CHAPTER ONE

EXECUTIVE SUMMARY

1.0.0 INTRODUCTION
This chapter gives the summary of all activities that have been carried out in the
business plan. The name of the business will be WAN COMMUNICATIONS and will
be dealing with selling, installation, repair and maintenance of communication
equipment. The form of a business will be sole proprietorship owned by EDWARD
OMONDI KASUKU.

1.0.1: BUSINESS DESCRIPRTION

The proposed business will be WAN COMMUNICATIONS address will be:-
WAN COMMUNICATIONS
P.O.BOX 32,
KAPSABET
EMAIL:-edwardomondi84@yahoo.com
It will also buy and sell those hardware components to customers. The owner will
ensure that services are offered and goods produced are of high quality and also the
business should meet legal requirements.

1.0.2: BUSINESS LOCATION

The business will be located in Kapsabet Town along. The form of business will be
sole proprietorship and will offer quality services that will justify the time and money
spent on it.
The business is well located and therefore cases of insecurity, lack of communication
and in fracture will hardly affect the running of the business. Therefore WAN
COMMUNICATIONS will operate smoothly without much interruption and tense the
business will have high potential prosperity.

1.0.3: MARKETING AND PROMOTION STRATEGY

The business will ensure good relationship with the local, town dwellers, visitors who
come to visit the town i.e. Tourist. Due to this good relationship, the business will earn
a good name across the country therefore marketing computer hardware services and
products will probably be done locally and nationally.

1
The business will advertise its products through:-
i. Posters.
ii. Television stations.
iii. Radio.
iv. Newspapers.
v. Magazines.

Due to high competition in the market WAN COMMUNICATIONS will ensure that
employees will be motivated through:-

a) Increasing salary as per their output

b) Rewarding hardworking employees.

c) Ensuring numerous training

d) On time payments
e) Reduction of robbers of time

1.0.4: ORGANIZATION AND MANAGEMENT PLAN

WAN COMMUNICATIONS will be owned and managed by EDWARD OMONDI

KASUKU who will the owner and manager of the business. In support to the owner,
an office assistant will be employed. In the repair section and maintenance of the
machines, a technician will be responsible. Also he requires the counter attendant to
serve as a receptionist and receive payments. Also a driver will be required incase of
transportation of products outside the business premises. For smooth running of the
business, the enterprise will incorporate the use of remote monitoring i.e. the business
will use services burglar detect events such as motion or a sudden impact e.g. breaking
glass. This will be for ensuring customers security while in the enterprise.

1.0.5 OPERATIONAL PLAN

WAN COMMUNICATIONS will sell / offer quality services according to the

requirements of existing market. Services offered by the business will be categorized
according to the type. The prices will also vary depending on the type and amount of

2
services offered. WAN COMMUNICATIONS will ensure that all people despite their
status are catered for. Hence the business will offer services at a fair price to its
customers.

1.0.6: FINANCIAL PLAN

WAN COMMUNICATIONS will require KSHS. 1,000,000.00 of which KSHS.660,
000.00 will be loan from bank and KSHS.340, 000.00 from owner’s savings and
relatives contribution. The management will ensure that the capital is well utilized and
will have to operate within the financial limit. Records will be well kept for future
references.

3
 CHAPTER TWO
BUSINESS DESCRIPTION

2.0.0 INTRODUCTION
WAN COMMUNICATION will be a sole proprietorship form of business, operated by
Edward Omondi Kasuku. It will be located in Kapsabet Town Centre, opposite the Bus
Terminal. It will operate by the name WAN, which is an abbreviation for the phrase
“Wide Area Network Communication.”
The official contacts will be:-

WAN COMMUNICATIONS,
P. O. BOX 32,
KAPSABET.
TELEPHONE: - 0729760112
E-mail: edwardomondi84@yahoo.com

2.0.1 THE SPONSOR

The business will be owned by Edward Omondi Kasuku. He was born in 1985 in
Muhoroni Sub location, Chemelil Location of Nyando District in Nyanza Province. He
attended Red Towers Nursery School and Nandi Township between 1990 to1998. He
then sat for the K.C.P.E and attained 451 marks.
In 1998, He joined Ngere High School for secondary education. After four years, He
successfully completed his education, scoring a mean grade of B minus. During His O-
level education, he was participant in scouting activities.
In 1999, he joined Chemelil Sugar Company as a casual worker. He also helped his
parents in a family Boutique Shop where he acquired entrepreneurial skills. He later
joined Celtel Kenya (now Zain) Kapsabet Branch as a sales representative. He was
then transferred to Eldorate where he worked until when he was recruited into the
National Youth Service.
On 20th April 2006, he reported to N.Y.S Training College in Gilgil. He then under six
months Para-military Course where He was taught;
Foot drills
Fire fighting
Disaster Management
First Aid
Guidance and Counseling

4
On completion, he was posted to N.Y.S Athi River Filed unit where He served as a
radio operator for one year.
In January 2008, He joined N.Y.S Engineering Institute to study Diploma in
Telecommunication Engineering, for three years.
Despite being trained as a Technician, Edward would like to use gathered and
sharpened in various enterprises to start up and run a business successfully, exploit the
available natural resource in order to boost his income, as well as create employment
in the telecommunication industry.

2.0 .2 MISSION STATEMENT

To own a growing, financially successful business through the exploitation of available
resources to increase sales and excellent profit achieved through fast and quality
services to all customers at all times.
2.0.3 BUSINESS NAME AND LOGO
The name WAN communications is derived from the phrase “Wide Area Network
Communications.” The abbreviation is easy to pronounce, clear and can be
remembered. It describes communication over a wider topographical area, a service
that the firm will offer to its customers. It is thus deemed best as it relates to the
communication industry in which the business belongs.
The business logo will be as on the cover page.
2.0.4 BUSINESS CONTACT AND LOCATION
The business venture will be situated in Kapsabet Town, opposite Kapsabet Bus
Terminal. This location is selected as it is a central point in the Town. It is also
accessible to all the travelers to and into the outskirts of the Town. It has better
infrastructure e.g. electricity. The level of competition will be relatively low, since
there are few electronic and communication firms already established within this
vicinity.
Business contact:
WAN COMMUNICATIONS,
P. O. BOX 32,
KAPSABET.
1St FLOOR KOSGEI PLAZA,
TELEPHONE 0729760112
E-MAIL: edwardomondi84@yahoo.com

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2.0.5 FORM OF OWNERSHIP
The enterprise will be a sole-proprietorship. This form of business will be chosen as it
has the following
Advantages
(i) Easy to start.
(ii) Needs few legal requirements to initiate.
(iii) Be the sole decision maker.
(iv) Enjoy all the profit.
(v) Enjoy being his boss.
(vi) Faster decisions making.
Disadvantages
(i) Contribute all the capital.
(ii) Bear all the risks.
(iii) No specialization

2.0.6 TYPE OF BUSINESS

WAN communication will be registered and operated as a retail shop. It will majorly
deal in selling of consumer electronic and telecommunication equipments.
Repair and maintenance of these equipments will also be available to diversify on sales
earn the business more.
2.0.7 INDUSTRY
This venture will fall under Telecommunication and Electronic industry, under the
umbrella of Ministry of Communication. It is regulated by the Communication
Commission of Kenya (CCK).
Historical background
In the ancient days, this industry used fire and smoke, drum beating, messengers, signs
and signals to effect the transfer of information at a distance. When electronic vacuum
tubes were invented, circuits which could replace the above mentioned traditional
methods of communication were developed to revolutionize the industry.
Then the transistor technology evolved that led to the development of the first
electronic Morse code Key, Telegraph and Telephone devices. Due to growing
technology and research carried out in the Bell Laboratory, the transistors were
developed into smaller chips with enormous number of transistors. I.e. Integrated
circuits (IC). These led to further development and enhanced communication rate as
well as distance through wireless devices.

