TITLE: JULIUS ELECTRICAL ENTERPRISE

PRESSENTER: OTIENO JULIUS OWINO

INDEX NO: 40703101/0049

INDEX CODE: 40703101

COURSE: ARTISAN CERTIFICATE IN PLUMBING

CORSE CODE: 0305

CENTER CODE: 703101

CENTER NAME: KISII NATIONAL POLYTECHNIC

DEPARTMENT: CIVIL AND BUILDING TECHNOLOGY

PRESENTED TO: THE KENYA NATIONAL EXAMINATION COUNCIL

IN PARTIAL FULFILMENT FOR THE AWARD OF ARTISAN

CERTIFICATE IN PLUMBING

SUPERVISOR: MR. NIMROD

SERIES; JULY 2019

i
DECLARATION
I, OTIENO JULIUS OWINO hereby declare that this business plan is my Original work and has
never been submitted to the Kenya national examination council before.

NAME: OTIENO JULIUS OWINO

SIGN:……………………………………………………..

DATE:…………………………………………………….

SUPERVISOR: MR. NIMROD

SIGN:……………………………………………………

DATE:…………………………………………………..

ii
DEDICATION
I dedicate this project to my father and mother for their financial support for the competition or
the course and project.

iii
ACKNOWLEDGEMENT
I wish to my family who made this business plan successful I also wish to thank Mr. Nimrod my
lecturer for the support in supervising and planning of business plan

TABLE OF CONTENTS
iv
 DECLARATION.......................................................................................................................ii
DEDICATION............................................................................................................................iii
ACKNOWLEDGEMENT..........................................................................................................iv
EXECUTIVE SUMMARY.........................................................................................................vii
CHAPTER ONE..............................................................................................................................1
1.0 BUSINESS DESCRIPTION..................................................................................................1
1.1 THE BUSINESS NAME.......................................................................................................1
1.2 ADDRESS OF THE BUSINESS...........................................................................................1
1.3 BUSINESS LOCATION.......................................................................................................1
1.4. BUSINESS OWNERSHIP...................................................................................................3
1.5. TYPES OF BUSINESS........................................................................................................3
1.6. PRODUCTS AND SERVICES............................................................................................3
1.7 JUSTIFICATION OF OPPORTUNITY................................................................................3
1.8. INDUSTRY..........................................................................................................................4
1.9 GOALS OF THE BUSINESS................................................................................................4
1.10. ENTRY AND GROWTH STRATEGY.............................................................................5
CHAPTER TWO.............................................................................................................................6
2.0. MARKETING PLAN...........................................................................................................6
2.1. THE CUSTOMERS..............................................................................................................6
2.2. THE MARKET SHARE.......................................................................................................6
2.3. COMPETITION....................................................................................................................7
2.4. METHODS OF PROMOTION AND ADVERTISEMENT................................................8
CHAPTER THREE.........................................................................................................................9
3.0 ORGANIZATION AND MANAGEMENT PLAN..............................................................9
3.1ORGANZATON PLAN/STRUCTURE.................................................................................9
3.2 KEY MANAGERMENT PERSONNEL AND THEIR QUALIFICATIONS AND
DUTIES.....................................................................................................................................10
3.3 SUPPORTIVE SERVICES..................................................................................................12
3.4 INCENTIVES......................................................................................................................12
3.5 LEGAL REQUIREMENTS.................................................................................................13
3.6 RECRUITMENT TRAINING AND PROMOTION..........................................................13
3.6.1 RECRUITMENT..............................................................................................................13
3.6.2 TRAINING.......................................................................................................................13
3.6.3 PROMOTION...................................................................................................................13
CHAPTER FOUR.........................................................................................................................14
v
 4.0 OPERATIONAL/PRODUCTION PLAN...........................................................................14
4.1 PRODUCTION FACILITIES AND CAPACITY...............................................................14
4.2 RAW MATERIALS (STOCK)..........................................................................................15
4.3 FACILITY LAYOUT..........................................................................................................15
4.4 PRODUCTION/OPERATIONAL STRATEGY.................................................................16
4.5 OPERATIONAL PROCESS...............................................................................................16
4.5.1 REGULATION AFFECTING OPERATION..................................................................17
4.5.2 HEALTH REGULATION............................................................................................17
4.5.3 SAFETY REGULATION.............................................................................................17
4.5.4 REGISTRATION..............................................................................................................17
CHAPTER FIVE...........................................................................................................................18
5.0 FINANCIAL PLAN.............................................................................................................18
5.1 PRE-OPERATON COSTS..................................................................................................18
5.2ESTIMATION OF WORKING CAPITAL..........................................................................18
5.3PROFOMA INCOME STATEMENT..................................................................................19
5.4 PROFORMA BALANCE SHEET......................................................................................20
5.5 PROJECTED CASH FLOW STATEMENT FOR THE YEAR 2020................................21
5.5.1 PROJECTED CASH FLOW STATEMENT FOR THE YEAR END 2021...................22
5.5.2 PROJECTED CASH FLOW STATEMENT FOR THE YEAR END 2022....................23
5.6 BREAK EVEN POINT........................................................................................................24
5.6.1BREAK EVEN POINT FOR 2020....................................................................................24
5.6.2 BREAK-EVEN POINT FOR 2021...................................................................................24
5.6.3 BREAK-EVEN POINT FOR 2022...................................................................................25
5.7 DESIRED FINANCING......................................................................................................26
5.8 CAPITALIZATION.............................................................................................................26
5.9 PROFITABILITY CALCULATION FOR THE YEAR 2020............................................27

