KENA’S FAST FOOD OUTLET

NAME :KEMEI NAOMI CHEPTOO

INDEX NO : 7411050169

COURSE : CERTIFICATE IN CATERING AND

ACCOMMODATION

MODULE : TWO

TOPIC : BUSINESS PLAN

COURSE CODE : 1819

CENTRE CODE : 741105

PAPER CODE :1819/207

INSTITUTION NAME : THE KISUMU NATIONAL

POLYTECHNIC

SUPERVISOR’S NAME : MADAM DEBRA OKAALO

SUBMISSION DATE : NOVEMBER 2023

 DECLARATION
I declare that this business plan is my own work and has been duplicated by anyone for academic
purpose

Name: Kemei Naomi Cheptoo

Signature:…………………………………………………...

Date:………………………………………………………....

This business plan has been submitted with my approval as the supervisor.

Name: Madam Debra Okaalo

Signature: …………………………………………….….

Date :……………………………………………………….

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 DEDICATION
This business plan is dedicated to all my family members and relatives who assisted me
financially. The Kisumu National Polytechnic provided me with conducive environment to help
me write this plan and lastly my supervisor who guided me through this process.

ii
 ACKNOWLEDGMENT
I acknowledge my family and my supervisor who were there for me during good and bad
moments when I needed help from them and never gave up on me. It were not for them I
couldn’t have achieved my goal. Mat God bless you all

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TABLE OF CONTENTS
DECLARATION ................................................................................................................................................ i
DEDICATION .................................................................................................................................................. ii
ACKNOWLEDGMENT .................................................................................................................................... iii
EXECUTIVE SUMMARY ................................................................................................................................. vi
CHAPTER ONE ............................................................................................................................................... 1
1.0 BUSINESS NAME ..................................................................................................................................... 1
1.1 BUSINESS NAME ..................................................................................................................................... 1
1.2 VISION AND MISSION STATEMENT ........................................................................................................ 1
1.2.1 Vision Statement ................................................................................................................................. 1
1.2.2 Mission Statement .............................................................................................................................. 1
1.3. BUSINESS LOCATION AND ADDRESS ..................................................................................................... 1
1.4 FORMS OF OWNERSHIP ......................................................................................................................... 2
1.5 TYPE OF BUSINESS .................................................................................................................................. 3
1.6 PRODUCT AND SERVICES ....................................................................................................................... 3
1.7 JUSTIFICATION OF BUSINESS OPPORTUNITY ......................................................................................... 3
1.8 INDUSTRY ANALYSIS ............................................................................................................................... 3
1.9 GOALS OF BUSINESS............................................................................................................................... 3
1.9.1 Short term goal ................................................................................................................................... 3
1.9.2 Long term goal .................................................................................................................................... 4
1.10 ENTRY AND GROWTH ITS STRATEGY ................................................................................................... 4
1.11 ENTRY STRATEGY.................................................................................................................................. 4
1.12 GROWTH STRATEGY ............................................................................................................................. 4
CHAPTER TWO .............................................................................................................................................. 5
2.0 MARKET PLAN ........................................................................................................................................ 5
2.1 CUSTOMERS ........................................................................................................................................ 5
2.2 MARKET SHARE .................................................................................................................................... 5
2.2.1 Expected Market Share ....................................................................................................................... 5
2.3 COMPETITION ANALYSIS ...................................................................................................................... 6
2.3.1 SWOT AMALYSIS................................................................................................................................ 6
2.4 ADVERTISING AND SALES PROMOTION ................................................................................................ 6
2.4.1 Advertising ......................................................................................................................................... 6
2.4.2 Promotion .......................................................................................................................................... 6
2.5 PRICING STRATEGY ................................................................................................................................ 6
2.6 SALES TACTICS ....................................................................................................................................... 7
2.7 DISTRIBUTION STRATEGY ..................................................................................................................... 7
2.8 BUSINESS LAYOUT ................................................................................................................................... 7
CHAPTER THREE ............................................................................................................................................ 8
3.0 ORGANIZATIONAL STRUCTURE .............................................................................................................. 8
3.1 ORGANIZATIONAL STRUCTURE. ............................................................................................................. 8
3.2 RECRUITMENT TRAINING AND PROMOTION......................................................................................... 9
3.2.1 Training ............................................................................................................................................... 9
3.2.2 Promotion .......................................................................................................................................... 9
3.3 REMUNERATION AND INCENTIVES ........................................................................................................ 9
3.3.1 Remuneration ................................................................................................................................... 10
3.3.2 Incentives .......................................................................................................................................... 10
3.4 LICENCE PERMIT AND LAW ............................................................................................................... 10

