BUSINESS NAME: LILIAN SAND SUPPLIERS COMPANY

ADDRESS: P.O BOX 89-0039

EMAIL: liane204@gmail.com

NAME OF PRESENTER: SIFUNA NAFULA LILIAN

INDEX NUMBER: 5031112337

COURSE CODE: 2707

PAPER CODE: 2707/505

DEPARTMENT: BUILDING AND CIVIL ENGINEERING

SUBMITTED TO: THE KENYA NATIONAL EXAMINATION COUNCIL IN PARTIAL FULFILLMENT FOR THE

AWARD OF DIPLOMA IN CIVIL ENGINEERING

SUPERVISOR: MR.ODENYO

EXAM SERIES: JULY 2022

1
DECLARATION

I, SIFUNA NAFULA LILIAN, do declare that this business plan is of my original work after a thorough study and survey to the best of my
knowledge and understanding. This work has never been presented to any examination body.

NAME: SIFUNA NAFULA LILIAN SIGNATURE:

DATE: 23/05/2022

SUPERVISOR: MR.ODENYO SIMON SIGNATURE:

DATE: 27/05/2022

2
DEDICATION

I dedicate this business plan to my entire family especially my father Mumu and mother Margaret for their financial and moral support
throughout my studies and completion of my business plan.

3
ACKNOWLEDGEMENT

I thank the Almighty God for his abundant blessings of good health, the gift of life and a sober mind.

I am grateful to my parents for their great support I needed for this business plan to be a success.

My sincere gratitude goes to Kitale National Polytechnic at large for the encouraging environment to my learning.

I extend my regards to my supervisor Mr. Odenyo simon, who took me through my technical work and general lectures.

4
EXECUTIVE SUMMARY

BUSINESS DESCRIPTION

My proposed business name will be LILIAN SAND SUPPLIERS COMPANY.

The business location will be in Kanduyi, along Sikata-Malaba highway.

It is a sole proprietorship form of business which will be operated by my father, my son and I.

The business major activity is sand supplying in construction sites both large and small scale constructors.

My contact information is

Phone 0711382493

Email: liane204@gmail.com

MARKETING PLAN

The targeted customers to my proposed business will be all types of construction industries, commercial buildings, personal houses, large
scale or small scale constructors. Local media like Mulembe radio and Magharibi television will be advertising the business too. There will be
sign posts allocated in all main joints and junctions. Through connections, either friendship of networking the business will be more exposed
and thus more customers.

MARKET SHARE

From my surveys and research, the knowledge of sand supply is minimal hence high demand. Same business exists at a further distance of
about 10 kilometers and cannot serve all the customers.

ADVERTISEMENT

Lilian sand suppliers will have business cards, posters, radios and television stations advertising for the company. The supply or delivery
trucks will be branded with contact information for easy access or if needed for hire.

PRICING STRATEGY

A price policy will be set using competitors price list. There will be discounts on huge purchases and free delivery on a certain bulk.

DISTRIBUTION STRATEGY

Trucks will be available for supplying sand to the company and delivering sand to customers. Due to capital shortage, only 3 trucks will be
available and more will be purchased as the business grows.

MANAGEMENT PLAN/ORGANIZATION

An organization may refer to a business set up to achieve a certain goal in this case the business main goal is to make maximum profit and
satisfy customers.

The organization is meant to show relations of various personnel and their duties and responsibilities within the business.

Human resource management is a crucial feature in a business and refers to the planning, organizing, directing and evaluating all activities
that are directly involved.

The firm shall have both permanent and semi-permanent employees to enable it economically run its affairs.

The firm shall have a good structure within to ensure effective information from the top management to the junior staff and encourages
checks and balances.

A simple line organization as a type of structure will be employed where authority descends from the top of the structure to its bottom level
systematically through a downward delegation of authority.

PRODUCTION/OPERATION PLAN

Operation and production is a fontal tool in a business as it helps in reducing operational costs and in turn maximize profits gained. This
chapter shows the kind of facilities, labor and expenses that will be incurred to ensure that the required services as delivered to customers.

