Jibana Building Construction Company Bus

JIBANA BUILDING CONSTRUCTION COMPANY
BUSINESS PLAN
BUSINESS NAME : JIBANA BUILDING CONSTRUCTION COMPANY
SCHOOL : KENYA WATER INSTITUTE
GROUP MEMBERS: Joshua Mutinda DWE 020/11
David Muranga DWE 002/11
Simon Munene DWE 054/11
Mike Ochieng DWE 035/11
Joseph Mwangangi DWE 059/10
Charles Kingori DWE/018/11
Juspar Kiprono DWE/006/11
Anthony Ireri DWE/019/11
Grace Kabucho DWE/036/11
SUBMITED TO : KENYA WATER INSTITUTE FOR
PARTIAL FULFILMENT OF THE AWARD
OF DIPLOMA IN WATER ENGINEERING.
EXAM SERIES : NOVEMBER 2013
Business Plan 2013 i

DECLARATION
We declare that the project is our original work for the purpose of partial fulfillment of award of
Diploma in Water Engineering.
ACKNOLEGEMENT
Business Plan 2013 ii

We wish to acknowledge and appreciate those who helped us to write this business plan. First
and foremost we thank almighty God for life and health, classmates for motivation, our parents
for financial support, and finally our supervisor.
Business Plan 2013 iii

EXECUTIVE SUMMARY
The Jibana Building Construction Company Business is an enterprise that wants to involve itself
in building residential houses and other types of house for people usage, the business realized
that many people were in such of residential house which were affordable and modern.
The enterprise plans to build houses which will be affordable by all people from different walks
of life. This houses includes
 Low class houses
 Middle class houses
 High class houses
The business will have a good market share since it intends to have modern houses which are
affordable to all
This will be will be supported by the organization and the management team that has been put
into place. Its operation and production are also well organized to ensure that the business do not
suffer in future maybe by running out of products and If the issue is finances business tends to
use the entrepreneurs savings loans and many more sources
The business has also mechanisms to use in order to overcome any kind of risks that may arise
during its operation
Business Plan 2013 iv

DEDICATION
We dedicate this project to our parents for their financial and moral support.
Not forgetting our colleagues who through their togetherness and encouragement have lead to
completion of this business plan. Mr. Kihara, the lecturer for his total cooperation and
guidelines throughout.
Business Plan 2013 v

Contents
DECLARATION..............................................................................................................................i
ACKNOLEGEMENT.....................................................................................................................ii
EXECUTIVE SUMMARY............................................................................................................iii
DEDICATION................................................................................................................................iv
CHAPTER ONE..............................................................................................................................1
1.0 Sponsor..................................................................................................................................1
1.1 Business name.......................................................................................................................1
1.2 Mission statement..................................................................................................................1
1.3 Business location...................................................................................................................2
1.4 Form of Business Ownership.................................................................................................2
1.5 Type of Business....................................................................................................................3
1.6 Products and services.............................................................................................................3
1.7 Justification of the Business Opportunities...........................................................................3
1.8 The industry...........................................................................................................................4
1.9 Business Objectives Mission and Visions.............................................................................9
1.10 Internal assessment............................................................................................................10
1.11 Growth and Entry Strategy................................................................................................11
CHAPTER TWO...........................................................................................................................12
2.0 Marketing Objectives...........................................................................................................12
2.2 Target Customer..................................................................................................................12
2.3 Market Share........................................................................................................................13
2.4 Advertisement and Promotion Strategies............................................................................14
2.5 Pricing..................................................................................................................................15
2.6 Sale tactics...........................................................................................................................17
2.7 Distribution..........................................................................................................................17
2.8 Customer service.................................................................................................................17
2.9 Duties and Responsibility....................................................................................................19
2.10 Recruitment........................................................................................................................20
2.11 Training..............................................................................................................................20
Business Plan 2013 vi

