BUSINESS PLAN FOR BURA YOUTH GRP FOR GOOD.docx

BURA YOUTH FOR GOOD GROUP
FARM BUSINESS PLAN
TABLE OF CONTENTS:
EXECUTIVE SUMMARY……………………………………………………………………………………………………………………………………………..1
CHAPTER ONE: INTRODUCTION: …………………………………………………………………………………………………………………… ………..1
1.1 Background information…………………………………………………………………………………………………………………………………………..1
1.2 Vision statement ……………………………………………………………………………………………………………………………………………………..1
1.3 Mission…………………………………………………………………………………………………………………………………………………………………….1
1.10 Organization Goals …………………………………………………………………………………………………………………………………………………2
1.11 Customer creation and retention strategy ……………………………………………………………………………………………………………..2
1.12 Growth strategies …………………………………………………………………………………………………………………………………………………..3
1.13 Business expansion plans ………………………………………………………………………………………………………………………………………..3
1.14 Business expansion strategy ……………………………………………………………………………………………………………………………………3
1.14.1 Building business value ………………………………………………………………………………………………………………………………………..4
1.14.2 Members attraction and retention……………………………………………………………………………………………………………………….4
1.14.4 Achieving economies of scale ………………………………………………………………………………………………………………………………4
1.14.6 Developing a new market segment ……………………………………………………………………………………………………………………..4
CHAPTER TWO: THE MARKETING PLAN……………………………………………...........................................................................5
2.1 Introduction……………………………………………………………………………………………………………………………………………………………….5
2.2 Sales and Revenue forecasts ……………………………………………………………………………………………………………………………………..5
2.2.1 Potential customer target……………………………………………………………………………………………………………………………………….5
2.2.2 Characteristics of customer groups ………………………………………………………………………………………………………………………..5
2.2.5 Purchasing patterns ………………………………………………………………………………………………………………………………………………..6
2.2.6 Market size ……………………………………………………………………………………………………………………………………………………………..6
2.2.7 Potential competition ……………………………………………………………………………………………………………………………………………..6
2.2.8 Comparative advantage ………………………………………………………………………………………………………………………………………….6
2.2.9 Overall Strength and weaknesses of competition ……………………………………………………………………………………………………7
2.3 Pricing strategy ………………………………………………………………………………………………………………………………………………………….7
2.4 Sales Tactics ……………………………………………………………………………………………………………………………………………………………….7
2.5 Promotion strategy ……………………………………………………………………………………………………………………………………………………7
2.6 Distribution strategy ………………………………………………………………………………………………………………………………………………….7
CHAPTER THREE: ORGANIZATION MANAGEMENT PLAN………………………………………………………………………………………………..7
3.1 Strategic management and committees………………………….…………………… …………………………………………………… …………….7
3.1.2 Technical Management Team ………………………………………………………………………………………………………………………………..8
3.2 Organization Structure……………………………………………………………………........................................................ ………………....8
3.3.2Training …………………………………………………………………………………………………………………………………………………… …………….9
CHAPTER FOUR: PRODUCTION AND OPERATION PLAN…………………………………………………………………………………………….10
4.1 Introduction ……………………………………………………………………………………………………………………………………………………………. 10
4.3 Production strategy ……………………………………………………………………………………………………….. ………………………………………10
4.3.1 Products development and prices …………………………………………………………………………………….. ………………………….. 10
4.3.2 Annual Production goals ……………………………………………………………………………………………. …………………… …….. 11
4.3.3 Strategies to achieve production goals ……………………………………………………………………………………………… 11
CHAPTER FIVE: FINANCIAL PROJECTION…………………………….................................................... ……………….. ……. 18
5.1 Introduction ……………………………………………………………………………… …………………………………………………………………….. 14
5.2 Proposed company financing…………………………………………………………………………………………………………………………………… 14
5.3 Enterprise Budget……………………………………………………………………………………………………………………………………… …………….17
5.4 Cash flow Statement, 2019 ……………………………………………………………………………….. …………………………………… …. .18
6.0 Assumptions…………………………………………………………………………………………………………… ……….. ……………………..

