FRANLAT SUPERMARKET ENTERPRISE

PRESENTED BY: FRANCISCA CHEPKOECH

INDEX NUMBER: 5831020644

PAPER CODE: 207

COURSE CODE: 1805

SUPERVISOR: KIPKIRUI TOWETT

CENTER NAME: SOT TECHNICAL TRAINING INSTITUTE

PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL IN PARTIAL

FULFILMENT FOR THE AWARD OF CERTIFICATE IN SOCIAL WORK AND

COMMUNITY DEVELOPMENT.

EXAM SERIES: JULY 2024

DECLARATION
I declare this business plan is wholly my own work and has never been presented to The Kenya
National Examination Council

Name: ………………………………………………………………………….

Date ……………………………………………………………………………

Signature…………………………………………………………………….

Supervisor…………………………………………………………………..

Date ……………………………………………………………………….....

Signature…………………………………………………………………….

ii
DEDICATION
I would like to dedicate this work to my parents, brother and uncle for their great financial
support. In addition, whoever wants to start a business will find this work more helpful because,
it is well organized a good manner. Thank you so much and may God almighty bless you all.

iii
ACKNOWLEDGEMENT
I humbly and gladly would like to appreciate the support of my family, friends and relatives
through their financial, player and time for research. My supervisors showed great support
towards writing this project.

iv
Table of Contents
DECLARATION.........................................................................................................................................ii
DEDICATION............................................................................................................................................iii
ACKNOWLEDGEMENT..........................................................................................................................iv
EXCECUTIVE SUMMARY....................................................................................................................viii
1.0 BUSINESS DESCRIPTION..................................................................................................................viii
2.0 MARKETING PLAN.............................................................................................................................ix
3.0 ORGANISATION AND MANAGEMENT PLAN......................................................................................ix
4.0 PRODUCTION PLAN...........................................................................................................................ix
5.0 FINANCIAL PLAN................................................................................................................................x
CHAPTER ONE..........................................................................................................................................1
1.0 BUSINESS DESCRIPTION.....................................................................................................................1
1.1BUSINESS NAME.................................................................................................................................1
1.2 BUSINESS LOCATION..........................................................................................................................1
1.3 OWNERSHIP.......................................................................................................................................1
1.4 PRODUCTION SERVICES.....................................................................................................................1
1.5 JUSTIFICATION OF BUSINESS VENTURE.............................................................................................2
1.6 GOALS OF THE BUSINESS...................................................................................................................2
1.7 ENTRY & GROWTH STRATEGY............................................................................................................2
1.8 GROWTH STRATEGYY........................................................................................................................3
1.9 RISK AND UNCERTAINITIES................................................................................................................3
CHAPTER TWO.........................................................................................................................................4
2.0 MARKET PLAN....................................................................................................................................4
2.1 TARGET MARKET................................................................................................................................4
2.2 COMPETITION AND COMPETITORS ABII Supermarket faces the following challenges:.....................4
2.3 MARKET SHARE..................................................................................................................................5
2.4 PROMOTION AND ADVERTISEMENT STRATEGY................................................................................5
2.5 PRICE STRATEGY................................................................................................................................6
2.6 PREMISES.........................................................................................................................................7
2.7 Distribution strategy..........................................................................................................................7
CHAPTER THREE.....................................................................................................................................8
3.0 ORGANISATION AND MANAGEMENT PLAN.......................................................................................8

v
 3.1ORGANISATION CHART.......................................................................................................................8
3.2 QUALIFICATION,DUTIES & SALARIES OF EMPLOYEES........................................................................8
3.3 PATROL ANALYSIS..............................................................................................................................8
3.4 QUALIFICATION DUTIES AND SALARIESOF EMPLOYEES.....................................................................9
3.5 LEGAL ASPECTS................................................................................................................................10
3.6 RENUMERATION & INCENTIVES......................................................................................................10
3.7 SUPPORTIVE SERVICE.......................................................................................................................10
CHAPTER FOUR.....................................................................................................................................11
4.0 PRODUCTION AND OPERATION PLAN.............................................................................................11
4.1 PRODUCTION FACILITIES & CAPACITY.............................................................................................11
4.2 REPAIR AND MAINTENANCE............................................................................................................12
4.3 WORKSHOP LAYOUT........................................................................................................................12
4.4 SCARCITY OF RAW MATERIALS........................................................................................................13
4.5 COST OF PRODUCTION....................................................................................................................13
4.6 FACTORS AFFECTING PRODUCTION PROCESS.................................................................................13
4.7 RISK OF THE BUSINESS.....................................................................................................................14
4.8 UNSEEN RISK....................................................................................................................................14
4.9 CRITICAL RISKS.................................................................................................................................14
CHAPTER FIVE.......................................................................................................................................15
5.0 FINANCIAL PLAN..............................................................................................................................15
5.1 PRE- OPERATIONAL COST................................................................................................................15
5.2 OPERATIONAL COST........................................................................................................................15
5.3 FINANCIAL REQUIREMENTS.............................................................................................................15
5.4 BANK LOAN REPAYMENT.................................................................................................................16
5.5 BREAK-EVEN LEVEL..........................................................................................................................16
5.6 DESIRED FINANCING........................................................................................................................17
5.7 PROPOSED CAPITALISATION............................................................................................................17
5.8 DESIRED FINANCING........................................................................................................................18
5.9 PROJECTED CASH FLOW FOR FRANLAT SUPERMARKET...................................................................19
5.9.1PROJECTED CASH FLOW FOR 1ST YEAR 2024................................................................................19
5.9.2PROJECTED CASH FLOW FOR 2ND YEAR 2025...............................................................................21
5.9.3 PROJECTED CASH FLOW FOR 3RD YEAR 2026...............................................................................23

