BUSINESS PLAN ELECTRO-TECH SOLUTIONS PRESENTER: SANCHEZ MWANGI KAMWATHL ADM NUMBER: 40970, (CENTRE NAME: THIKA TECHNICAL TRAINING INSTITUTE COURS # CODE:2601 INDEX NUMBER:2071012485 COURSE OPTION] :: DIPLOMA IN ERING [POWER SUPERVISOR: HENRY NJOGU PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL IN PARTIAL, FULFILLMENT FOR THE AWARD OF DIPLOMA IN ELECTRICAL AND ELECTRONICS ENGINEERING [POWER OPTION] EXAM SERIES: JULY 2024DECLARATION 1 SANCHEZ MWANGI declares that this piece of work is my original work and has never been dane by anyone for any award. Student name Supervisor name SANCHEZ MWANGI HENRY NIOGU SIGN, SIGN. DATE, DATE.DEDICATION With gratitude and respect this business plan is dedicated to my dearest family members. will also dedicate it to the Almighty God for giving me both physical and mental stengt to perform this task. I also want to ‘dedicate to all my fiends for ther sincere devotion and their endless support towards this business plan,ACKNOWLEDGEMENT First, I would wish to thank the Almighty God for giving me the opportunity to undertake this cours. also ‘wish to express sincere gratitude to my esteemed supervisor Mr. Henry Njogu for his unique and special guidelines. My special gratitude also goes tomy Family members, my Friends and all Electrical Companies for their help and support by providing me with techni information and also moral suppor throughout because without their help and support many aspects ofthis work would not have been possible‘Table of contents DECLARATION, DEDICATION. ACKNOWLEDGEMENT. ‘TABLE OF CONTENTS. LISTS OF TABLES. EXECUTIVE SUMMARY .. 7 [BUSINESS DESCRIPTIONS 7 [MARKETING FLAN 7 [MANAGEMENT PLAN 7 ‘OPERATION/PRODUCTION PLAN. 7 FINANCIAL PLAN 7 CHAPTER ONE 8 Business Background. 8 Business name. 8 Business Location 8 Form of Business Ownership. 9 Business Industry. 9 Business Goal 9 Short term goals 9 Long term goals 9 Entry and growth strategy 10 Grovah strategy 10 Product and services 10 Justification ofthe business opportunity 10 CHAPTER TWO. MARKETPLAN, 12 Customers R Institutional of Goveramental customers. os sonnel Individual customers. vss vl Market Share 2 Competition 3 Methods of Promotion and Advertsing. 4 Advertsing, 14 Promotion, 15 Pricing Strategy 15 Sale Tactics v7 Distribution strategy 7 Direct distribution, 18 Indirect distribution, 18 CHAPTER THREE. ORGANIZATION RESOURCES 19 Organization structure 19 Managers and Qualification. 0 General Manager. 19 Deputy General Manager. 20 Financial Controller. 20 Human Resource Manager. 20 Sales Manager. 20 Personnel Nuonber and Duties. 20 Recruitment, Training and Promotion. Pn Recruitment 21Training Promotion Remuneration and Incentives ‘Remuneration of staff. Remuneration of management Incentives Financial incentives, ‘Non - financial incentives Licenses, Permit and By- Laws. Support Service. CHAPTER 4 ccc PRODUCTION OPERATIONAL PLAN. Introduction ProducwService and development Production Facilities and eapacty. Production process Production strategy Premises Layout Working schedule Production plan Production design and development. Relevant regulation, CHAPTER FIVE FINANCIAL PLAN, Pre Operation Cost. Working Capital Preparation of Cash Flow Statements, Profoma income statement Profoma balance sheet Calculation of break-even point. Variable cost Calculation of profitabitity ratio Liquidity ratio. Desired capita Desited finances for ane year Proposed capitalization. 30 3 7 35 35 35 36 36 36 a7Executive summary The executive summary isthe overview of the proposed business fiom the business descriptions, marketing plan, menageril plan, production operational plan and financial plan Business descriptions ‘The business shall be called ELECTRO ~ TECH SOLUTION ENTERPRISE. It shall be owned by SANCHEZ MWANGI. The owner shall bea sole proprietor, the business shall be stated with a mission “innovating the future of electrical and electronics" it shall als offer services like maintenance and repair of electrical devices, the proposed business shall also venture in selling of electrical devices at fair prices and also in government projects The proposed business is suited in Nairobi city long Moi Avenue road, 100 meters from Archives opposite java house and next to Moi Avenue primary school. The business will operate under the hospitality industy Marketing plan ‘After research carried out, it was found out thatthe business will have workers, students from within the business location, individuals and businessmen as potential customers. The business identifies electrical dealers asthe main competitors offering the same services. The business shall therefore its service by offering by attractive sign boards, posters placed on strategic positions and location for advertisement, The proposed business wil also be giving discount and applying price control mechanism e.g. caleuating the average price ofthe competitor hence finding the business prices of certain device/components. The ‘enterprise targets several types of customers as stated above and hopes to attract even mote customers. The business will also use the distribution channels to distributes its goods all over the county, “Management plan ‘The proposed enterprise shall employ for key personne! who include the Manager, Assistant Manager:it will also employ supportive staffs to assist in naming ofthe business. Ths section will also include salary seale forthe month up to 25000 the