CHAPTER ONE

1.1: BUSINESS NAME

a) Business Identity

JOO CREAMERS is the name given to the business enterprise. J.C Forth worth, JOO comes from the
owner's name JOSEPH OBIERO OMONDI. From the business perspective these letters spell the image of
success through reliable, uniform tasty and best unique trust worthy Dairy products.

The logo of J.C on the cover page indicate that major source of dairy products by saying I one does not
need to read the name of the business. (Appendix 6A) from the logo shows the major source J.C relies
on for producing Dairy Products

The mission of the business is to be the most prominent producer and supplier of Dairy products to
meet customer's needs. The Motto of the J.C is, "For highly nutritious' milk and it's products". This
assures customers of high levels of production and supply of the milk products.

OPPORTUNITY CHOICE

The owner of the business was influenced to start the business by his parents since they had a farm
related to JOO CREAMERS. The owner is a graduate in food science &technology which helped him to
generate the idea of starting the business.

1.2: BUSINESS LOCATION AND CONTACT

a) LOCATION

Market area: The operation of J.C at Kenyatta Market in Ngumo Estate Nairobi County which will extend
to other parts of Nairobi. As a neighbor of High-rise, and Kibera area. The area also has a large
population thus allowing the business to grow tremendously due to high presence of people in the
surrounding. The area is also large that ranges to about 12Km2. The area's infrastructure is also good
due to proper roads in the area, pressure of fiber connectivity and proper network of phone
communication. (app6bi)

b) PREMISES AND SIZE

The firm is to be located near the taxi stage outside Kenyatta Market. The size of the premises is
approximately 3.2km2 that has a good environment to start a plant. There is also the presence of Equity
Bank that will facilitate proper banking. The roads in the area are also good that allow proper
connectivity and supply of goods. (app6bii)
c) CONTACTS

Customers are to get the owner of J.C through communication by use of post, telephone, internet and E-
mail. Before J.C gets its own postal address, it is to use the existing address for the building which will be
charged Kshs 12 a day. The address is 167-Nrb. J.C to use owner's telephone number before it get's
connected to landline. The mobile number is 070362322. E- mail to be used is Josbiero@[Link].

1.3: FORMS OF OWNERSHIP

a) Ownership

J.C is to be a sole proprietor enterprise but in due time it is to be changed to a limited company. The
proprietor, JOSEPH OBIERO prefers this kind of ownership as one gets experience since he needs from
the organization and management. A registration fee of Kshs 2500 is required. Government and local
authority are other requirements that J.C is to meet. J.C is to start operating from January 2015 with
sales expected in 4th month from milk. This is the time which J.C is to be fully operational.

b.) Sponsorship

Joseph Obiero (proprietor) is a youth who is conversant with computer and has been pursuing a
Diploma in food science & technology (App6c). The owner of J.C is creative and industrious through the
knowledge that he gained. He has been working in days with a food company in Langata as a
receptionist. This has enabled him to work with schools, restaurants, supermarkets and hospitals in the
area. Much of the owner's enterprenual skills have been developed out of enterprenualship education
subject.

The owner is to provide 30% finance that is Kshs 528,934 while the remaining 70% is to be secured from
a loan of Kshs 1,234,178 bringing the total amount required to Kshs 1,736,112.

1.4: TYPE AND NATURE OF THE BUSINESS

a) Type of venture

JOO CREAMERS is a production business with milk being the main product involving production of
various types of milk products. J.C is to produce butter, cheese, yoghurt and others. The main purpose
of J.C is to feed the person with various types of milk products which builds up the body, while skin is to
be used in making shoes and manure to farm soil J.C target market include both schools, hospitals
supermarkets, whole sales and even police stations and it's done after parking the products. J.C is to
market its products through advertisements and promotions to make customers aware of the milk
products.
b) Nature of opportunity

J.C is a nearly established enterprise and entering an already existing market with new products. J.C is to
produce highly hygienic products. The prices are to be charged at an affordable rate to attract
customers. Resent survey shows a market will appetite for milk products J.C starts operating on January
2015 and will operate for 6 days a week with outlet opening from 6:00 to 7:00 pm to ensure customer's
needs at various levels are met J.C is to produce quality and unique products and it's to improve on its
packaging. This is due to the already existing business weakness and it's to enable J.C compete fairly.

1.5: RODUCTS AND SERVICES

J.C offers a variety of dairy products including milk, cheese, butter, yoghurt and ice cream and other milk
products are sources of nutrients like vitamins and proteins (App6d). These milk products are of
different varieties depending on the type of the product. The main purpose of this business is to meet
the customer's needs; this is achieved by producing products of high quality. The main customers are
institutions, shops, hotels, supermarkets, individuals. Hospitals and others. The nutritious value of milk
and milk products underscores any other benefits customers are up to.

MILK: Milk will be produced differently i.e. Mala and Fresh. Even though they are different they share
same characteristics like color and packaging. Milk is cream white in color, mostly packed in packets of
different sizes. Mala milk has undergone fermentation. Customers need them for nutrients in the body.
Milk is a source of protein, vitamins and it contains some other mineral content. The target marked of
milk is schools, shops, supermarkets. Hotels, individuals and others.

BUTTER: J.C offers two types of butter, salted and unsalted. Butter is yellow in color and it's mostly
salted, Butter is delicious, nutritious satisfying and of good quality. It's packed in different quantities.
Butter contains vitamin d as is used as a source of food. The target customers include supermarkets,
shops, institutions, hotels and others.

