P & L PAINTING
ENTERPRISE
P.O BOX 55-
4000,OYUGI
S.
DOCUMENT NAME: BUSINESS PLAN
COURSECODE: 1704/2
NAME OF PRESENTER: OKINYI HANNINGTONE OBUYA
INDEXNO: 7411050202
PRESENTED TO: THE KENYA NATIONAL EXAMINATION COUNCIL
(KNEC) IN PARTIAL FULFILMENT FOR THE AWARD OF CERTIFICATE
IN BUILDING TECHNOLOGY.
SUPERVISED BY: MELVIN NANJALA
DATE OF PRESENTATION: MARCH, 2023
CENTRE NAME: THE KISUMU NATIONAL POLYTECHNIC
P.OBOX143-
40100KISUMU
DECLARATION
I declare that the project submitted here is my original work that has never been presented anywhere
therefore no part of this research should be produced without my concern.
Name of student: OKINYI HANNINGTONE OBUYA
Sign:.................
Date:.................
Supervisor’s Approval: MELVIN NANJALA
This project was submitted with the approval of the project
supervisor. Supervisor’s signature:..................
Date:............................
i
DEDICATION
I would wish to dedicate this project to my parents who encouraged me during the sleepless nights
and difficult moments. They even supported me in paying school fees to finance my studies, their
advices and their ideas helped me reach this far.
ii
ACKNOWLEDGEMENT
I would like to express my sincere gratitude to God for helping me successfully undergo my
businessplan. I acknowledge deep sense of gratitude to my project supervisor Madam Melvin
Nanjala for his time and dedication to enable me to come up with this project to its completion. I also
give thanks to my parents and friends for their support and encouragement.
iii
EXECUTIVE SUMMARY
The business name will be P & L ENTERPRISE and it will be located along Kisumu Kisii road at
Oyugis round about. It will deal with selling of paints and varnishes. Business would like to offer
quality products for large population of Oyugis to enhance beautification of environment and the
business will use social media, billboards to enhance its’s future growth. The business will have large
market and less competition due to pricing of our products and large number of offers. Sales will be
done in our large wholesale shop by use of business cards and websites. This business will be doing
free delivery to our customers depending on the quantity of products bought. The business will be led
by General Manager who will employ other staffs such as skilled personnel who will be helping in
mixing of the paints and unskilled personnel for the control of stock. Payments of the staffs will be
based on their job groups from most skilled to unskilled. Business will require the trading license and
certificate of registration from the Ministry of Environment.The business will focus on marketing and
beautification to improve its growth.
iv
TABLE OF CONTENTS
DECLARATION ................................................................................................................................... i
DEDICATION ...................................................................................................................................... ii
ACKNOWLEDGEMENT ................................................................................................................... iii
EXECUTIVE SUMMARY.................................................................................................................. iv
TABLEOFCONTENTS ........................................................................................................................ v
CHAPTERONE .................................................................................................................................... 1
1.0 BUSINESSDESCRIPTION ............................................................................................................ 1
1.1 NAME OF THEBUSINESS ........................................................................................................ 1
1.2 THE INDUSTRY ......................................................................................................................... 1
1.3 PRODUCT/SERVICES ............................................................................................................... 1
1.4 BUSINESS GOAL/OBJECTIVES .............................................................................................. 1
1.5 JUSTIFICATION OF BUSINESS OPPORTUNITY .................................................................. 1
1.6 ENTRY AND GROWTH STRATEGY ...................................................................................... 2
CHAPTER TWO .................................................................................................................................. 3
2.0 MARKETING PLAN ..................................................................................................................... 3
2.1 POTENTIAL CUSTOMERS ....................................................................................................... 3
2.2 COMPETITION ........................................................................................................................... 3
2.3 MARKET SIZE AND SHARE .................................................................................................... 3
2.4 PRICING STRATEGY ................................................................................................................ 3
2.5 SALE STATISTICS..................................................................................................................... 3
2.6 ADVERTISING AND PROMOTION STRATEGY ................................................................... 4
2.7 DISTRIBUTION STRATEGY .................................................................................................... 4
v
2.8 CUSTOMER SERVICES ............................................................................................................ 4
