MAGIC PRINTING SOLUTIONS

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MAGIC PRINTING SOLUTIONS

EXECUTIVE SUMMARY

BRIEF DESCRIPTION

Magic Printing Solution is a start up business that will be located in Strathmore University at the

Student but in the near future it will cater for a large number of people in other institutions since

we are assured of growing demand .It will offer computer services and accessories. It will also

offer its customers value for their money, be a source of knowledge and it will be an exceptional

service provider.

NATURE OF BUSINESS

Cost leadership will be used to define the key strategic orientation of the business. It will describe the way

to establish the competitive advantage, by having the lowest cost of operation in the industry which will

be driven by the efficiency of our services. It will also focus to exploit the scale of production, producing

highly standardized products and printing services by using the best technology in place.

On the other hand differentiation will also be used as a key strategic orientation, by doing things

differently, in regard to:

Business location: Magic Printing Solution will be located near the University

Customer service: Magic Printing Solution will provide coloured printing which our nearest

competititors dont provide.

Pricing: Magic Solution will provide affordable prices at a great quality.

Uniqueness of the communication message and channels: Magic Solution will use created

accounts for the clients to send the work they want printed.

BUSINESS STRATEGIES


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Our company will incorporate strategies that will enhance growth and profitability to the organization

and it will focus on long-term sustainability and survival, thus facilitating a portfolio of profit

maximization and customer loyalty.

We will apply a combination of pricing methods to ensure our target market is satisfied and also to meet

our objectives. A cost plus mark up approach will be employed: However, we will also use competitor

indexing as a pricing method, where we will compare and analyze our competitors price and peg them to

our products and services.

The demand for this market is fairly elastic and the consumers are price sensitive. Also our aim will be to

attract customers by the masses; therefore a penetration pricing strategy is the most appropriate. We will

be able to set a low price, at least lower than our competitors prices using the competitor indexing

method aforementioned, to pool in a load of customers.

BUSINESS FINANCING

The business has a projected source of 1 million which will be sourced from banks, our own savings,

sponsors (family, friends and relatives), government support programs e.g youth enterprise fund and other

financing organizations like Angels. As an organization we will need to adequately finance our business

so as to:

be able to attract and maintain qualified personnel

be able to adequately serve our customers and meet their requirements

facilitate continuity of the business operations and implement strategies that will result to a

sustainable competitive advantage

For purposes of achieving business growth, profitability and survival and mantain compliance

with established regulations.

RISKS


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Some of the challenges we are likely to encounter while moving from an idea to an entrepreneural firm

include:

Competition

The competitive environment directly influences a business in terms of its competitive decisions and

responses. Some of our competitors will include: Siwaka Plaza, Bookshop and the Library. They offer the

printing services to the Strathmore community and they have a wide range of customers. Their prices are

as follows:

Name Printing Photocopying Printing Type

Bookshop Sh.4 Sh.2.50 Non Coloured

Library Sh.5 Sh.3 Non Coloured

Siwaka Plaza Sh.5 Sh.2 Non Coloured

To overcome the competiitors risk, our organizations Magic Printing Solution will focuss on satisfying

the requirements of the Strathmore community by:

Providing services within the reach of the customers, by locating the business in a location where

everyone can access the services

Providing quality and coloured printing, which is not offered by our competitors

Offering the services and products at an affordable price compared to our competitors

Equipment and machinery

Coming up with the required equipments we will use to provide the quality and coloured printing

of the documents and brochures, will require advanced technology of printers and printers that


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can be able to print in bulk, thus we will outsource the equipments from Copy Cat ltd to perform

the services for our clients, and at a near future we will make the services in-house.

Competitive pricing

To ensure that customers come for your services you must offer competitive prices. This will be

major challenges as we can see from the above table that the prices are already relatively low.

Thus Magic Printing Solution will provide affordable prices and not also too low that will make

the organization to incur a loss.

Political instability

The political and economivc factors will affect the stability of the business market. Due to the

new emerging patterns of consumer behavior people are exposed to new ideas and behavior

patterns via global communication networks,old stereotypes, traditions, and habits are cast aside

or tempered.

Thus Magic Printing Solution will incorporate the latest infrustructure anfd technology to cater

for the needs of the customers which will be an indicator of economic growth in the company.

Financial risks

This involves carrying out a financial analysis of the company by examining the following

costs: Cost of development, Cost of IP, Cost of government approvals,Pricing strategy,Financial

value ,Operating expenses,Capital requirements,Sales forecasts,Industry standards sales,Net

present value and Licensing.


