BUSINESS PLAN
FOR
MERIDEAN SURVEYING AND
CONSULTANCE FIRM
PRESENTED BY : MAGGA OKOTH MARKUS
INDEX NO: 5411010406
PAPER NO: 2312/307
Submitted To Kenya National Examination Council (KNEC) In
Partial Fulfillment for the Award of Diploma in Land Survey
EXAM SERIES
: NOVEMBER 2018
CERTIFICATION OF SUPERVISION
I declare that this business plan has been under my close supervision and approval.
SUPERVISOR
NAME…………………………………………………………………………._
SIGNATURE……………………….DATE………………………………….
ii
DECLARATION
I declare that this business plan is my original work based on my personal research and has
not been presented anywhere else for examination purposes.
NAME…………………………………………………………………..
SIGNATURE……………………… DATE…………………………….
iii
DEDICATION
This project is dedicated to all my family members especially for all their financial and moral
support they gave me and my lecturers for the knowledge they equipped me during my course
study.
iv
ACKNOWLEDGEMENT
I sincerely wish to appreciate the Almighty God for the peace of mind and guidance that He
provided me with to go through my entire diploma course and successfully finish this
business plan .Am grateful to my supervisor Mrs. AKOMO for the advice and support. I also
appreciate my guardians for the financial support they gave me up to the end of my project
and my fellow students for the support and advice they gave me.
v
TABLE OF CONTENTS
CERTIFICATION OF SUPERVISION ....................................................................................ii
DECLARATION ..................................................................................................................... iii
DEDICATION .......................................................................................................................... iv
ACKNOWLEDGEMENT ......................................................................................................... v
TABLE OF CONTENTS .......................................................................................................... vi
CHAPTER ONE ........................................................................................................................ 1
EXECUTIVE SUMMARY ....................................................................................................... 1
CHAPTER TWO ....................................................................................................................... 2
BUSINESS DESCRIPTION ...................................................................................................... 2
2.1 Business Background ....................................................................................................... 2
2.2 Business Name ................................................................................................................. 2
2.4 Business Ownership ......................................................................................................... 3
2.5 Type of Business .............................................................................................................. 3
2.6 Justification of Opportunity ............................................................................................. 3
2.9 Goals and Objectives ....................................................................................................... 5
2.1 Entry and Growth Strategies ............................................................................................ 5
CHAPTER THREE ................................................................................................................... 6
MARKETING PLAN ................................................................................................................ 6
3.1 Customers ........................................................................................................................ 6
3.2 Market Share .................................................................................................................... 6
3.5 Competition...................................................................................................................... 6
3.4 Pricing Strategy................................................................................................................ 7
3.5 Sales Tactics..................................................................................................................... 7
3.6 Method of Advertising and Promotion ............................................................................ 7
3.7 Distribution Strategy ........................................................................................................ 8
CHAPTER FOUR ...................................................................................................................... 9
ORGANIZATION PLAN .......................................................................................................... 9
4.1 Organization Structure ..................................................................................................... 9
4.2 Key Management Personnel ............................................................................................ 9
4.2.1 Manager .................................................................................................................... 9
4.2.2 Marketing Director.................................................................................................. 10
4.2.3 Accountant .............................................................................................................. 10
vi
4.2.4 Secretary ................................................................................................................. 10
4.2.5 Surveyors ................................................................................................................ 11
