BUSINESS PLAN

PRESENTED BY : LYNIFFER KINYA

INDEX NUMBER :

PAPER NO :

INSTITUTE : BURGSPITSS PROFESSIONAL COLLAGE

SUPERVISOR : MR: AYOMAH ZADDOCK

PRESENTED TO : KENYA NATIONAL EXAMINATION COUNCIL

IN PARTIAL FULFILLMENT OF A DIPLOMA

IN ACCAUNTANCY.

SERIES : MARCH 2023.

 TABLE OF CONTENT

Table of content ........................................................................................... i

Declaration ................................................................................................. i

Acknowledgment…………………………………………………………... ii

Dedication .................................................................................................... iii

Executive summary........................................................................................ iv

The overall schedule ..................................................................................... vi

CHAPTER ONE

• BUSINESS DESCRIPTION
• The sponsor ....................................................................................... 1
• Business name, location and address ................................................ 4
• Suitability of the business location ....................................................... 5
• Form of ownership ............................................................................ 5
• The industry ....................................................................................... 7
• Industry trends and prospects................................................................ 7
• Products and services ........................................................................ 7
• Justification and opportunity ............................................................. 8
• Entry strategy .................................................................................... 9
• Growth strategy..................................................................................... 9
• Goals and objectives ......................................................................... 9
• Vision statement ............................................................................... 10
• Mission statement ................................................................................. 10
 CHAPTER TWO

• MARKET PLAN STATEMENT

• Customers ........................................................................................ 11
• Competition ....................................................................................... 13
• SWOT analysis .................................................................................. 15
• Market share....................................................................................... 15
• Pricing strategy ................................................................................. 16
• Sales analysis .................................................................................... 17
• Advertising strategy ......................................................................... 19
• Promotional strategy ......................................................................... 19
• Distribution strategy ......................................................................... 20
• Anticipated distribution problems...................................................... 20

CHAPTER THREE

• ORGANIZATION AND MANAGEMENT PLAN

• Organizational structure ................................................................... 21
• Annual general meeting ................................................................... 22
• Duties and Responsibilities............................................................... 22
• Management committee ................................................................... 22
• Banking Manager............................................................................... 24
• Deputy banking manager ................................................................... 24
• Internal auditor.................................................................................... 24
• Credit officer ........................................................................................ 25
• Accountant ........................................................................................... 25
• Chief cashier ........................................................................................ 25
• Other personnel ................................................................................. 26
• Recruitment, training and promotion................................................. 27
• Recruitment .......................................................................................... 27
• Training................................................................................................. 28
• Promotion............................................................................................... 29

• Remuneration and incentives ............................................................. 29

• Licenses, permits and by-laws .......................................................... 30
• Supportive advisors and services ...................................................... 30
 EXECUTIVE
SUMMARY
BUSINESS DESCRIPTION

The business will be sponsored by the authors of the business plan who is a

sole proprietor for Umoja Fresh Vegetables . The name of the business

proposed will be Umoja Vegetables which shall be situated in Emali Town in

Makueni County. The business shall commence January 2023.

MARKETING PLAN

Market is a potential place where people are willing and able to purchase the

service. The proposed business gets its potential customers from the local

neighboring residence government institutions, hotels and restaurants. It has

different customers ranging from individual, stalls and institutions.

It will be direct marketing type of distribution which will be used mostly

since it will be in direct contact with customers. Indirect marketing will be

done in few cases where the marketers cannot be direct contact with the

customer. It will locally influence the local market share by snatching a 31%

of the total market share from the existing competitors. It will capitalize on

the weaknesses of its competitors in order to pull a lot of customers. It will

inform its customers on its services by advertising in the posters, billboards

and even signboards also undertaking the service promotion.

ORGANIZATIONAL AND MANAGEMENT PLAN

The business will leave a management team which will be the management

committee elected among the members. The owners being the members. The

workers will consist of the Manager, Supervisor, and Account clerk, Cashier,

Salesman and the Cleaners. The team will be virtually given some training

and will ensure on their duties as soon a possible. They will be remunerated

fairly putting in consideration their position and qualification.

There will be legal requirements that will be expected to have inorder to start

the business unit. These will include licences, insurance, labour laws, public

health, regulations and government taxes. The services listed above will

enable smooth running of the business.

PRODUCTION PLAN

The proposed business will receive some of the equipment and machines

which will help facilitate efficiency. They will be acquired either on cash or

hire purchase basis. They will be acquired either on cash or hire purchase

basis. The business will have seven direct workers and others will be hired on

casual basis to assist in the business operation. The labour cost per month

will be Kshs. 115,000. Its production may be faced by problems like

technological changes, price fluctuations, climatic changes and shortage of

firm inputs and raw materials.

Financial plan

A financial plan will always be drawn so as to help the proprietor to decide on

how to allocate the financial resources that will be available inorder to attain

the objectives set. Working capital will have to be calculated by looking for

the difference between the current assets and current liabilities. The proposed

cash flow statement will help the proprietor to change and to be able to

know the financial position of the business. The desired financing for the

business to start up will be Kshs. 600,000.

 CHAPTER ONE
• BUSINESS DESCRIPTION

• THE SPONSOR

The business will be sponsored by ten members who is a twenty years old

and single. She is students at Burgspitss professional college waiting to

achieve their best currently. Her education and professional background is

as tabulated in the tables below:

YEAR INSTITUTION QUALIFICATION

2021– 2022 Burgspistts professional college Pursuing a Diploma in Cooperative
Management.
2020 Elite Technical Institute Certificate in Agricultural Science.