5
FINANCIAL PLAN

A financial plan is a breakdown of the business in relation to monetary terms. It assists in predicting costs that will be incurred by the
business, costs that will help the business to achieve its goals and set objectives.

The financial plan will ensure that financial position of the business is stable or does not threaten the existence of the business.

6
CHAPTER ONE

BUSINESS DESCRIPTION

The business will be LILIAN SAND SUPPLIERS COMPANY. I chose this title and name because it will be a sole proprietorship business. It
will deal in sand supplying to various locations according to customers preferred destination. I can guarantee excellence, quality or value of
this business.

Business Motto: QUALITY AND EXCELLENCE.

1.1 Business location and address

The business will be located in Kanduyi along Sikata-Malaba highway. It will be near Khetia’s supermarket, opposite Kanduyi- Bungoma
junction.

1.1THE BUSINESS ADDRESS

The business address

P.O BOX, 89-0039

BUNGOMA

EMAIL: liliansandsupplierslmtd@gmsil.com

CELL: 0711382493

1.1.2 BUSINESS LOCATION

LILIAN SAND
SUPPLIERS
COMPANY

BUNGOMA-CHWELE ROAD

MALABA

HIGHWAY

BGM-KANDUYI RD

1.1 FORM AND TYPE OF OWNERSHIP

This business will be a sole proprietorship. It was considered due to the below advantages;

Advantages of sole proprietorship

 It requires less paper work to get started

 Easier process and fewer requirements for business taxes
 Fewer registration fees
 Easy decision making
 More straight forward banking
 Simplified business ownership
 There is freedom and flexibility
 It is affordable and simple.

1
 1.2 QUALIFICATIONS AND ROLES
1.3.1 Owner

I will be the business owner with qualifications and skills for running this specified business. I hold a diploma in civil engineering where I
was exposed to this business through industrial attachments in different firms for a period of 7 months including Ederman Construction
Company and Shanxi Lu An engineering company. I also have a valid computer certificate from Wims Computer College. I am capable of
running this business as I have worked on construction sites thus have the experience and leadership skills.

Roles of the owner

 Planning and strategy

 Finance and accounting
 Compliance and legalization
 Marketing and sales
 Provide customer services
 Does hiring and resource management
 Building interest and captivating branding

1.3.1 Roles of a manager

 Ensuring that set standards are met

 He/she is in charge of hiring and firing of staff and taking disciplinary actions towards workers
 He coordinates all resources and channeling them into production
 He is responsible for planning all business activities and ensuring all plans are implemented

1.3.2 Accountant

Qualifications
i. Must be computer literate with required documents for justification
ii. Must have two years of experience
iii. Must have business education with necessary documents
Duties
 Prepares final accounts
 Processes all payrolls and workers payments
 Prepares and balances books of accounts
 Maintains up and keeps records of the business

1.3.3 Drivers
Qualifications
I. Must have a drivers’ license
II. Have good communication skills
III. Must be able to read and write
Duties
I. Deliver sand to customers
II. Make sure the lorries are cleaned and well parked after use
III. Ensure regular servicing of firm vehicles

1.3.4 Security officers

 Provide the overall security to the firm and assets

 Managing the gate and checking both outgoing and incoming visitors
 Taking names and particulars of visitors coming to the firm

2
1.3.5 Cleaners

Qualifications
I. Good health observant
II. Must be hardworking and ensure neatness of the firm
Duties
 Ensure the firm is neat, general cleanness

1.3.6 CAPITAL INVESTMENT

The capital to the business will amount to 6 million raised from the following sources;

Sources Amount
Owner 3million
Family contribution 1million
Loan 500,000

1.3 BUSINESS TYPE

This will be a trade type involving exchange of sand for money at affordable and friendly costs thus bridging all classes of peoples living in
the society.