vi
5.9.4 Proforma Income Statement for FRANLAT SUPERMARKET..........................................................25
5.9.5 Proforma Balance Sheet for FRANLAT SUPERMARKET.................................................................26
5.9.6 Break Even Point for 2024, 2025and 2026....................................................................................27
5.9.7 Profitability Ratio for 2024, 2025 and 2026................................................................................28
5.9.8 Desired Finance............................................................................................................................28
5.9.9 Proposed Capitalization................................................................................................................28

vii
EXCECUTIVE SUMMARY

1.0 BUSINESS DESCRIPTION

The name of the proposed business will be FRANLAT SUPERMARKET. It is located at Bomet
County; Sotik Sub County at Chebole town .It will be situated along Bomet-Kaplong main road.
The business will be a sole proprietorship managed by FRANCISCA CHEPKOECH, who is
currently a student at Sot technical Training Institute pursuing Certificate in social work and
community development. The entrepreneur intends to sell quality good items and products like
kitchen utensils, sugar, tealeaves, cooking fats to customers. Franlat Supermarket will be
accessed through the address

P.O BOX 13,

TEL: 0792616426
[email protected]

The supermarket will provide job opportunities to jobless youths in the town and thus improving
the economy growth of the town. The business operations hours commence early in the morning
and late in the evening. The schedule time will be from 6:00 am to 8:00 pm for weekdays and for
the weekend’s 6:00 am to 7:00 pm.The business engaged services of qualified and competence
personnel who will ensure goods and services are available to customers at all times to compete
with other competitors. The business will carry out promotions to its customers and provide
discount at a certain goods purchased. Signboards will be used to direct customers to the
premises to enable customers to identify from a distance.

The business will have profits if goals are achieved, this goals will be both short and long term:

I. Short term goals by first year the business will have required 55% of population
II. Long term goals are achieved by extending branches in town and outside town

2.0 MARKETING PLAN

a) Attraction of customers

viii
 In order to retained customers and attract more the experience will employ the
following methods:
 Charging prices which are relatively lower than the competitors
 Providing sample Lembus to the customers
 Providing discount to the customers
 Good public relations with the customers in order to ensure the potential
customers with goods and services
 Offer after sales services
b) Potential customers who will be able to buy the products &services are rural
shops, hospitals, institution, like schools, Jua kali people, retailers and
supermarkets.
c) Retention of customers
 Offer quality products
 Proper interaction with customers
 Maintenance of cleanliness
 Timely and prompt provision of products and services
d) Major competitors of ABII Supermarket will experience competitors, including
Dana supermarket and Radiant Supermarket.

3.0 ORGANISATION AND MANAGEMENT PLAN

The entrepreneur of the business will be the manager .The support staff will include cashier,
supervisor, security and cleaner.

4.0 PRODUCTION PLAN

The entrepreneur will have to secure sufficient capital co-op Bank through learning for the
business to be active its operational activities. The products and foodstuffs will be transported
from the manufacturer to the warehouse means of Lorries. The product will then be sorted out
and discipline on the shelves to the customers. For any issues that affect the operations of the
business will be quickly identified and solved at the right time. Defective items are returns back
to the manufacturer.

5.0 FINANCIAL PLAN

The source of capital to support the business will mainly from:

ix
*Family members

* Co-op Bank

*Relatives and friends

The capital will be used to purchase the product from the manufacturer in order to avail them to
customers. The capital also will be used to pay for electricity, rent, salaries and miscellaneous
expenses. The business will commence with capital, which will be source from the following:

Sources Amount
Personal investment 1,000,000
Relatives & friends 250,000
Family Members 250,000
Total 1,500,000

x
CHAPTER ONE

1.0 BUSINESS DESCRIPTION

1.1BUSINESS NAME
The name of the proposed business will be FRANLAT SUPERMARKET. The name being
derived from my name FRANCISCA CHEPKOECH. It will be dealing with foodstuffs, kitchen
utensils, beauty products, and many other goods from the customers.

