BUSINESS PLAN

P. O BOX 47, KISERIAN

TEL: 0707011939

EMAIL: newtonmoenga126@gmail.com

PRESENTED BY : MOENGA NGUGI NEWTON

INDEX NUMBER :2291010215

SUPERVISED BY : MR LINUS

PRESENTED TO : KENYA NATIONAL EXAMINATION COUNCIL IN PARTIAL

FULFULLMENT OF THE REQUIREMENT FOR THE
AWARD OF CRAFT IN PLUMBING

SUPERVISOR : MR LINUS

EXAM SERIES: :JULY AUGUST

DECLARATION

I hereby declare that this business plan is my original work. I also affirm that it has not been
presented to this institution or any other college for accaic purposes, or for any other purpose.

Name : MOENGA NGUGI NEWTON

Admin No: 17057

Signature: ………………………………………..

Date : ………………………..................................
DEDICATION
I dedicate this business plan to my family members: Mum, and my siblings. You gave me a

reason to study hard.

ACKNOWLEDGEMENT
I am very grateful to the almighty God for giving me good health, guidance, and the strength to
do my business plan work. And also want to thank my Mum and Dad for social and financial
support during writing of the business plan.
Thanks to my business plan supervisor, for guidance and support during the business
plan.

May God Bless you all.

 EXECUTIVE SAMMARY
1.0 BUSINESS DESCRIPTION
The name of the business will be CASTRO PLUMBING FITTINGS AND CERAMICS COMPANY. It will be located at KISERIAN TOWN
OPPOSITE TOTAL PETRO STATION. The product and services will be of high quality.

2.0 MARKETING PLAN

The potential customers of the business will be individuals, commercial and institutions customers respectively. The business will have
competitors who include; JJ PLUMBING SOLUTIONS located just a few meters from the business at KISERIAN TOWN.

3.0 ORGANISATION AND MANAGEMENT PLAN

The business will be managed by the owner of the business, and for assistance of the business there will be 15 employees required to assist in
the company.

4.0 OPERATION PLAN

The operation facilities will be acquired through purchasing goods from the manufacturers. Operation tactics will include; ensuring that there
is enough stock in the business, ensuring minimum utilization of business resources, employing good and qualified staffs who will be able to
maintain good business relationship among the workers and the customers.

5.0 FINANCIAL PLAN

The business owner will capitalize his business through borrowing loans from banks, donations from friends and relatives and also from the
owner’s personal savings.
CONTENTS
DEDICATION............................................................................................................................................ 2
ACKNOWLEDGEMENT .......................................................................................................................... 3
CONTENTS ............................................................................................................................................... 4

1. EXECUTIVE SUMMARY................................................................................................................. 6
1.1. Business description .................................................................................................................... 6
1.2. Marketing Plan ............................................................................................................................ 6
1.3. Organizational and Management Plan ......................................................................................... 6
1.4. Operational plan .......................................................................................................................... 6
1.5. Financial Plan.............................................................................................................................. 6

2. BUSINESS DISCRIPTION ................................................................................................................ 7

2.1. PERSONAL BACKGROUND................................................................................................. 7
2.2. INVOLVEMENT OF THE BUSINESS .................................................................................. 7
2.3. NATURE OF THE BUSINESS................................................................................................ 7
2.4. NAME OF THE BUSINESS .................................................................................................... 8
2.5. BUSINESS LOCATION AND ADDRESS .............................................................................. 8
2.6. COMMENCEMENT OF BUSINESS OPERATIONS........................................................... 9
2.7. INDUSTRY.............................................................................................................................. 10
2.8. ENTRY AND GROWTH STRATEGY................................................................................. 11
2.9. JUSTIFICATION OF THE BUSINESS................................................................................ 12
2.10.GOALS OF THE BUSINESS............................................................................................. 12
CHAPTER THREE .................................................................................................................................. 13
3. MARKETING PLAN ....................................................................................................................... 13
3.1. INTRODUCTION................................................................................................................... 13
3.2. Marketing area ........................................................................................................................ 13
3.3. Customers ................................................................................................................................ 13

