KENYA · GUIDE 0127 · EDITION 4.2
Boiled maize stand in Kenya: Pricing and Break-Even
Price an accepted unit, not an activity title
Start with this sale unit: cob or cup.
Decide whether the boiled maize offer serves whole cobs or prepared cups, matching the portion and packaging to customers' eating convenience at the authorized location.
A quotation needs the accepted quantity or scope, exclusions, completion point, delivery arrangement and payment schedule. Without that specification, two apparently similar prices may pay for different work.
Build the direct-cost sheet
- maize
- fuel
- waste
Include preparation, fuel, serving materials, unusable portions and safe end-of-session disposal, comparing paid servings with the usable yield of the actual maize lot purchased.
| Calculation | How to use it |
|---|---|
| Variable cost per accepted unit | Direct inputs, labour, delivery and measured losses divided by accepted units. |
| Contribution per unit | Agreed selling price minus variable cost per unit. |
| Period operating surplus | Contribution from units sold minus fixed overhead for the same period. |
| Break-even units | Fixed overhead divided by positive contribution, rounded up. |
Count rejected output, unsold stock and correction time. Keep fixed overhead in a consistent period; a daily contribution cannot be compared directly with a monthly overhead figure. If contribution is zero or negative, extra sales do not establish a workable break-even point.
Reconcile the cash separately
A customer's unpaid balance cannot pay today's supplier bill. List actual collections, advance payments, supplier deadlines, refunds and recurring bills by date. Separate refundable deposits and money held for an uncompleted commitment from funds freely available for expansion.
Whole-cob and cup prices cannot be compared directly when cup preparation adds labour and leaves uncounted waste, creating an apparently premium offer with disappointing real margins.
Test a weaker outcome
Recalculate with fewer accepted units, a delayed customer collection or a higher input quotation. Change one assumption at a time to see which constraint matters. Use the actual pilot record: Record raw lot, cooked usable yield, portion counts, service times and unsold servings, separating feedback on maize texture from complaints about package or portion presentation locally.
Do not interpret the invented financial teaching exercise in the complete manuscript as a market price or predicted income. Replace its assumptions before using it for a real decision. The public planning tool can help with arithmetic; it does not validate the inputs.
Work through this business's example
Test the listed example when things change
These calculations are invented teaching cases derived from this guide's example, "Invented teaching scenario; not a market quotation or income forecast". They are not observed customer results, local quotations or forecasts. They hold the listed input bill constant unless the row explicitly changes it. Excluded expenses and tax still need to be added.
| Case | Accepted / priced output | Example revenue | Listed cost | Difference before excluded costs / tax |
|---|---|---|---|---|
| Original example | 40 | KSh 2,800.00 | KSh 3,645.00 | KSh -845.00 |
| 20% fewer accepted units, rounded down | 32 | KSh 2,240.00 | KSh 3,645.00 | KSh -1,405.00 |
| 10% reduction in the assumed selling price | 40 | KSh 2,520.00 | KSh 3,645.00 | KSh -1,125.00 |
| 10% increase in every listed cost | 40 | KSh 2,800.00 | KSh 4,009.50 | KSh -1,209.50 |
The lower-acceptance case represents the loss of priced output, not a prediction of the actual reject rate. With 32 accepted units, the same listed bill costs KSh 113.91 per accepted unit. Do not divide it by the original 40 units and hide the loss. A whole-job price needs its own agreed acceptance and partial-payment treatment.
Inspect the cost that can change the decision
The largest listed line is Fresh cobs, each: 50 at KSh 25.00, giving KSh 1,250.00. A 10% increase in this line alone adds KSh 125.00 to the example bill. Check its exact unit, scope, quotation validity and whether it is a one-off resource or a repeat input before changing the quote.
Keep every input quantity separate from priced output. A fall in accepted output does not automatically reduce already-purchased inputs. Use the itemised costing tool to change the real quantities, rather than scaling the whole bill by a sales percentage.
Connect the commercial check to quality
For boiled maize stand, investigate this concrete failure: Cobs differ in tenderness. The guide's diagnostic check is: Cook reviews size batches and approved controls. Proposed response: Hold failed pieces and correct through competent method..
Record what was actually found and rechecked; do not mark a corrected item accepted until the agreed buyer checkpoint has passed. Any rework materials, transport, labour or credit must be added to the actual cost/result record.
A cash-timing exercise using the same example
Assume solely for arithmetic practice that opening cash is zero and the entire listed input bill of KSh 3,645.00 must be paid before handover. With no advance, that amount must be funded before any sale is collected. This deliberately simplified case does not establish when your actual suppliers need payment.
If a buyer hypothetically pays a 30% advance on the example revenue of KSh 2,800.00, cash received would be KSh 840.00. Paying the listed bill then leaves KSh -2,805.00. The additional cash needed to avoid a negative balance at that point is KSh 2,805.00. The unpaid remainder is KSh 1,960.00; it is a receivable, not cash already in the business.
The 30% figure is an invented teaching assumption, not a recommended or agreed customer term. Check whether deposits are refundable and which commitments they can actually fund. Do not count the advance again when entering the final collection. Add equipment payments, tax, owner drawings and unlisted operating bills to the dated cash plan as appropriate. The 13-week planner in file 10 shows week-end funding gaps; inspect intra-week dates for a large payment.