BUSINESS PLAN

NAME OF THE BUSINESS: ATIELIS’ RESTAURANT KAMPIRI

ADDRESS: P.O BOX 456 KAKAMEGA
TELEPHONE NUMBER 0723055190
EMAIL:odaridorophine@gmail.com

PRESENTED BY: ODARI DOROPHINE

INDEX NUMBER: 614101/0179
PRESENTED TO: KENYA NATIONAL EXAMINATION
COUNCIL IN PARTIAL FULFILMENT FOR THE AWARD IN
CRAFT CERTIFICATE IN FOOD AND BEVERAGES
PRODUCTION SALES AND SERVICES

SUPERVISOR: MR. MADAGA.

SERIES: JULY/AUGUST 2021
DECLARATION
I hereby declare that the Business plan presented is my own original work and it has never been
presented before to any other Institution.

Name : Odari Dorophine

Index Number : 614101/0179
Signature:
Date :15/5/2021

Name of supervisor: Mr. Madaga

Signature…………………………..
Date………………………..

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ACKNOWLEDGEMENT
I acknowledge the following people for the moral and financial support: The Almighty God who
sustained me. My mother Doris Anungo who has been my mentor and guider, spouse Daniel
Bulali who has offered financial support and counseling, my children Ruth, Brendah and Ibrahim
who have challenged me, spiritual parents, pastor and the wife, who have offered prayers and
guiding and counseling and Shamberere T.T.I including teachers, the supervisors who stood by
me offering guidance in every area to ensure that my work is accomplished not forgetting the
Kabras cyber who helped in typing and uploading my business plan. May God bless them.

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DEDICATION
I dedicate this business plan to Kenya National examinations council, my spouse, parents,
children and Shamberere Technical Training Institute for moral support and educational
breakthrough.

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SYNOPSIS
EXECUTIVE SUMMARY
This is the summary of all the components written in all the chapters. Starting from Chapter one
to chapter
five.
1.0BISINESS DESCRIPTION.
Atielis restaurant Kampiri is a sole – proprietorship type of business . it is owned by Atieli and
she li and has
employed workers who lends a hand to daily activities .
The business is located along Webuye- Kakamega road within kakamega county near west
Kenya sugar
company limited.
The restaurant offers food and beverage services,accommodation,wedding
grounds,conferencehalls among
others.
The objectives of the business is to ensure that our clients are served with the best foods and get
Satisfied .Also by maintaining profitability of sales of the business.
2.0MARKETING PLAN
The potential customers that the owner of the business focused upon were the employees of west
Kenya
sugar co. ltd ,shamberere tti staff .the methods of promotion used were as
Follows the advertisement ,the free sample ,after sale services. The restaurant operates
as a retail which to consumer as a method of distribution.
3.0ORGANISATION/MANAGEMENT PLAN
The organizations runned by board of governors starting from General manager who
Coordinates all the managerial departments ,the Hr,the procurement, the supervisors
, the accountant, the chef and many others .
The business obtained its license from kakamega county and helps in government revenue .
The business has an active running or operating bank(KCB) which helps in their financial
safety and loan facilities to the business. The business is also under the insurance cover
(APA) which makes sure that the business does not go at a loss in case of any disasterthet may
occur.
4.0PRODUCTION PLAN/OPERATION PLAN
The major facilities required in my restaurant include the following; furniture’s, cutlery,
pots,fridges,oven,computers etc. The total cost of all the facilities required is approximately
sh.3,760400.
5.0FINANCIAL PLAN
The business financial plan consisted of the following:
The pre- operational cost, the estimated of working capital showing the assets and liabilities.it
also focused on cash flow projections showing cash in and cash out.it also considered on the
gross profit under
the proforma income statement. It also worked upon the proforma balance sheet focusing upon
the working capital which is equal to total assets- current liabilities.
The business was financed by: capital of sh 948000.

