Business Plan on Construction company for

Henok Hailemariam
1. Introduction
The Construction companies have mainly involved in construct building, road, bridge and
others. These will done through winning the tender and received award or directly receive
award for the construction a given things. The sometimes it includes home improvement
centers, paint and wallpaper specialty stores or hardware stores.
HenokHailemariamTujuba Road and Building Contractor Companyconstruct building and road
for the government as well as non-government sectors.

2. Executive Summary the company

HenokHailemariamTujuba Road and Building Contractor Company. is a registered building

material supply business that will be located in Addis Ababa, Bole Sub City, 11 Kebele, House
No. new

Profile of the Business

i. Name of the applicant AtoHenokHailemariamTujuba Road and Building Contractor

Company
ii. Address : Addis Ababa, Bole Sub City, 11 Kebele, House No. newTEL+251-
911717184
3. Type of business: sole proprietorships
4. Contact person/Authorized person/: AtoHenokHailemariam
5. Marital status of the borrower: _____________
6.Type of project or economic activity: Suppliers
7. Legal form of business: Sole proprietorships
 Status of the business: Existed
 Registering Agency: Addis Ababa CityTrade office.
8. Registration number and date: BL/AA/1/0017034/2010
9. Trade License Number and License Date
 License: BL/AA/14/673/770107/2010

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  License Date: - 21/12/2010
 Taxpaying identification number (TIN):0029471606
 Startup capital Birr 100,000.00

Our company have aware that there are several constructions over all the country, which is
why we spent time and resources to conduct a thorough feasibility studies and market survey
so as to be well positioned to favorably compete with all our competitors. We have decide to
use onlineadvertising option for our customers, and our outlet is well secured with the various
options.
.

3. Our Products and Services

HenokHailemariamTujubaConstruction Company is in the Road and building construction
company to service a wide range of clients and of course to make profits, which is why we will
ensure we go all the way to make available a wide range of building materials from top
manufacturing brands in the countries of the world.
We will do all that is permitted by the law of the country to achieve our aim and ambition of
starting the business. Our product offerings are listed below;

 Construction of any kind of Building and Road

 Give Professional Service for those who has purchase materials by their own.

4. Our Mission and Vision Statement

 Our vision is to become the leading brand in the Construction Company in the country.
 Our mission is to establish a world – class construction company and affordableboth in
prices and quality to the residents of the country.

Our Business Structure

HenokHailemariamTujubaconstruction Company do not intend ask loan to start a
constructions of building business on a small scale; our intention of starting business is to build
a huge construction company in the country.
Although our store may not be as big as Builders First Source, but we will ensure that we put
the right structures in place that will support the kind of growth that we have in mind while
setting up the business. We will ensure that we hire people that are qualified, honest, customer
centric and are ready to work to help us build a prosperous business that will benefit all our
stake holders.
As a matter of fact, profit-sharing arrangement will be made available to all our senior
management staff and it will be based on their performance for a period of ten years or more.

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In view of that, we have decided to hire qualified and competent hands to occupy the following
positions;

 Chief Executive Officer (Owner)

 Store Manager
 Human Resources Manager
 Engineers /project Manager
 Marketing Manager
 Information Technologist/optional/
 Accountants/Cashiers
 Time Keeper Executive
 Truck and Van Drivers

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

 Increases management’s effectiveness by recruiting, selecting, orienting, training,

coaching, counseling, and disciplining managers; communicating values, strategies, and
objectives; assigning accountabilities; planning, monitoring, and appraising job results;
developing incentives; developing a climate for offering information and opinions;
providing educational opportunities.
 Creates, communicates, and implements the organization’s vision, mission, and overall
direction – i.e. leading the development and implementation of the overall
organization’s strategy.
 Responsible for fixing prices and signing business deals
 Responsible for providing direction for the business
 Responsible for signing checks and documents on behalf of the company
 Evaluates the success of the organization

Admin and HR Manager

 Responsible for overseeing the smooth running of HR and administrative tasks for the
organization
 Ensures operation of equipment by completing preventive maintenance requirements;
calling for repairs.
 Defines job positions for recruitment and managing interviewing process
 Carries out induction for new team members
 Responsible for training, evaluation and assessment of employees
 Responsible for arranging travel, meetings and appointments
 Oversees the smooth running of the daily office activities

