SUNRISE WHOLESALE LIMITED

P.O BOX 10-30100

ELDORET, UASIN GISHU
TEL: 0712345590
EMAIL: [email protected]

SUNRISE WHOLESALE LIMITED

PRESENTED BY:
QATIMA SUGAL BAF-050036/2019
PATRICK KITHIKII BAF-05-0145/2019
JOHN MBURU BAF-05-0030/2019
ALICE NDUNA BAF-05-0144/2019
ALLAN MWIRIGI BAF-05-0147/2019
KEVIN THIONG’O BAF-05-0148/2019
STALLON MACHARIA BAF-01-0193/2019
GEORGE MUTINDA BAF-05-0061/2019

INSTITUTION: ZETECH UNIVERSITY

COURSE: BACHELOR OF ACCOUNTING AND

FINANCE

DEPARTMENT: BUSINESS

SUPERVISOR: PROF PETER KIBAS

PRESENTED TO ZETECH UNIVERSITY IN PARTIAL

FULFILLMENT OF THE REQUIREMENT FOR THE AWARD

OF BACHELORS OF ACCOUNTING AND FINANCE.

TABLE OF CONTENTS

TABLE OF CONTENTS................................................................................................................3
DECLARATION.............................................................................................................................6
DEDICATION.................................................................................................................................7
ACKNOWLEDGEMENT...............................................................................................................8
CHAPTER 1. EXECUTIVE SUMMARY......................................................................................9
1.1 BUSINESS DESCRIPTION..................................................................................................9
1.1.1 OBJECTIVES.................................................................................................................9
1.2 MARKETING PLAN............................................................................................................9
1.3 MANAGEMENT AND ORGANISATION PLAN................................................................10
1.4 PRODUCTION AND OPERATION PLAN.......................................................................10
CHAPTER 2. BUSINESS DESCRIPTION..................................................................................12
2.1 SPONSOR............................................................................................................................12
2.2 BUSINESS NAME..............................................................................................................12
2.3 BUSINESS LOCATION AND ADDRESS........................................................................12
2.4 FORM OF OWNERSHIP....................................................................................................12
2.5 THE PRODUCT AND SALES...........................................................................................13
2.6 TYPE OF BUSINESS..........................................................................................................13
2.7 THE INDUSTRY.................................................................................................................13
2.8 JUSTIFICATION OF THE OPPORTUNITY.....................................................................14
2.9 GOALS OF THE BUSINESS..............................................................................................14
2.10 ENTRY AND GROWTH STRATEGIES.........................................................................14
2.10.1 SWOT ANALYSIS.....................................................................................................15
2.10.2 Strengths......................................................................................................................15
2.10.3 Weaknesses.................................................................................................................15
2.10.4 Opportunities...............................................................................................................15
2.10.5 Threats.........................................................................................................................16
CHAPTER 3. MARKETING PLAN.............................................................................................17
3.1 CUSTOMERS......................................................................................................................17
3.1.1 Industry customers........................................................................................................17
3.1.2 Commercial customers..................................................................................................17
 3.1.3 Final consumers.............................................................................................................17
3.2 MARKET SHARE AND TREND.......................................................................................17
3.3 COMPETITION...................................................................................................................18
3.4 SALES TACTICS................................................................................................................18
3.5 PRICING STRATEGY........................................................................................................19
3.6 PROMOTING AND ADVERTISING................................................................................19
3.7 DISTRIBUTION AND STRATEGY..................................................................................19
CHAPTER 4. MANAGEMENT AND ORGANIZATION PLAN...............................................20
4.1 ORGANIZATION PLAN....................................................................................................20
4.1.1 Organization structure...................................................................................................20
4.2 KEY MANAGEMENT PERSONNEL...............................................................................20
4.2.1 Board of Directors.........................................................................................................20
4.2.2 Business manager..........................................................................................................21
4.2.3 Supervisor......................................................................................................................21
4.2.4 Sub-ordinate staff..........................................................................................................22
4.2.5 Security officers............................................................................................................22
4.3 RECRUITMENT AND SELECTION.................................................................................23
4.3.1 Recruitment...................................................................................................................23
4.3.2 Training.........................................................................................................................23
4.3.3 Promotion......................................................................................................................23
4.4 REMUNERATION AND INCENTIVES...........................................................................23
4.4.1 Allowances....................................................................................................................23
4.4.2 Salary schedule..............................................................................................................24
4.4.3 Incentives.......................................................................................................................24
4.4.4 Support services............................................................................................................24
4.5 LICENSE, PERMITS AND BY-LAWS.............................................................................25
4.5.1 License and permits.......................................................................................................25
4.5.2 By-laws..........................................................................................................................25
CHAPTER 5. PRODUCTION AND OPERATIONAL PLAN....................................................26
Land and promises.....................................................................................................................26
Premises layout..........................................................................................................................26
5.1 Production facilities and capacity........................................................................................27
 5.1.1 Production facilities and capacities...............................................................................27
5.2 Production and operational process strategy........................................................................28
5.3 Production and operational process.....................................................................................28
5.4 Regulations affecting operations..........................................................................................29
CHAPTER 6. FINANCIAL PLAN...............................................................................................29
6.1 PRE-OPERATIONAL COST..............................................................................................29
6.2 WORKING CAPITAL........................................................................................................30
6.3 Projected cash flow statement..............................................................................................31
6.4 PREPARATION OF INCOME STATEMENT FOR THE FIRST YEAR.........................32
6.5 PREPARATION OF BALANCE SHEET...........................................................................33
6.6 CALCULATION OF BREAK-EVEN LEVEL...................................................................34
6.6.1 Gross profit margin.......................................................................................................34
6.7 CALCULATION OF PROFITABILITY RATIOS.............................................................34
6.7.1 Return on equity............................................................................................................34
6.7.2 Return on sales..............................................................................................................35
6.8 DESIRED FINANCING......................................................................................................35
DECLARATION
We declare that this work is an original copy of our business plan and it has never
been presented anywhere either in this university or any other learning institution.
This work is been presented for examination purposes.

