BUSINESS PLAN

BUSINESS NAME: JANE’S CONFECTIONERY SHOP

NAME: ATIENO JANE

INDEX NUMBER: 5031111534

COURSE CODE: 1819/2

PAPER CODE: 205

CENTRE NAME: THE KITALE NATIONAL POLYTECHNIC

SUPERVISOR: MADAM IRENE

PRESENTED TO: THE KENYA NATIONAL EXAMINATION

COUNCIL IN PARTIAL FULFILLMENT FOR THE AWARD OF

CRAFT CERTIFICATE IN CATERING AND ACCOMODATION

MANAGEMENT

SERIES: NOVEMBER, 2024

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DECLARATION

I Atieno Jane confirm that this business plan is my original work and has not been presented
in any institution for certification. The business plan has been complemented by referenced
duly acknowledged.

NAME: Atieno Jane…………………..

SIGNATURE:………………………….

DATE:……………………………………..

DECLARATION BY THE SUPERVISOR

I confirm that this work was done by the named candidate under my guidance and was
approved by the academic board of this institution.

Name: ………………………………………..

Signature …………………………………

Date ………………………………………..

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DEDICATION

I dedicate this business plan to my beloved parents, brothers, sisters and all my in-laws for
their moral support and advice which has made the preparation of the piece of this work
possible and complete.

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ACKNOWLEDGEMENT

I express my most heartful appreciation for the part played by the following individuals to
make this piece of work successful.

Special thanks to my dearest father for his punctual payment of fees during my course.

Supervisor for her tireless effort through guidance, advice and assistance during business
writing by pointing out and correcting mistakes in my book. Special thanks to my supervisor.

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Table of Contents
DECLARATION..............................................................................................................................................ii
DEDICATION................................................................................................................................................iii
ACKNOWLEDGEMENT.................................................................................................................................iv
EXECUTIVE SUMMARY..............................................................................................................................viii
BUSINESS DESCRIPTION............................................................................................................................viii
MARKETING PLAN.....................................................................................................................................viii
ORGANIZATIONAL AND MANAGEMENT PLAN............................................................................................ix
OPERATIONAL PLAN/ PRODUCTION PLAN..................................................................................................ix
FINANCIALPLAN..........................................................................................................................................ix
CHAPTER ONE..............................................................................................................................................1
BUSINESS DESCRIPTION...............................................................................................................................1
BUSINESS NAME..........................................................................................................................................1
BUSINESS LOCATION AND ADDRESS............................................................................................................1
FORM OF OWNERSHIP................................................................................................................................2
TYPE OF BUSINESS.......................................................................................................................................2
PRODUCTS AND SERVICES...........................................................................................................................2
JUSTIFICATION OF OPPORTUNITY...............................................................................................................2
BUSINESS GOALS AND OBJECTIVES.........................................................................................................3
MISSION..................................................................................................................................................3
VISSION....................................................................................................................................................3
ENTRY AND GROWTH STRATEGY.............................................................................................................3
MARKET PENETRATION...........................................................................................................................3
CHAPTER TWO.............................................................................................................................................4
2.0 MARKETING PLAN..................................................................................................................................4
2.1 Potential Customers..........................................................................................................................5
2.2 Competitors.......................................................................................................................................5
2.2.1 Competitive analysis table..............................................................................................................5
2.3 MARKET SHARE......................................................................................................................................6
2.4 PROMOTION AND ADVERTISEMENT......................................................................................................6
2.4.1 ADVERTISEMENT............................................................................................................................6
2.4.2 PROMOTIONS.................................................................................................................................7
2.5 PRICING STRATEGY............................................................................................................................7

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 2.6 SALES TARGET....................................................................................................................................7
2.6.1 SALES TACTICS............................................................................................................................8
2.7 DISTRIBUTION STRATEGY..................................................................................................................8
CHAPTER THREE..........................................................................................................................................9
3.0 ORGANIZATION AND MANAGEMENT PLAN..........................................................................................9
3.1 ORGANIZATION AND MANAGEMENT PLAN.......................................................................................9
3.2 ORGANIZATIONAL STRUCTURE..........................................................................................................9
3.3 MANAGEMENT TEAM......................................................................................................................10
3.3.1 GENERAL MANAGER (JANE OWNER)........................................................................................10
3.3.2 ICT MANAGER...........................................................................................................................10
3.3.3 PROGRAMMER.........................................................................................................................11
3.3.4 web designer............................................................................................................................11
3.4 Other business personnel............................................................................................................11
3.4.1 Bakers.......................................................................................................................................12
3.4.2 Sales and customer service staff...............................................................................................12
3.5 RECRUITMENT, TRAINING AND PROMOTION..................................................................................12
3.5.1 Recruitment..............................................................................................................................12
3.5.2 TRAINING......................................................................................................................................12
3.5.3 PROMOTION.............................................................................................................................13
3.6 REMUNERATION AND INCENTIVES..................................................................................................13
3.6.1 Remuneration...........................................................................................................................13
3.6.2 Incentives..................................................................................................................................13
3.7 LICENSE AND LEGAL REQUIREMENTS..............................................................................................13
3.7.1 LICENSES...................................................................................................................................13
3.8 SUPPORT LICENSE............................................................................................................................14
CHAPTER FOUR..........................................................................................................................................14
4.0 OPERATONAL PLAN/PRODUCTION PLANS...........................................................................................14
4.1 Production facilities and capacities..................................................................................................15
Bakery area........................................................................................................................................15
Storage area......................................................................................................................................15
Customer service...............................................................................................................................15
Custom cake production area............................................................................................................15
4.2 PRODUCTOIN AND OPERATIONAL STRATEGY..................................................................................15
Just-in-time production.....................................................................................................................15

