Comp-age technologies

P.O. Box 5214 Nakuru

Telephone +254731897214
Email: compage@gmail.com
compage@yahoo.com

Table of contents
Contents
Declaration.............................................................................................................................................. 6
Dedication ............................................................................................................................................... 7
Acknowledgement................................................................................................................................... 8
Executive summary ................................................................................................................................. 9
Chapter one .......................................................................................................................................... 10
1.0 Business description .................................................................................................................... 10
1.1 Business history ........................................................................................................................... 10
1.2 Our experience ............................................................................................................................ 10
1.3 Growth forecast ........................................................................................................................... 11
1.4 Customers ................................................................................................................................... 11
1.5 Business location ......................................................................................................................... 11
1.6 Source of funding......................................................................................................................... 12
1.7 Entry and growth strategy............................................................................................................ 12
1.8 Goods and services ...................................................................................................................... 13
1.9 Justification ................................................................................................................................. 13
Chapter Two .......................................................................................................................................... 14
Marketing plan .................................................................................................................................. 14
2.0 Pricing Power............................................................................................................................... 14
2.1 Advertising/promotional strategy ................................................................................................ 14
2.2 Sales projection ........................................................................................................................... 14
2.3 Market niche ............................................................................................................................... 14
2.4 Customers ................................................................................................................................... 14

2.4.1 Individual customers ............................................................................................................. 15

2.4.2 Institutional customers ......................................................................................................... 15
2.5 Competitors ................................................................................................................................. 15
Chapter Three ....................................................................................................................................... 16
Management structure ...................................................................................................................... 16
3.1 Organization chart ....................................................................................................................... 16
3.2 Responsibilities ............................................................................................................................ 18
3.2.0 Manager ............................................................................................................................... 18
3.2.1 Accountant ........................................................................................................................... 18
3.2.2 Technicians ........................................................................................................................... 18
3.2.3 Cashier .................................................................................................................................. 19
3.2.4 Shop attendants .................................................................................................................... 19
3.2.5 Driver .................................................................................................................................... 19
3.2.6 Cleaner and catering person.................................................................................................. 19
3.3 Qualifications............................................................................................................................... 20
3.4 Salary indication for employees ................................................................................................... 20
3.5 Evaluation and development ....................................................................................................... 21
3.6 Remuneration .............................................................................................................................. 21
3.7 Incentives .................................................................................................................................... 21
3.8 Support services .......................................................................................................................... 22
3.8.1 Banking services .................................................................................................................... 22
3.8.2 Electricity .............................................................................................................................. 22
3.8.3 Water and sewage services ................................................................................................... 22
3.8.4 Insurance services ................................................................................................................. 22
3.8.5 Medical service ..................................................................................................................... 22

3.8.6 Transport services ................................................................................................................. 22

3.8.7 Mailing services..................................................................................................................... 22
Chapter four .......................................................................................................................................... 23
Operational plan................................................................................................................................ 23
4.1 Types of operations and services ................................................................................................. 23
4.2 Business location ......................................................................................................................... 23
4.3 Licenses required ......................................................................................................................... 23
4.3 Supply chains ............................................................................................................................... 23
4.4 Product facilities and capacity ...................................................................................................... 23
4.5 Plans for repair and maintenance of machinery and equipment................................................... 24
4.6 Other fixed assets ........................................................................................................................ 24
4.7 Production strategy ..................................................................................................................... 25
4.7.1 Monthly requirements .......................................................................................................... 25
4.7.2 Monthly labor requirements ................................................................................................. 26
4.7.3 Monthly production expenses ............................................................................................... 27
4.7.4 Cost of running the business ................................................................................................. 27
4.8 Operation process........................................................................................................................ 28
4.8.1 for purchasing of goods ......................................................................................................... 28
4.8.2 For servicing, setting up of networks and repair services ....................................................... 28
4.8.3 Block diagrams for operation process .................................................................................... 28
Chapter Five .......................................................................................................................................... 30
Legislation issues ............................................................................................................................... 30
5.1 Licenses and permits.................................................................................................................... 30
5.2 By laws ........................................................................................................................................ 30
5.3 Taxation ...................................................................................................................................... 30