YOGHURT: Yoghurt is in different type's example vanilla and strawberry. It's packed in various quantities.
Its nutritious to people since they need it as an immune stimulation. Customers benefit in yoghurt for
stomach digestion. Target customers include individuals, hospitals institutions and others.

CREAM: J.C is to produce cream in different types like chocolate, vanilla and strawberry. Cream is
packed in different sizes depending on weight. It is mostly sold in frozen state. The target customers
include institutions, shops, individual's shops and others.
1.6: JUSTIFICATION OF OPPORTUNITY

A) SOURCE ANALYSIS

i) Internal analysis: J.C strength areas are keeping products fresh housing sales outlets that are one
point for milk products, supportive management teamwork to both it's sales force and customers, chase
and accessible to customers, ready market for products and owner's ability to facilitate efficient
communication, weakness are attributed to high financial or cost promotion requirements, high interest
rates by banks, lack of extensive distribution channels and lack of established industries.

ii) External analysis: Opportunities found in the area are conducive and active government policies on
enterprises. Increase in population growth and ready market for milk products. This is a sector that
helps the county to be sufficient in food security, employment and health. J.C threat is electricity that
aids in production, competition from outlets and maintenance of customers.

B) VIABILITY OF OPPORTUNITY.

Utilization and management of J.C resources in human marketing production and finance are sure way-
out ensuring success J.C has a potential to succeed. The premises layout is well designed and located.

Availability of capital provides a good start of both operational and pre-operational expenses. These are
abundant available skilled and un-skilled man-power in Nairobi and environs. The owner too has a
combination of related modern of operation.

The main outlet is situated close to the target market. The infrastructures of the areas improvement are
a good sign that the area is good for business operations. The area is big enough with a big population
that will facilitate proper sales of the business.

Raw materials, tools and materials are readily available in the area. There is a good security due to the
presence of a police station in the area. The plant on outlet stores are of adequate size remaining
strategically positioned.

Competitors in the area do not offer extensive services and that is why J.C extends its working hours,
offers products that are affordable, attractive packaging of products and offering gifts to frequent
customers and also enhancing communication from the sales person to the customer.

1.7: INDUSTRY

a) Dairy farming is under the agricultural industry. Dairy farming is practices widely including in
homesteads.

b) J.C is the second largest enterprise in Kenyatta Market. This is because it will offer high quality
products that will lead to revenue collection thus boosting the country's economy. J.C is to start working
with 10 skilled employees. In future the business is expected to work with more than 20 skilled
employees. Hardworking employees are to have salary increments annually. The business is also looking
forward to have its own building with time.

c) J.C is to deal with both the production of milk from dairy animals and producing products from milk.
Being the second largest enterprise it has to ensure production is done to the maximum.

1.8: BUSINESS GOALS

a) Visions of the business

To be the leading enterprise in producing, and supplying dairy products for human health.

B) GOALS/OBJ ECTIVES

Short term objectives Long term objectives

Joo creamers ensures at least 20% profit Employment of skilled workers permanently
attained
Open at least one branch in the region and
Producing affordable products and raise outside the region
sales to almost 15%
Workers to be increased and only those that
Ensure staff are qualified for easy flow are qualified promoted

Produce quality products to customers Improve technology by improving the quality of

machines
Networking should be done to meet all
stakeholders To be the leading in producing dairy products in the
country

1.9: ENTRY AND GROWTH STRATEGY

a) Entry strategy

J.C enters dairy industry offer researching and putting mechanism to enter speedily and secure a place
both locally and nationally. The following strategies J.C undertake to achieve short term goals

• The owner to explore fully in the industry and personal capabilities

• Develop the market, attract and retain customers and maintain good relationship with
customers
 • The owner to ensure proper financial control
• The owner to identify financial resources necessary factors of effective operations putting in
best to meet customer's needs.

b) Growth strategy

The growth strategy of J.C has to meet challenges by contributing to a spirit of partnership between
management and staff through teamwork. Mechanism to rate, it and continuously compare it with the
competitors to be put in place. The financial goals and benefits of options taken are clearly determined
which are geared towards improvement of productivity and cutting cost. The critical success strategies
J.C FOCUSES ON ARE:

• Aggressively networking associations, business community and products, services mainly to

maintain J.C in place with the sophisticated layers.
• Invent other services not offered by the other competitors like occasional discount to frequent
customers.
• Manage marketing meet activities.
CHAPTER TWO

2.0: MARKETING PLAN

2.1: MARKETING OBJECTIVES

Objectives

i. To produce high quality products by putting good packaging in place.

ii. Satisfy the target market in the region by ensuring the products are available at the right time.
iii. Ensuring profit is increased as the business grows
iv. Business to expand and four branches to be expanded in the regions outcasts.
v. Carry out effective promotions and research and development should be carried out.

2.2: CUSTOMERS MARKET.

Market analysis

J.C offers different types of products thus cheese, yoghurt, cream, milk butter and milk. The general target
market, are: Institutions, supermarkets, hospitals, hotels, shops, individuals and others. The owner did a
research in the area and identified this as the potential potential customers. (APP, 6.E ).The potential
customer in the area should include both rich and the poor. These customers purchase the products as
individuals, institutions or organizations and are mostly residents.

Institutions

They include schools, colleges and universities. J.C will supply its products to a minimum of 20 institutions.
During the normal school term this is high population hence surplus supply. They purchase the products
from shops or by placing orders.

Super market: They include large, medium and mini- supermarkets. The supply will target 95
supermarkets in the area. Most supermarkets are up coming due to rapid growth of business
opportunities. These customers prefer high quality products and customer services in terms of delivery.

