BUSINESS PLAN

Shamo builders and civil works

NAMBALE TOWN

P.O BOX 2210-143

NAMBALE

TELEPHONE: 0710-282924

EMAIL: mogoashadrack@gmail.com

PRESENTED BY: MIGERE MOGOA SHADRACK

ADMISSION NO: 2017BC129136

PRESENTED TO: THE KENYA NATIONAL EXAMINATIONS COUNCIL

NAME OF SUPERVISOR: MRS. KIRIUNGI

DATE: 26/09/2017

1
Table of Contents
ACKNOWLEDGEMENT...............................................................................................................ii

SPECIAL THANKS........................................................................................................................ii

DEDICATION...............................................................................................................................iii

1.0 BUSINESS DESCRIPTION.....................................................................................................1

1.1 THE SPONSOR.........................................................................................................................1

1.1.1 Background of the owner....................................................................................................1

1.1.2 Ownership structure of the business...................................................................................1

1.2 THE BUSINESS........................................................................................................................1

1.2.1Business name......................................................................................................................1

1.2.2 Business location.................................................................................................................1

1.2.3 Form of business ownership...............................................................................................2

1.2.4 Business Activities..............................................................................................................3

1.2.5 Marketing plan....................................................................................................................3

1.2.6 Justification of the Business opportunity............................................................................3

1.3 THE INDUSTRY......................................................................................................................4

1.4 THE PRODUCTS AND SERVICES........................................................................................4

1.5 ENTRY AND GROWTH STRATEGY....................................................................................5

2
DECLARATION

I Clement were, declare that to the best of my ability the originality of this project is my work
effort. Nobody under any occasion shall extract any information from this document.

Name: …………………………………………………………………………….

Admission number: ………………………………………………………………

Signature: ………………………………………………………………………….

Date: ……………………………………………………………………………..…

This is presented to the Examination Council with the approval of my supervisor

Supervisor’s name: ……………………………………………………………………

Signature: ………………………………………………………………………………

Date: …………………………………………………………………………………….

ACKNOWLEDGEMENT
I wish to extend my sincere gratitude to the almighty God for good health and protection cover in
my life throughout my endeavors both in and outside the college in all the researchers to ensure
completion of this business plan. Without forgetting my lecturers, the entire KTTC community

3
and Mrs. Kiriungi my entrepreneurship teacher for her advce and tireless devotion to see me
through in the production of this project.

Special thanks to our family who have seen me through ups and downs in life. Their assurance
and divine inspiration has been like a strong tower where I always do bible and get inspired to
mount up and like to the life challenges that awaits me daily.

SPECIAL THANKS
To Paul Were who is my mentor, financier, mother and great friend in the most trying moments
in life. He taught me that the world system calls for great simple people to embrace a spirit of
hard work, love to the humanity, praying without ceasing and selfless person who will give it all
in order to heal the society.

Thank you my uncle

DEDICATION
I would like to dedicate this project to my beloved father, mother and entire family for their
patience and encouragement during the preparation of the project and the whole academic period
in college.

4
 CHAPTER ONE

1.0 BUSINESS DESCRIPTION

1.1 THE SPONSOR

1.1.1 Background of the owner

The owner of the business will be SHADRACK MOGOA who is currently pursuing a Diploma
course in Building and Civil engineering at Kenya Technical Trainers College. He is 20 years
old and apart from pursuing his diploma he is also accompanying it with entrepreneurship studies
which will enable him to equip himself with more skills on how to run it efficiently.

1.1.2 Ownership structure of the business

The company needs an estimated start-up capital of Kshs 5 million of which will be raised as
shown in the table below.

5
 SOURCE AMOUNT (Kshs) PERCENTAGE
1 Owner 2,500,000 50%
2 Friends and relatives 1,500,000 30%
3 Loan from equity bank 1,000,000 20%

1.2 THE BUSINESS

1.2.1Business name
The name of the business will be SHAMO BUILDERS AND CIVIL ENGINEERING WORKS.
This name is extracted from the name of the owner SHADRACK MOGOA

1.2.2 Business location

The business shall be located along Kisii-Migori road from Kisii, pass Rongo and 500 meters
from Awendo town on the left hand side towards Awendo town. Its opposite Sony Sugar
Company and besides St. Paul of the Cross Catholic Church. On the right hand sided is Sony
Police Station.