3.4. COMPETITORS..................................................................................................................... 14
3.5. MARKETING SHARE .......................................................................................................... 16
3.6. PROMOTION ......................................................................................................................... 17
3.7. DISTRIBUTION STRATEGY .............................................................................................. 18
CHAPTER FOUR .................................................................................................................................... 19
4. ORGANIZATION AND MANAGEMENT PLAN .......................................................................... 19
 4.0 INTRODUCTION.............................................................................................................................19
4.1. BUSINESS MANAGER AND QUALIFICATIONS..............................................................20
4.2. PERSONNEL, NUMBER AND DUTIES................................................................................20
4.3. RECRUITMENT, TRAINING AND PROMOTIONAL PROGRAM.................................21
4.4. LICENSES, PERMITS AND BI-LAWS.................................................................................23
4.5. SUPPORTIVE PROFESSIONAL AND SERVICES.............................................................23
4.6. REMUNERATION AND INCENTIVES................................................................................24
CHAPTER FIVE........................................................................................................................................ 26
5. PRODUCTION AND OPERATIONAL PLAN.................................................................................. 26
5.1. PRODUCTION FACILITIES AND CAPACITIES...............................................................26
5.2. PRODUCTION STRATEGY................................................................................................... 31
5.3. REGULATIONS AFFECTING THE BUSINESS OPERATIONS.......................................32
5.4. ESTIMATED DAILY SALES.................................................................................................. 32
CHAPTER SIX........................................................................................................................................... 34
6. FINANCIAL PLAN............................................................................................................................ 34
6.1. ASSUMPTIONS...............................................................................................................................34
6.2. PRE-OPERATIONAL COSTS................................................................................................ 34
6.3. RAHISI CEREALS STORES BALANCE SHEET................................................................35
6.4. BREAK-EVEN LEVELS.......................................................................................................... 36
6.5. PROFITABILITY RATIO....................................................................................................... 37
6.6. PROPOSED CAPITALIZATION........................................................................................... 37
6.7. DESIRED FINANCING........................................................................................................... 38
6.8. RETURN ON EQUITY............................................................................................................ 38
6.9. RETURN ON INVESTIMENT................................................................................................ 38
REFERENCES..................................................................................................................................................39
APPENDICES....................................................................................................................................................40
 CHAPTER ONE
1.0 BUSINESS DESCRIPTION

1.1Business background
My name is MOENGA NGUGI NEWTON, aged 21years old and pursuing craft certificate in plumbing in MICHUKI
TECHNICAL TRAINING COLLEGE. I am the firstborn in a family of two children. My family and friends have supported me
with all the requirements required to complete this business plan.
1.2Business name
The name of the business will be CASTRO PLUMBING FITTINGS AND CERAMICS COMPANY. It’s dedicated to selling
innovative consumer products that may not be found in retail stores.
1.3 Business location and address
CASTRO PLUMBIMG FITTINGS AND CERAMICS COMPANY shall be located in KISERIA N
TOWN MARKET few kilometers from NGONG TOWN
Address: the business will operate under the following address
CASTRO PLUMBING FITTINGS AND CERAMICS COMPANY
P.O BOX 47
KISERIAN
Email: castroplumbingfittings@gmail.com

1.4 Form of ownership

This business will take
This business will take the form of sole proprietorship. The owner will have the following
advantages;1. Quick decision making.
2. The owner enjoys all the profit alone.
3. It’s easy to start and operate.
4. Ones becomes his/her own boss
5. The owner creates a good relation with his/her customers.

1.5 Types of business

CASTRO PLUMBING FITTINGS AND CERAMICS will be a wholesale business. The business
will be selling products like floor tiles, kitchen sinks, cements, PVC pipes, gutters, water closets,
bath tubs, grout, showers etc. The major activity of the business is to supply customers with high
quality products to retailers and individuals online or door to door delivery. The business will source
its products from well known manufactures like KIKUYU PIPES AND FITTINGS COMPANY
AND OTHERS, whereas competitor’s products are sourced from upcoming industry with no fame in
the market. Principal customers will be the retailers who are located in the town creating a huge
sale of products.

1.0.1 Product and services

The business will be offering products of ceramics and plumbing fittings. The products will be of
high quality that will satisfy customer’s need all over the country and outside the country too. It will
be offering services like delivery of products and installation of water and appliances. The price will
be fair and negotiable so at retain the customers and it will always be running on a 24hrs activity.

