BUSINESS PLAN

SIDEWAYS LIQOUR STORE

ADDRESS: P.O. BOX 123 EASTLEIGH, NAIROBI.

EMAIL:jeremychelanga029 @gmail.com

TELEPHONE NO: 0714531407

PRESENTED BY: JEREMIAH SUMUKWO

CHELANGA

ADM NO: PHP/B28-I/1207/24

INDEX NO:

SUPERVISOR NAME: MR STEVE

PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL IN PARTIAL

FULFILMENT AS A REQUIREMENT FOR THE AWARD OF DIPLOMA IN
SUPPLY CHAIN MANAGEMENT

EXAMINATION SERIES: JULY 2024

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DECLARATION
I hereby declare that this business plan is in my own work and it has never been presented in
any institution.

NAME:

SIGNATURE: DATE:

SUPERVISOR’S NAME:

SIGNATURE: DATE:

ii
ACKNOWLEDGEMENT
I would like to express my special thanks and gratitude to my family and friends who gave
their much effort of seeing this business plan come to pass. They took their precious time to
find new research and discovered so many new ideas on how to go about this business.

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DEDICATION
I solemnly dedicate this business to my family members, teachers and people of KIPS, who
helped me finish this business plan.

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 Table of Contents
DECLARATION...........................................................................................................................................ii
ACKNOWLEDGEMENT............................................................................................................................iii
DEDICATION..............................................................................................................................................iv
TABLE OF CONTENT
…………………………………………..………………………………………..1
LIST OF TABLES.........................................................................................................................................6
EXECUTIVE SUMMARY............................................................................................................................7
CHAPTER ONE............................................................................................................................................8
1.1 BUSINESS DESCRIPTION................................................................................................................8
1.2 BACKGROUND OF THE OWNER...................................................................................................8
1.3 BUSINESS NAME..............................................................................................................................8
1.4 BUSINESS LOCATION AND ADDRESS.........................................................................................8
1.5 FORM OF OWNERSHIP....................................................................................................................1
1.6 TYPE OF BUSINESS..........................................................................................................................1
1.7 PRODUCTS AND SERVICES............................................................................................................1
1.8 JUSTIFICATION OF THE BUSINESS..............................................................................................1
1.9 INDUSTRY.........................................................................................................................................1
1.10...........................................................................................................GOALS AND EQUUIPMENTS
2
1.11 ENTRY AND GROWTH PLAN.......................................................................................................2
CHAPTER TWO...........................................................................................................................................4
2.1 MARKETING PLAN..........................................................................................................................4
2.2 CUSTOMERS......................................................................................................................................4
2.3 MARKET SHARE...............................................................................................................................4
2.4 COMPETITION...................................................................................................................................5
2.5 METHODS OF PROMOTION AND ADVERTISING.......................................................................6
2.6 PRICE STARTEGY.............................................................................................................................6
2.7 DISTRIBUTION /DELIVERY............................................................................................................6
CHAPTER THREE........................................................................................................................................7
3.1 ORGANISATION PLAN....................................................................................................................7
3.2 ORGANISATION CHART.................................................................................................................7
3.3 DUTIES,RESPONSIBILITIES, QUALIFICATIONS AND EXPERIENCE......................................8
3.4 RECRUITMENT, TRAINING AND PROMOTION..........................................................................9
3.4.1 RECRUITMENT..............................................................................................................................9
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 3.4.2 TRAINING.....................................................................................................................................10
3.4.3 PROMOTION.................................................................................................................................11
3.5 RENUMERATION AND INCENTIVES..........................................................................................12
3.6 LEGAL REQUIREMENTS...............................................................................................................12
3.6.1 LICENSES......................................................................................................................................12
3.5.1 PERMIT..........................................................................................................................................12
3.6 SUPPORT SERVICES......................................................................................................................13
3.6.1 BANKING SERVICES...................................................................................................................13
3.6.2 INSURANCE SERVICES..............................................................................................................13
3.6.4 LEGAL SERVICES........................................................................................................................13
CHAPTER FOUR........................................................................................................................................14
4.1 PRODUCTION AND OPEERATIONAL PLAN..................................................................................14
4.2 PRODUCTION FACILITIES AND CAPACITY UTILISATION........................................................14
4.3 PRODUCTION STRATEGY................................................................................................................16
4.4 PRODUCTION PROCESS....................................................................................................................16
4.5 REGULATIONS AFFECTING THE OPERATION.........................................................................17
4.5.1 HEALTH REGULATIONS............................................................................................................17
4.5.2 SAFETY REGULATIONS.............................................................................................................17
4.5.3 ENVIRONMENTAL REGULATIONS..........................................................................................17
CHAPTER FIVE..........................................................................................................................................18
5.1 FINANCIAL PLAN...........................................................................................................................18
5.2 PRE-OPERATIONAL COSTS..........................................................................................................18
5.3 DETERMINATION OF WORKING CAPITAL...............................................................................18
5.4 ESTIMATION OF CASH FLOW PROJECTIONS..........................................................................19

