j&n business plan
TRANSCRIPT
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BUSINESS PLAN
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Table of Contents
CONTENT PAGE
TABLE OF CONTENT..2
EXECUTIVE SUMMARY.3
BUSINESS DESCRIPTION4
INDUSTRY ANALYSIS..9
MARKETING PLAN...10
SWOT ANALSYS.13
SALES TACTIVS & PRICING...15
PROMOTION AND ADVERTISEMENT..17
MANAGEMENT AND ORGANIZATION PLAN.19
ORGANIZATION CHART22
RECRUITMENT TRAINING AND PROMOTION..23
LICENSES, PERMITS AND BY-LAWS..25
PRODUCTION/OPERATIONAL PLAN..26
PRODUCTION COST..28
FINANCIAL PLAN32
BIOGRAPHIES OF THE COMPANY OWNERS42
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EXECUTIVE SUMMARY
A feasibility study was undertaken, where the student carried out a study on the existing business in
a bid to establish the viability of this type of business. The results were evident that this was a
viable business but there was a need to improve on the delivery of the services to met the demands
of the customers who are very busy and prefer a service which is technologically savvy.
J&N Green Grocers will be a store with a difference it will be technologically advanced it will
have a website and a use social media portals where its customers can shop online for groceries,
get health and nutritional information, and find all recipes and meals ideas needed for the different
products that we sell.
The business will employ a manager who will be responsible for the initiation of the business and
managing the other employees, while the 2 business owners shall be partners to in the business.
The partners will be responsible for producing the start up capital as well as providing ideas for the
growth of the business.
The partners will contribute towards the start up capital, therefore there will be no need for
obtaining a loan from any financial institution. It is however agreed that should the business expand
then there will be need to explore the possibility of getting funds from financial institutions.
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CHAPTER ONE
BUSINESS DESCRIPTION
The nature of our business will be dealing in fresh food supplies such as vegetables, fruits, fresh
juices and sea food.
Business Name
The business name shall beJ&N GREEN GROCERY
Mission Statement
The mission is to serve customers and provide them with the best grocery services.
Core Values
To achieve maximum customer satisfaction
To deliver quality services to customers
Practice what we preach: honesty, integrity and ethics
Background of Business OwnersThe business owners will comprise of a partnership of a couple namely:
1. Jeff Mokaya
2. Nasra Amina
The credentials of the owner are mentioned in their bio-data page attached in the annex.
A written agreement shall be prepared for the business and it will be clearly stipulated that the
partners will not be entitled to a salary or other remuneration for their services, they will however,
be entitled to a share of the profits, and they also share the risks incurred by the business even if it is
due to a partners mismanagement or dishonesty.
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A partnership has been decided as the preferred business because it is easier to set up this type of
entity, it only requires a partnership agreement and the process of converting the business into a
limited company later on is straight forward.
Business Location
The business shall be located along Amboseli Road, off Gitanga Road. The residents of this area
are mainly Asians, Europeans and affluent Kenyans. The business shall draw customers from the
surrounding residential homes, passerbys and motorists along Gitanga and Amboseli Road.
Building on Lease: - The store from which we are going to start our business is not our own but we
are starting business by taking it at on lease and paying monthly rent of Kshs.2500.
Postal Services - The business has its own private mailbox at City Square. This way our customers
can reach us through: The Manager, J&N GREEN GROCER, P. O. Box 2071 00200,
NAIROBI.
Equipment: - The main equipment which is requires for our vegetables retail and distribution store:
Motor cycles
Shelves
Packaging materials; bags and bottles
Fans
Computer
Refrigerators, freezers and cooler boxes
Weighing machines
Trays for cut vegetables
Office furniture
All these equipment shall be purchased at the commencement of the business.
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Legal Form of Business: - The business is a partnership in which all individuals are liable for
business liabilities of business. Partners make all decisions and can act immediately and they are
also responsible for all profits and losses. Partners will also contribute an equal percentage of the
startup capital.
Continuity of Business: - The continuity of our partnership will be based on the agreement held
between all the partners so that in case of death of any partner; there will be no affect on the
business.
Amount of Finance Needed
The proposed capital required will be Kshs. 500,000 this will be obtained through share
contribution from the group members. Each member will contribute Kshs 250,000 to obtain Kshs.
250,000 which is the required start up capital.
Products
The business will offer the following goods and services:
(i) Variety of fresh, processed and dried vegetables and juices
(ii) Variety of fresh / processed fruits and juices
(iii) Variety of sea foods
Business Status
This is a business start up and therefore will require registration of the business and equipping of the
business. The name will be searched at the Registrar of companies. The name will then be
registered by payment of a fee. A city council license shall also be obtained in order to get a city
council license. The business deals with food items therefore a city council health certificate shall
be obtained for the premises as well as the workers of the premises.
Expected Time of Opening
The business is expected to start operating early next year 2014. The business will operate on a six
days per week schedule, from Monday to Saturday working hours are: 8.00 a.m. - 6.00 p.m
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Industry
The business industry is under the Ministry of Agriculture as well as the Ministry of Commerce and
Industry, we will be selling products that are obtained from the agricultural sector and generate
income and profit as a form of business.
