TITLE: BUSINESS PLAN

BUSINESS NAME: LEVEL UP HARDWARE

PRESENTER: KENETH NDIRITU

INDEX NUMBER: 2021151221

INSTITUTION: NYERI NATIONAL POLYTECHNIC

COURSE: DIPLOMA IN BUILDING TECHNOLOGY

COURSE CODE: 2705

PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL

EXAM SERIES: JULY 2024

SUPERVISOR: MR.MUTAHI

TABLE OF CONTENTS
DECLARATION……………………………………………………..
ACKNOWLEGDEMENT………………………………………….
DEDICATION…………………………………………………………
EXECUTIVE SUMMARY
BUSINESS DESCRIPTION………………………………………
MARKETING PLAN……………………………………………….
ORGANIZATION AND MANAGEMENT PLAN…………
OPERATIONAL/PRODUCTION PLAN……………………..
FINANCIAL PLAN…………………………………………………..
1.0.BUSINESS DESCRIPTION………………………………….
1.1.BUSINESS NAME…………………………………………….
1.2.BUSINESS LOCATION AND ADDRESS………………
1.3.FORM OF BUSINESS OWNERSHIP…………………..
1.4.TYPE OF BUSINESS………………………………………….
1.5.PRODUCTION AND SERVICES………………………….
1.6.JUSTIFICATION OF AN OPPORTUNITY……………..
1.7.THE INDUSTRY………………………………………………..
1.8.GOAL OF THE BUSINESS…………………………………..
1.9.ENTRY AND GROWTH STRATEGY…………………….

2.0.MARKETING PLAN
2.1.CUSTOMERS………………………………………………………………..
2.2.MARKET SHARE…………………………………………………………..
2.3.COMPETITION………………………………………………………………
2.4.PRICING STRATEGY……………………………………………………….
2.5.SALES TACTICS………………………………………………………………
2.6.ADVERTISING AND PROMOTION STRATEGY………………….
2.7.DISTRIBUTION STRATEGY………………………………………………
3.0.ORGANIZATION AND MANAGEMENT PLAN
3.1.BUSINESS MANAGER[S] AND QUALIFICATIONS……………….
3.3.RECRUITMENT,TRAINING AND PROMOTION……………………
3.4.REMUNERATION AND INCENTIVES…………………………………..
3.5.LICENSES,PERMITS AND BY LAWS…………………………………….
4.0.PRODUCTION/OPERATIONAL PLAN
4.1.PRODUCTION FACILITIES AND CAPACITY………………………….
4.2.REPAIR AND MAINTENANCE…………………………………………….
4.3.WORKSHOP LAYOUT………………………………………………………..
4.4.PRODUCTION STRATEGY……………………………………………………
4.5.PRODUCTION PROCESS………………………………………………………
4.6.GOVERNMENT REGULATIONS GOVERNING FORM OF BUSINESS
5.0.FINANCIAL PLAN
5.1.PRE-OPERATIONAL COST……………………………………….
5.2.WORKING CAPITAL REQUIREMENTS…………………………
5.3.PROJECTED CAPITAL…………………………………………………
5.4.PRO-FORMA INCOME STATEMENT……………………………
5.5.PRO-FORMA BALANCE SHEET……………………………………
5.6.BREAK-EVEN ANALYSIS………………………………………………
5.7.EXPECTED PROFITABILITY RATIO………………………………..
5.8.DESIRED FINANCING…………………………………………………..
5.9. PROPOSED CAPITALIZATION……………………………………..

DECLARATION
I declare this is my original work and it has never been submitted elsewhere.
Name of the researcher: Cathy Wanjiru Nyambura
Signature…………………………………………………………………………………………………
Supervisors Name: MR. Mutahi
Signature……………………………………………………………………………………………………
Date……………………………………………………………………………………………………………..

ACKNOWLEDGEMENT
I would like to express my sincere gratitude to the Almighty God for being with me throughout
the module.
My special acknowledgement goes to my parents MR&MRS NICHOLAS MWANGI for their
financial support in my studies and also my brother Daniel Maina for their advise and support in
increasing my morale at all times.
I also thank my supervisor MR.MUTAHI for his guidance and availability in supervising me
during the production of the business.
Lastly my special thanks goes to my fellow friends ,CATHY CATE,PETERSON KAMAU AND JOSEPH
KIRAGU for their support and co-operation at all times .