iv
3.4.1 Licences ............................................................................................................................................. 10
3.4.2 Permit ................................................................................................................................................ 10
3.4.3 Law .................................................................................................................................................... 11
3.5 SUPPORT SERVICE ................................................................................................................................ 11
CHAPTER FOUR ........................................................................................................................................... 12
4.0 OPERATIONAL PLAN ............................................................................................................................ 12
4.1 OPERATIONAL FAILURE AND CAPACITY ............................................................................................... 12
4.2 OPERATIONAL STRATEGY .................................................................................................................... 13
4.3 OPERATIONAL PROCESS ...................................................................................................................... 15
4.4 OPERATIONAL PROCESS DIAGRAM. ...................................................................................................... 16
4.4 GOVERNMENT REGULATION AFFECTING OPERATIONAL PROCESS .................................................... 16
4.5 GOVERNEMNT LAWS ........................................................................................................................... 17
CHAPTER FIVE ............................................................................................................................................. 18
FINANCIAL PLAN.......................................................................................................................................... 18
5.0 INTRODUCTION ..................................................................................................................................... 18
5.1 PRE – OPERATIONAL COST .................................................................................................................... 18
5.2 ESTIMATION OF WORKING CAPITAL ..................................................................................................... 18
5.3 PREPARATION OF CASH FLOW PROJECTION ........................................................................................ 18
5.4 PREPARATION OF PREFORM INCOME .................................................................................................. 19
5.5 STATEMENT OF BALANCE SHEET .......................................................................................................... 20
5.6 CALCULATION OF BREAK-EVEN POINT.................................................................................................. 21
5.7 CALCULATION OF PROFITABILITY RATIO............................................................................................... 22
5.8 DESIRED FINANCING ............................................................................................................................. 22
5.9 PROPOSED CAPITALIZATION ................................................................................................................. 22
APPENDINCES.............................................................................................................................................. 23
APPENDIX 1 ................................................................................................................................................. 23
Location of business.................................................................................................................................... 23
APPENDIX II ................................................................................................................................................. 24
ORGANIZATION STRUCTURE ....................................................................................................................... 24
APPENDIX III ................................................................................................................................................ 25
BUSINESS LAYOUT ....................................................................................................................................... 25

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 EXECUTIVE SUMMARY

BUSINESS DESCRIPTION
The proposed business will be known as Kena’s fast-food outlet will need the support of capital
so as to start up. The business will assist in producing and products to customers.it will be
located in Kericho. The enterprise will be sole proprietor.

MARKET PLAN

The proposed business will get raw materials in the nearby supplies within Kericho town, the
targeted customers are the public institution and offices.
ORGANIZATIONAL PLAN

The business will require a manager who will be a proprietor by herself who has attend a grade
of certificate in catering and accommodation’s organizational plan deal with ways of acquiring
employees of the business.
OPERATIONAL PLAN
The proposed will involved in activities of realization of operational goals together with the
required raw materials, modern tools, equipment machineries and furniture. This will entail both
small ,large and mechanical equipment’s.
FINANCIAL PLAN
For the Kena’s fast-food outlet to start up from the scratch it will require Kshs.922,410 from the
support of family and relative contribution, banks and personal savings. The enterprise will be
analyzed through the following, cash flow, and balance sheet. The proprietor will use the easiest
way to analyze his business plan.

vi
 CHAPTER ONE

1.0 BUSINESS NAME

The business name will be KENA’S FAST FOOD OUTLET. Kena’s Fast Food Outlet will be
the name of the business. It will be owned by Naomi Kemei who isa student at the Kisumu
National Polytechnic pursuing a certificate course in catering and accommodation management
module two. The reason why I choose Kena’s Fast Food Outlet is because it offers Quick
services to customer at affordable price. the market is readily available and the customers can
access quickly.

1.1 BUSINESS NAME

Kena’s Fast Food Outlet will be the name of the business

The idea of the business will be;

• To provide quick service to customers

• To provide high quality food and services to customers
• To meet customers certification

1.2 VISION AND MISSION STATEMENT

The business will have both vision and mission statement for the purpose of acquiring
customers’ needs.

