THE ELDORET NATIONAL POLYTECHNIC

MAJI SAFI WATER TREATMENT SUPPLY

P.O BOX 61,

KAPTAGAT
0724378287

PRESENTER: KIPKOECH BRIAN

ADMISSION NO: 2022/203403

INDEX NO: 5781020117

COURSE CODE: 1314/2

SUPERVISOR: OKWARO JOSEPH

DEPARTMENT: CIVIL AND BUILDING ENGINEERING

PRESENTED TO THE KENYA NATIONAL EXAMINATION COUNCIL IN

FULFILLMENT FOR THE AWARD OF CRAFT CERTIFICATE IN WATER
ENGINEERING
 DECLARATION
I declare that is my original work and has not been submitted to the Kenya National
Examination Council or any other examination body.

NAME: KIPKOECH BRIAN

Signature; ________________

Date: ____________________

STATEMENT OF APPROVAL

The work has been submitted to the examination body by approval and contest of

SUPERVISOR: JOSEPH OKWARO

Signature; ----------------------

Date: -----------------------

i
 DEDICATION
I dedicate this entrepreneurship business plan to my beloved mother, brothers and
sisters. Indeed they have been my most faithful source of encouragement and
inspiration. No sacrifice was ever too great for them in their constraints efforts to lead
me towards the completion of this business plan.
May GOD bless them!

ii
 ACKNOWLEDGEMENT
I wish to take this opportunity to express my sincere gratitude to all those I have
mentioned in my dedication for their great efforts towards the success of this business
plan.

Special thanks too to my supervisor guided me through out when writing business
plan. May God bless you abundantly!

iii
Table of Contents
DECLARATION............................................................................................................i
DEDICATION...............................................................................................................ii
ACKNOWLEDGEMENT............................................................................................iii
1.0 EXECUTIVE SUMMARY......................................................................................1
1.2 MARKETING PLAN..............................................................................................1
1.3 ORGANIZATION AND MANAGEMENT PLAN................................................1
1.3 OPERATIONAL PLAN..........................................................................................2
1.4 FINANCIAL PLAN.................................................................................................2
CHAPTER ONE............................................................................................................1
1.0 BUSINESS DESCRIPTION....................................................................................1
1.1 BUSINESS NAME..................................................................................................1
1.2 BUSINESS LOCATION AND ADDRESS.............................................................1
1.4 TYPES OF BUSINESS............................................................................................3
1.5 PRODUCTS AND SERVICES...............................................................................3
1.6 JUSTIFICATION.....................................................................................................3
1.7 BUSINESS GOALS.................................................................................................4
CHAPTER TWO...........................................................................................................5
2.0 MARKETING PLAN..............................................................................................5
2.1 POTENTIAL CUSTOMERS...................................................................................5
2.2 COMPETITORS......................................................................................................5
2.3 MARKET SHARE...................................................................................................7
2.4 PRICING STRATEGY............................................................................................8
2.5 ADVERTISING AND PROMOTION....................................................................8
2.6 DISTRIBUTION STRATEGY................................................................................8
CHAPTER THREE......................................................................................................10
3.0 ORGANIZATION PLAN AND MANAGEMENT..............................................10
3.1 ORGANIZATION STRUCTURE.........................................................................10
3.2 MANAGEMENT TEAM, DUTIES AND QUALIFICATIONS..........................10
3.3 PERSONNEL.........................................................................................................13
3.4 RECRUITMENT AND TRAINING.....................................................................13
3.5 REMUNERATION AND INCENTIVES..............................................................14
iv
3.6 SUPPORT SERVICES..........................................................................................15
3.7 LICENSES AND PERMITS..................................................................................16
CHAPTER FOUR........................................................................................................17
4.0 OPERATIONAL / PRODUCTION PLAN...........................................................17
4.1 PRODUCTION FACILITIES AND CAPACITY.................................................17
4.2 PRODUCTION STRATEGY................................................................................17
4.3 PRODUCTION PROCESS....................................................................................19
4.4 PRODUCTION AFFECTING OPERATION.......................................................20
4.4.1 HEALTH REGULATIONS................................................................................20
4.4.2 SAFETY..............................................................................................................20
4.4.3 ENVIRONMENTAL REGULATIONS.............................................................20
CHAPTER FIVE..........................................................................................................21
5.0 FINANCIAL PLAN...............................................................................................21
5.1 PRE-OPERATIONAL COST................................................................................21
5.2 WORKING CAPITAL...........................................................................................22
5.3 CASH FLOW STATEMENT................................................................................30
5.3.1 CASH INFLOW STATEMENT FOR MAJI SAFI PURE MINERAL WATER
2023..............................................................................................................................30
5.3.2 NET CASH INFLOW STATEMENT FOR WATER PRODUCT SUPPLIES
2024..............................................................................................................................31
5.2.3 NET CASH INFLOW STATEMENT FOR MAJI SAFI PURE MINERAL
WATER 2025..............................................................................................................32
5.4 PROFORMA INCOME STATEMENT..................................................................3
5.5 PROFORMA BALANCE SHEET..........................................................................4
5.6 BREAK EVEN ANALYSIS..................................................................................28
5.7 CALCULATION OF PROFITABILITY RATIOS...............................................30
5.7 DESIRED FINANCING........................................................................................31
5.8 PROPOSED CAPITALIZATION.........................................................................31

