OL’LESSOS TECHNICAL TRAINING INSTITUTE

ART ELECTRICAL ACCESSORIES

P. O. BOX 333

ELDORET -KENYA

PRESENTED BY : BRIAN KIPCHIRCHIR KOECH

INDEX NO : 295411010
COURSE CODE : 2601
PAPER NO : 306B
PRESENTED TO THE KENYA NATIONAL EXAMINATION
COUNCIL FOR THE PARTIAL AWARD OF
CERTIFICATE IN ELECTRICAL AND
ELECTRONICS ENGINEERING

SUPERVISOR : MERCY NELLY

DATE OF PRESENTATION: JULY 2024

DECLARATION
Student declaration

I declare that this business plan is my original work and it has not been presented in any
examination bodies for marks interests.

NAME:

SIGNATURE………………. DATE…………………………

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 DEDICATION
First and foremost; I dedicate this work to my entire family for their financial support and
ideas during the presentation of this project.

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 ACKNOWLEGMENT
I would like to express my special thanks of gratitude to the Almighty Father for bringing me
this far and for the protection he showed to me during my whole life.
My sincere gratitude also goes to my supervisor MISS.MERCYNELLY for his guidance
through out the process.
I also wish to express my sincere gratitude to my family for their financial support and idea
contribution that may God bless you abundantly.

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 Table of Contents
DECLARATION.........................................................................................................................................ii
DEDICATION............................................................................................................................................iii
ACKNOWLEDGEMENT..........................................................................................................................iv
1.0: EXECUTIVE SUMMARY..............................................................................................................1
1.0: BUSINESS DESCRIPTION...........................................................................................................1
2.0 MARKETING PLAN........................................................................................................................1
3.0 ORGANISATION AND MANAGEMENT PLAN...........................................................................1
4.0 OPERATIONAL AND PRODUCTION PLAN................................................................................1
5.0 FINANCIAL PLAN..........................................................................................................................2
CHAPTER ONE..........................................................................................................................................3
1.0 BUSINESS DESCRIPTION..............................................................................................................3
1.1 BUSINESS NAME............................................................................................................................3
1.2 BUSINESS LOCATION AND ADDRESS.......................................................................................3
1.3 LEGAL FORM OF BUSINESS OWNERSHIP................................................................................4
1.4 TYPE OF THE BUSINESS...............................................................................................................4
1.5: GOODS AND SERVICES...............................................................................................................4
1.6: JUSTIFICATION OF THE OPPORTUNITY..................................................................................5
1.7 INDUSTRY.......................................................................................................................................5
1.8 GOALS OF THE BUSINESS...........................................................................................................5
1.9 ENTRY AND GROWTH STRATEGY............................................................................................7
CHAPTER TWO.........................................................................................................................................8
2.0 MARKETING PLAN........................................................................................................................8
2.1 CUSTOMERS...................................................................................................................................8
2.2 MARKET SHARE............................................................................................................................9
2.3 COMPETITION..............................................................................................................................10
2.4 ADVERTISEMENTS......................................................................................................................11
2.5 SALES PROMOTIONS..................................................................................................................11
2.6 PRICING STRATEGY...................................................................................................................12
2.7 SALES TACTICS...........................................................................................................................12
2.8 DISTRIBUTION.............................................................................................................................12

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CHAPTER THREE...................................................................................................................................14
3.0: ORGANISATION AND MANAGEMENT PLAN........................................................................14
3.1. 0: KEY PERSONNEL....................................................................................................................14
3.1 1: THE MANAGER....................................................................................................................14
3.1.2: CASHIER................................................................................................................................14
3.2.0: SUPPORT STAFF......................................................................................................................14
3.3: ORGANIZATIONAL CHART......................................................................................................15
3.4: RECRUITMENT, TRAINING AND PROMOTION.....................................................................15
3.5: RENUIMERATION AND INCENTIVES....................................................................................16
3.6: LICENSES, PERMITS AND BY-LAWS......................................................................................17
3.7: SUPPORT SERVICES..................................................................................................................18
CHAPTER FOUR.....................................................................................................................................19
4.0: OPERATIONAL AND PRODUCTION PLAN.............................................................................19
4.1.0: OPERATIONAL PLAN..............................................................................................................19
5.1.1: THE GEOGRAPHICAL LOCATION OF THE BUSINESS.................................................19
4.2 PRODUCTION PLAN....................................................................................................................19
4.3: PRODUCTION FACILITIES AND CAPACITY........................................................................20
4.4. PRODUCTION PROCESS............................................................................................................20
4.5: PRODUCTION STRATEGY........................................................................................................20
4.6 REGULATIONS AFFECTING OPERATION...............................................................................21
5.0: FINANCIAL PLAN......................................................................................................................22
5.1: PRE- OPERATIONAL COST........................................................................................................22
5.2: WORKING CAPITAL..................................................................................................................22
5.3.1: PROJECTED CASH FLOW FOR THE YEAR ENDED 31STDECEMBER, 2024.....................23
5.3.2: PROJECTED CASH FLOW FOR THE YEAR ENDED 31STDECEMBER, 2025.................24
5.3.3: PROJECTED CASH FLOW FOR THE YEAR ENDED 31STDECEMBER, 2026.................25
5.4: PRO-FORMA INCOME STATEMENTS FO THE THREE YEARS............................................26
5.5: PRO-FORMA BALANCE SHEET FOR THE THREE YEAR.....................................................27
5.6 BREAK EVEN POINT...................................................................................................................28
5.6.1 BREAK EVEN POINT FOR THE YEAR 2024.......................................................................28
5.6.2: BREAK EVEN POINT FOR THE YEAR 2025......................................................................29
5.6.3 BREAK EVEN POINT FOR THE YEAR 2026.......................................................................30
5.7: PROFITABILITY RATIOS...........................................................................................................31
5.7.1: FOR 2017................................................................................................................................31

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 5.7.2: FOR 2018................................................................................................................................31
5.7.3: FOR 2019................................................................................................................................32
5.8: DESIRED FINANCING................................................................................................................32
5.9: PROPOSED CAPITALISATION..................................................................................................33
APPENDICES...........................................................................................................................................34

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1.0: EXECUTIVE SUMMARY

1.0: BUSINESS DESCRIPTION

The business shall be a sole proprietorship type of business that shall be located along
eldoret- kapsabet high way where it shall be clearly seen from the road. The name of the
business shall be Art electronics and electrical accessories whose main dealings shall be to do
sales on electronics and electrical accessories. The source of capital shall be from owners’
savings, friends’ contributions and loan from the bank.

