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Umoja poultry business plan- Lydia

Community Development and Social work (Thika School of Medical and Health
Sciences)

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BUSINESS PLAN

ADMISION NUMBER :
CND/J-0001/KIS21

DEPARTMENT : HUMAN
NUTRITION

BUSINESS NAME : UMOJA POULTRY FARM

PRESENTED BY : LEWINSKY LYDIA

SUPERVISER : MADAM DEBORAH

BUSINESS PLAN SUBMITTED TO THIKA SCHOOL OF MEDICAL AND HEALTH SCIENCES

FOR THE AWARD IN NUTRITION AND DIETECTICS.

SEPTEMBER,2022
DEDICATION
My special dedication goes to fellow students whom we have worked together during the data collection, the
almighty god for the knowledge and good health he provided for me during the time of writing the business
plan.

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I also dedicated to and my family members and friends their support both financially and psychologically.

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Acknowledgement
I would like to register my sincere gratitude and appreciation to all those whose contribution made this project
a success. My research lecturer who gave his tireless to guide me throughout the business planning

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Table of Contents
DEDICATION................................................................................................................................................................ii

Acknowledgement.........................................................................................................................................................iii

CHAPTER ONE.............................................................................................................................................................1

1.0 Executive summery..................................................................................................................................................1

1.01 BUSINESS DESCRIPTION...................................................................................................................................1

1.02 ORGANIZATION AND MANAGEMENT............................................................................................................1

1.03 PRODUCTION AND OPERATION PLAN...........................................................................................................1

1.04 FINANCIAL PLAN..............................................................................................................................................1

1.2 BUSINESS NAME AND LOGO.............................................................................................................................2

1.1.1 BUSINESS LOCATION AND ADDRESS............................................................................................................2

1.1.1 BUSINESS OWNERSHIP...................................................................................................................................3

1.1.1 TYPE OF BUSINESS...........................................................................................................................................3

1.2 PRODUCT AND SERVICES...................................................................................................................................3

INDUSTRY....................................................................................................................................................................3

1.2 JUSTIFICATION OF OPPORTUNITY...................................................................................................................4

BUSINESS OBJECTIVES AND GOALS......................................................................................................................4

Short term goals..............................................................................................................................................................4

1.2 ENTRY AND GROWTH STRATEGY....................................................................................................................4

CHAPTER 2...................................................................................................................................................................6

2.0 MARKETING PLAN...............................................................................................................................................6

2.02 POTENTIAL CUSTOMERS..................................................................................................................................6

3.3 Market share/size......................................................................................................................................................6

KEY...............................................................................................................................................................................7

2.4 METHODS OF PROMOTION AND ADVERTISEMENT....................................................................................8

2.4.1 ADVERTISING.....................................................................................................................................................8

2.4.2 PROMOTION.......................................................................................................................................................8

2.5 PRICING STRATEGY...........................................................................................................................................8

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2.6 SALES TACTICS.....................................................................................................................................................8

discount.........................................................................................................................Error! Bookmark not defined.

2.7 DISTRIBUTION STRATEGY..................................................................................................................................9

CHAPTER THREE......................................................................................................................................................10

3.0 ORGANIZATION AND MANAGEMENT PLAN................................................................................................10

3.1 ORGANIZATION STRUCTURE..........................................................................................................................10

3.1.1 Organization chart................................................................................................................................................10

DUTIES AND RESPONSIBILITIES...........................................................................................................................11

SALES ATTENDANT..................................................................................................................................................11

DUTIES AND RESPONSIBILITIES...........................................................................................................................11

Farm assistant...............................................................................................................................................................11

Qualification.................................................................................................................................................................11

DUTIES AND RESPONSIBILITIES...........................................................................................................................12

3.3 RECRUITMENT, TRAINING AND PROMOTION..............................................................................................12

Recruitment..................................................................................................................................................................12

Promotion.....................................................................................................................................................................12

3.5 LEGAL REQUIREMENTS..............................................................................................................................13

3.6 SUPPORT SERVICES............................................................................................................................................13