2.12 Promotion.........................................................................................................................21
2.13 Remuneration and incentives.............................................................................................21
2.14 License and permits..........................................................................................................23
2.15 Supportive services............................................................................................................23
CHAPTER THREE.......................................................................................................................25
3.0 PRODUCTION AND OPERATION PLANNING.............................................................25
3.1 Production Objectives..........................................................................................................25
3.2 Production Facilities and Capacity......................................................................................25
3.3 Production strategy..............................................................................................................27
3.4 Monthly Overhead Expenses...............................................................................................28
3.5 Production process...............................................................................................................28
3.6 Regulations Affecting Operations.......................................................................................29
3.7 Operation table/production schedule...................................................................................29
CHAPTER FOUR.........................................................................................................................30
4.0 FINANCIAL........................................................................................................................30
4.0.2 Working capital................................................................................................................32
4.1 Project Income Instatement.................................................................................................33
4.2 Projected statement of financial position.............................................................................34
CHAPTER FIVE...........................................................................................................................36
5.1 RISK MANAGEMENT......................................................................................................36
5.2 Definition of Risk................................................................................................................36
5.3 Risk Management Stages.....................................................................................................36
5.3.1 Risk Identification............................................................................................................36
5.3.2 Risk evaluation.............................................................................................................36
5.4 Types of Risk.......................................................................................................................37
5.4.1 Financial risks...............................................................................................................37
5.5 How to Handle Risk.............................................................................................................38
Business Plan 2013 vii

CHAPTER ONE
1.0 Sponsor
Every business has the owner and the owner of the Jibana Building Construction Company is a
partnership between several members holding various qualifications in this field and experience
in estate designing and house planning.
1.1 Business name

The business name is Jibana Building Construction Company. This is because the company will
focus on a lot of construction in residential houses. The companies address is;
Jibana Building Construction Company
P.O Box 8222-00300
Nairobi
Telephone 0711759925
Email.jibanaconstruction@gmail.com
1.2 Mission statement

The business mission statement is standard houses for harmonious living. The company wants its
customers to have modern houses to live in and that’s why it came up with such a mission
statement
1.3 Business location
This business is located along Uthiru near Kangemi Market.
The main reasons and factors that enhanced the location of the business are;
1. The security in the area is impressing due to the police station around
2. The roads are well built hence less traffic jam
3. The place is accessible by students from Kabete Campus
1.4 Form of Business Ownership

The Jibana Building Construction Company is owned up by 10 people forming a private limited
company which will enable the business to enjoy the following advantages in addition to limited
liability. The private limited company/business will enjoy tax advantages in addition to limited
liability.
The business will pay corporation tax on its taxable profits and tend to be exempt from higher
personnel income tax rates. The business will enjoy permanent succession because the business
is its own legal entity.
The employees and shareholders acts agents of the company and therefore do not affect the
company if they leave
In case of death or resignation the business article of association allocates the shares to the
remaining members
Business Plan 2013 2

1.5 Type of Business
The type of business is real estate. Under this business the construction of residential houses is
carried out for all types of people. The type of houses constructed are categorized into three
stages
 Low class houses
 Middle class houses
 High class houses
1.6 Products and services

The main product in this kind of business is building all kind of houses ranging from residential
houses to social halls. The houses will be affordable to all people from different walks of people.
This includes low, middle and high class houses, the product will be for renting also for
purchasing according to the demand of the client.
The company will offer some services to the customers to show hospitality and also as a way of
showing gratitude to the customers for choosing our products/houses. The services will include;
Free transport-this will happen when they relocate to our houses.
Garget installation
1.7 Justification of the Business Opportunities

The main reason that led to implementation of this business is because there is high demand of
residential houses all over the country. Many people think ready built houses are easy to own as
compared to building one for you. This thought or perception made the company to come up
with the construction business. The aim of the business is to make and provide the customers

with modern houses which are affordable and safe for their living. This is done by making sure
the company builds houses which are affordable to different kind of people from different walk
of life and also by making sure that the houses built are strong enough to withstand any kind of
catastrophe.
1.8 The industry

The Jibana Building Construction Company falls under construction industry
Size of industry
The business is a fast growing sector, each day the growth is escalating due to high demands of
settlement for people all over the world. In the country the demand is the same as compared to
other parts of the country and the world at large. this industry is wide to the extent of covering all
real estate categories including single and multifamily residential dwellings commercial
dwellings, industrial and agricultural, land offices space, go-downs and ware houses, retail
outlets and shopping centers. Nairobi alone has more than 1753 farms as compared to almost
5376 farms all over the country.
The number in the region *100
Total number
1753 X100 =33%
5376
According to the survey the industry is growing rapidly due to high demands of residential
houses.