Industry Size
The business will have a variety of services on offer and will attract many customers. The business
will benefit from advertising on signposts, FM radio services, facebook pages, use of salesmen on
motorbikes and by word, this will be our strong point against our competitors who have a majority
of unskilled staff on the mama mboga kiosks. Many of the competitors do not sell fresh juices and
seafood therefore our business will have a larger customer base.
Business Goals
For the success of the business planning is essential for any enterprise particularly those with
growth aspirations. If the small enterprise is to grow beyond the survival stage, then planning and
establishment of goals is needed.
Viability of the Business
The feasibility study and research revealed that this type of business is profitable as long as the
entrepreneur has the capital and a trained staff.
The business set-up and environment will make it more attractive to customers.
The business will purchase its supplies from the mushrooming greenhouses and the Wakulima
market which is located 5km from the business location.
The business will provide specialized services like free home delivery, cut and packaged vegetables,
packed juices and processed/ cooked vegetables to our customers.
Entry and Growth Strategy
The entrepreneurs have carried out a market research to gauge the viability of the business. This
was achieved by use of use of sales person and some of the sales techniques that will be employed
include:
Introduce a 5% discount for every purchase of over 2000/= Kenya shillings as a compliment.
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Look out for contracts to supply to churches, hospitals and schools to make more profits.
Display of health and non-defective products to draw more attention from customers
Providing of special offers to win the majority of customers therefore making a higher profit
Providing raffles tickets for sales promotion.
Introduce Points Earning Card whereby customer earns 2 points for every Kshs 100 spent.
Management Control Strategy:
Distribution of Profits and Losses: - All the partners have equally responsible for loss and the
profit gained from the business. The profit will be distributed among all the partners equally.
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CHAPTER TWO
INDUSTRY ANALYSIS
Kenya is an agricultural country therefore it mostly fulfills its demand of fruits and vegetables itself.
There are number of markets and providing fruit shops serving customers. The concept of green
grocers are existed in the form of mama mboga and Most people buy their vegetable supplies
from the mama mbogas daily or from the market weekly in order to fulfill their requirements and
keep that stuff for a whole week. The availability of both vegetables and fruits, juices and sea food
in a single shop is not common practice, only super stores provide the fruits, vegetables and sea
foods collectively.
Market Segmentation:
Our market is integrated so we have only one segment to serve that is House hold Families
Market Situation:
As the food is basic necessity of people and people add vegetables to their food for getting the
nutritious values and changing their tastes. The people of the area that we are going to serves are
also found of vegetables and almost 300 families need vegetables on daily basis.
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MARKETING PLAN
Potential Customers
The customers will be the residents from the area as well as passerby and motorists using this busy
road. J&N GREEN GROCER will seek to attract them all and save them the cost of travelling
long distances to look for similar to those in bigger business enterprises.
Another category of customers to be served by J&N GREEN GROCERSare the surrounding
institutions such as hotels, schools and hospitals.
With eloquent and expounded advertisement on facebook, radio, daily News Papers, TV and on
billboards customers will be drawn from different areas who will come to buy from the business
premise.
Due to the average earning of the targeted customers the packaging of the commodities will be of
various standard quantities in order to give room for even the lower class level to be able to have
access to the business room and enjoy the vast services of the staff.
MARKET SHARE
The J&N GREEN GROCERSis hoping to capture a good number of the current market in order
to make it a success. We will Endeavour to provide first class services with food quality.
The market that we would like to penetrate is Families. There are thousands of families in this
area. They all belong to upper class. They are health conscious and time is important for them as
they have their own social and professional circles. They are not sensitive towards prices. Most
families have servants who perform the major duties such as cleaning houses, purchasing, cooking
etc.
Positioning Statement:
J&N Green Grocers provide vegetables to consumers who are health conscious and want to save
their time
Our business Green Grocers covers all future prospects. Currently it will sell vegetables, fruits
and sea food.
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Marketing Mix Variables:
Services: - the business willdeal in vegetables, fruits and sea food products and providing
this service to our customers in following ways:
Retailing: - We will have a shop that is located at the middle of the two societies, i.e. the
affluent citizens and the middle level citizens. We arrange the vegetables on shelves so that
the customer can easily make the buying decision. We give the opportunity to our customers
to visit the store and buy whatever they want.
Use of salesmen on motorbikes: - At the beginning of the day we will send our two motor-
bikers in both areas. They will visit the areas only once in a day. They will be there from
9:00 am 3:00 pm. They will be facilitated with bicycles on which there will be vegetables
up to 30kg for each hawker they will distribute the vegetables in brown papers packaging
Home Delivery: -We are also providing the free home delivery to our customers. As in
some families there is a trend of cooking in evening so by ordering us they can easily get
vegetables without tension of arranging the food stuff in day time. The other potential
reasons may be the shortage of vegetable, sudden arrival of guests or unplanned cooking.
Two kilogram (2-Kg) is the minimum order for which we will provide home delivery
services.
Cut Vegetables: - We are providing opportunity to our customers to get cut vegetables from
our store by ordering us. The customers can get benefit of this service who wants to save
their time. The cut vegetables will pack in plastic and then in brown packing.
COMPETITION
Though the business is not going to have a stiff competition as revealed by the survey there are a
few competitors such as the Good Edible Green at Lavington green, Green House and Excellent
Corner Greens. As estimated the J&N GREEN GROCERS shall offer a larger variety of
products as compared to the competitors.