CHAPTER FOUR........................................................................................................................................................15

4.0 OPERATION/PRODUCTION PLAN....................................................................................................................15

4.2 PRODUCTION OPERATION / OPERATION OBJECTIVES..............................................................................15

4.2 PRODUCTION FACILITIES AND CAPACITY...................................................................................................15

5.1.1 MACHINERY TOOLS AND EQUIPMENT.......................................................................................................15

Furniture and fitting for operations...............................................................................................................................15

4.3 PRODUCTION STRATEGY.................................................................................................................................16

Material requirement per month...................................................................................................................................16

4.4 PRODUCTION PROCESS....................................................................................................................................16

4.5 REGULATIONS AFFECTING PRODUCTION OPERATION.............................................................................17

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5.8.3 PRODUCT COSTS.............................................................................................................................................17

CHAPTER FIVE..........................................................................................................................................................18

5.0 FINANCIAL PLAN...............................................................................................................................................18

5.1 PRE-OPERATIONAL COST.................................................................................................................................18

5.2 working capital.......................................................................................................................................................19

5.3 PROJECTED CASH FLOW STATEMENT.....................................................................................................20

5.3.1 PROJECTED CASH FLOW STATEMENT FOR THE YEAR ENDING 2020 (1ST YEAR)........................20

5.3.2 PROJECTED CASH FLOW STATEMENT FOR THE YEAR ENDING 2019 (2nd YEAR)........................21

5.3.3 PROJECTED CASH FLOW STATEMENT FOR THE YEAR ENDING 2020 (3rd YEAR)........................22

5.4 PROFOMA INCOME STATEMENT FOR THE YEAR ENDED 31ST DEC 2020,2021,2022...............................23

5.5 break even analysis.................................................................................................................................................24

5.5.1 variable expences.................................................................................................................................................24

5.5.2 fixed expences.....................................................................................................................................................24

Break even level= fixed expenses x100.................................................................................................................25

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CHAPTER ONE
1.0 Executive summery
1.01 BUSINESS DESCRIPTION
Umoja poultry farm will be the proposed business name, located near Maseno University Campus. It will
engage in keeping of poultry layers for eggs production. The business ownership will be a sole proprietorship
farm of business. The factors which will enable business to succeed are:
I. Availability of market, sufficient demand for the business products.
II. Low competition; there are less poultry farms practicing the same form of business nearby in that
locality
III. Availability of infrastructure; the communication means like roads are available hence reduces the
cost of production also availability of water and electricity makes the business to have a good start
1.1 Marketing plan
The market shares of the proposed business at the start will be 30% of the potential customers. It will increase
to 60% after being in operation for 3 years.
The potential customers will constitute the following groups
- Learning institutions
- Hotels and restaurants eg Rock hotel
Advertising
It will use the following methods ; sign boards, word of mouth, radios and televisions gathering and hand bills
Promotion
The business will carry promotion by offering discount on bulk purchases and issuing of calenders which
carries the business name and logo
The customer near the locations of the business comes to take the products themselves and those far away will
be distributed to the by hiring vehicles
1.02 ORGANIZATION AND MANAGEMENT
the proposed business will be managed by the owner being the manager of the business. The number of staff
the business will have at the start will be three, and the amount of salary to be paid at the start will be KSH.
4000.00 inclusive of the manager.
1.03 PRODUCTION AND OPERATION PLAN
The cost of equipment at the start will be Ksh. 31000.00 and the cost of material or stock will be KSH.
48,500.00 of the proposed business. They will be maintained by handling them with care in order to reduce
occurrences of breakage and loss of materials and stock taking of raw materials to ensure proper storage,
customer satisfaction deterioration expenses to be incurred in the business
1.04 FINANCIAL PLAN
The proposed business initial capital will be Ksh. 400,000.00 and it will be acquired in the following ways
Sources Amount
Personal savings 150,000.00
Friends 50,000.00
Relatives 100,000.00

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Bank loans 100,000.00

Total 400,000.00

The break-even level for the proposed business for the first years will be as follows