5.4 Government regulations affecting operations .............................................................................. 30

Chapter six ............................................................................................................................................ 31
Financial plan .................................................................................................................................... 31
6.1 Pre-operational cost (per year) .................................................................................................... 31
6.2 Pro-forma income statements ..................................................................................................... 32
6.2.1 Pro-forma income statements for comp-age technologies as per December 2012................. 32
6.2.2 Pro-forma income statement for the year ending 31st December 2012 .................................. 33
6.2.3 Pro-forma income statement for the year ending 31st December 2013 .................................. 34
6.2.3 Pro-forma income statement for the year ending 31st December .......................................... 35
6.3 Projected cash flow statement for the first year (2012) ................................................................ 36
6.4 Balance sheet as per 31st Dec 2012 .............................................................................................. 37
6.5 Desired financing ......................................................................................................................... 38
6.6 Proposed capitalization ................................................................................................................ 38
Chapter Seven ....................................................................................................................................... 39
Risks and assumptions ....................................................................................................................... 39
6.1 Risks ............................................................................................................................................ 39
6.2 Assumptions ................................................................................................................................ 39
6.3 Delay in supplies .......................................................................................................................... 39
6.4 Market trends .............................................................................................................................. 39

Declaration
We declare that this business plan is our original work to the best of our knowledge and has never been
presented to any examination body for award of degree or any other level.
SN

Name

John Njuguna

Paul Macharia

Opanga Wilberforce

James Nakola

Emanuel Choge

Nickson Ochola

Signature

This business plan has been presented to the school of business with my approval as the supervisor.
Name: ________________________________________________________________
Signature: ______________________________________________________________
Date: __________________________________________________________________

Dedication
We dedicate this project to our lecturer Mr. Rogers Odima for the knowledge he gave us through this
course.

Acknowledgement
We wish to thank the almighty God for the strength and wisdom that He has always blessed us with.
Were it for not for Him we wouldnt be able to come up with this idea. We would also like to thank all
those that have positively contributed to our academic success they include; our parents, our lecturers,
and friends.

Executive summary
Comp-age technologies is a computer business where we will be dealing with computers and related
devices such as printers, printer ink, blank CDs and DVDs, flash disks, USB cables and network cables. We
are planning to start this business in January 2012.
This is a small business owned in partnership between six. In this business we have the ambition of
providing goods and services at an affordable price. We intend to provide good quality service which will
satisfy the customers.
In this business we will be targeting the business people, students and the rest of the people in Nakuru
and its environs as our potential customers.
In our business we will have Manager, Accountant, Cashier, Shop attendants (2), Technicians (2), Cleaner
& catering person and Driver as our staff. We will not be directly involved bearing in mind that we are
students. We will however be monitoring each and every activity of the business to ensure that
everything runs well.
The total amount to start up this business is kshs 7000000. We are expecting to get the funding from
various sources as quoted in this plan. This is a business that is projected to undergo its first expansion
after the first five years, once it has fully stabilized and also established firm foundation in it base
(Nakuru)

Chapter one

1.0 Business description

We are planning to set up a business by the name Comp-age technologies in which we will be
selling computers and related devices, offer repair & servicing and other computer related
technical services in Nakuru town at Giddo plaza building along Nakuru- Eldoret highway.
Through this business we are expecting to fulfill the needs of the people living in nakuru and its
environs. The business will be a partnership where the partners will include;

John Njuguna
Paul Macharia
Opanga Wilberforce
James Nakola
Nickson Ochola
Emanuel Choge

1.1 Business history

This is a business that has been invested in by many people due to the demand that has been
brought about by technology revolution around the world. Computers have in one way or the
other become a part of life to many people who include students, business people, teachers,
lecturers just to mention but a few. It is due to this reason that we conceived this idea of setting
up a business which will not only be involved in selling of computers and related devices but
also offer repair and servicing services.