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 Custom orders...................................................................................................................................15
Sourcing high-quality ingredients......................................................................................................16
Inventory management.....................................................................................................................16
Staff scheduling.................................................................................................................................16
4.3 PRODUCTION PROCESS....................................................................................................................16
4.4 REGULATION AFFECTING OPERATION.............................................................................................18
Health and safety regulations................................................................................................................18
Food handling certifications..................................................................................................................19
Fire and safety code..............................................................................................................................19
Labor laws..............................................................................................................................................19
Licensing requirements.........................................................................................................................19
Environmental regulations....................................................................................................................19
CHAPTER FIVE............................................................................................................................................20
5.0 FINANCIAL PLAN..................................................................................................................................20
5.1 PRE-OPERATION COSTS.......................................................................................................................20
5.2 WORKING CAPITAL..............................................................................................................................20
LIABILITIES.................................................................................................................................................21
5.3 PROJECTED CASHFLOW STATEMENT...................................................................................................21
5.4 PRO FORMA INCOME STATEMENT......................................................................................................25
5.5 PROFORMA BALANCE SHEET...............................................................................................................26
5.6 BREAK EVEN ANALYSIS........................................................................................................................27

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EXECUTIVE SUMMARY

BUSINESS DESCRIPTION

The proposed business will be operated under the name Jane’s confectioner shop. The
business wil be a sole proprietorship. It will be located in Kisumu County. The proposed
business is to be registered under the name Jane’s confectioner shop. This name originates
from the name of the entrepreneur. The business which is to be started on 1st Jan 2025 intend
to solve the problem of unemployment and to provide freshly baked artisanal cakes and
bread. The proposed business will be dealing with making bread, custom cakes, and pastries
and small baked goods.

MARKETING PLAN

After carrying out market research, the owner who is the manager indetifies the following
customers families and individuals, event planners and corporate clients. The firm also have
competitors like chain Bakeries, local independent bakeries and supermarket bakeries. The

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business will try to get as many customers as possible by capitalizing on such factors as price
and quality appearance timing.

ORGANIZATIONAL AND MANAGEMENT PLAN

The business will have organization and management plan simple and drawn to the lines of
its profession and administration aspects. The customers will have owner managers as she
intends to employ other employees will be operators accountant sales responsible for
strategies decision-making, overseeing day to day operations and ensuring customers
satisfaction while the general workforce will support the bakery’s goals through various
functions like baking, customer service and IT support.

OPERATIONAL PLAN/ PRODUCTION PLAN

The operational plan for Jane’s confectionery shop outlines how the bakery will produce and
deliver high-quality products efficiently while maintaining a smooth day to day operation.
The plan focuses on ensuring a streamlined finished goods with a clear strategy for meeting
customer demand.

FINANCIALPLAN

The financial plan for Jane’s confectionery shop outlines the anticipated financial
performance of the bakery including start-up costs, working capital needs, projected cash
flow, income statements, balance sheet and break-even, analysis. The approximate amount
required to start the business is Kshs 350,000. This will be raised inform of loan from Kenya
Commercial Bank Kahs 200,000 and Ksh 150,000 from owner savings.

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CHAPTER ONE

BUSINESS DESCRIPTION

Jane’s confectioner shop is a retail bakery dedicated to producing and selling high-quality
bread cakes and pastries. With a focus on freshness and artisanal methods, the shop aims to
create a welcoming environment where customers can enjoy a range of baked goods that
cater to both everyday cravings and special occasion. The bakery will emphasize local
sourcing of ingredients ensuring the highest quality products while supporting local farmers
and suppliers.

BUSINESS NAME

The business will operate under the name Jane’s confectioner shop, which reflects the
personal touch and commitment to quality that defines the brand. The name conveys a sense
of warmth and familiarity, inviting customers to experience the delightful offerings of the
bakery.

BUSINESS LOCATION AND ADDRESS

Jane’s confectioner shop will be located in Maseno Kisumu County near total petrol station.
The address will be as follows.

P.O. BOX 296

MASENO

TEL NO: 0713475622

EMAIL ADDRESS: atienojane944@gmail.com

This business will be strategically situated in a busy commercial are with foot traffic, making
it easily accessible to local residents and businesses. The location benefits from proximity to
schools, officers and shopping centers maximizing potential customers engagement.