Year 1 2020 654,403.11

Year 2 2021 697,835.11
Year 3 2022 841,835.90

The business will ensure finances are well taken care of by:
The business making an account with equity bank for saving money to ensure the finances of the business are
secured theft cases and loses. Investing in other viable business projects to save the amount of money for
future proposes
The business having financial accounting books where every business transactions are authorized, approved
and recorded to be kept by the right authority in the business in order to account for every financial year of the
business
1.2 BUSINESS NAME AND LOGO
The name of the proposed business will be Umoja poultry farm. It means one business operated by one
person , sole proprietorship business the logo of the proposed business will be a hen.

1.1.1 BUSINESS LOCATION AND ADDRESS

The business is proposed to be operated near maseno university campus along the Kisumu- lwanda road.
The address will be
Umoja poultry Farm
P .O BOX 40

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Maseno
Tell: 0728008591
The map showing the location of the business will be
1.1.1 BUSINESS OWNERSHIP
The form of business ownership will be a sole proprietorship business managed by one person independent to
utilize this interest and full fill the dream of becoming a self employed entrepreneur.
Proprietor’s profile
The academic qualification of the business owner is O level certificate and professional certificate in banking
and finance Award. The proprietor trait being hard working in the management of the business to yield
product of output in the farm, innovative, creative hence improving the business and making it more better
than it was before.
Capital investment
The amount of capital invested in the business when starting would be four hundred thousand shillings only

Sources Amount
Personal savings 150,000.00
Friends 50,000.00
Relatives 100,000.00
Bank loans 100,000.00
Total 400,000.00

Bank loan from equity bank at an interest of 16% which will take two years to refund the bank
1.1.1 TYPE OF BUSINESS
The type of business will be poultry farm keeping layers for eggs production
1.2 PRODUCT AND SERVICES
The product of the farm that it will engage in is eggs , the business will also offer public relations services
when treating when treating business customers with care.
INDUSTRY
The business belongs to agricultural industry under poultry keeping. Products produced are neither ready
made and does not require undergoing so many processes. Most of the work in this industry does not require
machine of any mechanical power but require man power. The agricultural industry being the major source of
Kenyan economy gives the owner a bright future of success in his goals and objectives to be attained.
The characteristics of the business are;
a) Sole proprietorship business
b) The farm will have 500 layers of poultry
c) One manager, the owner of the business
d) Four employees in the business farm
e) The payment of employees on monthly basis

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The kind of technology required will be the agricultural skills and knowledge about poultry farming and types
of food required

1.2 JUSTIFICATION OF OPPORTUNITY

Agriculture being the major Kenyan economy the owner will find availability of market for the product from
survey carried out in her area of location
Secondly, availability of the business, because this kind of business has been observed to give high returns
within shorter period of time.
BUSINESS OBJECTIVES AND GOALS
The business will have long term and short term goals
Short term goals
The business to generate income after operation
To make a high profit level or a reasonable profit level from the business
To provide best quality product to customers in time and when required
Long term goals
i. To increase the number of poultry layers and the business premise
ii. To improve the talent on poultry farming. iii. To provide a good role model to the
society by showing the image of a successful person

1.2 ENTRY AND GROWTH STRATEGY

1.9.1 Entry strategy
The owner will acquire all the legal documents and requirements needed by the business to make it work
smoothly. Bringing all required feeds, chemicals to be available to poultry in the farm.
In addition to enhance easy management of the business when all the needs are adhered to enter the market
and create public awareness of the product on offer, advertisement would be necessary and to be achieved
through
i. Word of mouth
ii. Printed posters pinned at various strategic points where they can be easily viewed
iii. Exhibition products taken to agricultural shows. It gives an opportunity to gauge for themselves for
the quality product and to bring to the attention of potential customers the existence of the new
business

1.9.2 Growth strategy

For business growth the business needs to consider the market for the products to make it grow wider. The
owner is also willing to study his competitors and have advantage over them and retain more customers

