MUINUKI ERICK MAINA

ENTRPREUNEURSHIP AND SMALL BUSINESS MANAGEMENT

BUSINESS PLAN ASSIGNMENT

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BUSINESS PLAN

EMARYA ELEGANCE WEAR

WEST CASTLE, KAKAMEGA ROAD

TEL;-020-445678

0725331648 or 0734568906

WEBSITE; - www.emarya elegance.com emarya99@yahoo.com

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MUINUKI ERICK MAINA (GENERAL MANAGER)

+254 722178944

P.O.BOX 423-00516

NAIROBI.

JAMES OKELLO (SECRETARY)

+254 799807654

P.O.BOX 44-00158

NAIROBI.

BRIAN MALWA (TREASURER)

+254 765678467

P.O.BOX 897=00515

NAIROBI.

Plan Prepared March 2015 by Corporate Managers.

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I. Table of Contents

I. Table of Contents...................................................................................................4

II. Executive Summary...............................................................................................5

III. Purpose and background…….............................................................................8

IV. Products and Services..........................................................................................9

V. Market..................................................................................................................10

VI. Marketing Plan....................................................................................................11

VII. Management and Organization.........................................................................13

VIII. Personnel Plan…………................................................................................14

X. Financial Plan.......................................................................................................15

XI. Appendices........................................................................................................... 17

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EXECUTIVE SUMMARY

Emarya Elegance Wear is a private limited company owned by three shareholders;-Caroline Mwaura, Brian Malwa and James Okello. As the name suggests, it is a company that deals in fashionable African-American wear ranging from clothes, shoes, bags to accessories for all ages and for both male and female.

The hours of operation will be Monday - Tuesday 10 a.m. - 6 p.m., Wednesday - Saturday 10 a.m. - 8 p.m., and Sunday 12 p.m. - 6 p.m. There will be extended special hours designated during the holidays especially during Christmas holiday shopping season.

Emarya Elegance Wear’s costs are listed below. The company will start with three months inventory on hand for apparel and accessories as this are the main revenue generator. The majority of the company's assets will reside in inventory. The opening day’s cash on hand balance will be KSh. 38,400

The purpose of this business plan is to secure a KSh. 167,000 Barclays loan. This supplemental financing is required to work on site preparation, inventory, and operational expenses. The loan amount appears in the long-term liability row of the start-up summary. Other financing will include the owner’s investment of KSh. 51,000 and a short term revolving line of credit of KSh. 20,000 for inventory replenishment during months of high receipts.

Successful operation and building a loyal customer base will allow Emarya Elegance to be self sufficient and profitable in year two.

We are the first and only African-American owned company in Kenya and main location and headquarter at West Castle, Kakamega Road, Asmara. This is a directly centralized position to the residential location and social activities of our target market.

We will have four other branches opened by end of this year (1995) around the country. We believe that this is critical to our initial success and long-term growth.

. The start-up funding is as follows;-

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EXPENSES ASSETS INVESTMENTS LOANS0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Series2

Start-up Funding KSh.Start-up Expenses to Fund 9,416 Start-up Assets to Fund 14,384 Total Funding Required 23,800 Assets Non-cash Assets from Start-up 14,000 Cash Requirements from Start-up 384 Additional Cash Raised 0 Cash Balance on Starting Date 384 Total Assets 14,384 Liabilities and CapitalLiabilitiesCurrent Borrowing 0 Long-term Liabilities 16,700 Accounts Payable (Outstanding Bills) 0 Other Current Liabilities (interest-free) 2,000 Total Liabilities 18,700 CapitalPlanned InvestmentOwners Investment – Cash 5,100 Other 0 Additional Investment Requirement 0 Total Planned Investment 5,100 Loss at Start-up (Start-up Expenses) (9,416)Total Capital (4,316)Total Capital and Liabilities 14,384 Total Funding 23,800

Business/Office Supplies 400

Other 500

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Total Start-up Expenses 9,416

Start-up Assets

Cash Required 384

Start-up Inventory 14,000

Other Current Assets 0

Long-term Assets 0

Total Assets 14,384

Total Requirements 23,800

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PURPOSE AND BACKGROUND

MISSION STATEMENT: WE ARE A COMPANY THAT TAKES UP THE

RESPONSIBILITY AND COMMITMENT TO DO BUSINESS IN WAYS THAT

ARE GLOBALLY ACCEPTABLE.

Goal: To offer quality, name brand African-American wears in an assortment of sizes and styles

to accommodate all varying body styles and shapes.

OBJECTIVES:

To have a healthy, successful company that is a leader in customer service and that

has a loyal customer following.

To map out all the necessary components to create a successful and well-run fashion

house.

