BUSINESS PLAN

TITTLE: JESSE WIFI SUPPLY AND INSTALLATION

NAME : VINCENT KIPKOECH

INDEX NO : 5341012584

INSTITUTION : RIFT VALLEY TRAINING TECHNICAL INSTITUTE

DEPARTMENT : ELECTRICAL ENGINEERING

COURSE : CERTIFICATE IN ELECTRICAL AND ELECTRONICS

ENGINEERING

CENTER CODE : 534101

COURSE CODE: 1601

PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL IN PARTIAL

FULFILMENT FOR THE AWARD OF ELECTRICAL AND ELECTRONICS

ENGINEERING

SUPERVISOR : MR REUBEN

EXAM SERIES : JULY 2024

DECLARATION
I hereby declare that this business plan is my original work and has not been presented to any
institution for any academic work.

NAME: VINCENT KIPKOECH

SIGNATURE……………

DATE……………….

The report has been presented to the supervisor

NAME:

DATE …………………………...

SIGNATURE…………………...

ii
DEDICATION
I wish to dedicate this work to my family for their continued support and encouragement throughout
my studies. I also dedicate this work to my friends who supported me psychologically throughout the
period.

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EXECUTIVE SUMMARY
1.0: BUSINESS DESCRIPTION
JESSE WIFI SUPPLY AND INSTALLATION is specializing majorly in supply and installation of
wifi, with a strong priority placed on quality of service. Specialize in products and services for
homes, events among others.

The Wi-Fi supply business requires a different set of skills. Both in installation and supply skilled
frequently share activities in the installation.

To sum it up, supply and installation process of Wi-Fi structures. This is achieved through a number
of methods, including assembling of internet cables .

During the installation process. The installer also procures these materials in their pure form, then
they are sliced, rounded, and molded in the sizes and shapes needed

The business address will be;

JESSE WIFI SUPPLY AND INSTALLATION

P.O BOX 126 – 30100
Nakuru
TEL: 0720409460

2.0: MARKETING PLAN

The proposed business will be marketed through various means such as sales promotion which will
include promotion of social services such as billboards and proper display of range of services that
the business offers . Also the business will be rewarding guests who will be visiting the restaurant
more often and the employees too will be rewarded to boost their morale to ensure maximum
delivery of services and products that are done professionally. The business will also be advertised
through outlets and sign posts which will have a proper display of the business location and product
offered.Installation ans supply of its services will be through motor vehicle which will be purchased
to ensure efficiency in delivery celebrations or ceremonies such as streaming of live events etc.

3.0: ORGANIZATION AND MANAGEMENT PLAN.

In any organization a chain of command must be clearly outlined and adhered to ensure all staff
understand it so that they are able to know who to approach in case of anything the management plan
ensure efficiency in work environment for the employees and services is enhanced since the
establishment aim is to make profit

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The chapter also shows a detail of how the business will recruit its employees and ways of ensuring
that they are all equip with the knowledge of the industry and the legal requirements for the business
operation.

4.0: ORGANISATION AND PRODUCTION PLAN

The staff will use their knowledge learnt that is the interpersonal skill and technical skills to welcome
quest in the to the company . through efficient communication by the quest and the staff and
amongest the staff it will ensure the quest receive total satisfaction and feel relaxed.

5.0 FINANCIAL PLAN

The business will require sh. 800,000 to start. The total amount of own saving and family
contributions will be sh. 500,000.The remaining sh.300,000 will be obtain from the bank loan
amounting to sh. 300,000.proformer invoice, cash flow, balance sheet and breakeven point will be
used to analyze financial performance of the business