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FORM OF OWNERSHIP

The bakery will generate as a sole proprietorship, owned and managed by Jane {Last name}.
this structure allows for greater control over business operations and decision making while
simplifying tax obligations. Then sole proprietorship will enable Jane to build personal
relationships with customers and maintain the quality and integrity of her products.

TYPE OF BUSINESS

Jane’s confectioner shop is a retail bakery, focusing on the production and sale of baked
goods directly to consumers. The business will serve a diverse clientele, including families,
local businesses and event planners by offering a variety of products suitable for everyday
enjoyment and special celebrations.

PRODUCTS AND SERVICES

The bakery will offer a range of products including

Bread – various types of artisanal bread including sourdough. Whole grain and specialty
loves.

Cakes – customized cakes for birthdays, customized cakes for birthday, weddings and other
celebrations as well as ready to sell cakes for everyday occasions

Parties – a selection of pastries including croissants, Danishes and cookies.

Specialty services – seasonal and holiday – the meal baked goods.

Catering services – system orders for events, including parties corporate gatherings and
weddings.

JUSTIFICATION OF OPPORTUNITY

The demand for high quality artisanal baked goods is on the rise, driven by consumers
increasing preference for fresh, locally sourced products. Additionally, the trend towards
personalized and unique experiences presents an opportunity for Jane’s confectioner shop to
stand out in the market. By providing a welcoming atmosphere and exceptional products, the
bakery aims to attract a loyal customers base.

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BUSINESS GOALS AND OBJECTIVES
Jane’s confectioner shop has set various goals and objectives to ensure sustainable growth
and customers satisfaction.

Goal 1 – establish a successful and profitable bakery within the first year of operation.

Objective – achieve monthly sales of 20,000 by the end of first year.

Goal – 2 build a loyal customer base and community presence

Objective – reach a costume retention rate of 70% by offering exceptional services and
quality products.

Goal 3 – expand product offerings and increase market reach within three years.

Objective – introduce a line of gluten-free and vegan baked goods by the end of year 2.

MISSION.
The mission of Jane’s confectioner shop is to create delightful baked goods that bring jot to
our customers while fostering a community focused environment. We strive to priotize
quality, creativity and sustainability in every product we offer.

VISSION
The vision of Jane’s confectioner shop is to be recognized as the go to destination for our
expectational quality, personalized service and commitment to the community.

ENTRY AND GROWTH STRATEGY.

To successfully enter the market and achieve growth, Jane’s confectioner shop will
implement the following strategies.

MARKET PENETRATION.
Initially, focus on establishing a strong local presence through community engagement,
special promotions and collaborations with local business to drive traffic to the bakery to the
bakery.

Product diversification.

Gradually expand the product range based on customer feedback and market trends,
introducing

Online presence

Develop a user friendly website with online ordering capabilities to cater for busy customers
and promote a special events, classes and seasonal offerings.

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Customer loyalty programs.

Implement a reward program to encourage repeat purchases and build customer loyalty,
enhancing the overall shopping experience.

Catering and event services

Position the bakery as a preferred vendor for local events by offering catering

CHAPTER TWO

2.0 MARKETING PLAN

The market plan for Jane’s Confectionery Shop focuses on capturing a strong share of the
local bakery market through high-quality products, excellent customers service, and strategic
advertising and promotions. Our goal is to establish a loyal customer base while expanding

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through event catering and online scales. The chapter outlines our market approach, target
customers, competitors, pricing, sales tactics and distribution strategy.

2.1 Potential Customers

Jane’s Confectionery Shop will target abroad range of customers including.

2.1.1 families and individuals: looking for fresh, daily bread, cakes and pastries these
customers value high quality products and convince.

2.1.2 event planners: needing customers cakes and desserts for weddings, birthdays and
corporate events. These clients require precision and corporate events. These clients require
precision and customization for their special occasions.

2.1.3 health – conscious consumer: seeking gluten – free, vegan or low sugar options. There
is growing demand for dietary. Specific baked goods in the market.

2.2 Competitors
The bakery industry is competitive, with both large chain and small local players vying for
market share. Our direct competitors include;

Chain bakeries – These bakeries have a standardized product however, they often the
personal touch and customization options that customers value for special occasions.

Local independent bakeries: these competitors typically emphasize handmade, artisanal

products similar to our own but lack the range of customization and online presence we will
offer.

2.2.1 Competitive analysis table

competitor Strengths weaknesses Opportunity Jane’s
Confectionery Shop
Large chain bakeries Low prices Lack of personalized Focus on high
Multiple locations service quality, artisanal and
Strong brands Generic offerings custom products.
Local independent High quality artisanal Limited marketing Better marketing and
bakeries products. reach, smaller online presence
product range
Supermarkets in Conveniences Limited products, Emphasize freshness
store bakeries Low price freshness, less and specially
variety. offerings.

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2.3 MARKET SHARE

Jane’s Confectionery Shop aims to capture 5-10% of the local bakery market within its first
year of operation. By offering unique blend of high quality products abd personalized
services, the bakery will attract customers seeking both everyday treats and customized goods
for special occasions. We expect to grow our market share by 15% by year three, with the
introduction of new products and catering services, alongside an expanded customer base
through online and corporate sales.