EXECUTIVE SUMMARY:
Bura Youth for Good Group is among program activities that were initiated by Red Cross to empower and motivate
young people to engage in socially and economically viable activities. Horticulture and legume production is one of the
economic mainstay in Kipini, Tarrasa, Garsen, Wenje, Galole, Bura & Madogo divisions where an estimated target of 60
FFAs are actively involved in production.
The idea to start the legume and horticultural production business emanated from incubation training organized and
conducted by Kenya Red Cross in 2017.The incubation trainings targeted vulnerable youth below 25 years . From this
training, the 20 members from Bura Youth for Good Group came together, discussed, the business opportunity of
horticulture and legume production and start on a three-acre piece of leased land. The business will deal in production
and marketing of horticulture and green grams. These products will be marketed to a number of bulk institutional
buyers, young and established clientele and the domestic markets in the three outlets – Bura, Hola and even Garissa.
When operational the business plan will create enormous avenues of job opportunities for the youth and women in the
county along all the stages of value chain and hence sparking and contributing to economic growth for the members and
the local community.
The business will generate a cash turnover of KES……., operational cost of KES….. in 2019 and healthy cash flows of
KES….... in 2019. For 2019, the business will generate a cash turnover of KES….... and operational costs of KES…...
It will be noted that from the start up capital of KES…......,the business will be able to raise enough to cover the issued
grant (KES…….) and at the same time maintain a cash balance of KES…… and horticulture and green gram stock worth
KES…… at the close of 2019.
The firm envisages expanding its product lines to tomato processing and sales of fodder crop residue to livestock
farmers during periods of extended drought. This is geared towards increasing its profitability as well as building the
current asset base. The option of buying securities in the stock market will be a course of action to be contemplated.
CHAPTER 1: INTRODUCTION
1.1 Background information.
Bura Youth for Good Group is involved in farming and production of horticulture (onions and tomatoes) and legume
(green grams) through planting, harvesting and marketing.
The group was put together by Kenya Red Cross who sponsored trainings on conflict management and
entrepreneurship in 2017.The initial entrepreneurs of this group comprised of 20 young people.
The business commenced In September 2017 by buying and selling of goats. The 55 entrepreneurs, after analyzing the
various value chains in the County realized that horticulture production in rotation with green grams was a profitable
enterprise with relatively low production cost after gross margin analysis was done.
The main office of the business shall be located at Bura Town in Tana River County.
In Tana River , legume farming has been taken as a traditional vocation undertaken by mainly members of the farming
communities for income generation but operators have concentrated on conservative practices with little introduction
of new business skills.
1.2 Support Services
For the project to achieve success in the business, crucial services shall be solicited from various actors in the value chain
who will provide services such as:
 Financial services; - to provide banking and saving services for the business
 Extension services-to provide latest agricultural information and on GAP and commodities market trends.
 Information services; - information sourcing, market linkages, promoting business centers activities and
improving on quality through horticulture and green gram handling and storage practices.
 Transport ; - To carry produce from the store houses to point of sale
1.3 Vision Statement
To be the leading supplier of premium tomatoes, onions and green grams
1.4 Mission Statement
To supply Premium Quality horticultural and legume products to consumers in Tana River County and beyond
1.5 Business Ownership
The Business is a group venture operating collectively just as sole trader ship, in the arrangement between the
members to undertake the stated business activities in common with a view to share the risks and rewards
accruing from the joint business operations. The business will involve growing and selling onions, tomatoes and

green grams at specified seasons to catch a particular market. The three products shall be offered for sale as a
one point shop where customers will access the services in one place. The type of business was chosen because
of the availability of lucrative markets and also group venturing will bring different skills and insights to the day
to day activities of the firm.
 To ensure that efficiency in the utilization of farm material is achieved, the project will undertake to sell farm
crop residue as fodder to supply fodder livestock farmers during droughts to sustain livestock herds of
neighboring communities.
1.6 Justification of the Business Opportunity
The rationale behind the business venture arose out of necessity to fill a gap in accessing quality horticulture
and legume products in Tana River County. A market research conducted in December 2016 across the County
revealed a widespread dissatisfaction among consumers of horticulture. In most cases horticultural products
offered for sale was either too dirty or contaminated and unavailable and unaffordable. Since the
implementation of the new Constitution dispensation, there has been increased influx of people into the
County as well as intensified economic activities. New hotels and Guest houses mushroomed and training
activities conducted in workshops. The demand for flour and fruits therefore increased with quality expected.
1.7 Growth Intent of the Firm
The business is a growth industry since it envisages to upscale services in the grain retailing services in the County
through just availed markets in the current PPP projects. The following growth areas shall be considered:
 The products offered – Quality shall be one of the key concerns in the growth plan. With superior quality
grain a large customer base will be assured because of reliability. This will be enabled through
differentiated technology
 Customer base – To increase revenue of the business, customer loyalty will be an important strategy to
pursue in order to increase new customers and retain existing ones.
 Marketing Mix: - After achieving market positioning, high advertising costs will have to be reduced as a
percentage of sales. These will be necessary as a result of reducing expenses on promotion and advertising
 Price and profits :- To achieve growth, the business will adopt a premium price strategy to achieve high
contribution margins as well as profit margins
1.8 Focused Short term and Long Term Changes in the Industry
In the short term changes in the industry will be as follows:
a) Product: - There will be frequent product design changes as a result of initial poor quality of products and lack
of standardization.
b) Customers: - Adjustment of prices as a penetration strategies to win customers. The favorable price is intended
to introduce the product to customers so as to expose them on the selling proposition to new consumers.
c) Marketing Mix: - Immediate changes will be on costs incurred on sales promotion and advertising. Initially
operators in the grain industry did not invest much on advertising and promotion. This will be a new
development which will require entrepreneurs to adjust.
In the long run, the following changes are expected:
a) Product : - Horticultural and legume products in the County will be more standardized as players in the industry
will have adjusted to the new standards of doing business or exit from the industry
b) Customers: - Mass market saturation will necessitate focusing on repeat buying. More branding of products will
be evidenced.