v
 1.0 EXECUTIVE SUMMARY
The name of the business will be Maji safi water treatment supply and will be located
at Kaptagat Town.
The business will deal with selling of treated water and will be a sole proprietorship
type of business.
The address of the business is:-

MAJI SAFI WATER TREATMENT SUPPLY

P.O. BOX 25,

1.2 MARKETING PLAN

The business will start by targeting 70% of the total market; however the percentage
is expected to rise once the business acquired more clients. Potential customers will
include people within the proposed business location, schools and churches within the
location.

This sole proprietorship type of business will experience competition from other
related business. The competitors surrounding Maji safi water treatment supply are;

i) Nick’s Water Business

ii) Tony’s Water Business supply company

iii) Karen’s Water supply Business

1.3 ORGANIZATION AND MANAGEMENT PLAN

The chain of command will run from the manager down to the rest of the staff. These
include; accountant, water supplier, Plumber, receptionist, cleaner, watchman etc.

The business will obtain licenses, permits and by-laws in order to secure the business
and ensure its smooth running for profit maximization.

1
The proprietor will be the business manager of Maji safi water treatment supply
having completed her certificate in Human resource management with skills in
entrepreneurship education.

1.3 OPERATIONAL PLAN

The business will be offering services such as; piping of water to customer’s premises
who buy water on bulk, counselling customers on proper use of water business.

The requirements for smooth running of the business are; computers for keeping,
retrieving of customers records, adequate cleaning materials, security etc. these will
ensure that the business does not face technicalities.

1.4 FINANCIAL PLAN

The start-up capital expected to start Maji safi water treatment supply7 will be Ksh.
700, 000 and the source will be as follows;

i) Owner’s contributions Ksh. 50,000

ii) Total investment Ksh. 700,000

iii) Bank loan Ksh. 60,000

This gives a total of Ksh. 810, 000.

2
 CHAPTER ONE

1.0 BUSINESS DESCRIPTION

1.1 BUSINESS NAME

The business name will be Maji safi water treatment supply . The business was
named so because it is easy for the customers to understand and cop with it. The
owner of the proposed business will be Kipkoech Brian. The name is precise and
therefore easy for the customers to memorize and they can also be able to inform
others willing to have our products. The name is also easy to use while giving
direction especially those who are coming from distances without misleading them.
There are a lot of people who use the road through the junction and therefore the
name will attract more customers.

The name is also easier to read and pronounce and this can both be done by the
young, elderly and the illiterate people. There are a lot of businesses that run around
the junction it is known to be their main trading centre and therefore the name will
mean business in progress.

1.2 BUSINESS LOCATION AND ADDRESS

The business will be located Uasin Gishu County, Kaptagat Town at. The main aim of
choosing the site is due to accessibility to roads, proper communication network, a
promising market atmosphere and the availability of security provided by the
presence of a Security officers and CCTV surveillance around the town. The location
was also due to a high population around the town and therefore the business will
capture a lot of Customers and colleges who comes in and out of KAPTAGAT
University. The students will buy Water from my company.

1
KAPTAGAT HIGH SCHOOL
KAPTAGAT POLICE
KAPTAGAT HELATH CENTER STATION

To Eldoret Town

THIKA ROAD

Maji safi
water
treatment

The business address will therefore be as:

MAJI SAF WATER TREATMENT SUPPLY,

P.O. BOX 26,

KAPTAGAT.

0724378287

2.3 BUSINESS OWNERSHIP

The business will be a sole proprietorship type of business this is to enhance future

expansion for easy management hence smooth running of the business. The type of

business was arrived at after comparing the advantage and the disadvantage of various

forms of businesses.

The advantages of a sole proprietorship business are;

o Profit is not shared among members.

o Enhances the owner’s close supervision

o It requires a small amount of capital and few legal requirements to start
up the business.
o The profits are used in the business if need be without consulting
anyone.

2
 o The owner is responsible for all transactions made and all records kept
to ensure there is proper management.
o The owner will be motivated to work since she will be her own boss.

1.4 TYPES OF BUSINESS

The business will be dealing with selling of Water Business. This will be done on
both wholesale and retail basis to ensure that our customers get the quality they
require. The reason why I decided to come up with this business is because there is a
big population of people who are forced to travel a long distance to install the same
product. Additionally, we have many Customers that prefer to install the same
products in bulk.
Also most of the retail customers come from areas within the location of the business.

