UNIVERSITY OF AGRICULTURE MAKURDI

BUSINESS PLAN ON WIRING AND INSTALLATION

(UGANA’S WIRING & INSTALLATION COMPANY)

LOCATION: NO: AREA ‘F’ NYANYA, FCT ABUJA

ENT 312

UGANA ECHE
16/36320/UE
LEVEL:300

DEPARTMENTOF CROP AND ENVIRONMENTAL PROTECTION

JULY, 2019

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 TABLE OF CONTENT’s

 Executive summary

 Mission

 Keys to success

 Company summary

 Company ownership

 Start up summary

 Services

 Market analysis summary

 Service business analysis

 Competitive edge

 SWOT Analysis

 Sales forecast

 Personnel plans

 Financial plan

 Projected balance Sheet

 Projected cash flow

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Executive Summary

UGANA’S WIRING & INSTALLATION COMPANY is a new wiring /electronics

contracting company that Ugana Eche has started to serve the former Fct Abuja
customers, as well as Nigeria at large. Ugana Eche, a member of local three jurisdictions,
has experience working with Emmanuel Fankule. his area of specialization is data,
communication, wiring installation and maintenance.

Currently, there is N100,000 worth of business with former Fct Abujacustomers. He

believes He can capture a lion's share of it and build from that base. He will start as the
company's only employee but will hire additional electricians as His sales grow.

1.1 Mission

UGANA’S WIRING & INSTALLATION mission is to offer its customers the highest-
quality wiring services. Ugana Eche focuses on personalized service by offering
convenience and rapid service. Additionally, UGANA’S WIRING AND
INSTALLATION COMPANY has the technologically expertise to install wireless voice
and data systems, as well as intelligence systems in any size facility. Finally, He has strong
vendor relationships with the most service conscious vendors who are capable of shipping
major parts rapidly (on an overnight timeline in most cases) minimizing the system down
time for UGANA’S WIRING AND INSTALLATION COMPANY customers.

1.2 Keys to Success

UGANA’S WIRING & INSTALLATION keys to success include:

1. Growing and maintaining a referral network of customers.

2. Rapid order and delivery of wiring components.
3. Expedient and convenient wiring services.
4. Focus expertise in data, communication and wiring installation and maintenance.

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Company Summary

UGANA’S WIRING & INSTALLATION is a new start-up wiring contracting company.

The area's economic growth the last several years has resulted in increased opportunity for
the installation of high-end wiring systems for security, data transfer and communication.
UGANA’S WIRING COMPANY is positioned to capitalize on the growing need of
businesses in the greater tri-county area.

2.1 Company Ownership

Ugana Eche is the sole owner and employee of UGANA’S WIRING COMPANY

2.2 Start-up Summary

Ugana Eche will invest His personal savings in UGANA’S WIRING COMPANY ’s. The
following table shows projected initial start-up costs for UGANA’S’s enterprise

Start-up Requirements
Start-up Expenses
Legal N0
Stationery etc. N200
Brochures N100
Start-up Inventory N30,000
Other N500
Total Start-up Expenses N38,800
Start-up Assets
Cash Required N29,400
Other Current Assets N0
Long-term Assets N22,500
Total Assets N51,900
Total Requirements N62,500

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Start-up Funding
Start-up Expenses to Fund N10,300
Start-up Assets to Fund N51,700
Total Funding Required N62,000
Assets
Non-cash Assets from Start-up N22,000
Cash Requirements from Start-up N29,400
Additional Cash Raised N0
Cash Balance on Starting Date N29,700
Total Assets N51,900
Liabilities and Capital
Liabilities
Current Borrowing N0
Long-term Liabilities N22,000
Accounts Payable (Outstanding Bills) N0
Other Current Liabilities (interest-free) N0
Total Liabilities N22,000
Capital
Planned Investment
Ugana Eche N40,000
Investor 2 N0
Other N0
Additional Investment Requirement N0
Total Planned Investment N40,000
Loss at Start-up (Start-up Expenses) (N10,300)
Total Capital N29,700
Total Capital and Liabilities N51,900
Total Funding N62,000

Services

The services rendered by this enterprise can cover a project in its entirety from original
concept to acceptance of completed construction work.