1.2 Our experience

We are still students pursuing various degree programs Kabarak university but we have good
knowledge in the field of computer, having undertaken a computer course in our first year at the
university and some of us in high school. Also having gained interest in this area we have been
able to acquire a lot of information and knowledge in computers hence putting us at a better
position to start and run this business effectively, offering high class and good quality service.

1.3 Growth forecast

We are expecting this business to grow and stabilize within the first one and a half years of its
inception. Nakuru is developing at a very high rate many schools, businesses and institutions of
higher learning have been set up, and as the trend is, computer are becoming part and parcel of
these groups that I mentioned above hence this is provides good opportunity for our business to
grow at a very high rate despite the fact that there are people who have already ventured in this
business. If a research was to be conducted today then we belive it would show the high rate at
which people are embracing the use of computer in their day to day activates. Computers are
machines and so for them to function effectively then, they have to be serviced. Computers are
also prone to damage and so they have to be repaired when this happens.

1.4 Customers
Our main customers will be schools, colleges, universities, business people, business
organizations, and people in Nakuru town and its environs.

1.5 Business location

The business will be located at Giddo plaza building which is located along Nakuru -Eldoret
highway. This building is well constructed and its environment is friendly for any kind of
business also it is well secured and hence making it ideal for this business that we are planning to
start. Also the fact that it is located along the highway gives good exposure and therefore making
it easy to advertise the business

1.6 Source of funding

Since the business will be a partnership, sources of funding will be as detailed below:
SN

Source

Amount ( Ksh)

1.

Our contribution

1500000

2.

Friends and family

2500000

3.

Loan from the youth enterprise

fund

3000000

Total

7000000

Graph showing funding percentages

1.7 Entry and growth strategy

The ambition and vision of any successful entrepreneur is to see his or her business venture in
the field, grow to great heights. For us to realize this, we are planning to create good relations
with our suppliers, customers, fellow competitors and people conducting their businesses within
the same premises as (Giddo plaza building).
Also we will have an organized management with well trained employees so as to ensure that
they offer good and quality service to our customers. We have conducted a good survey on this
business and therefore we have a clear view of what we want to do. Through critical thinking and
analysis we have been able to convince ourselves that this business venture is a risk worth
taking. We have identified several sources of funds as we stated earlier. We will use these funds

to finance the start up and upkeep of business in its first three months. In the first three years we
are planning to reinvest 75% of the profits so as to boost fast development of the business.

1.8 Goods and services

In this business we will be involved in;
Selling computers (both laptops and desktops)
Selling computer related devices such as:Blank CDs and DVDs
Flash disks
Network cables
Printers
Printer ink
USB cables
Repairing computers
Servicing computers
Technical services such as setting up local area networks for businesses and
schools in the area

1.9 Justification
The success of comp-age relies on the strategic location in which we are planning to locate it.
Also through our pricing strategy and quality service that we are planning to offer, we expect to
attract many customers within a short time. We are planning to come up with a better warranty
compared to our competitors

Chapter Two
Marketing plan
The major aim of this business is to provide high quality service to customers at an affordable
cost

2.0 Pricing Power

In this business we are expecting to give our customers a discount of approximately ten percent
on the major goods (computers) and also offer the repair and servicing services and the technical
services at a subsidized price compared to our competitors. This in one way or the other is
expected to give us power over all our competitors and also help us acquire high rating from the
customers who will in turn help us in advertising our products and services to other customers.

2.1 Advertising/promotional strategy

We are planning to use the local media as a means of advertising our business also we intend to
host one major road show at Lions garden in Nakuru town center. After six months in business
we intend to visit several schools and institutions of higher learning in the area so as to market
our business as well as host a number of competitions as a way of making our business known.

2.2 Sales projection

We are expecting to have a sales rise of about 25% within our first three years in the business.
We also project to offers services in areas beyond Nakuru and its environs hence raising our
revenue by 15%.