2.0 MARKETING PLAN

Art Electronics and Electrical Accessories plans to diversify its operations and is eyeing to
attract most of the customers from within the area after which it is expected to spread its
marketing to other parts of the nearest towns. This shall be made possible through
advertisement using posters and as it shall have grown, it shall be able to do advertisements
through electronic media such as radio and television.

3.0 ORGANISATION AND MANAGEMENT PLAN

There shall be action of authority in the organizational structure from one level to another.
The management shall consist of the manager who shall be the owner of the business, a
supervisor, an accountant, a clerk, service people and security guards. Their combination will
serve to maintain unit of command and discipline and they will provide knowledge and
advice in giving solution within the business.

4.0 OPERATIONAL AND PRODUCTION PLAN.

The business shall try to transfer fully to the market to make sure the operational plan comes
out with new tactics such as offering quick services to customers who shall be successfully
achieved by modern machines to increase in production and produce quality output with the
help of the workers.

5.0 FINANCIAL PLAN

In order to ensure that the business is monitoring and evaluating its activities, the financial
plan part will play a very big role by ensuring that funds are correctly utilized and controlled
to enhance success of the business hence achieving its goals and objectives.

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 CHAPTER ONE
1.0 BUSINESS DESCRIPTION
The business shall be dealing with sales of electronics and electrical accessories. It shall be
committed in the supply of electrical accessories. The business is intended to reduce the
expenses incurred by customers mostly when it comes to transportation cost of the purchased
electronics and electrical accessories. It shall therefore be established at a suitable location
that shall provide effective accessibility to help reduce the transportation cost and also to
provide such goods and services at a nearer location than it has been the case before. It
is also intended to help customers in purchasing affordable electronics and electrical
accessories.

1.1 BUSINESS NAME

The business shall bear the title name Art Electronics and Electrical Accessories. The name
acts as an encouragement to people so that they may keep in touch with technology and
other accessories in order to change the face of the local community by migrating
from analog electronics to Art electronics.

1.2 BUSINESS LOCATION AND ADDRESS

The business shall be located along Nandi gardens. It shall be situated at the left side of the
Nandi road in Eldoret. The location will be favorable due to the factor that it will be at a
strategic place because of the high population of Eldoret town center. The infrastructure is
encouraging since it is within the town, where there are good roads and the network reception
is very dependable.

Furthermore, security is very tight because Central police station is about 200meters away
from the building.

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1.3 LEGAL FORM OF BUSINESS OWNERSHIP
Art electronics and Electrical equipment and Accessories is intended to be established as a
sole proprietorship form of business that shall be managed by the owner, BRIAN
KIPCHIRCHIR.

The advantages of this kind of business ownership is that the decision will be made much
quicker, the profits will be enjoyed by the business owner, it will have less legal formalities
during the formation of the business and it will be flexible.

The disadvantages of this type of ownership is that; unlimited liabilities, a lot of work to be
done thus overwhelming the person in charge and lastly luck of good decision making since
there will be no consultation etc.

1.4 TYPE OF THE BUSINESS

The business is a medium-scaled type of business. This is because the business size is being
dictated by the amount of capital required to start the business. This has been decided since
the business is solely managed by the owner. It shall serve the purpose of trading and
servicing. The business shall have few employees who shall always assist customers daily. In
the future, the business intends to offer services such as free goods delivery to regular
customers since this shall help maintain and even attract more customers.

1.5: GOODS AND SERVICES

The business shall be dealing with electronics such as computers, audio system, Art camera,
television, display device, Art video player etc, and Electrical accessories such as conduit
pipes, wires, bulbs, fuses, relays, transformers, cables, proximity sensors, meters and
indicator, bulb holders, meter boxes, mains switch, sockets etc. The goods were selected
due to their durability and so they provide room for acquiring them in large quantity
hence enough stock in the store and therefore lack of shortage is dealt with appropriately.
Apart from doing sales of electronics and electrical accessories, the business shall also be
engaged in doing some installation and repairing some electronics. The business owner
intends to import high quality items as a future development plan. This will enable the
business to deal with strong durable items.

The business shall offer delivery of goods to customers. This is because the owner is
eyeing on attracting more customer and hence expanding in marketing strategies.

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1.6: JUSTIFICATION OF THE OPPORTUNITY
Since many years have passed without the people from this area obtaining electronics and
electrical accessories at a nearer distance, the business is therefore intended to solve this
problem faced by the local people in acquiring these commodities. This is because
customers have to go long distances in search for electrical accessories which in turn
make them spend a lot in terms of transportation. The business also eyes on the high
demand of electronics within the area. This is due to the fact that these electronics are
not available anywhere close to that area and this makes this location to be mostly
advantageous to the customers in acquiring these electronics and electrical accessories
closely and thereby spending little in terms of transportation. The location is also
suitable due to the fact that no electronic shop has ever been established in the area
and so it is therefore important to have one.

