FABIAN

BUSINESS PLAN

FABBY COMPUTER HARDWARE

STTI

I FABIAN INGOSI hereby declare that this business plan is my effort and original
work I did through research and consultation and has never been presented to
Kenya National Examination Council (KNEC) for any word.
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BUSINESS PLAN
BUSINESS NAME : FABBY COMPUTER HARDWARE

PRESENTER : FABIAN INGOSI

ADMISSION NUMBER 8016

COURSE CODE :

COURSE NAME : CICT

CENTRE NAME : SHAMBERERE TECHNICAL TRAINING

INSITUTE

DEPARTMENT : BUSINESS MANAGEMENT

SUPERVISOR :

EXAM SERIES : JULY /AUGUST SERIES

PURPOSE : THIS BUSINESS PLAN IS BEING

PRESENTED TO THE KENYA NATIONAL

EXAMINATION COUNCIL FOR PARTIAL
FULFILLMENT OF THE AWARD CERTIFICATE
IN ICT
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1. DEDICATION
I wish to dedicate this work to my beloved parents, siblings and friends. You have
paid a big price for me to be what I am. You encouraged, advised, supported,
mentored and finally prayed for me.
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2. DECLARATION
I FABIAN INGOSI hereby declare that this business plan is my effort and original
work I did through research and consultation and has never been presented to
Kenya National Examination Council (KNEC) for any word.

NAME : FABIANI INGOSI

SIGNATURE :

DATE :

NAME OF SUPERVISOR :

SIGNATURE :

DATE :
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3. ACKNOWLEDGEMENT
I kindly wish to requeste my humble gratitude to my parents for their financially
support and spiritually. I am also grateful to my mentor my supervisor who has
taught me the art of writing and naturing my mind to appropriate the world of
academic. Also, thanks goes to my fellow colleagues who supported me in my
ICT class.

May the Almighty God bless them abundantly Amen.

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EXECUTIVE SUMMARY
The business name will be FABBY COMPUTER HARDWARE which will be located at
Serem Market along Nandi -Kisumu highway opposite Goibei girls high school. The
business will be owned by Fabian Ingosi . The capital for the proposed business will be
Ksh. 800, 000

The owner of the business will intend transport the business on 1st July 2020. The main
products and services of the business will offer include: marketing of computer
accessories and all electronic devices and will also offer services of repair of computer
devices.. . .The goals of the business will include expanding the business to a much bigger
firm, increasing more agents to remote area to provide the services too.

The potential customers my business will include: institutional customers, domestic

customers, passers-by and wholesalers. The business is planning to give a high quality
products and services as well as giving offers to regular customers. It will also provide
goods and services at affordable prices in order to cope up with the stiff competition from
saimo computer hardware which is neighbouring business carrying out same type of
operation.

The business will employ qualified and skilled personnel headed by manager. Other sub-
ordinates will include: the cashier, salesman and casual worker. The business will offer
trainings like short courses and seminars to the workers. There will be promotion of the
staff or workers according to the level of training and work experience. The cashier will
ensure payment of the workers on monthly basis together with their allowances. The
owner of the business will be hiring business pickups to distribute products and services.\

The business will require a pickup for transportation of materials. The design of the
products will include: computer cables ,C.P.U s. monitors Mather bodies gun, , which
will be easy to carry. The business will use modern technology like, CCTV cameras will
be installed to monitor the working process. The owner will incur license cost, insurance
cost, rent cost, advertisement cost, electricity cost, cost of installation of CCTV cameras
and repair and maintenance cost before starting the business.