MANYATTA
AWENDO COMPANY’S
RONGO PRI SCHOOL
TO MIGORI

CATHOLIC SITE
DISTRICT
CHURCH
HOSPITAL SONY
POLICE
STATION

TO KISII
TO HOMA BAY

6
RANEN SONY TOWN
TOWN SUGAR COUNCIL
COMPANY
 FUEL PUMP SIRA
RE

Reasons for the business location

i. It is near the business and administration center

ii. Availability of ready means of transport and communication
iii. Ready market
iv. Availability of security and support services
v. Availability of labourers

7
 BUSINESS LOGO

1.2.3 Form of business ownership

The business will be a sole proprietorship form of business and thus the owner will be the one to
identify the sources if capital, decision making, preparation of business documents and others.
And the business will be started in the year 2021 after the owner has finished her diploma course
and make arrangements for the business

Advantages of sole proprietorship

i. Flexibility of operation
ii. Easy decision making
iii. Owner enjoys the profit alone
iv. The owner will be her own boss

There will be control of the business events if the owner is not present through some
measure

a. There will be no excessive investment in fixed assets

b. There will be proper employment of qualified staff
c. The owner will leave a will in case of death and the business will still continue its
operations

8
 d. 85% profit of the business will be used to expand the business
e. Construction materials and needy orders will be delivered on time, so there will be no
delay in delivery.

1.2.4 Business Activities

The company will be engaged in the production of concrete materials like fine and coarse
aggregates, building stones, manufacture of culverts, rings, bricks, road, caps road kerbs, pre cast
concrete. It will give services of concrete working site, site supervisors, renting of concrete
mixers, vibrators and hauling goods. For this to excel, it must have the following machines and
equipment: mixing machine, vibrators, masonry tools, water pumps, molds and haulage trucks.
The customers will include internal and external people.

1.2.5 Marketing plan

The company will adopt new entrepreneurial, innovative and creative marketing strategy
amongst other marketing tools to capture only the market demands. I will even change the
factors of production into productivity and further exploit its available resources within the
vicinity into innovative products in commercial terms.

1.2.6 Justification of the Business opportunity

The area is near a river which will be a source of water for manufacturing the products
There is good supply of power
The site is near quarriesThere is now other firm around the area with the same products
and services
There is good security in the area guaranteed by the presence of a police station
The firm will be within the town where demand for the building products is high
The area has good network and other infrastructure so transportation of the materials will
be easy Application of new technologies coupled with skilled manpower within the area
will lead to production of quality products.

1.3 THE INDUSTRY

Pamotta Builders and Civil Engineering works falls under the Ministry of Trade and involves
selling of manufactures products, distributing goods through suppliers to the construction sites.
The business industry touches the core section of transport, construction that enhances the sum
9
total development of a nation. The industry is marked by high capital cost both in construction of
roads and other social and private structures. Most of the projects that the company will be
working on are risky and need professional and skillful workers so as to provide good surfaced
roads, building and social services such as sewage systems that will not harm human health but
promote development and are capable of reducing the maintenance cost hence cutting costs and
transferring the saved sums to other sectors such as education.

The company through departmental heads will engage in employing small scale, medium scale
and large scale depending on the projected cost of the proposed civil works. The company shall
adopt appropriate technology which will entail blending of indigenous and alternative
technology shift as the market demands. The technology will be:

I. Labour based construction technology

II. Capital based construction technology

The company will have as many workers as possible due to the much work to be done. For
example, staff, handworkers, skilled workers and other involved in the supplies sector.

1.4 THE PRODUCTS AND SERVICES

The business will provide the following products:

- Culverts
- Rings
- Blocks
- Bricks
- Road caps
- Road kerbs
- Precise concrete

The business will provide the following services:

- Site supervision
- Renting services
- Haulage of goods

10
 - Design works

1.5 ENTRY AND GROWTH STRATEGY

The business will be advertised through the media immediately its operations start for people to
locate the place easily. The business enters the market by offering quality goods at affordable
costs. Charges are a little bit low compared to that of its competitors but after a period of time the
prices will be increased gradually to ensure the selling percentage remains high. Promotion
campaigns are amid a period of one week to ensure that the awareness is made to all for
penetrability into the market. The customers are to be offered with the best services which will
be carried out very fast in order to ensure satisfaction of goods sold to them will be used well.

In respect to all this, profit made after three months will be expected to expand its operations by
renting other premises to cater for growth of customers and purchases hence opening another
company. Also giving discounts on sale of goods upon certain recommended value of the
customers, offering after sale services to the goods sold out to the customers.

