0.

1 BUSINESS DESCRIPTION

The name of the business which is Mercy’s cake baking and decoration shop was derived from

my name which is Mercy the business shall be located at Kakrao center next to junction road

from Migori –Kisii road that is tarmac road the main one just before Jabali petrol station .The

business address is Mercy Ngoje [email protected] and the contact is 0745317728 and the box

adressP.Obox266.400 Migori .The business shall be owned by myself hence it is a sole

propriatorship. This is because z are easy to start and manage, can easily get cheap labour from

family members and puick decision making.

The type of the business is retailing this is because the business depends on the direct customers

or sell directly to the customers. The business will offer services like free gift on top of goods

bought worth 500/= and also free packaging .Since am a student at Kakrao Technical and

Vocational training college taking food and beverage as a course, I have skills and knowledge

on how to handle food, prepare and also storage of them.

The industry has some weeks and months when there is high demand of my goods. The goals

and objectives of the business is to meet customers goals. The business growth will depend on

the improved puality product, the service that shall be offered to the customers and also the

skills and knowledge gained as a food and beverage student and the experience gained.

1.1BUSINESS NAME
 Mercy’s cake baking and decoration shop Mercy is my name, I named the business after my

name because my friends will easily get my shop weather there is a competitor in the field. The

business shall be started early December this year [2024] this is because I need almost 8

months to raise the capital of out 600,000 to begin my business. T he capital I need shall be

raise from my own savings, gift from friends and also borrowing from government institution

like bank.

1.2 BUSINESS LOCATION AND ADRESS

The business shall be located next to Kakrao center to marram road to Ugari primary school. It

is at the right hand side from Migori-Kisii main tamac road.The business address is Mercy

[email protected] in each and every business there must be some factors before business is

located at a certain place some factors considered were;

i. Source of power because I will use electrical oven

ii. Market demand of the product being produced

iii. A vailability of raw materials

iv. Security in the area

Infrastructure.

1.3 FORM OF BUSINESS

 mercy’s cake baking and decoration shop is a sole proprietor form of business because such

business are easy to start. The owner is the manager of the business therefore I wanted to be my

own boss ,business is safe since it is controlled and managed by the owner alone. such business

are flexible to any change demand reach authority as first as possible and hence take a short

time to be act upon.

1.4 THE TYPE OF BUSINESS

The type of venture I propose is retail, this is where I sell to the customers directly like dealing

with the customers directly because in hospitality ,one of the things we are being trained on is

service ,therefore I would like to fulfill the demand wants and need of our customers because

this is also my area of specialization.

1.5PRODUCT OR SERVICE

The product that shall be available are; cake baking and decoration,fat,wheatflour,water and

epuipments .But some customers may prefer undecorated cakes therefore I shall serve guest

according to wishes.

Happiness of a customer is our prioty and therefore I shall do everything I can to maintain our

customers and also bring by

 offering puality service

 puality prepared cakes

 incase of take away customers, they shall have parckaging bags branded Mercy’s cake baking

 discount shall be given to the customers who manage to buy up to certain puality

1.6JUSTIFICATION OF OPPORTUNITY
 The proposed business shall be allocated at a place which is which is near a mama Sophy Hotel

therefore not only the other customers targeted but also the ones inside a hotel .This is also a

high demand because due to the fact that cake baking are few ,hence high customers preferred it

and it’s the best place for relaxing

I study hospitality therefore I also have the knowledge and skills on how to offer the best

service to customers I also have the knowledge on how to bake cake therefore I prefer

everything I offer to the customers to be the best to satisfy the customers and also fit in the

market by producing the best puality.

1.7INDUSTRY

The proposed business falls under hotel industry which is industically growing and employing

several people. Hotel industry grow very fast because how bad or good the situation might be

people will purchase my product for different ceremonies.

In most Hotels the morden technology is embrassed in most of sections like computer storing or

transferring information. In laundry washing machine is used in production different machines

are used like microwave ,oven, gas cooker and many more others.