DEDICATION
I would like to dedicate this business plan to my dear parents, brothers and friends who have
stood with me at all times and also their support and sharing their ideas.
EXECUTIVE SUMMARY
BUSINESS DESCRIPTION
Level up hardware is the name of the proposed business.The owner will be the managing
director as it falls in a soleproprietorship form of ownership.The business will be buying and
selling construction materials and hardware equipments.
MARKETING PLAN
After survey was conducted,the Cathy Wanjiru being the sponsor found that her plans and
operations were viable.The proprietor found that her competitors offered unsatisfactory
services,lack of business creativity and were unable to meet the current market needs.This will
enable the entrepreneur to capitalize on their weaknesses and exploit the axisting
opportunities and offering high quality services,better management to move with the current
time as well as strategies to fit in the market.
ORGANIZATION AND MANAGEMENT PLAN
For effective running of the proposed business,activities of the business will be organized
properly and individuals will be assigned their respective duties and responsibilities.Each
employee’s duties and functions will be described and will be required to undergo a specil
training.
Afterwards there will be an evaluation of performance each month to see how well one is
carrying his/her duties.The best employee shall be promoted after the appraisal.There will be a
compensation for any injury to an employee under his/her duties.
Cooperation between the manager and the employees will be enhanced so as to attain the
business goals.
OPERATIONAL/PRODUCTION PLAN
This procedures are to be followed by the proposed enterprise so as to accomplish the process
of receiving and selling construction materials and hardware equipments as per required time
by the customers.The proposed business will comply with the laws of the country like selling
quality products.It will ensure high level of cleanliness.The proposed business will also ensure it
will have a trading license ,permit before it starts its operations.
FINANCIAL PLAN
To gauge the future potential of the proposed business there are records that require to be
prepared like pro-forma,balance sheet and projected cash flow statements.Also the break even
levels as determined and allocating the expected profitability ratios of the business.
2ca
BBUSINESS DESCRIPTION
1.1.BUSINESS NAME
The proposed name of the business is level up hardware.This name was inspired by how the
local people in our town area struggle to access building materials so I wanted to level up the
situation and give a better solution and start a hardware in our town so as our local people will
access the material with ease.
The name of the sponsor of the business is Cathy Wanjiru Nyambura.The sponsor is 21 years
old.She resides in Mweiga ,kieni west in nyeri county.The sponsor is a stdent schooling at Nyeri
National Polytechnic,she started her primary school in Njengu primary school in mweiga,Nyeri
county.She later joined ST.FAUSTINA MWEIGA HIGH SCHOOL where she completed her
secondary education and attained a good grade which enabled her to join Nyeri national
polytechnic to persue Diploma in Building technology.
1.2.BUSINESS LOCATION AND ADDRESS
Level up hardware will be located in mweiga town opposite equity bank behind Kobil petrol
station. The address of the business is P.O BOX 115,Mweiga.The email address of the business
will be Levelup995@gmail.com.
The proposed business is located at Nyeri -Nyahururu highway which will be easy to access the
materials .Mweiga town has a high population,therefore it’s a guarantee that the business will
prosper and also there is tight security because the police station and sub-chiefs office are
near.
1.3.FORM OF BUSINESS OWNERSHIP
The business is a sole propreatorship.The reason for this form of business is because it is easy
to start and run because it only a license .There will be ease of management,quick decision
making and the sponsor will enjoy al the profits .The operations of the business will be easy to
control.
1.4.PRODUCT AND SERVICES
Level up hardware will be providing all the providing all building materials eg cements,sand,all
plumbing products eg pipes,taps ,capentry appliances and all kind of paints.
The products will be supplied Joseph’s store to develop the right quality goods.It will also be
providing household products eg utensils,housewares,keys,l ocks and hinges.The proposed
business will offer affordable delivery services and prices.
1.5.BUSINESS TYPE
The proposed business falls into the construction industry .It will be both a retail and wholesale
business.The capital to enable smooth running of the business will come from Equity bank.The
loan amount will be approximately ksh 600,000.
The aim of the business is to make profit and create employment to the local people,hence
improving their standards of living,therefore there will be low cost of living in the society ,the
business will close the market gap in our local area.

1.6.JUSTIFICATION OF OPPORTUNITY
The aim of choosing this type of business is to satisfy the great demand for building materials to
the local people in town area.
The business will be providing quantity and quality goods and services to the customers and
offering them discounts and affordable delivery prices,therefore attracting more customers
hence making profit without selfish intentions.
The proposed business will provide employment opportunities to the people of the area hence
contributing to urbanization.

1.7.THE INDUSTRY
The proposed business belongs to the building and construction industry .It deals with trade
and manufacturing of building materials eg repairing,constructing,maintaining and reinnovating
infrastructure.It has a high demand because buildings are constructed on a daily basis and
therefore it has a low competition because there are less hardwares and construction
companies in the area.
1.8.GOAL OF THE BUSINESS
The goal of the business is to earn profit and create more job opportunities to the people of our
town area.Another one is to provide goods of high quality goods to the customers hence
attracting more customers inside and outside the county.
The business will contribute in the growth of the town area because it will motivate other
entreprenuers to start up the business.
1.9.ENTRY AND GROWTH STRATEGY
The business will start in the year 2028 as the planned.The business will be advertised using the
local radios and televisions,magazines and posters .The business will considerably offer
discounts to the materials.At later stages as the businwss grows the sponsor intends to open
more branches across the country eg Thika,Nakuru,Mombasa and Nyahururu towns.The
sponsor will offer high quality goods so as to maintain a healthy customer retailer relationship.

