BUSINESS PLAN CHAPTER ONE 1.0 EXECUTIVE SUMMARY

BUSINESS PLAN

CHAPTER ONE

1.0 EXECUTIVE SUMMARY

1.1 DESCRIPTION OF THE BUSINESSSHAVIVA Wines and spirit will be initiated by Miss Tanui who

will be the owner by the end of this year. She is to complete

a course in supply chain management certificate in Kabete

Technical Training Institute.

The business will be dealing with selling wines and spirits

and offering services associated with spirits. The business is

supposed to commence by the year 2015.

1.2 MARKETING PLAN.The business will target the market within Nairobi center and

area surrounding it. As the business expands the market will

also expand and this will enable the business to serve more

customers even from other far areas.

The business potential customer will include both individual

and also those buying in wholesales.

1.3 ORGANIZATION AND MANAGEMENT PLAN.The business will be headed by the manager who is the owner

Miss Milly Tanui. It will also employee other few workers who

will be helping in running daily duties in the business. The

employee will all work under the manager.

1.4 PRODUCTION AND OPERATIONAL PLAN.This shows the process which the business will involve to have

the best product and service for the customers. Although the

business will be done with a high technological skills. The

manager will allocate different duties to supportive staff to

ensure that they get enough skill which will go a long way in

producing the quality goods and service.

1.5 FINANCIAL PLANThe financial plan in the business help to study the progress

of the business. The financial planning in SHAVIVA Wines and

Spirit will help the manager to know the growing trend of the

business to know the progress of the business whether it’s

operating on profit and loss. In time when the business will

be in need of financial support the manager will know what to

do. One can tell from business financial plan whether a

business can be able to pay a borrowed loan, also can tell

which part of the business need improvement.

The opening capital of the business will be kshs 750,000 which

will be as follows.

Personal saving 155,000/=

Family contribution 595,000/=

Total 750,000/=

CHAPTER TWO

2.0 BUSINESS DESCRIPTION

2.1 BUSINESS NAMEThe name of the business will be SHAVIVA WINES AND SPIRIT. The

reason for the selection of the name is because SHAVIVA is the

name of a famous author who has written stories of star gate.

It’s also dedicated to selling innovative consumer products

that may not be available in retail stores.

The owner of the business will be Miss Milly Tanui a young

lagged 25years. She comes from country province, central

district. Nakuru, Ngata. At the moment it’s my first year at a

Kabete institute pursuing certificate in supply chain

management.

The lady joined schooling at roots academy and later Lockwood

Girls High School where she persuade her certificate of

secondary school in year 2010. After school Tanui joined Coca-

Cola distribution owned by Mr. Kiptoo and worked as an attaché

in a packaging section and learnt how to run and mange a

distributing channel.

She’s equipped and skilled with various skills since she

joined Kabete in year 2014. She has also acquired knowledge of

entrepreneurial matter i.e. management skills. She has a plan

of advancing her studies after computing her certificate.

2.2 BUSINESS LOCATION AND ADDRESSThe business will be located at Nairobi City, Tom Mboya

Street, Dynamic Building ground floor room number 6.

It will have following address

SHAVIVA WINES AND SPIRIT

P.O BOX 252-00100

NAIROBI KENYA

EMAIL: [email protected].

The reason for choosing the location the location for the

business is because of a good infrastructure i.e. building,

transport, water and power supplier.

The population of this area is reasonably high hence creating

market for the product and service.

The security around the area is also good hence creating

confidence of working at any hour and time.

There is a bank across the road which creates convenience for

banking services.

Source of products is from a reputable companies i.e. London

distillers, KBL, EABL, Kericho etc.

SKETCH MAP OF BUSINESS LOCATION OF SHAVIVA WINES AND SPIRIT.

2.3 FORM OF BUSINESS OWNERSHIPThis business will take the form of sole proprietorship. The

owner will have the following advantages: quick decision

making the owner enjoy all the profit alone, as no one to be

consulted. This type of business is early to start and

operate. One becomes ones boss and receive orders from no one.

Business secret are also highly maintained within the

confidence of the owner. The owner also creator done

relationship with her/his customers.

The business require kshs 750,000/= based on equally financing

i.e.

Personal saving 155,000/=

Family 595,000/=

Total 750,000/=

She choose this type of financing because it’s advantageous.