1.5 PRODUCTS AND SERVICES

The business will provide both the products and services to the customers. The
products that will be provided include;
PRODUCTS
- Taps
- Horse pipes
- Metallic pipes
- Water tanks

1.6 JUSTIFICATION
The business will be situated at a suitable place where customers from near and far
places will find it easier to reach us and buy our outfits which will lead to a higher
profit making.

The availability of Water tanks transport network and Water tanks communication
network will make it easier and faster to bring in water at the appropriate time and this
will ensure that the business has a Water tanks and enough stock for smooth running
of the business. Due to the high demand of proposed business in the town, the
products aim at meeting the demands of these people.

The business will also provide the customers with a discount after buying certain
Product commodity and after sales services which will attract more customers and

3
hence lead to profit making. The presence of security in the area will ensure that the
business and our products are secured from any damages that may occur which may
lead to loses to the business.

1.7 BUSINESS GOALS

The business goals will be;

 Short term goals

To ensure that everyone gets the high standard Water supply at a reasonable price

Put more posters around the region and outside the region and give free samples to
attract and retain customers.

Provide low quality outfits for those who cannot afford high quality outfits.

 Long Term goals

i. To expand the business by starting many branches outside the town to
satisfy the customer’s needs.
ii. Provide more job opportunities to many youths so as to improve their
living standards.
iii. Provide adequate and reasonable salaries to my employees that will meet
their needs

To become a major distribution centre in the whole town.

4
 CHAPTER TWO

2.0 MARKETING PLAN

2.1 POTENTIAL CUSTOMERS

The potential customers for the business come from different parts of the areas. They
include those that come from the nearby trading centres, schools i.e. primary and
secondary, the villagers, and those from various dispensaries.

The potential customers include;

Individual customers

Institutions

The individual customers buy water in small quantities for demand. They include the
employees from different dispensaries, schools, trading centres and also the villagers.

The wholesalers and retail customers buy Water tanks in larger quantities and take
them for sale in their various premises.

The business targets a business population of many people in order to ensure that
most of its products get sold.

2.2 COMPETITORS
For a healthy business atmosphere to exist is necessary to promote hard work
commitment and improved quality of service offered.
Maji safi Water treatment supply expect stiff competition from;
Tony’s Water suppliers business
Davi’s Water Business
Karen’s Water suppliers
These competitors have been in existence for the last three years but have not been
able to meet the needs of customers.

5
This is by;

a) Tony’s Water suppliers

The business is situated along Nanyuki Highway road. Their main target is the
business people who are selling in shops those working in the hospital and the
travellers. They get their customers through a lot of advertisement. They sell mostly
outfits to bulk buyers

Their major weaknesses are;

They are relatively expensive

They have a poor way of advertising their business.

They do not offer discounts.

Maji safi water treatment supply will use these weaknesses to capture a large market
share in the area.

b) Karen’s Water suppliers

The business is situated along the Kaptagat market. Their main target is the secondary
school nearby and the residents of Kaptagat town. They get their customers through
offering discount on their commodities. They sell mostly school outfits and home use
outfits.

Their major weaknesses are;

They operate on a small scale and therefore their products and services produced
are limited.

They are not easily accessible.

Maji safi water treatment supply will utilize these weaknesses to market its products
and services to capture a Water tanks market share.

c) Devi’s Water Business

The business is located along the Kaptagat market highway. Its main target is the
school that is around. The business gets its customers through promotion especially
during school opening dates. They sell mostly school outfits and sport outfits.

6
Their major weaknesses are;

They have unskilled workers.

The business is located out of town.

They do not offer different services.

Maji safi Supplies will use these weaknesses to capture a large market share.

2.3 MARKET SHARE

After carrying out a thorough feasibility study of the potential market, the business
aims at attaining 75% of the market share to ensure that its products are sold. This is
because some other existing competitors which already gather for the rest percentage
25% for the first years.
Therefore it looks forward to ensure that it increases its share to 80% by popularizing
the business and providing quality services and competitors 20% for second year.
Also look forward to ensure that it increases its share to 90% and competitors 10% for
third year. The outfits will fetch more percentage than the competitors since they sell
quality outfits at a reasonable price and its effectiveness to sell outfits which suit
every category of individual in the society.
Pie chart showing business market share

Sales

20%
maji safi supllies
Tony's water supplies
Karen's water supplies
15% 55%
Davi's water business

10%

7
2.4 PRICING STRATEGY
The pricing strategy adopted will depend on various products, quality and quantity.
This is because over pricing is not only unfair to customers but will also put them off.
The business will check with their competitors and in this way will try to fix relative
prices.

The prevailing market force of supply and demand will also affect the pricing. Those
purchasing in large quantities will be given a certain percentage of quantity discount.

The selling price of products or services is calculated by evaluating the cost of

production of the products, the demand for the products, its supply and profit aimed
by the seller.

