DECLARATION

I MOREMA LYDIAH declare that the business plan to the best of my knowledge and
solely my original peace of work, which was achieved through hard work and sacrifice.

NAME : MOREMA LYDIAH NYANG’ANYI

SINGNATURE: _______________________

DATE : ________________________

SUPERVISED BY : SYLVIA KEMUNTO

SINGNATURE : ___________________

DATE : ___________________

i
 ACKNOWLEDGEMENT
I whole heartedly thank God and my friend and relative who helped me to come up
with the great dream-idea and made it real. Special thanks to my entrepeneual lecturer
who guided me with wonderful ideas in business management.

ii
DEDICATION
I dedicated this work to my parents, who helped me financially .

iii
EXECUTIVE SUMMARY

BUSINESS DESCRIPTION
Shanma Bricks Production Industry is affirm dealing in brick making for making for
building all kinds of civil structure as it, products are wide range of use this business
not only produces, but also offer after -sales services to its consumers.

TARGET MARKET
The business targets the government project as well as individual and all those in need
of bricks for their own purpose .this is because my construction project are ongoing these
products are at high demand.

COMPETITIVE ADVANTAGE
The live business operating have no better quality machines and equipment to produce
better products hence may customers prefer these products than theirs.

iv
 MANAGEMENT TEAM

MANAGING
DIRECTOR

SECRETARY

PRODUCTION OFFICE ATTENDANT MARKETING MANAGER

MANAGER

DRIVER

SECURITY GUARD

OPERATIVE /LABOURES

FINANCIAL PLAN

The sources of capital to this firm are friends and relative as well as owners ‘equity ,
since sole proprietorship form of business.

The above operation process and resumption of the company is production process are
taken into account.

It generally indicates the time of opening and closing, working days of the business.

v
Table of Contents
DECLARATION .............................................................................................................................................. i
ACKNOWLEDGEMENT................................................................................................................................. ii
DEDICATION ................................................................................................................................................iii
EXECUTIVE SUMMARY ................................................................................................................................iv
BUSINESS DESCRIPTION ..........................................................................................................................iv
TARGET MARKET .................................................................................................................................iv
COMPETITIVE ADVANTAGE ...............................................................................................................iv
MANAGEMENT TEAM ................................................................................................................................. v
CHAPTER ONE ............................................................................................................................................. 1
1.00 BUSINESS DESCRIPTION ...................................................................................................................... 1
1.01 MISSION STATEMENT ......................................................................................................................... 1
1.04 PROFFESSIONAL QUALIFICATION ........................................................................................................ 1
1.06 BUSINESS INDENTITY ...................................................................................................................... 1
1.07 FORM OF OWNERSHIP ...................................................................................................................... 1
ADVANTAGESOF OWNERSHIP................................................................................................................. 1
1.08 BUSINESS LOCATION ......................................................................................................................... 2
1.09 BUSINESS ADRESS /NAME: .................................................................................................................. 2
1.09.1` SIMPLE SKETCH OF THE LOCATION ................................................................................................. 3
ADVANTAGES OF CHOOSING THAT AREA AS COMPARED TO OTHER AREAS ............................... 3
1.12 PRODUCTS AND SERVICES OF THE BUSINESS .................................................................................. 4
UNIQUENESS OF THE PRODUCT/COMPARISON ...................................................................................... 4
1.1.3 BENEFITS OBTAINABLE....................................................................................................................... 5
B (Social gains) .................................................................................................................................... 5
1.1.4 COMPERTITIVE ADVANTAGE .............................................................................................................. 5
1.1.5 INDUSTRY ........................................................................................................................................... 6
CHARACTERITIC OF INDUSTRY ............................................................................................................ 6
1.1.8 EXTERNAL FACTORS ........................................................................................................................... 6
1.1.8 OBJECTIVES ........................................................................................................................................ 7
A. SHORT TERM GOALS ................................................................................................................... 7
B. LONG TERM GOALS ..................................................................................................................... 7
1.1.9 ENTRY STRATEGY ............................................................................................................................... 7
1.2 .0 GROWTH STRATEGY .......................................................................................................................... 8
1.21 TRENDS THAT SIGNAL GROWTH ......................................................................................................... 8