1.7 INDUSTRY
The business falls under electronic industry due to the fact that it deals with electronics
and electrical accessories that are used in various electrical installation. The cost of the
goods shall be determined by the quality of the product and the purchase prices of the
commodities brought to the business. The mode of production which may involve the
use of new technology such as application or use of modern machines such as
soldering machines, cutting machines e.t.c. These machines are expected to ease the work
and improving the quality of the output hence quality goods in the business.

1.8 GOALS OF THE BUSINESS

The business intends to achieve certain goals in the future after some reasonable
period of time. These shall help promote the business to a great deal and even attract more
customers to the business. The owner therefore is looking forward towards achieving
the following objectives:-

Job creation

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The business shall provide room for more employees in the society both skilled and
unskilled. There shall be the operators within the business who shall be assisting in
daily activities of the business. To the outsiders, this shall be helping them secure
transportation of the goods and services to customers various location.

Free learning on technical skills

The business intends upon expanding, to involve its employees in learning activities
on technical skills such as soldering, electrical wiring and installation in houses among
other skills which shall provide skills and knowledge to various people willing to
receive such trainings. This shall also enable the business to provide such skills to
various people which shall lead to labour hiring from the business in form of
contracts and so income generation in the business.

Free goods delivery to customers

The business is looking forward to offer regular customers free transport to

whoever shall have purchased goods in large scale. This is intended to keep
attracting more customers and even to maintain the current customers by relieving
them from transportation expenses which is one of the areas affecting most customers
and has even discouraged many customers in buying commodities in bulk.

Offering support to the needy children

As a long term goal intended to be achieved, the business is expected through the
owner who shall be the manager to involved in helping the needy children mostly
in line of education. This is simply because of the increased number of school
dropouts within the area due to lack of school funds and yet they are capable,
intelligent children who can perform well.

1.9 ENTRY AND GROWTH STRATEGY

Entry

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On entry into the business, great considerations shall be taken into account in order
to get rid of extravagancies in the business which shall help secure business income
by so controlling the expenditures in the business. The business shall therefore use
posters in doing its advertisements which shall be distributed to a long radius within
the area including the nearest centers such us Kapseret and Mosoriot. The posters shall
contain the business location and items descriptions. The customers shall be informed
on more details of the business during the official launching ceremony of the business
which shall be held at the exact location of the business.

Growth strategy

More of the electronics and electrical accessories shall be purchased to expand the business.
There shall also be employment of competent staff within the business to monitor the
daily operation of the business and to mobilize customers. Relevant trainings shall also be
introduced to the employed members. The owner is looking forward to opening more
branches even the local towns nearby to offer competition in the marketing of goods
and services.

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 CHAPTER TWO
2.0 MARKETING PLAN
The business shall have various strategies to ensure it advances its market in order
to cover a large area zone. These shall involve the strategies of how the goods shall
reach the targeted customers who shall be individual customers and groups. The
business shall ensure that every market is made up of different customers consisting
of the buyers with different needs. The business intends to expand in marketing
through gift offerings, free transportation of goods to customers, by using reasonable
pricing and having some promotions. There shall be full description of the business
which shall be displayed clearly on the signboards with distinct information on the
products that the business shall be dealing in. the business is intending to attract
customers both within the location and even the nearby local towns such as Kapseret
and Mosoriot and later expand its market to large towns such as Kapsabet.

2.1 CUSTOMERS
The business is intending to provide quality goods and services to customers in order
to make the customers be satisfied with the services they receive from the business.
The business therefore is looking forward to serving both domestic and institutional
customers. In order to keep the customers and even attract more customers into the
business, there shall be reasonable pricing of products which shall be determined by
different classes of people and the production cost of such items and the cost of
obtaining some materials. The business shall therefore identify its customers in various
ways which may include:- the working class customers who are earning high incomes
and those earning low incomes. There shall be another category of those who cannot
afford to buy in bulk the commodities as the other people but can manage to purchase
some. This will mean that the business shall consider bringing in goods of another class
so as to enable the customer buy what is within his/he reach. The mode of payments
shall be through Banking, M-pesa and Cash. To the regular customers, goods shall be
allowed to be purchased on hire purchase terms where the deposit shall be paid and
the remaining amount of money paid in installments depending upon the agreement
between the customer and the owner of the business. This is intended to help customers
who may be willing to obtain the commodities urgently but do not have enough cash

6
to do so instead they intend to pay on later dates. With these the business is believed
to shall have attracted more customers to the business.

2.2 MARKET SHARE

The business is looking forward to ensure that it obtains a larger portion of the
markets share than the other competitors. It shall therefore ensure that it obtains 50%
of the market share for the start after which the business intends to increase its market
share to 75% as per the statistics that had been taken compared to the other
competitors DND Electronics- 15% and Swinflex Electronics- 10%. To achieve this
percentage, it means that the business shall strive to have 100 customers per day for
the starting period after which the business shall be expecting 150-200 customers daily
in the future. This shall also be contributed by the business location since the location
provides a clear visual from the road as had earlier been stated. In order to achieve
the intended market share, the business shall therefore ensure that it offers affordable
prices of products and opening new branches in the local towns around and by also
ensuring new products are available so as to enable customers purchase all Electronics
accessories under one roof. This is targeted to relieve customers from walking from
one Electronics shop to another in search for other accessories which shall be now
acquired in one place as one of the set objectives of the business. With this, it is
expected that more customers shall be attracted to the business and this shall help
improve the market share compared to other Electronics shops.

2.3 COMPETITION
The business shall be in competition with DND Electronics and Swinflex Electronics has been
stated above. The business intends to face them in the market competition in order to
maintain and even attract other customers. The location of the business shall play a bigger
role in attracting most of the customers to the business. Also the business shall ensure good
and proper servicing to the customers. The business shall also offer after sale services such
as goods delivery to the customers. The business also intends to improve on other
competitor’s weaknesses in order to provide quality services and keep attracting more and
more customers. The below table shows some of the weaknesses and strength of the
competitors compared to the business.