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In addition, opening of a new branch of the same business to facilitate the growth of the business to yield
higher income from the two farms careful handling of eggs to avoid breakage which may bring loses to the
business. Finally, practice high standards of cleanliness in the farm and the products
1.9,3 SWOT analysis
These are the strengths weaknesses, opportunity and threats of the business
a) Weaknesses of the business are limited skills
b) The strengths of the business will be high demand for the product in the market and potential
customers
c) The threats and risks are poultry diseases like bird flue and Newcastle disease

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CHAPTER 2
2.0 MARKETING PLAN
To benefit fully from its marketing strategy the business will target

To favorably with the existing business of similar nature in the area by keeping with the dynamic forces in the market

To cultivate good will and trust from esteemed customers to make the business generate more sales and increase the
returns or results of the business

To cultivate and manifest customers sales and promotions to promote a healthy business to be viable project to venture
into

2.02 POTENTIAL CUSTOMERS.

The Customers will constitute the following groups

Hotel and restaurant
Learning institution
Hotel and restaurant include the rock motel
Learning institution includes Maseno University, Merseno School.Maseno boarding Pimary and St Peters Secondary
school.

3.3 Market share/size.

The intended business intends to capture at least 38% of the potential customer considering the advantages and
disadvantages of the competitors which is good for a start
The market share when the business has been in operation for at least two years will be 50% the intended business will
increase its market share by 12% due to the following reasons As provision of quality products

Serving the customers with courtesy

Advertising more frequently about the business
Selling at a slight lower price
Es convenient operating time 7.30 am to 6,30pm the promotion of the intended business and its counterpart at starts in
percentage as shown below

Sales

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uremo poultry mambo poultry pendo poultry

27.00 %

38.00%

35.00%

Key
A-Urembo poultry farm
B-Umoja poultry farm
C- Pendo poultry farm
The market share with the business has been in operation for two years is shown below

Sales
uremo poulrty farm mambo poulry farm pendo poultry farm

2.19% 1.23%

96.58%

KEY
A-Uremo poultry farm

B-Umoja poultry farm

C- Pendo poultry farm

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THE COMPETITORS WILL HAVE 60%proportion of the potential customers at start

These will include

2.4 METHODS OF PROMOTION AND ADVERTISEMENT.

2.4.1 ADVERTISING
Methods used to advertise include signboards, word of mouth, friends, and relatives, gatherings, barazas, local
newspapers and handbills This is a way of informing the customer about the new product that is brought into the market.
It makes the customer make a decision on what products to buy as the importance of the particular products has been
communicated to them. the frequency of advertising will be monthly and appropriate cost to estimate to be nearly two
thousand, the intended business will evaluate the efforts of advertising from increasing in sales per month and high
customer turn up.

2.4.2 PROMOTION
The intended business will carry out promotion by
Offering discount on bulk purchasing
Issuing use of calendar which carry the logo of the business
Selling products at fair and reduced price

2.5 PRICING STRATEGY.

The price of products and services will be according to the market price, competitors price and the cost of production.
The market price of an egg is ksh 10 and the competitors price is kshs 9. Therefore, the proposed business will sell an
egg at sh 8 the price.
Quantity Price kshs

One tray 240

An egg 8

2.6 SALES TACTICS.

The sales tactics will play a role in improving on the targeted business sales to generate more profit from more products
being brought by customers.
The business will also admit the use of motorbikes to travel.

Discount
Offering discount to those customers who will purchase in bulk quantities
Bonuses
Giving of ten eggs free of charge to customer who will bring more than twenty trays of eggs
Efficient service
Offering quality products and having good public relation to customers
Exhibitions
Taking of the products to various display to the general public
Sales staff having uniforms good customers relations trained and with experience of the field of poultry farming

2.7 DISTRIBUTION STRATEGY.

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The customer who will be near the location of the business come to buy and take the products, eggs by themselves
The benefit being sold eggs to them at slightly reduced price because the business will not incur any transport cost.
The customers slight far away from the intended business to make sure the product enriches all the people. As the
firm opens up branches, it will also use motorbikes to help reach the rural areas to the retailers shops in time to
satisfy the needs of customers. depending on the order of the products the customers benefit being given discount on
the products

The obstacle faced by the intended business will be arranging and putting of the products eggs to the trays before
being delivered to customers during distribution to avoid damages which may contribute to the loses of the
business .