The business will be registered with the name: FRANLAT SUPERMARKET,

P.O BOX 221

Sotik

[email protected]

Tell.0792616426

1.2 BUSINESS LOCATION

The business will be located in Sotik town along Sotik main Road opposite to dollar line petrol
station.

The area is highly populated and ready market; security level is very high because there are
many business-taking place including visitors who comes to visit the town.

1.3 OWNERSHIP
The business will be sole proprietorships owned and managed by FRANCISCA CHEPKOECH
having graduated in Certificate in social work and community development from SOT Technical
Institute for Three years. The owner preferred the business because the profit will be enjoyed by
her and at the same time being self-employed.

1.4 PRODUCTION SERVICES

FRANLAT SUPERMARKET will offer the best quality services to the consumers, food items
including :rice,sugar,salt,coffee,tea leaves,bread,cakes,cooking fat, biscuits and beverages such

1
as quencher, milk and sodas. It also sell cosmetics products like lotions, aloe vera, shampoo, &
Vaseline at affordable price.

1.5 JUSTIFICATION OF BUSINESS VENTURE

Having undergone a course of library and information studies, the entrepreneur will have skills
and knowledge to manage business growth and success, which the entrepreneur’s research has
processed as, outlined below:

a) Parking space- enough space – Enough space for reloading and customers are
able to park their vehicles.
b) Security – There is tight security in the environment because of nearness of
police station hence combing the area on a daily basis.
c) Transport and communication – There is good infrastructure particularly roads
network enabling customers to transport their goods and services without any
problem.
d) Population – due to increase in rural urban migration in town, they consume our
products daily leading to high demand of our quality products.
e) Competitors- our competitors are unable to satisfy consumer needs because of the
strategic position business is located.

1.6 GOALS OF THE BUSINESS

The entrepreneur has come up with the following goals:

a) Desired to achieved - the entrepreneur will make sure that she succeed or excel in
achieving her goal while competing with others. Always try to accomplish something
new.
b) Creation of employment – The business will create jobs opportunities to many people
who fail to secure employment by observing them.
c) Improving standard of living of the employees by enabling them to attain financial
independence.
d) The business will also promote social economy of the people in the area.
e) To sponsor some group of people in the society.

2
1.7 ENTRY & GROWTH STRATEGY
The business will reward as a way of free promotion those customers who purchase goods.

1.8 GROWTH STRATEGYY

 Advertisement will be done through signboards, and electronic media to alert the
community of the new business.
 The premises will be decorated with attractive coloring order to suit the business.
 Shelves will be constructed for holding goods.
 Government policy like license, location and taxation must be acquired and displayed on
the wall for smooth operations of the business.
 Modern technology will be employed for the business to run successfully and effectively.

1.9 RISK AND UNCERTAINITIES

An entrepreneur can set several risks which may affect the business either before or after.

The risks involved are:

 Lack of fire extinguishers

 Sickness
 Theft
 Natural calamities like floods, earthquake and fire.

My business will be insured under any risk that will happen for smooth running.

3
CHAPTER TWO

2.0 MARKET PLAN

2.1 TARGET MARKET

The most targeted customers of ABII Supermarket are placed as follows:

 Working class communities within town are our customers

 Institutions – such as universities, colleges ,secondary schools ,primary schools, street
workers and all the travelers gets all their daily food stuffs ,like sugar, rice, salt, soft
drinks and cosmetics items
 Since the business is created next to a petrol station, visitors come and shop in our
supermarket.

2.2 COMPETITION AND COMPETITORS

ABII Supermarket faces the following challenges:
There are two competitors operating next to our business. We employ public relations
techniques to our customers, we also compensate and motivate the by providing free
packaging materials.
The table below shows competitors strength, weakness, opportunities and threats.

FRANLAT Lembus ASIS SUPERMARKET

SUPERMARKET SUPERMARKET
Strengths Strengths strengths
Availability of goods and Variety of goods and Quality of goods and
services services services
Near petrol station Regular customers Near main road
Quality goods Large hall Tight security
Parking space Cheap prices
CCTV Camera Training hall
Weakness weakness Weakness
Fix prices High prices Unskilled personnel
Cannot optimize time Lack of good management No computer code software

4
 Opportunities

FRANLAT supermarket Lembus Supermarket ASIS supermarket

Growing demand Professional Increase business volume
Growing economy Trained staffs

2.3 MARKET SHARE

The business is targeting to set 55% of the total population in the area leaving the owner
percentage 45% to the competitors as well as increasing shares for effective running of
the business.
60