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TABLE OF CONTENT
Declaration……………………………………………………………………………………….i
Acknowledgement……………………………………………………………………………….ii
Dedication……………………………………………………………………………………….iii
Synopsis :Executive summary…………………………………………………………………..iv
CHAPTER ONE
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1.0business Description………………………………………………………..………………..1
1.1 Background……………………………………………………………...……………….…1
1.2 Business name……………………………………………………………………………....1
1.3 Business location…………………………………………………………………………...2
1.4 Forms of location type of business……………………………………………………........3
1.5 Type of business…………………………………………………………………………....4
1.6 Products and business………………………………………………………………………3
1.7 Justification of opportunity……………………………………………………………...…3
1.8 Industry……………………………………………………………………………….....…4
1.9 Goals and objectives of the business…………………………………………………….....4
1.9.1Goals…………………………………………………………………………………..….4
1.9.2 Objectives……………………………………………………………………………..…4
1.10.1 Entry……………………………………………………………………………………4
1.10.2 Growth plan………………………………………………………………………….…4
CHAPTER TWO
2.0marketing Plan……………………………………………………………………………...5
2.1 Customers………………………………………………………………………………….5
2.2 Market share………………………………………………………………………………..6
2.3 Competition………………………………………………………………………………...6
2.4 Methods of promotion……………………………………………………………………...6
2.5 Pricing strategy……………………………………………………………………………..7
2.6 Sales tactics…………………………………………………………………………………7
2.7 Distribution strategy………………………………………………………………………...7
CHAPTER THREE
3.0 Organization Plan……………………………………………………………………….…..8
3.1Management team…………………………………………………….…………………...…8
3.1.1General manager…………………………………………………………………………....8
3.1.2 Human resource……………………………………………………………………...….....8
3.1.3 Procurement manager……………………………………………………………………...8
3.1.4 Production manager……………………………………………………………………......9
3.1.5 General secretary…………………………………………………………………………..9

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3.1.6 Marketing manager……………………………………………………………………..…9
3.2 Other personnel……………………………………………………………………………..10
3.3 Recruitment ,training and promotion……………………………………………………….11
3.3.2 Recruitment……………………………………………………………………………….11
3.3.3 Training…………………………………………………………………………………...11
3.3.4 Promotion…………………………………………………………………………………11
3.4 Remuneration and incentives………………………………………………………………..11
3.4.1Remuneration……………………………………………………………..………………..11
3.4.2 Incentives ……………………………………………………………………………..….12
3.5 Licenses permit ,By laws……………………………………………………………………12
3.5.1 License…………………………………………………………………………………....12
3.5.2 Permit……………………………………………………………………………………..12
3.5.3 By-laws…………………………………………………………………………………...12
3.6 Support services………………………………………………………………………..…...12
3.6.1 Banking services………………………………………………………………………….12
3.6.2 Insurance services…………………………………………………………………………13
3.6.3 Consulting services………………………………………………………………………..13
3.6.4legal services……………………………………………………………………………….13
CHAPTER FOUR
4.0 Operation Plan……………………………………………………………………………..14
4.1 Production facilities and capacity………………………………………………………….14
4.2 Production strategy………………………………………………………………………...15
4.3 Production process………………………………………………………………………...16
4.4 Production affecting operation………………………………………………………….…17
4.4.1 Health regulations………………………………………………………………………....17
4.4.2 Safety…………………………………………………………………………………..….17
4.4.3 environmental regulation………………………………………………………………….17
CHAPTER FIVE
5.0 financial plan……………………………………………………………………………….18
5.1Pre-operation cost……………………………………………………………………….….18
5.2 Estimation of working capital……………………………………………………………...19
5.3 Cash flow projection…………………………………………………………………........20
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5.4 Proforma income…………………………………………………………………………..21
5.5 Proforma balance sheet……………………………………………………………………22
5.6 Calculation of profitability ratios………………………………………………………….23
5.7 Desired Financing…………………………………………………………………………24

