KENYA NATIONAL EXAMINATION COUNCIL

BUSINESS PLAN

NYS YATTA SCHOOL OF AGRICULTURE

BY DANCAN MUSEBE
 KENYA NATIONAL EXAMINATION COUNCIL

UNIT TITLE : BUSINESS PLAN

BUSINESS NAME : TRUVISION CYBER CAFE

COURSE NAME : DIPLOMA IN INFORMATION COMMUNICATION

TECHNOLOGY

SUBMITTED BY : DANCAN MUSEBE

INDEX NO :

SUPERVISOR NAME : ESTHER WAMBUI

SUBMITTED TO THE KENYA NATIONAL EXAMINATION COUNCIL FOR THE

PARTIAL FULFILLMENT OF DIPLOMA IN INFORMATION COMMUNICATION

TECHNOLOGY

AT

NATIONAL YOUTH SERVICE YATTA SCHOOL OF AGRICULTURE

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 DECLARATION
The project report is my original work and has not been presented to any college or examination body.

Name of student………………………………………………… Signature ………………

The project report is presented for examination with the approval of my supervisor.

Name of supervisor …………………………………………… signature………………

DEDICATION
I dedicate this business plan to my beloved Parents, Family, My teachers in my current studies and those in recent academic years
and The National Youth Service for its support in my studies.

ACKNOWLEDGEMENT
I wish to express my appreciation to all people who contributed to the successful completion of this business plan
especially my family members and friends, without them this business plan would have been impossible.
Special thanks to my supervisor Mrs. Esther Wambui provided guidance throughout the entire period of this business
plan.
My gratitude also goes to my classmates who were there to help whenever I was in need.
Above all my gratitude goes to almighty God for providing me with understanding, good health and providence.

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Contents
DECLARATION...........................................................................................................................................2
DEDICATION...............................................................................................................................................2
ACKNOWLEDGEMENT.............................................................................................................................2
CHAPTER ONE............................................................................................................................................4
1.0 Executive Summary.......................................................................................................................4
1.1 Business Description......................................................................................................................4
1.2 Market Plan...................................................................................................................................5
1.3 Organization and Management Plan.............................................................................................5
1.4 Operational/ Production Plan........................................................................................................5
1.5 Financial Plan.................................................................................................................................5
CHAPTER TWO...........................................................................................................................................5
2. 0 BUSINESS DESCRIPTION................................................................................................................5
2.1 Owners Background.......................................................................................................................5
2.2Business Name................................................................................................................................5
2.3 Form of ownership........................................................................................................................6
2.4 Business Location and Address......................................................................................................6
2.5Product and Services......................................................................................................................7
2.6 Justification....................................................................................................................................8
2.7 The Industry...................................................................................................................................9
2.8 The Entry and Growth Strategy.....................................................................................................9
CHAPTER THREE.......................................................................................................................................9
3.0 MARKETING PLAN..........................................................................................................................9
3.1Customers.......................................................................................................................................9
3.2 Market Share...............................................................................................................................10
3.3 Competition.................................................................................................................................10
3.4 Advertising and Promotion Strategy............................................................................................11
3.5 Pricing Strategy............................................................................................................................12
3.6 Sales Tactics.................................................................................................................................12
3.7 Distribution Strategy....................................................................................................................13
CHAPTER FOUR........................................................................................................................................13
4.1 Organizational Structure..............................................................................................................13

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 4.2 Manager......................................................................................................................................14
4.3 Personnel Numbers and Their Duties..........................................................................................15
4.5 Recruitment, Training and Promotion.........................................................................................16
4.6 Licenses Permits and by laws.......................................................................................................18
4.7 Support Services..........................................................................................................................18
CHAPTER FIVE.........................................................................................................................................19
5.1Operational/production plan........................................................................................................19
5.2 Operational facilities and Capacity..............................................................................................19
5.3 Production Service Strategy.........................................................................................................21
5.4 Production Process Operation.....................................................................................................22
5.5 Regulations Affecting Operation..................................................................................................23
CHAPTER SIX............................................................................................................................................23
6.0 Financial Plan...............................................................................................................................23
6.1 Pre-operational costs...................................................................................................................23
6.2 PROPOSED CAPITAL.....................................................................................................................24
6.3 PROFORMA CASH FLOW PROJECTION.........................................................................................24
6.4 PROFOMA INCOME STATEMENT (PROFIT AND LOSS ACCOUNT).................................................27
6.5 PROFORMA BALANCE SHEET FOR YEAR ENDED DEC 2018, 2019.................................................28
6.6 BREAK EVEN POINT......................................................................................................................29
6.7RATIOS..........................................................................................................................................30
6.8 DESIRED FINANCIAL OF TRUVISION CYBER CAFE.........................................................................30
6.9 PROPOSED CAPITALISATION FOR TRUVISION CYBER CAFE..........................................................30

CHAPTER ONE
1.0 Executive Summary
1.1 Business Description
TRUVISION CYBER CAFÉ is a sole proprietorship business that deals with typing, printing and packages.

The business is located at Kisumu-Eldoret road. The business is intended to meet its specified goal in all the time since the owner
would like to meet expectations over the business.

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1.2 Market Plan
Market is the coming together of potential buyers and sellers of goods and services to facilitate trading. The business aims at
creating customers and maintaining them for its growth and profit maximization. The targeted customers are individuals,
commercial and industrial. The business is located at the strategic point to make it possible to attract more customers.

1.3 Organization and Management Plan

This chapter contains details on the organization structure the management team with their respective duties and qualifications. It
also gives more information on how new staff will be recruited and be remunerated. The legal requirements of the business have
been discussed.

1.4 Operational/ Production Plan

Involves various equipment in order to run the business effectively... The business tends to offer its good and services and also
would incur pre-operational costs like water, electricity, telephone among others. Operation hours should be between 8.00am to
5pm and sales should be done by a responsible sales representative.

1.5 Financial Plan

The sole proprietor is to be the main sponsor of the business. The capital to be from personal saving, family, friends and from
bank loans. The total starting capital is1000000. The owner will raise 400 000, family members 400 000 and the bank loan
6000 000. This will also show working capital income statement balance sheet, break-even levels proposed capitalization and the
desired finances

CHAPTER TWO
2. 0 BUSINESS DESCRIPTION
The proposed business is an Internet and technological access. The business name is Truvision Cyber Café and is owned by
Dancan Musebe. He is a student at YATTA SCHOOL OF AGRICULTURE taking diploma in Information Communication
Technology. The prime purpose of this business is to provide communication services and entertainment through internet.
Truvision Cyber Café is the answer to an increase in public demand for

2.1 Owners Background

The business will be sponsored by the owner Dancan Musebe. He is 21 years old. He is a resident of Kakamega town, in
Kakamega County. He is a student at The Yatta School of Agriculture undertaking diploma in Information Communication
Technology. He possess skills in Computer Applications, Information System Management and Introduction to Computers
Operating Systems, Entrepreneurship and Communication Skills, Programming in different languages System Administration
and System Analysis as well as a Network Administration. These skills will help him in building the foundation of the business
and run it.