11
 CHAPTER TWO

2.0 MARKETING PLAN

The enterprise describes marketing as a social and entrepreneurial process by which market
demand is screamed competition are properly analyzed with a view to provide what the market
need at most affordable price and qualified standards. The entrepreneur has to use the market
mix to complete which includes; place, products, pricing and promotion.

2.1 MARKETING OBJECTIVE

The business objectives may include:

 To ascetic market demand and make drastic offer.

 To increases sales volume.
 To provide growth and develop the market area.

2.2 CUSTOMERS

There are many potential customers within the area that will be provided with the service and
products from our firm. There will be in the market domestic customers, NGOs etc.

2.2.1 Non Government Organization (NGOs)

12
These entail the companies which provide services such as counseling Civil Education who are
purely financed and controlled by government such as: WEFWE, BULALA, among many
NGOs within the area.

2.2.2 Individual

These are the local people who will be buying is small quantities for there own uses. Most of
them will be interested in buying blocks, sand for their home building and current rings for their
accessibility. It is anticipated that they will be buying in cash or paying with a period of one
month after delivery of the products.

2.2.3 Government Ministry

The government ministry which will need our services and products includes: local government
ministry of housing, land ministry, planning, public works and roads amongst any ministries
within the area which will require the services of my enterprise.

2.2.4 Institution

These includes private and public institution e.g. local authorities schools, school meeting halls,
stadium development, research and development institutions in the region who will be buying
our products in large quantity. There will be an agreement on modes of payment after they have
ordered our products on the quality and quantity they want.

2.2.5 Company

The business looks forward to work with customers such as West Build, Bridgestone Company,
Nzowasco etc. These are samples of companies which will need our services in the region.

Table 1.0

Category Expected No. Presentation Process Remarks

NGOs 32 19 Local and
international NGO
INDIVIDUALS 500 399 Private development
and homes
GOVERNMENT 16 11 Local road and

13
MINISTRY housing
INSTITUTION 350 209 Colleges, Schools
COMPANIES 22 13 Sony Sugar, West
Building

2.3 MARKET SHARE

As the direction was ascertaining the business opportunity came vividly clear that they had been
other enterprises carrying our business in the same industry which has not been fully exploited.
The resources for un exploitation range from poor services and production of provision, poor
management and lack of trust between company and market. The company drew below table of
finding to show the market as expectation immediately the company starts its operation.

Marketing share

12%

13% Market share

Pamotta builders
46% Raisi entreprise
Karibu builders
Others

29%

2.4 COMPETITION

14
The business defined competition as a means of assessing market demand and to improve its
brand products and services if provided and generally offer standardized services to market with
cheap of knowing controlling the market hence increasing the income.

2.4.1 Direct Competition

These are the companies and other businesses in the area that offer same products as the
company would wish to offer to the market.

The companies that were identified as direct competitors includes:

 Sunshine
 Simiyu builders
 Wehome enterprise

2.4.2 Indirect Competition

The enterprise also identifies small scale hardware that were penetrating marketing through
provision of civil engineering matched products but not to offer competition services as market
demand.

The indirect competitors include:

 Jevo hardware
 Kojwando hardware
 Wanganui store

Table 2.0 Rate of Competitors

Competitors Strength Weakness Opportunity Treats

SHAMO -Good transport -Room for -Most of road in
BUILDERS -Good security expansion region are not in
-Ready market -Financial good condition
-Well established support from
-Good communication NGOs
network -Have few
-Near the town competitors

15
 -Next to quarry -Ready
-Uses high technology customers in the
-Fair pricing region
-Excellent adverts -Has many
-Semet factors qualified
-Good management personnel
RAISI -Well established because it -Poor advertising -Up coming
ENTERPRIS is old -Far away from business
E -Have many machineries the town -Insecurity
-Well pay for their -High pricing -Changes in
technician -No room for technology
expansion
KARIBU -Next to quarry -Workers have -Financial by -Insecurity
BUILDERS -A partnership with good poor affordable NGOs -Competition
financial base work -Change in
technology
OTHERS -Close to customers -Unqualified -Financial -Do not embrace
-Can shift base depending personnel support from changes in
on customers demand -Poor management NGOs technology
-Buy product
from other
companies

2.4.3 Coping with Competitors

`The entrepreneur having analyzed all the weakness of his competitors and his own strongholds,
he will come up with the following.

i. Provision of quality products and efficient timely services

ii. Apply new technology to improve the business productivity
iii. Recruiting qualified technicians
iv. Good public relation with the customers to enhance their satisfaction with our products

2.5 PRICING STRATEGY

16
To complete favorable within the market with an aim of making reasonable profit the business
will engage a price list similar to the one as is commences its operation.

