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CHAPTER ONE BUSINESS DESCRIPTION 1.

1 Business Name The Art School will use the name Mallims Childrens Art Museum as the proprietor of the business. The name is considered suitable for the business as it is easy to remember, unique and relevant to the type of business being operated. The business will require at list Kshs 70,000, the proprietor intends to contribute Kshs 30,000 and raise the rest as follows; family kshs 20,000, relatives, kshs 12,000 and friends 8,000. This is expressed in the ratio 15:10:6:4

1.2 Business Location and Address The business will be located in Eldoret South constituency located in Langas location due to its accessibility on Eldoret town. The location is suitable as it has access to certain social amenities such as banks, post office and other service businesses that will facilitate the operations of the business.

1.3 Form of Ownership The business will be a sole proprietorship; it will however include an initial team of three directors, a curator, four senior staff working artists, and two store clerks. The sole proprietorship form of ownership is chosen because of the small size of the business on inception.

1.4 Type of Business Mallims Childrens Art Museum is mainly a service business that seeks to provide unique and meaningful arts programming for all children, to educate children in the arts, and to build a lifelong audience for the arts. The Museum plans to offer a dynamic and constantly evolving program. Although it will incorporate all of the fine arts into the 1

programs, the focus will be on visual art. Most activities will be open-ended and enjoyed on a walk in basis. The Museum will be staffed by working artists, and all structured activities will be led by master artist-teachers.

1.5 Products / Services The business is mainly a service business offering the following services; a) Open-Art Stations Mallims Childrens Art Museum will house nine permanent open-art stations. These stations are the focus of our daily work. Our resident teaching artists will staff the openart stations and will provide guidance when it is requested. The remainder of their time will be spent demonstrating their skills and maintaining the studio spaces. Each station provides a unique opportunity for Mallims Childrens Art Museum to further our purposes as an educational and charitable organization. b) Art Galleries Mallims Childrens Art Museum will have three art galleries: i. ii. Children's Gallery. This is an exhibit showcasing the work created by the children who visit Mallims Childrens Art Museum Artworks Gallery. This gallery is dedicated to the presentation of reproductions of work created by famous (and not so famous) grown-up artists. iii. Eldoret Artists Gallery. This gallery provides a venue for our resident artists, as well as other area artists, to showcase their work. The resident teaching artists staffing the museum will be available to answer questions and guide visitors through the galleries. These galleries provide an opportunity for our visitors to explore the full range of visual arts in all its forms, past and present. As children are exposed to quality art, it becomes an integral part of their lives. These experiences will be the catalyst to a lifetime of appreciation of and a respect for their own

creativity and the creativity of others. Additional services will include libraries, outreach program, classes, concert Series, family Workshops and film Series.

1.6 Justification of Opportunity The business was chosen by the proprietor due to a number of reasons. These reasons were the reasons that strategically placed the organization hence ensuring its success. Some of these reasons included; a. The uniqueness of the idea considering no other business of these natures was running in the area. b. The need among the people of Eldoret town and its environs to have an art museums identified through a pilot research conducted by the proprietor. c. The economic ability of the people in the area ensuring that they were going t utilize and pay for the services rendered to them by the art museum. d. The ease of starting the business considering that only few legal requirements will be needed and small amount of capital which can be raised.

1.7 Industry The business lies in the service industry under the early childhood development programme. There is no competitor known that can offer the unique art experience for children provided by the business. Through our singular focus on visual arts targeted to children, we are positioned as a premier source of arts education, enrichment, and enjoyment for the entire Eldoret Region. Our offerings include a diverse range of programs and activities on a rotated calendar basis, ensuring a fresh experience for even the most frequent visitors.

1.8 Goals of Business Objectives Mallims Childrens Art Museum objectives during the first year of business are: a. To generate earned revenue from a combination of membership and admission fees, programming, outreach, retail sales, and special events. b. To secure new funding sources including foundation grants, government grants, and private and corporate donations. c. To have 375 total paid memberships. d. To serve 1,500 children through our outreach programs. Mission The mission of Mallims Childrens Art Museum is to encourage children of all ages to develop their full creative potential through the visual and performing arts. The Museum strives, through the fine arts, to create a unique environment in which children of all ages, abilities, and experience can feel free to imagine, create, and welcome the arts into their lives. It provides a professional work environment that is challenging, rewarding, creative, and respectful of ideas and individuals. In the short term the museum expects to discover their potential and develop a liking and appreciation of art by impacting them with the relevant skills and knowledge. In the longterm the business will strive to establish professionals in the industry who will pioneer the art industry in the country.

