MUKURWE-INI TECHNICAL TRAINING INSTITUTE

BUSINESS PLAN

TITLE: VIRGINIA’S GROCERY

P.O.BOX 14102-980 NYANDARUA

PRESENTED BY: KURIA VIRGINIA WANJIRA

INDEX NUMBER:2190010059

PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL IN PARTIAL

FULFILLMENT FOR THE AWARD OF DIPLOMA IN HUMAN RESOURCE
MANAGEMENT

EXAMANATION SERIES: NOVEMBER 2022

i
DECLARATION
I declare that this is my original work and it has never been presented to any
other institution of learning.

NAME: Kuria Virginia Wanjira

DATE:____________________________

SIGN:________________

SUPERVISOR NAME: MR. KIBARU

DATE:_______________________

SIGN:____________________

ii
ACKNOWLEDGEMENT
First of all I thank the Almighty God for the far he has taken me. I appreciate the
support accorded to me by the Mukurwe-ini training institute fraternity who has
guided me in writing this business plan. I also thank my parent and relatives for
their financial, emotional and spiritual support.

iii
DEDICATION
I dedicate this business plan to my friends and family who have given their best
effort in writing this business plan. Special thanks to my supervisor Mr.Kibaru for
working tirelessly in helping me throughout this project.

iv
EXECUTIVE SUMMARY
1.0BUSINESS NAME

The business will be VIRGINIA’S grocery, the business will run under my name
since one has to come up with an attractive business name in order for one to
attract customers and as the name suggest a hardworking lady.

2.0BUSINESS DESCRIPTION

The business will comprise the sale of all kinds of vegetables and fruits e.g.;
cabbages, apples and dairy products. VIRGINIA’S grocery will consider all
categories of customers from all classes whether low, middle or upper class hence
will provide quality services.

3.0LOCATION

VIRGINIA’S grocery will be located at Olkalau town in Nyandarua County opposite

total petrol station along Olkalau-Nakuru road where most of the customers will
buy as they get to refill their cars.

4.0OWNERSHIP

VIRGINIA’S grocery will be a sole proprietorship kind of a business.

5.0FUNDING

It will be funded through my own savings and also donations from friends and
family members

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MISSION, VISION, CORE VALUES AND TAGLINE

MISSION
To provide a shopping experience that exceeds my customers’ expectations.

VISION
Be a leading supplier of quality fruits and vegetables not only in my area but all
over the town.

CORE VALUES
 Charity
 Honesty
 Hospitality
 Integrity

TAGLINE

FEEL THE FRESHNESS!

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 Table of Contents
DECLARATION.......................................................................................................... ii
ACKNOWLEDGEMENT.............................................................................................iii
DEDICATION............................................................................................................iv
EXECUTIVE SUMMARY.............................................................................................v
MISSION, VISION, CORE VALUES AND TAGLINE......................................................vi
CHAPTER ONE..........................................................................................................1
1.0 BUSINESS DESCRIPTION:....................................................................................1
1.1 BUSINESS NAME:................................................................................................1
1.2 FORM OF OWNERSHIP:......................................................................................1
1.3 BUSINESS OPERATIONS:.....................................................................................1
1.4 PRODUCTS INVOLVED:.......................................................................................2
1.5 BENEFITS OF OUR PRODUCTS:...........................................................................2
1.6 BUSINESS OBJECTIVES:.......................................................................................2
CHAPTER TWO......................................................................................................... 3
2.0 MARKETING PLAN..............................................................................................3
2.1 Introduction:......................................................................................................3
2.2 INDIVIDUAL CUSTOMERS...................................................................................3
2.3 CHARACTERISTICS OF THE CUSTOMERS.............................................................3
2.4 MARKET SHARE..................................................................................................3
2.5 THE COMPETION................................................................................................4
2.6 S.W.O.T analysis:................................................................................................5
2.7 PRICING STRATEGY:............................................................................................5
2.8 SALES TACTICS:...................................................................................................6
2.9 ADVERTISING AND PROMOTION........................................................................6
2.9.1 Promotion strategy:........................................................................................7