license, permits, by laws and supportive professional services eg, Lawyer, Bankers Insurance services will be needed for efTective, smooth and efficient operation of the business Operation/Production plan ELECTRO ~ TECH SOLUTIONS will involve the operational features of offering the services hence ‘equipment, machines and tools shall be put i place with the necessary spare pats, production strategies, expenses and government regulation i, health egulation and employment contract act shall be regulated and employment contrat act shall be regulated in the production plan. Financial plan Financial resources are required for registration, purchase of equipment among others. The business will carry out all the financial calculation to determine whether the business is running ata profit or @lossCHAPTER ONE BUSINESS DESCRIPTION ses Backeround ‘The business ELECTRO-TECH SOLUTIONS, will be a sole proprietorship where by it will be managed by Sanchez Mwangi. He is single and a second year student at Thika Technical Training Institue enrolling Diploma in Electrical and Electronics Engineering. Business name ‘This business plan wil be registered as ELECTRO-TECH SOLUTIONS. The enterprise name is original creation from my friends and I and its main objective isto increase sales of good quality devices and system. ‘mainly used in Electical and Electronics. Its motto is “Innovating the Future of Flectical and Bleetronies” Its vision is “becoming the best lighting enterprise in the country” 18 Loca ‘The proposed business will be located in Nairobi city alongside Moi Avenue road, This enterprise is located atthe center ofthe customer's project and also itis easy to access due to good infastructure and networking systems, The contact address of the proposed business wil be as follows: ELECTRO-TECH SOLUTIONS P.0 BOX 1000 NAIROBI ‘TaLo7017aso0481072702850 E-mail: Sanchomwa@[Link]Form of Business Ownership The basiness will bea soe proprietorship with the owner asthe general manager. He will be assisted by five employees and two supportive staff who willbe assigned diferent task and duties inthe enterprise. The type of busines ssituated because the owner will have time to run the business and he wll be able to Teer fom his estemed customers as he will have direct contact with them sharing of new and good ideas and this will enable him to make good and appropriate decision that may eneble him to expand his enterprise by identifying the market gop siness Industry The business isa dynamic sector encompassing the design, manufueturing and distribution of electrical components, devices and systems. The business focuses on leveraging technological advancement to provide innovative solutions, that will mainly major in market analysis, product development strategies and financial projection to ensure sustained growth and profitability. The business will also engage in recycling of electrical gadgets that are always disposed to ereate new components and also devices. The business wil also engage in assembling and will come into practice asthe owner will purchasing options then putting them together to come up with complete sets of electrical machines and equipment such as motors and generators. Trading seetions ofthe business will involve offering the lable goods to the willing customers on profitable terms. Business Goal This business is situated to facilitate and create jab opportunities to the youths and anyone in need of improving his living standards It also enables those who are willing unto their ski of production so as to give best services. The business also wants to major in identifying eleetic gap in the country so as to come up with good ideas of how we willbe able to come up with solutions example, by manufacturing of cheap ‘components like insulating conduits ‘Short term goals ‘The business manager will aim at obtaining a least 45% within the first six months thee by creating job ‘opportunities inthe surrounding, contributing o the market share of about 60% of the population, attracting ‘more customers into the business and maximize business profit, The manager will come up with possible ‘means of ensuring that the business goods and services are available at all times before advertising the products in the market. Long term goals The proposed business wil introduce modem technology and uplift the skills of each and every employee to provide quality and hetter working condition ofthe business within a period of one and half years of ‘operation, To make the business work easier in terms oftansportaton the business will Keep aside atleast 5% of the profit every month to enable i to purchase at least 2lories by the end of the second year. In ‘addition to that, the manager is ambitious of expanding the enterprise by extending its branches too fast developing towns like Thika, Eldoret and among others.