vi
 EXECUTIVE SUMMARY
BUSINESS DESCRIPTION

This chapter gives brief information about the business plan It states its location, address and
ownership which will be a sole partnership. It will highlight functions whereby the business shall
be dealing with selling of Electrical accessories.

THE MARKET PLAN

Besides local and urban centers the enterprise is targeting to acquire individual and institutional
based classes of customers. All these customers will be reached by extensive promotion of the
business that will include advertisement through both print and electronic media in their
respective counties .Also the electrical enterprise will be targeting customers from various
institutional and cooperatives who would facilitate the growth of the electrical enterprise. Our
prices will be moderate not to be too low or too high, the season and the origin of the customer is
likely to declare the prices for booking in other words prices will be fluctuating according to
season and origin of the customer. We are likely to attract a good number of customers and we
expect to dominate a significant market share of approximately 20% and progress even higher as
the business gain momentum and expand in future.

ORGANIZATION AND MANAGEMENT PLAN

The proprietor shall be overall manager. He is concerned on all managerial i.e. controlling,
planning, directing and coordinating .other personnel include salesperson and the accountant. All
staffs include cleaners and security officers. All these employees shall be competent in all their
respective fields of operation. The organization structure avoids the role demand and role
ambiguity. Employees shall be recruited on the basis of their qualifications, skills and
experience. Besides the personal function the firm shall have supporting staff and services for
effective communication.

vii
OPERATION PLAN

Under this plan the business lists all production facilities required during the operation of the
business. The production process will involve handling of materials in the hardware, delivery of
materials and serving the customers.

FINANCIAL PLAN

The business consist of pre-operational costs, working capital requirement, a projected cash
flow, that shows total supplies and also preformed income statement which is then reflected to
preformed balance sheet to show the financial position of the business

viii
 CHAPTER ONE
1.0 BUSINESS DESCRIPTION
1.1 THE BUSINESS NAME
The name of the business will be Julius electrical which comes from the owner is name

1.2 ADDRESS OF THE BUSINESS

Julius electricals

P.O BOX 77

KADONGO

Tel: 0705289073

1.3 BUSINESS LOCATION

The above name is the name of the business to be future situated at Kadongo trading centre,
along the Oyugis-Kisumu road Italia building room number 3

The market area is mostly in demand or essential

Equipments like the bulbs, switches, cables and installing of houses, this is due to the rural
electrification to this area.