2.0.MARKETING PLAN
The marketing plan is the most important phaseof preparing a business plan.It is crucial
because it gives the basics of the products in the organization ,financial plan,operational
activities in the business.Due to stiff competition in the construction industry many hardware
tend to close due to introduction of large stores which attract more customers.
The sponsor believes that local hardware can provide good quality products in areas where the
prices and are high and offer them reasonable services and prices and create a good co-
existence with the customers therefore building a good relationship with them so as they may
be free to buy without fear and hence the business will grow
2.1.CUSTOMERS
Customers in my home town that is Mweiga town are greatly involved in construction industry
due to high demand of rental houses by university students in Dedan Kimathi university.This
customers include home owners, building contractors and manager who greatly use hardware
product .The business will be offering services and selling products to direct customers at
reasonable prices and discounts .
 Contractors -these are people who has specialized in construction of buildings. In most
cases they are the ones who are in charge of construction projects and also prepares the
bills of quantities and pay all the workers that help him/her to finish the projects.
 Schools-schools will need raw materials like cement ,nails ,sand and iron sheets for the
construction of classes or practicals due to new curriculum (CBC) as level hardware we
will be providing for them.
 Home owners-this is a group of people in the community who owns a piece of land and
are building rental houses so as they can have a source of income. Our hardware will be
providing them with the materials.

2.1 MARKET SHARE

Market survey and researches will be done in order to penetrate through the available
market. The business will cover Mweiga town and the neighbouring town such as Nyeri
town. The possibility of the market is estimated to take 5,000 customers/clients .Level
up hardware is expected to take 35% of the customers.

The market share plan is as follows;

Mukeu hardware-takes around 20% of the total population with the area this is around
250 customers.
Jakaranda hardware-takes 15% of the total population which is around 170 customers .

Proof hardware-takes 25% of the total population which is around 450 customers .The
business strives to capture a big market share within the two years.

Level up hardware targets to take about 30% of the total population of 250 customers.
The business hopes to capture a big market share within the first year.By production of
quality goods , improved technology ,good customers relationship and affordable prices
the business shall increase the number of customers.
This proposed business will offer extra services like offering discount ,delivery services
and affordable prices for each goods and services.
Both the owner and the employees will practice friendliness with the customers and
provide their product demand.

2.4 PRICING STRATEGY

The proposed business will calculating its selling price for example(selling price=buying
priced +operational cost)
Level up hardware will consider the initial buying price of the products and operational
cost before.

2.5 SALES TACTICS

Through market survey wsa carried out in order to choose level up hardware location
inorder to penetrate the available market.We will come up with detailed information so
as to help us attract customers.
Inorder to continue in the business for it to grow we will continue to sell its products in
the hardware that are available in our store which will go out to empower our sales and
market to deliver
 In summary , level up hardware will adopt the following sales and market approach to
win customers over.

 Introduce our hardware store by sending introductory letters alongside our bronchure
to residents ,businesses and other key stakeholders in Nyeri town.
 We will ensure that we have a wide range of hardware and other related products from
different brands at all times .
 To make use of attractive hand bills to create awareness and also to give directions to
our store.
 Position our signage banners at strategy phase places around Nyeri .
2.6 ADVERTISING AND PROMOTION STRATEGY
Advertising program
Here are the platform we intend to use to promise and advertise level up hardware.
 Encourage the use of word of mouth publicity form for our loyal customers.
 Rely on the internet and social media platforms like youtube, Instagram tiktok and
facebook to promote our business.
 Distribute our fliers and handbills in target areas in and around the neigbouring towns.
 The total cost of all advertising platforms will range at ksh 20000

Promotion program
 Brand all our picks up cars and ensure that all our staffs members and management staff
wears our branded shirts at regular intervals.
 The business will also adopt a promotion strategy for customers who will purchase
goods from within the town center will have their products transported for free.

2.7 DISTRIBUTION STRATEGY

The business will embrace retail distribution channel. This is a strategy a business uses
to source products from a manufacturer and sell it to the end customer. The goods will
be made available to the customers through door to door deliver using our companies
pickups. The mode of transport will be by road. The distribution will be less costly to the
business as delivery is done whose profit will cover the expenses incurred from
transport. The total transports will be approximately Ksh 3000.
The anticipated problem will the presence of inaccessible routes which are bad
especially the rainy seasons.

3.0 ORGANIZATION AND MANAGEMENT PLAN

3.1 BUSINESS MANAGER(S) AND QUALIFICATIONS
Daniel Maina is an excellent manager and staff supervisor who will do well in managing
the staffs of Level up hardware. The manager has knowledge on how to run the business
 and also to come a plan on how to gather resources and to fund the business. The
business manager should be well educated , able to mobilize the personells appropriate
business unit comments. He/she should have atleast a Diploma in relation to
construction industry and a certificate in Economics.
Level up hardware will have the following staff members;
 Managing director
 Assistant manager
 Business secretary
 Customer assistant
 Stockers
 Drivers
Organization Chart

Managing Assistant Business

director manager secretary

Customer
Driver Stockers assistant
3.2
Level up hardware being a sole proprietorship business ,it will require less employees to run
the business because it cannot afford to employ many employees because it has just started
but in the future as the business expands we will add more. The employees should have the
following qualifications indicated below:

PERSONELL NUMBER QUALIFICATIONS SKILLS DUTIES

Managing 1 -Should have a -Technical skills -To plan how to
director diploma in a -Interpersonal gather resources
course related management and to run the
to construction skills entire business.
industry. -Conceptual -Should also
skills ensure proper
management of
business
activities
-To establish an
effective
organization.
Assistant 1 -Should have a -Human -To keep the
manager diploma in any management business moving
related course skills in absence of
to the business the managing
director.
-To receive all
the cash
payments and
keeping
accounts
records for the
business.
Business 2 -Good -To ensure
secretary communication smooth running
skills of the business.
-Organized -To ensure
proper
management of
daily activities.
Customer 3 -Negotiation -To give advice
assistant skills to the customer
 -Flexibility on the best
product to
purchase
-To act as
greeters to
welcome the
potential
customers

Stocker 2 -Should have -Team working -To receive

good skills products and
communication -Attention to goods from
skills details suppliers and
offloading them.
Driver 1 -Should have a -Efficiency and -To deliver our
drivers license time goods to
registered by management customers by
NTSA -Maintenance use of the
-Should be 25 knowledge business truck.
years and above

3.3 RECRUITMENT,TRAINING AND PROMOTION

.RECRUITMENT
Job vacancies will be advertised on local TV stations and newspaper for example the daily
nation, the standard and on the Hardware’s website and also posters will be supplied in social
gatherings such as churches and those that will succeed in job market shall be shortlisted after
which they will be necessary letter attachment with the firm rules and regulations .The
interview shall be conducted where character ,personality, intelligence and weakness shall be
noted.
.TRAINING
The required employees will be indicated in the organization by the business department and
immediate employees. The employees skills will be upgraded through training two times a
month so as to encourage them for promotion.
The criterial of promotion must be clear and measurable so that when employees compete for
promotion they should be able to tell who did perform perfectly.
.PROMOTION
Promotion will make the employees to work harder hence increasing the productivity of the
business .The promotion should or will mostly be based on employees performance and
creativity .The business will add them some more knowledge. The hardworking, creative and
innovative employees will be promoted in the future as the business expands.
3.4.RENUMERATION AND INCENTIVES
.RENUMERATION
The employee in the proposed business will receive good and reasonable salary and wages
which will be paid on time. Allowances will also be offered which consists of medical and house
allowances.
.INCENTIVES
The incentives will motivate and encourage the employees to work harder and therefore the
productivity of the business will increase.
The mandatory incentives to be offered will be:
 Business trips
Level up hardware will have arrangements of business trips to workshops and hardware
stores around the country for at least 3 months.
 Lunch tea
The business employees will be provided with a cup of tea at 10am and offer them
lunch at a reasonable price.

EMPLOYEE NUMBER MONTHLY ALLOWANCES SHIF NSSF HOUSING PAYE TOTAL

OF SALARY LEVY PAY
EMPLOYEES
Managing 1 14,000 1,500 1,000 700 2,000 1,000 20,200
director
Assistant 1 12,000 1,500 800 650 1,500 700 17,150
manager
Business 1 10,000 1,500 700 600 1,000 600 14,400
secretary
Driver 1 8,000 1,000 500 600 1,000 600 11,700
Customer 2 13,000 2,000 500 600 800 550 17,450
assistant
Stocker 2 13,000 9,500 500 600 800 550 24,950
TOTAL 8 70,000 17,000 4,000 3,750 7,100 4,000 105,850

3.5.LICENSES,PERMITS AND BY LAWS.

For the proposed business to operate it will require a trade license.The license will be obtained
from Nyeri county council at a price of 3,500 per annum.This trade license is necessary for
business as per ministry of local trade.
The proposed business will be allowed to operate after a single business permit which will cost
Ksh 6,000 annually it is necessary for proper business operations.
The business will also follow the by laws for improved operations and safety ie. Rules regarding
discrimination and harassment to help create better working conditions for any of the
employees which will lead to workers productivity. We will also follow safety and security
rules to prevent injuries or fire out breaks which may influence with the business productivity.

3.6.SUPPORT SERVICES
For financial support which may be required by the business level up hardware will be:
 Equity bank
Address f9x+82k
Nyeri branch
 Taifa sacco
p.o. box 143-101000
Nyeri branch
The business will operate some current accounts to help business from getting loans and
carryout transactions like payments and paying business employees.
For protection of the business from financial losses that may occur during business
operations,the proposed business require to have an insurance cover.
Level up hardware will agree with terms and conditions of APA insurance Agency limited for it
to give insurance cover to the business . The cost for insurance will be around Ksh.5,500 per
year.
Water and power services will also be necessary for smooth running of the business. Power
services will be provided by KPLC which is necessary for lighting and running machines in the
business.
The Nyeri water and sanitation company will connect water services to our business . The water
and power charges will be charged according to the consumption .

4.0 OPERATIONAL/PRODUCTION PLAN

4.1 PRODUCTION FACILITIES AND CAPACITY
Level up hardware will need production facilities which will enable the smooth running of the
business and serving customers in time hence quality.
This explains how the firm intends to carry out its operations and services in order to run
effectively and efficiently. Due to customer satisfaction level up hardware and workshop has
laid down various objectives which includes;
 Job creation to people within the locality.
 Acquiring large market share among the competitors.
 Making maximum profit to expand the business.
 Providing quality goods and services.