Market share

The bread busket Jane’s Confectionery Shop

cakes and bakes company pastry perfection
local independent bakeries

2.4 PROMOTION AND ADVERTISEMENT

Promotion and advertisement are critical for driving brand awareness and attracting
customers. Jane’s confectionery shop will focus on both traditional and digital marketing
strategies to maximize reach within the local community and beyond.

2.4.1 ADVERTISEMENT
Social media: we will invest in targeted advertisement on platforms like Instagram, Facebook
and Pinterest to reach local consumers searching for best cakes or artisanal bread in the area
find our business easily.

Local print media: Advertisement in local newspapers, magazines and community bulletins
will generate awareness among residents and businesses.

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2.4.2 PROMOTIONS
Grand opening event. A lunch event with free samples, discounts on first purchases and store
activities will generate initial buzz and attract walk in traffic.

Loyalty program. Introducing the bread and cake club, where customer earns points for every
purchase, which can be redeemed for free products or discounts. This will help faster repeat
business.

Seasonal promotions. Special promotions during holidays and events e.g. valentine’s day,
Christmas will entice customers to purchase partnership with local business. Collaborating
with coffee shops, restaurants and event planners will help extend our reach and encourage
cross production.

2.5 PRICING STRATEGY

Jane’s confectionery shop will adopt a competitive pricing strategy that reflects the quality of
our products while remaining accessible to a wide range of customers.

2.5.1 Bread: prices will range from 50 to 200 shillings depend on type (sourdough and
wholegrain) allowing us to carter to both budget conscious customers and those who to pay
for artisanal quality.

2.5.2 Custom cakes: custom cakes will start at 800 shillings for simple design complexity,
ingredients and size.

2.5.3 Pastries and small baked goods: these will be affordable priced between 20 – 100
shillings, encouraging impulse purchases and repeat business

2.5.4 Bulk discounts: we will offer discounts for bulk order especially for corporate clients
and event planners who order in large quantities.

2.6 SALES TARGET

Year one: The sales target for year one is Ksh .the expectations to break even by the end of
year two. The target is based on the assumption that we will gene consistent daily sales of
bread and cakes along with custom orders for event.

Year two: By year two, the goal is to increase sales 25% largely driven by the introduction of
new products gluten – free, vegan options and the growth of the event catering business.

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Year three: In year three, the sales target will increase by 15-20% as the business expands
into new customer segments and geographic areas.

2.6.1 SALES TACTICS

2.6.2 personalized consultations: for custom cake orders and event catering, we will offer
consultations and tasting to ensure the clients vision is met.

2.6.3 Upselling: staff will be trained to recommend additional items e.g. pairing bread with
pastries or offering a discount on a second item to increase average order value.

2.6.4 Online sales: Implementing an easy to use online ordering or delivery, increasing sales
and customer convenience.

2.7 DISTRIBUTION STRATEGY

In store sales – The primary distribution channel will be ouy brick and mortar bakery, where
customers can walk in purchase and place orders for custom products.

Online orders - -Through our website customers will be able to place orders for pick up or
delivery. This will be particularly useful for custom cakes and large orders for events.

Local delivery service we will partner with a local delivery service or use in house delivery
for orders within a specific radius, ensuring that customers can enjoy our fresh products from
the comfort of their homes or offices.

Event catering – Direct distribution to corporate clients and event venues will be an important
aspect of our strategy, ensuring that cakes and pastries are delivered fresh and on time.

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CHAPTER THREE

3.0 ORGANIZATION AND MANAGEMENT PLAN

3.1 ORGANIZATION AND MANAGEMENT PLAN

Janes’ confectionery shop will adopt an efficient organizational structure with clearly defined
rules and responsibilities to ensure smooth operations and sustainable growth. The
management team will be responsible for strategic decision-making. Overseeing day-to-day
operations and ensuring outcomes satisfaction while the general workspace will support the
bakery’s goals through various functions like baking, customer service and support.

3.2 ORGANIZATIONAL STRUCTURE

The organization will be divided into two key departments

1. Operations department: Focus on production, sales and customer service.

2. Information and Technology (IT) and Marketing department: Responsible for maintaining
the shops online presence, handling technical operations and managing marketing efforts.

The hierarchical structure will be as follows;

GENERAL MANAGER

IT MANAGER

PROGRAMMER

WEB DESIGNER

BAKERS

SALES & CUSTOMER SERVICE STAFF

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3.3 MANAGEMENT TEAM
The management team will consist of experienced individuals responsible for overseeing
both operational and ICT infrastructure aspects of the business.

3.3.1 GENERAL MANAGER (JANE OWNER)

The general manager will be responsible for overall business operations, financial
management and strategic growth.

Key duties include;

 Overseeing day-to-day operations

 Managing relationships with suppliers event planners and key
customers
 Ensuring the financial health of the bakery making strategic position
regarding product lines and business expansion.

