UNIVERSITY

FACULTY OF COMMERCEENTREPRENUERSHIP & SMALL BUSINESS MANAGEMENT

KCA

BUSINESS PLAN NAME: JOSEFRIDA MUMBUA KAMETI ADMNO.: 10/00340

PRESENTED TO OKACH

FRIDA GARMENTS
P.O BOX 8365 00100 LOCATED AT KITENGELA

TABLE OF CONTENTS

TABLE OF CONTENTS

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..............................................................................................................................................3 CHAPTER ONE..................................................................................................................3

1.1 THE EXECUTIVE SUMMARY ..................................................................................3 ...............................................................................................................17 ......................................................................................................................................17 5.5 Cashflow Statement for Year 1....................................................................................25 5.6 The organization Break-Even.....................................................................................26

CHAPTER ONE 1.1 THE EXECUTIVE SUMMARY

Through current statistics provided by Ministry of education and population forecast in Kenya it shows that the population has a higher rate of increment thus also the schools will also increase to meet the demand of the growing population. A total of 40,000 school will be established by vision 2030.This is because education is free and many parents will be able to educate their children thus creating a market to sell our uniform.

Education is basic need and cannot be wished away. Having looked keenly at this unravelling situation it therefore goes without saying that demand for education is on the rise. The other angle we considered is the need of the companies to identify its staff by buying uniform for them. Many companys staff put on uniform for security reasons. Having critically analysed the above situation, I have felt an ardent urge to be part of this growing sector of our economy. Starting a business to supply uniform is potential one in our developing country. It also given that quality life is a question of first satisfying physiological needs first (Food, Clothes, Shelter and basic education) and this is where am coming from. I want to share in this market through the provision of the necessary inputs (uniform) and I want to do this by opening a business that will make these materials readily available.

CHAPTER TWO
1.0 BUSINESS DESCRIPTION. 1.1 SPONSORS OF THE BUSINESS Name: Josefrida Mumbua Kameti. Age: 29 years Present occupation: Credit Advisor. Educational level: Currently at KCA University taking Bachelor of commerce. Technical qualification: No qualification. Professional qualification: CPA(K) acquired at Vision Institute of Professionals in 2004. 4

Name: Benjamin K Nyamai. Age: 33 years Present occupation: Finance and Administration manager Educational level: Bachelor of commerce. Technical qualification: No qualification. Professional qualification:B COM University of Nairobi, CPA(K) acquired at Vision Institute of Professionals in 2000. 1.2 EXPERIENCE REQUIRED The relevant experience of the proposed business is having experience in tailoring, sells and marketing, customer care, and good communication skills. The business will entail selling of school uniform to the neighboring school, whereby tailoring and sells and marketing experience will be required. For the business to run smoothly because I have no experience in tailoring I will contract a third party to make the uniform. I have identified two tailors at Kitengela who will be making the uniform and be paid on piece work. The selling and marketing will be done by one sales person who will be visiting the schools with a sample of their uniform especially the secondary schools which issue uniforms to their children. 1.3 OWNERSHIP STRUCTURE In planning the business I need to consider the ownership structure of the business. The business ownership structure will not only define who owns the business, but also will determine who controls it, who assumes liability, how profits are divided and how the business will be taxed. The following are the common business ownership structures. Sole Proprietorship Partnership Limited Parternship Corporation

Limited Liability Company cooperative

The business will be a sole proprietor owned and run by my family. The reasons why I choose the sole proprietorship are:Setting up and administering the business is comparatively easy and inexpensive. The sole proprietorship business operated under ones name is not registered with the state. The personal liability is not a big worry because of the kind of my business. For instance if the sizes of the uniform is small or big they can be adjusted. The business will fully be financed by myself. I will raise this capital from sale of my shares at East Africa Cables and Eveready limited.

1.4 BUSINESS The will entail selling of uniform to schools and big offices. It will involve moving from one school to another to look for business and also approaching big companies. Will also sell the uniform to the parents at our premises. 1.5 YEAR OF ESTABLISMENT I would like to start the business on 1st August 2010 because at that time will have gathered all the requirement of the business. The business will be located at Kitengela town along Namanga road. It is between several schools and companies which I intent to supply them with the uniform. The location is

