THIKA SCHOOL OF MEDICAL AND HEALTH

SCIENCES

TYPE OF WORK : BUSINESS PLAN

NAME : GIRARI NANCY MUTHONI

ADM : DCHD/S-045/16

TIhTTLE UNIT ; ENTREPRENEURSHIP

BUSINESS NAME : GITARI'S SUPPERMARKET

LECTURER ; MR FRANCIS

DATE : ………………………………....

BUSINESS PLAN SUBMITTED TO THIKA SCHOOL OF MEDICAL AND HEALTH

SCIENCES FULFILLMENT OF DIPLOMA IN COMMUNITY HEALTH AND
DEVELOPMENT
DECLARATION

The undersigned readers acknowledge that the information provided by Ann's Limited in this
business plan is confidential; therefore, reader agrees not to disclose it without the express
written permission of Agnes Limited.

Students Name: GIRARI NANCY MUTHONI

Signature: ……………………………………………

Date:…………………………………………………..

Lectures Name: Mr Francis

Signature;……………………………………………..

Date,…………………………………………………

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 ACKNOWLEDGEMENT

It is acknowledged by Gitari's that information to be furnished in this business plan is in all

respects confidential in nature, other than information which is in the public domain through
other means and that any disclosure or use of same by reader may cause serious harm or damage
to Gitari'sLimited.

I am grateful to our Almighty God for giving me life and strength and the ability to go on with
this business plan. I thank to our entrepreneurship lecturer for the guidance.

I also thank My parents for re financial support .

May God bless you all.

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TABLE OF CONTENT

DECLARATION...........................................................................................................................ii

ACKNOWLEDGEMENT...........................................................................................................iii

EXECUTIVE SUMMARY...........................................................................................................1

1.0 BUSINESS DESCRIPTION...................................................................................................2

Introduction..................................................................................................................................2

Business Name.............................................................................................................................2

Mission Statement.......................................................................................................................2

Long Term Objectives.................................................................................................................2

1.5 Business Location..................................................................................................................3

1.6 Form of Business Ownership.................................................................................................4

1.7 Justification of Opportunity...................................................................................................4

Entry and Growth Strategies....................................................................................................4

Entry Strategy..........................................................................................................................4

Growth Strategies....................................................................................................................5

2.0 MARKETING PLAN..............................................................................................................6

2.1 Introduction............................................................................................................................6

2.2 Objectives..............................................................................................................................6

2.3 Customers..............................................................................................................................6

2.3.1 Individual Customer..................................................................................................6

2.3.2 Institutional Customer....................................................................................................7

2.4 Market Share..........................................................................................................................8

2.5 Competition...........................................................................................................................8

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 2.7 Methods of Promotion and Advertising................................................................................8

2.7.1 Advertising.....................................................................................................................8

2.7.2 Promotion Methods........................................................................................................9

2.8 Sales Tactics........................................................................................................................10

2.9 Pricing Strategies.................................................................................................................11

Evaluation Mechanism..............................................................................................................11

3.0 ORGANIZATION STRUCTURE AND PLAN..................................................................12

3.1 Objectives............................................................................................................................12

3.2 Management Team and Their Qualifications......................................................................12

3.3 Remuneration.......................................................................................................................15

3.4 Recruiting and Selection......................................................................................................15

3.4.1 Recruitment...................................................................................................................15

3.4.2 Training.........................................................................................................................16

3.4.3 Promotion or Incentives/Motivation.............................................................................16

3.5 Legal Requirements (Permits, Licenses and By-Laws).......................................................16

3.6 Support Professional Services.............................................................................................16

3.6.1 Legal Services...............................................................................................................16

3.6.2 Banking Services..........................................................................................................16

3.6.3 Insurance.......................................................................................................................17

4.0 OPERATION PLAN.............................................................................................................18

4.1 Objectives............................................................................................................................18

4.2 Operation Facilities and Capacities.....................................................................................18

4.2.1 Premises........................................................................................................................18

4.2.2 Labour...........................................................................................................................20

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 4.2.3 Tools and Equipment and Furniture and Fittings.........................................................20

4.3 Operation Strategies.............................................................................................................20

4.4 Performance Analysis..........................................................................................................21

Clariesmatt’s performance analysis is related to the following:................................................21

5.0 FINANCIAL PLAN...............................................................................................................22

5.1 Objectives..........................................................................................................................22

5.2 Capitalization.......................................................................................................................22

5.3 Pre-operational Costs...........................................................................................................22

5.4 Operational Costs.................................................................................................................22

5.5 Cash flow Statements..........................................................................................................23

5.6 Income statements...............................................................................................................25