2016 – 2019 Molalla Girls’ High School Kenya Certificate of Secondary

Education.
2007 – 2015 Kalmia Primary School Kenya Certificate of Primary
Education

• BUSINESS NAME, LOCATION AND ADDRESS

The proposed business will be located at Emali Town along Nairobi

Mombasa Highway at Umoja Plaza, Ground Floor room No. 15. The

sponsors of the business chose this location because of the good road

network which connects Nairobi, Mombasa and Wote which are the

potential market supplier of the products offered by the business. It is an

upcoming place and also enjoys good communication network and outside

parts of the town. There is adequate electricity power supply which is

 needed for the business activities. The name of the business will be

PAMOJA FRESH VEGETABLES. The sponsors proposed that name as

it is derived from Swahili meaning Unity because they had unity since

they had started their youth self-help group earlier where they contributed

money and they ended up buying a piece of land. The piece of land they

owned triggered this though to them, and they decided to do some

vegetable farming which they hope will be successful through the unity

they have.

The business contact will be

TEL NO: 0725-672841

EMAIL: umoja@yahoo.com

• SUITABILITY OF THE BUSINESS LOCATION

The targeted customers will be the institutions within the town and in the

surrounding areas, transporters who use the main highway and the

Railway passing through the town and residents of the town. The good

road network enables easy facilitates faster and easy transport of the

vegetables from the shamba to the firm. There is good supply of water

and therefore there is assurance of continuous production in their farm.

The firm is near the town and so those who want many products can also

access from the farm directly. The location has a good labour market

whereby there is Kyeni Institute College which offers agricultural

education and this will be a benefit to the members whenever they are in

need of the knowledge.

 The place is also well supplied with electricity power thus promotes the

living standards in the area. It has also a good coverage network in terms

of telecommunication and banking services which can promote the living

standards.

There is assurance of good security since the police station is just across

about 50 meters away from the firm.

• FORM OF OWNERSHIP

The proposed business will be a sole proprietorship.

Workers are treated equally and they all benefit from the surplus

realized from the business in form of grants and this promotes unity and

hard work among them.

The proprietor shall be the key decision makers and this ensures that

different ideas are put together for every worker but key decision shall

be made by the owner. The owner intends to register the business legally

with the relevant government authorities just after she completes college

in which she will set a business into operation by the year 202023 after

collecting the required capital.

The required amount of capital is Kshs. 1,200,000 of which

The owner contribution = 150,000

Family friends donation = 200,000
Bank loan = 250,000
Total Amount = 600,000
• THE INDUSTRY

Pamoja Fresh Vegetables shall falls under the Agricultural produce

industry. This is one of the actively performing sector of the economy

hence enabling the production and offering of high quality products.

The industry is highly developing due to the new technology which

produce pure and best products in the market therefore attracting so many

people to use the products. The profits in the society are high due to the

high standard of living of the community targeted.

• INDUSTRY TRENDS AND PROSPECTS

The market trend is growing significantly and there are some factors that

affect the business positively. These include the profits which are high,

the government is also helping the youth to engage in such farming

activities. This helps in training them to specialize hence there is

availability of skilled labour which promotes production in the industry.

• Products and services

The business will be dealing with sales and supply of vegetables like Kale,

Cabbages, Carrots, Tomatoes, Chiui, Dhania, Onions among others.

Products will be sold to the customers according to the quantity they

require and the type of vegetables one orders for. They will also provide

packaging and short-distance transport services within the town and its

surrounding areas.

Customers will benefit since they will get vegetables at fair prices and of

good quality, since the workers have specialized in their field of work.

• JUSTIFICATION OF OPPORTUNITY

The sponsors of the business found it important to enter into a business

after they had identified problems and need of people from the

surrounding area such as lack of immediate accessibility of quality and

efficient vegetables. They also ventured into this with the ideal that they
 wanted to prove its capabilities. The business will succeed because there

will be efficient road network to all the viable consumers who are ready to

use the product.

The business will be assisting the customers by informing them on the

latest development in the industry and its effects on their health like

introduction of new vegetables. The business will inform the customers

on how to use and the benefits to their health.

The sponsor intends to employ more staff and as a result it will reduce the

unemployment in the area by employing more salesmen, cleaners, farm

specialists, etc. They also ensure that there is efficient utilization of the

available resources. The business will obtain farm inputs from the best

supplier who have good reputation and those who can respond positively

to the type of materials needed.

• ENTRY STRATEGY

The business will be recognized in the market by rapid strategy. This

involves the pricing strategy to its customers. At the same time it also

carry out promotion highly through advertisements through local radio

stations, media advertising agents, posters, through the internet etc. This

will be done three months before the grand opening and also after it is

opened.

For customer attraction the owners will hold functions for the members of

public free of charge like awareness in the sector

• Growth Strategy

Plans for growth and expansion of the business venture will be mostly

determined by the kind of profit the owner gets and also the number of

people to employ, skills and experience the owners will have, will enable

the facilitation of the business to higher prosperity so that the cooperative

society will be in a position of purchasing new farm inputs and equipment

to ease the smooth running of the business operation.

• GOALS AND OBJECTIVES

The primary goal for this society is creation of employment and

maximizing the profits from its consumers such that they will keep on

purchasing products from the firm.

The long term objectives include the following:-

• To attain a profit margin of 15% for every Kshs. 500 invested in

the first year of operation.

• To expand the business by bringing up another branch in a

nearby town in the second year of operation.

• Paying back 100% of the first loan obtained for the business by December 2017.

• To increase revenue by 30% each year as from 2015 to 2021

by continuously improving products and services.

 • Short term objectives includes products and services.

• To open two more office in Wote and Nairobi by January 2023.

• To hire two more marketing professionals by December 2023.

• To pay back 40% of the loan obtained for the business by December 2023

• VISION STATEMENT

By the year 2025 the business owners will be the main suppliers of

vegetables in all the big towns in Kenya.

By 2024 the owners will form savings and credit cooperative society.

By 2030, the sacco will be the leading suppliers and exporters of

vegetables in the country.

