GRANDEUR CONSTRUCTION PROPERTIES

LIMITED

Address:
P.O. Box 783-90200, Kitui
Mobile No.: +254795028514
Email: rashidnx77@gmail.com
Website: www.grandeurconproperties.com
PREPARED BY: RASHID BAKARI
INSTITUTION: NUU TECHNICAL AND VOCATION COLLEGE

1
COURSE: DIPLOMA IN BUILDING TECHNOLOGY
CENTER NAME: NUU TECHNICAL AND VOCATIONAL COLLAGE

CENTER CODE: 338101

INDEX NUMBER: 3381010037

ADMN NO: DIP/BT/02/022/355

PRESENTED TO: KENYA NATIONAL EXAMINATION COUSIL IN PERTIAL FULFILMENT OF THE

AWARD OF DIPLOMA IN BUILDING TECHNOLOGY CERTFICATE
SUPERVISOUR: MR ERASTUS NJUGUNA
SERIES: 2024 NOVEMBER

2
 Declaration ................................................................................................................. 6
Acknowledgement ...................................................................................................... 7
Dedication .................................................................................................................. 8
1.0 executive summary ........................................................................................ 9
2.0 Business Description ..................................................................................... 9
3.0 Marketing Plan .............................................................................................. 9
4.0 Organization and Management Plan ............................................................. 9
5.0 Operation Plan ............................................................................................ 10
6.0 Financial Plan .............................................................................................. 10
2.0 Business Description .................................................................................... 11
2.1 Background of the Owner.......................................................................... 11
2.2 Business Name ......................................................................................... 11
2.3 Business Location ..................................................................................... 11
2.4 Form of Ownership ................................................................................... 12
2.5 Type of Business ...................................................................................... 12
2.6 Products and Services ............................................................................. 12
2.7 Justification of Opportunity ....................................................................... 13
2.8 Industry .................................................................................................... 13
2.9 Goals and Objectives ............................................................................... 13
2.9.1 Goals ................................................................................................. 13
2.9.2 Objectives .......................................................................................... 13
2.9.3 Entry Plan .......................................................................................... 14
2.9.4 Growth Plan ....................................................................................... 14
3.0 Marketing Plan ............................................................................................ 15
3.1 Customers ................................................................................................ 15
3.3 Competition .............................................................................................. 15
3.4 Methods of Promotion and Advertisement ................................................... 16
3.5 Pricing Strategy ........................................................................................ 16
3.6 Sales Tactics ............................................................................................ 17
3.7 Distribution Strategy ................................................................................. 17
4.0 Organization and Management Plan ........................................................... 18
4.1 Management Team................................................................................... 18
4.1.1 Manager ............................................................................................. 18

3
 4.1.2 Other Personnel ................................................................................. 18
4.2 Organizational Chart ................................................................................ 18
4.3 Recruitment, Training, and Promotion ...................................................... 19
4.3.1 Recruitment........................................................................................ 19
4.3.2 Training .............................................................................................. 19
4.3.3 Promotion .......................................................................................... 19
4.4 Remuneration and Incentives ................................................................... 19
4.4.2 Incentives ........................................................................................... 19
4.5 Licenses, Permits, and Bylaws ................................................................. 20
4.5.1 Licenses ............................................................................................. 20
4.5.2 Permits ............................................................................................... 20
4.5.3 Bylaws ............................................................................................... 20
4.6 Support Services ...................................................................................... 20
4.6.1 Banking Services ............................................................................... 20
4.6.2 Insurance Services ............................................................................ 20
4.6.3 Consultation Services ........................................................................ 21
4.6.4 Legal Services ................................................................................... 21
5.0 Operation Plan ............................................................................................ 22
5.1 Facilities and Capacity Table .................................................................... 22
5.1.1 Repair and Maintenance ....................................................................... 23
5.1.2 Business Layout Diagram ..................................................................... 23
5.2 Production Strategy .................................................................................. 24
5.2.1 Development Stage ........................................................................... 24
5.2.2 Costs .................................................................................................. 24
5.2.3 Methods Used .................................................................................... 24
5.2.4 Technological Changes Anticipated ................................................... 24
5.2.5 Material Requirements ....................................................................... 24
5.2.6 Purchasing and Stock Control............................................................ 25
5.3 Production Process .................................................................................. 25
5.3.1 Product Design and Development ..................................................... 25
5.3.2 Production Planning and Preparation ................................................ 25
5.3.3 Production and Quality Control .......................................................... 25
5.3.4 Distribution ......................................................................................... 26
5.4 Regulation ................................................................................................ 26
5.4.1 Health Regulation .............................................................................. 26