FACILITIES SUPPLIERS QUANTITY UNIT COST(KSH) TOTAL

COST(KSH)
WELDING KATE’S 1 450,000.00 450,000.00
MACHINE SUPLLIERS
LATHE KATE’S 4 30,000.00 120,000.00
MACHINE SUPPLIERS
DRILLING KATE’S 2 30,000.00 60000.00
MACHINE SUPPLIERS
GRIDDING KATE’S 1 24000.00 24000.00
MACHINE SUPPLIERS
TOOL BOX MUKEU SHOP 2 26000.00 52000.00

VICE MUKEU SHOP 2 6000.00 12000.00

HACKSAW KIJO SHOP 2 200.00 400.00

FILE KIJO SHOP 2 150.00 300.00

ANVIL A-3 STORES 1 20000.00 20000.00

HAMMER A-3 STORES 2 300.00 600.00

AIR A-3 STORES 1 3000.00 3000.00

COMPRESSOR
622,300
TOTAL
 EQUIPMENTS QUANTITY UNIT COST(KSH) TOTAL COST(KSH)
Counter 1 12000.00 12000.00
Cabinet 2 2000.00 4000.00
Table 2 1500.00 3000.00
Chair 3 800.00 2400.00
Shields 2 200.00 400.00
Table measure 3 60.00 180.00
Welding rod 2 700.00 1400.00
Stationery pens 6 10.00 60.00
Books 2 80.00 160.00
Total 45,200.00

Repair and Spare Parts/Plans For Maintenance are;

Due to servicing of breakdown and failure of machine and equipments the business will be
conducting preventing maintenance to reduce the delay of operations and reduce the
development 0f harzardeous safety.
The busness machine and equipment will receive maintenance services regularly wherever
needed. The spare parts will be required from the local spare part store. The cost of
maintenance per year should range at Ksh 20000.

4.2 workshop layout

Workshop layout refers to the placemet of storage of machines and workbenches in a confined
space relative to each other.
The layout is as shown below which shows or should allow easy entrance and exit of clients into
and out of the premises
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 The premises shall ensure that it uses high quality materials that will meet their
customer ‘s needs and which will satisfy them fully.
The customers will be served immutable by allocating more services points and
personnel during peak hours. Customers will be encouraged to come to the premises by
binding for them their products nicely levels up hardware will ensure that it uses
branded packages which bear the name of the item.
The manager will ensure that there is good relationship between the employees in
order to motivte the customers. Customers being our main reason to operate our
operational strategy.
We will major in customer focus whereby every employee will be required to handle
every customer with a lot of respect and courtesy .All employees are therefore required
to demonstrate high level of trustworthiness and dignity to clients.

COST OF OVERHEADS

EMPLOYEE NUMBER MONTHLY TRAVELLING NHIF NSSF HOUSING TOTAL

OF SALARIES ALLOWANCE (KSH) (KSH) LEVY (KSH)
EMPLOYE (KSH) S
E (KSH)
MANAGING 1 14000 1500 2500 2500 1000 21500
DIRECTOR

ASSISTANT 1 12000 1500 2000 2000 900 16400

MANAGER
BUSINESS 1 10000 1500 1500 1500 500 15000
SECRETARY
TRUCK 1 8000 1000 1000 1000 600 11600
DRIVER
CUSTOMER 2 13000 2000 3000 3000 400 21400
ASSISTANT
 STOCKERS 2 13000 9500 3000 3000 500 29000

8 70000 17000 13000 13000 3,900 114900

TOTAL

4.3 PRODUCTION PROCESS

The business will have a very systematic procedure to be followed when receiving products and services.

The business will operate as per the following stages;

 Sales payments
After the inquiry of needs of customers are to be differd with the products and services with no
delay and payments to be done.
 Receiving of calls and reception of customers
The customer care will receive phone calls of customers and save their numbers for further
clarification to be made. If the customer finds no need of travelling to the business
location ,business manager will send his/her employee who will attend their problems at their
ground .

 Receiving and contract agreement

It will connected or administered by the personnel concerned factors that are likely to affect
our production process will heavily looked upon. Firstly the firm manager will ensure safety
notice are put in strategic places for instances to be aware of falling.

COST OF TOOLS

ITEMS QUANTITY TOTAL COST(KSH)

PLUMBING APPLIANCES - 30000
ELECTRICAL APPLIANCES - 30000
MILD STEEL 1000KG 110000
CEMENT 300KG 210000
IRON SHEET 100PCS 60000
TOOLS AND EQUIPMENTS - 10000
DPC SHEETS 20 ROLLS 10000
NAILS 150 KG 30000
DPM 20 ROLLS 11000
BRC MESH 15 ROLLS 200000
TOTAL 711,000
 COST OF OVERHEADS

OVERHEADS COST(KSH)
WATER AND SEWAGE 2000
INSURANCE 5000
POSTAGE 500
REPAIR AND MAINTENANCE 20000
ADVERTISEMENT 5000
LICENSE AND PERMIT 20000
TELEPHONE 2000
RENT 20000
TOTAL 73500

COST OF OPERATION

Total cost operation=cost of tools +cost of labour + cost of overheads

=711000+114900+73000

=1933000

4.4 GOVERNMEN REGULATIONS GOVERNING FORM OF BUSINESS

As for the government regulations the firms will have to pay tax in a good time to avoid any regulations
from the government although. The business will make sure that it has a got a trading license because
any business without a trading license is an illegal act as government of the kenya constitution .The
business will also observe the rules of products in the firm. the cost a trading license will be
approximately be ksh 20000.

