BUSINESS PLAN

AKOTHE’S DISHES

INSTITUTION ELDORET TECHNICAL TRAINING INSTITUTE

NAME OF PRESENTER: OUMA TRACY AKOTH

INDEX NO : 5091110512

COURSE CODE : 1410

SUPERVISOR : MADAM BRENDA ETOLE

PRESENTED TO : KENYA NATIONAL EXAMINATION

COUNCIL PARTIAL FULFILMENT FOR

AWARD OF CERTIFICATE IN

SOCIAL WORK

DATE PRESENTED : JULY 2021

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 DECLARATION
I hereby declare that this Business plan is my original work and that it has not been
presented to any examination in any other college or to other examination body. No part
of this work may be presented or reproduced without permission from the author and, or
the Kenya National Examination Council.

NAME: OUMA TRACY AKOTH

SIGNATURE DATE

Declaration by the supervisor

This Business Plan Business plan has been submitted for examination with my approval
as the supervisor.

NAME: MADAM BRENDA ETOLE

SIGNATURE DATE

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 DEDICATION
I dedicate this project to my family members who helped me financially, my siblings for
their co-operation, and lastly is to my friends those who have stay with me throughout the
season.

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 ACKNOWLEDGEMENT
I wish to sincerely express my regards to my parents who through his parental love and
care who guided me through this entire project. Also my other appreciations go to my
most friends for their encouragement and advice. Lastly for my classmates for giving
me their support during my business plan.

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 TABLE OF CONTENTS
DECLARATION.................................................................................................................ii
DEDICATION...................................................................................................................iii
ACKNOWLEDGEMENT..................................................................................................iv
EXECUTIVE SUMMARY.................................................................................................1
BUSINESS DESCRIPTION...............................................................................................1
MARKETING PLAN..........................................................................................................1
MANAGEMENT AND ORGANIZATION PLAN............................................................2
OPERATIONAL/PRODUCTION PLAN...........................................................................2
FINANCIAL PLAN............................................................................................................3
CHAPTER ONE..................................................................................................................4
BUSINESS DESCRIPTION...............................................................................................4
1.1 BUSINESS NAME........................................................................................................4
1.2 BUSINESS LOCATION AND ADDRESS..................................................................4
1.3 Business location and address.......................................................................................5
1.3 FORM OF OWNERSHIP..............................................................................................6
1.4 TYPE OF BUSINESS...................................................................................................6
1.5 PRODUCTS AND SERVICES.....................................................................................6
1.6 JUSTIFICATION OF THE BUSINESS OPPORTUNITY...........................................7
1.7 the industry....................................................................................................................9
1.8 industry trends...............................................................................................................9
1.9 industry characteristics..................................................................................................9
1.10 goals of the business....................................................................................................9
short-term goals.................................................................................................................10
long-term goals..................................................................................................................10
1.11 entry and growth strategy..........................................................................................10
CHAPTER TWO...............................................................................................................11
marketing plan...................................................................................................................11
2.1 customers.....................................................................................................................11
2.2 computation of market share.......................................................................................12
2.3 competition..................................................................................................................13
(c) potential competitors....................................................................................................13
(d) competitor analysis......................................................................................................13
2.4 pricing strategy............................................................................................................14
2.5 sales tactics..................................................................................................................14
CHAPTER THREE...........................................................................................................16
management and organization plan...................................................................................16
3.1 business management and qualifications.....................................................................16
3.2recruitment, training and promotion.............................................................................19
3.3remuneration.................................................................................................................20
3.4incentives......................................................................................................................20
3.4licence and permits.......................................................................................................20
3.5licence...........................................................................................................................20
3.5.2 permit........................................................................................................................20
3.5.3 support services........................................................................................................20
communication services.....................................................................................................21

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chapter four........................................................................................................................22
4.0 operational and production plan..................................................................................22
4.1 operational resources...................................................................................................22
4.2 production facilities and capacity................................................................................22
4.1.2 cutlery and crockery.................................................................................................24
4.3 operational strategy......................................................................................................25
4.4 production strategy......................................................................................................25
4.3.1 design........................................................................................................................25
4.3.2 raw material and items required...............................................................................25
4.3.3 labour requirements..................................................................................................26
4.5 production process.......................................................................................................26
purchasing process.............................................................................................................27
preparation.........................................................................................................................27
storage................................................................................................................................27
serving................................................................................................................................27
4.6 regulations affecting operations...................................................................................28
4.6.1 licence.......................................................................................................................28
4.6.2 permit........................................................................................................................28
catering levy fee.................................................................................................................28
labour laws.........................................................................................................................28
attending to duties..............................................................................................................28
accounts.............................................................................................................................28
safety..................................................................................................................................28
environment.......................................................................................................................29
good conduct......................................................................................................................29
chapter five........................................................................................................................30
5.0 financial plan...............................................................................................................30
5.1 pre-operational cost.....................................................................................................30
5.3.3 projected cash flow statement for the year 2021, 2022, 2020..................................31
5.3.1 projected cash flows akothe’s dishes 2021..............................................................32
5.3.2 projected cash flows akothe’s dishes 2022..............................................................33
5.3.3 projected cash flows akothe’s dishes 2023..............................................................34
5.3.4 proforma income statement......................................................................................35
5.5 break even analysis......................................................................................................35
5.4.1 fixed cost.........................................................................................................35
5.4.2 Variable Cost...................................................................................................36
APPENDIX........................................................................................................................37
1.3 Business location and address.....................................................................................37

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 EXECUTIVE SUMMARY

BUSINESS DESCRIPTION

AKOTHE’S DISHES business idea is to create a niche market of the healthy food. The
business will be a start up venture and it is intended to operate under the name
AKOTHE’S DISHES . The name symbolizes a place that offers an atmosphere for
relaxation, resting and comfort for the customers. It also communicates the idea of a
place where social and friendly working atmosphere prevails.

The business is to be situated at Pilot building, Kapsowar area under sole-proprietorship

with a start-up capital of Ksh 250,000.
The business will offer Hotel products. The presence of numerous institutions in the
area, potential customers and the regular visitors in the area will form the major
customers for the business.
The business will fall under Hospitality industry which is under the Ministry of Tourism.

MARKETING PLAN
For any entrepreneur to succeed in his/her venture , he/she should always be able to
identify the market ,segment the market appropriately, target the most viable segments
and position his/her products and services appropriately.
The potential customers for the AKOTHE’S DISHES will be individual customers and
institutional customers in the following proportions:
Customers Percentage
Businessmen 65%
Institutions 35%

The estimated market share is projected at 65% of the total market. The Hotel is
anticipated to give competition to other existing and upcoming Hotel s and Hotel s hence
promotion, and advertisement will be a crucial strategy to expose the business to the
potential markets. The Hotel will always strive to offer quality products and services to
its customers.