The proposed capital for the business will be Ksh.800, 000. This will be achieved by contribution
from friends Ksh. 150,000, Bank loans Ksh.200, 000 and personal savings Ksh. 450,000. For the
owner to manage the business well, the owner will be preparing cash flows, balance sheet,
performs income statement, profitability on a yearly basis.
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Table of Contents
Chapter 1 :BUSINESS DESCRIPTION........................................................................................................8
1.1 Business name.......................................................................................................................................8
1.2 Form of ownership................................................................................................................................8
1.3 BUSINESS LOCATION AND ADDRESS.........................................................................................9
1.4 TYPES POF BUSINESS....................................................................................................................10
1.5 GOALS OF THE BUSINESS............................................................................................................11
1.6 THE PRODUCT AND SERVICES...................................................................................................11
1.7 JUSTIFICATION OF VENTURE.....................................................................................................12
1.8 INDUSTRY.......................................................................................................................................12
1.9 TECHNOLOGY................................................................................................................................12
1.10 ENTRY AND GROWTH STRATEGY..........................................................................................13
1.12 MATURITY STAGE.......................................................................................................................13
Chapter 2 : MARKETING PLAN...............................................................................................................14
1.1. CUSTOMERS..............................................................................................................................14
1.2. THE MARKET SHARE..........................................................................................................15
1.3 COMPETITION................................................................................................................................16
1.4 Ways of overcoming competition......................................................................................................17
1.5 Pricing strategy..................................................................................................................................17
1.6 Sales tactics........................................................................................................................................17
1.7 Methods of promotion and advertisement.........................................................................................17
1.7.1 Advertisement strategy...................................................................................................................17
1.8 DISTRIBUTION STRATEGY..........................................................................................................19
Chapter 3 : ORGANIZATION AND MANAGEMENT PLAN.................................................................20
1.1. STAFFING AND THEIR QUALIFICATIONS.....................................................................21
1.2 RENUMERATION, SALARIES AND ALLOWANCES...............................................................23
1.3TRAINING AND PROMOTION.......................................................................................................23
1.3.1 TRAINING.....................................................................................................................................23
1.3.2 PROMOTION.................................................................................................................................24
1.4 LICENSE AND PERMITS BY LAWS AND LEGAL REQUYIREMENTS..................................24
1.5 Other legal requirements...................................................................................................................24
1.6 BUSINESS CONTROL ASSETS.....................................................................................................25
1.6.1Financial assets................................................................................................................................25
Chapter 4 :OPERATIONAL PLAN............................................................................................................26
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1.1 PRODUCTION DESIGN AND DEVELOPMENT..........................................................................27
1.2 PRODUCTION STRATEGY............................................................................................................30
1.3 Production process.............................................................................................................................31
1.4 Government regulations affecting your operation.............................................................................33
Chapter 5 :FINANCIAL PLAN...................................................................................................................34
1.1 PRE-OPERATIONAL COST............................................................................................................34
1.2 Working capital..................................................................................................................................34
1.3 Cash flow...........................................................................................................................................36
1.4 Proforma income statement...............................................................................................................37
1.5 Breaking even point...........................................................................................................................37
1.6 Breakeven level.................................................................................................................................38
1.7 Break even in units.....................................................................................................................38
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Chapter 1

BUSINESS DESCRIPTI
FABBY COMPUTER HARDWARE is business that deal with the sale of marketing of
computer accessories and all electronic devices and will also offer services of repair of
computer devices. The goals of the business will include expanding the business to a much
bigger firm,
increasing more agents to remote area to provide the services too. which will be located at Serem
Market along Nandi -Kisumu highway opposite Goibei girls high school. The business will be
owned by Fabian ingosi . The capital for the proposed business will be Ksh. 800, 000

1.1 Business name

The business name will be FABBY COMPUTER HARDWARE the name come from
the owner of the business that is Fabian ingosi and the name is femurs at the
located area. This means that is easy to locate the business.

1.1.1. Business logo

FABBYCOMPUTER

HARDWAR
E,
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1.2 Form of ownership

The business will be a sole proprietor form of business. The managerial skills I
acquired in entrepreneurship education class will be of much importance leading to
propose business. In this form of ownership it means that the proprietor will:

i. Require small capital to set-up the business.

ii. There is fast decision making.
iii. The proprietor enjoys all profits acquired after all the expenses have been
deducted.
iv. There is direct conduct with employees and customers
v. Top secrets are kept by the owner.

Some of the setbacks to be experienced by the sole proprietor will be:

i. Liability is limited
ii. The business cannot expand rapidly because of the manager
capital resources.
iii. He will carry out all the burden of business losses incase it arises.

1.3 BUSINESS LOCATION AND ADDRESS

Business is located at at Serem Market along Nandi -Kisumu highway opposite
Goibei girls high school. The business will be owned by fabian ingosi The
business is situated in a well and good transport network and a very busy area due
to different business and high population. There is also enough security since
there is a police station ground.
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The business address shall be:

FABBY COMPUTER HARDWARE ,

P.O BOX 334,

SEREM.

