Professional Documents
Culture Documents
Building Constraction Material
Building Constraction Material
O BOX 74-20100
NAKURU
INDEX NO : 552105/0215
TECHNOLOGY
PLUMBING
1
Table of Contents
DECLARATION......................................................................................................................iii
PREFACE..................................................................................................................................4
DEDICATION...........................................................................................................................5
ACKNOWLEDGEMENT.........................................................................................................6
EXECUTIVE SUMMARY........................................................................................................7
MARKETING PLAN................................................................................................................7
CHAPTER ONE........................................................................................................................1
1.5 PRODUCTS.........................................................................................................................2
1.7 INDUSTRY..........................................................................................................................3
CHAPTER TWO.......................................................................................................................5
2.1 CUSTOMERS......................................................................................................................5
2.2MARKET SHARE................................................................................................................5
2
2.3COMPETITION....................................................................................................................5
2.5DISTRIBUTION STRATEGY.............................................................................................8
2.6PRICING STRATEGY.........................................................................................................8
CUSTOMER ORIENTED.........................................................................................................8
PSYCHOLOGICAL PRICING.................................................................................................9
2.7SALES TACTICS.................................................................................................................9
CHAPTER THREE..................................................................................................................10
TRAINING..............................................................................................................................12
PROMOTION..........................................................................................................................12
3.4.1REMUNERATION TABLE............................................................................................12
3.7 BY LAWS..........................................................................................................................13
CHAPTER FOUR....................................................................................................................14
3
4.4 MATERIALS.....................................................................................................................17
LABOUR COST......................................................................................................................17
PRODUCTION COST.............................................................................................................18
4.8GOVERNMENT REGULATION......................................................................................19
FORMULAR 1.........................................................................................................................24
FORMULA 2...........................................................................................................................27
APPENDIX..............................................................................................................................28
4
DECLARATION
I declare that this business plan is my original work and has never been presented to any
other institution for the award of diploma certificate.
5
PREFACE
Due to economic constraints facing Kenya as a country which have led to high level of
unemployment, there is need to come up with an alternative of self-employment rather than
expecting to be employed by the government or private firms.
I therefore suggest that there is need to come up with creative ideas for finding out
information concerning the problem and implement in order to meet the demand of
unemployment.
For this problem to be solved, one has to come up with a suitable and viable business plan
which can give good and clear direction on how to initiate and operate a successful.
vi
DEDICATION
This business plan is dedicated to my brother Boniface Kibet, mum Pacifica and dad Mathias
for their entire full financial and material support throughout my course training.
Also my dedication goes to my friends, classmates and my teacher Merciline Langat for their
encouragement and guidance in the preparation of the business plan.
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ACKNOWLEDGEMENT
I appreciate the efforts of my teacher for assisting me on how to come up with this business
plan.
I also express my thanks to Brother Boniface Kibet, mum Pacifica and dad Mathias for all
their financial support which enabled me to write and finish this business plan in time.
Lastly I would not forget my colleagues for the wise suggestion which contributed to the
success of this project.
viii
EXECUTIVE SUMMARY
1.0 BUSINESS DESCRIPTION
ix
4.0 FINANCIAL PLAN.
The initial capital for the proposed business amount to Kenya shillings (300,000 on which
150,000 will be acquired from the owners’ equity and the remaining amounts 150,000 will be
obtained from the family contribution.
x
CHAPTER ONE
1.0 BUSINESS DESCRIPTION.
1.1 BUSINESS NAME
The name of the business will be SLY BUILDING AND CONSTRUCTION DEALERS
ENTERPRISE since it will only deal with construction equipment. The name is easily
pronounced and remembered by the potential customers.
1.2 BUSINESS LOCATION AND ADDRESS.
The business will be located in a suburb township of Nakuru Municipality opposite Sokoni
Plaza
The reasons for choosing the location is paramount to the following factors:
i. Transport and communication is effective.
ii. Availability of water and electricity.
iii. Nearness to customers.
iv. Proper security.
v. Availability of manpower.
vi. Availability of space for car parking.
vii. Maintained modern infrastructure.
The business building is more feasible to the customers and easy to reach than any other
business within its environs for instance customers coming to purchase other goods in the
shops, supermarket, warehouse and chemists may come before the premise first.
The address of the proposed business will be.