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 Today, the industry uses 3G technology with fairly robust gargets, enhanced data and
voice communication speed of communication. These devices support several
communication modes unlike the previously used. The key players in this industry
currently are:-
(a) Computer firms e.g.
(i) Star-Com
(ii) Hp
(iii) Dell
(iv) IBM,
(v) Huawei,
(vi) Alcatel
(vii) Eriksson
(viii) Siemens e.t.c.
(b) Telecommunication firms
(i) Safaricom
(ii) Zain
(iii) Orange
(iv) Telecom Kenya
(v) Essar Kenya (YU)
(vi) Wanainchi online
(vii) Kenya Data Networks (KDN)
(viii) Access Kenya
(ix) Africa online
(x) Broadcom ltd, e.t.c.
(c) Radio and T.V station such as;-
(i) K. B. C
(ii) Kiss100
(iii) Nation Media
(iv) Royal Media Services e.t.c.

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2.0.8 BUSINESS GOALS AND OBJECTIVES
a) Short term
To make profit, enhance high level of ethics, excellence, innovation and integrity by
being courteous to all customers at all times.
b) Medium
To improve service delivery in the industry by utilizing the new technologies that are
more efficient in cutting operation costs and bringing better services to customers.
c) Long Term
To be a premier firm that introduces new technologies to the market, with a balanced
approach towards people, offer quality services and to achieve wide profit margins.

2.0.9 PRODUCTS AND SERVICES

The business will deal ion such product and service as listed below. Any other new
product and technology invented will be introduced into the market as soon as it’s
unveiled.

GOODS

a Office desktop phones

b Mobile phones

C Phone Covers

d Phone Batteries

e Phone Chargers

f Memory Cards

h Radiation Reflectors

i Network SIM Cards

j Networking Cables

k Routers

l Switches And Hubs

m Modems

n U. S. B and Patch CORDS

o U. P. S

8
 SERVICES

a Repair

b Maintenance

c Configuration of new equipments

d Networking

e Installation of antennae

2.1.0 JUSTIFICATION OF THE VENTURE

There exist a business opportunity within the location of the venture due to such
factors as:
i) Low competition
Since the business will be located within Kapsabet bus Terminal that has no such
similar strong and established business.
ii) Security
The chosen area has adequate security due to the closely established Kapsabet police
post which is just 500metres away. The owners will also contract a security firm to
guard the holdings at night.
Customers will also feel secured as the shop will be in an open place next to other
ventures and is near the Bus Terminal.
iii) Location of the business
It will be strategically chosen opposite bus terminal in order that it be accessible to all
traveling into or from the out skit of the town other than serving the habitants of
Kapsabet Town market hence more sales.
iv) Bright future of the industry
Due to the entry of several internet and mobile communication providers into the
industry, these firms are expected to extend their services to grass root level. The
sponsor intends to exploit this chance and sell to the consumers all devices required in
order to enjoy the coverage that will be provided by the firms and make profit out of
these sales and servicing as well as maintenance of their equipments.

9
2.1.1 ENTRY AND GROWTH STRATEGY
a) Entry
The proprietor will exploit the fact that competition is healthy to customers. He will
sell goods and offer services at a lower cost and charge compared to its competitors,
but at a profit. All the prices and charges will be reasonable with all customers needs
catered for to maintain and attract more since the business needs to grow. Goods and
services will be of best quality. There will be special opening offers, extensive
advertisements through road shows, billboards, handbill, and mass media.
b) Growth Strategy
The owner will facilitate the growth by expanding the market through sales
representatives and distributors to sell items directly or indirectly to the outside market
for two years. He conducts frequent market survey by approaching his competitors as
clients and accessing their products and service demand. Any realized and unsatisfied
demand will be exploited for the growth of this venture.

In future, he will install computerized systems to improve efficiency at work. This will
result in:

 Improved service delivery.

 Enhanced record keeping.

 Reduce number of files kept within the premises.

 Enhanced data control and security

After 15years the owner wishes to expand to limited company, then to a multi-national
firm.

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 CHAPTER THREE
MARKETING PLAN
3.0.0 INTRODUCTION
This chapter outlines how the proprietor will popularize the business and his plans on
handling the already existing competitors and customers to ensure success.
3.0.1 CUSTOMERS
(a) Learning Institutions
Will include schools with computer laboratories which are:-

 Kapsabet Boys,

 ST Mary’s Girls

 ST Peter’s Boys.

 Rocky Computer College

 Modia Computer

 Yahweh Bible School.

These will include Hostels, Restaurants and others offering conference facilities
e.g.

 Sunshine 1994

 Keben Hotel

 Kapsabet Hotel and Guest houses.

(b) Companies

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These will includes firms within the defined market that will require communication
links for effective day-to-day business. Are to include:-
(i) Chebut Tea Factory
(ii) Kamobo Tea ltd
(iii) Nandi Tea Factory
(iv) Jego Milk Processing Plant
(v) Timsales sawmill
(c) Commercial customers
These are to include existing cyber café and communication beurrals. Examples
identified are: -

 Faith Cyber Café

 E-land Cyber Café

 Upland Communication

 Motherland Computers.
(d) Individual Households
These will include any customer other than the above outlined, who require products
and services in-order to satisfy personal communication needs. There are expected to
purchase more during November to January, May and August.

3.0.2 MARKET SIZE AND SHARE

Since the venture is new, it’s intended to command 32% of the total market size. The
rest shared among the competitors.
The total population of the market is 34401 persons (according to the National census
carried out in August 1999.) The business therefore aims to serve;-

32/100×34401 = 11,009 people

The pie-chart below helps to show the market share for the intended business and the
competitors.

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 TOMCOSSAFAR
DISTRIBUTORS
Market size is expected to grow with advancement in information technology and
penetration of the market by new mobile telephone communication companies such as
Orange, Telecom Wireless and YU.

3.0.3 COMPETITION
The venture will face competition mainly from:-
(a) TomCos Safaricom Distribution
This competitor is located 420 meters from the intended premises.
(b) Burgei Communication
TENOKWEBEURRA
This is situated just opposite the enterprise. The proprietor of WAN Communication
worked there as an employee. It’s old and established but not expanding over a long
22%
period of time.

(c) Tenokwe Communication Beurral

This is a recently started enterprise. It is located 200 meters away. It has young staff.
However, they do not market products extensively. The competitors are mainly
focused on sale of products. Their strength may be estimated as:-
(i) Large stock
(ii) Computerized services
(iii) More employees
On the other hand, their weaknesses are as follows;-

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(a) Reluctant staff at the customer desk.
(b) High prices and charges
(c) Lack of professional Technicians
(d) Time unconsciousness in product and service delivery
(e) Delay in adopting new technologies

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 COMPETITOR ANALYSIS TABLE

COMPETITOR STRENGTH WEAKNESS OPPORTUNITIES THREATS

• Established • Lack aggressive • Existing • High taxing

• Popular • Specialized dealer of Safaricom only demand rate
TomCos Saf. • New product in
Distributors the market
Burgei • Established • Very expensive products • High market • High taxing
Communication • Good equipments • Specialized dealer in Zain products demand policies
• Many employees only
Tenokwe • Young and • Lack publicity • Skilled • Offering low
Communication energetic staff • Very young business employee quality product
Beurrals who is readily from
available competitors
resulting into
mistrust by
customers

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A. Coping with competition
Wan Communication will diversify in terms of products and services to meet all the
communication needs of all customers, unlike the competitors who are specialized on
only one product; either Zain Kenya or Safaricom products.
There will also be related services offered to customers and such to include;-
(a) Structure and Cabling
(b) Networking
(c) Configuration and setting
(d) Maintenance and repair

B. Coping with competitors

The venture will ensure it survives by using the competitors’ weakness to win in the
market in the following ways:-

(i) High Prices and Charges

• The business will reduce prices on goods and charges on services by at least
2% of that charged by the competitors so as to woo a large number of
customers.
(ii) Delay in services and product delivery

• The business will have adequate number of motivated staff, who is energetic
enough to actively serve all customers at immediate time of need.

• The staff will also possess the relevant technical skills.

(iii) Poor quality of goods and services

• The business will be offering original products and high quality services.

• Where necessary the product will be tested for the customers for free before
carrying it way from the premises to assure them of the quality and
effectiveness.

• After sales services/ guarantee will also be provided for goods bought at the
enterprise on specified terms.

(iv) Poor management and public relation

• The management will constitute skilled personnel to ensure smooth

administration.

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• Computerized systems will also be adopted for high efficiency.

(v) Operation problems

• The proprietor will ensure there is proper coordination and handling of all
business activities to ensure smooth and continuous running of the firm. This
will ensure the customers are attended to all seasons.

