BUSINESS PLAN FOR SHARMBYN BAKERIES
i
Table of content
BUSINESS PLAN FOR SHARMBYN BAKERIES ............................................ i
DECLARATION ................................................ Error! Bookmark not defined.
ACKNOWLEDGEMENT .................................. Error! Bookmark not defined.
DEDICATION .................................................... Error! Bookmark not defined.
INTRODUCTION ............................................................................................................................. iii
EXECUTIVE SUMMARY ............................................................................................................... iii
CHAPTER ONE ................................................................................................................................. 1
BACKGROUND INFORMATION ................................................................................................... 1
CHAPTER TWO ................................................................................................................................ 4
2.0 MARKETING PLAN ................................................................................................................... 4
CHAPTER 3 ....................................................................................................................................... 7
HUMAN RESOURCE AND ORGANIZATIONAL MANAGEMENT PLAN ................................ 7
CHAPTER 4 ..................................................................................................................................... 13
OPERATIONAL PLANNING ......................................................................................................... 13
4.1 Production design and development ........................................................................................... 13
4.2 Technology ................................................................................................................................. 13
4.3 Production tools and Equipment ................................................................................................. 13
CHAPTER 5 ..................................................................................................................................... 16
FINANCIAL PLANNING ................................................................................................................ 16
5.2 Pre-operational cost .................................................................................................................... 16
ii
INTRODUCTION
EXECUTIVE SUMMARY
1 Business description
The name of the proposed business will be SHARMBYN BAKERIES, It will be a joint
ownership company that will have us the founders as the board of directors and caleb
Wanjiru as the manager. It will be in Juja town. The business will be dealing with baking and
distributing baked products.
2 Marketing plan
SHARMBYN BAKERIES will reach potential customers through segmenting the product
according to customer purchasing power. Price will be fair to attract more customers and
reach mass market and earn a profit. Aggressive promotion will be done to create awareness
of the firm through advertising and other attractive ways of selling tactics. Description
strategy will be from manufacture to wholesalers or retailers and finally to customers.
3 Organizational plan
SHARMBYN BAKERIES will require few employees. Recruitment and training will be
done using internal and external strategy. The total monthly salary of employees will range
between 5,000 to 20,000. The license and permits will be Municipal Council within the town
at Ksh 7.500 annually.
4 Production / Operational plan
SHARMBYN BAKERIES will acquire necessary facilities and machine to ensure that is
operating smoothly. The design layout has been designed to ensure smooth production and
maintainance has been budgeted on 5000 monthly from a local repairs company.
5 Financial plan
HOPE’S COMPUTER ENTERPRISE will require a capital of 1,000,000 for a start and to
keep it running efficiently for the financial year. The capital will then be broken-down as
shown
Amount raised by founders
ksh 700,000
Loan from Co-operative
ksh 300,000
Total
Ksh 1,000,000
The operational cost is interpreted to be kshs 259,150
Capital for start will be ksh 1,000,000 the expected profit for the business in the first year is
ksh 1,200,000
The overall assessment feasibility of the anticipated to be good as per the plans lay down by
the management.
iii
CHAPTER ONE
BACKGROUND INFORMATION
1.1 Introduction
We all have dreams of being successful and enjoying the rewards that success brings.
Whatever our dreams are, the business plan can help us translate those dreams into reality and
propose a workable plan. As a result our business plan helps us to market the right choice of
the kind of business we would like to invest in and maintain its operation effectively. Bakery
enterprise is a sector that requires inputs, innovative skills and entrepreneurial skills in order
to realize output and maximize the profit.
1.2 Business Description
The proposed name of the bakery will be SHARMBYN BAKERIES. This enterprise name
was proposed since it is short, clear and easy to memorize. The owners and founders of
Sharbyn Bakeries will be Caleb Njiru, Bynum Sharon, Caroline Mbaire, Peris Mwangi,
Simondo Faith and Ogutu Sheillah. The above founders are students at Jomo Kenyatta
University of Technology and Agriculture, main campus, pursuing degree in Innovation
Technology Management. We intend to start our own bakery business since a majority of us
have passion in baking hence can use our innovative skills to come up with new flavors and
designs for our baked products. The aim of our business will be to bake cakes, cookies, bread
and scones and do distribution. We ought to start our business with I ought to business a
capital of 1000,000 which will be contributed with the following percentages.