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CHAPTER 1:

BUSINESS DESCRIPTION

1.1 BUSINESS NAME AND CONTACTS

NAME: MAGIC PRINTING SOLUTION

PO BOX 2312-00100 NAIROBI

magicprinting @gmail.com

www.magicprinting.co.ke

TELEPHONE: 0738106395/0720152608/020-3541935

LOCATION: STUDENT CENTRE- STRATHMORE UNIVERSITY

STATUS: SOLE PROPRIETORSHIP
mailto:[email protected]://www.magicprinting.co.ke/http://www.magicprinting.co.ke/mailto:[email protected]


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REGISTERED OFFICE: N/A

1.2 OBJECTIVES, MISSION AND VISION

Objectives

To provide quality service to our clients

To strive to achieve profitability and sustainability

To direct all activities to increasing market share and revenue in the next 5 years

To strive to be the market leader in the particular field of printing services in the next 5

years

Mission

To be the organization that offers quality printing services at an affordable price, to thecommunity by enhancing common good to all.

Vision

To become the market leader by providing a portfolio of maximum customer satisfaction and

fulfulment.


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Business values

Magic Printing Solution will seek to place a high value to personal contact with the customer.

Offering quality printing and coloured printing will be the businesss topmost concern. The

business will use the best quality of paper so as to give the customer value for their money and

much more.

Magic Printing Solution will be a business driven by sound ethical practices and values. It will

not the kind of business that exploits its customers, is fraudulent or that engages in corrupt

business deals. The values of honesty, integrity and reliability will be upheld by the employees

of the business.The business will also embrace a culture continued improvement in the sense of

trying to always improve on previous mistakes. This will ensure consistent excellence.

1.3 NATURE OF BUSINESS

Magic Printing Solutions will be specializing in thePrinting and Technology Industry, whereby it

will be dealing with the following products and services:

Services

Printing

Scanning

Photocopying

Typesetting

Laminating

CD/DVD writing

Binding

Accessories

Flash disks

Printing paper

CD and DVDs

Basic stationeries(Books, pencils etc


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Market Need

Magic printing solutions will aim keep the following in order to survive and expand in the

Printing and Technology Industry:

Strategic positioning so that the target customers can easily access our facilities and

premises.

Coloured printing solutions that are not provided by our competitors.

Prepaid accounts-To ensure that customers easily print their work without the

intervention of the administrator.

Provide software solutions that will keep our clients free from virus attacks as this is a

major challenge with our competitors.

Offer additional services like typesetting that is not offered by any of our competitors.

Attain a high level of visibility through the media, billboards, and other advertising.

Establish rigid procedures for cost control and incentives for maintaining tight control in

order to become the low-cost leader providing computer services and accessories to our

target market.

In order to continually attract customers, we must be able to keep the maximum amount

of inventory available and achieve a high level of customer service.

Target Market

Magic Printing solutions will cater and meet the needs of the growing population of students in

the institution as well as serve the institution itself in matters regarding publications, printing and

designing of brochures and booklets.

1.4 SITUATIONAL ANALYSIS

The researchers will evaluate both the macro and micro environments to identify potential

opportunities and threats. Also an internal analysis will be carried out that will determine the

strong points as well as weaknesses. The following table identifies all these components parallel


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to each other and assists in gauging the companys ability to improve on its weaknesses and

tough out the threats, while employing its strengths to cease opportunities.

SWOT ANALYSIS

STRENGTHS WEAKNESSES

Competent and highly skilled personnel

Limited capital base and funds access might

cripple the company financially

Customer service; we aim to please our

customers by employing a personal

approach and putting in place a reward

system for our customers to create

loyalty. Also appointing customer service

representatives to receive feedback and

respond to the same.

Sometimes, the customers change their

minds and may refuse to pay for the spoilt

papers after being printed, thus a loss to the

company.

Unique interior dcor providing a nice

ambience that would attract potential

customers.

Lack of the required equipment and

machinery to perform the quality colured

printing since they are very expensive.

Strategic location and coloured printing

services that would pool in clients

OPPORTUNITIES THREATS

Unfulfilled customer wants, such as

typesetting services, protection from virus

attacks, providing user accounts to ease

the printing and management task

Competition and potential market entrants that

capitalise on weaknesses.

Expanding the services to other

Universities and working institutions Changes in customer wants and preferences,

uncertain economic conditions in terms of


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service providers.

Growth opportunities; opening up

branches country wide

Revenue from printing documents using 1

rim of papers, may not be able to cover its

costs

Piracy threats; pirated merchandise is cheaper

Sabotage by potential rivals.