‘The business i also planning tobe the leading enterprise in supplying, distributing and even manufacturing ofthe electrical and electronic devices in the county. Eniry and growth strategy ‘As per the mat sgement, the business is hoping to commence its normal operation as from 15! January 2024 as stated in the agreement withthe council ‘The business will penetrate into the market where there ae few competitors as the manager organizes for suitable ways to capturing half the market share percentage ‘These will be achieved through conducting personal selling, advertising using posters, magazines, newspaper and signboard Growth strategy ‘The business owner has an admiration thatthe business activities become profitable and of growth to the evonomy. The enterprise isto maximize the capabilities and prove thet skis and knowledge acquired are beneficial and of great valuc tothe economy. Among the growth strategies the manager has come up with his employing and training complementing stafls chat will ensure there is increased products and serviees loyalty through advertisement, monitoring sales and profit volume improving level of technology which in tum will enhance business expansion. ‘The small amount of capital available makes the business to staff of as a small business. All profit realized will be ploughed back to the enterprise to help in expansion The business owner will continue carying out assuring on the potential clients and intends to open up new branches in other parts of the country Produet and services The proposed business will specialize on production ofall electrical devices or components thus simplifying customer's movements. Very set of equipment willbe assigned technicians with the required skills help either inthe installation or even the sale ofthe device Examples of produet include: Y- Blectreal wiring and cables ¥ Cirouit breakers and fases Light Gxtures and bulb Example of services inelude: Lighting design and installation °Y- Blectrieal panel upgrades and replacement Commercial electrical installation and maintenance Y- Blectonies repairs Justification ofthe business opportunity “Most people are venturing into the cleczical field. The business manager thus expects to earn a living witha Jot of ease there is no much competition and consumer are many. Tast willbe possible because the manager ‘would have the technical knowledge forum the enterprise 20‘The manager will order for his customers to be offered goods and services ata fur price of the product, regular operation, attractive display and good communication with a persuasive language. Mainly to give the cnlerprise an opportunity to change marketing strategy to achieve profit, ‘The business has analyzed some ofthe factors are situated forthe growth ofthe busines, they include: < Availability of customers Good transport and networking system High demand ofthe goods and services Availablity ofprojects aCHAPTER TWO. MARKET PLAN Customers ELECTRO-TECH SOLUTIONS will target both domestic and industrial customers init provision the business environment will be much conducive for its customers and thereafter facilitate faster expansion due to the presence of the potential customers responsible forthe growth and expansion of ths business frm. ‘The business aim is o categorize its customers into two thats Institutional or Governmental customers The eategory constitutes the pubic institution who are business clients, within the geographical location such customers include nearby police camp division, Kenya wildlife service and many more. These customers will provide and generate large income to the business thereby enabling a faster growth and expansion ofthe firm in the area. Individual customers These kind of customers have organization and are owned by individuals who manage and conta their operation without much interference from extemal factors. In this business environment such customers are people who are engaged in real estate development, people who are in thei own apartment contact et. Market Share ‘The market share is the percentage of total sales eamed by an enterprise over a specific period of time During the first year ofthe proposed business it is expected tha it will be able to command 30% of the ‘market share. The business will face competition from other existing business inthe field ut due to the uniqueness the business will prosper. The targeted population ofthe entre market will be about 50,000 customers, The market share of our proposed business will be as follows compared to other similar business. rasinews nae Nuniber oF euntomers Pereeniage ikero-Tech Solutions 15,000 3% Miwesh Elscronies To,000 "Tronie Hesronies TOO Ribas Flecronies 3,000 ‘Kamwa Electonics 5000 Toad BOO 2MARKET SHARE Competition In consideration ofa field research that has been carried out to assess the number, weakness and strength of| the competitors who the business intends to compete with as it wil be commuting its profitable duties, the few competitors realized in the same environments have their business names know t their customers as Kibso clectrical and electrons ‘Tronic electrical and electronics Kama cletrial and cestonies Muvesh electrical and electronics In determination of their strength end weakness in comparison tothe ELECTRO ~ TECH SOLUTIONS a variety of conclusion are discussed to facilitate stiff competition strategies. The various weaknesses and strength are analyzed inthe next page: 3BBUSINESS NAME] LOCATION STRENGTIT WEAKNESSES ‘Ribao elecreal and [150m fom Eleetto— | Use of modern Tow quality of goods electronics ‘Tech Solu technology Low skilled personnel More evstomers ‘Operate in smal sale Long working hours Low pay of employees Long ours of Tronic clecioal and [200m fom Eleciro— | Wuge sources Poor customer electronics Tech Solutions raterials relationship Located ina strategic | Unskilled employees positon Low quality products Modem technology is | No testing of components sed Short service hours Rama cecal end] 500m fom Blecto— | Large