c) Marketing Mix : - Market segmentation will be pronounced and Unique Selling Proposition pursued
d) Prices: There will be the establishment of premium prices for quality products. High sales volumes and
emergence of high price markets
1.9 Industry size
The business will have an initial startup capital of KES….. to meet both fixed overheads and operational variable
costs. It is expected to undertake business throughout the 2 years. The firm will have a committee which will
ensure smooth running of operations. The business is envisaged to generate an annual turnover of KES….. in 2019
Currently, the competition comprises of about 4 other disorganized small scale operators distributed across the sub
County. The capital endowments basically ranging between KES……..A few of those outlets are independent outfits
and In most cases the entrepreneur is the sole employee.
1.10 Organization Goals
The overall goal of the business is to supply high quality premium grains and horticulture products to the local market
and beyond thus to increase return on capital employed ratio from 0.8 to 2.0
1.11 Customer creation and Retention Strategy – SWOT Analysis
In order to create more customers and retention, a swot analysis was done whereby, strengths, weaknesses,
opportunities and threats were identified .The swot analysis is the evaluation of the relative importance of the various
factors internal and external to the organization and thus presented as a matrix of Strengths,Weaknesses,Opportunities
and Threats.
Strengths.
 Availability of fertile land
 Cohesive group
 Good knowledge of the seasons
 Favorable weather conditions.
 Active bank account
Weaknesses
 High operation costs due to harsh climate
 Inadequate skills and knowledge on value
addition interventions
 Lack of innovative technologies,
 Absence of policies and regulations for
efficient operations.
Opportunities
 Increased demand for horticultural
products
 Institutions to supply produce
 Extension services from Government and
NGOs
 NGOs offering grants
Threats
 Wildlife and livestock conflicts
 Price fluctuation of farm produce
 Challenges with middlemen
 Meeting the set quality standards.
. The challenge here will be to retain customer loyalty. The extent to which our products meets the demand of
consumers will be based on how the firm mixes the 4 variants of marketing i.e the 4 Ps.The price that will be set will
attempt to read the mood of consumers relative to the products of the firm. The ability of the consumer to pay, the
perceived value of our products and their general attitudes and knowledge of our products are very important. Also
important is their sensitivity to price changes and branding. The marketing communication will such that the product
quality consistency, the place or availability, knowledge of what our products will have to offer in meeting consumer
satisfaction and the price. Branding of the firms products will be geared towards segmenting the market so as to reach
the various categories of our consumers.
1.12 Growth Strategies
The firm will pursue growth strategies using the Ansoff’s Product/Market matrix model opting to sell existing products
to existing markets. The following strategies shall be considered:

 Market penetration – selling more of the existing products to the existing markets. This will entail persuading
existing users to use more of our products by having a unique selling proposition that will attract even
customers from competitors so long as the market is not saturated with the product.
 Market Development – Develop new market segments through creating new uses to our products i.e Sifted
horticultural crops and legumes. flour packaged and branded
 Product development- developing new versions of the product such as packaging the horticultural crops and
legumes. as dried tomato and juice brand to meet special needs of existing consumers. This will increase the
competitive advantage of the firm over the competition.
1.13 Business Expansion Plans
Two years after establishment of the business, the firm will pursue expansionist policy so as to have a large market
share of the industry. In planning for the expansion of the business, the following steps are outlined as follows:-
 Planning - 1 month
 Capital acquisitions - 3 months
 Organization of resources - 2 months
 Communication of the expansion plan - 1 month
 Development of the marketing plan - 1 month
 Co – ordination of the expansion activities – continuous
1.14 Business expansion strategy
Business expansion will be a direction the firm will take as a strategic intent to remain the leader in the industry. In
doing so the group will have to ensure that the following pre-requisite areas are addressed:
 Inculcate a culture of innovation and success
 Skilled and motivated team of members with training plans in place
 Realistic plan with achievable targets along the way
 Enthusiastic management team with a variety of complementary skills
 Organizational structure with procedures that are simple and meaningfully defined
 Leadership ability and the ability to communicate it.
1,14.1 Build business value by dominating a market niche.
 Business growth may garner the business the advantage it needs to be a leader in a market niche. The business
can move into new geographic markets, acquire more customers or provide the next level of service to the
existing customers - perhaps, a service they have been asking for. Growing the group product brand brings
value to the business and quality to customers. Both are important in creating goodwill in the marketplace
1.14.2 Attracting and Retention of Good Members.
 Young group members are the new "green" in business, and the excitement of growth offers the potential for
career challenge that inspire skilled members to join the group. Growing businesses offer change and the need
to acquire new knowledge - both something that younger members seek and the global economy demands.
Motivated members are highly productive.
1.14.3 Landing major clients
 Landing major clients or contract can give the business the cachet that it needs to get others to follow. As the
group business builds her resume, financiers will take it more seriously, though they may consider the business
more risky too. The larger size of the business will increase the market place presence and strength.
1.14.4. Achievement of economies of scale.
 The age old concept in business is economies of scale. This implies that bigger businesses achieve lower costs
per unit and stretch administration expense over a larger product line: marketing, professional fees, insurance
and banking charges, to name but a few. This economy of scale contributes to having more money for R&D,
sponsorships, members training and education, investment in new technology and creating more productivity
out of members.
 Increase sales and products in existing markets. This will obviously be the easiest and most risk-free way to
expand. This tactic may require a bigger location, different pricing strategies, new/improved marketing