The business is to sell outfits at lower prices than the competitors so that the business
obtains a license from the local authorities which will help determine fair prices for
customers.

2.5 ADVERTISING AND PROMOTION

It involves the use of several ways to create awareness to the customers about the
products and services offered. Maji safi supplies will offer free samples e.g. Horse
pipes, water Taps to the customers who buy a large quantity of Products.
Use of posters at the stages where the bus stops in order for the customers to know the
business location and address. After the business has expanded the advertisement is to
be changed to newspaper and magazine which is effective to make the customers be
well informed about the products, also demonstration should be done.
2.6 DISTRIBUTION STRATEGY

The manager of the business will ensure that the products and services are accessible
to customers so that they continue having positive attitude towards the business. This
is to ensure that the business has large number of customers thus more profit obtained.

8
3.7 DISTRIBUTION STRATEGY

PURITY PURE MINERAL WATER RETAILER

PURITY PURE MINERAL WATER WHOLESALER RETAILERS

PURITY PURE MINERAL Horse pipe fix man WHOLESALER RETAILERS

WATER

PURITY PURE MINERAL WATER CUSTOMERS

9
 CHAPTER THREE

3.0 ORGANIZATION PLAN AND MANAGEMENT

3.1 ORGANIZATION STRUCTURE

The organization structure is based on the salary, qualification and responsibility of

each employee. The structure is from the manager downwards to the watchman.

Manager

Designer Accountant Cleaner Receptionist Storekeeper Watchman

3.2 MANAGEMENT TEAM, DUTIES AND QUALIFICATIONS

a) MANAGER
Qualification
Diploma in Human Resource management.
Certificate in computer studies
Should speak fluent English and Kiswahili
Should be aged 30-45 years.
Duties
Making rules and regulations
Maintaining coordination among the workers.
In charge of decision making
Responsible for staffing e.g. promotion, selection and employing.
Manages the running of the business.
b) ACCOUNTANT
Qualification
10
 Should have a Diploma in accountancy.
Should have worked with a company for at least two years.
Should be aged 25-40 years.
Duties
Ensures that the business funds are well used.
Looks or ensures that the business has enough money to use to buy water and pay
the employed staff.
Ensures accounts flow of the business.
c) PLUMBER
Qualification
Should have a Diploma in Plumbing.
Good communication skills.
Should be aged 25-30 years.
Duties
Fix broken pipes.
Installation of water taps and connection of water supplied in big houses.
d) RECEPTIONIST
Qualifications
Should speak fluent English and Kiswahili.
Should have a certificate in record keeping.
Should be computer literate.
Duties
Responsible for all business files.
Ensures entertainment media is utilized well.
Welcoming the customers to the premises.
Support all administration functions.

11
 e) STORE KEEPER
Qualifications
Should have worked in a busy industry for at least 2 years.

Should be computer literate.

Duties
Ensures that outfits are at right stock daily which enough as required by the
customers is.

Organizational and planning of the enterprise calculation.

Ensures that outfits are stored in Water tanks place.

Issues any requirement from the store.

Keeps store records.

f) CLEANER
Qualifications
Should have a certificate of KCPE with at least D+

Should have worked in a company for at least two years.

Duties
Should ensure high standards of cleanliness of the business compound.

Ensure proper arrangement of outfits for easy identification.

f) WATCHMAN
Qualifications
Should be skilled from youth service for about two years.

Should speak fluent English and Kiswahili.

Duties
To keep the business safe from theft.

12
3.3 PERSONNEL
These are people who are hired occasionally to offer certain services to the business
but they are not employed. They include;
a) DRIVER
They will assist in piping of outfits to the business from the producers.
They will also assist during advertisement and promotion programmes to carry the
advertisers and the advertising materials.
b) LOADERS
They will assist in loading of water into the car for piping to the business and also
during offloading on arrival to the shop.
c) PROMOTERS
They will be used to advertise water and services once in a while especially on arrival
of new types of outfits of new fashion to make our customers aware and updated.

3.4 RECRUITMENT AND TRAINING

Recruitment
This involves employing new workers to:-
 Replace the retired ones.
 Occupy a newly created job.
 Increasing posts in the job.
Maji safi supplies will recruit employees through the following way;
a) Interviews
An interview will be conducted to select the candidate who will have met the
requirements or qualifications. The interview will be formal where the candidates will
come with their result to secure a vacancy in the business.
b) Advertising of posts
The job vacancies will be made known by many people through radio, newspapers.
The management therefore expects candidate who meets the specification indicated to
apply for the job.
c) Employment
Maji safi supplies will induct those new employees all as the business expands.
There is need to employing more staff to cope with the increment of work in the
business.