5.7 Balance Sheet.......................................................................................................................26

6.0 POTENTIAL RISKS.............................................................................................................27

6.1 Economy..............................................................................................................................27

6.2 Industry................................................................................................................................27

6.3 Marketing.............................................................................................................................27

6.4 Operations............................................................................................................................27

6.5 Financing.............................................................................................................................27

6.6 Security................................................................................................................................28

6.7 Risks Analysis.....................................................................................................................28

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 EXECUTIVE SUMMARY

Gitari's Suppermarket is supermarket outlet to be opened in Chuka town in January of 2030 at

prestige plaza next to Total petro station. It is a private owned Company registered as
Gitari'sLimited. Gitari'smatt will be jointly owned by two directors. Gitari's Supermarket will
have a capital base of Ksh30 million; Ksh3 million from the owners savings and Ksh27 million
from Equity Bank Limited to be paid in years.

Gitari's Supermarket Ltd aims to be the leading supermarket outlet inthe entire country and East
Africa region. The products to be sold by the Supermarket will range from fast moving consumer
goods, to stationeries, cutlery, furniture, electric appliances, cards, decors, et cetera. These products
and associated services will be sold to corporations and retail consumers: composed of high, medium
and low income classes.

The supermarket will use pricing strategy (sale of quality goods and competitive pricing of the same)
and use personal advertisement and media in the local Radio as its entry strategy. As growth strategy,
Gitari'smatt will generate more capital which will be used to buy fixed and current assets and more
labor. The Supermatt will also expand by opening up new businesses within chuka town and
surrounding areas.

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 1.0 BUSINESS DESCRIPTION

Introduction

The business plan is for a private company whose business will be the purchase of
merchandise/goods and selling the same to the consumers as one of the supermarket outlets in Chuka
town, Tharaka Nithi county. The products will range from fast moving consumer goods, to
stationeries, cutlery, furniture, electric appliances, cards, decors, et cetera.

Business Name

The business name will be Gitari's Supermarket Ltd. This name emanates from One words ‘ Gitari's
and ‘mat’ which is an acronym for ‘market’. Being that kutus next to the Ilare high way, the name
Gitari'sMatt would be a good brand name as customers would easily familiarize themselves with and
to the name as a “a market near the Total petrol station next to Chuka road ”. This name will also be
useful in business as Gitari'sMatt envisions expanding to Chuka and The entire market; all have great
population.

Mission Statement

Gitari's Supermarket Ltd aims to be the leading supermarket outlet in Chuka town, the entire country
and East Africa region. To achieve at this the business will be committed to being a healthy,
successful company that is a leader in customer service and that have a loyal customer following.
The business also aims at reaching at its annual sales targets and some specific measures of customer
satisfaction. The business philosophy will be customer satisfaction and creating a name for its
products by giving the best.

Long Term Objectives

i. Productivity and chapter

We believe that our prime objective just like any other business entity is to be both
productive and profitable. It is from profits that dividends are paid to the owners and growth

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 fostered. As a measure of success, we aim to increase profitability at the rate of 5% per
annum.

ii. Financial success and sustainability

A business must make enough money to sustain its operations, reward employees and service
the daily costs it incurs. In cognizance of this, Gitari's Supermarket Ltd. will strive to ensure
that cost incurred are kept at optimal level and cost efficiency improved at an annual rate of
3%..

iii. Employees welfare and sustainability

Gitari's Supermarket Ltd will pride itself in its employees as a source of its competitive
advantage. Towards this end, we will ensure that employees’ satisfaction is met at all time.

1.5 Business Location

The company will be located in Amdulilahi plaza , ground floor, prestige plaza is located next to
Total petrol station, Matatu and Bus along Chuka high way. terminus which is strategic as most
customers are willing to shop in locations located next to transportation means. The official address
of the Company

GITARI'SMATT LIMITED,

P.O. BOX 6 –000210

CHUKA

MOBILE NO: 0712345678

E-MAIL: gitari'sali389@gmail.Com

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1.6 Form of Business Ownership

Gitari's Supermarket Ltd will be a registered private company owned by two shareholders who
will also be the directors of the company; mr Wakafa and Mrs. Waithira Isha the bulding owner.
The two have a vast experience in business world with several businesses that have picked up;
their business acumen will go along way in business development of the Supermarket.

1.7 Justification of Opportunity

Moves to liberalize the economy taken over the last ten years have laid the groundwork for an
investment-friendly environment in Kenya. The economic recovery strategy is targeted to achieve a
15% growth rate and industrial status for Kenya by 2025, creating 500,000 jobs a year in the process.
The Central Bank of Kenya has pledged to pursue “a stable monetary policy, which accommodates
the highest economic growth rate possible”, while keeping inflation low and stable. In the clothing
and accessory industry, changes in end-consumers (i.e. population growth and rise in incomes) have
made demand for the clothing products increase significantly which will have a direct effect on the
business.