4
 5.4.2 Operational Timetable ........................................................................ 26
5.4.3 Safety ................................................................................................. 26
5.4.4 Environmental Regulations ................................................................ 26
6.0 financial plan ............................................................................................ 27
6.1 pre operational cost .................................................................................. 27
6.2 working capital ......................................................................................... 27
6.3 pro forma balance sheet .......................................................................... 27
6.4 cash flow projection .................................................................................. 29
6.5 pro forma income statement ..................................................................... 29
Chapter 7.0 Potential risks .................................................................................... 32
 economy .................................................................................................... 32

5
Declaration

I, Rashid Bakari, hereby declare that this business plan is my original work and has not Been submitted in
part or full for any other degree or diploma.

Name.................
Date ..........
Sign .............

Supervisor Name..................
Date.................
Sign.............

6
Acknowledgement
I would like to express my sincere gratitude to Mr Erastus Njuguna, my supervisor and fellow trainees for
their invaluable guidance, support, and encouragement throughout the course of this project. Their expertise
and constructive feedback have been instrumental in shaping the direction and quality of this work.

7
Dedication
This business plan is dedicated to my family, whose unwavering love, encouragement, and support have
been the cornerstone of my academic journey. Their belief in my abilities has inspired me to strive for
excellence and persevere through challenges.

8
1.0 executive summary

2.0 Business Description

Grandeur Construction Properties Limited is a startup company specializing in the production of

affordable construction materials and offering contract management services. The company is based in a
strategic location that allows it to serve a wide range of clients, including small-scale developers and
contractors. The business is owned by Rashid Bakari, who has extensive experience in the construction
industry. The company aims to address the growing demand for cost-effective building materials while
providing comprehensive project oversight to ensure timely and successful completion of construction
projects.

Key aspects of the business include its focus on affordability, quality, and tailored services to meet the
specific needs of developers. With a goal to become a leading supplier in the local market, Grandeur
Construction is well-positioned to capitalize on market opportunities by providing reliable products and
services.

3.0 Marketing Plan

Grandeur Construction Properties Limited’s marketing plan is designed to build a strong customer base
through targeted promotion and competitive pricing. The company’s primary customers are small-scale
developers, contractors, and individual homeowners. To reach this market, the business will employ a
variety of promotional strategies, including social media campaigns, local trade shows, and direct marketing
efforts.

The pricing strategy focuses on offering affordable construction materials, with bulk purchasing discounts
available for larger orders. Sales tactics will center around consultative selling, where the company helps
clients select the right materials for their projects. The company will use its own fleet of delivery trucks for
distribution, ensuring timely and efficient delivery of materials to construction sites.

Through these marketing efforts, Grandeur Construction aims to capture a significant share of the growing
construction materials market while building long-term relationships with clients.

4.0 Organization and Management Plan

Grandeur Construction Properties Limited is structured to operate efficiently with a well-defined

organizational hierarchy. The business is led by the owner, Rashid Bakari, who oversees all major
operations. He is supported by a sales rep, and an secretary, each responsible for their respective areas. As
the business grows, additional project managers and support staff will be hired to ensure smooth operations
and customer satisfaction.

9
Recruitment focuses on hiring experienced professionals, and the company offers ongoing training programs to
keep employees updated on the latest industry practices. A clear promotion system based on merit ensures that
top performers have the opportunity to advance within the organization. Competitive remuneration and
performance-based incentives are provided to motivate employees and foster a positive work environment.

The company ensures compliance with all legal requirements, including obtaining necessary licenses and
permits. It also engages with banking, insurance, and legal services to support its operations and mitigate
risks.

5.0 Operation Plan

The operation plan for Grandeur Construction Properties Limited outlines the key facilities and processes
needed to produce construction materials efficiently. The company operates from a central facility equipped
with modern machinery for material production. This facility includes areas for production, raw material
storage, office space, and distribution.

Grandeur Construction employs a lean production strategy, focusing on minimizing waste while maintaining
high-quality output. The company’s production processes are supported by robust quality control measures
to ensure that all materials meet industry standards. Additionally, a well-organized distribution system
ensures that materials are delivered to clients on time.

The company adheres to strict health, safety, and environmental regulations, with measures in place to
protect both employees and the surrounding environment. Maintenance schedules are implemented to ensure
that machinery operates smoothly and efficiently, minimizing downtime.