This location is location is just like the existing infrastructure like tarmac road the location is just
like the heart or everything since it is situated at the centre of two big towns

Sources of raw materials are found easily from either or the towns of Oyugis/Kisumu

Since the area was supplied with the rural electricity. Julius electricals will get ready market and
customers who need its products and services

From this location Julius electricals could gat supplies and other electrical business services from
JAKOM ELECTRICALS DISTRIBUTORS, KISUMU and KOLANDO ELECTRICALS Kisii.

1
Map

JAKOM ELECTRICALS
KISII ROAD

KISUMU ROAD

Kadongo Town

JOGOO ROAD

Italia building

JULIUS
ELECTRICAL KOLANDO
ENTERPRISE ELECTRICALS

BUSINESS LOGO

JULIUS ELECTRICAL
ENTERPRISE

2
1.4. BUSINESS OWNERSHIP
Julius electricals will be a sole proprietor from a business it will be run and managed by Julius
Otieno as the owner or the business

The owner of the business is a student at Kisii national polytechnic doing artisan certificate in
plumbing

1.5. TYPES OF BUSINESS

Julius electricals will deal with wholesale products it will also deal with maintenance and sale of
electrical equipment and tools

1.6. PRODUCTS AND SERVICES

Julius electricals will be selling electrical equipment and fittings which include: cables sizes 2.5
mm, 1.0 mm, 4.0 mm, conduits, bulbs, switches, sockets and water heaters.

Also among the products to be sold here are tools which help in the installation work like pliers,
ball pen hammers all sorts and screw drivers also installing tapes

Other products to be sold by Julius electricals will educate its customers on how the products
bought are used to minimize destruction i.e.

Main switch is used for breaking and making the supply to Nails and buckle clips-used for
holding PVC cables along the ceiling board

Ball pen hammers-used for striking the nail in to a wooden timber. Julius electricals also offer
transportation services to customers.

1.7 JUSTIFICATION OF OPPORTUNITY

The business has been a hobby to the owner since childhood and this has led to being a personal
experience due to the high demand or the products and services

The business will contribute greatly to the creation of employment to this area this is to mean
people with installing knowledge will come for equipment needed in the field and go to use them
it will solve the problem or theft cases in the area due to creation or employment

Due to the learning he underwent in college and the experience undergone and obtained in
college and attachment and professional choice he has been promoted to start the business.

3
1.8. INDUSTRY
The business to be started is categorized under the industry or energy

The business size will be medium so as to compete with other small similar business in the area
which are few but competent

Julius electricals will employ new workers who will help in offering of products and services to
the customers just for the start

It will also employ four other skilled workers these workers will offer services for smooth and
effective working

They will also be hired for electrical installation and maintenance to the customers

The level of technology processed in this industry is modern because equipments sold are
modern i.e. radios, Tv sets and digital meters the basic capital for the entry into this type of
business is 400,000 for the start.

1.9 GOALS OF THE BUSINESS

Julius electricals aims to offering high quality products and services to its customers

Products shall be exposed so as to give customers confidence and therefore making profits from
sales. From the products they sell and profits they make Julius electricals will employ workers
who will help the owner in offering of services for quick operation this will be due to densely
populated area hence high demand in future Julius electricals is set to expand to other strategic
towns

It intends to open branches in various town centers in the county and by doing this will lead to
deeper penetration in to the market

4
1.10. ENTRY AND GROWTH STRATEGY
To gain entry to the market to the market area the business will print poster s and bill boards and
place them in strategic places

Since other competitors are close to the market and items sold there are or high prize Julius
electricals is set to reduce the price as the products by 2%

And as the business expands work time will be advertised im media like forms i.e business news
and news papers

Julius electricals will be gaining popularity in the area and its enormous growth it will expand by
employing a few employees for easy and faster handling or customers.