3.0.4 LOCATION AND MARKETING

Wan communication will be situated at Kapsabet Bus Terminal, Kosgei Plaza first
floor. The location has the advantage such to include:-
(i) Central point thus accessible to many potential customers for all over the
intended market.
(ii) Good security to make the customers buy from the enterprises at any time of
the day.
(iii) Open and thus can be located by potential customers with ease.

3.0.5 SERVICE STRATEGY

The owner of the business will give discounts to customers as a means of relaying
customers. Discounts will be based on quantity that the customers will purchase i.e.

i. Quality products and services

The owner of the business will provide quality products for sale. She will not deal with
counterfeit goods, which are cheaper. She will rather sale authentic merchandise at a
reasonable price.

ii. Credit facilities.

The owner of the business will offer credit facilities to customers whom she trusts and
well known to her. Credit facilities will be limited to certain amounts depending on the
customers.

iii. Proper management

This is meant to ensure that the customers puts the most skillful workers in the
business who will render efficient services to their customers by proper delegation of
duties to workers and ensuring that each participates fully for the business property.

iv. Advertising and publicity

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This will be through advertising the business in the Daily Nation and Standard Nation
magazines, signboards to create awareness of the business existence, product and
services offered and create anxiety to customers who want to know what is being sold
and its uniqueness.

v .Company Uniform

Employees shall report early to work, at workplace they will wear uniforms bearing
the name “WAN COMMUNICATIONS, WE DON’T JUST SELL, WE CONNECT
WORLDWIDE”.

vi. Evaluation of Market.

He will be also able to scan the environment of the market and know the products that
are fast and slow moving and prioritize them accordingly and know the customers
favors to cater for them effectively.

3.0.6 PRICING STRATEGY

WAN Communication will determine such prices and charges on goods and services to
ensure the firm;-
(a) Earns better profit margin.
(b) Provide adequate after sales services.
(c) Gainful credit terms.
(d) Allow discount on certain goods and services to customers.
To determine such strategies, the proprietor will consider factors as;-
(i) Prevailing of demand in the market for the goods and services.
(ii) Type of customers.
(iii) Seasonal changes.
(iv) Time of the day when the service is offered (day or night.)
(v) Location of the customer’s premises.
(vi) Use of competitive pricing.
The pricing structure will consider short term credit to customers classified under
learning Institutions and companies and such that meet the legal requirement for this
kind of contract.

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Discounted prices will also be given to all customers at appropriate time, especially on
cash purchase of goods during festive seasons.

3.0.6.1 PRICE LIST

GOODS PRICE (Ksh)

a Office desktop phones 3,000

b Mobile phones 2,900

C Phone Covers 100

d Phone Batteries 250

e Phone Chargers 150

f Memory Cards 450

h Radiation Reflectors 70

i Network SIM Cards 50

j Networking Cables 1,500

k Routers 3000

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l Switches And Hubs 1,500

m Modems 2,999

n U. S. B and Patch CORDS 300

o U. P. S 1,800

Laptop power Adopters 2,500

SERVICES Charges (KSHS)

a Repair 1,500

b Maintenance 2,500

c Configuration of new equipments 1,500

d Networking 1,500

e Installation of Antennae 2,500

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 3.0.6.2 SALES TARGET TABLE FOR 1st YEAR 2011

ITEM JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL SALES
Office phones - 8,400 9,200 10,700 10,000 10,800 10,500 12,000 11,200 11,500 11,650 11,700 117,650
Mobile Phones 3,800 - 4,100 5,500 5,800 6,000 6,700 7,000 6,900 7,400 7,400 7,500 68,100
Phone Batteries 300 1,250 1,500 1,750 1,800 1,500 1,400 1,800 - 1,250 1,400 1,500 15,450
Phone Chargers 150 900 - 1,200 1,100 1,000 900 1,200 1,500 - 1,500 1,200 10,650
Memory Cards 450 1,300 1,200 2,000 - 650 500 1,200 1,300 1,500 - 1,300 11,400
Radiation Reflectors - 200 500 - 400 150 - 200 500 400 251 400 3,001
Networking Cables 1,500 - 1,500 3,000 3,200 - 2,500 3,200 2,800 3,200 3,000 - 23,900
Routers 3,200 - 6,200 7,200 7,000 6,400 6,200 7,000 7,200 6,200 6,400 3,200 66,200
Switches $ Hubs 2,200 6,600 - 5,000 5,800 5,400 5,200 5,800 5,400 2,200 - 5,200 48,800
U.P.S 2,900 - 2,400 - - 2,600 - 2,900 - - 2,400 - 13,200
Modems 4,000 7,000 6,000 7,000 7,200 8,000 7,200 7,500 7,500 12,650 12,500 11,000 97,550
Repairs - 2,350 - 2,880 2,000 3,000 - - - - - 3,600 13,830
Maintenance - - 2,600 2,500 2,500 - 2,500 2,500 3,600 2,500 2,500 2,500 23,700
Configurations 1,500 1,500 5,500 1,500 - 1,500 1,500 - 2,600 2,600 2,800 2,500 23,500
Installation - 5,500 - - 5,500 7,100 5,500 5,500 5,500 7,500 7,100 7,500 56,700
TOTAL 20,000 35,000 40,700 50230 52300 54100 50600 57800 56000 58900 58901 59100 1,594,281.00

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 3.0.6.3 SALES TARGET TABLE FOR 2nd YEAR 2012

ITEM JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
SALES
Office phones 13,800 13,500 12,500 13,000 12,800 13,800 15,480 15,400 17,000 16,500 16,900 17,400 178,080
Mobile Phones 8,500 9,000 9,700 10,500 11,000 11,700 12,800 12,980 13,800 14,000 14,800 15,000 143,780
Phone Batteries 2,000 1,700 - 1,800 - 2,000 2,900 - 3,800 3,600 3,800 3,900 25,500
Phone Chargers 1,500 1,200 1,500 1,500 1,200 2,050 1,500 - 1,200 1,450 - 13,100
Memory Cards 2,500 2,800 3,200 2,900 3,700 - 3,400 3,800 2,900 3,400 3,800 3,950 36,350
Radiation Reflectors 400 - - 740 1,200 - 700 1,200 1,280 - - 1,200 6,720
Networking Cables 3,800 3,650 3,978 2,992 - 3,899 4,049 3,848 4,399 3,800 3,900 4,066 42,381
Routers 3,200 3,800 3,600 3,400 3,800 4,000 3,200 3,800 4,000 4,300 4,500 41,600
Switches $ Hubs 2,200 3,000 4,700 6,600 3,400 3,000 6,600 4,400 6,600 6,500 - 6,800 53,800
U.P.S - - 3,800 3,600 3,200 3,400 - 3,200 3,600 - 4,200 4,300 29,300
Modems 7,500 8,000 7,500 7,200 7,500 8,000 12,000 11,000 12,900 12,000 12,500 13,200 119,300
Repairs 3,600 3,800 - - 4,573 3,800 4,500 - - 3,633 3,972 4,100 31,978
Maintenance 2,700 2,600 - 3,200 6,500 5,700 - 5,600 5,700 4,000 3,900 - 39,900
Configurations 2,800 3,200 3,800 6,100 5,000 7,500 6,100 - 6,000 6,200 6,500 53,200
Installation 7,500 6,500 7,500 7,500 - 5,500 13,000 13,000 13,000 13,700 13,500 9,750 110,450
TOTAL 62,000 62,750 61,778 63,432 65,273 70,999 84,979 85,228 88,779 92,333 93,222 94,666 2,005,139

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 3.0.6.4 SALES TARGET TABLE FOR 3rd YEAR 2013

ITEM JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
SALES
Office phones 17,45 18,00 18,40 18,20 19,30 19,700 18,800 19,900 19,900 20,200 21,300 26,900 238,050
0 0 0 0 0
Mobile Phones 15,00 15,10 15,40 15,20 16,50 17,200 17,300 17,600 17,900 18,300 19,600 24,900 210,000
0 0 0 0 0
Phone Batteries 3,900 3,800 4,200 4,500 4,500 - 4,400 - 4,500 4,700 5,300 6,950 46,750

Phone Chargers - - 2,800 - 3,000 3,200 3,300 3,700 - 3,200 4,500 6,800 30,500

Memory Cards 3,950 3,900 4,300 4,500 4,800 4,900 4,700 4,900 5,000 5,100 6,200 7,950 60,200