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AKOTHE’S DISHES will be operating for 18 hours, which is from 6.00am to 12.00 mid
night. The business will adopt penetration pricing, break-even pricing and mark-up
pricing methods during various stages of the business life cycle. The business will use
personal selling and customer service to attract and maintain its customers.

MANAGEMENT AND ORGANIZATION PLAN

The business will employ competent personnel with the required skills, knowledge,
attitudes and experience.
The business will adopt the vertical structure where all the employees will be answerable
to the director (1)-OUMA TRACY AKOTH The director will assess the performance of
the entire business, coordinate business activities and ensure smooth running of the
business.
The other personnel will include; cooks, waiters, cashier, manager, and a security officer.
There will be a total of nine employees in the business. The business will employ the
right people for particular jobs, sponsor them for refresher courses and reward those who
will have contributed to the success of the business. All the employees will be
remunerated according to their skills and the number of hours worked.
The business will organize for annual awards for the best employees. Legal formalities
such as county council license, health clearance diploma, Hotel s and Hotel s Authority
license, Music Copyright Society of Kenya license and liquor licence will be obtained.
Support services which will be essential will include; financial, legal and technical.

OPERATIONAL/PRODUCTION PLAN
The main objective of the production strategy is to satisfy the customers’ requirements as
well as to enable the business earn sufficient profits. The AKOTHE’S DISHES will
require the use of refrigerators, cookers, cooking utensils and other food production
equipment.

The operational strategy will ensure that all the products are of right standards and the
services are excellent. Products will be designed in such a way that they exceed the
customers’ expectations. The manager will assess the level of stock and give advice on
restocking when necessary. The manager will assign duties to the other employees.

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Proper control will be exercised during the preparation of SOCIAL WORK drinks.
Proper storage and serving techniques will be applied. Regulations affecting operations
will include; licence, permits, labour laws, safety, environmental regulations and moral
conduct.

FINANCIAL PLAN
The size of the initial capital requirement for the business to start its operations will be
Ksh 150,000 in terms of pre-operational cost working capital. The cash flow for the
operations will be drawn up to show the inflow and outflow of cash. Trading and profits
and loss accounts will be prepared at every end of financial year. Balance sheets will also
be drawn. Proposed capitalization will be Ksh 150,000. The owner’s contribution is Ksh
100,000 and funds from borrowing source are Ksh 50,000.
The total investment is Ksh 150,000.
The financial plan has been projected through:
i. Cash flow statement
ii. Profoma income statement
iii. Profoma balance sheet
iv. Calculation of profitability ratios.

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 CHAPTER ONE

BUSINESS DESCRIPTION

1.1 BUSINESS NAME

The business name will be:
AKOTHE’S DISHES I have decided to use this name because there is no any other business
entity in this area using a similar name. The name is significant to the business in that it
symbolizes a conducive place or environment.
Since the business environment will be conducive to the employees, they are in turn going to
make the business environment conducive and satisfying to the customers.

The Hotel will offer adequate and quality meals, drinks and excellent services. The management
will adopt the Total Quality Management (TQM) approach.

1.2 BUSINESS LOCATION AND ADDRESS

The business will be located at Pilot building which is along Turbo town Uganda highway,
beside Highway club. We have chosen this location because this place hosts many people
including students from neighbouring institutions who will be the major customers throughout
the year. The place is also visited by many people, both Kenyans and foreigners especially
travelers through Kapsowar-Eldoret route. These two source markets will guarantee a continuous
customer inflow to the business. This area is easily accessible by road from all parts of Kenya as
well as from all other parts of the larger Kapsowar area region. The area has hospitable climatic
conditions that is favourable to the visitors thus making the area a preferred stop-over for the
travelers and tourists who enjoy to stay away from noisy Turbo town.
The area has got diverse commercial activities that attract many potential customers to the
centre.

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1.3 Business location and address

Tambach
Iten

Sergoin Kerio View AKOTHES

DISHES

Rimoi Game
Reserve

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 1.3 FORM OF OWNERSHIP
The business will be a sole-proprietorship but there will be other employees to the business.
Director will be – AKOTHE’S DISHES . We have chosen this type business because it will be
easier to make decisions and implement all the ideas for the growth of the business.

1.4 TYPE OF BUSINESS

The business will be a Hotel . It is to start in November, 2021 with a capital investment of Ksh
150,000. This is to be raised from personal savings and a loan from Equity Bank.

1.5 PRODUCTS AND SERVICES

Hotel Products
These will include the following:
(i) Chicken fry/Chicken roast
Fried chicken is a dish consisting of chicken pieces usually from broiler chickens which have
been floured or battered and then pan-fried, deep fried, or pressure fried. The breading adds a
crisp coating or crust to the exterior. What separates fried chicken from other fried forms of
chicken is that generally the chicken is cut at the joints, and the bones and skin are left intact.
Crisp well-seasoned skin, rendered of excess fat, is a hallmark of well made fried chicken.
(ii) Fish fry/Fish roast

 help maintain cardiovascular health by playing a role in the regulation of blood clotting
and vessel constriction;

 are important for prenatal and postnatal neurological development;

 may reduce tissue inflammation and alleviate the symptoms of rheumatoid arthritis;

 may play a beneficial role in cardiac arrhythmia (irregular heartbeat), reducing depression
and halting mental decline in older people.
(iii) Milk/Mala
The protein content of sour milk manufactured in Estonia is usually 1.9%. The somewhat altered
state of milk casein due to the activity of living lactic acid bacteria reduces the possibilities of
allergenicity. Compared with the proteins in fresh milk the proteins in fermented dairy products

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cause fewer allergic reactions. The advantage of the commercially manufactured sour milk with
1.5% fat content is also that, even if a lot is consumed, it doesn’t give a lot of food fats or
calories – the human body gets around 50 calories from a 100-gram portion of the product. At
the same time, the fat content of sour milk is sufficient to ensure the absorption of the necessary
micronutrients from the product and to give the product flavours that are palatable to many
people. As in the case of other fermented milk products, we should stress the suitability of sour
milk for people who have problems digesting milk sugar. The lactose content in sour milk is
lower, and the lactic acid bacteria consumed together with sour milk help to partially cleave
lactose.
(iv) Egg fry/Egg boil
(v) Tea
(vi) Coffee
(vii) Chips
(viii) Toast
(ix) Ugali
(x) Beans and Peas

Services
These will include the following:
(i) Safaricom/Orange airtime sales
(ii) Secure car parking
(iii) Free car wash
(iv) Free entertainment

1.6 JUSTIFICATION OF THE BUSINESS OPPORTUNITY

From the research carried out in the area, it has been established that the business idea is viable
due to the following reasons.