• MISSION STATEMENT

They aspire to be a profitable society offering their customers affordable

and quality products by skilled employees using the advanced standards

and uphold the higher level of integrity and meet all the expectations of

the stakeholders.
 CHAPTER TWO
• MARKETING PLAN STATEMENT

• CUSTOMERS

The proposed business get its potential customers from the residents of the

town, governmental institutions, stalls owners who sell vegetables in the

town and hawkers. The customers can be classified in institutional

customers and individual customers.

• Individual Customers

These comprises of people who come and take their vegetables

personally and this will be expected to form a larger proportion of

the total number of customers in the market. The owners of the

business further classified individual customers to age groups. The

potential customers will compose of both male and female aged

between 18-50 because they are the most productive group and they

are comprised of people who are working and others who own their

families and doing business in the town.

From the intensive research taken by the owners of the business, it

shows that the potential customers will be acquired from both middle

and higher working class individuals in that they highly depend on

their income, other will be long distance travellers who use the
 highway, people from far places who come to deposit or withdraw

money in the Barclays Bank and the Cooperative Bank and the Civil

Servants and Businessmen in the town.

The potential customers will be basing their services on high

performance, pricing criteria and the quality of services and the

customers have proved services to be of high quality then the

customers will be making frequent visits whenever they need

services.

The potential customers will be visiting the firm from 6.00 a.m. to

10.30 p.m. throughout the week.

• Institutional Customers

The institutional customers will comprise mainly of the schools in

the area and in the town. The training institutes will lie in the same

category.

These customer will be treated in a different way from the

individual customers since they will be buying in large quantity.

Orders from the institutions will be collected and recorded a few

days before the day of delivery and vegetables will be delivered to

their institutions for payment after delivery. Their prices will be

lower than the prices of the customers who by in small quantities

although the owner of the business will ensure that he uses the right
 price in order to get a good profit and also to cater for the transport to

the institutes. Vegetable supply to the institutes will be done through

the week from Monday to Saturday.

The other group of customers will comprise of the vegetable stalls in

the town, the hospitals and nursing homes in the area, the children’s

home and the hotels and restaurants, vegetable orders from these

customers will be ordered and received on a daily basis and the

supplies will be made daily through the day from the morning

10.30 a.m. to 6.00 p.m. in the evening. Pricing for these customers

will depend on whether the customers buy for consumption or for

resale and the quantity ordered and this will ensure customer

satisfaction.

• COMPETITION

The owners of the business believes that in any business environment,

competition inevitable and healthy for rapid growth of the business

venture. In preparing to venture into the business, the owner of the

proposed business identified their competitors as Afya Bora Vegetables

Firm, Nuru Vegetable Stalls and Elite Vegetable Stalls. The proposed

business is strategically located, 20 metres from Nuru vegetable stalls, 160

metres from Afya bora vegetables firm and 150 metres from Elite

vegetables stalls.
It is strategically located along the main Nairobi Mombasa highway where

it can be easily accessed by many people. It is atleast centrally placed in

the town compared to the other vegetable firms.

Elite vegetables stalls is located at the back of the town 20 metres from the

Railway station opposite Elite girls high school. Elite vegetables stalls

does not offer sales in large quantities as will be needed by Elite girls high

school and the other surrounding institutions and so the institutions will

get their services from Umoja fresh vegetables cooperative society.

Afya Bora vegetables firm is located opposite Hillcrest driving school and

30 metres from Kyeni institute college. Although residents in that area

may require vegetables in small quantities, most of the customers will

purchase from Umoja as they will need regular supplies in large quantities.

Nuru fruits and vegetable stalls is located opposite Umoja vegetables firm

20 metres away from each other along the Nairobi Mombasa highway.

Although the firm offers both fruits and vegetables, it does not offer all the

services needed by the customers and it operates on five days of the week

from Monday to Friday, hence it does not cater for the customers who

need services during the weekends.

The owners of the business will capitalize on competitors weakness by

ensuring that they offer competitive services that will attract the customers

over their competition in terms of quality, the owner will also establish
 some discounts and employ more workers to ensure that all customers

needs are catered for.

Table 2.0 Competitor Analysis table

PARAMETE
R
Firm Cleanliness Quality Customer Price Quantity Size Total
competitor
care
Nuru fruits 1 3 2 2 3 2 12
and
vegetable
stalls
Afya bora 3 2 1 2 1 2 11
vegetable
firm
Elite 2 1 2 2 1 2 10
vegetable
stalls
Umoja fresh 3 3 4 1 3 2 16
vegetables
cooperative
society

• SWOT ANALYSIS

The strengths and weaknesses are being analyzed on customer satisfaction as follows

Parameters Pamoja fresh Elite vegetable Afya bora Nuru fruits and
vegetables
stalls vegetable firm vegetable stalls
Strengths • Quality • Enough • Qualifie • Quality
vegetables employee d staff vegetables
• Fair pricing s • Experienced • Enough space
• Qualified • Good • Skilled
• Good management
personnel
• Enough space locatio worker
 n s
• Good • Experienced
location
• Good
managemen
t
Weaknesses • Lack of • Poor quality • Poor • Few workers
experience management
• Unqualified • Poor
• New in personnel • Small space management
market
• High pricing

• MARKET SHARE

The estimated market size of Pamoja vegetables will be 31% of total

targeted group and areas served by the firm. The estimated number of

persons who will be in need of the services in the approximate density of

the area is about 7,300.

Therefore, the market share of the total population to be shares is:-

51,000 x 100
73,000

Pamoja fresh vegetables = 100% - 69% = 31%

The period which the expected percentage will be attained is after six

months of operation in the market then this period will be liable in order

to market the establishment and capture all the potential customers.

Elite vegetable stalls = 41 x 73,000 = 29,930 x 360 = 147.60

100 730,000
Pamoja fresh vegetables = 31 x 73,000 = 22,630x 360 = 116.6
100 730,000
 Nuru fruits and vegetables = 13 x 73,000 = 29,490 x 360 = 46.80
100 730,000
Afya bora vegetables = 15 x 73,000 = 10,950 x 360 = 5460
100 730,000

• PRICING STRATEGY

The vegetables will be arranged reasonably to attract more customers and

also to assist the business in achieving its goals. The business owners will

avoid high costs which may be an hindrance to customers and adopt a fair

approach to lower prices and this will attract many customers. The prices

charged for better profitability will depend on how

the customers will be buying based on the demographic and psychological

factors of the customers and also how sensitive sales of the products are to
 its price. Below is a price list showing: the cost price, selling price and

the difference which is the gross profit.