The Industrial Trends and Prospect
Kenya is the most developed country in east Africa region and the middle class is growing
rapidly creating opportunities for housing. Business in tourism has increased significantly in
Kenya creating the need for more accommodation facilities. These are a need for investment in
affordable hotel. Accommodation facilitates that are up to standard with the rest of the world.
Low cost project remains the eternal gap in the market as potential demand is huge. However
due to the absence of good infrastructure in many parts of the country the costs and therefore sale
prices of this projects are such that the homes are not really affordable for the target market.
The security issues also have created difficulties in leaving in some areas of the country due to
fears of attacks.
Technology has been a great challenge to the real estate sector too, technology is dynamic and as
we know it changes within a very short time as a matter of fact this technology has kept sector on
its toes since the sector is left with no choice but to change with the technology though it is very
expensive to go by.
Despite this technology having its demerits it has its merits too. It has propelled the sector to
great heights in terms of service rendering and products producing. According to the statistics
and if the statistic is something to go by then I can say the real estate sector has been growing
from year to year. Many forms have been created in Nairobi and in other parts of the country
giving the sector the privilege of being among the sectors that are rapidly growing in the country.

In provinces in which real estate investments are situated, the survey shows that Nairobi has the
most popular investment destination having 43%companies while north eastern has the least
count of 1%the chart below illustrates this
r e a l e s t a t e f ir m s in e a c h c o u n t y
0 .9 , 1 %
1 0 .2 ,
10% n a ir o b i
r if t v a lle y
1 6 .7 ,
17% 4 2 .6 , c e n tra l
42% w e s te rn
nyanza
coas t
4 .6 , 5 %
e a s te rn
3 .7 , 4 % n o rth e rn
e a s te rn
12,12%
9 .3 , 9 %
This pie chart shows how the number of real estate companies are distributed all over the country
especially in the eight provinces. Among the 8 provinces Nairobi is the biggest with the number
of the real estate farm being 42.6% followed by coast which has 16.7% Central12% Eastern
10.2% Rift valley 9.3% Nyanza 4.6% Western 3.7% and finally 0.9 north eastern.

r e a l e s ta te g r o w th r a te in k e n y a
fro m 2 0 0 8 to 2 0 1 2
50
45
40
35
30 fifth ye a r
fo u rth ye a r
25 50
th ire d ye a r
20 40 s e c o n d ye a r
15 30 firs t ye a r
10 20
5 10
0
2008 2009 2010 2011 2012
The curve above shows that the farm is growing by at least 10% each year e.g. in 2008 the
business registered a growth of 10 percent. The curve shows the growth rate

Key Characteristics of the Industry
Anyone setting up a company needs to start by investing money in the project you need to find
out how much you need to invest by planning capital requirement and that is what is the business
is putting much attention on as it prepares to venture into the market
Capital requirement is a key plan especially if the business is planning to or needs to apply for
government or assistance or for a bank loan. Real Estate Construction industry is planning to get
some of its funds from bank loans and government and that is why it has to do a lot of thorough
planning of the capital
The following are the cost which might accrue during the business preparation for the lunch
1) Consultancy costs
2) Notaries fee
3) Operational expenses for goods
4) Vehicle and offices expenses
5) Machines and buildings cost
6) Staff salary
Fixed costs- they are costs that you will incur in the operation whether you are creating the profit
or not they include;
Insurances, loans payment and lease or rent payment equipments inventory and owner income
are also included

The business will incur variable costs-they are substantially from month to month and are based
on the usage, they include advertising delivering and shipping charges also utilities and
employment ways are included
1.9 Business Objectives Mission and Visions

Every company or business has objectives, mission and visions which helps the business to be
focused and have goals to achieve .objectives helps the company to move on track and it is easy
for the company to assess its success as per the achievement it has made
Objectives
The business objective is to built a lot of residential and a social halls unto 40% 2013 by making
the house affordable and modern
The enterprise will strive employment opportunity to the owner and other members of the
community who will need work
Goals
To complete a quarter of the business intended project within the first 1 year to asses
commitment
To improve the number and quality of residential houses in the region
To built different types of houses that are affordable to its customers
Mission
To be the best company that can create and design attractive homes to our customers. This is by
having the best engineers and designers who are experienced to do the jobs

Vision
The business wants to expand regionally and make itself popular in east Africa by marketing it
and building houses that are standard and modern
1.10 Internal assessment

I. Strength
The location where the business is taking place has good climatic history. It is not dry neither is
to wet, it is accessible with both electricity and water
The security is good since it is located near the police station
The technology has also boosted the project by making it simple and easy to be done.
The project has available market
II. Weakness
The big challenge facing the project is capital; capital is limited due to many requirements
involved in starting up the project also the limited human resources acts as a barrier to the
accomplishment of the project.
III. Opportunities
The project has numerous opportunities since it is entitled to expansion with the rising demands
of residential houses.
The government has also thrown weight behind the sector by encouraging the industry to
continue with its project

IV. Threats
The field has numerous people and companies who bring about a lot of competition. This
competition can range from the quality of products to the price of the product
This has pushed many companies to deep dip into their pockets in order to attract the attention of
the customer and remain top.
1.11 Growth and Entry Strategy