vii
2.9.2 DISTRIBUTION STRATEGY:...............................................................................7
CHAPTER THREE......................................................................................................8
3.0 MANAGEMENT AND ORGANIZATION................................................................8
3.1 MANAGEMENT TEAM:.......................................................................................8
3.2 Employees’ health and safety:...........................................................................8
3.3 Authority and responsibilities............................................................................9
3.4 STAFFING:...........................................................................................................9
3.5 HIRING, TRAINING AND PROMOTION..............................................................12
3.6 Recruitment and selection...............................................................................12
3.7 Training............................................................................................................13
3.8 Promotion........................................................................................................13
3.9 REMUNERATION AND INCENTIVES..................................................................13
3.9.1 COMMUNICATION CHANNELS......................................................................13
3.9.2 LEGAL REQUIREMENTS..................................................................................14
3.9.3 EXTERNAL SUPPORT SERVICES......................................................................15
CHAPTER FOUR......................................................................................................16
4.0 PLANT, FACILITIES AND EQUIPMENT................................................................16
4.2 Repairs and Maintenance................................................................................16
4.3 PRODUCTIONS STRATEGY:...............................................................................17
4.3.1 Monthly production costs.............................................................................17
4.3.2 Selling costs:..................................................................................................18
4.3.4 Policy of purchasing:.....................................................................................18
4.4 PRODUCTION PROCESS....................................................................................18
4.4.1Challenges in production...............................................................................19
4.4.2 Solutions to external problems.....................................................................19
4.5 REGULATIONS AFFECTING OPERATION............................................................19

viii
4.5.1 Licenses.........................................................................................................19
4.5.2 Business permit.............................................................................................19
4.5.3 Labor laws.....................................................................................................19
CHAPTER FIVE........................................................................................................ 21
5.0 FINANCIAL PLAN...............................................................................................21
5.2 ESTIMATION OF WORKING CAPITAL................................................................21
5.5 BREAK EVEN ANALYSIS.....................................................................................25

ix
 CHAPTER ONE

1.0 BUSINESS DESCRIPTION:

The enterprise shall be operated by a professional who is successful and is well
known by the residents where he shall be carrying out his operations on a daily
basis.
She shall be involved in the production of products of high quality with demand in
the area as well as in the township areas of Nyandarua town.
She shall work under the following principles to serve as his business objectives.
 Ensuring high and quality goods production.
 Promote the local area farmers by providing market for the fruits they grow
locally in their farms. This is by purchasing them.
 Expand his business and open new branches at the proper time and with
the right amount of funds to facilitate expansion.

1.1 BUSINESS NAME:

The businesses’ name is VIRGINIA’S Grocery, dealing with many types of fruits
which are of quality and nutritious. We have high hopes that it will also seem
unique to our customers and therefore it will attract them.

1.2 FORM OF OWNERSHIP:

The business will be a sole proprietorship form of business. The business is
located in a densely populated town at Ol-kalau center along Ol-kalau- Nakuru
road where it can be identified from a far distance.

1.3 BUSINESS OPERATIONS:

The business will be operating on a retail basis where we shall be purchasing
fruits from the local farmers and blending them to juice. We will then pack the
juice in packets and sell to those need a take-away juice or be selling to those
who need it there in glasses. Our packets are bought from the supermarkets
around the center and they are verified products.

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1.4 PRODUCTS INVOLVED:
We shall be dealing with all varieties of fruits. They are all available locally and we
did our research to add on to what we thought the locals love.

1.5 BENEFITS OF OUR PRODUCTS:

Because we are dealing with quality products, we ought to offer quality juice. Our
products have the following benefits:
 The fruits help boost immunity for young kids as well as for the
adults.
 They also assist in curing of some diseases.
 Some provide useful vitamins for bone formation of the
growing kids.

1.6 BUSINESS OBJECTIVES:

Our business intends to give its products and services for a long period of time.
We therefore formulated these long-term goals for our enterprise:
1. To not only sell juice but also, if we reach some level, we
shall also sell fruits.
2. We also want to be selling our products to our
supermarkets, once our products are verified by the
government of Kenya.
3. We would also like to open new branches in different parts
of Nyandarua town where there is dense population.
4. Our last objective is, to offer employment to the many
residents of Ol-Kalau area who do not have jobs, so that
they can work in our shops.
For us to ensure that we shall be offering high quality products to our residents,
and also residential houses to get verification from our customers. This way we
shall be able to know where to improve on and where not to.