Availability of Customers
The area has many institutions that need the products and services that will be offered by the
business. The area has a potential population that will be able to pay for the products and
services.

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Availability of Raw Materials
Most of the required raw materials are produced locally throughout the year and cheaply
available.
Other raw materials are easily accessible in the local market.

Variety of Meals and Drinks

The business will attract a high percentage of customers compared to other businesses since
it will offer different types of quality meals and drinks under one roof which is preferred by
many customers. The business will open for longer hours compared to other businesses in the
area.

Availability of Infrastructure
The area has adequate telephone services and wide network coverage for different
communication services, a factor that will facilitate fast and efficient communication in and
outside the business.
The area has an adequate drainage system and adequate supply of clean water. The area is
supplied hydroelectric power from the National grid.
The area is well linked to other parts of the country with a good road network thus making it
easily accessible.

Availability of Capital and Operational Funds

There will be enough capital to purchase all the essential machines, equipment, raw materials
and other requirements thus ensuring an efficient operation.

Availability of Managerial Skill

Since the Director (1) has the managerial skills and entrepreneurial skills, he will be able to
manage all the operations within the business thus ensuring high production and quality
products.
The business will employ a manager with a training background in hospitality management.
The man power within the business will be managed in the most efficient manner to promote
optimum productivity.
Government Policies

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The Kenyan government is encouraging more hospitality based businesses in the rural area such
as setting up of Hotel s, bars and Hotel s, guest houses, camps and even home stays in order to
promote rural tourism.
The government, through the Catering and Tourism Development Levy Trustees is providing an
opportunity for refresher courses for the employees working in the hospitality industry.
The local county council is encouraging establishment of quality hospitality businesses in the
area by exempting them from paying the council permit for the first one year of operation.

Non-Government Support
Many Non-governmental organizations such as the Integrated Community Initiative (ICI) and
the Equity Bank are encouraging and supporting development of small scale and medium
enterprises

1.7 THE INDUSTRY

The business is based on the Hospitality industry which is under the Ministry of Tourism in
Kenya.
The main purpose of the business is to offer different meals, drinks and services that are of high
quality to customers at a profit. The hospitality industry is dominated by the private sector and
thus it’s a free market that is faced by stiff competition.
There is free entry and free exit to and from this market.
There are many competitors in this industry such as; Motels, Hotel s, Resorts, Guest houses,
Clubs, Cafés, Bars and Hotel s.

1.8 INDUSTRY TRENDS

The hospitality industry is growing steadily due the increase in the number of domestic tourists
and a change in the lifestyle of most Kenyans which has facilitated traveling from one place to
another and especially from urban to rural areas. The Ministry of Tourism is aggressively
involved in marketing the hospitality facilities both locally and internationally.

1.9 INDUSTRY CHARACTERISTICS

The hospitality industry has succeeded in its operations due to availability of raw materials that
has facilitated constant production and trained personnel from the hospitality and tourism
institutions. Modern technology such as the use of computers in accounting, reservations, filling
and E-mail services have also improved operations in the hospitality industry.
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1.10 GOALS OF THE BUSINESS
The objective of the business is to provide high quality products, excellent services, attract and
maintain adequate number of customers thus maximizing profits.

SHORT-TERM GOALS
(i) To employ enough trained workers(service providers) in the business
(ii) To install enough furniture within the first year of operation
(iii) To install enough preservation equipment

LONG-TERM GOALS
(i) To extend the business by operating Computer College and a Guest House in
the area.
(ii) In four years time to buy a pick up to transport products and raw materials to
the premises.

1.11 ENTRY AND GROWTH STRATEGY

The business is going to be located at Pilot building, a place where it will be accessible by all the
potential and actual customers. The business is going to offer products and services at a place
where demand and utility is high.
During the initial stage, the business will use the local radio station and the local newspaper, that
is; the Fish FM, Chamgei fm and Kass FM to create awareness of its existence in the market. The
business will also use pamphlets, posters and the word- of -mouth to enhance customer
awareness of the new business in the area.

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 CHAPTER TWO
MARKETING PLAN
2.1 CUSTOMERS
The name ‘customers’ refers to those people who will buy and use the products and services that
will be offered by the AKOTHE’S DISHES .
AKOTHE’S DISHES , unlike other forms of businesses will not have middle market such as
wholesalers and retailers since its products will be consumed directly from the enterprise by
customers within reach.
The Products will be produced and consumed under one roof.
a. Individual Customers
Individual customers to AKOTHE’S DISHES will be the frequent visitors to the different
institutions in the area, the neighboring households, friends and relatives. These will make about
30% of the total number of potential customers. The total number of potential customers is about
200 people. The total number of individual customers will be 30/100x200=60. Most of these
customers will be aged 20-50 years thus they will enjoy the products and services that will be
offered by the business. The rest of the customers will be aged between 25-34 years. Individual
customers will be grouped into three categories according to their level of earnings.
i. Low income earners
These will comprise of 3% of the total number of individual customers. Therefore low income
earners will be 3/100x200=6
ii. Middle income earners
These will comprise of 30% of the total number of individual customers. Therefore middle
income earners will be 30/100x200=60
iii. High income earners
These will comprise of 67% of the total number of individual customers.
The high income earners will be 67/100x200=134
According to the research carried out in the area, majority of the individual customers are
males and these will contribute to the continuous customer visit to the business.
Generally males are more mobile and good spenders in leisure than females.
Majority of the individual customers have attained form four level of education and above.
This class is quality conscious and thus they will prefer my products and services since they
will be of high quality unlike those of other similar businesses in the area.

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 A small number of the individual customers is made up of retired men who have the money
and time to spend.
Majority of the individual customers are working men and women.
b. Institutional Customers
Institutional customers to AKOTHE’S DISHES will include:
Schools such as university of law ,school of medicine and all other institution and schools
within. The business will offer outdoor catering services to teachers and students during prize
giving days and during inter-school competitions. The business will also offer products and
services to teachers and other employees.
Institutional customers will make 70% of the total number of potential customers.
70/100x200=140 The business will reach and attract these customers through advertisement in
local newspapers, local radio stations, use of posters, pamphlets and face-to-face with potential
customers. The business will offer products and services at affordable prices. According to the
research carried out, teachers, nurses, doctors, social and development workers, priests, nuns,
visitors from abroad as well as students need a quiet, decent and a comfortable place where they
can get quality meals, drinks and cool music. All these will be offered by the AKOTHE’S
DISHES . This group of customers is made of people from different religious backgrounds.