Entry strategy
Entry strategy is very important for any business which wan to venture into the market, the
strategy helps the developer to have some tactics that will guide him in monitoring how the
business is doing and how to enter the market the enterprise will begin operating in the month of
January 2013.this are some of the business strategies
The advertising methods during this period and other subsequent periods will be through posters,
stickers, journals and use of employees and customers as sales representatives
Growth
For an enterprise to expand there must be growth in the business. A business is termed successful
when it grows in terms of size and profit income

CHAPTER TWO
2.0 Marketing Objectives

Jibana Building Construction Company will have many customers to sell its products to. The
business is targeting the customers around the location and others from far. The houses built
along the Uthiru are targeting customers from Kabete Campus. This are students who are the
country or outside the country and want to reside around the university area
The business is expected to hold a market share of 15%initially but his is expected to rise to
25%as operations and construction continues.
Jibana Building Construction Company Construction Industry will rely on the use of radios
television set, magazines and stickers as well as billboards and newspapers to have a big market
share. It is interested to note that both locals and international media will be used to advertise for
the presence of our products
The business will strive to have a competitive pricing system whereby only high and moderate
prices will be offered to the customers, the business will ensure this by making sure it deals with
the customers directly without using middlemen
2.2 Target Customer

The business will have both commercial and individual and as a matter of facts the Jibana
Building Construction Company estate plans to build low, middle and high class houses,
conferences hall, and many more types of houses. The business decided to do business with both
individuals and commercials so that no one should feel left out; this will also increase the market
share of the business. if the enterprise serves a number of customers in the forms of individual
,groups of individuals institution government departments and other social organization

2.3 Market Share
The business intention is to grow by 15% and later to have an increase in market share of up to
25%.despite all this plans the business has got a lot of competition. the competitions are both
from within the region and outside the region
2Competition
The following enterprises will be expected to compete alongside Jibana Building Construction
Company Construction Company
1. Shah and sons Construction Company
This is a construction company situated next to Kabete Campus . It was opened in the year 2010
and has been in operation for quite some time now. it offers high quality products and services
and has expertise management who are capable of making sound decisions. it has the most
modern machines and equipments for construction
2. Classic Homes Company
This construction company is situated along think road it is famous and therefore has a lot of
market and labor force it has been in operation for over five years. Though it is famous the
enterprise charges are very high and their products are of high quality
3. Patel house dealers
The company is owned by patels family. It does not build any houses but offers services in
repairing a doing other house related productions. It has a very special financial base and has
large and loyal customers who are ready to abide by its standards of operation .it offers moderate
prices for its services but suffers from employee dissatisfaction credibility

Competition analysis table
Competitor strength weakness
Patel house dealers  They have special  They suffer the
finance base weakness of
employees
 The have loyal
dissatisfaction
customers
credibility
 Their products are
of moderate prices
Shah and sons construction  Offers quality  It have poor
products customer and public
relation
 Good expertise
management
 It has all the
modern equipments
2.4 Advertisement and Promotion Strategies

Advertising is trying to persuade people to buy a product or a service by announcing on the
internet, on the television and in news papers. The business needs to be advertised to attract the
customers and to be recognized by the public which help the business to be much known to
people
The Jibana Building Construction Company will use a host of media to advertise and promote its
products and services to the customers. The use of a radio as mean of advertising and promotion

will be of great use to the company. Both the locals and international broadcasting Medias will
be asked to assist in the advertising and promoting the activities of the business.
The Kenya Broadcasting Corporation (KBC), the citizen radio station and the nation radio station
will be used. Also the use of newspaper and magazines will be maximized in advertising and
promoting the products of the business. The specific newspapers that the enterprise intends to
use are; the standard, the daily nation and the parents magazine
Posters stickers and letters will be also used to advertise the goods and services of Jibana
Building Construction Company. The posters will be printed and posted at all strategic points in
Nairobi town and other places.
On other hand the stickers will also be produced and distributed to as many vehicles as possible,
the car owners will have them free of charge.
Promotion- This is a process of attracting people’s attention to your event, product etc
It can be done through reduction of prices or giving free product after the customer has bought
either one or more products
2.5 Pricing
At the beginning of the business operations the business will have to operate with normal prices
despite the high start up costs and operation
The nature of the pricing will depend on fundamental business factors, the cost of service, the
quality of the product and services and the nature of product to be solved will be the main
determinants. With high cost of services and products the price might be forced to hike, while
with the low price of the product the price will be low