Hospitals: These comprises of district dispensary clinics. They mostly prefer milk and yoghurt. They are at
least 32 in number. They are widely spread in the region due to rapid population. Customers will get the
products by orders.

Hotels: The include restaurants, cafes and tea rooms. Tea rooms and cafes are widely scattered in the
area. The customers mainly prefer milk, butter and cream. They get the products on shops or by placing
orders.

Individuals: They include students, farmers and by-passers. Most of them are near the enterprise and
around the area. They are in large numbers. Most of them get the products from the shops and they
prefer high quality products.

Shops: They are retailers and wholesalers. They get the products through orders. They are widely spread
in the area since it's the main business. They buy the products in large quantities in order to go and sale to
others.

Others: They include individuals, businessmen residents and by-passers. These customers purchase
products in small quantities and directly from shops.

2.3: DEMAND ANALYSIS.

A: OVERALL

J.C offers different products thus cheese, butter, yoghurt cream and milk to its customers'. The overall
demand per product by the supplier in the area in a table (APP 6.F.A) Overall demand for yoghurt is
18.2%, institutions 15.7%, supermarkets 18.7%, hospitals 7.3%, hotels 19.7%, shops 17.2%, individual and
others 30.8%. Demand for butter is 18.5%m shops 10.5, individuals and others 7.7%. Demand for cheese
6.6%, institutionsl6.9%, supermarkets 64%, hospitals 21.2%, hotels 8.5, shops 11.9% individuals and 7.6%
other customers. Demand for milk 21.9%, institutions supermarkets 18.2%, hospitals 21.9, hotels 10.9%,
shops 6.9%, individuals 14.6% and 5.5% others. Demand for cream 23.3%, institutions 9% supermarkets
4.7% hospitals 28%, hotels 7%, shops 18.7% individuals and 9 % others. Hotels have the highest demand
18.4% and demand for all the products are 52, 860.

B: Current share supplies per product by supplier.

Products are supplied in the market in order to meet market demand. Elvis dairy farm 24.3% yoghurt,
16.5% butter, 26% cheese,19.8% milk and 10.7% cream. JJ Dairies supply yoghurt 7.2%, butter 13.8%,
cheese4.1%, milk 11% and creaml4.3%. Own business supplies 35.8% yoghurt, 36.7% butter, 31.1%
cheese, 23.2% milk and27.4% cream. Other business supplies 8.6% yoghurt, 5.5% butter, 23.3 cheese,
3.3% milk and 11.3% cream. And the suppliers are able to supply 35,980 products to the market (app
f.f.6).

C: Current share supplies to maintain customers

By all supplies is the share owned by many customers by all suppliers and they are shares owned by main
customers in the market. The customers include, institutions own share of 20.3%, supermarkets 11.7%,
hospitals 12.8% hotels 19.6%, shops 10.1% individuals 11.2% and others 12.8%. Institutions own 27.2
yoghurt, 11% butter, 13.1% cheese, 22.1% milk and 23.8% cream. Supermarkets own 8.6% yoghurt, 9.2%
butter, 11.5% cheese, 15.5 milk and 11.9% cream. Hospitals own 20% yoghurt, 5.5% butter, 11.5% cheese,
19.9% cheese, 13.3% milk, 34.6% cream. Shops own 5.7% yoghurt, 22% butter, 14.8% cheese, 11% milk
and 8.3% cheese, 7.2% milk and 10.6% cream. Overall products owned by all customers are 35980 (app
6.f.c).
D: Own business

J.C business which is capable of supplying institutions with 12%, supermarkets 30.6%, hospitals 15.3%,
hotels 11.6%, shops 12.5%, individuals 19.4% and others 7.9%. Own business is capable of supplying
supermarkets with the largest percentage (30.6) of total products , 10% yoghurt 37.5%, butter 3.7%
cheesel9% and 8.7% cream. The total own business share is 10800 (app 6.f.d). JOO CREAMERS aims at
increasing its market share for yoghurt first year 12%, second year 33%, third year 20% for butter first
yearl2% second year 15% and third year 33%, third year 20%. For milk 30% first year, second year 35% and
third year 38%. The total product for first year is 10800, second year 12506 and third year is 16848 which
is to add up to 40154 (app.6.f)

2.4: COMPETITION

a) Present and potential competitors.

Competitors in the area are not active and they hold a low percentage of production and supplying of
products. They are Elvis dairy farm, Brothers dairies, IRN dairies farm and its dairies. These competitors
are located in Nairobi west. They offer same products as JOO CREAMERS but of different standards. On
sales Elvis dairies gets 18.2% profit, Brother dairies 17.5%, IRN dairy 15.1%, JJ dairies gets 10.3%, JOO
CREAMERS IS TO GET 50% hence being the leader.

Elvis Dairy Farm: Located in Ngami. It offers vanilla yoghurt, butter ice cream and yoghurt. It has 5
workers, on equipments on production of milk products. It offers discount to regular customers.

Brother Dairies: Located in Magahi. It offers vanilla yoghurt, butter, cheese and milk. Has got 5 workers
and offers credit facilities to regular customers.

Im Dairy: Its located in the taxi park. Offers milk, cream, cheese and yoghurt. It has two branches and
eight workers.

Ji Dairies: Its located in Mimosa road. It has one branch and 9 workers. It produces milk yoghurt and
cheese. It operates on 5 days a week.

Other Businesses: They are located in the surrounding. They offer fresh & mala milk, yoghurt and creams.
They offer discounts and guarantees to regular customers. They have a good number of workers.