NAME OF CANDIDATES ADMISSION NUMBERS

1. QATIMA SUGAL BAF-05-0036/2019
2. PATRICK KITHIKII BAF-05-0145/2019
3. JOHN MBURU BAF-05-0030/2019
4. ALICE NDUNA BAF-05-0144/2019
5. ALLAN MWIRIGI BAF-05-0147/2019
6. KEVIN THIONG’O BAF-05-0148/2019
7. STALLON MACHARIA BAF-01-0193/2019
8. GEORGE MUTINDA BAF-05-0061/2019

SIGNATURE: ……………………
DATE: ……………………………

This business plan has been submitted under the supervision of our supervisor for
examination purposes.

SUPERVISOR’S NAME: …………………………………………………………

SIGNATURE: ……………………………………………………………………...
DATE: ………………………………………………………………………………
DEDICATION
We as a team (as listed above) dedicate this business plan to our family members
and friends for their unlimited support and not forgetting our supervisor, Prof.
Peter Kibas for his genuine impact on knowledge and skills.
May God bless everyone who has been supportive to our life and education.
ACKNOWLEDGEMENT
We are very grateful to the almighty God for giving us good health, guidance, and the strength to
do our business plan work. Our sincere thanks also go to our parents and friends for their moral,
social and financial support during writing of this business plan.

Thanks to our business plan supervisor Prof. Peter Kibas for guidance and support during the
business plan.

May God Bless you all.

CHAPTER 1. EXECUTIVE SUMMARY
1.1 BUSINESS DESCRIPTION
The name of the proposed business will be SUNRISE WHOLESALE LIMITED
located in Eldoret town opposite KCB bank along Moi Street. The proposed
business will be a partnership form of business where the owners will be the Board
of Directors of the business. The business will start its operations in the year 2023.
The proposed business will be dealing with selling different types of cereals.
1.1.1 OBJECTIVES
1. Provide quality products to people with proper fulfilment of the Government
entities.
2. Providing quality services to people as it will promote good relations among
customers and management.
3. To offer our services at affordable prices which will favour both the poor and
the rich.