The market price at which the goals and services are currently charged will also be another
determinant that is if the products in the market are expensive then the price will rise but if the
prices of the product are low then the price will lower
The table 2.1 below is for price list of individual customers
Products Price per product (ksh)
Single room 3500
Self contained house 5000
Family living house 11500
Social hall 20000
Table 2.1 The price able for commercial customers
Product price Discount % Price per product(ksh)
Social hall 20000 20% (80*20000) / 100=1600
Single rooms 3500 10% (90*3500) / 100=3150
Self contained 5000 25% (75*5000) / 100=3750
Family house 11500 30% (70*11500) /100=8050
2.6 Sale tactics

The business will use a host of instrument to sell itself and its products
There will be advertisement placed in newspapers journals and poster. In addition the employees
and customers will be used as sales representatives. The enterprise will also engage a public
relation firms as means of promoting its activities and familiarizing itself with the public

The use of stickers and other publications to sell the business and its product will be undertaken
as a very large scale. Therefore inured to sell itself and the products Jibana Building
Construction Company will use advertisements personal selling and public relation and also
publicity.
2.7 Distribution
In order to deal with its customers properly, the business will try to deal directly with customers.
This means there will be no middlemen to connect the business with the customers. This kind of
strategy will ensure direct assessment of the needs and aspirations of the customers by the
proprietor. As well it has the potential to limit communication expenses and other core problems
associated with consumers’ relationship management
The business will encourage scenario where customers are free to contact the owner at any time
and vice versa.
2.8 Customer service

The business intends to attract its customers by providing quality products better than those of
our competitors. We shall advertise our services and products to make the well known to
everyone.
Customers will be given different services ranging from house repair, free delivery of their goods
to their new homes and also installation of their home applications will be done free of charge.
The management team will consist of the general manager marketing managers and chief
engineer manager they will ensure all their departments are in order and running efficiently as
required to enable smooth operation of the business activities
This management team will be highlighted as

1. General Manager
2. Marketing manager
3. Chief engineer manager

2.9 Duties and Responsibility
Job title Qualification Duties Responsibility
General  Holder of degree in civil  To evaluate employees  Provides funds for

manager engineering and Business  He controls and running business
Administration oversees all the business  He manages the affairs
 Proper knowledge to make activities of the business
sound decision  He undertakes all  Evaluates the business
 Should have general matters to do with the growth and
business management skills administration performance
 Should be of age 30 and  Organizes and
above coordinates the
operation of the
business
Chief  Should have a degree in  To come up with best  Assigning work to

engineer both construction engineer designs and plans other employees
and information  Ensure the products of  He will be inspecting
communication technology the company are up to the projects started by
from a recognized required standard the business for safety
university in Kenya reasons
 Should have ability to  He will also be
make complex decision expected to inspect his
 Should be of age 25 and junior engineers
above
architectur  Holder of diploma in  Drawing well designed  Can undertake any

e drawings and designs house plans other duty as many be
 2 years working experience  Explaining all the assigned
 Ability to work long hours drawing details to the  Be able to cope with all
 Can draw 2-3 plans a day aimed patties kinds of drawings and
 Shaping drawings into designs demanded by
different sizes and his employees
designs
Marketing  Holder of a diploma in  Planning the enterprises  Communicating with

manager sales and marketing operations and activities the customers
 Publicizing the
business products
Land - Diploma in civil engineering

- Advertise the company on - Undertakes the services
surveyor the sites of construction of repair and maintenance
- Three years experience of the land
- Check whether the site has
- Ability to attend and work all the important features for
long hours construction he inspects the

land
constructor - Should have 6 months of - Commitment during - To carry out the work as
experience working hours provided by your seniors
- Ability to work for long hours
2.10 Recruitment
This is the process to get someone to work in the company or join an organization
The function of recruitment at the centre will be undertaken by the manager with the assistance
of the marketing manager, the potential candidates will have to be identified and then contacted
through either the existing employees, customers or the advertisement
The reasons we use advertisement is because it is
1) Cheap. It is not costly as compared to other methods
2) It is popular-the adverts are accessed by many people
3) It can take long before it gets invalid. Depending on the customer
The candidates will then be invited for selection where the testing method will be the most
preferred means
The management of the enterprise will have to get employees from existing construction firms
around and outside the region that will have had the experience needed to work effectively .these
will then be converted to proper workers with the very great perquisites that can make them work
t the center
2.11 Training
Training is the process of teaching someone to do a particular job or activity
The enterprise will offer short courses for the employees and other stake holders who may be in
need of the information about the various features in our firm
Specifically the employees will be encouraged to undertake courses in construction machine
maintenance and embracing of the new technology in the construction sectors and workshop
management practices
2.12 Promotion
Promotion is a process of attracting people’s attention to an event
All the positions with the exception of the general manager will be held on temporary basis. This
therefore means that promotion opportunities for all the employees
In this regard the enterprise will strive to make the employees conformed through the use of
other means and instruments like providing meaningful work, allowing the employees the
freedom to undertake their own activities without unnecessary hindrance
2.13 Remuneration and incentives

