1

BUSSINESS PLAN
TITLE: SWAHILI DISHES HOTEL

NAME. :

INDEX. :

COURSE NAME. : TOURISM MANAGEMENT DEVELOPMENT

COURSE CODE. :

EXAM SERIES NOVEMBER SERIES

SUPERVISOR NAME: MR AUSTINE KONZOLO

SUBMITTED TO : KENYA NATIONAL EXAMINATION

COUNCIL FOR PARTIAL FULLFILMENT OF AWARD IN
DIPLOMA IN TOURISM MANEGMENT
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Table of Contents
DECLARATION 3
ACKNOWLEDGEMENT 3
DEDICATION 4
CHAPTER ONE 5
1.0. BUSINESS DESCRIPTION 5
1.2. . BUSINESS LOCATION AND ADDRESS 5
1.3. THE FORM OF BUSINESS PLAN 5
1.4 TYPE OF BUSINESS 5
1.5 PRODUCT AND SERVICES 6
1.6. JUSTIFICATION OF OPPORTUNITY 6
1.7. INDUSTRY 6
1.8 GOALS OF BUSINESS OBJECTIVE 6
1.9. ENTRY AND GROWTH STRATEGY 7
CHAPTER TWO 7
2.0.MARKETING PLAN 7
2.1 CUSTOMERS 8
2.2 MARKET SHARES 8
2.3 COMPETITION 8
2.4 METHOD OF PROMOTION AND ADVERTISEMENT 9
2.5 PRICING STRATEGY 9
2.6 SELLING TACTICSS 10
2.7 DISTRIBUTION STRATEGY 10
CHAPTER THREE 11
3.0 ORGANISATION AND MANAGEMENT PLAN 11
3.1 MANAGEMENT TEAM 11
Qualifications 11
Duties 11
CHAPTER FOUR 16
4.0. PRODUCTION AND OPERATION PLAN 16
4.1 PRODUCTION FACILITIES AND CAPACITIES 17
5.2 PRODUCTION STRATEGY 18
5.3 PRODUCTION PROCESS 19
5.4 REGULATIONS AFFECTING PRODUCTION PROCES 19
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CHAPTER FIVE 20
6.0 FINANCIAL PLAN 20
6.1 PRE-OPERATIONAL COSTS 20
6.2 WORKING CAPITAL 20
6.3 PRO-FORMA BALANCE SHEET 20
6.4. PRO-FORMA INCOME STATEMENT (TRADING, PROFIT AND LOSS ACCOUNT) 21
Expenses 22

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DECLARATION

I hereby declare that my business plan is my original work that has not been represented for
the award of degree, diploma or certificate to any institution.

NAME:.................. ...................... ...................

INDEX NO........................

SIGNATURE………………………………… DATE…………………………………

SUPERVISOR NAME: MR AUSTINE KONZOLO

SIGNATURE…………………………..…….. DATE………………………………..

ACKNOWLEDGEMENT

I wish to acknowledge the following people who assisted me in ensuring that the business
plan was successfully done. First thanking my lecturer, where he tried very hard and put a lot
of effort and valuable time to guide me. And finally I am also very much thankful to my
friends and my parents who have helped me during my preparation of my business plan.
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DEDICATION
I dedicate my dissertation work to my husband ,family and friends. A special feeling of
gratitude to my loving parents for their moral support.

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CHAPTER ONE
1.0. BUSINESS DESCRIPTION
1.1. BUSSINESS NAME
The MOMBASA DISHES Hotel will be a sole proprietorship form of business.This will
enable me to run it effectively.

1.2. . BUSINESS LOCATION AND ADDRESS

The MOMBASA DISHES hotel is a sole proprietorship form of business It will be located
Bukiri along Funyula Port road near Petrol Station. It will be dealing with accommodation,
food and beverages. The reason for coming up with the hotel is because it’s a source of
income and creates job opportunities.