6.0 Financial Plan

The financial plan for Grandeur Construction Properties Limited includes detailed projections of pre-
operational costs, working capital, and long-term profitability. The company has allocated significant funds
to setting up its production facility, purchasing equipment, and marketing its services. With an initial budget
of ksh 950,000 for pre-operational costs, the company will be funded through a combination of the owner’s
equity and bank loans. Working capital requirements are projected to be ksh 714,000, which will cover
employee salaries, raw material purchases, and day-to-day operational expenses. The financial projections
indicate positive cash flow by the end of the first year of operation, with consistent revenue growth expected
in the following years. The balance sheet shows a healthy asset base, including equipment, inventory, and
accounts receivable, with manageable liabilities. Grandeur Construction is positioned for financial stability
and profitability as it continues to grow and expand its market share.

10
2.0 Business Description

Grandeur Construction Properties Limited is a construction company that specializes in creating low-scale
construction materials and providing comprehensive contract management services. The business is
committed to supplying high-quality and affordable construction materials to cater to the growing demand
for low-cost housing and infrastructure development. Additionally, the company offers contract management
services that ensure projects are completed on time, within budget, and to the satisfaction of all stakeholders.
With a focus on customer satisfaction, Grandeur Construction Properties Limited seeks to differentiate itself
in the competitive construction industry by offering unique solutions tailored to meet the needs of small to
medium-scale developers.

2.1 Background of the Owner

The business is owned and managed by Rashid Bakari, who has an extensive background in the construction
and real estate sectors. With several years of experience working on various construction projects, Rashid brings
a wealth of knowledge in project management, cost estimation, material sourcing, and business operations. His
passion for developing cost-effective solutions for the construction industry led him to establish Grandeur
Construction Properties Limited. He is well-equipped to lead the company toward achieving its strategic goals
and vision, with a commitment to fostering long-lasting relationships with clients and suppliers.

2.2 Business Name

The business is officially registered as Grandeur Construction Properties Limited. The name reflects the
company’s vision of delivering grandeur and quality in every construction project, regardless of scale.

2.3 Business Location

The company is headquartered in a strategically chosen location within the city centre to facilitate easy
access to clients, suppliers, and partners. The business is located at office number 13 ngonde arcade along
kilungya st Kitui Kenya. This central location will also allow the business to serve a wider region, ensuring
that materials and services can be delivered efficiently to construction sites.

11
2.4 Form of Ownership

Grandeur Construction Properties Limited is a sole proprietorship. This structure was chosen to allow for
centralized decision-making, flexibility in managing the business, and ease in tax administration. As the sole
proprietor, Rashid Bakari has full control over the business’s operations and financial affairs.

2.5 Type of Business

Grandeur Construction Properties Limited is a startup business that focuses on entering the construction
market with innovative approaches to materials production and contract management. By leveraging the
latest technologies and industry best practices, the business aims to build a solid foundation for long-term
growth and sustainability.

2.6 Products and Services

Grandeur Construction Properties Limited offers a range of products and services. The primary product line
includes low-cost construction materials such as bricks, cement, sand, and other basic materials required for
small-scale building projects. In addition to materials, the company also offers contract management
services, which involve overseeing construction projects from inception to completion, ensuring that they

12
are delivered within agreed timelines and budgets. This service includes coordination with contractors,
architects, and engineers to streamline project execution.

2.7 Justification of Opportunity

The growing demand for affordable housing and the increase in infrastructure projects in the region present
a significant business opportunity for Grandeur Construction Properties Limited. The construction sector has
seen a surge in activities, driven by both private and public investments. Small-scale developers, in
particular, are in need of low-cost materials and reliable project management services, making this a
lucrative market segment. The business is well-positioned to capture this demand by offering quality
products and services at competitive prices, ensuring that it meets the needs of its target customers.

2.8 Industry

Grandeur Construction Properties Limited operates within the construction industry, which is a vital sector
of the economy. The industry is experiencing growth due to urbanization, population expansion, and
increased government spending on infrastructure projects. The construction industry encompasses a wide
range of activities, including residential, commercial, and public building projects. The company’s focus on
providing low-scale construction materials positions it in a niche market within this broader industry.
Furthermore, the business contributes to the local economy by supporting infrastructure development and
providing employment opportunities.

2.9 Goals and Objectives

2.9.1 Goals

The overarching goal of Grandeur Construction Properties Limited is to establish itself as a leading player in the
supply of low-cost construction materials and contract management services. The company aims to grow its
market share and expand operations both locally and regionally over the next five years. In doing so, the
business seeks to build a solid reputation based on trust, reliability, and the consistent delivery of quality
products and services.