SLY BUILDING AND CONSTRUCTION DEALERS ENTERPRISE
P.O.BOX 74-20100,
NAKURU.
MOBILE NUMBER: 0743559180 OR 0724949805
1
1.3 BUSINESS OWNERSHIP.
The form of business will be sole proprietorship business meaning I am the one who is going
to monitor and run it as the manager. However, I will need the services of four workers two
general workers, two watchmen, two cleaners who will serve as messengers, one account
clerk and one typist or secretary.
1.4 TYPE OF BUSINESS
This type of business will offer services and goods mainly for building purpose such as
cement, iron, sheets and wire mesh.
The entrepreneur intends to have first his business as small- scale – sole proprietor business
then later he will expand to be large-scale business.
1.5 PRODUCTS.
As the name suggests Construction Dealers means the business will offer products related to
the building industry which means it will be dealing in goods related to it such as: -
i. Cement.
ii. Iron sheets
iii. Wire mesh
iv. Pipes
v. Wire mesh
vi. Pipes and fittings
vii. Carpentry tools like hammer, glue and nails.
viii. Brush
ix. Furnishing paints.
Nakuru town being the only strategically located town in the Rift valley region. It is the only
town in the region which is growing at fast rate in terms of infrastructure telecommunication
and population. Therefore, it has attracted many investors from within and outside the town
to invest in different business.
The environment of the town is good and conducive for the business. Other reasons include
2
clean water, good roads, proper housing, medical care, security and available foodstuffs.
There is easy transportation of goods to the customer because of good roads within and
outskirts of the town.
Ready market for the products is also available because of the increasing population which
has led to continuous building of houses and other business premises.
1.7 INDUSTRY.
The business falls under building industry that has been growing at a very high rate due to
increased population and upcoming investors.
The future prospects of the business are good as the economy will continue to improve and
the government concern to support the small business enterprise with the loan. The business
will be using Labour – intensive technology.
The main aim of the business is to give the best quality service in building and commerce
industry in small quality and quantity where minimal procedure is to be followed.
However, the business has other goals like.
3
1.9 ENTRY GROWTH AND STRATEGY.
Creating customers’ awareness is the key factor to the business. Therefore, before the start
of business the proprietor will advertise the enterprise using posters, signposts and through
radio. By stating clearly, the specific location, when it will start its operation and working
hours of the business.
The firm also intends to open another two branches one at BAHATI and another one at
NAIVASHA town. The main aim of increasing the business opportunities is to meet the
demand of potential customers who are far away distance from the town.
Another reason is that there will be no competition in those places from any other enterprise.
4
CHAPTER TWO
2.0 MARKETING PLAN
The targeted customers for the business will be mainly those dealing with building and
construction for example building societies estates, companies, commercial and domestic
purposes.
2.1 CUSTOMERS
The customers will be purchasing the goods on retail and wholesale purposes depending on
the purchasing power of large companies will be buying on large-scale while the others will
purchase on retail or small-scales.
Many of potential commercial buyers are located within the town and outside the town for
example Rift Valley bottlers, Rive tax, institutions like Egerton University, Nakuru
polytechnic, while the domestic customers settle within the town and its outskirts.
2.3 COMPETITION.
A competitor is an asset to the business and not a liability because it helps the entrepreneur to
get tactics to run the business effectively.
The weaknesses of the above competitors are poor salesmanship technique in that they do not
have promotion and good grounds for advertising the product.
5
Lack of qualified and experienced personnel in management of their business. Minor-
competitors.
2.3.1 ARAWA CONSTRUCTION DEALERS
2.3.2 REALERS CONSTRUCTION DEALERS
2.3.3 MINING CONSTRUCTION DEALERS
The minor and the major competitors might not affect the proposed business to be initiated
because they may not be accessed to customers due to poor relation with general public. The
location of its sites is not strategically good because others are behind big buildings. Others
are dispersed in distant location like for those in Kaptembwa
The entrepreneur of the proposed business upon carrying out market research of the products
will maximize his skills to outshine his competitors to win more customer’s satisfaction. This
will enable him to obtain more profit in the market, given the fact that building sector is
growing up at high rate due to high demand of building materials.
The owner must utilize the existing channel of distribution that wholesaler to customer to
ensure that customer satisfaction is achieved in relation to the market demand of the products.