2
 CHAPTER TWO

2.0 MARKETING PLAN

2.1 Introduction:
This chapter deals with how our enterprise shall find its customers, make sure we
are better than our competitors, our marketing strategies and how we shall be
advertising our products and services.

The customers are of no specific gender as all our products will cater for the
needs for both genders. Our products have equal impacts which are useful and
are needed for both the male and female gender.

2.2 INDIVIDUAL CUSTOMERS

These clients are mainly around the local community whom we consider as our
first authority.

They play a pivotal role of purchasing our products and offering their feedback
that help us improve our products production.

2.3 CHARACTERISTICS OF THE CUSTOMERS

The clients are of all genders well distributed and all ages are involved in
purchase of the products, with young people of between ages 8-50 being the
most of all the other ages.

2.4 MARKET SHARE

After seven months of quality service and product production, we plan on
increasing the production by a wide margin. This shall be dependent on how
much our products shall be recognized by the residents. The expected number of
clients should range between 1500-2500 clients covering the whole Ol-kalau area.

According to our research we found out that people in construction sites, shops
and those in playgrounds(footballers) have a high demand for these products and
therefore we have much expectations that specifically this groups shall have
much contributions to the total number of people who shall purchase this high-
quality products.

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Calculations in terms of money: (percentage)

=Number of expected clients -1700people

=Total population of Ol-kalau area -2500people

= 1700 *100 =68%.

2500

According to these outcomes we concluded that there shall be a high growth and
we shall be playing an important role in the production sector.

2.5 THE COMPETION

Our key competitors are:

I. Candy Blenders,
P.O BOX, 14-102
NYANDARUA.

This enterprise is found in Ol-kalau area an approximate distance of 2km from

where we operate.

II. Sweet Fruit Enterprise,

P.O BOX 3598-7765’

NYANDARUA.

He is located in our area of production at a distance of 4km from our shop.

The customers prefer our products because:

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  We use the locally available fruits by purchasing them from farms in the
area. They therefore trust our products as they are the ones producing
them.

2.6 S.W.O.T analysis:

Strengths in our business mainly involve operating for a longer day period and
hence we get more customers all through.

We also sell our products at a cheap price which makes us better off compared to
the other producers.

The weaknesses are properly recognized and have been well dealt with by our
management hence we are at a good shape.

The weaknesses are dealt with by persuading our customers to give as their
feedback which we take seriously to better produce quality products that are
important to us and the clients.

The main shortcoming that we are to suffer and which we shall overcome by
offering soda and water is the shortage of fruits during some seasons when there
are no fruits. Providing mineral water and soda is a rather more advantageous
way to overcome our challenge as we continue to gain while our competitors
remain shut as a result of lack of fruits.

2.7 PRICING STRATEGY:

As we try to penetrate through the market and match up with the competition,
we shall be offering cheap products to ensure that we get maximum customers in
the area.

We also take care of our profits to ensure we pay our power bills, water,
employees and maintain our machinery in the right manner and on time.

To ensure that we are not expensive in charging our products, we offer a glass of
juice at KES40 which is much fair compared to the other sellers.

We also encourage people to purchase our products as we have great offers. For
example, we give an extra glass of juice to those clients who purchase juice of
more than KES400.

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2.8 SALES TACTICS:
In order to achieve our target and objectives we shall make our products known
through the internet and making videos during our production process and taking
them to the TVs for them to be advertised.

We shall be operating daily to make sure that there is continuous production of

goods.

No credits shall be offered in our business unless the client is well known by the
manager or has a good reputation.

We shall not be hiking our prices here and there; they shall be fixed so as to meet
the customer’s needs.

We shall also be advertising our products time and then so that we continue
reminding people of our products and also to get new customers.

2.9 ADVERTISING AND PROMOTION

Advertising Method:

The managers have adopted the following advertising methods:

 Signboards
The management will have signboards made by the area welders and then have
them placed outside the shop and at the junctions in the Ol-Kalau area. The
signboards shall contain the businesses’ name, products produced and the
distance from where the poster is put.

