Business Plan For Salma Enterprises: Submitted
Business Plan For Salma Enterprises: Submitted
Business Plan For Salma Enterprises: Submitted
SALMA ENTERPRISES
SUBMITTED
BY
AUTHORS
MR. ANTO ADAMU JATAU
Email:
TABLE OF CONTENTS
CHAPTER 1
1.0
Executive Summary
1.1 Objectives
1.2
Mission, Vision and value
1.3
Key to success
CHAPTER 2
2 Company Summary
2.1 Company Ownership
2.2
Start Up Summary
2.3
Company Location
2.4
Legal Issues
CHAPTER 3
3.0 Business Description
3.1
Product
3.2
Quality Of Product
3.3
Affordability Of the product
3.4
SWOT Analysis
3.5
Competitive Comparison
CHAPTER 4
4.0
Market Analysis
4.1Target Market
4.2Marketing Strategies
4.3 Positioning
4.4 Marketing Mix
CHAPTER 5
5.0
Human Resource
CHAPTER 6
6.0
Financial Plan
6.1 Cash Flow Projection
6.2 Income Statement Projection
6.3 Balance Sheet projection
6.4 Break-even Analysis
6.5 Ratio Analysis
6.6 Conclusion
CHAPTER 1
1.0 EXECUTIVE SUMMARY
SALMA Enterprises is a start-up seeking N 4,000,000. The business produces
bricks with a slightly different composition but makes a bigger impact on cost of
manufacturing and utilizing industrial waste. These bricks use the usual cement,
sand and water mixture with the compliment of incinerated (burnt) industrial
waste, which reduces the usage of cement by more than 25% but still making
these bricks more durable. This means it provides three major benefits, reduction
of cost by as much as N 15 per brick, more durability and utilization of industrial
waste for which there is no viable solution in Kaduna.
The idea of business is to gain the advantage of cost reducing innovation. This
idea is a product of highly talented personalityAnto Adamu Jatau. We are
starting with standard size bricks but plan to introduce customize option to our
customers as well. The waste of marble industry is also utilized in our product.
We hope for this idea to succeed in short and long term as it provides benefits to
all from constructors to society.
1.1 OBJECTIVES
The Key objectives for SALMA Enterprises are:
1. To be recognized as safe and durable brick manufacturers throughout the
regional market in the first two years.
2. To achieve the sales target of 69,000 bricks in first year of operation and
145,000 bricks in 2017 (second year of operation).
3. To exceed the breakeven point of 131,055 Bricks before the end of the 2nd
quarter of second year.
4. To become profitable to minimum level of N 4,000,000 in third year.
5. To gain the support of international environmental protection agencies in
research and further product development.
6. To gain the government contractors of large project..
7. To become the first priority of brick purchasers who want bricks for
construction on large scale.
A business location that will assure high company visibility and a high flow
of customers.
1.3 MISSION:
We are a business entity
We use the industrial waste in innovative ways and form practical reliable
products.
To research, create and promote solutions that are valuable to customers, which
are high in quality, environmentally safe and long lived.
Core Values:
Our core values are:
I. Social responsibility and commitment .We do Business for betterment
II. Continuous improvement .Finding more effective solutions
III. Creativity and innovation. Finding novel ways to use the industrial waste
IV. Human resource development .People are the most valuable asset in our
business.
CHAPTER 2
2.0 COMPANY SUMMARY
2.1 COMPANY OWNERSHIP
SALMA Enterprises is a Sole Proprietorship business that is owned by Anto
Adamu Jatau.
2.2 START UP SUMMARY
Start-up capital of N 4,000,000 will be raised by the Kaduna State
Government through Bank Of Industry. The equipment needed for this start
up is:
6 Inch Machine
9 Inch Machine
Wheel Barrows
N 30,000
Shovels
N 25,000
Power Generator
N 150,000
Trays
N 200,000
N 400,000
N 500,000
TOTAL
N 1,305,000
CHAPTER 3
3.0 BUSINESS DESCRIPTION
SALMA Enterprises aims to capitalize on the growing construction market
across Kafanchan and beyond through the moulding of high quality bricks.