Pricing 7 6 6 9 8
Location 8 4 5 6 7
Promotion 7 5 5 6 6
Sales method 5 6 2 3 4
Advertising 9 6 4 6 7
Service 6 4 4 6 7
Total 48 36 31 39 43
6
The table above illustrate that SLY BUILDING AND CONSTRUCTION DEALERS stands
a better chance over its competitors in almost all the given areas of comparison Such as
competition in marketing goods and supplying them to the customers.
7
The above table shows that SLY BUILDING AND CONSTRUCTION DEALERS stands a
good position over its competitors in almost all areas of comparison.
2.4 ADVERTISEMENT AND PROMOTION
In promoting the business, the owner intends to give special offers at the outset of the
business. Each customer will be given free sample or rather be added a certain quantity on
purchased goods. This will attract them to continue buying the product.
Credit will also be used and free transport for sometime. For those who will buy in bulk
amount discount will be allowed at reasonable quantity Advertisement will be used in order
to promote the business by use of television, radios and posters. The estimated cost that might
be used in advertisement will be around 10,000.
Delivery notes, posters and invoice issued to the customers bearing the business name
address and location will be used as a business promotion strategy.
2.5 DISTRIBUTION STRATEGY
There will be no channel of distribution employed, since customers will be buying directly
from the business premises. Transport cost may be provided to all customers depending on
the quantity of goods they purchased.
The cost of the materials + cost of labour and overhead + profit = The selling price. MC + IC
+ O + Л = SP.
SLY BUILDING AND CONSTRUCTION DEALERS will be pricing its
products and services by competition pricing. This is because the entrepreneur is entering into
the market for the first time he will quote the price at low price to attract more customers.
CUSTOMER ORIENTED
8
According to research which was carried out by the entrepreneur the numbers of customers
purchasing the products are large enough. The parameters show that customers of both high
and low purchasing power can afford the quoted price in the market.
PSYCHOLOGICAL PRICING
During festive seasons the price of building materials tend to go down by about 5% of the
prevailing market prices hence customers in general buy in large numbers compared to other
seasons.
In order to attract customers, the owner must carry out research personally from his
competitors to analyze the potential customers. After knowing the customers, the owner will
establish ways of getting into contact through advertisement of his newly initiated business
and quote lower price, offer discounts, give credit and free samples. The owner will also visit
them personally to know the psychological taste and needs. At first the owner upon getting
the customers he will treat them well and offer the products at cheap price.
9
10
CHAPTER THREE
Manager (owner)
Two cleaners
The above organization structure shows that the owner is the one who undertake the duties as
wholly. The entrepreneur of the proposed business is well qualified enough to undertake this
responsibility given the fact that he has acquired entrepreneurial skills in THE RIFT
VALLEY INSTITUTE OF SCIENCE AND TECHNOLOGY.
However, the owner will be in need of six workers as shown above this include two general
workers, Accounts clerk, typist and two cleaners.
3.2 BUSINESS MANAGER AND QUALIFICATIONS MANAGER
Duties and responsibilities of the manager.
Supervision of the work on a daily basis.
Controlling and decision making on final matters.
Carry out business transaction
Recruitment of workers.
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Qualifications
Must be a diploma holder in business Administration or accountants.
Must have worked in very busy organization.
There are six additional workers, two general workers and Accounts clerk, typist and two
cleaners.
Duties.
Typing information and also act as receptionist.
Recruitment of workers should be done through interviews. These will enable the interviewer
to meet the candidates in person and have interview orally also as he checks the qualification.
12
The interviews will be candidates of the four vacancies through posters.
TRAINING.
Since the recruitment goes as per qualification to certain duty; there is less job training.
However, workers will be oriented to any new technology arising in the organization. This
will enable them to alter more skills of job instance if accumulated highly it need more
complex accountant to balance the books of accounts
PROMOTION
These will be practical often while starting the business. The sales manager will prioritize
efficiently and skills in organizing some promotion to advertise the firms’ products to its
potential customers. He might use posters, bill boards, free gifts or oral promotion.
3.4 REMUNERATION AND INCENTIVES.
SLY BUILDING AND CONSTRUCTION DEALERS will remunerate its workers fairly and
equitably as per the profits made by the enterprise. Which means the more the profits will
lead to increase in workers’ remuneration.
Additional allowance will be given to the workers after one year. Salaries will be paid in
relation to the academic qualification and nature of duties to be performed.