CHAPTER THREE............................................................................................................................... 5
3.0 ORGANIZATION AND MANAGEMENT PLAN ....................................................................... 5
3.1 ORGANIZATION STRUCTURE ............................................................................................... 5
3.2 KEY MANAGEMENT PERSONNEL........................................................................................ 5
3.3 OTHER PERSONNEL(SUPPORT STAFF) ............................................................................... 6
3.4 RECRUITMENT,TRAINING AND PROMOTION................................................................... 7
3.5 REMUNERATION AND INCENTIVES.................................................................................... 7
3.6 LICENSING / PERMIT REQUIREMENT ................................................................................. 7
CHAPTER FOUR ................................................................................................................................. 8
4.0 PRODUCTION AND OPERATIONAL PLAN ............................................................................. 8
4.1 PRODUCTION FACILITIES AND CAPACITY ....................................................................... 8
4.2 PRODUCTS/SERVICES DESIGN AND DEVELOPMENT ..................................................... 8
4.3 MONTHLY MATERIAL REQUIREMENT .............................................................................. 8
4.4 PRODUCTION PROCESS IN DETAILS ................................................................................... 8
4.5 QUALITY CONTROL ................................................................................................................ 8
CHAPTER FIVE ................................................................................................................................... 9
5.1 PRE-OPERATIONAL COSTS(Exhibit1) ................................................................................... 9
5.2 WORKING CAPITAL(Exhibit2) ................................................................................................ 9
5.3 CASH FLOW STATEMENT(Exhibit3) .................................................................................... 10
5.3.1 PROJECTED CASH FLOW STATEMENT FOR THE YEAR ENDED 31stDEC.2022... 10
5.4 INCOME STATEMENT(Exhibit4) ........................................................................................... 12
5.4.1 PRO-FORMA INCOME STATEMENT FOR THE YEAR ENDING
_31stDECEMBER2022 ........................................................................................................ 12
5.5 BALANCE SHEET (Exhibit5) .................................................................................................. 13
vi
5.5.1 PRO-FORMA BALANCE SHEET AS AT 15TH FEBRUARY 2023................................. 13
5.6 BREAK-EVEN LEVEL(Exhibit6) ............................................................................................ 14
5.7 PROFITABILITY RATIO’S ..................................................................................................... 15
5.8 DESIRED FINANCING(Exhibit7) ............................................................................................ 16
5.9 PROPOSED CAPITALIZATION(Exhibit8) ............................................................................. 16
5.10 POTENTIAL RISKS(Exhibit9) .............................................................................................. 16
vii
CHAPTER ONE
1.0 BUSINESS DESCRIPTION
1.1 NAME OF THE BUSINESS
The business is P and L enterprise located along Kisumu Kisii road at Oyugis roundabout.The
formal address of the business is P.O. Box 55-4000 Oyugis. The business will be owned by
individual making it a sole proprietorship form of a business.
1.2 THE INDUSTRY
P and L Enterprise with be a large wholesale that will cover large part of Oyugis and Homabay
County.P and L Enterprises will deal in the sale of paints and vanishes at affordable price to the
reliable customers.
1.3 PRODUCT/SERVICES
P and L Enterprise will produce paints and vanishes for large population of Oyugis and
Homabay county as a whole. We will go an extra mile of selling painting materials like sand
paper,brushes, and provide transport services to our customers who come from far. Our
customers who will stock in large quantities will also be given discounts thus giving our rivals
hard time in doing business.
1.4 BUSINESS GOAL/OBJECTIVES
The core objective of P and L painting enterprise is to offer quality and quantity paints and
vanishes to the people.The short term aims will be to improve the performance of community
when dealing with paints and vanishes.
1.5 JUSTIFICATION OF BUSINESS OPPORTUNITY
I was motivated to start up this business through a way of earning a living in the society but
lately I got interested to reduce the cost of transportation to our customers that came from
far.Many customers’ advice and motivation will favour the success of the enterprise.
1
1.6 ENTRY AND GROWTH STRATEGY
Giving our customers transport allowances will help us attract large numbers of customers
particularly far away from where the business enterprise is located and this may make us
to expand our business branches.
Thebusiness will be led by General manager,managing director will employ other personnel
such as skilled laborers for mixing of the paints and unskilled laborers for control of stock.
Payment of these staffs will be based on their job group from the most skilled to unskilled.
Business will source its trading license and certificate of registration from the ministry of
environment.The business will focus on marketing and beautification to improve its growth.