In that once the business kick-off all the business profit

goes to the owner and the risk or losses provide motivation to

succeed.

Finance from the family are also favorable because money can

be obtained easily. It doesn’t require a lot of procedure to

borrow less pressure in repayment.

The business will be registered on the year 2016 and its

activities will commence on March 2017.

2.4 TYPE AND NATURE OF BUSINESS.The type of business will be wholesale business

The business will be a product selling where the owner will be

dealing with will be types of wine and spirit among them will

be top secret, Smirnoff, Amarula, Richot, Black Label,

Napoleon, Whisky, Cane, Kenya King, Viceroy, Vodka, Blue-moon,

Moon Walker etc. the major activity is to supply her products

to retailers and individuals online or door to door delivery.

The business will be sourced from well known and respected

companies known worldwide i.e. KBL, EABL, LONDON DISTRILLERS

whereas competitors product are sourced from upcoming industry

with no fame in the market. Principle customer will be

retailers who are located just across the road creating a huge

sale of products.

2.5 PRODUCTS AND SERVICES The business will be offering products of wines and spirits.

The products will be of high quality that will satisfy

customer need all over the country and outside country too. It

will be offering service like surfing, selling movies to its

customers’ needs. The business will offer products like KK,

KC, Viceroy, Amarula, Smirnoff etc. at different quantities.

The prices will be reasonable so as to retain its customers

and not make losses.

The business will be running 24hours a day.

2.6 JUSTIFICATION OF BUSINESS OPPORTUNITYThere are high demand of wines and spirit and also an

increased number of customers in the area. Having worked in a

distribution industry the owner gained considerable

experienced on how to run such a kind of business will also be

strategically located near its suppliers, customers and

banking service purchase of the product from local industry

will boast the sum. The business will likely satisfy local

demand of community by setting quality product.

2.7 INDUSTRYThe business will be under alcohol and beverage industry. As

of the fast growing industry locally, the owner wants to take

advantage of the growth as to government fights to eliminate

illicit brews. Due to deaths and murder and wealth that brews

has brought about. But would profit the government wrong by

believing that drinking alcohol is to have fun with friends

and later on go back home.

It’s a way to relax one mind after whole week of job and

business running. Modern technology used by industry .i.e.

distilling and handling are closely monitored by the Kenya

Bureau of standards. The industry are average i.e. the

industry is performing well in the market. The business is

likely to succeed in the industry because of the measures that

the government has taken in place hence giving people

confidence on proper spending money in alcohol. We are pleased

that the government has listened to the concerns of the

industry and won’t be abolishing personal alcohol license.

While we are fully supportive to the government’s commitment

to reducing regulatory burden on business, allowing local

authorities the power to develop their own personal licensing

system risked improving unnecessary burden on the trade and

creating disparities between local authorities.

When it comes to the responsible sale of alcohol our member

are fully cooperative of measures to help raise the general

standards of training and will often go much further to ensure

they are operating the highest standards with regards to the

retail of alcohol.

2.8 GOALS OF THE BUSINESS The owner of the business intends to achieve a number of goals

both long and short term to aim including maximizing profit

and are established. She also aims at creating self employment

since the business is liable and there’s a high demand of

product. The owner aims at maximizing utilization of each

achieved skills. In course of her studies the owner intends to

acquire a large market share in the near future. The owner

plans to extend his business after one year of operation and

opens branches to diversify her business thus creating huge

profit.

2.9 ENTRY AND GROWTH STRATEGYIn order to start the business the owner intends to advertise

through giving business cards, placing posters around the

premise and away from the same. Advertising the business

through the media and also on billboards in the main highway

bearing the same name, location and product of the

business .the business owner intends to offer sale services to

its customers i.e. retailer who buy in bulk will get free

transport around the CBD .she also plans to offer cash

discount to its loyal customers and also/ free sample to

attract more customers. The owner plans to expand her business

thus creating huge profit trend that will influence his action

will be sale volume and demand curve. Customer turnover also

signify growth of the business and also means there’s future

for the business.

TANUI MILLT CHEPCHIRCHIRCSCM/171/01/014BUSINESS PLAN

CHAPTER (3.0) THREE

3.0 MARKETING PLANThe business will be targeting people from Nairobi area and

its surrounding .the town is highly populated with an

approximation of about 1000,000 people.

