EXECUTIVE SUMMARY
1.0.0 INTRODUCTION
This chapter gives the summary of all activities that have been carried out in the business
plan. The name of the business will be WAN COMMUNICATIONS and will be dealing
with selling, installation, repair and maintenance of communication equipment. The form
of a business will be sole proprietorship owned by EDWARD OMONDI KASUKU.
WAN COMMUNICATIONS
P.O.BOX 32,
KAPSABET
EMAIL:-edwardomondi84@yahoo.com
It will also buy and sell those hardware components to customers. The owner will ensure
that services are offered and goods produced are of high quality and also the business
should meet legal requirements.
The business will be located in Kapsabet Town along. The form of business will be sole
proprietorship and will offer quality services that will justify the time and money spent on
it.
The business is well located and therefore cases of insecurity, lack of communication and
in fracture will hardly affect the running of the business. Therefore WAN
COMMUNICATIONS will operate smoothly without much interruption and tense the
business will have high potential prosperity.
The business will ensure good relationship with the local, town dwellers, visitors who
come to visit the town i.e. Tourist. Due to this good relationship, the business will earn a
good name across the country therefore marketing computer hardware services and
products will probably be done locally and nationally.
i. Posters.
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ii. Television stations.
iii. Radio.
iv. Newspapers.
v. Magazines.
Due to high competition in the market WAN COMMUNICATIONS will ensure that
employees will be motivated through:-
d) On time payments
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1.0.6: FINANCIAL PLAN
3
CHAPTER TWO
BUSINESS DESCRIPTION
2.0.0 INTRODUCTION
WAN COMMUNICATIONS,
P. O. BOX 32,
KAPSABET.
TELEPHONE: - 0729760112
E-mail: edwardomondi84@yahoo.com
4
On completion, he was posted to N.Y.S Athi River Filed unit where He served as a radio
operator for one year.
In January 2008, He joined N.Y.S Engineering Institute to study Diploma in
Telecommunication Engineering, for three years.
Despite being trained as a Technician, Edward would like to use gathered and sharpened in
various enterprises to start up and run a business successfully, exploit the available natural
resource in order to boost his income, as well as create employment in the
telecommunication industry.
The name WAN communications is derived from the phrase Wide Area Network
Communications. The abbreviation is easy to pronounce, clear and can be remembered. It
describes communication over a wider topographical area, a service that the firm will offer
to its customers. It is thus deemed best as it relates to the communication industry in which
the business belongs.
The business venture will be situated in Kapsabet Town, opposite Kapsabet Bus Terminal.
This location is selected as it is a central point in the Town. It is also accessible to all the
travelers to and into the outskirts of the Town. It has better infrastructure e.g. electricity.
The level of competition will be relatively low, since there are few electronic and
communication firms already established within this vicinity.
Business contact:
WAN COMMUNICATIONS,
P. O. BOX 32,
KAPSABET.
TELEPHONE 0729760112
E-MAIL: edwardomondi84@yahoo.com
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2.0.5 FORM OF OWNERSHIP
The enterprise will be a sole-proprietorship. This form of business will be chosen as it has
the following
Advantages
Disadvantages
(iii) No specialization
WAN communication will be registered and operated as a retail shop. It will majorly deal
in selling of consumer electronic and telecommunication equipments.
Repair and maintenance of these equipments will also be available to diversify on sales
earn the business more.
2.0.7 INDUSTRY
This venture will fall under Telecommunication and Electronic industry, under the
umbrella of Ministry of Communication. It is regulated by the Communication
Commission of Kenya (CCK).
Historical background
In the ancient days, this industry used fire and smoke, drum beating, messengers, signs and
signals to effect the transfer of information at a distance. When electronic vacuum tubes
were invented, circuits which could replace the above mentioned traditional methods of
communication were developed to revolutionize the industry.
Then the transistor technology evolved that led to the development of the first electronic
Morse code Key, Telegraph and Telephone devices. Due to growing technology and
research carried out in the Bell Laboratory, the transistors were developed into smaller
chips with enormous number of transistors. I.e. Integrated circuits (IC). These led to
further development and enhanced communication rate as well as distance through
wireless devices.
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Today, the industry uses 3G technology with fairly robust gargets, enhanced data and
voice communication speed of communication. These devices support several
communication modes unlike the previously used. The key players in this industry
currently are:-
(i) Star-Com
(ii) Hp
(iii) Dell
(iv) IBM,
(v) Huawei,
(vi) Alcatel
(vii) Eriksson
(i) Safaricom
(ii) Zain
(iii) Orange
(i) K. B. C
(ii) Kiss100
a) Short term
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To make profit, enhance high level of ethics, excellence, innovation and integrity by being
courteous to all customers at all times.
b) Medium
To improve service delivery in the industry by utilizing the new technologies that are more
efficient in cutting operation costs and bringing better services to customers.
c) Long Term
To be a premier firm that introduces new technologies to the market, with a balanced
approach towards people, offer quality services and to achieve wide profit margins.
The business will deal ion such product and service as listed below. Any other new
product and technology invented will be introduced into the market as soon as its
unveiled.