1.5 KEY SUCCESS FACTORS

Success for the Industry

The Industry is going to be a success by facilitating expertise who will provide quality output

and thus increasing productivity, and also due to the business location at the insitutions, it will

incooporate a wider scope of customers and enhance accessibility.

Success for the business

Due to the rapid growth in the population of institutions coming up, and organizations that

require the printing services, then the business will demand for qualified labour and use of

advanced and efficient equipments to provide quality services thus in that way it will be inline

with the unique customer needs.

1.6 ACTION PLAN

ACTIVITY WHEN TO BE DONE WHO TO DO IT

Business registration 1st October 2010 Owners

(Hilda,James,Angela,Moureen,Cyrus)


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The students mainly print their assignments, research materials and class notes. Their peak

season is during the beginning and end of the semester, the greater of the two being the end of

the semester when many assignments and projects have to be submitted.

Strathmore University carries out quite a sizeable amount of printing such as course pamphlets,Graduation programs, student handbooks, Course certificates, posters and University

publications. They have a constant flow of print jobs throughout the year.

2.2 PRODUCT/SERVICE DESCRIPTION

Our Printing service shall have the following:

Printing /photocopy

This will include establishments primarily engaged in printing text and images on to paper,

metal, glass, and some apparel and other materials. Printing will be divided into three distinct

stages: prepress, the preparation of materials for printing; press or output, the actual printing

process; andpost press orfinishing, the folding, binding, and trimming of printed sheets into

their final form. It will start by first preparing the material for printing in the prepress

department, then produce the pages on the pressroom floor, and finally trim, bind, or otherwise

ready the material for distribution in the post press department. Increasingly, printers will also

are provide database management, mailing, or distribution services to meet customer needs. The

printed original copies can then be photocopied for the clients.

Scanning

Here Magic Printing Solution will have a scanner device that will be used to capture

images from photographic prints, posters, magazine pages, and similar sources for

computer editing and display.

Typesetting

This will involve having different texts of different fonts typed for the clients and

computerizing the texts that are organized and can be easily retrieved.

Laminating

The process will involve applying a film of plastic on the surface of any item is known as

laminating. When plastic coating is added to any item it becomes tear-proof and


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waterproof, since the laminating film encapsulates the item completely by being bonded

to both its sides.

CD/DVD writing

This will be used as a storage mechanism for the clients documents.

Binding

This will involve using a binding machine to put the loose papers together into one

organized booklet.

Our core business shall be printing and photocopying. The rest are just support services we shall

offer to our clientele.

We shall offer both color and black and white printing. We shall also offer to print in bulk and

small print jobs. In order to attract and keep our market we shall sell the following computer

accessories

Flash disks

Printing paper

CD and DVDs

Basic stationeries(Books, pencils etc)

2.3 MARKETING STRATEGY

Our marketing strategy mainly consists of offering competitively priced services paired with

convenience. This shall be executed through:

Place

We plan to be located within the upcoming Strathmore Student Centre. This shall be a central

point for students to carry out their extracurricular activities. Being conveniently located within

the university shall give us an advantage over our competitors. The student centre shall also have

other businesses located in the entrepreneurship incubators and the food court, this shall also be a

market we can capture.

Price

We shall price our services lower than those of our competitors outside the university. This shall

attract a large number of the target market and hence enable to make profits albeit the low prices.


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We shall also apply this strategy in securing bulk printing jobs from the University. The business

shall outsource the bulk printing to a larger printing service that shall print at a lower cost than if

Magic printed on its premises.

PromotionMagic Printing Solution shall distribute leaflets to the students to inform them of affordable

printing services available on campus. The business also plans to have an offer in which students

are invited to create a printing account for the entire semester in which they shall receive extra

credits for printing. For example if a student pays ksh.200 for printing they receive extra credits

that shall allow them to print 3 color pages and 7 black and white pages printing. If another

student pays kshs.400, they shall get 5 color pages and 2 free bindings.

The students who have credits on their account, will not require assistance while printing, the

business shall set aside 3 computers on which they can log in and carry out their printing from. It

is hoped the promotion shall attract loyal customers.

2.4 SALES PROJECTION

Considering that the current Strathmore student population is 5,000 students, we intend to attract

and maintain 70% of the market, which shall be 3,500 students. Approximately each student

spends kshs. 800 to kshs. 1000 annually on printing and photocopying.