Radiation Reflectors 1,200 - 1,420 1,200 - - 1,400 1,680 1,600 1,630 - - 10,130

Networking Cables 4,066 4,040 - 4,262 4,440 4,783 - 4,800 4,900 5,370 5,987 8,978 51,626

Routers 4,500 4,200 4,800 - - 4,600 4,800 5,200 5,100 - 5,600 7,500 46,300

Switches $ Hubs 6,800 6,500 6,800 6,700 6,800 7,000 6,500 7,200 7,300 7,500 7,900 9,600 86,600

U.P.S 4,300 - - 4,500 4,600 - 4,000 - 3,500 4,600 4,800 6,400 36,700

Modems 13,20 13,30 13,50 13,40 13,70 13,800 14,100 14,700 14,600 15,100 15,200 18,900 173,500
0 0 0 0 0
Repairs 4,100 4,400 4,200 4,300 4,200 4,240 4,344 5,745 5,433 5,936 6,000 7,787 60,685

Maintenance - 2,500 4,300 4,800 4,900 5,000 - 5,500 5,600 - 5,800 7,300 45,700

Configurations 6,500 6,500 5,600 - - 4,900 5,100 - - 5,400 5,400 7,100 46,500

Installation 10,89 9,900 12,50 11,60 12,60 12,900 12,700 12,900 13,000 13,200 13,300 16,500 151,990
0 0 0 0
TOTAL 95,85 92,14 98,22 93,16 99,34 102,22 101,44 103,82 108,33 110,23 126,88 163,56 2,895,231
6 0 0 2 0 3 4 5 3 6 7 5

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3.0.7 PROMOTION AND ADVERTISING
During the early stages will advertise goods and services extensively to create awareness of
its existence to the general public. It will also employ such techniques to influence the
attitude and behavior of customers to buy more from this business.
This will be achieved:-
(i) Using Posters
Several posters will be strategically placed within the intended business market location.
These posters will carry such information as the direction of the business, product and
services offered, the special offer prices and charges for goods and services on discount.
(ii) Through sign Boards
A sign board will be designed to show the location and direction of the business to potential
buyers. It will strategically, few meters from the business premises. (Kapsabet- Kakamega
junction will be the chosen site for this.)
(iii) By using Mass Media
Advertisement will be through TV and radio. This will be done in both Kiswahili and the
local dialect. Magazines and newspapers will also be used to show price lists and pictorials of
exact products as well as special offers and discounts available.
(iv) Through Mails and Hand bills
This venture will print handbills and give to the general public to provide them with the
information on the products and services. These will be mailed to several institutions within
the market. The handbill will contain the business address, phone number and location.
(v) Use of Music
The business will budget for DVD changer that will be used to promote the business. It will
be played occasionally at a tone to attract music lovers to the business and then inform them
of our products by the sales team.
Advertisement and promotion budget

FREQUENCY COST (Ksh.)

Calendars Beginning and end of the year 4,000.00

Posters Monthly 500.00

T- shirts Sports occasions and promotions 5,000.00

Local Magazines Quarterly 2,000.00

Road side shows Quarterly 12,000.00

TOTAL 23,500.00

24
Evaluation of effectiveness of promotion and advertisement activities
The proprietor will assess the effectiveness of all techniques employed in all activities aimed
at influencing buying habits of prospective customers and improving sales through:-
(i) Assessment of cash-in-flow and daily sales
(ii) Assessment of profit margin
(iii) Increase in growth of the total market share
(iv) Expansion of the total market size

3.0.8 DISTRIBUTION STRATEGY

Customer will be served directly from the business premises. Any information on the
operation of the equipment will be explained to the customers at the premise. Where
necessary, the user manual will be explained to the customer by the sales team/ technician.
The business will also put in place transportation for customers who buy bulky equipments.
However, transportation problems are anticipated especially during rainy seasons since roads
to the outskirts are not all weather roads. The business will also consider the first customer to
buy in bulk first.
3.0.9 SALES TACTICS
The venture will use various methods to obtain direct sales, satisfy customers’ needs,
enhance sales appeal, recruit and retain the sales force The tactics will include:-
(a) Offering credit facilities
The business will offer credit learning institutions and companies. They will be given one
month to liquidate their debts.

(b) Quantity discount

Customers who will buy products more than one or of price more than Ksh 2500 will be
offered a discount of at least 10%

(c) Quick services

The business will offer quick services to avoid queuing up of the customers, unlike in the
competitors’ premises. Larger number of customers will therefore be served, this way
promoting the general business sales

(d) Staff Motivation

25
 The staff will also be motivated and good working conditions provided. This will
promote there attitude towards there duties.

(e) Good communication

Better communication between the employees and employer will also be enhanced for better
sales. Staff recruited will be of enough relevant competence and work in shifts to avoid
overworking. Their salaries will be paid on performance basis. All appointed distributors and
sale representatives will receive discounts based on total sale made per person.

CHAPTER FOUR

ORGANIZATIONAL AND MANAGEMENT PLAN

4.0.0 INTRODUCTION
This chapter defines and elaborates ranks, responsibilities and qualification of personnel in
the business enterprise from junior to senior staff. It also has details on remuneration, staff
appraisal and development as well as communication within the organization.
4.0.1 BUSINESS MANAGER AND QUALIFICATION
The owner of the business will be the general manager. He will be the highest in hierarchy
and will have such duties and responsibilities as:-
Duties and responsibilities
(a) Marking business decisions.
(b) Planning and organization.
(c) Coordinating activities within the business.
(d) Supervision of business chores.
(e) Delegation of responsibilities.
(f) Fixing employees salaries.

26
(g) Set rules and regulations to be followed.

 He will ensure the business open and closes in time.

 Ensure good public relation.

 Will be in charge of procurement and will be the highest in hierarchy.

Qualifications
 Must be 25 years and above.

 Holder of Diploma in Telecommunication Engineering.

 Post graduate in Management courses is an added advantage.

4.0.2 STAFFING AND PERSONNEL

The organization will have a total of Ten 10 personnel, exclusive of the manager. The
organization structure will be as follows:-

Organizational Chart

MANAGER/OWNER

27
 OPERATIONS
MANAGER

WORKSHOP TECHNICIAN

ACCOUNTS CLERK
WORKSHOPTECHINCIAN

SALES TEAM

SECRETARY/RECEPTIONIST

CLEANERS

(i) Assistant Manager

Will be second in hierarchy after the Manager and will be appointed by the manager.
Qualifications:-
(a) Must be above 25 years old.
(b) At least 3 years experience.
(c) Holder of Diploma in Telecommunication Engineering or equivalent.
(d) C. P. A 1
(e) Any administration experience is an added advantage.

Roles and Duties

 Implement all organizational decisions reached by the management team.

 Reports to the manager to give detailed account of daily activities within the venture.

 In charge of operation of the business.

 Will be the heads of accounts.

(ii) Technicians
28
 Roles and duties

 He will be in charge of the workshop and stores.

 He will maintain and install all equipments to customer premises as guided by the
assistant manager.

 Carry out any other duties as delegated to him by the manager

Qualifications:-
(a) Must be at least 25 years old
(b) Holder of Diploma in Telecommunication Engineering
(c) Computer Application will be added advantage
(iii) Sales Team

The Team will ensure all the customers are given the best they need and deserves at the
appropriate time. This will be achieved by marketing the product within and outside the
enterprise building. They will make sale as per the set targets.
Roles and Duties
(a) Marketing the business name products and services.
(b) Enhance the business image
(c) Report to the Assistant manager to give accounts of daily sales and reports.
(d) Serve customers both within and outside the premises.
(e) Perform any other duties as maybe delegated to them by the authority.
Qualification:-
(a) Must be at least 18 years old
(b) Holder of Diploma in Telecommunication Engineering, IT or Computer Science.
(c) Must have Certificate of good conduct
(d) Certificate in sale s and marketing will be an added advantage.

(v) Receptionist
Roles and Duties
(a) Will be in charge of customer care desk.
(b) Direct customers and visitors within the premises
(c) Will carry out typing and printing duties whenever need for such arise.
(d) Will also be in charge of cleanliness of the premises.
Qualification

29
i) Has to be a lady between 21 – 27 years old at the time of her employment.
ii) Computer literate
iii) Must be able to speak fluent English and Kiswahili
iv) Be polite and self-disciplined, and can work for longer hours.