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CHAPTER THREE
3.0 ORGANIZATION AND MANAGEMENT PLAN.
Organization plan deals with people who work to meet the proposed objectives of the business
The management and organization objectives will be
To have a good public relation to customers when serving them for the purpose of maintaining them and for the
customers to bring in more customers
To develop staff through training as well as rewarding them generously so as to maintain them at high level of
motivation hence achieving high performance in return
the proposed of organization and management in the intended business will be
to make decision concerning the running of the business solving employees
disputes
to make sure the business turns in an orderly manner so as to yield good production outputs

3.1 ORGANIZATION STRUCTURE.

The intended business will be managed by the owner who is the boss in the business:

3.1.1 Organization chart.

MANAGER

SALES ATTENDANT

FARM ASSISTANT

WATCH MAN

3.2 KEY MANAGEMENT PERSONNEL.

At the start of operation, the key management personnel will only be the manager
Manager.

Qualification

Form four level of education

Currently at the final stage of competing certificate course in banking and finance

Computer litrate.

DUTIES AND RESPONSIBILITIES

Deligate duties to worker

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Make decision on the way to organize and business ii) The manager will

also be the overall financier of the business iii) recruiting and interviewing

of new employees iv) He will be the one authorizing and purchasing on

behalf of the enterprise

v) The manager remuneration will be Ksh 16,000 and future prospect of the mangaer will be increased ksh 18000 in
two years to come.

SALES ATTENDANT
FORM four level education

Have good public relations

Have a certificate in sales and marketing

Computer litrate

DUTIES AND RESPONSIBILITIES

Formulate market strategies

Looking for tenders for the business

To increase market share through aggressive marketing and advertising

The renemaration package will be kshs 9000 and in future prospect of the sales attendant will be kshs 10000

Farm assistant
Qualification
FORM four level education

Should have knowledge on poultry farming

Should be hardworking and honest

Ensure there is enough food and water for thepoultry at all times

Collecting eggs and putting them on trays

Cleaning of the business premises and going outmedicine to the poultry

The farm assistant will be paid kshs 9000 and the future prospect of the farm assistant will be 11000

Watchman

There will be one watchman

Qualification

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Standard eight level education

Hardworking and honest

DUTIES AND RESPONSIBILITIES

Safeguard business and assets

To ensure peace and stability prevail in the business

The salary will be kshs 6000 and medical allowance to be provided hewill be working during night hours

3.3 RECRUITMENT, TRAINING AND PROMOTION.

Recruitment.
Recruitment will satisfy be done by top management following all the recruitment and selection procedure
Recruitment procedure
• Advertising the vacancies through posters with detalaied requirement the applicant must adhere to requirement
stipulated in the posters.
• The interviewer must get application form and read against the job advertised and qualification then select
those who qualify for the interviewer and check the curriculum vitae against their original certificate it concurs
with the one written in the application from and test if the applicant is having the right skills in the field of job

3.3.2 Training
Training will be purely on merit that is according to the level of management whereby the manager will be
looking at qualification, respect, productivity and interest.
Training is provided whereby business is expanding and more employees who are working in the farm are first
promoted to different position and before that the firm will provide training according to work promoted to.

Promotion.
Promotion will also be based on academic qualification productivity and enterprenual skills
3.4 REMUNERATION AND INCENTIVES
The proposed business will remunerate the employees at end of the month
The table below how the employees will be remunerated

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past Basic salary Allowance Deduction Net salary

Transport medical

manager 1600 1500 1000 2500 16000

Cashier 10,000 1,000 500 1500 10000

1500
Sales attendant 9,000 1,000 500 9000
1000 500 1500
9000
Farm assistant 900
6000
watchman 30,000

TOTAL 265,000/= 5,000/= 3000 7000 50000

The staff will be given incentives like the overtime pay leave allowance ,working clothes sick off and end year party the
proposed business will ensure qualified and hardworking employees are promoted and their basic salary increased also
their good work appreciated

Through this policy, more workers will want to stay and work with the business for a long period of time since the
business will be willing to offer them anything they need in support.