good enough because is accessible its along a tarmac road, there is security because it is near a police post. As the business is located along the Namanga road which is the road ending to Tanzania where am intending to get my materials from. It will be easier to transport them. Tanzania has quality and cheaper materials. I have identified a sole supplier who will be supplying me with the material. Other items like socks, ties will get them locally. The reason why I have chosen to venture in the uniform supply business is that Kitengela is a developing town with many schools coming up both private and public. There are also many companies including the EPZ and banks which in the near future I will approach them after the business has stabilized to introduce it to them. Also after my survey I found only two shops supplying uniform but only at small quantities and one has to make an order for it to be made. For my business I will stock uniform for all the surrounding schools plus their socks, shoes and sweaters for different sizes. The business will contribute a lot to the community. Many people have been traveling to Nairobi to get uniform for their children. By setting the business at Kitengela I will save them the time and money spend to go to Nairobi. As am intending to employ one sales person I will have created employment. 1.6 THE OBJECTIVES AND GOALS OF THE BUSINESS

To maintain the quality of material in accordance with customer needs. Effective utilization of infrastructure facilities including manpower. To ensure continued customer satisfaction. Ongoing care and concern for maintaining high level of staff satisfaction and motivation.

1.7 INDUSTRY Cash is the most important yet least productive asset that a small business owns. The business must have enough cash to meet its obligations or it will be declared bankrupt, 7

creditors, employees, and lenders expect to be paid on time and cash is the required medium of exchange. The majority of funds will be allocated to the supplier which will be ksh 400,000.00. The supplier has agreed to offer the materials at credit term of a period of 30 days. I will employ only one sales person to assist in the shop and also in looking for sales from the schools nearby Kitengela. 1.8 PLANS FOR FUTURE GROWTH The tends and prospects of the industry. First I would like to increase my stock by double and also start selling on wholesale. I will approach the shops stocking uniforms and give them discounted prices so as to be able to supply them with my uniform. Also I will approach all the companies near Kitengela so as to introduce my business to them. I will visit the EPZ and the Kenya Meat Commission and ask for the tender of supplying them with the dustcoats and boots. Also am intending to increase my employees to five. This will enable me to move from one company to another looking for orders so happens to them. Will also introduce incentives to the highest seller so as to encourage them in selling hence improving in my outcome.

1.9 PRODUCT/SERVICE. For me to fit in the competing environment I have to stock and supply high quality uniform in accordance to customer satisfaction. Due to the opening of the East Africa countries to trade together without any barrier i have decided to get my uniform material from Tanzania. This is because material in Tanzania are of high quality and cheap. The uniform will be made by two qualified tailors whereby they will only do it when required and be paid on piece work basis. All the faulty products will be at their cost. For me to maximize the profits and incur as little as possible cost I should utilize my infrastructure. Also am intending to employ a sales and marketing person to assist in familiarize the potentials customers on our products.

The customer is the king of the business and is always right. To ensure customer satisfaction I need to work closely to them getting their complaints and solving them immediately. It is important to attract and retain customers for your business to have a going concern. The sales person employed will be selling on commission if he sales goods worth kshs 100,000.00. Also to motivate him to visit as many organizations as possible I will buy for him a motorcycle.

CHAPTER THREE.
2.1 CUSTOMERS My potential customers will be schools both secondary and the primary. Kitengela is a very fast growing town with many schools coming up both public and private. For the first time to get into the market I will the schools head teachers to refer the parents of their pupils to my shop. Most of these buyers will only buy a single item at a time.

2.2 TARGET MARKET I will approach the boarding schools were by they provide school uniform to the pupils to get the orders. After getting the market share in schools I will approach the other small businesses in the area for me to supply them with my uniform.

2.3 COMPETITION

The three most competitors are Eastmatt Enterprises, Kitengela uniform suppliers and Kitengela outfits limited. These three businesses sell school uniform and so we are competing for the same market. SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective SWOT FOR FRIDA GARMENTS STRENGTHS My value proposition is that I will supply the best uniform in the market which is in line with the customers expectation. The uniform will be of the best material imported from Tanzania. With the kind of capital I have to set up the business is capable of supporting it so as to expand the business. My business is located along the main road to Tanzania so any person on the road is able to see us. Also as my material is been imported it is of high quality and of unique texture. I have to outsource the making of the uniform to the qualified tailors whereby I have entered into an agreement that I will be paying them based on piece work. Also I will employ one salesperson to assit me in looking for customers from nearby schools or big companies. The sales person has experience in sales and also the knowledge of best materials for the uniform. I will offer the lowest price for the uniform because the materials will be cheap to import. WEAKNESSES I will face the problem of getting customers because this market is very much competitive. Some customers are very loyal to some shops and changing them to buy my uniform may not succeed. Also will face the challenges to build a good reputation of the company.