2
CHAPTER TWO
2.0 MARKETING PLAN
2.1 POTENTIAL CUSTOMERS
P & L Enterprises will mainly target large number of customers from clients who have managed
to build large storey houses and estates. The Enterprise also depend on the Mokwa Maize
Millers factory which also promote me on buying paints in large amount
2.2 COMPETITION
The business Enterprises from what I observed will face few competitions from firms since it
will offer transport allowance and discounts to his customers. By doing this will make our
enterprise reliable and vibrant than other competitors.
2.3 MARKET SIZE AND SHARE
We cover the market size of above(75-85%)of the total population of market size in Oyugis and
Homabay County. I expect a total of 100% market size after a few month of investigating
problems that my customers still face and looking for solutions to solve them.
2.4 PRICING STRATEGY
We do this by first setting down and determining the estimate pricing strategy where we identify
the business pricing reactions.
2.5 SALE TACTICS
At P & L Enterprises the sales will be done in the shops by used business cards and website
creating more customers for our products
3
2.6 ADVERTISING AND PROMOTION STRATEGY
The enterprise will advertise its products and services through printing poster sand posting it all
over the area. Any customers that will be buy paints in bulk will get good discount and this
effectiveness can be measured when customers turn out in large numbers to purchase the
products.
2.7 DISTRIBUTION STRATEGY
We will distribute our products to our customers through our channels and also by having
partners with other companies offering the same products and services.In the market leading us
to cover a wide range of customers.
2.8 CUSTOMER SERVICES
After sales activities we ensure that our product works well for our customers by making sure we
get feedback from our customers. We also advice our customers to market and bring us more
customers through great customer service.
4
CHAPTER THREE
3.0 ORGANIZATION AND MANAGEMENT PLAN
3.1 ORGANIZATION STRUCTURE
P & L enterprise will be headed by general manager who will oversee the activities of the firm
Generalmanager
Stock controller Sales or
marketingma
nager
Salesperson
DriverP
ainters
3.2 KEY MANAGEMENT
PESONNEL1.General manager
Qualifications
Must hold a degree in marketing
Must have sales and management experience
2. Sales marketing manager
Qualifications
Good communication skills
Should be persuasive
Duties
Ensure that sales of the products in a business are represented in the market
5
3. Stock controller
Shouldbe of age 30 and above.
Must be a literate person.
Duties
Maintain the reports of purchased and pricing.
Overseeing inventory audits.
4.Sales Persons
Must have business,marketing skills related field.
Must have atleast 2 years of sales experience.
Must have excellent interpersonal skills.
3.3 OTHER PERSONNEL(SUPPORT STAFF)
The proposed business would enhance employment to other personnel such as painters,drivers
and distributers.
1. Painters
Qualifications
Must have at least 3 years experience
Must have a good conduct.
Duties
Mixing and painting of paints
2. Driver
Qualifications
Must have valid driving license
At least 2-years experience
6
Duties
Distribution of goods to the customers
3.4 RECRUITMENT,TRAINNING AND PROMOTION
The business will employ different methods of recruitment of staffs i.e through the use of oral
interview,written interview.
The business will have regular training to the staffs and encouraging staffs to go for further
studies.
Basis of promotion will depend on the experience, level of education and personal attributes to
the company.
3.5 REMUNERATION AND INCENTIVES
Theenterprisewillusedifferentwaystopayandawardstheirworkersi.ethroughjobgroups.
JOB GROUP A B C D E
CASH 80,000 50,000 35,000 25,000 15,000
POSITION General Salesand StockCon Painters SalesPe
manager Marketing troller Driver rsons
manager
PROGRESSIONS 75% 10% 8% 5% 2%
3.6 LICENSING / PERMIT REQUIREMENT
The P & L enterprise will process all the legal requirements of documents before commencing
its operations.The following documents must be obtained and renewed when necessary:
i. Trading license
ii. Business permit
iii. KRA pin
iv. NEMA
7
CHAPTER FOUR
4.0 PRODUCTION AND OPERATIONAL PLAN
4.1 PRODUCTION FACILITIES AND CAPACITY
The P & L enterprise will need the following plant,equipment and tools to start the operations
i.e.vehicles,paint mixer,fork lift.
4.2 PRODUCTS/SERVICES DESIGN AND DEVELOPMENT
In our business, we depend on the products brand which varies in differences. This includes Liz
web design,depot.We offer paints which have a good spreading power,should form
durable,tough and resistant to wear filmon drying.