 Media

We shall make full use of the social media platforms and the TV stations to
advertise our products to ensure that they reach a great population of audiences.
This method shall be cheap and affordable by our enterprise.

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2.9.1 Promotion strategy:
The management shall reduce the price of the goods with much demand and also
offer discounts to the clients.

2.9.2 DISTRIBUTION STRATEGY:

Our products shall be distributed and delivered using a cab as we begin the
operations and afterwards, we shall develop and purchase trucks to carry the
goods in bulk.

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 CHAPTER THREE

3.0 MANAGEMENT AND ORGANIZATION

3.1 MANAGEMENT TEAM:

The enterprise shall be led by the manager who came up with the business. His
functions are as follows:

 Improve working relationships among employees by motivating them

accordingly.
 Engage new employees and those already working in effective recruitment
and training to equip them with the right skills and knowledge required for
them to operate efficiently.
 Interpret the business’ policies and regulations to the workers so that they
don’t conflict with them.

3.2 Employees’ health and safety:

To ensure the safety and health of all workers in the business, the manager shall
prevent hazards from occurring to employees by offering them with safety
equipment. These includes

- Overalls
- Safety boots
- Masks

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3.3 Authority and responsibilities.

STAFF RESPONSIBLITIES AND AUTHORITY.

-Ensure all financial records are properly kept

CASHIER

-Ensure that there is smooth running of operations in the

enterprise.
SUPERVISOR

-They should also take responsibility of cleaning the

CLEANERS environment surrounding the area of work.

-they should always ensure that the cars are in proper

shape y ensuring that they are always taken to the garage
DRIVERS
for maintenance.

3.4 STAFFING:
The following table shows the personnel, requirements and responsibilities that
we shall enquire from our workers.

PERSONNE NUMBER REQUIRED RESPONSIBILITIES SALARIES

L QUALIFICATIONS.

MANAGER 1 Should have a -He should take the Allowances

degree in food responsibility of
-house allowance
science or hold a interpreting the
4500ksh
degree in food enterprise policies
and nutrition. to the workers. -transport 500ksh.

To add to these, -other allowances

he must be 45 3000ksh.
years of age
9
 -Total
salary15000ksh.

CASHIER 2 Should have -House allowance

knowledge in 4500ksh.
-Balance the register
mathematics
and generating -Transport allowance
He/she should be reports for credit 300ksh.
above 35years of and debit sales
-Other allowances
age and must
-Accepting payments 1500ksh.
have an
and generating
experience of at -Total salary 7000ksh.
receipts for every
least 3years.
customer.

CLEANERS 3 Should have good -cleaning the -House allowance

communication business on a daily 2500ksh.
skills and have basis.
-Transport allowance
knowledge on
-Clean spills, broken 150ksh.
health and safety
glasses or any other
standards and -Other allowances
mess.
have the ability 550ksh.
of handling
-Total salary 4000ksh.
chemicals safely.

The cleaners
should be above
25years of age.

DRIVERS 2 Should hold a -Complete daily -House allowance

drivers’ license maintenance checks 3500ksh.
and have driving on delivery van and
-Transport allowance
experience of not notify the manager
1000ksh.
less than 2years. of any issues.
-total salary 2000ksh.
Should be above - Use of route
30years of age. navigation apps and -Other allowances
knowledge of area
10
 to deliver packages 8000ksh.
to customers on
time.

SUPERVISO 1, -Proven Receive complaints -House allowance

R experience as a and resolve 4000ksh.
supervisor. problems.
-Transport allowance
-should have 3500ksh.
excellent
-Other allowances
communication
3500ksh.
skills.
-Total salary
-Should have a
14000ksh.
diploma in
business
management

-To add on this,

he should be
above 30years.

WATCHMA 1, -Should have Protect the -House allowance

N good employer, 2000 ksh.
communication customers, clients or
-Transport allowance
skills. residents from harm
300ksh.
-should also be
–Other allowances
above 25years of
1500ksh.
age and have the
work experience -Total salary 5000ksh.
of at least one
11
 year.