PRICE LIST
Products Unit cost Number Total cost Selling Sales
in production in of units price
one portion of produced
the
shamba (kshs)
Cabbages 50 200 10,000 70 14,000
Kales 25 300 7,500 50 15,000
Tomatoes 35 400 14,000 500 20,000
Onions 30 500 15,000 100 50,000
Dhania 15 500 7,500 50 25,000
Carrots 20 400 8,000 100 40,000
Chilli 15 600 9,000 50 30,000
TOTAL 71,000 194,000

Gross profit = Total sales – Total cost of sales

= 194,000 – 71,000
= 123,000
2.6 SALES TACTICS

The growth of the business depends on the ability to sell more, hence the

business owners intends to concentrate much on selling the products.

They also intend to use two methods of selling i.e. direct selling and

Indirect selling.

• Direct selling of personal selling

This will be applied so as to satisfy the needs of the customers and

be applied so as to satisfy the needs of the customers and be a

 benefit to both parties. The reason for using this method is because

it provides immediate feedback to the business which will allow

them to adjust in serving the needs of all customers.

The method will also contribute to the firm marketing effort by

producing market place information on competitors and the

analysis both the existing on potential customers and market

development. The recruitment of the services force will be based

on the skills and qualifications for the task those who have

experience will be an added advantage. The serviceforce will be

given an induction training relating to the goals and service offered

by the firm so as to keep the firm more conversant on the

deliberating duties to its customers. Training will also be applied

out to keep the firm a competition in dynamic environment and

will be paid monthly.

• Indirect Selling

This is whereby sales personnel are employed to supply and sell

the goods to customer in different parts of the community and

people or institutions who need vegetables in large commodities

either for resale or consumption. The sales representative will

develop products to customers in their institutions and plan to

provide motorbikes and bicycles to the salesmen to be used in

delivery of the products to customers. The advantage of the

 indirect selling method is that the products are delivered directly

to them. The salesmen will be given incentives

Ranging from commission i.e the more a customer purchases, the

higher the benefit will be given allowances like transport and better

working conditions will be provided.

• ADVERTISING STRATEGY

This method informs the potential customers about the goods and services

offered and persuade them to buy. Advertising will also serve as a way of

conveying information about the business unit itself and informs its buyers

about the characteristics of the goods and services offered and their

availability. The mode of advertising to be used by the firm is outdoor on

posters and possibly billboards. The posters will be used owing to the

minimal cost incurred hence assuming that the presence of the firm will be

felt within and outside the locality and in all other places where people

will have good view of it.

Distribution on local publications will also be done and on magazines that

are read by the targeted groups. Since the business location is strategically

located near the highway making it very visible and well labeled on its

walls for easy identification by the potential customers as they drive or

walk past it.

 After the advertisements have been made, then post-test analysis to

ascertain its impacts on the potential customers will be done.

• PROMOTIONAL STRATEGY

The business owners will carry out trade promotions so as to boost the

firm’s adverts sales efforts. They will offer some free vegetables to

customers when they buy vegetables

Worth 100/= and give them such items as calendars which bears the name

of the firm, logo and what is on offer.

• DISTRIBUTION STRATEGY

Direct marketing will be applied for most of the consumer goods.

Therefore the channel of distribution that will be employed by business

owners is that of selling direct to the consumers and through agents for

instants the agents will distribute the vegetables to the consumers.

Indirect marketing will also be done to the customers who purchase for

resale and delivery of goods will be done to their firms after purchasing or

ordering for the goods.

The means of transport in delivering goods by the use of a bicycle or

motorbike will depend on the quantity of goods purchased. The cost of

transport will be applied depending on the distance to be covered.

• Anticipated Distribution Problems

The problem experienced during distribution process is the shifting of

goods due to the high amount hence it will make it difficult to reach the

corners of the town and the owner plans to overcome this by employing

many agents for easy transport in places when there is heavy and hostile

rainfall.
 CHAPTER THREE
• ORGANIZATIONAL AND MANAGEMENT PLAN

• ORGANIZATIONAL STRUCTURE

In this chapter, the owners have developed posts for staff and human

resource management. This will enable her to achieve the effective

performance of goods and services since there will be efficient production.

The owners of proposed business present joint analysis presentation and

evaluation of employees, training and staff competition. The owners

described the proposed business organizational structure in the figure

below.

• MANAGEMENT COMMITTEE

This is the second authority from top and consists of members elected by

the Annual General Meeting. The proposed business owners have elected

five members amongst themselves who will serve as the management

committee. The elected committee members will serve office for a period

of three years after which they will be eligible for re-election. These

elected are:-

• Lynifer Kinya who is an holder of Diploma in accountancy, a

certificate in Marketing and a certificate in agricultural science.

She will be the chairperson.

• Linet Mwendo will be the vice chairperson she has a diploma in

Cooperative Management and certificates in computer literacy,

agricultural science and sales and marketing.

• Virginia Kanini will be the secretary. She is an holder of a diploma

in Cooperative Management and holds a certificate in agricultural

science.

• Alex Murithi will be the vice secretary. He is a holder of a

diploma in Cooperative Management and also has attained a

certificate in Business Administration.

• Janet adhiambo will be the treasurer. She has a diploma in

Cooperative Management and a certificate in Agricultural Science.

Duties and Responsibilities

• Supervise rules and regulations for credit scheme to be compiled with.

• Follow the issuing and usage of loans by the members.

• Follow repayment of overdue and formalized debts.

• Grant or reject individual members applications.