Store Manager:

 Responsible for managing the daily activities in the store

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  Ensures that proper records of building materials are kept and warehouse does not run
out of products
 Ensures that the store facility is in tip top shape and goods are properly arranged and
easy to locate
 Interfaces with building material manufacturers
 Controls building material distribution and supply inventory
 Supervises the workforce in the building material sales floor

Project Manager/Engineers

 Manage the planning and design stages of construction projects

 Contributing technical expertise to project drawings and designs
 Performing cost calculations and preparing financial projections
 Preparing work schedules in collaboration with the project manager
 Leasing between contractors, subcontractors, vendors, and Supplies
 Overseeing construction engineering processes
 Performing regular tests on materials and procedures to ensure compliance with
industry regulation
 Ensuring that the construction project is completed on time and within budget
 Documenting processes and keeping detailed construction logs
 Presenting construction project progress updates to company and senior manager

Sales and Marketing Manager

 Manages external research and coordinate all the internal sources of information to
retain the organizations’ best customers and attract new ones
 Models demographic information and analyze the volumes of transactional data
generated by customer purchases
 Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
 Responsible for supervising implementation, advocate for the customer’s needs, and
communicate with clients
 Develops, executes and evaluates new plans for increasing sales
 Documents all customer contact and information
 Represents the company in strategic meetings
 Helps to increase sales and growth for the company

Information Technologist/Optional/

 Manages the organization website

 Handles ecommerce aspect of the business
 Responsible for installing and maintenance of computer software and hardware for the
organization
 Manages logistics and supply chain software, Web servers, e-commerce software and
POS systems
 Handles any other technological and IT related duties

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Accountant/Cashier:

 Responsible for preparing financial reports, budgets, and financial statements for the
organization
 Provides managements with financial analyses, development budgets, and accounting
reports; analyzes financial feasibility for the most complex proposed projects; conducts
market research to forecast trends and business conditions
 Responsible for financial forecasting and risks analysis
 Performs cash management, general ledger accounting, and financial reporting
 Responsible for developing and managing financial systems and policies
 Responsible for administering payrolls
 Ensures compliance with taxation legislation
 Handles all financial transactions for the organization
 Serves as internal auditor for the organization

Truck and Van Drivers

 Assists in loading and unloading goods/building materials

 Maintains a logbook of their driving activities to ensure compliance with federal and
regional regulations governing the rest and work periods for operators
 Keeps a record of vehicle inspections and make sure the truck is equipped with safety
equipment, such as hazardous material placards.
 Inspects vehicles for mechanical and safety issues and performs preventative
maintenance
 Complies with truck driving rules and regulations (size, weight, route designations,
parking, break periods etc.) as well as with company policies and procedures
 Collects and verifies delivery instructions
 Reports defects, accidents or violations

Timekeeper

 Oversees staff engaged in the employment verification of department personnel

 Compiles and generates compiles and generates comprehensive timekeeping reports
and prepares summaries of payroll activity for budgetary purposes, as required
 Approves time-off requests and coordinates activities of staff to ensure adequate
coverage and efficient processing of payroll
 Establish work standard and conducts performance evaluations of subordinates staff
 Participate in administering progressive discipline to staffs required

6. SWOT Analysis

We are quite aware that there are several building material supply stores all over town and
even in the same location where we intend locating ours, which is why we are following the
due process of establishing a business.

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We know that if a proper SWOT analysis is conducted for our business, we will be able to
position our business to maximize our strength, leverage on the opportunities that will be
available to us, mitigate our risks and be welled equipped to confront our threats.
HenokHailemariam constructionCompany employed the services of an expert HR and
Business Analyst with bias in supply chain business to help us conduct a thorough SWOT
analysis and to help us create a Business model that will help us achieve our business goals and
objectives.
This is the summary of the SWOT analysis that was conducted for company

 Strength:

Our business is located in a city with heavy construction and real estate activities and also, we
can boast of having good business relationship with top building contractors.