vi
1.2.2 OPPORTUNITIES ARISING ................................................................................................................... 9
CHAPTER TWO .......................................................................................................................................... 10
2.00 MARKETING PLAN ............................................................................................................................. 10
INTRODUCTION ................................................................................................................................. 10
2.01 Importance of marketing .................................................................................................................. 10
2.02 MARKETING ENVORNMENT .............................................................................................................. 10
2.03 GEOGRAPHICAL FEATURES ............................................................................................................... 10
2.07 CUSTOMERS ENVORNMENT ............................................................................................................. 11
TARGET OF THE BUSINESS .................................................................................................................... 11
The company will mainly rely on the following group of customers ................................................. 11
a. The government ........................................................................................................................ 11
b. Individual................................................................................................................................... 11
c. The commercial group .............................................................................................................. 11
2.09 CUNSUMER BEHAVIOUR ................................................................................................................... 12
2.10 MARKETING STRATEGY ..................................................................................................................... 12
2.11 MARKET SHARE ................................................................................................................................. 13
2.12 COMPETITION ................................................................................................................................... 14
2.13ANALYSIS TABLE ................................................................................................................................. 14
2.14 COPING UP WITH COMPETITION ...................................................................................................... 15
2.15 ADVERTISING STRATEY...................................................................................................................... 15
2.16PROMOTION STRATEGY ..................................................................................................................... 16
2.17 PRICING STRATEGY ........................................................................................................................... 16
2.18 SALE STRATEGY ................................................................................................................................. 17
2.19 DISTRIBUTION STRATEGY .................................................................................................................. 18
TRANSPORT MEANS .............................................................................................................................. 19
2.20 PROBLEMS ANTICIPATED AND SOLUTION ........................................................................................ 19
CHAPTER THREE ........................................................................................................................................ 20
3.00 ORGANIZATION STRUCTURE ............................................................................................................. 20
3.00 INTRODUCTION ................................................................................................................................. 20
3.01 IMPORATANCE OF A WELL ORGANIZED STRUCTURE ........................................................................ 20
3.02 ORGANIZATION STRUCTURE ............................................................................................................. 20
3.03 QUALIFICATIONS OF A MANAGING DIRECTOR.................................................................................. 21
3.04 FUCTION OF MANAGEMENT ............................................................................................................. 22
OTHER PERSONEL ................................................................................................................................. 22
3.05 RECRUITMENT TRAINING AND PROMOTION .................................................................................... 24
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  RECRUITMENT............................................................................................................................... 24
 TRAINING ...................................................................................................................................... 25
 PROMOTION ................................................................................................................................. 25
3.06 REMULATION AND INCENTIVES ........................................................................................................ 26
 INCENTIVES ................................................................................................................................... 26
3.07 LICENCES PERMIT AND BY LAW ........................................................................................................ 26
CHAPTER FOUR ......................................................................................................................................... 28
4.00 PRODUCTION /OPERATIONAL COST ............................................................................................ 28
4.01 PRODUCTION FACILTIES & CAPACITIES ............................................................................................. 28
4.02 PRODUCTION LAYOUT ...................................................................................................................... 29
4.03 PRODUCTION STRATEGY ................................................................................................................... 29
4.04 COST OF LABOUR .............................................................................................................................. 30
4.04 COST OF MATERIALS ......................................................................................................................... 30
4.06 OVERHEADS /EXPENSES .................................................................................................................... 30
4.07 PRODUCTION PROCESS ..................................................................................................................... 31
4.08 OVERALL SCHEDULE /WORKING SCHEDULE...................................................................................... 32
4.09 REGULATIONS AFFECTING PRODUCTION .......................................................................................... 32
CHAPTER FIVE ........................................................................................................................................... 33
5.00 FINANCIAL PLAN ............................................................................................................................... 33
5.01 PRE – OPERATIONAL COST ................................................................................................................ 33
5.02 ESTIMATION ON WORKING CAPITAL ................................................................................................ 33
5.03 PROJECTED CASH OUTFLOW ............................................................................................................. 34
5.04 PROFORMA INCOME STATEMENT .................................................................................................... 36
5.05 PROFORMED BALANCEMENT SHEET ................................................................................................. 36
5.06 BREAK EVEN POINT ........................................................................................................................... 37
CONTRIBUTION MAGIN ........................................................................................................................ 37
CONTRIBUTION MARGIN PERCENTAGE ................................................................................................ 37

viii
 CHAPTER ONE

1.00 BUSINESS DESCRIPTION

The property name of the business SHANMA BRICKS PRODUCTION is a sole
proprietorship form of ownership owned by LYDIAH MOREMA who is student
undertaking Diploma in Civil Engineering course at The Kisii National Polytechnic.

1.01 MISSION STATEMENT

To be preferred company production of quality tenacity bricks within Kisii County, outside
county and countrywide at large.

1.04 PROFFESSIONAL QUALIFICATION

Acquired technical skills engineering as technician from The Kisii National Polytechnic
and also computer application packages.

1.06 BUSINESS INDENTITY

the business will be registered as “brothers construction bricks manners “ where the first
3 names “brothers “ originated from twins brothers

1.07 FORM OF OWNERSHIP

The business is sole proprietorship from ownership owned by Lydiah Morema.

ADVANTAGESOF OWNERSHIP

1. I will be able to enjoy all the yield profits the business that is after payment of
all expenses incurred in purchase of raw material and labour force I will own the
reminder as my profit.
2. If sole proprietor will be able to asses or to get labour from the family and
relative hence low cost of production.
3. The decision making in the business will be very fast as will be coming up
with my own ideas to improve the business standard.

1
 4. The sole proprietor is free from corruption as compared to other forms of
ownership because all the resource passes through the owner and no long chain in
the .

1.08 BUSINESS LOCATION

The business will be located Mogusii River near the bridge along the Kisii-Oyugis road and
will be producing bricks for all construction purpose.

1.09 BUSINESS ADRESS /NAME:

The following is the address of the business

Shanma Bricks Production Industry

P.O Box 64
Kisii.
Tel: +254700813770

2
 1.09.1` SIMPLE SKETCH OF THE LOCATION

OYUGISI

SHANMA BRICKS
PRODUCTION
INDUSTRY

KISII TOWN

ADVANTAGES OF CHOOSING THAT AREA AS COMPARED TO OTHER

AREAS
 Availability of a labor: there is sufficient labor because there are many people who
are jobless and they can work under minimal supervision
 Availability of quality soil works for clay works which can be acquired more
cheaply
 The area is under development many contractors are carrying out structures with
the government and are creating market for my product; and service
 There is availability infrastructure where the transportation of products will be
very easy and economical

3
1.12 PRODUCTS AND SERVICES OF THE BUSINESS
The business will be producing the following products

 Common bricks
 Engineering bricks
 Facing bricks

Common Bricks

1. Common bricks have durability, strength and consistency of premium quality clay bricks
within the construction hence highly demanded.

Engineering bricks

1. Engineering bricks are burnt ant exceedingly high temperature. They possess a dense and
conform to defined limits for strength hence they doesn’t absorb water.

The quality burnt plain bricks which give attractive appearance in their color and texture. It is used
without rendering, plastering or other surface treatment.

UNIQUENESS OF THE PRODUCT/COMPARISON

1. Brothers Construction Company offers transportation of the products and services.
2. Brothers Construction Company has professional staffs with a minimum of a diploma and above.
3. Use of multimedia to reach customers in large and organized market analysis survey.
4. Has wide variety of products e.g. engineering bricks, common bricks and etc.

4
1.1.3 BENEFITS OBTAINABLE
A (Economic gains)

1. The business will employ people as possible in relative to business growth hence
increasing the sales volume as every employee will be working towards a goal
2. The business will also increases its per capital income hence expanding its business by
creating new branches in other countries
3. The living standards of the people in the country will be improved as that would work
with the company hence earning.

B (Social gains)
 The business will sponsor student in their education and also offer significant training to them
and even to interested individual.
 The business will offer attachment to the technical students to help them to improve the
skills in civil works hence creating more engineers within the county.
 It will offer bursaries to the student and give loans to those who wish to start small
business.
 The business will ensure friendly environment by avoid improve disposal and noise
pollution to the environment.