1.4 PRODUCTS AND SERVICES

The products of sand offered by Lilian sand suppliers’ company will be river sand from rivers.

Concrete sand made from crushed concrete with a mixture of asphalt and cement.

Fill sand, course sand, utility sand, pit sand and fine sand. They will be in standard and quality conditions.

The business will employ laboratory technicians with proper skills to test sand in all states

Laborers will be educated on how to handle sand both in storage and delivery.

Experienced and licensed drivers will do the supply of sand with the tippers this will ensure quality products and satiable services. There will
be a discount on bulk purchases.

1.5 BUSINESS ACHIEVEMENTS

Lilian sand suppliers company will be successful due to the encouraging environment and high demand of sand around it.

This industry will deal with sand supply. All types of sand required by customers will be available.

Its location has well improved infrastructure like a highway that will facilitate sand transportation and access to the company.

There is enough security, a police station nearby and company security guards.
There is availability of electricity power to start and operate laboratory equipment and machinery that will be required into the business.
Electrical power will also help in lighting of in the business.
There is availability of labour both skilled and unskilled labor that will aid in the running of the business.

1.6 INDUSTRY

This industry will deal in sand supply of all types of sand required by customers will be available. Proper services shall be provided to our
employees and customers at large. The business will hire skilled labor personnel in areas like computer in keeping financial, personal and
other records within the business, laboratory and driving sectors.
Total number of workers will be 10 maximum both skilled and unskilled.

3
1.7.1 BUSINESS ORGANIZATION
The business will employ 2 security guards who will be working in shifts, that is; day and night. There will be 2 cleaners who will be working
daily for 8 hours. The administration will be as follows;

The director

The general manager

Financial auditor

Secretary

Drivers

Security guards

Cleaners

1.8 BUSINESS GOALS

1.8.1 LONG TERM GOALS
 Opening up branches in other regions

 Improvement of technology of the business

 Purchasing of pieces of land or plots where to establish the business other than paying rent
 Purchasing more dumpers and lorries for easier and efficient transportation of sand to customers
 Buying more machinery and equipment to the business

1.8.2 SHORT TERM GOALS

 Creation of employment opportunities

 Business expansion
 Improve employees welfare
 Large scale of work done at a period of time

1.9 ENTRY AND GROWTH

For the business to create awareness of its existence to customers, it will engage in intensive advertisements and promotions which will be
done through posters and other communication media like west radio and television. By doing this, all profits gained will be used to expand
the business.

1.9.1 OPPORTUNITY FOR BUSINESS GROWTH

 Provide utilization of the profits made for the growth and expansion of the business branches in different regions.

 The business will operate on 12 hours daily basis and 6 days a week.

 Direct engagement with producers [miners] and hardware operators.

 Research will be conducted to realize other strategies.

4
1.9.2 BUSINESS STRENGTH AND WEAKNESSES

Business Strengths Weaknesses

LILIAN SAND SUPPLIERS  Qualified and experienced  new on market

COMPANY personnel
 poor government policies
 Friendly established

 Well located

 High security available

 Affordable prices

5
CHAPTER TWO

MARKETING PLAN

I.1 POTENTIAL CUSTOMERS

Lilian sand suppliers company has various types of customers that will enable the business to develop. Construction industry is large hence
the reason of getting customers at all times.

Construction companies and personal constructors have developed and they need sand from the business for construction purposes for
example sand for mixing with cement for flooring and walling hence creating potential customers.