The location of the business is in a secure location. There is maximum security to the business due to
tight security which has been imposed by the zoning of the area as a central business district. There
are police officers who patrol the area on daily basis. The area also comprises of people of all races
and the rich who due to diversity may demand a wide range of products and are willing to buy goods
in bulk and whatever price.

Entry and Growth Strategies

Entry Strategy

The Company has established two strategies, which will be used to enter into the market. First, it
intending to adopt the market penetration pricing strategy where by low pricing will be adopted. The
Company will use quality and competitive pricing of its goods.

Secondly, the firm will use personal advertisement and media in the local Radio as an entry strategy.
Posters will also be pasted in strategic places like social hall notice boards. The sales staff will also

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advertise the products by visiting various organizations and institutions with quotations showing the
products and services offered.

Reasons for low pricing will be:

i. To allow most of the would-be customers to test the business products.

ii. To increase demand for most of our products which will be new in the market

iii. To undercut competition from existing firm

After a given period, price adjustment will be effected basing on the market prices of the products.

Growth Strategies

The Company has various plans for growth and expansion. First, the business is expected to generate
more capital, fixed assets and labor. This capital will be generated from the business inflows, which
is perceived to be quite above the outflow owing to the viability of the business, the business will
have acquired from the sales made. This capital will be used to buy more assets for the Company and
hire more labour to handle the increased work volume.

After meeting all these, the business is expected to expand by opening up new businesses within
Chuka and surrounding area. This is all aimed at bringing products and services closer to the
customers.

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 2.0 MARKETING PLAN

2.1 Introduction

This chapter shows the type of customers that will be buying from Catherine's Supermarket, how the
market will be segmented and the products and services will be positioned. A market plan is a written
document that details the necessary actions for a business to achieve both long term and short term
objectives.

This market will be composed of low and middle income earners who are the majority at Chuka and
high income earners who are few in number; comprising of the flower farm owners and tourists.

2.2 Objectives

a) To capture as many new clients as possible

b) To establish a market share of over 30% in Chuka within the first year.

c) To acquire a perfect understanding of our customers, products and services and any
developments so as to inspire confidence to potential/willing buyers

2.3 Customers

Gitari's Supermarket will sell its products and services to corporations and retail consumers:
composed of high, medium and low income classes. Lantana customers hence consist of:

2.3.1 Individual Customer

This will include individual persons in low, middle and high income bracket. These customers might
or might not buy daily basis. They buy both in large and small quantities. These customers will form
a large percentage of the company’s customers.

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a. High Income Earners

High income earners in Gitari's county are very few and consist of flower farm owners and tourists,
both locals and foreigners. While these customers are few, they do buy goods in large quantity and
normally prefer goods of ostentation. In order to meet their needs, reideermatt will sale goods /like
furniture and artworks which will attract especially the tourists.

b. Middle Income Earners

These are the employees working corporations and organizations such as banks, co-operative unions,
teachers and owners of SMEs. This market segment is larger than the high income earners. This
segment is characterized by preference for quality but medium prized goods of which they buy in
medium quantity. reidersmatt will capture this segment by using customer loyalty cards to be
christened “bonus card” and promotions such as buy “two for the prize of one” after making special
arrangements with the manufacturers or suppliers.

c. Low Income Earners

These are the unemployed, workers in flower farms and other micro-medium enterprises and are the
majority of the population. This segment prefers low cost goods especially those falling under “basic
needs” or fast-moving consumer goods. To capture this market segment, reidersmatt will position
itself as a low cost seller by pricing some fast-moving consumer goods such as sugar, flour, cooking
fat slightly below the market price. reidersmatt will also sell these fast-moving consumer goods in
small units since this segment cannot afford goods packaged in big units such as 1kg. reidersmatt will
profit from sale volume and not profit margins.

2.3.2 Institutional Customer

These are the corporations, organizations, schools, flower farms, government ministries who will buy
goods in bulk or who will demand services that cost a lot of money on their part. This segment will
form a small part of Catherine'smatt target market since most of them prefer to outsource supply
function or deal directly with suppliers. The clients are characterized by high purchasing power or
financial independence as they buy goods or services on behalf of an institution. The special
arrangement, the Supermarket will provide a minimal discount for such segment but will freely offer

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credit for such advancements are always secure. With time, the Supermarket will also offer transport
for them.