13
Training
Maji safi supplies Water will train its employees on the water and services that they
offer to customers by organizing seminars, attending workshops, conferences and
joining a certain group.
Training will familiarize the employees with their new working conditions and to
improve technical ability the staff will undergo the following form of training;

Induction training
This is to enable the staff to be accustomed to their working environment and job
requirement the duties after working.

3.5 REMUNERATION AND INCENTIVES

The staff who has been employed in the proposed business will be paid according to
the number of hours worked. Incentives will be offered to the employees so as to
encourage hard working and increase sales hence high profit. They include;
 Newspapers
 Transport allowances
 Medical allowances
 Lunch allowances
Employee No. of staff Allowance Salary per Salary per
per month month month
MANAGER 1 100 6000 6100
ACCOUNTANT 1 100 6500 6600
PLUMBER 1 100 5000 5100
RECEPTIONIS 1 100 4500 4600
T
STORE 1 100 4000 4100
KEEPER
CLEANER 1 50 3500 3600
WATCHMAN 1 50 3000 3100
Promotion
Promotion will be done in appreciation of the staff who has worked hard and longer
years in the business to bring customers and hence profit. The management will first

14
educate the employees to be promoted so that one can have a higher salary scale for
the Water tanks work done.

3.6 SUPPORT SERVICES

Professional services will be needed after the business has fully established. These are
important in the growth of the enterprise.
a) Banking services
The business will be required to settle cash default if any of the potential customers
will have failed to pay cash after expired date of the credit. The business finances and
savings are to be banked at Equity Bank in Kaptagat.
b) Court services
The lawyer can also step in to assist in the case of theft. This will enable the business
to sign a contract with any advocate to cater for the legal rights of the business. The
court services will be provided by KAPTAGAT law courts and the business will be
guarded by Mr.Vincent who is an advocate.
c) Other services
The business will be situated in an environment with reliable conditions to smoothen
the running of the business e.g. Electricity to provide lighting in the business house.
This will be provided by the Kenya power in KAPTAGAT town centre. Water is also
needed in the business house which will be used for cleaning, drinking and drainage
to dispose waste products in the required place. This will be provided by the water
business plan dam constructed by youths in the area.

15
3.7 LICENSES AND PERMITS
Before the business starts its operations it must acquire a trading license from the
District Commissioner office which states that the business has been allowed to run
its business having gone through the firms to see that it is safeguarded for people to
work on it. The license will be renewed yearly according to trading license Act Cap
section 7 at a cost of 4500.
Permit
The district commissioner is to find out if the products to be used on the permits are
Water tanks for human use. This will allow the firm to use products without any fear
of being held responsible for using illegal products harmful to humans. This is
stipulated clearly in Cap 254 of drug food and chemical handlers section 9. It is also
renewed every 6 months at the cost of Ksh 800.
By-laws
This is to ensure that the employees are treated fairly and that they abide by the laws
that they are aware that the customers are not to be exploited through the products and
services offered. The by-laws govern the employees, business and customers. The by-
laws include:
a) Trade license
It states that the kind of trade or business one should be involved is one which the
water and services are in the license regulation.
b) Employment Act Cap 226
This Act ensures security of the employees. The employees feel secure that they
would not be sacked without a genuine reason or refusal to be given their dues as
stated in the contract.
c) Workers compensation Act Cap 236
The proprietor will compensate for death or accident of the employee during
performance in their duties at work.
d) Consumer protection Act 1987
This will ensure that customers are given correct information about the prices of
products and services offered.

16
 CHAPTER FOUR

4.0 OPERATIONAL / PRODUCTION PLAN

The operational/production plan describes how the product of the business will be
manufactured. It shows a breakdown of equipment’s materials and other necessary
requirements during the production process. For a service and retail business, the plan
indicates the requirements necessary to facilitate their operations.

4.1 PRODUCTION FACILITIES AND CAPACITY

This includes the various tools and the facilities which required for the efficient
working of the business.

Various items are required which include;

Equipment/ Mode of Quantity Amount (Kshs)

resources Acquisition

Portable watering Bought 1 50000

machine

Buckets Bought 10 5000

Store Constructed 1 60000

Stalk cutter Bought 1 150000

Other tools Bought 1 3000

Cattle dip Constructed 1 200000

Total 468000

4.2 PRODUCTION STRATEGY

The farm will invest in human resource meaning it will hire competent personnel to
manage the proposed business. For this reason, hiring in the company will use a
competence approach where all personnel hired will have to prove ability to perform a
task as this is forms the basis of effective organization management.

17
The capacity in this case will refer to the number of personnel required to work at the
farm. The farm structure proposed will be used to determine just how many personnel
will be required. 15 employees will be required for the farm to be assumed to be
working at optimal levels for the first 3 years or at capacity. This will include the
manager and employees of the farm

Other overheads that may be involved in operations of the farm will include
electricity, water cost and advertising costs. The table below summarizes costs that
the organization will incur during its operations.