techniques - but it will be in a customer group with whom the group already has a relationship. The familiarity
and cordial relationship a customer group will let the group know If it gets off track.
1.14.5. Introduce a New Product
The group will bank on having a successful product/service that has been offering for some time and has been collecting
data, customer feedback and doing the tinkering on the latest product. This is a normal evolution in business, not just an
expansion tactic. When positioned as adding value and being responsive to customer needs, this can be a relatively risk-
free way to expand i.e offering milled horticultural crops and legumes. flour packaged as a new product.
1.14.6 Developing a New Market Segment
Both of these areas require cost outlays and uncertainty. Moving products into new categories or demographic
segments requires market research, beta testing and new marketing strategies, i.e. a message for a 26-year old will
differ from a 60-year old. Management of new remote locations may absorb significant time and attention. While the
risks are more, the payoffs are large - and for any business looking to expand, these two methods of expansion are
inevitable for Bura Youth for Good Group horticultural crops and legumes production
1.14.7. Start a Chain of Business Outlets
The tomato, onion and green gram retail and service business that's easily reproduced can be run from a distance and
thus the practicability of launching a chain. But, the decision must be cognizant of what made the first location a success
- was it location, group members or the executive committee? If it is just the executive committee, then duplication is
only possible through detailed operations plans and information and management between locations. There will be
need to duplicate the plan of the first location while meeting increased customer demands. Starting a chain gives
current members crack at "management" duties, training opportunities and an opportunity to expand their horizon
1.14.8. Join Forces / Strategic Alliance
A merger or acquisition combines the best of two companies, expands the customer base, increases intellectual capital
and delivers operational efficiencies. The trick is finding the right partner. These partners may be new distributors, but
company shall be wary of large retailers who exact heavy performance expectations. Can the firm perform to the letter
of its promise? Can the firm meet high standards of quality (ISO, or the like) and adapt procedures to meet just-in-time
delivery? Due diligence and strong contractual arrangements will be essential here.In this essence the group shall merge
with other nearby FFAs to achieve economies and also maintain a healthy grain stock every school term.
CHAPTER 2: THE MARKETING PLAN
2.1 Introduction
Bura Youth for Good Group recognizes that without a marketing plan there will be no business worth mentioning. The
marketing plan is the reference point for organizational, operational and financial plans. A market research conducted in
August, 2016, provided the necessary data for an effective analysis of the group’s intended market. Primary sources of
information were used using direct interviews and questionnaires.
The marketing plan consisted forecasts of interrelated decisions as follows:
a) Sales targets: The firm as stated earlier will target to produce three types of commodities tomatoes,
onions and green grams. The sales targets per product per year will be as follows:
2.2 Sales and Revenue Forecasts
Annual Sales Forecast (Business for 2019 - 2020)
Annual Revenue Forecast (Business for 365 days of the year )
Product Unit June/Sept
(2019)
Nov/Dec
(2019)
Feb/April
(2020)
June/Aug
2020
Sept/Dec
2020
TOTALS
Tomatoes Kgs
Onions Kgs
Green grams Kgs
Product Unit Unit
price
Jun/Sept
(2019)
Nov/Dec
(2019)
Feb/April
(2020)
June/Aug
2020
Sept/Dec
2020
TOTALS
Tomatoes Kg KES
Onions Kg KES