For the bulk printing for the University, if the business secures a graduation printing which has

500 graduates, the booklets are 3 to each graduate, hence those are 1,500 booklets. For bulk

printing each would go for kshs.100. The business shall hopefully secure 3 of this printing jobs

within the year.

Year 1:

Small Jobs: 70% * 5,000* 800 = KES 2,800,000

Institutional Jobs: 1,500 * 100*3 = KES 450,000


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Year 2:

We intend to double the costs of the institutional jobs, while maintaining the small printing jobs.

2.5 COMPETITOR ANALYSIS

The competitive environment directly influences a business in terms of its competitive decisions

and responses. Magic Printing solutions will use Michael Porters five forces to analyze their

competitive factors and advantages

Threat of new entrants

The possibility of new entrants in this industry is quite high in this industry as its still growing

and new players are joining it. Some new entities are not even registered and try to pass on as

already established names in the industry. Magic printing solutions is thus acutely aware of this

threat of new businesses stepping up the competition. Their strategy however is to create and

maintain close relationships with their customer base so as to ensure their name precedes them.

Threat of substitute products

This threat is also particularly high as there are a substantial number of other computer services

and accessories providers. It is therefore very easy for an unsatisfied customer to seek another

provider. Magic Printing solutions view this as a reason to uphold a culture of excellence in all

their operations. This threat is more of a motivator for the business not to lose any of their

customers to the substitute products.

Bargaining power of buyers

Buyers in this industry dont have a strong bargaining power as such because price ranges

fluctuate constantly due to the continuous technological advancements. Buyers can however

bargain for a good price within the price range.

Bargaining power of suppliers

Most suppliers in the industry are well established with set prices. This threat will pose a small

problem as the suppliers seem to have a power over the businesses they are supplying to. To


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avoid this hold over them Magic Printing solutions plans to have several suppliers for different

products since the prices ranges from one supplier to another. When other materials are needed

e.g. paper, ink etc, Magic Printing solutions hopes to shop around for the best and most reliable

suppliers for the best quality.

Intensity of rivalry

The intensity of rivalry will tend to be high since there are already well established businesses in

the target environment of operations. Magic Printing solutions plans to offer their finest to their

target market. This combined with the personalized experience for the customer is bound to give

them leverage.

2.6 MARKETING ACTION PLAN

Strategies- before start up

Prior to the launch of our company, we will create hype in the market so that we attract our

customers and arouse interest. To achieve this we will have an aggressive selling approach

We will advertise through posters and even upcoming events and during club meetings.

Strategies-on going operations

Once our business is launched, our orientation shifts from an aggressive selling approach to a

personal marketing approach. The following strategies will enable us achieve the objectives:

We will have customer sale promotions; these include discounts on printing, coupon

offers, and gifts.

Quality control

To ensure that we offer our clients with the best and quality services and products we intend to

have monthly maintenance of our machines as well as select the best and reliable supplies of our

stock.

Inventory Control

For purposes of Inventory control, software which can help in maintaining inventory records will

be used. When goods are received they will be recorded manually and also scanned to ensure


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that there are no errors and that the correct amounts are recorded in the system. Monthly stock

taking will be done

CHAPTER 3

ORGANIZATION AND MANAGEMNET PLAN

3.0 PEOPLE OBJECTIVE

In Magic Printing Solution, the staff members will be required to have qualifications and experience in

the printing industy and computer literate. The qualified employees will be required to be at the right

places during working hours so as to perform their duties effectively thus being a source of competitive

advantage. Some of the emloyees objectives will include:

1. Gain a complete understanding of the current performance environment, and identify the

primary causes of performance shortcomings.

2. Substantiate business priorities and determine where incentives will have the greatest

impact.

3. Explicitly identify what needs to be accomplished and why that is important (to the

company and the participants).

4. Ensure consistency with the organizations vision and values.

5. Confirm that results will be measurable and objectively evaluated.


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3.1 ORGANIZATIONAL STRUCTURE

CIO

COMMERCIAL

SALES MAMAGER

CUSTOMER

CARE

MANAGER

MARKETING IN

INFORMATION

TECHNOLOGY

MANAGER

FINANCE MANAGER

HUMAN RESOURSE MANAGER

SYSTEM

ADMINISTRATORCONSULTANTS

PROCUREMENT

ASSISTANTS

3.2 MANAGEMENT TEAM

Board of directors

1. Angela Adhiambo- She holds a Bachelors degree in Business Information Technology

from Strathmore University and has been working with IHub for the last one year.

