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Business Plan - Fencing
Business Plan - Fencing
1. Industry Overview
Fencing companies are part of the fence construction industry and this industry
comprises of establishments that construct and install a wide range of fences,
including residential fences, security fences, niche fences amongst others.
In the same way, non – residential construction returned to growth during the
stated period as increasing consumer spending revived corporate profit margins.
Going forward, players in the industry are forecast to experience more favourable
conditions. Robust residential growth during the period, especially in the next years,
will aid fencing contractors increase profitability and enlarge their revenue.
Over the five years to come, revenue for the industry is projected to rise at a more
remarkable amount of money. With an expanding housing market, there will be
greater demand for fences, especially from home builders and households in need
of renovation.
In the past years, the most percentage of total industry revenue was derived from
metal sheet fences. Metal sheet fences are generally the more economical type of
fencing available in the market today compared to build up wall fences. The non-
residential commercial buildings, building sites, manufacturing factories, and
residentials are important markets for metal sheet fences. Ornamental metal fences
and Wood fences are among those chosen by residential homes.
Ever ending growing of inflation and shortage of foreign currency makes it hard
fencing with metal products. Stability issues with the wooden fences makes it the
least alternative. Cost, aesthetic value, time of construction and safety matters
driven us to consider prefabricated concrete installation business plan.
Some of the factors that encourage entrepreneurs to start their own fencing
companies could be that the business is a highly profitable business, and it can be
started with minimal capital and manpower. The fence construction industry is lowly
regulated in Ethiopia but anyone who aspires to start a fencing company must apply
and obtain a license before they can legally operate in the industry.
2. Executive Summary
NAD Fence Construction Company is going to be a licensed fencing company. Our
head office will be located in Guraghe zone, wolkite town. But we will open our
branch offices in major cities in Ethiopia within our first five years of operation.
We will work hard to ensure we have active presence in the following locations;
Wolliso,Oromia Region, Butajira, Guraghe zone, Hossana, Hadiya Zone, Jimma
Oromia region.
As part of our plans to make our customers our number one priority and to become
one of the leading fencing companies in Ethiopia, we have perfected plans to adopt
international best practices in the industry. NAD Fence Construction Company have
overtime perfected plans that will help us to become the go to fencing company in
the cities we operate in with a great vision to engage in green affordable modular
homes.
NAD Fence Construction Company will at all times demonstrate its commitment to
sustainability as a firm, by actively participating in our communities and integrating
sustainable business practices wherever possible. We will ensure that we hold
ourselves accountable to the highest standards by meeting our client’s needs
precisely and completely.
NAD Fence Construction Company is owned by Engr. Dessalegn Gamini and his
immediate family members. Engr. Dessalegn Gamini has a Degree in Civil
Engineering and had worked with top construction firms in Ethiopia including
Zebidar brewery, Wolkite university, SAMCON construction and others for many
years prior to starting his own business.
Our vision is to become one of the top 5 fencing and modular home building
companies in Ethiopia within the first 10 years of starting NAD Fence
Construction Company.
Our mission and values are to help people, farmers, businesses, home and
property owners in Ethiopia to handle all their fence and home construction
contracts.
Our company’s structure is not entirely different from what is obtainable in the
industry, as a matter of priority, we have decided to create a structure that will allow
for easy growth for all our employees and also, we have created platforms that will
enable us attract some of the best hands in the industry.
We are quite aware that the success of any business lies in the foundation on which
the business is built on, which is why we have decided to build our fencing company
on the right business foundation. We will ensure that we only hire people that are
qualified, honest, hardworking, customer centric and are ready to work to help us
build a prosperous business that will benefit all the stake holders.
NAD Fence Construction Company is fully aware of the modes of operation in the
industry, hence adequate provision and competitive packages has been prepared
for independent sales agents. Our marketing department will be responsible for
managing this aspect of our business structure. Below is the business structure we
will build NAD Fence Construction Company on;
Project Manager
Accountant
6. SWOT Analysis
Starting a fence construction business in Ethiopia comes with its own fair share of
challenges, you would have to abide by the law and also compete with loads of
other entrepreneurs in the industry who also are interested in making a living and
building a business in Ethiopia.
Strength:
Some of the strengths that we will be bringing to the table in the fence construction
industry is our robust relations with construction giants, home owners and property
investment moguls in Ethiopia. We have access to funding and also have a team of
experts who have cut their teeth in the fence construction industry.
Weakness:
Opportunities:
Threat:
Some of the threats that we are likely going to face as a fencing company
are unfavourable government policies, and global economic downturn; global
economic downturn usually affects spending power and the real estate industry is
known to encounter decline in sales during this period. There is hardly anything we
could do as regards these threats other than to be optimistic that things will
continue to work for our good.
7. MARKET ANALYSIS
Market Trends
The market trends in the industry are that there are no fixed profit projections when
engaging in a fence construction deals. The profit you stand to gain depends on
loads of factors amongst which are your attention to details, ability to source for
affordable and quality fencing materials. If you are able to get all the above stated
factors, your gains will always be far more than your loss.
Another obvious trend that is common with fence construction companies is that
most of them are improvising on more means of making money, and as a matter of
fact, they are also involved in some form of building renovation works.
Interestingly, growth has been underpinned by low interest rates and sustained
demand for new single-family homes. Industry operators have benefited from the
recent rebound in home prices and revenue is expected to grow due to rising
demand from homeowners and developers.
As a matter of fact, our target market is the whole of Ethiopia and we have put plans
in place to recruit freelance agents to represent our business interest wherever they
are located in Ethiopia. Below is a list of the people and organizations that we have
specifically designed our products and services for;
Our competitive advantage
The fence construction industry is indeed a very prolific and highly competitive
industry. Clients will only hire your services if they know that you can help them
construct fences that will help them secure their homes.