GOODS
b Mobile phones
C Phone Covers
d Phone Batteries
e Phone Chargers
f Memory Cards
h Radiation Reflectors
j Networking Cables
k Routers
m Modems
o U. P. S
8
SERVICES
a Repair
b Maintenance
d Networking
e Installation of antennae
There exist a business opportunity within the location of the venture due to such factors as:
i) Low competition
Since the business will be located within Kapsabet bus Terminal that has no such similar
strong and established business.
ii) Security
The chosen area has adequate security due to the closely established Kapsabet police post
which is just 500metres away. The owners will also contract a security firm to guard the
holdings at night.
Customers will also feel secured as the shop will be in an open place next to other ventures
and is near the Bus Terminal.
It will be strategically chosen opposite bus terminal in order that it be accessible to all
traveling into or from the out skit of the town other than serving the habitants of Kapsabet
Town market hence more sales.
Due to the entry of several internet and mobile communication providers into the industry,
these firms are expected to extend their services to grass root level. The sponsor intends to
exploit this chance and sell to the consumers all devices required in order to enjoy the
coverage that will be provided by the firms and make profit out of these sales and
servicing as well as maintenance of their equipments.
a) Entry
The proprietor will exploit the fact that competition is healthy to customers. He will sell
goods and offer services at a lower cost and charge compared to its competitors, but at a
profit. All the prices and charges will be reasonable with all customers needs catered for to
maintain and attract more since the business needs to grow. Goods and services will be of
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best quality. There will be special opening offers, extensive advertisements through road
shows, billboards, handbill, and mass media.
b) Growth Strategy
The owner will facilitate the growth by expanding the market through sales representatives
and distributors to sell items directly or indirectly to the outside market for two years. He
conducts frequent market survey by approaching his competitors as clients and accessing
their products and service demand. Any realized and unsatisfied demand will be exploited
for the growth of this venture.
In future, he will install computerized systems to improve efficiency at work. This will
result in:
After 15years the owner wishes to expand to limited company, then to a multi-national
firm.
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CHAPTER THREE
MARKETING PLAN
3.0.0 INTRODUCTION
This chapter outlines how the proprietor will popularize the business and his plans on
handling the already existing competitors and customers to ensure success.
3.0.1 CUSTOMERS
Kapsabet Boys,
ST Marys Girls
ST Peters Boys.
Modia Computer
These will include Hostels, Restaurants and others offering conference facilities e.g.
Sunshine 1994
Keben Hotel
(b) Companies
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These will includes firms within the defined market that will require communication links
for effective day-to-day business. Are to include:-
These are to include existing cyber caf and communication beurrals. Examples identified
are: -
Upland Communication
Motherland Computers.
These will include any customer other than the above outlined, who require products and
services in-order to satisfy personal communication needs. There are expected to purchase
more during November to January, May and August.
Since the venture is new, its intended to command 32% of the total market size. The rest
shared among the competitors.
The total population of the market is 34401 persons (according to the National census
carried out in August 1999.) The business therefore aims to serve;-
The pie-chart below helps to show the market share for the intended business and the
competitors.
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TOMCOSSAFARICO
DISTRIBUTORS24
Market size is expected to grow with advancement in information technology and
penetration of the market by new mobile telephone communication companies such as
Orange, Telecom Wireless and YU.
3.0.3 COMPETITION
This is a recently started enterprise. It is located 200 meters away. It has young staff.
However, they do not market products extensively. The competitors are mainly focused on
sale of products. Their strength may be estimated as:-
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(a) Reluctant staff at the customer desk.
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COMPETITOR ANALYSIS TABLE
Burgei Communication Established Very expensive products High market High taxing
Good equipments Specialized dealer in Zain products only demand policies
Many employees
Tenokwe Young and Lack publicity Skilled Offering low
Communication energetic staff Very young business employee who quality product
Beurrals is readily from
available competitors
resulting into
mistrust by
customers
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A. Coping with competition
Wan Communication will diversify in terms of products and services to meet all the
communication needs of all customers, unlike the competitors who are specialized on only
one product; either Zain Kenya or Safaricom products.
There will also be related services offered to customers and such to include;-
(b) Networking
The venture will ensure it survives by using the competitors weakness to win in the
market in the following ways:-
The business will reduce prices on goods and charges on services by at least 2% of
that charged by the competitors so as to woo a large number of customers.
The business will have adequate number of motivated staff, who is energetic
enough to actively serve all customers at immediate time of need.
The business will be offering original products and high quality services.
Where necessary the product will be tested for the customers for free before
carrying it way from the premises to assure them of the quality and effectiveness.
After sales services/ guarantee will also be provided for goods bought at the
enterprise on specified terms.
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(v) Operation problems
The proprietor will ensure there is proper coordination and handling of all business
activities to ensure smooth and continuous running of the firm. This will ensure the
customers are attended to all seasons.
Wan communication will be situated at Kapsabet Bus Terminal, Kosgei Plaza first floor.
The location has the advantage such to include:-
(i) Central point thus accessible to many potential customers for all over the intended
market.
(ii) Good security to make the customers buy from the enterprises at any time of the
day.
(iii) Open and thus can be located by potential customers with ease.
The owner of the business will give discounts to customers as a means of relaying
customers. Discounts will be based on quantity that the customers will purchase i.e.
The owner of the business will provide quality products for sale. She will not deal with
counterfeit goods, which are cheaper. She will rather sale authentic merchandise at a
reasonable price.
The owner of the business will offer credit facilities to customers whom she trusts and
well known to her. Credit facilities will be limited to certain amounts depending on the
customers.