4.3 Other Personnel .............................................................................................................. 11
4.3.1 Office Cleaner ......................................................................................................... 11
4.3.2 Driver ...................................................................................................................... 11
4.3.3 Security Guards ....................................................................................................... 11
4.4 Recruitment, Training and Promotion ........................................................................... 12
4.4.1 Recruitment ............................................................................................................. 12
4.4.2 Training ................................................................................................................... 12
4.5 Remuneration and Incentives ......................................................................................... 12
4.6 License, Permits and By-Laws ...................................................................................... 13
4.7 Supportive Services ....................................................................................................... 13
CHAPTER FIVE ..................................................................................................................... 14
PRODUCTION PLAN ............................................................................................................ 14
5.1 Production Objectives .................................................................................................... 14
5.2 Production Facilities and Equipments ........................................................................... 14
5.3 Production Process ......................................................................................................... 15
5.4 Production Strategy........................................................................................................ 15
5.5 Factors Affecting Production Process ............................................................................ 16
5.6 Production Output .......................................................................................................... 17
5.7 Regulations Affecting Production.................................................................................. 17
CHAPTER SIX ........................................................................................................................ 18
FINANCIAL PLAN................................................................................................................. 18
6.1 Pre-Operational Cost ...................................................................................................... 18
6.2 Working Capital ............................................................................................................. 18
6.3 Projected Cash Flow Statement ........................... Ошибка! Закладка не определена.
6.4 Proforma Income Statement .......................................................................................... 19
6.5 Proforma Balance Sheet ................................................................................................. 20
6.6 Break-Even Point ........................................................................................................... 21
6.7 Calculation of Profitability Ratio ................................................................................... 23
REFERENCES ........................................................................................................................ 25
vii
CHAPTER ONE
EXECUTIVE SUMMARY
The business will be registered under the name ELITE SURVEYING AND CONSULTING,
headquartered in Siaya town. It is a partnership form of a business comprising of two
individuals. The proprietors being the manager of the business therefore they will be
responsible for the organizing and managing the operations of the business. Key personnel
will comprise of two surveyors, one cartographer, chainman, Accountant, Secretary and
Security guards. The business will be opened in August 2017 and will deal with
Topographical Survey, Cadastral Survey, Hydrological Survey Construction and setting out
of features.
The business will target local residents, construction companies and parastatals. The business
will offer services at affordable price. Advertising and promotion will be used as service
tactics.
Organization and management plan of the business will have a management team from the
organization where the manager will be assisted by Assistant Surveyor, Cartographer,
Accountant, Secretary and Security Guards. They will be recruited as per their qualification,
experience and knowledge in the office and field work. Operation of the business will
therefore first purchase the required machine and furniture at the beginning and some of the
second year and third year. Every worker will follow the rules and regulations of the firm.
The business requires a projected start up of 2.8 million with which 1.6 million coming from
the partners half a million from the Youth Fund and 0.7 Million as a bank loan. A major
reason for sourcing most of the funds from the partners was to give the business “breathing
room” and allow it to grow. Of the total capital, a sum of 2.4 Million will be used to equip the
business and pay for the first month expenses. The loans are expected to start being repaid
during the second year with a repayment period of 2 years. The partners expect to recoup
their initial investment after the loan has been repaid.
1
CHAPTER ONE