Own Business: Its located in Kenyatta market. It offers all types of milk, cheese, butter yoghurt and
creams. It offers high quality products. Hasten workers and machines. Offers discounts to products. Offers
self services.

b) Own business market analysis

i) Internal analysis: Strength of J.C is access to high quality materials for business, employing skilled
workers who are required in production of high quality products. Distribution channels for J.C good and
ensures products reach customers in time. J.C weakness is credit offered to customers who refuses to pay
back.

ii) External analysis: Increase in customers due to production of high quality products. There is improved
relationship between suppliers and the organization.

2.5: PRODUCTION/ SERVICES DEVELOPMENT STRATEGY.

JOO CREAMERS helps in the improvement if its products quality by using skillful employees, using good
equipments, and using attractive packages. Packaging bags should contain KEBS stamps which assures
customers the product is good for consumption. The bags contain the manufacturing and expiring dates,
quality and quality of the products and ingredients used. In order for JOO CREAMERS to develop a
specialized product and provide products containing required amounts. Improvement of services quality,
through customers and sales-men.

2.6: MARKET PENETRATION STRATEGY.

A) PRICING

JOO creamers has decided to increase the volume of products. JOO CREAMERS is to improve quality by
acquiring good raw materials and using good equipments. Improving the packaging of products that
attract customers and placing a KEBS stamp on the pack. These strategies are carried out by the producing
manager. They are to be carried out in the end of the first year (App 2.7)

Products are to be priced depending on the quality and quantity. The prices should be affordable and
can change with time basing on the prices of raw materials. As per the competitors JOO CREAMERS prices
are low. If there is to be change in prices of products customers have to be informed in time. The
strategies are carried out by the marketing manager.

B) PEOPLE

The sales team include, marketing men and sales-men. They should have good communication skills.
They should ensure that customers are well traded. In order to achieve this a suggestion box is placed on
the outside of the company. To achieve this employees are motivated by rewards and appreciable
salaries. These activities are to be carried out by marketing personnel.

C) PROMOTION AND ADVERTISEMENT

i) Promotion

Promotion is to be done to workers by providing free transport, offering lunch, increasing salaries to
hardworking staff and offering gifts to workers and customers. Customers are to be given discounts on
products. Promotion products include t-shirts, business cards and prospects which contain business logo
and name.

ii) Advertisement

The business is to be advertised by using sigh-posts, business cards, t -shirts prospects through media. It
also makes different designs in packing the product to attract customers. The sales persons also advertise
products and advise them to buy.

D) DISTRIBUTION/ PLACE

i) Location: The Company is to create good relations with customers. The market is strategized near the
customers and assures of affordable working conditions. It also located in an area with proper security
and hygienic condition.

ii) Premises: The premises are to be improved by main things. The diagram below shows the distribution
channels of products. Customers can buy directly from the source or the retailers.

iii) Distribution Channel

2.7: Action plan

Item area Action activities Who to do & when Completion date

Product . Improving quality of products Production manager within 12 End of 2015
months
.Improving packaging of products

.maintaining quality of milk

. Produce variety products

Pricing .Discount to regular customers Marketing manager within 1 year Ongoing activity

•Products are categorized in different prices

•Prices of milk are to be affordable.

people •Employee skill personnel Marketing personnel with 3 years. December 2016

.Motivation of workers

.Locating suggestion box for people.

.Analyze employee performance

.Focusing to the sales
 .Listening to customers complains.

Promotion .Offering free samples By the owner within 6 months. Jan 2015 to June 2015

.Using different packings

.Offering free transport

.Increase workers salary

.Pricing Products

.Advertising the products

Place . Market of products should be near raw materials Sales person within 7 months Jan 2015 TO July 2015

.Improvement of premises

.Improve distribution channel

.Enlarging parking are for

Workers

.Locating a favorable working condition.

.Working area to be located near a police station

CHAPTER THREE
3,0: ORGANIZATION AND MANAGEMENT

3.1: People objectives

*
- JOO CREAMMERS is to give gifts and salary increment to hardworking employees.

- Introduce clear channels of communication between the employees.

- Plan to start a training programme for the employees.

- Plan to open more branches in Kenya.

- JOO CREAMERS intends to advance technology and retain its staff and employ more workers.

- Maintain team works within the employees.

 3.2: MANAGEMENT TEAM

a) Team and capabilities

JOO CREAMERS consists of the manager, production manager, account officer, lab analyst, sales
representative, cleaners and security guards .The owner is to be the manager of the enterprise. He is
qualified since he has a Diploma in Food Science and Technology. The production manager is to be in
charge of cleaners, security guards, lab analyst and production of products. Account officer is to be in
charge of business finance to ensure that business finance is effectively utilized. The manager of the
enterprise is to totally the company move smoothly that should be enhanced through staff cooperation.
(App6k) Employees should be involved in decision making. This is to enable the management team to
be able to deal with any challenges thus making the business realize maximum profit and expansion of
the business.

b) Organization structure

enterprise. The owner is to delegate authority of the production manager who ensures that the analyst
and production is done effectively. Production manager also ensures cleaners and security guards perform
effectively. Account officer also ensures that transactions are done effectively. Production manager and
accounts manager also have responsibility in controlling the business. They have to ensure there is good
relationship between them and the employees. Employees should be disciplined and honest to create a
friendly environment.

C) Managing systems

The company advertises posts through the media. The applicant is to submit or send qualifications online.
Qualified applicants are to be interviewed and the best to be trained for a specific job. The manager
delegates responsibilities to each employee. An employee should understand their roles in the enterprise
hardworking and performance. Communication is to be done through telephone, landlines, memos and
internet. For the owner to ensure teamwork, he is to involve the employee in decision making and holding
parties annually for motivation.