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CHAPTER ONE
1.0 BUSINESS DESCRIPTION
1.1 BACKGROUND OF THE OWNER
The owner of the business will be Dorophine Odari. She is married to Daniel. She is currently a
student at Shamberere Technical Training Institute undertaking a course in food and beverage
production,sales and services. She has five years working experience as part time job she is 30
years old.
1.2 BUSINESS NAME AND LOGO
The business identified will be called Atielis Restaurant Kampiri. Atieli is a Luhya name
symbolizing the ‘Truth’ .All the children named Atieli were expected not to tell lies but the truth
thus growing up with moral value

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1.3 BUSINESS LOCATION AND ADDRESS
The Atielis Restaurant Kampiri is located within Kakamega county , Malava Sub-County and
south Kabras location next to Kambi Mwanza junction opposite west Kenya sugar company
limited (Kabras).It is along Webuye Kakamega highway.
The Atieli’s address is 456 Kakamega and the email is Odaridorophine @gmail.com.

SHOPS
KAMBIRI JUNCTION

RESTARANT LOCATION
WEBUYE KAKAMEGA ROAD

WEST KENYA
JUNCTION
1.4 FORM OF OWNERSHIP
Sole proprietorship:- the reason for choosing this type of business is because the business is
simple and easy to form since only licenses from the government is required. The owner of the
business will be the manager of the business thus may employ people to work in the business.
The owner will make the decisions operating the day to day activities of the business. There will
be freedom of action at any time thus flexibility in adopting quickly to changes in customer’s
needs. The profits will be entirely on the owner’s hands. There will be control over business
secrets.

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1.5TYPE OF BUSINESS:
This is the startup type of business and it will offer the following amenities;
Accommodations.
Outside catering.
Children playground.
Conference halls.
Wedding grounds.
Laundry.
1.6 PRODUCTS AND SERVICES,
The business will be offering products and services of good quality and quantity for example the
food commodities prepared shall be fresh and prepared in a professional way according to the
customer desire and style ,The food shall be delicious and appetizing.eg the snacks, the proteins
even the starch e.g. rice, we shall also allow take-away foods to our customer[daily
customer].We shall also offer service such as accommodation where there shall be enough space,
well ventilated Porch sofa set flat TV screen with a DSTV ,standard bed with a mosquito
net .The client will be offered with free personal amenities like, shower get dental kit shampoo
lotion shaving kit etc. we shall also offer free wifi. The customers booking for wedding grounds,
price will be affordable and there will be all facilities Required e.g. tents seats and even skirting
and decoration will be done free of charge The play grounds parents bringing their children to
play and relax they will be offered free plate of chips with a glass of fresh juice swimming
pool .the swimming pool affordance will be offering good
training to those who don’t know how to swim and the price will be affordable compared to
other restaurant .This services offered will last long as long as the management of the restaurant
continues ,these services and products will always be convenience to our clients.

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1.7 JUSTIFICATION OF OPPORTUNITY
The type of business was chosen because it is establishment that offers very high aspects of
their operation example is the a lacarte menu silver service good quality facilities .This will be a
free standing restaurant.
The business will be a profit orientated and it will reflect the financial policies.
The higher the gross profit level of the a lacarte and high standard quality restaurant the lower
the percentage of variable costs of the operations and the need to cover the higher staff costs.
The marketing policies of these operation are quite clearly identify their market and target is
advertising their products & services be of high quality and standard of service will competitor.
The chef will be executive to ensure that food production is of good taste.
The executive chef will be responsible for the operation and the chef department responsible
for section of the kitchen with at least a number of chef who will assist the chef departments with
the manual tasks in the front of house a restaurant manager will ensure the setting are well done
by head waiter.
There will be use of electronic point of sales and mobile point of sales system technology,
this is to avid the reputation of the menu in the restaurant .The performance of work will be more
easier. The provision of information about an employee no of customers per hour no of revenue
generated times takes to serve the food the number of tips per table.
This will determine whether a staff needs more training, this will help the information to be
shared around the team and motivate the staff as they can share what is going on in the work
place.