market Tow pay/to employees electronics Tech Solutions Food record keeping | Long working hours Operate under large | Low skilled personnel seale Ready souree of funds TMiwesh ceciicaT and [Thin from Bleairo = | Modem machine and’ | Short hours of service electronics Tech Solutions equipment Low skilled personnel Good pay to customers. | No testing of products Acquired large umber | Poor record keeping Goods of high quality By use oftheir weaknesses the proposed business will come with strategies on how to allocate gaps in the marker and tke that chan Methods of Promotion und Advertis Advertsing The proposed business will have some advertising techniques that is Email marketing -this is the most in expensive digital way of marketing the business to potential leads. Ths is by sending emails to big projects within the business location. Social media ~ due to high growth rate ofthe interaet the busi 88 will take the opportunity and ope: platforms like Facebook and Instagram which will help in advertising Through Post— Sales Experience — we will request our esteemed customer who have reesived our services to rate them, and this will enable our enterprise toa There will also be posters “Promotion The business wil promote our esteemed customers by’ Offering discount for people who buy lange quantities of clettical components. Offering after services sale to our esteemed eustomers Sometimes offering fee deliveries to customers who ate within the enterprise Ask for eferals to help get new customers tothe business This are some of the promotion our proposed business is going to offer and many more to our esteemed The business will sta favorable price to our esteemed customers, The will depend on the competitors pricing which will be smaller than theirs but varies in one area These are some ofthe examples ofthe business pring of some components Pliers Tronie eestonies Rehiso Rae Mesh electronics KeheaT Kamua electronics KISS Kibao electronics KRIS Eleetro-tech solution S0AT-SAISTTIOD 133914-349,75 Motors (3 phase) Tronie electronies | Kahl 75,600 Kan TS ASO Mesh elestronies KahT76,000 Kibao electeonios Kahl 75800 Kama electronics KSnTTS 735 Electrotech solutions 8175,600+175,450+176,000~175 800-702, 00 -702,9008=175,725 Circuit Breakers je electronics | KANO Kahan Mwesh elecronies RS Kibao electronics Ra Kamwa electronics KEnIIE TS Electrotech solutions BOS OOS 90514-226.25 Daills nie TecTrORTeS T07 3000 Mwesh electronics FR Kibao electronics F500 Kamwa electronics as etro-tech solutions .45001-5000480014600 ~ 18900 1890014 = 4725 16Blectric bell “Tronie oecronies To00 TIs00 -Mwesh electronics ROT Kibao electrons TOs00 Kamyta electronics Toas Electro-tch solutions 19000+11500#9800+10S00 ~ 41800 4418004 = 10450 These are some of the examples of how the proposed business will set favorable pices to al esteemed customer: Taking the mean of competitors prices and dividing by thei total number. Sale Tueties Since the purpose ofstuating a busines is to exchange goods and services with currency or credit the proposed business has some sell tactics and some include +The enterprise will work on creating a strong relationship with contractors, electrician and other industry profession which may lead to referrals, +The enterprise will offer demonstration of electrical product to potential customers and showease their effectiveness and functionality helping o close sales. ‘Iti offer training sessions or workshop on new product, technologies or installation techniques and this may build trast within customers, ‘Last but not least the proposed business will offer special discount offers and even special promotion especially for bulk goods These are some of the ideas of sale tactics ofthe business and hoping for its suecess in the market competition Distribution strategy The customers willbe highly welcomed, make a choice of goods and services thry will desire, package and given atthe counter. The distribution channel which the manager will have power over the inthe business will be effective, convenient and reliable to all customers. The distribution channel may be long especially when the esteemed customer purchases goods in large quantities which may need transport services by the help of the agents The distribution channel forthe EILRCTRO ~ TECH SOLUTIONS is as shown below: ”Direct distribution ‘That is direct ftom the business fo the customer, ELECTRO —TECH SOLUTIONS custontens ENTENPAISE [electric center] Indirect distribution For the ezstomer to acquire goods and services helshe should go through an agent who wil act as a middle ELECTRO ~ TECH SOLUTIONS ‘AGENT customers ENTERPRISE [electric center] | | — | 18CHAPTER THREE ORGANIZATION RESOURCES Organization structure The above hierarchy structure represent the parties involved in ELECTRO-TECH SOLUTIONs: ENTERPRISE. They are situated to ensure that there are smooth operations of the business with limited confusion, complication and ensuring the financial breakdown is kept for future use. sand General Manager, The mani gers the key personnel for this sole proprietorship legal form of business, The operation and. ‘management ofthis business will be under hs instructions. He willbe known by the narve SANCHEZ, MWANGI-| 1430 years, Qualifications The proposed business is privileged to have the manager since he is qualified by having s sfacory achieved Aiploma in electrical and electronics engineering et Thika