3.1 POTENTIAL CUSTOMERSThe business will aim at offering its products to individuals

and also the retailers i.e. pubs and clubs .individuals

include those buying in large numbers and those purchasing

small quantities. The customer must be over 18 years.

The abstracter to the business is the religious beliefs at the

end and beginning of the month the purchasing power is aimed

to be high with an approximately 80%potential customer of

which most of them will be employed and self-employed.

3.2 MARKET SHARE OR SIZE According to the owner market survey and analysis the

estimated number of customers will be about10,000 of which

3,500of the reliable population have already been captured by

the competitors.

Since the competitors have established themselves in the

business for a longer time the market share of the proposed

business will be approximately 48% establishment will not take

long to the competitor having already established themselves

for a long time.

The owner through the product and service and also working

extra hours i.e. 24hrs intends to attain more customers,

promotions, advertisements and ensuring product are available

and at affordable prices.

The owner by the time will learn his strength and weakness

and will have to work out a way of improving the business

after the estimated operations.

THE PERCENTAGE MARKET SHARE IS AS SHOWN BELLOW

Shaviva wines and spirit 48% 48/100 x 10,000=4,800

Mukuria wines and spirits 18% 18/100 x 10,000=1,800

New millennium wine and spirit 20% 20/100 x10,000=2,000

Others 14% 14/100 x 10,000=1,400

SHAVIA WINES AND SPIRITNEW MILLINIUM WINES AND SPIRITMUKURIA WINES AND SPIRITOTHERS

3.3 COMPETITIONTo a proposed business competition is one of the greatest

challenges. The business competitor s are New Millennium

Mukuria, among others. The new millennium is one of the

biggest challenges and is located along Accra Road near Tea

room. Established 4years ago and have gained a good name in

the market. It has a 20%market share.

The proposed business since it will be offering wide variety

of brands will have an upper hand.

Mukuria wines and spirit which is located 1 km away from the

proposed business is also relatively big .although it was

established long time ago about 7-8 years.

It offers poor quality and service. The proposed business will

capitalize on the competitors’ weakness so as to attain its

goal and a good reputation.

3.4 PRICING STRATEGY.This will be the most determining factors for acquiring and

retaining customers and maximizing profit and sale growth.

The policy of product and service that will be established by

the owner will ensure that the pricing will be at least less

than the competitors price.

The price will highly be determined by the buying price,

transportation cost, living standard of the people their

purchasing power and the present market forces. Considering

levy and taxis payable to the government pricing effect of the

product will be under its control.

Selling price will be affair such as that it fit all different

classes of people. Operational cost will include salaries of

employees, rent, electricity bill etc. the method of

calculating the selling price of the product will be as

follows.

Selling price=buying price + expenses + markup

3.5 SALES, STRATEGY AND TACTICS.Personal or direct selling will be initially employed to the

business this will involves owner of the business and

permanent staff doing counter seeing later on estimation of 6

month the business intends to employ indirect price. This

involves selling of product to other retail shop in large

quantity sale men will be employed to market the product in

various market section after growth of the business.

Advantage of using direct method is that it’s quicker and

cheaper in contract to other selling methods also less tiring.

Direct method also as noted help in careful study of customer

need and behavior in regard to various products. It also

enhances public relation and also obtaining first hand

information from terminal uses. Therefore all staff and

personnel required to have a certificate in beauty therapy and

at least a diploma in public relation.

End of year party, free lunch and rewards in form of

commissions will be given to the salesmanship and staffs as a

motivation factor.

3.6 ADVERTISING AND PROMOTION STRATEGYTo create awareness of the business product and service the

business will develop different advertising and promotion

strategies.

Advertising will help in penetrating the market by retaining

and capturing new customers, advertising will also help in

obtaining information and regarding customers need so that

they’re met satisfactory.

Method of advertising included posters pined on strategic

places. The business will fix a small billboard on top of the

premise to draw the customer attention. Small leaflets and

tigers listing the name of business product, service and

location and working hours will be produced and distributes to

the potential customers. After successive growth of the

business, the owner intends to use both electronics and print

media for advert the higher the sale the more intensified the

promotion and advertising will be another form of promotion

will be holding of road shows when we will offer free service

while advertising the business.