• Follow the repayment of loans, members debts charge off

interest and the monthly reports.

• Decide on legal actions against defaulters on cases of disputes.

• Banking Manager

The banking manager should be a holder of a diploma in Cooperative

Management. He should have relevant skills in Cooperative banking and

experience on the same.

Duties and Responsibilities

He should be responsible for the day to day running of the Cooperative society.
• Deputy Banking Manager

He should be a holder of a diploma in Cooperative Management.

Duties and Responsibilities

• Act as a banking manager if the bank manager is not in.

• In charge the saving sections within the headquarters.

• In charge of mobile services for reports directly to the banking manager.

• Internal Auditor

Should be a holder of a diploma in Cooperative management or with the

relevant skills in auditing.

He will be in charge of audit with the sacco and reports directly to the banking manager.

• Credit Officer

Should be a holder of a diploma in Cooperative Management with

relevant skills and experience.

Duties and Responsibilities

• Receiving and processing loan applications.

 • Maintaining loans or any other matter pertaining the loans as directed

by the banking manager.

• Supervise loan clerks

• Accountant

Should be an holder of a diploma in Cooperative Management or

be a qualified accountant with relevant skills.

Duties and Responsibilities

• In charge of all accounting matters in the Cooperative society.

• In charge of supervising book keeping, account clerks and control clerks.

• Chief Cashier

Should be an holder of a diploma in Cooperative Management with

administrative skills and experience.

Duties and Responsibilities

• Responsible for all personnel records and handling of all personal matters.

• Responsible for daily administration and any other personnel or

administration matter as directed by the banking manager.

• Supervises personnel and administration matters as directed by the banking

manager.

• Supervises personnel and administrative clerks and all subordinate staff.

• SALES

• Responsible for getting orders from customers who are far and need

the goods to be delivered to them.

• Also responsible for creating awareness to the customers.

Educational Qualifications

• Must be a holder of a certificate in sales and marketing or any

other relevant qualification and skills.

• Must be social talkative and humble.

SUPPLIERS

• Responsible for transporting goods needed to customer to their places.

• Also responsible for packaging of goods bought by customers in the firm.

Educational Qualification

• Must have experience in the field.

• Holder of K.C.P.E. certificate.

Duties and Responsibilities

• Cleaning the shelves and arranging the vegetables.

• Cleaning all the furniture in the firm.

• Ensuring that inside the firm is clean and tidy.

• RECRUITMENT, TRAINING AND PROMOTION

• Recruitment

This will enable the performance of the business to obtain the qualified

employees required to satisfy the needs of the customers. The management

committee is responsible for giving a requirement which include the

following:-

• Advertisement

This is the way of attracting customers into the business which is the

main aim of the business. The proposed business has to attract, create

and maintain interest of the customers. The advertisement includes the

following information, name of the business, job title for the

recruitment, salary for the month. This will be done in writing to the

interested person through posters and outdoor advertisements.

• Shortlisting

This will be done after receiving the application for the interested

person to get the best candidate. The management committee is

responsible for shortlisting and will be based on educational

qualifications on applications.

• Interviews
 After shortlisting the qualified candidate will be called for an

interview where the short listed candidates will present their letters

and everything needed to obtain the employment.

• Selection

Those who qualify after interview will be offered employment

based on their qualification as stated in the advertisement.

Analyzing will be made by placing the right person to the right

position of work hence the one employed will start working.

• Training

This is when the management has to familiarize workers with business in

terms of office work. Sometimes will be conducted to enable the

employees to work effectively. Trade exhibitions will be conducted to

help in effective working of employees.

• Promotion

This is done after evaluating the individual performance according to the following:-

• Their level of performance.

• Their level of discipline and attendance.

• The quality of work done.

• The experience one has in the field

• Innovation of employees
• RENUMERATION AND INCENTIVES

Payment of salaries to employees will be based on their job title,

experience, level of education and duties and responsibilities as in the

entire business.

Table : Remuneration

Job title Salary per month (Kshs) Salary per the year (Kshs)
Manager 30,000 360,000

Supervisor 20,000 240,000

Account clerk/cashier 20,000 240,000

Internal auditor 20,000 240,000

Salesman 15,000 180,000

Cleaners 10,000 120,000

Total 115,000 1,380,000

Incentives

The employees will be provided with the following incentives:-

• Offering vouchers to employees over seasons.

• Offering allowances to overtime workers.

• Offering gift to employees performing well.

• LICENCES PERMITS AND BY-LAWS

 A trade licence shall be offered to legalize the service by paying an

amount of Kshs. 1,500 to the city council of Emaili. The business shall be

done in the town under a cost of Kshs. 1,500 to Emali Town council. The

owners of the business provides that all the workers must get medical test

from the government hospital within the area.

• SUPPORT ADVISORS AND SERVICES

• Financial/banking services

Banking services will be available in the cooperative and hence funds

will be generated from interest from loans granted to members and

also interest generated from members savings.

The firm will also obtain loans from the cooperative bank and other

donor agencies channeled through the cooperative bank of Kenya.

• Insurance Cover

The business will be insured incase of risk of fire and theft. This is

done by buying an insurance cover by the owners of the business.

• Postal Services

The business will access to post office box number of Emali post

office where they maintain good installation and maintenance of

telephone services.
• Business Advisor

The management committee advisor will be the Cooperative bank

director who is also an agricultural officer in the town.

 CHAPTER FOUR
• OPERATIONAL AND PRODUCTION PLAN

Pamoja Fresh Vegetables will ensure that they offer quality services and

goods in order to satisfy the needs of the society.

• PRODUCTION FACILITIES AND CAPACITY

In order to enable an efficient environment for the operation and offering

of services the owners of the business have identified that there is need for

the use of machines and equipment for efficiency of work in the

enterprise. Such machines and equipment can be identified as water pump

which can be used in the garden for pumping water for irrigation of

vegetables. A water sprinkler in the shamba will be used for easy and

efficient irrigation.