1.9 Entry and Growth Strategy Our diverse and calendar of programs and events, coupled with the uniqueness of the Museum, will deliver high member attraction and retention rates. Building and maintaining a solid database of potential customers will be critical to the success of our outreach programs. The firm is currently in the process of developing a database of contact persons at all local and Eldoret-area schools, community groups, and private

organizations whose programming serves the youth of Eldoret and its surrounding communities.

CHAPTER TWO MARKET PLAN 2.0 Introduction Mallims Childrens Art Museum will be focused on families seeking to nurture their children's creative potential through the visual and performing arts. Initially, The museum will address a segment of the Eldoret town known for its stable, family orientation, and for its willingness to support and patronize local institutions. Once established, it will expand its focus to include the entire Eldoret region.

2.1 Customers Every family with a child is a potential customer of the programs and services offered by the Museum. There are literally millions of households that meet these criteria. Our target market is families with children ages seventeen and under. Our core market is families with children between the ages of three and ten.

Table: 2.1 Market Analysis Market Analysis Year 1 Year 2 Year 3 Potential Customers Age 1-2 yrs Age 3 -4 yrs Age 5 -9 yrs Age 10 -12 yrs Age 13 -17 yrs Total Growt h 5% 3% 5% 5% 2% 3.88% 18,089 18,151 45,838 26,100 42,688 150,86 6 Source: Authors Data (2011) 18,993 18,605 48,130 27,405 43,542 156,67 5 19,943 19,070 50,537 28,775 44,413 162,73 8 20,940 21,987 19,547 20,036 53,064 55,717 30,214 31,725 45,301 46,207 169,066 175,672

Year 4

Year 5

2.2 Market Share There is no known organization in the Eldoret area that offers the unique art experience provided by Mallims Children Museum. Alternatives come from such Eldoret area institutions as the Huruma Children's Museum, and the Riverside Children's Museum, however, these institutions do not have the singular focus of providing a rich art experience for children. There are several area organizations where children can register for art classes. Local examples include the Inkulu Art Center and Heritage Gallery; Mallims Children Museum intends to establish cooperative relationships with these organizations with the expectation that increased awareness in these types of programs will result in mutual benefit. In a much broader sense, the museums competition is not limited to places offering art classes and museums. There are many external activities in which families can choose to participate. Given free time and disposable income, families may choose among a variety of activities including sports, music classes, dance classes, and park district programs. Families will recognize the benefit of an organization with a singular focus, as a means of providing balance, as an opportunity to enrich their children's lives, and as a fun place to spend time with their children

2.3 Competition There is no competitor we know of that can offer the unique art experience for children provided by Mallims Childrens Art Museum. Through our singular focus on visual arts targeted to children, we are positioned as a premier source of arts education, enrichment, and enjoyment for the entire Eldoret area. Our offerings include a diverse range of programs and activities on a rotated calendar basis, ensuring a fresh experience for even the most frequent visitors. Alternatives come from such Eldoret area institutions as the Huruma Children's Museum, and the Riverside Children's Museum, however, these institutions do not have the 7

singular focus of providing a rich art experience for children. There are several area organizations where children can register for art classes. Local examples include the Inkulu Art Center and Heritage Gallery; Mallims Children Museum intends to establish cooperative relationships with these organizations with the expectation that increased awareness in these types of programs will result in mutual benefit.

2.4 Methods of Promotion and Advertising A key strategy for Mallims Childrens Art Museum is membership growth as a mechanism to drive recurring revenue. By extending a value proposition to our target market in the form of comprehensive membership benefits, we expect to quickly expand our membership. Our membership plan is structured to allow members to determine the frequency of visits to the museum and the degree of participation in special programming. We will offer four levels of membership that include an "Introductory Membership," "Friend," "Frequent Artist," and "Sponsor." All members will receive a ten percent discount on retail purchases, special programming, and events. Our quarterly newsletter will keep members informed and involved. Our diverse and calendar of programs and events, coupled with the uniqueness will deliver high member retention rates.

2.5 Pricing Strategy Being a service industry, selling price or in this case the cost of offering the service will be calculated at 3 times the daily expenditure for the cost centre. This will enable the business make a third of the savings and use two thirds of the income on loan repayment and managing daily expenditures. The exact pricing will therefore dependent on the service being offered though most products will be offered at costs affordable to the locals. There will be no credit terms allowed though discounts will be offered to members who make prepayments for

services. This will ensure that the business meets its targeted monthly income as defined in the financial plan.

