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SECURE BRICK WORKS, BUSINESS PLAN

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A Business plan for

SECURE BRICK WORKS

A service provider in the South African construction industry…

Researched and written by EBIZPLAN


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Name of business: SECURE BRICK WORKS CC Legal person: Sole owner Member’s name: A Nother Physical Address: 1 Brick Road Postal Address: Box 123 StoneHill Telephone number: 000000000 0 Facsimile: 00000000 00 Cell phone number: 0000000 000 Email address: [email protected] Date of submitting: July 2017


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TABLE OF CONTENTS

TABLE OF CONTENTS ................................................................................................ - 3 -

INTRODUCTION ............................................................................................................... - 5 -

AIM OF THIS BUSINESS PLAN ...................................................................................... - 5 -

VISION ......................................................................................................................... - 6 -

VALUES ........................................................................................................................ - 6 -

THE MACRO ENVIRONMENT ............................................................................................ - 6 -

THE ECONOMIC ENVIRONMENT .................................................................................. - 6 -

TECHNOLOGICAL ENVIRONMENT ............................................................................... - 6 -

DEMOGRAPHICS .......................................................................................................... - 6 -

POLITICAL ENVIRONMENT ........................................................................................... - 7 -

INTERNATIONAL ENVIRONMENT ................................................................................. - 7 -

THE SOCIAL ENVIRONMENT ........................................................................................ - 7 -

THE BRICK INDUSTRY ..................................................................................................... - 7 -

PROFITABILITY OF THE CONSTRUCTION INDUSTRY .................................................. - 7 -

Entry barriers ............................................................................................................. - 7 -

Expected rivalry ......................................................................................................... - 8 -

Power of the users of concrete bricks ........................................................................... - 8 -

Power of the suppliers to the industry........................................................................... - 8 -

Substitute products .................................................................................................... - 8 -

COMPETITOR ANALYSIS .............................................................................................. - 9 -

The emerging competitive dynamics of the concrete brick making sector ........................ - 9 -

Future rivals ............................................................................................................ - 10 -

THE INTERNAL ENVIRONMENT OF SECURE BRICK WORKS ......................................... - 10 -

THE COMPANY .......................................................................................................... - 10 -

Legal person ............................................................................................................ - 10 -

Regulations ............................................................................................................. - 10 -

Location of SECURE BRICK WORKS ........................................................................ - 10 -

THE MARKETING MIX OF SECURE BRICK WORKS..................................................... - 10 -

Product ................................................................................................................... - 10 -

Distribution .............................................................................................................. - 11 -

Pricing .................................................................................................................... - 11 -

Promotion ................................................................................................................ - 11 -

OPERATIONS ............................................................................................................. - 11 -

HUMAN RESOURCES ................................................................................................. - 12 -

Structure of SECURE BRICK WORKS CC ................................................................. - 12 -

Job descriptions ....................................................................................................... - 12 -

Employer/employee agreement ................................................................................. - 13 -

Basic conditions of employment ................................................................................ - 13 -

Training ................................................................................................................... - 13 -

Remuneration .......................................................................................................... - 13 -

The culture of SECURE BRICK WORKS .................................................................... - 13 -

FINANCIAL MANAGEMENT ......................................................................................... - 13 -

Financial requirements ............................................................................................. - 13 -

Assumptions ............................................................................................................ - 14 -


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Projected Cash flow statement: First year ................................................................... - 16 -

Balance sheet of A Person 23 June 2017 ................................................................... - 17 -

Financial control ....................................................................................................... - 17 -

STRATEGIC INTENT OF SECURE BRICK WORKS CC ..................................................... - 18 -

SWOT ANALYSIS ........................................................................................................ - 18 -

CONCLUSION ................................................................................................................. - 18 -

APPENDIX A ................................................................................................................... - 19 -

Making the brick ....................................................................................................... - 19 -