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The competitors are:
a. Good Edible Green
b. Green House
c. Excellent Corner Green
The strengths and weakness of competitors are as follows:
Name Strength Weakness
Good Edible Green He is good in business
language i.e. knows how to
persuade customers.
Has a bigger stock than the
two.
Good prices.
No variety of goods has
more of the traditional
mama mboga supplies
No parking space for
customers in cars.
No transport facility for
bulks sales and supply.
Financial instability.
Green House
There is a parking space for
cars.
Good customer relationship
No transportation on
goods sold in bulks and
also on supplies.
Lowly paid staff has a
smaller stock of
products.
Much committed at his
place of work than
monitoring of the
business progress
Excellent Corner
Greens
Attractively designedpremises are a good crowd
puller.
It owns a van for the
delivery and supply of bulky
products.
Frequent water shortage.
High prices
Low morale of service
by the employees.
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J&N GREEN GROCERSwill employ a qualified staff of not less than two years experience in the
similar field. With total commitment to work with minimum supervision.
The higher stock is a greater incentive to winning many customers and better prices than his
competitors.
J&N GREEN GROCERS SWOTS
(Strengths, Weaknesses, Opportunities, Threats and Solutions)
The table below shows the approach behind the success of the business as compared to its
competitors.
Strengths of GreenGrocer:
Location & Accessibility to Customers: Our store is located at thejunction of the two busy roads Therefore the people of both areas can
easily be served. The surrounding of the stores is good; there is no
traffic and parking problems for us as well as for our customers. We
have the advantage upon our competitors in terms of location, service
delivery time and access.
Home Delivery: We will be providing free home delivery to our
customers as no our competitor is providing this service.
Serving/Delivery Time: Due to our location we can fulfill the order of
our customers within 15 minutes. While special services of cut
vegetables can be fulfilled within 30-35 minutes.
Cut Vegetables: We will give our customers the unique service of
providing them cut vegetables on order so that their time to prepare
food is reduced
Technology: The successful implementation of technology in the store
will be a real strength for the company.
Size of store: The business will enjoy the benefits of a smaller store
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format with a more singular focus than does a supermarket and
therefore, is able to focus on not only convenience but service as well.
Weaknesses of Green
Grocer Resources : much of the initial resources will be building its store from
the scratch
Inventory Management: The management of vegetables is our major
problem that how to manage the extra Inventory because extra
inventory will sale at another shop in poor area near to the Aden Avenue
at very low profit.
Long Distance: There is problem of long distance from some of the
markets supplier cost is higher.
Market : the number of green groceries are also increasing
Opportunities of Green
Grocer
Introducing meats: We can expand our business by introducing fruits
and meat so that our customers can get the food items what they want.
(one stop shop)
Online Services: In order to cover more market online services can be
helpful for us.
Health factors : there is a growing campaign of healthy eating habits in
the country from which the store will benefit
Threats of Green
Grocer
Most important is that to create the customers trust because the
cut vegetables and simply on order delivery services are
introducing first time in that area by J&N Green Grocer. So
there is most important point is to keep in mind the human
health. It is a threat, may people do not believe on our safety
steps, so we are very much conscious about our customers
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health and care it by providing washed vegetables, and keep the
employee appearance suitable by providing him proper uniform.
The natural disasters e.g. flood, lack of rain etc are another
threat for us. May be due to these disasters the prices of
vegetables rise and profit margin may decrease.
Another threat is from competitors because there is direct
competition from other competitors, and the one hawker who is
already serving this area. But J& N Green Grocers is
providing the unique services i.e. washed and cut vegetables, on
order delivery.
Solutions J&N Green Grocers will try to use quality materials during set up so
that there will be no much frequent need for repairs, we will also invest
in good quality refrigeration equipment to avoid the vegetables and
fruits going bad. J& N Green Grocers will also procure a van which
will be used to transport the supplies from the market.
To bit our competitors we will:
a. Offer a better, friendlier service
b. Show customers that they really are valued
c. Be different wrap our goods securely and always offer help
d. When customers make a return visit we will ask them if they
were happy with the services and goods we offered last time
e. Tell customers about new products that are available
f. Call the customers to find out if there is anything we can do for
them
g. Take time to know our customers well
h. Endeavour to sell quality goods
i. Run promotions to benefit our customers
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SALES TACTICS
The Sale tactics to be put in place for the business will include the following:
(i) A discount of 5% for any purchase of over 2000/= Kenya shillings
(ii) Purchases are carried to the owners car
(iii) Customer contacts will be taken and follow up calls will be made to the customer
(iv) Providing raffles tickets for sales promotion.
(v) Introduce Points Earning Card whereby customer earns 2 points for every Kshs.100
spent
PRICING STRATEGY
The J&N Green Grocers will take into consideration the following points when giving price
worthiness of the goods:
(i) The cost of acquiring this fruits and vegetables from the farmers and other suppliers.
This helps to finally give value of prices to the customers.
(ii) The competitors price: compare the pricing of your competitors will be much more
interested to buy from her.
(iii) The aim of making much more profit for the business to achieve its goals. It has to make
as much as possible profit to boost the morale of the business.
(iv) The cost of labor: the cost to pay salaries to the staff members also contributes for its
from the business they are going to be paid.