This is meant to ensure that the customers puts the most skillful workers in the business
who will render efficient services to their customers by proper delegation of duties to
workers and ensuring that each participates fully for the business property.
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iv. Advertising and publicity
This will be through advertising the business in the Daily Nation and Standard Nation
magazines, signboards to create awareness of the business existence, product and services
offered and create anxiety to customers who want to know what is being sold and its
uniqueness.
v .Company Uniform
Employees shall report early to work, at workplace they will wear uniforms bearing the
name WAN COMMUNICATIONS, WE DONT JUST SELL, WE CONNECT
WORLDWIDE.
He will be also able to scan the environment of the market and know the products that are
fast and slow moving and prioritize them accordingly and know the customers favors to
cater for them effectively.
WAN Communication will determine such prices and charges on goods and services to
ensure the firm;-
(i) Prevailing of demand in the market for the goods and services.
(iv) Time of the day when the service is offered (day or night.)
The pricing structure will consider short term credit to customers classified under learning
Institutions and companies and such that meet the legal requirement for this kind of
contract.
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Discounted prices will also be given to all customers at appropriate time, especially on
cash purchase of goods during festive seasons.
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l Switches And Hubs 1,500
m Modems 2,999
n U. S. B and Patch CORDS 300
o U. P. S 1,800
Laptop power Adopters 2,500
a Repair 1,500
b Maintenance 2,500
d Networking 1,500
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3.0.6.2 SALES TARGET TABLE FOR 1st YEAR 2011
ITEM JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL SALES
Office phones - 8,400 9,200 10,700 10,000 10,800 10,500 12,000 11,200 11,500 11,650 11,700 117,650
Mobile Phones 3,800 - 4,100 5,500 5,800 6,000 6,700 7,000 6,900 7,400 7,400 7,500 68,100
Phone Batteries 300 1,250 1,500 1,750 1,800 1,500 1,400 1,800 - 1,250 1,400 1,500 15,450
Phone Chargers 150 900 - 1,200 1,100 1,000 900 1,200 1,500 - 1,500 1,200 10,650
Memory Cards 450 1,300 1,200 2,000 - 650 500 1,200 1,300 1,500 - 1,300 11,400
Radiation Reflectors - 200 500 - 400 150 - 200 500 400 251 400 3,001
Networking Cables 1,500 - 1,500 3,000 3,200 - 2,500 3,200 2,800 3,200 3,000 - 23,900
Routers 3,200 - 6,200 7,200 7,000 6,400 6,200 7,000 7,200 6,200 6,400 3,200 66,200
Switches $ Hubs 2,200 6,600 - 5,000 5,800 5,400 5,200 5,800 5,400 2,200 - 5,200 48,800
U.P.S 2,900 - 2,400 - - 2,600 - 2,900 - - 2,400 - 13,200
Modems 4,000 7,000 6,000 7,000 7,200 8,000 7,200 7,500 7,500 12,650 12,500 11,000 97,550
Repairs - 2,350 - 2,880 2,000 3,000 - - - - - 3,600 13,830
Maintenance - - 2,600 2,500 2,500 - 2,500 2,500 3,600 2,500 2,500 2,500 23,700
Configurations 1,500 1,500 5,500 1,500 - 1,500 1,500 - 2,600 2,600 2,800 2,500 23,500
Installation - 5,500 - - 5,500 7,100 5,500 5,500 5,500 7,500 7,100 7,500 56,700
TOTAL 20,000 35,000 40,700 50230 52300 54100 50600 57800 56000 58900 58901 59100 1,594,281.00
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3.0.6.3 SALES TARGET TABLE FOR 2nd YEAR 2012
ITEM JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
SALES
Office phones 13,800 13,500 12,500 13,000 12,800 13,800 15,480 15,400 17,000 16,500 16,900 17,400 178,080
Mobile Phones 8,500 9,000 9,700 10,500 11,000 11,700 12,800 12,980 13,800 14,000 14,800 15,000 143,780
Phone Batteries 2,000 1,700 - 1,800 - 2,000 2,900 - 3,800 3,600 3,800 3,900 25,500
Phone Chargers 1,500 1,200 1,500 1,500 1,200 2,050 1,500 - 1,200 1,450 - 13,100
Memory Cards 2,500 2,800 3,200 2,900 3,700 - 3,400 3,800 2,900 3,400 3,800 3,950 36,350
Radiation Reflectors 400 - - 740 1,200 - 700 1,200 1,280 - - 1,200 6,720
Networking Cables 3,800 3,650 3,978 2,992 - 3,899 4,049 3,848 4,399 3,800 3,900 4,066 42,381
Routers 3,200 3,800 3,600 3,400 3,800 4,000 3,200 3,800 4,000 4,300 4,500 41,600
Switches $ Hubs 2,200 3,000 4,700 6,600 3,400 3,000 6,600 4,400 6,600 6,500 - 6,800 53,800
U.P.S - - 3,800 3,600 3,200 3,400 - 3,200 3,600 - 4,200 4,300 29,300
Modems 7,500 8,000 7,500 7,200 7,500 8,000 12,000 11,000 12,900 12,000 12,500 13,200 119,300
Repairs 3,600 3,800 - - 4,573 3,800 4,500 - - 3,633 3,972 4,100 31,978
Maintenance 2,700 2,600 - 3,200 6,500 5,700 - 5,600 5,700 4,000 3,900 - 39,900
Configurations 2,800 3,200 3,800 6,100 5,000 7,500 6,100 - 6,000 6,200 6,500 53,200
Installation 7,500 6,500 7,500 7,500 - 5,500 13,000 13,000 13,000 13,700 13,500 9,750 110,450
TOTAL 62,000 62,750 61,778 63,432 65,273 70,999 84,979 85,228 88,779 92,333 93,222 94,666 2,005,139
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3.0.6.4 SALES TARGET TABLE FOR 3rd YEAR 2013
ITEM JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL SALES