I.2 MARKET SHARE

From the gauging and research, Lilian sand suppliers’ company has the possible size of the market that can be gained in the business and it is
almost 40% of the total customers .This is because it is located in the central part of Kanduyi town. The remaining 60% will be shared among
the competitors as follows;

Prime sand limited 25 %

Wisco constructors 20%

Otis sand producers and suppliers company 15%

The pie chart below shows the market sharing of other companies.

otis sand producers

and suppliers; 20%

lilian sand suppliers;

40%
wisco constructors
company; 15%

prime sand limited;

25%

I.3 COMPETITION

The existing competitors are as follows;

Prime sand supply company 25%

Otis sand producers and suppliers 15%

Wisco constructors company 20%

6
 These competitors have the following strengths and weakness;

Name Weakness Strength

Prime sand limited  Small space for storage and  Has qualified personnel
operation
 Has been operating since
 Higher prices 2006

 Hard working personnel

Otis sand producers and suppliers  Has more skilled and

 Poor management
experienced personnel to
 Poor advertising methods
work in the business
 Lack of enough capital

Wisco constructors company  Low pricing

 Less transportation vehicles  Advanced laboratory

 Untidy environment
 Lack of public relations

I.4 PROMOTION AND ADVERTISING

Lilian sand suppliers company will be dwelling in public relations. It has the purpose of creating, understanding and building good will and
reputation.

The intended business will also supply news release and pictures to press rooms and reception on stand. This will be during shows, seminars
within Kanduyi town and Bungoma at large. A good relationship with constant customers will be created thus a good market.

I.5 PRICING STRATEGY

The pricing considerations of Lilian sand supplier’s company will be as follows;

The business intends to use competitors price lists as its main pricing policy. This is to entail the adoption of entrance policy, a strategy of
lowering its prices slightly compared to those of the competitors. The business will also be offering credit facilities as stated under the
policies, offering discounts on bulk purchase. It will not give out goods and services on credit.

I.6 SALES TACTICS

The business will be using several tactics to persuade the customers in to buying our sand and services. The business will be using prices and
drawings, exhibitions, giving discounts according to the nature of customer demands, labor scheduling, uniforms, efficient services and good
packaging facilities.

I.7 DISTRIBUTION STRATEGY

This is the process of delivering sand from the business to customers. The business available trucks will be used in sand transportation from
either producer to the business or from the business to customer.

7
CHAPTER THREE

3.0 ORGANIZATION AND MANAGEMENT PLAN

In this chapter this business being a sole proprietorship type, the owner of the business will put all the plans in place with the help of the
manager to ensure the business produces good quality sand and proper supply services to customers to avoid business failure.

Focus should be mainly on management, managerial skills and other type of personnel that the business should have to make sure the
business improves and runs smoothly.

3.1 ORGANIZATION STRUCTURE

In this section, the business owner puts in place the business structure of the business. There will be a manager and other employees assigned
to perform different tasks to ensure a smooth running of the business. Duties to be performed will include;

1. Coordinating payment and making sure suppliers and staff for example people employed are paid on time.
2. Carrying out market research to ensure that the correct prices are put on sand and procured at the correct prices.
3. Exchange information with the purchasing regarding customers and the suppliers.

Manager

Head of marketing
Storage office Finance officer

Storekeeper Accountant Off loaders and

loaders

Lab technician
Drivers
Cleaners

Watchman office

3.2 MANAGEMENT TEAM

The key management personnel the business is at the final stage of completing or attaining a certain targeted goal at a set period of time. It
includes;

 Directing
 Coordinating
 Staffing
 Hiring

A part from the business owner, the manager should have management experience as stated in chapter one as well as leadership qualities,
entrepreneurship skills and knowledge that enables him/her investigate various duties in the business, problems and identifying possible
solutions. The manager is to be paid at the same time as all the employees.

8
Tasks to be performed are;

1) Planning; when good plans are put in place and are being implemented according to the seriousness layout by the management, this
shall lead to achievement of desired goals.

2) Organizing; Ensuring necessary activities are organized in proper manner by controlling all the activities in different departments for
example finance office and marketing.
3)
3.3 OTHER BUSINESS PERSONNEL

It will include the following persons:

I. SAND LABORATORY TECHNICIAN

This business intends to employ one laboratory technician who will generally deal with testing moisture content and other properties of sand.
The technician will be paid 10,000 per month and overtime allowances will be paid. As the business grows, more laboratory technicians will
be added.