(v) The season of the year meaning that when there is plenty supply with goods bought from
farmers and suppliers at a lower price the effect so relayed to the pricing of the goods in
the grocery meaning reducing the prices. When goods are scarce in the market prices are
affected hence the rise of prices of goods.
PROMOTION AND ADVERTISEMENT
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For the enterprise to flourish and with possible expansion in the future, attracting customers and
retaining them will be of paramount importance. The following ways are used:
Current Strategy: - We are currently using the print media, facebook for the purpose of promotion.
We are using brochures and pamphlets for advertising. As it will cost effective for us as compare to
any other media. We have also contacted the other shop keepers to give our brochures to their
customer when they come to purchase.
Future Strategy: - In future we will use TV and radio media, road side banners and bill board. In
order to cover more markets. As the number of new housing schemes are build there.
ADVERTISING
This is done by:
(i) Use of posters that will be placed along sign posts to give direction to the business
location.
(ii) Advertising on mass media e.g. radio and TV sets, and even on magazines and daily
News Papers once a month.
(iii) Use of social media (Facebook & Twitter)
(iv) Sometimes organizing for a space in a busy traffic way where the majority pedestrians
pass and exhibit her products.
Personal Selling - This means that customers are not going to come and go round alone in the
business premises picking products and paying, There will be attendants who will be accompany the
customer and assist them as they select their produce.
Promotion
This is done in the following ways:
(i) Packaging of fruits in transparent polythene bags and other products in the grocer will
have a significant influence to the customers eye speculation.
(ii) Giving a free sample on special offers and gifts to potential customers
(iii) free gifts shall be given for purchases made for bulk purchases
(iv) The displaying of the products on shelves will be arranged in such a way that the
customers will find it easy to locate and move peacefully inside the shop i.e. it will be
attractive and appealing.
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Publicity - This is the action of doing something that will make the business be in the news. The
J&N GreenGrocers will do this by:
(i) Being helpful to customers who may need some advice on particular products on sale.
The business will offer advice on substitutes of sales on shelves.
(ii) Ensuring that customers are attended fully with honest dealings, polite and with a high
level of discipline put in place.
(iii) Donating money to charitable organizations, and self help groups
(iv) The customers are not restricted to come and view the products even through they are
not buying. They might be attracted and made to buy.
DISTRIBUTION STRATEGY
The J&N Green Grocers is to use a direct distribution channel as it will be dealing with its
customers directly. The reason for this choice of distribution is based on:
(i) The cost will reduced because the money comes directly to the enterprise as there are no
middle men.
(ii) The products get fast to the customers.
(iii) The other sales will be provided to restaurants, churches without any brokers or agents.
This way the proprietor is able to gauge how well the business is doing by the customers reaction
when he/she buys, by asking their opinion on what they are buying, what they are satisfied with and
what they think of the business generally.
Parking and Security - This is also among the priorities of the management to ensure that the
customers are safe and their cars at the parking are taken care of. This is done by employing a
watchman and also somebody to clean the front screen of the cars and also the business will be
fortified and electrical fence provided.
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CHAPER THREE
MANAGEMENT AND ORGANIZATION PLAN
Organization Structure
This comprises of different posts, with the highest post being the Business Manager and the lowest
being the watchman.
1. Business Manager
The proprietors ofJ&N GREEN GROCERSwill employ a business manager.
Qualifications
The Business Manager must have the following qualifications:
1. Must be a Kenyan citizen.
2. Must be aged between 24 35 years old.
3. Diploma in Business Management
4. Knowledge of Driving
Responsibilities
1. Recruiting support staff.
2. Purchasing of items needed for the business
3. Overall supervision and monitoring operations
4. Receiving money from sales made and approving discounts where necessary.
5. Allocating duties and responsibilities
6. Provide a good working environment and give incentives for increased morale
2. Assistant Supervisor
This is an assistant to the manager taking on the duties of a manager when she is not around in the
business vicinity.
Qualifications
1. Be an average age of 20-30 years.
2. Be a holder of a latest certificate in Business Administration
3. Have at least 2 years of working experience
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4. Should be hardworking, honest and ready to work under stressful environment.
5. Should be a Kenyan citizen.
Responsibilities
1. Should be checking on stocks on shelves to be able to buy stock and ensure enough stock
throughout the working hours.
2. Help the manager in overseeing the smooth working of employees and incase of anything
report to the manager.
3. To make sales but hand the money to the manager.
3. Cashier
The business firm has one employee who has the following qualifications:
1. A certificate in KCSE with mathematic mean grade C.
2. Should have worked in a busy business firm for at least 2 years.
3. Should be hard working, honest and have a good memory to be able to grasp the prices of
the commodities on shelves.
4. Must be between the ages of 18years to 27 years.
Responsibilities
1. Receive the money at the counter and give correct change.
2. Give correct figures to the customers incase they dont know the actual price.
3. To attend customers at the counter and give necessary information incase of need.
4. Counting the money and balancing the figures correctly before handing to the assistant
manager.
5. Seeing that all customers pay the counter.
4. Attendant / Motor Bike
There is one employee helping to assist customers go round the merchandise and help to carry the
goods sold to the counter and to the owners car.
They have the following qualifications:
1. Should be a form four leaver fluent in English and Swahili.
2. Should be above 18 years.
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3. Having worked in the similar enterprises would be an added advantage.