2.2Business Name
The business shall be called Truvision Cyber Café.

TRUVISION CYBER CAFÉ

P.O. BOX 1500,

ELDORET

TEL:0790906223

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EMAIL: truvisioncyber7@gmail.com

2.3 Form of ownership

The business ownership will be sole proprietorship and will be financed by the owner from his savings. He will get the rest of the
capital as Short-term Loans from bank and from The Youth Development Fund. The total contribution for the business will be
Ksh. 1,000,000 of which the owner will contribute Ksh. 400,000 that is 40% from personal savings, Ksh. 5000,000 which is 50%
will be from Short Term Loan and the rest 10% which is Ksh. 100,000 will be from friends and relatives.

Figure 1 Percentage contribution

Source of finance Amount(KES) Percentage (%)

Personal savings 400,000 40
Family members 100,000 10
bank 500,000 50
total 1,000,000 100

2.4 Business Location and Address

Truvision Cyber Cafe will be located at Uasin Gishu County at Kisumu road 10kilometers from Eldoret town opposite Wareng
High School and next to Eldoret National Polytechnic and Catholic University of Eldoret. The building where the business will
be located will be leased. The business will start its operations on January 2022. The business will operate under sole
proprietorship.

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 Figure 2 Map Directions to Truvision Cyber Café

Kisumu - Eldoret
HIGHWAY

ELDORET TEXTILE

INDUSTRY

ELDORET NATIONAL
POLYTECHNIC G

Fig. 2 Map Direction WHERE TRUVISION

Vision
To provide fast, quality and effective services to our esteemed customers

Mission
Truvision Cyber Café seeks to be an ICT provider for socio-economic enrichment of our society. We strive to exceed our clients’
expectations with friendly services, fast and effective ICT solutions.

2.5Product and Services

The firms in the industry are of medium sizes as majority of them are privately sponsored. Most of the service providers use
modern technologies though some of them are not well known ledged with the constant changing trends in the information
technology world. Majority of the firms have got twelve to twenty employees depending on how large and equipped the firm.

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Depending on the demand, casual workers are also sort for when the demand is high. Its main services will be the provision of
full access to email; WWW; FTP; Usenet; KNEC EXAMINATION (registration of students: school and college selection;
printing of result slips) registration and printing of KRA pins; printing of pay slips (GHRIS and TSC) and other internet
applications. Truvision Cyber Cafe will be fifth among top cyber Eldoret town. It will invest in high speed computers to provide
its customers with a fast and efficient connection to the internet. The computers will be reliable and fun to work with Industry
Trends and Prospects. The industry is growing industry since the information needs of a country are constantly growing. The
technologies used in the industry are constantly being developed. The technology used yesterday is different from the one used
today. The state of art, equipment and expertise used in the world of technology is being developed and improved day in day out.
For one to succeed in this business he must be dynamic and at par with the ever changing technologies. This being an emerging
industry within Eldoret town it thus requires modern and equipped technology in order to beat the small firms that are now in
existence. Truvision Cyber Cafe will differentiate itself from the strictly cyber cafes in Eldoret by providing its customers with
internet and computing services. Truvision Cyber Cafe will have a total number of 12 staffs for its daily operation this number
will be able to meet the thronging number of customers. Information industry returns a profit of 16% of the general market
economy, 33% of profit return to the business. This will be possible due to: Large investment in the business with a total amount
of Kshs. 1,000,000 which allow Truvision Cyber Cafe to successfully open and maintain operations through the year one.
Proximity to the downtown business community. High visibility Truvision Cyber Cafe will continue to upgrade and modify the
systems to stay current with communication technology. One of the main attractions associated with internet cafes is the state of
the art equipment available for use. Not everyone has a laptop or a tablet or iPad.

The Services
Truvision Cyber Cafe will provide full access to email, WWW, FTP, Usenet and other internet applications such as Telnet and
Gopher, Printing, Scanning and Introductory courses to the internet. Truvision Cyber Cafe will also provide customers with
unique and innovative environment to enjoy great cyber services. It will provide its customers with full access to internet and
common computer software and hardware. Access to external POP3 email accounts Truvision Cyber Cafe will be a hub for
socialization and entertainment Customer can sign up for Truvision Cyber Cafe email account. This account will be managed by
Truvision Cyber Cafe server and accessible from computer systems outside Truvision Cyber Cafe network. Offer online services
such as Teleconferencing, chat rooms and Videoconferencing. Access to Netscape or Internet Explorer browser. Access to laser
and color printing as well as scanning and photocopying services Access to popular software applications like Adobe Photoshop
and Microsoft Office.

It will provide its customers with access to introductory internet and email classes. These classes will be held in the afternoon and
late in evening. By providing these classes, Truvision Cyber Cafe will build a client base familiar with its services. The
computers, internet access, and classes wouldn’t mean half as much if taken out of the environment Truvision Cyber Cafe will
provide.

Provision of WI-FI services to the clients will also be able to access the internet through their smart phone, laptops, tablets and i-
pads at a cost. This will ensure flexibility and it will also boost customer confidentiality. Faster net and comfortable environment
will provide Truvision Cyber Cafe customers with a home away from home. A place to enjoy the benefit of computing in a
comfortable and well-kept environment. The Truvision Cyber Cafe compound is spacious to provide parking area where
customers can park their vehicles.

2.6 Justification
Eldoret town is the core of most activities in the district considering the fact that it’s the headquarters of UasinGishu County. Has
large number of business enterprises, hospitals, and institutions, investors in businesses and residents who would be potential
clients to the Truvision Cyber Café. Good transport network makes it easy for customers to access the business  Political
stability makes it the running of the business smooth and investment in the region and this makes the business gain profit. There
are quality personnel who are skilled and experienced thus providing quality services to the customers. There is enough security
in the region this will ensure smooth running of the business.

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2.7 The Industry
The business will be registered in the Information and telecommunications industry under the Ministry of information. The
industry has increased the government’s employment share as it is the largest in the country. In Eldoret town, the information
industry covers around 75% and it’s an economy lifter. There are three cyber cafes in the town and Truvision Cyber Café will be
the forth though there are other Information based firms in the town. This includes the radio stations, newspaper houses and
television houses as well as magazine producers.