Table No 3.0)

ITEM PRICE (KSHS)

900mm culvert 5,000.00
800mm culvert 3,500.00
450mm culvert 3,000.00
112.5 by 225 by 33.7mm brick 5.00
100 by 200 by 300mm block 4.00
Slap per square metre 120.00
Kerb stone per M3 100.00
6mm aggregate per M3 1,000.00
12mm aggregate per M3 1,800.00
18mm aggregate per M3 2,000.00
River sand per M3 5,000.00
Ordinary sand per M3 3,500.00

The company will adopt the following pricing methods depending on the performance.

i. Cost plus pricing – the management

ii. will fix by adding some predetermines margin on to the cost of work
iii. Marginal cost plus contribution – the management will add percentage contribution to the
marginal cost
iv. Marginal cost plus key – factor marginal the management will estimate the key fact
availability and cost and then add the same cost to marginal to that final market price
v. Break even pricing – this will be applied when producing identification products with
identifiable fixed cost that varies within level of activity. Here a break put (BEP) will be
worked and a profit comported on top of BEP
vi. Pricing and return of capital – this will adopt where the company has secured an
expensive works hence the management will market it.

17
Pricing Problems

i. Local government rules and regulations

ii. Total cost of raw materials and availability
iii. Unitable economical performance
iv. Government pricing methods and standards

2.6 SALES TACTICS

The enterprise must ensure that sales volume and income matter the market demand without
necessary causing any lose that lead to closure of the company hence the table below shows the
expected cost of sales.

The business will employ sales tactics such as after sales market, quantity, discount trade, cash
discounts and advertisements as means of penetrating and increasing sales volume.

Table 4.0

PROJECTED SALES OVERHEAD FOR THE FIRST THREE YEARS

Item Monthly cost Year 1 Year 2 Year 3 Totals
Sales salary 40,000.00 50,000.00 102,000.00 130,500.00 322,500.00
Salary 5,000.00 40,000.00 120,000.00 100,000.00 265,000.00
commission
Showroom 8,000.00 20,000.00 30,500.00 35,000.00 93,500.00
expenses
Advertising 1,000.00 22,000.00 50,200.00 30,000.00 112,200.00

2.6.1 ADVERTISING AND PROMOTION STRATEGY

Advertising strategy

Initially the market will not be aware of the existence of the firm; advertisement will be done to
introduce these products to market it. Some of the means of advertisement will include:

 Sign boards: They will be erected at strategic points within the towns on the first day of
business operation.

18
  Posters: They will be fixed at strategic points within the town, near shops, social halls,
churches, administration offices and public offices.
 Leaflets: will be given to construction sites which inform the general public about the
company and the products/ services they provide.
 Media: this includes through television, newspapers, magazines journals, radio etc.

Promotional strategy

The proprietor will use the following method to promote the business:

 Offering discounts to customers this will depend on the quantity of products purchases.
 Good customers care to facilitate better relationship.
 Our product will be of high quality which will be sold at a reasonable price.
 There will be transport arrangement between the customers and the business owner.
 There will be 24hrs of operation of provision of our services and products.
 Credit will be given to our entrusted customers on request.

Table No 5.0

PROJECT MONTHLY COST OF PROMOTION

Retails Frequency Cost per Monthly totals Annual

frequency
Posters 5,000 10,000
Sign board 7,500 20,500
Leaflet 100 2,000 15,000
Media 8 10,000 25,000
Social activities 18,000
Exhibition 500 150 65,000
Total cost 153,500

2.8 DISTRIBUTION STRATEGY

The role of distribution is to:

1) Create place utility

2) Change product ownership

19
 3) Create and ensure form utility

The enterprise proposed to employ below the distribution strategy depending on the cost and
economical performance and effectiveness.

1) Selective distribution strategy: Here the business exposures in product and services outlet
of middlemen.
2) Exclusive distribution strategy: Here the business management will its product and
services on its own or tough one dealer in each market. It will be provided or adopted
when technical products and services are needed by a customer.
3) Intensive distribution strategy: this is where the business management will open up and
place products in many of its branches or through outlets available after ascertain of the
distribution cost.