The Supermarket in diversifying its market risks as outlined and in advertising itself - using customer
to customer advertising, billboards, signposts and local daily and radio station – will ensure that it
makes sales in any period without subjecting its turnover to adverse seasonal boom and
contractions.3

2.4 Market Share

It is the distribution of potential customers who are able and willing to buy products, from different
establishments/enterprises dealing with the same products. Market share enables the business; get to
know its customers turnover and establish ways of dealing with customers by offering special
services that are not being offered by competitors. To identify special needs of target market and thus
work on achieving a favorable market share, a market team was sent out to various segments to carry
out research on individuals and corporate customers by fill questionnaire

2.5 Competition

The competition in Chuka stiff in that while supermarkets and wholesale business enterprises are
few; they compete for small ‘medium and high income’ segments and the large ‘low income’ market
segment. Mandera has only one big supermarket outlet; Nairobi, Gitari'smatt and Gitari's
supermarkets and other small supermarkets like Gitari'smatt super Market. This situation is not
helped by the many small-scale retail shops in the area that eats into the existing market.

2.7 Method side xxgvc dsdg of Promotion and Advertising

Z, ahdf2.7.1 Advertising

Advertising is creating awareness of the commodity or services to the customers to enable them
make a choice on what to buy.

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Advantages:-

Persuades consumers to purchase more of the product, a business is able to market its product,
residents who leave around the place know what services and products are being offered.
Advertising gives assurance to the consumers that they have made the right choice. It educate the
consumers about the products. Gitari's Supermarket will use the following methods to advertise are:

Publish brochures in local dialects and give to members of the community. The company will give
discounts to customers. Mounting a Billboard along the highway with the name of the company and
lines of its business and the services it offers. Stickers will be given to Othiambo and personal
vehicles with the name of the Supermarket and what it offers.

2.7.2 Promotion Methods

Promotion involves disseminating information about a product, product line, brand or company. It is
aimed at positively influencing customers to buy a firm’s products or services. The following
methods of promotion will be used by Gitari's Supermarket:-

(i) Buy ‘Two for Prize of One’

With special arrangement with the manufacturers or suppliers of certain commodity especially those
that are in promotion by their respective manufacturer, we will promote these goods buy using “buy-
two-for-price-of-one” pricing strategy. “Buy-two-for-price-of-one” pricing strategy also holds for
other pricing strategy of the same nature like; “buy-three-for-price of two”, “buy-four-for-price-of-
three” et cetera In as much as Gitari's will not incur such costs, it will help boost the sales turnover
of the respective products and consequently our turnover.

(ii) Offering cash discounts

This will apply in chosen days and goods/brands that have low turnover. This will help boost sales
and gain customer loyalty by positioning ourselves as ‘low cost’ sellers in the mind of the customers.

(iii) After sale services.

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This includes delivery of goods; packaging will be offered to customers. Delivery of goods will be
done to customers who buy in large quantities.

(iv) Free Samples

Certain products will also come with free samples. This will be advantageous to the Supermarket as
the customers will perceive such as Gitari's Supermarket promotions hence increase customers
loyalty.

(v) Loyalty Cards

Gitari'smatt will also use loyalty cards during sales where customers will get a point for every
goods worth Ksh50 bought. Our strength would come from this sales strategy for our market segment
will be composed of ‘low-income-earners’, who would rarely shop for goods exceeding Ksh100 (as
used by other supermarkets). Having low minimum basic amount for a point would increase sales as
customers (low-income-earners) would easily prefer shopping to the 50 th shilling mark.

2.8 Sales Tactics

The following tactics will be adopted:

i. The business will ensure that there is adequate stock supply every week to ensure a
continuous supply throughout the year to our customers;

ii. To maintain customers, the business will be sensitive on prices of goods and services. Good
relationship with customers will also be enhanced i.e. negligence or weakness of workers
should not be exposed to customers;

iii. Fast moving goods will be placed where visible on the shelves;

iv. No commodity/goods should obstruct/hide another;

v. Substitute goods that are expensive will be placed to the right of the low priced substitutes for
the customers to identify the low priced first.

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 vi. Necessary information from the customers will be taken into consideration in order to retain
them.

2.9 Pricing Strategies

Price is the value given to a product or service. Pricing strategies are ways put in place to ensure that
an enterprise is able to meet both short term and long term objectives. Price of the product will be
determined by the initial cost incurred e.g. purchasing price from the manufacturers, competitors’
prices, the purchasing power and market demand. Loyalty cards, promotions (buy-two-for-price-of-
one and free samples) and low cost for fast consumer moving goods (FCMG) will be used.