2.8 The Entry and Growth Strategy

As the popularity of the internet continues to grow at an exponential rate, easy and affordable access is quickly becoming a
necessity bearing in mind the time factor therefore speed is paramount. Truvision Cyber Cafe provides communities with the
ability to access the internet and share internet experience in a comfortable environment. People of all ages and backgrounds will
come to enjoy the unique, upscale, educational and innovative environment that Truvision Cyber Cafe provides. Truvision Cyber
Cafe will appeal to individuals of all ages and backgrounds. The introduction of internet classes and the helpful staff that
Truvision Cyber Cafe provides will appeal to the audience that does not associate themselves with the computer age. This
educational aspect will attract younger and elderly members of the community who are rapidly gaining interest in the unique
resources that online communications have to offer. Provision of WI-FI services to the clients will also be able to access the
internet through their smart phone, laptops, tablets and i-pads at a cost will encourage more customers to visit the café. Truvision
Cyber Cafe will also carry out computer and Internet sensitization by educating the community through Mobile-Computer-Room
set in a van. Truvision Cyber Cafe will as well provide mobile-computing services that will penetrate from town, schools and
villages surrounding Eldoret town. Truvision Cyber Cafe objectives for the first two years of operation include:

 The creation of unique, upscale, innovative environment that will differentiate Truvision Cyber Cafe from local
cybercafés
 Educating the community on what the internet has to offer
 The formation of an environment that will bring people with diverse interests and backgrounds together in a common
forum
 Affordable access to the resources of the internet and other online services.
 As Truvision Cyber Cafe grows, more communications systems will be added. The possibility of additional units has
been accounted for in the current plan.
 As the demand for internet connectivity increases, along with the increase in competition, Truvision Cyber Cafe will
continue to add new services and keep abreast with the current and ever changing technological trends so as to keep
her customers informed and give them a reason to come coming back for more.

CHAPTER THREE
3.0 MARKETING PLAN
Purpose Truvision Cyber Cafe is faced with the exciting opportunity of being the first-mover in the Eldoret town Cyber Cafes.
The consistent popularity of internet combined with the growing interest in the Internet, has proven to be a winning concept in
other markets and will produce the same results for Truvision Cyber Cafe The marketing plan will enable the proprietor to
understand the:

1. The nature of his potential customers

2. Help in determining the pricing strategy
3. Help in understanding the sales tactics, advertising and promotion including the distribution strategy.  Help him gain
the knowledge about the market share.

3.1Customers
The targeted customers to Truvision Cyber Cafe will be people who want a guided tour on their first spin around the internet and
to experience users’ eagerness to indulge their passion for computer in social setting. The potential customers are:- Teachers and
government employees These are the TSC and GHRIS users where they will mostly come for registration for them to be able to
access and use services on these sites. They will be coming mostly at the end of the month to log into the site and print out their
pay slips. They will be paying in cash or by Mpesa.

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Institutions
The second category of Truvision Cyber Cafe will be institutions i.e. secondary and primary schools. This will be between
February and March when they will be doing candidates registration for KCPE and KCSE. The café will be able to provide the
services to them at a subsidized rate as agreed upon with the institution. Form four leavers and university and college students.
After the release of the national examinations the form four leavers will be coming to check their results and collect their result
slips and also to fill in university application forms. They will be paying cash or by Mpesa. The college and university students
will also come to apply for KRA pins and also apply for HELB loans and bursaries. The café will offer these services to them and
they will be paying in cash or by Mpesa. Truvision Cyber Cafe will be a magnet for local and travelling professionals who desire
to work or check their email messages in a friendly atmosphere. These professionals will either use Truvision Cyber Cafe PCs or
plug their notebooks, laptops into internet connections. Truvision Cyber Café’s target market covers a wide range of ages, from
members of generation X who grew up surrounded by computers, to Baby Boomers who have come to the realization that people
today cannot afford to ignore computers. The location of the business will provide the adjacent universities and colleges; business
people; administration police from the nearby police post and staffs from the County office as well as staffs from Eldoret District
Hospital with convenient access to internet services.

3.2 Market Share

The market share in this regard will be summarized by comparing the opportunity with the three cyber cafes already established.
It will secure a high turn on customers. The population target in the area of the business is approximately 12,000 equivalent to
3600 on the pie chart therefore a fraction of the population to be served by Truvision Cyber Cafe will be:- 27/120 x 360 = 810
Therefore in percentage 81/360 x 100 = 22.50% Market share 22.5% out of four cyber cafes in the area. The market share for my
three competitor s will be: - Kings Center 34% Wazito Cyber Café 26% Big Mike Cyber café 17.5%

A PIE CHART SHOWING MARKET SHARE

Wazito Cyber Café Big Mike Cyber Café

10% 9%

Kings Centre Café

23%
Truvision Cyber
Café
59%

3.3 Competition
In this area high competition is expected because of existing cyber cafes around. With the insurgence of Truvision Cyber Cafe is
highly advantaged because of high quality facilities, current technology and quality services it will offer through investment and
affordable pricing.

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Analysis of Strength and Weakness.

BUSINESS NAME STRENGTH WEAKENESS

Kings centre  Well established  Overcrowded
 Qualified staff  Poor location
 Many facilities  Poor morale on staff
 Proper funding
Wazito cyber cafe  Proper facilities  Poor facilities
 Qualified staff  Poor moral on staff
 Well established  overcrowded
 Good location
Truvision Cyber Cafe  good facilities  poor location
 qualified staff  not well established
 good morale of staff  poor funding
 variety of services
Big mike cyber café  qualified staff  Few staff
 better facilities  No variety services
 well established  Poor site

COMPETITION ANALYSIS.

BUSINESS LOCATION PRICING PERSONNEL EQUIP ADVERT TOTAL

NAME
Kings 6 9 4 7 1 27
centre
Wazito 3 7 3 6 1 20
cyber café
Big mike 7 3 6 6 3 25
cyber café
Truvision 3 8 7 7 5 30
cyber cafe

Highest score 50 and particular to score 10 and at least score 1 As time goes by having strength and weakness SWAT analysis
thus it will stand a very high chance of improving and having a large market share. Truvision Cyber Cafe is advantaged in that
the proprietor discovered her competitors’ weakness and he is planning to capitalize. It came to her realization that, their
customers feel that they pay exorbitantly for services which is true to some extend since the cafes have taken advantage of
monopoly. The proprietor’s plan is to provide quality services at affordable prices but make profit at the same time. It also has all
factors required for emergency of substance of a business venture.