MOBILE: 0739501074

GOIBEI GIRLIS HIGH SCHOOL

CAM ACCADEMY
NANDI

VIHIGA

POLICE STATION FABBY

COMPUTER
HARDWARE

1.4 TYPES OF BUSINESS

The business will be a start-up type of business. The business will major on
providing the following services:

i. Supplying computer accessories

ii. Marketing electronic devises
iii. Installing drive and software
iv. Repair of fault computer
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1.5 GOALS OF THE BUSINESS

After the business come into existence and it is fully established there are some
goals which have to be achieved. These are:

i. To make maximum profits from the business venture

ii. To be self employed
iii. To create employment opportunities.
iv. To offer quality services and products
v. To minimize costs of tools and equipment by using them efficiently
and economically.
vi. Exercise social responsibility to the community at large
vii. Participate in National Building by paying taxes.
viii. To open more branches of the enterprise in the neighbouring towns. ,
Kakamega and Chavakali.
1.6 THE PRODUCT AND SERVICES
The product will be hired and accessories being made in the company since will be
buying them, that is used to be assemble to develop our product. And the repairing
machine like flashing tool kit and gun is needed to be bought by the owner and
packed in different quantities so as to meet the need of different level of customer.
I shall be also selling other devices like phone and shall be having logo of my
names company, the business address and phone number to avoid duplication of
the product by my business competition offer sale promotion to my customer so as
to attract more customer and retain them.
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1.7 JUSTIFICATION OF VENTURE

FABBY COMPUTER HARDWARE is justified and will be able to penetrate the
competitive market structure because:

i. There is high demand for the computer services agent and nil products
by the large population in serem centre.
ii. There is good communication network. Electricity is
supplied everywhere thus telephone cable are easily found.
iii. There is enough security in the area since the police station is near
thus rareness of theft cases.
iv. Good transport network also motivated me since it enables easy
provision of car washing services
1.8 INDUSTRY
The FABBY COMPUTER HARDWARE of the other product will fall under the
Computer hardware industry since it shall be dealing mainly on the computers and
networking services . The entire market area has slightly low competition. This is
due to poor performance management. There is no advertisement and the product
is not packed to attract customers.

My business will try it’s best to produce quality and in quantity the facilities of the
product thus making a promising profit. The industry is expected to grow due to
the increase in the population which is the key fact that has been observed.
1.9 TECHNOLOGY
The business will include the use of modern technology such as use of modern
fibre connection for net connection and. There will be use of modern CCTV
system for business security surveillance.

The owner of the business will require 800,000 ksh to start and will reach the
target through the following:

Personal savings 450,000

Bank loans 200,000

Borrowing from friends 150,000

Total 800,000
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1.10 ENTRY AND GROWTH STRATEGY

ENTRY STAGE

The business shall start to operate on 1st SEPTEMBER 2023 since I will have
accumulated enough capital from my share to start the business.

The owner will:

i. Seek funds from relevant resources.

ii. Marketing strategy by publicity using advertisement.
iii. Providing quality and quantity of the services from the start.
1.11 GROWTH STRATEGY

My business shall produce post on as to advertise my product. Sale promotion will

also be offered and also free sample. I will also install different branches of my
business as time goes depending on the program of the business .
1.12 MATURITY STAGE
To grow diversity of the operations of the business and a complete computer
development production services. This will essentially entrain having more
outlets in the other regions all over the country.
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Chapter 2 :

MARKETING PLAN
2.1 CUSTOMERS
My customers will be of all age and here are the categories of my customers:

i. Domestic customers

Most of my customers will be from kapsoi .Goibei area and Kapsotik and Nandi
and its surroundings since the population in this area is absolutely large. The large
population will provide a ready market for my products. School like Goibei girls
high school will provide market for the purchase of computers and desks tops for
ict learning ,

Institutional customers

This will be from learning and health institutions within and outside Serem
Centre and they include:

1. Kapsotik academy
2. Senende boys secondary
3. Kaimosi college
4. Banja primary school

ii. Regional customers

These customers will be coming from the neighbouring towns like: Kakamega,
Chavakali and Kisumu to buy the products. My business will operate from
7:00am-10:00pm as from Monday – Sunday and this will be the buying time for
my customers within the specified time.
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2.2 THE MARKET SHARE

The business is targeting 70% of the market share, the remaining percentage will
be shared among my competition from saimo computer hardware and the table
below shows the distribution of the percentage:

FIRM OUTPUT Selling price Sales week Percentage

%
Saimo COMPUTER Computer desk Sh12000@ Ksh. 27%
HARDWARE top 12,000

Sh.6000@
Computer day Sh. 30000
accessories

Computer desk Sh15000@ Ksh. 73%

FABBYCOMPUTER top 42,000
HARDWARE

Sh.16000@
Computer day Sh. 780000
accessories

TOTAL 100%

The business purchasing pattern will be as follows:

Purchasing pattern

Customers Daily Sales @ day Sales @month Total

customers
Kapsotik Supply of Ksh. 800 Ksh.16000 Ksh.18 ,000
academy printer ink
Service check
and reams Ksh.100 Ksh.2000

Senende Supply of Ksh. 1000 Ksh.16000 Ksh.22,000

Boys printer ink
high school Service check
and reams Ksh.100 Ksh.2000
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GOIBEI girls Supply of Ksh. 1500 Ksh.24000 Ksh.28 ,000

high school printer ink
Service check
and reams Ksh.200 Ksh.4000

Kaimosi Supply of Ksh. 2000 Ksh.32000 Ksh.34,000

college printer ink
Service check
and reams Ksh.100 Ksh.2000

banja Supply of Ksh. 800 Ksh.16000 Ksh.18 ,000

Primary printer ink
school Service check
and reams Ksh.100 Ksh.2000

1.3 COMPETITION
My business will encounter both direct and indirect competitions. My business will
try all means to provide the best services to the customers. The following will be
my potential competitors:

SAIMO COMPUTER HARDWARE

The table below shows the strength and the weakness of the business:

Name of the business strengths Weakness

SAIMO COMPUTER Has stable and permanent Poor communication to
HARDWARE customers the customers
The business place is
well installed and
entertainment sets Poor pricing.
Has enough personnel
FABBY COMPUTER Quality services and High competitors
HARDWARE products are provided Its newly established
business with highly
motivated power
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1.4 Ways of overcoming competition

I. Will always keep time.
II. Will slightly lower prices and offer quick services to my customers
III. Making sure that the products are always available on time.
IV. Will try all means to provide good services to my customers.
1.5 Pricing strategy
The following will be my business pricing strategy.

I. Demand pricing: The demand is high or low the prices will remain
same, there will be no increase when the demand is high.
II. Competitive pricing: this pricing will determine the price that my
competitors will set. To win more customers I will lower my prices
slightly.
1.6 Sales tactics
a. Direct selling

To my customers, I will deal with the directly and serve them face to face.

b. Indirect selling

I will employ agents who will be delivering the products to institution near or far
the business area.

1.7 Methods of promotion and advertisement

1.7.1 Advertisement strategy
I shall advertise my products through the following ways:

a) Use of posters

I will make and design colourful posters which will be showing the products of my
business and display them in strategic public places that will attract more
customers.

My posters will contain:

1. Name of the firm

2. Products provided on the firm
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3. My personal information i.e. phone number address and

business location.

Will stick and place the posters along the road, buildings and other place. The cost
will total up to KSH.4, 000

b) Media

Will also advertise through radio station that is the local radio station in Kakamega
County whereby this will cost to KSH.3, 000

1. Promotion methods

My products will be promoted through good that is marketing it colourfully i.e.

while with green strips and a symbol of clean water drop, it will also contain the
business logo and its mission and vision to the customers. I shall offer discount to
my customers according to the product they buy from my business. The more they
buy the more the discount they receive. I will offer sales services to my customers
who buy large quantities of my product i.e. transport. I shall employ the sales
person who moves from one place to another selling the business product and
advertising the product by convincing customers and giving them promotion. My
employee shall be motivated by giving them commission on the sale they make
and alter in the year they shall be given bonus for the good work done.
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1.8 DISTRIBUTION STRATEGY

The channel that will be used to ensure the products reach the customers is as
follows:

Producer consumers

Producer agent’s
consumer

For the place I will hire a pickup to deliver the product. This will cost me around
ksh, 13,500 per week.