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EXECUTIVE SUMMARY
Chapter 1

The chapter consists of the introduction of the business. It highlights the business name,
physical address and the form of the business ownership. It also contains the background of
the owner.

Chapter 2

The chapter entails the marketing plan, the targeted market and the market share. It will also
show ways of advertising the business, pricing of the products and ways of distribution of
the products.

Chapter 3

Here the will be the organizational plan, structure, qualifications, duties and responsibilities
of different staffs and methods of recruiting the staff and training. The legal requirements of
the business by the government will also be in this chapter.

Chapter 4

It contains the operational and production plan. A plan layout indicates where the business
will be partitioned.

The equipment’s and facilities necessary in for the business premises and the production
strategy will be seen in this chapter, the rules and regulations and also regulated in this
chapter.

Chapter 5

This chapter explains the financial plan of the business. The information is provided in the
cash flow, balance sheet and income statements.

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 CHAPTER ONE

1.1 BUSINESS DESCRIPTION

1.2 BACKGROUND OF THE OWNER

The owner of the business will be Jeremiah I am a Kenyan Citizen.

Currently residing at Eastleigh, twenty-six years old and single. Pursuing
a diploma at Kips Technical College. Has an experience in the proposed
business skills having worked for two years after secondary education.

1.3 BUSINESS NAME

The name of the business will be SIDEWAYS LIQOUR STORE. The reason
for giving the name is because the name will be easy to remember.

1.4 BUSINESS ADDRESS

SIDEWAYS LIQOUR STORE will be located in Eastleigh, Nairobi. The area is suitable
for the business as it is easily accessible and there is security and a lot of potential
customers

The address to SIDEWAYS LIQOUR STORE is shown below:

SIDEWAYS
LIQOUR STORE
P.O.BOX 123
Eastleigh, Nairobi

1.3.1 BUSINESS LOCATION

Eastleigh road SIDEWAY

S LIQOUR Pumwani hospital

K
i
s

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1.4 FORM OF OWNERSHIP
The proposed business will be a sole proprietorship in terms of its ownership, this is because:

 It does not require a lot of capital to start

 It is easy to manage it by myself
 I want to be in direct contact with my customers.

1.5 TYPE OF BUSINESS.

The business will be a starter. SIDEWAYS LIQOUR STORE will be an outlet that sells fast
Wine and Spirit but mainly drinks.

1.6 PRODUCTS AND SERVICES.

SIDEWAYS LIQOUR STORE will be selling cocktails,beers,soda,wines,spirits,red wine and any

alcoholic drinks as we want to provide services such as good security and high level of hygiene.

1.7 JUSTIFICATION OF THE BUSINESS.

The reason for choosing this kind of business is because of the increasingly demand for fast
drinks in Kenya.

A lot of people are too busy to make their own drinks so they just order fast drink instead.
SIDEWAYS LIQOUR STORE offer a healthy and nutritious drink for everyone of any age.

1.8 INDUSTRY
SIDEWAYS LIQOUR STORE falls under service industry. It will provide quality drink which
will increase the market share in the industries.

