INSTITUTE:
THE ELDORET NATIONAL POLYTECHINIC
TITLE:
JOHANA’S CYBER CAFÉ
NAME OF PRESENTER:
JOHANA KIPLAGAT KIPSIRICH
INDEX NO:
5780011136
CENTER CODE:
578001
COURSE CODE:
2804
COURSE:
DIPLOMA IN ACCOUNTANCY
PRESENTED TO:
KENYA NATIONAL EXAMINATION COUNCIL IN
PARTIAL FULFILLMENT FOR THE AWARD OF
IN ACCOUNTANCY
SUPERVISOR:
DANIEL WAMEYO
ADMISSION NO:
2018/03540
EXAM SERIES:
JULY 2022
DIPLOMA
DECLARATION
I declare that this is my original work and it has not been presented for examination purpose in
The Eldoret National Polytechnic or any other institution.
Name: JOHANA KIPLAGAT KIPSIRICH
Sign………………………
Date……………………………
Name: DANIEL WAMEYO
Sign ……………………………
Date …………………………
DEDICATION
I dedicate this work to my family; my siblings and to my friends as well as to my fellow students
ACKNOWLEDGEMENT
I would like to recommend my entrepreneurship teacher, for the guidance and corrections
concerning my project. I would like to appreciate my classmates who helped me on some
important decisions concerning my business plan. Above all I would like to thank God for his
care throughout my two year course.
EXECUTIVE SUMMARY
Business description
The objective of the business is to improve communication in the area and offer self
employment. The proposed name of the business is “JOHANA’S CYBER CAFÉ” and is a sole
proprietorship type of business (the owner is the overall boss and the final decision maker)
The business will be located at Kamoja shopping center in Eldoret town .
Marketing plan
JOHANA’S cyber café customers, mainly consists of the staff and students of Kamoja shopping
center and the surrounding community.
Due to high population and high need of cyber café, the JOHANA’SCYBER CAFÉ will offer
attractive services in addition to the few existing cyber cafes and therefore the proprietor aims at
winning over 50% of the cyber café users though adverts and offers to the customers.
Organization plan
JOHANA’S cyber café is to be managed by the owner, four other assistants will be employed in
order to improve the service offered. Staff appraisal is to be carried out annually so that
employee’s performance is evaluated. The firm will hire support service such as banking legal
business consultants insurance and security.
Production plan
The business is to be started in February 2023 since the owner will have acquired the
requirement to operate the business. The facilities to be used for effective operation is to be
acquired from the nearby selling outlets and different suppliers. The factor to effect the operation
of the business will include the prices of the materials and expenses to be used in the business
regulation is to obtained from the employment act in which the owner will ensure that the
employee keep time and maintain cleanliness in the business to avoid spreading disease and also
to ensure high quality services in terms of printing and binding.
Operation plan and productive plan
JOHANA’S cyber is to design and develop the services based on customer’s degree of
satisfaction. These will include computer service, photocopying, e-mail services and faxing.
Other complementary services will be introduced in the future e.g. the sale of stationary and
lamination.
Equipment and labour supply as the servicing of the equipment will be obtained locally.
Financial plan
JOHANA’S cyber café requires a starting capital of Ksh.50,0000. The proprietor has a personal
saving of Ksh.30,0000 and got the remaining Ksh20,0000 from loan from equity bank Eldoret
branch. This was picked because its repaying interest is much lower compared to other banks cooperatives.
CHAPTER 1
1.0 BUSINESS DESCRIPTION
JOHANA’S CYBER CAFÉ is a business located at Kamoja shopping center30 km from Eldoret
town. It is a sole proprietor. The business has modern facilities, well trained staff with good
management skill. JOHANA’S cyber café will venture in communication services for the
community around the town since a good number of customers will have paper services such as
printing, photocopying, scanning, web publishing, e-mail and assisting in application of schools
and institutions and other services through the internet.
One of o the major activities which will contribute to the community is employment provision to
the local qualified individuals.