2.2.1 Potential customers targeted
The customer base of the firm’s products will be:
 young people between 8 and 25 yrs old
 Young adults single and newly married between ages 30 - 45 years
 Established adults with children finishing colleges and universities between ages 46 to 64 years
 Habitual dieticians with a preference for plant proteins rather than animal proteins :- the elderly
 The customers will be particularly looking for quality, nutritive value of produce and also the plant protein
availed in the group’s products. For the young adult males, the water melon fruit outlets will be their favorite
joints because of the common perception that it has aphrodisiac advantages for users.
2.2.3 Product Preferences by Customers
Customers have a specific value preferences attached to each product offered as shown in the table below:
Product Consumer Preference
Tomatoes Ripe and fresh tomatoes
Onions Fully developed and mature onion
Green grams Fully developed and dry green grams
2.2.4 Purchasing Characteristics of Customers
Customers of the firm’s products will normally come for tomatoes, onions and green grams and in the beginning of
the school term and late prior to closing schools. For water melons, the product will fetch higher prices during hot
weather and no mango fruits in the market
2.2.5 Purchasing Patterns
Customers will purchase quantities suiting their need at any given time. However, most of them will go for bulk
quantizes i.e 50 bags .The quantities packaged in : 90 kg, and 50kg bags
2.3 Pricing Strategy
The firm will use various pricing policies to suit the competitive strategy appropriate as follows:
a) Mark up price based on standard costing methods .Computed from the cost of production and addition of a
profit as a percentage of variable costs and overheads.
b) Going rate pricing will be used to keep in line with industry norm.
c) Product line pricing. The firm will categorize various brands with specific qualities to suit purchasing power of
the customers
d) Offers and discounts will be given to bulk institutional buyers.
 The price will be variable for the consistent bulk buyers of the company’s products
 30 day credit terms will be offered to customers with reliable income or even institutions that use LPOs
 The discount policy will be a 1% discounts for every bulk sales .
2.4 Sales Tactics
In order to attract and retain customers the firm will use direct selling methods
 Communicating the advantages of the firm’s products to potential buyers, to develop the target customer’s
product and market knowledge
 Prospecting for additional customers, by visiting them several times especially institutions
 After sale service –to follow up and address any complaints on the quality of service and product
 Gathering information on what customers wants to be added to the service and product. For direct marketing,
the marketing subcommittee at the retail outlets will have to be properly selected
 Generally, the firm will be selling the image of quality, reliability and safety of its products
2.5 Promotion Strategy
BYFGG horticulture and legume project will embark on advertizing activities for it to maximize sales which increases
revenue. The type of media is important as a means of promotion. The following media will be used:
a) Radio. There is Tana FM Radio station that is operating in Hola
b) There shall be competitions among potential customers and offers of prizes
Green grams Kg KES

c) Publicity campaigns using audio voice transmitters of strategic messages to potential custo0ers
 The products shall be displayed in clean environment. The beef for direct selling shall be enclosed in glass
compartments. The image presented by the firm is that of quality and reliability
 Advertisement will be an exercise to be done once every three months..ksh.15,000 will be allocated for
seasonal advertising costs
 The increase in orders and enquires about the activities of the firm will be an indicator of the effectiveness of
advertising
 The firm will sponsor Good nutrition field days where competitions for best food presenters will be awarded
prizes. The firm’s products will be major entries for the presentations. This will be done once every year
especially, the World Food Day celebration. The project will spend at least KES…..
 The publicity campaign using mobile audio facilities will be used month
 Increase in sales turnover and orders will signify effectiveness of the promotional campaigns
2.6 Distribution Strategy
 Road transport shall be the main mode of transport
 Poor road network shall be the major concern
 Poor road network problems can be addressed through improved post handling of grains
CHAPTER 3: ORGANIZATION AND MANAGEMENT
3.1 Strategic management and committees.
3.1.1 Overall Board
The management of the horticultural and green gram marketing will initially be undertaken by the existing members
comprising of the chairman,, Secretary and treasurer
The Board committee will oversee the formation and operationalization of the business. The Board Chairman shall be a
revolving post of every 1 year, one of the members is appointed to chair the committee They will be responsible for the
day to day running of the operation activities. Their specific roles and responsibilities will be as follows:
Chairperson -
Secretary -
Treasurer -
3.1.2 Technical Management Team
The Business operations shall be under the Technical Management Team of five (5) sub committees. Their duties, roles
and terms of engagement are as tabulated below;
The composition of the management team and other committees will be structured or recruited factoring 30% threshold
for female staff or either gender.
3.2 ORGANIZATION STRUCTURE
CHAIRPERSON
MARK
ETING
INFOR
MATIO
N - IT
SAVIN
GS
/CRED
IT
SECRE
TARY
TREAS
URER
PROD
UCTI
ON
WELF
ARE