5
 CHAPTER TWO
2.0. MARKETING PLAN
2.1. THE CUSTOMERS
The potential customers of the business young and old people educated and non- educated

People from different tributes staying around the business will also serve domestic customers
who will buy items for home use e.g. bulbs switches water heaters sockets outlets and fuses

It will also serve institutional customers like schools who will buy items in bulk i.e. bulb circuits
breakers sockets switches e.t.c. other customers are commercial customers who will produce in
large quantities for the business purposes

What the potential customers will be looking for in the product and services they are offered is
the economy convenience and durability as products the business will be receiving customers
mostly during market days weekends and towards the end month.

Most of the potentials customers like institutions like purchasing items in large quantity at an
interval of two months and pay when approaching the third month.

2.2. THE MARKET SHARE

As per the quality or products and services the business will offer, it will serve approximately 50
people a day and at least five institutions a week

The business estimated number of expected total sales per month is as shown in the table below

Items Sales per item Quality per month Total sales

Circuit breaker 200 1000 20000
Circuit control unit 350 50 17500
Transformer 250 100 25000
Socket outlet 80 250 20000
Others 196667
Total 279167

Total cost of items per year is 3350000

6
2.3. COMPETITION
During the market period the business potentials competitors are

 Stima electrical
 Samwaya electrical
 Kismart electrical

These potentials competitors will be located just in the center of the market but at far distance.
They will be located deep in the market.

They will advantageous because they will get all the customers who will go in to the market to
buy items but they will be disadvantageous because as their interior hence services like
transportation are not offered by high quality delay of services because of unskilled personnel
and goods they sell at high prices

Julius electrical will be medium unlike itself which is large

The size of Julius electrical will be advantageous because it will employ the tactics in order to
overthrow its competitors who offer sales services e.g. transport offering quality products to
customers.

The comparison between Julius electrical and other competitors in the market is shown below.

MONA KISMA STIMA

ELECTRICALS ELECTRICALS ELECTRICALS
Quality of products 5 4 3
Location 3 5 4
Capital 4 2 3
Worker skills 6 3 2
Size 8 5 6
Total scale 20 19 18

7
2.4. METHODS OF PROMOTION AND ADVERTISEMENT
Julius electrical will apply different methods to inform the public and promote the business

These will include;

Face to face method- explaining more about the business to the people, personally using media
i.e. local television radios writing leaflets and signboards and placing them at strategic areas.

The radios will be the most used media for advertising because many people have radios
magazine can also be used

It will be advertised 3 times a year the effectiveness of the advertisement will be known after
selling products and services and compare them with the sales before the advertisement was
made.

The business will be promoted through issuing free samples as calendars printing the enterprise
heads bearing the logos on the products sold and services

And also by writing leaflets and issuing these to people around the target market area

8
 CHAPTER THREE
3.0 ORGANIZATION AND MANAGEMENT PLAN
3.1ORGANZATON PLAN/STRUCTURE
For an organization to have systematic business there must be good management and
relationship between its working members.

There must alliterate and experience manager who has the skill on how to relate with people. The
manager of the business will be the owner who is OTIENO JULIUS

MANAGER

ASSISTANT MANAGER RECEPTION

STORE KEEPER
TECHNICIAN CASHIER

SECURTY SECRETARY

9
3.2 KEY MANAGERMENT PERSONNEL AND THEIR QUALIFICATIONS AND
DUTIES

THE MANAGER

This is the overall head on the proposed business

Qualifications

i. Literate on electrical engineering

ii. Has to be a computer literate
iii. Two years’ experience
iv. Should be sociable to all people
Duties

i. Promote the image positively in public

ii. Maintain good relationship between the staff and customers
iii. Maintain good relationship within the organization and the public
iv. Guide the staff and workers

ASSISTANT MANAGER

The one who will be in charge when the manager is not around/assist the manager on daily work

Qualification

i. Takes over when the manager is not around

ii. Should fit in any office in the organization should be answerable to the manager
iii. Ensure smooth operation in the business
iv. Ensure smooth operation between the customers and workers
SECRECTARY