2.9.2 Objectives

1. Market Expansion: To increase the company's market penetration by 20% within the first two years
of operation, through targeted marketing and customer acquisition strategies.
2. Customer Satisfaction: To ensure that 95% of clients report high satisfaction levels with both
products and services, ensuring repeat business and positive word-of-mouth referrals.
3. Revenue Growth: To achieve consistent annual revenue growth of at least 15% by optimizing
operations, increasing production capacity, and reducing operational costs.

13
2.9.3 Entry Plan

The company’s entry into the market will focus on establishing strong relationships with small-scale
developers, contractors, and other key stakeholders in the construction industry. Initial activities will include
setting up the production facility, securing contracts with suppliers, and conducting promotional campaigns
to raise awareness about the company’s offerings. Grandeur Construction will use its competitive pricing
strategy to attract clients and gain a foothold in the market.

2.9.4 Growth Plan

Grandeur Construction Properties Limited plans to expand its operations by gradually increasing its product
range and scaling up its contract management services. As demand grows, the company will reinvest profits
into upgrading equipment, expanding its workforce, and improving production processes. The growth strategy
also includes entering new geographic markets by establishing distribution networks in neighboring regions.
Additionally, the company plans to explore opportunities in public sector projects and larger private
developments as it builds its reputation.

14
3.0 Marketing Plan

The marketing plan outlines how Grandeur Construction Properties Limited intends to attract and retain
customers, build brand awareness, and grow its market share. Through a combination of targeted
promotions, competitive pricing, and strong customer relationships, the company aims to position itself as a
go-to provider of low-cost construction materials and reliable contract management services.

3.1 Customers

Grandeur Construction targets a diverse range of customers, primarily focusing on small-scale developers,
individual homeowners, contractors, and construction firms looking for affordable materials. These
customers are typically price-sensitive and are seeking materials that are both cost-effective and durable. In
addition, the company’s contract management services will appeal to developers and firms that require
professional oversight for their construction projects.

3.2 Market Share/Size

The construction materials market is large, with billions of dollars in annual revenue generated from both
public and private sector projects. The demand for affordable housing and infrastructure has increased,
creating a sizeable market for low-cost construction materials. Grandeur Construction Properties Limited
aims to capture a portion of this market, with a focus on smaller, localized projects that have been
underserved by larger construction companies. By entering this niche market, the company can gain an
initial market share of 5% within the first two years.

Before penetration market was as follows

competitor Serene properties

Crossline Mulatin total
properties ltd construction ltd
sales 45% 100%
30% 25%
Market share 405000 900000
270000 225000
After penetrating market the business has a share of 40% worth 600000

3.3 Competition

The construction industry is highly competitive, with numerous players ranging from large-scale
construction firms to small material suppliers. However, Grandeur Construction plans to differentiate itself
from competitors through its unique focus on affordability and quality. The company will also leverage its
contract management services to provide added value to clients, making it more attractive than competitors
that only supply materials. By offering comprehensive solutions, Grandeur Construction aims to build a
loyal customer base.

Competition table

mulatin serene crossline grandeur total

assets 250000 200000 130000 3400000 9200000
Sales volume 405000 225000 270000 600000 1500000
15
Market share 27% 15% 18% 40% 100%
Profit p.a 4860000 2700000 3240000 7200000 18000000
Number of 6 8 5 9 28
employees

3.4 Methods of Promotion and Advertisement

To build brand awareness and attract customers, Grandeur Construction Properties Limited will utilize a
variety of promotional and advertising strategies. Given that the business is in its startup phase, these efforts
will focus on both cost-effective and targeted approaches to reach its desired customer base. The following
methods will be employed:

1. Social Media Marketing: The company will create and maintain active profiles on platforms such
as Facebook, Instagram, and LinkedIn, where visual content about completed projects and available
materials can be shared. Social media advertising will target local contractors, developers, and
homeowners.
2. Website and SEO: A professional website will be developed to showcase the company’s products,
services, and completed projects. Search engine optimization (SEO) techniques will be employed to
ensure that potential clients can find the company easily when searching for construction materials
and services online.
3. Direct Marketing: The company will engage in direct marketing by sending brochures and emails to
local contractors, construction firms, and property developers. This will be supported by cold-calling
campaigns to introduce Grandeur Construction’s offerings to potential clients.
4. Referral Program: A referral program will be established to encourage existing clients to refer new
customers to the business. In exchange for successful referrals, clients will be offered discounts on
future purchases or contract management services.
5. Local Trade Shows and Exhibitions: Grandeur Construction will participate in local trade shows,
construction expos, and real estate exhibitions to showcase its products and services. This will
provide the company with opportunities to network with industry professionals and generate leads.
6. Word of Mouth: Satisfied clients will be encouraged to share their positive experiences with others.
Given the nature of the construction industry, word of mouth plays a vital role in building trust and
credibility. The company will emphasize excellent customer service and timely delivery to ensure
positive client feedback.