(vi) Cleaner
She will ensure high standards of cleanliness in the premises. All his duties will be overseen
and supervised by the receptionist.
Qualification
At least K. C. P. E certificate
4.0.3 RECRUITMENT AND SELECTION
All prospective employees will be reached and stimulated to apply through news papers,
posters and radio broadcasting. To stimulate them, salaries will be stated for each relevant
post announced as vacant.
This process will include:-
a. Advertisement of the vacant post
b. Reception of application letters through mails and Emails.
c. Invitation of those candidates who meet the specified requirements
d. Interview
e. Selection
f. Employment

30
 PERSONNEL QUALIFICATION AND RESPONSIBILITY TABLE
The qualification that the manager will be looking for in the candidates may be summarized as in the table below:-

PERSONNEL No QUALIFICATION ROLES AND RESPONSIBILITY

ASSISTANT 1  Must be above 25 years old  Implement all organizational decisions reached
MANAGER  At least 3 years experience by the management team.
 Holder of Diploma in  Reports to the manager to give detailed account
Telecommunication Engineering or of daily activities within the venture.
equivalent  Will be the heads of accounts
 C. P. A 1
TECHINCIAN 2  Must be at least 25 years old  He will be in charge of the workshop and stores
 Holder of Diploma in  He will maintain and install all equipments to
Telecommunication Engineering customer premises as guided by the assistant
 Computer Application will be added manager
advantage.
SALES TEAM 4  Must be at least 18 years old  Marketing the business name products and
 Holder of Diploma in services.
Telecommunication Engineering  Enhance the business image
 Must have Certificate of good conduct  Report to the Assistant manager to give accounts of
 Certificate in sale s and marketing will daily sales and reports.
be an added advantage.  Serve customers both within and outside the
premises.
RECEPTIONIST 1  Has to be a lady between 21 – 27 years  Will be in charge of customer care desk.
old at the time of her employment.  Will carry out typing and printing duties whenever
 Computer literate need for such arise.
 Must be able to speak fluent English and  Will also be in charge of Cleanliness of the
Kiswahili premises.
 Be polite and self-disciplined, and can
work for longer hours.
CLEANERS 1  At least K. C. P. E certificate  Will ensure high standards of cleanliness in the
premises. All his duties will be overseen and
supervised by the receptionist.

31
REMUNIRATION TABLE

PERSONNEL NO SALARY SALARY P.A.

P.M.

Managing Director 1 16,000.00 192,000.00

Operation Manager 1 14,000.00 168,000.00

Technicians 2 12,000.00 144,000.00

Sales Team 4 10,000.00 480,000.00

Receptionist 1 9,000.00 108,000.00

Sub-Ordinate Staff(Cleaner) 1 6,000.00 72’000.00

TOTAL 10 109,000.00 1,308,000.00

4. 0. 4 RETAINING AND MOTIVATING EMPLOYEES

WAN Communication will once they are employed if they are productive. This will be
achieved through:
(i) Organizing of end year parties to all employees
(ii) Paying for overtime work done
(iii) Allowing offs and leaves
(iv) Using democratic style of leadership
(v) Salary Increment after every year
4.0.5 REWARD AND APPRAISAL
Reward is the compensation of employees’ effort beyond normal performance expectation.
WAN Communication will ensure all such employees are rewarded at the end of every
year. This will always be on commission as set by the management.
Performance is the process of determining how well the employees do their work compared
to the company sets of standard and communication that information to them.

32
The main rating that will be applied will include:-
(a) Trait based
These will be mainly used to access the personal characteristics of the employees as it
relies on factors such to include:-

• Communication skills

• Loyalty

• Attitude towards supervisor

• Ability to work as part of a team

• Decision making ability

(b) Behavior based
These assess employees on the behavior rather than their personal characteristic and will be
used to assess the employees on friendliness toward customers’ helpfulness.
(c) Result based
WAN Communication will also assess the performance of employees on the base of the
number of customers served.
Appraisal will be conducted by:-

• Supervisor who rates the employees

• Employee who rate their supervisors

• Peers who rate each other

• Customers who evaluate the employees performance

4.0.6 TRAINING AND DEVELOPMENT

WAN Communication will invest in training and development in order to modify the
attitude, knowledge and skills of employees with a view of enhancing performance. Such
will be conducted as necessary to instill a learning experience which seeks relatively
permanent in an individual that will contribute to a better and enhance job performance.

Aim of Training and Development

 To ensure that WAN Communication has competent employees that it needs to

achieve the set short and long term goals.

 To ensure that each of the staff has the required skills and knowledge necessary and
relevant to carry out their duties competently.

33
Importance of Training and Development

 Improve the quality and quantity of output by improving skill.

 Reduces errors at work.

 Reduce supervision since the supervisor will spend less time in correcting errors.

 Help the employees keep in touch with the changing and developing technologies.

4.0.7 COMMUNICATION
This is the process of passing information from within the organization to produce mutual
understanding.
WAN Communication intends to use the following types of communication for smooth
running and passing of information in the business.

(A) Download communication

This will include all forms of communication from a higher authority to staff in a lower
level in the organization chart.

Advantages
(a) Specific information is clearly spelt out.
(b) Quick decision can be made when speed is required.
(c) Updates the subordinates with information about ration of their job.

(B) Horizontal Communication

This will cover all forms of communication between people in the same level in the
management hierarchy in the organization chart.

Advantages
a) Promotes understanding and co-ordination among various departments in the
business.
b) Enhance production due to co operation.

c) Better co-existence among workers.

34
 d) Cohesion in leadership at the enterprise.

4.0.8 LEGAL REQUIREMENT

WAN Communication will certify all the requirements by the government and local
authority in order to be categorized as an existence company that will be tax compliant.
Such requirements includes:-
(A) Company Registration Act Cap 497
This will be done at Sheria House whereby the name will be logged and certified then
authorized for use after payment of a fee.
(B) V.A.T Registration
This will be obtained for free after a proof of existence of the business, at the Kenya
revenue Authority.
(C) P I N Number
This is issued at the Kenya Revenue Authority for free and helps in identifying the business
for tax purpose.
(D) Trade Licensing Act Cap 499
This will be issued free of charge at by the Ministry of Trade and Industry. This will help to
prove that the business really operates and is licensed by the government.
(E) County Council Certificate
The proprietor will obtain this at a fee from the Municipality of Kapsabet. It will help in
County Council authorization to operation.
(F) Business License
The business will be licensed by Kapsabet Municipality Council Kenya Bureau Standards
Act.
(G) Employee Act Cap 226
WAN Communication will comply with the Employment Act term that requires that all
workers be insured by the NHIF.

35
 4.0.9 SUPPORT SERVICES
These will include any other service that will be provided to this organization to help
normal operation. WAN Communication will need such services that will include:-
i. Banking Services

 Such services will help the business operate an account and pay out the
creditors or receive payments on behalf of the business.

 Help keep in custody the business important documents and financial

records.

 Assist in loan advances to the business.

Equity Bank of Kenya,
Kapsabet Branch,
Main Street, P. O. Box 32,
Tel 0729760112
ii. Auditing service

 Help in preparation of company financial statements and checking on the financial

statements.

 Help in filling of company tax returns.

 Offer business advisory services.