The address will be,

Mombasa dishes hotel,

P.o box 231-50406

FunyulaPatricakadsima1997@gmail.com
1.3. THE FORM OF BUSINESS PLAN
The Mombasa dishes hotel will be a sole proprietorship form business. The reason why I
come up with this business is because no competition availability of ready market for our
business and willing partners with a lot of experience.
1.3.1 Advantage of sole proprietorship

• Easy to form

• Has few legal requirements

• The business has high level of confidentiality

• One enjoys profit alone

1.3.2 Disadvantages of sole proprietorship

• Owner suffer loses alone

• Poor decision making can make business loss

• Long irregular working hours

1.4 TYPE OF BUSINESS

My business will be a startup business. Its major activities will be, to offer quality food and
services, transport and comfortable and affordable prices to all customers.
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1.5 PRODUCT AND SERVICES

The main product and services my Mombasa dishes Hotel intends to offer includes: hotel
accommodation, food and beverage, entertainment in 24 hours, conference and meetings
facilities, outside catering. We will also provide private meeting rooms and shopping arcade,
we will also include sporting activities alike golfing, windsurfing, scuba diving and
catamaran that other hotels are still trying to bring out. For dinner our guest will be joined by
our culture dancers.
We will be preparing delicious and nutritious food which will meet the standard of all our
customers including our tourist. Our prices will be reasonable to all customers. Customers
oriented will be either of recreation tourism, incentives tours, and conference tours. Their
prices will range from 150,000/= per month with a respect to their occupation 70% profit to
the business.

1.6. JUSTIFICATION OF OPPORTUNITY

Mombasa dishes Hotel is justified through its fine and quality services. We believe our
business will be successful due to this and all the offers we intend to offer. Being an
upcoming business around there is a high growth rate and population demand for the
commodities that the business intends to offer. Therefore, he services will be in great
demand. The manager from Japan has also agreed to send us some of their employees to
come and help us in our start up business and also agreed to post us some travel agents and
tour operators who will market our business through television, pamphlets, internet and also
billboard worldwide.

1.7. INDUSTRY
The business is under hospitality because of high demand from the overgrowing population
in the urban areas, the industry need to expand and open up more opportunities to offer
services so as to meet the demand of people. Due to this high population we decided to
venture and invest this industry as it has a promising future. It will offer its services for
twenty-four hours to ensure large scale is being achieved every day and creating broader job
opportunities and we will try to identify our competitor’s strength and weakness.

1.8 GOALS OF BUSINESS OBJECTIVE

2.7.1. Goals
The goals of our business is to satisfy the needs of the community at large and welcome the
tourists into our world peace and beauty to discover the Magical African in our hotel, find the
combining rich history of Kenya’s culture, nature and delicious African food and beverage.
1.8.2. Long term Goals
• To make aggressive marketing through world life advertising.
• Develop good reputation, worldwide as one of the best resort and offering the best
needs effectively and efficiently.
• Gain self-actualization, the partners should be able to stay a comfortable and self-
sufficient life.

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1.8.3. Short term Goals

• Attracting more customers by giving goals and objective discounts to regularly
customers.
• Creating more job opportunities in order to improve the living standards in town.
• Expansion of business and opening new branches in the town and buying more
equipment to cater for more profit.
• To be at a point of offering attachments chances to students undertaking catering.
1.9. ENTRY AND GROWTH STRATEGY
Before starting any type of business it is important to check and study the stability of the
already existing business related to your proposed one. In our case we have looked into the
weakness and the strength of the business efficiency similar product and services like the
three stairs hotel, this will enable us to venture into the business world with enough
knowledge to curb stiff competition we experience in order to attract and maintain customers.
1.9.1 Entry Strategies
• Hand bills, these are small papers with information about the business to be
published.
• Posters will be typed and decorated so that it can be attract more customers.
• At the starting point we were going to start with low pricing of the sales and by doing
more customers will be attracted.
2.9.2 Growth Strategies
• The business will have good packaging so as to give customers the highest sanitation.
• We will offer free samples.
• Good customer relation will be the best to ensure advocates in our business.

CHAPTER TWO
2.0.MARKETING PLAN
In duration of three years Bondo Soap Industry will have realized a state turnover of Kenya
shillings 16,200,000 million and above after carefully considering the factors that will enable
us moving wisely when marketing products.
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2.1 CUSTOMERS
Our customers will be from any groups of people in-terms of gender, age and religion. Since
the product we will be dealing with are convenient to all forms of people. It will range from
rich to the poor, young to the old and all tribes to reduce unfair treatment of people.
2.1.1. Institutions Customers
Most of our targeted customers will be youths who will be meeting for their groups meetings,
church members preparing for their weddings and pre-weddings, women’s who will be
meeting for their groups, and even elder people from Bhades clan who usually held their
meetings.