Qualifications

Experienced in bakery management or food business financial acumen and strong leadership
skills

3.3.2 ICT MANAGER

The ICT manager will be responsible for managing the bakerys’ online infrastructure,
overseeing the development and maintenance of the website and ensuring efficient use of
technology with the business.

Key Responsibilities

Managing the websites and online ordering system

Coordinating with the web designer and programmer to ensure smooth user experience

Implementing and maintaining point of sale systems and other tech tools for efficient
business operations.

Qualifications: strong background in ICT management knowledge of e-commerce platforms

and experience in overseeing tech related projects.

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3.3.3 PROGRAMMER
The programmer will work under the ICT manager and be responsible for creating and
maintaining the software that supports the bakery’s operations. This include; ensuring smooth
integration between the websites, online ordering system and point of sale system.

Key Responsibilities

 Developing and maintaining custom software solutions to streamline bakery operations

 Troubleshooting technical issues related to the bakery’s ICT systems.
 Ensuring that the bakery’s website is user friendly and functional.

Qualifications

 Expertise in programming languages

 Expertise in e-commerce or retail tech development and problem solving skills

3.3.4 web designer

The web designer will be responsible for the designing layout and visual aspects of the
bakery’s website. They will work closely with the ICT manager and programmer to create an
appealing, functional online presence.

Key Responsibilities

 Designing the websites to reflect Jane’s confectionery shop’s identity

 Ensuring the site is mobile-friendly and visually appealing
 Updating the website with new content, products and promotions regularly

Qualifications

 Expertise in web design

 Strong portfolio of creative work
 Experience with e-commerce platforms.

3.4 Other business personnel

In addition to the management team, Jane’s confectionery shop will employ a team of bakers,
customer’s service staff and sales personnel to ensure the efficient production and sales of its
products.

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3.4.1 Bakers
Responsible for producing fresh bread, cakes and pastries daily. They will also handle custom
cake orders and collaborate with the G.M on new recipes and products.

3.4.2 Sales and customer service staff

These employees will assist customers in stores, process sales and handle special orders.
They will also be responsible for maintaining cleanliness and ensuring an enjoyable customer
experience.

3.5 RECRUITMENT, TRAINING AND PROMOTION

The bakery will have a structured recruitment; training and promotion plan to ensure that
employees are motivated, skilled and aligned with the business goals.

3.5.1 Recruitment
The recruitment process will focus on attracting skilled individuals who are passionate about
the bakery industry.

 Recruitment channel
 Job posting on local and national job boards
 Partnerships with culinary schools to find talented bakers and pastry chefs.
 Referral from current employees
 Candidates will be selected based on their experience, creativity and enthusiasm for
customer service

3.5.2 TRAINING
New employees will undergo comprehensive training to familiarize theselves with the
bakerys’ products customers’ service expectations and operational procedures.

Baking staff- will receive hands-on training to master Jane’s confectionery shops baking
techniques, product line and quality standards.

Customer service and sales staff

Will be trained in product knowledge, point of sale system operation and customer interaction
to ensure smooth shopping experience for every customer.

Ongoing training will be provided to keep employees up to date with new products and
technologies.

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3.5.3 PROMOTION
Promotion within the business will be based on performance, commitment and leadership
potential.

Opportunities for promotion will include moving from entry-level roles e.g customer service
to supervisory positions e.g store manager.

3.6 REMUNERATION AND INCENTIVES

To attract and retain top talent, Jane’s confectionery shop will offer competitive remuneration
and incentives to employees.

3.6.1 Remuneration
The bakery will offer competitive wages based on industry standards and employee
experience levels

Bakers- Competitive hourly wages plus overtime pay for a large order.

Customer service/sales staff- hourly wages plus performance based bonuses for meeting
sales targets.

Management team- salaries commensurate with experience, including potential profit

sharing based on the business financial performance.

3.6.2 Incentives
Incentives will be offered to motivate employees and reward outstanding performance.

Sales bonuses-employees who meet or exceed sales target will receive bonuses.

Employee of the month program- employees demonstrating exceptional work will be

recognized and rewarded with cash prizes or additional time off.

Professional development- support for continued learning through workshops or culinary

classes will be offered to bakers to refine their skills and grow with the business.

3.7 LICENSE AND LEGAL REQUIREMENTS

Operating Jane’s confectionery shop will require obtaining various licenses and complying
with legal requirements to ensure the business functions smoothly and within the law.

3.7.1 LICENSES
The followings will be required;

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 1. Business license- To legally operate the bakery in the location
2. Food safety license- Ensuring that the bakery meets all food hygiene and safety
standards.
3. Health inspection certification- Regular health inspections must be passed to maintain
this certification
4. Signage permit-To legally display the bakery’s signage in the location.

3.8 SUPPORT LICENSE

Additional license may be required depending on the services offered such as;

Music license- If background music is played in the bakery, a music license from a
performance rights

Organization maybe needed

Event permit- For hosting events or workshops within the bakery, certain permits maybe
needed by the local government.