Since the majority of the customers will be from the low-income segment, pricing FCMG slightly
below the competitors price would position Gitari'smatt as low-cost seller thus the Supermarket
would profit from sales-volume other than ‘mark-ups’.

Evaluation Mechanism

To ensure that we have, efficient and effective marketing plan, the marketing plans adopted by the
Supermarket will be evaluated on a quarterly basis. This will involve both summative (quantitative)
and formative (qualitative) evaluation techniques. While formative will involve how happy
consumers are will our marketing strategies and the subsequent market share and loyalty as will be
indicated by the loyalty cards, summative evaluation will look at the relationship between the sales
turnover and the subsequent profit (net and gross) and financial soundness of the business computed
from the financial ratios.

CHAPTER 3

3.0 ORGANIZATION STRUCTURE AND PLAN

3.1 Objectives

The objective of the Business plan is to optimize the use of Supermarket’s staff such that both
efficiency and effectiveness of the employees’ input and output is upheld at all time. To do this,

xvii
Gitari'ssmatt will ensure that there is full employment of employees and no outsourcing of human
resource is practiced as acting to the contrary will compromise either efficiency or effectiveness or
both.

3.2 Management Team and Their Qualifications

In order to increase productivity by fully utilizing both labour and capital the Gitari's Supermarket
will employ the following employees whose job description is described below:

i. Branch Manager

Oversee the implementation of the business plan, compiling of reports, monitoring costs and
expenses, payroll administration and inventory control.

Qualifications

A degree business human resource management or finance or economics

One year experience in a supermarket or business of similar nature

ii. Security Supervisor

In charge of the security persons employed by the Supermarket, monitor and control the receiving,
storage and movement of products in and out of the storage.

Qualifications

At least diploma in criminology and technical/practical certificate in security related course

At least one year experience in similar job.

iii. Security Persons

Monitor and control the movement of people in and out of the supermarket.

Qualifications

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Certificate of security related training

At least 3 months experience in a similar job

iv. Cashiers

Receive cash from customers and issue receipts

Qualifications

i. At least CPA II finalist

ii. Computer literature
iii. Good intra and inter-personal skills
iv. Able to speak English and Kiswahili

v. Packers

Pack goods already receipted into polythene bags or boxes as may be required. Clean the floor when
not busy and immediately after the day’s work.

Qualifications

i. Form four certification

ii. Good inter-personal relations

vi. Floor Supervisor

Supervise shelves arrangement and floor cleanliness and also is in charge of packers and shelf
stockers.

Qualification

i. Diploma in marketing
ii. Good inter-personal relations

vii. Shelf Stockers

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Remove goods from lorry/van to store, remove goods from store to shelves and responsible to the
floor and shelves arrangement. Their work also involves reporting on the stock movements daily.

Qualifications

i. Form four certification

ii. Good inter-personal relations

viii. Luggage Collector

Temporary store and ensure security of the customers luggage and personal belongings while they
are in the supermarket.

Qualifications

i. Form four certification

ii. Good inter-personal relations

ix. System Administrator

Supervise, maintain, repair and monitory both the security and accounting systems in the
Supermarket.

Qualifications

i. At least a diploma in IT (management system implementation)

ii. Work experience on the same.

3.3 Remuneration

The Supermarket will provide competitive remuneration to its employees so as to eradicate disloyalty
and to realize the full potential of the employees. However, Reidersmatt will optimize the amount of
salaries that employees earn so as not to incur unnecessary losses. After one year the employees’
salaries will be revised.

Personnel Number Basic Salary Total Salary

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 Branch Manager 1 35,000 35000
Security Supervisor 1 30,000 30000
Floor Supervisor 1 30,000 30000
Security Persons 2 17,000 34000
Cashiers 5 15,000 75000
Packers 5 10,000 50000
Shelf Stockers 10 10,000 100000
Left Luggage Attendant 1 610,000 10000
System Administrator 1 20,000 20000
Total 0 0 369,000

Table 1: Staff Remuneration

3.4 Recruiting and Selection

3.4.1 Recruitment

Gitari's Supermarket intends to advertise locally on the notice boards in near on radio and local
Dailies. Advertisement on vacancies will also be posted in the firm’s website. Once the candidates
apply for the job, short listing will be done for the ones with the required qualification then call them
for an interview. The interview with be both written and oral.

The Supermarket will consider competence in its selection and will carry out selection based on
academic qualification, personal qualities such as trust, work attitude and general knowledge.
However, trust and good employee attitude will form important part of the package.