 Field services: 24 hour emergency service, troubleshooting, field & installation

liaison and inspection, commissioning and checkout, customer representation at
acceptance testing of equipment, preventive maintenance programs.
 Design services: cost estimates, design analysis, project scheduling, conceptual
drawings: wiring standards, specifications.

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  Field services: 24 hour emergency service, troubleshooting, field & installation
liaison and inspection, commissioning and checkout, customer representation at
acceptance testing of equipment, preventive maintenance programs.
 Construction services: commercial and industrial.
 Consulting services: & installation studies (functional analysis), evaluations and
recommendations (value & installation analysis), feasibility studies, master
planning.

Market Analysis Summary

UGANA’S WIRING AND INSTALLATION COMPANY focus is to meet the demands
of the former Fct Abuja customer base. This enterprise has established relationships
with these companies and believes we will receive referral business from them over time.
The company estimates that 75% of revenues will come from old Fct Abuja crescent and
25% from new referrals and business. Though the former Fct Abuja clientele will be
important during the first year of business, Ugana Eche knows the future of the business is
new referrals. The table below further estimates the total market potential of type of
services rendered by UGANA’S WIRING AND ISTALLATION COMPANY in

the Richmond tri-county area.

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Fct AbujaCustomers 0% 250 250 250 250 250 0.00%
New Customers 20% 2,000 2,400 2,880 3,456 4,147 20.00%
Other 0% 0 0 0 0 0 0.00%
Total 18.23% 2,250 2,650 3,130 3,706 4,397 18.23%

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Service Business Analysis

The market for commercial wiring contracting services is very fragmented and crowded.
Among these, only a few are large companies with 20 or more electricians on staff. The
remainder are small companies with less than three full-time electricians. UGANA’S
WIRING & INSTALLATION current niche is its strong relationship with former
customers of Benue. But this will not be sufficient for growth in a competitive market. By
focusing on data, communication and wiring installation and maintenance, Ugana Eche
reduces his direct competitors to two large wiring companies that bid on the area's largest
projects. Though, one day, UGANA’S WIRING AND INSTALLATION COMPANY
plans to be a force in the area's largest projects, an opportunity exists now for new
customers whose smaller projects are not being pursued aggressively by his competitors.

Strategy and Implementation Summary

UGANA’S WIRING & INSTALLATION strategy is simple and ambitious. First,

capture most of Benue's old customers as a base is which to build the company. From this
secure footing, Ugana Eche will begin to market His specialization skills to new
customers. UGANA’S WIRING COMPANY is also certified as a Man

with numerous authorities, agencies, and companies, Ugana Eche believes that he will be
successful marketing His services to the many business men in the area. Currently,
UGANA’S WIRING & INSTALLATION COMPANY is the only men-owned wiring
contracting company is the tri-county area.

6.1 Competitive Edge

When Mr Ugana opted to start His own company and take matters into her own hands, this
was just another step in her quest to deliver services to customers that were second to
none. As a man in the male-dominated electrician profession, it has always been his
competitive edge that has pushed ahead with customers and employers. Her focus on new
wiring technology places He in a unique situation. Both the major competitors had sought
her services when Fct Abuja announced the company's departure from the area. Her
reputation for quality work and excellent customer skills could have landed His with a new
employer and a bigger pay check. The Richmond tri-county area is booming with new
commercial construction, including a new research park and airport. Ugana’s technical
skills in data retrieval and communication systems will be a valuable asset for a company
to have in the next five years. , UGANA’S WIRING & INSTALLATION COMPANY
is well positioned to compete for numerous small contracts that focus on new wiring
technology. When combined with the advantages, UGANA’S WIRING &

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INSTALLATION COMPANY has in capturing the old Fct Abuja contracts, the
company is in an excellent competitive position.

6.2. SWOT Analysis

SWOT Analysis is a strategic planning tool used to evaluate the Strengths Weaknesses,
Opportunities, and Threats associated with a business venture. This method identifies the
internal and external factors that could prove favourable or otherwise towards certain
business objectives. The technique was developed by Albert Humphrey (Stanford
University)
using information from the fortune 500 (Rwigema et al, 2004).
Strengths – Identify all attributes that could provide a competitive advantage.
Weaknesses – Identify all shortcomings that could be harmful to reaching objectives.
Opportunities – Identify external elements that could help in reaching objectives.