1.1.4 COMPERTITIVE ADVANTAGE

NAME OF COMPETITORS STRENGTH
XYZ CONSTRUCTION  Has sufficient numbers
MATERIALS DEALERS of plants and machine
COMPANY that enable their
quality.
 As short up capital was
very at the business
could not collapse
early.
JUMIA CONSTRUCTION  The business has
COMPANY sufficient plant for
production.
 It always has stand by
product and best to
advertise the business
WEAKNESS
 The profit attainable
are not sufficient for
significant growth.
 The quality of the
product produced is
very low
 Has low number of
skilled labor which
limits its quality
production.
 Low quality product.

5
1.1.5 INDUSTRY
SHANMA BRICKS PRODUCTION INDUSTRY will fall under construction industry that
deals with construction and building works

The business product will be under the index of the government expenditure on roads increased
from 100.3 in 2013/2014 to 1008.9 in 2012/2013 billion 2012 brick - cement construction rise by
10.9% in 2005. Kenya road board increased its disbursement to various agencies by 14.3 % from
kshs 8.4 billion in 2004 to Kshs 9.6 million in 2005.

CHARACTERITIC OF INDUSTRY
1. They will have common goal
2. We will have a particular structure that show construction between different
3. Department in the industry
4. We will set individuals in different offices.

1.1.8 EXTERNAL FACTORS

The business is positive affected by external factors which include

a. Availability of labor forces

The number of the employed people is very high in the county who will be requiring job
vacancies as they are both skilled and unskilled.

b. Government policy

The government will offer the business with licenses for it to operate officially.

c. Infrastructure

Good means of transport will enable easy access to the business area and also available of
auxiliary services which will make the business operate smoothly

d. Raw material

The county advantaged to have the best soil for clay work such as brick which are the business
major products. It also has sufficient soil for production of any other clay product to be included
in bricks products when expansion arises within the business.

6
1.1.8 OBJECTIVES
The business aims at achieving both short and long term goals in order profit and increase sales
volume

A. SHORT TERM GOALS

i. The business will be planning to have a profit margin of (0-15%) with first year .They be
enhanced by creating good public relation and always have ready product to supply to its
customers instantly .It will also set to motivate the sales manager and its department
whichever they make high sales value.
ii. Increase in sales volume 13% in the first six month
iii. The business will offer loan to the companies within the county but not related through
which it will enable evolve and become popular than any other related company.

B. LONG TERM GOALS

These goals to be achieved after a year

They will include

i. The business will buy a lorry so as to help in transportation of product into or from
the business premise after years after business has collected enough profit
ii. Opening up business to other areas and towns so as to create awareness to people
about the existence of the business one year after commenced

1.1.9 ENTRY STRATEGY

The company will be making regular advertisement through billboards which will be placed at
open and busy area .They will be also eye catching to create and win interest of all both target
and target to get to know about the business company.in the county and country at large
advertising will be through personal selling where the business will offer high quality products
,sign and posters will also be used as well as through them the customers will know that the
business offers as on them, there will be information about what the business sell ,services
offered ,location and the contact

7
1.2 .0 GROWTH STRATEGY
Growth of the business is expected to increase with time .As a result of this, the business is
expected to offer good quality products and service in a way to keep up with other competitors.
Therefore the company has set strategies which will enable its growth positively

i. The business will produce new trends regularly to have at least sense of change
with the new products and service which are standard at the market.
ii. It will increase through a public relations and improve its products to be more
unique to increases their customers
iii. It will be to increase its profit by selling its products of fair prices that can
facilitate value buying regularly .It will also be paying the labors in respect to
their work

1.21 TRENDS THAT SIGNAL GROWTH

Things that will signal growth of business will include:

a. Increase in customers

This will be seen when those customers will be flocking into the business to buy the products
from the business and also use the services being offered. More employees would be employed
as people who had attention in the business premises since an increase in the number of
customer’s results to an increase of numbers of employees to work.

b. Increase in sale volume

This will be seen when many space will be left in the business premises without items to be sold
and this indicate continuous flow of customers who have brought the product request for orders
will also show the increase in sales volume .

c. Profits

Increase in sales results to increase in profit margin of the business as more people will be
purchasing the product and this result to expansion of business

8
1.2.2 OPPORTUNITIES ARISING
In relation to the growth of the business the owner will be able to introduce business branches in
different countries that favor the business location. The business will be able to sponsor
engineering /building students in their studies and offer attachment to them.

It will also become a limited company due to its high profit attainable and stability in its
operation.

9
 CHAPTER TWO

2.00 MARKETING PLAN

INTRODUCTION
Marketing –Is the activities that direct the flow of goods and services from the producer to
satisfy customers and accomplishment the objective of the company. Furthermore it is also a
creative management function which promotes the trade and employment by assessing customer
needs and initiating research and development to meet them.

2.01 Importance of marketing

1. Marketing help to co-ordinate resource production and distribution of the goods and
service.
2. It will help to ensure that the marketing activities are properly integrated as per the target.
3. It helps to determine the nature of the total effort required to sell profitably the maximum
production to the ultimate user.

2.02 MARKETING ENVORNMENT

The business will be operated at Kisii County ,312km from Nairobi , along the main road .In
this area there is availability infrastructure where the accessibility always favorable . The
climate in this environment is always moderate hence favoring all the customers.

2.03 GEOGRAPHICAL FEATURES

The company will run under very suitable geographical environment since area of Kisii has
enough resource of raw materials suitable for clay works production and building tone.

Transport expenses to the operational area are reduced as these materials are near the location.

Furthermore the area receives relief rainfall as its on highland the rainy seasons experienced both
short and long rain. The planting season is twice in a year i.e June / September through October
the area has favorable climatic condition and it is subject to natural calamities’ like flood since
the area is not flat.

10
2.07 CUSTOMERS ENVORNMENT
In this region /Kisii county, there is very high demand for building houses, hence high demanded
of bricks and which the company will be producing even as per their specification and to the
relative cost, this implies that the business has to produce and stock readily for its customers.

Due to high demand of this materials offered in the business it will intend to emerge nationally
through online selling of the products and service to provide more profits.

TARGET OF THE BUSINESS

The business will be targeting all groups and individuals undertaking any forms of construction
requiring any of the business products .It will also be forgetting all the entrepreneurs who can
purchase and sale to the contractor’s carrying out the construction products.