Technical Institute fora period of 3 years. Duties The major responsibility ofthe manager inthe enterprise include evaluating the performance of the business, negotiating for loans on bebalf ofthe business, achieving ll the business goals planning, coordinating and administering business funetions effectively. ‘The manager fits tobe the head of the enterprise mainly because he poses both theoretical, practical and cferprenual skills well acquired throughout his training session to provide smooth running of the busines, In addition, the manager is honest, faithful, sovial, responsible and principled to run the 9Deputy General Manager The proposed business will have an active assistant to the General Manager known as STEPHEN IRAKT he will provide essential services to his manager. Duties He will also help the manager to plan, develop, implement and oversee the enterprise initiatives and projects in absences ofthe manager. He will also oversee the business operations, have budgeting responsibility and be involved in hing and evaluating the business personnel’, Financial Controller In every business there must be record of funds consumed and earned and so, the business will have a financial contoller MOUREEN NJERI, she will oversee the business day to day financial operations and ensuring the ledgers accurately eflect money coming in and out ofthe business, ‘She will also play a big role in decision making, forecesting and budgeting of the business level based on the sccounting data. The individual is required o have done the job for some years earlier enabling her more experience inthe eourse of accounting. Human Resource Manager This party is involved within the business and he or she willbe responsible for certain roles and some include: > Recruitment and hiring > Training and development > Maintaining the business culture > Handling disciplinary ations ‘The human resource manager should have a Bachelor Degree i Human Resource Sales Manager ‘This party is available since heshe is responsible for building and leading a team of sales people to help {rive revenue into the business. he/she is roquited to have Bachelor Degree in Business Matketing or ‘Communication and experience of about § years in sales, Personnel Number and Duties Tn this business, there wll be grouping of individuals who will ensure the work done is efficient and is profitable tothe busines. They are situated to also enriching the busines target ‘These group include: 1, Producing Group- it consist of 10 parties who are there to ensure production of materials is efficient and smooth, 2. Packing and Sorting Group- it consist of 15 partes who are able to give services of packing items and erouping them according to their operation. They will also be checking quality ofthe components and removing the damaged devices. 2053, ‘Transporting Group- this is the group of situated fr transportation purposes within the business by either eyeling or even use of vehicles, Recruitment, Training and Promotion Recruitment The business will make advertisement of its job opportunities through locel newspaper, Emails even FM radio ©.g, NRG radio, There will be interviews for the reruit done by the human resource manger questions willbe asked concerning the job ascertained Individuals dignity, honor will be considered so as to reach tothe satisfaction of the customers, Employees will have one week to adopt and familiarized wi Training The new employees will be tained according to their qualifications to improve their efficiency and knowledge They will be taught the salety measures . her oles et. inthe business. They will also be atending seminars or workshop, Promotion The following will be considered when promoting employees: 1, Their level of performance 2. Training and qualifications of each individual 53, Punctuality and accountability 4, Diligence and creativity 5, ‘Trust worthiness and loyalty to the enterprise ‘The business will ensure thatthe employees will be paid their salaries on time during the time which will be agreed upon by the employer and the finaacial controller. The employees’ salary will ot be paid on cash basis but will be paid by either check or deposited inthe employees’ bank account, this wll be done forthe security oftheir salaries Remuneration of management The payment of managers will be done on the basis of profits and efficiency on their departments. This way the managers will strive to make sure that their side is more efficent and reliable forthe enterprise, however there will be a standing salary which will be set despite an increase or decrease in profit [Employees earnings will include salaries and allowances monthly aIncentives Financial incentives Employees willbe paid money according to their productivity and hours worked for, Also they can earn overtime, bonus and interest. Non - financial incentives They will be safety at work place, health facilites, sick pays, transportation to and from work, free lunch and 9 safety cloting te Tob we Salaries hs | Medical | Other Toual she} Personnel | (P.M) allowance | specify Manager T 5000 1000 TOO 5000 Ass anager T 20000 1000 1000 20000 Financial controller | 1 Ts000 1000 Tam Truman resource PT T3000 ToO0 Toa Ry ‘Sales manager T Ta000 Too T5000 Common employees | 2 3000 1000 0000 Supportive sai | 000 To00 Toa TOTAL 712000 Licenses, Permit and By- Laws To enhance smart operations of the business then it must meet goverment