 Every year members at the operation core will be trained by relevant stakeholders at a convenient time that
will not affect the operation of the business.
 Organizational meetings will be held monthly (1st
Saturday) or when need arises.
 The organization shall motivate members who have shown:
o Diligence in doing their work
o Commitment to organizational goals and targets
o Innovation in the way they execute their jobs
o Faithfulness
3.3.4 Legal Requirements
The firm has adhered to all the necessary Government Legal Requirements such as
o Registration as a Self Help Group (No……………. at the Social Services office a legal community group.- Costed
Ksh.1,000
o Obtaining a trade license from the County office (TRCG No……).- Costed ksh.2,500
o Obtained a Health License from Public Health department
o The firm will operate in approved standard premises with the necessary facilities such as toilets, piped water
and electricity.
3.4. Support Services
The business will seek support services and relevant infrastructure to enable it run efficiently. The following institutions
will be involved in the day to day running of the business:
1) Bankers
 Equity Bank
2) Consultants
 Local agro vets/professionals
 Local/distant markets
3) Mentors and Key Advisors i.e.
 M.o.A
 Kenya Red Cross Society
CHAPTER 4: PRODUCTION AND OPERATION PLAN
4.1 Introduction
Ascertainment of costs is key to the day to day running of the business...The management would like to know the
cost of resources used in the business. Production materials, labor costs (wages, salaries, bonuses etc), variable costs
such as seeds, fertilizers, pesticides selling and distribution expenses and so on. The project will need to establish selling
prices for the products offered. Unless the costs involved in production is known and allocated to the specific product,
there may be a risk that set prices being too low to earn a profit
4.3.1 Products Development and Prices
To develop our products and services from idea generation to saleable products, a series of activities were undertaken:
• A market research done in Tana River County on the level of cereal value addition and marketing activities
• The project conducted a feasibility study on the business idea to start the cereal production and marketing
• The final business plan eventually became the blue print.
• After selling the idea to group members KRCS agreed to raise capital for the business
• Each member agreed to mobilize efforts and funds to invest into the business
The market research and feasibility study on the idea, writing a business plan and assembling a business team gave the
foundation of starting the cereal marketing business.
(Because no single member could afford the capital required to flag off the business).
The business idea developed after observing the way current operators were doing business. There was a gap in
production and post harvesting technology. Most premises were a health risk because of the high incidences of crop
BURA YOUTH FOR GOOD GROUP MEMBERS

pests and diseases. Also there were a lot of wastages of grains due to poor harvesting and post harvest handling. There
were no preservative technologies being used.
The purpose of starting the horticulture and green grams value addition marketing business therefore was to offer
benefit to the customer by solving a problem or fulfilling a need. Customers buy products and services for just one
reason; to satisfy a need.
Have a market that is willing to accept it. Feasible arrangements for catering to that large market as well as unique
values that differentiates it from the competition.
Mechanism for making revenue. Shows how much money can be earned from it and how the money will be earned.
4.3.2 Table 4: Annual Production Goals
4.3.3 Strategies to achieve production Goals
This shall involve communication with customers, telling them about the product and price advantages, through:
1. Mobile audio announcements, Fi eld days, Agricultural shows and Market days.
2. Purchase of quality seeds and agro inputs to ensure quality from the beginning
3. Linking with the right stakeholders for success,
4. Securing contracts and tenders to supply institutions.
5. Competitions between customers and providing discounts to bulky purchases
6. Reliable capital financing. In addition to the foregoing, the following strategies will be considered to achieve
production goals
• Cost of production- minimizing costs by reducing wastages through application of just –in –time principle
• Differentiation of products (create lasting, hard-to-imitate products)
• Product attributes- attractiveness of our products in terms of aesthetics
 Marketing mix attributes – product quality, promotion Pricing strategy and the distribution of our products
• Service delivery –customer friendly business practices that will assure return sales
• Technology – seed preservation technologies will be pursued to minimize wastages
• Innovation – introducing new ways of doing business.
• Integration: forward or backward
1. Seasonal Production costs ( July – Dec 2019 Season ) – Tomatoes
Material Unit Cost / unit
Ksh.
Total
No.
JULY
Ksh.
AUG
Ksh.
SEPT
Ksh.
OCT
Ksh.
TOTAL COSTS
Ksh
DAP Fertilizer Bag 4000 2 - 8000
CAN Fertilizer Bag 3500 3 10500
Basic seed( ASILA F1) 1 kg pkt 100000 1 100000
Land lease Acreage 5000 1 5000
Irrigation Water bill - 5000 1 5000
Land
preparation(Ploughing)
MD 4000 1 4000
Land ridging 3500 1 3500
Manual preparation of
ridges
MD 4000 1 4000
Nursery preparation MD 10000 1 10000
Transplanting costs MD 5000 1 5000
Irrigation Cycles 400 20 8000
Herbicides 1L 1800 1 1800
Top dressing labour MD 1000 1 1000
Pesticide purchase Litres 4,000 3 4000
Spraying labour Cycles 500 15 7500
Purchase of foliar feed 1Litre 1000 1 1000
Harvesting MD 200 40 8,000 8,000
Product Unit June/Sept
(2019)
Nov/Dec
(2019)
Feb/April
(2020)
June/Aug
2020
Sept/Dec
2020
TOTALS
Tomatoes Kgs
Onions Kgs
Green Grams Kgs