START UP CAPITAL

SOURCES OF FUNDS AMOUNT

Owner savings 500,000

Bank loan 300,000

TOTAL 800,000

TABLE OF CONTENTS

DECLARATION............................................................................................................................................ii
DEDICATION...............................................................................................................................................iii
EXECUTIVE SUMMARY...................................................................................................................................iv
1.0: BUSINESS DESCRIPTION.................................................................................................................iv
2.0: MARKETING PLAN............................................................................................................................v
v
 3.0: ORGANIZATION AND MANAGEMENT PLAN.............................................................................v
4.0: ORGANISATION AND PRODUCTION PLAN................................................................................v
5.0 FINANCIAL PLAN..................................................................................................................................v
TABLE OF CONTENTS......................................................................................................................................vi
CHAPTER ONE.....................................................................................................................................................1
1.0 BUSINESS DESCRIPTION.....................................................................................................................1
1.2 BACKGROUND OF THE OWNER........................................................................................................1
1.3 BUSINESS NAME...................................................................................................................................1
1.4 BUSINESS LOCATION AND ADDRESSS............................................................................................2
1.5 FORM OF OWNERSHIP.........................................................................................................................2
1.6 TYPE OF BUSINESS..............................................................................................................................3
1.7 PRODUCTS AND SERVICES................................................................................................................3
1.8 JUSTIFICATION OF THE BUSINESS...................................................................................................3
1.9 GOALS/ OBJECTIVES OF THE BUSINESS.........................................................................................3
1.10 ENTRY AND GROWTH STRATEGY..................................................................................................3
1.11 SWOT ANALYSIS...............................................................................................................................4
CHAPTER TWO....................................................................................................................................................5
MARKETING PLAN.....................................................................................................................................5
2.0 INTRODUCTION....................................................................................................................................5
2.1 CUSTOMERS..........................................................................................................................................5
2.3 COMPETITION.......................................................................................................................................5
2.4 METHODS OF PROMOTION AND ADVERTISING............................................................................6
2.4.1 ADVERTISING METHODS.............................................................................................................6
2.4.2 PROMOTIONAL METHODS..........................................................................................................6
2.5 PRICING POLICY...................................................................................................................................7
2.6 SALE TACTICS.......................................................................................................................................7
2.7 DISTRIBUTION STRATEGY.................................................................................................................7
CHAPTER THREE..................................................................................................................................................8
3.0 ORGANIZATION AND MANAGEMENTPLAN...................................................................................8
3.1ORGANIZATIONAL STRUCTURE........................................................................................................8
3.2 RECRUITMENT, TRAINING AND PROMOTION...............................................................................9
3.2.1 RECRUITMENT POLICY................................................................................................................9
3.2.2 TRAINING POLICY.........................................................................................................................9
3.2.3 PROMOTION....................................................................................................................................9
3.3 REMUNERATION AND INCENTIVES.................................................................................................9
3.4 MANAGEMENT TEAM.......................................................................................................................10
3.5 LICENSES, PERMITS AND BY LAW.................................................................................................12
3.6 SUPPORTIVE SERVICE.......................................................................................................................13
CHAPTER FOUR.................................................................................................................................................14

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 4.0 PREPARATION AND PRODUCTION PLAN......................................................................................14
4.1 PRODUCTION FACILITIES AND CAPACITIES...............................................................................14
4.2 PRODUCTION STRATEGY.................................................................................................................14
4.3 PRODUCTION DESIGN AND DEVELOPMENT................................................................................15
4.4 PRODUCTION PROCESS....................................................................................................................15
4.5 REGULATIONS AFFECTING OPERATIONS....................................................................................15
I) TRADE LICENCING ACT...............................................................................................................................15
II) SAFETY REGULATION ACT.........................................................................................................................16
III) BUILDING BY-LAWS..................................................................................................................................16
IV) TAXATION................................................................................................................................................16
4.6 INTERNAL RULES AND REGULATIONS.........................................................................................16
CHAPTER FIVE...................................................................................................................................................17
5.0 FINANCIAL PLAN...............................................................................................................................17
5.1 PRE-OPERATIONAL COSTS...............................................................................................................17
5.2 WORKING CAPITAL...........................................................................................................................18
5.3 CASH FLOW STATEMENT FOR YEAR ONE....................................................................................19
5.4 PROFOMA INCOME STATEMENT AS AT 31ST DEC YEAR I.......................................................20
5.5 PROFOMA BALANCE SHEET FOR THE FIRST YEAR...................................................................21
5.7 PROFITABILITY RATIO ANALYSIS.................................................................................................23
5.8 PROPOSED CAPITALIZATION..........................................................................................................23
PROFORMA BALANCE SHEET........................................................................................................................24
5.9 PERFORMA BALANCE SHEET FOR THE YEAR ENDING DEC 2023.............................................................24
5.10 PERFORMA BALANCE SHEET FOR THE YEAR ENDING DEC 2024...........................................................25
5.11 PERFORMA BALANCE SHEET FOR THE YEAR ENDING DEC 2025.......................................................26
5.12 BREAK EVEN POINT...........................................................................................................................28

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 CHAPTER ONE

1.0 BUSINESS DESCRIPTION

Jesse Wi-Fi supply and installation is a start-up company specializing in installation and distribution
of high-quality Wi-Fi services products for various industries and applications. Our mission is to
provide durable, reliable, and cost-effective solutions to meet the shelter needs of businesses, event
organizers, disaster relief agencies, and outdoor enthusiasts. Our product line includes a wide range
of supply, including events premium-grade materials to ensure superior strength, weather resistance,
and longevity. In addition to offering standard Jesse Wi-Fi supply and installation takes pride in our
ability to customize supply to meet specific client requirements. Our team of experienced installers
and suppliers collaborate closely with customers to understand their unique needs and deliver
solutions.