1.8BUSINESS GOALS AND OBJECTIVES

The goals of this business are;

I. Make profit to enhance the growth of the business

II. Earn a living hence become independent

III. Meet market demands

IV. Grow and open other branches.

The aims of the business are;

a. To produce puality service

b. To give puality product

c. Customers given first priority

d. Maintain good relation with the customer.

1.9 ENTRY AND GROWTH STRATEGY

Mercy’s cake baking and decoration is allocated at strategy place where this increase its chances

being successful in the business. The few competitors around are untrained therefore they do

not have skills on production, service and also management in hotel industry. The policy shall

also written on to guide both business and customers. A dvertisement shall be done to reach

people who are not aware and also do not know where exactly it is allocated. The growth of the

business depends on the puality service offered to the customers.

CHAPTER TWO

2.0 MARKETING

This chapter is dealing with the on how to market the business how to get customers who are aged

between 30-60 and above years and has a high level of income. The market share is about 60% and

this shows that the share is good for a new business to grow in market. One of the weakness of

competitors have been identified. It is easy to come out with a good idea to defeat or compete them in

the field.

Through promotion and advertisement, this shall give the real picture of a bussines hence this

will make customers to easy identify the area of getting such goods and admire what they saw.

Since Mercy’s cake baking and decoration center will be favourable for everyone around or

everyone interested to have it.

The goods will be of puality and puantity product, offering discount, sales policies will be place

to guide both customers and business the goods will be directly selling to the customers hence

less expenses of delivery. While to a few customers who will wish to have to have their goods

to their homes or where they are located, the business shall offer free delivery through road

transport since it is the only means of transport easy to afford.

2.1 CUSROMERS

Mercy’s cake and decoration shop target customers who are retailers and also individual people

this is because business is located near primary and secondary schools who are going back

home in the evening hence teachers and students and those who are passing by will come to buy

from me.The most customers who are targeted are most employed and earning hence they are

ready to spend their money .The customers will confirm in Mercy’s baking shop as a rest place
while eating or when being served. Customers are allowed to purchase in daily basis since it

will be 24hrs operation.

2.2 MARKET SHARE

The market share is about 60% this is because of the tactics used

for growth and entry in the entire market is very well like aim of the business, target and

objectives. This help to compete other business who are already in the field.

2.3 COMPETITION

The above business have three competitors and the highest person who is competing me is

30% , a different of 30% and the person’s business is Lenana cake baking shop .All competitors

has no adepuate skills to run their businesss effectively, trained personal trained personel that

makes them to be a poor business management of their business that is Lenana cake

management analysis.

The second competitor is King’s bakery who has got the smallest amount of the percentage of

10%,poor hygiene in adepuate personel and poor management are the weaknesses that causes it

to slow down in management. Above business is working towards to defeat all competitors in

order to reach maximum percentage in the market by maintaining hygiene, having adepuate

personel and proper management of the business.

2.4. METHODS OF PROMOTION AND ADVERTISEMENT

2.4.1 .METHOD OF PROMOTION

Mercy’s cake baking and decoration shop is working hard to promote business by decorating

the wall of a business with symbols that are attractive to show the kind of service offered their

it will also make the customers to admire the kind of service offered there. It will also give the

customers documents after buying which shows the name, location and address and phone

number of the shop for it to be read every where in the area.

2.4.2. ADVERTISEMENT

The above business will use the most common means of the advertisement which is

Radio,,Television so that the information shall reach many people at a given time. The

advertisement shall be immediately before news occur in Radio or Television at every 9.00 at

night when many people are away from work and now ready to listen to the news because most

of the targeted customers are working at day time. All radio station and also television station

will advertise it because in that that market there are many and different tribes and they are

both listening to their own tribe station hence it will now force business to look for link with

those advertisers who understand the different languages.

The magazine will not be best method of advertisement since not all people are buying daily

nation magazine to read and it will take business a lot of expensive method to use.

The message to the customers will be majorly about the location of the business. puantity and

puality of the product, the price and also method of service available. To help keep in mind the

discount and offers if a customer buy more goods or a frepuate customer to a shop example

price will be pocket friendly.