 Weakness:

A major weakness that may count against us is the fact that we don’t have our own building
material production plant and shop, we are a new construction company and we don’t have the
financial capacity to compete with multi – million dollars companies.
Opportunities:
The fact that we are going to be operating our business in one of the busiest markets city in
Addis Abbaba and its surrounding.
We have been able to conduct thorough feasibility studies and market survey and we know
what our potential clients will be looking for when they order contact us to get construction
service; we are well positioned to take on the opportunities that will come our way.

 Threat:

Just like any other business, one of the major threats that we are likely going to face is
economic downturn. It is a fact that economic downturn affects purchasing / spending power
especially construction materials. Another threat that may likely confront us is the arrival of a
new building material store in the same location where ours is located. So also, unfavorable
government policies may also pose a threat for businesses such as ours.

7. MARKET ANALYSIS

 Market Trends

If you are conversant with the constructionCompany, you will quite agree that the changes in
disposable income, consumer sentiment, ever changing trends and of course the rates of
homeownership are major growth drivers for this company.

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No doubt, a massive rise in consumer confidence has also contributed in helping the company
experience remarkable growth, but uneven performance in these drivers has led to slightly
constrained revenue growth.
So also, the rising demand for both building renovations, as a result of increasing disposable
income and consumer sentiment will result in revenue growth, but profit margins will stagnate
as building construction keep prices low to attract more sales amid growing competition.

8. Our Target Market

We have positioned our company to the residents of Addis Ababa and surrounding every other
location where outlets of our service will be located all over key towns in the Country.
We have conducted our market research and feasibility studies and we have ideas of what our
target market would be expecting from us. We are in business to give a wide range of
construction service to the following;

 Real State Constructed company

 Individual Home Constructed Customers
 Government and non-government organization which need our service to construct any
kind of construction property.

Our Competitive Advantage

A close study of the construction of buildingreveals that the market has become much more
intensely competitive over the last decade. As a matter of fact, you have to be highly creative,
customer centric and proactive if you must survive in this company. We are aware of the stiff
competition and we are well prepared to compete with other leading constructioncompany
inAddis Ababa and throughout the country.
HenokHailemariam construction Company is launching a standard building construction
company that will indeed become the preferred choice for key players in the construction real
estate and other.
One of our business goal is to make our Construction company onetop selected construction
service company for customers at all levels. Our excellent customer service culture, online
advertise, various payment options and highly secured facility will serve as a competitive
advantage for us.
Lastly, our employees will be well taken care of, and their welfare package will be among the
best within our category in the company meaning that they will be more than willing to build
the business with us and help deliver our set goals and achieve all our aims and objectives.

9. SALES AND MARKETING STRATEGY

 Sources of Income

HenokHailemariam constructionCompany. is in business with a wide range of construction of

building, bridge, road and others the residents of Addis Ababa City – and its surrounding. We

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are in the construction to maximize profits and we are going to go all the way out to ensure that
we achieve or business goals and objectives.
Henok Hailemariam Construction Company wil generate income from;

 Construction of building
 Construction of bridge
 Construction of road
 Other type of construction including mini renovation

10. Marketing and Sales Strategy

Before choosing a location for Henok Hailemariam Construction Company, we conducted a
thorough market survey and feasibility studies in order for us to be able to penetrate the
available market and become the preferred choice for key players in the construction and real
estate company of around our town.
We have detailed information and data that we were able to utilize to structure our business to
attract the number of customers we want to attract per time.
We hired experts who have good understanding on construction sectors to help us develop
marketing strategies that will help us achieve our business goal of winning a larger percentage
of the available market in our capital city Addis Ababa.

11. Publicity and Advertising Strategy

Despite the fact that our company is well located, we will still go ahead to intensify publicity
for the business. We are going to explore all available means to promote company service.
HenokHailemariam Construction Company has a long – term plan of opening branches in
various locations all over the country.
As a matter of fact, our publicity and advertising strategy is not solely for winning customers
over but to effectively communicate our service brand. Here are the platforms we intend
leveraging on to promote and advertise our Company.;

 Place adverts on community based newspapers, radio and TV stations

 Encourage the use of word of mouth publicity from our loyal customers
 Leverage on the internet and social media platforms to promote our business
 Ensure that our we position our banners and billboards in strategic positions all around
city
 Distribute our fliers and handbills in target areas in and around our neighborhood

12. Our Pricing Strategy

Aside from quality, pricing is one of the key factors that gives leverage construction service, it
is normal for consumers to go to places where they can get construction service at cheaper
price which is why big player in the company will attract loads of clients..