Days Time
Monday – Friday 8:00am – 9:00pm
Weekends

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Saturday & Sunday 10:00am – 8:00pm
Holidays 10:00am – 7:00pm

1.9 GOALS AND OBJECTIVES

1.9.1 GOALS

Short term goals of SIDEWAYS LIQOUR STORE will be:

 To sell products that are of the highest quality

 To keep the customers satisfied and happy.
 To get access to high traffic shopping mall near target market.
 To control cost at all times.
 To create a unique, innovative and entertaining menu different from the competitors.
 To promote good values of the company.

1.9.2 OBJECTIVES

Long term goals of SIDEWAYS LIQOUR STORE will be:

 To make SIDEWAYS LIQOUR STORE destination spot for everyone.

 To be one of the most successful fast drink outlets in Kenya.
 To expand into a number of outlets by year 3.

1.10 ENTRY AND GROWTH PLAN

1.10 1 ENTRY PLAN

SIDEWAYS LIQOUR STORE will have days where people will be given free samples of our drink
to taste them.

i. Social media -SIDEWAYS LIQOUR STORE will open a social media account where
people will get to see and know of our business.
ii. Discounts- SIDEWAYS LIQOUR STORE will give great discounts to its customers.
iii. Posters- We will advertise our business through posters and billboards.

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 iv. As we continue to grow we will also advertise on various media outlets like TVs,
newspapers and radio.

1.10.2 GROWTH PLAN

 Opening more branches.

As the business grows we will open more branches in malls and close to gas stations.

 Increasing equipment’s.

SIDEWAYS LIQOUR STORE will increase its equipment’s and change the other ones to
more advanced
equipment’s.

 Increasing productions.

As the business grows the production rate will have to increase too.

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 CHAPTER TWO
2.1 MARKETING PLAN

2.2 CUSTOMERS
SIDEWAYS LIQOUR STORE will use the marketing mix to identify its customers and to know
the strategies of acquiring them.

After carrying out a research, I realized that people of all ages prefer fast drink over homemade
dish.

SIDEWAYS LIQOUR STORE will have customers who are middle aged, youth and other place
to find it other than Drinks.

SIDEWAYS LIQOUR STORE will offer tasty & yummy drink of good quality and a dipping
sauce of course.

2.3 MARKET SHARE

Since the business will have good customer and public relation in the market it will have the
highest market share than the competitors like Staddah wines and spirit,Dollars wine ans spirit,joy
wine and spirit and jj wine and spirit.

Sales

1st Qtr
2nd Qtr
3rd Qtr
4th Qtr

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2.4 COMPETITION
SIDEWAYS LIQOUR STORE will be located at Eastleigh Town where it will face stiff
competition from other drink stores.

Most of my competitors sell their drinks at a very high price ,SIDEWAYS LIQOUR STORE
will sell its drink at an affordable price; we will also offer delivery services to all parts of the
country and sell different kind of drink but mostly drink as the business name suggests.

COMPETITORS STRENGTH WEAKNESSES

Staddah wines and spirit  Offer quality drink  Too expensive
 Located in most  Sell small portions
shopping malls. hence not satisfactory.
Dollars wines and spirit  Fair pricing of their  Only sell wines and
drinks drink.
 Offer delivery  Selective delivery.
services.
Joy wines and spirit  Fair pricing of their  Drinks contain a lot of
drinks. carbs.
 Have great offers and  Selective delivery.
discounts from time to
time.

JJ wines and spirit  Offer quality drink.  Drinks contain a lot of

 Have great offers and carbs.
discounts from time to  Too expensive.
time.

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2.5 METHODS OF PROMOTION AND ADVERTISING
The following are also some of the methods used to promote and advertise the businesses
services:

i. SIDEWAYS LIQOUR STORE will use any form of business promotion to get it out in
public as long as it’s
legal and is good publicly.
ii. SIDEWAYS LIQOUR STORE will use mostly billboards to promote it.
iii. As a lot of people tend to listen and watch to radio and television respectively,
SIDEWAYS LIQOUR STORE will be promoted through those media outlets mainly.
- The cost of promotion will cost the business approximately 20,000/=

2.6 PRICE STARTEGY

-The following are factors that will be considered by the proposed business when choosing the
price:

a) The cost of cooking ingredients.

b) The nature of competition.
c) Income of our customers.