1.8 INDUSTRY
The restaurant will be among the food processing industry.
1.9 GOALS & OBJECTIVES OF THE BUSINESS.
1.9.1 GOALS
The business will be expanded inform of being rated as a four or five stairs due to high standard
of food & services offered.
1.9.2 OBJECTIVES
The main objective will be to ensure that there is enough profit being made during the span of
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one month.
Ensuring that the workers are of high skilled and sound mind.
Attract more customers compared to other restaurants.

1.10 ENTRY AND GROWTH STRATEGY.

1.10.1 ENTRY PLAN
The business will be rated among the best because it will offer high standard of goods and
services among the customers.
The products and services will be at affordable price compared to others.
It will be among the cleans and tiredness among all.
There will be use of cc.TV, incorporation of new technology e.g. the use of electronic
machines for data collection, number of staff, food issued and consumed etc.

1.10.2 GROWTH PLAN

.This will be determined by the strength of the business where by the adequate finance is
required the access to economic sales ,the distinctive competition among other establishment.
Lack of proper skills will affect the business especially the use of electronic also there will be
poor tract records due to lack of internal operation system.
The opportunity here is from the potential customers who always buy our products and
services to promote the establishment .This is to generate revenue.
Also there is threats among competitor e.g. there is strong competition thus less profit margin
.
Adverse governments policies the taxation being paid is high compared to profit margin .The
political stability also affects the establishment in a serious note where by it hinders the coming
of customers hence growth is stagnant.

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CHAPTER TWO
2.0 MARKETING PLAN
2.1 CUSTOMERS:
The owner will be looking at the ways to offer services and how to retain customers.
The owner will be focusing upon the two types of customers. The potential customer and those
who are not potential. For example potential customers will be determined by those workers
from West Kenya Sugar Company, the Shamberere staff and the Secondary teachers around. The
business will make sure that these customers get the best services because they will be promoting
the business sales hence we shall be maintaining the flow of revenue. The business will be
dealing with both cash and credit facility. To our potential customers we will be offering both.
These potential customers will be buying more products from the business and consuming little
time. The restaurant owner will be focusing to employ about forty staffs to serve approximately
five hundred quests per day.

2.2 MARKET SHARE.

The cost of business sales that the owner of the business is targeting at the end of month is
approximately nine hundred thousand shillings.
The competitors around are, Amani Quest House and the Eagles hotel restaurant.
The Competitors strength of work in the market
Atieli’s Restaurant dominates a large percentage of 70% thus being the leading one in the
market.

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Sales

Atlie's Restarant Kambili

20%
70% Amani Quest House
10%
Eangle Restaurant

2.3 COMPETITION.
Factors that will contribute to the success of the business will be:
i. The high quality of food production and services this will be depending on the type and style
of the products and services.
ii. The price of the commodities will be at an affordable price where all customers can afford.
iii. Good communication skill. We shall be using a good language, attractive and easy to
understand to our customers.
iv. The infrastructure. We will ensure that there is good and proper infrastructure around which
will make proper and quick access to the premises.
v. The factors that contributed to the failure of my business is due to high price market control,
vi. Due to few workers thus making work heavy.
vii. Lack of credit facilities.
viii. High competition from other competitors.
ix. The strength and weakness of other competitors includes the following: quantity of
production &services.
x. Poor quality of production &services.
xi. High price on food commodities therefore unaffordable to customers.