Other farm inputs like jembes and rakes will also be needed both in the

shamba and in the firm for moving vegetable in short distances. A

chemical spray machine will be needed for application of chemicals on the

vegetables. Weighing machine will be needed for measuring the quantity

of vegetables which are small in size chilies. Calculators will be needed

for the computation purposes. The refrigerator will be used in storage of

some vegetables when need be. Motorbikes and bicycles will be

purchased for transport services.

The machines and equipment will be purchased from potential suppliers in

the month of December the year 2022 before the business commences its
operation on January 2023 and non of the equipment and machines will

be hired. Employing and hiring technical

personnel will help in the maintenance of these machines inorder to

ensure smooth operations. Monthly inspections on these machines and

equipment will be undertaken.

ITEM CAPACITY UNIT COST TOTAL SUPPLIER

(KSHS) COST (KSHS)

Weighing machine 1 1,000 1,000 Email
Enterprises

Limited
Calculators 3 500 1,500 Maisha Mapya

Bookshop
Water sprinkler 1 3,000 3,000 Daima
Hardware
Rakes/Jembes 20 500 10,000 Daima
Hardware
Refrigerator 1 30,000 30,000 Uchumi

Supermarket
Wheelbarrow 2 600 1,200 Daima
Hardware
Printing Machine 1 3,000 3,000 Email Enterprise

Limited
Chemical 1 2,000 2,000 Daima
Hardware
Spraying

Machine
Motor bikes 2 56,000 116,000 Email motors ltd
Bicycles 2 1,000 2,000 Email Motors
Ltd
TOTAL 179,700
• GROUND PLAN

The owners of the business plans to expand their business in the next 4-5
years after its operation by opening other branches within and outside the
locality.

They will also expand the enterprise so that it can satisfy other
strategic needs by the customers.
The parking area will be expanded to accommodate the rising number
of potential customers.
Table : List of other fixed assets

Assets Amount (Kshs)

Electric power generator 20,000

Water pump 9,000

Total 29,000

• PRODUCTION STRATEGY

The owner of the business will design and develop a plan that will guide in

the operation of the business. It would be developed against treats or

challenges that might be caused by the environment.

This will be done to ensure that the business achieves its set objectives and

goals so as to ensure the quality of goods and services in consideration to

the following:-
Monthly material requirements

The owners will keep a list of products that will be required every month.

The requirements will majorly depend on the demand and consumption of

the customers and customers purchasing power and patterns. The owners,

then having fully accessed the consumption deals, then they will order

materials needed in bulk so as to ensure that they give goods and services

without shortages. The lists of materials received monthly

will include the following items which will be acquired from potential

suppliers whom are well established and have proven good reputation on

the quality of products and are at a close access to the premises.

These materials shall be available to the enterprise for the production of vegetables.

Items Quantity Cost per unit Total cost Supplies

(Kshs) (Kshs)
Tomato seeds 2kgs 250 500 Highway agricultural
seeds
Cabbage seeds 2kgs 300 600 Highway agricultural
seeds
Dhania seeds 1kg 150 150 Highway agricultural
seeds
Carrot seeds 1kg 200 200 Highway agricultural
seeds
Kale seeds 2kgs 100 200 Highway agricultural
seeds
Onions seeds 2kgs 150 300 Highway agricultural
seeds
Chilli seeds 1kg 100 100 Highway agricultural
 seeds
Total 2,050

Transport of materials to the business

The business owners will be arranging for the transportation of materials

from the suppliers premises by placing orders to the suppliers and then the

materials will be dropped to the firm by the suppliers using their van as

they purchase in bulky. Incase of any inconveniences the owners will also

be allocating some amount of money Kshs. 10,000 per month for

transportation of materials.

• Production Experiences

Number Expense Cost (Kshs)

1 Installation of telephone 2,500
1 Installation of power electricity 3,000
1 Opening of postal address 2,400
1 Installation of furniture 25,000
1 Painting 5,000
Total 37,900

• Production Overheads

As depicted in the organizational chart, the business unit will have direct

workers who will be involved in the operations at the premises and plans

will also be laid to hire some indirect workers who will either be involved
 in the advertising campaigns of the firm or will assists the business in the

achievement of its goals by undertaking activities such as, cleaning,

washing and provision of strategic services. They will be hired on casual

basis and will be rewarded depending on the work or task performed. The

total overheads per month will be as follows:-

Table : monthly production overheads

Number Overhead (personnel) Monthly Total amount

salary (Kshs)

(Kshs)
1 Manager 30,000 30,000
1 Supervisor 25,000 25,000
1 Account clerk 20,000 20,000
1 Cashier 15,000 15,000
1 Salesman 15,000 15,000
Cleaners 10,000 10,000
Total 115,000

• PRODUCTION PROCESS

The business will be opening at 6.30 a.m. every morning. On customers

arrival, the receptionist shall receive customers by taking their orders.

Then the receptionist shall take the order and help in packaging customers

vegetables according to their needs. Then the receipt will be given to the
 customers for payment to the cashier. After which the customer leaves the

firm

Offering the service

Production process
Costing

Good communication with customers, fast, flexible and cost effective

practices improve good relations with customers. The external factors that

affect the business at a very high rate from outside include the following:-

• Insecurity - Security around the location is not good since it

is located at the town centre so there are many

cases of theft and robbery.

• Political threats - This is where the government imposes to the

business at a very high rate.To overcome the

above external factors for example insecurity one

of the security officers will be employed liable to

any case of theft arising. The security officer shall

be courageous with experience to come up

successful and curiously without fearing facing

the robbers.
• GOVERNMENT REGULATIONS

• Local government Act (Cap 265)

This is an act of parliament providing to establishment of

authorities to look into the licensing of business enterprise. The

registration charges will be 3,000 per year.

• Insurance Act (Cap 507)

The government requires that insurance policy be recovered for the

safety of the premises and for personnel working incase of fire or

accidents.