WORKERS
Accounts clerk 4,500 2,000 9 6,500
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3.6 LICENSE FOR THE BUSINESS.
Trade license will be acquired from the County government of Nakuru
3.7 BY LAWS.
Enhance the relationship between the employer and workers some duties have more than one
employee, thus will be given room for annual leave for employee in that department.
3.8 SUPPORT SERVICES.
As an aspiring entrepreneur I would need more consultants to pave way my goals. I will
choose places and people to ask for what I required in my business. I will consult different
agencies e.g. government experts, such as ministry for advisory and financial support in order
to finance or run my business better. Friends and micro-finance institutions like Faulu Kenya
will help in advice on how to engage and run the business effectively.
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CHAPTER FOUR
4.0 PRODUCTION AND OPERATION PLAN.
For SLY BUILDING AND CONSTRUCTION DEALERS to have productive business that
is profitable, efficient and effective, the following facilities and equipment are necessary:
4.1 PRODUCTION FACILITIES AND CAPACITY
NO EQUIPMENT NO QUANTITY MODEL TOTAL COST SUPPLIER
QUALITY KSHS CONSTRUCTI
ON DEALERS
1 Roofing ceiling 10 Soft board Hard Recommended 40,000 Raiply Webuye
and cardboard wood modern pan Paper
10
2 Tables cabinets To 3 Office table Aim Modern type 150,000 Copy cat ART
and office desks chairs Conference Modern type ART ART ART
To 4 Tables Cabinets Modern type Hire purchase ART
Wardrobes and Modern type
15 drawers. Modern type
Modern type
6
3
3 Telephone and 3 Telephone and Modern type 10,000 Telcom Other
fax mobile phone Construction
1 Dealers like
nokia, Motorola
companies.
15
The cash to be used for purchasing the equipment, facilities and appliances will be Kshs
100,000 and Kshs. 900,000 will be used in different parts to pay for deposits for example
buying the vehicles and furniture.
4.2 REPAIR AND MAINTENANCE.
To ensure that proper use of machinery and equipment is kept up to date, breakages and
repairs will be done according to the type of equipment for example machines like type
writers will be serviced throughout the year, the telephone at the end of every week and
Vehicles will be serviced daily to ensure that they are in good order. Different personnel will
be employed to ensure that repair and maintenance is kept up to the required standard on the
regular times schedule. The cost per schedule time will be as follows.
PERIOD
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4.3 WORKSHOP LAYOUT
MAGERS OFFICE
MAIN OFFICE STORE ONE
WATCHMAN
LABOURERS OFFICE
GATE
RECEPTION ROOM
TELEPHONE
GATE TO WAREHOUSE
The business deals mainly with purchase, storage and supply of gods to the customers. The
channels involved are easy for instance zero channel of distribution. The design I will use
will be as follows:
1. Purchase and store the products.
17
2. Deliver the goods to the customers by providing transport.
4.4 MATERIALS.
My personal business will major in al building materials for example cement iron rods, iron
sheets house or office fixture and appliances, wood, nails and cupboards. I will be
transporting these goods on my own vehicles to the warehouse and later to the customer’s
premises on request.
4.5 COST OF RAW MATERIALS.
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NO POSITION MONTHLY (KSHS) YEARLY (KSHS)
1 Manager 10,000 120,000
each.
2 Watchman 1,000/= each. 2,000 24,000
PRODUCTION COST
Direct materials 100,000 1,200,000
PRODUCTION PROCESS.
The following stages will be the guiding means of transaction of goods and services to the
customers.
19
4.7 STAGE INVOLVED
Either way of distribution of goods and services to the customers is applicable. In my case as
a wholesaler and retailer the type of goods and services I am dealing in the first option is
applicable.
STAGE 1
Goods are supplied by the manufactures to the warehouse or store in the downtown industrial
are a long the railway depots.
STAGE 2.
I will buy from the stores in large quantities and then transport them to the premises for
storage and reselling them to the final retailer and potential customers.
STAGE 3
After buying the goods the owner packs or loads them on the customers’ vehicles or his
vehicle for minimal cost to the customer’s residences within or outside the city.
STAGE 4
The fourth stage is where the goods are bought on customer’s recommendation loaded to the
vehicle from the depot, transported to his premises in advance payment or if the customer is
faithful one he will pay on credit terms he is given service and good with discount on the
agreement reached as the tender or contract.