50

40

Machep Supermarket
30 Danasu permarket
Radiant supermarket

20

10

2.4 PROMOTION AND ADVERTISEMENT STRATEGY

Franlat Supermarket would attract the attention of customers by:
i. Electronic and social media including newspapers, radio stations
ii. Posters-placed along shops sideways
iii. Sign boards will be located outside the premise using for better and quality goods
iv. To place the advert on the website and internet, WhatsApp, twitter and Facebook

5
2.5 PRICE STRATEGY
Franlat Supermarket carried out survey on the prices charged by our competitors in the market
and decided to fix it is at a reasonable prices. The prices of our items are variable depending on
the reasons and special occasions for example, during Christmas holidays our prices are slightly
up because of the demand. During the middle of the year, our process are favorable lower
because of the demand and supply in the market. In addition, inflation plays a major factor
during this period.

The demand price list will be as tabulated below:

COSMETCS PRICE KITCHEN PRICE FOOD PRICE

ITEMS KSH UTENSILS KSH ITEMS KSH
Shampoo 350 Spoon set 1500 Rice 1kg
250ml
Cream Eye 550 Try set 800 Sugar 1kg
Color
Perfumes- 207 Sufuria set 900 Cooking fat
floral fresh
50ml
Soft 405 Cups set 600 Wheat floor
smoothing
toner 725ml
Protections 207 Stainless steel 500 Soda 300ml
men’s soup pot

Roll-on 50ml Set cookware 2000 Soda 500ml

Cocoa Buffer 92 Pieces 2600 Quencher300ml,500ml

lotion 200ml nonstick pan 500ml

Thermos 1500 S Rising flour 2kg

flask
Water filter 2990

6
 Drinking 825
water

2.6 PREMISES
The building on which the business is carried out is for hire. The property owner charges
ksh 150,000per month.

It’s a big hall measuring 20feet square. It is partition into two where kitchen items side are
displace and food items side. There is also a small office of the manager.

2.7 Distribution strategy

We placed orders from our suppliers and manufactures then we received goods at our warehouse
for sorting and display at shelves .The customers identified the goods and purchased whatever
they are interested with.

The supplier are paid by way of chaques and at times, they wait for a period of a month before
they are paid. This is an agreement with them to enable the business generate profit and
consumption of items by our potential customers.

7
CHAPTER THREE

3.0 ORGANISATION AND MANAGEMENT PLAN

As the business being sole proprietor, it will be operated under the management of the owner
as the general manager, while his supervisor would be in charge of other areas.

3.1ORGANISATION CHART

MANAGER

SUPERVISOR

CASHIER SECURITY CLEANER

3.2 QUALIFICATION, DUTIES & SALARIES OF EMPLOYEES

3.3 PATROL ANALYSIS

JOB CATEGORY BASIC BENEFIT TOTAL
SALARY SALARY KSH
MANAGER 20,000 5000 25,000
SUPERVISOR 15,000 2000 17,000
CASHIER 10,000 1500 11,000
SECURITY 6000 1000 7000
CLEANER 5000 500 5,500
TOTAL 56,000 10,000 66,000

8
3.4 QUALIFICATION DUTIES AND SALARIESOF EMPLOYEES
JOB TITLE QUALIFICATION DUTIES SALARY
MANAGER Certificate in business Recruit & terminates 20,000
management staff
4 years’ experience in Check flow services
a busy institution Plan strategic areas
Being a computer with staff
literate
Be over 30 years
SUPERVISOR Certificate/certificate Deputize when the 15,000
in purchasing & manager is a way
supply Ensure work flow
2 years’ experience smoothly
Must be over 25 year Report any problem to
the business
CASHIER Certificate in CPA III Prepare trial balance $ 10,000
2 years experiences balance sheet
Must be over 30yrs Prepare profit % loss
Prepare payrolls to the
staff
Does any other duties
assigned by the
manager
SECURITY ‘O’ level certificates Maintain law and 6,000
Must have attended order
driving course Maintain risk &
Physically & mentally accidents against
fit theft, fire& customers
2 year experience condition especially
expectant mothers on
the que

9
 CLEANER Must have completed Cleaning the floor 5,000
primary school walls, shelves &
1 year experience windows
Ability to handle Maintaining proper
delicate items like cleanliness in the
classes & cleanliness environment

3.5 LEGAL ASPECTS

i. Trade license – the business must acquire trade licence for smooth operations of the
business.
ii. Insurance – the business must also have insurance card in case of any natural calamity the
business must be insured.

3.6 RENUMERATION & INCENTIVES

Every year staff that performed excellently are rewarded. The manager carry out staff annual
appraisal report. This will encourage and motivate staff to work harder. The mode of reward is
salary increase and the manager provides a token after the end year party hosted to the staff.