BUSINESS DESCRIPTION
2.1 Business Background
The business is a sole proprietorship form of a business which will have one person no
partners. Magga Markus and is currently undertaking a diploma in land surveying at Ollessos
technical training institute. He obtained her first experience when was working in kwale
sugar as field assistant and chainman later during industrial attachment at Nanchang foreign
engineering company limited. The financial sources is from personal savings, donations from
family members and friends, other finance fund is from Youth Fund and bank loan. He plan
to acquire more knowledge and experience through seminars, from other entrepreneurs and
he continues to operate.
2.2 Business Name
The name of the business will be MERIDEAN Surveying and consulting firm. The proprietor
selected the name due interest in geography and its phenomenon. This shows that through
offering best services the business will win the potential customers for its products and
services.
2.3 Business Location and Address
The business will be located in Mbita Town ,Mbita point opposite shell petrol station next
building to equit ybank .The business will operate under the following Address:
MERIDEAN SURVEYING AND CONSULTING FIRM
P.O. BOX 1030
MBITA
TEL: 0795722996 or 078922118
E-MAIL: medsurvconc@gmail.com
2
2.4 Business Ownership
The business is a one man business, sole proprietorship, this form was preferred because the
owner was willing and able to run the business and have enough knowledge and skills in
terms of expertise and experience. Also the capital specified amount of monetary investment
on entry.
2.5 Type of Business
The business being a startup is primarily a consulting with plans to increase the service
rendered as time goes by and the company grows to be service oriented.
2.6 Justification of Opportunity
Mbita Town is one of the fastest developing towns in Nyanza and the proprietors have
already learnt more about surveying. It is therefore the proprietor’s profession and the skill he
has attained will be useful in the business. During industrial attachment I attained a good
experience. The business friends also has more experience that he gain through consultation
and also during experience when he is employed. Therefore am capable to open and operate
an office. The market is large. These include local residence construction companies and
parastatals that will require the services.
The competition in the market is low because the competitors who exist do not offer good
quality service because of inexperience. In that over the year there has been a shift from
manual field visit to less contact method like Remote Sensing and Photogrammetry. This has
increased the form of outputs of survey works and as such introduced new applications of
geospatial science. The development of GIS and GPS has enabled more analytical of spatial
data and provision of precise location anywhere, anytime. Therefore it is an opportunity that
is expected to have a good life because according to the need of customers it cannot come to
an end.
2.7 Industry
The field of survey is wide and with varied applications. It provides solutions to a wide range
of problems and introduces a unique dynamism to every function. This include the
competitors and the customers. There are only three competitors in the area i.e. ministry of
lands and private firm which is still developing According to the data collected they do not
3
offer good quality services because of inexperience and introduction of new machine due to
improvement of technology.
Therefore the competitors need to go for further study of the practices so that they can be able
to use digital machine i.e. GPS and total station so as to offer good quality service to keep the
market alive. This is why the proprietor have decided to enter into the industry and offer the
quality product to the customers.
2.8 Product and Services
The firm will be offering service such as the following:
i)
Cadastral – This will de with division of land and location boundaries
ii) Engineering and design – providing a design plan for land development including
layouts of construction plans for drainages ,sewer lines ,waterlines , highways etc.
iii) Land title –completing land title survey of multifamily, commercial or industrial site
to the national standards. Carrying out searches and title processing
iv) Topographic survey –determining the configuration of the ground. its elevations and
the location above the ground and underground of both natural and manmade features
v) Land use planning - preparing feasibility and concept studies for the highest and
best use of land for residential and commercial sites
Other may include
GIS related survey
As built survey
Control survey
Quantity survey
They will also offer; Consultant service, correction of boundaries and solving of land dispute.
The firm will give accurate services because the main survey feature is accuracy of data
4
collection and presentation. Therefore the firm will offer high quality service than the other
competitors.
2.9 Goals and Objectives
-
The main goal of this business is to provide accurate and quality services to the customers
i.e. provide accurate scaled maps and plans with accurate dimension.
-
To solve land dispute problems hence create peace.
-
To create job opportunity to the jobless hence improving living standard in the society.
-
Meridean surveying and consulting intend to penetrate new market segments in other
town within the country in a period of three years of operations.
-
Attracting and retaining customers by maintaining its good name and customer relations.
The vision: To become the number one provider of precision surveying service.