2. Maureen Gitau- She holds a Bachelors degree in Business Information Technology from

Strathmore University. Current Chairman of the University Student Council.

3. Cyrus Muthumbi- He holds a Bachelors degree in Business Information Technology from

Strathmore University.


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4. Hilda Moraa- She holds a Bachelors degree in Business Information Technology from


5. James Ndiga- He holds a Bachelors degree in Business Information Technology from


Managing director

Her/his roles will be;

Supervising the two consultants

Attending Companys meetings and other invitations

Updating the Board of directors on the affairs of the company

Appraising the employees

Meeting with other stakeholders of the company e.g. investors

Chairing the management meetings

Solving any conflicts with the employees

Consultants

Generate publicity and media exposure

Updating the Managing directors on the sales and marketing affairs

Providing our services to the customers

Assisting our clients in matters regarding the services and products being offered.

Ensuring Company resources are well utilized.

POSITION QUALIFICATION


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Managing director Degree in IT

Computer literate

Atleat 1 year experience in printing

Consultant Diploma in IT or related field

Good communication skills

Good typing skills

3.3 STAFFING PROCESS

Magic Printing Solution will be an equal opportinity employer and will be a company that

enhances and appriciate diversity.

3.3.1 Steps in staffing

Manpower requirements- The very first step wil be to plan the man power inventory

required by a concern in order to match them with the job requirements and demands.

Therefore, it will involve forecasting and determining the future manpower needs of the

concern.

Recruitment- Once the requirements are notified, the concern invites and solicits

applications according to the invitations will be made to the desirable candidates.

Selection- This is the screening step of staffing in which the solicited applications will be

screened out and suitable candidates will be appointed as per the requirements.

Orientation and Placement- Once screening takes place, the appointed candidates will be

made familiar to the work units and work environment through the orientation

programmes. Placement takes place by putting right man on the right job.

Training and Development- Training is a part of incentives given to the workers in order

to develop and grow them within the concern. Training is generally given according to

the nature of activities and scope of expansion in it. Along with it, the workers will be

developed by providing them extra benefits of indepth knowledge of their functional


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areas. Development will also include giving them key and important jobs as a test or

examination in order to analyse their performances.

Remuneration- It is a kind of compensation provided monetarily to the employees for

their work performances. This will be given according to the nature of job- skilled or

unskilled, physical or mental, etc. Remuneration forms will be an important monetary

incentive for the employees.

Performance Evaluation- In order to keep a track or record of the behaviour, attitudes as

well as opinions of the workers towards their jobs. For this regular assessment will be

done to evaluate and supervise different work units in a concern. It is basically

concerning to know the development cycle and growth patterns of the employess.

Promotion and transfer- Promotion is said to be a non- monetary incentive in which the

worker is shifted from a higher job demanding bigger responsibilities as well as shifting

the workers and transferring them to different work units and branches of the same

organization.

3.3.2 STAFFING POLICY

Purpose

To ensure that competent candidates are selected to fill new and vacant positions and to give

internal candidates priority.

Scope

This policy applies to all regular administrative and support staff.

Selection Policy

Positions will be awarded to the most competent internal candidates, and only if no internal

candidates meet the minimum requirements of the position, as posted will external candidates be

considered. Internal candidates with Employment Security, who are temporarily without anappointment and other internal candidates who have been given notice of layoff, must be granted

first priority in filling posted positions.


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Position Postings

All vacant and newly created positions shall be posted for eight (8) working days from

the date indicated on the posting notice.

Employees being transferred or promoted within a department, and/or staff who havebeen laid off, whether they have Employment Security or not, may be offered a position

without that position being posted.

Positions are not considered vacant for reasons of maternity leave, sick leave, vacation or

other authorized absences.

Positions Available are posted on the web site and on the Bulletin Board located in the

premises. Information contained on the posting will include:

position title

job family

role profile and level

grade

salary scale

minimum requirements

supervisor's title

summary of responsibilities

date of posting

Internal Candidates

1. Staff members who wish to be considered for a new or vacant position must apply by

submitting an Internal Application Form and curriculum vitae to the office indicated on the

posting notice. Staff members are eligible to apply for new and vacant positions, without regard

to the length of their employment with the organization.

2. All internal candidates who meet the minimum requirements of the position, as posted, must

be granted an interview. All internal candidates must be notified in writing of the selection

decision and the reasons they were not offered the position. If an external candidate is selected,

this must be specifically noted in the selection decision notice.