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INTRODUCTION

The empowerment of the previously disadvantaged citizens of South Africa is and should be one of the primary goals of the government and other (big) organisations. In line with Section 163(a) of the constitution i.e. The Gauteng Provincial Government must do everything in its power to promote and facilitate the provision of housing in the province within the framework of national policy in respect of housing development. The City of Tshwane Metropolitan Municipality has a housing backlog estimated around 129 000. As a result of the huge backlog, Tshwane has prioritised housing delivery for the next four years. Soshanguve, a township north of Pretoria was earmarked as a priority region benefit from the Tshwane Metropolitan Municipality’s housing strategy. They also recognised the importance of the following services in order to reach their housing targets:

Brick making Brick laying Plumbing Carpentry and joinery Electrifications Painting

SECURE BRICK WORKS CC is a young entrepreneurial concern in Soshanguve. The managing member, A Person, has recognised an opportunity to manufacture and deliver bricks to builders and individuals in the Soshanguve area.

Figure 1: Empowering the community of Soshanguve: then and now…

AIM OF THIS BUSINESS PLAN

This business plan has two objectives:

1) It will be used to demonstrate the viability of the business, and the skills and knowledge of the entrepreneur in order to obtain funds to grow the business;

2) It will serve as a guide to the entrepreneur to run his business strategically and profitable.


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VISION

SECURE BRICK WORKS CC will be the preferred supplier of concrete bricks in the Sushanguve and surrounding areas.

MISSION

We will realise our vision by doing the following:

Making enough concrete bricks of good quality, on time;

Practice project management principles to ensure productivity to the benefit of all the stakeholders;

Always putting the interest of our customers first.

VALUES

We will do our business in the following way:

We conduct our business in an ethical and professional way.

We add value to our clients and stakeholders through the provision of unsurpassed services and by the ongoing training of staff.

We offer opportunities to all on a non-discriminatory basis.

THE MACRO ENVIRONMENT

The macro-environment contains variables that directly or indirectly exert an influence on the business and market environment.

THE ECONOMIC ENVIRONMENT

The economic outlook for South Africa is positive, at least for the next three years. The consistent high consumer spending that started during 2001 has resulted in the emergence of thousands of new businesses, the majority trading as SMEs. More businesses results into more jobs. As more people starts to earn a monthly salary, the demand for housing in the lower income groups will increase. However, higher commodity prices, a weaker rand, and (as a result) higher inflation, higher prices and high interest rates may affect the spending power of the consumer over the short-medium term negatively.

TECHNOLOGICAL ENVIRONMENT

Technology influences all businesses and many individuals in South Africa. The construction industry experience higher productivity because of the use of advanced technology.

DEMOGRAPHICS

The demographic spread of the population in South Africa is quite skew. Most of the economical active population of South Africa lives and works in or near the big cities. The rural areas economic survival usually depends on the production of commodities such as mineral or agricultural


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activities. The concentration of people in the Pretoria area resulted in a huge shortage of houses for the lower income population. The urbanisation of people is a worldwide trends thus there will be always a demand for houses in urban areas.

POLITICAL ENVIRONMENT

To provide houses for previously disadvantage people is a top priority for the South African government. The provincial governments and specifically the municipalities have been given the authority to implement the rollout of the houses. The rollout of the government subsidised houses has however not go without problems thus far. Misuse of funds and the build of sub-standard houses have been issues regularly reported on by the press. This has made the backlog for houses even bigger…

INTERNATIONAL ENVIRONMENT

Overseas investors will value South Africa as an attractive investment opportunity as long as we’ve got a stable government and sustain the current economic growth. Participation of global investors in our economy does however result in our local firms that have to compete with the multi-nationals. Overseas firms have however not been visibly involved to help poor communities with housing thus far.

THE SOCIAL ENVIRONMENT

The devastating affect that HIV-AIDS has on the prosperity of our society still continues. Also are the problem of illegal immigrants and the subsequent increase in crime. The explosive situation in neighbouring Zimbabwe is causing millions of its people to flee to South Africa. They usually settle in the townships near big cities thus putting the township housing infrastructure under even bigger pressure.