Market research indicates a growing demand for durable and versatile supply across industries. With
our focus on delivering exceptional quality and customization options, we aim to capture a
significant share of this expanding market. competitive advantage lies in our commitment to superior
craftsmanship, prompt delivery, and exceptional customer service. We have invested in state-of-the
installation equipment, quality control processes, and a skilled workforce to ensure consistent
product excellence

1.2 BACKGROUND OF THE OWNER

The name of the business Jesse Wi-Fi supply and installation . The owner decided to use this name
because his home ground name and is well known. The logo Jesse Wi-Fi supply and installation
enterprise

1.3 BUSINESS NAME

The proposed name of the business is Jesse Wi-Fi supply and installation. The name is chosen
because its states the products sold and also it’s the nick name of the owner.

It communicates the business strategy to customers and employees to understand how the business
represents itself in the business world and beyond.

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It also an essential part of branding.

Quality products, Affordable price is the slogan of the proposed business plan. The slogan helps
build relationship between the brand and the public what Trim’s shop stands for and what it offers.

1.4 BUSINESS LOCATION AND ADDRESSS

Jesse Wi-Fi supply and installation shop is located at Nakuru town. This site of the business is next
to delux electrical and electronics .

1.5 FORM OF OWNERSHIP

Jesse wifi supply and installation shop employs sole proprietorship of ownership. Sole proprietorship
is simpler requiring no legal filing to start the business

Also work better because it is entirely self-financed.

Advantages of sole proprietorship

 It is easy to change your legal structure later if circumstances changes you easily wind up the
business.
 Affordable and simple
 Less paperwork
 Simpler income tax
 Freedom and flexibility
Disadvantages of sole proprietorship
 No liability protection
 Financing and business credit is harder to procure
 Raising capital can be challenging

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1.6 TYPE OF BUSINESS
This business ventures mainly in supply and installing The activities of the business will be selling,
deliver orders, offering consultancy to customer’s and also preparing and processing of orders.

1.7 PRODUCTS AND SERVICES

The business will sell products such as cables wifi routers and its accessories. For large orders we
will offer free delivery services. Packaging of orders will also be offered. This will help the
customers access a one stop shop for all their products needs and we will strive to offer the best
quality of the products.

Our business will be unique In that we will stock all types of wifi ensuring no customer lacks a
product and this will give us a great advantage over our competitors.

1.8 JUSTIFICATION OF THE BUSINESS

The reason why the business will be located in that particular area is because it enjoys a large flow of
people and also availability of good road network connection with electrical power which is stable.

The second reason is that through the joint venture, the business will be able to satisfy customer’s
needs since there is available labor which is initially cheap. This will ensure that all orders will be
processed and done on time.

Thirdly the business will be feasible since there is high return due to our modern technology needs in
our society.

Lastly, we will off job opportunities to the local communities hence there will be job creation.

1.9 GOALS/ OBJECTIVES OF THE BUSINESS

The objectives of the business will be to acquire and maintain 40% of the surrounding customers in
the first year of operation, to clear the loan within the first two years of operation and to increase
profit levels to 7% within the first eight months of operation.

1.10 ENTRY AND GROWTH STRATEGY

The business will attract its customers by offering and gain acceptance in the market through
advertisement mostly through the vernacular radio stations, newspapers. Billboards will also be used
to enlighten customers who will be used to enlighten customers who will be using highway.
Newspaper and magazines will be another method of informing its customers about their products.