2.3 Market niche

We intend to serve people from Nakuru population. As we enter into this field we will be holding
a very low position compared to our competitors who have been in the market for a will. But as
time goes by we believe that we will be able to reach their level and serve 65% of the population
in the next eight years hence taking leadership of the market. This will be brought to reality by
the fact that we will be offering services in a special as as stated in this plan.

2.4 Customers
Our potential customers will be people in Nakuru and its environs
They will be grouped as follows;
i) Individual customers
ii) Institutional customers

2.4.1 Individual customers

Those will include;
and teachers Students
Business people
Lecturers
2.4.2 Institutional customers
They will include;
Schools
Colleges and universities
Businesses and organizations

2.5 Competitors
Our potential competitors will be also the in Nakuru town that are involved in this business.
Our strengths are;

Well trained and friendly staff

Spacious and clean shop
Organized management
Tidy workers
Punctual opening of business
Affordable prices
Quality services
Our weakness;
New in the field
With the above factors in mind, I believe it will be easy for us to take control of the business in
the are because we are planning to use the weaknesses of our competitors as an advantage for us
hence attracting more customers.

Chapter Three
Management structure
3.1 Organization chart
It indicates how duties will be distributed in this business. We are planning to start with nine employees
The management hierarchy will be as follows;
Manager
Accountant
Cashier
Shop attendants (2)
Technicians (2)
Cleaner and catering person
Driver (will be employed after the business has gained stability and is able to purchase vehicles)

Manager

Accountant

Technician 1

Shop attendant 1

Driver

Technician 2

Shop attendant 2

Cashier 1

Cleaner and catering

personnel

3.2 Responsibilities

3.2.0 Manager

Will be in charge of the business.

Be the overall supervisor, ensuring that everything is running effectively
Give direction and leadership to the rest of the team
Ensure that the business is run effectively hence ensuring high customer satisfaction
Forward workers grievances to us
Overall supervisor
Make stock orders from suppliers
Receive stock
Write and sign all transaction cheques

3.2.1 Accountant

Drafting purchase letters

Prepare expenditure and income budget
Banking
Prepare salaries
Keep all transaction records up to date
Act as manager when manager is absent or out for business.
Ensure that all purchase is made on time so as to ensure the business does not run out of
stock.

3.2.2 Technicians
Provide repair and servicing services
Installation services to both the business and customers
Ensure that all systems in the business premises are working effectively so as to avoid
inconveniencing both the customers and the business
Go out for assignments i.e. installing softwares and setting up local area networks to
organizations, businesses and institutions
Assist shop attendants when there is much work
Together with the manager they will act as sales persons
Help manager to inspect stock before purchase

3.2.3 Cashier
Receive cash and cheques from customers
Issue receipts to customers
Update daily transaction records
Assist accountant in preparing expenditure and income budget

3.2.4 Shop attendants

Assist customers in the shop

3.2.5 Driver
Transport supplies from the suppliers to the business
Transport staff when they are going out for and assignment

3.2.6 Cleaner and catering person

Keep the business rooms clean
Prepare lunch and tea for the staff
Keep the shelves clean
Wipe dust from computers and counter
Clean the staffs lab coats

3.3 Qualifications
Manager - diploma holder
Accountant diploma holder
Technicians- diploma holders
Cashier- certificate holders
Shop attendants certificate holders
Driver driving license from a certified driving school and personal experience
Cleaner and catering personnel- certificate and personal experience