THE BRICK INDUSTRY

To build lasting houses, one needs bricks. You also need money to build houses. During 2003, The Gauteng government allocated R2.68 billion rand for subsidised houses. The bricks of a subsidised house contribute about 10% towards its total costs. Thus the value of the brick market just for building subsidised houses in Gauteng during 2003 was R268,000,000. The backlog with supplying subsidised housing in Gauteng will ensure long-term demand for bricks to that sector.

PROFITABILITY OF THE CONSTRUCTION INDUSTRY

The profitability of the market where SECURE BRICK WORKS CC does its business may be influenced by the following factors:

Entry barriers


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New entrants to the construction industry bring new capacity, the desire to gain market share, and often substantial resources. The seriousness of the threat of entry depends on the barriers present and on the reaction from existing competitors that the entrant can expect. Labour The shortage of skilled labour may be the biggest barrier to enter the South African construction industry. Also are the legal requirements of the labour law and the subsequent administrative burden thereof, too much for new entrants especially with the high number of workers needed to be employed by the industry.

Capital requirements Capital requirements may hinder the progress of new entrants into the brick industry. Although it is possible to manufacture concrete bricks manually, the process is slow and requires large numbers of manual workers. The automation of the concrete manufacturing process entails the acquisition of expensive brick making machinery. This may be a barrier to enter the industry for many entrepreneurs.

Expected rivalry

Because of the high demand for bricks, especially concrete bricks, the manufactures cannot supply enough stock to the users thereof. Little rivalry is thus foreseen in the industry for at least the next five years.

Power of the users of concrete bricks

The strong demand for concrete bricks gives little power to the users thereof. The prescriptions regarding the specifications/costs of subsidised house as explained in the tender documents of builders, help however to keep the price of building materials in check.

Power of the suppliers to the industry

The power of the concrete brick suppliers depends on the quantity, quality and price asked for their products. Manufactures that deliver irregular quantities of sub-standard bricks at a too high price won’t last long.

Substitute products

There are many substitutes for concrete bricks. Clay bricks are however expensive and other material such as wood or asbestos is dangerous to use (fire hazard), or has a health risk. Concrete bricks are the best solution to build low-cost houses with.


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COMPETITOR ANALYSIS

In contrast with the clay brick industry, which is characterised by the takeover of small companies by big companies to achieve scale economies, the concrete brick manufacturing industry has a large number of small manufacturers, proving bricks to customers in their immediate vicinity. Most of the small brick manufactures may be found in townships where there are low-costing hosing developments. Competition is limited at this stage because of the huge demand. Also are the purchasers of the bricks in many cases the price makers thereof because of tender agreements. Manufactures of concrete blocks most probably sell their stock in advance.

The emerging competitive dynamics of the concrete brick making sector

As the local concrete brick manufacturer’s business grows and it gains the necessary resources, it may enter into the more formal market. He/she may now integrate horizontally to acquire the capacity and clients of nearby smaller competitors. A further step forward is to diversify its product offering to include concrete paving blocks, or roof tiles for the more upmarket customers. Value The total value of the brick industry In South Africa is estimated to be R15 billion rand a year. Cost structure It depends on how much the concrete brick manufacturer has mechanised. Labour and mechanisation costs are the major industry costs.

Exit barriers How easy it is to exit the concrete brick manufacturing industry may depend on what capital investment the entrepreneur has made. High capital investments (e.g. new equipment or vehicles) may delay the exit. Also will long term contracts with builders/contractors hinder quick exit out of the industry. Key success factors The following key success factors may provide first entrants into the concrete brick making segment a competitive advantage:

Reliability;

Quality of work;

Productivity;

Technical know-how

Negotiation skills (to secure contracts)

People management skills


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Future rivals

SECURE BRICK WORKS CC will certainly have future rivals. The rivalry will however not be notice at this time because of the demand/supply situation. Should the demand for concrete bricks declines, or rivalry increases, then SECURE BRICK WORKS should relay on its strong points to differentiate itself from the rest.

THE INTERNAL ENVIRONMENT OF SECURE BRICK WORKS

The internal environment of SECURE BRICK WORKS concerns the company itself, its owners, clients, suppliers and intermediaries.