3.5 LEGAL REQUIREMENTS.

The proposed business being an agricultural activity of farming does not need to necessarily have any government
permits and license

3.6 SUPPORT SERVICES.

The business will open an account with equity bank Kisumu branch this will help to keep finances of the business
secured.
The address of the bank will be equity bank
Po box 21
Kisumu
Portal service
It is onother major business service which provides adequate communication with its potential key customers
Time management
All the business employees should adhere to the stipulated business hours to enhance effective and efficiency of the
business production

CHAPTER FOUR
4.0 OPERATION/PRODUCTION PLAN

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IT WILL PLAY AROLE OF provision of high quality standard product to its esteemed customers it also ensures
effective and sufficient use of time management and the resources to achieve the stipulated goals.

4.2 PRODUCTION OPERATION / OPERATION OBJECTIVES

It will play a role of provision of high quality standard product to its esteemed customers effectively as they are
expected.
To have sufficient use of resources to achieve a high profit level
To source per starndards equipment and facilities so as to provide customers with high quality products and services
To ensure that the supply of goods are at the right time to attract more customers due to shortage of the product supplied

4.2 PRODUCTION FACILITIES AND CAPACITY

These are materials tools and equipment needed for the business to start the business will have to allocate some funds to
meet the method requirements

Equipment and machinery for operation

4.2.1 MACHINERY TOOLS AND EQUIPMENT

The business will need refrigerators, incubators, heaters to warm the poultry when it’s cooled
ITEM capacity Unit cost TOTAL
(KES)
Iegg trays 40 40 1600
Whell barrow 2 1500 3000
Buckets 4 100 400
Dustbin 1 400 400
Calculator 2 500 1000
First aid box 2 1000 2000
Feed through 2 1000 2000
Total 10,400

Furniture and fitting for operations

Item Capacity Unit cost total
Chairs 5 1000 5000
Tables 4 1500 6000
Shelves 2 10000 20000
31000

The equipment and machines will be handle with a lot of care in order to reduce the occurrence of accident and losses
safety regulations of handling of tools and equipment will be followed by every staff employee the plas fo future
expansion of the business will be to increase the number of poultry layers and increase the poultry for a higher viability
of the business

4.3 PRODUCTION STRATEGY

it is how the proposed business will apply to its products and services to enhance high sales of the product to customers
it will depend on the application of modern technology in production it will also try to provide to customers the product
and services will have to adhere to the changing competition .

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Material requirement per month

The following are the monthly material requirement for the proposed business depending on the balance off the previous
stock.

ITEM Capacity Unit cost total

Poultry feed 1800kg 10 18000
Poultry 160ml 8 14800
chemicals
Saw dust 500kg 5 2500
Layers mash 300kg 45 13500
Total 48800

Labour requirement for month

Th business will require effective and qualified labour who works adequetly to achieve their stipulated business goals
the following are the staff who will be required by the business

Operation overheads per month

Particulars amount
Transport 2000
Advertisement 2000
Water bills 1000
Electricity 1500
Postage 500
Telephone 2000
Miscellaneous 2000
Totals 11000
Cost of production
These are the expences incurred by the business in the production of materials requirement ,labour and operational
expences
Particulars total amount
Materials requirement 48800
Labour requirements 40000
Operation overhead expenses 11000
Total 99800

4.4 PRODUCTION PROCESS

The business manager will make sure that there is constant supply of goals to the farm and the proposed business is
systematically arranged to provide adequate supply of the product the proposed business will follow strictly to the orders
made to supply the products to ensure smooth flow of goals and services to avoid delay The production which will
effect the operation process are

Transportation
Delay of the requiiered materials
The owner will reduce the factors which will effect the operation process by
Early booking of means of transportation of goods
Making early orders of materials depending on the stock balances

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4.5 REGULATIONS AFFECTING PRODUCTION OPERATION

There are no much regulations affecting the business but only the public health requirements
This will be required by the ministry of healthy as the business operates which will ensure the business place is
condusive for human health for example fresh water for drinking ,dust pits for litter and also clean toilets clean poultry
premise and well ventilated buildings.

