles (DPs).
 Voltage regulator (Vs 30).
 Cable
 Speakers
 Tv sets
 Radios
 Digital cameras
 Computers
12
 Wiring cables
 Extensions

CHAPTER FIVE
5.1 FINANCIAL PLAN
This is the key in an organization since it ensures or determines if the business is making profit or loss.

It also provides transparency and accountability.

5.2 PRE-OPERATIONAL COST

Pre-Operation cost includes; all the expenses incurred before the start of a business operation.

Item Cost

13
 Machinery and equipment 70,000

Cash at hand 205,000

Furniture and fittings 10,000

Licenses and permission 12,000

Rent 5,000

Advertisement and promotion 5,000

Insurance deposit 2,500

Power installation 5,000

Transport 2,000

Telephone and meeting People. 3,000

TOTAL 319,500

5.3 WORKING CAPITAL

Using book keeping equations where; asset is equal to

Working capital=Assets-Liability e.g.

The table below show, working capital.

Current Liabilities
ITEM AMOUNT
Creditors 100,000/=

Cash in hand 300,000 Taxation 2000/=

Cash at Bank 100,000 Total=102,000/=

Stock 200,000

Debtors 20,000

Total 620,000

Working Capital=622,000-102,000

=520,000/=

14
5.4 CASH FLOW FOR VIMO ELECTRONICS ENTERPRISE SHOP
ITEMS JA FEB MAR APR MA JUN JUL AU SEP OCT NO DEC TOTAL
N Y G T V

Opening 162, 157,8 149,5 170, 181, 212, 245, 300,0 375,7 436, 511,4 291,440
Cash 400 00 00 400 500 600 600 00 00 600 00

Bank 200, 200,000

Loan 000

Sale 80,0 72,5 80,50 100,5 120, 119, 150, 160, 165,5 160,0 168, 105,0 1,482,00
00 00 0 00 400 600 000 000 00 00 000 00 0

Own 200, 200,000

Equity 000

Debtors 25,00 25,000

0

Total 480, 234, 238,3 250,0 290, 311, 362, 405, 466,4 535,7 604, 641,4 4,821,40
Cash 000 900 00 00 800 100 600 600 00 00 600 00 0
Flow

Cash
Flow

Purchas 150, 18,5 30,00 20,00 40,0 20,0 52,0 45,0 30,00 40,00 35,0 20,00 500,500
es 000 00 0 0 00 00 00 00 0 0 00 0

Creditor 100, 2,00 20,0 120,000

s 000 0 00

Rent 2,00 2,00 2,000 2,000 2,00 2,00 2,00 2,00 2,000 2,000 2,00 2,000 24,000
0 0 0 0 0 0 0

15
Wages/ 49, 491, 491,0 491,0 491,0 491,0 491,0 491,0 491,0 491,0 491,0 491,0 58
Salaries 100 000 00 00 00 00 00 00 00 00 00 00 00

Telepho 2,0 1,20 1,500 2,000 1,500 500 800 1,000 2,000 1,000 500 2,000 16
ne 00 0 0

Electrici 8,0 2,50 2,000 2,000 2,100 1,900 1,000 2,000 2,000 1,500 1,400 2,000 22
ty 00 0 0

Advertis 5,0 5,000 10

ement 00 0

Insuranc 2,0 2,00 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24
e 00 0 0

Transpo 3,0 2,00 2,000 24,00 25,00 1,800 2,000 1,600 1,500 1,800 1,200 3,500 24
rtation 00 0 0 0 0

Loan 2,000 2,000 2,000 2,000 2,000 2,000 74

payment 0

Licenses 2,0 2,
00

Total 317 771, 88,80 79,60 99,30 98,50 117,0 104,7 90,70 99,10 93,20 83,30 1,
cash out ,60 000 0 0 0 0 00 00 0 0 0 0 ,9
flow 0

Net cash 162 157, 149,5 170,4 191,5 212,6 245,6 3,00, 375,7 436,6 511,4 558,1 3,
,40 800 00 00 00 00 00 900 00 00 00 00 ,5
0

16
5.5 PREPERATION OF PROFORMER INVOICE STATEMENTS AND BALANCE
SHEET
This shows profit or loss made by or business for a particular year.

ITEM AMOUNT (KSHS)

Services 1,500,000

Less purchases 50,500

Total goods profit 981,500

Less expense

Rent 24,000

Salaries & wages 589,200

Telephone 16,000

Electricity 22,700

Advertisement & promotion 10,000

Stationery 2,100

Insurance 2,000

Transportation 24,100

Loan payment 14,000

License 200

Total cost of expenses 728,400

Net profit before 253,100

Less tax 8% 20,248

Net profit after tax 232,852

17
Balance Sheet.

Profoma balance sheet for DANO ELECTRONICS ENTERPRISE SHOP,

AS AT 30TH DEC 2022

Machinery 7,000

Building 24,000

Furniture &fitting 6,000

Motor vehicle 350,000

Total fixed assets 387,000

CURRENT ASSETS

Cash at hand 10,000

Cash at bank 50,000

Debtors 25,000

Stock 200,000

Total current Assets 373,500

Total assets 658,500

CURRENT LIABILITIES

Creditors 100,000

Taxation 30,000

Total current liability 130,000

18
LONG TERM LIABILITIES.

Owner’s equity 200,000

Loan 200,000

Net profit 232,852

Total 632,852

5.6 CALCULATION OF BREAK-EVEN POINT.

5.6.1 Variable Cost.

ITEM AMOUNT IN CASH

Electricity 22,700

Telephone 16,300

Transport 24,100

Advertisement 10,000

Stationary 2,100

Total 75,200

a) Contribution margin = sale – total variable cost

1,482,000-75,200 = 1,406,800
b) Percentage contribution margin = contribution ×100
Sales
1,406,800×100
1,482,000
=94.93%

19
5.6.2 Fixed Cost for One Year.
ITEM AMOUNT (KSH)
Rent 24,000
License 2,000
Loan payment 14,000
Insurance 24,000
Salaries 49,100
Total 113,100.

Breaken level for sale.

Fixed cost× 100
Total contribution margin percentage
113,100×100
94.93
= 119,140.42.

5.7 DESIGNED FINANCING.

For an effective business, there should be enough finance that is needed to facilitate the
operation.
The designed financing for the proposed business will be as follows.
ITEM AMOUNT IN KSH
Preparation cost 345,000
Fixed assets 257,852
Total 602,852

5.8 PROPOSED CAPITALIZATION.

Personal savings 300,000
Loan from equity bank 100,000
Donation from family 46,354
Amount obtained from credit 100,000
Total 546,354

20
 BALANCE SHEET

BALANCE SHEET FOR

DANO ELECTRONICS ENTREPRISE SHOP,

AS AT 30TH DECEMBER 2022

ITEM AMOUNT

Machinery 200,000

Building 300,000

Furniture and fittings 70,000

Total mixed Asset `327,000

Current Asset 10,000

Cash at hand 50,000

Cash at Bank 25,000

Debtors’ ___________

Total 985,000 /=

21
 APPENDIX

MRI MAROWA SAFARICOM VIMO

BRIDGE HARDWARE SHOP ELECTRONICS
ENTERPRISE

MIGORI – SIRARE HIGHWAY TO

SIRARE

HOMABAY COOL
HARDWARE PLAZA

22