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 What pq Strengths Weaknesses
-Have raised enough capital to -High prices of Electronics.
open up other brunches. -No goods delivery to
DND Electronics -Has been long in the customers.
market -No quality products.
-Has no electrical accessories.
-Its located in a town where -Poor business management
the population is high. -Offers transportation to
Swinflex Electronics customers at a high cost.
-No electrical accessories
-Has electrical accessories. -Has no enough capital to
-Offers transportation of purchase all the Electronics
Art Electronics And goods to customers at a machines.
Electrical Accessories lower cost -Cannot produce electrical
-Good business management accessories but rather purchase
strategies. from producers.
-Located where there is high
demand from people within.

2.4 ADVERTISEMENTS
In order to reach more customers at a wide range of radius from the business location, the
business shall advertise its products so as to create awareness to the customers and attract them
to the newly brought items into the market by the business. This also intended to maintain the
current customers. The most of advertisement that shall be convenient to the business shall be
through poster, signboards which shall be distributed in all the small towns and in the villages.
There shall also be indoor product display, direct personal contact to customers and as the
business shall have grown enough and stable, print media and electronic media shall be
engaged in the advertisements in order to attract customers from far place.

2.5 SALES PROMOTIONS

The business is looking forward to ensuring customers get correct and distinct
information in the kind of products that shall be dealt with in the business. This
shall help in making customers buy the products in large scale, attracting more
customers attention to the business’ and also ensuring customers are truly satisfied
with the services and the products offered by the business. In order to make this
successful, the business will be looking forward to distributing free calendars to customers
after purchasing of goods from the business which shall also indicate what the business is

8
dealing with which products hence advertising the business more, offering free
additional items to customers after purchasing a product in order to make them keep
visiting the business, offering after sales services such as goods delivery to customer
who happens to buy goods in large quantity and offering goods and services at an
affordable rate.

2.6 PRICING STRATEGY

Due to the fact that price fixation is what determines the success of any business and the
type of market the business is dealing in, the business there intends to have strategies
on ensuring the purchasing of goods and services are to the standards that everyone is
capable of buying. the price shall be based on the demand of the product and the cost
of production including expected profit. The business is also looking forward to put into
considerations the low incomers so that they may also be involved in the purchasing of
the electronic and electrical accessories from the business. It shall also consider the high earning
customers who shall be coming into the business as their prices shall be slightly above that
for low incomes. The process will also be under the set business objectives which is to
maximize profit and so the pricing shall be set to accomplish and attain the set objectives
of the business.

2.7 SALES TACTICS

In order to attract more customers and maintain the current customers into the business, there
shall be a few tactics to be used in the sale of products. The business shall allow easy
payments which shall include paying in installments to regular customers who shall be offered
period of time in order to help them clear their payments. The business also looks forward to
involve goods delivery in order to attract customers and so increase in the sales of goods
and also provide room for more purchase of commodities to customers. The business also
targets institutional customer such as N.G.O’s, schools and colleges who shall be purchasing
goods from the business.

2.8 DISTRIBUTION
It is intended that consumers closely link with the business in order to ensure they
receive quality services of delivery of goods. The business is focused on making good
use of the accessibility of the road networks to offer goods delivery to customers in
various locations. Some customers shall pick their goods at the business location
while a room shall also be provided to customers who may wish to order for
goodsthen delivery is done to them and pay later. The business shall obtain some

9
products from the producers after which selling to the customers shall follow. This is
because the business shall not be able to produce some products but can purchasefrom
producers.

Producers/ manufacturers Wholesalers Retailers Customers

CHAPTER THREE
3.0: ORGANISATION AND MANAGEMENT PLAN
The business intends to organize and manage the business through some strategic plans
which shall provide for a unified mechanism in which authority coordination and control
of common resources may effectively be exercised to achieve the set goals and objectives of
the business. This shall be enhanced by involving qualified, experienced and responsible
personnel’s in the business.

3.1. 0: KEY PERSONNEL

3.1 1: THE MANAGER

For efficient management of the business it shall require the business to have a manager
who shall be involved in the following duties:-

• To initiate and make sure the policies are properly implemented

• To approve the projects to be undertaken within the enterprise

• To ensure efficiency and smooth running of activities in the business

• To carry out final decision making within the business

• To ensure production, marketing and financial control are administered correctly

3.1.2: CASHIER
The accountant shall be required who shall have attained two years experience in the field.
He/ she shall be involved in the following duties:-

• To ensure efficient and effective running and control of the business finances

• To ensure payments are done effectively

• To determine whether the business is making profit through the cash books

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3.2.0: SUPPORT STAFF
For efficient flow of work daily the business intends to involve operatives within the
enterprise to increase the output in the business. The business intends to hire drivers, , sales
people and a janitors.

• Sales people shall ensure proper services are provided to customers

• The drivers shall be committed in goods delivery to customers and collecting stocks

• Janitors shall ensure the bussness will be clean an tidy at all times.

3.3: ORGANIZATIONAL CHART

MANAGER

ACCOUNTANT

SALESPEOPLE JANITORS DRIVERS

3.4: RECRUITMENT, TRAINING AND PROMOTION

RECRUITMENT

This shall involve the process of employing staff workers for specific jobs. In the initial stage of
operation, the business will consider unsolicited applicants for a source of recruitment. This
shall be achieved through advertising the posts, inviting the respondents for an interview and
then selecting the best. This is where the appointed for the particular post shall be involved. The
recruitment policies shall be:

• To find and employ the best qualified person.