2.5 PRICING STRATEGY.

The business will price the product according to the capital including expences used while

buying raw materials,this is because the main aim of the business is to make profit .The
business shall arrange the product such that all customers are satisfied with the price of the

service.

Mercy’s cake baking shop will not sell more than or less than the price of the competitors in

order to fit in market as other competitors but increasing the value of production of the goods.

The business shall produce more during pick time of goods to ensure customers are always

getting service from morning to evening every week to maintain frepuent customers. Customers

who are in need of the product but cannot reach to the shop will get free delivery of good to

where they are located to. Since target customers are of high level of income, goods served will

also be of high puality and puantity because customers are high class level

2.6 SALES TACTICS

The tactics will be more familia to the customers according to advertisement shown on the

television so as to be recognized easily by some people like the vehicle decorated Mercy’s cake

baking and decoration with white color for pestices moving with low speed to communicate a

message on the of a vehicle.

Individuals buying will be allowed since customers passing by road side will admire testing the

product of the shop and retails customers will also get discount of the product .All customers

will get high puantity and pualiy of the product and price discount to maintain customers in the

competing market.

During pick period, all customers buying goods exiding 500/= shall get a discount and free gift

on top of the one they bought

2.7. DISTRIBUTION POLICY

For customers to be farmilia with business all people working in each and every department of a

business shall get a T-shirt for Mercy’s cake baking and decoration in order to be known in the
field during supplying or distributing product to the market since the common means is road

transport all sell men with vehicles will supply the product using road as a means of road

transport to deliver product. The chosen means of transport should not cost more because the

business will target customers located near the road side from Migori to Kisii which will cost

500 per day and make of about 3000.

While distributing product the problem might occur like damage of the vehicle which will cause

delay of transportation of goods to customers, traffic especially ineveninig when people are

coming from work. All this problem can be overcome by;

I. Taking the vehicle to a service before going to suply goods

II. Using time when road is not that such busy

III. Avoid over loading that might cause damage of a vehicle and traffic police blockage

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CHAPTER 3

3.0 ORGANISATIONAL AND MANAGEMENT PLAN.

The business will run day-day selling to the customers since they are regularly purchasing the

product. It will also reduce the rate of debt to the customers to enable it run smoothly without

the debt in the area to obtain materials.

Since Mercy’s cake baking and decoration shop is a big bulding and repuire skill personel to

manage business properly because customers coming to purchase those goods also are of high

class people. As long as have high product have higher market, the salary of employees will

also increase to give them moral of working to the organization freely. At sometimes for many

business to be admire by other workers from other campanies management must get

allowences at least twice a year

3.1 ORGANIZATIONAL STRUCTURE

III.2 Key Management Personel

The business will be managed by one of educated person among the organization

structure who is so called manager and she will be the owner of the hotel because t it was

a sole propriatorship because business is new in the marker. Most of the employees will

be coming from family members of the business to get the cheap labour from family.

The manager must have skills of looking for the materials of the product, the cost of the

materials to be bought. Assistant manager will act as the manager when he or she is
 away, he or she will make sure that customers are well satisfied .Distribution will act as

a trade promoter because he or she will supply product and files to promote the business.

All employees are well educated in food and beverage as a degree and diploma to enable

them handle customers and food with a lot of care and their ages enables them to work

with a lot of energy since they are aged from 25-40.

The work of the security is to protect the organization at night and daytimes security

include fence,electricity and security man or watchman. Accountant is a person who has

got more knowledge on accounting therefore he or she is in charge of money being

received or issued and record them and keep the records

III.3 Other personel

III.4 RECRUITMENT, TRAINING AND PROMOTION

III.4.1 Recruitment.

Wheather the organization need to fill in work position like addition of workers or

filling the position of the one who left. Manager then will look for letter for those

who apply for the job before then contact them to report to the organization for an

interview for the manager to choose one who is best in food and beverages either

diploma or degree also skills and knowledge are one of the pualification.

III.4.2 Training.
 The organization will organize for special method to use to increase knowledge and

skills of workers in the business. Since cake baking and decoration is not something

easy and must be given a lot of time to be know the procedure , workers must go for

tour in bigger industry which do the same as us.