Threats – Identify external elements that could be harmful to reaching objectives

6.3 Sales Forecast

The first three month of operation will focus on the former customers of Benue. ,
UGANA’S WIRING & INSTALLATION COMPANY will then turn to marketing to
new customers. The following table will outline, UGANA’S WIRING &
INSTALLATION COMPANY sales forecast data.

Sales Forecast
Year 1 Year 2 Year 3
Sales
Fct AbujaCustomers N62,787 N80,000 N90,000
New Customers N22,200 N40,000 N70,000
Total Sales N84,987 N120,000 N160,000
Direct Cost of Sales Year 1 Year 2 Year 3
Fct AbujaCustomers N21,975 N26,400 N29,700
New Customers N7,770 N13,200 N23,100
Subtotal Direct Cost of Sales
N29,745 N39,600 N52,800

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7.0 Management Summary

, UGANA’S WIRING & INSTALLATION COMPANY is owned by its sole employee,

Ugana is a talented electrician from Federal University of Agriculture Makurdi which he
obtained while working full-time as an electrician. Ugana entered the world of electricity
at just the right time when national legislation made it possible for Him to join the
electricians' union. He started His apprenticeship and early training as an electrician in
Lagos in 1978.

7.1 Personnel Plan

The following table shows the personnel plan for UGANA’S WIRING AND
INSTALLATION COMPANY .

Personnel Plan
Year 1 Year 2 Year 3
Ugana Eche N42,000 N44,940 N48,086
Other N0 N0 N0
Total People 0 0 0
Total Payroll N42,000 N44,940 N48,086

Financial Plan

The financial plan is presented in the following topics.

8.1 Break-even Analysis

The following table and chart show the break-even figures for Sunny wiring /electronics

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Break-even Analysis
Monthly Revenue Break-even N9,365
Assumptions:
Average Percent Variable Cost 35%
Estimated Monthly Fixed Cost N6,087

8.2 Projected Profit and Loss

The following table and chart outline the projected profit and loss for three years.

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Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales N84,987 N120,000 N160,000
Direct Cost of Sales N29,745 N39,600 N52,800
Other Production Expenses N0 N0 N0
Total Cost of Sales N29,745 N39,600 N52,800
Gross Margin N55,242 N80,400 N107,200
Gross Margin % 65.00% 67.00% 67.00%
Expenses
Payroll N42,000 N44,940 N48,086
Sales and Marketing and Other
N1,100 N2,000 N3,000
Expenses
Depreciation N2,748 N2,748 N2,748
Leased Equipment N12,000 N12,000 N12,000
Utilities N2,400 N2,400 N2,400
Insurance N0 N0 N0
Rent N6,500 N6,500 N6,500
Payroll Taxes N6,300 N6,741 N7,213
Other N0 N0 N0
Total Operating Expenses N73,048 N77,329 N81,947
Profit Before Interest and Taxes (N17,806) N3,071 N25,253
EBITDA (N15,058) N5,819 N28,001
Interest Expense N2,200 N2,200 N2,200
Taxes Incurred N0 N261 N6,916
Net Profit (N20,006) N610 N16,137
Net Profit/Sales -23.54% 0.51% 10.09%

8.3 Projected Balance Sheet

The table shows projected balance Sheet for three years.

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets
Current Assets
Cash N7,274 N8,720 N25,034
Accounts Receivable N9,188 N12,973 N17,297
Other Current Assets N0 N0 N0
Total Current Assets N16,461 N21,693 N42,331

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Long-term Assets
Long-term Assets N22,000 N22,000 N22,000
Accumulated Depreciation N2,748 N5,496 N8,244
Total Long-term Assets N19,252 N16,504 N13,756
Total Assets N35,713 N38,197 N56,087
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable N4,020 N5,893 N7,646
Current Borrowing N0 N0 N0
Other Current Liabilities N0 N0 N0
Subtotal Current Liabilities N4,020 N5,893 N7,646
Long-term Liabilities N22,000 N22,000 N22,000
Total Liabilities N26,020 N27,893 N29,646
Paid-in Capital N40,000 N40,000 N40,000
Retained Earnings (N10,300) (N30,306) (N29,697)
Earnings (N20,006) N610 N16,137
Total Capital N9,694 N10,303 N26,441
Total Liabilities and Capital N35,713 N38,197 N56,087
Net Worth N9,694 N10,303 N26,441