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xii. Poor location and inaccessibility.
xiii. Inability to provide extra services to customers.
2.4 METHODS OF PROVISION AND ADVERTISEMENT.
i. The owner of the business will prefer to use.
ii. Sales people to advertise which is easier and cheap to afford, thus reaching the customers face
to face.
iii. The use of trade shows and exhibitions.
iv. The use of seminars and workshops.
v. This business, the owner will prefer to advertise it on weekends. This will be on Saturdays and
Sundays because majority of the people or workers will be on their off duties which will enable
them to attend this seminars. This will be the way of sourcing customers.
vi. This advertisement will approximately cost around sh.60,000.00 only Kenyan money.
vii. We will be also offering free samples to those attending the seminars, which will be the
method of promoting the business.
viii. Use of road shows and also use of sponsorship. This will help the business promotions and
grow rapidly. promotions and grow rapidly.

2.5 PRICING STRATEGY.

This will depend on the new technology method system.
Factors that will influence the price setting of the restaurant will include the
following:
The population level of clientele in my establishment.Level of income of customers basically
focusing at the end of the month.
Nature of competition-Due to tough competition from other competitors for example where there
foods are of poor quality and high price. The food produced will be of high quality and
affordable price. The products produced will be of high standard nutritive value and prepared
with proper professions in a hygienic way.
Concerning transport services our customers who will be not able to come to the restaurant we
will be taking foods to them.

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2.6 SALES TACTICS
The business will be offering both direct and indirect selling to our customers.
Direct selling:- means that these sells will be offered to those customers coming to the restaurant
to take their foods and services from there while indirect we will be sending these foods products
and offering services from where they are may be due to lack of time to the restaurant.
The channel of distribution of the restaurant as part of the business- may include operation
from retailers who will be the owner to the customers who are the client’s.

2.7THE DISTRIBUTION STRATEGY

This will include the mode of transport that will be used to reach our customers for example
there will be a vehicle to offer this services.
The advantage of this means will create work and innovation thus ensuring that products or
services offered satisfies the minds of our customers
The problems anticipated in these chain of distribution includes high cost due to competition
with other companies.
Difficult to enter into the market through the rural (distance barrier)

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CHAPTER THREE
3.0 ORGANIZATION PLAN
3.1 MANAGEMENT TEAM
This will be the managing team that will be heading various departments in the restaurant.
3.1.1 General Manager
Duties and responsibilities
a. Taking charge of all activities that are taking place in the business.
b. Making decision by recruiting and firing of the staff.
c. Coordinating all the managerial officials and planning.
d. Heading and giving directions to the staff.
Qualifications
a. Must be a degee holder in food and beverage production.
b. Must be 5 years working experience.
c. Must be 30 years and above with a good cv.
3.1.2 Production Supervisor
Duties
I. Providing various types of dishes to the guests as per menu
II. To provide food for various buffet and banquet party
III. Preparing different types of dishes for special occasions for example Indian dishes
IV. To provide food for the staff
Qualifications
I. Must be a degree holder in food and beverage production.
II. Must have a food handling certificate.
III. Must be 30-35years old.
III. Must be a computer literate and fluent in English speaking.
3.1.3 Secretary
Duties and responsibilities
Taking minutes during the meetings
Taking records of goods needed to be stoked and already in the store

Qualifications

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 i. She must be a lady aged 28-35 years old
ii. She must be fluent in English speaking
iii. She must be a diploma holder in food and beverage production
iv. She must be at least have three years working experience in food and beverage establishment
3.1.4 Marketing Staff.
Duties and responsibilities
To make the brand image of the hotel to the market
Act as an agent of a hotel and provide various information of changes and updating
To sell various conference facilities to various customers/clients
Selling the room nights to individual guests for holiday purposes
Qualifications
Must be a diploma holder in sales, supply and marketing.
Must be 25 years and above with at least three years working experience.
Must be computer literate and fluent in speaking.
3.2 OTHER PERSONNEL
Tittle No. required Qualification Duties
Checking on theft cases in
Must be form 4 leavers and restaurant
undertaking any course Keeping records of movement of
Security 2
Must be 25-30years fixed assets and property
Open to both ladies and gents checking an authorized entry of
people in the premises