Therefore the selling price will be:

Selling price = total cost of production + profit

2.7 DISTRIBUTION /DELIVERY

Since SIDEWAYS LIQOUR STORE is a retail business, customers will get directly from our
drink store or through door to door delivery.

The means used to transport drink deliveries are vehicles and motor cycle which are safe and
quick.

The delivery persons will be paid on commissions.

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 CHAPTER THREE
3.1 ORGANISATION PLAN.
SIDEWAYS LIQOUR STORE is a form of sole proprietorship therefore, it will not need a lot of
supervision from different people.

SIDEWAYS LIQOUR STORE will have me (Sandra Anne) as a manager and it will also have
few cahiers, cleaners, security guards, and delivery people.

3.2 ORGANISATION CHART

MANAGER

DELIVERY SECURITY
CASHIERS CLEANERS SELLER
PERSONS GAURDS

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3.3 DUTIES, RESPONSIBILITIES, QUALIFICATIONS AND EXPERIENCE.

Title Responsibility Qualification

Manager  In charge of
employing and
recruiting staff.
 Orienting and training
new staff members.
 Managing the
business operation
 Manages the business
financial status
 Ensures employee
welfare and safety.
Seller  In charge of each and i. Should have at least 2-4 years of
every selling experience in the hotelier ,drink
operation in the production and hospitality
store. industry.
ii. Certificate ,diploma, degree in
Drink And Beverages
iii. Should be ready to learn new
recipes.
iv. Should have kitchen operation
skills.

Cashier  Taking order from the i. Should be disciplined

customers ii. Ability to speak fluent English
 Receive payments and Kiswahili
from the customers. iii. Must know how to use a
computer.
Cleaners  Responsible for all the i. Have at least 2years experience

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 cleaning duties around in the similar.
the business premises ii. Should be disciplined and polite
iii. Ability to speak fluent English
and Kiswahili.
Delivery persons  Responsible for each i. Have proper driving skills
and every delivery whether vehicle or motorcycle
and drink distribution accompanied with a driving
to customers. licence as proof.
ii. Should have excellent
communicating skills.

Security gaurds  Incharge of safety and i. Have at least 2years experience

security of the in the similar.
building premises ii. Should have excellent
where the business is communicating skills.
located. iii. Should have good decision
making skills.

3.4 RECRUITMENT, TRAINING AND PROMOTION.

3.4.1 RECRUITMENT
Our personnel will be recruited by posting the vacancies on our social media platforms, online
platforms and also on the newspapers.

 Application

The business will take applications for both physical and online application. For online
application, the applicant will be required to scan their necessary documents and send them to us
while the physical ones will have to bring copies of their necessary documents.

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  Advertising

SIDEWAYS LIQOUR STORE will advertise the available vacant job positions on asocial media
platforms in order to attract the youth seeking for job opportunities.

 Shortlist

The business will choose from among the applicants and shortlist those who will have the
required qualifications .it will be conducted by the manager.

 Interview
The applicants who will have qualified and shortlisted will be contacted and invited for the
interview.
The interview will be of either two types:
a. Oral interview
This is where the interviewee will be asked questions to ascertain that he/she is qualified for the
post applied for.
b. Practical interview
The interviewee will be tested to show his/her practical skills on the post applied for.

 Recruitment
The candidate who will have qualified after the interviewee will be contacted and will be sent a
letter indicating their post, responsibilities, duties and the rules and regulations of the company.

3.4.2 TRAINING
The business will take their employees on training to equip them with the proper skills and
knowledge.

 Orientation

Her the employees will be informed a mission, vision and values of the business, the rules and
regulations, the administrative procedures, organization structure and leadership team.

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  Life skills training

The business will train the employee on personal attributes that will enable them to interact
effectively and harmoniously with their fellow workmates and customers.

 Team training

SIDEWAYS LIQOUR STORE will empower employees in team to improve in decision

making, problem solving and team development. This will improves communication among
employees and result to more productive business.

 Safety training.