Table 5.1 Production Strategy (Costs)

Start-up Funding

Start-up Expenses to Fund 20,000

Start-up Assets to Fund 10,000

Total Funding Required 30,000

Assets

Non-cash Assets from Start-up 10,000

Cash Requirements from Start-up 5,000

Additional Cash Raised 0

Cash Balance on Starting Date 5,000

Total Assets 20000

Capital

Planned Investment

Founding family 20,000

Grants 3,000

18
 Additional Investment Requirement 0

Total Planned Investment 23,000

Loss at Start-up (Start-up Expenses) (15,000)

Total Capital 8,000

Total Capital and Liabilities 25,000

Total Funding 33,000

Table 5.2 Other Expenses

Start-up

Requirements

Start-up Expenses

Pumping machines 1,500

Water Taps 1,100

Electricity 1,200

Insurance 1,000

Permit of selling 10,000

Total Start-up Expenses 14,800

4.3 PRODUCTION PROCESS

Water plants process the raw water they receive from company so as to extend its
marketable life. Two main types of processes are employed: heat treatment to ensure
the safety of water for human consumption and to lengthen its shelf-life.

4.4 PRODUCTION AFFECTING OPERATION

In every business organization there are risks and regulations that are needed to be
followed for the smooth running of the organization. This rules and regulations are
19
vital for smooth running business firm there will be rules and regulations that will
guide both the staff and the customers to avoid the customers to avoid conflicts in the
business.

These rules include the opening hours/working hours of the firm the weekends should
the commission to be given.

The discipline should be taken in any case arrivals and environment should be
appropriate and with conducive environment for every person and even for the poultry
for their best result output. Before starting the business it should be approved by
professional for it to be before starting this business this will ensure that all the
necessary requirements are available for both the personnel.

4.4.1 HEALTH REGULATIONS

All the staff will be registered by National Hospital insurance Fund (NHIF) in case of
any serious sickness of a worker.

4.4.2 SAFETY
The location of the business will be located in a safe environment to avoid theft or
breakages of water in the company.

4.4.3 ENVIRONMENTAL REGULATIONS

The business will ensure that the premise is clean there are Water tanks ventilation in
the room’s proper lighting and enough space.

20
 CHAPTER FIVE

5.0 FINANCIAL PLAN

5.1 PRE-OPERATIONAL COST

EXPENSES COST (KSHS)

Water 1500
Electricity 1500
License 5000
Rent 3000
Opening stock 200,000
Advertisement 2000
Painting 2000
Insurance 5000
Telephone 2500
Recruitment 25,000
Total 247500

SUMMARY OF SOURCE OF CAPITAL

ITEM AMOUNT (KSHS)
Owner’s contribution 50,000
Total investment 700,000
Bank loan 60,000
Total 810000

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5.2 WORKING CAPITAL
Working capital = current assets – current liabilities
ITEMS AMOUNT IN
KSHS
Current assets Year 1 Year 2 Year 3
Installed stock 90,000 85,000 95,000
Cash in hand 591,910 844,580 969,480
Debtors 5000 3000 500
Less liabilities
Creditors 8400 1,850 7,100
TOTAL 678,510 930,730 1,057,880

22
 5.3 CASH FLOW STATEMENT
5.3.1 CASH INFLOW STATEMENT FOR MAJI SAFI PURE MINERAL WATER 2023
particulars Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Total
Cash flow - - - - - - - - - - - - -
Cash sale 84000 84000 84000 84000 84000 84000 84000 84000 84000 84000 84000 84000 1001000

debtors - - - - - - - - - - - - -
friends - - - - - - - - - - - - -
Total cash 1123500 1190810 1281110 1378410 1468210 1536310 1622610 1704910 1792290 1877860 1961160 205440 1899160
inflow
Cash out flow
Cash out flow - - - - - - - - - - - - -
installs 20000 30000 50000 - 50000 60000 80000 90000 60000 - 10000 350000
Salary & 37500 37500 37500 37500 37500 37500 37500 37500 37500 37500 37500 37500 450000
wages
creditors 25000 - - - - - - - 25000
security 6250 6250 6250 6250 6250 6250 6250 6250 - - - - 50000
telephone 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 13000
Insurance 1250 1250 1250 1250 1250 1250 1250 1250 1250 1250 1250 1250 15000
Licence& - 2500 - - 2500 - - - - - - - 5000
permit
products 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000
Investment - - - - - - - - - - - - -
Loan payment - - - - - - - - - - - - -
Interest on - - - - - - -- - - -- --
loan
postage 25000 - - 2500 - - - - - - - - -
Discount 1250 1250 1250 1250 1250 1250 1250 1250 1250 1250 1250 1250 1250
allowed
Electricity 500 500 500 500 500 500 500 500 500 500 500 500 500
Water - - - - - - - - - - - - -
Miscellaneou - - - 12500 - - - 12500 - - - - -
s
Total cash out 22700 103700 105700 104700 125980 101700 99700 97700 105350 109700 104700 130700 1212330
Net cash 299500 297500 300000 385000 734000 794000 800000 940000 1000000 1020000 1240000 1340000 9150000