Problems encountered during distribution

I. High cost of hiring a pick up

II. Unfavourable weather conditions

Solutions to the distribution problems

I. Ensure to purchase a picup in time to reduce the high cost of hiring.

II. Ensuring the vehicle is well covered not to damage my products.
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Chapter 3 :

ORGANIZATION AND MANAGEMENT PLAN

Management refers to the process by which an organization is administered and
how the resources are co-ordinated effectively to achieve the goals of the
organisation. The business will be managed by the following:

 A manager
 A cashier
 A salesman
 Casual workers
 Storekeeper

The organizational management structures

The staff will be under the following sub divisions:

Manager

Cashier

Casual workers Store keeper

Salesman
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1.1. STAFFING AND THEIR QUALIFICATIONS

The following will consider for one to be recruited in the above named positions
and their roles in the organisation.

A. MANGER

I will be available for managerial duties and supervision of employee’s

performance

Qualifications

I. High national diploma in site management

II. Diploma in information studies.
III. KCSE minimum grade of C+ with A- in agriculture as a subject.

Duties

I. My main duty in the firm is to provide a vision of mission to develop

my business.
II. Also I will accomplish staff results by communicating job expectation-
planning whereby it concerns with defining goals for the future
direction and determining on the mission and resources to achieve these
targets.
III. As a manger I will be monitoring the employees in the firm by
supervising activities in progress to ensure they are on duty as per
scheduled, also apprising their performance [Link] this performance
evaluation development discussion/ employee apprising method by which
the job performance of an employee is documented and evaluated. Also
coaching.
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B. CASHIER

Qualification

I. ACPAI holder
II. Have a certificate in business administration

Duties

I. He / she shall be in charge of keeping the books of account

II. He / she will have the responsibility of transacting the balance sheet
trial balance and cash book.
III. He / she will be in charge of money used to acquire recruitment needed.
IV. He/she transact profit and loss account.
C. SALESMAN

Qualification

I. Should have a good public relation.

II. Should be hardworking and honest.

Duties

I. He / she are to transport all minor computer accessories like cables phone
laptops and monitors to the kiosk.
II. He / she are to supply the customers with my product.
III.
D. Cleaners

Qualifications

I. Should be hardworking and honest

II. Should have knowledge of requirement
Duties

I. Cleaning and maintain the product in shop are out of dust and any dirty
II. Cleaning all cling tools before submitting to store keeper
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Store keeper
Certificate in storekeeper
Keep record in store
1.2 RENUMERATION, SALARIES AND ALLOWANCES
The table below represents how the FABBYCOMPUTER HARDWARE employee
shall be receiving their salaries and remunerations.

Title Number Allowance Monthly gross Basic salary

salary
Business 1 2000 10000 8000
manager
Cashier 1 1000 8500 7500
Salesman 4 500 8000 3500
Cleaners 11 500 3000 2500
Store keeper 1 400 3500 2000
Total 6 4400 35000 23500

1.3TRAINING AND PROMOTION

1.3.1 TRAINING
Fabby Hardware Company will employ trained personnel and those who have the
working experience in the same field. Will also take its employee to the related
seminar for further and modernized level of education if necessary. After this
training I will take them through interview to test their understanding. This will
help workers to improve their working ability hence developing the business.
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1.3.2 PROMOTION
Hardworking employers will be promoted to higher level. I can either promote
them by increasing their wages regarding to their hardworking and discipline or
moving them to higher level.

1.4 LICENSE AND PERMITS BY LAWS AND LEGAL REQUIREMENTS

FABBY COMPUTER HARDWARE will acquire its license from county government of
vihiga,at cost of 10,000/=.

1.5 Other legal requirements

I. Waste disposal

The firm waste shall be dumped in a one hole and burn

II. Health and safety

Employees i.e. salesman shall be provided with required equipment for road safety
and the cleaners provided with gloves and aprons without excluding helmets to
prevent injuries while at work.

Environmental pollution.