The company will mainly rely on the following group of customers

a. The government
Since the government has a lot of projects that it carries on, the business will sell its products to
it, for instance government is there to repair and maintain all public schools, hospitals and all
marketing area .It will make large volume orders of construction materials such as stones and
brick from my company.

b. Individual
Most of the people are building their own structure for commercial purposes and also their non-
commercial .They will be buying products from the business and hence be potential customers as
well as commercial group and government.

c. The commercial group

Many of the people in this area becoming business people, hence they will be able to buy many
products and sell their customers. They will make the business ever producing as they will be
ordering a lot.

11
2.09 CUNSUMER BEHAVIOUR
In this region, there is very high demand for building bricks and which the company will be
producing even as per their specification and to the relative cost. This implies that the business
has to produce and stock readily for its customers furthermore the business will be determining
by the following factors.

i. Cultural factors

People in the area believes in change and development projects thus engaging themselves in
several projects which are in that area leading to growth and development of the country.

ii. Personal Factors

People living in the area are mostly aged between 25-33 years who are idlers and this make it
advantageous for the business as they are young and energetic for this business production
purposes, also they take the highest percentage rate compared to the aged between 0-22 years
and 34 years and above most people living in the area have high standard of living as they have
got employment thus making the business to be more effective though therefore a few who are
of low class whom the business, intends to improves their living standard through creation of
employment

iii. Psychological factor

This involves how the business will motivate its customers and their perception offered. The
business will provide quality and quantity of bricks with affordable prices hence offering after
sales, service i.e. transport to customers who buy in bulk with minimum charge. Therefore
motivation them to come back again furthermore the business will provide knowledge and skill
on how to deliver the product on their required place of work which will increase the attitude of
the buyers to their business both locally and countrywide .

2.10 MARKETING STRATEGY

Since the business has known the wants of the customers, it will have to produce the best quality
products which favor the customers need and offer them fair prices.

12
2.11 MARKET SHARE
Though the market is very large, there are some related companies who have been operating
there before, due to the fact Shanma Bricks Production Industry has to carry out several
exercises to identify the share that is after its products and services on introduction to this
market.

The following method would be considered.

1. Questionnaires

This is a list of question written by company and issued or to customers and competitors so that
the customers can fill in and give a required statement back to the company for analysis.

return x 100%
Market share =
Total question

2. Interview

The business will also carry out interviews to know the percentage of the market share own as a
supplement to observation method the target care customers will be interviewed regularly to
know their view towards the business, also the business will interview the common people
around the company to get to know how they feel about the business location as they may lead to
success or failure of the business and also to other related companies within.

3. Observation

It will be done through evolution process of checking the competitors of the products as well as
the services they offer after wheel my company work hard towards the best in goods and services
.The company will also observe on the other companies assets the use on production and the kind
of management they have.

The capital the competitors started off with able to target unit as well as manpower they operate
with.

After thorough market research, the report will be represented on a pie chart below. The table
also shows the competitors of Brothers Construction Bricks Markers Company, the approximate
number of customers they have and the percentage market share.

13
INDUSTRY MRT SHARE 2ND YEAR 3RD YEAR
SHANMA INDUSTRY 49 55
TETEMESHA 48 43
SHAMJI 31
2

2.12 COMPETITION
My business will offer after sales services offering discounts sells on credit to maintain our
customers and the competitors will be Tetemesha and Shamji.

2.13ANALYSIS TABLE
The following is analysis table showing the competitors strength in different requirement of
business over my business.

NAME COMPETITORS MY BUSINESS

Product 3 5
Service 2 3
Technology 3 4
Capital 5 4
Quality 4 3
Asset 5 2
Price 4 2
Promotion 4 2

KEY

5 Excellent
4 Very good
3 Good
2 Fair
1 Poor

14
2.14 COPING UP WITH COMPETITION
1. Employing new technology by ensuring only the efficient and effective machines are
used for production for best quality for best quality products
2. Introduction of training –This will ensure the employees get the basic skills and
knowledge of helping the know how to cope with customers hence will improve skills on
how to run also and the business succeed.
3. Competitive pricing –The business will sell its products and services at affordable prices
compared to other business therefore bulk buying of products with less transportation
cost.
4. Motivation – in order to succeed in business workers must be motivate through
promotion to ensure that the hard working workers are promoted to next level as well as
lazy individuals on the higher side of the government hierarchy.
5. The business will also improve its advertisement technics to get more customers and
these will be done through posters, business cards and sign posts will help the creation of
awareness of business products and services.
6. Treating the customers in friendly manners and with etiquette so that they do not cease
coming for more products and services.
7. Credit facilities – The business will give credit to customers who are regular and who
buy bulk materials and accept emergency cases offered by the client.
8. Managing time effectively by working blocks of time since is a very essential factor to
consider for business success.

2.15 ADVERTISING STRATEY

The main objective for advertising my business is to create awareness to the customers therefore
attracting more customers and as a result this increase reflects on sale increase the methods to
use includes;

i. Bill boards

The business will as well use bill boards to supplement on the business cards .The will cost at
least kshs 65,000 per advertise.
15
 ii. Business cards

My business will use business cards to advertise the business existence. This will be cheaper, it
will need the business just to print and produce cards of which it can do it for itself and supply to
the people. This will cost at least kshs 46,000.

iii. Posters / Sign Post

This business will put posters within allowed site and areas which will improve the name of the
business location and the products it will be offering. Installation fee 50,000.

2.16PROMOTION STRATEGY
This is an element that the business will use to inform and persuade customers to purchase a
good & service.

1. Road shows –This is displays which will cost 50,000 per day but not made daily but
seasonally, it will be also affective as the targeted and none targeted will get the business
product details as the way they are and incase of questions they will be answered
instantly.
2. Training and services –This will be organized to train staffs of the business to ensure
they are well equipped with managerial skills and knowledge to cope with the customers.
This will help to attract more customers in the business.
3. Discounts - This method will be employed to the business and it will promote its
products which will able to reach the target customers effectively for those who buy bulk
goods by giving them or adding them an item for free.
4. The business cards - These will be in bundles of 100 and 1300 cash ,if which go for is as
& 20,000 per bundle respectively .They be more effective as they will be applied all
people and are portable as well.