II. LOADERS AND OFFLOADERS

For loading there will be persons to do so while offloading tippers will be available to do the job. This loading is not a permanent job.

III. CLEANERS

The business will hire two cleaners who will ensure the entire business premise is under good hygienic conditions and cleaning will be done
daily for 6 days a week

III.4RECRUITMENT, TRAINING AND PROMOTION

III.4.1 RECRUITMENT

Recruitment will be done to evaluate and determine those who are attracted to the vacancies available at the start of the business.

III.4.2 TRAINING

There will be less training because skilled personnel will already have the knowledge and skills to operate the tasks and the most tasks need
no training for example cleaning.

III.4.3 PROMOTION

During the operation of the business, promotions shall be done on the following basis:

I. Upon attainment of a set goal.

II. Upon the growth of the business and the position falling vacant whereby new branches are created from already existing.
III. Qualification of an individual as one advances privately on his/her education level and as long the business is bringing in more profits.

III.5 REMUNERATION AND INCENTIVES

III.5.1 REMUNERATION

Remuneration depend on the level of individual education and experience more so on sand properties like texture appealing to the customers.
It also depends on work done per day.

9
REMUNERATION TABLE

JOB TITTLE NO. REQUIRED BASIC SALARY

MANAGER 1 30,000
LABORATORY TECHNICIAN 1 10,000
ACCOUNTANT 1 15,000
DRIVER 3 10,000
CLEANER 2 5,000
SECURITY GUARD 2 10,000

III.5.2 INCENTIVES

Even if the employees are being given allowances, they are to enjoy short leaves, medical allowances if in need. The employees need attires
to protect them from any effect of dust and injuries. I t will also maintain practical communication of feedback to enable employees to know
their progress.

III.6 LICENCES, PERMITS AND OTHER REQUIREMENTS

In this business, the manager should ensure that the business meets all the necessary requirements. He must ensure that the business is
registered with the county council which needs not less than 10,000 Kenyan shillings per year, upon acquiring the license, he shall ensure that
tax is paid by getting the Kenya Authority Pin.

He shall also ensure that the workers are well treated and works under prescribed way.

He shall also come up with rules and regulations that will govern the business as follows;

I. Every employee should embrace good relations with customers.

II. All the employees maintain and keep time every day to have high production and supply.

III.7 SUPPORTING SERVICES

The enhancement is done on services, for the efficiency of business operation. The following is to be required;

I. BANKING SERVICES

An account is opened at the Kenya Commercial Bank. It is to provide safe keeping of finances and loans are given due to a continuous service
with the bank.

II. INSURANCE

Since interference might occur due to unpredictable natural calamities or accidents, Pioneer Insurance Company will embrace the services
against perils.

III. SECURITY

Provision of security will be available into the business will be available. The nearest police station will also provide security to ensure the
business is run in a secured and safe environment.

IV. POSTAL INSURANCE ADDRESS

A postal address will be available under the business name where the business needs to realize and make transactions and correspond to
people who will require door-door services.

LILIAN SAND SUPPLIERS COMPANY

P.O BOX, 89-0039,

BUNGOMA

10
CHAPTER FOUR

4.0 OPERATION PLAN

The design of proposed product (sand) in LILIAN SAND SUPPLIER COMPANY will include delivery notes, invoice notes and receipts.

Being a newly initiated business, the best sand product and services will be offered since there will machinery, tools and skilled personnel to
handle the tasks.

Computers will use electrical power while tippers will use either petrol or diesel.

The business will use both direct and indirect selling methods in order to maximize profit, to create good relationship with respect and direct
customers where to bet our product and services.

4.1 PRODUCTION PLAN AND CAPACITIES

MATERIAL CAPACITY SOURCE COST

Machinery 3 County public works 150,000
Sand Bulky Bungoma river sand 200,000
miners
Land 1 acre Family land converted to 100,000
business company
Transport 3 Company’s tippers
Tools 7 Kanduyi tools workshop 20,000

4.1.1 MAINTENANCE

The business plans for repairing and maintenance of tools and equipment is to recruit people who are specialized in particular field to avoid
machine and tool breakdowns or breakages.