The business will train the employees on safety measures and control in case of any accidents
or injury that may occurring the business premises.

3.4.3 PROMOTION
The employees will be promoted by evaluating the following;

Responsibility of the employee – The employees to take the promotion should be accountable
and responsible for his/her action at work and has clear sense of direction of the progression of
his /her career.

Has good work ethic – This is characterised by good prioritization skills like punctuality,
commitment to continuous improvement and consistency.

Respect by co-workers – He/she should easily earn the trust and respect of the co-workers
through their ability to work.

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3.5 RENUMERATION AND INCENTIVES
Employee Number Monthly Allowances Total (Ksh)
salary
Manager 1 30000 30000
Cleaners 3 8000 24000
Delivery person 3 8000 24000
Cashiers 2 10000 20000
Security 2 12000 24000
Cooks 4 12000 48000
TOTAL 170000

3.6 LEGAL REQUIREMENTS

3.6.1 LICENSES
For SIDEWAYS LIQOUR STORE to start its operation it will require a license from the county
government of Nairobi to indicate that the business is legal and the products are of no harm.

LICENCES AMOUNT PURPOSE

Trade license 5000 Recognition of the business by
the state government as a
legally operated business.

3.5.1 PERMIT
The business proposal will secure the following permits to ensure smooth running of its
operations.

PERMIT AMOUNT PURPOSE

Business permit 15000 That the business has followed all
the legal procedures and it has
been allowed to sell goods to the
public for consumption

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3.7 SUPPORT SERVICES
For the business to run smoothly it will be required to have support services such as;

3.7.1 BANKING SERVICES

SIDEWAYS LIQOUR STORE will open a bank account at Equity Bank in Eastleigh. The
account will be used to receive payments from our customers and will also be used to receive
payments from our customers and will also be used to deposit our daily cash from our daily
sales.

It will be a business account.

EQUITY BANK
P.O.BOX 123 00100
EASTLEIGH.

3.7.2 INSURANCE SERVICES

SIDEWAYS LIQOUR STORE will require an insurance cover to protect it against the losses that
may occur during its activities.

The business will take insurance cover from APA Insurance Company.

It will take the cover against theft and fire the monthly premiums costing about 3,000 Kshs per
month.

APA INSURANCE COMPANY

P.O BOX 123 00100
EASTLEIGH.

3.6.4 LEGAL SERVICES

The business will require government support services so as to have permits and also trading
licenses.

These services will also include government incentives like tax holidays from the government
occasionally to support start up businesses.

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 CHAPTER FOUR

4.1 PRODUCTION AND OPEERATIONAL PLAN

The proposed business will be required to have a proper management operation and production
plan so as to be able produce high quality products and achieve future goals and objectives.

4.2 PRODUCTION FACILITIES AND CAPACITY UTILISATION.

ITEM QUANTITY COST PER ITEM AMOUNT
(KSHS)
Computer 3 15000 45000
Fridge 1 18000 18000
Microwave 1 15000 15000
Wine and Spirit maker 1 6000 6000
Blender 1 3000 3000
Oven/cooker 1 15000 15000
Tables 30 300 9000
Chairs 70 200 14000
Cutlery 4 sets 150 600
Air conditioner 2 1500 3000
Cups 10 sets 300 3000
Plates 10 sets 400 4000
Glasses 10 sets 300 3000
Baking tins 2 600 300
Radio 1 9000 9000
Television 2 (32 inches) 15000 30000
Pans 3 100 3000
Delivery motorbike 2 50000 100000
Serviettes 2 80 160
Gas cylinders 1 (30kg) 8000 8000
TOTAL 286360

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OFFICE LAYOUT

15
SIDEWAYS LIQOUR STORE will later expand its premises after it blooms. It will open other
branches and introduce new drinks in the menus every month

4.3 PRODUCTION STRATEGY

Fresh potatoes will be delivered weekly by our suppliers from Central Kenya.

Our suppliers will also be delivering fruits and spices that will be required for making our drinks
at SIDEWAYS LIQOUR STORE as they are cheap.