2.2 COMPUTATION OF MARKET SHARE

Most part of Pilot building is inhabited by people who run various businesses ranging from
barber shops and salons to bar and food joint operators. According to the research carried out, the
number of people who are likely to consume Hotel products is approximately 8,000. The
analysis is illustrated in the table below:
COMPETITOR’S NAME % ALLOCATION SHARE
Meteitei Camp 35% 2,800
Alakara Inn 20% 1,600
Jumbo Hotel 10% 800
AKOTHE’S DISHES 30% 2,400
Others 5% 400
TOTAL 100 8,000
The customers of AKOTHE’S DISHES will buy more during evenings, weekends, month ends
and during holidays since most of them (potential customers) are regular income earners. They
will pay in cash for the products and services consumed. There are 8,000 people who will need
the products and services that will be offered by the businesses.

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2.3 COMPETITION
There is competition in every free market just like the one in the hospitality industry. Healthy
competition however is an advantage to the business since it helps the entrepreneur to devise
new ways of marketing his/her products.

(c) Potential Competitors

AKOTHE’S DISHES will face competition from the following businesses.
(i) Buffalo Inn
P.O BOX 84-60400
Kapsowar.
Cell: 0722-456783
This is located at the college compound directly opposite the dispensary.
(ii) Mutithi Springs Camp
P.O BOX 240-60400
Kapsowar
Cell: 0727-455788
This is located a short distance from Sos Primary School
(iii) Wakulima Hotel
P.O BOX 120-60400
Kapsowar

(d) Competitor Analysis

The Wakulima Hotel has strength over my business in that it has many workers compared to my
business.
On the other hand it has the following weaknesses:
 Most of the workers are not trained in the hospitality industry
 Most of the workers are employed on casual basis and thus they are not fully
committed to quality service delivery.
 The business opens late in the morning and closes early in the evening.
(i) The Mutithi Springs Camp has strength over my business in the fact that it has more
space and the prices for its products and services are relatively lower.
On the other hand it has the following weaknesses:
 The business opens from 8.30 am -7.00 pm from Monday to Saturday.
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  The business does not have well trained and motivated staff.
 The business does not take any promotion activities.
(ii) The Buffalo Inn has strength over my business in that it has been existing for a
long time thus well known in the market.
On the other hand it has the following weaknesses:
 The business offers a limited range of products and services to its customers.
 The services are not customized.

2.4 PRICING STRATEGY

This means the methods to be adopted in setting prices of products and services. Initially the
business will adopt the break-even point pricing method whereby the prices will cover up all the
total costs incurred.
The business will also adopt the penetration pricing strategy whereby the initial prices will be
lower than those of the competitors.
After a certain period of operation, mark-up pricing policy will be applied. This is will be after
the business attracts and retains repeat customers to the business.
In setting up my prices, we will consider the competitors’ selling prices and cost of production.
Selling prices will also vary according to the government policies.
Short-term credits, those payable within a month will be suitable for my products and services.

2.5 SALES TACTICS

The proprietor of the AKOTHE’S DISHES will adopt the following selling methods:
(i) Personal selling
Customers for AKOTHE’S DISHES will be attended to promptly without delay by the well
trained and motivated waiters who will be employed by the business. From time to time,
promotional prices will be introduced to attract customers to the business and encourage more
sales.

ADVERTISEMENT AND PROMOTION METHODS

To create awareness of my business to the customers, we will use the following forms of
advertisement:
a. Print media: These will include the local newspapers, posters, pamphlets and hospitality
journals.

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 b. Electronic media: These will include Television and local radio stations.
To successfully promote the business, the following strategies will be adopted:
(i) Prices of the products and services will be lowered at every first Friday and Saturday of
the month to encourage more sales.
(ii) The business will engage itself in Corporate Social Responsibility in the community.

DISTRIBUTION STRATEGY
This refers to the ways by which the products in the business will reach the customers.
The products and services in the business will be directly sold to the customers just on arrival to
the business since most of the products and services will be made ready for consumption at all
times. Customers will be served promptly on arrival.
Outside catering will be provided on request and high standard of cleanliness will be exercised at
all times.
Trained waiters and waitresses will be employed to serve the customers.

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 CHAPTER THREE

MANAGEMENT AND ORGANIZATION PLAN

3.1 BUSINESS MANAGEMENT AND QUALIFICATIONS

Good organization is an essential component of good management in any successful entity. To
achieve its objectives, the AKOTHE’S DISHES will employ competent and enough personnel
with the required knowledge, skills, experience and attitudes.
This will guarantee quality service delivery to the customers.

The form of organization will be the vertical one whereby the employees will be answerable to
the manager who will in turn be answerable to the DIRECTOR (1) – OUMA TRACY AKOTH
I have chosen this form of organization because it will be easier to make decisions, control
business activities and implement new ideas faster.

Manager

Cashier

Cooks Waiters Security Officer

2.1.1 Manager
The proprietor-OUMA TRACY AKOTH will be the Manager of AKOTHE’S DISHES .
MANAGER
QUALIFICATION
(i) Should have a diploma in Information Communication Technology from a recognized
institution
(ii) Have a working experience of at least 2 years in an Hotel or Hotel
(iii) Should have interpersonal skill
(iv) Should have positive attitudes towards diversity

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DUTIES
(i) Planning for the day-to-day activities of the business
(ii) Coordinating work within the premise
(iii) Supervising the other employees
(iv) Attending to the guests’ complaints
(v) Reporting the day-to-day matters of the business to the Director

COOKS
QUALIFICATIONS
(i) Should have a Diploma or a Diploma in Food Production from a recognized training
institution
(ii) Have a working experience of at least 1 year
(iii) Have working etiquette in hospitality industry
(iv) Must be healthy
(v) Have interpersonal skills
(vi) Willing to work for long hours
(vii) Aged 25 years and above
DUTIES
(i) To prepare meals and maintaining cleanliness in the kitchen
(ii) To wash kitchen utensils and their work uniforms
WAITERS/WAITRESSES
QUALIFICATION
(i) Should have a Diploma in Hospitality related field from a recognized training
institution
(ii) Have interpersonal skills
(iii) Have customer service skills
(iv) Have a working experience of at least 1 year
DUTIES AND RESPONSIBILIES
(i) To serve the guests/customers
(ii) Maintaining cleanliness in the Hotel
CASHIER