1.0.2 Goals and Objectives of the business

a. Maximize profit and satisfy customers

b. To win the customers and clients

c. To provide the best and quality products and services to customers
d. To expand the market share by 20%through opening the branches
e. To cope with market demand offer the six months on starting

1.0.3 Entry and Growth Strategies

In order to start the business the owner intends to advertise through giving business cards, placing posters all over the town and
villages. Advertising on media and on billboards bearing the same name, location and product of the business. The business
owner intends to offer sale services to its customers.
 CHAPTER TWO
2.0 Marketing plan
2.1Potential Customers
The business will aim at offering its product to individuals and also the retailers i.e institutions and construction sites. Individuals
include those buying in large and small quantities

2.2 Market Share

According to research done competitors take 50% of the date in the total market area
Rahisi hardware will occupy 40% at the start up with vision of increasing its market
share up to 60%.
This will be achieved through proper marketing mix which will include
(a) Proper pricing
(b) Providing high quality product
(c) Efficient
This will be done with an aim of maintaining and improving market share,
meeting competition, minimizing profits.
2.3 Competition Commented [M1]:

There are two competitors who are really active take 70% of the product share
and are located in Nginda improved opened other branches.
Main competitors
are (a uncle b’s
hardware
Address P.O BOX 47,KISERIAN
Strengths
. It’s widely
. It offers sales service e.g transport
. They sell quality and clean products
. Have excellent customers
services Weakness
. Lock packing facilities
. Little stock
. Offer a bit higher price
(b) Tumaini hardware
(i) Address P.O BOX 47 KISERIAN
(ii) Located behind home choice Supermarket few Kilometers from matatu terminus
(iii) Strengths
. It is highly stocked
. use direct channel of distribution
. Has personal car for personal
selling Weakness
. Sell dirty products
. Have no specific working hours

2.4 Method of Promotion and Advertising

This will be done purposely to create awareness to customers of new
products in the area I include
. Reducing the price
. Education on those who have no ideas on the products
Advertising
This will be done by being directly in contact with customers showing
pricelist to our products and will also show location of the business

Public Relation
Beckie's chains and fittings hardware will contribute in sponsoring
schools of disables children’s It will provide
. Good customer relations
. Always be positive enthusiastic
. Treat each customer as loyalty
. Fulfil customer’s need

2.5 Sale Tactics

 The sale tactics in our hardware it will offer a differentiated
service. First step increasing our hardware
To invest in e-commerce

And still the sale manager will have to apply some tactics to the
customer’s Tactics will (i) Punctuality
(ii)Offer Discounts
(iii)Create some brands
(iv)Offering some
samples

2.6 Pricing Strategy

The business intends to stick a relative profit margin while this is to be
determined by competitor’s price transportation.
Competitor’s price. The proprietor has to try as much as possible to much
with that of competitor.
The business; the pricing of products will
depend on (i)Demands
(ii)Size which is length and
width (iii)The permit and
license (iv)Weight

2.7 Distribution Strategy

The business should use a direct channel of distribution which will be
very short and no middle men shall involve.
The equipment’s and fittings will be transported to the business premises,
for sale to customers or to other retailer who will also sell to customers
as shown below.
 CASTRO ENTERPRISE

CHAPTER THREE

3.0 Organization plan

3.1 Management Technology

The business managers shall perform the

following duties (i)Making decision
(ii)Making
polices
(iii)Planning
(iv)Employing, recruiting, promoting

3.2Key Management personnel

The business at startup will have eight personnel though it expects to employ more
as the business grows to diversity, the qualification of those personnel is shown in
the organization;

S/N Personnel number Qualification Duties $ Responsibility

1 Manager 1 Diploma in Job description
human employing new
Resource employee decision
management making
2 Assistant 1 Has managerial Evaluating and
Manager skill interviewing
employees check on
business short comings
give solution
director absence
 3 Marketing
Manager
4 Cashier
5 Messengers
6 Cleaner
1 Diploma in Promotional tools
sales $ coordinating
marketing
1 K.A.T.C Holder Receiving payments on
behalf of the business
controlling credit keep
business documents
2 Certificate in Taking orders from
sales customers cleaning the
fittings
1 Std 8 Leaver Cleaning business
Faithful premises