The business will attract its customers by offering to them goods of high quality, offering more
affordable prices, discounts, offering goods in credit and offering after sale services such as
transportation of goods. The business plan is to grow and expand in future by employing more
qualified personnel, conducting seminars to enlighten both the employees and the public about the
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 intended plans of the business and building a bigger expanded premises to cope up with the growing
the business enterprise

1.11 SWOT ANALYSIS

The following table shows the strengths that will help the business achieve its goals and also the
weakness which may lead to slow growth rate.
Strength Weakness Opportunity Threats
There is enough capital. Embezzlement of funds in Adequate stock and Management of the
the business. timely payment of funds may be difficult
wages and salaries
There is availability of well Personnel may require Effective and Personnel may
qualified personnel. Training which is efficient will be demand high
expensive. provided payments
Its location is convenient. Congestion due to high It will got many There is lack of space
number of customers. customers hence high for expansion
profits

There is use of computers The personnel may be There is increased There will be high
which will speed up business illiterate to operate efficiency and maintenance costs of
Operations. computers. minimization of the computers
Errors

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 CHAPTER TWO

MARKETING PLAN

2.0 INTRODUCTION

Business intends to start with the target customers thus it will promote the business in its sales
and maximum profits. It also identifies the customers, competitors and outlines the pricing,
selling and promotion and distribution strategies. The business will use different methods of
marketing its products. The methods may include advertising, sales promotion, road shows
and exhibitions

2.1 CUSTOMERS

The proposed business venture will take a very large portion of the market share in the area
because most people in the area travel for a long distance to get the goods. When the business
starts it will serve an approximate area of hundred square kilometers of the total population
area.

The chart below shows how the market share will be:

SALES

INFILL General Kago Trim's INFILL

2.3 COMPETITION
The competitors of the proposed business will be general kago, infill traders, Deri markets. The
business will take advantage of the opportunities and strengths it prides itself in to stay
competitive and fully taking advantage of its competitors’ weaknesses.

STRENGTHS WEAKNESSES

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Professional expertise Improper packaging
Interpersonal skills Stock outs

From the table above it is clear that Jesse Wi-Fi supply and installation will be better placed to
compete for customers in order to establish its customer base. Since we will be a one stop shop
we will attract more customers and in line with our strengths we will face out competition and be
the dominant installation.

2.4 METHODS OF PROMOTION AND ADVERTISING

The proposed business enterprise will enlighten its customers about its products through
different methods like advertising through radios, TV, newspapers, billboards and through
different promotional methods. This will help it to capture and attract more customers and
sales.

2.4.1 ADVERTISING METHODS

Jesse Wi-Fi supply and installation will use different advertising techniques to familiarize
and enlighten the public about products. They will use advertising media such as radios,
mostly the vernacular radio stations and TV stations to advertise its products. They will
advertise their products thrice a day and they will specify the quality, prices and the contents
of the products

2.4.2 PROMOTIONAL METHODS

Jesse Wi-Fi supply and installation will promote its products through different promotional
methods which will make customers aware of its products and also create confidence in them.
Road shows will used as a means of promoting the product where the management will
organize for visits in different towns along the highway and promote the products of Trim’s.

2.5 PRICING POLICY

The pricing strategy will be based on the prevailing prices in the area. However as an entry
strategy we will sell three shillings less for the first month in order to attract customers.

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customers. Customers buying 40 % of the of the willing product that they need in Trim’s will
enjoy a discount of 2% per item. During the first month the first 100 customers will enjoy a 0.5%
discount per item.

We will be offering good credits terms to trustworthy customers to enable those who do not have
available cash acquire the goods and pay later and offering after sales services.

2.6 SALE TACTICS

The sole proprietor will adapt different sale tactics to reach out his customers. These sale
techniques which will determine the sale volume of the business. The techniques which will
be used include; personal selling where the products will be sold directly to its customers in
the business enterprise. This will give the customer a sense of belonging thereby motivating
him. Sales agents and distributors will also be used to take products in the market places. They
will be given a commission which will be calculated on the basis of volume of sales. This will
motivate them to make more sales so as to cam higher wage.

2.7 DISTRIBUTION STRATEGY

The distribution strategy will be through road using pick up tracks and Lorries in case of large
purchases. These large purchases must cover the fuel cost of transportation, driver’s wage and
car maintenance all covered in the profit from these sales. Challenges to be anticipated include;
delayed deliveries due to traffic congestion and lack of tracks and pick- ups to transport products.
The solutions to these challenges will be to require a one day prior for orders that require
transportation and hire specific tracks for distribution purposes only before we secure our own.