SUNRISE WHOLESALE LIMITED

P.O BOX 10-30100
ELDORET, UASIN GISHU
TEL: 0712345590
EMAIL: [email protected]

1.2 MARKETING PLAN

The proposed business intends to use billboards, posters and Televisions to
advertise its products. As a result of the proposed business facing stiff competition
from existing businesses, the owners of the business will provide management
policy that will carter for the needs of the society at large.
We will compare our services with those of our competitors so as to know how to
provide better and quality services.
The business will put strategies to improve in its area(s) of weakness. Our main
strength over our competitors will be providing quality products which they do not
offer. We will link with big organizations dealing with such business to ensure that
we are in touch to certain changes in the market.

1.3 MANAGEMENT AND ORGANISATION PLAN

The owners of the proposed business will give the structure of the business. The
business will start with 25 employees including the owners who will be the Board
of Directors of the business. Remunerations and incentives will motivate the
employees. Recruitment will be relevant when the post is vacant or when creating
new more branches of the business.
Promotion will also be done as a way of motivating the employees and embracing
hard work. The employees will receive training based on their working capabilities
that will help them acquire more skills in their area of specialization.
The supervisors will be in charge of operations in the business as they will be
working on behalf of the Board of Directors when they will be not around so as to
ensure smooth flow of work in the business.
Training will be done once per year so that employees get more knowledge and
skills in their area of specialization. It will enable them to be more advanced with
the upcoming trends and issues in the business sector.
The business will also follow the legal formalities by acquiring a license from
relevant authorities so as to abide by the government regulations to avoid our
business being closed up.

1.4 PRODUCTION AND OPERATION PLAN

The business will be based on a very big premise with spacious partitions to
accommodate all the activities that shall be conducted. In order to have proper
delivery of goods and services the business will allocate specific tasks to every
employee to enhance productivity. The business will be opened from 7:30am to
6:45pm from Monday to Saturday. On Sundays and public holidays, it will open
from 12:00noon to 6pm.
The business will ensure that it has the relevant equipment and facilities to start its
operations. It will be offering direct services to customers as it will be way of
ensuring customer needs are satisfied.
1.5 FINANCIAL PLAN
The business will start with an initial capital of 20Million. The money will be
raised as follows:
Name KSH
Owners (Board of Directors) 8,000,000
Family member and Relatives 1,500,000
Friends 5,000,000
Loan from Bank 5,500,000
Total 20,000,000

The loan from the bank will be paid in installments as the business continues to
grow and make profit.
CHAPTER 2. BUSINESS DESCRIPTION
2.1 SPONSOR
The sponsors of the business will be family members, friends, financial
institutions, government and non-governmental organizations. We will work with
them hand in hand so as to make the business a success.
As the business will be focused on cereals, we will work closely with organizations
that are highly competitive in the production of cereal products. Financial
institutions will provide assistance in terms of finance when the business is
financially low or wants to expand. Through all this support we will be able to
grow faster. The proposed business will start its operations in the year 2023.
2.2 BUSINESS NAME
The business is given the name Sunrise Wholesale Limited and it will mainly
operate under that name. There are plans also to enlarge the business and come up
with various branches under it that will operate from different locations after the
business has operated for some years and generated profit.
2.3 BUSINESS LOCATION AND ADDRESS
The business will be located in Eldoret town opposite KCB bank along Moi Street.
The business is purposed to serve all institutions and all the people in Eldoret both
of high class and low class of living standards.
SUNRISE WHOLESALE LIMITED
P.O BOX 10-30100
ELDORET, UASIN GISHU
TEL: 0712345590
EMAIL: [email protected]

2.4 FORM OF OWNERSHIP

Sunrise Wholesale Limited will be a partnership business whereby the employees
will be able to interact with customers physically to enhance good relations
between the business and the customers. The reason as why the owner chose this
kind of business is because a partnership business requires huge capital which will
help quick expansion of the business.
Advantages of a partnership

 Two heads (or more) are better than one.

 Your business is easy to establish and start-up costs are low.
 More capital is available for the business.
 You’ll have greater borrowing capacity.
 High-calibre employees can be made partners.
 There is opportunity for income splitting, an advantage of particular importance
due to resultant tax savings.
 Partners’ business affairs are private.
 There is limited external regulation.
 It’s easy to change your legal structure later if circumstances change.