rules und regulation. The business will sequire number of documents such a license, permits and by laws, The various licenses and other supportive documents will be of cost depending on validity and set regulations for their existence, Tn totaly the documents include 1, NSSF [National Security Society Fund] 2. NHIF [National Hospital Insurance Fund] 3. KEBS [ Kenya Bureau Standards 2‘The other legal license required to start the business from Nairobi county under the docket of ministry of | [egal government. The license willbe renewed annually at @ proposed cost of kshs.2000 stated inthe Kenyan industrial act, The works men compensation license for protection of workers through compensation in case of damage or injuries within the business, Also a trade mark license that permits the use ofthe trade marks to identify the goods and services tobe offered as per the agreement ‘The proposed business must also comply with the by-laws for effective operations after the permission from ‘he municipal council after proper inspection ofthe enterprise. A few sample ofthe bylaw from the Electrical Centre include being onthe business with one license, yearly renewal of the license and recommendation by the public heath for the business fo run ‘The most vital service includes: 1, Banking servies where the business will open an account with Equity bank in Nairobi Branch ‘which will help in providing loans and saving money forthe business. 2, Auditing books of account; auditors will be hired and be peid daly upon delivering ay auditing report. 3, Medical services wil be offered by local dispensary around the business allocation and insurance will be offered by Monarch Insurance company. 4, Water will be provided by a company known as MAWASCO which is located within the business 5, The business will employee secutity from a well know company that offers the best security for an enterprise the GAS. Power will be supplied from the K.P.L.C and the enterprise will hve a backup generator thet will ensure the ‘working ofthe proposed business 247, 2CHAPTER 4 PRODUCTION / OPERATIONAL PLAN Introduction The Electro “Tech solution will have a number of objectives set help during production. The objectives include Ordering of goods in large quantities ata minimum loss to ensure low cost for its potential customer to acquire possible discount ProductiService and development ‘The business will also test its good thoroughly before delivery to promote good relationship with customers and als altract more customers The business will provide goods at affordable prices to the customers hence reducing bulky af payment The business will provide free maintenance and repair of goods to its customers under a period of Production Facilites and capa: Te business aims at getting involved in using the best production methods by encouraging right equipment and machinery mainly to enhance adequate, quality and efficient outputs inform of products being of desired shape, The table below shows a variety of equipment used in ELECTRO - TECH SOLUTION for production TTEMS ‘QUANTITY ‘UNIT CosT Computerayatem — 2 0000 0000 Furniture cabinet 3 seis 500 3500 Cash book 1 600 00 ‘Telephone i 000 3000 Stationary assis 1000 3000 Electrical tool box 2 000 12000 Printers 2 100000 20000 Generators i 0000 0000 TOTAL 32000 388100 2%Production process The business will majorly deal with trading of goods which they order ftom outside in large quantities for resale to other customers, The recived product will then be recorded in the computer for future references and also recorded in receipts and the invoice are printed. A technician willbe assigned to test the products before they are sold tothe final consumers. In his same case the materials wor out from the old machines such es motors and generators will be ‘manufactured into different gauges fo avoid wastages of wires, thus providing a favorable chance forthe business expansion thereby capturing a variety of customers trate ‘The business will put in place a strategic plan that all the products are tested before being released from the store for change in the market. This will mainly help to reduce or do away with complains from our esteemed customers, The firm will ensue thatthe products are order in large quantities to help in measu ng of low price charged. to the customers a warranty will be offered in a period of § months. Aftersales service will be offered to the customers. Those who buy bulky goods will be given a free transport to their destinations, this will help improve and attract more customers into the business from other business organizations. Premises Lavout Por stat ELECRTO- TECH SOLUTION has to run on rental premises with cash 6500-9500 monthly as the business advances arrangement is done to acquire a sef- owned premises to enhance growth and expansion. Inthe main workshop is where all the business operation will take place. All purchase stock will be stored in the store plus other important things Book keeping and recording is done inthe cashier's office and where purchase of stock tobe sold is done, 2Wash rooms 7 parking Customer service Store 1 WORK PLACE Cashiers room offices | | 1 Store 2 Working schedule ‘A work day schedule will always set off t 8:00 am up to 6pm time that all wsual employees wil be reporting and leaving the business firm with an exception of holidays. During weekends reporting and leaving willbe from 8 am to 2 