1.2.1 Vision Statement

Kena’s Fast Food Outlet will have vision. It aims at providing quality products and services to
customers.

1.2.2 Mission Statement

Kena’s Fast Food Outlet aims at creating the best and conducive environment to customers. To
be the Centre of excellent to meet customers.

1.3. BUSINESS LOCATION AND ADDRESS

Kena’s Fast Food Outlet will be located along Kisumu Nakuru Highway approximately 1 km
from king tires enterprises opposite Kericho Teachers Training College. The reason why I
choose that place is because its located along high way next to college

1
 Kericho Teacher’s
Training College

Kericho Nakuru

Kena’s Fast
Food Outlet

Business Address
The proposed business address will be Kena’s Fast Food Outlet of P.O. Box 275 – 20200
Kericho. Email [email protected] Contact 0705 539 606

1.4 FORMS OF OWNERSHIP

The proposed enterprises will be a sole proprietorship
The owner of the enterprises will be Naomi Kemei who is the director.
The owner of the business will carry out the following duties
• In charge of purchasing food items
• Responsible for liencing and firing of staff
• To prepare duty for the staff.
Advantages and disadvantages of a sole proprietorship
Advantages
• Enjoys all the profit
• Be your own boss
• The owner takes total control of the business
• The owner makes independent decision
• The owner has personal contact with employees and customers
Disadvantages
• The owner bears all the losses
• The capital may be limited

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 1.5 TYPE OF BUSINESS
The business is a sole proprietorship since the share holders are family members from Naomi
and relatives to have cooperated commitment to attain high goals and objectives on how the
prepared business will function and meet customers’ needs.

1.6 PRODUCT AND SERVICES

Kena’s Fast Food Outlet will offer the following services to their customers;

• To deliver a product at right time

• To offer food at cheaper price
• To offer products of high quality to customers
• To give product that is well packaged.

1.7 JUSTIFICATION OF BUSINESS OPPORTUNITY

The reason why I choose Kena’s Fast Food Outlet is because its family business so needs to
continue with family lineage. The reason I choose Kena’s Fast Food Outlet is because it offers
good products and services to customers at the right quantity.

1.8 INDUSTRY ANALYSIS

The proposed business will fall under hospitality Industry. Therefore, it will require a startup
capital of Kenya Shillings 922,410 to startup a business, pay workers, purchase raw materials,
paying rent, water bill and electricity

Business will be from;

Friends and relatives 210,000/=
Bank loan 350,000/=
Personal saving 362,410
Total 922,410

1.9 GOALS OF BUSINESS

Kena’s Fast Food Outlet will have short term goals and long-term goals.

1.9.1 Short term goal

Kena’s Fast Food Outlet will be required to capture as much customers as expected.

• To make profit
• Ensure that customers retention is maintained

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 • To offer products of quantity products

1.9.2 Long term goal

Kena’s Fast Food Outlet aims at creating more employment having more branches

Aims at expanding the business

1.10 ENTRY AND GROWTH ITS STRATEGY

Kena’s Fast Food Outlet will have both entry and growth.

1.11 ENTRY STRATEGY

The owner of the business will have to market the business to increase customer turn over and
awareness of products and services offered. The tack will be door to door delivery
advertisement. Facebook, twitter and Instagram.

1.12 GROWTH STRATEGY

The owner of the business will open more branches, employ staff selling products of goods
quality and quantity to meet customers certification.

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 CHAPTER TWO

2.0 MARKET PLAN

The main objective of marketing plan of an enterprise is to ensure that it offers goods that are
of good quality and quantity to achieve the mission and goal of the business in the entire county.
The business will be serving both private and public sectors such as hospitals, churches, schools
public offices at large with equal distribution of services.

2.1 CUSTOMERS
Kena’s Fast Food Outlet will be located in Kericho town that has a total of 100,000 people
since the business will be a startup business. It will require potential customer for it to prosper
and make profit.

2.2 MARKET SHARE

Kena’s Fast Food Outlet suggest that the services will capture small shareholders due to their
background weakness hence charges offered will be at lower price compared to other business
sector around. The total number of customers targeted within Kericho town is 100,000. Kena’s
Fast Food Outlet will have a market share of 20% of the target customers while other
competitors will 80%

2.2.1 Expected Market Share

In the next future Kena’s Fast Food Outlet is expected to increase. The proposed business will
have a market share of 30% of the total targeted customer while the other competitors will have
the rest of 70%

The expected market share is summarized in the pie chart below.