Other customers will be from institutions like secondary schools, primary schools, churches
and hospitals. These institutions will have the advantages of board rooms for their organized
tours hence need parked field which the hotel will offer for available and affordable prices.
We will use indirect selling method in our hotel and there will be no credit facilities in our
hotel to avoid credit we will need cash in our hotel. Hospitals will be preparing highly
qualifies food which should be such special to all with required nutrition for the patients.

2.2 MARKET SHARES

Pamsite Resort Hotel will sell product as we said to all customers. There is high number of
this type of business. In our company we estimate 200,000/= to be the total sale in a month.
These are other customers, selling similar product in the market include Three Stairs,
Riverbank hotel, Meru Safari Hotel, Simba Wells and Pamsite Resort Hotel.

2.3 COMPETITION
Without competition there would be no challenges to improve products, services and
ourselves. Therefore competition is very important to each and every business to be
successful.

Three Safari hotel Pamsite stairs

hotel
Assets 900,000 1m 800,000
75,000.
Sales 85,000.00 95,000.00 00
Market
share 33.0% 35.8% 31.2%
110,000.0
Profit 150,000.00 130,000.00 0

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Location of our business is the major leading to success in our business, cleanliness and also
quality of services customers’ satisfaction. Some of our competitors are offering products in
small quantities and low quality which become unsatisfying to customers we will close that
gap by offering large quantities and of high quality to satisfying our customer.
Their strength is that there are 150 comfortable rooms with tasteful colours schemes whereby
every room is beautifully furnished. Weaknesses are that unfaithful to customers, expensive
therefore not convenient for all people apart from the rich, very tribalistic when it comes to
employing staff. We will take that advantage of being convenient to all people without
discrimination.

2.4 METHOD OF PROMOTION AND ADVERTISEMENT

We will be showing persuasive information about our product to remind the customers that
our product are still existing in the business by the use of media
• Television adverts
This will be accompanied by pictures, samples, product and the business name to create more
awareness to all people
• Radio station media
The radio media station will touch all the stations .This is because the largest percentage of
the public access to radio and thus it will be more effective for the customers both the poor
and rich.
• Posters and circulars
This will involve small leaflets written and mounted along highway corners; road and all
institutions block .This will help them to know the specific location of the business and what
it deals with.
• Painting Business
We will paint our business name pamsite resort hotel entailing the mission statement good
and services .This will attract more customers from all ends. The cost of painting will be
30000 and to know effectiveness of it is by increasing of customers and calls from other
different people asking for services.
2.4.1 Promotion
We will usually done promotion to motivate and maintain the customers to assure them the
business is providing quality products the business will conduct annual public action of
calendars will contain the buildings. Its locality and services offered the cost of promotion
will be 35000.

2.5 PRICING STRATEGY

We will come up with penetration calculation method to come up with selling price.
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Factors that will influence our pricing strategy

• State of technology
Affect the productivity of our output per person and also affect the cost structure it will be
our duty to know the flexibility of one’s equipment so as to be able to work effectively
• Cost of raw materials
Output production will be majority be considered to avoid loss of income
• State of economy
The price must be put accordingly to the state of economy in the country .Credit buyers
will be charged a small percentage to their price s but will also get cash discount to
encourage prompt payment of debt since some of our competitors already market for
their product so fair competition, we will set our commodity price very close to their
price in order to gain business idea in price. The influence of the customers’
expectations and willingness .It will be very important in our pricing decision .Our
actual price and services will be accordingly to the quality and quantity of the type of
food you want. We will put menu board to show all type of food and their prices

ACTUAL PRICE
1TEM COST
Chicken 1kg 1,500
Kienyeji 800
Chips 500
Tea 250
Milk 300
Pizza 1,800
WalMlima 500
Ugali 400
Matoke 600
Tangu fish 800
Octopus 1800

• After sales service

After sales service transportation cost will be the hotel issue, where our company
vehicles will be transporting customers in different destination.
2.6 SELLING TACTICSS
In our company we will use person selling method that is direct selling for the satisfaction of
their need to ensure easy access of customers and by doing so we will capture large number
of customers .We will be paying our workers in monthly period and by doing that, we will
motivate them to work hard towards their work.
2.7 DISTRIBUTION STRATEGY
For the orders received from different customers our company motor van would be required
on hire basis to transport the product and service to the required destination ,thus our van
will only be put into use when needed arises .Therefore because the services offered will be
purchased by the customers themselves from the Mombasa dishes hotel, thus distribution
doesn’t prove to be major problem as regarding our firm.