THE COMPANY

Legal person

SECURE BRICK WORKS is a sole owner. It has one member only (A Person).

Regulations

SECURE BRICK WORKS does its business under the company’s act and all other regulations concerning its business.

Location of SECURE BRICK WORKS

SECURE BRICK WORKS is located in Soshanguve, Pretoria, Gauteng. It does all its business in the Soshanguve area.

THE MARKETING MIX OF SECURE BRICK WORKS

Product

Description

SECURE BRICK WORKS will start off by making a single line of products. Concrete bricks are in great demand to build low-cost subsidised houses. The specification of the brick is as follow: Name: 6” Hollow Block Size: 390mm x 190mm x 140mm Colour: concrete. The bricks will be made to the specifications laid down by the South African Bureau of Standards (SABS) to ensure uniform quality.


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Distribution

Product availability

SECURE BRICK WORKS should learn what minimum quantities bricks it should manufacture to always have stock available for its customers. A customer may source its bricks elsewhere and may then be lost forever. Proactive planning will ensure optimum stock levels to satisfy the needs of the customers at all times.

Pricing

The price of concrete bricks may start at R2.80 a brick (low quality materials used) to end at R4.80 for the top quality brick. SECURE BRICK WORKS will strive to manufacture top quality bricks. The cost to manufacture a top quality brick is around R2. This leaves SECURE BRICK WORKS with a healthy margin of 60% to cover its operational costs and makes some profit.

Promotion

The main means of promotion will be personal selling to the builders/contractors of low-cost subsidised houses. Positive word-of mouth will however ensure long-term profits through brand recognition and brand loyalty.

OPERATIONS

The concrete brick manufacturing will be done on a 4ha site, in Soshanguve. The site The site of SECURE BRICK WORKS will make provision for stockpiling aggregates and storing cement, a production area, a stacking area, staff facilities, an office, and access between different areas and facilities. Equipment Blockyard equipment consists essentially of a means of moulding blocks, a concrete mixer, and various general purpose tools and equipment.


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Block making equipment There are two basic types of equipment, depending on the method of moulding the blocks: • Stationary machines that mould blocks, one or more at a time, on pallets. • “Egg-layer” machines that mould blocks on a concrete slab. SECURE BRICK WORKS will make use of an “Egg-layer” machine. Concrete mixer It is possible to make blocks on a small scale without a concrete mixer. Hand mixing has the advantage of reducing the amount of capital required and providing employment, but may limit output and not always be thorough. A pan mixer is the only type of machine mixer suitable for blockyards. Pan mixers, with a forced mixing action, can cope with the semi-dry mixes used for making blocks. Drum mixers do not work because they cannot mix the semi-dry concrete. The output of the mixer should match that of the block making machine. A mixer of adequate capacity for making hollow units may have insufficient capacity for solid units. Miscellaneous equipment This includes wheelbarrows, batching containers, trolleys (for moving blocks), shovels, hosepipes and plastic sheeting. Making the brick The manufacturing process is described in Appendix A at the end of this report.

HUMAN RESOURCES

Structure of SECURE BRICK WORKS CC

Job descriptions

Employees of SECURE BRICK WORKS CC will be provided with job descriptions where their job duties and responsibilities will be stipulated.

A Person

Site foreman

5 Labourers

1 Admin clerk


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Employer/employee agreement

Employment contracts will be agreed on and introduced according to the guidelines given by the Department of Labour www.labour.gov.za.

Basic conditions of employment

Basic Conditions of Employment applies to all employers and workers and regulates employment conditions such as leave, working hours (ordinary, Sundays and public holidays), employment contracts, employee records, deductions, pay slips, overtime, and termination. Again SECURE BRICK WORKS CC will use the guidelines of the Department of Labour to implement its rules and policies

Training

The training and development of SECURE BRICK WORKS’s employees will form an important part of the firm’s strategy to survive and grow.

Remuneration

SECURE BRICK WORKS will offer the new employees a market related salary package. The representative will work on a commission-based remuneration only. Annual salary increases will be determined by SECURE BRICK WORKS CC.