108
Business share

Other Competotors
252 share

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2.3 COMPETITION ANALYSIS
Kena’s Fast Food Outlet will complete with other customers to meets customers needs and
make profit.

The weakness of the business will be lack of enough finances to pay employees staffs that are
experience in various fields to provide quality goods and services. being growing business it
requires electronic technology to run work and operate efficiently.

2.3.1 SWOT AMALYSIS

Name of the Strength Weakness Opportunity Threats
business
Kena’s Fast Security Expensive Employment Demand
Food Outlet Opportunity supply training weather
Skills
Unique
Resources
Other History Resources Services offered Shortage of raw
competitors like Equipment’s materials
hotel Customers
Turn over

2.4 ADVERTISING AND SALES PROMOTION

Kena’s Fast Food Outlet will have both advertising and sole promotion

2.4.1 Advertising
Kena’s Fast Food Outlet will do advertisement using posting posters along popular busy street.
Use of social media advertising like Facebook.

2.4.2 Promotion
The proposed business will have the following networks to promote and expand the business
creating more branches sharing experience with other stakeholders and email.

2.5 PRICING STRATEGY

The charges of the services will be affordable and stable to all customers, promotion will be
offered for three days after every month. The products offered to customers will be of good
quality and quantity to meet customers need.

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2.6 SALES TACTICS
For sales to increase their will be utilize distribute agencies will offer after prepared.
The owner will offer discount to customers to promote the business.
2.7 DISTRIBUTION STRATEGY
The owner of the business will involve direct and both indirect distribution channel of food and
drinks.
The food and drinks will reach to customers through door-to-door delivery after order made.

2.8 BUSINESS LAYOUT

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 CHAPTER THREE

3.0 ORGANIZATIONAL STRUCTURE

The business will be managed by the managing director who will be the owner of the
business. Assistant manager, Accountant, Cashier, head waiters, waitress and security officer.

3.1 ORGANIZATIONAL STRUCTURE.

Manager

Assistant Manager

Accountant Cashier

Head Waitress
waiter

Security Officer
Cleaner

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 Tittle Qualifications Duties/Responsibilities
Manager • Hiring and train the staff to gulp them
with knowledge
Assistant • Should be artisan graduate in food • To control and coordinate all the activities
manager and beverage when managers is a way from duty
• Should have experience and well
organized

Accountant • Should be bonded with Christian • Responsible for keeping financial records
values and good conduct and bide
with the regulation governing the
business
• Should be artisan graduate in
accountants.

Cashier • Must have good communication • Receiving payment by cash, cheque &
skills credit card.
Head • Must be a Kenyan citizen by • Supervising a number of waitress
waiter Nationalism
Waitress • Good communication skills • Welcoming of guest and serving them
with the required food
Security • Have experience of at least two • To maintain the order in the establishment
officer years

3.2 RECRUITMENT TRAINING AND PROMOTION

The proposed business will ensure that it recruit the training staff basing on their qualification
and experience.

3.2.1 Training
The business will be training workers as per new technology to meet the demand of the new
market requirement and become more competitor to
needs.

3.2.2 Promotion
Kena’s Fast Food Outlet will have promotion to the employees in order to offer quality
services as a recruit retain customer and expand the business, creation of employment the
business will expand and have more branches and advertising using posters.

3.3 REMUNERATION AND INCENTIVES

The proposed business will have both remuneration and incentives.

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3.3.1 Remuneration
Payment will be offered according to work level and how productivity and dedication he/she
works in the business.

3.3.2 Incentives
Workers should be provided with cash money and valuable products and hardworking
employees. Should be rewarded at the end of every year special gift should be awarded as a
way of appreciation.

No. Tittle No of Basic House Travelling Sitting Total

position salary allowance allowance allowance
1 Manager 1 40,000 9,000 4,000 - 53,000
2 Assistant Manager 1 35,000 7,000 4,000 - 45,000
3 Accountant 1 30,000 5,000 - - 35,000
4 Cashier 1 20,000 3,000 - - 23,000
5 Head waiter 1 15,000 3,000 - - 18,000
6 Waiter 2 10,000 2,000 - - 12,000
7 Security Officer 2 9,000 1,000 - - 10,000
8 Cleaner 1 8,000 1,000 - - 9,000
9 Chef 2 18,000 - - 36,000
Total 242,000

3.4 LICENCE PERMIT AND LAW

The enterprise will have both licence permit and law to run the business.