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CHAPTER THREE
3.0 ORGANISATION AND MANAGEMENT PLAN
Mombasa dishes hotel has opted to have management organization to easy smoothly run of
business duties where we will have a general manager

3.1 MANAGEMENT TEAM

The management team will be composed of the General Manager, the supervisor and food
and beverage manager. The qualifications and duties of the management team can be
summarized as follows:

3.1.1 GENERAL MANAGER

General Manager of Mombasa dishes hotel will be Peter musings 26 years old having
attained masters in hospitality and tourism management from Nairobi University. With
relevant working experience in many hospitality enterprise like Royal hotel in Meru.
Qualification
• Should have a minimum of A- in K.C.S.E
• A holder of a C.P.A certificate
• Prior working experience in a hotel industry for 4 years
• Forecasting
• Computer literate
• Good public relation and communication skills Duties
• Will be formation of rules ,regulation and polices governing Pamsite Hotel
• Selecting qualified employee
• Responsible for the recruitment of the employee
• Responsible for managing the growth of business

3.1.2 SURERVISOR
Qualifications

• KCSE Mean grade C+

• Working experience in Hotel Industry for 2 years

• Good communication skills

• Computer literate

• Forecasting
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Duties

• Giving instructions to employees who report to him or who are under him.

• To make sure that good hygiene has been maintained i.e. clean sanitation, smart and
clean employees.
• To ensure there is safety and security for both workers and guest in the restaurant.

• Duty to scheduling the staff.

3.1.3 FOOD AND BEVERAGE MANAGER

Qualifications
• KCSE Mean grade C
• Good communication skills

• Goals oriented

• Two and half year (21/2) working experience in the related job.

Duties
• Maintaining efficient catering services within the hotel.
• Responsible for attending any staff meetings arranged by General Manager.

• Responsible for hygiene and safety standards in food and beverage department.
• Maintaining effective control of raw materials.

3.2 OTHERS
Position NO. Qualification Duties

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ACCOUNTANT 3• KCSE mean grade B+ • Preparing financial

• A holder of CPA. business statements.
• 3 years’ experience in relevant • Counter checking
money
position. received and daily receipts.
• Computers literate in M.s excel, • Will be solely
responsible book keeping. for receiving money.
• Good communication • Preparing balance sheet
and business ledgers

CHEFS 1 • KCSE mean grade C+ • Responsible for training the

• Kenyan citizen aged 25-30 years cooks in various
tasks
• Diploma in food production • Be in charge of general
• Self-driven in a good conduct and production of food
items.
disciplined.
• Knowledge of using advanced kitchen technology equipment

MAINTANANCE 1 • Diploma in mechanical • Will deal with repair and

ENGINEER engineering preferable from mechanical breakdowns of
Kenya polytechnic University machines, furniture within
College. the organization
• 4 years working experience.
• Always punctual.
DRIVERS 5 • Driving License.
• 2 years working
experience.
• Receiving and
transporting our product
• Transporting our
customers
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WATCHMEN 2 • KCSE mean grade C-. •Maintain security within

• 2 years working experience. the organization and
• Certificate of criminology. guarding customers
• Certificate of Good conduct. •Protecting the properties
• Physical and mentally fit. from robbers within
business enterprise.

CLEANERS 3 • KCSE mean grade C. •Ensuring cleanliness is

• Diploma in environmental maintained within the
science. compound
• Fluent in English and Kiswahili. • Planting and maintaining
flower garden within the
hotel environment.

GENERAL MANAGER

ORGANIZATION STRUCTURE

FOOD AND BEVERAGE

SUPERVISOR
MANAGER

CLEANER
DRIVER CHEFF MECHANICAL SECURITY

ENGINEER
3.3 RECRUITMENT, TRAINING AND PROMOTION

4.3.1 Recruitment
The general manager of the business will be responsible for the recruitment of his workers.
This will be dome through advertising using posters, newspapers and televisions. Through
the advertisement the applicants will be able to know their qualifications, working experience
which will also be required, the deadline and where to take the application forms when they
apply for the job. The date of the interview will be communicated to the qualifiers applicants
through their cell phones numbers. The interview will be conducted within the business
enterprises in two ways.
• Written method- whereby the interviewees will be given written questions to
answer.