One who records all activities carried in the business

Qualification

i. Enlightened to computer world

10
 ii. Have good communication skills and growing
Duties

i. Recording the attendance in the organization

ii. Taking care of office key
iii. Taking of incoming goods on daily bass
TECHNICIAN

Qualification

 Should hold a certificate in electrical installation

 Age 24 years and above
 Experience at least 2 years
Duties

i. Checking the quality of product purchased

ii. Doing installation for whoever might be in need
iii. Giving information about products to be the customer
CASHIER

i. Should be a holder as KATC 111 from a recognized institution

ii. Aged should be between 25-35 years
iii. Should have experience o 2years
Duties

i. Paying his workers

ii. Preparing and writing accounts statement
iii. Dong any other duty assigned by the manager
WATCHMAN

Qualification

i. Should be a holder of KCSE and certificate of good conduct

Duties

1. Taking care of the compound during day and night

11
The proposed remuneration and incentives for the business employees is as shown below

Workers Number Monthly salary Annual salary

Manager 1 20000 240000
Ass. Manager 1 15000 180000
Cashier 1 12000 144000
Technician 2 16000 384000
Receptionist 1 8500 102000
Watchman 2 10000 240000
Total 8 81500 1290000

3.3 SUPPORTIVE SERVICES

The business ensures that it has opened a bank for an employee who may to have one. It should
also open account at family bank which may be paying using their private account

It should have supplies countywide who may be selling the quelling

For the good of the business in order to achieve its goal and objectives supportive will be need
and will include

Insurance- my insurer with be British American Insurance Electrical enterprise Kisumu branch
this will cater for products in case of damage

Lawyer-the business lawyer will be Ondieki the advocate to handle legal matters. If need will
arise to represent the business

Business consultant- will be doctor Ben Koloo of Rich chem machineries will give advice
concerning Julius electrical

3.4 INCENTIVES
In order to make employees work hard to achieve the goals of the business Julius electrical s
intended to offer the salary increment to workers

Employees will be allowed to go for trips in order to come up with new ideas they will also be
given allowances, overtime payment depending on the production

12
They will also be given salary and loan advance in order to encourage them work more

3.5 LEGAL REQUIREMENTS

As per the routine Julius electrical will be given a trading license and the permit from the county
council. As per the insurance s concerned employees and the products sold is another factor will
be considered

3.6 RECRUITMENT TRAINING AND PROMOTION

3.6.1 RECRUITMENT
Julius electrical intends to get qualified staff based on selection of good academic ground and
experience. Any interested person will send documents about themselves and afterwards they
will be invited for interview

Whoever fits will be selected and given an opportunity in his/her preferential area

3.6.2 TRAINING
Training various staff will be carried out in coordination with the polices of the enterprise. Only
the hardworking and devoted employees will be awarded the study leave

3.6.3 PROMOTION
The employee who will have undergone training will be promoted as per their work experience

The promotion of workers to various positions will be carried out as the business grows and their
salary will be boosted annually as it expands

13
 CHAPTER FOUR
4.0 OPERATIONAL/PRODUCTION PLAN
Julius electricals will deal with the products and services which it is customers will need most

4.1 PRODUCTION FACILITIES AND CAPACITY

Julius electricals has listed the production design or apparatus and equipments which it is going
to sell to customers thus they are required as they are required by customers from the nearby
environment as they are required in the business .The cost of cash and the suppliers who are
likely to supply to Julius electricals dealers as shown in the table below