 INSURANCE
All workers are required to be well ventilated to aid in their competition in case of any risk or
injury that may occur in work. The insurance cover will cost about ksh 5000 per month.
 BUILDING BY LAWS
The building by laws says that the hardware should be well ventilated to aid in ample circulation
of air. There will also be an emergency doors mainly for fire outbreaks.

 LICENSES
The business is required to be authorized by the government of the areas .This is issued as a
certificate that the business has met all the requirements and standards of such kind of business
are required by by laws. The cost of the license is Ksh 20000.
 REGULATIONS OF THE COMPANY
All workers are required to obey the rules and regulations that will govern the business. This will
include:
 Arrival at work on right time
 Failure to go to work without notice
 Misuse of business
 Working hours will be from 6.30 am to 7.00 pm.

5.0 FINANCIAL PLAN

The financial plan comprises of analyzing financial requirements of the business and
developing financial plans.

5.1 PRE-OPERATIONAL COST

DESCRIPTION COST(KSH)
RESEARCH AND TRANSPORT 20000
RENT DEPOSITS 20000
LICENSES 20000
ADVERTISEMENTS 5000
UTILITY BILLS 2000
PROFESSIONAL FEE 1000
INSURANCE COVER 5000
FURNITURE AND INSTALLATION 10000
INSTALLATION COST 45000
TOTAL PRE-OPERATIONAL COST 141000
 5.2 WORKING CAPITAL REQUIREMENTS

PARTICULARS YEAR 2025(KSH) YEAR 2026(KSH) YEAR 2027(KSH)

Current assets
Stock and raw 1,039,000 871000 800,000
materials
Debtors 30000 35000 40000
Prepaid expenses 90000 70000 100000
Cash in hand 15000 60000 100000
Cash at bank 60000 70000 120000
Total CA 1,234,000 1,106,000 1,160,000
Current Liabilities
Creditors 70000 60000 50000
Rent 20000 20000 20000
Bank loan 50000 40000 35000
Water 2000 2000 2000
Electricity 2000 2000 2000
Total C.L 144,000 124,000 289,000
Working capital 1,090,000 982,000 871,000

5.3 PROJECTED CAPITAL

YEAR 2025

ITEM JAN FEB MA APR MA JUN JUL AUG SEP OCT NOV DEC TOT
R Y AL
Balance - - - - 222 524 704 775 775 826 877 986 4,90
b/f 483 260 28 ,30 ,80 ,10 ,50 ,80 ,70 650 800 4,10
60 10 900 0 0 0 0 0 0 0
0 0
cash
infiow
Cash 100 120 140 150 150 130 120 160 150 50, 100 70,0 1,44
sales ,00 ,00 ,00 ,00 ,00 ,00 ,00 ,00 ,00 000 000 00 0,00
0 0 0 0 0 0 0 0 0 0 0
Credit 90, 102 100 200 50 100 50 - - 100 - - 792,
sales 000 ,00 ,00 ,00 000 ,00 000 ,00 000
0 0 0 0 0
debtors 150 100 90, 100 200 50, 40, - - 90,0 - 820
,00 ,00 000 ,00 ,00 000 000 00 000
0 0 0 0
Total 340 - 69, 421 622 603 651 576 727 778 1,06 1,03 3,05
cash ,00 161 900 ,10 ,35 ,40 ,42 ,10 ,60 ,60 7,65 9,80 2,00
inflow 0 ,60 0 0 0 0 0 0 0 0 0 0
0
Cash
outflow
Purchase 711 - - 100 - - - 100 - - - - 911,
s ,00 ,00 ,00 000
0 0 0
creditors 5,0 5,0 4,5 5,5 3,0 7,0 4,0 6,0 5,0 5,0 4,20 5,80 60,0
00 00 00 00 00 00 00 00 00 00 00 00 00
Rent 20,0 20,0 20,0 20,0 20,0 20,0 20,0 20,0 20,0 20,0 20,0 20,0 240,
000 000 000 000 000 000 000 000 000 000 000 000 000
salaries 73, 73, 73, 73, 73, 73, 73, 73, 73, 73, 73, 73, 876,
000 000 000 000 000 000 000 000 000 000 000 000 000
Telephon - 100 200 150 250 500 100 200 100 150 150 100 2,00
e 0
Electricity 100 200 - 100 200 - 200 300 - 400 500 - 2,00
0
transport - - - - - - - - - - - - 10,0
00
water - 200 100 - 100 200 300 200 - 500 - 400 2,00
0
repairs - - - - - - - - - - - - 10,0
00
advertise 1,0 - 1,0 - 1,0 - 10,0 - 10,0 - - - 5,00
ments 00 00 00 00 00 0
insurance 5,0 - - - - - - - - - - - 5,00
00 0
Total 823 98, 98, 198 97 100 98, 199 99, 99, 97,8 99,3 2,11
outflow ,80 500 800 ,75 550 ,70 600 ,70 100 100 50 00 1,50
0 0 0 0 0
Net cash - - - 222 524 704 775 775 826 877 969 940 5,40
per 483 260 28, ,30 ,80 ,10 ,50 ,80 ,70 ,65 800 500 6,60
month ,60 ,10 900 0 0 0 0 0 0 0 0
0 0
16% tax - - - 35, 83, 112, 124, 124, 132, 140, 155, 150, 935,
77, 41, 4,6 576 968 ,65 ,08 ,10 ,27 ,42 168 480 136
376 616 24 6 0 8 2 4