4. knowledge of motorcycle
Responsibilities
1. Make sure that grocer is very clean and tidy.
2. Make sure that all vegetables and fruits are arranged in an orderly manner, attractive to
customers.
3. Attend customers in a respective and patient way to him/her.
4. To carry any heavy or bulky sales to the counter and finally to the means of transport.
5. Help to load and unload the goods to be sold in the grocery.
6. Should be a hard working, honest and good socialization and interaction with customers.
Watchman
The firm will be operating with two watchmen having the following qualifications:
1. Scored at least an average of D- KCSE.
2. Should have trained as a security guard and at least 4 years of working experience.
3. Should be strong, commanding, honest and trustworthy.
4. Having handled dog section will be an added opportunity
ORGANIZATION CHART
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The following is an organization chart forJ&N Green Grocers flowing from the top highest rank to
the least rank.
RECRUITMENT TRAINING AND PROMOTION
22
MANAGER
ASSISTANT
MANAGER
CASHIER ATTENDANT
WATCHMAN
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After all the employees have qualified for the jobs they are inducted on the business requirements
and operations and the manager allocates them duties.
Recruitment : Advertisement for the positions will be done by word, and all the interested
candidates shall go through an interview session.
Training : The watchman is trained on how to usher in customers during the day. They are advised
to be in their uniform throughout the working hours. They are also trained on how to guide
customers to the business firm. The cashier and the assistant manager plus the three customer care
employees are taught on various names of the sales vegetables and fruits, their prices and how to
make the place attractive and appealing to customers. They are also trained on how to make
business a success. The training is to be presided by the GREEN VEGETARIAN FIRM. Lasts
for one day starting at 8.00 a.m. to 5.00 p.m.
Promotion : Promotion given on the hardworking, honest, punctual in reporting hours of work and
experience gained through everyday performance. Promotion done by the manager of the business.
If an employee is working as a customer care he/she will be promoted to buy stock from the farmers
and other suppliers. The cashier the watchman and assistant supervisor are to get promotion on
their salary scale increment.
Remuneration, Incentives and Salaries
For greater output employees have to be given morale to work efficiently with good and conducive
working environment.
This is done through the following remuneration and incentives:
1. Twenty five working day leave for every employee per year at different and well spaced
months.
2. 5% commission of their salaries to be given after two weeks of every month. This calculated
on the salary of each individual.
3. Christmas and other holidays of an employee hours of work receives 5% of ones salary.
4. Praising employees work and adding more value on direct communication between
employee and employer.
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Salaries : After three months of work all employees will work on a permanent basis and the
business will support them by processing the statutory requirements such as NHIF and NSSF
contributions. The business will also pay the obligatory tax requirements.
Position Number of
Employees
Monthly salary per
Employee in Kshs.
Assistant Supervisor 1 20,000
Cashier 1 10,000
Distribution / sales 2 18,000
Watchman 1 6,000
TOTAL 5 54,000
LICENSES, PERMITS AND BY-LAWS
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Every business is required to obtain a license, this is a legal requirement from the city council. The
license gives the business a permit to operate and this is issued according or depending on the kind
of business.
R& B GREEN GROCERS, will obtain a permit which is in the class of permits that ranges for
Kshs. 5,500.
By-Laws : The By-Laws that governs the enterprise are the foods and poison act which require:
(i) To sell fresh vegetables and fruits
(ii) Comply with health requirements of proper dumping
(iii) To sale products measured on weight quantities to comply with the standard
measurements and weight.
(iv) No illegal products should be sold.
(v) The employees will also be required to obtain a certification from the City
council to confirm that they are not suffering from Tuberculosis.
The others are that will be enacted deal with labor laws for reinforcement of employer and
employees relationship and respect human rights.
Legal services - A lawyer is needed to represent the R& B Green Grocer to provide advices and to
mitigate any misunderstandings or court battles with different stakeholders. The lawyer will handle
all legal aspects of the business and will be paid for every assignment that his/her services will be
used.
Bankers COOPERATIVE BANK The business will obtain a bank account from Equity Bank.
Banking of the funds will be done daily.
CHAPTER FOUR
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PRODUCTION/OPERATIONAL PLAN
Equipments and Tools - The equipments and tools that a firm uses are of great importance as they
determine how well the work in the firm is carried out.
The equipments that the R& B Green Grocers will purchase for use are little long term cost is
reliable of adequate capacity and to be handled with maximum care and maintenance. They are as
follows:
Equipments for the First Year
TYPE OFEQUIPMENT
CAPACITY QTY COST IN KSHS.
Refrigerator Medium 1 50,000
Freezer Medium 1 40,000
Weighing machine Each 1 15,000
Calculator Each 1 2,000
Trolleys Each 3 3,000
Baskets Each 10 500
Water tank 2000 liters 1 3,000
Watering can 10 liters 3 600
Wheel barrow 100 kg 2 1,200
Air fans Each 3 2,400
Knives Each 5 150
TOTAL 31 119,050
Premises
The J&N Green Grocers operates a long Amboseli road off Gitanga Road near Valley Arcade. It is
situated near the junction of Gitanga and Amboseli where very few shops of similar kind are set.
The permit to let the business start is acquired from the city council.