30
Bal c/f 299500 297500 300000 385000 734000 794000 800000 940000 1000000 1020000 124000 1340000 9150000

5.3.2 NET CASH INFLOW STATEMENT FOR WATER PRODUCT SUPPLIES 2024
Particular Jan Feb mar Apr May Jun Jul Aug Sept Oct Nov Dec Total
Cash flow
b/f 42000 13901 11451 11901 11943 10345 14500 14950 15000 15120
0 0 0 0 0 0 0 0 0
Cash sale 42000 60000 80000 10000 12000 15000 16000 10000 88000 50000 50000 100000
0 0 0 0 0 0
Debtors
Friends
Personal 25000 250000
saving 0
Bank loan 15000 150000
0
Family&friend 50000 50000
s
Total cash 45000 20000 14000 70000 16000 72000 15020 14000 14000 25000 60000 70000 237000
inflow 0 0 0 0 0 0 0 0 0 0 0 0
-cash outflow
Install 20000 30000 50000 60000 80000 90000 60000 1000 300000
Wages 12000 12000 12000 12000 12000 12000 12000 12000 12000 12000 12000 12000 144000
&salaries 0 0 0 0 0 0 0 0 0 0 0 0
creditors
Security 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 1000 1000 70000
Telephone 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000
Insurance
Licence&
permit
Products 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 250000
0 0
Investment 4000 7000 5000 10000 26000
Postage 500 500 500 500 500 500 500 500 500 500 200 200 5000
electricity 1000 1000 1000 1000 1000 1000 1000 1000 1000 2000 2000 20000 15000

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water 500 500 500 1000 500 500 500 500 500 500 500 1000 7000
miscellaneous 1000 1000 1000 2000 7000 500 500 500 500 500 500 1000 20000
Total cash 53649 66500 78500 72500 85580 87980 91580 10088 10188 97580 10828 85500 155203
outflow 0 0 0 0 0
Net cash 42000 13901 11451 11901 11943 10345 14500 14950 15000 15120 15400 29950 168610
0 0 0 0 0 0 0 0 0 0
Bal c/f 42000 13901 11451 11901 11943 10345 14500 14950 15000 15120 15400 29950 168661
0 0 0 0 0 0 0 0 0 0 0 0

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 5.2.3 NET CASH INFLOW STATEMENT FOR MAJI SAFI PURE MINERAL WATER 2025
. Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Total
Cash flow - - - - - - - - - - - - -
B/F 1923760 1907760 1992760 2087060 1179360 2234660 2326960 2415260 2499210 2469510 2364 25980
810 670
Cash sale 100000 100000 100000 100000 100000 100000 100000 100000 100000 100000 100000 100000 1200000
Debtors - - - - - - - - - - - -
Friends - - - - - - - -- - - - - --
Total cash 2108760 2097760 2192760 2284060 2373860 2428660 2514960 2597260 26845602 2770210 2662510 2562810 29278170
inflow 7

Cash outflow - - - - - - - - - - - - -
Installs 46000 46000 48000 47000 45000 44000 42000 40000 43000 46000 47000 48000 542000
Salary & wages 44000 44000 44000 44000 44000 44000 44000 44000 44000 44000 44000 44000 528000
Creditors 1300 1300 20000 20000 - - 6000 - - - - - 39000
security 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000
Telephone 1000 1000 1000 1000 1500 1500 1000 1000 2000 1000 2000 2000 17000
Insurance - - - - - - -- - - - - - -
Licence & - - - - - 2500 - - 2500 - - - -
permit
Products 50000 50000 50000 50000 50000 50000 50000 50000 - - - - 400000

Investment - -- - - - - - - -- - -- - -
Loan payment -- - -- -- -- - -- - -- - -- -
Interest on loan - - - -- - -- -- -- -- - -- - --
postage 5000 5000 - - - - - 10000
Discount - - - - - - - - 1200 - -- - 1200
allowed
Electricity 1000 - - 1000 1000 1000 1000 1000 1000 1000 2500 2500 17000
miscellaneous 5000 5000 5000 5000 - 2500 2500 2000 - - 2000 - 29000
water 10000 500 500 500 500 500 500 500 500 500 500 1000 7000
Total cash out 201000 10500 105700 104700 139200 101700 997000 977000 105350 109700 104700 130700 1312
flow 250
Net cash 1907760 1992760 2087060 2179360 2234660 2326960 2415260 2499560 2579210 2469510 2364810 2234110 27291020

Bal c/f 1907760 1992760 2087060 2179360 2234660 2326960 2415260 2499560 2579210 2469510 2364810 2234110 2729020