3.4 Advertising and Promotion Strategy

The business will be advertised mainly through the local dailies and occasionally through national newspapers and local radio
stations. The management also intends to publish

Journals, calendars, diaries, T-shirts and others and distribute them to the potential customers to ensure that the business is well
known and familiar to the locals. The firm will also use signboards and bill boards at designated place especially road junctions
outside and within the district. These methods of advertisement are meant to portray an image of quality, efficiency, and high
effective standards of workmanship in all areas .The advertisements will appear weekly in local dailies and monthly in the
newspapers. The business will also open a Website where all the necessary information concerning the business and its services
will be provided to market the business. The Website will also enable communication with the customers as well as welcome
their views on the improvement of the business and its services. A total of about Kshs.400 per advertisement will be spent.
Through the correspondence that will be received through the emails and in the suggestion box and the customer turn up the
proprietor will be able to vet the efficiency of the advertisement

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Promotion
The business will use various promotion methods to market its activities and services. The customers will be given business
manuals on how to carry out internet services and accessibility if they so wish. The business will also design business cards that
will be issued to the potential customers through our sales promotion agents. This whole process will cost around Kshs.2000 and
it will be carried out four times in a year.

3.5 Pricing Strategy

At the initial stage a market research and survey will be carried out to establish the competitors pricing and the modes used in
staging their prices. Through the weaknesses and shortcomings in their pricing strategy we will be in a position to establish our
prices. This will base on:-

a) Competitors’ price which forms most of the important pricing policy. From the competitors, the enterprise is to have direction
on how to price and retain customers

b) Consumer price in regard to the willingness and ability to obtain services by the potential customers. This is going to play a
very important role in the pricing policy. The question of at how much are customers willing and able to obtain services will to a
great extend determine the policy. This is because it will be inadvisable to price more than they are able and willing to buy.

c) Stocking and overheads. The cost of material and the overheads will be the hall-mark of pricing upon which their factors will
be added. As much as he aspires for good workmanship and quality at the end, he does also desire to scale down costs by
carrying out various management techniques such as work study aimed at reducing costs while at the same time staying effective
and efficient by offering quality services.

d) Demand and supply. Any commercial venture is related to the forces of demand and supply. The business is no exception in
this regard. If the demand proves to be higher, then he will be forced to supply more to meet the demand and the opposite is true.
The price will however take care of customers’ price factor and demand/supply factor.

The enterprise will extend credit but only to number of customers whose credit reliability is unquestionable such as
government bodies, schools, agricultural firms. In case of an increase in fee, management would inform client prior to that so as
to prepare them psychologically

Price list

Item Price list

Internet browsing Ksh 1 @ min
Type setting Ksh 20 @ page
Printing Ksh 10 @ page
Photocopy Ksh 2 per page
Spiral binding Ksh 30
Tape binding Ksh 20
Scanning Ksh 30 @ page
Graphic design Ksh 500
Computer hands on skills tutorial 1000/- @ package
KNEC registration per student 300/-
HELB loan application 300/-
KRA pin 250/-
Pay slip application(GHRIS & TSC) 250/-

3.6 Sales Tactics

Due to high competition Truvision Cyber Cafe will allow payments for services in installment according to agreement with the
present. The firm will reward those audit staff who will work efficiently with accuracy and speed. The management will
appreciate those clients who will be bringing along with themselves their several friends through offering those discounts and

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giving incentives thus encouraging them to be permanent customers. The management shall encourage cash payment so as to
enable plan and follow agreement. Truvision cyber café realizes that there is need to increase sales in the business time to time.
Following the major tactics that will help to increase the sales in the business as well as attracting customers to buy and use more
products and services that are offered in the business.

 Customers who buy and acquire reasonable amount and quality of products and services will be appreciated by
discounts.
 Customers are awarded free products on purchase of products offered in the business so that they can refer more
customers to the business as well as come back again for more products and services.
 Customers will be offered mobile services to ensure that those who do not find time to avail themselves to premises are
also included in the sales plan of the business.

3.7 Distribution Strategy

The services will be offered from door to door i.e. delivery services to customer in need as well as in our business premises.
Impromptu orders via the e-mail will be responded to. The proposed business distribution channel shall be within its premises.
The customers who will be in need of services delivered at their doors will place their requests and the services will be delivered
to them. In our delivery we will use motorbikes but as time goes by we will acquire a van for the same purpose. There are a
number of problems likely to arise from this since there are some regions which are inaccessible due to poor roads, breakdown of
the motorbikes and this will lead to losses. This will be caterer for through frequent servicing of the motorbikes, service the roads
where necessary and employing some operatives who will ensure safety.

CHAPTER FOUR
4.1 Organizational Structure
Objectives

o To manage and plan for quality services

o To achieve maximum profit on investment.

Truvision Cyber Cafe is owned and operated by Dancan Musebe. The company, being small in nature, requires a simple
organizational structure. Implementation of this organizational form calls for the owner, to make all the major management
decisions in addition to monitoring all other business activities

Organization chart
The purposes of the chart are:-

a) Define the accountability system of the organization

b) Inform individual of their status within the management hierarchy. c) Facilitate organization design.
d) Enable the preparation of management succession programs
e) Indicates line of communication
f) Show each manager span of control

The following is an organization chart for Truvision Cyber Café

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 Manager

Technician

Part Part Part Part Part Part

Time 1 Time 2 Time 3 Time 4 Time 5 Time 6

Key Management Personnel For smooth and smart running of the business there is need to have a planned management.
Truvision Cyber Cafe has a plan to establish a strong management team of qualified personnel in order to achieve its set goals
and meet its mission in all dimensions. The cafe will be made up of key personnel and subordinate who would offer the auxiliary
duties. The director will be regarded in the top management position though he will engage in service provision until when the
café would have grown considerably.

The staff will consist of six part time employees working thirty hour a week at Ksh. 150 per hour. In addition, one full time
technician (who is more technologically oriented to handle minor terminal repairs and inquiries) will be employed to work forty
hours a week at Ksh. 200 per hour. This simple structure provides a great deal of flexibility and allows communication to
disperse quickly and directly.

Because of these characteristics there are a few coordination problems seen at Truvision Cyber Cafe that are common within
larger organizational chains. This strategy will enable Truvision Cyber Cafe to react quickly to changes in the market.

4.2 Manager
The café manager would be the owner. By that time he will have acquired a Diploma in Business administration with the many
other skills he poses thus putting him in an advantaged position in management and administration. Will be the overall manager
of the company since Truvision Cyber Cafe is a small company.

Duties and Responsibilities

 Ensure smooth administration of the café in hand with the Technician.

 He would be the figurehead role model in the café and the outer society
 Would oversee recruitment of personnel to work in any department in the cafe
 Making all of the major management decisions
 Would ensure that personnel are properly and promptly paid and also oversee the personnel welfare up held.
 Monitor all other business activities
 He will be in charge of finance and coordination of all activities of the business.
 Making of policies and planning on the business opportunities
 Responsible in influencing harmony among all the employees in this business
 Coordination of the business activities such as advertisement, promotion, stock taking.  Allocate duties and motivate
employees using several performance appraisal methods to create a positive attitude towards their jobs.
 To ensure that resources are available to meet the company objectives.