3.7 DISTRIBUTION STRATEGYThe business will employ a few salesmen who will go round

distributing the product to retail shops. For a distance

location hired car will be made available to assist them the

hiring cost should be a list 3,000 per week hired twice a

week.

Hiring tour wheeled driver vehicle will help to overcome the

anticipated problem of poor roads and security.

PRODUCER WHOLESALE RETAILER

CONSUMER

The reason for acquiring many products from manufacturer

directly such that the owner will want quality and authentic

product. It’s also less costly compared from obtaining the

product from middlemen.

The owner will also engage in sale of the product in both who

sale of the product in both who sale and retail quantities.

Distribution will be as follows.

CHAPTER FOUR

4.0 ORGANIZATION AND MANAGEMENT PLAN

The proper arrangement of activities in business in order to

attain its goals and objectives is termed as organization.

The activities of a proposed business will be managed in a way

that every activity is carried out at the right time, and for

the intended purpose. The general lead of the business

operation will be the manager. Sub-ordinate staff will be

supervised minimally, so as to achieve seriousness and

responsibility in the business.

4.1 BUSINESS MANAGER AND QUALIFICATION

As the manager of the business, final decision making will be

the owners, on how to achieve various goals and objectives of

the business. The owner will also come up with policies and

strategies on how to achieve short term goals of the business,

which are aimed at making profit and expansion of the

premises.

The owner of the business is also required to take

responsibilities like planning controlling, and co-

coordinating, all the activities and sales promotion; and

enter into contract with experts where necessary. She will

also have the environment responsibility of hiring and firing

employees, and also motivating them to boost the productivity

of the business.

Below the manager, there will be the supervisor, cashier,

cleaner, watchman, and distributing officer.

The Organization chart for the organization will be as

follows:

4.2 PERSONEL NUMBER AND DUTIES

The business will have a total of seven employees. The number

will increase depending on customer demand and growth of the

business. The personnel that will be in included are cashier,

driver, cleaner, watchman, and distributing officer.

There will be one supervisor in the business that will be in

charge of ensuring that work is done well to meet the

standards. He will control quality of work i.e. productivity.

He will also ensure that the office is in good order and

organized. He should be qualified with at least a Diploma in

Human Resources with at least one a half work experience.

The distributing officer will be responsible for distributing

the responsible for distributing the required brands of

Viceroy and Richot to retailers and ensure that delivery is on

time.

MANAGERWATCHMANCLEANERCASHIERDISTRIBUTING OFFICERDRIVER

The driver will be responsible for bringing in goods from the

manufacturer, and delivering them to customers. She has to be

qualified and have a clean driving license, and a certificate

of good conduct. She also has to be above twenty three years

in age and have at least a secondary school certificate.

The cleaner will be only one in number, and will be a lady

aged above 19 years with at least a high school certificate.

The watchman will be responsible for safeguarding the premises

against vandalism, disturbance, or robbery attempts. He should

be an energetic man aged at least twenty five years and above.

Most importantly, he should be very disciplined and obedient.

4.3 RECRUITMENT, TRAINING, AND PROMOTION

The method of recruiting the employees will be though

interviews. This will be possible through advertising the

offer which the trade is set for interview. After completing

the exercise successfully, candidates will be given a

reporting date.

The interview will ensure a legitimate candidate fills the

advertised position. This will be followed by training

sessions which will be conducted internally to reduce the cost

of training.

The business intends to promote its employees on merit basis

i.e. giving consideration to experience and qualification. The

business will also base its promotion on sales made. i.e.

considering set targets. High discipline, honesty,

effectiveness, efficiency, hard work, and competency in the

areas of work; and also the growth of the business.

4.4 REMUNERATION AND INCENTIVE

In order to increase performance, the business will use

various methods of motivation to encourage its employees to

effectively make contribution to the business. The method of

promotion will include prompt payment; its employees will be

paid immediately at the end of every month because delays can

lower employee’s motivation.

Employees will be involved in decision making so as to feel as

part of the business and also offer some sort of job security.