The culture of SECURE BRICK WORKS

The current organisational culture is typical that of an entrepreneurial business at the beginning of its life cycle. Although SECURE BRICK WORKS may formalise its human resource management, it will maintain and build on the current culture of the business.

FINANCIAL MANAGEMENT

Financial requirements

SECURE BRICK WORKS need money to acquire brick making equipment, buy raw materials, to secure the manufacturing site and to start operating.

http://www.labour.gov.za/


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Assumptions

Sales Month 1 is January. Seasonality applies

Cost of Sales (COS)

COS was calculated using industry averages

Value added tax (VAT)

The standard rate for VAT in South Africa, 14%, was used to project the cash flow figures.

Amortisation All loans was amortised over 5 years

Interest Based on an annual interest rate of 15%

Personnel Appointments will only be made on a fixed contract basis.

December The construction industry traditionally closes from the middle December till the middle January each year. We have provided for that loss of income.

Start-up costs Item Rand

BBM D.I.Y hand moulds 5,052.00

Twin Cavity Block 390x190x140 5,998.80

PK 300 Cornet Diesel Egg layer 80,000.00

V200 pan mixer diesel 57,354.00

Concrete slab 50x15mx125mm 12,000.00

Transport Ex Durban 3,400.00

Delivery vehicle 200,000.00

Site Office & stores 150,000.00

Cement, sand (1month) 110,400.00

Operating expenses (3 months) 210,000.00

Deposits 10,000.00

Fences & security 60,000.00

Training 25,000.00

`Total 929,204.80


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Projected Income Statement Year 1 to 3

Year 1 Year 2 Year 3 Totals

Sales

Sales 2,152,800.00 2,475,720.00 2,970,864.00 7,599,384.00

Other - - - -

Total Sales 2,152,800.00 2,475,720.00 2,970,864.00 7,599,384.00

Less Cost of Sales

Cost of Sales

Cost of Sales 818,064.00 883,509.12 971,860.03 2,673,433.15

Total Cost of Sales 818,064.00 883,509.12 971,860.03 2,673,433.15

Gross Profit 1,334,736.00 1,592,210.88 1,999,003.97 4,925,950.85

Operating Expenses

Accounting Officer 6,000.00 6,480.00 7,128.00 19,608.00

Advertising 4,500.00 4,860.00 5,346.00 14,706.00

Bank Charges 4,200.00 4,536.00 4,989.60 13,725.60

Cell Phones 19,200.00 20,736.00 22,809.60 62,745.60

City of Tswane 17,750.00 19,170.00 21,087.00 58,007.00

Cleaning Material 3,000.00 3,240.00 3,564.00 9,804.00

Consulting Fees 7,600.00 8,208.00 9,028.80 24,836.80

Creditcard 9,000.00 9,720.00 10,692.00 29,412.00

Entertainment 9,000.00 9,720.00 10,692.00 29,412.00

Fines 3,000.00 3,240.00 3,564.00 9,804.00

Diesel 87,000.00 93,960.00 103,356.00 284,316.00

Interest 113,542.13 103,795.87 114,175.45 331,513.45

Loan Repayment 254,400.00 254,400.00 254,400.00 763,200.00

Member's Fees 120,000.00 129,600.00 142,560.00 392,160.00

Rent 36,000.00 38,880.00 42,768.00 117,648.00

Repairs and Maintenance 7,200.00 7,776.00 8,553.60 23,529.60

Salaries and Wages 183,155.65 197,808.10 217,588.91 598,552.67

Stationary 1,500.00 1,620.00 1,782.00 4,902.00

Telephone and Fax 15,000.00 16,200.00 17,820.00 49,020.00

Travel Expenses 3,500.00 3,780.00 4,158.00 11,438.00

Vehicle Expenses:

- Insurance 12,312.00 13,296.96 14,626.66 40,235.62

- Petrol/Diesel and Oil 42,000.00 45,360.00 49,896.00 137,256.00

- Repairs and Maintenance 18,000.00 19,440.00 21,384.00 58,824.00

- Tolgate Fees 648.00 699.84 769.82 2,117.66

Vehicles 34,950.00 37,746.00 41,520.60 114,216.60

Total Operating Expenses 1,012,457.78 1,054,272.77 1,134,260.05 2,848,340.72

Income / (Loss) Before Tax 322,278.22 537,938.11 864,743.92 1,724,960.25

Income Tax 80,569.55 134,484.53 216,185.98 431,240.06

Nett Income / (Loss) 241,708.66 403,453.58 648,557.94 1,293,720.19

Cumulative Nett Income 241,708.66 645,162.25 1,293,720.19 1,293,720.19


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Projected Cash flow statement: First year

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Total

Sales

0.04 0.07 0.09 0.1 0.12 0.15 0.12 0.09 0.09 0.06 0.05 0.02 2,152,800

Sales 98,168 171,793 220,877 245,419 294,503 368,129 294,503 220,877 220,877 147,252 122,710 49,084 2,454,192

Loans - - - - - - - - - - - - -

Investment - - - - - - - - - - - - -

Vat Claims 7,006 10,923 13,535 14,840 17,452 21,368 17,452 13,535 13,535 9,618 8,312 4,395 151,970

Total 105,174 182,717 234,412 260,259 311,955 389,497 311,955 234,412 234,412 156,869 131,022 53,479 2,606,162

Expenses

Startup expenses 929,205

Accounting Officer 500 500 500 500 500 500 500 500 500 500 500 500 6,000

Advertising 375 375 375 375 375 375 375 375 375 375 375 375 4,500

Bank Charges 350 350 350 350 350 350 350 350 350 350 350 350 4,200

Cell Phones 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 19,200

City of Tswane 1,479 1,479 1,479 1,479 1,479 1,479 1,479 1,479 1,479 1,479 1,479 1,479 17,750

Cleaning Material 250 250 250 250 250 250 250 250 250 250 250 250 3,000

Consulting Fees 633 633 633 633 633 633 633 633 633 633 633 633 7,600

Cost of sales 37,304 65,282 83,933 93,259 111,911 139,889 111,911 83,933 83,933 55,956 46,630 18,652 932,593

Credit Card 750 750 750 750 750 750 750 750 750 750 750 750 9,000

Entertainment 750 750 750 750 750 750 750 750 750 750 750 750 9,000

Fines 250 250 250 250 250 250 250 250 250 250 250 250 3,000

Diesel 7,250 7,250 7,250 7,250 7,250 7,250 7,250 7,250 7,250 7,250 7,250 7,250

Interest 9,462 9,462 9,462 9,462 9,462 9,462 9,462 9,462 9,462 9,462 9,462 9,462 113,542

Loan Repayment 21,200 21,200 21,200 21,200 21,200 21,200 21,200 21,200 21,200 21,200 21,200 21,200 254,400

Member's Fees 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,000

Rent 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 36,000

Repairs and Maintenance 600 600 600 600 600 600 600 600 600 600 600 600 7,200

Salaries and Wages 15,263 15,263 15,263 15,263 15,263 15,263 15,263 15,263 15,263 15,263 15,263 15,263 183,156

Stationary 125 125 125 125 125 125 125 125 125 125 125 125 1,500

Telephone and Fax 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 15,000

Travel Expenses 292 292 292 292 292 292 292 292 292 292 292 292 3,500

Vat 13,743 24,051 30,923 34,359 41,230 51,538 41,230 30,923 30,923 20,615 17,179 6,872 343,587

Vehicle Expenses:

- Insurance 1,026 1,026 1,026 1,026 1,026 1,026 1,026 1,026 1,026 1,026 1,026 1,026 12,312

- Petrol/Diesel and Oil 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 42,000

- Repairs and Maintenance 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 18,000

- Tolgate Fees 54 54 54 54 54 54 54 54 54 54 54 54 648

Vehicles 2,913 2,913 2,913 2,913 2,913 2,913 2,913 2,913 2,913 2,913 2,913 2,913 34,950