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  Define methods and facilities to be used.
 Prepare budgets and estimates for the enterprise.

4.3 Personnel Numbers and Their Duties

Technician
The technician will be charged with the general responsibility of handling computer machines. He will be more technologically
oriented to handle computer repairs, maintenance and inquiries. He or She must be At least being holder of diploma in
Information Technology from a recognized institution with a credit. Have certificate in Network management and reprographic
management. Have an experience of at least 2 years from a busy organization.

Duties and Responsibilities

 Take charge of management responsibilities whenever the manager isn’t present
 Manages the network and internet applications
 Responsible for keeping system up to date with current and new technology
 He is the head the training courses offered by Truvision Cyber Cafe
 Will be in charge of system and data security by employing security techniques that will keep the system and data safe
from internet crimes
 Will be handling repairs and operations of the computer and other external devices like printers, scanner.
 He is the one to justify the installation and uninstallation of programs.

Other Personnel
The other personnel will include: - six part time workers, security officers, cleaners, office assistant and any other officer for a
given job.

Six Part Time Workers

These employees will be working for 30 hours a week with three different shifts a day. This will enable them to carry out their
own activities at their free time or have part time studies. Here is how the shift will be done;

1. First shift starts from 6.00 am to 11.00 am

2. Second shift starts from 11.00 am to 4.00 pm

3. Third shift starts from 4. 00 pm to 9.00 pm

For every shift there will be two part time employees and it will consist of five hours. The two part time workers will be having
their area of specialization for each of the shifts in cyber café. They must be a certificate holder in Information Technology or
equivalent, Understands and can work well with basic applications packages, Can operate stationery machines like printer and
scanner

Duties and Responsibilities of the part time employees.

 Work hand in hand with the technician
 Attending to customers and offering assistance to them
 Handle stationery works like printing, scanning, lamination
 Receive payments on services offered by Truvision Cyber Cafe to its customer, for he will be the one sitting at the
counter which is will be located just at the entrance and other refreshment orders will be taken in form of a receipt.

SECURITY OFFICERS.

Should at least have basic education (KCPE CERTIFICATE), be flexible and able to work in changing environment, good public
relations, be at least 25 years of age,be honesty and ready to work under minimal supervision.

Duties
i. Ensure proper security of both physical and documentary items/ assets and physical protection of assets.

15
 ii. Take details of visitors who enter and leave the firm.
iii. Report any security matter to the management and offer alternative solution.
iv. Do any other duties assigned by the management.

Office assistant
Should be physically fit, Should have at least O – level education, Responsibility a must. Be at least 20 years of age, Should
have unquestionable honesty and secrecy.

Duties
i. Assist in clerical duties in the office.
ii. Make errands within and outside the office.
iii. Assist any other duties assigned by the management.
iv. Keep stock records in organization and maintain the inventory.

Cleaners.

Must be age between 20-30 years. Capable of working under least supervision. Physically fit and mentally fit. Hardworking and
ready to beat deadlines. Duties  Ensure highest order of cleanliness in Truvision Cyber Cafe audit premises.  Work on general
hygiene of the business components e.g. shaping flower and weeding.  Ensure proper hygiene in auditing environment. 
Assist in any other duty especially for those who have gone on leave

Any other officer

Truvision Cyber Cafe firm will be engaging different officers for short term duties especially seasonal on any other project
meant for investment of the cafe. This will depend on demand. This will be done by the management advising the director as per
demand.

Secretary
The firm would employ a qualified secretary to oversee the cafes correspondence and preparation of minutes taken in meetings
for typing office organizations. Must at least having single and group certificate stage III, Prior experience not mandatory? Good
tract as per secrecy and honesty. Should be between 20-30 years of age. Proven good public relation. Good organizational skills.

Duties
 Ensure proper office arrangement all the time.
 Ensure all correspondence are adequately managed.
 Ensure al typing work is done as scheduled.
 Ensure incoming and outgoing mails is adequately handled
 Do any other duties assigned.

4.5 Recruitment, Training and Promotion

Training
Truvision Cyber Cafe owner plans to have his employees trained on their specific areas of work. The training shall be conducted
by allowing at least four of the workers attending educational seminars in a period of one year, as well as user education. Each
worker attending a seminar will be fully sponsored by Truvision Cyber Café.

Promotions
Promotion is very important in any business entity as it improves the staff performance and esteem. Promotions will be based on
the workers academic qualifications, performance. They will also be awarded motivational certificates of performance at the end
of each year. This will encourage them to work even more. The promotions in the farm will also go hand in hand with the salary
of that hierarchy. The management will have to interview those to be appraised. Truvision Cyber Cafe will be keen on evaluating
the employees to identify which staff can contribute towards achieving the company objectives. Selection of right person to
implement the strategies in place and carried out through careful study of what is in the curriculum vitae and application forms
and contacting referees .after one is selected proper orientation is done to abide the rules.

16
Recruitment
Recruitment is the process of obtaining applicants for a job by choosing the applicant who will best fill a position. The major
issue is deciding on the characteristics or qualities of the most suitable person. The business will recruit when there is a vacancy
due to departure of a worker, when the work load expands or when the business expands and opens other branches. After
determining the qualifications and experience required for the anticipated worker then the business will carry out advertisement.

 Job Identification. This will define the job description and the position that will be vacant. It will give the
responsibilities, duties and requirements and the reporting line in the organization for efficiency.
 Advertisements .The positions that will be required or fall vacant will be advertised through different advertising
media depending on the positions. The advertising will also include internet, the newspaper and through the public
board within the district.
 Short Listing. The selected candidates will be advertised in the newspaper for top positions and the Managers will also
contact them through their telephones. The short listed candidates of all other positions will be pinned on the public
notice board within the district.
 Interviewing. The interviews will be carried out at the business official offices. The interviews will be carried on by
the manager.
 Employment Test. The qualified ones will be given employment test to improve their skills. The tests will be in writing
and practical that is relative to the kind of work they want.
 Hiring of Employees .The technician will be hired on a contract basis subject to renewal as will have been agreed
between the manger and the staff. The contract will be in writing and signed by both the manager and the staff. The part
time employees will be hired on a daily basis.

4.5 Remuneration and incentives

Evaluation of the employees will most depend on their qualification as well as their performance. Performance of an employee is
critical to evaluate because when this is done it will help motivate the workers. All the workers’ wages will be made per hour.
The part time workers each will be working for thirty hours a week at a rate of Ksh. 150 per hour. The technician will be working
for forty hours a week at a rate of Ksh. 200 per hour. All the workers will be paid at the end of the month, but arrangements could
be made with the part time workers to be paid by the end of the week. For the weekly paid part time workers will be remunerated
using cash but for the all end-month paid workers will be paid through their personal bank accounts.