2.5 THE PRODUCT AND SALES

Sunrise Wholesale will be offering a variety of cereals such as maize, beans, peas,
rice among others. The services will be rendered by our trained and qualified
staffs.
2.6 TYPE OF BUSINESS
Sunrise Wholesale Limited will be offering services such as; selling of different
cereals, delivery of goods and customer care services. Electronic machines will be
available to make it easier in terms of payment services so as to avoid long queuing
of customers and ensure that all customers are offered equal and quality services.
2.7 THE INDUSTRY
Sunrise Wholesale Limited will be selling various products whereby we will be
purchasing direct from the manufacturers in large quantities and sell in both large
and small quantities according to our customers taste and preferences. We will be
selling foods such as; Rice, maize Beans among others. We are looking forward to
be the best wholesale around our area of locality because we will sell volumed
trends which will be increasing daily due to professional services that we intend to
give to our customers. There is a quite number of people thus we believe that if we
render best services to them, we will be the best.
2.8 JUSTIFICATION OF THE OPPORTUNITY
There is an existence of an opportunity in wholesale Limited in the area of the
proposed business, this is because the business will be operating every day from
7:30AM morning to 6:45 PM. Since there are many institutions around the area,
the business will have more customers from all institutions and the people in
Eldoret. It has been noted also from the recent research that has been done that,
most of the people around the proposed area of the business are not satisfied with
the services and products competitors render to them, therefore we want to be the
best so we can fill this gap.
2.9 GOALS OF THE BUSINESS
Sunrise wholesale Limited has set its long-term and short-term goals that will
make our operation to succeed and make the targeted profit.
The short-term goals are;
 Increase the stock of the products within a year.
 Increase the sales volume within a year.
 Increase the number of employees within the period of two years.
Long term goals are;
 Open new branches in different areas.
 Expand our business premises and design it in a modern way.
 Create and promote job opportunity to both skilled and semi-skilled
labourers.
 Be the most making venture within its locality.
 Use advanced technology to enhance quality services.

2.10 ENTRY AND GROWTH STRATEGIES

The business is starting up in the year 2023 thus various methods will be used to
draw customers alert and make them aware of its existence. In order to make
customers aware of the business the Board of Directors will use well designed
posters in different places so as to attract more customers as possible. The Board of
Directors will also use magazines, televisions, radios and social media to advertise
this business.
As the business grows on, more branches will be opened in different areas. In order
to make our business more unique, we will invest capital and buy more Lorries that
will assist carrying goods for those retailers who will be buying in large quantities
into their various places of operation.

2.10.1 SWOT ANALYSIS

It helps you to know the position of the business as it will help us accomplish our
business goals and objectives. It helps us identify some of the opportunities in the
business and how to utilize them.

2.10.2 Strengths
 Convenient location where customers can get services and products easily.
 Affordable products and services compared to our competitors which makes
us acquire a more customer base.
 We are able to respond very quickly as we have no red tape and no need for
higher management approval.
 We have strong relationship with suppliers.
 Highly experienced owners-operator.
 Ability to sell products online.
2.10.3 Weaknesses
 Competitors can offer same/similar products easily.
 High transportation costs.
 Our company has little market presence or reputation.
 We are vulnerable to vital staff being sick or leaving.
 Our cash flow will be unreliable in the early stages.
 Limited startup costs.

2.10.4 Opportunities
 Continued expansion for online sales.
 Ability to develop additional stores.
 Acquisition of additional funds of capital.
 Affiliate relations with related vendors.
 Development of wholesale distribution relation.
2.10.5 Threats
 Other indirect competitors entering the field to compete directly.
 Changes in regulation can impact the business.
 Products are already sold by major competitors.
 Insurance costs are continually increasing.
CHAPTER 3. MARKETING PLAN
3.1 CUSTOMERS
The target customers will be grouped according to their potentiality of buying. It
will depend on various factors like income, social class, traditional belief and
practices.
This groups include:
3.1.1 Industry customers
These customers who will be buying goods to go and produce others. They include
those customers in slums owing kiosks, because most customers in slums are better
in buying from kiosks than any other source.
3.1.2 Commercial customers
These are customers who will be buying products for sale at a profit. We will be
selling goods to commercial customers allowing them at a set discount according
to the quantities that they will be buying from our business.
3.1.3 Final consumers
These are the final users of product, most of them are those who buy from kiosks
for the purpose of going to use them all at their own places.