3.4 Salary indication for employees

Number of
employees

Title

Basic
salary

Medical
allowance

Travelling
allowance

House
allowance

Total salary

One

Manager

15000

1500

2000

3000

21500

One

Accountant

10000

1500

2000

3000

16500

Two

Technicians

8000 x2

1500 x2

2000 x2

2500

25500

One

Cashier

6500

1500

1000

2500

12500

Two

Shop
attendants

6500 x2

1500 x2

1000x2

2500

20500

One

driver

5000

1500

1000

2500

10000

One

Cleaner and
catering
personnel

5000

1500

1000

2500

10000

Grand Total

116500

3.5 Evaluation and development

Employees evaluation will be based on their efficiency at work. Hardworking and committed
employees will be sponsored to relevant training seiners and short term courses.
To ensure that it is a fair play, the employees will be expected to sign performance contract and
also set targets for themselves and from there we as the business owners will be able to tell if the
employees performance in satisfying. The manager will have the power to evaluate the other
employees. The employees will be given the ability to evaluate the manager. Also customers will
also be requested to fill staff and business evaluation forms.
Employees with high rankings will be considered for promotion during the expansion of the
business but that will be after undergoing short term courses sponsored by the business.
Innovative and creative employees will be given an opportunity to utilize their skills with all the
required support from us.

3.6 Remuneration
In case of an emergence the business will come in and offer financial assistant to the
employees
Employees will be compensated for and accident that occurs at work place or while on
job assignment
All employees will be paid at the agreed time (including public holidays and Sundays)
Employee will be paid for extra hours worked
As business expands employees salaries will also be hiked so as to motivate them
Sick leave on paid ground will be given

3.7 Incentives

Lunch
Ten oclock and five oclock tea
End of year party will be organized for workers
Encourage workers to register with NHIF and NSSF
Provision of business t-shirts after every six months

3.8 Support services

3.8.1 Banking services
Banking services will be provided by cooperative bank. Money will be deposited on weekly
basis. It is the accountant who will be making the deposits after consulting with the manager.
The bank is expected to provide advice on loans and procedures of obtaining them

3.8.2 Electricity
Electricity Will be provided by Kenya power and lightning company. They service will be paid
for on a monthly basis.

3.8.3 Water and sewage services

We are expecting that the service will be provided by the premise owner and its charges will be
included in the rent.

3.8.4 Insurance services

The business and workers will be insured by APA insurance company. And will be paid on the
basis of the agreement reached upon between them and the business management.

3.8.5 Medical service

It will be obtained from selected public and private hospitals.

3.8.6 Transport services

The business will purchase a van and a salon car after making substantial profits. But for the
mean time we will depend on hired vehicles. The driver will be employed after the vehicles have
been purchased.

3.8.7 Mailing services

The business will rely on the services of Securicor Company for mail and parcel delivery. And
payments will be made immediately.

Chapter four
Operational plan
This will imply to both the goods sold and services offered.

4.1 Types of operations and services

The business will be involved in selling computers and related devices, also the business will
offer servicing, repairing of computer hardware, solving software issues for customers and
technical services such as setting up local networks for businesses and schools

4.2 Business location

The business will be located in Nakuru town at Giddo plaza along Nakuru - Eldoret highway.
The premise is located at a well known location and so it will be easy to advertise it. Also
Nakuru being a quickly developing town there are many customers to satisfy based on the fact
that schools, businesses and individuals in that area are our target customers. Also it is important
to note that Giddo plaza is a well secured place and so our customers and workers will be
running their activities with a peace of mind.

4.3 Licenses required

In this business we are expected to apply for trade license and health license which will be
obtained form Nakuru County authorizes.

4.3 Supply chains

We are expecting to get our supplies from wholesale suppliers to supply in Nairobi for all the
goods that we will be selling in our business.

4.4 Product facilities and capacity

These refers to all the machinery that will be required for the business to run effectively and
productively

Four computers
Tool kit for technicians
One printer/ photocopier
One receipt machine
Machine dust blowers

Facility

Quantity

Unit cost

Total cost

Computers

25000

100000

Tool kits

7500

15000

Printer/photocopier 1

20000

20000

Receipt machine

7500

7500

Stationeries

_______

6500

6500

Furniture and
fittings

_______

150000

150000

Grand total

366500

4.5 Plans for repair and maintenance of machinery and equipment

This will be the work of the technicians.
That maintenance will include;
Blowing dust from the computers
Update necessary software to the computers
Ensure that computers speed is efficient to ensure that service is offered
effectively
In case of virus attack they will be expected to disinfect the computers
Ensuring the computer network is running effectively
Otherwise general servicing of the equipments will be after every six months