Table 6.0

PROJECTED SUMMARY OF DISTRIBUTED OVERHEAD

Overheads Last per unit Monthly cost Annual cost

Vehicles 5,000.00 60,000.00
Distribution salary 3,000.00 36,000.00
Deposit cost 5,000.00 60,000.00
Supervision cost 3,000.00 36,000.00
Energy cost 7,000.00 84,000.00
Total 23,000.00 276,000.00

DISTRIBUTION FLOW CHART

20
 B
D

A– Business

B – Wholesale

C- Retails

D- Customer

E- Dealers

PROJECTED SUMMARY ON MARKETING COST FOR THE FIRST THREE YEARS

Overheads Monthly YEAR 1 YEAR 2 YEAR 3 Total

cost
SALES 12,500.00 150,000.00 250,000.00 241,000.00 322,500.00

PROMOTIONS 12,900.00 154,800.00 149,100.00 145,000.00 265,000.00

DISTRIBUTIO 3,000.00 36,000.00 50,600.00 80,000.00 112,200.00
N

21
CHAPTER THREE

3.0 ORGANIZATION PLAN

22
 The business shall ensure that there is a sound and functional establishment of its authorities that
will ensure goal achievement within defined time frame.

3.1 ORGANIZATION TRUCTURES

This is a diagrammatic chair that the enterprise employs to logical agreement of viral
organization branches and personnel who will expect to carry out the management
recommendations.

MANAGING DIRECTOR

FINANCE SALES & PERSONNEL QUALITY OPERATIONS R &D COMPANY

MANAGER MARKETING MANAGER MANAGER MANAGER MANAGER SECRETARY
R

CHIEF SALES PERSONNEL LAB SUPERVISOR QUALITY

ACCOUNTANT SUPERVISOR OFFICER TECHNICIAN MANAGER

ACCOUNTANT SALES PERSONNEL TECHNICIANS OVERSEAS

CLERK CLERK

MESSENGER RECEPTIONIST OFFICE CLEANER

PURPOSE OF THE ABOVE ORGANIZATION STRUCTURES

i. Shows the span of control.

ii. Set to indoor new employees on the working conductivity of the enterprise.
iii. Shows flows of chair of command and authority.

3.2 KEY MANAGEMENT PERSONNEL AND QUALIFICATIONS

23
 3.2.1 MANAGEMENT DIRECTOR

Qualifications

i. Must poses administrative qualities and good communication skills.

ii. Must have bookkeeping and accounting knowledge.
iii. Must have attained higher Diploma in civil and building.
iv. Must be creative, innovative and have a good public relation.
v. Must have a minimum of 3 years working experience in construction related works.

Duties

i. Carry out planning of business.

ii. Final decision maker.
iii. Coordinates the management activities.
iv. Civil technical advice to the sub- ordinates staff.
v. Chairs the management meeting.
vi. Initiate exploitation of new and proposed business ideas.

3.2.2 FINANCE MANAGER

i. Must have passed CPA III and a holder of bachelor or degree in commerce.
ii. Must have 2 ½ working experience in related work.
iii. Have good interpersonal skills.
iv. Must be above 24 years of age.

Duties

i. Receiving and banking cash.

ii. Present financial records to the managing director.
iii. Maintain the proper record of book of records.
iv. Advice management on financial matters.
v. Prepare palsy’s for wages and salary.

3.2.3 SALES AND MARKETING MANAGER

24
Qualification

i. Must have 3 years working experience.

ii. Computer literate.
iii. Must have degree in sales and marketing or related courses.
iv. Being a diviner will be an added advantage.

Duties

i. Prepare the departmental budget.

ii. Analyze the market situations and report to the management.
iii. Carry out sales and marketing survey.

3.2.4 PERSONNEL MANAGER

Qualification

i. Must have a degree in Human Resources Management.

ii. Must have a Diploma in Industrial psychology as an added advantage.
iii. Good public relation.
iv. Must have 1 year working experience.

Duties

i. Plan and advice the management in ways to adopt in recruiting new employees and
promotion
ii. Recommend best form of punishment to be administered to untruly workers.
iii. Carry put planning of human resources management.