2.13.1 Remuneration
Is increasing the employee’s salary to improve their working morale
There will be straight salary of all in the position of the employees in the business; the skills
being possessed by the employee and the nature of duties undertaken by the employee at any
single time in the workplace
For instance the chief engineer will earn more than all other employees, by this position of being
second in the business hierarchy, while the constructors will earn less than any other employees
in the center.

2.13.2 Incentives
In attempts to improve the performance of employees, the business will install a range of
strategies. There will be a piece work system of servicing whereby the employees will be
enumerated according to the piece of work they produced within a given rate of payment
The profits and other gains made by the centre will also be shared between the manager and the
other employees
The various welfare services and other benefits will equally be provided by the business in
pursuit of the comfort of its employees. The employees will also be given the chances to
participate in the decision making process within the business. This will likely inspire the
performance of the employees in terms of productivity efficiency and effectiveness.
Category of Basic salary Allowances Total

employee remunerations
General manager 100,000 20,000 120,000
Chief engineer 85,000 20,000 105,000
architectures 70,000 15,000 85,000
Marketing manager 70,000 10,000 80,000
Land surveyor 70,000 10,000 80,000
instructor 50,000 8,000 58,000
constructor 20,500 5,000 30,000

2.14 License and permits
Before the beginning of its operation the enterprise will quire the permit from the Ministry of
Trade and a license from the City Council of Nairobi.
These documents will be renewed when required, for instance by laws of the city council in
regards to working hours, hours will have to be adhered to and worked upon as the basis on
which the operation of the business will be enhanced.
Waste disposal by laws as formulated by the city council of equally determine the operation of
the enterprise.
2.15 Supportive services

In its operations the business will need several services so as to effectively undertake its key and
subsidiary objectives
The following services will be sourced from outside firms
2.15.1 Banking services
These will be needed to keep excess funds and advices on the best way of undertaking future
investment
The enterprise will be in liaison with the Kenya commercial bank
Coop Bank,
P.o Box 7789, Nairobi.
Tom mboya avenue branch
Email:info@coop.co.ke

2.15.2 Insurance services
The business will have to source for insurance services from the Madison insurance company,
Nairobi branch. both the business premises products and personnel will be in insured against any
risks or dangers
Madison insurance co.
P.o Box 0007211,
Nairobi
Email; info@madson.co.ke
2.15.3 Legal services
The business will have to prepare legal document and at time seek to be represented in a court
when there is a case of whatever nature especially when entering into business contracts, the
finer details required in the execution of contractual obligations and the consequences associated
with the non compliances of work with Rotich and company advocates that will help it transact
its business in the region
Rotich and company
P.o Box 459980
Nairobi
Telephone; 0722613791
Email;rotco@gmail.com

CHAPTER THREE
3.0 PRODUCTION AND OPERATION PLANNING
3.1 Production Objectives

Jibana Building Construction Company has some objectives related to producing products
First the business has a plan to produce more goods or products as compared to the customers
demand. The business also has a plan to build houses that can withstand any kind of catastrophe.
This includes earthquakes and thunderstorms. The main reason to build such strong houses is to
ensure our customers are safe in all kinds of weather an avoiding any fatal case of the above to
occur
3.2 Production Facilities and Capacity

Facilities will be provided in abundant to enable smooth running of the business. The business is
also planning to offer facilities for young children and people with special needs and many more.
By doing so Jibana Building Construction Company will be more famous and considered to be
serving every member of the community or people from different walks of life irrespective of
their disabilities ,status and gender.