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Most of the cash will be held in the stock so will have very little cash flows. I have to commit myself in the business for it to succeed also I should give my workers morale and the best leadership for them to be comfortable. OPPORTUNITIES The business has the opportunity to develop and grow this is because of the ready market from the growing population of Kitengela. I will be able to succeed in the steep competition because of my unique material of the uniform. Also as I have approached the best tailors whose cost is low I will offer the lowest price. The targeted market will never exhaust because schools are there to stay and children have to go to school. Also many companies are coming up in Kitengela where by their staff put on uniform. THREATES Competition from other firms which are supplying the same products. Employees might decide to move to other places after gaining knowledge and experience of sells and marketing from my company. The economy of Kenya is becoming unstable and most of the things are becoming to expensive to acquire. This may lead to people not buying uniforms frequently. Due to the fast changing of technology people may start looking for quotations for the uniform in the internet so as to get the cheapest SWOT FOR OTHER BUSINESSES. STRENGTHS The businesses are located in the middle of the market whereby many people go there after doing other businesses in the market. There business are of big size because they established them long ago and are able to stock what the customer expects from the past experience.

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They will take the advantage of customers behavior of not switching from one buyer to another. WEAKNESSES Most of the companies are not financially stable and this may make them not to compete effectively in the market. Lack of well kept records for the organizations to forecast and plan for the future. Lack of enough manpower to be able to meet the customers set targets and deadlines to pick their uniforms. OPPORTUNITIES; Due to improved technology many businesses are also changing to adapt the new technology so as to compete effectively in the market. The business have a lot of information and conducting research on customer expectation and satisfaction so as to be able to stock what the customer will require. There is an opportunity of the market developing due to the growth of population in Kitengela.

THREATS The market demand may change due to the change of economy. Customers may not buy uniform frequently due to the high cost of living. New competitors competing for the same market share. High competition leads to drop of prices thus leading to the organization to reduce market share. 2.4 PRICING STRATEGY. While our ceiling price will be dictated by the movement of demand, our floor will be directed by the costs of the wares up to the moment they arrive at the out let. We will therefore seek to peg our prices slightly below what the market prices ( for penetration purposes) in order to be able to survive in case the business payers decide to counter our actions in regard to pricing. Pricing our wares slightly above the floor (costs) would work

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against since in case our competitors decision to counter our moves by lowering their prices. It is therefore quite important to strategically price within the market rates. The prices of the products will be fixed. This is to enable us to serve the customers fairly and also easy for me to track sales.

2.5 PRODUCTS OFFERED AND THEIR SELLING PRICES

SELLING ITEM AGE Below 5 Full dress years 5 -10 10-18 Below 5 skirt years 5 -10 10-18 Below 5 years 5 -10 10-18 Below 5 short years 5 -10 10-18 Below 5 years 5 -10 10-18 Below 5 150.00 Neck tie 180.00 200.00 20.00 vests 150.00 ties 200.00 250.00 150.00 Leg warmers 180.00 200.00 400.00 stockings 450.00 500.00 600.00 Socks with stripes 800.00 1400.00 PRICE ITEM SELLING COST PRICE Below 5 years 5 -10 10-18 Below 5 years 5 -10 10-18 Below 5 years 5 -10 10-18 Below 5 years 5 -10 10-18 Below 5 years 5 -10 10-18 Below 30.00 50.00 70.00 35.00 50.00 75.00 100.00 50.00 65.00 80.00 25.00 30.00 40.00 20.00 30.00 35.00

Blouse short sleeved

Shirt short sleeved

White socks

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5 years 5 -10 10-18 Below 5 Red socks years 5 -10 10-18 Below 5 Yellow socks years 5 -10 10-18 Below 5 Dark grey socks years 5 -10 10-18 25.00 wrappers 30.00 35.00 10.00 bloomers 15.00 20.00 15.00 P.E Kits (set) 20.00 30.00 25.00 35.00 years 5 -10 10-18 Below 5 years 5 -10 10-18 Below 5 years 5 -10 10-18 Below 5 years 5 -10 10-18 150.00 165.00 200.00 100.00 150.00 200.00 150.00 160.00 200.00 40.00 50.00

SELLING ITEM AGE Below 5 T shirts - white years 5 -10 10-18 Below 5 years 5 -10 10-18 Below 5 50.00 Trousers - black 65.00 80.00 450.00 Trousers other 14 50.00 Trousers - grey 80.00 90.00 PRICE ITEM