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  Payment Options

The payment policy adopted by HenokHailemariam construction Company. is all inclusive

because we are quite aware that different customers prefer different payment options but at the
same time, we will ensure that we abide by the financial rules and regulation of the Country.
Here are the payment options that our company will make available to her clients;

 Payment via bank transfer

 Payment with cash
 Payment via online bank transfer
 Payment via check
 Payment via mobile money transfer

In view of the above, we have chosen banking platforms that will enable our client make
payment without any stress on their part. Our bank account numbers will be made available on
our website and promotional materials.

13. Financial Analysis

Table 1. Summary Operational Cost/Working Capital

S/no Cost Item Annual Cost

Raw materials
1
Purchase 4,940,000.00
1.1
Administrative Expenses
2
Salary and Wages 288,000.00
2.1
Employee benefit 31,680.00
2.2
Labor cost 156,780.00
2.3
Telephone, fax and postal 21,345.00
2.4
Repair and maintenance 45,231.00
2.5
Advertisement 102,451.00
2.6
Stationery and Printing Expense 14,951.00
2.7
transportation Expense 34,560.00
2.8
Miscellaneous Expense 12,900.00
2.9

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 Grand Total 5,647,898.00

Table 2. Depreciation Schedule

Original Depreciation Depreciation Depreciation Depreciation Depreciation

SN Description
Value In Birr year 1 year 2 year 3 year 4 year 5

1 Building 9,225,895.83 461,294.79 461,294.79 461,294.79 461,294.79 461,294.79

Computer &
2 Related 57,722.25 14,430.56 14,430.56 14,430.56 14,430.56 14,430.56
Materials

3 Furniture 45,969.28 9,193.86 9,193.86 9,193.86 9,193.86 9,193.86

4 Vehicles 3,000,000.00 600,000.00 600,000.00 600,000.00 600,000.00 600,000.00

12,329,587.3 1,084,919.2 1,084,919.2 1,084,919.2 1,084,919.2 1,084,919.2

Total
6 1 1 1 1 1

Table 3 TOTAL INITIAL INVESTMENT COST

No Description Cost in birr in Br.

1 Total Fixed Investment Cost 12,329,587.36

2 Investment in kind /Inventory 109,520.00

3 Initial Working capital 5,647,898.00

Total Initial Investment Capital 18,087,005.36

Table 4. Projected Purchase list Year 1st

Item Quantity Unit Price Total Price

Cement 1,200.00 1,200.00 1,440,000.00

Metal Sheet 1,000.00 400.00 400,000.00

Nail 500.00 200.00 100,000.00

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 Other 3,000,000.00

Total 4,940,000.00

Table 5 Revenue projection

The project will collect its revenue from sales of construction materials. The selling price based
on the current market price

Item Quantity Unit Price Total Price

construction 10.00 1,500,000.00 15,000,000.00
revenue

Other 3,000,000.00

Total 18,000,000.00

Table 6 Profit and Loss Statements

Henok Hailemariam Road and Construction Company

Projected Profit and Loss Statements

Year 1 year 2 year 3 year 4 year 5

18,000,000.0 30,420,000.0 39,546,000.0 51,409,800.0

Revenue 23,400,000.00
0 0 0 0

Less Cost of good sold 4,940,000.00 5,681,000.00 6,533,150.00 7,513,122.50 7,888,778.63