3.5 Pricing Strategy

Grandeur Construction Properties Limited will adopt a competitive pricing strategy that aligns with its
goal of providing affordable, high-quality materials to small-scale developers and individual homeowners.
The pricing of construction materials will be set lower than that of major competitors by focusing on
efficiency in production and material sourcing. Furthermore, the company will offer tiered pricing based on
the volume of materials purchased, allowing bulk buyers to receive discounts.

For contract management services, the company will implement a flexible pricing structure that takes into
account the size and complexity of the project. Small projects will be charged on a per-hour or flat-fee basis,
16
while larger projects will be billed based on a percentage of the total project cost. This approach ensures that
clients can receive tailored services within their budget constraints.

3.6 Sales Tactics

The company’s sales tactics will focus on building strong relationships with clients, emphasizing the
reliability and quality of both its products and services. Personalized service will be a key component of the
sales approach, ensuring that each client receives attention that is specific to their needs. The following
tactics will be employed:

1. Consultative Selling: Sales representatives will take a consultative approach, helping clients identify
the right materials for their projects and offering advice on project management. This will position
the company as a trusted partner rather than just a supplier.
2. Follow-up Services: Grandeur Construction will ensure that after-sale support is provided, including
advice on the best use of materials and additional services like transportation to construction sites.
This will encourage repeat business.
3. Special Promotions: Limited-time promotions and discounts will be offered periodically to
incentivize clients to make bulk purchases or sign contracts for management services.
4. Partnerships with Local Contractors: By building relationships with local contractors, the
company will establish a network of professionals who can recommend its materials and services to
their own clients.

3.7 Distribution Strategy

the company will implement an efficient distribution strategy to ensure timely delivery of materials to
construction sites and other locations. Grandeur Construction will operate a fleet of delivery trucks to
manage local distribution. For larger, regional orders, the company will partner with third-party logistics
providers to ensure materials reach clients on time. The distribution strategy will also emphasize inventory
management to ensure that the company always has adequate stock to meet demand.

17
4.0 Organization and Management Plan

The success of Grandeur Construction Properties Limited depends heavily on the strength of its management
and operational teams. The business will establish a clear organizational structure to facilitate smooth
operations and the achievement of its strategic objectives. The management plan will outline the leadership
roles and the structure required to maintain efficient day-to-day operations.

4.1 Management Team

Grandeur Construction Properties Limited will be managed by myself since it is a start up and a sole
proprietorship

4.1.1 Manager

The business will be led by Rashid Bakari, the owner and manager. As the primary decision-maker, Rashid
will oversee all aspects of the business, from operations to finances and marketing. His responsibilities
include strategic planning, client relationship management, and ensuring that the company meets its goals
and objectives. Rashid’s background in construction and project management equips him with the skills
necessary to lead the company successfully.

4.1.2 Other Personnel

The management team will also consist of:

Title Number Qualifications duties

Sales rep 11 KCSE C plain -distributing products
secretary -sales promotion
Diploma in sales and marketing
KCSE C- -handling paperwork
Diploma in secretarial studies -booking appointments

4.2 Organizational Chart

manager

secretary sales rep

18
4.3 Recruitment, Training, and Promotion

To ensure the company hires and retains skilled employees, Grandeur Construction will establish clear
policies for recruitment, training, and promotion.

4.3.1 Recruitment

The recruitment process will focus on hiring individuals with experience in construction and project
management. Job openings will be advertised both online and through local networks. In addition to
technical skills, the company will prioritize candidates who demonstrate problem-solving abilities, strong
communication skills, and a commitment to customer satisfaction.

4.3.2 Training

New employees will undergo a comprehensive onboarding program to familiarize them with the
company’s operations, values, and safety protocols. Ongoing training programs will be offered to all
employees to ensure they stay up-to-date with the latest construction techniques and technologies.

4.3.3 Promotion

Promotion policies will be based on merit, performance, and demonstrated leadership potential. Employees
who excel in their roles will have the opportunity to advance to higher positions within the company,
fostering a culture of growth and career development.

4.4 Remuneration and Incentives

To attract and retain top talent, Grandeur Construction Properties Limited will offer competitive
remuneration packages and performance-based incentives.

Title numbe Monthly bonus allowanc Total

Manager r111 salary 20000 - e 5000 25000
Sales rep 15000 10000 5% 3750 18700
secretary - 2500 12500

4.4.2 Incentives

Incentive programs will be offered to employees based on their performance and the achievement of specific
business targets. These incentives may include:

 Performance Bonuses: Offered quarterly based on individual and company-wide achievements.