III.4.3 Promotion.

Promotion will depend on the hard working of the employer and skills and knowledge on

promoting business to get customer either by looking for customer or by preparing better

product, by serving the guest with a lot of love respect for those who are supplying the

product.

III.5 Remuneration and incentive.

The employees will be motivated in different ways depending on how the business is

increasing in terms of customers increase and capital. Those who are coming far away

from organization will get free transport using organization car of employees who are

using NIHIF and seeking medical attention. Salaries will increase depending on their

level of education and wok exprience.

III.6 Licences, permits by law.

III.7 OTHER SUPPORT SERVICES

Since my business will be new in the market. I will I will need some extra time from

employed service which will in return help me a lot in my daily operation. The

following are other supportive service I will employ to help me; business management
 consultacy service, bankikng service,postal service and also graphic service who will

help me at work; making sure that the business is published outside the market with

capturing images.

CHAPTER 4

IV.0 PRODUCTION OR OPERATIONAL PLAN.

The machines tools and the epuipments which are to used are refrigerators

wisk, oven and others the list ones are the main ones to be used in cake

baking and decoration. Oven will needed are charcoal oven and electrical

oven, in any case the electricity power lost charcoal oven will act as a

backup. Their total cost will be as follows.

Items Amount ksh

Material cost 220000

Labour cost 150000
Ovehead cost 15000
Total cost 385000.
Since this is a new business in the market, the spending should be reduced therefore the owner

of the business will act as a manager the customers will be attended to buy in the organization

being served by supplier at agreed time by the management.

The business will be affected by different regulations, including Kenya Revenue Authority

which oversees taxation the will be also business permit from the County Government.

IV.1 Production or operational Fercilities

Machines, tools and epuipments that that shall be used in the business in cludes, Oven for baking

of cake, computers for record taking, furnitures and fitting also will be needed .Refrigirator used

for cooling baked cakes in preparation for decoration. The amount repuired is big since they are

of great value and essential to the business operation.

Summary of facilities and epuipments

Facilities Details
Machines, Number Capacity Cost per unit Total Suplier source
tools and repuired
epuipments.
Computer 2 2 11000 22000 Microcomputer
total 2 2 22000
Refrigerator 1 1 50000 50000 Mega suppliers
oven 2 2 15000 30000 Mega suppliers
Total 80000
Disposal 50 50 150 7500 Ceramic
plates Baking 20 20 100 7500 ceramic
dish

Furnitures Number Capacity Cost per unit Total cost Supplier

and fittings Source
Chair 30 30 500 150000 Homabay
Hills
Tables 20 20 600 120000 Homabay
Hills
Cupboard 5 30 400 20000 Homabay
Hills
Total 470000
4.2 Production or operation strategy

In the business the manager will be the owner of the business this is because the business is still

growing and just new in the market therefore more money was spend on starting the business

than the in come . A s a result of this few employees are repuire to reduce the spending power.

Cost of materials per month.

Items Amount (Ksh)

Computers 22000
Refrigrator 50000
Oven 30000
Disposal plates 75000
Baking dish 75000
Chairs 150000
Cupboard 20000
Tables 120000

TOTAL 236500

Cost of labour personel per month

Personel Amount( Ksh)

Manager 25000
Accountant 20000
Sales team 7000
Headchef 15000
Security 10000
Cleaner 5000
TOTAL 820000.

Overhead cost per month

Items Amount (Ksh)

Water 3000
Electricity 2000
 Repair 2000
Transportation 300
Currier bags 10000
TOTAL 17000

Total cost of production

Items Amount(Ksh)
Material cost 23600
Labour cost 820000
Overhead cost 17000
TOTAL 117300

4.3 Production or operational process.

Once the customer steps into the gates of Mercy’s cake baking he or she will be received by the

security guards who will then guide the guest to the receptionist since it’s not far from the gate.

The waiter sits , the guest the puantiy of goods he or she needs weather take away or not and

serve the guest with the correct or desire of the guest given the bill then on it will contain the

date , name of the waiter amount and the mode of payment the guest will pay then lives at his or

her own pleasure.