1.1 BUSINESS NAME
The proposed name of the business is JOHANA’S CYBER CAFÉ. The name is basically though
the owner, the owner’s official name JOHANA KIPLAGAT KIPSIRICH
JOHANA’S CYBER CAFÉ
P.O BOX 4461-30100
ELDORET
1.2 BUSINESS LOCATION AND ADDRESS
The business will be located at Kamoja shopping center30 km from Eldoret town. The
proprietor intends to register the business under the following address:
JOHANA’SCYBER CAFÉ;
P.O BOX 4461
ELDORET
KAMOJA CENTER
Business location
JUNCTION
1.3 BUSINESS OWNERSHP
The business will be operated as a sole proprietorship type of business. This means that the
owner will be the overall boss and the financial decision maker. The profits shall also be
owner of the firm alone. The owner will also be in control of the operational hours of the
business.
1.4 TYPES OF THE BUSINESS
The business will be sole proprietorship since it has low cost to start. Low working capital
requirement tax advantages, less amount of regulation and one is able to being liable for all
debts of the business.
1.5 PRODUCTS AND SERVICES
Business will be offering the electronic e-mail services as most of them often provide the
same business activities but are unsatisfactory to the customers. The goods that will be sold
will be printing ink, papers, compact disc and diskette. Other services to be provided are
scanning printing and business cards.INDUSTRY
It falls under communication industry. This is an industry that is rapidly growing with the
evolution of the new technology; people have now resolved to faster and more liable
methods of communication hence there is every need to expand this industry. It is
anticipated that the industry will have a continuous growth in future since Kenya is geared
to full industrialization by the year 2030.
1.6 JUSTIFICATION
Due to the overgrowing population of Kamoja shopping center and increased need of the
internet service by the students, the business venture is both viable and profitable. The
business has a better chance of growing since its main competitors are out of Kamoja
shopping center compound. Its location is also worthwhile venture.
1.7 BUSINESS GOAL
i.
This business is aimed at boosting the owner’s income as the ultimate goal will be to
provide better services and maximize profit.
ii.
The other reason is to provide a viable means of communication as well as source of
information to the local community right at their locality in an efficient affordable
and friendly environment.
iii.
Market share – the business will ensure that it captures a large amount of market.
This will be done by offering high quality services.
Long term goals
a) Profit maximization – the goals of the business is that in one year of its operation its
expected to make high profit of its invested capital.
b) To purchase plot for the business in other big towns.
c) Maximizing sales and achieving profits to enhance expansion of the business to a bigger
firm.
Short term goals
a) To reach customers’ needs and helping them to feel at home when editing and
photocopying at the cyber café.
CHAPTER 2
2.0 MARKETING PLAN
2.1 POTENTIAL CUSTOMER
The targeted customer of JOHANA’S cyber café will comprise mostly of the staff and
students of Kamoja Center. Due to its strategy positioning they will easily reached and their
gate is at a central point. Most of the customers have the purchasing power since some are
monthly earners while students are training for their career. The information on scholarship,
news happening around the world, jobs and also educational material will be availed
The firm will purchase high speed computers for comfort ability and economy convenience
of the services during the operations and ensuring customers are served efficiently.
2.2 COMPETITION
The main competitors of JOHANA’S cyber café are the information management center,
Cheptol cyber café and Sogomo computers. All these are situated outside the campus. They
share a total of 700 of the total market population in the ration 124:26:18
The fact that the other subsidiary services such as faxing, printing and photocopying are
services offered by JOHANA’S makes it an added advantage for the cyber café over its
main competitors.
a) Cheptol cyber café will be the main competitor since it is known by man students and
staff, but this dealer does not have sufficient computers thus slow to respond to
customers. The main weakness will be advantages to JOHANA’S in terms of having
more customers. The main goal to JOHANA’S cyber café is to look upon its potential
customers as business men and women, schools and other organizations to make them
aware of the internet. Another goal will be served to customers and make them aware of
the activities and the function of the business itself. These services are not offered by the
cyber café around the center hence this will help in marketing of the business.