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 CHAPTER THREE

3.0 ORGANIZATION AND MANAGEMENTPLAN

Proper organization and management of the business will play a key role in the success of the
business. The organization and management of the business through different organizational
structure will enable the staff to identify the duties and responsibilities assigned to each
individual. This will also help them to identify different communication channels to present
their grievances and help them to know different lines of authority.

3.1ORGANIZATIONAL STRUCTURE
The business will design its organizational structure from the top management to the
subordinates. Line of authority will flow from the highest level where those in the higher level
will delegate duties and have control over those in the lower levels in the organizational chart.
The organization structure of the proposed business will be as follows;

GENERAL MANAGER

ACCOUNTS PROCUREMENT HUMAN

MANAGER MANAGER RESOURCE
MANAGER

SUPERVISORS

EMPLOYEES

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3.2 RECRUITMENT, TRAINING AND PROMOTION

3.2.1 RECRUITMENT POLICY

Recruitment of departmental managers will be interview based where the best will be picked
using qualification parameters as the guiding base. Departmental managers will oversee
recruitment of supervisors based on interview basis as well as through direct recommendations.
Employees will be hired at the gate and retention will be on performance basis.

3.2.2 TRAINING POLICY

Orientation training will be conducted for new employees. Periodic health and safety training
will also be conducted in order to ensure the employees are always prepared. The business will
hire external training personnel. The employees will also go for periodic workshops and
seminars for further training where need arises.

3.2.3 PROMOTION
Promotion will be based on performance of an employee as well as academic qualification.
Years of service to the business will also be a determining factor during promotion cases. This
will motivate employees to put in more effort in their daily activities.

3.3 REMUNERATION AND INCENTIVES

JOB TITLE NUMBER OF BASICSALARY P.A TOTAL

EMPLOYEES
General manager 1 210,000 210,000
Departmental 3 400,000 400,000
managers
Supervisors 6 400,000 400,000
Employees 5 175,000 175,000

Drivers 10 300,000 300,000

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The business will give incentives to the workers in order to motivate them to work even harder.
The incentives will include; bonuses, overtime pay, holiday gift hampers and free training.

3.4 MANAGEMENT TEAM.

This will be comprised of the top manager working together with the departmental managers to
oversee formulating, planning and directing the junior employees on the roadmap to follow in
order to achieve success of the business. Their qualifications and responsibilities will be as
follows;

Office holder Qualifications Responsibilities

General Manager  Should be a holder of  Planning and managing business
bachelor of commerce activities.
master’s degree.  Decision making.
 Should have great  Solving internal conflicts and
leadership skills. disputes.
 Should be aged between  Overall signatory of financial
30-45 years of age. documents.
 Should have an  Pay employees.
experience of not less
than 5 years.

Departmental Managers  Should be a holder of  Handling all departmental related

bachelor’s degree in their matters.
respective field of  To facilitate the daily operations
expertise. of the business activities.
 Have good  Help the business in
communication skills. implementation of its goals and
 Should have great objectives.
interpersonal skills.  Make departmental decisions.
 Have an experience of not
less than two years.

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There will also be other personnel who will be entrusted with the day to day activities of running
the business. These include the supervisors and the employees whose qualifications and
responsibilities will be as follows;

Qualifications Responsibilities
Supervisors  Have at least a college  Oversee implementation
diploma or certificate. of instructions from
 Have at least six months departmental managers.
experience.  Oversee performance of
the employees.

Employees  Have a form four  Treating cereals with

certificate. pesticides.
 Be self-driven.  Packaging of cereals to fit
 Be hands on. customer orders.
 Have a six months  Oversee cleanliness of the
experience. warehouse.
 Report to supervisors on
levels of cereal stocks.
 Attend to all customers
without discrimination.

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The business will embrace a vertical communication channel. Instruction are to flow downwards
from the top manager and trickle down to the least employee while feedback will flow upwards
from the employees to the top manager.

Top manager

Downward flow Departmental managers upward flow

(Instructions) (Feedback)

Supervisors

Employees

3.5 LICENSES, PERMITS AND BY LAW

The business will have to obtain some legal documents as required by law to start its
operations. They will obtain a trading license from the local government which will specify
the type of business they intend to undertake. This license will be renewed annually after
paying a certain fee which will be ksh3500 for the proposed business venture. The business
will also obtain an insurance cover at a fee of ksh20000 with a well-established insurance
company to ensure that it will be compensated if any hazard insured against causes a loss. The
insurance cover will also be renewed annually after the payment of the fee. The business will
also pay tax at the rate of twenty percent of the profit realized annually.