Description Quality Suppliers Unit price Amount

Pliers 50 Kisii 90 45,000
Switch boxes 120 Kisii 40 45,000
Consumer 100 Kisii 240 24,000
control
Meters 40 Kisii 1,000 40,000
Distribution 20 Getembe 500 10,000
board
Screws 100 pic Kisii 40 60,000
Cables 200 rolls Kodiang 7,000 17,500
Saddles 2,000 Koloo 30 150,00
Cut outs 5 Kisii 1,500 36,000
Lamb holders 5,000 Getembe 720 5,000
fluorescent tubes 500 Kisii 50 2,000
Space bar 100 Kisii 40 4,000
saddles
Screw driver 50 Kisii 30 1,200
Junction boxes 40 kisii 50 1,200
Totals 550,000

14
4.2 RAW MATERIALS (STOCK)
Description Quantity Unit price Amount
Lamb holders 100 30 3,000
Incandescent tubes 150 50 4,850
Cut out 15 1,500 7,500
Junction box 80 pieces 50 4,000
Circuit breakers 10 1,500 15,000
Cables 10 roles 7,000 70,000
Distribution box 5 500 2,500
Switch box 150 40 6,000
Conduits 100 pieces 90 9,000
Screw 100 pct 100 10,000
Meter 3 100 5,000
Filament tubes 100 720 72,000
Switches 100 50 5,000
Consumer control 100 240 2,400
unit
Total 224,400

4.3 FACILITY LAYOUT

According to Julius electricals all the available facilities should be arranged as follows in the
block diagram shown below. This shows the actual presentation of the business.

T.T
S.R S.P.E S.R –STORE

C.R

E.N.H P.T.C
C.R

15
4.4 PRODUCTION/OPERATIONAL STRATEGY
The business should be working daily as from 6:30 am daily apart from Sunday since the owner
is a Sabbath keeper and the day should be kept holy as per requirement .

A short period is set aside for breakfast and lunch where the owner will utilize the opportunity to
motivate worker .Here provision of study leaves should be highly appreciated in order to meet a
new technology to put in application in the workshop.

Also better service such as training the employees should be encouraged to gain enough skills on
how to treat and service customers. High standards of hygiene should be appreciated in order to
reduce the outbreak of diseases thus provision of double protective clothing should be used to
reduce this problem from arising.

In addition use of posters should be encouraged to keep on reminding customers or newly

introduced equipment and apparatus on the market.

The owner should provide it is client with plenty supply of quality materials since it has got
professionally qualified personnel through professional qualifications mentioned thus technology
in different fields should be accorded with the spirit of working together.

The operation time should be between band limits the speed of processing orders should be fast
as possible to have goals. Teamwork spirits should be encouraged in order to meet their
obligations.

4.5 OPERATIONAL PROCESS

All services which will offered by Julius electricals will be following a process. This will help
out in avoiding problems hence ensuring that the right services are given to i.e. in the
management will ensure some bill as quantitate after accessing their work.

16
4.5.1 REGULATION AFFECTING OPERATION
4.5.2 HEALTH REGULATION
The business will offer gloves,overalls,dust coats, heavy boots to condition as per the rates of
health regulation for production while working.

4.5.3 SAFETY REGULATION

The business will operate under proper safety regulation such as fire extinguisher, First AID and
emergency doors for better security.

4.5.4 REGISTRATION
The business will regular with the attorney general chamber of commercial business in order for
it to work effectively and to be given licence from municipal council

17
 CHAPTER FIVE
5.0 FINANCIAL PLAN
The financial plan will be used by the owner in estimated business operates and performance

5.1 PRE-OPERATON COSTS

Description Amount
Building 60000
Advertisement 10000
Rent 5000
Electricity 10000
Salary 25000
Water charges 2000
Insurance 3000
license 2000
Machinery and equipment 222000
Total 33000
5.2ESTIMATION OF WORKING CAPITAL
CURRENT ASSET YEAR1 AMOUNT IN KSH YEAR 2 AMOUNT KSH
Cash in bank 9000 16000
Cash at hand 15000 10000
Debtors 7000 7000
Stock 330219 456821
Total 361219 484821
Current liabilities
Creditors 100000 96000
Total 100000 96000