4.4 PRODUCTION PROCESS

Receiving of raw
Preparation of the
materials and Checking and
special Dippin’ Drink
produce from the removing the drink
suppliers sauce

Serving the Dippin’

Confirmation of the
Preparation of Drink special sauce
supplied raw
various dishes together with drink
materials
while hot

Sorting raw
Storage and counter materials accoring to
checking amount to be used
daily

EXTERNAL FACTORS AFFECTING THE PRODUCTION PROCESS AND THEIR

SOLUTIONS

i. Delay in delivery of the product by our suppliers.

ii. Tardiness by the employees.
iii. Power shortages.

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Solutions

 We will be ordering extra supplies that can take us through a couple of days or weeks in
case of delay in supply of fresh supplies.
 We will have a backup generator in case of power shortages to avoid stopping production.

4.4 REGULATIONS AFFECTING THE OPERATION.

4.4.1 HEALTH REGULATIONS.

The proposed business will ensure that all employees working are of good health and that
cleanliness is maintained at the highest level.

The employees, especially the ones handling drink will have to strictly practice and maintain
hygiene.

4.4.2 SAFETY REGULATIONS.

SIDEWAYS LIQOUR STORE will prioritize safety for every employee

Cleaner at SIDEWAYS LIQOUR STORE will be provided with gloves and mask that will
prevent them from catching any germs

Security guards will be issued with teasers for defense purposes in case of any physical attacks.

The premises will have CCTV installed for security purposes.

4.4.3 ENVIRONMENTAL REGULATIONS.

The business will ensure that all the government regulations concerning the environment are
adhered to.

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 CHAPTER FIVE
5.1 FINANCIAL PLAN
This section involves evaluating the action of the business performance so as to achieve the
desired results. The financial plan determines whether the business is viable or not.

Objectives of a financial plan

i. To maintain and control the businesses expenses

ii. To maintain an effective accounting system.
iii. To maintain return on owners equity.
iv. Maintaining a healthy liquidity position throughout the reading period.

5.2 PRE-OPERATIONAL COSTS

ITEMS COSTS (KSH)
Insurance 15000
Rent 20000
Advertisement 8000
Licenses 5000
Transport 4000
TOTAL 52,000
Table 1: PRE-OPERATIONAL COSTS

5.3 DETERMINATION OF WORKING CAPITAL

ITEMS YEAR 1 (Ksh)
CURRENT ASSETS
Stock 300000
Debtors 50000
Cash 150000
TOTAL CURRENT ASSETS 500000
CURRENT LIABILITIES
Wages 170000
Creditors 30000
TOTAL CURRENT LIABILITIES 200000
ESTIMATED WORKING CAPITAL 300000
Table 2: Determination of working capital

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 *Estimated Working Capital = Total Current Assets – Total Current Liabilities

5.4 ESTIMATION OF CASH FLOW PROJECTIONS.

SIDEWAYS LIQOUR STORE
CASH FLOW JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
PROJECTION
Balance b/d - 860000 935000 995000 900000 805000 655000 520000 410000 420000 375000 415000
Cash inflows
Capital 800000 - - - - - - - - - - -
introduced
Discount received 30000 40000 20000 15000 15000 15000 10000 15000 20000 30000 40000 40000
Cash sales 250000 200000 250000 100000 100000 50000 55000 100000 100000 150000 200000 250000
TOTAL 1080000 1100000 1205000 1110000 101500 865000 720000 635000 530000 600000 615000 705000
INFLOWS 0
Cash outflows
Purchases 30000 40000 30000 250000 30000 30000 20000 40000 30000 350000 20000 25000
Salaries 170000 170000 170000 170000 170000 170000 170000 170000 170000 170000 170000 170000
Creditors 20000 25000 10000 15000 10000 10000 10000 15000 10000 20000 10000 15000
TOTAL 220000 165000 210000 21000 210000 210000 200000 225000 110000 225000 200000 210000
OUTFLOWS
Balance c/d 860000 935000 995000 900000 805000 655000 520000 410000 420000 375000 415000 495000
Table 3: Cash flow projection for the year 2024