The production cost will be noted as follows

Expenses Costs (kshs)
Security 15000
Transport 20000 Insurance
30000
Raw materials 100000

The overheads will be:

Overheads Costs kshs
Water 30000
Electricity 50000
Telephone 10000 Allowances 20000
Furniture 20000
Total Kshs 130,000
CHAPTER FIVE 5.0 FINANCIAL PLAN
The financial plan shows the expected flow of funds in the business for every year of financial period of business

Financial objectives

Investing of business funds in most viable projects and approved by rightful authority and kept securely in the business

The loan borrowed to be refunded as per stipulated conditions made

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5.1 PRE-OPERATIONAL COST

These are the cost which are to be incurred at initial stages before business is started
Items Cost(kshs)
Stock 48800
Water installation 1000
Furniture and fittings 31000
Telephone 2000
Transport 2000
Advertisement and 2000 promotion
Machinery and 10400
equipment
Miscellaneous expenses 2000
Total 99200

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5.2 working capital

This is the difference between current assets and total current liabilities

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5.3 PROJECTED CASH FLOW STATEMENT

5.3.1 PROJECTED CASH FLOW STATEMENT FOR THE YEAR ENDING 2023 (1ST YEAR)

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5.3.2 PROJECTED CASH FLOW STATEMENT FOR THE YEAR ENDING 2023 (2nd YEAR)
Particulars Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec TOTALS
Cash in flow beginning
cash
Bal. B/F 732050 804150 882000 960100 1044350 1128150 1218450 1311200 1396300 1487000 1582950 1679750 14226450
Sales 120000 123000 124500 130000 135000 140000 145000 140000 141000 150000 155000 160000 1663500
TC Inflow 852050 927150 1006500 1090100 1179350 1268150 1363450 1451200 1537300 1637000 1737950 1839750 15889950
Expenses
Salary 27900 27900 27900 27900 27900 27900 27900 27900 27900 27900 27900 27900 334800
Legal services 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 30000
Permit 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000
Telephone 200 350 500 450 600 400 900 600 300 700 850 1000 6850
Depreciation 800 850 900 950 1000 1050 1100 1150 1200 1250 1300 1350 12900
Rent 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000
Insurance 500 500 500 500 500 500 500 500 500 500 500 500 6000
Water 1000 1200 1500 2000 2500 3000 3500 2800 2500 4000 4500 5000 33500
Electricity 1500 1800 2000 2500 3000 3500 4000 3000 3000 4500 5000 5500 39300
License 450 450 450 450 450 450 450 450 450 450 450 450 5400
Advert /Prom 1500 1500 1500 2000 2000 8500
Bank charges 2600 2700 2800 2800 3400 3600 3800 3600 3650 4000 4200 4400 41550
Stationery 1500 1000 1500 1500 800 1500 2000 900 1000 2500 500 1000 15700 Postage 800 850 900 900 1000 1050
1150 1200 1250 1300 1350 1400 13150
Taxation 450 450 450 450 450 450 450 450 450 450 450 450 5400
Maintenance 3000 3500 4000 4500 15000
Transport 1200 1100 1000 1400 1600 1800 2000 1800 1600 2000 2200 2400 20100
Total cash Inflow 852050 927150 1006500 1090100 1179350 1268150 1363450 1451200 1537300 1637000 1737950 1839750 15889950
Total cash outflow 47900 45150 46400 45750 51200 49700 52250 54900 50300 54050 58200 55850 611650
NET CASH 804150 882000 960100 1044350 1128150 1218450 1311200 1396300 1487000 1582950 1679750 1783900 15278300