The mission: To provide customized services to clients and provide new and improved
methods of doing ordinary things in an extra ordinary way.
2.1 Entry and Growth Strategies
The business is intended to start with an estimated capital of 2.8 million. It is hoping to start
its operation on august 2020 with a major informative types of advertisement which will be
done through the media e.g. TV, Radio and newspapers and use of sign post which will be
located at strategic place along major highways within Mbita and its surrounding to gauge the
significance of the business internal competitiveness and resources SWOT analysis will show
the weakness, opportunities, threats and strength.
Opportunities – Include favourable situation in a firm environment include low competition
and stable political environment.
Threat – Unfavourable situation e.g. bargaining power of clients and the government rules
and regulations if the business.
Strength – Resources, skills and experience or other advantages the meridean surveying and
consulting has over other competitors i.e. Professional, knowledge and skills of thee owner.
Weakness – Deficiency in resources and capital to fund the business.
5
CHAPTER TWO
MARKETING PLAN
3.1 Customers
Carrying out market research has enabled the owners to validate the business. Survey firms
are currently faced with a lot of challenges particularly inexperience on the Digital
equipment. Meridean surveying and consulting firm intend to maximum the advantage of
geospatial technologies in ensuring that client are served well.
meridean surveying and consulting targets farmers around Lake Victoria and upper Victoria
and residents within Homabay and Migori and part of Siaya and Kisumu County. Therefore it
will be based at Mbita Town. The basic of selecting the area is supremely because it is one of
land dispute problem in Kenya. It contributes to a high percentage of deaths in Kenya.
From the research surveyors in this area are having challenges with their clients in that most
surveyors are inexperienced hence they don’t produce accurate data. The firm will provide
solution to this problem by utilizing digital machines to produce accurate data.
3.2 Market Share
The main clients are farmers, construction companies NGOs,parastatals. Farmers with
plantation of 100 acres and above under farming and are utilizing mechanization in their
farming practices, for a start the firm intends to engage at least 20 large scale farmers by end
of our first quarter of the operation. The owners will take one selected firm as the pilot
project and the result will determine whether the firm will continue its operations or will
terminate. If successful they will proceed to engage all the other farmers and diversify the
services.
3.3 Competition
There are two firms in Homa bay County offering the same service. They include District
Survey in mbita town and upcoming private firm. Although they have been in the industry for
quite sometimes meridian intents to gain competitive advantage through utilizing geospatial
technologies as a basis of providing consultancy services to our clients. The satellite images
that will form the basis of our information acquisition are accurate and provide huge
6
quantities of information of large geographical areas without having to be there physically.
The advice we will give to our client will be accurate, informed and sure. SWOT analysis are
the key areas we considered.
STRENGTH
OPPORTUNITIES
Technical skills – Elite Surveying and
Consulting are well trained and therefore
will produce the best output.
- Management – We have expertise
management and various marketing
officers hence increase the number of
clients against competitors.
- Establish market share.
WEAKNESSES
-
-
-
Political instability
Improved manager – client relationship.
Low competition.
THREATS
Being new in the market is a threat since -
Pricing strategy
it must start and look for its own -
Government policy
customers deficiency in capital.
-
Cost of production
-
Competitors
-
Bargaining powers of clients
3.4 Pricing Strategy
The services are going to be priced on the basis of the market penetration strategies whereby
a cheaper price than that of the competitors which will attract more customers to utilize the
company’s services.
Also to be considered in the pricing policy of the business is the demand for the services with
regard to the 20/30 concept and the cost of the services to be rendered taking into account
how the business is to maximize profit and sales hence achieve market leadership.
3.5 Sales Tactics
The services will be offered in the business premises house. It will accommodate all the
services and consultants that will be required. The business will also participate in fields
(site) of the client.
3.6 Method of Advertising and Promotion
7
The customers will be informed of the services in the market to promote the success of the
business. The methods of promotion will be through the radio, brochures and direct
communication. The brochures will have the name, location and service of the business. The
logo of the business will be placed along the road. The local radio stations e.g. Ramogi FM,
Citizen and Lake Victoria FM will be used to advertise on daily basis of the firm.
Seminars and announcements will be made in church and other public meetings about the
business. The advertisement strategies will be launched before the business commences. The
business will also have seminars on the lectures. The effectiveness of the advertisement will
be measured by the turn-up of the customers. The total advertisement will be Kshs. 10,000.
3.7 Distribution Strategy
The business will deal with the direct service because dealing with customer will help the
business to eliminate the middlemen who exploit the customers by overcharging the clients