-

Total Expenses 1,013,576 173,704 199,228 211,989 237,513 275,798 237,513 199,228 199,228 160,942 148,180 109,895 2,201,638

Nett Profit / Loss ( - ) -908,402 9,013 35,184 48,270 74,441 113,699 74,441 35,184 35,184 -4,073 -17,159 -56,416 -560,633

Bank Begin - -908,402 -899,389 -864,205 -815,935 -741,494 -627,795 -553,353 -518,169 -482,985 -487,058 -504,217 -504,217

Bank End -908,402 -899,389 -864,205 -815,935 -741,494 -627,795 -553,353 -518,169 -482,985 -487,058 -504,217 -560,633 -560,633


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Balance sheet of A Person 23 June 2017

ASSETS LIABILITIES

CURRENT ASSETS CURRENT LIABILITIES

Cash - Unsettled accounts -

Monies owned to you - Credit card outstanding -

Furniture & other moveable assets 10,000 Advanced rent payment -

Total Current Assets 10,000 LONG TERM LIABILITIES

None -

Total Liabilities -

FIXED ASSETS OWNERS CAPITAL

Motor vihicles - Own contribution 100

Fix property* 70,000 Retained earnings -

Less depreciation -

Total Fixed Assets 70,000 Total Capital 100

TOTAL ASSETS 80,000 TOTAL LIABILITIES & CAPITAL 100

Net value 79,900

*Owned by member's mother

Financial control

Financial control will be done in according to the general standards of accounting practices. The projected income statement will serve as a guide for the first budget.


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STRATEGIC INTENT OF SECURE BRICK WORKS CC

SWOT ANALYSIS

Strengths Weaknesses

1. Well located near low-costing house building activities.

2. Local resident – know the area and its people.

3. Well developed business strategy

1. SECURE BRICK WORKS lack capital resources to fulfil lucrative contracts.

2. The owner needs some training in business management.

Opportunities Threats

1. Diversifying product offering to the lucrative middle-income market;

2. Integrating horizontally when the time comes.

3. Offering brick-lying services.

1. Competitors entering and busy in the market;

2. Unskilled workers; 3. Economic downswing

SECURE BRICK WORKS will use its strengths to build a brand and hence lift the entry barriers to the industry. By diversifying its product/service offering, it will remain profitable, even when times are bad.

CONCLUSION

SECURE BRICK WORKS CC will provide concrete bricks in the community he has grown up and now lives. Sadrack has an entrepreneurial outlook and is determined to make this venture a success. Sincerely Yours. Douw Gerbrand Steyn

Consultant Owner: EBIZPLAN

10 July 2017


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APPENDIX A

Making the brick

Materials for brick making Cement Cement should comply with SANS 50197-1. Strength class should be 42,5N or higher because the concrete must develop strength as rapidly as possible. Note that it is illegal to sell cement which does not bear the SABS mark. Aggregates Sand and stone are used for most block production. Sand and stone are fragments of rock and differ only in size. Sand particles will pass through a sieve with 4,75 mm square openings. Stone particles will not. All aggregates should be clean and not contain organic matter such as roots or humus. If the aggregates contain clay it should be in a very small fraction. The following aggregates may be considered:

Fine sand with particles mainly smaller than 1‑mm: pit, fine river or dune sand

Coarse sand with the biggest particles approximately 5‑mm in size: crusher, pit or coarse

river sand

Stone with a maximum size of 13‑mm for bricks or solid blocks or 10‑mm for hollow

blocks. It is normally possible to make blocks with coarse sand on its own. Alternatively combinations of aggregates may be used:

A blend of coarse sand and fine sand

A blend of fine sand and stone

A blend of fine sand, coarse sand and stone For small-scale production, the best aggregate or combination of aggregates is normally found by trial and error. Water Water that is fit for drinking is suitable. Most river and borehole water may be used. Production Ordering and stockpiling materials Aggregates and cement should be ordered in good time. Stocks should be sufficient to prevent stoppages due to lack of material. As a rough guide, using an aggregate: cement ratio of 8:1 by loose volumes, three and a half bags of cement and a cubic metre of aggregate will be enough to make about 400 bricks. The number of blocks produced from the same quantity of material will depend on block size and whether they are solid or hollow. Aggregates must be stockpiled in such a way that contamination is prevented and mixing of different types is not possible. Cement must