Employees will be given bonuses during holidays and at the end

of every financial year. To ensure that the workers are free

to make contributions towards the business operation,

remunerations will be as tabulated below:

TITLE SALARY’S

(Kshs)

ALLOWANCES TOTAL

MANAGER 11,000 1000 12,000

SUPERVISOR 9,500 1000 10,500

CASHIER 7,500 1000 8,500

DIST. OFFICER 6,000 1000 7,000

DRIVER 6,500 500 7,000

WATCHMAN 4,000 500 4,500

CLEANER 3,500 500 4,000

TOTAL 53,000

4.5 LICENSE, PERMITS, AND BYLAWS

Licenses are permits which regulate the activities of the

business and the expected conduct of a business license is

issued by the government council to starting businesses.

Before the business commences, it will be required by law to

have a trade license which will be issued by City Council.

This will be at a cost of Kshs 7,000 and Kshs 3,500 for

insurance cover of the business. The business or trade license

will be annually reliable; the renewal cost will be Kshs

1,000. By-laws will include a health license which is under

the Health Act Cap 242, which involves ventilation, clean

working environment, clean toilet, and clean water to drink

and use. Watchmen Compensation Act Cap 237 that will ensure

every employee is compensated when they undertake work,

accidents occur while in the performance of their duties.

4.6 SUPPORT SERVICES

When running a legal business plan, one is required to have

various support services i.e. Banking Service: The proposed

business will open an account with Equity Bank Moi Avenue

Branch. The business will also offer business loans when

required e.g. when the owner decides to expand and doesn’t

have enough financiers. The bank will offer advice services on

how effectively to run his business and also to have more.

Legal Services: The business will require legal advisories as

it will be dealing with different people with different

characters hence the need for a lawyer to represent the

business in case of a suit against or for the business. The

services will be offered by Jacob and Sons Advocates P.O.Box

325 Thika.

Insurance services will be provided by A.M Insurance Agency

which is located at Agip House, 3rd Floor Room No. 1.

MAVIS INSURANCE AGENCY

P.O.BOX 522-00100

Nairobi, Kenya

Other services include power which will be supplied by the

Kenya Power and Lighting Company, and piped water services

supplied by Nairobi Water And Sewerage Company.

CHAPTER FIVE

5.0 PRODUCTION AND OPERATIONAL PLAN

For a business to be successful, it must attain its

objectives. It should also have a good framework and well

achievable plan. However, **** prevents clear details of the

facilities and respective quantities that will be required by

the business to enable it to attain and meet its goals and

objectives.

5.1 PRODUCTION FACILITIES AND CAPACITIES

Computers will be essential to the business since they will be

used to record data, and reduce workload. E.g. calculating

sales, profits, and salaries. Telephone handsets will assist

in communication with salesmen, suppliers, and customers.

A refrigerator will also come in handy for cooling and

preserving beverages. A fire extinguisher will also be

necessary incase of accidental fire breakout to minimize

damages.

Future expansion plans for the business will be to add more

employees to the business, earning more profits, and building

own business premises, and expanding the business to allow

more machinery and equipment.

GROUND PLAN FOR THE PROPOSED BUSINESS

5.2PRODUCTION STRATEGIES

The proposed business will be offering various goods and

services of high quality and right pricing. The owner will

ensure a consistent stock level is maintained throughout to be

able to compete with the rest of the market.

THE TABLE BELOW SHOWS THE FACILITIES REQUIRED DURING THE

COMMENCEMENT OF THE BUSINESS

STORE

CASHIER’S OFFICE

WATCHMAN’S OFFICE

SUPERVSOR

DISPLAY AREA

TOILET

DISTRIBUTINGAREA

MANAGERS OFFICE

EQUIPMENT NUMBER SUPPLIER COST/UNIT TOTAL COSTREFRIGIRATOR 1 Nakumatt 50,000 50,000COMPUTER 2 Bloomberg

Electronics

25,000 50,000

TELEPHONE 2 Bloomberg

Electronics

10,000 20,000

FORKLIFT 1 Shah

Machineries

20,000 20,000

FIRE

EXTINGUISHER

1 Nakumatt 1,000 1,000

TOTAL 141,000

The above equipment will be purchased immediately after

commencing of the business. The business equipment and machine

will be serviced by suppliers after every year at an estimated

cost of about Kshs. 2,000. After a successful growth of the

business, it will be turned into a self service selection shop

hence there will be a big space to facilitate display of

products.