7 Watchman 1
Maasai by
tribe Faithful Protecting business
energetic premises both at day $
night

3.3Other Personnel

3.4 Recruitment Training and promotion

(a) Training
Training will formalize the workers with the job and give them all the basic skills
like communication, public relation and technical skills in order to have
knowledge of product and also enable them to;
i. Have confidence and enthusiasm when dealing with customers
ii. Use competitors as their level
iii. Borrow ideas from other especially sales representative, Distributors, Customers, supplies
$ Competitors
The business Managers will do this training within business premises.
(b) Recruitment.
This will be done to identify the right and qualified work force for the
business. It will be done in different ways like;
(i) Sex
(ii) Age
(iii) Interview both Oral and written
 (iv) Size of the family(dependents)
(c) Promotion
Workers and any other employee in the business who will work hard towards the
success of the business shall be rewarded, promoted and given other priorities
depending on how much the work was done, and to be promoted encouragement to
the rest who are not rewarded. The best potential customer shall be invited to the
party.

3.5 Remuneration and Incentives

The business shall use the following remunerations

(a) Allowances -all employees will enjoy transport and medical allowances
Ksh.1000 for each employee and this will cater furthers transport back
home as well as their medical status.
(b) Salary schedule-The salaries shall vary with one’s position and Responsibility as shown.

S/N Personnel Monthly Allowances Net pay

pay
without (KSH)
Allowanc
es
1. M/Director 15,000 1,000 16.000
2. G/Manager 10,000 1,000 11,000
3. Mkt/Manager 8,000 1,000 9,000
4. Cashier 10,000 1,000 11,000
5. Messenger-2 8,500 1,000 9,500
6. Cleaner 5,000 1,000 6,000
7. Watchman 7,000 1,000 8,000

Total 70,500

(b) Incentives
The employees shall enjoy following intensives in the business as a way of motivating them.
(c) Off duties $ Leave
Each employee except the Watchman and cleaner shall be given off duties every two weeks a day.
(c) Parties
There shall be an annual party for the employee and the best customers at the end
of the year, will be awarded and even most frequent potential customers.

3.6License’s, Permits and By-Laws

(a)Licenses
This allows the business to operate within the town center .it will be obtained at
Nairobi City Council Licensing office, in the Haile-selassie Avenue opposite Mug
hotel.
After registration the business will get a License @ Ksh 8,000 and is renewed on a yearly basis.

(b) By-Laws
The business will use the following
By-laws Install alarms for security
especially against theft
Ensure alarms good ventilation and drainage of
the store Preserve plumbing items with
authorized chemicals
 3.7Other Support Services

The business shall rely on the following supportive service for its successful

operations;

(i)Banking services -The business shall bank its money with Family bank of

Kenya KISERIAN

(ii) Advertising

At the start up the business will not afford to advertise using Radio’s and
Television but will use sign posts for advertisements. As the business grows it will
use KCB because it is the cheapest and reaches a wide area.

(iii)Water

The KISERIAN water supply shall cater for water supply in the premises, this shall
be paid also according to water used, the bill shall be paid through KAJIADO
WATER OFFICE.

(Iv)Electricity

Electricity will be supplied and managed by the Kenya power and

lightning Company. Bill will be paid according to the amount used.

(v)Insurance -when business have grown a bit it will insure its premises and assets
stock and any other equipment against fire and theft risk.

Chapter Four
4.0 Operation plan
At the start up, the business shall operate with the locally available Machines
and technologies. These technologies will be cheap to purchase, easy for
running the business.
S Equipment Qty Supplier Cost Use
N
1. Weighin 3 Jumbo 9,000 Weighi
g
2 Suppliers 7,000 ng
machine
2. Bicycle’s Lyiers Transp
ort
3. Furniture
(i)Tables 2 Sip 1,000 Placing weighing
(ii)Chair’s 2 entep 2,000 balance Cashier’s
(iii)Cabinets 1 Sip 2,000 Office
(iv)Wooden 12 entep 800 documents
bars 1 Sip 600 Placing bags
(v)Shelves entep Placing items
Sip
 entep
Sip
entep
4. Stationa
ry 4 Uchumi 140 Keeping
(i)Files 2 Supp 150 records
(ii)Receipt of 1 Uchumi 1000 Showing
books 1 packet Supp 600 purchase
(iii)Calculator 1 packet Uchumi 200 Doing
(iv)Biro pens 1 Supp 120 calculation
(v)paper Uchumi Placing parked
bags(big) Supp Parking
(vi)Paper Punch Uchumi Punching files papers
Supp
Uchumi
Supp
4.1 Facilities
Capital. The business source of finance will be from three sources