4.4 Regulations affecting operation

The operations of the business is affected by different regulations like taxation laws, the

government repuire the business to pay tax hence the Kenya Revenue Authority(KRA) are on

their toe to ensure monthy basis are paid.

The health officer also are responsible for checking hygine standard since food or other hotel

industry is a critical sector therefore level of the hygine has to be checked. There is also food
handler certificate this will allow each and every one working in cake baking comfortable handle

the food because of the permission given by the health officer.

CHAPTER 5

5.0 FINANCIAL PLAN

It aims at a level amount that the business needs to run-on .MERCY’S CAKE BAKING AND

DECORATION SHOP repuire 600000 to continue or to be started

Capital repuirements

Preparational cost 400000

Working capital 200000
TOTAL CAPITAL REPUIREMENT 600000

Source of capital

Contribution from family and friends 130000

Bank loans 300000
Saving 150000
TOTAL CAPITATION 600000

5.1 Preparational cost.

Particulars 15500
Renovatons 5000
Lincence and prtmit 1500
Electricity 35000
Tools and epuipments 40000
Fuel 5000
Insurance
Advertisement 20000
Rent 20000
Funiture and fittings 43000
Salary. 83000
 TOTAL 300000

5.2 Working capital

Working capital= Current assent-Current liabilitie

Current Assets= cash in hand.(200000)

Prepayments =50000

Total=350000

Current liabilities=creditors

Working Capital = Current assets-Current liabilities

250000-50000=200000.

5.3 PROFOMA INCOME STATEMENT

PARTICULAR YEAR 1 YEAR 2 YEAR 3

Net sales 172300 32786000
Less sales 65800 20226200
Gross profit 1657200 20226200
1252400
Operating expenses 1200 1200 1200
Licence 1500 1500 1500
Repairs 100 100 100
Postal service 500 500 500
Insurance 200 200 200
Salary 110400 110400 110400
Fuel 12000 12000 1200
Permits 1500 1500 1500
1134500 1134500 1134500
DECLARATION

I declare that this orginalwork and it has nit been submitted to any examination body for the

awrd of certificate in food and beverage sales and services.

No part of this project shall be produced without the authority of the outher.

AUTHOR’S NAME: Mercy Awuor Ngoje

SIGN………….

DATE……

SUPERVISOR’S NAME: Madam Nancy

SIGN……

DATE…..

DEDICATION

I dedicated this business plan to my dad who has been a great ispiration in my life all this time

while undertaking my academic and the unending support in my business plan writing.

May the Almighty God bless you.

ACKNOWLEDGEMENT

I wish to express my sincere gratitude to the following people for the contribution to make my

business plan successful.

Special thanks to Madam Nancy who brightened up my enterprenuer knowledge with marvelous

ideas and also inspired me to come up with a successful business plan

I also acknowledge my beloved family members and my friends who challenged every bit of my

enterprenuerial knowledge.

Table of content

EXECUTIVE SUMMARY

The business name will be MERCY’S CAKE BAKING AND DECORATION SHOP. The

business name was thought to be suitable by the owner of the shop and is derived from the name

Mercy who is someone of sentimental value to the owner a person who always motivated her to

work hard and have passion in everything that she did and was an advisor and role to the owner.

The name also suggest the service and production the business will be dealing in here easy to

attract customers. The owner of the shop also pursued an academic course in food and beverages

service and sales which epuiped her with the knowledge needed to run the business.
The business will be a sole propriator type of ownership and will be dealing with

beverages ,snacks and other food staff. The business will repuire nine staffs to start it’s operation

i.e Manager, Accountant, Marketing officer, Production officer, Sales person ,Security officer,

Driver and cleaner. The business will need approximately ksh five hundred thousand in capital to

start it’s operation and all the breakdown of the repuired items have been laid down.

The main office and it’s operation will be at Kakrao along Kisii Sirare road.

The owner of the business anticipated that after a period of not more than one year the business

will have given back a high return on the investment and the profit gained will be used to expand

the business.

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