13,060,000.0 23,886,850.0 32,032,877.5 43,521,021.3

Gross Income 17,719,000.00
0 0 0 8

Salary and Wages 288,000.00 374,400.00 486,720.00 632,736.00 822,556.80

Employee benefit 31,680.00 41,184.00 53,539.20 69,600.96 90,481.25

Pre -service Expense 156,780.00 203,814.00 264,958.20 344,445.66 447,779.36

Telephone, fax and

21,345.00 27,748.50 36,073.05 46,894.97 60,963.45
postal

Repair and
45,231.00 58,800.30 76,440.39 99,372.51 129,184.26
maintenance

Advertisement 102,451.00 133,186.30 173,142.19 225,084.85 292,610.30

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Stationery and Printing
14,951.00 19,436.30 25,267.19 32,847.35 42,701.55
Expense

Packing Expense 34,560.00 44,928.00 58,406.40 75,928.32 98,706.82

Miscellaneous Expense 12,900.00 16,770.00 21,801.00 28,341.30 36,843.69

Depreciation Expense 1,084,919.21 1,084,919.21 1,084,919.21 1,084,919.21 1,084,919.21

Interst Expense/
765,703.09 643,267.00 498,315.97 326,709.59 123,546.24
margin cost

Total Expenses 2,558,520.30 2,648,453.61 2,779,582.80 2,966,880.71 3,230,292.93

10,501,479.7 21,107,267.2 29,065,996.7 40,290,728.4

Profit Before Tax 15,070,546.39
0 0 9 5

10,155,098.8 14,083,754.9
Less Income Tax 3,657,517.90 5,256,691.24 7,369,543.52
8 6

13,737,723.6 18,910,897.9 26,206,973.4

Profit after Tax 6,843,961.81 9,813,855.15
8 2 9

Note: Sales revenue is assumed to increase by 30% annually

Table 7 Projected Balance Sheet

One of the basic financial statements that show the asset, liabilities, and equity accounts of the
business..

Asset

Current Asset

Cash on hand 31,112.00

Cash at Bank 217,981.00

Inventory at year End 109,520.00

Prepayment rent 0

Account Receivables 0

Total Current asset 358,613.00

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 Fixed Asset

Building 9,225,895.83

Computer & Related Materials 57,722.25

Furniture 45,969.28

Vehicles 3,000,000.00

Total Fixed Asset 12,329,587.36

Total Asset 12,688,200.36

Liabilities

Current Liability

Trade account payable

Salary Payable

Total Current Liability

Long-term Payables

Bank Loan 4,800,000.00

Total Liability 4,800,000.00

Capital

Owner's Equity 7,888,200.36

Retained Earnings

Total Capital 7,888,200.36

Total Liabilities and Capital 12,688,200.36

Table 8 Projected Cash Flow Statement

Description Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Cash Inflow

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Equity 7,888,200.36

Bank Loan 4,800,000.00

6,843,961.8 13,737,723.6 18,910,897.9 26,206,973.4

Revenue 9,813,855.15
1 8 2 9

1,084,919.2
Depreciation 1,084,919.21 1,084,919.21 1,084,919.21 1,084,919.21
1

12,688,200.3 7,928,881.0 10,898,774.3 14,822,642.8 19,995,817.1 27,291,892.7

Total Cash Inflow
6 2 6 9 3 0

Cash out flow

Fixed Costs 0

Initial Working 6,212,687.8

5,647,898.00 6,833,956.58 7,517,352.24 8,269,087.46 9,095,996.21
Capital 0

Contingency (Lump
sum)

Loan repayment 637,051.57 761,670.43 910,667.01 1,088,810.02 1,301,800.97

6,849,739.3 10,397,797.1
Total Cash Outflow 5,647,898.00 7,595,627.01 8,428,019.25 9,357,897.48
7 8

8,119,444.0 11,422,591.3 10,637,919.6 16,894,095.5

Net Cash Flow 7,040,302.36 6,394,623.64
1 6 4 2

8,119,444.0 19,542,035.3 25,936,659.0 36,574,578.6 53,468,674.1

Cumulative Balance
1 6 1 5 7

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have, the capacity and
competence of their employees, their investment strategy and the business structure. If all of
these factors are missing from a business, then it won’t be too long before the business closes
customers.
One of our major goals of starting this business 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 retain our
wide range of quality service a little bit cheaper than what is obtainable in the market and we
are well prepared to survive on lower profit margin for a while.

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Our ConstructionCompanywill 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 company; they will be more committed to help us build the business of
our dreams.

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