Office phones 17,450 18,000 18,400 18,200 19,300 19,700 18,800 19,900 19,900 20,200 21,300 26,900 238,050
Mobile Phones 15,000 15,100 15,400 15,200 16,500 17,200 17,300 17,600 17,900 18,300 19,600 24,900 210,000
Phone Batteries 3,900 3,800 4,200 4,500 4,500 - 4,400 - 4,500 4,700 5,300 6,950 46,750
Phone Chargers - - 2,800 - 3,000 3,200 3,300 3,700 - 3,200 4,500 6,800 30,500
Memory Cards 3,950 3,900 4,300 4,500 4,800 4,900 4,700 4,900 5,000 5,100 6,200 7,950 60,200
Radiation Reflectors 1,200 - 1,420 1,200 - - 1,400 1,680 1,600 1,630 - - 10,130
Networking Cables 4,066 4,040 - 4,262 4,440 4,783 - 4,800 4,900 5,370 5,987 8,978 51,626
Routers 4,500 4,200 4,800 - - 4,600 4,800 5,200 5,100 - 5,600 7,500 46,300
Switches $ Hubs 6,800 6,500 6,800 6,700 6,800 7,000 6,500 7,200 7,300 7,500 7,900 9,600 86,600
U.P.S 4,300 - - 4,500 4,600 - 4,000 - 3,500 4,600 4,800 6,400 36,700
Modems 13,200 13,300 13,500 13,400 13,700 13,800 14,100 14,700 14,600 15,100 15,200 18,900 173,500
Repairs 4,100 4,400 4,200 4,300 4,200 4,240 4,344 5,745 5,433 5,936 6,000 7,787 60,685
Maintenance - 2,500 4,300 4,800 4,900 5,000 - 5,500 5,600 - 5,800 7,300 45,700
Configurations 6,500 6,500 5,600 - - 4,900 5,100 - - 5,400 5,400 7,100 46,500
Installation 10,890 9,900 12,500 11,600 12,600 12,900 12,700 12,900 13,000 13,200 13,300 16,500 151,990
TOTAL 95,856 92,140 98,220 93,162 99,340 102,223 101,444 103,825 108,333 110,236 126,887 163,565 2,895,231
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3.0.7 PROMOTION AND ADVERTISING
During the early stages will advertise goods and services extensively to create awareness of its
existence to the general public. It will also employ such techniques to influence the attitude and
behavior of customers to buy more from this business.
Several posters will be strategically placed within the intended business market location. These
posters will carry such information as the direction of the business, product and services offered,
the special offer prices and charges for goods and services on discount.
A sign board will be designed to show the location and direction of the business to potential
buyers. It will strategically, few meters from the business premises. (Kapsabet- Kakamega
junction will be the chosen site for this.)
Advertisement will be through TV and radio. This will be done in both Kiswahili and the local
dialect. Magazines and newspapers will also be used to show price lists and pictorials of exact
products as well as special offers and discounts available.
This venture will print handbills and give to the general public to provide them with the
information on the products and services. These will be mailed to several institutions within the
market. The handbill will contain the business address, phone number and location.
The business will budget for DVD changer that will be used to promote the business. It will be
played occasionally at a tone to attract music lovers to the business and then inform them of our
products by the sales team.
TOTAL 23,500.00
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Evaluation of effectiveness of promotion and advertisement activities
The proprietor will assess the effectiveness of all techniques employed in all activities aimed at
influencing buying habits of prospective customers and improving sales through:-
Customer will be served directly from the business premises. Any information on the operation
of the equipment will be explained to the customers at the premise. Where necessary, the user
manual will be explained to the customer by the sales team/ technician.
The business will also put in place transportation for customers who buy bulky equipments.
However, transportation problems are anticipated especially during rainy seasons since roads to
the outskirts are not all weather roads. The business will also consider the first customer to buy in
bulk first.
The venture will use various methods to obtain direct sales, satisfy customers needs, enhance
sales appeal, recruit and retain the sales force The tactics will include:-
The business will offer credit learning institutions and companies. They will be given one month
to liquidate their debts.
Customers who will buy products more than one or of price more than Ksh 2500 will be offered a
discount of at least 10%
The business will offer quick services to avoid queuing up of the customers, unlike in the
competitors premises. Larger number of customers will therefore be served, this way promoting
the general business sales
The staff will also be motivated and good working conditions provided. This will promote
there attitude towards there duties.
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(e) Good communication
Better communication between the employees and employer will also be enhanced for better
sales. Staff recruited will be of enough relevant competence and work in shifts to avoid
overworking. Their salaries will be paid on performance basis. All appointed distributors and sale
representatives will receive discounts based on total sale made per person.