3.2 MARKET SHARE AND TREND

According to the research we conducted recently, the appropriate number of
potential customers in the locality are about 100,000 of this competition services
are about 40% which is below demand. Therefore, the proposed business will have
about 50% at the start up to 60% which will be made by rendering good quality
products and a high-quality service by our trained employees with proper
management and skilled personnel.
This will be achieved through proper marketing mix which will include;
 Proper pricing.
 Efficient and reliable channels of distribution.
 Providing high quality of products and services.
 Employing skilled personnel with high experience of handling customers.
This will be done with an aim of maintaining and improving market share,
marketing competition, maximizing profits, achieving targets return on investment
and for survival.
The following shows the share of each customer when proposed customers are
100,000.
 Institutions 50,000
 Business people 25,000
 Residents 18,000
 Non-residents 7,000

3.3 COMPETITION
There will be two main competitors who have the same type of business in the
area, they include; Wasafi wholesale Limited and Arise & Shine wholesale
Limited which are 300m and 450m respectively away from the area of the
proposed business. For Sunrise wholesale Limited to stay ahead and cope with the
competition the Board of Directors will ensure that products and services are
offered are of good quality and right quantities and set prices which will fit both
the rich and the poor. Also, Sunrise wholesale Limited will have an advantage over
them in terms of operational hours where it will be operating as from 7:30 AM
morning and closing at 6:45 PM, while our competitors operate from 8:00 AM to
5:00 PM and 7:30 AM to 5:00 PM respectively. We will ensure that the products
and services are readily available at any time of need so as to attract more
customers.
3.4 SALES TACTICS
The method that will be used to sell products will be direct selling to customers,
there will be no middlemen. Those customers that will be buying in large
quantities will be allowed a commission of 8% of the price. The sales will be done
by employed personnel with high experience in selling and packing of goods.
Courtesy of the highest order will be demanded from our employees to maintain
the good image of the business.
3.5 PRICING STRATEGY
The prices of all the products will determine the profit to be made. Considering
stiffness of competitions and distribution, we will ensure that neither the business
nor the customers are losing. Competitions from the neighboring wholesales will
enable us to set the best prices for our business considering both sides; business
side and customer side, economic stability and government regulations like
licensing will also determine the pricing of our products.

3.6 PROMOTING AND ADVERTISING

In order to ensure that people are aware of Sunrise wholesale Limited, we will
promote the business through advertisement. We will use billboards which will be
fitted around Eldoret town showing the business name, address and location. We
will also use posters and brochures that will be distributed within Eldoret. We will
also use televisions and radios frequently to make people aware of our business
and the products we will be offering. Methods of promotions to be used are
allowances of commissions for customers who will be purchasing in large
quantities from our wholesale.

3.7 DISTRIBUTION AND STRATEGY

The business intends to offer transportation services for those customers
purchasing from us in large quantities. Plans are made to establish a warehouse
where we will be storing goods for customers purchasing in large quantities before
they are transported to their various areas of operation. This will ensure that the
customers’ products are well secured and there will be compensation for any
damage maybe caused while in the warehouse. The already bought products will
be staying in our warehouse until the customers intended time to move them into
his area of operation, no charges will be applied on warehousing.
CHAPTER 4. MANAGEMENT AND ORGANIZATION PLAN
4.1 ORGANIZATION PLAN
The Board of Directors(owners), manager, supervisor, subordinate staffs will form
the management. The owners of the business will be the Board of Directors and he
will be the manager too. They will employ staff and assign duties to them; the
business will distribute work according to professions and experience those in top
position will guide and control those below them in operating the business.
4.1.1 Organization structure

Board of Directors

Manager

Supervisor

Subordinate Staff

Security Officer

4.2 KEY MANAGEMENT PERSONNEL

4.2.1 Board of Directors
The Board of Directors must be the owners of the business since it’s a partnership.
Duties and responsibilities of Board of Directors
  Determining the partnership’s strategic objectives and policies.
 Monitoring progress towards achieving the objectives and policies.
 Appointing senior management.
 Accounting for the company’s activities to relevant parties, e.g.,
shareholders.