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Trial/Probationary Period

1. Staff members who are transferred or promoted will have a trial period of fixed duration in the

new position. Unless otherwise specified, this trial period will be thirty (30) working days, but in

no circumstances should exceed thirty (30) working days. If this trial period is not satisfactorily

completed, the staff member will return to the original position, corresponding salary and

working conditions, without prejudice. This return may be initiated by either the staff member or

the department head.

2. The position from which the staff member has been promoted or transferred will not be filled

permanently until the trial period has been completed.

3. If a staff member who is transferred or promoted to a new position is still on his/her

probationary period with the organization, a new probationary period for that position will

commence.

The employee on probation who is not successful in the new position, to which he/she applied,

has no right to return to his/her initial position, except at the discretion of the department. In the

latter case, the outstanding remaining period of the original probationary period will continue.

External Candidates

1. Qualified candidates from outside the organization will be considered by the board of directors

for new or vacant positions, only if no internal candidates meet the minimum requirements of the

position.

2. Prior to a verbal or written offer of employment being made to an external candidate the

recruiting department must prepare written justification for the selection of an external candidate.

This documentation will indicate the requirements of the position which were not met by the

internal candidates.

3. If an external candidate is proposed, all documentation relating to the recruitment process,

including Internal Application Forms must be forwarded by person authorized to do so by the

board of directors.An offer of employment may be made only after approval to appoint an

external candidate has been received and approved by the board of directors.


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Dispute

The application of this policy will be disputable when an employee who has successfully

completed his/her probationary period, believes he/she met the requirements of the position and

an external candidate was selected.

Restrictions

It is the policy of the organization to avoid employment of relatives and close family members in

the same work group or in a department where the employee would be under the supervision or

direction of a relative or close family member subject to agreement by the board of directors.

Accidents at work

The organization is subject to any injuries sustained by employees during work hours.However a

form must be completed in its entirety and duly signed by the employee and a work mate

accompanying the victim to enable the office to initiate the processing of the claim.

3.4 LEGISLATION RELATING TO ORGANIZATION AND MANAGEMENT

3.4.1 Labour Laws

Termination of contract

The contract of employment can terminate, not at the initiative of the employer, in certain

circumstances, including by:

The expiry of a fixed-term contract; and

The completion of the task for which a contract was concluded.

Dismissal

The board of directors is supposed to follow the guidelines as stated in thes staffing policy but

some offences may lead to direct dismissal include:

Absence of work without leave or lawfull case

Negligence and carelessness in ones duties

Imprisonment for an offence lasting more than four (4) days.

Failure to comply with the law as instructed by the authorative personnel.


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3.4.2 Employment Act

Employer will put mechanisms in place to compensate the employees in case of damages they

undergo during the working period

These shall be applied as stated in the Employment act 2007 document.

3.4.3 Occupational Health and Protection Act

3.5 Support Services

Service Contracted Partner Contact Details

Cleaning Strathmore University Strathmore University

Machinery Maintenance Technology Today Roy Rutto 0733 879278

Cabling Icon Telesec Daniel Majok Lighting Cadplan Lightings John Mwaniki 0752 106 633

ISP KDN Daniel Musyoka 0724 633 106

Transport G4s Mike Oluoch 0720345345

3.6 ACTION PLAN

THINGS THAT NEED TO GET DONE TIME PERIOD

Recruitment process November

Legislation process November

Acquiring intellectual property December

CHAPTER FOUR

PRODUCTIONS AND OPERATIONS PLAN


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40 PRODUCTION AND OPERATIONS OBJECTIVES

The objectives of the production and operations of the business will include:

1. To develop a good brand image for our business.

2. To minimize cost of production/operation

3. To utilize existing raw materials and resources.

4. To ensure that the customers of the business get quality products and services, worth the

value of their money and at the most affordable rates available by offering JIT(just in time)

delivery.

5. To offer variety in terms of the products and services offered.

4.1 EXPENSES AND INVENTORY ANALYSIS

Item Quantity Unit Cost Total Cost

Printer and Photocopier 1 30000 30000

Laser colour printer 1 10000 10000

Ink Cartridges 3 1500 4500

Rims of paper 10 packs of 350

papers each

500 5000

Binding Machine 1 1000 1000

Accessories Sum Sum 5000

Cables and cabling expenses Sum Sum 3000

Computers 3 20000 60000

Legal documents Sum Sum 7000

Premises 20000 sq. feet N/A N/A

Electricity Sum N/A N/A

ETR machine 1 20000 20000

Salaries (for the onsite 3 5000 15000


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employees)

The premises and electricity costs are catered for by the location of the business being the

business incubation center at the students center of Strathmore University. This means that those

particulars have been removed so as to facilitate the growth of the business.