CHAPTER FOUR
4.0.0 INTRODUCTION
This chapter defines and elaborates ranks, responsibilities and qualification of personnel in the
business enterprise from junior to senior staff. It also has details on remuneration, staff appraisal
and development as well as communication within the organization.
The owner of the business will be the general manager. He will be the highest in hierarchy and
will have such duties and responsibilities as:-
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(g) Set rules and regulations to be followed.
Qualifications
The organization will have a total of Ten 10 personnel, exclusive of the manager. The
organization structure will be as follows:-
Organizational Chart
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MANAGER/OWNER
OPERATIONS
MANAGER
WORKSHOP TECHNICIAN
ACCOUNTS CLERK
WORKSHOPTECHINCIAN
SALES TEAM
SECRETARY/RECEPTIONIST
CLEANERS
Will be second in hierarchy after the Manager and will be appointed by the manager.
Qualifications:-
(d) C. P. A 1
Reports to the manager to give detailed account of daily activities within the venture.
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(ii) Technicians
He will maintain and install all equipments to customer premises as guided by the
assistant manager.
The Team will ensure all the customers are given the best they need and deserves at the
appropriate time. This will be achieved by marketing the product within and outside the
enterprise building. They will make sale as per the set targets.
Roles and Duties
(c) Report to the Assistant manager to give accounts of daily sales and reports.
(e) Perform any other duties as maybe delegated to them by the authority.
Qualification:-
(v) Receptionist
(c) Will carry out typing and printing duties whenever need for such arise.
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(d) Will also be in charge of cleanliness of the premises.
Qualification
iv) Be polite and self-disciplined, and can work for longer hours.
(vi) Cleaner
She will ensure high standards of cleanliness in the premises. All his duties will be overseen and
supervised by the receptionist.
Qualification
At least K. C. P. E certificate
All prospective employees will be reached and stimulated to apply through news papers, posters
and radio broadcasting. To stimulate them, salaries will be stated for each relevant post
announced as vacant.
d. Interview
e. Selection
f. Employment
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PERSONNEL QUALIFICATION AND RESPONSIBILITY TABLE
The qualification that the manager will be looking for in the candidates may be summarized as in the table below:-
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REMUNIRATION TABLE
WAN Communication will once they are employed if they are productive. This will be
achieved through:
Performance is the process of determining how well the employees do their work compared to
the company sets of standard and communication that information to them.
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The main rating that will be applied will include:-
These will be mainly used to access the personal characteristics of the employees as it relies on
factors such to include:-
Communication skills
Loyalty
These assess employees on the behavior rather than their personal characteristic and will be
used to assess the employees on friendliness toward customers helpfulness.
WAN Communication will also assess the performance of employees on the base of the
number of customers served.
WAN Communication will invest in training and development in order to modify the attitude,
knowledge and skills of employees with a view of enhancing performance. Such will be
conducted as necessary to instill a learning experience which seeks relatively permanent in an
individual that will contribute to a better and enhance job performance.
To ensure that WAN Communication has competent employees that it needs to achieve
the set short and long term goals.
To ensure that each of the staff has the required skills and knowledge necessary and
relevant to carry out their duties competently.
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Importance of Training and Development
Reduce supervision since the supervisor will spend less time in correcting errors.
Help the employees keep in touch with the changing and developing technologies.
4.0.7 COMMUNICATION
This is the process of passing information from within the organization to produce mutual
understanding.
WAN Communication intends to use the following types of communication for smooth running
and passing of information in the business.
This will include all forms of communication from a higher authority to staff in a lower level in
the organization chart.
Advantages
(c) Updates the subordinates with information about ration of their job.
This will cover all forms of communication between people in the same level in the
management hierarchy in the organization chart.
Advantages
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4.0.8 LEGAL REQUIREMENT
WAN Communication will certify all the requirements by the government and local authority
in order to be categorized as an existence company that will be tax compliant.
This will be done at Sheria House whereby the name will be logged and certified then
authorized for use after payment of a fee.
This will be obtained for free after a proof of existence of the business, at the Kenya revenue
Authority.
(C) P I N Number
This is issued at the Kenya Revenue Authority for free and helps in identifying the business for
tax purpose.
This will be issued free of charge at by the Ministry of Trade and Industry. This will help to
prove that the business really operates and is licensed by the government.
The proprietor will obtain this at a fee from the Municipality of Kapsabet. It will help in
County Council authorization to operation.
The business will be licensed by Kapsabet Municipality Council Kenya Bureau Standards Act.
WAN Communication will comply with the Employment Act term that requires that all
workers be insured by the NHIF.
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4.0.9 SUPPORT SERVICES
These will include any other service that will be provided to this organization to help normal
operation. WAN Communication will need such services that will include:-
i. Banking Services
Such services will help the business operate an account and pay out the
creditors or receive payments on behalf of the business.
Help keep in custody the business important documents and financial records.
Kapsabet Branch,
Tel 0729760112
P. O. Box 32
Kapsabet.
Tel 0729760112
These services will help in guiding the business when signing contracts as swell as protect the
Enterprise rights and Facilitate a legal process in defense. Such services will be provided by:-
Kapsabet,
Tel 0713175011
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iv. Security Services
These services will ensure that the company premises and assets are all secure and protected
for theft at all times. This will be provided for by:-
KK Security Ltd
Showground Kapsabet,
P. O. Box 55,
Tel 0727121245
During the operation of the business, such factors to include:-economic, government policies,
education, competition, technology, and social factors may bring changes in the venture.
Therefore the business will be prepared for such eventualities. The main technique that can be
use to curb these changes are:-
(a) Persuasion
(b) Training
WAN Communication will adopt job design as the technique to manage changes. This
technique refers to a conscious effort to organize tasks and responsibilities in a job to enhance
satisfaction and avoid stress which in turn leads to motivation and discourage high rate of
absenteeism. Job design focus on how work will be done. This will be implemented through;-
1) Job specification
Will involve breaking down jobs into smallest component and trying to assess how job is done
in each of the components of the whole job.
2) Job Enlargement
Is the process of broadening jobs by adding together tasks together. Tasks involving similar
skills and abilities will be combined together. This will help WAN Communication motivate
who perceives increased responsibilities as a step to towards advancing their carriers. However,
such will not be accompanied by additional compensation.
3) Job Enrichment
This is also called vertical expansion. In this technique, responsibilities are added to an
employees job that is not extremely similar to the task the employee performs.
4) Job Rotation
WAN Communication will often deploy its employees to different departments to perform
different tasks in the organization. This will help alleviate some of the boredom that employees
may face because of performing the same job over and over. This system will require that the
employees be trained in several jobs.
37
CHAPTER FIVE
OPERATION AND PRODUCTION PLAN
5.0.0 INTRODUCTION
This chapter outlines all the activities that the venture will carry out. Such will include:-
(d) Networking.
Good operation strategies will ensure that WAN Communication Ltd attains maximum
utilization of available resources. It will also take advantage and capitalize on competitors
weaknesses and carry out timely market survey, to understand market requirements in order to
adopt efficient techniques in operation.
WAN Communication will require machinery and equipments in order to use to render
satisfactory services to meet customers needs to ensure continuity and profitability of the
organization. Such tools can be classified as in the table in the next page.
The organization will formulate a plan whereby equipments will be received, recorded, sorted
then issued to the relevant section of the enterprise.
38
MACHINES , TOOLS AND EQUIPMENTS
TOTAL 320,000.00
The organization will recruit distributors to deliver goods and services to the customers. In this
way, the Company will bring its goods and service closer to the prospective customers and
subdivide the whole operation area into units which will make the organization have control of
the market area.
It will also enhance customer satisfaction by adopting price reduction and timely service
rendering strategies
39
5.0.2 OPERATION STRATEGY
WAN Communication will carry out market survey in order to understand the market on a
wider perspective. The result from such survey will be used to implement the firms operation
strategies. The organization will also give incentives to loyal customers in order to maintain
customers as well as offer discounts to customers who purchase in bulk.
Intensive marketing techniques will also be enforced to widen the market and to market the
venture further, all employees will have to wear uniforms with painted pocket shirt or blouses
which bear the company name and logo.
WAN Communication will deal in installation and repair of communication equipment as well
as selling. He operation processes are illustrated in the flow charts below.
Actual Repair
Actual Installation
Reassembly
Receive Payments
40
5.0.4 REGULATION AFFECTING OPERATION
These are laws and regulations that WAN Communication will adopt as whole while operating.
The legal laws binding the business will be inter-twined to the organizations own rules for a
profitable operation.
The organization will observe this Act by offering the stipulated salaries and wages as well as
the employees rights.
The organization will observe standard health requirement in the premises and with the
employees.
The organization will apply for the acquisition of this license from the Ministry of Trade and
Industry.
The organization will register with the NSSF and forward monthly contributions of all
employees to the fund.
The organization will foresee the registration of its employees with the Kenya revenue
Authority to curb incidences of tax default and also have the organization remit its own returns
to the authority.
(i) All employees should report to work by 8:00 am and leave the premise by 5:00
pm.
(ii) All the employees working past the required time (past 5:00pm) must sign in
with the security for security and financial consideration.
(iii) Employees must wear uniforms at all times during working hours.
(iv) Any act of theft will be dealt with in accordance with the laws of Kenya.
(vi) Lunch breaks will last for one hour and thirty minutes, from 12:30 pm to 2:00
pm.
41
CHAPTER SIX
FINANCIAL PLAN
6.0.0 INTRODUCTION
This chapter focuses on matters pertaining to finance, expenditure and inputs. It represents
financial estimations at the beginning and in future in quantitative terms. These details will
then be used by the management of WAN Communications to assess the performance of the
venture.
Such will include all expenses incurred before the business commences and are summarized
as:-
PRE-OPERATIONAL COST
ITEMS COST(KSHS)
Insurance 10,000.00
Stationary 4,5000.00
Miscellaneous 2,800.00
TOTAL 574,800.00
42
6.0.2 ESTIMATION OF WORKING CAPITAL FOR THE YEAR 2011, 2012 & 2013
CURRENT LIABILITIES
TOTAL WORKING
CAPITAL 353,500.00 960,250.00 1,434,800.00
The proposed business loan will be from Equity Bank of Kenya. The loan will be Ksh
660,000.00 which will be repaid at an interest of 16%. The loan will be paid for a period 30
months with agrace period of 2 months from the date of borrowing.
The borrowed amount will all be introduced into the business and the repayment schedule will
be as per the table in the next page.