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QUALIFICATION
(i) Holder of CPA 2 or an equivalent
(ii) Working experience of at least 1 year
DUTIES AND RESPONSIBILITIES
(i) To receive payments from customers
(ii) To account for the inputs and outputs on daily basis
SECURITY OFFICER
QUALIFICATION
(i) Should be physically strong
(ii) Able to communicate in English and Kiswahili
(iii) Have good conduct
(iv) Aged 30 years and above
DUTIES AND RESPONSIBILITIES
(i) To guard the business at night
(ii) To provide essential information to the customers
KEY PERSONNEL, NUMBER AND DUTIES
POSITION NUMBER DUTIES
MANAGER 1  Planning for the daily business
activities
 Coordinating work within the
business
 Supervising the other employees
 Attending to the guests complaints
CASHIER 1  Receiving payments from customers
 Accounting for the inputs and outputs
on the daily basis
COOKS 2  Preparing meals and maintaining
cleanliness in the kitchen
 Washing kitchen utensils and their
work uniforms
WAITERS/WAITRESSES 3  Serving the guests/customers
 Maintaining cleanliness in the Hotel
 Attending to guest complaints
SECURITY OFFICER 1  Guarding the business at night
 Providing essential information to the
customers

OTHER PERSONNEL

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The other service providers to be employed by the business will include the following:
(i) Casual Laborers
These will be required when there is a need, particularly when there is power problem in the
business, when there is a water problem, problem with the fridge or the freezer, broken tables
and chairs.
Remuneration will be done according to the amount and kind of work done.

RECRUITMENT, TRAINING AND PROMOTION

For any business to succeed, it requires a team of well trained manpower who are able work
together to achieve the objectives of the enterprise AKOTHE’S DISHES will consider those
employees who have the required knowledge, skills, experience and attitudes.
a. RECRUITMENT
This will involve getting the right people to be in charge of various positions in the business. The
business will advertise for job vacancies through posters, local newspapers, the local radio
station and word -of -mouth.
After receiving the applications from potential applicants, interviews will be conducted and
selection done to get the most qualified applicants for the job.
The applicants who will prove competent will secure the existing position(s).
[Link]
Since it is necessary for the employees to have the current knowledge of the operations in any
business, the AKOTHE’S DISHES will undertake in-house training programmes and liaise with
the Catering and Tourism Development Levy Trustee to offer refresher courses to some key
employees.
These will include the waiters and the cooks who need current knowledge on the changing
customer needs. The cashier will also need current knowledge on how automation is affecting
accounting procedures.
c. PROMOTION
To ensure quality service delivery and increased productivity, the business will organize the
work in such a way that each employee has enough time to rest.
At the beginning, those who are promoted will be awarded higher salary according to the
work they do. As the business grows, it will offer more incentives to the employees.

19
REMUNERATION
Based on the existing standards and salaries guidelines, the following will be the package for the
employees according to their respective positions.
PERSONNEL NUMBE SALARY-PM (KSHS) ALLOWANCE (KSHS)
R
DIRECTOR 1 20,000 House Allowance 5,000
MANAGER 1 10,000 House Allowance 2,500
CASHIER 1 7,000 House Allowance 2 ,000
COOKS 2 @ 6,000 House Allowance 1,000
WAITERS 3 @ 5,000 House Allowance 1,000
SECURITY 3,000 House Allowance 800
OFFICER 1
CASUALS NEGOTIABLE
TOTALS 8 67,000 15,300

INCENTIVES
The business will give rewards to the most active worker in a year. The business will also
organize a trip to particular areas of attraction for the first three workers who will have
contributed towards the success of the AKOTHE’S DISHES .

LICENCE AND PERMITS

LICENCE
In order to run my business well, we will need to have a valid trading licence which will be
issued by the County Council.
The business will need to have a valid Hotel s and Hotel s Authority licence which will be issued
by the Ministry of Tourism. The two licenses will be renewed every year.
The liquor licence will be renewed annually.

3.5.2 PERMIT
To operate the business legally, the business will need to obtain a Music Copyright permit and
Health Inspection permit. The two permits will be obtained annually.

3.5.3 SUPPORT SERVICES

In order to run a business successfully, it is necessary to seek consultancy advice from competent
firms so as to solve problems affecting the enterprise. Some of the services that will be required
are

20
Communication Services
In order to pass information to the general public and to the customers in particular, the business
will work jointly with the regional newspaper called “The Voice of the Kapsowar” and the local
radio station called “Kass Fm”. The business will advertise all the products and services through
these media.

21
 CHAPTER FOUR

4.0 OPERATIONAL AND PRODUCTION PLAN

AKOTHE’S DISHES will start its operations on 1stAugust, 2021. It will begin as a small
enterprise and at its initial stage it will require few workers, equipment and other facilities. With
time the business will increase the numbers of workers, equipment and facilities in order to
match with the increasing demand.

The business will be operating throughout the day, which is from 6.00 am-11.00 pm from
Monday to Sunday. Workers will be given breaks in turn in order to rest. The employees will be
paid according to the kind of work they do. The director will be entitled to a monthly pay.

The operations will be planned in such a way that the business will offer quality products and
services to different market segments.

4.1 OPERATIONAL RESOURCES

Before starting the operations of the AKOTHE’S DISHES , we will make sure that all the
equipment required is available and all the operational resources are available and adequate. We
will also make sure that the necessary capital has been raised; furniture, equipment, machines
and all the necessary items have been installed.
We will also ensure that the right manpower is recruited before the business starts its operations.

Raw materials, that is food to be cooked and other readymade products like, sodas and other
beverages which will be obtained from Kapsowar area Town will always be ordered at the right
time, taking quality and quantity into consideration. The cost of buying these materials and
products will be low since they are readily available in the shops, depots and local market.

The business will adopt the Just- In -Time purchasing (JIT) concept which will guarantee
efficiency, customer satisfaction and high productivity.