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The shop or grocery is packed well with vegetables and fruits and other kinds of sales in an
organized and attractive way. In rows to let way for the customers go round. A space of 10 x 10 ft is
left in the shop where the counter cashier is seated.
Opposite the grocery is build an office for the assistant manager who monitors for the sales and
customer needs incase of help or advice. Also at the opposite side is a small shade for customers
who take soft drink. All the things in the grocery are closed inside as the watchman takes guard at
night.
Labour
J& N GREEN GROCERSwill employ skilled labor for they underwent training before starting on
the business grocery. The owner is the manager under her is the assistant manager then the cashier,
the 3 attendants and the watchman. Hired laborers are also required who come to weed the flowers
and clear the fence and cut grass. A lawyer is also needed incase of legal matters to be carried out.
Capital
The initial money to put the business on its feet is from reliable source this will be a contribution by
all the business owners. It has been agreed that each owner will contribute an equal share of
Kshs.250,000 to the business to meet the Kshs.500,000 that is required for the business to
commence.
PRODUCTION COST
This is the entire cost incurred in establishing the J&N GREEN GROCERS before any profit has
been made. All the money at start up which has been pumped into the business.
Type of Cost Amount in Kshs.
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This is a 6 months costing
Salaries
Water
Advertising
License
Hired laborTelephone
Electricity
Rent
279,000
7,500
8,000
5,000
3,0005,500
7,200
TOTAL 315,200
Cost of operation for the first year in Kshs.
Equipment cost + Material cost + Overhead cost.
119,050 + (68,600 x 2) + (315,200 x 2)
119,050 + 137,200 + 630,400 = 886,650
Production Strategy
This involves the areas that management has laid strategies on ways of improving the designs of the
products considering aspects like consumer tastes and preferences based on the sales made.
Products Designs
The product design constitutes packaging of the fruits and vegetables on various quantities based on
market demand.
The type of products to be incorporated by theJ& N GREEN GROCERS includes:
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(i) Offer varieties of vegetables -e.g. spinach, cabbages, sukuma wiki, asparagus etc.
(ii) The vegetables and fruits purchased from the markets and farms will be of the
highest quality and very fresh and free from any defects. These will attract
customers and retains them.
(iii) The management will ensure that there is enough stock for mostly demanded
products, this keeps steady flow of customers and in the process gives them an
opportunity to Window shop
(iv) Motivation of employees, the management is trying to make their working hours
convenient while at the same time using this hours scheduling to the enterprise
advantages. They are expected to report in at 8.30 a.m. and leave at 6.00 p.m. so
as a customer from work can still find the grocery open and buy something if
there is need.
(v) It is the intent of the J&N Green Grocer is to increase production by making
greater sales in the market.
Waste products include polythene bags, vegetable leaves, spoilt fruits and stalks of some vegetables
and onions will be collected and packed in composite pit and sold to farmers will use them for
processing organic fertilizer or for pig feeds.
OPERATIONAL PLAN SCHEDULE LAYOUT
STEP DUTIES
1 Manager and assistant Manager reporting hours 8.00 a.m.
2 Manager hears from is assistant manager about the
watchman. He also gets a list of things to be purchased for
8.00 - 8.30 a.m.
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the day to add stock.
3 The assistant manager ensures all employees have reported
to work and prepares them for work.
8.30 9.00 a.m.
The Grocery is opened as the cashier receives some money
from the manager to cater for changes
9.00 9.15 a.m.
4 Break tea is served while working 10.00 10.30 a.m.
5 Lunch break for a short while the grocery is under themanager and his assistant.
12.30 1.00 p.m.
6 Evening tea served 4.00 4.30 p.m.
7 The manager and his assistant takes stock of the grocery 5.00 5.30 p.m.
8 Assistant manager receives money for the days sale from
the cashier and hands over to the manager
530 6.00 p.m.
9 The grocery closed 6.00 p.m.
The work flow is as follows:
Purchasing/supervision/selling
Receive money
Records money Received
Takes Stock
Close the Business
REGULATIONS
Environmental - The firm is to provide a dust bin to put all the waste polythene papers, vegetable
leaves, spoiled fruits and any other waste material
These are sorted out to be sold to the farmers who take them as manure and for mulching and the
polythene papers are given to waste collectors. This way there would be no biodegradable item is
released to the environment.
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Health - As required by the ministry of health under the local Authority the business is to be set
under hygienic environment. The products to be sold must adhere to the Food and Beverage Act
free from poison. The workers health conditions are checked after every three months to ensure no
contamination of vegetables and fruits during handling.
Safety
1. Nobody is allowed to run or move fast while in the shop
2. Serve one customer at a time to avoid confusion.
3. In case of any problem the manager should be contacted immediately
Other Regulations
The other regulations observed are:
1. Punctuality
2. Loyalty and adherence to rules.
3. Ensure no council rules are broken in any way. All business transactions are within the
enterprise except the manager and the assistant who contact supplies, distributors, market
agents and legal provision.
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CHAPTER FIVE
FINANCIAL PLAN
This section deals with allocation of funds to various activities within the enterprise, machines, and
persons aimed at achieving the pre-set goals of the business.
Plan for the management of the enterprise.
Shows the potential of the enterprise and its progress
Assess the performance of the business
Uses as standard against which the performance is measured
Represent the entrepreneurs best estimate of future operations is quantitative terms.