O Level Taking care of cleanliness of

Pass in related course rooms, building and furniture
Cleaners 3
Must be both ladies and Maintain cleanliness of linens
gentleman Receiving and issuing lines

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 Diploma in food and
beverage production
Food handling certificate
with a cv Prepares the menu meals
Cooks 3
Fluent in English speaking Training the trainees
2 years working experience

Open to both ladies and men

Provide food and beverage to the
Fluent in English speaking
guests
Waiters 4 3 years working experience
Taking orders
Diploma in service and
billing
catering

3.3 RECRUITMENT ,TRAINING AND PROMOTION

3.3.1 RECRUITMENTS
The trainees will be recruited through the advertisement media for example by the use of posters
along the road posts, mass media example Mulembe FM radio. This will enable the information
to reach the applicants in an easy way. The interviewed will secure job chances on condition that
they qualify the interview.
3.3.2TRAINING
The business establishment will be offering training to their trainees through seminars,
workshops and conferences this will enable them to acquire new skills and new technology also
will enable them to adopt new environment and interruption with others freely which will
promote self-esteem

3.3.3 PROMOTION
This will depend on individuals hard work, merits and qualifications in their departments.
This will be considered:
i) The relationship of the staff to the guests
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ii) Skills and innovation applied
iii) Working experience depending on the type of service and work
iv) The education level and determination
v) Those who will achieve the above qualification will be considered first.
3.4 REMUNERATION AND INCENTIVES
3.41 REMUNERATION
NO. OF MONTHLY TOTAL
TITLE ALLOWANCES
EMPLOYMENT PAY PAY
Manager 1 40000 10000 50000
Cleaners 3 30000 _ 30,000
Cooks 3 60000 30,000 90000
Waiters 4 40000 40000 80000
Secretary 1 15,000 5,000 20,000
Security 2 30000 _ 30,000
Drivers 1 20,000 10000 30000

TOTALS 235000 95000 330000

3.4.2 INCENTIVES
There will be ways of motivating our staffs. Example through the high sells as expected which
will be a high profit. Through overtime work there, will be bonus to other employees .Also there
will be salary incentive depending on the profit of sells gained.

3.5 LICENSES, PERMIT, BY LAWS

3.5.1 LICENSES:
This license will be acquired from the country government of Kakamega . It will be
approximately 10,000 which will be renewed on a yearly basis. It will help the business to
participate in government revenue obligations.

3.5.2 PERMITS
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The business will acquire the permit from the offices of sub-county Malava which will cost
approximately 5000 shillings.
3.5.3 BY-LAWS
These will be important because will enable to comply with the government by helping to
understand what is expected of them and what will happen. It will help in good communication
between the two parties.
3.6 SUPPORT SERVICES
3.6.1 BANKING SERVICES
The banking services for the proposed restaurant will be Kenya Commercial Bank(KCB) of
account number 11110003781. It will be specializing in keeping our finance to avoid
unnecessary use and for our money to be safe and easy controlling.
3.6.2 INSURANCE SERVICES
The owner will ensure the business is under the cover of A.P.A Insurance. The importance of
insurance is to compensate the lose that would secure for example ,the business will be ensured
against fire outbreak, theft and the disasters like wind.
Advantages of insurance
In case of the disaster insured against occurs, the owner of the business will be compensated.
Disadvantages
No compensation in case of other disaster occurs apart from what insured for.
3.6.3 CONSULTING SERVICES.
The advisors will be golf hotel Kakamega. They are great business operators in hotel restaurant
management in Kakamega county. They have operated for many years almost four decades and
therefore are good advisors. They will be helping me on the ways to maintain, run and grow as a
business which will be still young
3.6.4 LEGAL SERVICES
The business will be offering working contracts of at least one year which is a way of creating
job opportunities to youths and generating government revenue.