4.2 PRODUCTION FACILITIES AND CAPACITY

Production facilities are those that will be essential for the business to operate, which should be
available, suitable and adequate. The house or the building in which the business will start will

22
be rent from a landlord whom we have already contacted. The building will be big enough to
accommodate all the intended activities.
We will hire a lorry from my friend who resides in the area to transport raw materials from the
market. Other products like beer and sodas will be ordered from the depots and the company
vehicles will be delivering them to the enterprise.
The business will need other equipment and machines to improve the business operations. Such
equipment will include; refrigerators, a freezer and cookers which will be bought before the
business starts its operations. Other equipment and tools will be bought as the business
progresses.
The staff will well oriented into the operation of the machines and equipment. In case of
breakdown, we will hire experts from the nearby Josep Multipurpose Engineers who handle all
the electrical and gas equipment.
4.1.1 The production equipment and quantities as well as the estimated costs are as shown
below
EQUIPMENT QUANTITY TOTAL COSTS (KSHS)
Refrigerator 2 100,000
Gar cooker 1 15,000
Charcoal jikos 3 900
Electric cooker with an 1 80,000
oven
1000 litres water tank 1 15,000
Coloured Television 2 20,000
Music system 1 20,000
Potato chopper 1 4,000
Juice mixer 1 5,000
First Aid Box 1 2,000
Fire extinguisher 1 25,000
Furniture and Fittings 62 50,000
Calculator 2 600
Cell phone 1 3,000
Radio 1 8,000
Building (rent) 1 7,000
TOTAL 355,500

23
4.1.2 CUTLERY AND CROCKERY

EQUIPMENT QUANTITY TOTAL COSTS (KSHS)

Tea cups 5 Dozen 2,700
Salt shakers 1 Dozen 600
Folks 5 Dozen 2,100
Table spoons 5 Dozen 1,800
Plates 6 Dozen 3,600
Thermal flask 5 PCS 3,500
Glass jugs 6 PCS 1,800
Glasses 2 5 Dozen 1,800
Bottle openers 3 PCS 150
Sufuria 11 PCS 4,400
Frying pans 5 PCS 5,000
Sugar bowls 8 PCS 800
Knives 5 PCS 600
Trays 8 PCS 1,200
Cooking spoons 4 PCS 100
Beer tumblers 3 Dozen 2,160
Wines tumblers 1 Dozen 720
Miscellaneous 20,000
TOTAL 53,030
The total cost of all the production equipment is Ksh. 108,530. The above equipment is most
essential for the business to start its operations. The business will have two refrigerators at the
beginning to store cold hard and soft drinks respectively.
To make sure that food is prepared fast, we will use the gas and electric cookers. To make sure
that water supply to enterprise is constant; we will install a 1000 litres water tank. A music
system will also be necessary to entertain the customers and create a relaxing environment.
Utensils will include sufurias, glasses, jugs and plates among others. With all the equipment
available and in good condition, there is an assurance of the business running profitably. The
staff will be trained on how to handle and use the equipment to reduce damages.

4.3 OPERATIONAL STRATEGY

The business will ensure that all the products that will be offering to its customers are prepared
and served in the highest standards possible to guarantee guest satisfaction.
The staff will be properly supervised to ensure that they are working efficiently. All the
machines and equipment will be maintained in their right condition and position.

24
The staff will be expected to report to work in time and perform their assigned duties which will
be assigned by the manager. The manager will monitor the performance of the staff at all times
to make sure that satisfactory product and services are offered to customers. The manager will be
expected to innovate means and ways of improving the services in the business.

4.4 PRODUCTION STRATEGY

Being a Hotel where customers will be served with fresh meals and drinks, the volume of food
to be prepared each day and the quantity of beverages and other drinks like beer will be carefully
considered to make sure adequate and constant supply is maintained.
The right volume will be maintained because less volume will mean customers are going without
being served thus losing them to our competitors.
Bigger volume will mean a lot of SOCIAL WORK drinks will be wasted thus incurring losses in
the business.

The day-to-day experience will give an average of what volume of Information Communication
Technologies as well as beer that should be stocked in the business at any one time.

4.3.1 DESIGN
With the qualified cooks who will be employed by the AKOTHE’S DISHES , the colour of the
meals will be attractive and well garnished. The meat pieces, chapattis, toast, chicken, fish and
eggs will be presented in a form that will show adequate catering knowledge. Beer, wines and
sodas will be served to the customers in clean, well shaped and attractive trays.

4.3.2 RAW MATERIAL AND ITEMS REQUIRED

The head cook will be assessing the levels of stock and frequently advise the cashier on what to
budget on.
The following quantity of raw materials will be required by the business per month.
RAW MATERIALS QUANTITY PER MONTH
Onions 70KG
Maize grains 3 BAGS-90KG
Beans 2 BAGS-90KG
Peas 2 BAGS-90KG
Vegetables 3 BAGS
Meat (goat) 250 KGS
Chicken 80 KGS

25
Fish 70 KGS
Irish potatoes 20 BAGS
Fruits 28 CRATES

The following quantity of items will be required by the business per month.
ITEM QUANTITY PER MONTH
Maize meal 15 BANDARIES
Rice 60 KGS
Baking flour 20 BANDARIES
Tea leaves 10 KGS
Coffee 5 KGS
Sugar 80 KGS

Other requirements will include; milk, soft drinks, beer, wines, spirits, loaves of bread and
mineral water. All the materials bought in cash will be entered in the cash book while those
bought on credit will be entered in the purchase ledger. Excess materials will be returned to the
suppliers and recorded in the returns outwards journal.
Just-In-Time purchasing policy will be adopted where possible. All the materials will be
maintained in their right standards.

4.3.3 LABOUR REQUIREMENTS

Labour in the business will be in form of long-term contracts, ranging from 6-12 months
renewable. Casual labour such as electricians, carpenters, refrigerator technicians and water
technicians will be called upon whenever there is a job to be done.

4.5 PRODUCTION PROCESS

In order to ensure that quality and attractive SOCIAL WORK drinks are produced and delivered
to the customers at all times, all the production processes will be maintained at the set standards.
Customer service will be performed in the most professional manner to ensure guest satisfaction.
Foods like ugali, peas and beans will be prepared using charcoal jikos. This kind of food need
long time to get cooked and are in big volume. The rest of the foods like chapattis, eggs, chicken,
beef, fish, rice, chips, sukuma wiki will be cooked using gas or electrical cookers.
Drinks such as soda, wines, beer and spirits will be ordered in time and in the right quantity.
Storage of the various drinks will be professionally and attractively done.
Tea, coffee and milk will be prepared in the highest standard possible.

26
PURCHASING PROCESS
The main objective of Just-In-Time purchasing will be to maintain a regular and quality supply
of foods and drinks for the Hotel and to reduce chances of poor quality products/materials,
unnecessary material handling, loss of materials through expiry and use of excess space for
storage purposes.
The business will install a fringe for the drinks and a freezer for the perishable materials.

PREPARATION
The business will exercise a proper control over the production process to ensure high quality
end-products, avoid over-production, wastage and loss of materials.
Some of the meals will be prepared on order from the customers. All the meals will be prepared
in accordance with the interest of the customers.