Owner
Competitor
-
Employing qualified staff
-
Improving any staff
-
Working to late hours
-
Closing the business early
-
High quality
-
Low quality
-
Affordable price for goods and
-
High price of goods and services
services
-
Providing good services of high
quality
2.3 MARKET SHARE
The total population of the largest market is of about 11,000 people. Currently there are
two internet cyber cafes which can hardly sustain this large population is opening of
another cyber café will be greatly received as it is near the customers. A total of 35% of the
market share is targeted. This forms 3950 of the total market population.
2.4 PRICING STRATEGIES
After a careful survey, the proprietor has settled on using the comparative method of
pricing. This is whereby all the prices of the major competitors will be compared and
their average found. This will be price of JOHANA’S cyber café.
i.e. (x+y)/2= price for JOHANA’S cyber café products and services.
2.5 ADVERTISEMENT AND PROMOTION STRATEGY
Upon entering the market aggressive marketing strategies are to be adopted in order to
attract and retain more customers. The major forms of advertisement are to be sign post
and posters which will be printed and pinned at strategic points and at an average of ½
km radius.
JOHANA’S cyber café intends to pay for a space in the “technology students”
promotional magazine which is released weekly at a fee of Shs 150 as the business grows
more and wider advertisement will be made through the classified in the nation
newspaper on a monthly basis in future the business will brand its name and location on
pens and sell them. Free 20 minutes will be given to customers for the first two weeks
upon entering the market.
MARKET SHARE
30%
35%
First year
second year
third year
35%
2.6 DISTRIBUTION STRATEGY
The distribution of goods is done only after the payment is settled or in terms of payment
is agreed upon.
Those within the locality can be distributed by the casual workers. Those at a far distance
can be transported on vehicles but the cost of transport must be shared by the customers
and business.
Manufacture
Wholesalers
Johana’scyber
cafe
Customers
CHAPTER THREE
3.0 ORGANIZATIONAL PLAN AND MANAGEMENT
3.1 ORGANIZATION STRUCTURE
Manager
Café operator
Messenger
Cashier/typist
3.2 MANAGEMENT TEAM
3.2.1 MANAGER
The manager will be Johana kiplagat kipsirich who is also the owner of the business. The
manager has good knowledge in computer operation. These skills were acquired while in college
as computer operation is one of the skills she trained in.
Duties
i.
Setting goals and objectives of the firm
ii.
Identify strategies to achieve them main goal objective.
iii.
Purchasing office equipment and ensuring proper use of the same.
iv.
Organizing business activities and monitoring performance.
v.
To assist customers in technical situations.
3.2.2 CASHIER/TYPIS
i.
Should be a holder of type writer certificate (50 words per minute) form a recognized
institution.
ii.
Experience of at least two years in an internet firm. Aged between 26 and 30 years
iii.
O level aggregate C-
iv.
Basic knowledge of accounts and computer software
v.
Ready to work in any environment.
Duties
i.
Keep the business accounts and records
ii.
Depositing and drawing money from the bank
iii.
Writing cheques and vouchers.
iv.
Make balances and provide balance sheets
v.
Pay salaries and control the business budget
vi.
Collect all payments made by the customers.
3.2.3 MESSENGER
Qualifications
i.
Aged 23 years and above
ii.
O level certificate with aggregate of D+ or equivalent
iii.
Good command of English and Kiswahili both written and spoken.
iv.
Two years working experience in busy office.
Responsibilities
i.
Maintaining of the inventory and supplies for the business
ii.
Marketing of the service of the business
iii.
Arranging for business supply
iv.
Co-coordinating business activities at every stage.
v.
Cleaning and dusting the office
vi.
Making sure the office is clean
vii.
Preparing office tea.
3.2.4 CAFÉ OPERATORS
Qualifications
i.
Basic knowledge in computer hardware and software
ii.
Certificate in internet operations or web administration.
iii.
Must have two years working experience in a busy internet environment.
iv.
O level aggregate of C
v.
Good command of English and Kiswahili both written and spoken
vi.