3.7 SUPPORTIVE SERVICE

1) Bank : Equity Bank Bomet Branch
P.O BOX, 431
BOMET
Email: equity bank @gmail.com
2) Mr. Richard Langat
Tel: 0742600115
P.O BOX 13
Email: [email protected]

10
CHAPTER FOUR

4.0 PRODUCTION AND OPERATION PLAN

The business is expected to start operations on September 2024 from 8.00 to 6.00 pm.The
business will be committed to high quality products to customers and maintained high level of
cleanliness.

4.1 PRODUCTION FACILITIES & CAPACITY

ITEM QUALITY COST ITEM TOTAL
FOODS
Fats 10 1,500 15,000
Bags of sugar 15 3,000 45,000
Wheat flour 20 1,900 38,000
Bags of rice 20 10,000 20,000
Soda 300ml 30 720 21,600

Kitchen
Thermos flask 10 1,500 15,000
Drinking water 30 825 24,750
Pot set 15 2,600 39,000

COSMETIC
Shampoo 100 350 35,000
Cocoa Butter 50 92 4,600
Pot Cook ware 100 207 20,700
Perfumes flora 100 207 20,700
Creamed eye(make 30 550 16,500
ups)
Total 351,850

11
 4.2 REPAIR AND MAINTENANCE
Frequently the supervisor inspects the building, shelves, lights, water supply and any other
important parts. He then advice the manager on the way forward. If need a replacement or repair,
the cashier is advised to access the damage and cost is estimated and budgeted for approved by
the manager. Hence, repairs are done by qualified personnel and quality materials are used to
avoid accident or risk because of expensive item displaced on the shelves.

4.3 WORKSHOP LAYOUT

The workshop layout or the mash hall has been subdivided into three units namely:

 Beauty/cosmetics sides
From Kaplong to
 Food stuff sides
Sotik
 Households equipment

To police
station

To Ndanai
Governor’s office
KWF AFC AGROVET

Oil Libya Petrol

Petrol Station

PS
To
Lembus
Kaplo
Asis supermarket supermarket
ng
High
way

12
4.4 SCARCITY OF RAW MATERIALS
The supervisor with the help of manager takes stock of all missing items at the store and the
shelves. At times the customer request for certain products and are not available in our store.
This will prompt the manager to make or place orders and supplied immediately.

It takes one day to arrive from Nairobi suppliers. In the course of business, the supervisor records
all the items in demand and not found in our competitors shops. This is one way of winning
confident and maintaining our customers. In the end strategy, we will achieve the 55% target
market share.

4.5 COST OF PRODUCTION

Franlat Supermarket experience rise in the cost of production mainly on the following foodstuffs,
rice

The steep rise in the cost of production has push up price of 1kg of pishori to Kshs 120 up from
Kshs.150 to Ksh 160 in May 2018.

Dawaat Basmati rice is currently at Ksh 243, sunrise rice at 212 and pear. Kenya pishori at Ksh
249.

The increase was contributed by the cost of production and drought.

In addition, the cost of labor was high which added up to 67% of the total cost of production. At
Mwea irrigation scheme. The total cost of production per kilogram of rice was at Ksh 25 with
labor taking up to Ksh 18

The price of sugar 50 kg bag had reached Ksh 9,000 but is rotating at Ksh 9,000-5500=3500.

4.6 FACTORS AFFECTING PRODUCTION PROCESS

During the cost of running ABII Supermarket, the following factors affect the smooth running of
the business.

 Government policy- Before commencement of the business operations the license and
health certificates are acquired. All these are mandatory to avoid close of the business.
 Outdated Products-In course of receiving goods from suppliers, some items are expired
or damaged. They are sorted out and re-send back to the manufactures.

13
  Power black-out-frequently power blackouts are experience in Bomet. This leads to the
effects to our perishable goods. To prevent this this power generating will be purchased
as an alternative power supply.
 Shortage- the business likewise experience challenges of shortage of goods from the
suppliers. We will ensure that goods ordered correspond with the goals received and to be
in good condition.

4.7 RISK OF THE BUSINESS

The major risk in Franlat Supermarket is the danger of the fire and theft. The following measures
have been taken to remedy the situation:

-Fire extinguishers install in a strategic area in case of fire outbreak.

-We have installed our CCTV Camera and reinforce security staff to ensure smooth running of
the business against thieves.

4.8 UNSEEN RISK

These are unpredictable risk, which occur suddenly and cause great loss to the business risks like
earthquakes and floods. The business will be insured to overcome the problem and compensation
in case it happens.

4.9 CRITICAL RISKS

Franlat Supermarket will face challenges of stiff competition in the market. We will ensure we
operate within optimum level, making sure our products are not identical with the competitors
‘products. The business will also undertake marketing research& training of staff.