2.17 PRICING STRATEGY

The company will set its price selling through marketing skimming price method
This will help the products to skim maximum revenues larger by larger from the
segments will to pay the high prices .The company will make few but more profitable
sales.
16
 FACTORS TO BE CONSIDERED ON PRICING STRATEGY
1. Cost of production - The business has included the expenses on the production the
products on the arrival of the best value for the products in order to evade losses.
2. Government policy - The government policies include the licenses and taxes that the
company has to pay in order to operate smoothly if the taxes to be paid is 16% the
company to include in its products prices.
3. After sales services - The business will be able to offer sales service customers buy
products in bulk. Also the business with the products bought at considerable rate to the
potential customers.
4. Market demand - It is an important factor to consider as the demand may be very
low and only the prices can sooth the few customers to buy products and get services.
5. Competitors price – prices of the competitors’ products if are low my business will
regulate its price hence maintaining potential customers and attract other more to
bond with the business.
6. The buying price of the materials - The Company has to consider the expenses
incurred during the attainment of the raw materials from the source to the operational
point, and it has divide then evenly to each product price.
7. Transport cost - The price of the product will also depend on transportation cost as
some money will be used to fuel the vehicle and a lot offering after sales services to
those customers who buy bulk.

Price list

Item Item
Engineering brick 50.00
Common bricks 35000
Faced bricks 45.00

2.18 SALE STRATEGY

The decision on the strategic way to enter into the market in order to make sales is very
important. My company is to have several methods to involve itself into the market.

17
These include;

i. Direct method

The company will produce and sell the product direct to customers such as government and
commercial purposes and also the individuals .This is become they will require quality goods
and services from my company. This will help the business to have potential customers as they
will be getting first hand commodities.

ii. Personal selling

The business is able to employ highly qualified personnel who can increase the number of
customers.

iii. Advertising and promotion – the business will advertise its products mainly through
the business cards, billboards and posters to create awareness so as to promote its
services & products thus increasing sales.
iv. Credit facilities

The company will as well offer credit facilities to the mostly potential customers on their
emergency orders .This will also make customers purchase from my company.

v. Indirect method : This kind of method, the product will be using this channel to sale
it’s good & service whereby
Producer --------------------middle men -------------------------------customers

2.19 DISTRIBUTION STRATEGY

i. Due to the need for the transfer of goods and services from the production company
to the customers, the business will be able to use direct means to the customers.

Producer Customers

The company will also use indirect method to get to its customers.

Producer Distributer Agent Customers

18
ADVANTAGES OF DIRECT MEANS

i. It becomes very easy for the sales person to persuade customers hence making very
high volume.
ii. There are no delays on delivery of the customers as they acquire what they need
directly from the source.
iii. Customers get high quality products since products are not distributed during the
delivery.
iv. Customers get high quality products since products are not distributed during the
delivery.
v. The producer enjoys all the profit alone as no one else will participate in selling.

ADVANTAGES OF INDIRECT MEANS

i. More sales will be made as many sale persons to make the market delivery product.
ii. The production rate will be high as the output is distributed as quality as possible to
the market.
iii. The profit margin will rise from the daily accumulation of small profit gained hence
helping the company to achieve its arranged goals.

TRANSPORT MEANS
The company products will be transported or distributed by use of transit and also small pick up
to the low quality order .The total amount for transportation per month is kshs 10,000.

Advantage

i. This method is quick and easy means to transport, it’s easy to access the main and
minor roads in the county during most of time.

2.20 PROBLEMS ANTICIPATED AND SOLUTION

During the transportation several problems face the means;

i. Some of the roads are impassable due to bad weather e.g. during rainy season and so
more deliveries will be able to compensate the time when it would be accessible.
ii. Traffic jam - the transportation means face traffic jam where it is proposed to be done
easily have before the common drivers start off their work.
iii. Lack of transporting Lorries which are available but expensive to hire.

Solutions

Due to poor infrastructure in some areas may lead to delay of products therefore Lorries will
make it possible to move through.
19
 CHAPTER THREE

3.00 ORGANIZATION STRUCTURE

3.00 INTRODUCTION
Organization plan is the order to which the performance of the business is influenced effectively
and efficiently .The structure of working and the duty allocation is well organized to enable
smooth operation of the activities in the business whereby the flow of information from the
junior to the senior staff is arranged and enhanced ensuring the order in execution of duties
allocated.

3.01 IMPORATANCE OF A WELL ORGANIZED STRUCTURE

1. A well-organized structure will ensure that the customers are properly served and avoid
delays in delivering the product.
2. It enhances good working condition of workers who are in the same business and who are
along together in the place of work.
3. It will enhance proper utilization of the resource and time as different people are assigned
the work to do

3.02 ORGANIZATION STRUCTURE

This is the total sum of the ways in which the labor is shared in an organization from top to
the bottom and achieving co-ordination between them .This is important that it show the right
position of each in the business. The also show the responsibilities for each respectively.

The Shanma Bricks Production Industry will be able to use the following structure.

20
 MANAGING
DIRECTOR
SECRETARY

PRODUCTION MARKETING
MANAGER MANAGER

OFFICE ATTENDANT

DRIVER

SECURITY GUARD

OPERATIVE /LABOURERS

3.03 QUALIFICATIONS OF A MANAGING DIRECTOR

For the successful operations of the business the managing director must have specific
qualification concerning business operations. Must be a diploma holder in civil engineering.

a. Should have experience of entrepreneurial skills.

b. Should have technical skills in civil workers.
c. Must have three years of experience in managing section.

21
3.04 FUCTION OF MANAGEMENT
Management is a very essential features in the company its operations. For it to suit its presence
in the business area it must play the following;

1. ORGANISING –Since this is the act of organizing people and the available resources,
the manager should organize the process of establishing a structure of relationship in
order to strategize on achieving the set goals and objective as allocating the resources.
2. PLANNING –The management is in charge of coming up with activities to be done in
advance so as to achieve the set goals & objectives. The manager should be able to come
up with time schedule to finish any job given to him by the client and deliver products as
per the client order at the right time.
3. DIRECTING - The manager should be able to give direction in the certain things,
should be done and to that those who are under him be aware of the goals & objective.
4. CO-ORDINATING - The manager will ensure that the structure of organization is made
to operate smoothly with the flow of information ,decision and results in every direction
he/she will divide the organization work into department.
5. CONTROLLING - It’s the function of the manger to process the planning and to check
the business closely so as to confirm to work as planned.
6. The actual performance is compared with the estimated performance at regular intervals.