Regular oiling and greasing will be done on tools and equipment.

Tools will be washed and stored well after work.

4.1.2 SOURCE OF FINANCE

The business intends to acquire capital from various sources to enable smooth running and to avoid failure for the purchase of materials
(sand) and machinery.

My personal savings and monthly income will be contributed into the business.

11
 4.1.3 GROUND LAYOUT SHOWS/ WORKSHOP PLAN

Men’s room
Changing room Material store

Laboratory

Water supply
accounts
office

parking

security

exit

Entrance

4.2 PRODUCTION/SUPPLY STRATEGY AND OPERATION

The business will be getting its materials from dealers and other registered miners. Sand will be acquired through road transport as it is easily
accessed.

Purchase of sand has to be either maximized or minimized according to demand so as to make reasonable profit. Materials will be transported
by tippers purchased by the business.

Through the strategic plan, we shall make sure sand is enough in quantity and daily records are taken to know the flow of the business. The
business requires ten people to employ in the firm so that to boost supply and service levels. Total profit estimated in a year is Ksh.5000000
and we hope to increase because of the growth in construction sector.

The table below shows workers and their labor;

Worker Labor
Nelson Okumu Manager
Linda Nelima Accountant
Sam Leon Driver
Arnold Wafula Driver
Chris Pino Driver
Gladys Mueni Cleaner
Nancy Kerubo Cleaner
Peter Kalu Security guard
Musyoka Austin Security guard

4.3 PRODUCTION/SUPPLY PROCESS

12
In this process, there will be steps to follow because the industry will be dealing with sand supply. The industry will be collecting sand from
miners who operate from within the town.

Sand will be stored in the firm to wait for delivering to customers.

The flow structure below shows this process flow;

raw Sand

Miners

Tested sand

Storage

Selling/transport

4.4 REGULATIONS AFFECTING OPERATIONS

i. SAFETY REGULATIONS

Lilian Sand Suppliers Company is to provide enough security at work for its employees. Security will be offered by the nearest police station.

There will be fire extinguishers and protective clothing like sun glasses, gloves and gumboots will be provided for all workers. Emergency
exits will be available within the business premise.

ii. HEALTH REGULATION

The business will ensure that employees’ health is protected as they must have medical covers like the National Health Insurance Funds card.
There is a health facility near the business that when emergencies occur, employees shall be attended to.

4.5 OPERATIONAL TIMETABLE

TIME ACTIVITY

8:00-8:30a.m Assembly of workers to be assigned duties.

8;30-10:00a.m Arrival of sand
10;00-1:00p.m Testing and mixing process, supply/selling.
1:00-2:00p.m Lunch break
2:00-4:00p.m Selling/ supply
4:00-4:30p.m Summary of work done
4:30-5:00p.m Assembling tools in store then departure.

13
CHAPTER FIVE

5.0 FINANCIAL PLAN

This chapter deals with financial management of the proposed business. It will give a comprehensive analysis of the revenue and expenditure
to portray the future of financial potentiality of the business. It will use balance sheet, income statements and cash flow statements.

Financial objectives

1) The business will repay the borrowed loan at the end of two and a half years

2) The management will also ensure the business keep up to date financial records of all transactions. This is a legal
requirement by the government for taxation and helps the business in managing their funds.

3) Surplus funds will be ploughed back into the business so as to ensure growth and expansion.