14
CHAPTER FIVE

5.0 FINANCIAL PLAN

5.1 PRE- OPERATIONAL COST

The following cost will be incurred before the start of the business

Item Cost
Advertisement 10,000
Insurance 20,000
Opening stock 800,000
Equipment stock 200,000
Repairs and renovations 4,000
Trade license and permits 16,000
Total 104,4000

5.2 OPERATIONAL COST

These are elements of cost but not to include pre-operational cost

Item Cost
Purchases 50,000
Advertisement 3,000
Auditing 2,000
Sanitization 8,000
Electricity 65,000

5.3 FINANCIAL REQUIREMENTS

Operational cost 7,000

Pre-operational 1,300,000

Proposed capital 1,900,650

Bank loan 1,000,000

15
Owner’s equity 100,000

=1,100,000

5.4 BANK LOAN REPAYMENT

The bank loan will be paid within 10 years and will be paid with an interest of 1% of the loan,
which the total amount would be as follows:-

Bank loan 2,250,000

Personal Interest 30,000

Loan calculation 2,500,000/10

=250,000/12

=20,833.30 per month

OVERHEAD PER MONTH

Advertisement 10,000
Salaries 56,000
Electricity 8,000
Health certificate 3,000
Transport 3,000
Marketing 2,000
Total amount 82,000

5.5 BREAK-EVEN LEVEL

i. Variable cost
Electricity 3,000
Postal/Tel 1,600
Purchase/interest 2,500

= 7,100

16
 ii. FIXED COST
Rent ---------- ----- 6,000
Salaries ------------ 1,500
Insurance ------- 3,000
Loan repayment 5,000
=18,500

iii. Contribution Margin=Sales-Variable cost

: 30,000-71, 00= 22,900
iv. Contribution Margin %
Contribution margin x 100 =22,900 x 100

Sales 30,000

v. Break even =fixed cost x 100

Contribution cost
18,500 x 100
22,900 =81%

5.6 DESIRED FINANCING

Pre-operational 30,000
Working capital 600,000
Fixed assets 50,000
Total 680,000

5.7 PROPOSED CAPITALISATION

Owner’s equity 90,000

Bank loan 500,000

=590,000

17
5.8 DESIRED FINANCING
Pre-operational 125,000

Working capital 500,000

Fixed assets 20,000

Total =645,000

18
 5.9 PROJECTED CASH FLOW FOR FRANLAT SUPERMARKET

5.9.1PROJECTED CASH FLOW FOR 1ST YEAR 2024

Cash Jan Feb Marc April May June July Aug Sept Oct Nov Dec Total
inflow h
Balance - 343,00 880,0 1,597,00 2,520,0 3,49 4,712 6,156, 7,761 9,318,00 11,181,0 13,585,0 61,549,0
0 00 0 00 6,00 ,000 000 ,000 0 00 00 00
0
Cash at 150,00 200,00 300,0 400,000 500,00 600, 700,0 800,00 900,0 1,000,00 1,500,00 1,550,00 8,600,00
hand 0 0 00 0 000 00 0 00 0 0 0 0
Sales 450,00 460,00 470,0 490,000 500,00 550, 570,0 600,00 650,0 690,000 700,000 750,000 6,880,00
0 0 00 0 000 00 0 00 0
Stock 100,00 150,00 170,0 200,000 250,00 300, 350,0 380,00 400,0 450,000 500,000 550,000 3,800,00
0 0 00 0 000 00 0 00 0
Total Cash 700,00 1,153, 1,820 2,687,00 3,770,0 4,94 6,332 7,936, 9,711 11,458,0 13,881,0 16,435,0 80,829,0
Inflow 0 000 ,000 0 00 6,00 ,000 000 ,000 00 00 00 00
0
Cash
outflow
Telephone 1,000 9,000 8,000 9,000 1,000 9,00 8,000 1,000 8,000 1,000 1,000 10,000 74,000
0
Transport 2,000 3,000 3,000 4,000 2,000 3,00 4,000 2,000 3,000 2,000 5,000 5,000 38,000

19
 0
Salaries 50,000 50,000 50,00 50,000 60,000 60,0 60,00 60,000 70,00 70,000 70,000 70,000 720,000
0 00 0 0
Rent 3,000 3,000 3,000 3,000 3,000 3,00 3,000 3,000 3,000 3,000 3,000 3,000 36,000
0
Utilities 1,000 8,000 9,000 1,000 8,000 9,00 1,000 9,000 9,000 1,000 9,000 8,000 73,000
0
Miscellane 300,00 200,00 150,0 100,000 200,00 150, 100,0 100,00 300,0 200,000 200,000 100,000 2,100,00
ous 0 0 00 0 000 00 0 00 0
Total cash 357,00 273,00 223,0 167,000 274,00 234, 176,0 175,00 393,0 277,000 296,000 196,000 3,041,00
outflow 0 0 00 0 000 00 0 00 0
Net profit 343,00 880,00 1,597 2,520,00 3,496,0 4,71 6,156 7,761, 9,318 11,181,0 13,585,0 16,239,0 19,118,5
0 0 ,000 0 00 2,00 ,000 000 ,000 00 00 00 00
0