Evaluation
The manager will evaluate his workers according to the performance, for example, punctuality, good general work performance,
good relationship with customers as well as with the colleagues

Remuneration
At the end of the month the workers of will be remunerated according to the positions held and terms of their contracts. They
will also be given allowance that include house and medical allowance. By paying employees on time and giving them all their
salary, they will be committed, motivated and work more diligently. As the firm will be growing and earning more profits so will
the employee’s salary be increased in accordance to the laid down policy.

REMUNERATION AND ALLOWANCES TABLE

STATUS NO SALARY HOUSE MEDICAL TRAVEL TOTAL TOTAL

PER
PERSON
Manager 1 12000 1750 1450 1300 16500 16500
Technician 1 10000 1750 1450 1300 14500 14500
Part time 5 14000 2000 1200 800 18000 90000
café workers
Part time 1 12000 2000 1400 600 16000 16000
café workers
Secretary 1 4200 800 700 400 6100 6100
Security 2 4000 400 400 200 5000 10000
officer
Office 1 3200 500 500 300 4500 3100

17
assistant
Cleaners 1 3400 500 300 300 4500 2500
Totals 13 62800 9700 7400 5200 85100 161600

Total monthly requirement will be kshs.66, 200 on salaries and allowances. All this will depend with client registration. The
above will be met if the business is operating at maximum.

Incentives
This is an action done as a form of appreciation and a boost for work well done or in order to encourage the employees to
maximize their output. It does not necessarily have to be in monetary form. Incentives will be given in the following forms:-

1. Taking the staff for a trip at the end of each year to places like Mombasa.
2. Treating the staff to get together parties at the end of a financial year to appreciate each other and celebrate our work.
3. Issuing of certificates to the staff that have shown outstanding and exemplary performance.
4. Rewarding the departments and the employees who have produced the best and outstanding results.
5. The employee will also benefit from taking one day off-duty every week even though this wouldn’t be payable.

4.6 Licenses Permits and by laws

These are a mandatory for their acquisition and will be acquired as

Trade license
This is essential as per trade license at (cap 492) issued by trade and industry office from Eldoret trade and industry
office.

Business permit
This will be issued by Eldoret town council with fixed charge of: Registration form Kshs. 1000 (non-refundable
amount fee Kshs. 2,500)

Labor Permit
The labor permit will be collected from Eldoret labor office at an estimated cost of Kshs.3,000/=.

Ministry Certification
This is a certificate which would be obtained from the ministry of information and communication on payment of some
fee. It is a requirement that every business must be certified by the ministry.

Certificate of Ownership
This will be obtained from the registrar of business located in Eldoret town. The business will adhere to rules and regulations of
the ministry included in the payment of N.S.S.F dues, NHIF and UNION belonging of workers. The business will source its
service from professionals in the society to help its smooth running.

4.7 Support Services

Banking Services
The enterprise money will be safe guarded by the bank because the owner will be taking the finances for safe keeping at weekly
intervals. The company will bank with Cooperative Bank, Equity Bank and Visa Bank. The business will operate with two
accounts.

i. A current account through which the firms’ bills will be paid by issuing cheques;
ii. A business savings account through which is very appropriate for the business venture since it allows one to save a
little more without making unnecessary withdrawals. A bank has a policy of accepting share certificates as security for
loans.

Postal and telephone Services.

18
 The owner will ensure that these services are provided to the enterprise to communicate with the potential customers and
suppliers where needs arise. Postal services will help in receiving and sending of letters from clients and other applicants of the
telephone enterprise will be very importantly because the owner of the firm will get in contact with the supplier and ask them for
supplies and also get some important information pertaining the production and supplies.

Telephone Services
Telecom Kenya limited will provide telecommunication services internet option and landline telephone services. The services
will be paid annually.

Water Services
The company will supplied by Kenya Water Company Services.

Electricity Services
Kenya power and lighting company will connect electricity to the business premises at a cost of Ksh. 3, 000 and will continue
rendering the required services.

Lawyer
The enterprise will require a legal advisor to assist on giving legal advice and preparing the legal records. The lawyer will act
and speak on behalf of the venture in case of any misunderstanding between the business and other industries and individuals
within the region.

Auditors
The venture will require auditors who will verify all records pertaining finances to ensure that they are accurately and
appropriately distributed without errors. They will also ensure that there are no errors like products being under charged since
they may cause some issues in the venture.

CHAPTER FIVE
5.1Operational/production plan
This gives the description of running the business. It displays strategies relevant to facilitate the smooth running of the
enterprise. For a superb and effective proving performance in conjunction with eventual growth of my profound business, there is
a need for a profound operational plan to be put into accountability considerations. Besides financial resources, Truvision Cyber
Café needs sufficient, effective and adequate facilities and equipment to propagate its function operationally.

5.2 Operational facilities and Capacity

Truvision Cyber Café as a new business requires new facilities and equipment beforehand for the commencement of the business
operations. The facilities are fixed assets and current assets. The eloquent purported business will acquire a variety of tools and
equipment of high quality from recognized dealers. The proposed business intents to acquire the following facilities for its
operation:

 Building; there will be need to lease a building where the business operations are going to be carried out from as it
prepares to build its own at a cost of Ksh100, 000/= per year and it will be done a month before the business can open
its door. This should allow for the installation of the necessary facilities and equipment, setup and configuration.
 The firm will need telephone for communication purposes this will also be installed when the network connections
will be installed.
 There will be need for electricity for power supply so as to run the firm.

The list in the table below is an estimate of the production facilities, which will be required to launch the business into
operational plan.

Table showing analysis of the firm’s machines, equipment and their costs

Item Quantity Cost per item (Ksh.) Total cost(Ksh.)

Computers 11 15000 16500

19
Printers 2 16000 32000
Scanner 1 5000 5000
Laminating machines 1 11000 11000
Binding machines 2 9000 18000
Network switch 1 10000 10000
Fax machine 1 12000 12000
Software 30000 30000
Espresso machine 1 25000 25000
Automatic expresso grinder 1 7000 7000
Telephones 2 7400 14800
Computer desks 11 2000 22000
Computer chairs 11 1700 18700
Information display counter 1 3300 3300
Computer repair machines 1 5000 5000
Drinking eating counter 2 5000 10000
Stools 12 600 7200
Photocopier 1 36000 36000
Total 431300

Repairs and Maintenance

It is important to note that the above mentioned requirements need repair and maintenance. The proposed business shall have
routine maintenance in its machinery and equipment. The computers and the printers will be repaired and maintained by the
organization from which they were leased. This will be done before the equipment breaks down so as to avoid unnecessary costs.