FOR YEAR 2026

ITEM JAN FEB MAR APR MAY JUN JUL AUG SEP OC NOV DEC TOTA
T
Balance b/f 940, 788 757 740 625 657 64 485 463 455 253 251 7,06
500 ,10 ,75 ,60 ,50 ,40 0 ,50 ,20 ,35 ,80 ,85 0,35
0 0 0 0 0 ,80 0 0 0 0 0 0
 0
Cash inflow
Cash sales 70,0 50, 55, 70, 100 60, 60, 50, 60 70, 80, 85, 810,
00 000 000 000 00 000 00 000 000 000 000 000 000
0 0
Credit sales 10,0 12, 15, 10, 20, 12, 20, 16, 15, 14, 12, 20, 176,
00 000 000 000 000 000 00 000 000 000 000 000 000
0
Debtors - 6,0 10, 7,0 10, 12, 16, 14, 15, 14, 10, 21, 135,
000 000 000 000 000 00 000 000 000 000 000 000
0
Total cash 1,02 856 837 827 755 741 73 565 553 553 355 377 8,18
inflow 0,50 ,10 ,75 ,60 ,50 ,40 6 ,50 ,20 ,35 ,80 ,85 1,05
0 0 0 0 0 0 ,80 0 0 0 0 0 0
0
Cash
outflow
Purchases 120, - - 100 - - 15 - - 200 - - 570,
000 ,00 0 ,00 000
0 ,00 0
0
creditors 3,70 3,8 3,9 3,4 3,6 4,1 4,0 3,5 2,0 5,0 5,5 2,5 45,0
0 00 00 00 00 00 00 00 00 00 00 00 00
Rents 20,0 20,0 20,0 20, 20 20 20 20 20 20 20 20 240,
00 00 00 000 000 000 00 000 000 000 000 000 000
0
Salaries 73,0 73, 73, 73, 73, 73, 73, 73, 73, 73, 73, 73, 876,
00 000 000 000 000 000 00 000 000 000 000 000 000
0
Telephone 200 100 - 200 300 - 15 450 250 150 200 - 2,00
0 0
Electricity - 200 100 300 - 200 - 150 450 150 250 200 2,00
0
Water - 250 150 200 200 300 15 200 150 250 150 - 2,00
0 0
Transport 2,00 - - 5,0 - 3,0 - 5,0 1,0 1,0 3.0 - 20,0
0 00 00 00 00 00 00 00
Repairs 5,00 - - - - - 3,0 - - - 2,0 - 10,0
0 00 00 00
Advertise - 1,0 - - 1,0 - 1,0 - 1,0 - - 1,0 5,0
ments 00 00 00 00 00 00
License 20, - - - - - - - - - - - 20,
000 000
Total 232, 98, 97, 202, 98, 100 25 102 97, 299 103 96, 3,58
Cash 400 350 150 ,10 100 ,60 1 ,30 850 ,55 ,95 700 0,38
outflows 0 0 ,30 0 0 0 0
0
 Net cash 788, 757 740 625 657 640 48 463 455 253 251 281 6,40
per month 100 ,75 ,60 ,50 ,40 ,80 5 ,20 ,35 ,80 ,80 ,10 0,95
0 0 0 0 0 ,50 0 0 0 0 0 0
0
16% tax 126, 121 118 100 105 102 77, 74, 72, 40, 40, 44, 1,02
096 ,24 ,49 08 ,18 ,52 00 112 856 608 616 976 4,15
9 6 0 4 8 0 2