so as to maintain the number of clients.
DIRECTOR
EMPLOYEES
8
CUSTOMERS
CHAPTER THREE
ORGANIZATION PLAN
4.1 Organization Structure
Being a partnership kind of a business, the business will be managed by the proprietor who
will be the overall supervisor so as to enhance maximum profit and success of the business.
The proposed organization structure of the business is as shown below:
MANAGING DIRECTOR
SURVEYOR
CARTOGRAPHER
CHAINMAN
SECRETARY
ACCOUNTANT
MARKETING
SECURITY
DIRECTOR
GUARDS
4.2 Key Management Personnel
a) Manager
The business will be a partnership by MAGGA MARCUS having acquired a diploma in land
surveying for three years at Ollessos technical training institute
Responsibilities
-
Supervision of staff
-
Planning
-
Coordinating
-
Directing firm’s activities
9
b) Marketing Director
Qualifications
-
Diploma in sales and marketing
-
Good public relations skills
-
Should be computer literate
Responsibilities
-
Attracting and ensuring customers remain loyal to the business.
-
Ensures business expansion through adverts and promotions.
c) Accountant
Qualifications
-
Should be a CPA holder having a work experience of 2 years.
-
Computer literate.
-
Able to apply accounting skills and professional work ethics.
Responsibilities
-
Keeping day to day financial reports
-
Preparation checks.
-
Calculating wages for every employee’s.
d) Secretary
Qualifications
-
Good customer relations.
-
Diploma in Secretarial studiers and communication techniques
-
Computer literate
Responsibilities
-
Keeping business records.
-
Maintaining records effectively
-
Typing records and documents
10
e) Surveyors
Qualifications
-
Diploma in Land Surveying
-
Computer literate
Responsibilities
-
Carrying out general duties i.e. land subdivision.
-
Collection, compilation and computation of field data.
-
Processing of title deeds.
4.3 Other Personnel
a) Office Cleaner
-
Must be a Kenyan citizen.
-
Must be responsible, hygienic and self driven.
Responsibilities
-
General cleanliness of the premises and compound.
b) Driver
Qualifications
-
Have a driving experiences for three years.
-
Drivers license and should be non alcoholic.
-
Age of 25 years and above.
Responsibilities
-
Driving manager and surveyors during field work.
-
Picking and dropping manager to and from his office.
c) Security Guards
Qualifications
-
Able to use-security gadgets
-
Reliable
-
Physically fit.
11
4.4 Recruitment, Training and Promotion
4.4.1 Recruitment
Recruitment will be done by advertising of workers needed. The applicants will be shortlisted
and called for interviews according to positions they applied for. The applicants will then be
selected according to their performance during the interview and placed in different positions
depending on their capabilities.
4.4.2 Training
The manager will thereafter organize for the training of workers so as to equip them with the
necessary skills. Employees will be trained on how to use and adapt to new and latest
technology by attending workshops, seminars and practical work. They will also be oriented
on how to handle different equipment to boost their confidence.
The business tend to boost morale of employees by establishing a base where employees are
allowed to compete for higher positions, this will be done by checking hard work competence
and commitment of the employees.
4.5 Remuneration and Incentives
As a way of motivating employees the business tend to offer additional allowance to psyche
them up. They include bonuses, commissions and free meals during fieldwork.
JOB TITLE
Manager (Surveyor)
NO. OF
EMPLOYEES
1
BANK
SALARY
40000
4800
TOTAL
SALARY
44800
Assistant Surveyor
1
17600
3200
20800
Marketing Director
1
35200
3200
38400
Accountant
1
35200
3200
38400
Driver
1
8000
3200
11200
Secretary
1
16000
3200
19200
Officer cleaner
1
8000
3200
11200
Security Guards
1
8000
3200
11200
TOTAL
9
168000
27200
195200
12
ALLOWANCES
4.6 License, Permits and By-Laws
The business will acquire license to legally operate in the country. It will need a trade license
service, license from the local authority. It will operate on a single business permit. Under the
national and county government the business is governed by regulations as follows.
-
The business will operate with county government in participation in its activities.
-
Business will ensure zero contribution towards environmental pollution and eradication
practices.
-
Business will ensure it pays necessary taxes without being followed.
-
Business will follow the registration Business Act and Employment Act.
4.7 Supportive Services
This includes professional services that will be taken in to assist in the smooth running and
expansion of the business they include;
-
Allowing customers to air their view during the visit to the business.
-
Banking services from Kenya Commercial.
13
CHAPTER FOUR
PRODUCTION PLAN
5.1 Production Objectives
The following objectives must be considered.
i.
To maintain customers for continuous existence of the business.
ii.
To provide accurate scaled maps and plan with accurate dimension.
iii.
To create job opportunities do the jobless hence improving living standards in the society.
5.2 Production Facilities and Equipments
Total station
1
COST PER
UNIT
880,000
Ranging roads
6
3200
19200
Steel tapes
3
4800
14400
Computers
1
19200
19200
Photocopies
1
12800
12800
Targets
4
5600
22400
Cabinets
2
6400
12800
Chairs
12
3200
38400
Tables
6
4800
28800
Drawers
4
2400
9600
942400
1057600
EQUIPMENTS
CAPACITY
TOTAL
TOTAL COST
The following will be considered during equipment selection.
-
Cost of equipment.
-
Cost of the maintenance and repair.
-
Durability of the equipment.
14
880,000
SUPPLIER
AND MODEL
The diagram below shows the proposed firm layout.
5.3 Production Process

