UNIVERSITY OF DAR ES SALAAM

COLLEGE OF ENGINEERING AND TECHNOLOGY

(CoET)

DEPARTMENT OF MECHANICAL AND INDUSTRIAL ENGINEERING

(MIE)

TECHNO-ENTERPRENEURSHIP FOR ENGINEER

(IE 445)

ASSIGNMENT TWO:

PRODUCTION & ORGANISATION AND MANAGEMENT PLAN

BUSINESS IDEA: Supply and Installation of Solar Power Accessories for Off-Grid Domestic
Users.
 Contents
SECTION 2 ..................................................................................................................................... 2
Operation Plan ................................................................................................................................ 2
2.1. Production Process ......................................................................................................... 2
2.2. Fixed Capital ................................................................................................................... 2
2.3. Life of fixed capital......................................................................................................... 2
2.4. Maintenance and repair................................................................................................. 3
2.5. Sources of Equipment .................................................................................................... 3
2.6. Planned capacity ............................................................................................................. 3
2.7. Future Capacity .............................................................................................................. 3
2.8. Terms and Conditions of Purchase of Equipment ...................................................... 3
2.9. Office Location and Layout........................................................................................... 4
2.10. Materials and Equipment needed and their Cost .................................................... 4
2.11. Materials Availability ................................................................................................. 4
2.12. Labour ......................................................................................................................... 4
2.13. Cost of Labour ............................................................................................................ 4
2.14. Labour Availability .................................................................................................... 5
2.15. Labour Productivity ................................................................................................... 5
2.16. Overhead Expenses..................................................................................................... 5
SECTION 3 ..................................................................................................................................... 6
Organization and Management Plan ............................................................................................... 6
3.1 Form of Business ............................................................................................................ 6
3.2 Company logo ................................................................................................................. 6
3.3 Organization Structure .................................................................................................. 7
3.4 Organizational Chart ..................................................................................................... 7
3.5 Business Experience and Qualifications of the Entrepreneur ................................... 8
3.6 Pre-Operating Activities ................................................................................................ 9
3.7 Pre-Operating Expenses .............................................................................................. 10
3.8 Office Equipment ......................................................................................................... 10
3.9 Administrative Expenses ............................................................................................. 10

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 SECTION 2

Operation Plan
2.1. Production Process
Our company deals with designing and installation of solar power system to different consumers
especially in rural areas where national grid is not connected. Business operation of the company
will be done as follows;

 Products, materials and components of solar system will be imported from China at
specific industry where we can do the business as partnership.
 Partnership will be done in terms and condition as specified in section 2.8
 After importing, all the materials will be tested in our workshop before putting them into
the warehouse.
 As per received tender, the team will be on site within 48 hours for those customers in
Dar es Salaam and 3 to 4 days for those outside Dar es Salaam.
 Charges of the service will be done depends on project size and location of the site.
 For those customers who cannot afford to pay total cost of service instantly, will be given
a chance to pay a certain amount each month until the debt is cleared under a specific
contract.
 The company will also sell solar products and materials for those customers who don’t
need installation service.

2.2. Fixed Capital

Fixed capital Amount (Tsh)

Land 50,000,000/=
Building (warehouse, work shop and offices) 75,000,000/=
Truck 25,000,000/=
Solar Electrical installations 5,000,000/=
Registration and license 5,000,000/=
Total fixed capital 160,000,000/=

2.3. Life of fixed capital

 The life of the buildings will be 70 years with a depreciation charge of 1.4% per annum
 The truck life will be 15 years with a depreciation charge of 4% per annum
 Solar electrical installations systems will have life of 10 years with depreciation charge of
10% per annum
 The annual depreciation cost, assuming no scrap value for building and solar electrical
installations and the truck will have scrap value of 10,000,000 Tshs.

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 Item Cost (Tshs) Depreciation Depreciation Amount
(%) ( Tshs)
Building 75,000,000.00 1.4 1,050,000/=
Solar electrical installations 5,000,000.00 10 500,000/=
Truck 25,000,000.00 4 1,000,000/=
Total annual depreciation cost 2,550,000/=
Monthly depreciation cost, Tshs 212,500/=

2.4. Maintenance and repair

All electrical based maintenance shall be done by personnel within the company. Other
maintenance works such as truck maintenance, outsourcing will be used and professionals will be
hired for the job.

2.5. Sources of Equipment

The solar equipment, tools and accessories will be imported from one of the manufacturing
countries but we are planning to have special order after five years of operation. There will be
charges for covering the equipment transportation.

2.6. Planned capacity

With considerations that our company is starting we are planning to start with a capacity worthy
of 40,000,000/= Tshs as a beginning capital which means ability to maintain 10 installation
projects of normal residential houses worthy 4,000,000/= per house simultaneously.
This value has been reached as the result of analysis of our technical expertise and financial
capability in term of working capital per month.