• NSSF – Contribution of each employees will be forwarded

according to the requirement of the NSSF.

• Business Registration

Business registration should be carried out to ensure business

carryout its duties as per the registration act the cooperative

registrar.

• Taxes Cap 170

 Under the enlisting of Kenya Revenue Authority Afya Bora Fresh

Vegetables Cooperative Society will be expected to pay taxes as

per the regulations.

• Labour Law Cap 517

The act provides that terminating on employees from the business

have to follow the regulation for the labour.

• Value Added Tax (VAT) Cap 470

Goods and services transacted within the business will be

subjected to a 18% VAT which is a substitute set by the

parliament.
 CHAPTER FIVE
• FINANCIAL PLAN

• ESTIMATED WORKING CAPITAL FOR THE FIRST THREE YEARS

ITEM YEAR 1 (KSHS) YEAR 1 (KSHS) YEAR 1 (KSHS)

Current Assets

Stock of finished goods 120,000 126,000 132,000

Debtors 10,000 10,500 11,000

Cash 400,000 420,000 440,000

Total Current Assets 530,000 556,500 583,000
(A)
Less: Current
Liabilities
60,000 63,000 66,000
Creditors
Loan
120,000 126,000 132,000

repayment 41,000 43,050 45,100

Unpaid

expenses
 TOTAL 221,000 232,050 243,100
CURRENT
LIABILITIES
(B)
WORKING CAPITAL 309,000 324,450 339,900
(A-B)

• PROJECTED CASH FLOW STATEMENT

CASH JAN FEB MAR APRI MAY JUNE JULY AUG SEPT OCT NOV DEC TOTA
INFLOW CH L L
Cash sales 560,00 600,00 645,00 705,0 762,00 821,00 800,00 800,00 860,00 850,00 861,00 862,70 9,126,7
0 0 0 00 00 0 0 0 0 0 0 5 05
Debtors 800 830 830 838 838 838 840 840 800 850 852 852 10,000
Bank loan 250,00 - - - - - - - - - - - 250,00
0 0
Capital 250,00 - - - - - - - - - - - 250,00
introduced 0 0
TOTAL 1,060,8 6,008,8 645,83 705,8 762,83 821,83 800,84 800,84 860,80 850,85 861,85 863,55 9,636,7
CASH
00 30 0 30 8 8 0 0 0 0 2 7 05
INFLOW (A)
CASH
OUTFLOW
Cash 233,00 333,05 333,02 333,0 333,00 333,00 333,10 333,02 333,02 333,02 333,00 333,05 3,996,3
purchases 0 0 5 25 0 0 0 5 5 5 0 0 00
Rent 22,000 22,000 22,000 22,00 22,000 22,000 22,000 22,000 22,000 22,000 22,000 22,000 264,00
0 0
Transportatio 15,350 15,000 15,300 15,35 15,400 15,000 15,350 15,350 15,300 15,600 15,650 15,650 184,30
n 0 0
Loan - - - 28,16 28,167 28,167 28,167 28,167 28,167 28,167 28,167 28,167 253,50
repayment 7 0
Loan interest - - - 3,380 3,380 3,380 3,380 3,380 3,380 3,380 3,380 3,380 30,420
Advertiseme 14,750 14,700 14,800 14,00 14,000 14,850 15,100 15,100 14,750 14,800 14,850 15,300 177,00
nt 00 0
Salaries and 115,00 115,00 115,00 115,0 115,00 115,00 115,00 115,00 115,00 115,00 115,00 115,00 1,380,0
wages 0 0 0 00 0 0 0 0 0 0 0 0 00
Postage and 5,100 5,000 5,200 5,000 5,000 54,000 5,100 5,100 5,200 5,500 5,550 5,550 62,300
stationeries
Maintenance 17,000 18,000 16,000 16,00 17,000 17,000 18,000 18,000 18,000 18,600 18,700 18,700 211,00
0 0
Electricity 8,500 8,400 8,300 8,300 8,500 8,300 8,300 8,200 8,100 8,400 8,200 8,200 99,600
and water
Licences and 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 33,000
insurance
TOTAL 533,45 533,90 532,37 562,9 564,19 564,44 566,24 566,07 565,67 567,67 567,22 567,24 6,691,4
CASH
0 0 5 72 7 7 7 2 2 2 1 6 20
OUTFLOW
(B)
NET CASH 527,35 66,930 113,45 142,8 198,64 257,39 234,59 234,76 295,12 283,62 294,60 295,81 2,945,2
(A-B)
0 5 58 1 1 3 8 8 9 6 1 85
BAL B/D - 527,35 594,28 707,7 850,59 1,049,2 1,306,6 1,541,2 1,775,9 2,071,1 2,354,7 2,649,3 2,945,1
0 0 35 3 34 25 16 86 14 43 49 60
ACCUMULA 527,35 594,28 707,73 850,5 1,049,2 1,306,6 1,541,2 1,775,9 2,071,1 2,354,7 2,649,3 2,945,1
TED
0 0 5 93 34 25 16 86 14 43 49 60
CASH
• PROFORMA INCOME STATEMENT FOR THE FIRST THREE
YEARS
ITEM YEAR YEAR YEAR
2015 2016 2017

(KSHS (KSHS (KSHS

) ) )
Sales 9,126,70 9,583,04 10,039,37
5 0 5
Less: Sales
6,705 3,040 9,375
Return NET
9,120,000 9,580,000 10,030,000
SALES

COST OF GOODS SOLD

100,000 120,000 126,000
Opening
3,996,300 4,196,115 4,395,930
stock
23,295 117,567 105,530
Add:
10,000 12,000 14,000
Purchas
4,109,595 4,421,682 4,613,466
es
120,000 126,000 132,000
Carriage
3,989,595 4,295,682 4,481,466
inwards Less:

Purchases returns

GOODS AVAILABLE FOR

SALE
Less: Closing

stock Cost of

goods sold (B)