19
  Profit-Sharing: Key management personnel will participate in a profit-sharing scheme, which will
provide additional financial rewards when the company exceeds its revenue targets.

4.5 Licenses, Permits, and Bylaws

The company will ensure that it operates in full compliance with all legal requirements, including obtaining
necessary licenses, permits, and following local bylaws.

4.5.1 Licenses

Grandeur Construction will obtain all relevant business and trade licenses required for operating in the
construction industry.

4.5.2 Permits

The company will ensure it has the proper building permits for each project it undertakes, ensuring
adherence to local zoning laws and construction regulations.

4.5.3 Bylaws

The company will comply with all local bylaws related to safety, environmental regulations, and labor laws
to ensure smooth operations.

4.6 Support Services

Grandeur Construction Properties Limited will engage a variety of support services to assist with the
management of its business.

4.6.1 Banking Services

The company will establish business accounts with reputable local banks to handle its financial transactions,
payroll, and business loans.

4.6.2 Insurance Services

The company will obtain comprehensive insurance coverage, including general liability insurance, worker’s
compensation, and coverage for equipment and property.

20
4.6.3 Consultation Services

Grandeur Construction will engage external consultants, including legal advisors, financial planners, and
project management experts, to assist in strategic decision-making and risk management.

4.6.4 Legal Services

The company will maintain a relationship with a law firm that specializes in construction law to assist with
contract drafting, regulatory compliance, and dispute

21
5.0 Operation Plan

The operation plan for Grandeur Construction Properties Limited outlines the processes, resources, and
infrastructure required to produce construction materials and deliver contract management services. The
company will implement efficient production strategies, adopt best practices for inventory management, and
adhere to industry regulations to ensure smooth operations.

5.1 Facilities and Capacity Table

Grandeur Construction will operate from a central facility that houses the production equipment, raw
materials, and administrative offices. The facility will have designated areas for production, storage, and
distribution. Below is a summary of the key facilities and their capacities:

Equipment qua Cost per unit Total cost Capacity(pple)

ntity
1
Survey tools
 Theodolite 2 7000 7000 10
 Total station 1 1500 3000 5
 Laser level 2 4000 4000 2
 Gps reciever 500 1000 4
Measurement tools
 Tape measure 5 200 1000 15
 Chain 4 450 1800 12
 Building square 6 150 900 18
Concrete equipment
 Wheelbarrow 4 700 2800 16
 Concrete mixer 2 8800 7600 20
 Shovel 10 300 3000 20
 Concrete pump 2 1500 3000 4
Power tools
 Power drills 5 700 3500 5
 Nail guns 2 1000 2000 2
 vibrators 3 950 1850 3
Demolition equipment
 Sledge hammer 4 1000 4000 4
 Hydraulic shears 1 4000 4000 3
Maintenance tools 1 3000 3000 5
 Paint spray
5 500 2500 5
 Wrenches
3 1200 3600 3
 Electrical tester
Safety equipment
 Hard hats 10 300 3000 10
 Overall 15 180 2700 15
 Safety hammer 5 250 750 5
 Barricade tapes 10 100 1000 10

22
5.1.1 Repair and Maintenance

Maintenance of the company’s equipment and facilities is critical to minimizing downtime and ensuring
consistent production. A routine maintenance schedule will be established to service production machinery,
delivery vehicles, and office equipment. The company will employ a dedicated technician responsible for
conducting preventive maintenance and addressing any repair issues that arise. Regular checks will also be
conducted to ensure compliance with safety standards.

5.1.2 Business Layout Diagram

The business layout will include separate zones for production, storage, office space, and distribution. The
layout is designed to optimize the flow of materials, reduce handling time, and ensure that all departments are
easily accessible. A detailed floor plan will be developed to show the positioning of equipment, storage areas,
and office spaces, ensuring a functional and efficient workspace.

23
5.2 Production Strategy

Grandeur Construction will employ a lean production strategy, focusing on minimizing waste and
maximizing efficiency. The company will implement production techniques that allow for the rapid
manufacturing of materials while maintaining high quality. This will involve careful planning and
scheduling of production activities to meet client demand without overproducing or holding excess
inventory.

5.2.1 Development Stage

The initial development stage will focus on setting up the production facility, acquiring necessary
equipment, and establishing relationships with suppliers for raw materials. During this stage, the company
will also finalize its product offerings, ensuring that all materials meet industry standards and are ready for
market introduction.