Age limit 23-33 years.
Duties
i.
Making all deliveries.
ii.
Collecting mails and taking mails to the post office
iii.
Assisting clerical officer where necessary
iv.
Ensure all mails have been dispatched.
3.3 OTHER PERSONNEL
The business will start by employing four employees, one typing clerk, two café operators and
one messenger/cleaner.
Employees are the backbone of the business. Satisfaction is inheritant to ensure their cooperation and contribution to the business. Efficient and quality service on the business
participatory style is to be adopted.
3.4 RECRUITMENT AND TRAINING
The following procedure in recruiting employees
i.
Establish the task to be performed
ii.
Carry out job analysis for each task and come up with job specification and
description.
iii.
Recruitment of staff and by advertising in public notice boards/local newsletter and
through friends by word of mouth.
TRAINING
Orientation will be given to all employees before they start any kind of work at the café. They
will be offered a chance for further training in order to improve their skills as the business grows
more, knowledge and skills are required, and therefore staff will be sponsored by the company to
attend seminars and short courses that come up from time to time.
3.5 RENUMERATION AND INCENTIVES
JOHANA’S cyber café is to pay salaries to the employees based on growing market rates. It will
also be based on qualification experience and the position of the employees on the firm.
The approximate employee salaries for the first three years
INCETIVES
JOHANA’S cyber café intends to motivate its staff after the completion of the first phase (3
years) by the time the business is expected to have cleared its financial commitments such as
loans and profitability rate ascertained. A part from payment of salaries the employees of
JOHANA’S will also be entitled to the following incentives:
a) Overtime allowance at one end and half duty rates when need arises.
b) 21 days annual leave with full pay
c) A bonus leave with full pay
d) Yearly get together parties
e) Staff rates when they need to use the interest
f) 10.00 and 4.00 o’clock tea
1st year
2nd year
3rd year
Monthly Annual
Monthly Annual
Monthly Annual
Monthly Annual
1
4000
4800
4000
4800
4000
4800
4000
4800
2
6000
72000
6000
72000
6000
72000
6000
7200
3
2500
30000
2500
30000
2500
30000
2500
30000
4
1500
18000
1500
18000
1500
18000
15000
18000
5
14000
168000
14000
168000
14000
168000
14000
168000
Personal Number
CHAPTER FOUR
4.0 PRODUCTION AND OPERATIONAL PLAN
4.1 PRODUCTION FACILITIES
All the equipment are locally acquired and include
ITEM QUANTITY
UNIT/PRICE
SUPPLIER
TOTAL
COST
Computer
10
1500
BML
15000
Printer
2
12500
BML
25000
Laser jet 400
1
15000
BML
15000
Flash disk
3
12600
BML
1800
Stapler hear duty
1
600
6 H ENTERPRISE
600
Staple ordinary
1
100
64 ENTERPRISE
100
Paper bunch ordinary
1
75
64 ENTERPRISE
75
Paper bunch heavy
1
400
64 ENTERPRISE
400
Chairs
15
125
64 ENTERPRISE
1875
Campert table
10
300
Local carpet enter
3000
Benches
2
400
Local carpenter
800
Office desk
3
1500
Local carpenter
4500
shelves
5
2500
Local carpenter
12500
TOTAL
80650
4.2 PRODUCTION STRATEGY
All the machines are locally available. The following are machines and equipment’s to be
acquired by BCC for its services.
In order for the business to run smoothly and effectively the firm has to have a plan for regular
and constant supply for materials throughout the year.
Personnel
No
Salary (Khs)
Manager
1
8000
Café operator
2
12000
Clerk typist
1
51000
Messenger
1
31000
Total
5
28000
4.3 PRODUCT DESIGN AND DEVELOPMENT
To have high competitive demand offered by JOHANA’S cyber cater the enterprise will have
products design and data development of various ways. The technology used by the enterprise
will be improved to show high quality standards are met.
The enterprise will use modern machines to offer quality service.