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be stored so that it is kept dry. Cement in bags should be used within one month of being delivered. Batching Cement, if supplied in bags, should preferably be batched by the full bag. Cement supplied in bulk may be weighed (preferable) or batched by loose volume. It is important to batch all materials accurately. Batching containers, eg wheelbarrows, buckets, drums and wooden boxes, should be loosely filled to the brim and struck off flush with it. To avoid errors, there should be enough containers for a full batch to be made without using any container more than once. Dented or broken containers must not be used. The amount of water to be added to the mix is judged by eye and by doing some simple tests (see Water content below). Time can be saved if, once the

approximate quantity of water per batch is known, about 90‑% of this is measured out and added

to the mix at the start of mixing. The rest of the water can then be judged by eye and by test. Water content Water content is critical. The mixture must be wet enough to bind together when compacted, but it should not be so wet that the blocks slump (sag) when the mould is removed. A common mistake is the use of mixes that are too dry, resulting in incomplete compaction. The moisture content should be as high as possible as this allows better compaction and thus gives the best strength. Moisture content is approximately right when ripple marks form on a steel rod or the back of a shovel when it is rubbed against some of the mixture. The water content is just over optimum when ripple marks start appearing on blocks when they are de-moulded. Mixing Hand mixing should be done, using shovels, on a level concrete slab or steel plate. First spread the aggregate out 50 to 100mm thick. Then distribute the cement, and stone if any, evenly over the sand. Mix aggregate and cement until the colour is uniform. Spread the mixture out, sprinkle water over the surface and mix. Continue with this process until the right amount of water has been mixed in. For machine mixing, first mix aggregate and cement then add water gradually while mixing until water content is correct. Moulding Hand operated machines should be used as instructed by the manufacturer. The mould of a powered machine should be filled until approximately six to eight cycles of compaction are required to bring the compacting head to its stops. Too little or poor compaction should be avoided as it results in greatly reduced strengths. De-moulding or removal of the mould should be done carefully so that the fresh blocks are not damaged. Fresh blocks should be protected from rain with plastic sheets or any suitable covering during the first day and from the drying effects of the sun and wind until curing starts. In some cases it may be necessary to protect blocks from frost damage. Covering with plastic sheeting with the edges held down is normally sufficient. Curing


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The day after production, blocks should be removed from the production slab or pallets and stored in the stacking area, ready for curing. Stacks should be carefully built to avoid chipping edges and corners. Curing is the process of maintaining a satisfactory moisture content and a favourable temperature in the blocks to ensure hydration of the cement and development of optimum strength. In the South African climate it is normally sufficient to cover blocks with plastic sheeting to prevent moisture loss or to spray blocks with water. Blocks should be cured for at least seven days. Quality control Three aspects should be monitored to ensure quality masonry units: strength, dimensions and shrinkage. Strength Quality of blocks should be controlled so that strengths are adequate (to avoid breakages or rejection by customers) and mixes are as economical as possible. Ideally, blocks should be regularly tested for strength and mixes and production processes modified if necessary. If testing is impracticable or unaffordable, block strength should be continually assessed by noting whether corners and edges, or even whole blocks, tend to break in handling. Strength can also be assessed by knocking two mature bricks together. Dimensions The length and width of the units are determined by the mould and will not vary greatly. However, the height can vary and should be monitored using a simple gauge. Units of inconsistent height will lead to difficulties in the construction of masonry and possible rain penetration. Shrinkage Concrete masonry units shrink slightly after manufacture. In order to avoid this happening in the wall, blocks should be allowed to dry out for at least seven days before being used for construction. Reference: Published by the Cement & Concrete Institute, Midrand, 1996, reprinted 1997, 1999, 2003, 2006. © Cement & Concrete Institute

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