CHAPTER THREE ORGANIZATIONAL / MANAGEMENT PLAN 3.0 Introduction The organization plan explains how the business will be coordinated to accomplish its objectives. It shows the organization structure of the business and identifies key management personnel and other personnel expected to be employed. It also indicates the expected compensation plans for the employees.

3.1 Organizational Structure The organization will be headed by the board of directors who will mainly serve as the advisory committee but all the affairs of the organization will be under the executive director who is the business proprietor assisted by the operations and marketing managers who form the key business managers. Fig 3.1 Organizational Structure Board of Directors

Executive Director

Operations Manager

Marketing Manager

Art Coordinator

Curator

Store Keeper

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Senior Staff Junior Staff Source: Authors Data (2011)

3.2 Key Management Personnel The personnel of the organization will include executive directors, Operations Director, Marketing Director, Store Manager, Culture Bugs and Art Colony Coordinator, Curator Senior Staff or General Employees, and Junior Staff. (volunteers student).

3.3 Remuneration and Incentives for Personnel The employees will be remunerated as follows. Table 3.2 Remuneration Personnel Plan Directors Culture Bugs/Art Year 1 Year 2 Kshs 86,400 Kshs 90,720 Colony Kshs 6,480 Kshs 9,180 Kshs 10,800 Kshs 16,320 Kshs 12,960 Kshs 37,440 14 Kshs 170,400 Source: Authors Data (2011) Employee will have a salary increase at the end of every year as indicated in the table above to serve as an incentive to ensure that employees continue serving the organization faithfully for the period of time that they will be working. Kshs 11,520 Kshs 17,136 Kshs 13,608 Kshs 39,936 14 Kshs 182,100 Year 3 Kshs 95,256 Kshs 9,720 Kshs 12,240 Kshs 17,993 Kshs 14,288 Kshs 42,432 14 Kshs 191,929

Coordinator Curator Store Staff Junior Staff Senior Staff Total People Total Payroll

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Management shall receive additional incentives of house and medical allowances of upto 10% of their total income per year. All employees shall be entitled to retirement benefits at the age of 55years on retiring.

3.4 License, Permits and By-Laws To operate in the town the business shall only require a licence permit from the municipal council The license cost of Kshs 10,000 per annum and an additional Kshs 1000 as conservancy fees paid to the council. The organization shall also register with the NSSF and NHIF so that employees can be making monthly contributions to these bodies as stipulated by law.

3.5 Other Support Services The organization shall use KCB as its major bank. It shall operate an account from this bank. Legal services will be provided by Kamanzu Advocates for and on behalf of the company on all legal matters. The board shall provide the necessary advisory and consultancy services.

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CHAPTER FOUR OPERATIONAL PRODUCTION PLAN 4.0 Introduction The operational / production plan describes how the product of the business will be manufactured. It shows breakdown of equipments, materials and other necessary requirements during the production process. For a service and retail business, the plan indicates the requirements necessary to facilitate their operations.

4.1 Production Facilities and Capacity

Equipment Resources Land family lounge childrens classes galleries Poopyseed rooms Total

/ Mode Acquisition Hired Constructed Constructed Constructed Constructed

of Quantity 1 (200m ) 1 2 3 2
2

Amount (Kshs) 20,000 Per Yr 7,000 23,000 17,000 5,000 72,000

To acquire all this assets the following costs will be involved. A rental fee of Kshs 20,000 per month and Kshs 35,000 for facilities which will be recovered from the fee parents will be making while registering their children with the art museum.

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4.2 Production Strategy The organization will invest in human resource meaning it will hire competent personnel to manage the company. The activities of the organization are structured in a way that the company could effectively operate if it has the right personnel who understand children and their needs. For this reason, hiring in the company will use a competence approach where all personnel hired will have to prove ability to perform a task as this is forms the basis of effective organization management.

4.4 Production Process The production processes will mainly involve the integration of all resources at the centre to be able to render the services required. That is, the human resource manpower and the children who will use the materials and other facilities at the centre to acquire knowledge.

4.5 Regulations Affecting Operation To be ale to operate the said business the company will have to register with the municipal council of the area and be awarded a license which will indicate that they have the municipals authority to conduct business in the area. Seek health and safety license from the ministry of health.