43
PRINCIPAL MONTHLY INTEREST BALANCE
MONTH No.
AMOUNT INSTALMENT
44
Balance = Principal Amount - (Interest +Monthly Installment)
Bank Loan
Monthly Installment = 30 ( No of Months)
45
6.0.4 (A) Projected Cash Flow for the year (2011)
DETAILS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
CASH INFLOW
BEGINNING CASH 1,475,175 1,172,025 994,560 799,260 986,235 976,415 1,635,065 1,445,135 1,385,341 1,339,481 1,387,439 1,327,940 14,924,07
SALES &SERVICE CHARGE 20,000 35,650 40,700 50,230 52,300 54,100 50,600 57,800 56,000 58,900 58,901 59,100 1,594,28
RECEIPT 5,000 2,000 8,000 4,000 - - 10,000 5,000 4,000 2,000 9,120 85,000 134,12
DEBTORS - 20,000 30,000 400,000 350,000 860,000 100,000 200,000 220,000 310,000 200,000 600,000 2,930,00
TOTAL INFLOW 1,500,175 1,229,675 1,073,260 1,253,490 1238,685 1,890,515 1,795,665 1,707,935 1,665,341 1,710,381 1,655,460 2,072,040 21,461,89
CASH OUTFLOW
PURCHASE 20,750 15,715 20,000 15,000 20,800 16,000 20,300 16,999 10,000 17,000 18,980 21,800 213,34
RENT& DEPOSIT 28,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 105,00
SALARIES 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 2,580,00
ELECTRICITY 400 500 450 600 550 700 650 800 750 800 750 900 7,85
BANK LOAN REPAYMENT - - 25,520 25,520 25,520 25,520 25,520 25,520 25,520 25,520 25,520 25,520 255,20
ADVERTISEMENT 9,500 500 500 14,500 500 500 500 14,500 500 500 500 14,500 56,00
TELEPHONE&STATIONERY 1,000 800 750 755 900 910 800 700 910 756 890 900 10,07
WATER 500 800 800 900 820 820 1,300 920 750 786 900 940 5,98
TOTAL OUT FLOW 328,150 274,815 274,000 267,255 262,270 255,430 350,550 322,594 325,860 322,942 327,520 332,600 3,917,36
NET CASH FLOW 1,172025 994,560 799,260 986,235 976,415 1,635,085 1,445,135 1,385,341 1,339,481 1,387,439 1,327,940 1,739,440 17,544,53
46
6.0.4 (B) Projected Cash Flow for the year (2012)
DETAILS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
CASH INFLOW
BEGINNING CASH 1,739,440 2,150,640 2,605,261 3,050,937 3,437,115 4,124,648 4,880,954 5,667,899 6,926,981 7,620,447 8,460,179 9,455,805 60,120,306
SALES &SERVICE CHARGE 62,000 62,750 61,778 63,432 65,273 70,999 84,679 85,228 88,779 92,333 93,222 94,666 2,005,139.00
RECEIPT 100,000 98,820 103,251 119,222 332,000 421,356 400,722 376,800 300,831 426,870 560,800 700,890 3,941,562
DEBTORS 625,000 650,001 652,320 569,000 600,000 621,432 639,876 641,257 651,234 668,765 675,678 519,283 7,513,846
TOTAL INFLOW 2,526,440 2,962,211 3,422,610 3,802,591 4,434,388 5,238,435 6,006,231 6,771,184 7,967,825 8,808,415 9,789,879 10,770,644 72,500,953
CASH OUTFLOW
PURCHASE 40,000 52,024 60,763 61,772 70,000 80,000 92,826 99,555 102,434 103,876 92,083 92,140 947,473
RENT 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 84,000
SALARIES 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 2,580,000
ELECTRICITY 800 900 937 1,200 2,246 2,031 1,956 1,949 2,260 2,032 686 4,999 8,996
BANK LOAN REPAYMENT 25,520 25,520 25,520 25,520 25,520 25,520 25,520 25,520 25,520 25,520 25,520 25,520 306,240
ADVERTISEMENT 9,500 500 500 14,500 500 500 500 14,500 500 500 500 14,500 56,000
TELEPHONE&STATIONERY 1,000 826 973 1,024 2,264 2,030 1,925 1,899 2,884 2,773 2,667 3,689 13,954
WATER 800 700 800 920 820 720 9400 920 750 786 900 940 6,000
TOTAL OUT FLOW 375,800 356,950 371,673 365,476 309,740 357,481 338,332 344,203 347,478 348,236 334,092 357,339 4,186,790
NET CASH FLOW 2,150,640 2,605,261 3,050,937 3,437,115 4,124,648 4,880,954 5,667,899 6,926,981 7,620,447 8,460,179 9,455,805 10,413,305 68,314,172
47
6.0.4 (B) Projected Cash Flow for the year (2013)
DETAILS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
CASH INFLOW
BEGINNING CASH 10,413,305 11,132,133 11,834,015 12,596,534 13,640,291 14,122,129 14,688,063 15,328,017 16,018,432 16,739,917 17,426,421 17,991,691 157,808,
SALES &SERVICE
CHARGE 95,856 92,140 98,220 93,162 99,340 102,223 101,444 103,825 108,333 110,236 126,887 163,555 2,895,
RECEIPT 570,901 522,688 600,400 923,445 400,361 447,881 493,863 500,000 520,633 420,923 367,924 499,861 6,268,
DEBTORS 519,229 522,636 463,801 455,667 439,891 486,222 499,660 516,826 509,823 566,871 522,081 500,000 5,532,