Located in Kafanchan, the company will become highly profitable through
moulding and sale of cement products products. SALMA Enterprise will own
and control facilities, inflow and outflows, which will enable SALMA Enterprises
to create immediate revenue streams while growing its factory into a large
income generator.
3.1 PRODUCTS
The company will mainly be focused on the high quality standard cements
product that is second to none and these products are:
Bricks
Interlocks
Concrete Realms
Strengths
Our bricks price on average is less than what competitors offer, due to
the usage of incinerated waste that reduces cement usage up to 25% in
manufacturing.
Our bricks are more durable than those available in the market.
Our bricks are less water absorbent, which will give extra protection from
dampness during rainy seasons.
Our product bricks, are environment friendly as they are formed with
industrial waste. Every brick formed is every unit of earth saved from
being polluted.
No potential aspect has been identified so far that makes our product
inferior to those available in the market.
Weaknesses
There are cartels and pressure groups in the market which support certain
business groups (our competitors). If they turn against us, we cannot do
much to prevent them from interfering in our business.
We do not have huge investment portfolio, any big problem can question
our existence.
Opportunities
Our unique product opens the vistas of opportunities for us. There is no
other such product in the market, so there is potential chance that we
could easily capture more and more markets.
We are located in Kafanchan, which is an urban area. Availability of wellbuilt infrastructure will facilitate us in many operations.
Threats
Threats of substitute.
CHAPTER 4
4.0 MARKETING ANALYSIS
Our focus will be to cover the aspects the local manufacturers often ignore. Long
term agreements and just in time partners of construction projects. Also research
to improve the block strength and letting the customers know what we are doing
to improve our product.
4.1 TARGET MARKET
Initially contractors and builders i.e. business customers will pervade our target
market. The contractors can be of all types requiring bricks for construction.
However, with the passage of time we also intend to penetrate the consumer
market. Hence, looking forward to carrying out both businesses-to-business and
business-to-customer transactions simultaneously. Yet, our prime focus will
remain on business-to-business transactions.
4.2 MARKETING STRATEGY
Our focus will be to cover the aspects the local manufacturers often ignore. Long
term agreements and just in time partners of construction projects. Also research
to improve the block strength and letting the customers know what we are doing
to improve our product.
4.3 POSITIONING
SALMA Enterprises will establish itself as a cost saving, environment friendly,
durable and reliable supplier of raw material to construction contractors.
4.4 MARKETING MIX
Product
Our firm offers bricks as a product to customers. The bricks are made of a
conventional material with addition of incinerated ash (a complement). The
combination results in 25% less cement usage and significantly improves
durability of the bricks as compared to traditionally prevalent bricks. The
incinerated ash is obtained from industrial waste which is easily and abundantly
available, textiles, chemical and marble industry waste is to be utilized. Asias
largest marble market is just a few kilometre from the sites. The waste is in the
form of sludge, which is dried out and burnt to obtain the incinerated ash. The
mixture of incinerated ash, cement and sand is combined with water to obtain
the material to be used for manufacturing. We will initially offer standard blocks
of 6 inch and 9 inch. However, when requested, it can be altered according to the
customer requirements. The quality of our bricks and their durability is much
more than our competitors making our product a low-priced good-quality distinct
offering. We will look forward to get our product certified by international
agencies.
The price of our bricks will be N110 for 6 inch blocks and N170 for 9 inch blocks
it, which is less than the price of bricks in the local market. Hence, our price will
give us the competitive edge against the competitors and will greatly help in
penetrating the market with tremendous growth potential. Moreover, the quality
of our bricks and their durability will be much more than the competitors,
making our product a low-priced good-quality distinct offering.
Other than the regular price, we are offering discounts to our customers in the
form of different packages. Like early-order discounts, early-payment
discounts and bulk discounts. However the extent of discounts will be
dependent on the deals because the raw material rates differ from day to day.
Besides this we will be doing transactions on credit basis too but prompt
payment will be encouraged through discounts. Special discounts will be given to
long-term major project contractors.