3.2.5 OPERATION MANAGER

Qualification

i. Must have good communication skills

ii. Must have a diploma in Civil engineering

25
 iii. Be 22 years and above
iv. Must have 1 year working experience

Duties

i. Trains personnel under his department

ii. Draft less expensive methodology is field operations
iii. Prepare departmental budget
iv. Advice the management on operation mattered activities

3.2.6 RESEARCH AND DEVELOPMENT MANAGER

Qualifications

i. Computer literate
ii. Must have 2 years working experience
iii. Must have a degree in civil and structural engineering

Duties

i. Advice the management about the product market response

ii. Draft reports and findings
iii. Carry out research and product development

3.2.7 OTHER PERSONNEL

PERSONNEL QUALIFICATIONS DUTIES

Secretary -Have certificate in computer
packages
-Have CPS III certificate
-Honest and trustworthy
-Have good communication
skills
Technicians -Have grade I certificate from
-Receives and make calls.
-Filling of documents.
-Write introduction letter to
suppliers and customer
-Hassle fields and laboratory

26
 government ministry -Forward results to the
-Able to speak English and laboratory technicians
Kiswahili
-Be a Kenyan citizen
-At least 20 years of age
-Holder of DIT certificate
Messenger -Have KCSE certificate -Taking and delivery of
-Good communication skills messages
-Kenyan citizen
-At least 21 years of age
Security -Able to speak English and -Provide security
Kiswahili -Check and reduce pilferage

Receptionist -Be able to speak -Directing customers

-Welcoming customers
Cleaner -Be above 18 years of age -Ensure general cleanliness of
-Have a good public relation business enterprise

3.3 PROJECTED RENUMERATION OF THE EMPLOYEES

Job Title No. of Monthly Year 1 Year 2 Year 3 Remarks

employees
M. Director 1 57,630.00 691,560.00 692,700.0 695,700.0
0 0
Sales & marketing 1 44,630.00 535,560.00 536,110.0 537,210.0
0 0
The
Finance management 1 44,630.00 535,560.00 536,110.0 537,210.0
increase in
0 0
`Personnel manager 1 44,630.00 535,560.00 536,110.0 537,210.0 salary
0 0 indicates
Quality manager 1 44,630.00 535,560.00 536,110.0 537,210.0 the market
0 0 demand
Operation manager 1 44,630.00 535,560.00 536,110.0 537,210.0
and the
0 0
27
Research & 1 44,630.00 535,560.00 536,110.0 537,210.0 client
Development manager 0 0 synergy.
Supervisor 3 44,630.00 415,560.00 411,610.0 417,210.0
0 0
Technician 7 44,630.00 627,120.00 627,670.0 628,770.0
0 0
Personal clerk 1 44,630.00 271,560.00 272,110.0 273,210.0
0 0
Sales supervisor 1 44,630.00 327,120.00 327,670.0 333,210.0
0 0
Chief accountant 1 44,630.00 331,560.00 332,110.0 273,210.0
0 0
Accountant 1 44,630.00 271,560.00 272,110.0 417,210.0
0 0
Sales clerk 3 44,630.00 415,560.00 416,110.0 544,220.0
0 0
Technologist 2 44,630.00 543,120.00 543,670.0 484,770.0
0 0
Overseers 4 44,630.00 483,120.00 599.230.0 600,330.0
0 0
Secretary 3 44,630.00 598,680.00 279,670.0 280,770.0
0 0
Messenger 2 44,630.00 279,120.00 483,670.0 484,770.0
0 0
Receptionist 2 44,630.00 483,120.00 111,110.0 111,210.0
0 0
Cleaner 5 44,630.00 109,560.00 110,110.0 328,770.0
0 0
Quantity manage 1 44,630.00 220,680.00 221,230.0 222,330.0
0 0
Totals 773,530.00 928,236.00 9,336,000
9,300,300

3.4 TRAINING

28
The proprietor of the business will train the employees so that their skills can go hand in hand
with the change in technology.

ON JOB TRAINING

This will apply to the servicemen during the field work by their senior personnel’s.

OFF JOB TRAINING

This will be done for the key personnel’s. They will get chances of leaves then attend the training
sessions.

SEMINARS AND WORKSHOP

The employees will be attending seminars, workshops, sites to gain more knowledge on their
different fields. The managing director, finance manager etc will organize trips and tours for the
employees.

3.4.1 JOB PROMOTION

Promotions will be based on the following factors.

i. Experience

Those workers who have had enough experiment will be promoted, this will be evidenced by
increase of salary.

ii. Merit (hard work)

All those employees who have shown hard work and dedication to their work will also be
promoted

iii. Qualification

Employees with higher education level and knowledge of their work will also be promoted.