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 5.9.2PROJECTED CASH FLOW FOR 2ND YEAR 2025

Cash Jan Feb Marc April May June July Aug Sept Oct Nov Dec Total
inflow h
Balance 16,239, 16,682 17,15 17,665,0 820,00 1,37 1,866 2,408, 2,979 3,468,00 4,187,00 4,845,00 89,690,0
000 ,000 8,000 00 0 3,00 ,000 000 ,000 0 0 0 00
0
Cash at 160,00 170,00 180,0 190,000 200,00 220, 240,0 250,00 260,0 270,000 280,000 290,000 2,710,00
hand 0 0 00 0 000 00 0 00 0
Sales 460,00 470,00 480,0 490,000 500,00 520, 540,0 550,00 560,0 570,000 580,000 590,000 6,310,00
0 0 00 0 000 00 0 00 0
Stock 120,00 130,00 140,0 140,000 150,00 160, 170,0 180,00 190,0 200,000 220,000 240,000 2,040,00
0 0 00 0 000 00 0 00 0
Total Cash 16,979, 17,453 17,95 18,485,0 1,670,0 2,27 2,816 3,388, 3,989 4,508,00 5,267,00 5,965,00 100,750,
Inflow 000 ,000 8,000 00 00 3,00 ,000 000 ,000 0 0 0 000
0
Cash
outflow
Telephone 9,000 8,000 8,000 9,000 9,000 8,00 10,00 10,000 10,00 10,000 10,000 10,000 111,000
0 0 0
Transport 3,000 2,000 1,000 2,000 2,000 3,00 2,000 3,000 5,000 5,000 6,000 6,000 40,000
0

21
Salaries 80,000 80,000 80,00 80,000 80,000 90,0 90,00 90,000 100,0 100,000 100,000 100,000 1.070,00
0 00 0 00 0
Rent 3,000 3,000 3,000 3,000 3,000 3,00 3,000 3,000 3,000 3,000 3,000 3,000 36,000
0
Utilities 2,000 1,000 1,000 2,000 3,000 3,00 3,000 3,000 3,000 3,000 3,000 2,000 29,000
0
Miscellane 200,00 200,00 200,0 200,000 200,00 300, 300,0 300,00 400,0 200,000 300,000 200,000 3,000,00
ous 0 0 00 0 000 00 0 00 0
Total cash 297,00 294,00 293,0 296,000 297,00 407, 408,0 409,00 521,0 321,000 422,000 321,000 4,286,00
outflow 0 0 00 0 000 00 0 00 0
Net profit 16,682, 16,682 17,15 17,665,0 820,00 1,37 1,866 2,408, 2,979 3,468,00 4,187,00 4,845,00 19,118,5
000 ,000 8,000 00 0 3,00 ,000 000 ,000 0 0 0 00
0

5.9.3 PROJECTED CASH FLOW FOR 3RD YEAR 2026

Cash Jan Feb Marc April May June July Aug Sept Oct Nov Dec Total

22
inflow h
Balance 5,644,0 6,246, 6,890 7,631,00 8,323,0 9,14 10,09 10,880 11,73 12,097,0 13,801,0 14,833,0 117,921,
00 000 ,000 0 00 5,00 7,000 ,000 4,000 00 00 00 000
0
Cash at 200,00 220,00 240,0 260,000 270,00 280, 290,0 300,00 350,0 360,000 370,000 380,000 3,520,00
hand 0 0 00 0 000 00 0 00 0
Sales 400,00 420,00 450,0 460,000 470,00 480, 490,0 500,00 550,0 570,000 580,000 600,000 5,970,00
0 0 00 0 000 00 0 00 0
Stock 200,00 300,00 350,0 370,000 380,00 390, 400,0 450,00 460,0 470,000 480,000 490,000 4,740,00
0 0 00 0 000 00 0 00 0
Total Cash 6,444,0 7,186, 7,930 8,721,00 9,443,0 10,2 11,22 12,130 13,09 14,097,0 15,231,0 16,303,0 132,151,
Inflow 00 000 ,000 0 00 95,0 7,000 ,000 4,000 00 00 00 000
00
Cash
outflow
Telephone 10,000 9,000 10,00 10,000 10,000 9,00 10,00 9,000 10,00 9,000 10,000 10,000 116,000
0 0 0 0
Transport 3,000 3,000 3,000 3,000 2,000 2,00 3,000 2,000 3,000 2,000 2,000 3,000 31,000
0
Salaries 80,000 80,000 80,00 80,000 80,000 80,0 80,00 80,000 80,00 80,000 80,000 90,000 970,000
0 00 0 0
Rent 3,000 3,000 3,000 3,000 3,000 3,00 3,000 3,000 3,000 3,000 3,000 3,000 36,000