Working capital = current asset- current liabilities

=361219-100000

=261219

2nd year

489821-96000

=393821

18
5.3PROFOMA INCOME STATEMENT
Julius electrical investment

Trading and profit loss account for year ending 2020

Particulars (amount ksh) Particulars (amount in ksh)

Cost 3610000
7000 Sales 4136000
3617000 100000
Less closing stock 330219 4436000
Cost of goods sold 3286751 Gross profit 1173219
Gross profit 1173219
Expenses
Salaries 300000
Rent 60000
Insurance 24000
Water 12000
Electricity 24000
Telephone 11888
Total expenses 538880
Net profit 634419

19
5.4 PROFORMA BALANCE SHEET
Julius electrical investment

Balance sheet as at 12th Dec 2020

Asset (amount ksh) Liabilities (amount in ksh)

Fixed asset
Furniture and fitting 150000 capital 100000
Building 60000 net profit 634419
Machinery and equipment 330219 734419
432000 Long term liabilities
Loan 100000
Current asset Current liabilities
Stock 330214 Creditors 100000
Debtors 70000
Cash at bank 15000
Cash at hand 15000
Electricity 24000

Total 34419

20
5.5 PROJECTED CASH FLOW STATEMENT FOR THE YEAR 2020
PARTICULAR JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
Opening stock 5000 9950` 26800 36260 747320 445270 45126 462915 471385 492870 54930 512050 3746395
5
Sales 92090 98500 90230 800000 8850 94640 98330 100700 97350 103000 92400 99540 1133110
Debtors 10000 8000 6000 300 2000 5000 3000 2500 4010 3000 8000 1500 56000
Total cash flow 5000 5000
License 187475 195855 20227 918525 907655 614645 62332 635790 642550 568550 67606 686805 6077135
5 0 5
Rent 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 36000
Registration 6500 6500
Water 420 400 380 480 440 445 440 420 460 445 500 490 5240
Insurance 350 350 360 300 360 340 390 350 320 300 340 365 4025
Purchase 3000 3000
Stationery 36000 42500 38350 46500 34300 39900 43700 35000 43600 45300 38000 38000 65815
Transport 3000 300 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000
Creditors 15000 10000 12000 18000 13000 10000 12000 15000 10000 18000 19000 2000 132000
0
Salaries 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000 288000
Telephone 350 350 350 350 350 350 350 350 350 350 350 350 4200
Loan interest 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 60000
Total cash 102070 89650 86770 91940 392550 93645 88680 94630 78875 96940 90280 80455 1386485

21
outflow
Closing stock 9950 26800 36260 747320 445270 4512265 46291 471385 492870 54930 51205 559000 4690670
5 0

5.5.1 PROJECTED CASH FLOW STATEMENT FOR THE YEAR END 2021
PARTICULA JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTA
R L
Opening stock 55900 98000 10604 11582 81715 51500 52199 53259 54119 56255 57566 58576 504390
0 5 5 5 5 0 0 0 0 5 5
Sales 92090 98500 90230 80000 8850 94640 98330 10070 97350 10300 92400 99540 155821
0 0 0 0
Debtors 10000 8000 6000 300 2000 5000 3000 2500 4010 3000 8000 1500 5600
License 18747 19585 20227 91852 90765 61464 62332 63579 64255 56855 67606 68680 685951
5 5 5 5 5 5 0 0 0 0 5 5 0
Rent 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 36000
Registration 6500
Electricity 3000
Water 420 400 380 480 440 445 440 420 460 445 500 490 5320
Insurance 350 350 360 300 360 340 390 350 320 300 340 365 4085
Purchase 3000
Stationery 36000 42500 38350 46500 34300 39900 43700 35000 43600 45300 38000 38000 489400
Transport 3000 300 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 35000
Creditors 15000 10000 12000 18000 13000 10000 12000 15000 10000 18000 19000 2000 132000