The business will have the following assets:

ASSETS NO. SUPPLIERS COST TOTAL COSTChairs 4 KIM

Furniture

1,000 4,000

Tables 2 “ “ 2,000Cabinets 1 “ “ 10,000 10,000

Shelves 2 “ “ 5,000 10,000Van 1 CMC Motors 200,000 200,000Total 226,000

The table below summarizes the materials required per month by

the business:

MATERIALS CAPACITY COST/UNIT TOTAL SUPPLIERSLedger

Books

1 200 200 Savanna

Bookshop Receipt

Books

5 200 1000 “

“Pens 5 10 50 “

“Total 1,250

The table below shows the preliminary expenses of the business

ITEMS COST PER MONTHElectricity Installation 8,000Fitting and Shelves 8,000Water Deposits 2,000Renovation 10,000Rent & Deposit 15,000TOTAL 43,000

The total cost of production in a month will be calculated as

follows: Total Labor cost + preliminary cost + cost of

materials bought during the month i.e.

141,000+226,000+1,250+4,300= 411,250

5.3 PRODUCTION PROCESS

Since the business is operating through selling of its

products, it will usually act as a retailer operated under the

following steps:

Step 1 Step 2

Step 3

Key

Step 1- Purchasing of goods from the manufacturer

Step 2- Storage and display

Step 3- Advertising, sales, and marketing

Step 1 Purchasing Of Goods from The Manufacturer

The business will be ordering its product from various trusted

companies i.e. EABL, London Distillers, Kenya Wine Agencies

(K.W.A.L) e.t.c.

Since the business will be purchasing products in bulk

quantities, it will not incur high transportation costs

because these companies normally offer transportation as an

after sales service. The business will also enjoy discounts

from suppliers due to buying stock in large quantities.

Step 2- Storage and Display

After the products are brought, they will be displayed in the

premises very smartly so as to attract customers, and the rest

will be stored in the business store waiting for potential

customers.

Step 3-Advertising, Selling, and Marketing

The business will be selling its products through prompt

payment. This will be done after extensive advertisement of

the products through pricing and sales tactics such as

personal selling tactics. Use of polite language when

welcoming customers and courtesy. Proper and attractive

display of products, giving out of discounts after buying

specific quantity of products, and offering after sales

services.

5.4 GOVERNMENT REGULATI ONS

The business will be required to obtain a trading license from

the Ministry of Local Government. This will be obtained from

the Nairobi City County Offices upon payment of the requisite

fees. The license will be renewed annually. The business will

adopt the Employment Act to ensure that workers are paid as

per the set standards, and also provide a conducive

environment for its workers. Workers compensation in case of

any accident during the course of their duties shall be

absorbed. The business shall abide to the Health and

Environment regulations to ensure the safety of both its

workers and customers.

The business will also pay its taxes as required by the Kenya

Revenue Authority, and will also issue remittances to the

National Social Security Fund (NSSF) for its employees.

6.0 FINANCIAL PLAN

This is a course of action of an entrepreneur employed to

achieve business objectives. It represents the entrepreneur’s

best estimate of future operations in quantitative terms i.e.

it shows the amount in figures speculated for use within a

specified period of time.

6.1 PRE OERATIONAL COSTS

These are the initial costs that a business expects to incur

at before the commencement of its operations. They vary with

the expenditure.

ITEMS AMOUNT

Furniture and fittings 40,000

Rent deposit 15,000

Electricity Deposit 2,500

Water Deposit 1,000

Initial Stock 50,000

Telephone Installation 5,000

License 10,000

Machinery 150,000

Total 273,000

6.2 ESTIMATION OF WORKING CAPITAL

Working capital is the difference between current assets and

current liabilities of the business. A good business should

ensure that assets are higher than liabilities so as to get

reasonable profits. As the business should show the ability to

meet its financial obligations. The table below shows the

breakdown of working capital:

CURRENT ASSETS AMOUNTStock 50,000Debtors 50,000Cash in Bank 150,000Cash at hand 70,000Total 320,000CURRENT LIABILITIES Creditors 10,000Tax 5,000Total 15,000

Total Working Capital = Current Assets-Current liabilities

320,000-15,000=305,000

Working capital is very vital for any business to succeed.

This is because assets are the backbone of any business.