• To retain the best and most promising of the shop

• To offer promising opportunities for a lifetime work

• To improve, program and facilitate personnel growth

TRAINING

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This is the process of acquiring a particular skill. The business intends to offer training to the
workers so as to enable the business provide proper services to customers. These shall
comprise of the training on the use of the electronic appliances within the enterprise and also
to gain skills on how to relate with the customers well in order to improve customer relation
and provide proper services to the customers.

PROMOTION

This is the process by which employees get to increase in their positions being held in the
business. The business therefore intends to offer promotions to workers who shall have shown
signs of love and commitment in delivering in their duties.there is also commision in volume of
sales. This is also intended to be done in any case there is a vacant position left within the
business at a higher rank.

3.5: RENUIMERATION AND INCENTIVES

RENUIMERATION

The business will ensure this is done to the employees depending upon the their qualifications
and positions held by the personnel in the business offices and how performance is done.

Position No. Salary Per Month Salary Per Year Totals Per
(Kshs) (Kshs) Year (Kshs)
Supervisor 1 9,000 108 ,000 108 000
Cashier 2 7,000 84,000
84 ,000
Salespeople 1 5,500 198,000
Janitors 1 5,000 60,000
Drivers 1 6,000 72,000
330,000
Grand Total 522,000

INCENTIVES

This is one of the vital areas which determine the success of the business. the business
therefore intends to encourage workers to produce and perform duties effectively. This is to be
achieved through the following:-

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 • occasional medical allowance

• there shall be provision for overalls, gloves and gumboots for workers

• there shall be house allowance for the workers

• there shall be also internal recruitment which is also a technique of motivating

workers.

• Internal promotions shall also be offered to workers after some given period of time

POSITION TYPE OF INCENTIVE MONTHLY(KSHS YEARLY(KSHS)

)
Supervisor Medical allowance 3,000 36,000
House allowance 4,000 48,000
Transport allowance 2,000 24,000
Cashier Medical allowance 3,000 36,000
House allowance 2,000 24,000
Transport allowance 1,000 12,000
TOTAL 15,000 180,000

3.6: LICENSES, PERMITS AND BY-LAWS

LICENSES,

This is a document which gives the business power to operate within an area. This shall be
obtained from the county council to prove that the business is owned by the owner.

Name – trading license

Use - authority trade practice

Cost - Kshs. 5,000

Duration – 6 months

Origin – county council

PERMITS

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This is a document which temporarily give the business authority to carry out a particular
trading activity such as transportation of goods. This shall be obtained from the municipal council
of Eldoret town.

BY-LAWS

The business shall have its by-laws from the Kenya legislative framework that governs employment
policies and practices or labour related issues in the country.

3.7: SUPPORT SERVICES

These are services that shall be involved in the business :-

• To provide professional advice and consultancy.

• To identify potential investors.

• To train workers.

• To advertise products.

The business therefore intends to involve services such as Banking, Insurance, and Public relations,
Advertisements, Electricity, Water and Business Lawyer.

BANKING

The business shall have an account with Family Bank where the daily deposits and
withdrawals shall be serviced. This is intended to guarantee safety of the business against
insecurity ,for saving purposes and also allow for emergency loans required.

INSURANCE

The business shall be insured to create safety from calamities such as fire policy, theft
policy ,motor vehicle policy and other risks which might interfere with the business running .

ELECTRICITY

The business shall be supplied with electricity from Kenya power and lighting company that will be
used to run the machines and provide ample lighting within the enterprise.

BUSINESS LAWYER

The business intends to involve a lawyer who shall help in assisting the business in cases of
any legal matters arising.

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 CHAPTER FOUR
4.0: OPERATIONAL AND PRODUCTION PLAN
This shall indicate the strategies which the business shall undertake in the operational process
of the business. This shall involve the acquiring of facilities such as both electronic appliances
and books that shall be used to ensure maximum quality goods at a minimum cost and
within a short time. These shall help improve the quality of output in the business hence
attracting more customers.

4.1.0: OPERATIONAL PLAN

This shall outline the activities involved in the production process, the schedule of production
of goods and services and also the activities arrangement for effective production.

5.1.1: THE GEOGRAPHICAL LOCATION OF THE BUSINESS

Kairo 1heacter piece of land where by the shop will be on the ground floor which will be easy to
access.

There will be future expansion whereby they will be allocated at section 58 at Rupa's eneterpises.

The site will be ideal for the bussines due to the fact that there will be availability of good
infrastructure, which includes good road networks, electricity for running the machines and lightning.

5.1.2: WORK SCHEDULE

The business shall be operating as from 7:00 am and close at 6:00 pm. This is intended to keep the
customers visiting since it has also put into consideration those who may be at work places
but can only be available by 5:00 pm. This is done so as to achieve the expected number of
customers per day visiting the business. The goods shall be received and stored in the store
where the records of those materials shall be taken. This is when the goods shall be considered
ready for marketing.

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4.2 PRODUCTION PLAN
The business intends to deal in electronic devices, and among others accessories . This is intended
to be achieved by the help of the well informed, experienced and trained personnel and other
resources. That will attract more customers.

4.3: PRODUCTION FACILITIES AND CAPACITY

For quality production the business intends to purchase mechanized machines which are
expected to help speed up work and produce quality work within the enterprise. The
following are some of the machines that may required at initial stages of the business.:

ITEM QUANTITY COST(KSHS) SUPPLIER

PRINTERS 2 30000 Del Printers
Hp Elites Pro- 1 49000 H.P laptops
Book laptops
Phones 3 47000 Tecno phones
Speakers 5 50000 pioner sounds
Cctv,camera’s, 1 30000 Samsung accessories and external
mouse ,keyboards outputs
TOTAL 206,000

4.4. PRODUCTION PROCESS

To ensure smooth flow of activities and quality work output, the following operation shall be
required to be employed to ensure work output is to the required standards to meet the
customers expectation;

• There shall be cashier to sell to the customers

• The customer shall be required to place an order according to his/her requirement

• The services shall be offered according to customers placed order by the sales people

• Check for the materials shall be done to verify the goods by the supervisor

• Then payment shall be done and receipts issue by the cashier after verification.