ENGINEERS 2 -Should have a Ensure production -House allowance

degree or a equipment are in 5000ksh.
diploma in good shape and
-Transport allowance
electrical or whenever there are
3000ksh.
mechanical challenges take
engineering or actions -Other allowances
Mechatronics 3500ksh.
engineering.
-Total salary
-They should be 10000ksh.
above 30years of
age and should
have work
experience of at
least five years.

3.5 HIRING, TRAINING AND PROMOTION

-Hiring is mainly for addition of human resource in an organization.

-Recruitment is the process of finding candidates for a post in an organization.

-Training involves equipping employees with the right knowledge for them to
perform a specific task.

3.6 Recruitment and selection

Recruitments shall be performed by the manager himself mainly through
interviews. Afterwards he shall be the one to determine if a candidate is
competent to start working with the enterprise or if he is incompetent.

After an employee is recruited and has qualified to work for the enterprise, then
training shall commence.

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3.7 Training
Training can be done to improve the working skills, to stimulate working
knowledge or to have the proper know-how of job instructions. Training
employees has the following benefits:

 Sufficient training of employees means that more customers will come to

your enterprise. This is because they don’t make mistakes and they ensure
quality production of goods
 Training your employees helps to reduce related costs of taking them
elsewhere to gain the training skills.

3.8 Promotion
It refers to the entire set of activities which communicate the product, brand or
service to the user/ it is also the advancement in rank or position.

The owner shall promote his products and workers by ensuring he reduces the
costs of some products and also pay his staff on time and also considers their level
of education and skills.

3.9 REMUNERATION AND INCENTIVES

This aims at motivating the employees to perform work in a professional manner
by ensuring you meet their needs on time so that they can also meet their own
needs.

Incentives are aimed at boosting, rousing and encouraging workers for better
work performances.

3.9.1 COMMUNICATION CHANNELS

The communication channels in our organization will vary depending on the
availability and reliability of the channel and shall vary from formal to informal
channels.

 Formal channels shall include annual reports, company communications

and business plans.
 Informal communications shall mainly involve employee interactions during
lunch time.

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3.9.2 LEGAL REQUIREMENTS
The following areas shall require workers to adhere to laws:

 Safety and health

 Labor and safety regulations
 Environmental and health laws
 Marketing and privacy guidelines and
 Security privacy protection.
If this is the case the business shall perform its operations as intended with no
quarrels with the laws of Kenya.

REQUIREMENTS DESCRPTIONS OBTAIN FEE TO BE THE

FROM PAID REMARKS

Labelling and To meet the E.U 5000kshillings. yearly

packaging legislations of (European
food labelling. Union)

Certificate as To be GLOBAL 2000Kshillings Yearly

guarantee guaranteed G.A.P
and meet
international
laws.

Environmental Meet NEMA 500kshillings Yearly basis

compliance environmenta
l standards to
better protect
the
environment
by reducing
pollutions.

Business permit Permits for State 5000Kshillings. yearly

and licenses operations agencies
and the
business as a

14
 whole

Insurance To safeguard State 2000Kshillings yearly

the enterprise agencies.
against losses
if any.

To be part of the business decisions every employee should participate in the

organization decision making process and their own reflections should be taken
seriously as other peoples’ ideas.Business meetings shall be held twice a month to
discuss and overcome our obstacles. Issues like money and hiring of new
employee’s shall also be discussed and decisions shall be made by the manager.

3.9.3 EXTERNAL SUPPORT SERVICES

Our enterprise shall seek external support for it to carry on with its operations as
intended by the owner. These services may include bank support services, legal
and licensing services and advisory services.

Licensing services

Nyandarua Municipal Council

P.O. Box 347-459

Nyandarua.

Banking services

Equity bank

P.O. Box 20345

Nyandarua.

15
 CHAPTER FOUR

4.0 PLANT, FACILITIES AND EQUIPMENT.

4.1 MATERIALS FOR PRODUCTION:

The following machinery are required for appropriate working of the enterprise.

All this equipment shall be purchased in cash from loans, savings and
contributions from friends who are concerned with our operations.

They include:

ITEM FUNCTION COST

Juice Blender For blending fruits 13,500ksh

Fruit Peeler For peeling fruits 8,500ksh

Computer For keeping 30,000ksh

records

Fruit Washing For washing fruits 40,000ksh

Machine

Total =0

4.2 Repairs and Maintenance

We shall take all means available to ensure that our equipment are in good shape
by maintaining them twice every month.