4.6 Other fixed assets

Business premises: for a start we will rent a business premise at giddo plaza but after five
years in business we will purchase a building at an appropriate location in nakuru.
Furniture: this includes tables, chairs, shelves and counters.
Gas/electric cooker
Two cars

4.7 Production strategy

4.7.1 Monthly requirements
Materials
Quantity

Unit cost

Total cost in ksh

Desktop
computers

10

20000

200000

Blank CDs

2 boxes

9500

19000

cables

10000 meters

15 per meter

150000

Laptop computers

15

35000

525000

Printers

6000

30000

Blank DVDs

5 boxes

15000

75000

Grand total

999000

4.7.2 Monthly labor requirements

Employees

Total

Number
Basic
salary
of
employees

Allowances
house

medical

transport

Manager

15000

3000

1500

2000

21500

Accountant

10000

3000

1500

2000

16500

Technicians 2

7500x2

2500x2

1500

2000x2

25500

Cashier

6500

2500

1500

1000

12500

Shop
attendants

6500x2

2500x2

1500

1000x2

20500

Cleaner

4500

2500

1500

1000

10000

Driver

4500

2500

1500

1000

10000

Grand
total

116500

4.7.3 Monthly production expenses

Expenses

Cost per month

Electricity

3500

Transport

10000

Advertisement

6250

Telephone

6250

Rent

15000

Total

41000

4.7.4 Cost of running the business

Particulars

Cost

Salaries

116500

Stock

999000

Expenses

41000

Total cost

1156500

4.8 Operation process

4.8.1 for purchasing of goods

Making of purchase deal by the manager

Inspection of goods by manager and technicians at the suppliers
Purchase of goods.
Transportation of goods to the business premise
Placing of goods on the shelves for customers viewing and purchasing

4.8.2 For servicing, setting up of networks and repair services

Making of deal between customer and manager

Assignment of all required materials
Sending the technicians for the task
Offering of services by technicians
Sending invoice by accountant
Receiving payment as agreed

4.8.3 Block diagrams for operation process

4.8.3.1 for purchase of goods
Selling

Making of
purchase deal

Display
Inspection of
goods

Purchase

Transportation

4.8.3.2 For technical services

Making a deal
between customer
and manager
Receive of
payment
Survey by
technicians

Assignment of
required resources

Job done by
technicians

Sending of
invoice by

Chapter Five
Legislation issues
5.1 Licenses and permits
They are meant to ensure that the business activities conforms to the required conditions and as
stated by the Kenyan law. We will acquire trade license from Nakuru county authorities. We will
also acquire health incense so as to satisfy the regulation act of safe handling of stuff good for
human consumption. The license is also meant to ensure that the machines are safe to be used by
the employees and our goods are safe for customers, also it will be used to satisfy that the
business premise and surrounding environment is safe for the workers and customers

5.2 By laws
We will ensure that we have all relevant licenses for this business as require by the law.
We will also ensure we have the latest version of wages and conditions of employment act.
We will provide compensation for overtime (including public holidays and Sundays)
We will provide compensation for any worker involved in accidents while at work both in the
shop and out for assignment
5.3 Taxation
The income tax will be deducted for the profits that been made from the business.

5.4 Government regulations affecting operations

As per the requirement by the trading licensing act, we will apply for a trading license. The trading
license will be obtained from Nakuru county authorities at the cost of 5000 per year.
The proposed business will undergo procedures and documentation from different departments. These
will involve obtaining health certificates from, the ministry of health, income tax certificate from the
Kenya revenue authority. We will also comply premise act/ public health act which deals with
environmental regulations
The wastes from the business will be disposed and cleanliness maintained to avoid environmental
pollutions.