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• Oral interview- this is whereby interviewees will be asked questions by the

interviewers. After everything the new employees will be introduced into the new
business environment so as to familiarize them.
3.3.2 Training
The employees are expected to be well trained and qualified. The owner of the business will
further train its entire staff within the business to familiarize his workers with their duties.
Experienced personnel will be invited in the business at all times to give educative advice on
how to conduct the business effectively, this will be include experienced chefs from other
hotels and well established hotels.

3.3.3. Promotion
The owner of the business will be promoting her employees annually depending on some
factors for example academic knowledge, higher academic standards will be promoted
especially those who have gone through masters will stand at a better chances. Also how one
performs his/ her duties will determine his/her promotion. Workers who perform their duties
and task in various sections leading to greater output of the business and more profit will
stand a chance of being promoted. Responsible employees who prove to be responsible so as
to meet objective of the business will also be promoted, that is someone who perform his/her
duty without supervision and also extend the working hours.
3.4 REMUNERATION AND INCENTIVES

3.4.1 Remuneration
By understanding workers and make them feel part of the business; we will have some
policies of generosity which include; uniforms, bonuses, annually and parties.
• Annually parties
Having parties will make the employees to feel free to each other. This will make the
employees to talk about their problems without fearing thus important points to build up the
enterprise will be gotten.
• Bonuses
Bonuses will be given to workers in case of high sales meaning more income or profit due to
his/her work outcome.
• Uniforms
All workers will be given a pair of uniform according to his or her job.

MONTHLY PAYMENT
Job Title NO. Monthly Allowance Total Annual Pay
Pay
General Manager 1 20,000.00 11,000.00 31,000.00 372,000.00 Accountant 3 18,000.00
8,000.00 26,000.00 312,000.00
Supervisor 1 15,000.00 4,000.00 19,000.00 228,000.00 Food and beverage 1 14,000.00
8,000.00 22,000.00 264,000.00 manager
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Chefs 2 10,000.00 3,000.00 13,000.00 156,000.00 Maintenance 1 15,000.00 5,000.00

20,000.00 240,000.00
Engineer
Drivers 5 10,000.00 5,000.00 15,000.00 180,000.00
Watchmen 2 9,000.00 7,000.00 16,000.00 192,000.00
Cleaners 3 8,000.00 2,000.00 10,000.00 120,000.00
Cooks 14,000.00 4,050.00 18,050.00 216,600.00
TOTAL IN KSHS 57,050.00 190,050.00 2,280,600.00

3.4.2 Incentives
The business will give overtime allowances to employees who sacrifice their time for the
sake of the hotel
3.5 LICENSE, PERMITS AND BY-LAWS
3.5.1 License
It will be needed to secure trade licenses for registrations. The business will have to register
its name with the register of names
• VAT regulation certificate from Kenya Revenue Authority.
• Trade Licenses from Local Authority Council
• Trade certificate for Trade Department
3.5.2 Permits
An operation permit for the business will be obtained from Bunsia county Council for Kenya
Shillings 9000/=
3.5.3 By-Laws
This will be based on the factors and other places of work which ensure that the business
offers good working conditions for its employees. It will also caters for employees personal
security, it will also guard them against accidents and it will cost 12000/=

3.6 SUPPORT SERVICES

Mombasa dishes hotel will require some services and supportive from various field who will
advise us for smooth maintaining and operating its daily activities.
3.6.1 Banking Services
We will use Co-operative bank of Kenya, this will offer banking and financing aids to the
business, this will be done through Busia branch.
3.6.2 Insurance services
Will ensure our safety in cases of fire outbreak, accident within the company or robbery and
also life insurance cover.
3.6.3 Typing services
For typing service Mombasa dishes will use computer and typing services which is situated
within the locality

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CHAPTER FOUR
4.0. PRODUCTION AND OPERATION PLAN
There are various equipment and production facilities that will be required for the production
and operation of the business.