For the equipment requiring repairs they shall be immediately repaired to ensure
there are no delays in production of our services.

Repairs and maintenances shall be carried out by Engineer machinery Co., Ltd

16
4.3 PRODUCTIONS STRATEGY:
It helps a company to make operational and strategic decisions that follow a
logical pattern and supports the corporate strategy and the competitive priorities
of the company.

Product development

From our surveys, we found out some weaknesses during the production process
of our competitors. We are planning to improve on those weaknesses to serve as
the strategies of our enterprise.

First, we realized that they don’t use the modern technology to produce their
products. For us we raised enough capital and also took some loans to purchase
these machines to ensure that we come up with high quality products. These
machines include the fruit cleaners, fruit sorters, blenders and juice sterilizers
among many others.

Secondly, we shall make sure that we advertise our enterprises well enough and
in a proper way to make sure that we persuade the residents and make them
purchase our products.

My enterprise’ requirements are mainly fruits, new machinery and furniture to

construct luxuriant places where our customers can have a nice time to enjoy our
products.

4.3.1 Monthly production costs

ITEM MONTHLY PRODUCTION
COST

Mangoes 3000ksh

Oranges 7000ksh

Pineapples 4000ksh

Bananas 15000ksh

Passion fruits 2000ksh

Lemon 5000ksh

17
 Grapes 6000ksh

TOTAL PRODUCTIONS 0 ksh

COST

The total monthly productions of our enterprise are 42,000kshillings.

4.3.2 Selling costs:

From our pricing strategies, we came up we shall come up with costs to ensure
that our initial investment is retrieved back within a short period of time. We also
consider our customers and we don’t want to lose them, so we shall come up
with a price that is acceptable and realistic to us as the producers and to our
customers and clients who are in one way or another interested with our
products and services.

4.3.4 Policy of purchasing:

We don’t want to contradict with the law in any way, so we shall come with ways
to ensure that we are always in line with the law. We shall follow all the
guidelines in acquiring supplies as required by the legal authorities.

4.4 PRODUCTION PROCESS

The production process involves the use of the machines to first sort out the fruits
in order to remove those fruits that could be over ripen, the fruits that could have
been damaged in the course of transportation and those fruits which are not
ready to make quality juice( those that are not ripe).

Secondly, the fruits are taken to the machine where they are properly washed to
remove any unwanted particles like dust which could lower the juice quality after
blending.

The process that follows is pealing out the fruits before finally the fruits are
turned into juice.

Blending of the juice is done after fruits have been peeled, washed and sorted. It
is the final process in our production process.

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4.4.1Challenges in production
The core challenges that could face in the course of production is power problems
and water shortages.

4.4.2 Solutions to external problems

To overcome power problems, we got a generator from a family member who so
that in case power goes off, we do not stop operating. The generator though not a
long-term remedy can assist us in the short run before we find other solutions to
this major problem.

To outdo with water shortages, we shall engage with the local community to dig a
borehole which shall not only help us continue operations in times of water
shortages but also to benefit them as well.

4.5 REGULATIONS AFFECTING OPERATION

4.5.1 Licenses
Acquiring a license for our business shall be our area of concern during the initial
stage of start- up.

Business name or company

We shall ensure that we register our premises’ name to avoid unnecessary

penalties and fines that could bring down our morale’s for production or slow
down the production process.

4.5.2 Business permit

This document is very essential for any particular activity to be undertaken. It
shall therefore be our responsibility to ensure that we acquire one so that we
don’t rub shoulders with the city council.

4.5.3 Labor laws

We shall always follow all the labor requirements to ensure we don’t mishandle
or mistreat our workers. We shall take all the laws in place and make sure total
care and attention is given to the workers.

19
We shall also stay updated in case there are changes in the legislation process or
new regulations are put in place.

20
 CHAPTER FIVE

5.0 FINANCIAL PLAN

This chapter deals with financial plans of the business. Future financial potential of

the business will be looked at and also the revenue expected together with cost

which the proprietor will incur in running the business. This will enable the

determination of viability of the business.