SELLING COST PRICE Below 5 years 5 -10 10-18 Below 5 years 5 -10 10-18 Below 400.00 650.00 800.00 300.00 500.00 600.00 700.00

- other colours

Red sweaters

5 years 5 -10 10-18 Below 5 Green sweaters years 5 -10 10-18 Below 5 Grey sweaters years 5 -10 10-18 Below 5 years 5 -10 10-18 Below 5 years 5 -10 10-18 Below 5 years 5 -10 10-18 Below 5 years 5 -10 10-18 350.00 Full neck tops 450.00 550.00 200.00 Gloves 250.00 300.00 colours 500.00 650.00 Blouse long 500.00 sleeved - white 650.00 700.00 Blouse long 600.00 sleeved - blue 650.00 750.00 Blouse long 400.00 sleeved - checked 450.00 500.00 Blouse long sleeved - other 300.00 colours 350.00 400.00 years 5 -10 10-18 Below 5 years 5 -10 10-18 Below 5 years 5 -10 10-18 Below 5 years 5 -10 10-18 Below 5 years 5 -10 10-18 Below 5 years 5 -10 10-18 Below 5 years 5 -10 10-18 150.00 200.00 300.00 25.00 50.00 65.00 300.00 350.00 400.00 250.00 400.00 450.00 250.00 350.00 400.00 200.00 300.00 350.00 600.00 800.00

Sweaters of Other colours

Shirts long sleeved - white

Shirts long sleeved - blue

Shirts long sleeved other colours

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Most of our sales will be on cash bases to our customers. After establishing the business will approach schools to get orders from them. The orders from the school will be paid on credit terms. The credit will be for 30 days. The criteria to use to get who qualifies for credit is: The customer has been buying from us for more than 6 months. The customer buys in bulky like schools or buying for resale. Must have been paying in cash without delay.

No after sale services are offered. 2.6 SALES TACKTICS. Most of the sales will be done directly to the final consumer. But when the business picks will start distributing the uniform to schools and other retailers in wholesale basis. The target market is whole of Kajiado District but start focusing on schools in Kitengela. 2.7 ADVERTISING My business need a lot of advertising because is a new one in the market whereby there other businesses like mine in the place which are well established. To advertise it I will use the local vernacular radio stations of all the tribes. There charges are better and most people listen to them. They charge fifteen shillings per word. I will also advertise in the Daily Nation Newspaper in the classified section. They charge two hundred shillings per the space they provide in the classified section. Also will put some print out in the schools, market centre and along the main road giving information about my business. The information will include the name of the business and the types of uniform found in my store.

CHAPTER 4
3.1 ORGANIZATIONAL CHART An organizational chart is a diagram that shows the structure of an organization and the relationships and relative ranks of its parts and positions/jobs.

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An organizational chart of a company usually shows the managers and sub-workers who make up an organization. It also shows the relationships of directors, managing director chief executive officer and various departments.

DIRECTOR

MANAGER

SALES PERSON

Frida Garments will be managed by a Director and full time Manager for the day to day running, The board which comprise the Director and Manager will meet regularly to deal with issues beyond the jurisdiction of the manager. Such issues include approval of capital expenditure beyond that allowed for the manager, authorization of recruitment or dismissal staff, review of performance and any other issues that the board may deem necessary. The manager shall be responsible for the day to day running of the establishment. He will oversee the smooth operation of the business and ensure that the set targets and objectives are met. He will ensure that the business adheres to the laws of the government of Kenya, and bylaws of the Local authority in our establishment 3.2 STAFF DUTIES , RESPONSIBILITIES AND COMPANSATION PACKAGE Job Tilte Director: Benjamin Compensation package 20,000.00 Duties 1. Overall Directorship of the business.

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K Nyamai Qualification: Bachelor of Commerce Age: 33 years MANAGER: Josefrida M Kameti Qualification: Bachelor of Commerce Age: 29 years SALES PERSON: Qualification. Sales and marketing Dip. Age: 27 years 6,000.00

2. Making top level decisions 3. Formulating polices and objectives of the business 4. Chairing board meetings

15000.00

1. Daily management of the business 2. Overall Supervisor 3. Making top level decisions 4. Any other as may be delegated by the Director 1. selling in the shop 2. marketing our products

3.3 SUPPORTING SERVICES WILL BE PROVIDED AS FOLLOWS; 1. Bankers: The Cooperative Bank. 2. Lawyers: The Business will appoint Mungata & Co. advocates to be business lawyers. 3. Financial Advisors: The Director has consulted Vipul Shah Consultants before on a personal level and intends to continue consulting them on behalf of the business. 4. Our postal address will be 8365 -00100 GPO. This is an existing address for the family and so will be used for the business. 5. Our designers will be Fabians designers. Have experience on designing fashions for various functions so they will be designing the uniform samples to be taken to schools.