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5.4 PROFORMA INCOME STATEMENT
This shows the income an entrepreneur earns after investment in the business and the
loss of profit made. The following is the preparation of Proforma income statement
for a period of three years.
ITEM YEAR 1 (KSHS) YEAR 2 (KSHS) YEAR 3 (KSHS)
Sales 1,679,000 1,260,100 1,385,500
Less installs 1,005,000 321,000 75,000
Gross 674,000 939,100 1,310,500
Expenses
Salaries 444,000 444,000 444,000
Rent 24,000 24,000 24,000
Water bills 1,870 1,800 2,310
Electricity 1,870 1,750 3,250
Insurance 5,000 5,000 5,000
Advertisement 9,200 6,090 12,970
Loan payment 60,000 60,000
Licenses 5,000 5,000 5,000
Transport 7,750 6,940 8,690
Depreciation 15,795 15,795 15,795
Total expenses 574,485 570,375 521,015
Net profit 99,515 368,725 789,485

3
 5.5 PROFORMA BALANCE SHEET
YEAR 1 (KSHS) YEAR 2 (KSHS) YEAR 3 (KSHS)
Fixed assets
Tools and equipment 200,000 200,000 200,000
Less depreciation 14,200 28,400 42,600
Furniture 16,000 16,000 16,000
Less depreciation 1,280 2,560 3,840
Fixture and fittings 3,500 3,500 3,500
Less depreciation 315 630 945
Total fixed assets 203,705 187,910 172,115
Current assets
Stock 90,000 85,000 95,000
Debtors 5,000 3,000 50,000
Cash at hand 591,910 844,580 969,480

Capital 444,500 591,910 844,580

Net profit 99,515 390,325 114,485
Net capital 544,015 982,235 959,065
Long term liabilities
Loans 60,000 60,000
Current liabilities
Creditors 8,400 1,850 7,100
Outstanding expenses 278,200 76,405 2,755,430

Totals 890,615 1,120,490 1,241,595

4
5.6 BREAK EVEN ANALYSIS
VARIABLE AMOUNT
COST (KSHS)
Year 1 Year 2 Year 3
Installs 100,500 321,000 750,000
Water bill 1,870 1,800 2,310
Electricity 1,870 1,750 3,250
Advertisement 9,200 6,090 12,970
Transport 7,750 6,940 8,690

Total 1,025,690 337,580 777,220

FIXED COSTS
Loan repayment 60,000 60,000
Salaries 444,000 444,000 444,000
Rent 24,000 24,000 24,000
Insurance 5,000 5,000 5,000
License 5,000 5,000 5,000

Total 538,000 538,000 478,000

6.6.1 TOTAL CONTRIBUTION MARGIN

Total contribution margin = Total sales – variable cost
Year 1 = 1,679,000 – 1,025,690
= 653,310

Year 2 = 1,260,100 – 337,580

= 922,520

Year 3 = 1,385,500 – 777,220

= 608,280

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6.6.2 CONTRIBUTION MARGIN PERCENTAGE
Contribution margin % = contribution margin x 100
Total sales
Year 1 = 653,310 x 100
1,679,000
= 38.9%

Year 2 = 922,520 x 100

1,260,100
= 73.2%

Year 3 = 608,280 x 100

1,385,500
= 43.9%
6.6.3 BREAK EVEN LEVEL OF SALES (B.E.P)
Break-even level of sales = fixed costs
Contribution margin %
Year 1 = 538,000
0.389
= Ksh. 1,383,033.4

Year 2 = 538,000
0.732
= Ksh 734,972.68

Year 3 = 478,000
0.439
= Ksh 1,088,838.27

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5.7 CALCULATION OF PROFITABILITY RATIOS
i) Gross profit ratio
= Gross profit x 100
Total sales

Year 1 = Ksh 674,000 x 100

1,679,000
= 40%

Year 2 = Ksh 939,100 x 100

1,260,100
= 75%

Year 3 = Ksh 635,500 x 100

1,385,500
= 46%
ii) Net profit ratio
= Net profit x 100
Total sales
Year 1 = Ksh 99,515 x 100
1,679,000
= 6%

Year 2 = Ksh 390,325 x 100

1,260,100
= 31%

Year 3 = Ksh 114,485 x 100

1,385,500
= 8%

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 iii) Return on investment
= Net profit x 100
Total investment
Year 1 = Ksh 99,515 x 100
800,000
= 12.43%

Year 2 = Ksh 390,323 x 100

800,000
= 43.79%

Year 3 = 1,156,515 x 100

800,000
= 144.56%

5.7 DESIRED FINANCING

ITEM AMOUNT (KSHS)
Pre-operational costs 225,000
Working capital 375,000
Fixed assets 203,705
Totals 803,705

5.8 PROPOSED CAPITALIZATION

ITEM AMOUNT (KSHS)
Owner’s contribution 50,000
Total investment 700,000
Bank loan 60,000
Total 810,000

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