GROSS PROFIT (C) 5,130,405 5,284,318 5,548,534

TOTAL OPERATING 2,664,700 2,797,935 2,930,770
EXPENSES
 (D)
NET PROFIT BEFORE TAX 2,465,705 2,486,383 2,617,764
(C-D)
LESS: 16% TAX 394,513 397,822 418,843
NET PROFIT AFTER TAX 2,071,192 2,088,561 2,198,921

• PRO-FORMA BALANCE SHEET FOR THE

YEAR ENDING 31ST DECEMBER 2015
FIXED ASSETS YEAR 2015 YEAR 2016 YEAR
2017
(KSHS) (KSHS)
(KSHS)
Machinery and 100,000
equipment Less: 5,000 95,00
0
Depreciation Furniture 60,00
and fittings Less: 0
3,00 57,00
Depreciation Motor
0 0
vehicle
58,00
Less: Depreciation 0 45,10
Bicycle 2,90 0
Less: Depreciation 0
2,000 1,90
100 0
TOTAL FIXED ASSETS (A) 199,000
Current Assets
Debto 10,00
0
rs
120,00
Stock 0
Cash at bank 250,00
Cash at hand 0
150,00
0
TOTAL CURRENT ASSETS (B) 530,000
TOTAL ASSETS (A+B) 729,000
LESS: CURRENT LIABILITIES
Creditor 60,00
 s Bank 0

loan 120,00
0
TOTAL CURRENT LIABILITIES 180,000
TOTAL NET ASSETS 549,000
FINANCED BY
Capital 309,000
Net profit after tax 2,071,19
2
Less: Drawings
1,831,19
2
TOTAL 549,000

• PRO-FORMA BALANCE SHEET FOR THE

YEAR ENDING 31ST DECEMBER 2016
FIXED ASSETS YEAR 2015 YEAR 2016 YEAR
2017
(KSHS) (KSHS)
(KSHS)
Machinery and 95,00
equipment Less: 0 90,25
4,75 0
Depreciation Furniture
0
and fittings Less:
57,00 54,15
Depreciation Motor 0 0
vehicle 2,85
Less: Depreciation 0
42,84
Bicycle 45,10 5
0
Less: Depreciation
2,25
5 1,80
5
1,900
95
TOTAL FIXED ASSETS (A) 189,050
Current Assets
Debto 10,50
0
rs
126,00
 Stock 0
Cash at bank 262,50
0
Cash at hand
157,50
0
TOTAL CURRENT ASSETS (B) 556,500
TOTAL ASSETS (A+B) 745,550
LESS: CURRENT LIABILITIES
Creditor 63,00
0
s Bank
126,00
loan 0
TOTAL CURRENT LIABILITIES 189,000
TOTAL NET ASSETS 556,550
FINANCED BY
Capital 324,450
Net profit after tax 2,088,56
1
Less: Drawings
1,856,46
1
TOTAL 556,550

• PRO-FORMA BALANCE SHEET FOR THE

YEAR ENDING 31ST DECEMBER 2017
FIXED ASSETS YEAR 2015 YEAR 2016 YEAR 2017
(KSHS) (KSHS) (KSHS)
Machinery and 90,2
equipment Less: 50 85,7
4,5 37
Depreciation
13
Furniture and fittings
54,1 51,4
Less: Depreciation 50 42
Motor vehicle 2,7
Less: 08
40,7
Depreciation 42,8 02
45
Bicycle
 Less: Depreciation 1,7
2,1
14
43
1,805
91
TOTAL FIXED ASSETS (A) 179,595
Current Assets
De 11,0
00
btor
13,2
s 00
Sto 275,0
ck 00
Cash at bank 165,0
00
Cash at hand
TOTAL CURRENT ASSETS (B) 464,200
TOTAL ASSETS (A+B) 643,795
LESS: CURRENT LIABILITIES
Credit 66,0
00
ors
132,0
Bank 00
loan
TOTAL CURRENT 198,000
LIABILITIES
TOTAL NET ASSETS 445,795
FINANCED BY
Capital 339,9
Net profit after tax 00
219,9
Less: Drawings
21
2,093,0
26
TOTAL 445,795

• BREAK-EVEN POINT ANALYSIS (B.E.P)

FIXED COSTS AMOUNT (KSHS)
Salaries and wages 1,380,000
 Rent
264,000
Insurance
30,000
Licenses
3,000
Loan repayment
253,500
TOTAL FIXED COST 1,930,500
VARIABLE COSTS
Electricity and water bill 99,600
Postage and stationeries 62,300
Advertisement 177,000
Transportation 184,300
Repair and maintenance 211,000
TOTAL VARIABLE COSTS 734,200

Contribution Margin = Total sales – Total variable costs

= 9,920,512 – 734,200
= 9,186,312

Contribution Margin Percentage = Contribution Margin x 100

Sales
= 9,186,312 x 100
9,920,512
= 92.59

Break Even Point = Fixed Costs x 100

Contribution Margin Percentage
= 1,930,500 x 100
92.59
= 20,850

BREAK EVEN CHART

• DESIRED FINANCING

DESCRIPTION AMOUNT (KSHS)

 Pre-operational 291,000
Working capital
280,000
Fixed asset
29,000
TOTAL DESIRED FINANCING 600,000

• PROPOSED CAPITALIZATION

SOURCE AMOUNT (KSHS)

Owner’s contribution 245,000

Bank loan 255,000

Family and friends 100,0000

TOTAL 600,000

• CALCULATION OF PROFITABILITY RATIOS

a) Gross Profit Percentage = Gross Profit x 100

Sales
= 5,130,405
9,126,705
= 56.21%

b) Return on Investment = Net profit after tax x 100

Total Investment
= 2,071,192 x 100
600,000
= 345.2%

c) Return on equity = Net profit after tax x 100

Owner’s contribution
= 2,071,192 x 100
 250,000
= 828.48%