3.4.1 Licences
The business operator should obtain a licenses and should be renewed annually as stipulated
by the county laws. The most common type of licence used in Kena’s Fast Food Outlet
include liquor license which is obtained from local authority. Restaurant license should be
obtained to run the business smoothly.

3.4.2 Permit
Is a business license one need a permit before running a business ie one need license when
serving alcohol. Rules varies as per municipality as one should have certificate of food
handlers in order to operate.
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3.4.3 Law
The business will be led by laws issued by the county municipality to avoid the risk of
closing down the business due to failure to follow the rules like health and safety rules.

3.5 SUPPORT SERVICE

To facilitate growth and expansion of the business the firm would borrow loans from banks.
The business will also obtain help and advice from other big restaurant to obtain new skills
and get idea.

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 CHAPTER FOUR

4.0 OPERATIONAL PLAN

The business will ensure that it has tools and equipment’s to run the business successfully.
The proposed business will have key objectives and goals on organizations and how to reach
them.

4.1 OPERATIONAL FAILURE AND CAPACITY

The proposed business focus on materials equipment tools and machinery so as to do work
efficiently. It requires small equipment like bools, large equipment and mechanical
equipment’s to make the operation flow easily and make work easier.

Tools Machine and Equipment.

No Equipment Capacity Quantity Cost unit Total cost Suppliers

A Machine
Micro wave Small 1 30,000 30,000 Gift matt
Dish washer Medium 1 20,000 20,000 Khetias
Refrigerator Medium 2 40,000 80,000 Khetias
Oven Medium 1 35,000 35,000 Naivas
Cooker Small 2 12,000 26,000 Naivas
Mixer Small 2 15,000 15,000 Shivling
Silcer Medium 1 12,000 12,000 Shivling
Total 218,000
B Tool 3 Equipment
Plates Medium 50 100 5,000 Gift matt
Measuring equipment Medium 2 100 200 Gift matt
Deep fat frier Medium 1 500 500 Gift matt
Cups Medium 50 50 2,500 Gift matt
Strainer Medium 1 80 80 Gift matt
Whisk Large 12 120 240 Naivas
Knives Medium 3 30 90 Naivas
Sufuria Medium 10 200 2,000 Naivas
Chopping board Medium 4 50 200 Naivas
Total 10,810

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 C Furniture fixtures and
fitting
Carbinet Medium 5 10,000 50,000 Khetias
Desk Medium 10 3,000 30,000 Khetias
Sheives Large 8 2,000 16,000 Khetias
Tables Medium 10 3,500 35,000 Khetias
Totals 131,000

4.2 OPERATIONAL STRATEGY

The proposed business will have operational strategy to achieve its goal and run the business
smoothly. The operational strategies will base on monthly cost of raw material, monthly cost
of labour, monthly cost of over head and the total cost of operation per month.

(a) Monthly Cost of Raw Materials

The proposed business will ensure that material arrives at the right time and are of good
quality to meet customers certification.

Monthly materials Requirements

No. Items Total cost

1 Stationery 1,000
2 Sugar 6,600
3 Potatoes 10,000
4 Pineapples 8,500
5 Oranges 1,500
6 Mangoes 4,000
7 Oil 15,000
8 Magazine 500
9 Salt 200
10 Wheat flour 5,000
Total 49,800

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 (b) Monthly Cost of Labour

The proposed business will have labour cost which will ensure payment of staffs to maintain
good relationship with the working staff.

No. Job tittle Total salary

1 Manager 53,000
2 Assistant manager 46,000
3 Accountant 35,000
4 Cashier 23,000
5 Head waiter 18,000
6 Waitress 12,000
7 Chefs 36,000
8 Cleaner 9,000
9 Security officer 10,000
Total 242,000

(c) Monthly Overhead Cost

The proposed business will have the following overhead cost

No Items Total Cost

1 Rent 20,000
2 Labour 206,000
3 Transport 2,000
4 Advertisement 1,500
5 Raw materials 49,800
6 Insurance 6,000
7 Electricals & water bills 2,000
8 Mislcenious 1,500
Total 270,000

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 (d) Total Cost of Operation per Month.