Chapter six
Financial plan
It consists of the following;

Pre-operational costs
Projected cash flow statement
Pro-forma income statement
Desired financing
Proposed capitalization

6.1 Pre-operational cost (per year)

Items
Rent
Business permit
Electricity bill
Insurance policy
Consultation fee
Furnishing and fittings
Total

Amount (KSH)
180000
7500
42000
90000
54000
150000
523500

Other fixed assets

Business premise: rented in the early stages of the business but once the business is stable we
will purchase one
Vehicle: for the first one year we will depend on hired vehicle but after the business has
stabilized we will buy our own so as to ease transport.
Mail delivery service
Gas/ electricity cooker
Office furniture
Telephones

6.2 Pro-forma income statements

6.2.1 Pro-forma income statements for comp-age technologies as per December 2012

Cash sales
Credit sales
Opening stock
Purchases
Closing stock
Salaries
Rent
Electricity
Advertisement
Transport
Mail delivery
Stationary
Telephone

16800000
7200000
18000000
950000
6000000
1392000
174000
35000
75000
120000
24000
78000
75000

Depreciation

4500

6.2.2 Pro-forma income statement for the year ending 31st December 2012

Year
Item
Sales
Less: cost of sales
Opening stock
Add: purchases
Less: closing stock
Gross profit (sales-purchases)
Less: expenses
Salaries
Rent
Electricity bill
Stationary
Advertisement
Transport
Mail delivery
telephone
Depreciation

2012
Ksh
24000000

Cts
00

18000000
950000
6000000
4450000

00
00
00
00

1398000
174000
35000
78000
75000
120000
24000
75000
4500

00
00
00
00
00
00
00
00
00

Total expenses net

Profit before tax
Less: 5% taxation

1983500
2466500
123325

00
00
00

Net profit after taxation

2343175

00

6.2.3 Pro-forma income statement for the year ending 31st December 2013

Year
Item
Sales
Less: cost of sales
Opening stock
Add: purchases
Less: closing stock
Gross profit (sales-purchases)
Less: expenses
Salaries
Rent
Electricity bill
Stationary
Advertisement
Transport
Telephone
Mail delivery
Depreciation

2013
Ksh
32000000

Cts
00

20000000
1000000
6000000
5000000

00
00
00
00

1400000
174000
35000
78000
60000
120000
75000
20000
3500

00
00
00
00
00
00
00
00
00

Total expenses net

Profit before tax
Less: 5% taxation

1965500
3034500
151725

00
00
00

Net profit after taxation

2882775

00

6.2.3 Pro-forma income statement for the year ending 31st December

Year
Item
Sales
Less: cost of sales
Opening stock
Add: purchases
Less: closing stock
Gross profit (sales-purchases)
Less: expenses
Salaries
Rent
Electricity bill
Stationary
Advertisement
Transport
Telephone
Mail delivery
Depreciation