The ETR (Electronic Tax Register) is a requirement by the Kenya Revenue Authority; hence it is

a necessary acquirement.

4.2 OPERATIONS AND PRODUCTIONS STRATEGY

These refer to the steps taken so as to ensure that the operations run smoothly and accordingly soas to ensure that the quality in the business is evident.

Source of raw materials

As our core business is about services, our main raw materials are the papers used to print, and

the printing materials used to achieve the quality prints obtained from the businesss printers.

These papers shall be sourced from the Seal Honey Stores, which are known for quality printing

materials, and stationery.

Also, as pertains to the other pieces of stationery that will be on sale at Magic Printing Solutions,

their main store will be Seal Honey as they have a whole sale outfit, which is used to service

retailers such as Magic Printing Solutions.

The printers, binding machine and the computers shall be sought from computer hardware shops

in town where they sell quality computers at competitive prices. The computers to be bought are

yet to be decided upon, but their specifications have been defined, hence the decisions to be

made on this particular issue are not very intense.

The employees to assist in the running of the business on the site, and its management have also

been selected, and vetted to have the relevant qualifications for the said job. They have the

necessary knowledge of the running of computer.

Technology


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At Magic Printing Solutions, giving the best service is our key objective. We have hence had the

best analysis done so that the best technology has been chosen for implementation. The printer

that was chosen to cater to the printing and copier solutions is a very recent model that can

handle high speed and high quality printing services.This means that the printing will be done at

a very high speed, and in quality.

The computers that will be chosen are also of high standards, so as to ensure that there will be

the added advantage of the printing be done fast as to avoid the constant delays encountered

when customers try to use the computers in most printer services places, and have to wait

another couple of minutes before they can access the items they intend to print.

Quality Control

So as to reduce the effects of the viruses that are a constant threat to the customers documents,

the management deemed it necessary to use Open Source operating systems on two of the

computers, and Microsofts Windows Operating System on one. This is so as to have a

controlled environment on which to work on, and have a reduced chance of having the computer

systems being run down by viruses. This helps also in the reduction of the businesss costs, as

the costs of repairing the dead computer systems.Also, by having qualified employees, the

business will be run in a quality assured way.

Location of the business

The business location will be convinient for the Strathmore community, and accessibility to the

products and services will be easily available to the clients which will also result in JIT (just in

time) delivery to the clients.

4.3 LEGISLATIONS RELATING TO PRODUCTION AND OPERATIONS

So as to make the business a legal venture, there is need for the right legislations to be followed

and adhered to. These include the businesss registration and the obtainment of the VAT numberand the PIN number, operate a bank account, paying the city council counties, and observing the

environment Act.

Registered Name


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Magic Printing Solutions

PIN Number and VAT Number

These are yet to be obtained.

4.4 ACTION PLAN

Action When to be done Who to do it

Registering of the Business

and its Name

1st October 2010 James Ndiga, Angela

Oduor, Hilda Morara,

Maureen Gitau, Cyrus

Muthumbi

Booking and buying of the

computers and the printer

15th October 2010 to 25th

October 2010

Angela Oduor, Hilda

Morara, James Njeru

Obtaining of the KRA PIN

Number

30th November 2010 James Njeru, Hilda Morara

Obtaining of the VAT

Number

30th November 2010 James Njeru, Hilda Morara


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CHAPTER FIVE

FINANCIAL PLAN

5.0 FINANCING OBJECTIVES

Achieve high returns on investment within one year of the business running.

Increase market share

Reduce operational costs of the business

To provide the best quality products and services To attract qualified personnel

For the purpose of imroving the market image

5.1 CAPITAL REQUIREMENTS


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Source Amount Repayment Schedule

Owners Equity

1. Hilda Morara

2. James Ndiga

3. Angela Oduor

4. Maureen Gitau

5. Cyrus Muthumbi

250,000

50,000

50,000

50,000

50,000

50,000

-

Well Wishers and Friends 100,000 2 Years (50,000 per Year)