Contributed.
1. Caleb Njiru
2. Bynum Sharon
3. Caroline Mbaire
4. Peris Mwangi
Amount.
130,000
120,000
100,000
130,000
Percentage
13%
12%
10%
13%
5. Simondo Faith
6. Ogutu Sheillah
110,000
110,000
11%
11%
7. Loan
300,000
30%
1.3 Business Name and Location
The name of the business is Sharmbyn bakeries. The name was derived from the acronym of
the initial names of the founders. The word ‘Shar ‘ was derived fromthe names Sharon,
Sheila and Simondo. The word ‘mbyn’ was derived from the names Mbire, Mwangi , Niru
and Bynum.
1
Our business will be located around Jomo Kenyatta University of Technology and
Agriculture since most of our targeted customers reside around the school. Our choice of
location was because we mainly targeted students who take bread, scones and cakes for
breakfast or as snacks and this location will be easily accessible by them.
1.4 Industry
The business is small but we have hope that with the coming times it will expand its niche.
Technology used will be capital intensive. The industry will use modern means of technology
i.e. computers, modern ovens that use electricity, mixers, baker racks used to prepare multiple
batches of dough for baking, proof boxes for storage of dough inside a rise. Bakery racks that
store baked good during production. The use of computers for keeping records of clients’
properties will also be highly embraced.
General Level of sales of profitability will likely to be high since customers will acquire
baked products more often. This will contribute towards developing high quality products
necessary for industrial growth. It will have number of employees.
There are various advantages and disadvantages.
Advantages
•
•
•
Low staff needed since most of the work will be done by machine.
There is high profit earned since the products are of high quality.
Low level of competition since in the whole town we have few bakers.
Disadvantages
•
•
•
•
It has to be licensed.
It needs qualified personnel.
It needs time management.
It is very costly and risky.
1.5 The Products and Services
The products i.e. bread and cakes will be sold at fair prices that will be pocket friendly. The
cakes will have different shapes, star shaped, rectangle depending on the customer prefers.
The cakes will have different flavors and colors of which the customer will order according
to his/her wishes. Some of the flavors that will be available include;
•
•
•
•
•
Vanilla
Lemon
Orange
Ginger Cinnamon
Marble
2
•
•
•
•
•
•
•
•
•
Red Velvet
Black Forest
Chocolate
Strawberry
Blueberry
Fruit flavor
Passion
Carrot
Coconut
These products will be packed in a manner that will be convenient to both retail and
wholesale. The business will also provide goods at a good and higher quality.
A legal entitle will be followed to acquire the business ownership permit, the regulatory
licensed including one from municipal council.
1.6 Market Entry and Growth Strategy
Sharmbyn Bakeries Enterprise will be advertising to capture the attention of target market.
This will help create an entry awareness of the incoming enterprise. In order to gain
acceptance in the market area, we will ensure our products are affordable and easily
accessible. The forms of advertising to be used include; posting on digital platforms like
Facebook, Instagram and WhatsApp, use of word of mouth as well as using posters.
Opportunities available for growth of business will include: increase population, creation of
job opportunities and adequate supply of electricity in the area of operation. The business will
be planned to large scale in future depending on its expansion on the performance with the
change of technology.
3
CHAPTER TWO
2.0 MARKETING PLAN
2.1 Customers
All kind of customers will be purchasing products from the bakery. Most of the customers
will be after buying a variety of products. The potential customers intended for will be
resident around Jommo Kenyatta University of Agriculture and Technology and will be
divided into two groups, individuals’ customers and institution of customers.
2.1.1 Individual Customers
The individual customers will be local found in the area. They will include;
•
Students
University and college student would occasionally purchase bread, scones and cakes for
breakfast or for snacks since it will be very affordable and easily available.