Customer consumption statistics will be used to predict the kind of food to prepare and the
quantity at any one time and the kind of drinks to stock.

STORAGE
This is the stage whereby ready meals and drinks will be placed in the right places awaiting
consumption by the customers. Products like milk will be stored in places away from
contamination. Chapatis, samosa and mandazi will be stored in enclosed places to keep them
soft.

SERVING
Information Communication Technologies will be served to the customers promptly on request.
SOCIAL WORK drinks will be served according to the customer interest.

4.6 REGULATIONS AFFECTING OPERATIONS

4.6.1 LICENCE
To ensure that my business is operating lawfully, I will obtain the following licences:
 The county council licence
 The Hotel s and Hotel s Authority licence

27
 4.6.2 PERMIT
In order to be allowed to offer food to the public, we will obtain a health clearance permit
(diploma) from the public health officer. we will ensure that all my employees have valid
medical diplomas at all times.
We will obtain a permit from the Music Copyright Society of Kenya so as to be allowed to play
music in the business.

CATERING LEVY FEE

The business will pay the 10% Fee for every product sold, to the Catering and Tourism
Development Levy Trustee (CTDLT).

LABOUR LAWS
To ensure full compliance with the revised Labour Laws 2007, we will observe all the
employees’ rights.

ATTENDING TO DUTIES
All the employees will be expected to report for duty in time to avoid inconveniences in the
operations. In case of sickness or demanding circumstances, the workers will be given an off
duty or a leave.

ACCOUNTS
Proper accounts will be kept by the business in order to facilitate efficient operations. Trading,
profit and loss accounts will be prepared at every month-end and at the end of the year.

SAFETY
Safety and security rules in the business will be properly communicated and adhered to. A fire
extinguisher will be placed at a point where it will be easily accessible in case of a fire outbreak
in the business.
A First Aid Box will be kept in the kitchen where the workers can access it in case of injuries or
cuts.

ENVIRONMENT
The waste products from the kitchen and the entire business will be recycled and re-used. The
business will have a proper drainage system. Energy saving jikos will be used in the business to
reduce on excess use of fuel.

28
The music system will be operated at a medium tone to avoid disturbing the neighbours.

GOOD CONDUCT
Good conduct will be expected from the workers while handling the guests. Team work will be
encouraged and promoted at all times. Extra care will be exercised while handling the machines
and equipment.

29
 CHAPTER FIVE

5.0 FINANCIAL PLAN

Before the business starts in operations, we will ensure that all the necessary funds have been
acquired .All the business funds will be under the management of the director.
5.1 PRE-OPERATIONAL COST
These are costs that will be incurred before the business starts its operations these pre-operational
cost will include capital and expenditure. We will pay for the total fixed assets a sum of ksh 98,
050 as show in chapter five operational facilities .other operational costs will include the
following.
The cash balance at the beginning of the business will be equivalent to total capital .pre-
operational costs .This cash balance will be transferred to the business bank account. The total
pre-operational costs will be ksh 80,000.
Working capital
Working capital is the total amount that will be required to finance business activities or
transactions .this amount must be at disposed before the business starts its operations.
This is the amount that is needed for the running of the business in its day to day activities .this
will be shown as follows.
WORKING CAPITAL REQUIREMENT AMOUNT PER ANNUM KSH
Raw materials 109,500
Salaries 987,600
Mainteinance and repair 100,000
Travelling expenses 14,000
Postage and stationery 12,000
Water bills 3,000
Electricity 100,000
Licences 168,000
Fuel 28,000
Advertisement 12,000
General expenses/miscellaneous 15,000
Total 1,577,100

30
5.3.3 PROJECTED CASH FLOW STATEMENT FOR THE YEAR 2021, 2022, 2020
CURRENT YEAR 2021 YEAR 2022 YEAR 2020
ASSETS
DEBTORS 250,000 320,000 330,000
CASH IN HAND 100,000 75,000 185,000
CASH IN BANK 300,000 330,000 350,000
650,000 825,000 865,000
CURRENT LIABILITIES
Bank over digits 350,000 375,000
Creditors 300,000 330,000 650,000
Short term loan 200,000 245,000 220,000
850,000 950,000 870,000

LONG TERM LIABILITIES

Bank over draft 300,000 750,000 800,000
300,000 750,000 800,000
FIXED COSTS.
Salaries 840,000 900,000 936,000
Insurance 60,000 60,000 60,000
Rent 36,000 36,000 36,000
936,000 996,000 1,032,000
VARIABLE COSTS.
Water 16,500 13,400 12,350
Telephone 12,770 11,830 11,950
Rent 15,300 16,020 15,200
Transport 12,700 13,190 13,150
Electricity 48,500 14,780 13,750
Advertisement 10,050 12,400 5,400
116,270 81,520 71,400

31
5.3.1 PROJECTED CASH FLOWS AKOTHE’S DISHES 2021
PARTICULARS JAN FEB MARC APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
Cash inflaws Kshs Kshs Kshs Kshs Kshs Kshs Kshs Kshs Kshs Kshs Kshs Kshs Kshs
Balance B/F 300000 128300 106100 82880 74580 71560 50680 30530 43550 26890 19780 47730 982580
Sales 50000 52600 53400 54000 56500 59000 61000 64000 66500 69000 72000 82000 740000
Bank loan 200000                       200000
Debtors       15000 20000     30000   1000 40000 70000 176000
TOTAL CASH FLOW 550000 180900 159500 151880 151080 130560 111680 124530 110050 96890 131780 199730 2098580
Cash outflow                         0
Pre-operational 347000                       347000
Purchases 15000 20000 23000 25500 26000 28000 28000 28500 30000 32500 34000 36000 326500
Salaries 25000 25000 25000 25000 25000 25000 25000 25000 25000 25000 25000 25000 300000
Electricity 1000 1050 1000 900 800 1000 750 700 850 650 700 500 9900
Water 1000 800 850 900 750 800 800 600 500 550 500 350 8400
Rent 6500 6500 6500 6500 6500 6500 6500 6500 6500 6500 6500 6500 78000
Creditors             1000     3000     4000
Transport 3000 2750 2500 2800 2500 2250 1500 3000 2800 2000 2250 2000 29350
License                       20000 20000
Insurance                       1000 1000
Advertisement 4000           2000           6000
Security 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000
Loan repayment 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 96000
Loan interest 2500 2400 2300 2200 2100 2000 1900 1800 1700 1600 1500 1400 23400
Repair         2000             3000 5000
Miseleneous 5000 5000 4000 2000 2500 2800 2000 2000 2500 3000 2200 3000 36000
Total cash outflow 416000 69500 72150 74800 76650 76550 78450 77100 78350 82800 81450 106750 1290550
Bal b/f 128300 106100 82880 74580 71560 50680 30530 43550 26890 19780 27730 81810 744390