The business will receive an order from client stating service needed.

Preparation for field work by gathering required machines needed by surveyor like map,
measuring tapes, note book, target, ranging rod and total station.

Surveying the site by taking measurement.

Office processing is done by drawing, recording and analyzing collected data.

Final presentation and report for the required service.
5.4 Production Strategy
The business will use high quality equipments and machines to satisfy and attract more
customers. It will also identify itself with its products and will also identify itself with its
products and services by adopting unique trademarks so as to differentiate from other
competitors. The business will also strategize on the following;
15
I. Labour
Business will recruit specialized personnel to produce quality services that will ensure easy
market penetration and customers’ maintenance. Every employee will also work
independently on his or her area of specialization.
II. Materials
The cost of materials depends on the market. The business intends to purchase materials
directly from dealers so as to get friendly terms ad highly quality materials.
III. Expenses
Apart from labour the business will incur other expenses to ensure it runs smoothly.
EXPENSES
COST PER MONTH
Legal fees
17600
Electricity
1600
Telephone
3200
Water
1920
Miscellaneous
16000
TOTAL
40320
5.5 Factors Affecting Production Process
i. Inadequate finance. This may lead to poor performance of the business not expanding and
employee’s strikes due to delayed salary.
ii. Theft. Business may incur loses due to insufficient security gadgets and employees stealing
stuff from the premises.
iii. Inadequate skills. Employees may not be able to handle equipment and perform task
assigned since they have no skills for the modern technology.
iv. Competitors. Upcoming similar firms with proper and advanced equipment may be a
threat to the business since it might lose other customers.
v. Government Policies. The roles and regulations stated by authority might be too harsh,
high taxation and tedious license procedures.
16
vi. Technology advancements. This will incur more cost on the business training and buying
of the new technology will be required.
To curb all these, the business will put in place the following;

Provide adequate training to the employees.

Install modernization security to the employees and alarms to ensure safety throughout.

Ensures good interaction and relation with Kenya Commercial Bank so that they may
assist in financing.

Give reasonable allowances and incentives to boost morale of employees.
5.6 Production Output
When production process prospers, the business tends to:

Open up more branches in order to provide more services for the country.