5.1 PRE-OPERATIONAL COST

These are cost incurred before the business begins its operation:-

SUMMARY PRE-OPERATION COST

ITEM AMOUNT KSHS

1 Bank account 5500

2 Bill board 2000

3 Post office box 1500

4 Construction of counter and shelves 10000

Recruitment expenses 1500

Total 20500

5.2 ESTIMATION OF WORKING CAPITAL

Working capital means the amount of money required in day to day running of the
business.

SUMMARY – WORKING CAPITAL ON MONTHLY BASIS

ITEM AMOUNT KSHS

1 Opening stock 120000

21
2 Salaries 21700

3 Electrical bill 560

4 Postage bill 400

5 Trade license 4500

6 Loan payment 4500

7 Water bill 200

8 Rent 3000

9 Travelling 1000

10 Advertisements and promotions 9600

Total 120000

5.2 ESTIMATION OF FIXED ASSETS

These are costs spent on capital machinery, tools and equipment. They usually
have long life span

SUMMARY – FIXED ASSET COST

ITEM AMOUNT KSHS

1 Calculator 1000

2 Balance 2990

3 Cell phone 1690

4 Motor vehicle 160000

Total 1000

The total amount of fixed assets Kshs.165,680

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 5.3 CASH FLOW STATEMENT FOR VIRGINIA’S GROCERY AS FOR THE YEAR 2021
ITEMS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

Cash sale 227710 191580 194210 206920 210010 212860 215800 197880 192480 198890 203130 212140 2463610

Bank interest - - - - - - - - - - - 850 850

Cash inflow 227710 191580 194210 206920 210010 212860 215800 197880 192480 198890 203130 212990 2,464,460

Purchases 180000 155000 16000 170000 175000 176000 178000 159000 158500 162000 165000 168500 2,007,000

Loan payment 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500 54,000

Salaries 21700 21700 21700 21700 21700 21700 21700 21700 21700 21700 21700 21700 260,400

License 4500 - - - - - - - - - - - 4,500

Postage bill 400 - - - - 400 - - - - - 300 1,100

Rent 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36,000

Water bill 200 180 150 180 200 200 200 180 180 150 200 180 2,200

Electricity bill 560 500 510 530 520 510 550 500 510 520 530 530 6,270

Transport fee 1000 - - - - 500 - - - - - 200 1,700

Miscellaneous 350 200 - - - - 100 - - - 200 50 900

Promotions 3500 - - 2000 - - - 3000 - - - 4000 12,500

Advertisement 2600 - - - - - 500 - - - - 500 3,600

Total outflow 222310 185080 189860 201910 204920 206810 208550 191880 188390 191870 195130 203460 2,390,170

Net cash 5400 6500 4350 5010 5090 6050 7250 6000 4090 7020 8000 9530 74,290

Cumulative 5400 11900 16250 21260 26350 32400 39650 45650 49740 56760 64760 742290 1112410

23
cash

4 PROFORMA INCOME STATEMENT FOR YEAR 1,2,3

ITEM YEAR 1 YEAR 2 YEAR 3

Cash sales 2463610 2470350 2627060

Interest 850 3600 4500

24
Total income 2464460 2473950 2631560

Cost of goods 2007000 2004000 2178300

Gross profit 457460 469950 453260

Expenses

Loan payment 54000 54000 2700

Salaries 260400 260400 260400

License 4500 4850 5200

Postage bill 1100 1450 1550

Rent 36000 36000 36000

Water bill 2200 2300 2350

Electricity bill 6270 6210 6110

Transport fee 1700 2000 1900

Promotions 12500 9500 6500

Advertisement 3600 5000 9200

Miscellaneous 900 740 1550

25
Total expenses 383170 382450 357760

Net profit before 74290 87500 95500

tax
11143.50 13125 14325
Estimated tax at
15%

Net profit after tax 63146.50 74375 81175

5.5 BREAK EVEN ANALYSIS

Item Amount

26
Fixed Lost (Ksh’s)

Rent 50,000

Salaries 125,000

Insurance 10,000

License and Permits 10,000

Loan payment 50,000

Total Fixed Assets 245,000

Variable Cost

Advertisements 33,500

Transport 152,500

Telephone 21,000

Electricity 40,500

Water 29,500

Total Variable cost 277,000

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