5.2.2 Costs

Production costs will include raw materials, labor, equipment maintenance, and utility expenses. The
company will monitor costs closely, seeking opportunities to reduce expenses through bulk purchasing,
efficient use of resources, and negotiating better rates with suppliers.

5.2.3 Methods Used

Standardized manufacturing methods will be employed to ensure consistency in the production of materials.
Grandeur Construction will adopt best practices from the construction industry, including automated mixing
and molding equipment for materials like bricks and concrete blocks. These methods will ensure high
production rates while maintaining quality control.

5.2.4 Technological Changes Anticipated

The company anticipates investing in advanced production technologies as the business grows. This includes
machinery for automated brick manufacturing, improved packaging systems, and digital inventory tracking
software. Additionally, as sustainability becomes a greater focus in the construction industry, the company
will explore eco-friendly production methods and materials that reduce environmental impact.

5.2.5 Material Requirements

The primary materials required for production include cement, sand, gravel, and steel. Grandeur
Construction will establish long-term contracts with reliable suppliers to ensure a steady supply of these
materials at competitive prices. The company will also stock secondary materials, such as additives and
water, to support production.

24
5.2.6 Purchasing and Stock Control

A robust purchasing and stock control system will be implemented to track inventory levels, anticipate
demand, and prevent shortages. The system will also monitor the cost of materials to ensure that purchasing
decisions align with the company’s budget. An inventory management software will be used to automate
reordering and track stock levels in real-time.

expense amount
electricity 2000
water 700
rent 7000
total 9700

5.3 Production Process

The production process for construction materials at Grandeur Construction will follow a step-by-step
approach to ensure high-quality output and efficiency.

5.3.1 Product Design and Development

The company will develop a range of construction materials designed to meet local market needs, focusing
on affordability and durability. Engineers and designers will collaborate to ensure that materials such as
bricks, concrete blocks, and other products meet the necessary specifications for strength and longevity.

In this stage we focus on: Market research, concept development, final design and regulatory compliance.

5.3.2 Production Planning and Preparation

Before production begins, the company will develop detailed production plans that outline the quantity of
materials needed, production schedules, and labour requirements. The goal is to ensure that production is
aligned with customer orders and that materials are delivered on time.

5.3.3 Production and Quality Control

Quality control will be a key focus at every stage of production. Quality checks will be carried out on raw
materials before they enter the production process, and ongoing inspections will be conducted to ensure that
finished products meet safety and durability standards. The company will implement strict quality control
protocols, including random sampling and testing of materials.

25
5.3.4 Distribution

Once materials are produced, they will be distributed to construction sites via the company’s fleet of trucks.
The company will ensure that delivery schedules are aligned with project timelines to avoid delays.
Distribution routes will be optimized to reduce transportation costs and delivery times.

5.4 Regulation

Grandeur Construction will adhere to all local, regional, and national regulations governing the construction
industry. This includes complying with safety, environmental, and labor laws to ensure that the business
operates within legal frameworks.

5.4.1 Health Regulation

The company will implement stringent health and safety regulations to protect workers and ensure that the
production facility meets industry standards. All employees will be required to follow safety protocols,
including wearing protective equipment and adhering to guidelines for handling machinery and materials.

5.4.2 Operational Timetable

The business will operate on a standard five-day workweek, with production hours set from 8:00 AM to 5:00
PM. Overtime may be required during peak periods, and flexible scheduling will be implemented to
accommodate urgent client needs.

5.4.3 Safety

Safety is a top priority at Grandeur Construction. The company will conduct regular safety training sessions
for all employees to ensure that they are aware of the latest safety protocols. Equipment will be regularly
inspected, and any safety hazards will be promptly addressed. Fire safety measures, such as fire
extinguishers and emergency exits, will be installed throughout the facility.

5.4.4 Environmental Regulations

Grandeur Construction will comply with all environmental regulations related to waste disposal, emissions,
and water usage. The company will implement sustainable practices wherever possible, such as recycling
waste materials and reducing energy consumption. Efforts will be made to minimize the environmental
impact of production activities, and the company will seek certifications for sustainable construction
practices.