pm. Following a wide requirement by customers the business wil involve shifts workers who will take a least 6 hours beginning from 6 pm to 8 am in the morning. In two shifts a total of 14 hours, to enhance continuous profitability tothe busines. Goods Received — store ——+| ssies counter | __, Dispatch Production plan The production plan for this business cover all its manufactures, assembling and trading sections and services The company will thus order in large quantities tes them and resell them at a profit where necessary before teading them. this wll just be to expand business income The business plan in production sectors to provide such as motors, generators, motor rewinding wes rotor and stator, excitation eapacitor, water pumps ee 6Production design and development The business will majorly deal with trading of goods which they oder ftom outside in large quantities for resale to other customers, The received product will then be recorded in the computer for future references and also recorded in receipts and the invoice are printed. A tech ian will be assigned to test the products, before they are sold tothe final consumers. In this same case the materials wor out from the old machines such es motors and generators will be ‘manufactured into different gauges fo avoid wastages of wires, thus providing a favorable chance forthe business expansion thereby capturing a variety of customers Relevant regulation ‘The business will operate under strict government regulation which will be obtained and renewed on stipulate regular basis to avoid conflict withthe law For the busines to satis operation it must have license and permits after full approval by the municipal council to satisty human usage In addition, the proposed business wil be registered party of national insurance company for all sorts of Aisaster compensation with the expected period of operat 2CHAPTER FIVE FINANCIAL PLAN Pre Operation Cost The total cost that was incurred by the business before stating lo operate isa follows: Item ‘Amount 15000 Rent Deposit 25500 Furniture and fittings 15000 ‘Tools / cleaning equipment 10000 Services eg, license, business registration electricity ete 6000 Installation cost 1000 Stationary 5000 Market Research 77500 total 28Working Capital This describes how excess the value of the cuttent assets is over the current liabilities asa given period for the ELECTRO ~ TECH SOLUTION ENTERPRISE type of business Ttems Year ‘Year 2 Year3 30000 45000 0000 (Cash in band 100000 130000 150000 (Cash at bank. 50000 150000 200000 Debtors 0000 100000 150000 Stock of 220000 0000 75000 creditors 210000, 375000 485000, ‘Total working capital ‘Working cepital= current assets ~ curent liabilities ‘Year 1: [30000+100000--50000-50000] - (20000), 230000 - 20000 = 210000 2; (45000+130000-150000+ 100000) ~ {50000} 425000 ~ S000 = 375000 ‘Year 3; (60000+150000+200000+150000} - {75000} 560000 ~ 75000 =485000sparation of Cash Flow Statements ‘This part shows the movement af funds into and out of the business. It involves of two parts Le, both inflow and outflow acquisition of net cashflow. The ash flow for three yeers 2023 to 2025 areas follows Electro Tech Solution projected cashflow statement for year 2023 Tan [Feb] March] Apa] May] ine] July [August] Sept] October |Nov [Dee] Totals Receipt Cain flow Capital | S500 | SORO00 | ZERGOO | S4AU00 | SOTO | ITSO |T4AOOT | DART | STS [STIS | SOROOD | DS500 Bank oan | 300000 [= ss 7 : ss 7 7 00000 Donations | 130000 Bebrars | FO0G0 | Fao | TooRD | SonoO | AaDGT | SoaaT | FaNGT | AaHGT | AAGO | SaNGT | FaOGT | FoNGO | SOSOHT Sales | T000T | TFOOHT | TaOGDT | TROD | BH0GN0 | F0GOT | F000 TIGHT | F2O0HT | TOOTH | FTHOOT | T3600 Totalin | R2W0OT [OFROOO | S9ROOT | STAOOT | S49500"| S450 | $5400 SAISON | SU7S0O | SAROOO | ADASOO flow Cash out flow Purchases | 150000 [S000 | ToODGD | TTaOHT | T2O0G0” | TAONGD | T3000 | T2006 | TooNGT | T300R0 | T4000 | T3G000 | TzR0HOo “Ravers | 6000 [= = ‘san [= 7 000 |= 7 TR000 Tieense [3500 ]= ss 3500 Salaries | 112000 | 112000 | 112000 | 11Z000 | 112000 | 1Tz000 | 172000 | 112000 | TTz000 | TTz000 | T1z000 [T1000 | 1344000 Rent [6000 | sooo) co0a | Boo | aoog [soo | sooe | woo [wove sao | soo —wooG | 73000 Tleatrciy [3000/3500 3500 [3500 [3500 [3500 [3500 [3500 [3500 [3500 3500 [3500 | aTS00 Transpo | 1500 [1500 1500 | T0009 [2000 | 2500 | Sou [2500 | Ts00 —|Tao0 TOOT —FTo0G | Bu0G Tavuranee [6000 | 6000 | son | 600 | soo | eona | sooo | wood [wove waa | soo —wooG | T3000 Taan [25000 | 25000 | 25000 | 35000 | 2s000 | 25000 | T5000 | 2s00N | Zs0a0 | Ds000 | 2s000fBs0G0 | 30007 payment “Farad oat | S1SOOT | TEHDHO | ISAO | TATOO | TAIT | SOTGOO | TASH | I5I00 | T5400 | HIV | FTO | TRIO flow Neteash | S02000 | 228000 | 544000 | 309800 | 275000 | 244000 | TeRSDO | 376500 [317500 |SOROON | 254500 | DTTO00 flow Net cash flow = Total cashflow in ~"Total cashflow out eg; January: (820,000 ~318,000} = 502,000, 20Projected cash flow preparation for the year 2024 Receipt [Jan Feb | March [Apel] May [June [July August [Sept Oct] Nov [Deo | Tors Cahn flow Capital PUTOWO | TSTSOO [ISRSWO [ST9SO0 | 1OSOO [aTeSOO [ASGSHO | 323000 | S4RSO0 | 59900 | S40SHO | 305500 Bank | 7 7 : 7 7 loan Tasker Suo0e Tomo TraoR Ps00G | Tomes TanoR[so0G | TIsoeN | TanoNe- SoaNG | TTHOGT | Boao | aTsoOT bank Debian [20000 | 30000 | Sooo [oon | 25000 S000 [S500 | ToOGD |= ToGo | 13000 247500 Sales [200000 | Za0000 | 2F00H | ZeGNGO | ZeUOGD | TOODH | S2o0G0 | ToUNGT | 320000 | Sa0NG | Z5U000 | TROD | 97OON Tomlin [481000 | 537500 [63RS00 |TA9S00 | RISSOO [ATISUO [OSTOO —[O4TSON PORRSOO [949500 [oTOSON | ST7500 flow Ca out flow Parchas | 150000 | 170000 | T9000 [210000 | 270000 | 28000 | SAG0GG | 270000 | SOOO) | 280000 | 270000 | 270000 | 2960000 avers [6000 7 7 - e000 [= - 7 a0 = Tsu Tieense 500 7 - Salaries PTTIOO | TIIOOT | TION | TTFOOT | TITOGT | TsO | TRIOS | TsVON | TaN TsO | TsVGT | TaN Ken 6000 | 000 [6000 [evan | «oan [e000 | avad | e000 [ound | evan | woud [000 | 72000 Fleairer [3000 3000 [3000 [S000 S00 [S000 S000 | 3000 [S000 S000 | 3000 [S000 | 56005 y Transpo [2000 2000 [2000 [000 | Foo [F000 200 | FoGN | F00 Food| FoGN [Food FAT Tnsarane [000 6000 [e000 [euGN wooo —[enao —eoGD | aouN —[anaD — waON | woud —[enGD | 72000 Toa [= 7 payment Toral —PI95S00 | Z990G0 | 319000 [S39000 | S99NGD [ATSOOT PaDwIGD | T9900 | AZTOHT | O90 | FOSDOT | 395000 outflow Net PTRTSOO [EIRSOO | S19SOO [ATOSOO PATESOD | ASGSOT [S2I000 S4RSON | SOTSOT | SAOSOO | SOSSOO | ATRSOO flow aProjected cashflow preparation for the year 2025 Receipt [Jan] Feb] March] Apa | May Tune] July | August [Sep] Os | Now] Des] Totals Cashin ow Bank |= Capital | TFROO | ASGOT | AOTSON | AWTEOO | FOSOOT | AFOOT | 59200 | TOAUOT | ATSOO | SFRGOO | ST5OOT | PASOT Casha | $0000 soo00 | As0G0 | TZoG0— Sa00 | SS0a0 | B5000 | Ss0a0 | 35000 | BKOON | So0G0 | auOG0 | S300 bank Debiors | S000 z000G | A500 | eaOGN S000 | ToHGD | TSooN | T0G0 | Ss0o0 | S000 | BOSG0 | Is0o0 | ATO Sales | BoHON | TTONGT | Tz000G | T9OGG- | aGRHT | TZAONG | Zz0000 | TTOWDT | TSAGNG | Bn0G00 | TTOODT | TOSONT | DaRTOO Toalin | T5850 | FTENOO | TATEOG | ATTSOO | TO3O0D | TATOO | 673000 | TOAOOT | ARGOHG | FATGOD | STISON | STOSG ow Cah oat flow Purchase | 750000 | TxO000 | T7A000 | T99G00 | STOOHD | ZoNGNG | 40000 | TeDOON | TNOGNG | So9G0G | ToOOOG | Ts0GNG | Zr2U000 Auverie [6000 7 a0 [= 7 “a0 = TRG BT 00 Sataries | TT2000 | TT2HOO [T1200 | T7200 | TTawOH [THAN |TIZON0 | TTzHOT [TTFoHN | TIZ0O | TTzHT |TTIOOT | T34A000 Rear [000 00a —[enOD— HON [eNO [eno —| Ha [eNO eHOG—| BHD | eaHO | FONT Fleswien | 3000 5000 | S000 —| S00 S00 [Sa —| HOO —| 590 —| Fa" FHGG—| F090 —| FO | HOT y Transport | 1000 1500 | Too | 1500 — 3000 [Boo | TH90 | Too | To Toe0 | Too | Too | Toa a a) THISUO | SORSOD | OROOT [STRSOO | 539000 | SSOON | ZABDGO | ZRROGD | TORO | S2R0G0 | 324000 | T7ROOT Neveash [465000 | 467500 | 489500 ] 493000 ] 54000 | 392000 ] 404000 | 16000 | 37800 ] 313000 | 249500 | 241500 flow 2Profoma income statement This section suramarizes the business income and expenses forthe given period mainly for the purpose of knowing whether the busines is operating at a loss or profit The proposed enterprise has its business prof statement recorded forthe three ye ofits operation as {allows Description Yar! [vear? Yard as00 | 2970000 | TARSOO0 Cash sales ‘os000 | Ba7500 | 450500 Debvors T2000 | $23000 Cash at bank “BROsOO | AaRI500 | SASRS0O Totals [ Ts0000 | 350000 | 300000 Less cost of sales Grove prof eTs000 | AESI500 | SIRSOO Expenses ‘zan900 | 2000000 1020000 Purchase Ts000 | 18000 T3000 Advertisements 00 [3500 00 License Tsaq000 | T34a000 | T344000 Salaries Ta000 | F000 000 Rent 1500 | 36000 36000 Electricity o000 | 2a000 T5000 nsport Fano | FOG FRO Insurance Total expenses 576000 | 3074500 [2585500 Nal polit before wx a000 | eBRON | RS3000 Tess provision tax 15% | 44850 | 98700 37950 Nal profit after ax Tsais0 | S59500 | 335050 BProfoma balance sheet tora liabilities Tem Yert Yard Years (Current Assets 130000 7 Donations ‘05000 HATS OSU Debtors 7 1275000 [523000 (Cash at bank 35000 Tsaas00 [953500 Total Fixed As Ts00000 | Tom00 ——FTRO000 Machinery 50000 350000 50000 Equipment Tiso0a0 | Zos0000 [2350000 Total Tawsaao | 3572500 | 3205500 Total Assets Current liabilities 30000 Bask loan T7000 | T340000 | T340000 salaries Terooae | 1340000 7340000 3Variable cost Teme Kahr Trem es 300000 T340000 0000 TR000 Advertisement 320000 F000 Total Rent 500 License THRO Total CComtibution margin = fixed asset- variable cost 118500 = Kshs1,118,500 Broakeven point = [contribution marginitotal investment} * 100 [1118500/2500000} * 100 =20.925 = 20.925 Calculation of profitability ratio Profitability ratios ~ These are financial metrics used to asses a business abiltyto generate profit relative to items suchas revenue or even asset Gross profit ratio Gross profit ratio= [gross profitisles] 100, 1500000'5000000) *100 -30 30% Net profit ratio Net profit ratio [net profivsaes] *100 [850000/5000000] *100 =17 Im 8Liaw These are cial ratios used to determine @ company's ability to pay offits current debt obligation, Liquidity ratio= curent assets(eurent liabilities 1660000142000 ~ 1.6 16 Desired capi This specifies the eppropriate amount of money required by the proposed business to operate successfully eg. forbuying furniture, machines, paying electricity bills among ather necessary expenses before Desired finances for one year Dail “Amour Kae ines FeeTTaTON 60 les iavalaion [75540 Tasuranee 10 Ret deposit DSR Tivense and pers Ta509 ‘Telephone wstallaion [4280 Flexi ndy Trae Waterson TR ‘Aaverisenents T2100 Miscellaneous expenser | 980 Rad ix wets TIS Famnitare and irings 350 Machinery 376 “Kad working capital ear Tal dared capital THRE 26Proposed capitalization Details “Amount in kh Bank Toan 150000 Capital 60000 ‘Contibution rom frends 50000 Total proposed capitalization 00500 2