Bill of Quantity
items quantity description Supplier Unit price Total cost
Bricks and 200 lorries No 1 Block miners 50 000 10,000 000
blocks
Building 150 piles any Insulator 5000 750000
insulations manufactures
Plywood 115 piles Wood Woodcutters 500 57500
cutters
Switches 300 sachets Smart switch 50 15000
Metal 20 tins Metal care 200 4000
fabrication
Electric 500 meters any Any 45 22500
wire
metals 700 rods 150 105000
Structural 200 pieces any Any 50 20000
steel
Wood 15 tins Kingston 30 450
finishing finisher
Plastic 200 pipes teepee Teepee 70 14000
pipes and
fire stop
aggregates 25 lorries any Any 10000 250000
sandstone 15 lorries 7000 105 000
Window 700 Jua kali 200 140000

frames framers
cement 100 bags Bamburi 500 50000
cement
3.3 Production strategy

The production strategy will be put in place to make sure the business does not run out of
products or stock. The strategy will be effective as soon as the business products are introduces
into the market
To make sure the stock lasts ,Jibana Building Construction Company will ensure construction of
all sorts of houses will be taking place everyday as long as our products are having a good share
in the market and attractive to the customers all over
Jibana Building Construction Company will also buy more land to make sure it has enough sites
of construction in future. This will prevent the business from reducing its pace of construction of
houses due to lack of enough land
3.4 Monthly Overhead Expenses

item Monthly cost
water 12,000
electricity 27,000
security 10,000
Garbage collectors 2,000
internet 7,000
DSTV 8,400

maintenance 5,000
Total 134,400
3.5 Production process

The product production will be carried out only after the product has been well analyzed by the
business analyzing team and have met the required standard to be now introduced to the market.
The production process itself shows how our products are being processed these are the houses
that will be taking a period of 7 months to be built and 3 months to do all the required finishing
before they are ready to be used by the customer both for renting and buying process .this
includes safety measures.
3.6 Regulations Affecting Operations

The servicing and operation function at the Jibana Building Construction Company will be
affected or constrained by a number of factors which will comprise of a
3.7 Operation table/production schedule

activity When to be Who is to do What to be Duration of
done it done the action
Recruitment of It will be done manager Interview short 2 weeks
the staff after six listing
months
Training It will be Civil engineer Learning the 2 weeks
taking place new
after every 2 technology

years
CHAPTER FOUR
4.0 FINANCIAL
Jibana Building Construction Company will have to draw up financial statements after every
year end. The statistic from this financial document will be of help especially when the business
wants to determine the effectiveness of the business operations. The profit obtained from the
business operation will be invested in other more important activities for the benefit of the owner
and others in the business
In addition the most important areas will be much more looked into and these are significant
documents to be constructed after every trading period, they include balance sheets income
statement working capital and cash flows among other
4.0.1 Pre-operation cost

Items Cost
Business registration 30000
License fee 25000
Electricity connection 30000
Water installation 10000
Machines and equipments 1000000
Feasibility analysis fee 50000
Stationary 15000
Traveling and transport 27000
Communication 7000
Fixed assets and acquisition 700000
Repairs and maintenance 19000
Office computer 150000
Office stamps 320
Reception seats 38000
Tractors 3700000
Security 16000
Insurance 20000
Salary and wages 400000
Padlocks 16000
Total 5 005 768 920

4.0.2 Working capital
items 1st year 2nd year (4%) 3rd year (6%)
Stock 500000 52000 530400
Debtors 200000 208000 212000
Cash at bank 1000000 1040000 106000
Cash in hand 100000 104000 106080
Prepayment 20000 20800 21216
Total current 1820000 1892800 1930496
4.1 Project Income Instatement

IN (2013-2014-2015)
For the year ending 31st
items 1st year 2013 2nd year 2014 3rd year 2015
Sales 7000 890 10000990 15000000

Cost of sales 3000043 6874992 4010735
Gross profit 4000847 3125998 10989265
Salary and wages 500000 600000 630000
Water 100000 100000 100000
Electricity 360000 360000 360000
Insurance 240000 240000 240000
Communication 84000 84000 84000
Repair and maintenance 228000 228000 228000
Transport 324000 200000 300000
Stationery 18000 180000 180000
Total overhead expenses 1516000 1392000 1492000
Net profit 2484847 1733998 9497265
4.2 Projected statement of financial position

Jibana Building Construction Company projected statement of financial position as at year
1, year 2, and year 3.
1st year 2nd year 3rd year
Fixed assets
Premises 10000900 23635520 47691339
Vehicles and tractors 50000112 6977100 200100000

Machinery 73000000 100000000 110000
Current assets 133001012 130612620 247901339
Stock 500000 520000 530000
Debtors 200000 208000 212000
Cash at hand 1010000 900000 200000
Cash at bank 50000000 60000000 79000000
Total assets 51710000 61628000 799420000
Current liabilities
Trade creditors 900000 30000 70000
Bank overdraft 1000000 700000 1500000
Long term liabilities
Long term loan 110000000 70000000 99000000
Owner contribution 273000000 150000000 350000000
Total liability 384900000 220730000 449000000