2.7. Future Capacity

It is our expectation that after five operational years, our company will grow in its production
ability to a point of operating fully in most of its strategic areas as specified in the marketing
plan. In order to cater for such demand the following improvement will be needed which
includes; Expansion of our warehouse since our area of land can accommodate such expansion.
This expansion will cost 20,000,000/= which is prepared for expansion activities which will arise
as operation continues

2.8. Terms and Conditions of Purchase of Equipment

Initially the operation will be undertaken using the company working capital. At the same time,
logistics will be undertaken to make it possible to operate under partnership with solar power
products manufacturers, in order to avoid huge investments in materials and give room for
expansion. The money for purchasing of material will be used for other expansion and
improvement in the operation process. Such partnership will be undertaken under an agreement
to use those companies’ products in our operation and they will have to ensure quality of
products. Payments will be done after an equipment is installed at site

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2.9. Office Location and Layout
Headquarter will be located at Dar es Salaam in Kinondoni area plot No 65 near Kawawa road
at the building owned by the company where it includes three offices, warehouse and workshop
and constructed by owners as their contribution or equity to the project. The size of each office
will be of 20 sq. meters, warehouse will have a size of 28 sq. meters and workshop 16 sq. meters.
The land is owned by company founders and has market value of Tshs 50,000,000/= and also
forms part of equity and will serve as collateral.

2.10. Materials and Equipment needed and their Cost

No Material & equipment Qty Life span Cost/ Item Total cost
(Yrs.) (Tshs) (Tshs)
12V, 100W Solar panels 15 20 450,000/= 6,750,000/=
2. 12V/24V-110V/220V Inverter 15 15 200,000/= 3,000,000/=
3. Solar batteries 15 15 132,000/= 1,980,000/=
4. Solar charger controller 15 10 24,200/= 363,000/=
5. Solar toolbox 10 10 187,000/= 1,870,000/=
Total Material cost 13,963,000/=

2.11. Materials Availability

The equipment and machinery will first be purchased from the manufacturing centers (through
ordering and shipping), upon growth of the business the company will develop a partnership
relation with the manufacturing industry. Consider shipping & procurement cost, storage costs,
testing & adaptation cost

2.12. Labour
Labour in our company will be categorized as follows;

1. Permanent Labour
2. Part time (daily paid) Labour
Permanent labors these are the ones who will be permanently employed by an enterprise on
contract base. These are the managing director, finance manager, human resource manager, project
manager and engineers.

Part time labors are the ones who will be taken during the need and payment done per day.

2.13. Cost of Labour

The labors salaries will be different depending on whether they are permanent or daily paid
employees as per specified in the table below

Labor position Skill level Number Salary Pay per

month

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 Finance manager, BSc. In electrical engineering 5 1,000,000/= 5,000,000/=
HR, project manager
Engineers BSc. In electrical engineering 6 1,000,000/= 6,000,000/=
Part time workers Certificate in electrical L.S 10,000/=
Total salary payment for permanent workers 11,000,000/=

2.14. Labour Availability

The engineers, finance manager, HR, project manager will be available throughout, since they are
permanently employed and actually are the founder of the business. The part time employees will
be called in when there is a need like more projects are needed to be accomplished at a time.

2.15. Labour Productivity

The contractual labors productivity will be rated according to their work commitment from starting
to the completion of the projects and adherence to meeting the deadlines.

Part time labors productivity will be assessed as they will be carrying on day to day activities and
since they will be paid daily their employment will be terminated if they fail to meet the deadline
with no specific reason.

2.16. Overhead Expenses

Company overhead expenses per month will include;

Overhead expenses Month Cost (Tshs)

Water supply 50,000/=
Transport 1,200,000/=
Telephone 150,000/=
Repair and maintenance of car 100,000/=
Security system 150,000/=
Total 1,650,000/=

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 SECTION 3

Organization and Management Plan

3.1 Form of Business
The Business is a Partnership Company that will be registered under the name “Eleven Solar-
Tech” and owned by

Name Qualification Institution

Eng. Nickson, Mosses
Eng. Mwani, Andrew
Eng. Lugano, Benedictor
Eng. Christian, Kelvin
Eng. Marshal, Teddy
Eng. Kajela, Tuntufye
Eng. Daniel, Dionis
Eng. Manga, Fausta
Eng. Elington, Elias
Eng. Kalalu, Elinainyi
Eng. Batholomayo, Emmanuel.
BSc In Electrical Engineering
BSc In Electrical Engineering
BSc In Electrical Engineering
BSc In Electrical Engineering
BSc In Electrical Engineering
BSc In Electrical Engineering
BSc In Electrical Engineering
BSc In Electrical Engineering
BSc In Electrical Engineering
BSc In Electrical Engineering
BSc In Electrical Engineering
University of Dar es salaam
University of Dar es salaam
University of Dar es salaam
University of Dar es salaam
University of Dar es salaam
University of Dar es salaam
University of Dar es salaam
University of Dar es salaam
University of Dar es salaam
University of Dar es salaam
University of Dar es salaam

The Company Physical Address is Eleven Solar-tech P.O.Box 331 Dar es salaam Tanzania
Kinondoni Plot No 65.