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3.4.2 Training

Gitari's Supermarket will use in-house training, seminars, workshop and external trainer in training
its employees. In-house training will follow after selection, it will involve other staffs who are
competent with business activities that the firm engage in to teach others how work is done. Using in
house training will reduce the cost of hiring training services. Employees will also attend workshops
and seminars organized by the government especially for those in managerial and supervisory
positions.

3.4.3 Promotion or Incentives/Motivation

Snacks and tea will be offered to the workers two times in a day to help keep them entertained in the
course of duty. Provide them with insurance cover incase one is hurt and needs treatment, grant them
leave at least 21 days in a year.

3.5 Legal Requirements (Permits, Licenses and By-Laws)

Gitari's Supermarket will be registered with the Registrar of Companies under the Companies Act
Cap.486, Laws of Kenya. Licensing of the business will be done through the municipal/county
council who will give the business a trading license. The license will cost Ksh50,000.
3.6 Support Professional Services

P m .6.1 Legal Services

This involves legal advice on contracts, defense incase of legal suits and advice on legal issues on
employment and policy change. The company will out-source legal services when need arises.

3.6.2 Banking Services

The firm will bank its monetary resources with Equity Bank of Kenya, Kagwe Branch.

3.6.3 Insurance

The firm will subscribe to insurance against injuries, theft, fire and accidents. Insurance company
will offer advice on risk management. The insurance company will be UAP Life Insurance.

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CHAPTER FOUR

4.0 OPERATION PLAN

4.1 Objectives

This chapter highlights on the operations of the business; a blueprint of what is to be sold and how it
will operate which includes the machine to be employed and the raw materials to be used. The
objective is to come up with ways of optimal operations strategies and synchronize the activities of
both the employees and the machines.

4.2 Operation Facilities and Capacities

4.2.1 Premises

The Supermarket’s premise will be located in Prestige plaza and will occupy both the ground and the
first floor which will be leased exclusively to the Supermarket. The floor plans are as shown
beloFigure 1: Ground Floor Plan

The ground floor will contain Women Group and the Supermarket as shown by the floor plan. Part
of the floor will also be rented to other business that will provide other services that will be
considered as complimentary to the supermarket products and services like cybercafés and food
courts/restaurant. While this is aimed at attracting customers through these services, this will also
help reduce cost of rent while optimizing the use of the available space.

Apart from the space allocated to the women group, the other space to be rented will be the sole
responsibility of the Supermarket’s management hence reduce conflict of interest with whomever is
to take the afore-mentioned spaces.

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Figure 2: First Floor Plan

First floor will be leased exclusively to the supermarket. There will however be a food court on the
first floor’s balcony whereby customers will be served with snacks as they take an aerial ni
Gitari'smatt factors . Being on the first floor and given the décor that will be used, customers walk
past by and those on tour will be attracted to the supermarket which will help increase its turnover.

4.2.2 Labour

It is the workforce that will be employed, both skilled and unskilled to ensure that work is carried out
effectively. All the employees shall have the necessary skills to deliver services to the customers.

4.2.3 Tools and Equipment and Furniture and Fittings

Tools and equipment are the facilities that are needed to facilitate the smooth running of the office.
The table below shows the tools and equipment and furniture and fittings that will be used in:

xxiv
 Item Description Qty Unit Price Total Price
1 Desktops Computers 7 48,000 336,000
2 Shelving & Furnishing Assorted 2,000,000 2,000,000
3 Furniture Assorted 200,000 200,000
4 Printer and Handheld Barcode Readers 5 200,000 1,000,000
5 Telephone (landline) 2 3,000 6,000
6 Information System Assorted 100,000 100,000
7 Fire Alarm System Assorted 724,264 724,264
8 CCTV Installation Assorted 798,000 798,000
9 Alarm System Assorted 466,900 466,900
  Total     5,631,164
Table 2: Preoperational Costs

4.3 Operation Strategies

The Supermarket will be open from 7:30am all the way to 9:00pm. This will be aimed at making sure
that it traps both early risers and late clients. The Supermarket will also have an exciting,
informative, actively managed display shop front window. There will be a video/digital displays
showing outdoor adverts.

The Supermarket will have a well-managed Web site. This is fast becoming a major promotional
channel and we believe it will increase in importance over time.