5.1 PRE-0PERATIONAL COST

The business is to allow strict financial management policy in order to promote profit oriented products and avoid losses. The pre-operational
Cost is to be as follows:

Expenses Cost
Insurance 1,500
License and Permits 5,000
Electricity(meter) 3,000
Advertisements 2,000
Tools and equipment 100,000
Water(meter) 3,000
Furniture 7,500
Stock 75,000
Rent 10,000
Miscellaneous 1,500
Postal 1,500
Bank account 200,000
Total 410,000

5.2 Working Capital

ITEMS 2021 2022

Current Assets
Cash at hand 15,000 80,000
Cash at bank 1,000,000 2,000,000
Stock 70,000 80,000
Debtors 17,500 17,000
Total 1,099,000 2,177,000
Current Liabilities
Creditors 13,500 9,000
Bank loan 500,000

14
Interest on loan 14,500 16,380
Totals 526,500 25,380
Working Capital 572,500 2,151,620

15
 5.3 PROJECTED CASH FLOW YEAR 1(2021)

particulars JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
Cash flow
Beginning cash 280,000 282,000 285,000 287,000 288,000 300,000 306,000 312,000 318,000 322,000 330,000 334,000 3,644,000
Sales 1,200,000 1,270,000 1,295,000 1,350,000 1,570,000 2,000,000 1,950,000 2,320,000 2,500,000 2,455,000 2,910,000 3,000,000 23,820,000
Debtors 5,000 6,000 6,500 17,500
Total cash inflow 1,480,000 1,552,000 1,585,000 1,637,000 1,858,000 2,300,000 2,256,000 2,638,000 2,818,000 2,777,000 3,246,500 3,334,000 23,837,500
Cash outflow
Purchases 65,000 68,000 70,000 72,000 74,000 76,000 78,000 80,000 82,000 84,000 86,000 88,000 923,000
Salaries 115,000 115000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 1,725,000
Rent 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000
84,000
License and permits 6,000 6,000
Electricity and water 3,000 2,000 1,500 1,350 1,400 1,600 1,100 2,500 1,400 1,200 1,400 1,300 19,750
Loan Repayment 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,000
Interest on Loan 2,500 2,290 2,080 1,870 1,665 1,455 1,250 1,040 830 625 410 210 16,225
Transport 1,500 1,200 1,300 1,400 1,000 1,500 1,400 1,200 1,100 1,350 1,500 1,600 16,050
Creditors 4,000 5,000 4,500 13,500
Advertisement 3,000 3,000 3,000 9,000
Insurance 10,000 10,000
Telephone 1,000 1,000 1,000 1,200 1,300 900 1,300 1,100 1,400 1,200 1,100 1,100 13,600
Miscellaneous 2,000 1,500 2,000 2,500 1,900 2,500 2,000 1,500 2,000 1,500 1,500 2,200 23,100
Total Cash Outflow 226,000 207,990 213,880 212,320 213,265 218,955 222,050 219,340 220,730 226,375 223,910 229,410 2,979,225
Net 1,254,000 1,344,010 1,371,120 1,424,680 1,644,735 2,081,045 2,033,950 2,418,660 2,597,270 2,550,625 3,022,590 3,104,590 20,858,275