3.3: Staffing other personnel

a) Personnel needs

J.C team consists of manager, owner, production manager, accounts officer, lab analyst, and
receptionist/secretary, sales representative, processing team, store keeper and security guards. First year
J.C is to have 10 workers, second year25 workers and third year50 workers. The number will increase
depending on the expansion.(App6l) Qualification of employees is as follows: Manager or Owner Diploma
in food science Accounts officer: all levels of CPA and should be computer literate. Production manager
should have a diploma in food science and at least a diploma in management. Lab analyst should have at
least a diploma in micro-biology and should be computer literate. Receptionist should have a diploma in
information technology and should be friendly. Processing team should be qualified to handle food and at
least have a certificate in food science. Store keeper is to have a certificate in store keeping or book
keeping and computer literate. Cleaners and guards should be hardworking and able to speak English and
Kiswahili. (app 6).

b) Policy rules and regulations

Management teams should create rules to govern the team. They should be disciplined, punctual to work,
committed respectful and honest to ensure effectiveness. Those who are not abiding to the rules may be
sent home after being warned. Off days and leaves are to be offered to workers. The health and staff of
workers are to be maintained by offering staff training and providing requirements of the enterprise.

3.4: PEOPLE SYSTEMS

RECRUITMENT AND SELECTION

a) Recruitment

The company is to recruit employees through advertisement and media, newspapers and website.
Application letters are to be sent online or through post office. (App6mi) After recruitment an interview
should be carried out. Those qualified are taken and trained and given opportunity to work to work. The
training is to be done for two weeks before the work begins.

b) Training and development

For the company to develop, workers are to be trained annually. The main purpose of training is to boost
production. Some training includes firefighting, first aid and public relations. This enables workers gain
more skills in different departments. (App6mii)
C) PROMOTIONS, RETENTION AND APPRAISAL

Promotion/ Retention: Promotion is done of performance and good conduct. Performance is measured
mainly by attendance and hard work. J.C also facilitates proper working conditions and proper relations
between the workers. This enables retention of workers. Workers that work well are well appreciated or
even promoted.

Appraisal: This is based on the performance. It's done through forms. The apprecial is done twice
annually. The mode of rating is excellent, very good, good average and below average.(App6miii)

d) REMUNERATION AND INCENTIVES

Staff is to be paid at the end month basing on the type of job. Employees are given fair wages to enable
them meet their needs. The workers are to be paid online or electronically, especially through banks.
Remuneration fee is 320, 000 for staff and beginning Kshs 20, 000 and monthly Kshs 25, 000.

E) COMMUNICATION

According to J.C policy, staff are to conduct a meeting offer every month aim being ton discuss any
problem arising in the plant and among employees.

3.5 ; LEGAL REQUIREMENTS (ASPECTS)

For proper operation J.C is to acquire some legal requirements like business registration, tax licenses
insurance registration public health certificate and labor laws. Including NEEMA approval, single
business permit and health policy. (App6n)

The amount set aside for legal requirements is Kshs 22,000 and paid after every 12 months and renewed
in December 22,000.

3.6 ; PROFESSIONAL / EXTERNAL SERVICES

J.C outside assistance coming from institution agencies like banks, who offered loan leading payment
insurance agencies that insure both individual property, consultant agencies who offer training, auditors,
Medicare institutions ensure staff care and NHIF services, legal agencies who are lawyers and other
services like maintaining and firefighting (App66p). This is to ensure the success of the plant. The budget
and set up amount is Kshs 30, 000.
3.7; ACTION PLAN
Area Activities/ Action Who to do Date of completion
Recruitment Job advertisement Ongoing activities done Dec 2017
&selection Job application by the manager
Interviewing applicants
Orientation of qualified applicants
Assigning employees duties

Training & Preparing a training table Providing Ongoing activity done by Dec 2017
development regular trainings Training of firefights& the manager
aid
Retention and Research done on the employees After 6 months done by Dec 2017
promotion performance manager
Well performed employees to be
promoted
Ensure good working condition
Ensure good staff relations

APPRAISAL Appraisal forms used to staff Counseling After 6 months done by Dec 2016
done to workers who do not perform manager
well
Remunerations Fair payment of workers Wages End of every month By 28th every month
&incentives deposited in workers account
Reward best performers

Communication Conduct meetings every month End of every month by By 1st every month
Participation of employees in decision manager
making
Issuing of notice and memos
Responsibility role Delegation of responsibility and After seven months Dec 2016
authority by manager to staff Carrying
out orientation process recruitment and
selection

CHAPTER FOUR

4.0: OPERATION AND PRODUCTION PLAN

4.1: OBJECTIVES

i. Produce quality products in the market

ii. Purchase durable raw materials and machines for the start of the business.
iii. Use modern technology in the production of products
iv. Ensure proper processing capacity.
4.2: Facilities and capacities.

a) Capital purchase and assets

J.C is to purchase machines, and equipments for running the enterprise, modern machines are required
for efficient running of the company. These machines include: Homogenizer, Plate heat exchanger
separator and batches. The level of production depends on the type of machine. J.C is to provide quality
machines and equipments for production of high quality products. In future, the company is to expand its
business and install modern technology. J.C is also to purchase equipments in large quantities in order to
be given discounts. Expansion is to be done after every one year. J.C is to purchase cleaning equipments
and other necessary equipments like fire extinguishers. Money for production purchases start up is Kshs
1,600,000. The money for the office purchases is Kshs 80,000 and start up of Kshs 5000.

b) Stored plant lay out

J.C is divided into departments that include: production department, finance department and marketing
department. The premises contain production office. Store, laboratory, washroom, boardroom, parking
and changing room(App6qii). J.C has one store for products to be dispatched and is equipped with
refrigerators. All offices are named on the door for easy identification. The company has also one perking
room. The layout is designed to allow future expansion needs.