Business Layout
Below is the layout of the firm in the leased premises at a cost of Ksh100,000/- per year though in future when the organization
will have built its own premises they will have bigger premises with enough space and which will allow future expansion as the
firm will be growing and expanding.

20
 Games
Computer Hall1 Room

computer Hall 2 Information/

reception
desk

Parking Area
Toilets

Other Fixed Assets

Other fixed assets value
Van 189000
Dstv receiver dish 12000
Two 21 inch plasma TV 72000
21 theatre benches 210000
3 CCTV cameras 56000
2 Fans 50000
total 540000

These fixed assets are already available. These assets will be leased from Ace computers limited Eldoret town. The van will be
mostly used in transportation of supplies and stocks from the suppliers to the business. It will be driven by the owner of the
suppliers to the business. It will be driven by the owner of the business to cost-cut expenses of hiring a driver and transportation
means.

5.3 Production Service Strategy

Monthly Material Requirement
item quantity cost

21
Photocopying papers 100 reams 50000

stationery 27700

TOTAL 76700

Monthly Labor Requirement

Post No. Per head Amount
Technician 1 29000 29000
Part time workers 6 18,000 108000
Secretary 1 6100 6100
Security officer 2 5000 10000
Office assistant 1 4500 4500
Cleaner 1 4500 4500
Total 161600

Monthly Production Cost

DIRECT COST KSHS.
Cost of raw materials 76700
Labor requirements 161600
TOTAL 238300
INDIRECT COST/OVERHEAD
Electricity bill 4000
Telephones services 2000
Postage services 700
Advertising 5000
Transport cost 9950
Internet services provider 46200
Stock requirement 76700
Trading licence 4500
Water bill 350
TOTAL 149400
GRANT TOTAL 387700

Total production cost = direct + indirect cost.

=238,300/- + 149,400/-

= 387,700/-

5.4 Production Process Operation

Since Truvision Cyber Café is a service provider business, its production goals to achieve is to offer the best services to its
customer at an affordable and conducive environment. The production process of Truvision Cyber Café will be in the following
sequence.

Step 1 Giving Customer warm welcome.Truvision Cyber Café employees will be charged with responsibility of welcoming the
customers and give them direction according to areas they need service either browsing the internet, photocopying, scanning,
laminating, typesetting, and faxing for refreshment or entertainment.

Step 2 Attending to the customer .The customer is then attended by the respective Truvision Cyber Café and the service required
card with computer number given for computer usage

22
 Stage 3 Payments. After the customer is done and satisfied with the services he/she required will make payment at the cash
office which is integrated with reception desk. After receiving the receipt and payment the receipt will be rubber stamped
“PAID” and kept at the cash office for auditing purposes.

5.5 Regulations Affecting Operation

The owner will register the enterprise to the government and to ensure that its operations are well protected and certify the
business. The business will always follow and adopt acts and policies laid down by the government and other legal agencies for
the continuity of the business in a conducive and free environment.

License
The owner of the business will acquire a trading license before the business begins its operations, this will ensure smooth running
of the firm because it will be legally known and registered. The trading license will indicate either in months or years in which
the business will be legally recognized. And therefore the owner will always be renewing it after the duration has come to an end.
The amount of attaining the license will be Ksh. 4500 per month.

Health Act
Since the business will be dealing with consumable items and its high chances to be on high demand and many people visiting on
daily basis, the owner will ensure that health issues are attained and considered. For example, the owner will ensure that all
workers are full attire like putting on white aprons and the business shirts, good drainage and sanitary.

Business permit. This will be issued by Eldoret town council with fixed charge of: Registration form Kshs. 1000 (non-
refundable amount fee Kshs. 2,500)

Labour permit: The labour permit will be collected from Eldoret labor office at an estimated cost of Kshs. 3,000/=.

Ministry certification: This is a certificate which would be obtained from the ministry of Information and Communication
on payment of some fee. It is a requirement that every business of finance nature must be certified by the ministry.

Certificate of ownership: This will be obtained from the registrar of business located in Eldoret town. The business will adhere
to rules and regulations of the ministry included in the payment of N.S.S.F dues, NHIF and UNION belonging of workers. The
business will source its service from professionals in the society to help its smooth running.

The support service will include consultancy which is a major banking, postal, insurance, and legal and communication.

CHAPTER SIX

6.0 Financial Plan

The financial plan will include pre-operational cost, estimated working capitals, pre-preparation of cash project and other
financial aspects.

6.1 Pre-operational costs

These are costs incurred in the business before a business finally starts;

ITEM COST

Sign post 2000

License and permits 1500

23
 Electricity 2000

Insurance 1000

Tools 5000

Total 11500

6.2 PROPOSED CAPITAL

Source Amount Percentage
Owner 500,000 50
Loan 400,000 40
Relatives 100,000 10
Total 1,000,000 100

6.3 PROFORMA CASH FLOW PROJECTION

Details Jan Feb Mar Apr May Jun Jul Agus Sep Oct Nov Dec Total
Openin 50000 520 659, 7910 9184 102 110 11840 1254 132 138 143 1209
g cash 0 ,05 500 97 94 569 488 85 282 197 267 037 317
0 1 8 9 6 3
Sales 27000 279 280, 2800 2700 260 270 27500 2800 280 275 302 4544
0 ,50 000 0 0 00 00 0 00 00 00 450 500
0 0
Cash 67455 79, 939 1071 1188 128 137 14590 1534 160 135 390 1718
inflow 5 955 500 097 494 569 488 85 282 197 767 234 9144
1 8 9 6 5
Expens _ _ 300 4000 5000 600 700 7500 7500 800 800 660 1220
es 0 0 0 0 0 00 00
Purchas 30000 37, 420 4500 5000 680 700 80000 8500 950 950 790 1487
e 000 00 0 00 0 0 0 0 00 000
Electric 15000 15, 160 2000 2000 350 500 3500 3500 350 350 321 1037
ity bill 000 0 0 0 0 00 00

24
Salaries 83000 83, 830 8300 8300 830 830 83000 8300 830 830 830 9960
000 00 0 0 00 0 0 00 00 00 0
Mainte _ _ _ 700 1000 100 150 _ 2000 200 200 117 2190
nance 0 0 0 0 00 0

Packag 700 750 800 900 1000 150 150 2000 2000 200 300 201 3630
e 0 0 0 0 54 0
Transp _ 1,5 100 1500 1500 360 300 3500 500 350 400 310 5460
ort 00 0 0 0 0 0 00 0
Loan 3903 3,9 390 3903 3903 390 390 3903 3903 390 390 390 4683
paymen 03 3 3 3 3 3 3 6
ts