4.4 PRODUCTION PROCESS
Have a multi-purpose computer center for information technology enabled service producing the
internet and development
Internet café
The normal process to operate on internet café
Internet café timing software free deltravorm
4.5 RELEVANT REGULATION
All regulations of the company act enterprise will be required to file its name with the register of
the company under registration of the business name act at the fee of Kshs. 400
CHAPTER FIVE
5.0 FINANCIAL PLAN
5.1 PRE-OPERATIONAL COST
This is the cost incurred before trading starts, varies from one business to another. The preoperational cost to be incurred by JOHANA’S CYBER CAFÉ will be as follows.
ITEM
AMONT (Ksh.)
Registration fee
5000
Transport
2000
Installation cost
8000
License and permit
5000
Furniture and equipment
5000
Electricity
2000
Advertisement
2000
Water deposits
3000
TOTAL
32000
5.2 WORKIG CAPITAL REQUIRMENTS
This is the capital used to support the normal short term operations. It consists of current assets
and liabilities working capital = current assets – current liabilities.
ITEM
AMOUNT (Ksh)
Purchase
48000
Postage charges
28000
Salaries
28000
Rent
6000
Insurance
10000
Telephone
10000
TOTAL
110000
5.3 PRO – FORMA INCOME STATEMENT
ITEM
YEAR 1 (KSH. )
YEAR 2 (KSH. )
Sales
500000
540500
Cost of goods sold
120000
160000
Gross profit
300000
390000
Wages and salaries
150000
120000
Rent
116000
90000
Water
2600
4000
Telephone
3000
6000
Transport
3000
3000
Interest
2000
2000
Electricity
1200
7000
Postage
3000
40000
Repair and maintenance
6000
45000
Total expenses
339500
335000
Provision for tax
43700
44225
Net profit
43415
42013
EXPENSES
5.4 PRO FORMA BALANCE SHEET
This is to indicate the relationship between the assets liabilities and owners’ equity in the
business
ASSETS
LIABILITIES
Current assets
Current liabilities
Cash at hand
Creditors 36000
Cash at bank
Miscellaneous 60750
Debtors
Total current liabilities 96750
Stock
Long term liabilities
Total current assets
Bank loan 280000
Fixed assets
Refrigerator 20000
Premises
26450
Furniture 500000
Equipment
100000
Total fixed assets 3461450
TOTAL ASSETS 376750
TOTAL LIABILITIES 376750
5.5.1 CASH FLOW YEAR ONE
RECEIPT
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
TOTAL
80000
85000
95000
106500
125800
135200
130800
135600
138200
140500
145600
1600
1473080
Cash from debtors
1800
1500
1600
2100
1800
1500
1700
1800
1900
2000
1600
19200
Capital introduced
156496
148437
141156
147469
176765
218291
249977
289218
336609
384725
433236
2676381
10000
6000
96000
MONTHS
Cash sales
Own contribution
42500
Bank loan
200000
Other
5000
8000
10000
4000
6000
10000
5000
7000
13000
12000
TOTAL RECEIPTS
710000
251296
248937
253258
281269
323765
355591
394277
442218
491009
Purchase of inputs
48260
47500
48000
48500
47200
47500
46000
47800
48200
48700
99200
49800
576660
Salaries/wages
28000
2800
28000
28000
28000
28000
28000
28000
28000
28000
28000
28000
336000
Rent/rates
600
600
600
600
600
600
600
600
600
600
600
600
72000
Water/electricity
2500
2450
2580
2500
2400
2480
2400
2450
2510
2400
2490
2440
29600
Transport
1000
1500
1300
1000
1200
1500
1400
1100
1300
1000
1400
1200
14900
Licences
8250
8250
Insurance
10000
10000
Repairs/renewals
11500
11400
10400
10600
10200
10700
10300
10500
10400
10900
10500
10600
128000
5000
8000
10000
6000
4000
5000
10000
12000
7000
13000
10000
6000
96000