YEAR 2027

ITEM JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
Balance 281 189 303 182 190 16, 487 - 17, - 106 67, 1,38
b\f ,10 ,05 ,70 ,40 ,80 200 00 12, 350 4,2 ,50 750 7,30
0 0 0 0 0 050 00 0 0
Cash out
flow
Cash sales 100 120 90, 70, 10, 80, 110, 70, 190 100 130 120 1,28
,00 ,00 000 000 000 000 ,00 000 ,00 ,00 ,00 ,00 0,00
0 0 0 0 0 0 0 0
Credit sales 70, 80, 50, 20, 15, 30, 40, 50, 60, 35, 45, 20, 515,
000 000 000 000 000 000 000 000 000 000 000 000 000
Debtors 30, 20, 16, 20, 10, 20, 60, 10, 80, 65, 75, 48, 454,
000 000 000 000 000 000 000 000 000 000 000 000 000
Total cash in 481 409 459 293 315 146 258 117 347 205 346 255 3,63
flow ,10 ,05 ,70 ,40 ,80 ,20 ,70 ,95 ,35 ,80 ,50 ,75 6,00
0 0 0 0 0 0 0 0 0 0 0 0
Cash
outflow
Purchases 190 - 180 - 200 - 170 - 250 - 180 - 1,17
,00 ,00 ,00 ,00 ,00 ,00 0,00
0 0 0 0 0 0 0
Creditors - 4,0 4,0 2,0 6,0 - 4,0 5,0 3,0 4,0 5,0 3,0 40,0
00 00 00 00 00 00 00 00 00 00 00
Rent 20, 20, 20, 20, 20, 20, 20, 20, 20, 20, 20, 20, 240,
000 000 000 000 000 000 000 000 000 000 000 000 000
Salaries 73, 73, 73, 73, 73, 73, 73, 73, 73, 73, 73, 73, 876,
000 000 000 000 000 000 000 000 000 000 000 000 000
Telephone 100 200 - 300 - 200 150 450 150 - 250 200 2,00
0
Electricity 200 - 100 300 200 - 450 150 200 150 250 - 2,00
0
Water 250 150 200 - 200 300 150 - 200 150 250 150 2,00
0
Transport - 2,0 - 5,0 - 3,0 - 1,0 5,0 1,0 - 3,0 20,0
00 00 00 00 00 00 00 00
Repairs - 5,0 - - - - 3,0 - - - - 2,0 10,0
00 00 00 00
Advertise - 1,0 - 1,0 - 1,0 - 1,0 - 1,0 - - 5,0
ments 00 00 00 00 00 00
Licenses 20, - - - - - - - - - - - 20,
000 000
Total cash 292 105 277 101 299 97, 270 100 351 99, 278 101 2,37
out flow ,05 ,35 ,30 ,60 ,60 500 ,75 ,60 ,55 300 ,75 ,35 5,70
0 0 0 0 0 0 0 0 0 0 0
Net cash per 189 303 182 190 16, 48, - 17, - 106 67, 154 1,44
month ,05 ,70 ,40 ,80 200 700 12, 350 4,2 ,50 750 ,40 9,65
0 0 0 0 050 00 0 0 0
16% tax 30, 48, 29, 30, 2,5 7,7 - 2,7 - 17, 10, 24, 231,
248 592 189 528 92 92 1,9 76 672 040 840 704 944
28

5.0 PR0-FORMA INCOME STATEMENT

 LEVEL UPS’ HARDWARE

Particulars 2025 2026 2027

Sales 3,052,00 8,181,050 3,636,000
Less purchase 911,000 570,000 1,170,000
Gross profit 2,141,000 7,611,050 2,466,000
Expenses
Salaries 876,000 876,000 876,000
Rent 240,000 240,000 240,000
Water bills 2,000 2,000 2,000
Electricity 2,000 2,000 2,000
Insurance 5,000 5,000 5,000
Telephone 2,000 2,000 2,000
Repair and maintenance 10,000 10,000 10,000
Transport 20,000 20,000 20,000
Advertisements 5,000 5,000 5,00
Total expenses 1,162,000 1,162,000 1,162,000
Net profit before tax 979,000 6,449,050 1,304,000
Tax 16% 156,640 1,031,848 208,640
Net profit after tax 822,360 5,417,202 1,095,360

5.5 PRO-FORMA BALANCE SHEET

ITEM AS AT THE END OF YEAR 2025

FIXED ASSET
Land 500,000
Motor vehicle 1,200,000
Furniture and fittings 15,000
Total 1,715,000
Less 25% depreciation 428,750
Total fixed assets 1,286,250
CURRENT ASSETS
Stock 711,000
Cash at bank 50,000
Cash at hand 18,000
Debtors 22,000
Pre-payments 100,000
Total current asset 961,000
Less current liabilities
 Creditors 60,000
Rent 240,000
Insurance 5,000
Water and power 4000
Total liabilities 309,000
Working capital 652,000

5.6 BREAK -EVEN ANALYSIS

FIXED COSTS AMOUNTS

Sales 1,440,000
Purchases 911,000
Gross profit 529,000

Salaries 876,000
Rent 240,000
Insurance 5,000
Total 1,121,000
Variable cost
Advertisement 5,000
Transport 20,000
Electricity bills 2,000
Water bills 2,000
Telephone bills 2,000
Repair and maintenance 10,000
Total 41,000

5.7 EXPECTED PROFABILITY RATIO

Gross profit=529,000/1,440,000 by 100%

=36.74%
Return enquiry= Net profit tax/owner’s enquiry by 100%

=822,360/(817000+822,360) by 100%

=50.16%

Return on investment = (Net profit after tax /total investment) by 100%

= (822,360 /1,450,000) by 100%

= 56.71%

5.8 DESIRED FINANCING

ITEM AMOUNT
(KSH)
Pre-operational cost 117,500
Working capital 652,000
Fixed assets 1,286,25O
Total desired financing 2,055,750

5.9 PROPOSED CAPITALIZATION

ITEM AMOUNT (KSH)

Owners contribution 400,000
Loan from bank 700,000
Borrowed funds 350,000
Total proposed capitalization 1,450,000