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8.4 Projected Cash Flow

The following table and chart show the projected cash flow for Annet wiring /electronics

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales N21,247 N30,000 N40,000
Cash from Receivables N54,553 N86,215 N115,676
Subtotal Cash from
N75,800 N116,215 N155,676
Operations
Additional Cash Received
Sales Tax, VAT, HST/GST
N0 N0 N0
Received
New Current Borrowing N0 N0 N0
New Other Liabilities
N0 N0 N0
(interest-free)
New Long-term Liabilities N0 N0 N0
Sales of Other Current Assets N0 N0 N0
Sales of Long-term Assets N0 N0 N0
New Investment Received N0 N0 N0
Subtotal Cash Received N75,800 N116,215 N155,676
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending N42,000 N44,940 N48,086

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Bill Payments N56,226 N69,829 N91,276
Subtotal Spent on Operations N98,226 N114,769 N139,362
Additional Cash Spent
Sales Tax, VAT, HST/GST
N0 N0 N0
Paid Out
Principal Repayment of
N0 N0 N0
Current Borrowing
Other Liabilities Principal
N0 N0 N0
Repayment
Long-term Liabilities
N0 N0 N0
Principal Repayment
Purchase Other Current
N0 N0 N0
Assets
Purchase Long-term Assets N0 N0 N0
Dividends N0 N0 N0
Subtotal Cash Spent N98,226 N114,769 N139,362
Net Cash Flow (N22,426) N1,446 N16,314
Cash Balance N7,274 N8,720 N25,034

8.5 Business Ratios

The following table provides important ratios for the industry, as determined by the
Standard Industry Classification (SIC) Index, 4911, Wiring Services.

Industry
Year 1 Year 2 Year 3
Profile
Sales Growth 0.00% 41.20% 33.33% -1.20%
Percent of Total Assets
Accounts Receivable 25.73% 33.96% 30.84% 5.10%
Other Current Assets 0.00% 0.00% 0.00% 26.70%
Total Current Assets 46.09% 56.79% 75.47% 32.80%
Long-term Assets 53.91% 43.21% 24.53% 67.20%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 11.26% 15.43% 13.63% 21.10%
Long-term Liabilities 61.60% 57.60% 39.22% 38.10%
Total Liabilities 72.86% 73.03% 52.86% 59.20%
Net Worth 27.14% 26.97% 47.14% 40.80%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%

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Gross Margin 65.00% 67.00% 67.00% 57.80%
Selling, General & Administrative
88.54% 66.49% 56.91% 22.80%
Expenses
Advertising Expenses 1.29% 1.67% 1.88% 0.10%
Profit Before Interest and Taxes -20.95% 2.56% 15.78% 11.10%
Main Ratios
Current 4.10 3.68 5.54 1.45
Quick 4.10 3.68 5.54 1.09
Total Debt to Total Assets 72.86% 73.03% 52.86% 59.20%
Pre-tax Return on Net Worth -206.39% 8.45% 87.19% 4.10%
Pre-tax Return on Assets -56.02% 2.28% 41.10% 10.20%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -23.54% 0.51% 10.09% n.a
Return on Equity -206.39% 5.92% 61.03% n.a
Activity Ratios
Accounts Receivable Turnover 6.94 6.94 6.94 n.a
Collection Days 58 45 46 n.a
Accounts Payable Turnover 14.99 12.17 12.17 n.a
Payment Days 27 25 27 n.a
Total Asset Turnover 2.38 3.14 2.85 n.a
Debt Ratios
Debt to Net Worth 2.68 2.71 1.12 n.a
Current Liab. toLiab. 0.15 0.21 0.26 n.a
Liquidity Ratios
Net Working Capital N12,442 N15,799 N34,685 n.a
Interest Coverage -8.09 1.40 11.48 n.a
Additional Ratios
Assets to Sales 0.42 0.32 0.35 n.a
Current Debt/Total Assets 11% 15% 14% n.a
Acid Test 1.81 1.48 3.27 n.a
Sales/Net Worth 8.77 11.65 6.05 n.a
Dividend Payout 0.00 0.00 0.00 n.a

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