•
Residential
These are people which reside bear the town. They will also come for bread, cakes and
scones.
2.1.2 Institutional Customers
The institutional customers will be the schools around e.g secondary and primary schools. .
The products will be available on a daily basis so as to completely be in service of people and
customers. The products produced will be of good and high quality and good service will also
be provided to the customers.
2.2 Competitors
Since the town is growing fast, this business will face competition from other existing
bakeries. The following table shows analysis of some of the competitors.
Competitor analysis Sheet
COMPETITORS
FACTOR
Price
Performance
Quality
Packaging
Safety
Durability
Variety of service
After sale service
2.2.1 SWOT Analysis
CARAMELLA
BAKERY
High
Medium
Medium
High
Medium
Medium
High
Low
QWIN BAKERIES
Low
High
Medium
Medium
Medium
High
Medium
Low
4
PRISAM
BAKERS
Medium
Medium
Medium
high
Medium
Low
Medium
Low
•
Strength of the Competitors
The potential competitor has the following strengths
•
•
They have hardworking staff
They offer credit facilities
• Weakness of the Competitors
1. Lack of enough Capital
The competitors do not have enough amount of capital to run their business as well as they
have low gross profit. This makes their business strength weak hence not providing sufficient
service to their customers.
2. Poor relationship with the Customers
The competitors company lack of close relationship with the customers. They do not keep
contact with their customers and collect their feedbacks. This lack effective communication
skills hence makes customers to run away.
Advantages Sharmbyn Bakeries have over their competitors
1.
2.
3.
4.
5.
6.
Prices will be favorable to the customers
There will be off days and team building, holidays for the employees
Free delivery of products to the customers
Convenient after sales services
Good quality products will be sold to customers
There will be social media marketing efforts
2.3 Pricing Strategy
Price is the value that will purchase a finite quantity, weight or other measure of a good or
service. Price strategy means the methods companies use to price their products or services.
Sharmbyn Bakers will consider some factors when setting and selling its products such as;
Cost of production in order to know the amount of the products. In terms of competitor
prices, our business will be lower the price of our products in order to attract more customers
over our competitors. The selling price of business will be variable according to our suppliers
cost of production.
•
Credit terms to be allowed.
5
Credit will be given to away institution that have been regular customer and any local
customer who has been co-operating with the company.
The credit will be paid according to the period agreed.
•
Discount to be allowed.
The discount will be offered to the customers who purchase bulky goods. The profit that the
company gets will count most on the amount of discount allowed.
•
After sale service
After sale service will be offered to the customer who buy goods of large quantities and this
is a motivate to the customers.
6
CHAPTER 3
HUMAN RESOURCE AND ORGANIZATIONAL MANAGEMENT PLAN
3.1 Introduction
It involves the process of identifying an organization short- and long-term objectives and
formulating and monitoring specific to achieve them.it also entails staffing and resource
allocation and is one of the most important responsibilities of a management team.
3.2 Organizational Structure
The organizational chart below will dictate the flow of work at Sharmbyn Bakers Enterprise.
Board of Directors
General Manager
Production
HRM
Store
Machinery
Keeper
Technician
Marketing manager
Financial manager
Sales persons
Bank
Accountant
Suppliers
3.3 Key Personnel Duties And Responsibilities
1. BOARD OF DIRECTORS
The key proprietor to the business will consist of all the founders who will be handling all
work of the business as the board of directors.
7
2. GENERAL MANAGER
One of the key proprietors to the business is Caleb Njiru who will be handling all work of
the business as the manager but will work together with the rest of the founders.
Duties are Responsibilities of the manager include;
•
•
•
•
•
Establish new ways of improving sales
Decision making, policy making and budgeting.
Receiving any sales, reports from the business and assistance.
Recruit and employ personnel of the business.
Contract on behalf of the business.
The basic salary of the managers will be shared based on percentage of contribution
3. PRODUCTION MANAGER
Qualifications
•
•
•
•
Should have all the skills needed in the bakery industry and knowledge
At least two years’ experience in a busy organization.