23
 0
Utilities 2,000 1,000 3,000 2,000 3,000 2,00 1,000 2,000 1,000 2,000 3,000 2,000 24,000
0
Miscellane 100,00 200,00 200,0 300,000 200,00 100, 300,0 300,00 300,0 200,000 300,000 300,000 2,800,00
ous 0 0 00 0 000 00 0 00 0
Total cash 198,00 296,00 299,0 398,000 298,00 196, 397,0 396,00 397,0 296,000 398,000 408,000 3,977s,00
outflow 0 0 00 0 000 00 0 00 0
Net profit 5,644,0 6,246, 6,890 7,631,00 8,323,0 9,14 10,09 10,880 11,73 12,097,0 13,801,0 14,833,0 19,118,5
00 000 ,000 0 00 5,00 7,000 ,000 4,000 00 00 00 00
0

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5.9.4 Proforma Income Statement for FRANLAT SUPERMARKET

Particular 2024 2025 2026

Sales 450,000 460,000 400,000

Stock 100,000 120,000 200,000

Cash at hand 150,000 160,000 200,000

Gross profit 700,000 740,000 800,000

Less expenses:

Rent 3,000 3,000 3,000

Salary 50,000 80,000 80,000

Transport 2,000 3000 3,000

Utilities 1,000 2,000 2,000

Telephone bill 1,000 9,000 10,000

Miscellaneous cost 300,000 200,000 100,000

Total 357,000 297,000 198,000

Net profit before tax 26,967,000 135,888,000 337,009,000

Tax 10% 10/100*26,967,000 10/100*135,888,000 10/100*337,009,000

=26,967,00 =135,888,00 =337,009,00

Net Profit after Tax 26,967,00 135,888,00 337,009,00

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5.9.5 Proforma Balance Sheet for FRANLAT SUPERMARKET

Particulars 2024(1st year) 2025 (2nd year) 2026(3rd year)

Fixed Assets:

Furniture 4,000 - -

Material 5,000 - -

Machinery 10,000 - -

Total fixed assets 19,000 - -

Current Assets:

Cash at hand and Cash at 50000 300000 400000

bank

Debtors 30,000 30,000 30,000

Stock 50,000 200,000 300,000

Total assets 130,000 530,000 730,000

Current liabilities:

Creditors 50,000 50,000 50,000

Total current liabilities 180,000 580,000 780,000

Long term liability

Owners’ equity =(TA-CL) 130,000 530,000 730,000

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 Net profit after Taxation 130,000 530,000 730,000

Total 260,000 1,060,000 1,460,000

Total liabilities = current 210,000 1,110,00 1,510,000

liability +long term liability

5.9.6 Break Even Point for 2024, 2025and 2026

Years 2024 (1st year) 2025(2nd year) 2026(3rd year)

Fixed cost:

Rent 3,000 3,000 3,000

Utilities 1,000 2,000 2,000

Salary 30,000 35,000 40,000

Total cost 34,000 41,000 47,000

Variable cost:

Transport 4,000 4,000 5,000

Telephone 1,000 1,000 2,000

Miscellaneous cost 18,000 20,000 25,000

Total variable cost 23,000 25,000 32,000

BEP= Fixed cost 34,000 41000 47,000

1- Variable cost 1-23,000 1-25000 1-32,000

Sales 100,000 400,000 500,000

=- =-656,000 =-734374.94
147,832.51

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5.9.7 Profitability Ratio for 2024, 2025 and 2026

Years/Total ratio 2023(1st year) 2024(2nd year) 2025(3rd year)

Gross profit=GP/sales 200,000 *100 900,000 *100 1,200,000*100

*100 100,000 400,000 500,000

=200% =225% =240%

Return on equity = 130,000 *100 530,000*100 730,000 *100

NPAT*100 130,000 530,000 730,000
Owners’ equity =100% =100% =100%

Return on investment= 130,000 *100 130,000 *100 730,000 *100

NPAT*100 150,000 200,000 400,000
Investment =86.67% =65% =182.5%

5.9.8 Desired Finance

Particular Cost

Starting capital 200,000

Preoperational cost 100,000

Working capital 50,000

Total 350000

5.9.9 Proposed Capitalization

Source/ particulars Amount

Personal savings 1, 000,000

Loan 250,000

Contributions 250,000

Total 1,500,000

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