Joel & Associates,
Main Street Kapsabet,
P. O. Box 32
Kapsabet.
Tel 0729760112
iii. Legal Services
These services will help in guiding the business when signing contracts as swell as protect
the Enterprise rights and Facilitate a legal process in defense. Such services will be
provided by:-
Arap Kosgei & Associates,
Main Street Kapsabet,
Kapsabet,
Tel 0713175011
36
iv. Security Services
These services will ensure that the company premises and assets are all secure and
protected for theft at all times. This will be provided for by:-
KK Security Ltd
Showground Kapsabet,
P. O. Box 55,
Tel 0727121245
4.1.0 MANAGING CHANGES
During the operation of the business, such factors to include:-economic, government
policies, education, competition, technology, and social factors may bring changes in the
venture. Therefore the business will be prepared for such eventualities. The main technique
that can be use to curb these changes are:-
(a) Persuasion
(b) Training
(c) Job design
(d) Innovation and creativity
WAN Communication will adopt job design as the technique to manage changes. This
technique refers to a conscious effort to organize tasks and responsibilities in a job to
enhance satisfaction and avoid stress which in turn leads to motivation and discourage high
rate of absenteeism. Job design focus on how work will be done. This will be implemented
through;-
1) Job specification
Will involve breaking down jobs into smallest component and trying to assess how job is
done in each of the components of the whole job.
2) Job Enlargement
Is the process of broadening jobs by adding together tasks together. Tasks involving similar
skills and abilities will be combined together. This will help WAN Communication
motivate who perceives increased responsibilities as a step to towards advancing their
carriers. However, such will not be accompanied by additional compensation.
3) Job Enrichment
This is also called vertical expansion. In this technique, responsibilities are added to an
employees’ job that is not extremely similar to the task the employee performs.
4) Job Rotation
WAN Communication will often deploy its employees to different departments to perform
different tasks in the organization. This will help alleviate some of the boredom that

37
employees may face because of performing the same job over and over. This system will
require that the employees be trained in several jobs.

CHAPTER FIVE
OPERATION AND PRODUCTION PLAN

5.0.0 INTRODUCTION
This chapter outlines all the activities that the venture will carry out. Such will include:-
(a) Sale Telecommunication Equipments.
(b) Installation and configuration of new equipments.
(c) Repair and Maintenance.
(d) Networking.
Good operation strategies will ensure that WAN Communication Ltd attains maximum
utilization of available resources. It will also take advantage and capitalize on competitors
weaknesses and carry out timely market survey, to understand market requirements in order
to adopt efficient techniques in operation.

5.0.1 OPERATION FACILITY AND CAPACITY

WAN Communication will require machinery and equipments in order to use to render
satisfactory services to meet customers’ needs to ensure continuity and profitability of the
organization. Such tools can be classified as in the table in the next page.
The organization will formulate a plan whereby equipments will be received, recorded,
sorted then issued to the relevant section of the enterprise.

38
 MACHINES , TOOLS AND EQUIPMENTS

CAPACITY QTY UNIT COST TOTAL SUPPLIER

NAME COST

Office furniture 120,000 Jacaranda

Wooding ltd

Digital Meters 240-100 mA 3 500 1,500 Star Electronics ltd

Tape Measure 10 ft 4 100 400 Asai Hardware

Work bench 4×6 ft 2 12,000 24,000 Jacaranda

Wooding ltd

Screw Driver Full set 5 300 1,500 Asai Hardware

Pliers 500V 3 120 360 Asai Hardware

Computer 2.1Ghz/4Gb/256H 5 24,000 120,000 Comptech LTD

Soldering Gun 13A/240V 3 120 360 Star Electronics ltd

Hacksaw 9” 2 1,500 3,000 Asai Hardware

Solder Sucker 13A/240V 1 2,500 2,500 Star Electronics ltd

Ladder Expandable 3 5,000 15,000 Asai Hardware

Hummer Ball Pen 3 180 540 Asai Hardware

Electric Drill 13A/240V 4 2,500 10,000 Asai Hardware

Spanner Size 10” , 13” 4 150 600 Asai Hardware

Safe belt 4 1,000 4,000 Asai Hardware

Steel Tape Diamond 4rolls 500 2,000 Asai Hardware

Clumping tool Diamond 5 2,000 10,000 Star Electronics ltd

Bending spring 20mm 10 424 4240 Devan tech

TOTAL 320,000.00

The organization will recruit distributors to deliver goods and services to the customers. In
this way, the Company will bring its goods and service closer to the prospective customers
and subdivide the whole operation area into units which will make the organization have
control of the market area.
It will also enhance customer satisfaction by adopting price reduction and timely service
rendering strategies

39
5.0.2 OPERATION STRATEGY
WAN Communication will carry out market survey in order to understand the market on a
wider perspective. The result from such survey will be used to implement the firm’s
operation strategies. The organization will also give incentives to loyal customers in order
to maintain customers as well as offer discounts to customers who purchase in bulk.
Intensive marketing techniques will also be enforced to widen the market and to market the
venture further, all employees will have to wear uniforms with painted pocket shirt or
blouses which bear the company name and logo.

5.0.3 THE OPERATION PROCESS

WAN Communication will deal in installation and repair of communication equipment as
well as selling. He operation processes are illustrated in the flow charts below.

(A) INSTALLATION PROCEDURE (B) REPAIR

PROCEDURE
Receiving faulty equipment
Survey of the premises

Trouble Shooting
Costing & Estimation

Costing
Supply of Material

Actual Repair

Actual Installation
Testing Repaired Equipment

Assessing the Work done

Reassembly

Receive Payments
Paying for services

Collection of Ready Equipment

40
5.0.4 REGULATION AFFECTING OPERATION
These are laws and regulations that WAN Communication will adopt as whole while
operating. The legal laws binding the business will be inter-twined to the organizations
own rules for a profitable operation.
Such rules will be divided into two categories as:-
(A) External Rules
(i) Employment Act Cap 226
The organization will observe this Act by offering the stipulated salaries and wages as well
as the employees’ rights.
(ii) Public Health Cap 260
The organization will observe standard health requirement in the premises and with the
employees.
(iii) Trade License Act Cap 497
The organization will apply for the acquisition of this license from the Ministry of Trade
and Industry.
(iv) National Social Security Fund Act Cap 258
The organization will register with the NSSF and forward monthly contributions of all
employees to the fund.
(v) Income Act Cap 620
The organization will foresee the registration of its employees with the Kenya revenue
Authority to curb incidences of tax default and also have the organization remit its own
returns to the authority.

(B) Internal rules and Regulations

(i) All employees should report to work by 8:00 am and leave the premise by
5:00 pm.
(ii) All the employees working past the required time (past 5:00pm) must sign
in with the security for security and financial consideration.
(iii) Employees must wear uniforms at all times during working hours.
(iv) Any act of theft will be dealt with in accordance with the laws of Kenya.
(v) All employees will be entitled to 25 days leave per year.
(vi) Lunch breaks will last for one hour and thirty minutes, from 12:30 pm to
2:00 pm.

41
 CHAPTER SIX
FINANCIAL PLAN
6.0.0 INTRODUCTION
This chapter focuses on matters pertaining to finance, expenditure and inputs. It represents
financial estimations at the beginning and in future in quantitative terms. These details will
then be used by the management of WAN Communications to assess the performance of
the venture.

6.0.1 PRE-OPERATIONAL COST

Such will include all expenses incurred before the business commences and are
summarized as:-

PRE-OPERATIONAL COST

ITEMS COST(KSHS)

Equipment & Tools 200,000.00

Stock/ Raw Materials 160,000.00

Licenses and permits 6,500.00

Advertisement of the grand opening 20,000.00

Insurance 10,000.00

Business Registration 3,000.00

Furniture & Fitting 120,000.00

Staff Uniform 10,000.00

Rent Deposit & Goodwill 38,000.00

Stationary 4,5000.00

Miscellaneous 2,800.00

TOTAL 574,800.00

42
6.0.2 ESTIMATION OF WORKING CAPITAL FOR THE YEAR 2011, 2012 & 2013

DETAILS 1st YEAR 2nd YEAR 3rd YEAR

(2011) (2012) (2013)

CURRENT ASSETS KSHS KSHS KSHS

Stock 160,000.00 299,750.00 402,300.00

Debtors 30,000.00 20,000.00 23,000.00
Cash At hand 102,000.00 99,500.00 96,000.00
Cash At Bank 306,000.00 520,000.00 735,500.00

TOTAL (A) 1,013,500.00 1,239,250.00 1,453,800.00

CURRENT LIABILITIES

Creditors - 15,000.00 19,000.00

Bank Loan 660,000.00 264,000.00 -

TOTAL (B) 680,000.00 279,000.00 19,000.00

TOTAL WORKING
CAPITAL 353,500.00 960,250.00 1,434,800.00

43
6.0.3 LOAN AND INTEREST REPAYMENT
The proposed business loan will be from Equity Bank of Kenya. The loan will be Ksh
660,000.00 which will be repaid at an interest of 16%. The loan will be paid for a period 30
months with agrace period of 2 months from the date of borrowing.
The borrowed amount will all be introduced into the business and the repayment schedule
will be as per the table in the next page.