Pre-Operational Cost
These are costs incurred by the owners of the business before starting to operate the business such
as; Opening stock, salaries, materials and equipments, license, advertisement.
ITEM COST (Kshs.) Kshs
Opening stock
Salaries
Materials and
Equipments
Licenses
Advertisements
135,000
54,000
5,000
3,000
135,000
54,000
119,050
5,000
3,000
TOTAL 316,050
PROJECTED CASH FLOW STATEMENT
The profit and loss account shows how the business is operating whether at a profit or at a
loss.
Suggests ways of improving projected profitability.
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PROJECTED CASH FLOW FOR 2013
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC A.
TOT
/F 44,30
0
93,50
0
139,80
0
185,10
0
226,45
0
267,90
0
308,30
0
347,35
0
385,55
0
426,65
0
469,1
00
2,893,000
ales 80,00
0
81,00
0
82,00
0
80,000 75,000 76,000 77,000 75,000 75,000 72,000 74,000 75,00
0
922,000
ebts - - - - - - - - - 3,000 5,000 10,00
0
18,000
otal 80,00
0
125,3
00
175,5
00
219,80
0
260,10
0
302,45
0
344,90
0
383,30
0
422,35
0
460,55
0
505,65
0
553,1
00
3,833,000
xpensesurchases 10,00
0
12,00
0
15,00
0
15,000 13,000 13,000 15,000 14,000 15,000 12,000 14,000 15,00
0
163,000
Wages &
alaries
15,00
0
15,00
0
15,00
0
15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,00
0
180,000
icenses 5,000 - - - - - - -- - - - - 5,000
dvertisem
nt
1,000 - 1,000 - - - - - - - 1,000 - 3,000
Water 500 550 500 600 500 450 550 600 500 500 450 600 6,300
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lectricity 900 850 950 900 800 800 850 900 900 950 800 900 10,500
elephone 800 900 750 700 850 800 700 950 900 950 800 900 10,000
ransport 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000
oan
nstallment
- - - - - 2,000 2,000 2,000 2,000 2,000 2,000 2,000 14,000
epair &
Maintenanc
- - - - 1,000 - - - - - 1,000 - 2,000
Miscellane
us
1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 18,000
otal 35,70
0
31,80
0
35,70
0
34,700 33,650 34,550 36,600 35,950 36,800 33,900 37,550 36,90
0
423,800
et Profit 44,30
0
93,50
0
139,8
00
185,10
0
226,45
0
267,90
0
308,30
0
347,35
0
385,55
0
426,65
0
468,10
0
516,2
00
3,409,200
PROJECTED CASH FLOW FOR 2014
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC B.
TOT
B/F 781,00
0
781,90
0
791,70
0
801,40
0
813,20
0
827,6
50
837,20
0
856,90
0
875,30
0
889,00
0
906,80
0
926,55
0
10,088,60
0
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Sales 50,000 51,000 52,000 51,000 52,000 53,00
0
55,000 55,000 56,000 60,000 62,000 68,000 665,000
Debts - - - 3,000 5,000 - 6,000 3,000 - - 5,000 - 22,000
Total 831,00
0
832,90
0
843,70
0
855,40
0
870,20
0
880,6
50
898,20
0
914,90
0
931,30
0
949,00
0
973,80
0
994,55
0
10,775,60
0
Expenses
Purchases 11,000 12,000 10,000 13,000 12,000 12,00
0
11,000 10,000 12,000 13,000 13,000 15,000 144,000
Wages &
Salaries
21,000 21,000 21,000 21,000 21,000 21,00
0
21,000 21,000 21,000 21,000 21,000 21,000 252,000
Licenses 9,000 - - - - - - - - - - - 9,000
Advertise
ment
- - 1,000 - 1,000 - 1,000 - 1,000 - 1,000 1,000 6,000
Water 800 800 900 900 900 950 900 950 850 800 850 900 10,500
Electricity 1,000 1,000 1,100 1,000 1,200 1,100 1,000 1,200 1,000 1,100 900 1,200 12,800
Telephone 800 900 800 800 950 900 900 950 950 800 1,000 1,000 10,750
Transport 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 18,000
Loan
Installmen
ts
2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,000
Repair &
Maintenan
ce
- - 2,000 - - 2,000 - - - - 4,000 - 8,000
Miscellan
eous
2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,000
Total 49,100 41,200 42,300 42,200 42,550 43,45
0
41,300 39,600 42,300 42,200 47,250 45,600 519,050
Net Profit 781,90 791,70 801,40 813,20 827,65 837,2 856,90 875,30 889,00 906,80 926,55 948,95 10,256,55
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0 0 0 0 0 00 0 0 0 0 0 0 0
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PROJECTED INCOME STATEMENT FOR YEAR ENDING 2013, 2014, 2015
ITEM YEAR 1 YEAR 2 YEAR 3
Cash sales
Credit sales
Sub-total (I)
Opening Stock
Purchases
Less closing stock
Cost of goods sold
Sub-total (II)
TOTAL (I-II) (Gross Profit)
Expenses
Wages and salaries
Advertisement
Water
Electricity
Telephone
Transport
Repair and maintenances
Loan re-payment
Licenses
Miscellaneous
Sub-total
Less depreciation at 5% on
material and equipment.