CHAPTER FOUR

4.0 OPERATONAL PLAN/PRODUCTION PLANS

The operational plan for Janes’ confectionery shop outlines how the bakery will produce and
delivers high quality products efficiently while maintaining a smooth day-to-day operation.
The plan focuses on ensuring a streamlined production process from sourcing ingredients to
delivering finished goods with a clear strategy for meeting customer demand. This chapter
covers the bakerys’ production facilities, operational strategies and the regulations that affects
the business operations.

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4.1 Production facilities and capacities
Jane’s confectionery shop will operate out of a single location in with dedicated areas for
baking, storage and customer service. The layout will be designed to optimize the flow of
goods and staff efficiency.

Bakery area
Equipped with commercial ovens, mixers, proofing cabinets and specialized equipment for
cake decoration, the bakery will have the capacity to produce large numbers of loaves of
bread and cakes per day. This capacity will allow the bakery to meet both daily retail demand
and special orders.

Storage area
A climate controlled storage area will house raw materials including flour, sugar and other
baking ingredients. A dedicated cold storage section will be used for perishable like butter,
milk, eggs and cream.

Customer service
A retail counter and display cases will showcase freshly baked products. This area will be
designed to create an inviting atmosphere for customers with space for order placement and
customer consultations.

Custom cake production area

A specific area will be allocated for decorating and assembling custom cakes allowing for the
precision needed for detailed cake designs.

4.2 PRODUCTOIN AND OPERATIONAL STRATEGY

The bakery’s production strategy will focus on maintaining the highest standards of quality
while ensuring efficient operations. This will involve sourcing premium ingredients, using
skilled bakers and implementing effective operational procedures.

Just-in-time production
To ensure freshness, bread and other daily products will be baked in batches throughout the
day. This strategy will help reduce waste while ensuring that customers receive the freshest
product possible.

Custom orders
For custom cakes and event orders production schedules will be aligned with customer
deadlines.

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The production team will collaborate closely with the sales team to ensure that each order is
completed on time and to the clients’ specifications.

Sourcing high-quality ingredients

The bakery will priotize locally sourced and organic ingredients where possible. This not
only aligns with customer preferences for quality but also supports local farmers and
suppliers.

Inventory management
A digital inventory system will be used to track ingredients usage, monitor stock level and
place timely orders with suppliers. This will ensure that the bakery operates efficiently
without running out of key ingredients.

Staff scheduling
Employees will be scheduled based on demand forecasts. Peak baking times will be early in
the morning and late in the afternoon to accommodate both morning and evening rushes.
Additional staffs will be brought in during holidays and for large orders.

4.3 PRODUCTION PROCESS

The production process at Jane’s confectionery shop for bread cakes and other baked goods
will follow a systematic approach to ensure consistency, quality and efficiency. Below is a
breakdown of the typical production process;

1 ingredients sourcing and preparation

Sourcing-Ingredients such as flour, sugar, eggs, butter and flavouring are sourced from local
suppliers to ensure the freshness and quality.

Preparation-Upon arrival, ingredients are inspected for quality and freshness, then stored in
temperature controlled environments. Ingredients are weighed and measured according to the
specific recipes for each product.

2 Mixing and kneading

Bread-For bread, ingredients are mixed in industrial mixers and kneaded to develop the
gluten, giving bread its texture and structure.

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Cakes-For cakes, dry and wet ingredients are mixed separately before being combined in the
correct proportions, ensuring a smooth batter.

Pasteries and small baked goods- Ingredients for pastries are mixed to create dough, which is
then rested and folded multiple times to create flaky layers.

3 Fermentation and refining (For Bread)

After kneading dough for bread is left to ferment for a specified period. This allows the yeast
to activate, causing the dough to rise and develop flavor.

After the initial rise, the dough is punched down and shaped before a second proofing.

4 Shaping and molding

Bread- Dough is shaped into loaves or rolls depending on the product. Special tools and
molds are used for consistency.

Cakes- Cake batter is poured into pans of various shapes and sizes based on the customers’
orders. For multi-tiered cakes, multiple pans are used.

Pastries- Dough for pastries is rolled and shaped using cutters or by hands depending on the
design.

5 Baking

Bread- The shaped bread dough is placed in industrial ovens and baked at controlled
temperature for a specific time ensuring a perfect crust and soft interior.

Cake-Cakes are baked at lower temperature to avoid overbrowning and ensure even cooking
throughout.

Pastries and small baked goods- Pastries and cookies are baked at higher temperatures for a
shorter time to achieve a crispy, flaky texture.

6 Cooling and finishing

Once baking is complete all products are transferred to cooling racks to reach room
temperature.

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Cakes- After cooling, cakes are decorated with frosting, fondant and other embellishments
according to customers specifications.

Pastries and small baked goods- These are often dusted with powdered sugar, glazed or filled
with creams after cooling.

7 Packaging and storage

Bread- Once cooled, bread is packaged in environment friendly packaging for sale or
delivery.

Cakes- Custom cakes are carefully boxed to prevent damage during transportation.

Pastries and small baked goods- These are placed in display cases for immediate sale or
packaged for the take away orders.