(a)Personal 500,000
savings
(b)Owners Equity 300,000
(c)Bank loan 150,000
Total 950,000

Operator of business will have worked for 3 years after which she shall save up
300,000 as personal saving this will be used for startup cost like;

(i)Paying rent
Initial capital
(ii)
(iii) Purchasing fittings
(iv) Advertising
While friend’s contribution and loan from bank will cater for;

(i) Deposit for rent

(ii)Furniture and
equipment (iii)Legal
fees
(iv)Advertising for glad opening

4.2 Production Strategy

S Task Equipment Personnel Time (hrs)

N
1. Determine market for Bicycle Director 8hrs
production within which
market research
2. Identifying important Pen/papers Director 3hrs
attribute qualities noting the
quality
3. Developing model Sieves Employee 6Hrs
relating to customers
preference taste

4.3 production Process

Our business operation hours will be as follows;

Day Time
Mon-Friday 8:00Am-6.00Pm
Saturday 8:00Am-6:00Pm

The packing of the purchased items is to be done by the messengers and assisted by
the cleaner while the manager will be assisting the cashier to attend to customers and
make sure that they are served on time.

4.4 Regulation
The regulation affecting the business operation.
External regulations

1. Business must have a trading license

 2. Business must have a required Permits.
3. Business must have a record showing all their facilities and equipment’s stock and source.
4. Each employee must have an identification card to show that he/she is an
employee with your business.

Internal regulations
1. Allemployee must have permission from manager wherever not at work.
2. Any problem or proposal facing workers must be reported and handled
immediately by personal manager.
3. Any misconduct should be punishable e.g stealing from customers
employee will be given a compulsory leave without pay and later on
sacked.
4. All employees must report at (8:00am) in the morning as the business opens.

Chapter Five
5.0 Financial Plan

5.1Assumptions

(i) Machine and equipment’s, Furniture’s and fitting will

depreciate by 2% yearly. (ii)Sales will appreciate with 2%
(iii)Rent will appreciate by 3% yearly as from second year of operation.

5.2Pre-Operation Cost
Items Cost
Rent 20,000
deposit 10,000
Insurance 15,000
Water bills 10,000
Stock 100,000
Electricity 8,650
bill 8,000
Furniture’s, 16,000
Fittings License 10,500
Machine and Equipment’s 7,000
Safely clothing (Aprons and 2,500
Masks) Advertisements
Stationery
207,650

Total

5.3Castro plumbing fittings and ceramics

As at opening December 2021to December 2022

 Assets 1st 31st December 31st December 30th December
Janua 2022 2020 2023
ry
2022
Current
Assets 92,922 82,000 48,152.8 31,690.84
Cash at 202,473 206,518.9 205,000 200,000
hand Cash 82,955 84,614.1 86,373.2 87,932.3
at bank
Stock
Total current 378,3 373,193 339,426 319,623.14
50
Assets
Fixed
Assets 16,00 16,00 15,680 15,366.4
Mechanism 320 313.6 307.5
one 5,650 5,537 5,426.26
Equipment’ 56.50
s 1 113 110.74 108.5
Dep2
%
Furniture and
Fittings Dep2%
Total 26,65 21,217 20,792.66 20,318.86
0
Fixed
Assets
Current 0 0 0 0
liabilities 100,0 80,000 60,00 40,000
Long term 00
Liability 14,410 218,66
300,000 300,000
Retain
300,0
ed 00
Earnin
gs
Total 400,0 394,410 360218.66 340,000
liabilities 00

5.4 Break Even Levels

Particulars 2021
Total sales 3,397,594

Fixed
cost 8,000
License 8,400
Interest on 30,000
Loan 20,000
Insurance
Loan repayment
66,400

Tot
al

Variable
cost 7,200
Electricity 995,460
bills Cost of 16,000
purchase 788,000
Advertiseme 39,000
nt Salaries 4,800
Rent
Water 1,830,460
bill

Tot
al
 Total contribution margin

= sales-----Total variable cost

= 3,397,564 ---- 1,830,460

= 1,567,104

Contribution Margin Percentage

=Contribution margin 1x100%

Sales 1,567,104 x100
3,397,564
= 46.12%

Break-even of sales in Shillings

Fixed cost x
100%
Contribution
Margin

=
66,400x
100%
4612
=143,972,246313