TOTAL
Profit before tax
Tax at 10%
Net profit after tax
922,000
18,000
940,000
-
163,000
15,000
148,000
133,000
807,000
180,000
3,000
6,300
10,500
10,000
12,000
2,000
41,000
5,000
18,000
260,800
5,952.50
254,897.50
552,102.50
55,210.25
496,892.25
636,000
33,000
669,000
15,000
132,000
17,000
130,000
133,000
536,000
180,000
3,000
6,252
10,250
11,700
12,000
2,000
24,000
5,000
18,000
272,200
5,952.50
266,247.50
269,752.50
26,975.25
242,777.25
665,000
22,000
687,000
17,000
144,000
10,000
151,000
141,000
546,000
252,000
6,000
10,500
12,800
10,750
18,000
8,000
24,000
9,000
24,000
385,550
5,952.50
379,597.50
166,402.50
16,640.25
149,764.25
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PROFORMA BALANCE SHEET
ITEM
ASSETS
ENDING
31/12/12
ENDING
31/12/13
ENDING
31/12/14
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CURRENT ASSETS
Cash
Debtors
Purchases
Closing stock
Total current assets
FIXED ASSETS
Materials and equipments
Less acc. Depreciation
Total fixed assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Creditors
Taxes
Accruals
Total Current Liabilities
LONG TERM LIABILITIES
Youths Community Loan
Owners Equity
Family contribution
Total
Total Liabilities
516,200
18,000
163,000
15,000
712,200
119,050
5952.50
125,002.50
837,202.50
261,202.50
10,000
66,000
337,202.50
250,000
50,000
200,000
500,000
837,202.50
781,000
33,000
132,000
17,000
963.000
119,050
5,952.50
125,002.50
1,088,002.50
365,002.50
10,000
73,000
448,002.50
290,000
100,000
250,000
640,000
1,088,002.50
948,950
22,000
144,000
10,000
1,124,950
119,050
5,952.50
125,002.50
1,249,952.50
217,952.50
10,000
92,000
319,952.50
360,000
180,000
390,000
930,000
1,249,952.50
FIXED COSTS YEAR 1
KSHS
YEAR 2
KSHS
YEAR 3
KSHS
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Salaries
Loan re-payment
Licenses
Transport
Miscellaneous
TOTAL
VARIABLE COSTS
Purchases
Advertisements
WaterElectricity
Telephone
Repair and maintenance
TOTAL
180,000
14,000
5,000
12,000
18,000
229,000
163,000
3,000
6,30010,000
2,000
184,300
180,000
24,000
5,000
12,000
18,000
239,000
132,000
3,000
6,25010,250
11,700
2,000
165,200
252,000
24,000
9,000
18,000
24,000
327,000
144,000
6,000
10,50012,800
10,750
8,000
192,050
WORKING CAPITAL
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This is the same as operating capital which measures the flow of cash and the ability of the firm to
maintain its cash or liquid assets to compute the working capital.
CURRENT ASSETS
Cash
Debtors
Purchases
Closing stock
Total current Assets
CURRENT LIABILITIES
Creditors
Accruals
Taxes
Total current Liability
Working Capital
YEAR 1
516,000
18,000
163,000
15,000
7,122,000
261,202.50
66,000
10,000
337,202.50
374,997.50
YEAR 2
781,000
33,000
163,000
17,000
963,000
365,002.50
73,000
10,000
448,002.50
514,997.50
YEAR 3
948,950
22,000
144,000
10,000
11,249,500
217,952.50
92,000
10,000
319,952.50
10,929,548
DESIRED FINANCING
FOR THE FIRST 3 MONTHS Kshs.
1 Purchase 37,000
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2. Wages and salaries 54,000
3 Licenses 15,000
4 Telephone 5,500
5 Electricity 5,500
6 Water 4,800
7 Transport 4,000
8 Miscellaneous 5,200
9 Tools and equipment 119,050Total cash 270,050
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ANNEX 1
BIOGRAPHIES OF THE COMPANY OWNERS
Jeff Mokaya has over fifteen years professional experience in related aspects of management
covering various hotel industries. He has gained global exposure in this sector having been engaged
on many duties and assignments related to the provision of food distribution and management
services to clients in Boston Massachusetts USA .He is a creative Chef de Cuisine as well He has
been in charge of introducing new, creative and contemporary delicacies in addition to the main
dishes offered. In his previous engagements is responsible for creating and implementing seasonal
He has been a team leader on various market research and market segmentation assignments. Ben
has good communication and interpersonal skills. He is fluent in English, Kiswahili, Arabic and
French German and is conversant with international standards in hotel management. He holds a
rich experience in hospitality field. Ben has a bachelor of commerce (Accounting and Marketing
option) , A Bachelors degree in Mathematics and Currently pursuing a Masters degree psychology
at the Boston University USA Ben has gained vast experience by playing key roles in the duties
and assignments that he has undertaken in various location in and out of Kenya. He also developed
the financial and administrative procedures manuals for big players in the Hotel Industry in
America.
Nasra Ajmina kicked off her career as a Sales Executive in 2012 at KFC , She is a Business
Administration graduate from Presbyterian University of E. Africa. She has a wealth of knowledge
in consumer goods and customer care.
.