8 Quality control

Throughout the production process, the bakery staff ensures that each item meets the highest
standards of quality.

Regular checks are performed for consistency in taste texture and appearance.

9 Distributions

Finished products are either displayed in store for walk in customers or prepared for delivery
to event venues, corporates clients or individuals.

4.4 REGULATION AFFECTING OPERATION

Several regulations will influence the bakery’s preparations, particularly in areas of health,
safety and food production.

Health and safety regulations

As a food business, Jone’s confectionery shop will adhere to all local health and safety
regulations. This includes; maintaining a clean and sanitary production environment proper
food storage and handling procedures. Regular health inspections by the local health
department will ensure compliance with these regulations.

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Food handling certifications
All employees involved in food production will be required to have food handling
certifications. This will ensure that staff members understand the proper procedures for
handling raw materials, preventing contamination and maintaining food safety standards.

Fire and safety code

The bakery will adhere to local fire and regulations including having the necessary fire
extinguishers and first aid kits on site and ensuring that all employees are trained in
emergency response procedures

Labor laws
The bakery will comply with all local labor laws, including minimum wage requirements,
overtime regulations and providing a safe working environment for all staff members.

Licensing requirements
The bakery will maintain up to date business licenses health department certifications and
any other permit required by the local government. Regular renewals of these licenses will be
part of the business operational calendar.

Environmental regulations
The bakery will seek to minimize its environmental impact by reducing waste, recycling and
using energy, efficient equipment. Local environmental regulations regarding waste disposal,
water usage and emissions will be strictly followed.

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CHAPTER FIVE

5.0 FINANCIAL PLAN

The financial plan for Jane’s confectionery shop outlines the anticipated financial
performance of the bakery including start up costs, working capital needs, projected cash
flow, income statements, balance sheet and break even analysis. This comprehensive
financial strategy will help ensure the business profitability and sustainability.

5.1 PRE-OPERATION COSTS

Before opening Jane’s confectionery shop, various pre-operational costs must be incurred.
This includes cost of securing permits, purchasing equipment and initial inventory.

Description Costs (ksh)

License permit 2700
Equipment purchase 29000
Rent 5000
Marketing and advertising 1500
Electricity installation 1700
Insurance 4000
Salaries 47500
Furniture and fitting 14000
Stationary 1200
Bank charges 1000
Miscellaneous 2500
Total pre-operation costs 110100

5.2 WORKING CAPITAL

Working capital is essential for covering ongoing operational costs after the bakery opens.

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ASSETS
Items Amount (kshs)
Cash at hand 40000
Cash at bank 60000
Debtors 6000
Totals 106000

LIABILITIES
Item Amount (kshs)
Bank overdraft 15000
Creditors 10000
Bank loan 10000
Totals 35000

Working capital = current assets – current liabilities

106,000-35,000

=71,000

5.3 PROJECTED CASHFLOW STATEMENT

The projected cash flow statement outlines expected cash inflows and out flows over the first
year of operations.