4.5: PRODUCTION STRATEGY

This shall incorporate measures of tactics and precautions that will be applied to
ensure maximum production of quality goods and services at a minimum cost and in
the shortest time possible. To achieve this, the manager shall therefore ensure that the
operation within the business is smoothly run. By so doing this the supervisor shall

16
ensure that there is enough stock and give reports in case of any additional
requirement. This will involve monitoring which provide management with information
for stock control. Recording of stock, movement of stock, usage of stock and
shortages of stock shall be also keenly checked on daily basis. Supplies shall be
frequently done in first hand basis to avoid stock shortages. The business intends to buy from
well known and trusted companies

The business also intends to introduce different qualities to enable customers to be able
to choose on which to buy as per their capabilities.

4.6 REGULATIONS AFFECTING OPERATION

License and permits

This must be obtained first from the local authority

Building regulation

In this case, it is a requirement that the kind of building required should be well ventilated
effectively so that fresh air circulation is enhanced in the building

5.0: FINANCIAL PLAN

5.1: PRE- OPERATIONAL COST

ITEM C0ST(KSHS)
Machine and equipment 206,000
Renovation of the premise 100,000
Market research 60,000

17
 Licensing requirement 20,000
TOTAL 386,000

5.2: WORKING CAPITAL

PARTICULARS 2024 2025 2026
Current asset
Stock 75000 85000 95000
Cash on hand 40000 60000 60000
Cash at bank 350000 520000 650000
Debtors 200000 350000 350000
Total current assets 665000 1015000 1155000

Current liabilities
Creditors 129283 380559 518234
Loan 225000 125000 25000

Total current liabilities 354283 505559 543234

Working Capital 310717 509441 611766

5.3.1: PROJECTED CASH FLOW FOR THE YEAR ENDED 31STDECEMBER, 2024
PARTICUL JA FE MA APR MA JU JU AU OC NO DE TOT
ARS N B R IL Y N LY G SEP T V C AL
CASH
INFLOW
OPENING 5000 3527 3878 4084 4203 4094 3914 3795 3805 3589 3642 3723
BALANCE 0 00 50 68 35 06 81 60 44 15 06 01 50000
2900 3025 3095 3150 3240 3350 2400 2520 3670 2700 2800 2950 35800
CASH SALES 0 0 0 0 0 0 0 0 0 0 0 0 0
3000 30000
BANK LOAN 00 0
OWNERS 7500 3500 2500 2000 2100 1000 1200 1500 2500 1900 1700 2600 30000
FUNDS 0 0 0 0 0 0 0 0 0 0 0 0 0
1000 1050 1000 10000
FRIENDS CONTRIBUTION
0 9200 6000 8000 8200 6000 6800 8000 0 8300 0 9000 0
TOTAL
CASH 4640 4271 4498 4679 4819 4589 4342 4277 4527 4132 4192 4368 11080
INFLOW 00 50 00 68 35 06 81 60 44 15 06 01 0
CASH
OUTLOW

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 10980
PURCHASES 7150 9150 9150 9150 9150 9150 9150 9150 9150 9150 9150 9150 0
SALARIES 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 90000
WAGES 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 72000
RENT 3600 3600 3600 3600 3600 3600 3600 3600 3600 3600 3600 3600 43200
1500
LISCENCE 0 15000
WATER 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 14400
ELECTRICIT
Y 2400 2400 2400 2400 2400 2400 2400 2400 2400 2400 2400 2400 28800
TELEPHONE 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000
ADVERTISE
MENTS 500 500 500 500 500 500 500 500 500 500 500 500 6000
REPAIR
AND
MAINTANA
NCE 500 500 500 500 500 500 500 500 500 500 500 500 6000
INSURANCE 7000 7400 14400
LOAN
INTEREST 3750 3750 3750 3750 3546 3542 3438 3333 3229 3125 3021 2817 41051
TRANSPORT 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000
LEGAL FEE 2032 2000 4032
MISCELLAN
EOUS 700 700 700 700 700 700 700 700 700 700 700 700 8400
LOAN
REPAYMENT 8333 8333 8333 8333 8333 8333 8334 8334 8334 75000
5000 2500 2000 4671 14171
CREDITORS 0 0 0 7 7
TOTAL
CASH 1113 3930 4133 4763 7242 6742 5472 4721 9382 4900 4690 4680 71780
OUTFLOW 00 0 2 3 9 5 1 6 9 9 5 1 0
CLOSING 3527 3878 4084 4203 4095 3914 3795 3805 3589 3642 3723 3900 39000
BALANCE 00 50 68 35 06 81 60 44 15 06 01 00 0

5.3.2: PROJECTED CASH FLOW FOR THE YEAR ENDED 31STDECEMBER, 2025
PARTICUL JA FE MA APR MA JU JU AU OC NO DE TOT
ARS N B R IL Y N LY G SEP T V C AL
CASH
INFLOW
OPENING 390 3686 3739 3972 5172 5240 5876 5457 5596 5706 5822 5817 39100
BALANCE 000 54 13 76 43 14 89 44 28 15 06 01 0
7500 6700 8500 8350 7820 7500 9500 7500 7200 7500 6030 5900 90000
CASH SALES 0 0 0 0 0 0 0 0 0 0 0 0 0
BANK LOAN
OWNERS 1000 1000 20000
FUNDS 00 00 0
FRIENDS
CONTRIBUTI 1000 10000
ON 00 0
DEBT
COLLECTIO 1200 1000 5000 27000
N 00 00 0 0
TOTAL 7850 4356 5589 5807 5954 6490 6826 6207 6316 6456 6425 6407 18600
CASH 00 54 13 76 43 14 89 44 28 15 06 01 00