16
 partic JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTA
ulars L
5.3 PROJECTED CASH FLOW YEAR 2 (2022)
Cash flow
Beginning 260,00 282,00 285,00 287,00 290,00 300,00 306,00 312,00 318,00 322,00 330,00 300,00 3,592,0
cash 0 0 0 0 0 0 0 0 0 0 0 0 00
Sales 1,300, 1,270, 1,295, 1,350, 1,570, 2,000, 1,950, 2,320, 2,500, 2,400, 2,900, 3,000, 23,855,
000 000 000 000 000 000 000 000 000 000 000 000 000
Debtors 5,000 6,000 6,000 17,000
Total cash 1,560, 1,552, 1,585, 1,637, 1,860, 2,300, 2,256, 2,638, 2,818, 2,722, 3,236, 3,300, 27,640,
inflow 000 000 000 000 000 000 000 000 000 000 000 000 000
Cash
outflow
Purchases 70,000 72,000 74,000 76,000 78,000 80,000 82,000 84,000 86,000 88,000 90,000 92,000 972,00
0
Salaries 120,00 120,00 120,00 120,00 120,00 120,00 120,00 120,00 120,00 120,00 120,00 120,00 1,440,0
0 0 0 0 0 0 0 0 0 0 0 0 00
Rent 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 96000
License and 8,000 8,000
permits
Electricity 3,000 2,000 1,500 1,500 1,400 1,600 1,100 2,500 1,400 1,200 1,400 1,300 19,900
and water
Loan 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,00
Repayment 0
Interest on 2,500 2,290 2,070 1,870 1,650 1,400 1,200 1000 900 800 400 300 16,380
Loan
Transport 1,500 1,200 1,300 1,400 1,000 1,500 1,400 1,200 1,100 1,350 1,500 1,600 16,050
Creditors 4,000 5,000 9,000
Advertiseme 3,000 3,000 3,000 9,000
nt
Insurance 10,000 10,000
Telephone 1,000 1,000 1,000 1,200 1,300 900 1,200 1,100 1,300 1,200 1,100 1,100 13,400
Miscellaneou 2,000 1,500 2,000 2,500 1,600 2,500 2,000 1,500 2,000 1,500 1,500 2,300 22,900
s
Total Cash 239,00 217,00 223,87 222,47 222,95 228,90 231,90 229,30 231,80 232,05 233,90 239,60 2,752,6
Outflow 0 0 0 0 0 0 0 0 0 0 17 0 0 30
Net 1,321, 1,334, 1,361, 1,414, 1,637, 2,071, 2,024, 2,408, 2,586, 2,489, 3,002, 3,060, 24,887,
000 010 130 530 050 100 100 700 200 950 100 400 370
 5.5PROFORMA INCOME STATEMENT FOR YEAR 2021, 2022

Particulars 2021 2022

Sales 23,820,000 23,855,000
Less Purchases _ 923,000 _972,000
Gross Profit 22,897,000 22,883,000
Expenses
Rent 84,000 96000
Salaries 1,725,000 1,440,000
Electricity and Water 19,750 19,900
Interest on loan 16,225 16,380
Transport 16,050 16,050
Telephone 13,600 13,400
Advertisement 9,000 9,000
Insurance 10,000 10,000
License and Permits 6,000 8,000
Miscellaneous 23,100 22,900
Total expenses 1,922,725 1,651,630
Net Profit 20,968,275 22,231,370
Less 10% tax 2,096,827.5 2,123,137
Net Profit 18,871,4447.5 20,108,233

5.6PROFORMA BALANCE SHEET FOR THE YEAR 2021, 2022

Item 2021 2022

Fixed Assets
Tools and Equipment 100,000 75,000
Furniture 7,500 7,000
Less 2% Depression 2,150 1,640
Total 105,350 80,360
Current Assets
Cash at hand 15,000 80,000
Cash at Bank 1,000,000 2,000,000
Debtors 17,500 17,000
Stock 75,000 80,000
Total 1,107,500 2,177,000
Total Assets 1,212,850 2,257,360
Current liabilities
Creditors 13,500 9,000
Long term liabilities
Bank Loan 500,000
Interest on Loan 16,225 16,380
Total Liabilities 529,725 25,380

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 5.7 DETERMINATION OF PROFITABILITY OF BREAKING –EVEN POINT FOR 2021

Gross Profit Margin= Gross Profit ×100/sales

22,879,000×100÷23,820,000=

96.13%

Net profit ratio=Net profit×100÷sales

18,871,447.5×100÷23,820,000

79.23%

Gross profit 2022

22,883,000×100÷23,855,000

95.93%

Net profit 2022

20,108,233×100÷23,855,000

84.28%

5.8 DETERMINATION OF DESIRED FINANCES

Item Amount
Pre-operational cost 410,000
Working Capital 2,151,620
Fixed assets 80,360
Total desired financing 2,272,980

5.9 DETERMINATION OF PROPOSED CAPITALIZATION POTENTIAL

Total Investment 1,000,000

Total own contribution 3,000,00
Funds from borrowing 500,000

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