4.2.2 Business manager

The role of a Business Manager is to supervise and lead a partnership's operations
and employees.
Duties and responsibilities of the manager
 To co-ordinate all activities carried out in the business.
 He will ensure that the business runs smoothly.
 Make sure that all matters pertaining finances are attended to as quickly as
possible.
 He controls all the staff ensuring that they carry out their duties as expected.
 Maintaining good relations between employees.
 Ensuring that there is availability of products always and customers are
served well.

4.2.3 Supervisor
Duties and responsibilities
 The supervisor will closely work with the manager and will ensure that
employees are working smoothly and that they report to work on time.
 The supervisor will also provide assistance to workers so as to speed up the
work done.
Qualifications
 He/she should be 25 years and above.
 Should hold a degree from a recognized institution in business
administration and management.
 Should have good communication skills.
 Must have a certificate of good conduct.
 Should be able to make proper decisions concerning the business especially
when the manager is out and about.
4.2.4 Sub-ordinate staff
Qualifications
 Should be above 23 years of age.
 Should have good communication skills.
 Should have qualified training in the field of his/her working area.
 Should be computer literate or able to use a smartphone.
 S/he should be able to keep good working records.

Duties and responsibilities

 Ensure that everything is done at his area of specification well.
 To give right information to customers according to their concerns and
inquiries.
 To ensure good arrangements of products in store.
 Maintain cleanliness within the business premises.
 Ensure that the machines are at the right functionality and work well, if not
report to the supervisor.
4.2.5 Security officers
Qualifications
 Should be above 21 years of age.
 Must be at least a form four graduate
 Must be able to communicate well.
 Must have a certificate of good conduct.
 Should have relevant skills in the field of security.
 Must have trained from a recognized institution.
 Must have a work experience of more than 1 year.
Duties and responsibilities
 To ensure that properties of the organization is well taken care of.
 Ensure general security to the organization.
 Ensure good relation with both employees and customers.
4.3 RECRUITMENT AND SELECTION
4.3.1 Recruitment
The required employees of the proposed business will be obtained from relevant
institution which are recognized to have qualified and disciplined workers.
Employees will be selected on the basis of their education skills and competence in
doing work. Employees’ performance will be assessed by the manager in terms of
hard work, quality services and level of productivity. The business will add on
other more employees when the need arises.
4.3.2 Training
Employees will receive quality training from a well-known institution. They will
receive training once in a year, it will familiarize the workers with the job and give
them all the basic skills like communication skills, public relation and technical
skills in order to have knowledge of products and how to maintain the facilities
available.
Training will enable workers to:
 Increase their efficiency and productivity in completing their daily work tasks.
 Learn from the competitor’s mistakes in order to help in correcting our
mistakes.
 Borrow ideas from others especially sales representatives, distributors,
customers, suppliers and competitors
4.3.3 Promotion
Promotion will be done based on performance and level of skills the employees
have. There will be awarding of incentives as a way of motivating employees and
promoting hard work. The promoted employees will be given other benefits
depending on the work done and this will encourage the rest workers to work hard.

4.4 REMUNERATION AND INCENTIVES

The business shall use all the following remuneration.
4.4.1 Allowances
The manager and the supervisors will enjoy an allowance of Ksh. 4000 per month
which will cater for both transport and medical.
4.4.2 Salary schedule
The salaries shall vary with one’s position and responsibilities as shown below.
Occupation Salary in Ksh
Manager 50,000

Supervisor 35,000
Subordinate staff 18,000

Security officers 15,500

Total 118,500

4.4.3 Incentives
Employees shall enjoy the following incentives as a way of motivating them.
i. Off duties and leaves
Each employee shall be given off duties a week in every four months one
person at a time, but they will get paid even when they are on a leave. The
employees will also not work on holidays.
ii. After sale services
Customers will enjoy free delivery service and 2.5% discount for purchases
above Kshs. 150,000.