Moreover, we offer 15% discount if we receive the order one week before the
delivery date. We will also offer 20% discount if our customer uses his own
warehouse for the storage of the ordered bricks.
Placement (Distribution)
Our distribution network will cover entire Kafanchan and beyond. At first, our
distribution network will not be that big, but in the coming years there is a great
potential for the expansion of our network. Our distribution network will expand
as the demand of our bricks increases. Quick delivery will always remain our
preference, at starting we will promise the delivery of bricks in the same day as
the order is received. Later promise to deliver will shrink to within hours. Timely
delivery will be guaranteed. We will charge transportation cost separately from
the cost of bricks. Transportation charges will vary from order to order depending
on the delivery location and other factors.
Promotion
(i)
Our product is less costly than ordinary blocks and we are targeting specifically
B2B customers who focus on cost plus reliability. These contractors often have
contacts with each other, our satisfied customers will tell others about this
product and we will reward those customers with discounts who bring other
customers to the company.
(ii)
Sign Boards
Sign boards will be displayed on project sites where these bricks will be used
This project is build with Green Bricks.
CHAPTER 5
5.0 HUMAN RESOURCE
The company will operate with 5 staff to start operation where it consists of 1
cashier and 4 labourers. Wages will be paid according to the number of products
moulded.
5.1 Organisational Chart
Sole
Proprietor
Cashier
Labourer
Labourer
Labourer
Labourer
The cashier will responsible for collecting, recording and keeping all cash and
credit sales while the labours will be responsible for mixing and moulding of brick
with the aid of the machine. The cashiers salary is 25,000 per month while the
labourers are paid base on production output.
CHAPTER 6
6.0 FINANCIAL PLAN
In every project found. We have to pass through the financed process. This have
to do with the starting of business, whether the personal income used or term
loans from banks. In our business, the financing structure and ways of doing it is
like the path below.
1) Equity contribution: this cover the land we are using for the brick factor.
2) Bank Of Industry funding of 4 million Naira, which will be used to start-up
the operations.
Projected Income statement
INCOME
YEAR 1(N)
YEAR 3 (N)
Product Sale
10,800,000
Cost of Goods
8,430,000
TOTAL INCOME
2,370,000
16,140,000
9,240,000
6,900,000
YEAR
(N)
15,810,000
8,940,000
6,870,000
EXPENSES/COST
Delivery
123,000
125,000
Labor
1,660,000
2,372,000
Advertisement
10,000
10,000
10,000
Other expenses
100,000
200,000
120,000
TOTAL EXPENSES
1,893,000
2,707,000
2,551,000
477,000
4,193,000
4,319,000
Taxes
47,700
113,000
2,308,000
419,300
431,900
Depreciation
84,179
NET INCOME
39,150
390,150
63,293
3,710,407
3,802,921
Particulars
Year 1 (N)
Year 2 (N)
Year 3 (N)
ASSETS:
1
a
Equipments
1,305,000
1,265,850
1,202,557
1
b
Cash in Hand
2,045,874
4,547,565
2,593,191
TOTAL ASSETS
3,350,874
3,767,541
7,140,756
LIABILITIES:
3
a
Rent (Equity)
200,000
200,000
200,000
3
b
Loan
3,222,216
1,888,872
555,528
3c Interest
161,108
94,436
27,764
3
d
Retained Earnings
232,450
1,584,233
3,012,456
TOTAL LIABILITIES
3,350,874
3,767,541
3,795,748
Break-even Analysis
SALMA ENTERPRISES is expected to reach break even in the third month of the
first year of operations. With the sales of 12,000 units.
Ratio Analysis
YEAR 1
YEAR 2
5.4%
Debt Ratio
52.6%
Current Ratio
6.6
96.6%
158.2%
YEAR 3
5.3%
15.4%
79.3%
22.5%
Conclusion
To have a successful business there are a couple of methods that the business
must consider first.
(1) They must know their target market and by knowing this they have a
competitive advantage that allows them to have an edge on the competitors
(2) They must also know their value chain which is a series of transactions
between all participants that influences the final product. The value chain is a
place where the businesses need to be in order to identify the needs of its target
market