19
 INFLOW
CASH
OUTLOW
2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000
PURCHASES 0 0 0 0 0 0 0 0 0 0 0 0 0
SALARIES 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 96000
WAGES 6500 6500 6500 6500 6500 6500 6500 6500 6500 6500 6500 6500 78000
RENT 4200 4200 4200 4200 4200 4200 4200 4200 4200 4200 4200 4200 50400
2000
LISCENCE 0 20000
WATER 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 18000
ELECTRICIT
Y 2600 2600 2600 2600 2600 2600 2600 2600 2600 2600 2600 2600 31200
TELEPHONE 2400 2400 2400 2400 2400 2400 2400 2400 2400 2400 2400 2400 28800
ADVERTISE
MENTS 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 96000
REPAIR &
MAINTANA
NCE 700 700 700 700 700 700 700 700 700 700 700 700 8400
1400 1000
INSURANCE 0 0 24000
LOAN
INTEREST 2813 2708 2604 2500 2396 2292 2188 2083 1976 1875 1771 1667 26876
TRANSPORT 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000
LEGAL FEE 2000 1500 2500 6000
MISCELLAN
EOUS 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000
LOAN 10000
REPAYMENT 8333 8333 8333 8333 8333 8333 8333 8333 8334 8334 8334 8334 0
3200 1000 7422 49472
CREDITORS 50 00 4 4
TOTAL
CASH 4163 6174 1616 6353 7142 6132 1369 6111 6101 6340 6080 6070 12800
OUTFLOW 46 1 37 3 9 5 45 6 3 9 5 1 00
CLOSING 3686 3739 3972 5172 5240 5876 5457 5596 5706 5822 5817 5800 58000
BALANCE 54 13 76 43 14 89 74 28 15 06 01 00 0

5.3.3: PROJECTED CASH FLOW FOR THE YEAR ENDED 31STDECEMBER, 2026
PARTICUL JA FE MA APR MA JU JU AU OC NO DE TOT
ARS N B R IL Y N LY G SEP T V C AL
CASH
INFLOW
OPENING 5800 2424 2569 2791 3833 2297 2708 3264 3696 4363 4594 5399 58000
BALANCE 00 37 79 25 75 29 87 49 16 87 37 17 0
7500 8500 9250 9950 1000 1200 1255 1380 1400 1250 1500 2495 15000
CASH SALES 0 0 0 0 00 00 00 00 00 00 00 00 00
BANK LOAN
OWNERS
FUNDS
FRIENDS
CONTRIBUTI
ON
DEBT 2000 7500 7500 35000

20
 COLLECTIO
N 00 0 0 0
TOTAL
CASH 8560 3274 3494 4536 4833 3497 3963 5394 5096 5613 6094 7894 24300
INFLOW 00 37 79 25 75 29 87 49 16 87 37 17 00
CASH
OUTLOW
2666 2666 2666 2666 2666 2666 2666 2666 2666 2666 2666 2666 32000
PURCHASES 7 7 7 7 7 7 7 7 6 6 6 6 0
10800
SALARIES 9000 9000 9000 9000 9000 9000 9000 9000 9000 9000 9000 9000 0
WAGES 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000 84000
RENT 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500 54000
2200
LISCENCE 0 22000
WATER 1800 1800 1800 1800 1800 1800 1800 1800 1800 1800 1800 1800 21600
ELECTRICIT
Y 2875 2875 2875 2875 2875 2875 2875 2875 2875 2875 2875 2875 34500
TELEPHONE 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 30000
ADVERTISE
MENTS 875 875 875 875 875 875 875 875 875 875 875 875 10500
REPAIR &
MAINTANA
NCE 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000
2000
INSURANCE 0 8800 28800
LOAN
INTEREST 1563 1458 1354 1250 1146 1042 938 833 729 625 520 417 11875
TRANSPORT 3200 3200 3200 3200 3200 3200 3200 3200 3200 3200 3200 3200 38400
LEGAL FEE 3500 3500 7000
MISCELLAN 1250 1250 1250 1250 1250 1250 1250 1250 1250 1250 1250
EOUS 1250 15000
LOAN 10000
REPAYMENT 8333 8333 8333 8333 8333 8333 8333 8334 8334 8334 8334 8334 0
5000 1800 1000 3232 81232
CREDITORS 0 00 00 5 5
TOTAL
CASH 6125 7045 7035 7025 2536 7884 6993 1698 7322 1019 4552 6941 17100
OUTFLOW 63 8 4 0 46 2 8 34 9 50 0 7 00
CLOSING 2424 2569 2791 3833 2297 2708 3264 3696 4363 4594 5399 7200 72000
BALANCE 37 79 25 75 29 87 49 16 87 37 17 00 0

5.4: PRO-FORMA INCOME STATEMENTS FO THE THREE YEARS

PARTICULARS 2024 2025 2026
Sales 528,000 780,000 900,000
Less cost of goods sold 109,800 240,000 320,000
Gross profit 418,200 540,000 580,000
EXPENSES
Salaries 90,000 96,000 108,000
Wages 72,000 78,000 84,000

21
 Rent 43,200 50,400 54,000
Licenses 15,000 20,000 22,000
Water 14,400 18,000 21,600
Electricity 28,800 31,200 34,500
Telephone 24,000 28,800 30,000
Advertisement 6,000 96,000 10,500
Repair and Maintenance 6,000 8,400 12,000
Insurance 14,400 24,000 28,800
Loan interest 41,051 26,876 11,875
Transport 24,000 36,000 38,400
Legal fee 4,032 6,000 7,000
Miscellaneous 8,400 12,000 15,000
Total Expenses 391,283 445,276 477,675