26
6.0 financial plan
6.1 pre operational cost
item cost
Permits and licences 11000
Market research 26000
Setup and office layout 15000
Professional services 5000
total 57000

6.2 working capital

Current ksh
assets Cash 55000
at hand 20000
Cash at bank 0
Debtors 100000
stock 45000
total 0
80500
0

Current liabilities ksh

Creditors 65000
Bank overdraft 26000
total 91000
Working capital = current assets less current liabilities
= 805000 – 91000
= 714000

6.3 pro forma balance sheet

Fixed assets
Building cost 120000
Furniture and 50000
fittings 70000
land total 0
Current assets 87000
Cash at hand Cash 0
55000
at bank Debtors
stock total 200000
100000
Current liabilities
450000
805000

27
Creditors 6500
Bank overdraft 0
total 2600
0
91000
Financed by :

Opening capital 2000000

Net profit 530000

Less drawing 150000

Closing capital 2380000

28
6.4 cash flow projection
Chart for cash projection(monthly values are in thousands)

receipts Jan Feb mar Apr may June July Aug sept oct Nov dec total
Sales 50 8 - 18 70 90 150 300 270 400 150 100 1578000
Rent - - 10 10 10 - - 10 10 - 10 - 60000
Donation - - - 50 - - 430 - - - 61 - 540000
Discount 15 - - - 6 - - 26 - - 10 - 58000
Bal b/d 450000
payment
Salary 45 45 45 45 45 45 45 45 45 45 45 45 540000
Rent 10 10 10 10 10 10 10 10 10 10 10 10 120000
Loan - - - 35 - - - - 15 - 15 - 65000
Bills 9.7 9.7 9.7 9.7 9.7 9.7 9.7 9.7 9.7 9.7 9.7 9.7 116400
Insurance 1 1 1 1 1 1 1 1 1 1 1 1 12000
Taxes 2 2 2 2 2 2 2 2 2 2 2 2 24000
Repair 16 - - - - - 6 - - - 7 - 29000
Maintain 2.5 - - - 2.5 - - - 2.5 - - - 7500
Discount - - 6 - - 7 - - - 2 - - 15000
Purchases 60 - - 2 - 41 - - - 11 - - 114000

6.5 pro forma income statement

Item Sales 2024 2025 2026
Cost of sales 257800 2140000 460100
Gross profit c/d 0 1000000 0
Gross profit b/d 700000 1140000 1300000
Any other income
878000 160000 2501000
16000 100000 740000 240000
total 1994000 2374000 86000
362700
0
Expenses

Item 2024 2025 2026

Salaries 540000 650000 700000
Rent 120000 120000 120000
bills 116000 116400 116400
total 776400 880400 936400

Net profit = gross profit – expenses

B4 tax 2024 2025 2026

=1994000-776400 2374000-880400 3627000-936400
=1217600 1493600 2690600

Net profit =0.84 x net profit

After 16% tax

= 1022784 1254624 2260104

29
6.6 break even analysis
This is where the total revenue is equal to the total cost. This determines whether the business profit or not.

item 2024 2025 2026

Total sales and fixed costs 1994000 2374000 3627000
Loan repayment 65000 20000 81000
Interest on loan 6000 4000 10000
Salaries and wages 540000 540000 540000
insurance 12000 12000 12000
Total fixed costs 623000 976000 643000

6.7 desired financing

item ksh
Pre operational cost 70000
Working capital 4500000
Fixed assets 870000
total 5440000

6.8 proposed capitalisation

Item ksh
Owner contribution 3500000
Bank loan 150000
Friends contribution 750000
total 4500000

6.9 profitability
For 2024
 Gross profit ratio = gross profit /sales x 100

= 1217600/2575000 x 100 = 47.23%

 Net profit ratio = net profit /sales x 100

=1022784/2575000 x 100 = 39.67%

 Return on equity= net profit /owners equity x 100

30
 =1022784/3500000 x 100=29.22%

 Asset turn over = total sales / assets

=2578000/167500= 1.54

 Quick ratio = (current assets – stock)/current liability

= (805000 – 450000)/91000= 3.9

 Liquidity ratio = current assets / current liabilities

= 805000/91000= 8.85

31
Chapter 7.0 Potential risks
This are the risk which may occur in my business as I operate it. These risks might drg back my business
when they are not taken in to account, they include

 economy
 It is cost by economic factors. they include budget reading, corruption and taxation. during budget
some products reduce cost while others increase causing failure of the business
 Due to economic risks workers may reduce helping evolution expense done

Remedy
Reduced labour force

Financial risks

This is whereby an enterprise financially strain

 Remedy

Create a financial buffer to withstand fluctuations caused by sudden tax changes or price increases. This
buffer can help absorb short-term economic shocks and maintain stability

Fire risks
The business maybe failed by fire occurrence and thus bringing the loss Remedy

 Remedy

Provide insurance services

Legal
This is whereby some products which the business offer get banned by the law of land .for the business will
have brought raw materials it occurs losses

 Remedy
This is where you convert raw materials into meaningful products

32