44
 PRINCIPAL MONTHLY INTEREST BALANCE
MONTH No.
AMOUNT INSTALMENT

2 months grace period

3 765,600.00 22,000.00 3,520.00 740,080.00

4 740,080.00 22,000.00 3,520.00 714,560.00

5 714,560.00 22,000.00 3,520.00 689,040.00

6 689,040.00 22,000.00 3,520.00 663,520.00

7 663,520.00 22,000.00 3,520.00 683,000.00

8 638,000.00 22,000.00 3,520.00 612,480.00

9 612,480.00 22,000.00 3,520.00 586,960.00

10 586,960.00 22,000.00 3,520.00 561,440.00

11 561,440.00 22,000.00 3,520.00 535,920.00

12 535,920.00 22,000.00 3,520.00 510,400.00

13 510,400.00 22,000.00 3,520.00 484,880.00

14 484,880.00 22,000.00 3,520.00 459,360.00

15 459,360.00 22,000.00 3,520.00 433,840.00

16 433,840.00 22,000.00 3,520.00 408,320.00

17 408,320.00 22,000.00 3,520.00 382,800.00

18 382,800.00 22,000.00 3,520.00 357,280.00

19 357,280.00 22,000.00 3,520.00 331,760.00

20 331,760.00 22,000.00 3,520.00 306,240.00

21 306,240.00 22,000.00 3,520.00 280,720.00

22 280,720.00 22,000.00 3,520.00 255,200.00

23 255,200.00 22,000.00 3,520.00 229,680.00

24 299,680.00 22,000.00 3,520.00 204,160.00

25 204,160.00 22,000.00 3,520.00 178,640.00

26 178,640.00 22,000.00 3,520.00 153,120.00

27 153,120.00 22,000.00 3,520.00 127,600.00

28 127,600.00 22,000.00 3,520.00 102,080.00

29 102,080.00 22,000.00 3,520.00 76,560.00

30 76,560.00 22,000.00 3,520.00 51,040.00

31 51,040.00 22,000.00 3,520.00 25,520.00

32 25,520.00 22,000.00 3,520.00 0

45
Balance = Principal Amount - (Interest +Monthly Installment)

Principal Amount = Bank Loan + Interest

Bank Loan
Monthly Installment = 30 ( No of Months)

Interest = 16% of the Borrowed amount

46
 6.0.4 (A) Projected Cash Flow for the year (2011)

DETAILS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

CASH INFLOW

1,475,17 1,172,02 1,635,06 1,445,13 1,385,34 1,339,48 1,387,43 1,327,94

BEGINNING CASH 5 5 994,560 799,260 986,235 976,415 5 5 1 1 9 0 14,924,07

SALES &

SERVICE CHARGE 20,000 35,650 40,700 50,230 52,300 54,100 50,600 57,800 56,000 58,900 58,901 59,100 1,594,28

RECEIPT 5,000 2,000 8,000 4,000 - - 10,000 5,000 4,000 2,000 9,120 85,000 134,12

DEBTORS - 20,000 30,000 400,000 350,000 860,000 100,000 200,000 220,000 310,000 200,000 600,000 2,930,00

1,500,17 1,229,67 1,073,26 1,253,49 1238,68 1,890,51 1,795,66 1,707,93 1,665,34 1,710,38 1,655,46 2,072,04
TOTAL INFLOW 5 5 0 0 5 5 5 5 1 1 0 0 21,461,89

CASH OUTFLOW

PURCHASE 20,750 15,715 20,000 15,000 20,800 16,000 20,300 16,999 10,000 17,000 18,980 21,800 213,34

RENT& DEPOSIT 28,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 105,00

SALARIES 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 2,580,00

ELECTRICITY 400 500 450 600 550 700 650 800 750 800 750 900 7,85

BANK LOAN

REPAYMENT - - 25,520 25,520 25,520 25,520 25,520 25,520 25,520 25,520 25,520 25,520 255,20

ADVERTISEMENT 9,500 500 500 14,500 500 500 500 14,500 500 500 500 14,500 56,00

INSURANCE
COVER 30,000 - - - - - 30,000 - - - - - 60,00

TELEPHONE&

STATIONERY 1,000 800 750 755 900 910 800 700 910 756 890 900 10,07

WATER 500 800 800 900 820 820 1,300 920 750 786 900 940 5,98

TOTAL OUT FLOW 328,150 274,815 274,000 267,255 262,270 255,430 350,550 322,594 325,860 322,942 327,520 332,600 3,917,36

1,172025 994,560 799,260 986,235 976,415 1,635,08 1,445,13 1,385,34 1,339,48 1,387,43 1,327,94 1,739,44 17,544,53
NET CASH FLOW 5 5 1 1 9 0 0

47
 6.0.4 (B) Projected Cash Flow for the year (2012)

DETAILS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

CASH INFLOW

1,739,44 2,150,64 2,605,26 3,050,93 3,437,11 4,124,64 4,880,95 5,667,89 6,926,98 7,620,44 8,460,17
BEGINNING CASH 0 0 1 7 5 8 4 9 1 7 9 9,455,805 60,120,30

SALES &

SERVICE CHARGE 62,000 62,750 61,778 63,432 65,273 70,999 84,679 85,228 88,779 92,333 93,222 94,666 2,005,139.0

RECEIPT 100,000 98,820 103,251 119,222 332,000 421,356 400,722 376,800 300,831 426,870 560,800 700,890 3,941,56

DEBTORS 625,000 650,001 652,320 569,000 600,000 621,432 639,876 641,257 651,234 668,765 675,678 519,283 7,513,84

2,526,44 2,962,21 3,422,61 3,802,59 4,434,38 5,238,43 6,006,23 6,771,18 7,967,82 8,808,41 9,789,87 10,770,64
TOTAL INFLOW 0 1 0 1 8 5 1 4 5 5 9 4 72,500,95

CASH OUTFLOW

PURCHASE 40,000 52,024 60,763 61,772 70,000 80,000 92,826 99,555 102,434 103,876 92,083 92,140 947,47

RENT 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 84,00

SALARIES 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 2,580,00

ELECTRICITY 800 900 937 1,200 2,246 2,031 1,956 1,949 2,260 2,032 686 4,999 8,99

BANK LOAN

REPAYMENT 25,520 25,520 25,520 25,520 25,520 25,520 25,520 25,520 25,520 25,520 25,520 25,520 306,24

ADVERTISEMENT 9,500 500 500 14,500 500 500 500 14,500 500 500 500 14,500 56,00

INSURANCE COVER 30,000 - - - - 30,000 - - - - - - 60,00

TELEPHONE&

STATIONERY 1,000 826 973 1,024 2,264 2,030 1,925 1,899 2,884 2,773 2,667 3,689 13,95

WATER 800 700 800 920 820 720 9400 920 750 786 900 940 6,00

TOTAL OUT FLOW 375,800 356,950 371,673 365,476 309,740 357,481 338,332 344,203 347,478 348,236 334,092 357,339 4,186,79

2,150,64 2,605,26 3,050,93 3,437,11 4,124,64 4,880,95 5,667,89 6,926,98 7,620,44 8,460,17 9,455,80 10,413,30
NET CASH FLOW 0 1 7 5 8 4 9 1 7 9 5 5 68,314,17

48
 6.0.4 (B) Projected Cash Flow for the year (2013)
DETAILS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

CASH INFLOW

BEGINNING CASH 10,413,305 11,132,133 11,834,015 12,596,534 13,640,291 14,122,129 14,688,063 15,328,017 16,018,432 16,739,917 17,426,421 17,991,691 157,808,

SALES &SERVICE
CHARGE 95,856 92,140 98,220 93,162 99,340 102,223 101,444 103,825 108,333 110,236 126,887 163,555 2,895,

RECEIPT 570,901 522,688 600,400 923,445 400,361 447,881 493,863 500,000 520,633 420,923 367,924 499,861 6,268,

DEBTORS 519,229 522,636 463,801 455,667 439,891 486,222 499,660 516,826 509,823 566,871 522,081 500,000 5,532,

TOTAL INFLOW 11,599,291 12,269,597 12,996,436 14,068,808 14,579,883 15,158,455 15,783,030 16,448,668 17,157,221 17,837,947 18,443,313 19,155,107 170,905,