3.4.2 RECRUITMENT OF WORKERS

29
Before recruiting employees, the business will make advertisement using internal memo, T.V.
newspaper and/or involve recruitment agents. After the advertisement the applicant will be
sorted through personnel and related department and the best applicant will be interviewed in
order to come up with the best candidate to fill the advertised vacancy.

3.5 LEGAL REQUIREMENT

For the business to operate, it will then have the conditionality and requirement that pertains to
the industry and the business, such requirement will be license permits and by laws as listed
below.

Trade requirement Source Cost

Trade license Local authority 50,000.00
Specialized license Kenya Bureau of STDS 30,000.00
Employment Act KFAE 20,000.00
Occupant liability Insurance agent 25,000.00
Compensation Act Insurance agency 80,000.00

3.6 SUPPORT SERVICES

The enterprise cannot actively be able to provide all service the market without consideration of
axially that will enhance speed performance.

SUMMARY OF SERVICES AND PROJECTED COST

Item Source Units Cost per unit Monthly cost Annual cost
Banking Kenya 1,500.00 18,000.00
services Commercial bank
Doctor Sony Hospital 2,000.00 24,000.00
Security Apex 2,500.00 30,000.00
Electricity Kenya power 1,500.00 18,000.00
Advertisement Ramogi FM 1,000.00 12,000.00
Stationary Khetias 1,300.00 15,000.00

30
Internet AOL online 1,000.00 12,000.00
Insurance Amaco 1,200.00 14,400.00
Language K & Comrades 1,500.00 18,000.00
totals 13,500 162,000.00

CHAPTER FOUR

4.0 OPERATION (PRODUCTION) PLAN

The business explains production plan and perpetual organization, planning, directing and
controlling of all resources. The enterprise has proposes a vibrant production system that will
enable management meet the time frame of the market. The business is the start up type of
business that shall carry out its operation in supply of products and services to its customer, its
operation will mainly involve production and construction products as services.

4.1 PRODUCTION SYSTEM

31
The business shall adopt service production and unit production system so as the enterprise meet
eh market demand by creation of place utility, time utility and form utility. The production
system will be adopted so as to cater for service related production and service design and
development in order to meet market demand.
4.1.1 GOALS OF PRODUCTION SYSTEM

i. Optimal use and available of material and labour

ii. To produce products that meet market demand
iii. To design and improve quality of productions and services
iv. To design and improve the quality of productions and services that suit the building and
construction standards.

Overheads expenses.

Table no. 4.1

ITEMS COSTS
Water bills 500.00
Insurance cover 5,000.00
Postal services 350.00
Telephone expenses 2,500.00
License/permits 5,000.00
Advertisement 5,000.00
Promotion 5,000.00
Maintenance 500.00
Diesel 500.00
Oils 100.00
Totals 34,350.00

4.2 PRODUCTION FACILITIES AND EQUIPMENT

32
The enterprise anticipates employing a capital intensive method that will enable administration to
run, manage and establish a wholesome system of management that achieves its goals within this
stipulated period of time.

The business will have to acquire some of the machinery and equipment before it commences its
affairs while others will be hired or leased due to initial cost of purchase and maintenance cost.

Table no. 4.2

ITEMS NO UNIT TOTAL (KSHS)

Mixing machine 1 100,000 100,000
Vibrator 1 30,000 30,000
Spades/shovel 10 200 20,000
Wheel barrows 4 1,500 6,000
Gauge boxes 5 300 1,500
Trowel 3 400 1,200
Mold 15 (600g) 10,000 150,000
10 (900g) 15,000 150,000
5(450g) 6,000 30,000
Tampering rod 5 150 750
Balloon set 1 150,000 150,000
Block mold 15 200 3,000
Sledge hammer 4 600 2,400
Masonry hammer 4 200 800
Mattock 5 100 500
Totals 478,150

4.2.1 THREAT OF LOSS, WASTES AND SCRAPS OCCURING DURING

PRODUCTION

After valuing the cost of normal loss, waste and scraps below are proposed measures that will be
taken by management.

i. Any by-product released will be sold and treated as other income.

33
 ii. Scraps will be sold and treated as other income
iii. Waste will be designed and sold at a cheaper price
iv. For any process loss incurred shall be approved to the department or charged on
production costs.