4.1 PRODUCTION FACILITIES AND CAPACITIES

Oven 3 22,000.00 66,000.00

Sufuria 30 700.00 21,000.00
Utensils 300 80.00 2,400.00
Potato peeler 1 10,000.00 10,000.00
Cleaning 8 600.00 4,800.00
equipment
Staff uniform 20 700 14,000.00
Cash register 2 2,000.00 4,000.00
Hot chamber 1 1,500.00 1,500.00
TOTAL 1,017,100.00

We will be checking our machines monthly and repairing of machine and equipment will be
once per year. By doing that we will ensure proper utilization of resource of machines and
equipment will be used with proper care and any misuse will be denied a substantial amount
of cover cost. Additional equipment is as follows:

Item Quantity Cost per Total

unit
Refrigerators 2 60,000.00 120,000.00
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Deep fryers 2 17,000.00 34,000.00

Barquejiko 1 3,000.00 3,000.00 Oven 3 30,000.00 90,000.00
Hot chamber 2 2,000.00 4,000.00 Potato peeler 1 13,000.00 13,000.00
Cooler 1 17,000.00 17,000.00
Cash register 2 2,500.00 5,000.00
Utensils 300 100.00 30,000.00 Sufuria 10 14,000.00 140,000.00
Cutleries 200pcs 15,000.00 3,000,000.00 Staff uniform 10 16,500.00
165,000.00
Cleaning equipment 8 13,000.00 104,000.00
TOTAL 3,725,000.00

5.2 PRODUCTION STRATEGY

Process Activity Person
responsible Raw
material acquisition Raw materials will be brought to the Food and Beverage
and selection. hotel and selection will be done for the Manager
required product
Assembly The chosen material will be assembled Head Chef
after assembling, inspection will be done.
Soldering Components are placed according to Head Chef
their perishability.
Fault diagnosis This will be done to ensure protection Chef
and efficiency on finished product.
Working performance Sorting to reduce the wastage of Head Chef
perishability of goods
Storage methods This will be dome either through the Chef
refrigerator.
Through the employee are expected to be well trained and qualified. We will further train its
entire staff with the business to familiarize his workers with the duties. We will use
orientation and invitation of more experienced personnel. These are some of raw materials we
will require for our business.

Materials Quantity Price Supplier Months Amount

Carrots 3 bags 2,500.00 January 40,000.00
Potatoes 3bags 3,000.00 February 45,000.00
Drinks 4crates 2,700.00 March 40,000.00
Onions 1 bag 1,000.00 April 30,000.00 Tomato 1 crate 1,200.00 May 30,000.00 paste
Fat 20 kg 1,500.00 June 35,000.00
Milk 1 crate 1,500.00 July 30,000.00
Sugar 20 kg 1,700.00 August 30,000.00
Wheat 3 bundles 3,000.00 September 40,000.00 Cocoa 20 pkts 1,500.00 October
50,000.00 Coffee 20 pkts 1,500.00 November 60,000.00
Tealeaves 20 pkts 1,300.00 December 65,000.00
Octopus 1 haul 2,000.00 TOTAL 455,000.00
Maize 3 bundles 3,000.00
TOTAL 30,900.00

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5.3 PRODUCTION PROCESS

The following is our process, the guest have to pass through the guards at the gate for
security purposes, then to the receptionist who will attend to them as guest, one will be
shown where to sit as he/she wait to be attended to. In a waiting bay there is a television to
keep the guest entertained. Each waiter will be assigned to their respective table introduce
themselves to the customers, and then he/she will take the menu of the guest. The waiter has
to go to the kitchen and make an order for what the customers have ordered. Then the waiter
shall serve the customer with what he/she has ordered. After the customers are through the
waiter will give them their bills which the customers will forward to the counter and clear the
bill.
In our organization communication is the main factor which might affect our organization.
Communication is very important that can make the management diagnose problem that
affect the employee and also can be used to disseminate the company policies. It affects when
something mysterious happen in an organization and the staff keeps it as secret. To curb up
with this kind of problem we just try to encourage staff to keep everything in transparency.

5.4 REGULATIONS AFFECTING PRODUCTION PROCES

1. Liscences and permits from county government.The business will start running after
it has acquired liscence and permits from county government.

2. Taxes to Kenya revenue authority. The business will be paying taxes to Kenya
revenue authority for it to run smoothly without any interference from KRA staffs.