I will have government experts to come on regular basis to carry out inspections in all areas
of the business premises, workers’ health, good or services rendered to the customer. Also the
permits and vehicles dealing with different issue will be made available though the
government. Money to start the business will be raised through the following ways:
20
Personal savings (owner’s) 1,298,200/= Bank loan (Barclays)
1,500,000/=
Total investment 2,798,200
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CHAPTER FIVE
ASSUMPTIONS.
1. Stock of raw materials and working capital increased at the rate of 40% to 50% in the
second and third year of operations.
2. Debtors increased by 16% on the subsequent year at the rate of 50% to 60%.
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5.3 PROJECTION CASH FLOW STATEMENT
CASH FLOW JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEC TOTAL
Cash sales 90,000 92,000 84,000 82,000 89,000 80,000 92,000 90,000 90,000 85,200 85,300 200,500 1,160,000
Debtors 1,000 2,000 900 500 1,500 1,500 1,200 1,300 300 2,000 1,500 1,500 15,200
Total cash 91,000 94,000 84,900 84,500 90,500 81,500 93,200 91,300 90,300 87,200 86,800 202,000 1,175,200
flow
Cash outflow
Telephone/ 200 500 600 260 300 400 500 200 300 350 200 300 4,100
postal
Purchases 10,000 20,000 20,000 10,000 25,000 25,000 10,000 15,000 25,000 10,000 20,000 20,000 210,000
Rent 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,000
Salaries or 35,200 35,200 35,200 35,200 35,200 35,200 35,200 35,200 35,200 35,200 35,200 35,200 422,400
wages
Water or 1,500 1,500 1,600 1,500 1,600 1,500 1,600 1,600 1,500 1,800 1,500 1,600 18,700
electricity
Transport 2,000 2,400 2,500 3,000 2,200 2,000 2,100 2,300 2,400 2,000 2,000 2,400 27,300
Advertisement 500 400 500 600 700 500 500 400 500 400 300 400 5,700
Repair/ 200 300 400 300 200 1,000 2,000 500 500 400 500 200 6,500
maintenance
Fuel 2,000 4,000 3,000 6,000 5,000 4,000 3,000 2,000 3,000 4,000 3,000 2,000 41,000
23
Licenses 10,000 10,000
Insurances 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000
Loan 500 550 600 650 700 750 800 850 930 950 1,000 1,050 9,330
repayment
Total outflows 65,100 67,850 72,400 70,500 58,900 73,350 53,700 60,950 72,950 57,800 66,800 66,050 791,030
Net profit 25,900 26,150 9,100 14,400 23,600 17,150 34,500 30,350 17,670 29,400 20,000 135,150 384,170
Accumulated 25,900 52,050 61,150 75,560 99,150 116,300 150,800 181,150 198,820 228,220 248,220 384,170
cash
24
5.4 ASSUMPTIONS.
1. Machinery, furniture/ fittings and miscellaneous assets remain constant for the second
and third years of operation.
2. Stock of raw materials and financial status increased by 40% to 50% and 60%
respectively showing that there was a slight profit made in the second and third year.
3. Debtor increased at the rate of 15% for the rest of second and third years at rate of
50% to 60% respectively.
FORMULAR 1
VARIABLE COST KSHS
Fuel 41,000
Transport 27,300
Rent 24,000
25
FIXED ASSET COST
Machinery 1,000,000
Salary 35,200
Insurance 12,000
Loan 600,000
License 120,000
Total 2,798,200
26
5.8 PROFITABILITY RATIOS FORMULA.
= 347,600 x 100
= 34,760,000
= 347,600 x 100
= 34,760,000
iii) Return on investment = Net profit before tax of total investment + Interest x 100
= 411,700
27
FORMULA 2
= 1,090,000 – 227,300
= 862,700
= 862,700 x 100
1,090,000
= 79.1467%
= 1,090,000 – 227,300
100
= 8,627
= 5,167,200
28
APPENDIX
NAKURU TOWN
SLY BUILDING
AND
CONSTRUCTION
DEALERS
29
APPENDIX 2: RUJE DOCTOR DRAINS COMPANY
MAGERS OFFICE
MAIN OFFICE STORE ONE
WATCHMAN
LABOURERS OFFICE
GATE
RECEPTION ROOM
TELEPHONE
GATE TO WAREHOUSE
30