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CHAPTER FIVE FINANCIAL PLAN

5.0 Introduction The financial plan determines the financial requirements of the business venture. It also provide contained in projected cash flow statements

5.1 Projected Cash Flow

F 28,000

M 37,500

A 32,000

M 37,500

J 40000

J 25000

A 25,000

S 30,000

O 30,000

N 30,000

D 32,000

TOTAL 70,00 135,000

Bal b/f Cash Inflow Cash Sales Loan Debtors Receipt Others Total Received Cash Outflow Cash Purchases Creditors Paid Wages Salaries Rent Telephone Water Electricity Stationery Transport

70,000 28,000

5,000

5,000

10,000

5.000

17,500

15,000

4,500

5000

10,000

9,800

10,000

8,000

99,808

35,000 5,000

30,000 7,000

23,000 7,000

16,000 7,500

9,500 7,000

2,5006,500

2500

35,000 35,000

3,000

1,000

10,000

4,500

10,500

13,500

5000

5,000

10,000

10,000

10,000

12,000

94,500

5000

1000

6000

8000

7000

5500

6000

2500

2500

14000

2500

3400

63,400

4,000

7,000

12,000

11,000

15,000

15,000

5000

5000

10000

5000

10000

12000

111,000

2,000

5,000

5000

10,000

15000

15000

5,000

5000

10000

5000

10000

5000

92,000

8,000

8,000

8,000

10,000

12,500

12,500

15,000

15,000

20,000

20000

20,000

21,000

170,000

3,500 400 400 250 1000 2000

3,500 400 400 275 100 500

3,500 400 400 275 50 -

3,500 400 400 275 500 -

3,500 400 400 275 200 500

3,500 400 400 275 300 500

3,500 400 400 300 200 800

3,500 400 400 300 350 1000

3,500 400 400 300 400 800

3,500 400 400 300 450 500

3,500 400 400 300 100 200

3,500 400 400 350 200 -

42,000 4,800 4,800 3475 3850 6,800

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Postage Repair Insurance Drawings Internet Taxes Others (Specify) Total Net Cash flow

50 1000 1000 1600 500 800 -

100 1500 1600 500 800 -

50 1200 2500 500 1750 -

50 500 2500 500 1200 -

100 200 500 1750 -

200 300 500 2000 -

150 500 500 500 -

50 2500 500 500 500 -

75 150 -2500 500 1000 -

75 125 2500 500 1000 -

75 2000 1600 500 1000 -

100 1000 500 1200 -

1075 10975 1000 15,300 6000 13500 -

20,500

17,675

18,625

19,825

20,325

20,875

22,250

25,000

30,025

9,750

30,075

17,675

252,600

7,500

10,325

18,875

12,175

17,175

19,125

2,750

-25

9,750

-75

14,325

111,900

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TABLE OF CONTENTS CHAPTER ONE..................................................................................................................1 1.1 Business Name...............................................................................................................1 1.2 Business Location and Address.....................................................................................1 1.3 Form of Ownership........................................................................................................1 1.4 Type of Business............................................................................................................1 1.5 Products / Services.........................................................................................................2 1.6 Justification of Opportunity..........................................................................................3 1.7 Industry..........................................................................................................................3 1.8 Goals of Business..........................................................................................................4 1.9 Entry and Growth Strategy............................................................................................4 CHAPTER TWO.................................................................................................................6 2.0 Introduction....................................................................................................................6 2.1 Customers......................................................................................................................6 Table: 2.1 Market Analysis..................................................................................................6 2.2 Market Share..................................................................................................................7 2.3 Competition...................................................................................................................7 2.4 Methods of Promotion and Advertising........................................................................8 2.5 Pricing Strategy.............................................................................................................8 CHAPTER THREE...........................................................................................................10 3.0 Introduction..................................................................................................................10 3.1 Organizational Structure..............................................................................................10 Fig 3.1 Organizational Structure........................................................................................10 3.2 Key Management Personnel........................................................................................11 3.3 Remuneration and Incentives for Personnel................................................................11 Table 3.2 Remuneration.....................................................................................................11 3.4 License, Permits and By-Laws....................................................................................12 3.5 Other Support Services................................................................................................12 CHAPTER FOUR.............................................................................................................13 4.0 Introduction..................................................................................................................13 4.1 Production Facilities and Capacity..............................................................................13

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4.2 Production Strategy.....................................................................................................14 4.4 Production Process.......................................................................................................14 4.5 Regulations Affecting Operation.................................................................................14 CHAPTER FIVE...............................................................................................................15 5.0 Introduction..................................................................................................................15 5.1 Projected Cash Flow....................................................................................................15

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