SERVICE AND PRODUCTION LAYOUT

S.S.I F A B DR D T BR

V M

DR

Dust RMM Ballast Sand G

Quarry ballast
Bay H Bay G K
Bay J Bay I

34
Key

A – Sales office DR – Dressing room

B – Accounts office BR -Bathroom

C – Secretary’s office K - Kitchen

D – Curing shed J,H – Ballast bay

E – Store S.S – Senior Staff toilets

F – Casting shed T - Toilet

G - Stand bay N - Gate

M – Showroom V – Watchman kiosk

4.3 PRODUCTION STRATEGY

The business after intensive survey has realized that most of the civil works companies fail to
control and fully monitor due to constraints in materials supply , measures all pleaders that it will
need to serve. Constant supply of raw materials and vital facilities for the sake of production and
service provision.

4.3.1 MONTHLY MATERIALREQUIREMENTS/PURCHASE.

The table below shows the raw materials, source and cost that will be paid for the acquisition so
as to enable effective service delivery.

Table no. 4.3

Material Frequency Source Quantity Cost per unit Total

cost
Cement Twice a year E.A Portland 900 bags 500 450,000
Lime Twice a year E.A Portland 800 bags 300 240,000
Coarse Several H –Young 50 trucks a 12,00 per 600,000
aggregate Several Within year truck 296,000
Fine aggregate Several Yako 37 trucks a 8,000 per 40,000

35
Paints Several Hardware year truck 30,000
Diesel/Petrol Several Total 1000 litres 40 200,000
Clean sand Several Within 1.5 drums 20,000.00 180,000
Stones Within 20 trucks 10,000.00
30 trucks 6,000.00

MONTHLY PRODUCTION OVERHEADS COST

Table no 4.3

Overheads Amount Annual cost Remarks

Indirect materials 5,000 Depends on the level
Power and 10,000 of activity in the
supervision 15,000 company affairs.
Indirect labour 3,000
Maintenance
Total cost 33,000

PRODUCTION PRELIMINARY EXPENSE

Table no 4.4

Expense Cost Total amount Remarks

Overhead 750,000 Cost based on FIFO
Raw materials 800,500 method
Machine and 1,000,000
equipment 41,000
Rent and water 65,000
Spare parts

4.3.2 REGULATIONS AFFECTING PRODUCTION

The business realized that the following are likely to affect its operations immediately it starts its
operations.

36
 i. Registration act (cap 505)- the business will have to duly register with government to
avoid any legal cases that may affect its operations.
ii. Trade mark acrt (cap 506) – the business will have to design and register its logo to avoid
any court cases.
iii. Safety- the business will ensure that it promises to comply with the fire and safety
measures so as to avoid any road for accidents
iv. Trade license from local authority annually.
v. Health and environment – the layout of the business yard will be in such it meets the
requirements of health and environment.

4.4 PRODUCTION PROCESS

4.4.1 The business will undergo the following production process

STEP I

i. Taking the building materials before the firm machines

ii. All the buildings and sheds will be constructed on the owner’s land
iii. Fine and coarse aggregate kept within the bags.

STEP II

i. Supervisor to make sure that each person is in the right position of work.

STEP III

i. The required cement for the day should be removed from the store, mixing of the
aggregate done by the mixing machine. This is followed by casting of culverts,
bricks, blocks etc. A talk rate of the number of culverts rings to be produced each day
by a specific group and noted. Extra work costs for extra payment.

STEP IV

i. Caring of the wet products should be done very well and kept under shed. This should
stay for at least 28 days. No ring/blocks should be dispatched from the premise
without proper curing.

37
STEP V

i. All rings should be stored under shed. The manufacturing of rings, blocks be
controlled by the number of stores.

STEP VI

All bought and ordered culvert moulds should be dispatched as the requires them. There should
be no delay of orders.

4.4.2 PRODUCTION PROCESS CHART

TESTING

BATCHING -
MASS/VOLUME

MIXING

CASTING IN
MOULDS

REMOVING OF
MOULDS

CURING

STORING

TRANSPORTATION

4.5 GOVERNMENT REGULATIONS THAT AFFECT PRODUCTION

The business will be affected by the following factors.

- Trade Act – The owner should come up with his own trade marks so as to overcome
conflicts with other businesses.
- Public health – All first aid and safety precautions should be on the premises. There
should be clean drinking water.

38
- Environment – The business should comply with NEMA conditions.
- Insurance policy – The business will comply with the policies set up by the insurance
firm.
- Employment Act – The right of the employees should always be put into account.
- Government policy – Paying of taxes should be complied with others remitted to bodies
like NHIF,NSSF and PAYE.

39