OTHER PERSONEL
These are just the other people in the organizational structure of the business with roles to play
towards achievement of the set goals & objective.

PERSONAL NO Qualification DUTIES

SECRETARY 1 1. Must be fluent in 1.Keeping business
both languages. letter for the
2. Have a certificate managing director
in secretarial 2. Passing
which is a information the
diploma holder managing director
3. Computer literate through the
4. Discipline and marketing &
hardworking production
Kenya aged 25- manager
30 years

PRODUCTION 1 1. Have a two 1. Control all

MANAGER years’ experience stages in
must be computer production
literate. 2. Ensure quality
production
2. Must have a and services

22
 diploma in 3. Purchase raw
business materials for
administration production
MARKETING 1 1. Should be fluent 1. Making
MANAGE in both language advertisement
(English & the business
Kiswahili ) products
2. Must hold 2. Doing
diploma in sales products
& marketing promotion
3. Market
researcher and
informing on
current
products
OFFICE 1 1. Hold a diploma 1. Cleaning the
ATTENDANT in catering & be office
able speak fluent 2. Serving tea to
both language the stuff
(English & 3. Keeping the
Kiswahili ) records of
2. Have experience tools &
storekeeping for equipment in
at least a year. out of the
store.
DRIVER 1 1. Have kcse D+ Guarding both
and above in and outside
2. Have 35 years of the site area
age and above Reception at
3. Be able to speak the main gate
English & to the site
Kiswahili
4. Crime for both
OPERATIVES 6 1. Health and 2)able to do
LABOURES energetic loading &
person attending good
2. Must be at site
mentally
normal

23
3.05 RECRUITMENT TRAINING AND PROMOTION
Brothers Construction Company will require workers who could suits its operations hence will
recruit them to identify and employ those who merit the opportunities after analyzing the
vacancy; the following procedure will be used.

 RECRUITMENT
PROCEDURE OF RECRUITMENT

a. Advertising : After analyzing the job opportunities ,the vacancies will be advertised for
the people to be aware of them which be through several communication media such as
newspaper
b. Application – Application forms will be released for applicants to apply which must be
filled in capital letters and appropriately. The applicant must have national identification
card.
c. Short Listing - Those who qualify for the vacancy will be shortlisted and posted for
them to know. The people who qualify should adhere to the business rules and conditions
of the business.
d. Interview - The shortlisted people after their application should attend for interviews as
stated .The company will carry out a very genuine consideration in getting the
employees.
e. Selections - From the above interview those who meant for the vacancies will be selected
and they will be done through considering those who have 85% of the interview
attempted.
f. Appointment Letter
The company will write the appointment letters to the selected including the salaries each
deserve and the type of contract each person has to complete.
The reporting date will be stated in the letter.
g. Acceptance
After receiving the appointment letter the selected will as well write to the company
showing whether they have accepted the vacant or not. He or she must communicate
clearly with the business if to attend or not.
h. Employment
Those selected will now be employed with the company and immediately start to work
towards the business set goals and objectives.

24
 TRAINING
Since training is very important exercise for the business progress, SHANMA BRICKS
PRODUCTION INDUSTRY Company will carry out its training within the business as
stated for quality production.

a. Advance training will be offered to employees – This will be done before the
employees get down to the real work within the business.
b. In house training - During the real works the supervisor will be guiding them as a
part of the training on how to produce the quality. This training will be compulsory
from the head, to all new and old workers for attainment, improvement of the quality
skill.

 PROMOTION
Promotion is an important factor to consider for better progress of the business as the
employees will be motivated and work towards the attainment of the business set goals
and objective .

The following consideration must be considered.

A. Qualification: Brothers Company will consider who to be promoted .For instance
if a marketing manager has made a lot of sales and searched more market, than
any other percentage increase of other department, he will be promoted.
B. Experiences: Person with a lot of experience in a certain sector within business
has to be promoted so as to encourage other persons to work hard in their
respective sectors.
C. Merit ; Promotion will not made according who do you know or who seen to be
promoted but only to those who merit whichever the status .Any to be promoted
must deserve and have ability to deserve the promotion according to his or her
efforts. This person will be given a high position and demotion will also be done
to those deserve it..

25
3.06 REMULATION AND INCENTIVES
PERSONNEL NUMBER SALARY PER TOTAL TOTAL ANNUAL
HEAD (KSHS) MONTHLY SALARY (KHS)
SALARY (KSHS)
Managing director 1 1500 1500 180,000
Secretary 1 7000 7000 84,000
Production manager 1 7000 7000 84,000
Marketing manager 1 8000 800 96,000
Office attendant 1 8000 8000 60,000
Driver 1 500 5000 60,000
Security guard 1 4000 4000 48,000
Lab drivers 6 3500 21000 252,000
/operative
TOTAL 13 3 75000 864,000

 INCENTIVES
Since for the business to achieve set goals and objectives, the human resource must be
involved it will give incentives to her workers so as to motivate them in their daily
activities, the following incentive will be offered by the company to the worked
a. Medical allowances : In case of any injury to the workers ,the medical services will
be given and all the bills be settled by the company .Also all the people will be
registered to NHIF & NSSF and expense paid by the company until employee resigns
from the company.
b. Transport allowance : To facilitate the operations ,company will give workers
transport allowances .This will be mostly considered to employees such as marketing
manager and production manager as they will be operations greatly in and out the
business

3.07 LICENCES PERMIT AND BY LAW

Licenses are on important factor that Brothers construction company center has to obtain the
licenses that would be needed will include

A. Registration cost

This is the cost that would be needed to register the business before it commences its
operation, registration will take place at attorney general office and the cost is about Kshs
1000.This is done to ensure that the business name doesn’t resemble any other.

26
B. Company pin number

The business will have to open a business pin number that it will identify itself with and this
will not resemble any other pin number will be given from Kenya revenue Antony at a cost
of ksh 300.