Create more employment for surveyors who are not able to use their skills due to lack of
jobs.
5.7 Regulations Affecting Production
Safety Regulation
Two fire extinguishers will be purchased and placed strategically for easy extinguishing
process in case of fire outbreak.
Health Regulations
The business will be purchased a first air kit that will be permanently kept refilled the
premise will also be kept clean at all times.
Government Regulation
Labour laws; the business will ensure employees are paid early and compensated incase of
any problem, practiced under the workers compensation Act 236 under Ministry of Labor.
Environmental Regulation
The business will dispose of its waste and garbage in a garbage bin to ensure proper disposal
and maintain a clean and healthy environment.
17
CHAPTER FIVE
FINANCIAL PLAN
6.1 Pre-Operational Cost
These are the expenses incurred before start of the business operation.
ITEM
COST
Prepaid rent
55200
Permits
7200
Water bills
2016
Electricity bills
1200
Stationery
2432
TOTAL
68048
6.2 Working Capital
Working Capital = Total Current Assets – Total Current Liabilities
ITEM
Current Assets
YEAR 1
YEAR 2
YEAR 3
Stock
40000
16000
24000
Debtors
80000
32000
8000
Cash in bank
1600022.40
1760000
1067808
Cash in hand
654400
215456
160000
2374422.40
2023360
1259808
Creditor
104000
88000
160000
Short term loans
400000
320000
528000
Total Current Liabilities
504000
408000
688000
2878422.40
1615360
571808
Total Current Assets
Current Liabilities
Working Capital
18
Projected cash flow statement
Meridian surveying and consulting
projected cash flow as from January 2020-2022December
ITEMS
Cash inflow
Cash balance
Cash from Survey
Services
Total Cash Flow
Cash Outflow
Purchases
Salaries
Rent
Water
Electricity
Total Outflow
Net Cash Flow
JAN – MARCH
APRIL – JUNE
JULY – SEPT
OCT – DEC
78422.40
1920000
951062.40
2160000
1999062.40
2400000
3206262.40
2624000
1998422.40
3111062.40
4399062.40
5830262.40
284800
585600
192000
5760
4800
1047360
951062.40
320000
585600
192000
8000
6400
1112000
199062.40
400000
585600
192000
8800
6400
1192800
3206262.40
480000
585600
192000
9600
8000
1275200
4555062.40
Net Cash Flow = Total Cash Inflow – Cash Outflow
6.4 Proforma Income Statement
Elite surveying and consulting
Proforma income statement as from January 2020-2022 December
ITEM
Sales
Cost of services
Gross Profit
EXPENSES
Salaries
Rent
Electricity
Water
Advertisement
Stationery
License
Maintenance
9104000
4320000
4784000
8880000
4160000
4720000
7200000
3200000
1000000
2342400
768000
19200
23040
192000
28800
211200
200000
2342400
768000
11200
12800
128000
192000
32000
80000
2342400
768000
8000
9600
80000
12800
16000
32000
19
Telephone
Insurance
Total expenses
Net Profit before tax
Taxation 16%
Net profit after tax
38400
32000
3675040
1108960
177433.60
845126.40
8000
32000
19433600
1286400
205824
1080576
8000
32000
3308800
691200
110592
580608
6.5 Proforma Balance Sheet
Elite surveying and consulting
Proforma balance sheet as from 1st 2020,2021,2022
ITEM
YEAR 1
YEAR 2
YEAR 3
Survey equipment
176000
1105120
581920
Furniture
108800
440000
298880
Vehicles
108990
Total Fixed Assets
1374704
1545120
880800
Stock
40000
16000
24000
Debtors
80000
32000
8000
Cash at bank
654400
215456
160000
Cash in hand
1600022.40
1760000
1067808
Total Current Assets
2374422.40
2023360
1259808
TOTAL ASSETS
3749126.40
3568576
2140608
Creditors
104000
88000
160000
Short Term Loan
400000
320000
528000
Total Current Liabilities
504000
408000
688000
Owners Equity
1120000
1280000
800000
Long Term Loan
1280000
800000
72000
Total Long-term Liabilities
2400000
2080000
872000
TOTAL LIABILITIES
2904000
2488000
1560000
FIXED ASSETS
CURRENT ASSETS
CURRENT LIABILITIES
LONG TERM LIABILITIES
20
NET PROFIT
845126.40
1080576
580608
Total (Net Profit – Liabilities)
3749126.40
3568576
2140608
6.6 Break-Even Point
Determination of fixed cost
FIXED COST
YEAR 1
YEAR 2
YEAR 3
Salaries
2342400
2342400
2342400
Rent
768000
768000
768000
License
2112000
32000
16000
Insurance
32000
32000
32000
TOTAL
3353600
3174400
3158400
Determination of Variable Cost
VARIABLE COST
YEAR 1
YEAR 2
YEAR 3
Electricity
19200
11200
8000
Water
23040
12800
9600
Advertisement
192000
128000
80000
Stationery
28800
19200
12800
Maintenance
200000
80000
32000
Telephone
38400
8000
8000
Total
501440
259200
150400
Calculation of break-even point
Break-even = fixed cost/contribution margin
21
Contribution margin = contribution/sales
Contribution = sales – variable cost
1st Year
Contribution = 9104000 – 501440
= 8602560
Contribution margin = 8602560
9104000
= 0.94
Breakeven Point
=
3353600
0.94
= 35676.60
2nd Year
Contribution = 8880000 – 259200
= 8620800
Contribution margin = 8620800
8880000
= 0.96
Breakeven Point
=
3174400
0.96
= 3306666.67
3rd Year
Contribution = 7200000 - 150400
= 7049600
Contribution margin = 7049600
7200000
= 0.98
22
Breakeven Point
=
3158400
0.98
= 3222857.14
6.7 Calculation of Profitability Ratio
Gross Profit Percentage
% G.P. = (Gross Profit/Sales) x 100%
1st Year
% G.P. = 4784000 x 100
9104000
= 52.55%
2nd Year
% G.P. = 4720000 x 100
8880000
= 53.15%
3rd Year
% G.P. = 4000000 x 100
7200000
= 50%
6.8Return on Investment
R.O.I = Net Profit x 100%
Total Fixed Assets
23
APPENDIX I
CRITICAL RISKS
The risks expected to be encountered during the operation of the business include the
following:

Over taxation in the in the region may affect the operational budget of the enterprise

Presence of attackers in the region such as Al-shabaabs may threaten and scare the
customers and daily operation of the enterprise

In case of any fire-outbreak, most of the facilities used to run the enterprise may be
damage hence affecting the enterprise negatively.

Presence of corruption by some of the members may affect the business negatively

Theft of the existing stock may also affect the operational activities of the business
The mitigation to be used during the operation of the business includes the following:
 Insurance cover
 Prudence management and adherence to corporate
 Maintain enough working capital
 Develop risk management plan.
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APPENDIX 11
MILESTONE
ACTIVITY
START DATE
END DATE
Choosing a business proposal 3/02/2018
18/02/2018
Commencing write up
21/02/2018
03/03/2018
Writing chapter two and 06/03/2018
12/03/20168
three
Writing chapter four to six
13/05/2018
27/05/2018
Review and correction of 28/05/2018
29/05/2018
business plan
Typing chapter one to six
4/06/2018
Completion of business plan
02/07/208
23/06/2018
25
REFERENCE
Graham, F & Stetan Z (2014). Guide to Business Planning. Profile Publishers.
Economist Edition
Hirsch, R. D (2015). Entrepreneurship 6th Edition McGraw Hill Publishers New
Delhi.
Kuratko, D & Hodgetts, R (2015). Entrepreneurship in the New Millennium. India
Edition. 5th Edition
Kuratko, Donald H and Richard M. Hodgetts, R (2014).Entrepreneurship: A
Contemporary Approach. South West Division of Thomson Learning.
Manu George and Thiongo John (2014). Entrepreneurship Education in Vocation
and Technical Training. UNDP/ILO Geneva, Turin and Nairobi Kenya.
Salemi, N.A (2015). Fundamentals of entrepreneurship.
www.bplans.org
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