Competitions/Grants 50,000 -

Youth Enterprise Programs

Initiative

50,000 -

5.2 PROJECTED PROFIT AND LOSS ACCOUNT

Projected Profit and Loss

Year 1 Year 2 Year 3

Sales 500,000 750,000 1,000,000

Purchases 300,000 175,000 200,000

Gross Profit 200,000 575,000 800,000

Expenses

Salary and Wages 120,000 150,000 180,000

Telephone - - -

Rent - - -

Utilities 20,000 25,000 25,000

Marketing 10,000 5,000 2,500

Depreciation 0 10,000 10,000

Net Profit 50,000 385,000 582,500


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5.3 PROJECTED BALANCE SHEET

Projected Balance Sheet

Year 1 Year 2 Year 3

Non-Current Assets

Fixtures and Fittings 50,000 50,000 50,000

Computers 100,000 100,000 100,000

Intangible Assets 10,000 10,000 10,000

Accumulated Depreciation 0 10,000 10,000

Current Assets

Receivable 500,000 750,000 1,000,000

Cash and Bank Balances 350,000 500,000 600,000

Inventory 0 150,000 300,000

Current Liabilities

Payables 120,000 150,000 180,000

Overdraft - - -

Net Assets 890,000 1,420,500 1,790,000

Equity

Share Capital 450,000 450 ,000 450,000

Retained Earnings 0 50,000 300,000

Earnings 50,000 385,000 582,500

Capital Employed 890,000 1,420,500 1,790,000

5.4 ACTION PLAN

ACTIVITY WHEN TO BE DONE WHO TO DO IT


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Managing Receivables End of every month Manager

Managing Payables End of every month Manager

Coming up with a budget Start of every Financial Year Board of Directors

Managing the P&L and the BalanceSheet

End of every Financial Year Board of Directors

CHAPTER SIX:

RISK ANALYSIS

6.0 OBJECTIVES OF RISK ANALYSIS


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The objectives of this risk analysis include:-

Identification of risks and threats posed to the business.

Mitigation of these risks e.g risk avoidance, acceptance, limitation, transfer, elimination.

Definition of necessary changes to be made in business operations based on these risksand their implications on the business.

6.1 TYPES OF RISKS

Type of risk Low Medium High

Human

Capital

OperationalReputational

Procedural

Project

Financial

Technical

Natural

Political

Competitors

6.2 HOW THE TYPES OF RISKS ARE RELATED TO THE BUSINESS

Human - from individuals or organizations, illness, death, etc. We employ people to

manage the business and it is not possible to foresee occurrence of illness or death.

Operational - from disruption to supplies and operations, loss of access to essential

assets, failures in distribution, etc. Suppliers have more bargaining power.


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Reputational - from loss of business partner or employee confidence, or damage to

reputation in the market. This is a critical factor seeing as we are a start up business in a

highly competitive and volatile market. We therefore have to position ourselves such that

we win a competitive start-up advantage.

Procedural - from failures of accountability, internal systems and controls, organization,

fraud, etc. Seeing as we are employing people to manage the business for us,

accountability is of concern to us as owners of the business.

Project - risks of cost over-runs, jobs taking too long, of insufficient product or service

quality, etc.

Financial - from business failure, stock market, interest rates, unemployment, etc. Since

getting financial backing for start-up businesses is hard, we may have to raise money out

of our own pockets, and success and gaining of profits is not assured.

Technical - from advances in technology, technical failure, etc.

Natural - threats from weather, natural disaster, accident, disease, etc

Political - from changes in tax regimes, public opinion, government policy, foreign

influence, etc

6.3 STRATEGIES FOR MANAGING RISKS

Some of the strategies that we would use to manage the risks include the following:-

Risk Transfer: This involves transferring responsibility or burden of dealing with the

potential loss from a risk. Insuring our equipment would be a means of transferring risk.

Risk limitation: This involves minimizing the effect the risk would have on the business.

A good example of risk limitation would be constantly monitoring the competitive prices

being offered by our competitors and adjusting ours in order to maintain our customer

base.

Risk Avoidance: This involves completely avoiding a business activity that would pose a

threat to the operations of the business. Risk elimination: This involves dealing with the risk such that it no longer poses a threat

to the business. A good example in our case would be, in the event that one of our

competitors introduced a new service such as batch printing of photos. In order to

eliminate the risk of losing our customer base, we would introduce a new and better

service of our own that would attract an even wider customer base.


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REFERENCES

1. Randy Augsburger how to start a printing business

2. L. Zable and H. C. Lee. "An overview of impact printing" (PDF). IBM Journal of

Research and Development. http://www.research.ibm.com/journal/rd/416/zable.pdf.
http://www.research.ibm.com/journal/rd/416/zable.pdfhttp://www.research.ibm.com/journal/rd/416/zable.pdfhttp://www.research.ibm.com/journal/rd/416/zable.pdfhttp://www.research.ibm.com/journal/rd/416/zable.pdf

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