Net Profit before tax 26,717 94,724 102,325

Taxation (30%)
Net Profit after tax 18,702 91,883 99,256

5.5: PRO-FORMA BALANCE SHEET FOR THE THREE YEAR

PARTICULARS 2024 (KSHS) 2025(KSHS) 2026 (KSHS)
Fixed Assets
Furniture and fixture 416,000 416,000 416,000
Less depreciation (25%) 104,000 104,000
Net fixed Assets 416,000 312,000 312,000
Current Assets
Cash on hand 40,000 60,000 60,000
Cash at bank 350,000 520,000 650,000
Debtors 200,000 350,000 350,000
Stock 75,000 85,000 95,000

22
 Total current assets 665,000 101,5000 115,5000

TOTAL ASSETS 1,081,000 1,327,000 1,467,000

Current liabilities
Equity owners 700,000 700,000 700,000
Long term loans 225,000 125,000 25,000
Creditors 129,283 380,559 518,234
Retained earnings 26,717 121,441 223,766
TOTAL LIABILITIES 1,081,000 1,327,000 1,467,000

5.6 BREAK EVEN POINT

5.6.1 BREAK EVEN POINT FOR THE YEAR 2024

PARTICULARS VARIABLES FIXED
Purchases 109,800
Salaries 18,000 72,000
Wages 72,000
Rent 43,200
Licenses 10,500 4,500
Water 14,400
Electricity 28,800
Telephone 12,000 12,000
Advertisement 6,000
Repair and Maintenance 4,200 1,800
Insurance 10,800 3,600

23
 Loan interest 8,250 33,001
Transport 16,800 7,200
Legal fee 4,032
Miscellaneous 4,200 4,200
TOTAL 315,750 185,533

(i) Contribution Margin = Total Sales - Variables

528,000 - 315,750

= Kshs. 212,250

(ii) Contribution Margin % = Contribution Margin x 100

Total Sales

= 212,250 x 100
528,000
= 40.20%
(iii) Break Even Point = Fixed
Contribution Margin %
= 185533
40.20
= Kshs. 4615.25
(iv) Total Fixed Cost = Kshs.185533

5.6.2: BREAK EVEN POINT FOR THE YEAR 2025

PARTICULARS VARIABLES FIXED
Purchases 240,000
Salaries 19,200 76,800
Wages 78,000
Rent 50,400
Licenses 20,000
Water 18,000
Electricity 31,200
Telephone 14,400 14,400
Advertisement 9600
Repair and Maintenance 4,200 4,200

24
 Insurance 16,800 7,200
Loan interest 5,375 21,501
Transport 25,200 10,800
Legal fee 6,000
Miscellaneous 6,000 6,000
TOTAL 46,7975 21,7301

(i) Contribution Margin = Total Sales - Variables

= 780,000 - 467975

= Kshs. 312,025

(ii) Contribution Margin % = Contribution Margin x 100

Total Sales
= 312,025 x 100
780,000

= 40.00%

(iii) Break Even Point = Fixed

Contribution Margin %
= 217301
40

= Kshs. 5,432.53

(iv) Total Fixed cost = Kshs.217301

5.6.3 BREAK EVEN POINT FOR THE YEAR 2026

PARTICULARS VARIABLES FIXED
Purchases 320,000
Salaries 32,400 75,600
Wages 84,000
Rent 54,000
Licenses 22,000
Water 21,600
Electricity 34,500
Telephone 15,000 15,000

25
 Advertisement 10,500
Repair and Maintenance 6,000 6,000
Insurance 8,640 20,160
Loan interest 7,125 4,750
Transport 19,200 19,200
Legal fee 7,000
Miscellaneous 75,000 75,000
TOTAL 566,465 231,210

(i) Contribution Margin = Total Sales - Variables

= 900,000 - 566,465

= Kshs. 333,535

(ii) Contribution Margin % = Contribution Margin x 100

Total Sales

= 333,535 x 100
900,000

= 37.06%

(iii) Break Even Point = Fixed cost

Contribution Margin %

= 231210
37.06
= Kshs. 6238.80
(iv) Total Fixed cost = Kshs. 231,210

5.7: PROFITABILITY RATIOS

5.7.1: FOR 2024

Gross profit %= Gross profit X 100
Sales

26
 = 418200 X 100
528000

= 79.20%

Net profit % = Net profit X 100

Sales

= 26717 X 100
528000

= 5.06%

5.7.2: FOR 2025

Gross profit %= Gross profit X 100%

Sales

= 540000 X 100%

780000

= 69.23%

Net profit % = Net profit X 100%

Sales

= 94724 X 100%

780000

= 12.14%

5.7.3: FOR 2026

Gross profit %= Gross profit X 100%

Sales

= 580000 X 100%

900000

= 64.44%

Net profit % = Net profit X 100%

Sales

27
 = 102325 X 100%

900000

= 11.37%

5.8: DESIRED FINANCING

PARTICULARS AMOUNT (KSHS.)
Pre- operational cost 416,000
Working capital 310,717
Long term assets 665,000

TOTAL 1,391,717

5.9: PROPOSED CAPITALISATION

Art electronics and Electrical Accessories shall require Kshs. 700000 to commence its operations
as from January 2024. The amount shall be raised as follows.

PARTICULARS AMOUNT
Personal savings 300,000
Loan from Bank 300,000
Friend’s contributions 100,000

TOTAL 700,000

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 APPENDICES
BUSINESS LOCATION

ART ELECTRONICS AND ELECTRICAL ACCESSORIES

P. O. BOX 333 ,

NANDI ROAD,

ELDORET -KENYA

Customers shall be directed as per the map below in order to locate the exact business
premises.

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30