4.4.4 Support services

i. Bank
The bank that will be working with the proposed business will be KCB bank
that will bank our money. It will provide us with financial assistance e.g.,
loans and offer security for our savings.
ii. Law firm
The lawyer of the proposed business will be the person who will defend the
business against any intruders. The lawyer must be a person who is qualified
in matters concerning the law.
The business will be out sourcing legal services in case any issues arise.

iii. Transport
 The business will purchase its own vehicles for transportation and employ
drivers.

4.5 LICENSE, PERMITS AND BY-LAWS

4.5.1 License and permits
This will be obtained at Eldoret town council licensing office which will allow the
business to start operating as stated in the constitution that governs all businesses
in Kenya.

4.5.2 By-laws
The business will use the following by-laws during its operations.
 Installation of a number of fire extinguishers at every corner of the business
premises
 Ensure good ventilation and drainage of the store
 Installation of alarms for security especially against theft
 Installation of CCTV at every corner of the business premise.
CHAPTER 5. PRODUCTION AND OPERATIONAL PLAN
Objectives of production and operational plan include:
 To use quality products
 To meet possible customer expectations and complaints
 To be able to device high quality services and goods
Land and promises
The business will occupy a large room that will be fit its purpose and partitioned
into subsections for various activities of the business, professional designers and
carpenters will be hired to assist for the same.
Premises layout and locality
Moi Airforce’s
KCB Bank
KCB Eldoret
Eldoret west

Moi street

Sunrise Wholesale Ltd.

Power Security
Sales Office/Room
house Office

Parking Lot

Manager’s office Supervisor’s office

Warehouse
Washrooms
5.1 Production facilities and capacity
Sunrise wholesale Limited aims at employing a production process that will suit
the various needs of the customers in the aspect of quality products and services.
This shall be achieved by optimum utilization of the resource available.
It will follow the stages below;

Purchasing from manufactures

Transporting to business premises

Recording the purchases

Selling to customers

Recording of sales

Transport service to customers.

5.1.1 Production facilities and capacities

Here are some of the items and equipment needed to start up the business
ITEMS QUANTITY UNIT COST TOTAL
Desktop 5 18,000 90,000
computers
Water dispensers 4 4,500 18,000
Executive Chairs 2 8,000 16,000
Office chairs 15 2,000 30,000
Tables 5 7,000 35,000
Television 2 25,000 50,000
Trollies 10 5,000 50,000
Shelves/Counter 10 5,000 50,000
Dust coats 30 600 18,000
Vehicle (Lorry) 2 1,200,000 2,400,000
Safety equipments 20,000
Total 2,777,000

The business will not be involved in production of goods but rendering services
and selling goods hence ensuring quality output to satisfy customer needs.
These facilities will be purchased at the start of the business to keep it on trade as
more items will be purchased while the business continues to grow.
The business will ensure that the legal formalities by the government is worked on
before the business can start its operations.
Change in business laws may change the way business operates. Business laws
affects employer to employee relationships and vice versa. For instance, it is
mandatory for employees to follow government regulations regarding the way they
treat their employees and their hiring mechanism.

5.2 Production and operational process strategy

The business will be involved in rendering services to the people and it aims at
coming up with strategies that will pose a great impact to the firm and gain surplus
profits.
Some of the strategies involve relocating the business in case of complaints from
customers. The design of the products will be some of the strategies that the
business will use as a competitive advantage over its competitors.
5.3 Production and operational process
While the business is in operation, it will incur expenses that will be paid every
month so as to ensure continuous flow of work.
They include:
Description Cost
Salaries and allowances 126,500
Water 2,000
Repairs and maintenance 15,800
Advertising 15,000
Insurance 100,000
Total 259300

5.4 Regulations affecting operations

The government imposes regulations that affect business operations.
Example:
 Taxes
 Employment and labor law
 Business name registration
 Insecurity
 Environment regulations
 Operational license
 Advertising
 Antitrust laws

CHAPTER 6. FINANCIAL PLAN

6.1 PRE-OPERATIONAL COST
The business will have a starting capital of 20,000,000
ITEMS QUANTITY UNIT COST TOTAL
Desktop 5 18,000 90,000
Computer
Water Dispenser 4 4500 18,000
Executive chairs 2 8,000 16,000
Office chairs 15 2000 30000
Tables 5 7000 45,000
Television 2 25,000 50,000
Trolley 10 5,000 50,000
Shelves/counter 10 5,000 50,000
Dust coat 30 600 18,000
Vehicle(lorries) 2 1,200,000 2,400,000
Safety equipment 20000
TOTAL 85 1275100 2,777,000