C) Capacity lamination

J.C is to produce throughout the year due to high demand of the products. At the start of the second year,
J.C is to increase its personnel, machines and equipments hence leading to production of high products.
The product operation cycle vary depending on demand. J.C enterprise will not need any work to be
subcontracted at the start.

4.3: OPERATIONAL/ PRODUCTION STRATEGIES

a) Larbour planning

System of working / work schedule

Time 6:00- 7:00- 7:30- 8:30- 12:00-
7:00am 7:30am 8:30am 12:00am 7:00pm
Work to be Receiving Testing Storing Processing Packing & Storing &
done milk milk milk & testing labeling distribution

The manager has prepared a working schedule for every employee. Employees are allocated to work
according to their qualifications and experience. Each worker is allocated 6 days a week and one day of
Sunday. When the demand is high casual workers are employed in order to meet customer's needs and
increase the profit.
b) Control

To achieve quality control, JOO CREAMERS is to produce high quality products whereby workers
performance is high. Employees in JOO CREAMERS have a working experience in any food company in
order to acquire the job. This is to lead to production of high quality products. The products to be
produced are to achieve a standardized mark of the KENYA BUREU STANDARD (KEBS), to assure
customers of the quality of the products produced. Workers are to be inspected by respective managers
to assure that duties are well performed. Performance evaluation, are based on work workers do.

c) Purchasing and stock control

I) Purchasing: J.C production manager is responsible for all the purchasing. Raw materials are bought
through tenders so as to earn fair prices and discounts. J.C SUPPLIERS ARE RELIABLE AND OFFER QUALITY
PRODUCTS ON TIME.

II) Stock control

Stock control: J.C is to introduce the use of inventory control record in order to ensure proper stock
control. This is to enable the store keeper to account for milk and its products in the store. The order of
stocks is to be done before the equipment is used. The products are stored in a modern store which is
specious enough to accommodate more products.

d) Costing account

The cost of products is to be based on the quality. Packaging of the products is to also determine the
products cost and delivery to the customers. J.C is to ensure all expenses of operation s are paid on time
to ensure cost effectiveness.

e) Designs and development

J.C is to produce products and pack them in different designs. Modern technology is to be applied in
future in the production of the products and distribution to customers, thus enhance high production.
Changes are to be made in order to attract customers.

4.4: PRODUCTION PROCESS

a) Production Methods

i)overall

J.C products include: milk, yoghurt i.e. vanilla & strawberry, cheese i.e. ripened & un ripened, butter i.e.
salted & unsalted and cream i.e. vanilla chocolate and strawberry.

ii)Milk processing
a) Fresh milk

The milk is pasteurized to eliminate all pathogenic micro-organisms associated with milk spoilage. It's then
accompanied by rapid cooling.

Procedure

■ Milk is pumped in the pasteurizer at 40 o C to separate cream from milk. Skimmed milk is retaken
to the pasteurizer heated to 75o C then taken to homogenizer where fat globules are broken
down, mixed well with milk to attain a homogenous product.
■ Milk is then reversed to the pasteurizer where its preheated at 82oC and kept at constant
temperature for 20mls.
■ Milk is then rapidly cooled then taken to the storage tanks.

b) Fermented milk (mala)

After treatment of milk through pasteurization some micro-organisms are used to develop some
characteristic flavor, body and its texture then packed.

iii) Ice cream production

Ice cream is frozen dairy product with agitation to incorporate air and ensure uniformity of consistency.

Ingredients

.Milk .Flavoring

.Sugar . Colour

.Stabilizer .Msnf

.Emulsifier .Water

It must contain not less than 20% milk fat and 20% milk solids. The weight of the total milk solids and the
milk fat shall be less than 8 ND 16%. Stabilizer and emulsion should not exceed 0.5% by weight.

Procedure

The mix is prepared, pasteurized for about 60% for 30 mins and homogenized at 65-77oc. The mix is
cooled to O.5o, aged to 5oC for 12 hours. The mix is frozen up to 4to 3oC THEN PACKED. Hardening and
storage of the ice cream at 23to 29oC

iv) Cheese production

Cheese is a product obtained by draining whey after coagulation of milk with harmless milk coagulation
agent under influence of desirable bacteria culture.
Procedure

■ Milk is received, pasteurized at 60oCfor 30 mins. Calcium chloride is added, starter is added at 2%
at 31oC and then rennet is added at 0.13-0.5 %.
■ Cud is formed after setting its cut and cooked up to 37-39oC, acidity 0.18-0.26%.
■ Whey is drained chedaring done at lOOof and then salting at 2% at temperatures of 75oC
■ Hopping and vacuum pressing is done then drying, packing and storage.

v) Butter production

Butter means a food made of milk or cream or both, without common salt and with or without coloring
matter containing not less than 80% by weight of milk food. Butter contains 70-80% butterfat and 20-25%
moisture.

Procedure

■ Cream selection: Only first grade cream sweet or slightly sour cream will produce good quality
butter.
■Miniaturization of cream: It's done if acidity is high otherwise cud will precipitate during
pasteurization process.
■ The soda and lime components are added to the cream
■ Cream is pasteurized to kill bacteria, yields and moulds.
■ Cream is ripened using bacteria in fermentation and churning is done until complete separation of
fat and scum occurs.
■ Salt in butter is mixed to get rid of excess water.
■ Fat soluble colors are added during churning to have uniform color.
■ Butter is packed into different packets of quantities.

vi) Yoghurt

Yoghurt is produced from high quality fresh milk free from inhibitors and preservatives which affect the
activity of starter culture. Milk for yoghurt has to be homogenized.