3. Public health act. The business will have a conducive environment in order to
facillitate customers and employees perform their effective duties.

4. Insurance,laws and regulations. It will be insured for it to be compensated incase of

loss of property incase of fire or robbery incidences.
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CHAPTER FIVE
6.0 FINANCIAL PLAN
It is very important to maintain financial plan for effective management of a business and
hence will depict the track of financial flow of business which will be determining factor in
growth of a business.
6.1 PRE-OPERATIONAL COSTS
ITEMS COSTS
buildings 500,000 Computers 160,000
Advertisement and recruitment 70,000
Machinery, equipment and tools 65,000
Van 200,000
Electricity instalment 15,000 Water instalment
19,000
Stock 1,010,100
Insurance Policy 15,000
Business registration 13,000
Telephone instalment 15,000 Internet instalment 15,000
TOTAL 2,097,100

6.2 WORKING CAPITAL

Current assets
Cash at hand 400,000.00
Cash at bank 300,000.00
Debtors 52,800.00
Stock 400,000
1,152,800.00

Less current assets

Bank overdraft (100,000.00)
Accruals (300,000.00)

Working Capital 752,800

6.3 PRO-FORMA BALANCE SHEET

PAMSITE RESOTY HOTEL BALANACE SHEET FOR THE YEAR DECEMBER
2015

Fixed assets
Buildings 2,000,000.00
Motor vehicles 2,500,000.00

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Computers 160,000.00
Machinery equipment and tools 65,000.00
TOTAL 2,425,000.00

Current assets
Cash at hand 400,000.00
Cash at bank 300,000.00
Debtors 52,800.00
Stock 400,000
1,152,800.00
Less current assets
Bank overdraft (100,000.00)
Accruals (300,000.00)

Working capital 3,177,800.00

Financed by:
Capital 3,00,000.00
Net profit 1,184,800.00
Loans 1,693,000.00
TOTAL 3,177,800.00

6.4. PRO-FORMA INCOME STATEMENT (TRADING, PROFIT AND LOSS ACCOUNT)

ITEM YEAR 1 YEAR 2 YEAR 3
Sales 14,995,000.00 16,000,000.00 16,000,000.00 Add debtors 19,600.00
20,000.00 20,000.00
Less purchases 3,833,800.00 9,000,000.00 9,000,000.00 Gross profit c/d
6,180,800.00 7,020,000.00 7,020,000.00
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Expenses
Wages and Salaries 1,602,000.00 1,602,000.00 1,602,000.00 Water 243,000.00
244,000.00 244,000.00
Telephone 154,000.00 155,000.00 155,000.00
Electricity 1,500,000.00 1,500,000.00 1,500,000.00
Advertisement 816,000.00 816,000.00 816,000.00 Insurance policy 83,000.00
84,000.00 84,000.00
Business registration 74,000.00 74,000.00 74,000.00
Transport 216,000.00 217,000.00 217,000.00 Repair 284,000.00
270,000.00 270,000.00
Insurance 24,000.00 240,000.00 240,000.00 Total expenses 4,996,000
5,202,000 5,202,000

Net profit 1,184,800 1,818,000 1,818,000

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6.5. CASH FLOW PROJECTIONS

6.5.1. CASH FLOW PROJECTIONS FOR 2016

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6.5.2. CASH FLOW PROJECTION FOR 2017

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6.5.3 CASH FLOW PROJECTION FOR 2018

6.6. BREAKEVEN ANALYSIS

B.E.P = Fixed cost/Contribution
Contribution = Selling price – Variable cost
= Ksh 500 – Ksh 166 = 334
B.E.P = 2,445,000/334 = 7,320 Units
6.7. DESIRED FINANCING
Item Ksh
Pre-operational cost 2,097,100
Fixed asset 2,445,000
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Working capital 752,800

Total 3,094,400
6.8. CAPITALIZATION
Item Ksh

Owner’s contribution 300,000

Loan 1,693,000
Total 1,993,000
6.9 PROFITABILITY RATIO
Gross profit ratio = G.P/Sales * 100
= 6,180,800.00/14,995,000.00 * 100 = 41%
Net profit ratio = N.P/Sales * 100
= 1,184,800/14,995,000.00 * 100 = 7%
Return on equity = N.P/Owner’s contribution * 100
= 1,184,800/3,177,800 * 100 = 37%