Adverti 1000 _ 390 700 1000 150 150 2000 2500 300 350 214 4200
sement 0 0 0 0 0 00 0
Rent 2000 2,0 200 2000 2000 200 200 2000 2000 200 200 200 2400
00 0 0 0 0 0 0 0

License 6000 _ _ _ _ 600 _ _ _ _ 600 120 2700

0 0 00 0
Teleph 3000 3,5 300 3000 3500 350 400 4500 5000 500 500 480 9100
one 00 0 0 O 0 0 00 0
Water 2000 2,0 200 2000 2100 200 250 3000 3000 300 300 296 5620
bill 00 0 0 0 0 0 00 0
Insuran 3000 _ _ _ _ _ _ _ _ _ _ 600 9000
ce 0

Miscell 2000 2,0 250 3000 3900 450 600 7000 7000 800 850 644 1888
aneous 00 0 0 0 0 0 00 00

Cash 15450 140 148 1496 1628 180 190 20480 2133 219 227 222 4218
flow 3 ,05 403 03 03 803 803 3 03 303 303 730 167
2 3

Total 52005 659 791 9184 1025 110 118 12542 1321 138 143 143 1302
cash 2 ,50 097 94 691 488 408 82 979 267 037 037 349
flow 0 8 5 6 3 3

25
PARTIC JAN FEB MA APR MA JUN JUL AUG SEP OCT NOV DEC TOT
ULARS R I Y E AL
FOR 2019

Cash in Ksh Ksh Ksh Ksh Ksh Ksh Ksh Ksh Ksh Ksh Ksh Ksh Ksh
flow

Beginning 169 23000 2700 2800 3000 3500 3800 4000 4400 4600 5000 5200 42995
capital 585 000 000 000 000 000 000 000 000 000 000 000 850
0

Sales 200 19000 1950 1850 1650 1700 1750 1800 1900 1950 1950 2000 22400
000 0 00 00 00 00 00 00 00 00 00 00 00

Debtors 300 4000 3000 2000 1800 13800

0

Total cash 189 24900 2899 2988 3165 3672 3976 4180 4590 4619 5195 5400 45074
in flow 885 00 00 000 000 000 800 000 000 500 00 000 150
0

Purchases 660 64000 6800 6000 5800 5900 6000 6100 6300 6500 6300 5800 74800
00 0 0 0 0 0 0 0 0 0 0 0

Creditors 1500 2000 1000 2500 1000 2000 1500 11500

Salaries 170 17000 1700 1700 1700 1700 1700 1700 1700 1700 1700 1700 20400
000 0 00 00 00 00 00 00 00 00 00 00 00

Advertise 400 2000 2000 3100 2800 13900

ment 0

Loan 450 45000 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500 54000
repay 00 0 0 0 0 0 0 0 0 0 0

Water bill 250 270 260 240 215 310 300 240 260 210 300 280 3135

Rent 400 40000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 48000
00 0 0 0 0 0 0 0 0 0 0 0

Licenses 900 9000

0

Electricit 120 800 1400 1300 1600 1000 1100 1500 1300 1400 1500 1200 15300
y bill 0

Promotio 120 1400 1600 1700 1300 1800 2000 1700 1900 1700 1400 1600 19300
ns 0

Total out 296 28247 2857 2817 2756 2796 2804 2830 2837 2848 2822 2755 33911

26
 flow 150 0 60 40 15 10 00 40 60 10 00 80 35

Net cash 160 22075 2613 2706 2889 3392 3696 3896 4306 4234 4912 5124 41583
270 30 240 260 385 390 400 960 240 690 800 420 015
0

6.4 PROFOMA INCOME STATEMENT (PROFIT AND LOSS ACCOUNT)

Item Year 2018 Year 2019

Beginning cash 1000000 120000
Sales 624500 1281000
Gross profit 1124500 2,231000

Expenses
Purchase 790000 770,550
Rent 24000 24,000
Electricity bill 32100 31,333
Telephone bill 4800 47,000
Water 29600 24,100
License 12000 12,000
Repair and 11700 13,000
mantainace
Miscellaneous 64400 62,000
Insurance 21400 64,000
Advertisement 20150 21,700
Packages 20150 21,400
Transport 31000 5,000
Total expenses 1,104,500 1,096,033
Net profit before tax. 20,000 1,134,964

27
6.5 PROFORMA BALANCE SHEET FOR YEAR ENDED DEC 2018, 2019
PARTICULARS Year Year 2(2019)
1(2018)

Assets

Fixed assets

Equipment 35000

Vehicles 900000 520000

Total fixed assets 1250000 520000

Current assets

Cash in hand 240000 300000

Cash at bank 300000 320000

Stock 500000 510000

Debtors 60000 620000

Total assets 1100000 119200

Liabilities

Long term liabilities

Bank 270000 405000

Owner’s equity 280000 163100

Net profit

After tax 150678 307678.5

Creditors 399322 316221.5

TOTAL LIABILITIES 1100000 1192000

6.6 BREAK EVEN POINT

FIXED COST

Particulars YEAR 1 YEAR 2

28
 Salaries 170000 170000

License 9000 9000

Rent 480000 480000

Loan repayment 54000 54000

Total fixed cost 713000 713000

Variable cost

Purchase 697000 748000

Advertisement 304000 13900

Water bill 4180 3135

Electricity bill 18200 15300

Promotion 14800 19300

Total variable cost 764580 799635

Contribution margin for year 1 sales-total variable cost

2040000-764580

1275420/=

Contribution margin for year 2 2240000-799635

1440360/=

Contribution margin % = contribution margin /sales x 100

Year 1 1275420/2040000 x 100

62.5%

Year 2 1440365/2240000 x100

64.3%

Breakeven level = Total fixed cost/contribution margin

Year 1 713000/62.5

14408/=

Year 2 713000/64.3

11088.65/=

29
6.7RATIOS.
YEAR 1 YEAR 2

Gross profit G.P/Sales x100 2970000/2273000 x100= 2988000/2240000 x100=

ratio
130.66 133.39

Return on Profit after 150678/280000 x100= 307678.5/163100

equity tax /owners’
equity x 100 53.81 188.64

Return on Net profit after 150678/1000000 x100 307678.5 /1000000 x100

investment tax /Total
investment 15.068 30.77

6.8 DESIRED FINANCIAL OF TRUVISION CYBER CAFE

Item Amount

Pre-operational cost 88000

Working capital 6252360

Fixed Assets 1100000

Total 7440360

6.9 PROPOSED CAPITALISATION FOR TRUVISION CYBER CAFE

SOURCE COSTS KSHS

Owners saving 600000

Loan 200000

Family member 200000

Total 1000000

30