4.4 Performance Analysis

Gitari'smatt’s performance analysis is related to the following:

i. the strategic goals and measures that are organizationally significant and drive business
performance:

ii. Be relevant to the objectives and accountabilities of the teams and individuals concerned they
are only effective if they are derived from statements of accountabilities and/or are based on
well-researched capability frameworks:

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iii. Focus on measurable outputs, accomplishments and behaviour that can be clearly defined and
for which evidence can be made available;

iv. Indicate the data or evidence that will be available as the basis of measurement;

v. Be verifiable-provide information that will confirm the extent to which expectations have
been met;

vi. Be as precise as possible in accordance with the purpose of the measurement and the
availability of data;

vii. Provide a sound basis for feedback and action;

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 CHAPTER FIVE

5.0 FINANCIAL PLAN

5.1 Objectives

Our financial objectives are to be operating far much beyond the cash flow break-even by the end of
next year. We aim at a profit of 50% or more by the end of the coming year. To ensure our profit
margin on sales grow consistently.

5.2 Capitalization

The supermarket will have a capital base of Ksh30,000,000; Ksh3,000,000 from the directors savings
and Ksh27,000,000 by way of loans from Equity Bank.

5.3 Pre-operational Costs

It is anticipated that the business will incur the following pre-operational costs:

i. Tools and Equipment and Furniture and Fittings will be 5,631,164 (Table 2)
ii. Rent Expense will be Ksh3,000,000 (Quarterly monthly billing)
iii. Trade License will be Ksh50,000
iv. Staff Remuneration will be Ksh1,107,000 (3 months provision)
v. The initial supplies will be worth Ksh8,000,000

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5.4 Operational Costs
Ite
m Description Total
1 Salaries and Staff Remuneration 369,000
2 Transport expenses 30,000
3 Rent 1,000,000
4 Supplies 4,000,000
5 Bank Charges 1,000
  Total Monthly Operational Costs 0

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 5.5 Cash flow Statements
GITARI'S SUPERMARKET          
         
     
CASH FLOW STATEMENT FOR THE YEAR ENDING DEC 2025
         
       
       
Item Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Cash In-flows                          
Cash-flow b/d 0 2836720 3192720 3548720 3904720 4260720 4616720 4972720 5328720 5684720 6040720 6396720 6752720
Sales 3,000,000 8000000 8000000 8000000 8000000 8000000 8000000 8000000 8000000 8000000 8000000 8000000 91000000
Other Income 300000 300000 300000 300000 300000 300000 300000 300000 300000 300000 300000 300000 3600000
Loan 15000000 0 0 0 0 0 0 0 0 0 0 0 15000000
From the Owner 3000000                        
1113672 1149272 1184872 1220472 1256072 1291672 1327272 1362872 1398472 1434072 1469672
Total In-flows 21300000 0 0 0 0 0 0 0 0 0 0 0 112752720
Cash Out-flows                          
Desktops
Computers 336,000 0 0 0 0 0 0 0 0 0 0 0 336000
Shelving &
Furnishing 1,500,000 0 0 0 0 0 0 0 0 0 0 0 1500000
Furniture 200,000                        

Printer and
Handheld Barcode
Readers 1,000,000                        
Telephone
(landline) 6,000                        
Information System 100,000                        
Fire Alarm System 724,264 0 0 0 0 0 0 0 0 0 0 0 724264
CCTV Installation 798,000                        
Alarm System 466,900                        
Inventory 8,000,000 0 0 0 0 0 0 0 0 0 0 0 8000000
Web Development 20,000                        
Advertisement 30,000                        
Legal Cost 25,000                        
Salary 254000 254000 254000 254000 254000 254000 254000 254000 254000 254000 254000 254000 3048000
Rent 3000000 1000000 1000000 1000000 1000000 1000000 1000000 1000000 1000000 1000000 1000000 1000000 14000000
Miscellaneous 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 240000
Insurance 1313116   0 0 0 0 0 0 0 0 0 0 1313116
Call cost 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 48000
Loan repayment 500000 500000 500000 500000 500000 500000 500000 500000 500000 500000 500000 500000 6000000
Interest on loan 135000 135000 135000 135000 135000 135000 135000 135000 135000 135000 135000 135000 1620000
Transportation
Cost 30000 30000 30000 30000 30000 30000 30000 30000 30000 30000 30000 30000 360000
Bank Charges 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000
Inventory Supply   6000000 6000000 6000000 6000000 6000000 6000000 6000000 6000000 6000000 6000000 6000000 66000000
Total Out-flows 18463280 7944000 7944000 7944000 7944000 7944000 7944000 7944000 7944000 7944000 7944000 7944000 103201380
Net Cash Flows 2836720 3192720 3548720 3904720 4260720 4616720 4972720 5328720 5684720 6040720 6396720 6752720 9551339

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5.6 Income statements
GITARI'S SUPERMARKET
TRADING, PROFIT AND LOSS ACCOUNT
FOR THE YEARS ENDING 31ST DECEMBER
  2017 2018 2019
  Kshs Kshs Kshs
Sales 91,000,000.00 118,300,000.00 153,790,000.00
Less cost of sales      
opening stock 8,000,000 15,000,000 12,000,000
Add: purchases 51,000,000 61,200,000 73,440,000
Goods Available for Sales 59,000,000 76,200,000 85,440,000