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3.6 SUPPORTIVE SERVICE
PROFESSIONAL

The following will be considered for effective flow of the business; guidance and counselling of
the employees on health issues and family issues, training of the employees in order to make
them more effective.

INSTITUTIONS

The business will work hand in hand with several institutions such as insurance companies,
Kenya power and lighting company, county water services, banks and saccos’.

Support service Service provider Services provided Contact/Address

Banking service KCB Bank Business savings account. KCB Bank, Nakuru town.
Bank loans. P.O Box 341Nakuru
Current account.
Insurance CIC insurance Indemnity over fire, theft Coinsurance, Nakuru branch.
company and destruction by floods. Email; CIC.group.co.ke
Powered lighting KPLC Electricity installation. Kenya power Nakuru
Support machines and substation.
equipment’s.

Finance Zenka sacco Loans Zenka sacco@gmail.com

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 CHAPTER FOUR

4.0 PREPARATION AND PRODUCTION PLAN

Operation that the business will be undertaking are; transportation of products for their
customers from the business enterprise to their destinations, installation of tents for the benefit
of their customers. This will make the activities of the business flows smoothly and give the
customers a sense of belonging as they can purchase products at any quantity for they are
assured of assistance to the destination of their choice.

4.1 PRODUCTION FACILITIES AND CAPACITIES

For the operation to flow smoothly, the business will require facilities and equipment that will
ease the duties and tasks to be undertaken in the business. These facilities will be purchased
and the other leased or hired for a specified period. The facilities and equipment will include;

Equipment Units Supplier Cost

Pickup 1 Audi motors 1,000,000
Nissans 2 Parkmart 25,000
Computer 1 Gateways limited 30,000
Cables 3 G.K electronics 5,000
routers 10 G.K electrons 25,000
Shelve 4 TUK 24,000
Total 21 109,000

4.2 PRODUCTION STRATEGY

For Wi-Fi supply and installation , the business will need some materials which include screws,
cables.ladder e.t.c

For services that require more labor more laborers will be hired and paid 700kshs per day. The
services outside the business premises transport and lunch will be offered by the business for our
employees.
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Most of the production process will be undertaken by the distributors. Other production
process will be undertaken by the receptionist by use of computers. The computer will be used
in the production of receipts, orders, payrolls for personnel and any other document that will
be needed in the business undertakings.

4.3 PRODUCTION DESIGN AND DEVELOPMENT

Tent welders enterprise shop will offer high quality products and services at a fair price this
thus to compete favorably with competitors. Our products will be of latest technology from well-
known industries and companies. We will have a showroom where customers will be explained
on how products work and their advantages. The new services and products will be offered at a
lower price for the first two months to attract customers.

4.4 PRODUCTION PROCESS

The proposed business will be receiving customers from all over the country. The customers will
pass the reception office where they are welcomed by receptionist and they will meet with the
secretary. The secretary will explain the type of services and goods the business is offering and
the customers makes his decision, afterwards the customers will decide the services he will need
and the secretary will record in full details the customers’ needs and then forward it to
appropriate department.

4.5 REGULATIONS AFFECTING OPERATIONS

The regulations will help to curb any accident and misunderstanding that may occur in future.
The regulations will be there to ensure that the employees are comfortable and feel secure when
undertaking any operations as their health and safety is safeguard.

For the business to operate legally the following has to be considered:

I) TRADE LICENCING ACT

The government requires that every business to hold a trade license from country council before
operation begins

II) SAFETY REGULATION ACT

The business will ensure better working condition and protective gears or equipment are out in
place as laid down by safety act of Kenyan Law.

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 III) BUILDING BY-LAWS
The business will ensure that it fits securely in the building by laws act of Kenyan law by using
recommended building materials and procedures.

IV) TAXATION
No business operates without paying taxes to the government. The taxes form a source of
government revenue.

4.6 INTERNAL RULES AND REGULATIONS

These sets of guidelines that spells out how the workers and other participants should behave
towards one another. They are aimed at promoting the name of the business, its priority and also
to cater for each person's welfare within the business together with the customers. These rules
and regulations include:

- It’s a must to all workers report to work in time and to leave at prescribed time 7:30 am to 5:00
pm.

- All workers shall be answerable to the manager.

- All must wear protective gears and devices given to them when operating their duties.

- Every worker is expected to work efficiently and effectively under no supervision.