De-suckering MD 10000 1 10000
Purchase of harvesting
boxes No. 200 100 20000
Transport Truck 1,000 5 5,000 5,000
Total production costs 221,300
2. Production costs (July – December 2019 Season) – Onions
Ksh.
Total
No.
JULY
Ksh.
AUG
Ksh.
SEPT
Ksh.
OCT
Ksh.
TOTAL COSTS
Ksh
Basic seed(REDCOACH) 1 kg pkt 6000 1 6000
Irrigation water bill - 5000 1 5000
Land
MD 4000 1 4000
ridges
MD 4000 1 4000
Irrigation Cycles 400 20 8000
Harvesting MD 500 40 20,000 20,000
gunny bags No. 50 100 5000
3. Production costs (July – Dec 2019 Season) – Green grams.
Ksh.
Total
No.
JULY
Ksh.
AUG
Ksh.
SEPT
Ksh.
OCT
Ksh.
TOTAL COSTS
Ksh
Basic seed(KS 80) 2kg pkt 300 3 900
Land lease acreage 5000 1 5000
Land
MD 4000 1 4000
ridges
MD 4000 1 4000
Irrigation-2mths Cycles 500 4 2000
Harvesting MD 5000 1 5000 5000
gunny bags No. 50 20 1000

4.3.4 Choice of Technology
In the mean time, direct labor and utilization of the locally available materials will be used to produce the merchandise
The dried tomatoes will be a technology to carter for a specialized clientele. The technology will also preserve the meat
that will not be sold for the day. In the long run freezers will have to be purchased to preserve tomatoes left for the day.
 The technology is the best under the circumstances for the maximum utilization of material.
 Business process re –engineering will have to be applied to the business to cope with development in the
industry. Evaluation shall be done on the current production systems and move backwards to identify those
areas of technological weaknesses and improve them. Rational Instrumentalism will also be applied – improve
gradually every time.
4.4.0 Manufacturing and Operation
4.4.1 Production control procedures
 Production will be on just – in-time principle. This implies that demand will determine the allocation of
resources to production
 There will be an internal audit to monitor use of resources and also take corrective measures for any
malpractices.
 Proper books of accounts will be maintained
 The treasurers in the sub committees will be allowed to manage a small petty cash for the daily sundry
expenses
 Every asset be entered in an account in the stores ledger
 All production processes will be on Total Quality Management (TQM).Striving to achieve zero defects during
production of goods. All possibilities of defects will be eliminated
 100% of production will be done internally.
4.4.2 Environmental and Economic Impact
o The business will have no major environmental impact
o The business is well located in the the village and town. The location is at busy farms where there are several
businesses and farms working.
o Just in time principle of production will give the firm leverage over its competitors. The organization structure
will enable production flow smoothly and thus giving the firm a comparative advantage.
o The existences of the business in the community will share several economic benefits. Most important is the
job creation.13 people will be employed and thus raising their standards of living
o The firm will give sideline services to the community through transaction cost economics
o The firm will have to get certificates of good health to the shop attendants and also obtain a certificate of good
conduct from the police. Trade permits from the County Government.
CHAPTER 5: FINANCIAL PROJECTIONS AND PLANS
5.1 Introduction
The financial projection plans is the culmination of the whole business plan and it will determine the viability of the
enterprise. Three sections of the financial plan are going to be presented, Gross Margins, cash flow
Proposed Company Financing
The firm will source finance from owners’ equity and Bank loan as follows
1. Owners’ Equity……….
5.3 ENTERPRISE BUDGET
1. Tomatoes (1 ACRES)
VARIABLE COST UNIT NO UNIT PRICE TOTAL
AMOUNT(KES)
DAP Fertilizer Bag 2 4000 8000

Basic seed( ASILA F1) 1 kg pkt 1 100000 100000
Land lease Hire 1 5000 5000
Irrigation Water bill hire 1 5000 5000
Land preparation(Ploughing) Acreage 1 4000 4000
Land ridging Acreage 1 3500 3500
Manual preparation of ridges MD 1 4000 4000
Irrigation cycles 20 400 8000
Pesticide purchase Litres 3 4,000 4000
Spraying labour cycles 15 500 7500
Harvesting MD 40 200 8,000
De-suckering MD 1 10000 10000
Purchase of harvesting boxes
No.
100
300 3000
Transport Truck 5 1,000 5,000
Total production costs Unit
price
204,300
Expected yield from 1 acre 20,000kgs KES 50 GROSS
PROFIT
1000,000
Gross Margin 795,700
2. Onions (1 ACRES)
VARIABLE COST UNIT NO UNIT PRICE TOTAL
AMOUNT(KES)
Basic seed(REDCOACH) 1 kg pkt 1 6000 6000
Irrigation water bill cycles 1 5000 5000
Land preparation (Ploughing) MD 1 4000 4000
Land ridging MD 1 3500 3500
Irrigation cycles 20 400 8000
Top dressing labor MD 1 1000 1000
Spraying labor cycles 15 500 7500
Harvesting MD 40 500 20,000
Purchase of harvesting gunny bags
No. 100 50 5000
price
133,500
Expected yield from 1 acre 15000kgs KES 50 Gross profit 750,000
Gross Margin 616,500