CASH OUTFLOW

PURCHASE 92,145 93,162 93,179 94,222 96,822 98,333 99,429 99,360 99,560 99,627 99,382 102,801 1,167,

RENT 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 84,

SALARIES 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 774,000

ELECTRICITY 800 860 937 950 1,000 920 1,000 982 990 730 686 1,020 10

BANK LOAN

REPAYMENT 25,520 25,520 25,520 25,520 25,520 25,520 - - - - - - 153,

ADVERTISEMENT 9,500 500 500 14,500 500 500 500 14,500 500 500 500 14,500 56,

INSURANCE COVER 30,000 - - - - - 30,000 - - - - - 60,

TELEPHONE
&STATIONERY 3,000 3,600 2,887 2,817 1,826 1,936 1,946 1,984 1,999 2,009 2,120 2,012 28,

WATER 1220 900 800 920 820 720 1200 920 750 786 900 1240 9,

TOTAL OUT FLOW 467,158 435,582 399,902 428,517 457,754 470,392 455,193 430,233 417,304 411,526 451,622 513,377 15,338,

NET CASH FLOW 11,321,133 11,834,015 12,596,534 13,640,291 14,122,129 14,688,063 15,328,017 16,018,432 16,739,917 17,426,421 17,991,691 18,641,730 165,567,

49
 6.0.5 PROJECTED TRADING PROFIT AND LOSS ACCOUNT
WAN COMMUNICATIONS LTD
Projected Trading profit and loss Account
For the year ending 2011

Opening Stock 160,000.00 Sales 1,594,281.00

+Purchases 213,344.00

Gross profit c/d 1,380,937.00 Gross Profit b/d 1,380,937.00

-Expenses
Salaries 258,000.00
Rent 105,000.00
Electricity 7,850.00
Water 5,986.00
Telephone &Stationeries 10,071.00
Advertisement 56,000.00
Loan repayment 396,000.00
Company Registration 3,000.00

TOTAL EXPENCES 841,907.00

NET PROFIT 539,030.00 NET PROFIT 539,030.00

50
 WAN COMMUNICATIONS LTD
Projected Trading profit and loss Account
For the year ending 2012

Opening Stock 110,193.00 Sales 2,005,139.00

+Purchases 947,473.00

Gross profit c/d 1,057,666.00 Gross Profit b/d 1,057,666.00

-Expenses
Salaries 258,000.00
Rent 84,000.00
Electricity 8,996.00
Water 6,000.00
Telephone &Stationeries
13,954.00
Advertisement 56,000.00
Loan repayment 264,000.00
TOTAL EXPENCES 690,950.00

NET PROFIT 366,716.00 NET PROFIT 366,716.00

51
 WAN COMMUNICATIONS LTD
Projected Trading profit and loss Account
For the year ending 2013

Opening Stock 559,547 Sales 2,895,231

+Purchases 1,167,842

Gross profit c/d 1,727,389 Gross Profit b/d 1,727,389

-Expenses
Salaries 774,000
Rent 84,000
Electricity 10,875
Water 9,000
Telephone & Stationeries 28,136
Advertisement 56,000
TOTAL EXPENCES 962,011

NETPROFIT 765,378 NET PROFIT 765,378

52
 6.0.6 PROFORMA BALANCE SHEET
WAN COMMUNICATION LTD
Proforma Balance Sheet for 3 years

DESCRIPTION 1ST YEAR 2ND YEAR 3RD YEAR

Fixed Assets
Large Tools & Equipments 130,000.00 50,000.00 72,000.00
Small Tool & Equipments 70,000.00 25,000.00 60,000.00
Furniture & Fitting 120,000.00 7,000.00 11,5000.00

320,000.00 82,000.00 143,500.00

+Current Assets
Cash at hand 102,000.00 99,500.00 96,000.00
Cash at bank 306,000.00 520,000.00 732,500.00
Stock 213,344.00 189,000.00 200,000.00
Debtors 30,000.00 20,000.00 23,000.00

651,344.00 828,500.00 1,051,500.00

-Current Liabilities
Creditors - 15,000.00 19,000.00
Bank Loan 396,000.00 264,000.00 -
Owners Equity 340,000.00 - 250,000.00
Interest 21,120.00 42,240.00 42,240.00

757,120.00 321,240.00 311,240.00

Balance b/d 214,224.00 589,260.00 883,760.00

53
6.0.7 BREAK EVEN ANALYSIS
This is an effective way of presenting the relationship between volume cost and profit. It also
gives the relationship between the revenue and cost with respect to volume. It shows
equilibrium level of sale at which revenue equals cost. This equilibrium point is also known
as the break Even Point. At this point there is neither profit nor loss.

WAN COMMUNICATION LTD

BREAK EVEN POINT ANALYSIS

DETAILS SALES FIXED COST VARIEBLE

COST

SALES 1,594,281.00 - -

EXPENSES - - -

Rent - 105,000.00 -

Insurance - 60,000.00 -

Salaries - 258,000.00

Electricity - - 7,850.00

Telephone - - 4,071.00

Water - - 5,986.00

Advertisement - - 56,000.00

Stationary - - 6,000.00

License - 6,500.00 -

Staff Uniform - 10,000.00 -

TOTAL 1,594,281.00 181,500.00 337,907.00

54
 Fixed Cost
(1) BEP = Contributi on Margin X 100

181 ,500 .00

= 1,594 ,281 .00 X100

= 11.38%

(2) Total contributing margin = {Total Sales–Total Variable Cost}

= 1,594,281.00 – 337,907.00

= 1,256,374.00

Total Contributi on Margin

(3) Contribution Margin % = X100
Sales

1,256,374. 00
= 1,594,281. 00
X100

=78.80%

55
6.0.8 PROFITIBILITY RATIOS
This is used to reflect the element to determine the proportionality status of the business rated
against the established standards.

(A) For the year 2011

Net Profit Before Tax

(i) Return On investment= Owners Equity

539,030.00
= 340,000.00

=1.585

Net Profit Before Tax

(ii) Net Profit Margin =
Sales

539,030.00
= 1,594,281. 00

=0.338

Gross Profit
(iii) Gross Profit =
Sales

56
 1,380,937. 00
= 1,594,281. 00

=0.866

Sales
(iv) Asset Turn Over = Average Total Sales

1,594,281. 00
= 2,093,769. 00

=0.761

Sales
(vi) Asset Turn over Ratio = Average Total Sales X100

1,594,281. 00
= 2,093,769. 00 X 100

=76.14%
Current Assets
(vi) Current Ration =
Current Liabilitie s

57
 651,3444.0 0
= 757,120.00

=0.860

Near Cash Assets

(vii) Liquidity Ratio = X100
Total Assets

651,344.00
= 971,344.00

=6.71%

Totak Revenue
(viii) Inventory Turn Over =
Total Assets

539,030.00
= 971,344.00

=0.555

6.0.9 DESIRED FINANCING

This is the financing that will be required by the business before commencing. It is
expressed as below:-

58
Pre-operation Cost 574,000.00

Working Capital 106,000.00

Fixed Assets 320,000.00

TOTAL DESIRED FINANCING 1,000,000.00

DESIRED FINANCING = Pre-Operational Cost + W.C+ Fixed Assets

6.1.0 PROPOSED CAPITAL

This refers to the source of business financing and is summarized as:-

Bank Loan 660,000.00

Equity Financing 340,000.00

Proposed capitalization 1,000,000.00

CONCLUSION
Market research leaves no doubt that WAN COMMUNICATION will be viable. The
outline and research has revealed that the existing Telecommunication industry

59
improvement in technology day by day, making it very vital for establishing of firms
which will be sensitive to these change technoloogy as well as taste and perference.
The business strategic location as well as entrepreneurial skills and managerial skills
acquired by the proprietor will make the business successful. Any short comings
which will be encountered during operation will be dealt with in the year to come
besides the preventive measures taken upon them.
The business will have all merit to give it shinning future!

60
 LOCATION MAP

ELDORATE
BUS STOP
POLICE P
OST

KAPSABET TOWN

HO
NAMGOI

SP
IT
ROUNDABOUT

AL
COMMUNICATION
WAN

PETRO
L
STATIO
N

KAPSABET OPEN AIR MARKET

HILLS
NANDI
61
 COUNTER

WORKSHOP

SHOP

MD OFFICE
SHOW ROOM STORE

Toilet
s

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