27
 CHAPTER FOUR

4.00 PRODUCTION /OPERATIONAL COST

Shanma Bricks Production Industry will need different facilities of high quality in order to
produce high quality products and offer better services to customers.

They are key and basic necessities for any business and this will help the owner of the business
to ensure that all customers will get the products of the expected time and expected nature this
making the business to run smoothly, some materials are fixed and will need to be bought once
and can stay for long while others will need to be bought now and then.

4.01 PRODUCTION FACILTIES & CAPACITIES

This will involve the use of materials that is tools, machines and equipment to produce brick
products and will be used to carry out written product for production.

ITEMS QUALITY CAPACITY MAKE SUPPLIER UNIT TOTAL REMARKS

PRICE
Molds 6 600m China Viry chard 30,000 180,000 Start up
Shovels 6 - Tuli Yal harware 500 3000 Start up
hardware
Vibrator 2 JCB42m Japa banchu 3700 74000 After month
Pug-mail 8 600mmx100m - Imara 1500 12000 Start up
hardware
Wheel 4 large China Muli 1150 4600 After 3 min
barrow hardware
1 4 - - 5100 5100 Start up
Computer
Fork 5 pieces Jogoo Winister 605 3025 Start up
common
Panga 5 pieces Wina Wina 300 1500 Start up
hardware hardware
Power 2 CCB92F China china 6500 130,000 After one
rammer month
TOTAL 184,000

28
4.02 PRODUCTION LAYOUT

TOOL AND PRODUCTION SITE

EQUIPMENT

CAR PARK
WATER
POINT

DIRECTOR
OFFICE
SECURITY
STAFF OFFICE GUARDS WASH ROOM
MAIN GATE

4.03 PRODUCTION STRATEGY

Production strategy is the value incurred during production by the company. A successful
business most has the exact value of production so that it includes it in the determination of the
selling price of the product to avoid operating at loss. The production include the following,
which should be in monthly records.

29
4.04 COST OF LABOUR
PERSONEL NUMBER DAILY WAGES TOTAL MONTHY
(a)OPERATIVE WAGES
Indirect labor 1 15000
Managing 1 15000
Director
Secretary 1 7000
Production 1 7000
manager
Office 1 8000
attendant
Driver 1 5000
Security 1 4000
guard
Direct labor 1
Laborers 21000
/operatives
Total 6 350 21000 75000

4.04 COST OF MATERIALS

The cost of materials in the value or amount incurred on materials used for Production Company
will incur the materials tabulated value on acquiring materials for production

MATERIALS TOTAL COST

(MONTHLY )
SANDY –SOIL 14400
CLAY-SOIL 420,00
COVE CASH 10,000
PLASTICIZER 28000
Total 94,400

4.06 OVERHEADS /EXPENSES

Overhead are expenses incurred during the production process and the business has to pay for the
in order produce my business will incur the following expense during its production

ITEM QUANTITY AMOUNT

Water 500,000 100,000
Lubricant (oil) 90 liters 4800
Logs (fuel) 80 pieces 5000
109800

30
Cost of production =cost of materials +cost of labor +Overhead

=94,400+75000+109800

Kshs=279,200

4.07 PRODUCTION PROCESS

Production process is the procedure or the method that is specifically used by the company to
give the end product that is ready to be used by the customers according to their desires. The
Brothers construction company will use the following process to come up with the quality bricks
that can full fill the client’s needs

STEP OR PHASE IN OPERATION /PRODUCTION PROCESS

a. Preparation

The brick earth will be set free of vegetable soil and dug or excavated and cleaned while dry.
Any Lumps are broken down into powder form by use of Jembe, and left to the atmospheric
action for one day to impact plasticity and strength to the brick earth.

Different types of earth will be mixed in suitable proportions with little quantities of ash to
develop essential quantities needed for molding ,drying and burning ,waters and plasticizer will
be will be added and pug-mail used to break the day lumps .

b. Molding Stage

It will be done mostly by machines as the company will need to produce very large number
of bricks & quickly clay in plastic conditions will be formed through an opening of
dimensions equal to the length and breadth of the bricks required ,when using the drying
process ,the ,moist product clay will be compressed under great pressure into well shaped
bricks according to the design.

c. Drying Stage

For drying the bricks made, artificial method will be used as it is rapid and allows for large scale
production .Here special driers which receive heat from special furnaces will be used or by hot
gases from cooling chambers of a kiln large will be used to produce the heat for drying.

d. Burning Stage

The bricks will be burnt to impact hardness and strength which be compulsory with exception of
the client’s specifications and orders .In this stage, open kiln will be used, where fixed will be
arranged alternating layers with the bricks, Air spaces be allowed between the bricks for
circulation of hot gases .This will increase density of the bricks so as to absorb less water.

31
4.08 OVERALL SCHEDULE /WORKING SCHEDULE
DAY WORKING HOURS
Monday –Friday 8.00Am-5.00Pm
Saturday 8.00Am-5.00PM
Sunday Closed

4.09 REGULATIONS AFFECTING PRODUCTION

These are factors that affect the production of the business in its location .The company
should adhere to these factor or acts as they are set to guide the business to affects the
environment negatively.

a. Environmental Act

This mainly deals with cleanliness with the company .Therefore ,this company will ensure that
any site are cleaner with trees ,plantation of trees for replacement will be done to resume the
environment beauty also ,excavated area will be back filled to keep the area safe and good .

b. Health And Safety Act

The company will train all the workers on safe operations of machines and equipment on
handling them to safeguard them from accidents and proper dressing

c. Copy-right Act

Since this helps in protecting the trademarks and regulations against adopting someone else logo,
this company will brand its own products clearly and acquire all the legal registration.

d. Safety Rule

These safety rules require first aid kits within the company to prevent further injuries in case of
accidents .The Company will therefore need people who are able to give first aid to the victims.

e. Factory Act

In every operation with machinery which is run should provide with firefighting equipment as
well as appropriate maintenance therefore Brother’s construction company will place fire
extinguisher ready available and accessible areas.

32
 CHAPTER FIVE

5.00 FINANCIAL PLAN

Financial plan - Is the plan of the company on how to spend the money it has for the business. It
gives the general performance and the overview of the business position.