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5.3.3 PROJECTED CASH FLOW STATEMENT FOR THE YEAR ENDING 2020 (3rd YEAR)
Particulars Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec TOTALS
Cash in flow
Bal. B/F 1783900 1863900 1957850 2053450 2161500 2264250 2378250 2489150 2588450 2637500 2756600 2898450 27833600
Sales 165000 166000 168000 180000 185000 190000 1955000 175500 178000 210000 225000 230000 2267000
TC Inflow 1948900 2029900 2125850 2233450 2346500 2454250 2573250 2664150 2733450 2847850 2981600 3128450 30100600
Expenses
Salary 37900 37900 37900 37900 37900 37900 37900 37900 37900 37900 37900 37900 4548800 Legal service 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000
3000 36000
Permit 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000 Telephone 1000 1200 1400 1600 1800
2000 2200 2400 2600 2800 3000 3200 25200
Depreciation 1400 1400 1800 2000 2200 2400 2600 2800 3000 3200 3400 3600 30000
Rent 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000 Insurance 1000 1000 1000 1000 1000
1000 1000 1000 1000 1000 1000 1000 12000
Water 5500 5600 5700 6000 6500 7000 7500 6200 6400 8000 8500 9000 81900 Electricity 6000 6000 6000 6500 7000
7500 8000 6600 6800 8500 9000 9500 87400
License 500 500 500 500 500 500 500 500 500 500 500 500 6000
Advert /Prom 2000 2000 2000 2500 2500 11000
Bank charges 4600 4500 4200 4800 5000 5200 5400 4600 4700 5800 6000 6200 170800
Stationery 1500 1000 1500 500 800 1500 2000 900 1000 2500 500 1000 14700
Postage 1400 1450 1000 1050 1250 1000 800 950 800 1050 1150 1200 13100
Taxation 600 600 600 600 600 600 600 600 600 600 600 600 7200
Maintenance 5000 5500 6000 8000 24500
Transport 2600 2700 2800 3000 3200 3400 3600 3200 3000 3400 3600 3800 92300
Fuel 8000 8500 9500 26000
Total cash 1948900 2029900 215850 2233450 2346500 2454250 2573250 2664150 2766450 2847850 2981600 3128450 30100600
Inflow
Total cash 85000 72050 72400 71950 82250 76000 84100 75700 128600 91250 83150 82600 1005050 outflow
NET CASH 1863900 1957850 22053450 2161500 2264250 2378250 2489150 2588450 2637850 2756600 2898450 3045850 29095550

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5.4 PROFOMA INCOME STATEMENT FOR THE YEAR ENDED 31ST DEC
2020,2021,2022

Note the method of description used is redusing balance whereby the depreciation of machinery and
equipment keep on reducing over two years

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5.5 break even analysis

5.5.1 variable expences

advertising

5.5.2 fixed expences

Fixed expences Year2020 Year 2021 Year 2022
Intrest on loan 6000 4000 Depreciation on loan 86800 811.44 795.21
Depreciation of fixed 600000 1360200 660000 804000 assets
Salaries and wages 66828 664811.44 80475.21

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Year 2020 year 2012 year 2022

Variable expenses x100 Variable expenses x100 Variable expenses x100

sales sales sales

152 600x100 156x100 158600x100

2161900 3304200 360400

7.06% 4.72% 4.40%

100%-7.06% 100x4.72% 100%-4.40%

92.94% 95.28% 95.59%

Break even level= fixed expenses x100

Percentage difference

Year 2020 Year 2021 Year 2022

=60588 x100 664811.44 x 100 804795.21 x100

92.94% 95.28% 95.59%

=6529.24 x 100 697745.00 841924.06

652924.46

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5.6 PROFITABILITY RATIOS

GROSS PROFIT RATIO=GROSS PROFIT X 100

SALES

RETURN ON INVESTMENT = NET PROFIT BEFORE TAX X 100

OWNERS EQUITY

RETURN EQUITY = NET PROFIT TAX X 100

WNERS EQUITY

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