1500
1000
1200
1500
1300
1000
1200
1400
1300
1000
1400
13800
4889661
Expenses
Stationary/postage
Bank interest
Loan repayment
Purchase of fixed assets
42500
Other expenses
5000
2500
2500
Total payment
171004
107854
107779
105789
104504
104504
105614
218291
176765
147469
141158
143342
538976
Cash surplus/deficit
6944
6944
6944
6944
6944
6944
6944
6944
6944
6944
6944
6944
833328
Tax payable
Dividend/drawing
42500
2500
2300
15000
Net flow
474177
433236
334725
336409
289218
249997
Opening bank balance
538996
143342
141158
147469
176765
218291
249997
289218
336409
334725
433236
474177
883440.8
Closing bank balance
538996
682338
823496
976965
117730
1366021
38615998
1905216
2341625
2626350
3059586
3533763
335681
5.5.2 CASH FLOW YEAR TWO
RECEIPT
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
TOTAL
Cash from debtors
1600
1800
1500
2400
2500
1700
1300
2600
2800
1100
1400
1000
217000
Capital introduced
47471177
488673
524964
561735
596046
627242
660568
687554
713695
737936
762952
785513
7621545
Own contribution
1200
1900
1500
1000
1500
13000
1700
1400
1200
1900
1600
2000
18200
MONTHS
Cash sales
Bank loan
Other
2500
2500
2500
7500
TOTAL RECEIPTS
616617
636623
676564
712435
748446
782742
811868
839054
866695
891636
916652
941613
9440945
Purchase of inputs
50250
54500
58650
60300
62500
65700
68300
69200
76250
72500
28000
28000
336000
Salaries/wages
2800
2800
28000
28000
28000
28000
28000
28000
28000
28000
28000
28000
336000
Rent/rates
600
600
600
600
600
600
600
600
600
600
600
600
36000
Water/electricity
950
965
955
945
960
950
970
965
955
940
955
940
11485
Transport
900
1400
1200
900
1100
1400
1300
1000
1200
900
1300
1100
13700
Licences
8250
8250
Insurance
1000
1000
Repairs/renewals
2500
Stationary/postage
135200
138400
140600
142800
144600
143900
140300
143200
144500
144700
145300
146200
1709700
Bank interest
1400
1200
1300
1400
1200
1200
1200
1300
1500
1200
1300
1400
15500
Loan repayment
6944
6944
6944
6944
6944
6944
6944
6944
6944
6944
6944
6944
83328
Other expenses
10500
10400
9400
9600
9200
9700
9300
9500
9400
9900
9500
960
116000
Total payment
127994
111659
114829
116389
120604
122174
124314
125359
128789
128684
131139
13157
1447513
200
800
600
700
900
950
450
450
450
450
450
300
6700
Expenses
2500
2500
7500
Purchase of fixed assets
Cash surplus/deficit
Tax payable
Dividend/drawing
Net cash flow
488623
524964
561735
596046
627842
660568
687554
713695
737906
762952
785513
Opening bank balance
488623
1013587
157532
2171368
279210
3459778
4861027
559833
6361885
7147398
79434
Closing bank balance
7621545
785513
762952
737936
713695
687554
6605568
627242
596046
561735
529664
8110039
7957437
488623
592647
5.6 BREAK EVEN LEVEL
Total expenses = 40360
Breakeven level = 4036 x 100/Gross profit
= 51546
5.7 DESIRED FINANCE
Pre – operational cost 32000
Working capital requirement/total = 110800/142800
5.8 PROPOSED CAPITALIZATION
Owner’s equity 3200
Company loan 110800
Total 142800
5.9 RATIO ANALYSIS
LIQUIDITY RATIO = 116
i.
Current assets/current liabilities
ii.
Gross profit ratio = gross profit x 100/ sales = 55940 x 100/76520
= 78.3%
5.9 PROFITABILITY RATIO
i.
Gross profit ratio = gross profit/total sales
= 5594x100/76520
ii.
Return of equity = net profit before tax x 100/owner equity
= 158517 x 100/2000
= 76.2%
iii.
Return on investment = net profit before tax x 100/total investment
= 116288 x 100/50000
= 23.2%