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DESCRIPTION JAN FEB MAR APR MAY JUNE JULY AUG SEP OCT NOV DEC

CASHSALE 320000 300000 310000 310000 30000 310000 350000 300000 300000 305000 310000 300000

DEBTORS 650 750 450 350 250 150 800 450 150 250 450 350

TOTAL 320650 300750 310450 310350 300250 310150 315800 300450 3000150 305250 310450 300350

CASH OUTFLOW - - - - - - - - - - - -

LICENCES 11000 - - 11000 - - - 11000 - - - 11000

PURCHASE 6000 60000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000

SALARIES 206100 206100 206100 206100 206100 206100 206100 206100 206100 206100 206100 206100

RENT 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000

ELECTRICITY 2700 2400 2500 2300 2500 2800 30000 2450 2500 2700 2650 2500

ADVERTISEMENT - - - 10000 - - - 10000 - - - 20000

LOAN REPAYMENT 3333.3 3333.3 3333.3 3333.3 3333.3 3333.3 3333.3 3333.3 3333.3 3333.3 3333.3 3333.3

REPAIR - - - 4000 - - - 5000 - - - 6500

TOTAL 249133.3 237833.3 237933.3 262733.3 237933.3 238233.3 238433.3 263883.3 237933.3 238133.3 238083.3 257433.3

CASH SURPLUS 71516.7 62916.7 72516.7 47616.7 62316.7 71916.7 111766.7 36116.7 62216.7 67116.7 72366.7 42916.7

ACCUMULATED 71516.7 134433.4 206950.1 254566.8 316883.5 388800.2 500566.9 536683.6 598900.3 666017 738383.7 781300.4

5.3.0 CASHFLOW YEAR 1

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 5.3.1 CASHFLOW YEAR 2

DESCRIPTION JAN FEB MAR APR MAY JUNE JULY AUG SEP OCT NOV DEC

CASH SALE 105000 110000 80000 90000 50000 104000 107000 12000 102000 110000 105000 200000

DEBTORTS 800 450 560 600 550 450 950 750 650 450 350 250

TOTAL 105800 110450 80500 90600 50550 104450 106950 107750 102650 110450 105350 200250

CASHOUTFLOW - - - - - - - - - - - -

LICENCES - - - 11000 - - - 11000 - - - 11000

PURCHASE 5500 5500 5500 5500 5500 5500 5500 5500 5500 5500 5500 5500

SALARIES 206100 206100 206100 206100 206100 206100 206100 206100 206100 206100 206100 206100

RENT 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000

ELECTRICITY 3000 2500 2800 2800 2500 2400 2700 2600 2600 2400 2500 3000

ADVERTISEMENT - - - 10000 - - - 10000 - - - 20000

LOAN REPAYMENT 4166.7 4166.7 4166.7 4166.7 4166.7 4166.7 4166.7 4166.7 4166.7 4166.7 4166.7 4166.7

REPAIR - - - 3000 - - - 5000 - - - 7500

TOTAL 23766.7 238266 258566 262566 238266 238166 238066 253466 238366 238166 238266 257266

CASH SURPLUS 132966.7 127816 178066 171966 187716 133716 131116. 145716 135716 127716 132916 570167

ACCUMULATED 132966.7 260783 438849 610816 798533 932249 1063366 1209083 1344800 14725168 1605433 2175600

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 5.3.2 CASHFLOW YEAR 3
DESCRIPTION JAN FEB MAR APR MAY JUNE JULY AUG SEP OCT NOV DEC

CASH SALE 400000 490000 485000 490000 410000 408000 405000 404000 402000 400000 405000 400000

DEBTORS 450 800 250 350 450 650 550 850 250 550 650 450

TOTAL 400450 490800 485250 490350 410450 408650 405550 404850 402250 400550 405650 400450

CASHOUTFLOW - - - - - - - - - - - --

LICENSES - - - 11000 - - - 11000 - - - 11000

PURCHASES 6500 6500 6500 6500 6500 6500 6500 6500 6500 6500 6500 6500

SALARIES 206100 206100 206100 206100 206100 206100 206100 206100 206100 206100 206100 206100

RENT 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000

ELECTRICITY 2500 3000 2500 2650 2700 2800 3000 2850 2370 2800 2900 3000

ADVERTISEMENT - - - 10000 - - - 10000 - - - 20000

LOANREPAYMENT 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

REPAIR - - - 9000 - - - 5500 - - - 10000

TOTAL 236100 236600 236100 266250 236300 236400 236600 262950 235970 236400 236500 277600

CASH SUPLUS 164350 254200 249150 224100 174150 172250 168950 141900 166280 164150 169150 122850

ACCUMULATED 164350 418550 667700 891800 1065950 1238200 1407150 1549000 1715330 1879480 2048630 2171480

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 YEAR ONE 2025

MONTH CASHFLOW CASHOUTFLOW NET CASH (KSHS)

January 15000 12000 3000
February 20000 12000 8000
March 22000 12000 10000
April 25000 12000 13000
May 28000 12000 16000
June 30000 12000 18000
July 32000 12000 20000
August 35000 12000 23000
September 36000 12000 24000
October 38000 12000 26000
November 40000 12000 28000
December 42000 12000 30000
TOTALS 363000 144000 219000

5.4 PRO FORMA INCOME STATEMENT

The pro forma income statement provides an estimate of bakeries profitability over the first
year of operations

2025 2026 2027

INCOME STATEMENT YEAR ONE YEAR TWO (KSH) YEAR THREE
(KSH) (KSH)
Revenue
Sales revenue from 392000
products sold
Costs of goods sold
Ingredients and supplies 72000
Labour cost 72000
Total costs of goods sold 14000
Gross profit 248000
Operating expenses
Rent 24000

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 Utilities 6000
Marketing 6000
Miscellaneous 12000
Total operating expenses 48000
Net income before taxes 200000
Taxes (25%) 50000
Net income 150000

5.5 PROFORMA BALANCE SHEET

The preforma balance sheet reflects the financial position of Jane’s confectionery shop at the
end of the year 1

2025 20026 2027

Balance sheet Year one (ksh) Yr 2 Yr3
Assets
Current assets
Cash 60000
Inventory 10000
Total current assets 70000
Fixed assets
Equipment 15000
Leasehold 10000
improvements
Total fixed assets 25000
Total assets 95000
Liabilities
Current liabilities
Accounts payable 10000
Short term loans 5000
Total current 15000
liabilities
Long term liabilities
Long term loans 10000

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 Total liabilities 25000
Owners equity
Owners capital 70000
Retained earnings 0
Total owners equity 70000
Total liabilities and 95000
equity

5.6 BREAK EVEN ANALYSIS

The break-even analysis determines the point at which Jane’s confectionery shop will start to
generate a profit.

ITEMS YEAR 1 YEAR 2 YEAR 3

Electricity 163200 104200 165000
Stationery 2250 2000 2500
Transport 39000 4000 6000
Purchase 40000 200000 250000
Advertisement 20000 15000 5000
Miscellaneous 10000 1500 1000
Total 274450 326700 429500

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