4.3 MONTHLY MATERIAL REQUIREMENT
We use raw materials like pigments (titanium dioxide, zinc oxide), solvents (mineral
turpentine)and resins and additives.We will be working with 5 professional technicians to
supervise and the skilled labourers who will be doing the packaging and selling or delivery of our
products.
4.4 PRODUCTION PROCESS IN DETAILS
The raw materials are sent to the laboratory.Weighing of the raw materials,dispersion of the raw
materials, pre-mixing, grinding the pigments, fineness inspection, colour inspection, stability
inspection and filling is done then containers.
4.5 QUALITY CONTROL
We will be using each and every raw material only when necessary and regular check up on
themixing machines, filling machines to be done each and every two weeks. This will ensure that
maximum out put of production and delivery of our products is done at the top.
There are gazetted compulsory standards to stop the production, import, export, use and sale of
leads containing paints in Kenya.These standards will not only control lead paints in Kenya but
8
also directly protect intelligence.
9
CHAPTER FIVE
5.1 PRE-OPERATIONAL COSTS(Exhibit1)
ITEM COST(KES)
Machinery,tools & equipment 2,500,000
Renovation of business premises 70,000
Market research 15,000
Licensing requirements 10,500
Installations 10,000
Legal fees 8,000
TOTAL COST 2613500
5.2 WORKING CAPITAL(Exhibit2)
PARTICULARS YEAR–I YEAR–II YEAR-III
Current Assets (KES) (KES) (KES)
Stock 450,000 540,000 700,000
Cash-in-hand 180,000 300,000 450,000
Cash-at-bank 150,000 200,000 140,000
Debtors 70,000 90,000 60,000
Pre-paid rent 30,000 30,000 30,000
Pre-paid insurance 180,000 180,000 180,000
Total Current Assets 1060000 1340000 1560000
Current Liabilities
Loans 70,000 200,000 150,000
Bank-overdraft 10,000 50,000 80,000
Creditors` 70,000 50,000 90,000
Bills-payable 40,000 30,000 60,000
10
Total Current Liabilities 190,000 330,000 380,000
Working Capital Requirement XXXX XXXX XXXX
(TotalC.A–Total C.L) 870000 1010000 1180000
5.3 CASH FLOW STATEMENT(Exhibit3)
5.3.1 PROJECTED CASH FLOW STATEMENT FOR THE YEAR
ENDED31stDEC.2022
PARTICULARS MONTHS
Jan. Feb. Mar April May June July Aug Sept Oct. Nov Dec
Beginning balance: 369 122 220 220 170 350 320 320 320 130 230
000 000 00 00 00 00 00 00 00 00 00
Cash-in-hand 1060 369 218 175 146 196 198 177 187 136 153 251
000 000 000 000 000 000 000 000 000 000 000 000
Accounts- 4000 100 200 700 150 120 170 160 200 700 600 500
receivable
0 00 00 0 00 00 00 00 00 0 0 0
Others 1000 600 200 150 700 500 180 160 120 250 700 180
0 0 00 00 0 0 00 00 00 00 0 00
Add: 400
Cash-sales 00
Total Cash Receipts 1110 794 258 197 168 213 233 209 219 168 166 274
000 000 000 000 000 000 000 000 000 000 000 000
Cash-payments:
Purchases 6000 400 300 700 150 800 900 700 160 200 400 700
11
00 00 00 00 00 00 00 00 00 00 00 00
Creditors 4000 600 500 400 300 150 700 600 700 150 120 800
0 00 0 0 00 00 0 0 00 00 00 00
Wages 2100 210 210 210 210 210 210 210 210 210 210 210
0 00 00 00 00 00 00 00 00 00 00 00
Rent 5000 500 500 500 500 500 500 500 500 500 500 500
0 0 0 0 0 0 0 0 0 0 0
Water 1000 100 100 100 100 100 100 100 100 100 100 100
0 00 00 00 00 00 00 00 00 00 00 00
Telephon 2000 200 200 200 200 200 200 200 200 200 200 200