Will check on Higgins 100%

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1.6 BUSINESS CONTROL

ASSETS 1.6.1Financial assets
The firm cashier will be responsible for financial issues.

Insurance

The firm will take its assets together with its employees in case of accidents they
will be catered for. The insuring organisation will be Kaysmart Insurance
Company Management.

Banking

The farm will use business kcb account for keeping its money/finance.
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Chapter 4 :

OPERATIONAL PLAN
Operational plan is the process of planning strategies goals and objectives to
tactical goals and objectives is a detailed plan used to provide a clear picture of
how a team section of department will contribute to the achievement of the
organisation strategic goals. A short term highly detailed plan formulated by
management to achieve a tactical.

The operational plan of fabby computer hardware is:

1) Production design and development design as a verb is to create a new

product to be sold by business to its customers. A very broad concept.
It’s essentially the ideas through the process that leads to a new
product. Development is the process of developing or being
developed. Production strategy is the foundation of a product lifecycle
and the execution plan for further development. Production facilities
and capacity. Production facilitates the equipment used for the
production of oil or gas located on a production installation includes:
separation, treating and processing facilities equipment and facilities
used in support of production storage are on tanks and developing
personnel accommodation. Production capacity is the volume of
product or services that can be produced by an enterprise using
current resources.
2) Production process= is concerned with transforming arrangements of
inputs into outputs that are required by the market. This involves two
main sets of resources i.e. the transforming resources and transformed
resources.
3) The government regulations are a rule of order having the force of
laws, prescribed by the superior or competent author by relating to the
action of those under the authorities control.
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1.1 PRODUCTION DESIGN AND DEVELOPMENT

1.1.1 Production design

Since fabby computer hardware produces its own product, it will ensure the
assembling machine is of high quality and quantity. This will lead to high
production that will be enough to be satisfied by customers need. By doing this
business will be making high profit.

1) To ensure that the firm run its work successfully in the market. I shall
employ the following doctors:
 I will ensure there is proper management in terms of delivery
of product to my customers and services to them.
 I will ensure my employees have good public relation to the
consumers so as to attract them to my premises.
 I shall renumerate well my employees so that they can be motivated
to work well to the expectation of my customers.
 I shall delicate duties of my employees as well as to enhance quick
services to the customers.
 I shall institute a good credit policy to customer without business.
 I will ensure that there is enough working capacity in the business
and also I shall ensure there is effective use and utilization that are
available.
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1.1.2 Production facilities and equipment

The business will require equipment for it to run smoothly. The required
equipment include :

 Plot- is the small piece of ground marked out for a purpose such as
building or gardening.
 Buildings-this is a structure with a roof and a wall/ enclosed construction
over a plot of land having a roof and usually windows and often one level
used for any of a wide variety of activities but for this purpose of business
of computer-shop office this will be made for workers, offices and building
for working machine
 Furniture and fitting-is large marble equipment such as tables and
chairs used to a house, office/ other suitable living or working. A small
accessories/ fitting for a particular use/ piece of equipment.
 Stationary-this are office supplier(especially papers and envelops) used for
writing, typing or printing fan folded paper with sprocket holes on sides
and transverse per formation for easy separation into individual sheets.
Used mainly with impact printer.
 Repairing machine –these are machines that are used to repair fault
computers, phones, printers it include heating gun solder gun system
checker flashing toolkit etc
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Facilities Method of acquisition Cost

Plot Inherited 500,000
Building Inherited 20,000
Machine Bought 150,000
Total 710,000

1.1. Maintenance and repair

My equipment and machines will be repaired and maintained by a qualified

technician from a qualified institute and he/ she must have a certificate. The person
to repair my machines will be fedha shabdin who will be checking how my
machines will be running every Saturday and Sundays from 7:00am to 1:00pm.

cctv will be checked every weekend also during morning hours so as not to prevent
running off the business. This will be done by a qualified technician from the
government by the name Jamalidine Mudegu who is a qualified cctv operation .

The hygiene of my employees will be checked by a special doctor from the county
government that has approved to be a doctor. This will be done every end month
from 7:00am to 10:00qam.