Aged 24-32 years old
Ability to communicate well both in English and Kiswahili.
•
Duties
He/she is responsible for the technical management, supervisor and control of industrial
production process
4. BAKERS
He/she should be 21years and above
•
Qualifications
He/she should have qualified and having diploma in human and resource management and
have experience.
•
Duties
Works in the kitchen baking the products.
5. MARKETER
8
He/she should be of 25years
Qualification
He/she should have passed through the course of marketing and have the skills and
experienced.
Duties
Managing all marketing activities in the marketing department
Developing marketing strategies for the industry.
Coordinating sales activities.
6. FINANCIAL MANAGER
Should be age of 25yrs and above.
Qualifications
He/she should have qualified in accounting and having diploma and have experience about
the work.
Duties
Responsible for financial health of the company.
To produce financial reports direct investments activities and develop strategies and plan for
the long term financial goals of their organization’
7. STORE
Should be age of 18yrs and above.
Qualifications
Should be qualified and skilled in working in the stores.
Duties
•
•
Keeping all records in the stores.
Issuing of products.
8. MACHINE TECHNICIAN
We should be 18 yrs and above.
Qualifications
Should be qualified and skilled on machines
9
Duties
Making repair on the machine
Operating with the machine.
8. Supervisor
Should be 21yrs and above.
Salary will be 10,000
Qualification
He should have skills of handing the work as a supervisor and have experience.
Duties
Supervise all work done in the company and make sure all things are in place and company
runs smoothly.
9. SALES PERSON
Should be age of 18yrs and above.
Qualifications
Should have all qualifications and skills needed by the company
Duties
Make records on sales and deal with all sales in the company.
10. BANKER/ACCOUNTANT
Should be age of 25yrs and above
Qualifications
Should have all necessary qualifications needed and skills and have done diploma in
accountants.
Duties
Prepare financial records
Make payments.
11. CLEANERS
Should be age of 18 years and above
Qualification
10
Should have all the skills needed for cleaning in the company,
Duties
His or her work is making sure that all places in the company are clean and neat for hygiene
purposes.
12. SECURITY GUARDS
Should be 18 years and above.
Qualification
Should have skills for providing security and be trained.
Duties
Maintain security and make sure no theft and pilferage.
3.4 Salaries and Wages
Salaries and wages will be issued to employee's worth.
This includes the position in the business and the performance of each individual.
Category
No. of staff
Monthly pay rate
Manager
1
20,000
Bakers
3
45,000
Machine Technician
1
5,000
Accountant
1
10,000
Sales Person
2
15000
Security guard
1
7,000
Cleaners
1
5,000
Total
13
107,000
3.5 Supporting Staff and Services
11
1. BANKING SERVICE
The best bank chosen by the company is Kenya central bank because it offers loans to the
customers
2. GURANTORS
Our other supporting staff required will be our guarantors who will help us finalize our
business operation.
3. INSURANCE COVER
The enterprise will have insurance cover against the will of and theft the insurance company
limited. They will cost from 8000kshs to acquire the insurance and 400kshs per month per
month premium.
4. LEGAL SERVICES
The firm will require the services of a private legal advisor so as to update the firm on current
legal position in the business environment.
5. POWER SERVICES
Power services will be supplied to Sharmbyn bakeries by Kenya Power and Lighting
Company (KPLC) at a monthly pay.
12
CHAPTER 4
OPERATIONAL PLANNING
This section describes the physical necessities of the business operation such as equipment,
facilities, and physical layout of the business
4.1 Production design and development
The cakes, bread and scones to be produced depends on the customer need and wants and
preference. The form and design intends to modify the products to fit the modern technology
and changing customer preference and therefore research need to be carried out to determine
customer needs.
4.2 Technology
The firm intends to use electricity and technological equipment to speed up production where
possible.