e 0 0 0 0 0 0 0 0 0 0 0
Electricity 5000 500 500 500 500 500 500 500 500 500 500 500
0 0 0 0 0 0 0 0 0 0 0
Stationery 4000 400 400 400 400 400 400 400 400 400 400 400
0 00 00 00 00 00 00 00 00 00 00 00
Interest- 5000 500 500 500 500 500 500 500 500 500 500 500
on-loan 0 0 0 0 0 0 0 0 0 0 0
Advertisi 7000 700 700 700 700 700 700 700 700 700 700 700
ng 0 0 0 0 0 0 0 0 0 0 0
Sundries 6000 600 600 600 600 600 600 600 600 600 600 600
0 0 0 0 0 0 0 0 0 0 0
Total 7410 201 136 175 146 196 198 177 187 136 153 251
Cash-payments 00 000 000 000 000 000 000 000 000 000 000 000
Ending 3690 593 122 220 220 170 350 320 320 320 130 230
Cash-balance 00 000 000 00 00 00 00 00 00 00 00 00
12
5.4 INCOME STATEMENT(Exhibit4)
5.4.1 PRO-FORMA INCOME STATEMENT FOR THE YEAR
ENDING_31stDECEMBER2021
YEAR
PARTICULARS
31/12/2021
(KES)
Sales 2000000
Less:Purchases(Cost ofgoodssold) 40000
Gross Profit 2040000
Less:Expenses:
Wages 201000
Rent 170000
Water 120000
Telephone 15000
Electricity 13000
Advertising 20000
Stationery 15000
Postage 4000
Transport 40000
Depreciation 15000
Loan plus interest 400000
Repairs/maintenance 10000
Sundries 70000
Total Expenses 1093000
Net Profit(Beforetax) 947000
Less:Provision for taxation(10%) XXX
Net Profit(Aftertax) XXX
13
5.5 BALANCE SHEET(Exhibit5)
5.5.1 PRO-FORMA BALANCE SHEET AS AT 31stDECEMBER2021
ASSETS
Current Assets: COST(KES)
Cash 2000000
Debtors 700000
Stock 400000
Total Current Assets 3100000
Non-CurrentAssets:
Machinery and equipment(cost) 600000
Accumulated depreciation 40000
Vehicles(cost) 10000000
Accumulated depreciation 40000
Furniture and fittings(cost) 10000
Accumulated depreciation 20000
Total Non-CurrentAssets 10710000
TOTALASSETS 13810000
LIABILITIES
Current Liabilities:
Creditors 200000
Other liabilities(specify) 10000
14
Total Current Liabilities 210000
Long-term liabilities:
Bank loan 1500000
Others(specify) 17000
Owner’sEquity 3000000
TOTAL LIABILITIES AND EQUITY 4727000
5.6 BREAK-EVEN LEVEL(Exhibit6)
I. Operating Expenses
FIXEDCOSTS AMOUNT(KES)
● XX
● XX
● XX
● XX
● XX
● XX
● XX
TOTAL XXX
VARIABLE COSTS AMOUNT(KES)
● XX
● XX
● XX
15
● XX
● XX
● XX
● XX
● XX
TOTAL XXX
Calculate Total Contribution Margin (TCM):TCM = Sales – Total Variable Cost
Calculate Contribution Margin Percentage:TCM%=Contribution Margin/Salesx100
Determine theTotal Fixed Costs(i.e.operating expenses for year-I)Total Fixed Costs=KES.
Calculate Break-even level of sales in shillings:
Break-even level=Fixed Cost/Contribution Margin Percentage VI Calculate Break-even level in
units:
B.E(Units)=Contribution Margin/Fixed Cost
5.7 PROFITABILITY RATIO’S
I Calculate Gross Profit Percentage:
Gross Profit Percentage=Gross Profit/Salesx100 II Calculate Return-on-Equity:
Return-on-Equity=Net Profit/Owner’s Equityx100 III Calculate Return-on-
Investment:Return-on-Investment=Net Profit aftertax/Total Invested Capital x 100
16
5.8 DESIRED FINANCING(Exhibit7)
ITEM AMOUNT(KES)
Pre-operational costs 109100
Working-capital 187200
Non-Current assets 45000
Total Desired Financing 341300
5.9 PROPOSED CAPITALIZATION(Exhibit8)
ITEM AMOUNT(KES)
Owner’s Contribution(Equity) 800000
Borrowed Funds(Loan) 200000
Total 1000000
5.10 POTENTIAL RISKS(Exhibit9)
NATURE/TYPE OF RISK CONTINGENCY MEASURES
●
17