[];LPI9IJI duration time Cost

Viehhecal After 1 week 7:00= 10:00am 20,000
Machines Every Saturday 7:00-1:00pm 15,000
and Sunday
Employees Every end of the 7:00-10:0am 10,000
hygiene month
Total 45,000
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1.2 PRODUCTION STRATEGY

Monthly material requirement

This is the monthly material requirement for my production strategy.

Material Quantity Price Total amount

Sealing 1 8,000 8000
Furniture and 8 1600 1600
fitting
Stationary 1 70 70
Purchasing of 2 45,000 90,000
computers
Assembling 1 20000 20000
machine and tool
box
Total 153070

Monthly labour requirement

Labour Number Monthly payment

Manager 1 35,000
Cashier 1 25,000
Salesman 4 3,500@
Cleanness 11 7,000@
Total 145,500
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Monthly production expenses

The following is a table showing production expenses monthly.

Expenses Monthly payments

Electricity 10,000
Insurance 10,000
Repair 10,000
Water 30,000
Telephone 9,000
Total 69000

Monthly total cost of production

The table below shows the total cost used in my business monthly.

Title Cost
Monthly material requirement 70,000
Monthly labour requirement 100,000
Monthly production expenses 185,000
Total 355,000

1.3 Production process

Will intend to set up a competitive team of operators who are qualified in their
filed because their firm will be delivering various product to customers who are
ready to buy product as early as 6am, the employees are to be effective and
efficient in their field of work. I shall organize its production activities according
to the customers demand since customers are ready and willing to buy products as
early as 7:00 in the morning before moving to their respective work places.
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I as the manager shall report early enough to make sure that the facility of the
business run smoothly.I will make required correction and give guidance where
necessary. The structure of the production is illustrated below:

Sto
re Store

Car wash Manager’

s office

Sales area

Counter

Water Cashier
trough office
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1.4 Government regulations affecting your operation

The following are government regulations that will affect my operation and
compliances:

a. Safety regulatory

Ensure that the organization will be safe incase of any risk.

b. Environmental regulatory act

Make sure that the environment is good for the people living around

c. Health regulatory act

The health of the employees will be in a good condition such that making the
environment conducive.
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Chapter 5 :

FINANCIAL PLAN
This is a systematic plan on how fabby hardware will manage and analyse its fund,
also the financial needs and the expected output for financial expectations.

1.1 PRE-OPERATIONAL COST

The business will incur the following expenses.

Items Cost
Operating machine 350,000
Wages and salaries 33,000
Transport 4,000
License 3,000
Advertisement 3,000
Electricity 4,000
Water 5,000
Raw materials 280,000
Discounts 1,000

Total 800,000

1.2 Working capital

This this is the amount of money that will be required by the owner of fabby
hardware service during its operation.

Working capital=current assets – current liabilities

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Current assets Amount

Cash in hand 450,000
Cash at bank 250,000
Stock 150,000
Total 800,000

Current liabilities Amount

Creditors 150,000
Bank loans 250,000
Total 400,000

Working capital=current assets – current liabilities

= 800,000- 400,000

=400,000
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1.3 Cash flow

1.1.1 Cash f low statement for year 1(2022 )

Items Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Total
Bal b/d 1,317,000 1,506,000 1,781,000 2,084,000 2,441,000 9,129,000
Capital 1,500,000 1,500,000
Sales 300,000 350,000 420,000 450,000 500,000 500,000 2,520, 000
Debtors 4,000 5,000 3,000 7,000 4,000 23,000
Total cash in 1,800,000 1,671,000 1,931,000 2,234,000 2,591,000 2,945,000 13,100,000
Purchases / 300,000 330,000
advertise
Repairs $ 15,000 15,000
maintain
Insurance 5,000 5,000
Electricity 2000 2000 2000 2000 2000 2000 12,000
Rent 10,000 10,000 10,000 10,000 10,000 10,000 60,000
License 8,000 8,000
Salaries 128,000 128,000 128,000 128,000 128,000 128,000 76,800
Loan repayment 10,000 10,000 10,000 10,000 10,000 50,000
Total cash out 483,000 165,000 150,000 150,000 150,000 150,000 1,248,000
Net balance 1,317,000 1,506,000 1,781,000 2,084,000 2,441,000 2,795,000 11,924,000