6.2 WORKING CAPITAL

The working capital of proposed business will be Ksh.17,223,000
Calculation showing working capital
Working capital = initial cost - Initial pre-operational cost
Where: initial cost = 20,000,000
Pre-operational cost =2,777,000
Therefore 20,000,000-2,777,000 = 17,223,000
Working capital= 17,223,000
6.3 Projected cash flow statement

CASH FLOW PROJECTION FOR THE FIRST 3 YEARS

PARTICULARS 2023 2024 2025

Opening cash 17,223,000 24,723,000 34,723,000

Sales 10,500,000 15,000,000 20,000,000
Total cash inflow 27,723,000 39,723,000 54,723,000
Cash out flow
Purchases 12,000,000 12,000,000 15000000
Salaries and allowances 1518000 1518000 2000000
Electricity 60,000 62000 63000
Water 24000 28000 29000
Rent 600,000 600,000 600,000
Fuel 300,000 320,000 350,000
Insurance 100,000 100,000 100,000
Advertisement 180,000 160,000 130,000
Maintenance 189600 195,000 200,000
Miscellaneous 20,000 25000 22000
Total outflow 14,991,600 15008000 18494000
Net cash inflow 12,731,400 24,715,000 36,229,000
6.4 PREPARATION OF INCOME STATEMENT FOR THE FIRST YEAR

Particulars 2023 2024 2025

Sales 10,500,000 15,000,000 20,000,000

Purchases 12,000,000 12,000,000 15,000,000

Gross profit -1,500,000 3,000,000 5,000,000

Expenses

Salaries 1,518,000 1,518,000 2,000,000

Electricity 60,000 62,000 63,000

Water 24,000 28,000 29,000

Insurance 100,000 100,000 100,000

Advertisement 180,000 160,000 130,000

Maintenance 189,600 195,000 200,000

Miscellaneous 20,000 25,000 22,000

Total outflow 2,091,600 2,088,000 2,544,000

Net profit -3,591,600 912,000 2,456,000

Net profit b/d -3,591,000 912,000

Net profit c/d -3,591,000 912,000 2,456,000

Assets 2023 2024 2025

Fixed assets
2,400,000
Motor vehicle (Lorries) 2,400,000 2,400,000
Computer desktop 90,000 90,000 90000
Furniture and Fittings 131,000 131,000 131,000

Total Fixed assets 2,621,000

2,621,000 2,621,000
Current assets
Cash 17,223,000 15,800,000 23,200,000
Debtor 150,000 100,000 80,000
Stock 9,000,000 10,500,800 17,790,000
Total Current assets 26,373,000 26,400,800 41,070,000
Total Assets 28,994,000 29,021,800 43,691,000
Current liabilities
Creditors 4,501,000 3,800,000 1,889,000
Bank Overdraft 810,900 650,000 578,000
Total Current liabilities 5,311,900 4,450,000 2,467,000
Long term liabilities
Bank loan 5,500,000 900,000 600,000
Owner equity 2,500,000 2,800,000 3,200,000
Total liabilities and Equity 8,000,000 3,700,000 3,800,000

Total Liabilities 13,311,900 8,150,000 6,267,000

6.5 PREPARATION OF BALANCE SHEET

6.6 CALCULATION OF BREAK-EVEN LEVEL
Determines whether the business is making profit or loss.
6.6.1 Gross profit margin
Gross profit× 100%

Sales

5,000,000× 100

20,000,000

=25%

Breaking level

Expenses

Gross profit margin

=2,544,000

25%

= 10,176,000

6.7 CALCULATION OF PROFITABILITY RATIOS

6.7.1 Return on equity
Net profit ×100

Capital employed +net profit

2,456,000×100

20,000,000+2,456,000

= 10.9%
6.7.2 Return on sales
Net profit×100

Sales

2,456,000×100

20,000,000

= 12.28%

6.8 DESIRED FINANCING

Total desired financing= pre-operational cost +working capital

= 17,223,000 +20,000,000

= Sh. 37,223,000