22
 0
Salaries 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000 288000
Telephone 350 350 350 350 350 350 350 350 350 350 350 350 4290
Loan interest 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 60000
Total cash flow 98120 89810 86750 10137 39265 92655 90730 94600 80000 92885 90300 81535 139140
0 0 5
Closing stock 98000 10604 11552 81715 51500 52199 54119 56255 56225 57566 58576 60527 556810
5 5 5 5 0 0 5 5 5 5 0 5

5.5.2 PROJECTED CASH FLOW STATEMENT FOR THE YEAR END 2022
PARTICULA JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTA
R L
Opening stock 58576 90435 10711 11745 83986 53839 54558 55608 56457 58482 59793 60703 523083
5 5 5 5 0 0 0 0 5 5 0
Sales 92020 98500 90230 80000 8850 94640 98330 10070 97350 10300 92400 99540 155821
0 0 0 0
Debtors 10000 8000 6000 300 2000 5000 3000 2500 4010 3000 8000 1500 5600
Total cash flow 5000
License 12121 19585 20227 91852 90765 61464 62332 63579 64255 56855 67606 68680 685951
1 5 5 5 5 5 0 0 0 0 5 5 0
Rent 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 36000
Electricity 3000
Water 420 400 380 480 440 445 440 420 460 445 500 490 5320

23
Insurance 350 350 360 300 360 340 390 350 320 300 340 365 4085
Purchase 3000
Stationery 36000 42500 38350 46500 34300 39900 43700 35000 43600 45300 38000 38000 489400
Transport 3000 300 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 35000
Creditors 15000 10000 12000 18000 13000 10000 12000 15000 10000 18000 19000 2000 132000
0
Salaries 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000 288000
telephone 350 350 350 350 350 350 350 350 350 350 350 350 4290
Loan interest 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 60000
Total cash flow 98120 89810 86750 10137 39265 92655 90730 94600 80000 92885 90300 81535 139140
0 0 5
Closing stock 90435 10711 11476 83986 53859 54558 55608 56457 58482 59793 58576 60703 631090
5 5 5 5 5 0 0 0 5 5 5

24
5.6 BREAK EVEN POINT
Is a point at which the business experience no profit or loss

5.6.1BREAK EVEN POINT FOR 2020

Fixed costs

Salaries 300000

Rent 60000

Insurance 24000

Water 12000

Total =396000

Variable cost

Telephone cost 11800

Break-even point=fixed asset

Sales/sales-variable cost

396600 X (4460000/4460000-11800)

=397050

5.6.2 BREAK-EVEN POINT FOR 2021

Fixed costs

Salaries 300000

Rent 60000

Insurance 24000

Total =384000

Variable cost

Water 10000

Telephone cost 11600

25
Electricity 23000

Total 43600

Break-even point=fixed asset

Sales/sales-variable cost

384000 X (4356000/4356000-436000)

=387.882

5.6.3 BREAK-EVEN POINT FOR 2022

Fixed costs

Salaries 300000

Rent 60000

Insurance 24000

Total =384000

Variable cost

Water 10000

Telephone cost 10000

Electricity 23000

Total 43000

Break-even point=fixed asset

Sales/sales-variable cost

43560000 X (4356000/4356000-436000)

=43124000

26
5.7 DESIRED FINANCING
ITEM AMOUNT KSH
Pre-operation 339000
Working capital 655040
Fixed assets 432200
Total 1426240

5.8 CAPITALIZATION
Capitalization for Julius electrical shop for the year 2020

Item description Amount

Pre-operation cost 300000
Working capital 150000
Business branches 60000
Tools and equipment 100000
Improving workshop 100000
Total 710000

Capitalization for Julius electrical shop for the year 2021

Item description Amount

Pre-operation cost 300000
Working capital 180000
Business branches 60000
Tools and equipment 200000
Improving workshop 100000
Total 840000

27
5.9 PROFITABILITY CALCULATION FOR THE YEAR 2020
i. Returns on sales
Net profit

Total sales

634419/4136000

=0.67

ii. Return on capital

Net profit

Total asset

634419/434419

=0.67

28