3.2 Company logo

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3.3 Organization Structure
The Company will be managed by Eng. Mosses, Nickson who will be the Managing Director of
the Business. The Business will have also Human Resource Manager (Marshal, Teddy),
Marketing Manager (Lugano, Benedictor), Financial Manager (Manga, Fausta) and Project
Manager (Kalalu, Elinainyi).The project Engineer will oversee the Site Engineers, Materials
Engineers and Design Engineers. The company will also hire the daily paid workers who will
assist the Site Engineer in the site works.

3.4 Organizational Chart

The company organization Structure is shown below:

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 Managing Director

Human Resource Project Marketing Finance

Manager Manager Manager Manager

Materials Site Design

Engineer Engineer Engineer

Workers

3.5 Business Experience and Qualifications of the Entrepreneur

Eleven solar Tech will consists total of eleven technical staffs, all holding Bsc. in Electrical
Engineering from University of Dar-es-Salaam. The members attended different appropriate
courses and gained enough experience in renewable energy, electrical power generation,
distribution, control and supply systems, economic and financial planning and analysis, cost
analysis, design control systems, simulation analysis and optimization.

These members joined together and formed the company which will be engaged in selling and
installation of solar power and solar energy products.

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3.6 Pre-Operating Activities
Before operation start Eleven Solar Tech will have to carry out the following activities for
smooth operation when operation starts:

No Activity Time
1 Company registration 1 week
2 Preparing the business plan 4 weeks
3 Applying for a loan and approval 8 weeks
4 Contacting equipment supplier 1 week
5 Setting up the offices and warehouse 2 weeks
6 Hiring labour 2 days
7 Advertising company’s services 4 weeks

The company plans to start its operation around seven weeks after the release of loan. The
following Gantt chart summarizes the above activities and their duration.

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3.7 Pre-Operating Expenses
The mentioned above activities will cost some amount of money to be accomplished. A
summary of estimated cost for each is given below:
Activity Cost (Tsh)
Registration by ERB 150,000
Registration by BRELA 40,000
Survey cost 2,000,000
Advertisements 5,000,000
Transportation costs 1,000,000
Total 8,190,000

3.8 Office Equipment

Our company will have the following office equipments:

Item Number Cost per Total cost

of items item
Office desks 3 150,000/= 450,000/=
Office shelf 1 150,000/= 150,000/=
Chairs 20 20,000/= 400,000/=
Calculators 3 20,000/= 60,000/=
Filling cabinet 1 200,000/ 200,000/=
Desk top computers 11 600,000/= 6,600,000/=
Total office materials cost 7,860,000/=

These equipments will cost Tshs 7,860,000/=. Annual depreciation will be Tshs 786,000/=
monthly or Tshs 65,500/= annually

3.9 Administrative Expenses

Tshs

 Watchman’s allowance 150,000/=

 Secretary’s salary 200,000/=
 Depreciation of office equipment 65,500/=
 Supplies and communication 300,000/=
Total 715,500/=

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BUSINESS IDEA: Supply and Installation of Solar Power Accessories for Off-Grid Domestic
Users.
COMPANY MAMBER
S/NO NAME REG.# PROGRAMME PHONE NO
1 LUGANO, BENEDICTOR C 2012-04-01942 B.Sc. EE 0765 202470
2 ELIAS, ELINGTON M 2012-04-01930 B.Sc. EE 0715 582770
3 DANIEL, DIONIS 2012-04-01928 B.Sc. EE 0789 233924
4 MWANI, ANDREW 2012-04-01956 B.Sc. EE 0764 516156
5 KALALU, ELINAINYI 2012-04-01938 B.Sc. EE 0688 086425
6 BATHELOMEO,EMMANUEL 2012-04-01924 B.Sc. EE 0718 142616
7 CHRISTIAN, KELVIN 2012-04-01926 B.Sc. EE 0783 005276
8 MOSES, NICKSON 2012-04-01950 B.Sc. EE 0717 055806
9 MARSHAL, TEDDY 2012-04-01947 B.Sc. EE 0712 052530
10 KAJELA, TUNTUFYE 2012-04-02384 B.Sc. EE 0755 396235
11 MANGA. FAUSTA 2012-04-01945 B.Sc. EE 0767 247860

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