8. Green grams :- (1 ACRE)
VARIABLE COST UNIT NO. UNIT PRICE TOTAL
AMOUNT(KES)
Basic seed(KS 80) 2kg pkt 3 300 900
Land lease acreage 1 5000 5000
Land preparation(Ploughing) MD 1 4000 4000
Land ridging MD 1 3500 3500
Irrigation-2mths cycles 4 500 2000
Spraying labour cycles 15 500 7500
Harvesting MD 1 5000 5000
Purchase of harvesting gunny bags
No. 20 50 1000
price
68,900
Expected yield per acre 720kgs 150 Gross profit 108,000
Gross margin 39,100
5.5: Cash Flow Statement
The cash flow of the company will show physical shillings moving in and out of the business. Since this is a new business
and does not have historical documents such as Profit and loss Account and Balance Sheet, some projections of a cash
flow statement broken into 12 months is given.
BURA YOUTH FOR GOOD GROUP HORTICULTURAL AND GREEN GRAM PROJECT
STATEMENT OF CASH FLOWS FOR THE YEAR ENDING 31 DECEMBER 2018
ITEM JAN FEB MAR APRIL MAY JUNE JULY AUG SEP OCT NOV DEC
Balance
carried down 80,000 86,400 92,400 98,800 105,200 150,350 124,650 83,950 51,750 370,050 323,450 264,550
Cash Revenue 6,400 6,400 6,400 6,400 106,400 12,800 12,800 12,800 12,800 6,400 6,400 6,400
Sales from
by-products
Product Sales 315,000
Service Sales
Total Cash
Revenue
6,400 6,400 6,400 6,400 106,400 12,800 12,800 12,800 327,800 6,400 6,400 6,400
Cash
Disbursement

Cash Payment
to Trade
Suppliers
61,250 29,000 42,350 35,500 43,500 55,800 28,000
Management
drawings
Salaries and
Wages
Promotion
Expenses Paid
Professional
Expenses Paid
Rent/Mortgag
e
9,500 9,500 9,500 9,500 9,500 9,500 9,500
Insurance
Utilities
Total Cash
Disbursement
s
61,250 38,500 53,500 45,000 9,500 53,000 65,300 37,500
Opening Cash
Balance
80,000 86,400 92,400 98,800 105,200 150,350 124,650 83,950 51,750 370,050 323,450 264,550
Add:. Total
cash
Revenues
86,400 92,800 98,800 105,200 211,600 163,150 137,450 96,750 379,550 376,450 329,850 270,950
Less:.Total
cash
Disbursement
s
86,400 92,400 98,800 105,200 150,350 124,650 83,950 51,750 370.050 323,450 264,550 233,450
Closing cash
Balance
86,400 92,400 98,800 105,200 150,350 124,650 83,950 51,750 370,050 323,450 264,550 233,450
N/B: The above cash flow statement is an assumption
The closing cash balance is carried over to the next month
6.0 Assumptions:
 RCSK will issue the group with a grant in the specified time of KES ………
 Members will contribute KES……..per month to boost the grant.
 Weather conditions will be favourable to achieve the production targets
 The group will secure tenders to supply produce to at least government facilities and parastatals
6.1 Risk Analysis
6.1.1 Socio-political
The effects of making investments in an unstable socio-political environment are some of the major concerns of the
business. However, the project will aim to integrate all the consumers of horticultural and green gram products in the
county.
6.1.2 Environmental Concerns
The project will ensure compliance of National Environmental and safety standards. Monitoring & Evaluation reports will
factor all appropriate areas of environmental concerns, and the effects of climate change such as drought and excessive
flooding. The business will assist in mitigation measures such as utilization of irrigation farming and promote sales of
crop residues to livestock farmers during extended droughts.
6.1.3 Global Warming
World over agricultural economic performance and inflation have been adversely linked to unprecedented challenges of
global warming and over reliance on non renewable sources of energy, the project will meet the challenges by
introducing recycling of waste products.

6.1.4 Anticipated Non monetary Outcomes
The business anticipates meeting both monetary and non monetary outcomes largely arising from its pursued policies,
goals and objectives of the project.
Individuals:
 Improved incomes will impact on the level of access to education, the young farmers are likely to benefit from
the three value chains.
 Use of environmental friendly production materials that reduce water and soil pollution sources like use of
compost, manures and approved products to control pests .
Community Level
 Enhancement of social cohesion resulting in social economic and political development.
 Increased employment and business opportunities leading to declining of dependence ratio.
 Improved community participation in the local micro economics
 Serve as a model farm for the local community
County Level
 Spur socio-economic development of the county by providing opportunities for investment.
 It contributes to socio-political cohesion.
 It will assist in mobilization of resources within the county.

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