Our intentions are to obtain 80% market share and become a central hub of shopping

activity for the local African-American population

To be an active and vocal member in the community supporting fashion events, and

organizations working on youth, fashion and design talents for blended African-

American wear.

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PRODUCTS AND SERVICES

Emarya Elegance will carry nationally recognized African- American wear brands (see list

below). We will be purchasing through sales representatives and manufacturers in a variety of

sizes, colors and style to fit our target market base. The greatest percentage of merchandise will

be in clothes, followed by accessories, hats, and gifts.

We will have our clothes designers at Dallas Market, a four hour drive from Asmara, where our

own designers will operate from. For other brands who have showrooms around the region, we

will place our weekly re-orders and review them.

Management will rely on customer feedback, suggestions, and sales reports to introduce or

eliminate certain brands, styles and sizes. Our goal is to carry a selection of labels from the

hardcore western wear to African-Kenyan wear.

For a reasonable competitive advantage over our competitors, we will offer clothing to fit plus-

size women and big and tall men, create a sense of culture and bonding with the community by

offering products that combine both the American-African Kenyan cultures, our branches are to

be centralized to our target customer base and maintain a detailed record on each customer,

logging addresses, their purchases, size, and brand for customer follow-up and in-house

promotional purposes.

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THE MARKET

Asmara’s is the capital city of Kenya therefore leading to the highest concentration of our

customer base.

Kenya has greatly embraced the American wear while still maintaining our own African values

and culture hence about a circumference of 400 kilometers outskirts of Asmara will be a great

market too.

The last area of potential customers is labeled as "other." These are other Kenyans and

American-African wear lovers whom along with accessories and gifts we feel that we will attract

them. Our ambience and customer service will make them repeat customers.

Market segmentation

As Emarya Elegance wear, we will attract more customers in the market using our brand name

and logo that has the sign to show harmony between African and American wear.

The main goal to serve the nation and East African with this kind of wear is due to the rise in

demand of harmonizing African wear with the western wear since most outfit companies in

Kenya specialize in manufacture and sale of western wear only; for example, Mr. Price who only

sell the western type of outfit ranging from clothes, bags, accessories and shoes.

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MARKETING PLAN

Marketing strategy

Marketing strategy will focus heavily on sales promotion, niche positioning in the market and

customer service with loyalty and retention in sales.

Our promotions will always stay in tune with our company objectives and mission statement.

Promotion strategy

1. A press release kit will be sent to all major media outlets in Asmara and outskirts

highlighting the grand opening of the first African-American wear apparel retailer in

the city. This kit will include a press release, pictures of the interior space and a

business card.

2. Spot radio advertisements on two local FM radio stations, NATION FM and KISS

100. Our retail location will be the foundation of building our customer base.

Distribution strategy

We will also manage a direct mail program that will focus on our top 50% customers

spotlighting any in-house sales and promotions.

Sales strategy

The following table and chart give a highlight on forecasted sales. We expect sales to start off

conservatively and increase extensively during the Christmas holiday shopping season.

Emarya Elegance Wear has planned for a rate of growth at 15% for the first year as we build

name recognition and status in the community. In the second and third year we look to see an

increase of revenue of 20% as we gain a larger percentage of the market share and increase our

customer base beyond Asmara city.

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MANAGEMENT SUMMARY

Employees will be encouraged to work within their creative, physical, and intellectual

boundaries. All duties will be divided and delegated according to strengths and weaknesses. At

Emarya we will expect a high degree of customer service skills and personality as this is

essential to our success.

Human Resource Management will assess the productivity and perform informal employees’

evaluations of all employees every six months. These bi-annual evaluations are conducive to the

continued growth of our small business.

Organizational Structure

Emarya elegance is a small business and therefore requires a simple organizational structure. All

decisions are made in-line with the company objectives. Employees’ tasks are delegated based

upon their level of expertise, creativity, strengths and weaknesses.

Management Team

Caroline Mwaura, co-owner and general manager will be responsible for all administrative

functions, purchasing, inventory control, and promotions. She will also act as a part-time sales

representative. She has spent over 8 years in accounting, finance and operations management.

She was also the owner of Luked Limited Company, an e-commerce toy store for three years.

She has extensive background in purchasing, inventory control, and marketing.

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THE PERSONNEL PLAN

During the commencement of the actual job, we will have a total of fifteen employees’

managers, designers, sales and marketing persons and others inclusive at Asmara. Other

employees to be obtained as time go by for purposes of other joints to be opened in different

locations in Kenya.

Since trending fashion and design of African-American wear is our most unique feature in our

wear, our designers are the most important during the manufacture. We have recruited the best

known designers in Kenya.