CHAPTER 5
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4.1 THE MACHINERY AND EQUIPMENT REQUIRED BY THE BUSINESS ARE AS FOLLOWS. MACHINERY AND EQUIPMENT Sewing machine ETR UTILIZATION For doing minor repairs. For example uniform not fully hemmed For production of receipts for the government to track our sales for quick determinant of VAT. WHERE TO PURCHASE Kirinyanga Cycle Mart. Luthuli Electronics COST Ksh 30,000.00 Ksh 75,000.00 A down payment of Ksh Calculator Telephone Assist in computation For communication with our suppliers and customers Luthuli Electronics Luthuli Electronics 10,000.00 Ksh 750.00 Ksh 16,000.00

4.2 A SIMPLE PICTURE OF THE BUSINESS PREMISES

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4.3 GOVERNMENT REGULATIONS INDICATE BOTH PERMITS AND LICENSES AND COMPLIES REQUIRED. The government requires the following documents to be displayed in the business. Trade licenses, Kajiado Municipal council. VAT certificate

CHAPTER 6
5.1 START UP CAPITAL/PRE OPERATIONAL COST Initial investment into the business is Kshs 500,000.00. I will raise this capital from sale of my shares at East Africa Cables limited and Eveready limited. Preoperation costs will take Kshs.100,000.00 whereas Inventory will take the rest of Kshs.400,000.00. Put it simply the preoperation financial plan is as follows; a) Machinery and Equipments b) Fixtures & Fittings c) Registration /license d) Rent d) Stock /Inventory - 56,000.00 - 20,000.00 -14,000.00 -10,000.00 - 400,000.00 500,000.00

5.2 WORKING CAPITAL FOR ATLEAST THE FIRST YEAR Working capital = current assets current liabilities. Working capital as at 31/08/2011

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Current assets Stock/inventory Debtors Pre-paid rent Cash Less Current liabilities Tax payable Working capital (22,192.50) 551782.50 265,500.00 25,700.00 10,000.00 272,775.00 573,975.00

5.3 PROFORMA PROFIT AND LOSS ACCOUNT FOR YEAR 1,2,AND 3.

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Proforma Profit & Loss A/c Year 1-3 (Kshs) Year 1 855,500.00 0.00 685,000.00 (365,500.00) 319,500.00 536,000.00 Year 2 1,026,600.00 365,500.00 345,600.00 (295,000.00) 416,100.00 610,500.00 Year 3 1,385,910.00 295,000.00 552,350.00 (125,400.00) 721,950.00 663,960.00

Sales Opening/Stock Purchases Less: Closing/stock Cost of sales Gross profit Less: Salaries and wages Allowances to director Insurance Marketing/Adverti sing Depreciation Miscellaneous Postage/Delivery Stationery Rent/Utilities Telephone Repair & Maintenance Licences Total Expenses Net profit Other Income Profit before Tax Taxation (30%) Profit Atfer Tax Less : Dividends Retained profits Transfer to Reserves

227,500.00 25,000.00 25,000.00 7,500.00 0.00 7,500.00 14,200.00 15,625.00 110,000.00 15,000.00 6,700.00 8,000.00 462,025.00 73,975.00 0.00 73,975.00 (22,192.50) 51,782.50 (0.00) 51,782.50 (51,782.50) 0.00 22

276,000.00 20,000.00 25,000.00 8,000.00 0.00 6,500.00 16,735.00 16,250.00 120,000.00 14,250.00 4,500.00 8,000.00 515,235.00 95,265.00 0.00 95,265.00 (28,579.50) 66,685.50 (0.00) 66,685.50 (66,685.50) 0.00

282,000.00 35,000.00 27,000.00 12,500.00 0.00 6,790.00 22,000.00 17,500.00 120,000.00 16,750.00 5,600.00 8,900.00 554,040.00 109,920.00 0.00 109,920.00 (32,976.00) 76,944.00 (0.00) 76,944.00 (76,944.00) 0.00

5.6 REAKEVEN POINT FOR THE BUSINESS At break even total costs equal to total revenue. Let sales be X. 462,025= x - cost of sales. X = 462,025 + 319,500.00. X= 781,525.00

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