19
 SIDEWAYS LIQOUR
STORE CASH FLOW
PROJECTION
FOR THE YEAR 2024
ITEM JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Balance b/d 495000 672000 833000 1055000 936500 1018000 1210000 1260500 1226000 961000 729000 679000
Cash inflows
Debtors 150000 150000 100000 50000 50000 100000 30000 20000 10000 10000 5000 10000
Discount 40000 30000 35000 20000 10000 25000 15000 10000 10000 10000 5000 5000
received
Cash sales 200000 200000 30000 200000 250000 300000 250000 100000 100000 10000 150000 200000
TOTAL 8850000 1050000 1268000 1145000 12455000 1443000 1505000 1390000 1246000 1081000 952000 894000
INFLOWS
Cash outflows
Purchases 30000 35000 30000 30000 45000 50000 60000 80000 10000 100000 90000 50000
Salaries 170000 170000 170000 170000 170000 170000 170000 170000 170000 170000 170000 170000
Insurance 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 30000
Maintenance 4000 3000 3500 - 4500 3500 6000 10000 6000 10000 4000 3000
Transport 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000
TOTAL 213000 217000 212500 209000 228500 232500 245000 269000 285000 289000 273000 232000
OUTFLOWS
Balance c/d 672000 833000 1055000 936500 1018000 1210000 1260500 12260000 961000 729000 6790000 672000
Table 4:cash flow projection for the year 2024
29
 SIDEWAYS LIQOUR
STORE CASH FLOW
PROJECTION
FOR THE YEAR 2025
ITEM JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Balance b/d 662000 757000 809000 901000 978000 1002000 981000 1003000 921000 1048000 1071000 968000
Cash inflows
Sales 300000 250000 300000 300000 250000 200000 250000 150000 350000 250000 200000 300000
Discount 30000 25000 15000 10000 10000 10000 25000 15000 30000 20000 10000 15000
received
Debtors 15000 15000 10000 5000 17000 14000 5000 18000 10000 16000 5000 20000
TOTAL 1007000 1047000 1134000 1216000 1255000 1226000 1261000 1186000 1311000 1334000 1286000 1303000
INFLOWS
Cash outflows
Purchases 60000 80000 80000 85000 100000 85000 90000 100000 110000 10000 150000 200000
Salaries 150000 150000 150000 150000 150000 150000 150000 150000 150000 150000 150000 150000
Insurance 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000
Discount 10000 5000 - - - 7000 15000 12000 - 10000 15000 20000
allowed
TOTAL 250000 238000 233000 238000 253000 245000 258000 265000 263000 263000 318000 373000
OUTFLOWS
Balance c/d 757000 809000 901000 978000 1002000 981000 1003000 921000 1048000 1071000 968000 930000
Table 5:cash flow projection for the year 2025
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5.4 PROFOMA INCOME STATEMENT

SIDEWAYS LIQOUR
STORE PROFOMA INCOME
STAEMENT
FOR THE YEAR ENDED 31ST DEC 2024
Details Ksh Ksh Ksh
Net sales
Total sales 1805000
Less return inwards 30000
Less cost of sales
Opening stock 800000 1050000
Add net purchases
Purchases 355000
Add carriage 20000
inwards
Less return 5000
outwards
Cost of good 330000
available for sale
Less closing stock 150000 180000
Gross profit 870000
Add: Trading
revenues
Discount received 50000
Less: Trading
expanses 600000
Salaries 36000 636000
Insurance
Net profit 204000
Table 6:profoma income statement for the year 2024
22
 SIDEWAYS LIQOUR
STORE PROFOMA INCOME
STAEMENT
FOR THE YEAR ENDED 31ST DEC 2024
Details Ksh Ksh Ksh
Net sales
Total sales 2350000
Less return inwards (495000) 1855000
Less cost of sales
Opening stock
Add net purchases
Purchases 470000
Add carriage
inwards
Less return
outwards
Cost of good 470000
available for sale
Less closing stock
Gross profit
Add: Trading 210000 210000
revenues
Discount received
Total income 2065000
revenues
Less: Trading 600000
expanses 36000
Salaries 72000 (708000)
Insurance
Net profit 1357000
Table 7:profoma income statement for the year 2024