The proposed enterprise will have a total cost of operation per month which includes cost of
raw materials, cost of labour, cost of overhead.

No. Items Total cost

1 Cost of raw materails 49,800
2 Cost of labour 242,000
3 Cost of overhead 270,000
Total 562,600

4.3 OPERATIONAL PROCESS

The proposed enterprises will have operational process to run the business and meet
customers certification.

Reasons for purchasing Equipment’s

• To make work easier

• To have good quality products in order to meet customers certification.

Reason for purchasing raw materials

• To have good quality products

• To have the correct quantity of products
• The business would have to achieve these through the following process.

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4.4 OPERATIONAL PROCESS DIAGRAM.

Purchase - The proposed business will ensure that goods are purchased at the right time of
right quality and quantity

Receiving - The proposed business will ensure that they count and weigh goods and
checking that the quantity and size of items match the order one.

Storage - The proposed business will have stock record so as to keep records

Issuing - The proposed business will require to have weighted average price, standard price
and selling price

Prepare - The proposed business will produce products based on customers expectations
to increase production efficiently

Sell - The business will have to keep control the number of covers sold

Monitor - They will ensure they monitor all the activities that take place so as to make the
business successful

4.4 GOVERNMENT REGULATION AFFECTING OPERATIONAL PROCESS

The proposed business will have government regulations which affect operational process.

Income tax - This is the tax that is direct imposed on income derived from business
employment and rent.

Work permit - The business will have permit so as to identify control risk in hazardous and
prevent accident.

PAYE - This is a method of collecting tax from individuals in gainful employment.

NHIF - National Health Insurance Fund will affect staff where they will be deducted from
salaries.

Licence - The enterprise will be required to register a business licence inorder to run the
business smoothly.

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4.5 GOVERNEMNT LAWS
The proposed business will ensure that they follow the government laws.

License - The proposed business will ensure that they register a business which shows
ability to perform their services and products.

Fire fighting equipment - The proposed business will ensure that it has more fir fighting
equipment’s incase of fire

Solid waste management - The proposed business will ensure that the government has put
on a place for keeping waste for safety environment.

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 CHAPTER FIVE

FINANCIAL PLAN

5.0 INTRODUCTION
It entails pre operational cost estimation of working capital, preparation of cash flow projection,
preparation of preform income, statement of balance sheet, calculation of break even point,
calculation of profitability ration, desired financing and proposed capitalization

5.1 PRE – OPERATIONAL COST

Items Costs

Machinery, tools and equipment 200,000

Renovation of business enterprise 400,000

Market research 239,210

Licensing requipment 55,000

Installation 20,200

Legal fees 8,000

Total 922,410

5.2 ESTIMATION OF WORKING CAPITAL

KENA’S FAST FOOD OUTLET
Particulars Years 1 Year 2

Current stock (kes) (Kes)

Stock of goods 150,000 120,000

Cash at hand 95000 90000

Debtors 50,000 30,000

Cash at bank 140,000 160,000

Prepaid rent 33,000 18,500

Total current assets 46800 418,500

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Current liabilities

Loans 90,000 75000

Bank overdraft 105000 140,000

Creditors 75000 70000

Total current liabilities 270,000 285000

Working requirement (total 468000 418500

current

Assets – total liabilities 270,000 285000)

=19,000 133,500

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 5.3 PREPARATION OF CASH FLOW PROJECTION
KENA’S FAST FOOD OUTLET
FOR THE YEAR STARTING 1ST JANUARY 2024
Item JAN FEB MAR APR MAY JUNE JULY AUG SEP OCT NOV TOTAL DEC
description

KSH Ksh Ksh ksh Ksh Ksh Ksh ksh Ksh Ksh Ksh ksh KSH

Bal c/f 24,500 26,500 150,800 174,800 193,300 167,500 16,500 310,800 47,200 26,700 17,200

Cash sale 100,000 110,000 150,000 165,000 160,000 150,00 175,000 155,000 195,000 205,00 200,000 190,000 200,000

Debtors 55,000 30,000 17000 8000 4000 5500 - - 8900 5000 8000 140000 70000

Total 155000 164500 193500 323800 338800 348800 342500 320000 235700 257200 234700 287200