2014
Ksh
38000000

Cts
00

22500000
1500000
6500000
7500000

00
00
00
00

1550000
174000
40000
78000
90000
200000
80000
__
6500

00
00
00
00
00
00
00
00
00

Total expenses net

Profit before tax
Less: 10% taxation

2218500
5281500
528150

00
00
00

Net profit after taxation

4753350

00

6.3 Projected cash flow statement for the first year (2012)
Item

Jan

Feb

Mar
ch

Apri
l

May

June

July

Aug

Sept

Oct

Nov

Dec

Total

Cash
sale
Credit
sale

1400
000

1400
000

1400
000

1400
000

1400
000

Cash inflow
1400 1400
000
000

1400
000

1400
000

1400
000

1400
000

1400
000

6000
00

6000
00

6000
00

6000
00

6000
00

6000
00

6000
00

6000
00

6000
00

6000
00

6000
00

6000
00

16800
000
72000
00

Total
cash
Inflow

2000
000

2000
000

2000
000

2000
000

2000
000

2000
000

2000
000

2000
000

2000
000

2000
000

2000
000

2000
000

24000
000

Cost of
goods
Sold
Salarie
s
Rent

2079
166.7

2079
166.7

2079
166.7

2079
166.7

2079
166.7

Cash outflow
2079 2079
166.7 166.7

2079
166.7

2079
166.7

2079
166.7

2079
166.7

2079
166.7

24950
000.4

116,5
00
1450
0
2916.
5

116,5
00
1450
0
2916.
5

116,5
00
1450
0
2916.
5

116,5
00
1450
0
2916.
5

116,5
00
1450
0
2916.
5

116,5
00
1450
0
2916.
5

116,5
00
1450
0
2916.
5

116,5
00
1450
0
2916.
5

116,5
00
1450
0
2916.
5

116,5
00
1450
0
2916.
5

116,5
00
1450
0
2916.
5

116,5
00
1450
0
2916.
5

6250

6250

6250

6250

6250

6250

6250

6250

6250

6250

6250

6250

1000
0

1000
0
2000

1000
0
2000

1000
0
2000

1000
0
2000

1000
0
2000

1000
0
2000

1000
0
2000

1000
0
2000

1000
0
2000

1000
0
2000

Electric
ity
Adverti
sement
Transp
ort
Mail
deliver
y
Station
ary
Teleph
one
Deprec
iation
Tax

2000

1000
0
2000

6500

6500

6500

6500

6500

6500

6500

6500

6500

6500

6500

6500

6250

6250

6250

6250

6250

6250

6250

6250

6250

6250

6250

6250

Total
cash
Outflo
w
Net
cash
Balanc
e C/F
Cash
balance
B/F
Accum
ulative
cash

2244
083.2

4500
12332
5

2244
083.2

2244
083.2

2244
083.2

2244
083.2

2244
083.2

2244
083.2

2244
083.2

2244
083.2

2244
083.2

2244
083.2

2371
908.2

27056
823.4

6.4 Balance sheet as per 31st Dec 2012

Assets and liabilities
Assets
Furniture
Computers
Printer/photocopier
Receipt machine
Stock
Cash
Business premise
Furniture
Gas/ electric cooker
Kitchen utensils
Total assets
Liabilities
Insurance
Compensations
End of year part
Maintenance
Mail delivery
Loan
Total liabilities
Equity(assetsliabilities)
Liabilities + equity

6.5 Desired financing

Item
Pre-operational cost
Fixed assets: machines and furniture
Total

amount
523500
366500
890000

6.6 Proposed capitalization

Item
Our own contribution
Friends and family
Loan
Total investment

Amount
1500000
2500000
3000000
7000000

Chapter Seven
Risks and assumptions
Entrepreneurship is about risk taking. There is no way one can be able to succeed in this or any
other business without taking risks. The fact that we can be able to predict trends of the market
does not mean that we can be able to precisely tell that all we have predicted will come to pass.
We have to make assumptions. This plan is based on assumptions.

6.1 Risks
As far as risks are concerned, we have made many risks they include;
Taking a very huge loan and investing it in a highly competitive busies. We hope that we
will be able to succeed in this venture so that we repay the loan.
Getting into the business with very low prices.
Investing a lot of resources in this business.

6.2 Assumptions
We are assuming that the business will be self sufficient after three months and thus we have
split the start-up capital for that period after which we will be able to run the business form the
money that is generated from it.
We are assuming that all our projections will come to pass and thus the business will grow at an
high rate.

6.3 Delay in supplies

In this business, we will not suffer from this problem because it is the manager and the suppliers
who will be making the purchases and then ensure that the goods are transported to the business
premise on the same day.

6.4 Market trends

We are not expecting unfavorable market trends to affect because of the global revolution that is
taking place at the moment. Unlike other industries, this one is stable, this was evident during the
recession that had hit the western countries; while other industries were being given grants, and
the ICT industry sustained itself. But in case it suffers, then we wont suffer so much because
from the profits that we will be making, there is a percentage that we will be keeping aside for
emergency i.e. to bail the business in case of economic downturn.