Gross Income 32,000,000 42,100,000 68,350,000

Other Income 3,600,000 3,600,000 3,600,000
Total Income 35,600,000 45,700,000 71,950,000
Less operating expenses      
salary 3,048,000 3,352,800 3,688,080
Rent 12,000,000 12,000,000 12,000,000
Miscellaneous 240,000 264,000 290,400
Insurance 1,313,116 1,444,428 1,588,871
Bank Charges 12,000 13,200 14,520
Transportation Cost 360,000 432,000 475,200
Interest on loan 1,620,000 1,080,000 540,000
Call cost 48,000 48,000 48,000
Legal Cost 25,000 25,000 25,000
Total Expenses (operating) 18,641,116 18,634,428 18,645,071
Operating Profit 16,958,884 27,065,572 53,304,929
Less depreciation 513,116 310,988 493,832
Earnings Before Interest and Tax 16,445,767 26,754,584 52,811,097
Less Interest expense 1,620,000 1,080,000 540,000
Net Profit 14,825,767 25,674,584 52,271,097
5.7 Balance Sheet

GITARI'S SUPPERMARKET
BALANCE SHEET
AS AT 31st DECEMBER:
  2025 2018 2030
  Kshs Kshs Kshs
Non-Current Assets      
Desktops Computers 302,400.00 272,160.00 244,944.00
Shelving & Furnishing 1,350,000.00 1,215,000.00 1,093,500.00
Furniture 180,000.00 162,000.00 145,800.00
Printer and Handheld Barcode 900,000.00 810,000.00 729,000.00
Readers
Telephone (landline) 5,400.00 4,860.00 4,374.00
Information System 90,000.00 81,000.00 72,900.00
Fire Alarm System 651,837.60 586,653.84 527,988.46
CCTV Installation 718,200.00 646,380.00 581,742.00
Alarm System 420,210.00 378,189.00 340,370.10
Total Non-Current Assets 2,737,800.00 2,464,020.00 2,217,618.00
       
Current Assets      
Inventory 15,000,000.00 12,000,000.00 21,000,000.00
Debtors 536,628.00 - -
Prepaid Rent 2,000,000.00 2,000,000.00 2,000,000.00
Cash Book 9,551,339.20 33,036,331.66 72,771,448.44
Total Current Assets 27,087,967.20 47,036,331.66 95,771,448.44
       
Total Assets 29,825,767.20 49,500,351.66 97,989,066.44
       
Financed By      
Owner's Equity 3,000,000.00 3,000,000.00 3,000,000.00
Retained Profits - 14,825,767.20 40,500,351.66
P&L 14,825,767.20 25,674,584.46 52,271,096.78
Total Equity 17,825,767.20 43,500,351.66 95,771,448.44

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CHAPTER SIX

6.0 POTENTIAL RISKS

6.1 Economy

The country is not very stable with the increasing rate of inflation; this may require price
adjustment that might interrupt the smooth sale of our products. Our branch manager and the
directors will professionally and tactfully deal with the pricing of our goods that any hike will
not interrupt the normal operation.

6.2 Industry

The industry is well advanced with most of catering firms selling substitute goods that might be
preferred to our goods due to human dynamic taste and preference. Gitari's Supermarket will sell
products of originality this will be our major competitive edge over the stiff competition.

6.3 Marketing

Local media stations charge very high advertisement rate and the use of bill boards is very
expensive but their effectively can’t be precisely quantified.

6.4 Operations

Since this is an original venture is profitability cannot be precisely determined. One best ways of
operating has not also been institutionalized for it will be on trial basis for the first month.

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6.5 Financing

Sources of finance are tricky with most banks not financing start-up businesses. Owing to strong
collateral security the enterprise has obtained a loan with Equity Bank, sources. Due to an
obligation of repaying the loan within the five years, the business may operate at break even for
the first year.

6.6 Security
Gitari's town is a secure place which gives a conducive environment for both business and
residence.
6.7 Risks Analysis

It will be the responsibility of management to make sure that the potential risks that are a
potential to a business do not disrupt the ‘business’ of the business. Gitari's matt will avert risks
by:

i. Being innovative in production of goods and packaging there-of

ii. Identify and maintain loyalty to a bank with a good financial portfolio from which it can
obtain financial assistance

iii. Make sure that they market the products appropriately so as to attract customers.
Gitari'smatt will provide competitive services and pricing to customers.

34