CHAPTER FOUR
4.0 OPERATION PLAN
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4.1 PRODUCTION FACILITIES AND CAPACITY
The facilities that will be required in my restaurant will include the following:
Furniture for example tables where we will need around 16 tables, chairs (around 700 chairs in
the restaurant) we shall also require side boards around eight of them.
The equipment’s that will be required will include the following;
Forks, saucepan, frying pan, pots, spoons, knives, flasks, tureens, side plates, cups platers, trays
Item Quantity Cost Capacity
Tables 16 13 600 32
Chairs 64 41 600
Cutlery 256 38 400 256
Pots
Flask 2 4 200 32
Platters 16 8 000 32
Saucepan 8 20 000 400
Computers 4 125 600
Fridges 2 125 600
Ovens 1 376 400

The office layout will look like these;

Secretary Control/account Security

Entrance
Restaurant Cleaners
Store
Reception
G Production area
Cold
M Room

4.2 PRODUCTION STRATEGY

There will be different methods of production to be used for example. There will be receiving of

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products from the supplier. There will be storing of the products after that the products will be
taken to kitchen for productions (preparation) after preparation there will be presentation and
service of the food.
The skills required during production will include the following.
I) Good communication skills where by all the kitchen staffs employed will be required to be
fluent in English speaking because the restaurant will be having from other races.
II) They will be required to computer literate, this is because the company will be operating a
new technology whereby all the operations taking place will be under digital control.
III) Research and strategy. The staff will be required to be innovative and come up with new
ideas on how to make improvements.
IV) Negotiation and persuasion – they will be able to negotiate with the customer during the
interaction period and should know how to use persuasive language and not a language to scare
customers away. Persuasive language normally attracts customers this is a good way of sourcing
clients/customers.
The main supplies here will include the following;
i) The Jrs Company which will offer security to my located area of business to ensure that there
will be no thefts and frauds (they will be from Kakamega County)
ii) The national oil company in Kakamega County will ensure that there is enough fuel being
supplied to my establishment area. For example they will ensure the gas cylinders are filled on
time, all the vehicles being fueled.
iii) The one acre fund. Due to their hard working and determination they will be given a tender to
be providing the establishment with enough food supplies both horticultural and others
They will be providing fresh vegetables due to the green house type of farming which will enable
the customers to be served with fresh and delicious food.
iv)There will be also general cash, credit and hire purchase store. This shop will be replacing and
supplying the establishment with new furniture’s, the utensils and other things required by an
establishment.

v) The method of stock control that will be used in my establishment will be the last in first out

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(LIFO). This is where all the last items produced or purchased will be sold first to allow business
owner to value the cost.

4.3 PRODUCTION PROCESS

The first stage will be the increase average of product production. This is through direct from the
business.
-The decrease marginal returns.
-The internal factors that affect production will include the following.
-The staff; the owner of the establishment will need to employ qualified staff with high rank
education and at least with a working experience.
Campaigns culture – all the staff and the customers will be required with the culture and norms
of establishment. For example no client will be allowed to practice their cultural habits in the
restaurant. For example entering the restaurant with swimming costumes
Finance – the business will be needed to have enough finances in order to facilitate its
programmes and duties.
Processes – such as price fluctuation, overstocking of the commodities
The external factors will include the following
Economy
This will raise the standard of living among our customers and other individuals by lowering
production cost and increasing the wages
Political Technology
Competitors: they will be put out by reducing prices of goods and services.
Change in the market – identify the market section which are not being utilized.
Financial – this will determine the overall design and acceptability thus considering capital
budget.
Weather/location – should be located in a place where there is enough customers to purchase
the goods and services
Infrastructure – one will have to ensure that the entrance faces the road passing by.
Effects of factors
i. Poor economic growth

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ii. Lack of skilled labour
iii. The environmental factors enforced on the stock
iv. Insufficient finances
v. Inadequate infrastructure
vi. Lack of market