Procedure

■0.75% starches mixed using cold milk . Milk is then heated to 30o-40oC then mixed with 5% skim
milk powder.
■ Heating contentious up to 75oC,then addition of sugar.
■ Milk is pasteurized at 8OoC FOR 40 minutes then cooled to 42oto 42oC TO 49oc the inoculated
using aromatic culture and thermopile Heating continuous then addition of sugar.
■ Milk is pasteurized at 8OoC for 40 minutes then cooled to 42oC to 49oC then inoculated using
aromatic culture.
■ During fermentation, the coagulation should not be disrupted until yoghurt is ready.
 ■ After cooling the yoghurt up to 25oC flavors are added then yoghurt is stocked.
b) Factors affecting production

■ The business is to face certain challenges either, local national or even global. They include:
■ production equipment: Their prices differ in relation to season.
■ Raw materials: Their prices and cost is high and keep on changing
■ Cost of feed for the animals keeps on changing depending on season.
■ Outbreak of pests and deceases that lead to low yields
■ Weather facilitation like drought also lead to low yields
■ Size of the land of premises that may restrict the business expansion.

J.C is to look for ways to solve these affecting issues for the business to run smoothly.

4.5REGULATIONS AFFECTING PRODUCTION/OPERARION

The owner has to adhere to the government and regulations for one right document for the business
operations. Insurance policy for the staff workers. Some of the government regulations include. The
health trade mark act provides the firm employees with good health conditions. It provides conditions like
sewage maintenance, latrine and sanitation and also good working space for workers. Trade license is to
be obtained from the municipal council legal license to enable the firm run smoothly. In case of any
accidents in the workplace, the compensation is provided by the insurance company that is a requirement
for every employee to have one.

Internal rules and regulations are to be followed to the maximum e.g. Lateness and negligence of duties
cannot be tolerated; employees are to be promoted on merits of their performance, attendance.
Attendance should be smart and in their uniforms, no employee should delegate duties to fellow
employees, and no idle sitting at the workplace.

CHAPTER FIVE
5.1: A. OBJECTIVE

Within the first six months the business is intending to add 6 more employees.

During the third year of the business J.C is intending to open two other branches for a fair price.

b) Assumptions

I) Cash flow

i. The 3 years are balancing

ii. Rent is payable monthly
iii. sales, is spread evenly in the third year
II) Profit and Loss

i. The business is expanding

ii. Depreciation remains constant
iii. Cost of sales is increasing yearly

III) Balance sheet

- Depreciation of fixed assets is constant that the closing stock for 1 year is building for the starting
stock for the second year.
5.2: Pre -operational expenses.
Item description Amount
Capital purchase 110,000

Maintenance 2500

Rent 5000

Electricity 5000

Water 6000

Postage 11,500

Telephone 16,480

Legal fee 80.510

Professional fee 3,000

Purchase production 100.000

Office supplies 6.000

Promotion/Advertisement 96,000

Miscellaneous 7,000

Total 443,920
 b) Personal expenses
Item description Monthly estimates Allowances Total amount

Rent 80000 1 8000

Food 10,000 1 10,000

Clothing 2000 1 2000

Medicare 1000 1 1000

Transport 4000 1 4000

Electricity 1000 1 1000

Entertainment 5000 1 5000

Miscellaneous 1000 1 1000

Total 32,000 32,000
5.3: Operational expense?.

a) Operational costs

Item Amount Allowance Total

Renumeration 1500 4 60,000

Maintainance 4000 2 8,000

Rent 5000 12 60,000

Electricity 5000 2 10,000

Water 500 12 12,000

Post 2000 6 3,000

Telephone 10,000 2 4,000

Legal fee 10,000 3 30,000

Professional fee 20,000 2 20,000

Purchase production 2000 7 140,000

Office supplies 10,000 2 4,000

Promotion/advertisement 7500 2 20,000

Transport 50,000 7 52,000

Loan repayment 5000 5 250,000

Interest on loans 6000 4 20,000

Miscellaneous (3%) 6,000 2 12,000

Total 207,000 705,500

5.4: Profoma cash flow statement

* Summary for 3 years

Yearl Year 2 Year 3
Beginning cash balance 409,500 409,3500 790,3500
Cash sales 4800,000 5040000 5160000
Loan 700,000
Owners equity 500,000
Total cash available 640,9500 9133500 13063500
Expenditure
Construction 100,000
Rent 75,000 60,000 60,000
Post 16,000 6,000
Telephone 46,000 36,000
Electricity 85,000 60,000 60,000
Water 12,000 12,000 12,000
Maintenance/Repair 80,000 130,000 330,000
Advertisement/promotion 126,000 96,000 96,000
Remunerations 320,000 360,000 360,000
Legal fees 66,000 54,000 54,000
Professional fees 51,000 36,000 36,000
Purchase of raw materials 128,000 260,000 2,200,000
Office supply 112,000 172,000 72,000
Transport 26,000 18,000 18,000
Interest on loan 120,000 120,000 120,000
Loan repayment 600,000 600,000 600,000
Drawings 24,000 120,000 220,000
Capital purchases 700,000 120,000 120,000
Miscellaneous 99,000 84,000 150,000
Taxation 35% 20,000 25,000 10,000
Total expenditure 2806500 2327000 4480000
Net surplus/Deficit 3603000 68086500 8585500