1.1.2 Cash f low statement for year 2(2023 )

items Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec total
Bal b/d 27950 278650 2,800,8 28303 2,8673 2,9143 30413 31743 31743 34693 35883 37403 373260
0 0 00 00 00 00 00 00 00 00 00 00 0
Capital
Sales 16050 180,80 200,00 220,00 22000 30000 290,0 31o,o 320,00 300,0 320,5 310,5 3,0423
0 0 0 0 0 0 00 oo 0 00 00 00 00
Debtor s 60000 5000 2000 2000 4000 5000 2500 3000 2500 3000 31500
Total cash 29555 297330 300580 30508 3,0893 32183 33463 34863 3640,8 37723 39113 40538
in 00 0 0 00 00 00 00 00 00 00 00 00
Purchase 6000 10,000 15,000 20,000 15,000 10,000 7,000 8,000 15000 20,00 10,00 136000
0 0
Advertise 3000 3000 3000 3000 120000
ment
Repairs 5000 1000 1000 2000 2000 1000 500 12500
maintain
Insurance 6000 6000 12000
Electricity 3000 3500 2500 2000 2000 2000 2000 2000 2500 1000 2000 2000 268020
Rent 10,00 10,000 10,000 10,000 10,000 10,000 10,00 10,00 10,000 10,00 10,00 10,00 120,00
0 0 0 0 0 0 0
License 8000 8000
Salaries 12800 128000 128000 12800 12800 12800 12800 12800 12800 12800 12800 12800 153600
0 0 0 0 0 0 0 0 0 0 0
Loan 20,000 20,000 20,000 20,000 20,000 20,00 20,00 20,000 20,00 20,00 20,00 220,00
repayment 0 0 0 0 0
Total cash 16900 172500 175500 18300 17500 17700 17200 16800 17550 18400 17100 16050 208300
out 0 0 0 0 0 0 0 0 0 0
Net bal 27865 2,800,8 283030 2,8673 2,9143 30413 31743 31743 34693 35883 37403 38933 384243
00 00 0 00 00 00 00 00 00 00 00 00 00
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1.4 Pro forma income statement

Item Year 1 Year 2
SALES 2,520,000 3,043,300
COST OF SALES
Opening stock 2795000
Purchases 330,000 136,000
Closing stock 2,795,000 3,893,300
TOTAL 275,000 851,000
GROSS PROFIT
LESS EXPENSES
Insurance 5,000 12,000
Electricity 6,000 26,600
Repairs 15,000 12,500
Rent 60,00 120,000
Salaries 76800 1,536,000
Total 162,800 1,707,100
Net profit before tax 5,1076, 200 2,186,200
Tax 30% 30% *5,107,200 30%*2,186,200

=1,532,160 =655,860
Net profit after tax 5,107,200-1,532,160 2,186,200-655,860

=3,575,040 =1,530,340

1.5 Breaking even point

At the break even points the business makes profit.

Variable cost

Items Year 1 Year 2

Purchase 330,000 136,000
Insurance 5,000 12,000
Repairs and maintenance 15,000 12,500
License 8,000 8,000
Total 358,000 168,500

Fixed cost

Items Year 1 Year 2

Rent 60,000 120,000
Salaries 76,800 1,536,000
Total 136,800 1,656,000
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Contribution margin

Items Year 1 Year 2

Contribution sales 2,520,000 3,042,300
- - -
Variable cost 28,000 32,500

=2,492,000 =3,009 800

Year 1 Year 2
Percentage variable 249200/252000*100% 3,009800/3042300*100
Contribution - cost/ *100%
Margin contribution
=98.89% =98.93%

1.6 Breakeven level

Year 1 Year 2
Fixed cost/contribution*100% Fixed cost/contribution*100%

136,800/2,492,000*100% 1,656,000/3,009,800*100

=5.49% =55.02%

1.7 Break even in units

Year 1 Year 2
Contribution/fixed cost Contribution/fixed cost

2,492,000/136,800 3,009,800/1,656,000

=18.22 =1.82

Desired finance

Item Amount in ksh

Pre-operational cost 800,000
Working capital 800,000
Fixed assets 800,000
Total 2.400,000

Proposed capitalization

Item Amount
Personal savings 450,000
Borrowing from friends 200,000
Loan from bank 150,000
Total 800,000