TOTAL INFLOW 11,599,291 12,269,597 12,996,436 14,068,808 14,579,883 15,158,455 15,783,030 16,448,668 17,157,221 17,837,947 18,443,313 19,155,107 170,905,
CASH OUTFLOW
PURCHASE 92,145 93,162 93,179 94,222 96,822 98,333 99,429 99,360 99,560 99,627 99,382 102,801 1,167,
RENT 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 84,
SALARIES 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 215,000 774,000
ELECTRICITY 800 860 937 950 1,000 920 1,000 982 990 730 686 1,020 10
BANK LOAN REPAYMENT 25,520 25,520 25,520 25,520 25,520 25,520 - - - - - - 153,
ADVERTISEMENT 9,500 500 500 14,500 500 500 500 14,500 500 500 500 14,500 56,
TELEPHONE
&STATIONERY 3,000 3,600 2,887 2,817 1,826 1,936 1,946 1,984 1,999 2,009 2,120 2,012 28,
WATER 1220 900 800 920 820 720 1200 920 750 786 900 1240 9,
TOTAL OUT FLOW 467,158 435,582 399,902 428,517 457,754 470,392 455,193 430,233 417,304 411,526 451,622 513,377 15,338,
NET CASH FLOW 11,321,133 11,834,015 12,596,534 13,640,291 14,122,129 14,688,063 15,328,017 16,018,432 16,739,917 17,426,421 17,991,691 18,641,730 165,567,
48
6.0.5 PROJECTED TRADING PROFIT AND LOSS ACCOUNT
+Purchases 213,344.00
-Expenses
Salaries 258,000.00
Rent 105,000.00
Electricity 7,850.00
Water 5,986.00
Advertisement 56,000.00
49
WAN COMMUNICATIONS LTD
+Purchases 947,473.00
-Expenses
Salaries 258,000.00
Rent 84,000.00
Electricity 8,996.00
Water 6,000.00
Advertisement 56,000.00
50
WAN COMMUNICATIONS LTD
+Purchases 1,167,842.00
-Expenses
Salaries 774,000.00
Rent 84,000.00
Electricity 10,875.00
Water 9,000.00
Advertisement 56,000.00
51
6.0.6 PROFORMA BALANCE SHEET
Fixed Assets
+Current Assets
-Current Liabilities
52
6.0.7 BREAK EVEN ANALYSIS
This is an effective way of presenting the relationship between volume cost and profit. It also
gives the relationship between the revenue and cost with respect to volume. It shows equilibrium
level of sale at which revenue equals cost. This equilibrium point is also known as the break
Even Point. At this point there is neither profit nor loss.
SALES 1,594,281.00 - -
EXPENSES - - -
Rent - 105,000.00 -
Insurance - 60,000.00 -
Salaries - 258,000.00
Electricity - - 7,850.00
Telephone - - 4,071.00
Water - - 5,986.00
Advertisement - - 56,000.00
Stationary - - 6,000.00
License - 6,500.00 -
Fixed Cost
(1) BEP = Contributi on Margin
X 100
53
181 ,500 .00
= X100
1,594 ,281 .00
= 11.38%
= 1,594,281.00 337,907.00
= 1,256,374.00
1,256,374. 00
= X100
1,594,281. 00
=78.80%
54
This is used to reflect the element to determine the proportionality status of the business rated
against the established standards.
539,030.00
=
340,000.00
=1.585
539,030.00
=
1,594,281. 00
=0.338
Gross Profit
(iii) Gross Profit =
Sales
55
1,380,937. 00
=
1,594,281. 00
=0.866
Sales
(iv) Asset Turn Over = Average Total Sales
1,594,281. 00
=
2,093,769. 00
=0.761
Sales
(vi) Asset Turn over Ratio = Average Total Sales
X100
1,594,281. 00
= X 100
2,093,769. 00
=76.14%
Current Assets
(vi) Current Ration =
Current Liabilitie s
56
651,3444.0 0
=
757,120.00
=0.860
651,344.00
=
971,344.00
=6.71%
Totak Revenue
(viii) Inventory Turn Over =
Total Assets
539,030.00
=
971,344.00
=0.555
This is the financing that will be required by the business before commencing. It is
expressed as below:-
57
Pre-operation Cost 574,000.00
CONCLUSION
Market research leaves no doubt that WAN COMMUNICATION will be viable. The
outline and research has revealed that the existing Telecommunication industry
improvement in technology day by day, making it very vital for establishing of firms
which will be sensitive to these change technoloogy as well as taste and perference. The
58
business strategic location as well as entrepreneurial skills and managerial skills acquired
by the proprietor will make the business successful. Any short comings which will be
encountered during operation will be dealt with in the year to come besides the
preventive measures taken upon them.
59
LOCATION MAP
ELDORATE
BUS STOP
POLICE P
OST
KAPSABET TOWN
HO
NAMGOI
SP
IT
ROUNDABOUT
AL
COMMUNICATION
WAN
PETRO
L
STATIO
N
HILLS
NANDI
60
COUNTER
WORKSHOP
SHOP
MD OFFICE
SHOW ROOM STORE
Toilet
s
61