Cash flow

Expenses

Water bill 6000 5500 7000 7500 8000 8000 8500 9000 9500 10,500 9500 89500 6000

Insurance 5500 - 4000 10500 12000 17000 - 6500 7000 5000 7000 82000 5000

Salaries 7000 8000 9500 25000 18000 23000 24000 21000 - 28000 19000 209500 19000

Bad debts 8000 - 7500 10,000 - 6500 7000 6200 8000 4000 12000 61000 5000

Transportation 4000 4500 4700 6000 7500 6800 8000 7000 4000 3000 5000 63500 5000

Total cashflow 130500 138000 42700 149000 145500 181300 177500 288200 188508 230500 217500 187500

Net cash flow 24500 26500 150800 174800 193300 167500 165000 31800 47200 26700 17200 187500

Accumulated cash 24500 26500 150800 174800 193300 167500 165000 31800 47200 26700 17200 99700

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5.4 PREPARATION OF PREFORM INCOME
KENA’S FAST FOOD OUTLET
Particulars 31/12/24 31/12/25 31/12/26
Sales 22,000 300,000 280,000

Less purchase 50,000 110,000 90,000

Less expenses

Wages 4000 5000 3000

Rent 1200 2000 2000

Water bill 1500 2000 1800

Telephone 2000 1900 3000

Bad debts 950 1000 -

General expenses 10,000 8000 12,000

Furniture repairs 11,000 11500 12,000

Total expenses 28,650 31400 42000

Net profit (before tax 131,350 148,100 138000

Less provision for 103350 116700 96080

before tax (10%)

Net profit after tax 103350 116700 96000

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5.5 STATEMENT OF BALANCE SHEET
KENA’S FAST FOOD OUTLET
Description As of opening As of ending
Assets 1/1/23 31/12/24

Current assets Ksh Ksh

Cash at bank 200,000 300,000

Debtors 90,000 50,000

Stock 8000 160,000

Total current assets 478000 700,000

Fixed assets

Vehicles 300,000 400,000

Building 170,000 210,000

Furniture 120,000 140,000

Total fixed assets 590,000 750,000

Total assets 1,068000 1,450,000

Liabilities

Creditors 180,000 200,000

Loan 160,000 220,000

Capital 380,000 480,000

Total liabilities 720,000 900,000

Assumptions

Creditors are to be in second year

Stocks are to be in second year

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 5.6 CALCULATION OF BREAK-EVEN POINT
1. OPERATING EXPENSES
Fixed costs (itemize) Amount (ksh)
Water 3000
Insurance 9000
Electricity 10,000
Transportation 12,000
Total 142,000
Calculate Of Break-Even Point

2. Calculate Total Contribution Margin (TCM)

TCM = Sales – Total Variable Cost

= 220 – 142000

= 78000

3. Calculate Contribution Margin %

Tem % = Contribution Margin / Sales X 100

= 78000 / 220000 x 100

= 35%

4. Determination Of Total cost operating for 1 year

Total Fixed Costs = 34000
5. Calculate Break-Even Level of Sales In Shilling
Breakeven Level = Fixed Cost/ Contribution Margin Percentage
= 34000x35/100
= 11900

6. Calculate break -even level in units

Be (units) = contribution margin / fixed costs

= 78000/34000

= 2.29 units

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5.7 CALCULATION OF PROFITABILITY RATIO
Profitability rations

1. Calculate Gross Profit Percent

= Gross Profit / Sales x100
= 70,000/220,000 x 100
= 31.8 %

Calculate Return of Equity

= Net Profit / Capital X 100

= 60,000 / 220,000 x 100
= 27.3%

Calculate Return on Investment

= Net Profit (after tax) Total Invested Capital X100

= 103350/ 700000x100
= 14.8%

5.8 DESIRED FINANCING

Item Amount (ksh)

Pre- operational cost 300,000

Working capital 700,000

Non – current assets 100,000

Total desired financing 1,100 000

5.9 PROPOSED CAPITALIZATION

Item Amount (ksh)

Owners contribution (Equity) 350,000

Borrowed loans 300,000

Family 272,410

Total proposed capitalization 922,410

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APPENDINCES

APPENDIX 1

Location of business
Kericho Teacher’s Training
College

Kericho Nakuru

Kena’s Fast Food

Outlet

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APPENDIX II

ORGANIZATION STRUCTURE
Manager

Assistant Manager

Accountant Cashier

Head Waitress
waiter

Security Officer
Cleaner

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APPENDIX III

BUSINESS LAYOUT

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