There will be six full-time employees as top management, five full-time designers and four part-

time employees working 20-30 hours per week. The full-time employees in exclusion of the top

management who have their monthly salaries ranging from sh. 30,000 to 65,000 will be paid at a

rate of Sh. 250 per hour and the two part-time employees will be paid at a rate of Sh 150.00 per

hour. All employees will benefit from a one day paid holiday on their respective birthdays and

one week of paid vacation after twelve months of employment.

At this time medical benefits will not be offered to employees. As profits increase in the future

medical benefits will be offered to all employees.

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FINANCIAL PLAN

The growth of Emarya Elegance will be moderate and the cash balance will always be positive.

Being a retail environment we will not be selling on credit. We will accept cash, cheques, and all

major credit cards. TeleCheck Services will be used as the check guaranty system to help reduce

the percentage of loss on bad checks. Marketing and advertising will remain at or below 5% of

sales. We will continue to reinvest residual profits into company expansion, and personnel.

Important Assumptions

Emarya Elegance does not sell on credit nor do we offer layaways at this time. We accept cash

and checks, Visa, MasterCard and Discover. All sales paid via credit cards will be deposited in

our business checking account within 48 hours. Our business checking account will be with

National Bank. They have reported the interest rate as those listed below.

BREAK-EVEN ANALYSIS

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A break-even analysis table has been completed on the basis of average costs/prices. With fixed

costs of Sh 580,000, sh. 4700 in average sales, and sh.2300 in average variable costs, we need sh.

1,170,000 per month in sales to break even.

PROJECTED CASHFLOW

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Pro Forma Profit and LossMnth 1

Mnth 2

Mnth 3

Mnth 4 Mnth 5 Mnth

6Mnth 7

Mnth 8

Mnth 9

Mnth 10

Mnth 11

Mnth 12

Sales 17800 19050 19050 21800 21800 26550 27800 26500 27750 27500 24300 24300

Direct Cost of Sales 8900 9525 9525 10900 10900 13275 13900 13250 13875 13750 12150 12150

Other Production Expenses

0 0 0 0 0 0 0 0 0 0 0 0

Total Cost of Sales 8900 9525 9525 10900 10900 13275 13900 13250 13875 13750 12150 12150

Gross Margin 8900 9525 9525 10900 10900 13275 13900 13250 13875 13750 12150 12150

Gross Margin %

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

Expenses

Payroll 3460 3460 3460 4325 3460 3460 4325 3460 3460 4325 3460 3460

Sales and Marketing and Other Expenses

1229 1229 1579 1229 1229 1229 1229 1579 1229 1229 1229 1229

Depreciation 0 0 0 0 0 0 0 0 0 0 0 0

Telephone / Pagers/ Cell

150 150 150 150 150 150 150 150 150 150 150 150

Utilities 375 375 375 375 375 375 375 375 375 375 375 375

Payroll Taxes

10% 346 346 346 433 346 346 433 346 346 433 346 346

Other 0 0 0 0 0 0 0 0 0 0 0 0

Total Operating Expenses

5560 5560 5910 6512 5560 5560 6512 5910 5560 6512 5560 5560

Profit Before Interest and Taxes

3340 3965 3615 4389 5340 7715 7389 7340 8315 7239 6590 6590

EBITDA 3340 3965 3615 4389 5340 7715 7389 7340 8315 7239 6590 6590

Interest Expense 137 135 132 130 128 125 123 121 119 116 114 112

Taxes 961 1149 1045 1278 1564 2277 2180 2166 2459 2137 1943 1943

Net Profit 2242 2681 2438 2981 3649 5313 5086 5053 5738 4986 4533 4535

Net Profit/Sale

12.60%

14.08%

12.80%

13.67%

16.74%

20.01%

18.29%

19.07%

20.68%

18.13%

18.66%

18.66%

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Pro Forma Cash FlowMnth 1

Mnth 2

Mnth 3

Mnth 4

Mnth 5

Mnth 6

Mnth 7

Mnth 8

Mnth 9

Mnth 10

Mnth 11

Mnth 12

Cash Received

Cash from Operations

Cash Sales 17800 19050 19050 21800 21800 26550 27800 26500 27750 27500 24300 24300

Subtotal Cash from Operations 17800 19050 19050 21800 21800 26550 27800 26500 27750 27500 24300 24300

Additional Cash Received

Sales Tax VAT HST/GST Received

0.00% 0 0 0 0 0 0 0 0 0 0 0 0

New Current Borrowing 0 0 0 0 0 0 0 0 0 0 0 0

New Other Liabilities (interest-free)