N/B,spread sheet details refer in (app 6r iii)

 5.5: Proforma profit and loss statement
Yearl Year 2 Year 3
Sales 4800000 504,0000 516,0000

Cost of sales 1,200,000 1,800,000 216,0000

Gross profit/loss 357,6000 3,000,000 289,8000

Expenses cost 60,000

60,000 60,000
Depreciation 240,000
240,000 240,000
Remunerations 30,000
30,000 30,000
Maintenance 60,000
60,000
Rent 60,000 60,000
60,000
Electricity 60,000 12,000
6,000
Water 12,000 6,000
36,000
Postage 60,000 36,000
96,000
Telephone 36,000 96,000
18,000
Advertisement/Promotion 96,000 18,000
54,000
Transport 18,000 54,000
36,000
Legal fees 54,000 36,000
84,000
Professional fees 36,000 84,000

Miscellaneous (2%) 84,000 792000 792000

Total expenses 79,2000 24,30000 2296000

Profit before taxation 2784000 164,500 150,000

Cumulative profit 208,000

 5.6: Proforma balance sheet
Item description Start up Year 1 Year 2 Year 3
Assets at fixed
price 1,200,000 1,400,000 1,690,000 1,590,000
Building 4000,000 520,000
Capital purchase (50,000) (50,000)
50,000
Less depreciation
Total 1,600,000 1,870,000 1,640,000 1,540,000
b) Current assets
Stock 1,280,000 1,280,000 1,280,000
Office supplies
Less taxation 40,000 72,000 72,000
Debtors (10,000) (144,000) (220,000)
Total 9,000 80,000
1,208,000 1,140,000

c) Liabilities Loan 7,00,000 700,000 650,000 600,000

Repayment (50,000) (50,000) (50,000)

Creditors 300,000
Total 700,000 650,000 600,000 350,000
d) Capital
500,000 500,000 280,000 1,400,000
Owners equity
Less drawings (240,000) (240,000) (24,000)
Cumulative
Total 1,310,000 1,242,000 1,208,000 1,140,000
5.7: Breakeven analysis

Based on 1st year sales of Kshs 4,800,000

Item description Fixed cost Variable cost Total cost
Cost of sales 4,800,000 4,800,000
Remuneration 1,201,000 1,201,000
Maintenance 4500 45,000
Rent 60,000 60,000
Electricity 30,000 30,000
Water 20,000 20,000
Postage 6,000 6,000
Telephone 40,000 40,000
Transport 8,000 8,000
Professional fee 20,000 20,000
Office supplies 60,000 500
Loan interest 5000 450,000
Depreciation 450,000 1000
Legal fee 1000 70,000
Advertisement 70,000 50,000
Miscellaneous 50,000

120,6000 610,000 6866,000

Breakeven point= FC (Cl-Y-C)

120, 6000/1-6-1-.000

4, 8000, 000

6,010, 000

= 12.5208

NB : Refer to BEP Chat

 5.8: A) PROFITABILITY RATIOS
J.C identifies its financial rates strengths by comparing the items in its balance sheet and those in the
profit and loss. The finances generated are as follows:

Type of ratios 205 206 207

Industry menu Interpretation (Comparison indication)

Working capital W 4.25 2.62 1.32 This shows the ability of the enterprise
c=CA/C.A to meet its liabilities from current
assets over 3 years
Quick ratio Q r =C.A- 2.33 2.2
2.25
5/B
Asset turn over 50 70 40 RD is facing limited assets over the 3
A.T.D= Sales/ T.A Times Times Times years therefore need to be increased.

Profit gross sales 69.5 75.6% 80.2% JOO CREAMERS management is good
NP=NPA100/sales since the business is increasing every
year hence utilizes material

Returns owners 3% 15% 25% The business meets its liabilities since
quality gross there is increase in net profit percent.
profit*100 Owners
The business is making an increase
equity
profit

Operation ratio OR=T 15% 45% 60.5% The operation ratio is reducing over the
Cost*100/sales 5 years which shows the business has
805% 72.5% 69.5% attained its goals

5.9: B) DESIRED FINANCING

For the business to run and manage the business operation effectively, he has selected Equity Bank as the
source of loans. The Bank is located at Kenyatta Market, Ngumo area.

From the bank the owner of the business gets a loan of Kshs 700,000 which is 60% of its capital required.
For the owner to source the loan the business has to be opened and registered.

Equity Bank to the owner of the business seems to be the checkpoint in terms of charges imparted on
loans. The owner can deposit money to Equity and withdraw depending on the situation. The bank lends
overdraft to the account holder.
The security to the loan is the business plan which the owner must show the operation of the business
and the owner's equity should be indicated as how much contributed to the business.

5.10: FINANCING ACTION PLAN.

Item description Action/Activities Period &by who Completion/deadline

Pre-operational First 4 months by general No deadline
Analyzing and paying for manager
pre-operational expenses
Operational express Analyzing and paying for During operation by the No deadline
operational expenses general manager

Profit and loss Prepared for profit and Yearly by the accountant No deadline
loss for year 1 and 2

Balance sheet Preparation of balance After 6 months by the No deadline

sheet i.e assets, liabilities accountant
and capital outcome.
Preparing balance sheet
for year 1 and 2

D.E.P Distinguish fixed and Monthly by general No deadline

volume cost. Calculating manager
break even cost.

Performance During operation by No deadline

Measuring how the general manager
business can turn into
assets sales showing how
to control the expenses.
Capitalization Pre-operation start up During the starting of the No deadline
expenses. business
Setting a schedule foe
disbursement.