- All customers must be treated equally in all circumstances.

- Absenteeism in the business may lead to retrenchment as it will be determined by the manager
and any defilement of above regulations.

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 CHAPTER FIVE

5.0 FINANCIAL PLAN

This provide the business with overview idea of the prices required to start and run the business
for all the funds that will be provided by the owner or borrowed from the bank. It also shows on
loss, profit and the cash flow of the business. Financial plan enables for easy auditing of the
business and give an idea on ways to avoid any kind of financial instability.

5.1 PRE-OPERATIONAL COSTS

ITEMS COST (Kshs)

Transport 10,000

Assets 400,000

Rent deposit 50,000

Market research 15,000

Consultation fees 5,000

Installation 60,000

Stationeries 30,000

Telephone 10,000

License& Registration 30,000

TOTAL 610,000

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5.2 WORKING CAPITAL
ITEMS YEAR I (Kshs) YEAR II (Kshs) YEAR III (Kshs)

CURRENT ASSET

Stock of raw materials 250,000 300,000 500,000

Work in progress 20,000 40,000 70,0000

Stock of finished 50,000 90,000 150,000

goods

Closing stock 10,000 70,212 170,634

Debtors 250,000 500,000 600,000

Cash in hand 751,703 863,391 996,706

Cash at bank 351,703 463,391 796,706

TOTAL CURRENT 1,312,703 1,906,994 3,284,046

ASSETS (A)

LESS CURRENT
LIABILITIES

Creditors 16,703 36,997 57,523

Loan payment 16,000 19,000 27,000

Unpaid expenses 10,000 23,000 50,000

TOTAL CURRENT 42,703 78,997 134,523

LIABILITIES (B)

WORKING 1,355,406 1,985,991 3,418,569

CAPITAL A-B

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5.3 CASH FLOW STATEMENT FOR YEAR ONE
Cash Flow Statement for supply enterprise Business Year 1 Year 2 Year 3

Cash inflows

Sales revenue 500,000 600,000 700,000

Loans received 100,000

Total cash inflows 600,000 600,000 700,000

Cash outflows

Cost of goods sold 200,000 240,000 280,000

Salaries and wages 100,000 120,000 140,000

Rent and utilities 20,000 25,000 30,000

Marketing and advertising 10,000 15,000 20,000

Supplies and materials 30,000 40,000 50,000

Equipment purchases 50,000 75,000 100,000

Loan payments 30,000 50,000

Total cash outflows 410,000 545,000 670,000

Net cash flow 190,000 55,000 30,000

Beginning cash balance 0 190,000 245,000

Ending cash balance 190,000 245,000 275,000

32

19
5.4 PROFOMA INCOME STATEMENT AS AT 31ST DEC YEAR I
Pro Forma Income Statement for installation
enterprise Business Year 1 Year 2 Year 3

Revenues

Sales revenue 500,000 600,000 700,000

Total Revenues 500,000 600,000 700,000

Costs of Goods Sold

Direct materials 50,000 60,000 70,000

Direct labor 100,000 120,000 140,000

Overhead expenses 50,000 60,000 70,000

Total Costs of Goods Sold 200,000 240,000 280,000

Gross Profit 300,000 360,000 420,000

Operating Expenses

Salaries and wages 100,000 120,000 140,000

Rent and utilities 20,000 25,000 30,000

Marketing and advertising 10,000 15,000 20,000

Supplies and materials 30,000 40,000 50,000

Depreciation 20,000 20,000 20,000

Total Operating Expenses 180,000 220,000 260,000

Operating Income 120,000 140,000 160,000

Interest Expense 10,000 12,000 14,000

Net Income Before Taxes 110,000 128,000 146,000

20
Pro Forma Income Statement for installation
enterprise Business Year 1 Year 2 Year 3

Income Taxes 22,000 25,600 29,200

Net Income 88,000 102,400 116,800

5.5 PROFOMA BALANCE SHEET FOR THE FIRST YEAR

Pro Forma Balance Sheet for Jesse supply and installation YEAR 3
enterprise Business Year 1 YEAR 2

Assets

Current Assets

Cash 190,000 195, 000 200,000

Accounts receivable 100,000 110,000 130, 000

Inventory 50,000 55,000 60,000

Prepaid expenses 5,000 7,000 9,000

Total Current Assets 345,000 367,000 399,000

Fixed Assets

Land 50,000 70,000 90,000

Buildings 150,000 155,000 160,000

Equipment 200,000 210,000 220,000

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Pro Forma Balance Sheet for Jesse supply and installation YEAR 3
enterprise Business Year 1 YEAR 2