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 SIDEWAYS LIQOUR
STORE PROFOMA INCOME
STAEMENT
FOR THE YEAR ENDED 31ST DEC 2025
Details Ksh Ksh Ksh
Net sales
Total sales 2800000
Less return inwards (662000) 2138000
Less cost of sales
Opening stock
Add net purchases
Purchases 200000
Add carriage
inwards
Less return
outwards
Cost of good 200000
available for sale
Less closing stock
Gross profit
Add: Trading 250000 (250000)
revenues
Discount received 2388000
Less: Trading
expanses 600000
Salaries 36000
Purchases
Insurance 40000
Discount (776000)
allowed
Net profit 1612000

24
Table 8:profoma income statement for the year 2025

25
 5.5 PROFOMA BALANCE SHEET.
SIDEWAYS LIQOUR
STORE LTD
PROFOMA KSH KSH KSH
BALANCE SHEET
(Cost.) (Dep) (N.Bv)
Fixed assets
Premises 200000 (20000) 180000
Motorbike 100000 (5000) 95000
Equipments 150000 (15000) 135000
Machinery 300000 (45000) 25000
TOTAL FIXED 665000
ASSETS
Current assets
Stock 200000
Bank 150000
Debtors 30000
Cash 100000
Prepayments 300000
TOTAL CURRENT 780000
ASSETS
TOTAL ASSETS 1445000
Short term liabilities
Creditors 50000
Wages 80000 (130000)
Net assets 1315000
FINANCED BY:
Capital 1615000
Less drawings 300000
Net capital 1315000
Table 9: profoma balance sheet for the year 2024

25
 SIDEWAYS LIQOUR
STORELTD PROFOMA
BALANCE SHEET
FOR THE YEAR ENDED 31ST DEC 2024
DETAILS KSH KSH KSH
(Cost.) (Dep) (N.Bv)
Fixed assets
Premises 180000 (10000) 170000
Motorbike 95000 (5000) 90000
Equipments 135000 (5000) 130000
Machinery 25000 (5000) 250000
TOTAL FIXED ASSETS 640000
Current assets
Stock 150000
Bank 200000
Debtors 25000
Cash 150000
Prepayments 250000
TOTAL CURRENT 775000
ASSETS
TOTAL ASSETS 1415000
Short term liabilities
Creditors 10000
Wages 100000
Rent 80000 190000
Net assets 1225000
FINANCED BY:
Capital 1285000
Less drawings 10000
Hospital bill 70000
Net capital 1225000
Table 10:profoma balance sheet for the year 2024
26
5.6 BREAK EVEN ANALYSIS.

Break even point for 2023:

Sale ratio = Contribution in units*100

Sales
=800000 * 100
500
=Ksh 160,000

Sale ratio = Contribution in units *100

Sales
=800000 * 100
4000
=Ksh 200,000

5.7 CALCULATION OF PROFITABILITY RATIO

Gross profit ratio (margin) = Gross profit * 100

Net profit
=870000 * 100
1050000
=82.8%

Net Profit ratio = Net profit before tax * 100

Net sales
=234000 * 100
1050000
=22.3%

Return on equity ratio = Net profit * 100

Owner’s equity

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Owner’s equity = opening capital + net profit – drawings
=800000+1612000 – 300000
=2112000
Return on equity ratio = 1612000 * 100
2112000
= 76.33

Quick Ratio (Acid test/liquid ratio)=Current Assets -Stock

Current Liabilities
775000 – 150000
190000
=3.29

Current ratio (liquidity ratio) =Current Assets * 100

Current liabilities

=775000 * 100
190000
=394.737

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5.8 DESIRED FINANCING

ITEM AMOUNT (Ksh) AMOUNT (Ksh)

Pre-operational cost 52000 52000

Working capital 300000 300000

Total fixed assets 665000 640000

TOTAL 1017000 992000

Table 11: Desired financing

5.9 PROPOSED CAPITALIZATION

ITEM AMOUNT
Personal contribution 800000
TOTAL 750000
Table 12: Proposed capitalization

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