CHAPTER FIVE
5.1 RISK MANAGEMENT

This is the identification assessment and prioritization of the risks. It aims to generate ideas and
promote good practice for the betterment of the business and managing risks through the
exchange of information
5.2 Definition of Risk

It is also known as hazard perit, jeopardy, danger, venture chances. Risk is a situation involving
exposure to danger. It can also be defined as a probability or threat of damage, liability loss or
other negative occurrence that is caused by external or internal vulnerability
5.3 Risk Management Stages
5.3.1 Risk Identification

Here the business risks are identified. In Jibana Building Construction Company some of the
most feared risks are earthquake, building collapsing and many more
5.3.2 Risk evaluation
Risk evaluation is concerned with assessing probability and impact of individual risks taking into
account any factors outside the immediate scope under investigation
In Jibana Building Construction Company there is probability that some risks may arise.
probability is the evaluated likelihood of particular outcome actually happening including a
consideration of the frequency with which the outcome may arises for example major damage to
building is relatively unlikely to happen but would have enormous impact on business continuity.

5.3.3 Choosing device of handling
Risks are many and occur differently however there are some devices that can be used to handle
the risks when they occur
Jibana Building Construction Company business will ensure the following things are put into
consideration to avoid risks
All construction will be provided with helmet for protection in case of bricks failings
Strong functions will be put in place to withstand earthquake
Fire extinguisher will be provided in the buildings incase of inferno
Emerging exit will be availing incase of any pending danger
5.4 Types of Risk
5.4.1 Financial risks
Financial support is very crucial to any business to function however lack of it can cause the
business to fail drastically and stop functioning.
Debts can also cause the business fail since the business needs many top function and when debts
are incurred it means there is no many and businesses don’t run in absence of money to cater for
its expenses

5.4.2 Economic Risk
Economy is crucial for a business to function regarded that in real estate materials price do
change with economy changes. The business will face risks in terms of economy when there is
inflation, this may affect the budget and plans of the business to carry out its activity.
5.5 How to Handle Risk

Jibana Building Construction Company will put in place mechanism to overcome this risk. In
terms of financial risks the business will put in place some measures to make sure it gets its
financial plans in order through;
a) Borrowing loans from banks
b) Using the savings to boost the business
c) Contribution from friends
To overcome economic risks the business ensure that
a) Its budget is not fixed
b) It will purchase many of its material to avoid later rush when there is inflation

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JIBANA BUILDING CONSTRUCTION COMPANY

SCHOOL : KENYA WATER INSTITUTE

GROUP MEMBERS: Joshua Mutinda DWE 020/11

David Muranga DWE 002/11

Simon Munene DWE 054/11

Mike Ochieng DWE 035/11

Joseph Mwangangi DWE 059/10

Charles Kingori DWE/018/11

Juspar Kiprono DWE/006/11

Anthony Ireri DWE/019/11

Grace Kabucho DWE/036/11

SUBMITED TO : KENYA WATER INSTITUTE FOR

PARTIAL FULFILMENT OF THE AWARD

OF DIPLOMA IN WATER ENGINEERING.

EXAM SERIES : NOVEMBER 2013

Business Plan 2013 i

Diploma in Water Engineering.

Business Plan 2013 ii

for financial support, and finally our supervisor.

Business Plan 2013 iii

of life. This houses includes

 Low class houses

 Middle class houses

 High class houses

use the entrepreneurs savings loans and many more sources

during its operation

Business Plan 2013 iv

Business Plan 2013 v

Business Plan 2013 vi

Business Plan 2013 vii

in estate designing and house planning.

1.1 Business name

focus on a lot of construction in residential houses. The companies address is;

Jibana Building Construction Company

P.O Box 8222-00300

1.2 Mission statement

2. The roads are well built hence less traffic jam

3. The place is accessible by students from Kabete Campus

1.4 Form of Business Ownership

is its own legal entity.

company if they leave

Business Plan 2013 2

 Low class houses

 Middle class houses

 High class houses

1.6 Products and services

purchasing according to the demand of the client.

Free transport-this will happen when they relocate to our houses.

1.7 Justification of the Business Opportunities

Business Plan 2013 3

1.8 The industry

5376 farms all over the country.

The number in the region *100

1753 X100 =33%

Business Plan 2013 4

Business Plan 2013 5

count of 1%the chart below illustrates this

Business Plan 2013 6

Business Plan 2013 7

is putting much attention on as it prepares to venture into the market

planning of the capital

3) Operational expenses for goods

4) Vehicle and offices expenses