32
5.3.2 PROJECTED CASH FLOWS AKOTHE’S DISHES 2022
PARTICULARS JAN FEB MARC APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
Cash inflaws Kshs Kshs Kshs Kshs Kshs Kshs Kshs Kshs Kshs Kshs Kshs Kshs Kshs
Balance B/F 81810 54660 85770 120440 136890 143770 149810 143990 167980 169940 190640 202690 1648390
Sales 70000 146000 160000 160000 160000 165000 170000 190000 200000 250000 250360 270000 3839750
Debtors       1000     30000 1000     5000   2228360
TOTAL CASH FLOW 151810 200660 245770 281440 296890 308770 349810 334990 367980 419940 446000 472690 3913750
Cash outflow                         3876750
Purchases 40000 60500 70000 90000 100000 105000 120000 12000 140000 170000 190000 190000 1287500
Salaries 27500 27500 27500 27500 27500 27500 27500 27500 27500 27500 27500 27500 1617500
Electricity 1200 950 1000 800 950 900 1000 950 1000 1200 1000 800 341750
Water 800 800 700 900 700 750 870 830 900 1000 700 700 21400
Rent 6500 6500 6500 6500 6500 6500 6500 6500 6500 6500 6500 6500 87650
Creditors       1000     30000   5000 500     114500
Transport 3500 3200 2700 2500 2500 2700 3000 2800 3000 3300 3000 2500 71200
License                       20000 54700
Insurance                       10000 30000
Advertisement 3000           3000           16000
Security 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 42000
Loan repayment 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 132000
Loan interest 1300 1200 1100 1000 900 800 700 600 500 400 300 200 105000
Repair     2000         3000         14000
Stationary 150 120 150 200 200 170 130 150 180 200 180 170 7000
Miseleneous 2000 3000 2500 3000 2700 3000 2000 2500 2300 3000 3000 2000 33000
Total cash outflow 96950 114770 125150 144400 152950 158320 205700 67830 197880 224600 243180 271370 2034100
Bal b/f 54660 85770 120440 136890 143770 149810 143990 167980 169940 190640 202690 201170 3770850

33
 5.3.3 PROJECTED CASH FLOWS AKOTHE’S DISHES 2023
MAR
PARTICULARS JAN FEB C APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
Cash inflaws Kshs Kshs Kshs Kshs Kshs Kshs Kshs Kshs Kshs Kshs Kshs Kshs Kshs
20117 23495 28647 40605 44215 41263 48165 54990
Balance B/F 0 0 0 0 0 0 0 0 571030 623870 686030 808690 5704590
30000 35000 35000 32500 32000 40000 42000 45000
Sales 0 0 0 0 0 0 0 0 450000 420000 500000 500000 4785000
Debtors     50000           30000   2000   82000
TOTAL CASH 50117 58495 68647 73105 76215 81263 90165 99990 105103 104387 118803 130869 1057159
FLOW 0 0 0 0 0 0 0 0 0 0 0 0 0
Cash outflow                         0
20000 25000 23000 20000 30000 28000 30000 35000
Purchases 0 0 0 0 0 0 0 0 28000 300000 350000 320000 3108000
Salaries 30000 30000 30000 30000 30000 30000 30000 30000 30000 30000 30000 30000 360000
Electricity 1200 1000 1500 1000 1000 800 900 1000 1000 1200 800 900 12300
Water 700 750 900 1000 700 700 1000 1000 800 800 700 750 9800
Rent 6500 6500 6500 6500 6500 6500 6500 6500 6500 6500 6500 6500 78000
Creditors       40000       30000   10000     80000
Transport 4000 4000 3700 4000 5000 4500 5000 4000 3500 4000 3000 4000 48700
License                       20000 20000
Insurance                       10000 10000
Advertisement 4000         3000             7000
Security 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000
Loan repayment 8000                       8000
Loan interest 100                       100
Postage 100 80 120 150 120 130 170 180 150 160 140 120 1620
Repair 3500         1200           1300 6000
Stationary 120 150 200 250 200 150 180 200 200 180 200 200 2230
Miseleneous 5000 3000 4500 3000 300 4000 2000 3000 2000 2000 3000 3000 34800
26622 29848 28042 28890 34682 33398 34875 42888
Total cash outflow 0 0 0 0 0 0 0 0 75150 357840 397340 399770 3822550
23495 28647 40605 44215 41263 48165 44990 57102
Bal b/f 0 0 0 0 0 0 0 0 623870 686030 808690 908920 6312330

34
5.3.4 PROFORMA INCOME STATEMENT
DESCRIPTION YEAR 1 YEAR 2 YEAR 3
Sales 2,369,500 2,552,000 2,702,500
Less cost of goods 1,025,500 1,125,500 1,235,500
sold
Gross profit 1,344,000 1,4426,500 1,467,000
Less Expenses
Salaries 732,000 777,000 785,000
Electricity 8,550 9,050 9,300
Rent 36,000 36,000 37,000
Water 3,600 3,600 3,600
Transport 9,600 10,000 11,000
License 24,000 24,500 25,000
Insurance 18,000 18,000 19,000
Advertisement 800 1,000 1,500
TOTAL 832,550 879,150 891,400
EXPENSES
NET PROFIT 511,450 547,350 575,600
BEFORE TAX
LESS PROVISION 81,832 87,576 92,096
OF TAX 16%
NET PROFIT 429,618 459,774 483,504
AFTER TAX

5.5 Break Even Analysis

This table comprises of variable costs and fixed cost. It portrays the unit of sales in a
given period without consideration of the profit at the point.

5.4.1 Fixed cost

DEPRECIATION SHS
Sales 1,369,500
VARIABLE COSTS
Transport 9,600
Telephone 2,000
Water 3,600
Electricity 8,550
Advertisement 800
Purchase 1,014,600
TOTAL 1,039,150
5.4.2 Variable Cost
Items 2021 2022 2020
Purchases 298,000 305,600 400,600
Electricity bill 22,300 22,600 29,200
Water bill 13,400 16,300 18,900
Transport 21,900 26,000 32,900
Creditors 25,200 25,600 45,400
Total 380,800 396,100 527,000

36
APPENDIX

1.3 Business location and address

Tambach
Iten

Sergoin Kerio View AKOTHE

DISHES

Rimoi Game
Reserve