4.4 PRODUCTION AFFECTING OPERATION

4.4.1 HEALTH REGULATIONS
The requirements of public health regulations. This is under the law that governs the food
industry. Food drug and chemical substance act (chapter 254). The public health ACT and the
standard act is the first requirement. It will ensure that; food is clean proper hygiene is practiced
and make sure that those working are of good health and free from diseases.
4.4.2 SAFETY
The following are the necessary measures for safety
Personal measures
Wearing flat leather shoes
Chefs jackets
Chef hut
Protective gloves
Apron – this will enable to prevent injuries and accidents

4.4.3 ENVIRONMENTAL REGULATIONS

The surroundings around the premises will be well cleared, it will be a very well moisture
surrounding with clear breezes due to Kakamega forest. The premises will be located next to the
main road. Webuye Kakamega road as explained in the first chapters.
The restaurant owner will comply with these rules and regulations forced by administrative
agencies to control pollution environment and manage natural resources with the purpose of
protecting the environment

CHAPTER FIVE
5.0 FINANCIAL PLAN
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5.1 PRE- OPERATION COST
This will be the total cost in the card before the start of the business
Item Amount (ksh)
License 10000
Insurance 250000
Food handling certificate 10000
Furniture’s 65 200
Crockery 50000
Fridges 60 000
Ovens 150 000
Gas cookers 50 000
Utensils 200 000
Cutlery 38 000
Total 878400

5.2 ESTIMATION OF WORKING CAPITAL

Current Assets Amount
Cash 100 000

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Bank 250 000
Debtors 150 000
Total 500000

Current liabilities Amount

Loan 450000
Accruals (the outstanding
500 000
payments)
Totals 950000
Difference of total assets and current liabilities
=Sh 950000 – 878400
=Sh 71600

5.3 CASH FLOW PROJECTIONS

This is the financial statement that shows cash in and cash out of Atlie’s restaurant.
Receipts January February March

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Loan 500 000 400 000 600 000
Salary 200 000 200 000 400 000
Debtors 60 000 400 000 60 000

Payments Jan Feb March

Electricity 5 000 5 500 7 000
Salaries 500 000 550 000 60 000
Water bills 5 000 5 500 5 000

5.4 PROFORMA INCOME STATEMENT

Item Jan Feb March
Sells 600000 420000 640000
Less cost of sales 300000 200000 300000

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Gross profit 300000 220000 340000

Less expense
Travelling allowances 5 000
Rent 5 000
Telephone bills 5 000
Water bills 2 500
Advertisements 10 000
Total 28 500
Net profit = Gross profit – less expenses
Jan = 600 000 – 28 500
Net profit = 571 500
Feb = 200 000 – 28 500
Net profit 171 500/=
March 400 000 – 28 500
Net profit = 371 500

5.5 PROFORMA BALANCE SHEET

This will be a financial position of a business belonging to Atieli’s Restaurant.
Assets Amount January February March
Furniture 120 000 100 000 80 000 10 000

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Building 350 000 250 000 100 000 90 000
Motor vehicle 1 000 000 800 000 90 000 80 000
Fridges 140 000 700 000 75 000 90 000
Oven 70 000 357 000 20 000 8 000
Totals 160 000 275 000 179 000

WORKING CAPITAL
Working capital = total assets – current liabilities
5 000 000 – 3 000 000
= 2 000 000
Financed by
Capital sh. 2 000 000
Less drawings sh. 998 40

5.6 PROFITABILITY RATIO

Gross profit ratio = gross profit x 100%
Sales
= 220 000 x 100
880 000

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= 2 200
88
= 25%
Net profit ratio Net profit x 100%
Sales
= 28 500 x 100
371 500
= 13.03%
Liquidity ratio current assets
Current liabilities
= 500 000
300 000
= 5/3
= 1.67

5.7 DESIRED FINANCING

Item Amount
Pre operational cost 498000
Working capital 300000
Fixed assets 150000

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Total 948 000

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