Less: Accumulated depreciation 20,000 18,000 16,000

Total Fixed Assets 380,000 370,000 355,000

Total Assets 400,000 388,000 371,000

Liabilities and Equity

Current Liabilities

Accounts payable 50,000 45,000 40,000

Short-term loans 30,000 28,000 25,000

Total Current Liabilities 80,000 73,000 65,000

Long-term Liabilities

Long-term loans 70,000 73,000 75,000

Total Liabilities 150,000 146,000 140,000

Equity

Common stock 300,000 280,000 260,000

Retained earnings 275,000 260,000 250,000

Total Equity 575,000 540,000 510,000

Total Liabilities and Equity 725,000 686,000 650,000

5.7 PROFITABILITY RATIO ANALYSIS

Profitability Ratio Analysis Year 1 Year 2 Year 3

Gross Profit Margin 60% 60% 60%

Operating Profit Margin 24% 23.3% 22.9%

22
Profitability Ratio Analysis Year 1 Year 2 Year 3

Net Profit Margin 17.6% 17.1% 16.7%

Return on Assets (ROA) 17.6% 17.1% 16.7%

Return on Equity (ROE) 29.3% 27.4% 25.6%

5.8 PROPOSED CAPITALIZATION

Proposed Capitalization Structure Amount

Equity
Common stock 300,000
Retained earnings 275,000
Total Equity 575,000
Debt
Short-term loans 30,000
Long-term loans 70,000
Total Debt 100,000
Total Capitalization 675,000

PROFORMA BALANCE SHEET

5.9 PERFORMA BALANCE SHEET FOR THE YEAR ENDING DEC 2023
Particulars Kshs Kshs

23
Assets

Fixed Assets

Equipment 68200

Furniture 44000

Current Assets 112200

Stock 43300

Cash At Bank

Cash At Hand 131000 221200

Total Assets 46900 333400

Liabilities

Long Term Liabilities 166668 166668

Bank Loan

Short Term Liabilities 105502

Investment Equity 51230

Net Profit 156732

Total Liabilities 333400

24
5.10 PERFORMA BALANCE SHEET FOR THE YEAR ENDING DEC 2024
Particulars Kshs Kshs

Assets

Fixed Assets

Equipment 68200

Furniture 44000

Current Assets 112200

Stock 43300

Cash At Bank

Cash At Hand 131000 221200

Total Assets 46900 333400

Liabilities

Long Term Liabilities 166668 41670

Bank Loan

Short Term Liabilities 105502

Investment Equity 51230

25
Net Profit 398620

Total Liabilities 440290

5.11 PERFORMA BALANCE SHEET FOR THE YEAR ENDING DEC 2025
Particulars Kshs Kshs

Assets

Fixed Assets

Equipment 68200

Furniture 44000

Current Assets 112200

Stock 43300

Cash At Bank

Cash At Hand 131000 221200

Total Assets 46900 333400

Liabilities

Long Term Liabilities 166668

26
Bank Loan

Short Term Liabilities 16760

Investment Equity 560748

Net Profit 383010 960518

Total Liabilities 960518

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5.12 BREAK EVEN POINT

VARIABLE EXPENSES(KSHS) FIXED COST KSHS

Transport Fee 50 000 Rent 70 000

Telephone Services 24 000 Salaries 144 000

Cost Of Sales 301 190 Loan repayment 160 000

Water bills 24 500

Total 384 090 398 500

Contribution margin(C.M)% = ( sale−variable

sales ) x 100
1743,970−384 090
c . m%= ×100
1743 970
1359 880
cm %= x 100
1743 970
c . m%=77.98 %
¿ cost
Break even point =
c.m%
390500
= 5110.29
77.985
Break even point for year 1= 5 110.29

Variable Expenses (Kshs) Fixed cost kshs

28
Transport 94 140 Rent bills 84 000

Telephone bill 50 000 Salaries 192 000

Cost of sales 330 320 Water bills 30 000

474 460 Loan repayment -

474 460 306 000

sales−variable cost x 100

% Contribution Margin (C.M) =
sales

1323 320−474 460 x 100

¿
1 323 320

848 860 x 100 %

¿
1323 320

C.M % = 64.15%
Break even point for year 2 = 4 770 .07

29