0 0 0 0 0 0 0 0 0 0 0 0

New Long-term Liabilities 0 0 0 0 0 0 0 0 0 0 0 0

Sales of Other Current Assets 0 0 0 0 0 0 0 0 0 0 0 0

Sales of Long-term Assets 0 0 0 0 0 0 0 0 0 0 0 0

New Investment Received 0 0 0 0 0 0 0 0 0 0 0 0

Subtotal Cash Received 17800 19050 19050 21800 21800 26550 27800 26500 27750 27500 24300 24300

Expenditures Mnth 1

Mnth 2

Mnth 3

Mnth 4

Mnth 5

Mnth 6

Mnth 7

Mnth 8

Mnth 9

Mnth 10

Mnth 11

Mnth 12

Expenditures from Operations

Cash Spending 3460 3460 3460 4325 3460 3460 4325 3460 3460 4325 3460 3460

Bill Payments 263 8078 13581 13247 15963 14881 20346 19017 17337 19200 17935 14605

Subtotal Spent on Operations 3723 11538 17041 17572 19423 18341 24671 22477 20797 23525 21395 18065

Additional Cash Spent

Sales Tax VAT HST/GST Paid Out

0 0 0 0 0 0 0 0 0 0 0 0

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Principal Repayment of Current Borrowing

0 0 0 0 0 0 0 0 0 0 0 0

Other Liabilities Principal Repayment

0 0 0 0 0 0 0 0 0 0 0 0

Long-term Liabilities Principal Repayment

275 275 275 275 275 275 275 275 275 275 275 275

Purchase Other Current Assets 0 0 0 0 0 0 0 0 0 0 0 0

Purchase Long-term Assets 0 0 0 0 0 0 0 0 0 0 0 0

Dividends 0 0 0 0 0 0 0 0 0 0 0 0

Subtotal Cash Spent 3998 11813 17316 17847 19698 18616 24946 22752 21072 23800 21670 18340

Net Cash Flow 13802 7237 1734 3953 2102 7934 2854 3748 6678 3700 2630 5960

Cash Balance 14186 21423 23157 27109 29212 37145 39999 43748 50425 54125 56755 62715

Pro Forma Balance SheetMnth 1 Mnth 2 Mnth 3 Mnth 4 Mnth 5 Mnth 6 Mnth 7 Mnth 8 Mnth 9 Mnth

10Mnth 11

Mnth 12

Assets Starting Balances

Current Assets

Cash 384 14186 21423 23157 27109 29212 37145 39999 43748 50425 54125 56755 62715

Inventory 14000 9790 10478 10478 11990 11990 14603 15290 14575 15263 15125 13365 13365

Other Current Assets 0 0 0 0 0 0 0 0 0 0 0 0 0

Total Current Assets 14384 23976 31900 33634 39099 41202 51748 55289 58323 65688 69250 70120 76080

Long-term Assets

Long-term Assets 0 0 0 0 0 0 0 0 0 0 0 0 0

Accumulated Depreciation 0 0 0 0 0 0 0 0 0 0 0 0 0

Long-term Assets 0 0 0 0 0 0 0 0 0 0 0 0 0

Total Assets 14384 23976 31900 33634 39099 41202 51748 55289 58323 65688 69250 70120 76080

Liabilities and Capital Mnth 1 Mnth 2 Mnth 3 Mnth 4 Mnth 5 Mnth 6 Mnth 7 Mnth 8 Mnth 9 Mnth 10

Mnth 11

Mnth 12

Current Liabilities

Accounts Payable 0 7625 13143 12714 15473 14202 19710 18441 16696 18599 17450 14062 15762

Current Borrowing 0 0 0 0 0 0 0 0 0 0 0 0 0

Other Current Liabilities 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000

Subtotal Current Liabilities 2000 9625 15143 14714 17473 16202 21710 20441 18696 20599 19450 16062 17762

Long-term Liabilities 16700 16425 16150 15875 15600 15325 15050 14775 14500 14225 13950 13675 13400

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Total Liabilities 18700 26050 31293 30589 33073 31527 36760 35216 33196 34824 33400 29737 31162

Paid-in Capital 5100 5100 5100 5100 5100 5100 5100 5100 5100 5100 5100 5100 5100

Retained Earnings (9416) (9416) (9416) (9416) (9416) (9416) (9416) (9416) (9416) (9416) (9416) (9416) (9416)

Earnings 0 2242 4923 7361 10342 13991 19304 24389 29443 35180 40166 44699 49234

Total Capital (4316) (2074) 607 3045 6026 9675 14988 20073 25127 30864 35850 40383 44918

Total Liabilities and Capital 14384 23976 31900 33634 39099 41202 51748 55289 58323 65688 69250 70120 76080

Net Worth (4316) (2074) 607 3045 6026 9675 14988 20073 25127 30864 35850 40383 44918

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