NAD Fence Construction Company might be a new fencing company, but we can
boast of having links with suppliers, ability to expand and curtail operations rapidly
in line with market demand and access to niche markets. Plus, our management
team are gurus in the industry, who have what it takes to grow a business from
scratch to become a top brand within the shortest time possible.
Aside from the robust experience and expertise of our experts, we have a very
strong online presence that will enable us attract clients from all across Ethiopia.
Lastly, our employees will be well taken care of, and their welfare package will be
among the best within our category in the industry. It will enable them to be more
than willing to build the business with us and help deliver our set goals and
objectives. We will also engage freelance marketing agents on a commission level to
help us market our services.
Sources of Income
NAD Fence Construction Company is established with the aim of maximizing profits
in the industry. We have successfully built a vibrant real estate network that covers
the whole of Ethiopia so as to help us build a profitable business. Below are the
sources we intend exploring to generate income for NAD Fence Construction
Company;
We are well positioned to take on the challenges that are synonymous to fence
construction businesses in Ethiopia, and we are quite optimistic that we will meet
out set target of generating enough income from our first month of operation and
grow the business beyond Wolkite to other towns in Ethiopia within record time.
We have been able to examine the real estate market cum fence construction
business, we have analysed our chances in the industry and we have been able to
come up with the following sales forecast. Below are the sales projections for NAD
Fence Construction Company. It is based on the location of our business and the
fence construction and related services that we will be offering;
N.B: This projection was done based on what is obtainable in the industry and with
the assumption that there won’t be any major economic meltdown and any major
competitor offering same services as we do within the locations where we have a
strong business presence. Please note that the above projection might be lower and
at the same time it might be higher since some factors are beyond our control.
We are quite mindful of the fact that there are stiff competitions in the industry,
hence we have been able to hire some of the best business developers to handle
our sales and marketing.
Our sales and marketing team will be recruited based on their vast experience in
the construction industry and they will be trained to meet their targets and the
overall goal of the organization. The training is not restricted to only our full – time
employees but also includes our freelance brokers that are scattered all over the
country. NAD Fence Construction Company is set to make use of the following
marketing and sales strategies;
Since we are not directly in control of the pricing system in the real estate industry
(building materials et al) we can only abide by what is obtainable when it comes to
fixing a price for a fence construction contract. But one thing is certain, we will
ensure that we deliver excellent jobs when have we are contracted to do so.
Lastly, we will ensure that we keep our fees below the average market rate by
keeping our overhead low and by collecting payment in advance. We will also offer
special discounted rates to our clients from time to time especially when they
recommend clients to us.
Payment Options
At NAD Fence Construction Company our payment policy is all inclusive because we
are quite aware that different people prefer different payment options as it suits
them but at the same time, we will not accept payment by cash because of the
volume of cash that will be involved in most of our transactions. Here are the
payment options that NAD Fence Construction Company will make available to its
clients;
In view of the above, we have chosen banking platforms that will help us achieve
our plans without any hitches and we will also pay our freelance sales agents with
same platforms. Our bank account numbers will be made available on our website
and promotional materials.
The total fee for incorporating the business in Ethiopia – ETB 750.
The budget for permits and license – ETB 2,000
The cost for hiring Consultant – ETB 2,500.
The cost for computer software apps (Accounting Software, Payroll Software,
CRM Software, Microsoft Office, and QuickBooks Pro) – ETB 7,000
The budget for insurance (general liability, workers’ compensation and property
casualty) coverage at a total premium – ETB 5,400.
The cost for payment of rent for a suitable Office facility with enough space in
Wolkite for 12 months at ETB 1.76 per square feet in the total amount of
– ETB105,600.
The cost for office remodelling (construction of racks and shelves) – ETB 20,000.
The cost for equipping the office (computers, printers, fax machines, furniture,
telephones, filing cabins, safety gadgets and electronics et al) – ETB15,000
Other start-up expenses including stationery (ETB500) and phone and utility
deposits (ETB2,500)
Purchase of working tools and equipment – ETB60,000
Operational cost for the first 3 months (salaries of employees, payments of bills
et al) – ETB100,000
The cost of launching our official website – ETB 600
Additional Expenditure (Business cards, Signage, Adverts and Promotions et al)
– ETB 5,000
Going by the report from the market research and feasibility studies conducted, we
will need over two hundred and fifty thousand (250,000) ETB to successfully set up a
small scale but standard fencing company in Ethiopia.
NAD Fence Construction Company is a business that will be owned and managed by
Dessalegn Gamini and his immediate family members. They decided to restrict the
sourcing of the start-up capital for the business to just three major sources.
N.B: We have been able to generate about ETB 100,000 (Personal savings ETB 80,000
and soft loan from family members ETB 20,000) and we are at the final stages of
obtaining a loan facility of ETB 150,000 from Liyu Bidirna kuteba. All the papers and
documents have been duly signed and submitted, the loan has been approved and
any moment from now our account will be credited.
One of our major goals of starting NAD Fence Construction Company is to build a
business that will survive off its own cash flow without the need for injecting finance
from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to
offer our fence construction services a little bit cheaper than what is obtainable in
the market and we are prepared to survive on lower profit margin for a while.
NAD Fence Construction Company will make sure that the right foundation,
structures and processes are put in place to ensure that our staff welfare are well
taken of. Our company’s corporate culture is designed to drive our business to
greater heights and training and retraining of our workforce is at the top burner.
We know that if that is put in place, we will be able to successfully hire and retain
the best hands we can get in the industry; they will be more committed to help us
build the business of our dreams.
Check List/Milestone