It accounts for all the funds in the business and show accountability of every cent incurred as a
profit, loss or even purchase. This the company to utilize all the available resource this reducing

5.01 PRE – OPERATIONAL COST

ITEM AMOUNT PER YEAR
Salaries 864,000
Tools & equipment 1,844,625
Advertisement 161,000
Promotion 120,000
Premises (Rent) 100,000
Water 100,000
Logs 5,000
Lubricant 4,800
Licenses 1,600
Materials 94,400
TOTAL 3,295,452.

5.02 ESTIMATION ON WORKING CAPITAL

Working capital is the amount of money the business will work to run its operation also running
capital.

ITEMS FIRST YEAR

CURRENT ASSETS 1,50,000

Cash in hand 3,000,000

Cash at Bank 300,000
Debtors 900,000
Stock
Total ASSSETS 5,700,00
CURRENT LIABILITIES
Creditors 20,000
Loan 400,000
Total liabilities 2,020,000

33
 WORKING CAPITAL

CURRENT ASSETS –CURRENT LIBITIES

5,700,000-2,020,000

= 3,680,000/=

5.03 PROJECTED CASH OUTFLOW

This show the record of the flow of cash out of the business for a given period of time

6.4 PROJECTED CASH FLOW

ITEM JAN FEB MAR APR MAY JUN JUL AUG SEP OCT
CASH INFLOW

Balance B/F 410,366.00 824,232.00 1,202,198.00 133,664.00 1,911,930.00 2,273,946.00 2,134,412.00 2,576,428.00 3,520,369

Cash in hand 120,000.00 120,000.00 140,000.00 132,500.00 130,000.00 115,500.00 115,500.00 110,000.00 110,000.00 69,000.00

Cash at bank 200,000.00 200,000.00 220,500.00 220,500.00 250,000.00 250,000.00 200,000.00 200,000.00 200,000.00 185,300.0

Cash sale 200,500.00 180,000.00 180,000.00 150,000.00 150,000.00 180,000.00 200,000.00 300,000.00 577,375.00 577,375.0

Debtors 2,050.00 21,500.00 25,500.00 30,000.00 40,000.00 42,000.00 42,500.00 47,000.00

Loans 320,000.00 320,000.00 320,000.00

TOTAL CASHINFLOW 841,000.00 910,366.00 1,385,232.00 1,726,698.00 2,215,164.00 2,457,430.00 2,525,446.00 2,786,412.00 3,826,303.00 4,399,044
CASH OUTFLOW

34
SALARIES 81,000.00 81,000.00 81,000.00 81,000.00 81,000.00 81,000.00 81,000.00 81,000.00 81,000.00 81,000.00

Creditors 1,150.00 1,150.00 2,000.00 2,000.00 2,000.00 2,200.00 2,250.00 2,250.00 2,200.00 2,400.00

Purchase 96,000.00 96,000.00 96,000.00

Advertisement 24,000.00 24,000.00 24,000.00

Electricity bills 1,250.00 1,250.00 1,300.00 1,300.00 1,500.00 1,550.00 4,000.00 4,000.00 4,100.00 4,150.00

Water bills 84.00 84.00 84.00 84.00 84.00 84.00 84.00 84.00 84.00 84.00

Stationary 22,500.00 22,500.00

Equipment and Tools 200,000.00 180,000.00 185,000.00 137,000.0

Insurance 2,000.00

Telephone 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00

Postal bills 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00

Rent 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00

Loan repayment 96,000.00 96,000.00 96,000.00 96,000.00 96,000.00 96,000.00 96,000.00 96,000.00

Loan interest 24,000.00 24,000.00

TOTAL CASH
OUTFLOW 430,634.00 86,134.00 183,034.00 387,034.00 303,234.00 183,484.00 391,034.00 209,984.00 305,934.00 323,234.0

NET CASH 410,366.00 824,232.00 1,202,198.00 1,339,664.00 1,911,930.00 2,273,946.00 2,134,412.00 2,576,428.00 3,520,369.00 4,075,810

35
5.04 PROFORMA INCOME STATEMENT
This is a record that the business uses to evaluate itself whether it is running at a profit or not
.It is important as the company uses it to take caution in time to correct its weakness

ITEM FIRST YEAR

Sales 7,000,500
Less purchase 2,333,500
Gross PROFIT 4,6667,000
Expenses 864,000
Salaries 100,000
Premises (rent ) 100,000
Tools & equipment’s 1,841,46,625
Advertisement 161,000
Transport 120,000
Water 100,000
Logs 5000
Lubricant 4800
Licenses 1600
Materials 94,400
Pan interest 200,000
TOTAL EXPENSES 3,495,425
NET PROFIT BEFORE TAXES 1,71,575
LESS TAXES (16%) 984,123

5.05 PROFORMED BALANCEMENT SHEET

SHANMA BRICKS PRODUCTION INDUSTRY
As at first Jan 2022

ITEMS FIRST YEAR AMOUNT

FIXED ASSSETS
PREMISES 100,000
Vibrator 740000
Computer 51000
Power rammer 130,000
Molds 180,000
Total fixed assets 535,000
CURRENT ASSETS
Cash in hand 1,500,000
Cash at bank 3,000,000
Debtors 300,000
Stock 900,000
Total current assets 5,700,000
TOTAL ASSETS (FIXED +CURRENT ) 6,235,000

36
LONG-TERM LIABILITIES
Friends contribution 60,000
Bank loans 200,000
Relatives contribution 90,000
Owners’ Equity 3,877,548
Totals 6,027,548
CURRENT LIABILITIES
Creditor 20,000
Tax accrued 187,452
Total liabilities 207,452

5.06 BREAK EVEN POINT

ITEMS FIRST YEAR AMOUNT
SALARIES 864,000
PREMISES /RENT 100,000
LICENSE 1,600
TOTAL FIXED COST 965,600
VARIABLE COST
WATER 100,000
LOGS 5,000
LUBRICANT 4800
PROMOTION 120,000
TOTALS V.C 229,800

CONTRIBUTION MAGIN
TOTAL SALES LESS VARIABLE COST

7000,500-229,800

=6,770,700

CONTRIBUTION MARGIN PERCENTAGE

CONTRIBUTION MARGIN –TOTAL SALES) X100%

57770, 700/7000500) X100

Or

6770700 -7000500x100%

=96.72%

37
38