4.3 Production tools and Equipment
Production is the conversion of raw materials into finished goods. Purchase of durable and
liable machinery equipment will be required to help in the production process. The following
table show the production tools and equipment that will be needed
EQUIPMENT
CAPACITY QUANTITY COST
PER
ITEM
Ovens
MEDIUM
3
15000
Table
MEDIUM
10
1000
Chairs
MEDIUM
10
500
Detergents
MEDIUM
5
500
Basins
MEDIUM
5
200
Dustbins
MEDIUM
5
350
Mixers
MEDIUM
2
2000
Bread slices
MEDIUM
2
2500
Sheet pan rack
MEDIUM
6
1500
Proof boxes
MEDIUM
6
1500
Fryers
MEDIUM
5
1500
Banking tins
MEDIUM
6
1500
Bread pans
MEDIUM
5
1000
Pastry knife
MEDIUM
5
200
Flour sifters
MEDIUM
2
1500
Dough sheeters
MEDIUM
2
2500
Refrigerator
MEDIUM
1
20000
Doughnuts cake MEDIUM
1
3500
tryers
TOTAL
PRICE
Display case
Mops
Banking tins
TOTAL
10000
1200
2500
159950
MEDIUM
MEDIUM
MEDIUM
2
3
5
5000
400
500
13
45000
10000
5000
2500
1000
1750
4000
5000
9000
9000
7500
9000
5000
1000
3000
5000
20000
3500
4.4 Maintenance and Repair of Machinery
The business will repair the damaged equipment and machinery under the supervisor of
production office. It will allocate ksh. 5000 for repair each month. The spare parts of the
machines will be arranged by the officer concerned.
4.5 Proposed workshop Layout
MANAGER
OFFICE
SHELVES
HRM OFFICE
PRODUCTION
MANAGER
OFFICE
SHELVES
FINANCIAL
OFFICE
STORE
ACCOUNTANT
OFFICE
CLEANERS
SECURITY
GUARD
4.6 Production Strategy
14
MATERIALS QUANTITIY COST
PER
UNIT
Flour
80kg
60
Sugar
15kg
120
Salt
5kg
200
Cooking oil
10litres
200
Yeast
5kg
200
Fat
10kg
250
Eggs
5crates
360
Butter
5kg
400
Baking
2.5kg
160
powder
TOTAL
15
TOTAL
COST
4800
1800
1000
2000
1000
2500
1800
2000
800
17,700
CHAPTER 5
FINANCIAL PLANNING
5.1 Introduction
The financial plan consists of financial statement such as income statement, balance sheet
and cash flow statement. It also determines the break -even level of sales analysis and show
calculation of profitability ratio expected of a business.
5.2 Pre-operational cost
Pre-operational costs are costs which are incurred by the business before start of the business
operations to enable it operate within the law and have necessary assets required.
Item
Rent
Water and Electricity bill
License
Insurance
Stock
Equipment
Salaries
TOTAL
Amount Ksh
9,000
5,500
7,500
1,500
17,700
110,950
107,000
259,150
5.3 Financial Assumptions
5.3.1 Projected Cash flow for 1 year
PARTICULAR
Sale of HALF(1/2)
kg of Cake
Sale of 1kg of Cake
Sale of 1.5kg of Cake
Sale of 2kg of Cake
Sale of 2.5 kg of
Cake
Sale of 3kg of Cake
Scones
Bread
Cookies
Cupcakes
TOTAL
QUANTITY
500
UNIT COST(KSH.)
700
TOTAL AMOUNT
350,000
500
200
150
100
1500
1900
2500
2900
750,000
380,000
375,000
290,000
50
10,000
15,000
10,000
18,000
3500
5
50
70
30
175,000
50,000
750,000
700,000
540,000
4,360,000
5.3.2 Projected Expenditure record within 1year
16
PARTICULAR
Salaries
Pre-operational cost
Equipment
Miscellaneous
expenses
Licensing
Total
QUANTITY
12months
12months
12 month
12months
UNIT COST
107,000
140700
159,950
10,000
TOTAL COST
1,284,000
1,688,400
159,950
10,000
12month
7,500
7,500
3,149,850
5.3.3 Net Profit Projection
NET PROFIT PROJECTION= 4,360,000-3,149,850
= 1,210,150
17