Starting an electronics shop in Kenya will need more than superficial research for you to succeed in the hustle. For this reason, the business guide/business plan attached to this post has extensively and intensively delved into the dynamics of starting and running an electronics shop business in Kenya.
Make sure that you have already read our previous post on how to start and run a successful electronics business in Kenya.
Kindly note that this business guide is not your typical business plan as it focuses on providing guidance and support for entrepreneurs, rather than serving as a tool to secure funding.
Here is how the content is organized in the e-book:
- Introduction
- Conducting Market Research
- Market Plan
- Financial Planning
- Operations and Management
- Legal Requirements and Regulations
- Risk Management
- E-Commerce
- Terms and Conditions
Here is the financial planning chapter for you to review, and gauge if it will help you.
Financial Planning Chapter (Sample)
A successful business needs a solid financial plan. Financial planning involves setting up budgets, forecasting future financial needs, creating financial statements, and tracking financial performance. This chapter will guide you through the necessary steps to create a financial plan for your electronics shop.
a) Start-Up Costs
Start-up costs are the expenses incurred when starting a new business. It is crucial to identify and estimate these costs to plan and budget for the start-up phase. In the previous chapter, we identified some of the start-up costs for an electronics shop. Here is a summary:
Task Expenditure in KES
- Rent 15,000
- Licenses 10,000
- Inventory 40,000
- Complements of electronics shop e.g., shelves, counters, security system etc. 30,000
- Branding and marketing 5,000 Total 100,000
b) Cash Flow
Cash flow is the amount of money coming in and going out of a business over a specific period. A positive cash flow means that more money is coming in than going out, while a negative cash flow means that more money is going out than coming in. As a business owner, it is essential to track your cash flow to ensure that you have enough money to pay your bills, purchase inventory, and cover any unexpected expenses.
To create a cash flow statement, you need to identify all the cash inflows and outflows for a specific period. Here is an example of a cash flow statement for an electronics shop for a month:
Cash inflows:
- Sales revenue 150,000
- Loans 0
- Other income 0 Total cash inflows 150,000
Cash outflows:
- Rent 15,000
- Salaries 50,000
- Inventory purchases 30,000
- Utilities 5,000
- Marketing expenses 3,000
- Other expenses 2,000 Total cash outflows 105,000
Net cash flow 45,000
This example shows that the electronics shop has a positive cash flow of KES 45,000 for the month. It is essential to track your cash flow regularly to ensure that you can cover all your expenses and have enough money to grow your business.
c) Financial Statements
Financial statements provide an overview of a business’s financial performance over a specific period. They include the income statement, balance sheet, and cash flow statement. These statements are crucial for assessing your business’s financial health and identifying areas that need improvement.
The income statement shows the business’s revenue, expenses, and net income over a specific period. Here is an example of an income statement for an electronics shop for a month:
Revenue:
- Sales 150,000
Expenses:
- Cost of goods sold 75,000
- Rent 15,000
- Salaries 50,000
- Utilities 5,000
- Marketing expenses 3,000
- Other expenses 2,000
- Total expenses 150,000
Net income 0
This example shows that the electronics shop had zero net income for the month, indicating that the expenses were equal to the revenue. This is common in the start-up phase, but the goal is to increase revenue and decrease costs to achieve a positive net income.
The balance sheet shows the business’s assets, liabilities, and equity at a specific point in time. Here is an example of a balance sheet for the electronics shop as of the end of the month:
