business pln
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YAWEH CONSTRUCTION AND SURVEY COMPANY (U) LTD.
P.O Box 21812, Kampala
Fjpyawehco yahoo.com
CO-OWNERS
Name Telephone Number
Filly John Paul 0700632191
Singh Patel 0770023547
SSekijjoba Daniels 0755278659
Nabaterega Safina 0700023546
Description of the Business
Yaweh constructional and surveying company (YCSC) is a start up company in theBugolobi area. It is the mission of the YCSC (U) Ltd to provide real estate services in thenewly established Golden Valley Retirement Community, located in Bugolobi. YCSC(U) Ltd is a full real estate, mortgage and title company.
Financing
YCSC (U) Ltd expects to raise $390,000 as its own capital and to borrow $4.2 millionguaranteed by the Cairo bank as a ten year loan. This provides the bulk of the currentfinancing requirements for company growth.
A statement of confidentiality.
This report is confidential and a property of the owners listed above. It is intended onlyfor use by the persons to whom it is transmitted and any reproduction of its contentswithout their permission is prohibited. And the loan acquired will be paid off with in tenyears of the companys operation without fail.
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TABLE OF CONTENTS
CHAPTER ONE..................................................................................................................11.0 EXECUTIVE SUMMARY.....................................................................................1
1.1 management Capabilities...........................................................................................11.2 Finances.....................................................................................................................1
1.3 Target market.............................................................................................................11.4 Products and Services................................................................................................21.5 keys to success...........................................................................................................21.6 Vision and mission statement....................................................................................2
CHAPTER TWO.................................................................................................................32.0 INDUSTRY ANALYSIS..........................................................................................32.1 Competitors................................................................................................................32.2 strength and weaknesses of the competitor................................................................42.3 customer profile.........................................................................................................4
CHAPTER THREE............................................................................................................43.0 COMPANY OVERVIEW.........................................................................................5
3.1Business Location.......................................................................................................53.2 Company Objectives..................................................................................................53.3 Company ownership..................................................................................................63.4 Company Background...............................................................................................63.5 Management Experience............................................................................................63.6 venture prospects.......................................................................................................73.7 legal status..................................................................................................................7
CHAPTER FOUR................................................................................................................74.0 PRODUCTION / SERVICE PLAN..........................................................................84.1 Products / services......................................................................................................84.2 Uniqueness of services...............................................................................................8
4.3 Development of services / products...........................................................................84.4 Draw backs.................................................................................................................84.5 competitive comparisons...........................................................................................94.6 future expansions.......................................................................................................9
CHAPTER FIVE.................................................................................................................95.0 MARKETING PLAN................................................................................................95.1 Market Analysis Summary........................................................................................95.2 Market Segmentation ..............................................................................................105.3 Target Market Segment Strategy.............................................................................115.5 Competition and Competitive Edge.........................................................................125.6 Strategy and implementation summary...................................................................14
5.7 Sales strategy...........................................................................................................145.8 Ongoing market evaluation......................................................................................15
CHAPTER SIX..................................................................................................................156.0 MANAGEMENT PLAN.........................................................................................156.1 Organizational structure...........................................................................................166.2 Board of Directors ..............................................................................166.3 Management Team...................................................................................................176.4 Labor Management Techniques...............................................................................19
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6.6 Management compensation.....................................................................................206.7 Other investors.........................................................................................................216.8 Critical risks, problems and assumptions.................................................................21
CHAPTER SEVEN...........................................................................................................227.0 OPERATING PLAN...............................................................................................23
7.1 Operating Cycle.......................................................................................................237.2 Geographical Location.............................................................................................237.3 Facilities and Improvements....................................................................................237.4 Strategy and plans ...................................................................................................237.5 Quality assurance.....................................................................................................247.6 Regulatory and legal issues......................................................................................24
CHAPTER EIGHT............................................................................................................258.0 FINANCIAL PLAN.................................................................................................258.1 Investments and financing.......................................................................................258.2 Break-even Analysis................................................................................................258.3 Sales forecast for three years...................................................................................25
8.4 YCSCS PROFORMA BALANCE SHEET FOR THREE YEARS......................268.4 PROJECTED PROFIT AND LOSS........................................................................278.6 YCSC (U) LTD PROFORMA CASH FLOW FOR THREE YEARS....................288.7 BUSINESS RATIOS...............................................................................................29
APPENDIX 1.....................................................................................................................31APPENDIX 3.....................................................................................................................34
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CHAPTER ONE
1.0 EXECUTIVE SUMMARY.
Yaweh constructional and surveying company ltd is a medium sized commercial
construction company with offices in bugoloobi. YCSC (U) Ltd has been fortunate to be
awarded some initial sizable contracts for several projects among its four locations.
1.1 management Capabilities
The management of Yaweh constructional and surveying company (U) Ltd is to be of
vast professional experience dedicated towards the satisfaction of the customers who are
the major reasons for the companys existence. The management capabilities are actually
a booster to our objectives as evidenced by the academic qualifications possessed.
1.2 Finances
The total amount required for the company is $4,590,000. This will include the amount
for the insurance, purchase of non current assets, office set up, acquiring legal documents
and others. The stated co-owners will contribute $390,000 as capital and the $4.2 million
will be obtained as a loan from the bank. This will be used to purchase the non current
assets, office set up and cash requirements. The loan acquired will be paid within ten
years of the companys operation.
1.3 Target market
The company will mainly focus on two market sub- segments of commercial
construction industry that is, the urban project segments and the local government
contracts.
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1.4 Products and Services
The company will provide the following types of constructions and surveys; schools,
apartments, arcades, parking lots, roads and services like installation of building lights,
Data information system.
The main focus of the company shall be on how to out compete our competitors and fully
exploit the Ugandan markets due to the invasion and innovation of new ideas to correct
deviations incase of any.
1.5 keys to success.
YCSC (U) Ltd keys to success will be comprised of the following factors;
a) Promoting trust worthy among other commercial real estates in the community.
b) Retaining high quality on site management
c) Completion of work within the given time as stated in the contract.
d) Track the progress of each construction project,
e) Taking accurate estimates on the prices of the materials
1.6 Vision and mission statement
Vision statement
To provide high quality craftsmanship in the commercial construction industry at a
competitive cost.
Mission statement
To achieve a greater reputation for quality and on time delivery than the current
competitors in the central region. We further intend to deliver on time competition and
maintaining high integrity on all promised timelines and quality assurances.
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CHAPTER TWO
2.0 INDUSTRY ANALYSIS
With the extensive contracts of the Yaweh Constructional and Surveying Company (U)
Ltd has in the commercial real estate business, it is estimated that the company will have
a significant number of contacts within the first three days.
There are very few construction companies that provide the products and services given
by the YCSC (U) Ltd.
The company has come up with new developments in the installation of all business
operation systems like data information system and wreaking services as part of building
re-construction project.
2.1 Competitors
Some of the companys competitors include; HOSSANA REAL ESTATES, JOMAYI,
SEMA PROPERTIES and others.
As regards to the competitive environment. YCSC (U) Ltd aims at customer or client
satisfaction as they are the major reasons for existence. This is done by providing quality
assurances and ensuring on time deliveries and fulfilling the general welfare of the
public.
Through research will be conducted to avail the management team with the necessary
information about the products and services that the company provides to the public. In
case of a decline in demand, new techniques will be adopted to meet the needs of thecustomers thus creating operational efficiency.
According to the recent study carried out, research shows that the sales of JOMAYI are
declining with decreasing demand for their products and services, while the sales of
HOSSANA are growing at a steady pace.
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2.2 strength and weaknesses of the competitor
The following are the strength and the weaknesses of the competitors
2.3 customer profile
The marketing and sales department will ensure that the contacts of the clients and
customers are noted so as to keep a track of the regular customers. This will provide an
accurate record of the customers profile with the aim to increase profits through sales.
My competitors may not be having the customer profiles and they just assume the levels
of demand in the market. Thus the YCSC (U) Ltd hopes to use its customer profile to hit
the competitors from the market. We will also deliver our products and services to the
individuals in need.
CHAPTER THREE.
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Competitor strength weakness
Hosanna real estates affordable prices delayed deliveries
Jomayi flexible management low qualities
Semma properties good quality few products provided
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3.0 COMPANY OVERVIEW
Yaweh constructions and surveying company (U) Ltd is the name that the project intends
to establish. This company will be set-up to fulfill the desires of the shareholders and
other stake holders as well as satisfying the needs of our customers and clients.
During the study the company examined a number of areas such as; location and financial
aspects, marketing aspects, technological, social and economic aspects of projects in the
area it is entitled to serve.
YCSC (U) Ltd is a construction company that will provide products and services which
will include installation of all business operations like electrical, data information system,wreaking services, office building, parking lots and garages, arcades and government
contracts.
The planned business will exist as a private limited company owned by a trustworthy
group of entrepreneurs who purchase and become shareholders.
Besides the economic and social benefits, the company will save the government from
the increasing unemployment yet they have the experience and qualifications. And
further attract investors who will finance the project thus increasing the funds available
for its operations.
3.1Business Location
The proposed projects headquarters will be located in Bugoloobi. This was issued by the
suggestion of the members due to the available space to accommodate the operations of
the company, good roads and future expansion. The company will also enjoy the
economies of scale due to other companies in the area thus the benefits will be reduced
cost of utilities and access to stable markets.
3.2 Company Objectives
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i) providing high quality
ii) creating a strong relationship with the customers and clients
iii) building long term ties with the suppliers
iv) ensuring deliveries on time
3.3 Company ownership
Yaweh constrictions and surveying company will exist as an equal partnership of Filly
John Paul, Nabaterega Safina, Singh Patel, Jack Daniels. The company will focus further
still to recruit other people like investors as opportunities arise.
3.4 Company Background
The partners have known each other for over five years. Safina and filly began working
in the construction business immediately out of high school as supervisors. Mr. Patel
Singh did his civil engineering degree in India where he worked in several companies
before coming to Uganda on a contract with the zzimwe constructions after which he got
an MBA hence becoming the general manager for zzimwe constructions for over six
years. Over the years, he met friends who realized that Uganda lacked a commercial
construction company that could be competent and provide consistent high quality work
and on time deliveries thus wishing to capitalize this opportunity.
3.5 Management Experience
The company will consist of a vast professionals dedicated towards customer satisfaction.
Filly John Paul holds a degree in business studies with a working experience for over
four years working in hosanna estates as a supervisor in the finance department hence
finances will be effectively handled. Patel Singh 55years holds an MBA, degree in civil
engineering and a diploma in project management. This is evidenced in his CV where he
has worked in a number of departments thus getting the ability to deal with the vast
complex organizational activities with many employees.
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Nabaterega safina 35 holds a degree in human resource management, a diploma in public
relations. She worked as the assistant supervisor as a human resource manager for the
sugar corporation of Uganda and a public relations officer with the akaboozi fm and news
papers for the past 10 years.
SSekijjoba Daniels 40 holds a degree in marketing and supply chain management where
he is a member of the procurement society in Uganda. He worked with khamis industries
as the sales director and a procurement officer in Kyambogo University for the last nine
years.
3.6 venture prospects
The gap in the market that was realized during the research and development study, gives
an assurance for the success of the company. Hence seeking to meet the future needs of
the target groups so as to fulfill the market gap that is not exploited.
3.7 legal status
The company will be incorporated on the 8 June 2016 as a limited liability company. The
shareholders will contribute share capital of $97500 upon the registration by the registrar
of companies.
CHAPTER FOUR
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4.0 PRODUCTION / SERVICE PLAN
4.1 Products / services.
YCSC (U) Ltd provides commercial construction services, with a primary focus on
large urban structure development. This includes the following types of constructions;
office buildings, parking lots, apartments, arcades and government contracts.
YCSC (U) Ltd intends to provide the installation of all the required business such as
electrical, lightening, heating and data information system as well as wreaking services
4.2 Uniqueness of services
The services / products of the company will be appreciated by both the local and
international market as our main aim is to provide high quality services in the commercial
construction industry at a very competitive cost and ensuring on time delivery than the
current competitors in the central region.
4.3 Development of services / products.
Most times the construction process takes a long period of time due to the complex
productions. We seek to shorten the lead time so as to create satisfaction to our
customers. This will be achieved by setting up long term ties with its suppliers so as to
create sourcing efficiency that will minimize supply delays.
With the research carried out, the company hopes to re-engineer its services continually.
This will include the application of other unique features to grab the demand of the
customers.
4.4 Draw backs
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The services and constructions made by the company will have a price slightly higher
than that of the existing firms due to the high quality that they will contained.
4.5 competitive comparisons
YCSC (U) Ltd has quality assurance as regards to the recently research that was
undertaken. All the services offered posses at least an added unique feature different from
its competitors. This helps the company to provide the customers with the value equal to
the price they acquire the services.
The company also intends to enter contracts with the new vision and other companies as
regards to advertise and promote our services. Through this relationship, our products and
services will be published to the general public so as to create awareness of our existence
to the public. This will help to enhance the marketability of our products and services
both within and outside the country.
4.6 future expansions
With the thorough research and development, the customers will be requested to
comment on the services of the company. By filling in the answers to the self designed
questions and during the interviews. The information gathered will act as a basis for
further expansion so as to asses customers needs, wants and desires.
CHAPTER FIVE
5.0 MARKETING PLAN
5.1 Market Analysis Summary
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The total market demand in Uganda Commercial construction industry sector is huge .The total
demand is estimated as 173 billion for fiscal year 2013. For Bugolobi the total demand is shs.24.6
billion .Even with YCSC expects large scale growth due to its contacts and reputation, the
market is so large that by the end of 2013 YCSC will project market share for the other areas in
Kampala hence urban areas as well as in foreign countries.
YCSC (U) Ltd has a focus on meeting the development demand for urban located properties
YCSC will hope to bid on government project as resources permit.
The market Analysis table shows the estimated total number of potential customers in the two
states in which the company will be operating. The majority of the company's revenue lies on
commercial contracts
This market sector provides significant growth and ample project for the future.
Market Analysis
year1 year2 year3 year4 year5
Potential Customers Growth CAGR
Commercial Buildings 12,000 13,080 14,257 15,540 16939 5.00%
Government Contracts 5,500 5,775 6,064 6,367 6,685 2.79%
Total 17,500 18,855 20,321 21,907 23,624 7.79%
5.2 Market Segmentation
The company will mainly focus on two market sub segments of the; commercial construction
industry segment .The first will be the urban project segment and the second will be the local,
state and federal government contracts segments.
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Urban Project
YCSC (U) Ltd focuses on construction and wreckages/re-construction projects with urban
locations. Large office buildings will make up a majority of these projects. YCSC desires to
establish and maintain long-term relationship with clients to develop a referral network and future
repeated business. Recent industrial trends seem to suggest that this segment will retain a relative
high growth rate for the future.
Government Contract Projects
Government contracts projects make up approximately 15% of revenues. High visibility and
competitive bids are critical to capture this segment of the market .One of the reason why this
segment is attractive is its relative stability. Contracts from these sources are not dependent on the
current market conditions and will provide revenue even during an economic down turn.
5.3 Target Market Segment Strategy
YCSC (U) Ltd will focus on its target market, the large urban areas, by maintaining and
increasing its relationship based with commercial real estate clients. By offering a unique and
impeccable level of workmanship along with competitive costs. YCSC will be to procure and
maintain a healthy level of market share.
Market Needs
As for companies located in down town urban areas are continually modernizing and growing ,
the demand for commercial construction services has steadily increased over the past 20 years
and the need for uniquely-savvy commercial construction services is significant hence companies
seek to maintain a professional image.
5.4 Service Business Analysis
The construction industry is a capital-intensive field that requires large investment in long-term
assets such as bulldozers, cranes, cement mixers, etc. In addition, variable material costs such as
I-beams, roofing tiles, paint etc., are also very high .This means that for the commercial
construction segment, which will focus on large scope projects, that entry / exit into the
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industry is quite difficult.
The industry is further fragmented with a vast number of very small companies. Most do not
employ more than 40 individuals. YCSC will be employing a significantly large number beyond
its first year in operation, and will therefore have the ability to bid the large and most profitable
contracts.
Due to such large number of companies and the intense competition, margins are relatively low
for the construction business as a whole. For the commercial segments, the margins are some how
higher due to the high cost of construction.
Because each building is a unique product, the cost are very high relative to other assets and the
clients need such assets at a specific time, the company's reputation in quality on-time delivery,
and cost are the crucial element used in assessing a contractor.
In this area the major competitors in the commercial segments are JOMAYI Construction,
Semma properties and Hosanna estates. Each of these companies focuses on the same type of
clientele as YCSC (u) Ltd. However, YCSC will offer more services, such as paving , road
/highway construction, and environmental construction .With the exception of Hosanna each of
these competitors has such a broad range of customers that a more focused company.
5.5 Competition and Competitive Edge
There more than 1000 commercial contractors nationwide .YCSC will primarily compete on the
basis of its levels of workmanship and relationships among the commercial real estate
community.
Large competitors are providers of services to a broad range of commercial, industrial, utility, and
institution customers, typically through principal operating subsidiaries and joint ventures. The
specialties of our competitors are;
Design installation, integration, start-up, operation and maintenance of distribution
system for electrical power.
Low-voltage systems such as fire alarm, security, communications and process control
system.
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Voice and data communications system.
Heating, ventilation, air conditioning refrigeration and clean-room process ventilation
system.
Plumbing process and high piping system.
Some competitors also provide services needed to support the operation of customers facilities.
These services include;
Site-based operations and maintenance.
Mobile maintenance and services.
Mall modification and retrofit projects.
Consulting, program development and management for energy systems and themaintenance of facilities.
Facility services are being provided to a wide range of commercial industrial utility and
institutional often including those at which construction services have been provided and others at
which construction services have been provided by other contractors. Facilities services are
frequently combined to provide integrated services packages, which include mechanical and
electrical services.
Mechanical and electrical construction services and facilities services are typically offered to
corporations, municipalities and other governmental entities, owners/developers and tenants of
buildings. Companies are also providing these services indirectly acting as subcontractors to
construction managers, general contractors, systems suppliers and others subcontractors. While
facilities services business is also highly fragmented, a number of large corporations, such as
Johnson controls, inc. and the Flour Corporations, are engaged in this field, and there are other
companies seeking to consolidate facilities services businesses.
5.5 Competitive edge
The competitive edge and the Yaweh construction and surveying company (U) ltd is its book of
contacts which make up a healthy referral network, and its competitive cost on projects.
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5.6 Strategy and implementation summary
YCSC (U) ltd will succeed by providing high quality craftsmanship at a competitive cost, within
initially promised timelines. To implement this strategy,
YCSC will seek to create a highly efficient, rapidly responsive project implementation and
tracking department within each office. By forming close long term ties with its suppliers, this
will create sourcing efficiencies that will minimize supply delays. It is planned that each of the
offices will be provided with equipments, maintenance, design, and infrastructure so as to make
them each self sufficient profit centers.
A bonus and profit sharing systems, with the benefits clearly defined for everyone, will be used to
promote the company goals at all levels.
Finally the company will seek to institute an ongoing training program to promote the most
promising people in the company and to retain a standard of excellence in workmanship.
5.7 Sales strategy.
As the table shows, YCSC (U) Ltd plans to deliver contract revenue of approximately $40 million
in the first years, $51 million in the second year and $65 million in the third year of the plan.
Sales forecast
Unit sales year1 year2 year3
Commercial buildings 19 22 25
Governmental contracts 6 7 9
Total unit sales 25 29 34
Unit prices
Commercial Buildings $2,000,000,000 $2,200,000,000 $2,420,000.00
Governmental Contracts $500,000.00 $550,000,000 $605,000.00
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Sales
Commercial Buildings $37,484,763 $47,418,225 $59,984,054
Governmental Contracts $3,050,000 $51,268,225 $5,445,000
Total Sales $40,534,763 $51,268,225 $65,429,054
Direct cost of sales year1 year2 year3
Commercial Buildings $16,868,143 $20,368,283 $24,594,702
Government Contracts $1,525,000 $1,837,500 $2,480,625
Subtotal direct cost of sales $18,393,143 $22,205,783 $27,075,320
5.8 Ongoing market evaluation
The level of profitability will be ascertained by carrying out research so as to obtain feedback
from customers as regards to their needs, and improvements in the services, re-engineering will
be done.
Measurements will be made on the level of demand to our segment markets on a continuous
reason basis being to correct deviations in case of any.
CHAPTER SIX
6.0 MANAGEMENT PLAN
The YCSC (U) Ltd will be managed by a management team which will be under the supervision
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of the Board of Directors who are the companys planning and authoritative staff responsible for
formulating and implementing policies and principles especially those that need special
consultation. The rest of the work shall be done by the managers and their assistants plus other
elected official members, some of which include the company lawyers and secretary.
6.1 Organizational structure
The company lawyer will be responsible for all the legal matters and written agreements like
contracts.
BOARD OF DIRECTORS
PROJECT MANAGER
COMPANY SECRETARY
Human Sales and COMPANY LAWYER Accounting and Finance Relations
Resource Marketing
6.2 Board of Directors
This will be made up of 10 members with 4 share holders and 4 departmental head assistant
managers.
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Share holders Post
Filly John Paul Accounting and Finance manager
Singh Patel Project Director
Ssekijjoba Daniels Sales and marketing manager
Nabaterega Safina Human Resource Manager
Departmental Assistants
Mr. Ssevvume Augustine Accounting and Finance
Madam Makumbi Patrick Project manager
Mrs. Nabukenya Rodah Sales and marketing
Madam Namugga Josephine Human Resource Manager
Company lawyer -Madam Nulugge Diphine
-Mr. Ssumbwe jonny
Company secretary; Madam kyembi Rose
Madam Namusooli Justine
6.3 Management Team
The project director, Mr. SINGH PATEL is an experienced person with good past records. He
acquired a Masters in Business Administration, a degree in Civil engineering, and a diploma in
project management. He has worked with various construction companies as a project manager
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and as a financial analyst. Thus has the ability to deal with the vast complex operations of the
company and with many employees.
Makumbi patrick the assistant holds a degree in Electrical engineering. She worked as an
equipment operator with the Real estates for the past nine (9) years and has clean records in the
previous place of work.
The Accounting and Finance manager, Filly John Paul holds a degree in Business Studies, a
certificate in ACCA. He has worked with Hosanna real estates as the financial manager for the
last fifteen (15) years.
Mr. Ssevvume Augustine, the assistant accounting and finance manager, holds a degree in
Accounting and Finance. He acquired his experience in this field when he was working with the
National water and sewerage cooperation for the past ten (10) years.
The Sales and Marketing manager, Ssekijjoba Daniels, holds a bachelor in marketing and supply
chain management, he is also a member of the procurement society of Uganda. He worked with
Khamis industries (U) Ltd as the Sales Manager and as a procurement officer with kyambogo
university for the past (9)years.
Mrs. Nabukenya Rodah, the assistant manager for Sales and marketing, also holds a degree in
marketing and Supply Chain Management. she worked as a Sales person for Haven Products for
the past eight (6) years.
The Human Resource Manager, Nabaterega Safina has a degree in Human Resource
management; Sunderland University. she has worked with the Kaboozi fm as the public relations
officer and as the assistant Human Resource Manager with the sugar corporation of Uganda Ltd
for the last fifteen (10) years. He is a dedicated person and highly determined to manage the
public relations, as regards to the past work experience. This will help boost the companysimage.
Madam Namugga Josephine, the assistant Human Resource Manager, holds a degree in
Management science. She worked with the Monitor Publications for ten (4) years.
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The company lawyers, Madam Nalugge Diphine and Mr. Ssumbwe Jonny both hold a degree in
Laws, Diploma in Law practice at the Law Development center. They are associates Advocates of
Lagoon company Advocates.
Madam Kyembi Rose, the company secretary, holds a degree in secretarial services Kyambogo
University. She has been working with UNGA MILLERS (U) Ltd as the general secretary for the
past five (8) years.
6.4 Labor Management Techniques
The management of Yaweh construction and surveying company will be well equipped with all
the labor programs to increase on the skills of the employees to enable them undertake the tasks
assigned to them effectively. The company will impart thorough training on the newly recruited
employees for a period of five months and provide thorough education for the employers. This
will help in enhancing and building on the skills and competence of the staff.
Management will give promotions, carryout job rotations and transfers, performance appraisal
and those that do not abide by the set rules and regulations in order to enhance performance and
boost the morale of the employees. With this, the company will be able to achieve its objectives
through the utilization of Human resource.
6.5 Duties and Responsibilities of the department managers
Human Resource Manager
a) Recruit and train new employees.
b) Conduct programs for performance appraisal.
c) Attach duties and responsibilities to all positions.
d) Draft a Human Resource Work Pan.
e) Retain, transfer and promote staff at all levels.
Sales and Marketing Manager
a) Draft a sales and marketing plan.
b) Conduct a market survey.
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c) Set prices to the services and products of the company.
d) Ascertain and provide the revenue to the Accounting and finance manager.
e) Supervise and monitor all the sales persons.
Accounting and finance manager
i. Transact and record all the activities with the help of accounting clerks.
ii. Draft a financial plan.
iii. Prepare and submit in the financial reports to the Board of Directors of the company.
Public relations manager
i. Provide the answers to the questions asked by the public about the companys products.
ii. Create a good relationship between the company and the public.
iii. Give out company brochures to the public.
6.6 Management compensation
The salary of the key management team is as follows;
Position salary to be paid
Project manager $296,650
Financial manager $296,650
Sales manager $296,650
Human Resource Manager $296,650
Company lawyer $246,650
Company secretary $196,650
Each share holder will contribute an amount equal to $97500 for the companys planned stock
ownership.
Comparison
In comparison with the gains that the key management team members were receiving in their
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previous jobs, the Yaweh Construction and Surveying Company (U) Ltd will be offered higher
salaries to its employees plus other allowances like: food, transport, and accommodation.
6.7 Other investors
As more opportunities arise, there are greater hopes of obtaining potential share holders to join
the company.
With the experience and ability of the management team, the Company is not in danger since they
are all hard working, self motivated and ready to work tirelessly in order to obtain in a good
reputation of the company. This can stimulate the investors to invest in the company.
The accounting and finance manager intends to undertake the decisions of allocation, financing,
Liquidity and Divided policy; and also to manage effectively the finances of the company. This
will create a positive relationship with the lending institution.
6.8 Critical risks, problems and assumptions
The Yaweh Construction and Surveying Company (U) Ltd is likely to encounter some critical
risks and problems but the management team is ready to find solutions for each of them.
These risks can be categorized into;
Financial risks
Shortage in cash before securing the orders.
Difficulties in acquiring the needed bank credits.
Running out of cash after orders pour in.
Marketing risks
Unfavorable market trends.
Sales projections not achieved.
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Potential price cutting by competitors.
Construction risks
Construction costs in excess of the estimates.
Long lead times in the procurement of the necessary construction raw materials.
6.9 Solutions to the risks and problems
Increasing funds through obtaining grants and borrowing from friends and relatives.
Conducting thorough research to know the market share of the products and services
provided by the company.
Maintain a high level of liquidity through limiting on the credit sales.
CHAPTER SEVEN
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7.0 OPERATING PLAN
7.1 Operating Cycle
Since the construction lay outs and processes are well established then the operating cycle is
expected to move on little or no difficulties. The construction of strip malls will take one and half
years for commercial parking lots and garages will take nine months. While the lead time for the
services provided like; installations of business operating systems e.g. lighting, electrical, heating,
refrigeration and data information system will take a maximum of six months.
The seasonal construction loads will be handled without leading to severe dislocation by building
part-time help in the peak periods, and building long term ties with our suppliers of the
construction materials.
7.2 Geographical Location
Yaweh Construction and surveying Company (U) Ltd will be located in Bugolobi a suburb in
kampala district. This location was selected due to the well established transport and
communication network that eases the movement of construction materials from the market to the
place at which the materials are required. There is accessibility to the market for the services and
constructions made. Due to the existence of other firms in the industry, the company is more
likely to enjoy the economies of scale.
7.3 Facilities and Improvements
The company intends to obtain the necessary facilities in the first year of operation. These
facilities include: purchasing non-current assets like buildings, machinery, motor vehicles etc. the
firm will be expanded in the future say, in a period of three (3) years as by the predicted sales
production.
7.4 Strategy and plans
The construction process involves; mixing, grinding, softening, baking and building. This can be
difficult in the absence of a well designed construction lay out. YCSC (U) Ltd intends to close
long term ties with potential suppliers so as to avail sourcing efficiencies in order to minimize
delays in the supply of the construction materials.
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The labor skills are availed by outsourcing the qualified personnel from outside the company and
by sponsoring the employees for further studies to build on the skills that they possess.
The following are the overheads that the company will incur; electricity cost of indirect materials,
construction wages, and other expenses. Some of the materials to be used in the construction are:
water, cement, concrete, stones, nails, iron sheets, bricks, paints, windows, ventilators, I- beams,
roofing tiles, etc.
7.5 Quality assurance
Quality assurance techniques will be installed in inventory and construction output. The
construction control technique is to be carried out at each process during the construction with the
view to eliminate material losses at any stage. The inventory control technique will be instituted
by the procurement and stores personnel to ensure that the construction materials received are as
per order made. This helps to take course on the receipt of the customers order.
7.6 Regulatory and legal issues
The company enjoys favorable licenses and zoning permits. Environmental approval have also
been received to start operation.
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CHAPTER EIGHT
8.0 FINANCIAL PLAN
The following documents will be the basis of financial planning and decision making for the
company; the balance sheet, cash flow statement, income statement, business ratios and other
necessary documents. These will help to predict, compare and evaluate the earning potential of
the company.
8.1 Investments and financing
YCSC (U) Ltd expects to raise $390,000 as its own capital, and to borrow $4.2 million
guaranteed by the Cairo bank as a ten-year loan. This provides the bulk of the current financing
required for company growth.
8.2 Break-even Analysis
YCSCs break-even analysis is based on the average of the first-year figures for total sales by
project, and by operating expenses. These are presented as per- project revenue, per-project cost,
and fixed costs. These conservative assumptions make for a more accurate estimate of real risk.
Break even analysis
Monthly Units break even 1
Monthly revenue break even $1,966,721
Assumptions:
Average per unit revenue $1,621,390.50
Average per unit variable cost $735,725,73
Estimated monthly fixed costs $1,074,298
8.3 Sales forecast for three years
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YEAR 1 YEAR 2 YEAR 3
Total unit sales 25 29 34
Total unit prices $2,500,000 $2,750,000 $3,025,000
Total sales $40,534,763 $51,268,225 $65,429,054
Total direct unit cost $1,150,000 $1,207,500 $1,267,875
Total direct cost of sales $18,393,143 $22,205,783 $27,075,327
8.4 YCSCS PROFORMA BALANCE SHEET FOR THREE YEARS
YEAR 1 YEAR 2 YEAR 3
Assets
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Non Current Assets
Long-term Assets $4,600,000 $8,200,000 $13,500,000
Accumulated Depreciation $300,000 $1,400,000 $3,000,000
Total long-term Assets $4,300,000 $6,800,000 $10,500,000
Current Assets
Cash $6,817,122 $18,293,084 $33,561,391
Other current Assets $100,000 $10,000 $10,000
Total Current Assets $6,917,122 $18,393,084 $33,661,391
Total Assets $11,217,122 $25,193,084 $44,161,391
Liabilities and capital
Current Liabilities
Accounts payable $1,167,159 $2,766,028 $3,364,481
Subtotal Current Liabilities $1,167,159 $2,766,028 $3,364,481
Non-current $4,233,200 $2,766,028 $3,233,200
Total Liabilities $5,400,359 $6,599,228 $6,597,681
Paid-in Capital $390,000 $390,000 $390,000
Retained earnings ($1,193,284) $5,426,763 $18,203,855
Earnings $6,620,047 $12,777,092 $18,969,854
Total capital $5,816,763 $18,593,855 $37,563,710
Total liabilities and capital $11,217,122 $25,193,084 $44,161,391
Net worth $5,816,763 $18,593,855 $37,563,710
8.4 PROJECTED PROFIT AND LOSS
As the Highlights table shows below, YCSCs sales are expected to increase by $10,000,000 each
year. The following profit and loss table demonstrates YCSCs expectation of continuing steady
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growth over the next three years of operation.
8.6 YCSC (U) LTD PROFORMA CASH FLOW FOR THREE YEARS
Year1 year2 year3
Subtotal cash from operations $40,534,763 $51,268,225 $65,429,054
Subtotal cash received $40,534,763 $51,268,225 $65,429,054
Expenditures from operations $32,448, 557 $1,546,664 $44,260,747
Additional cash spent $2,100,000 $4,000,000 $5,900,000
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YEAR 1 YEAR 2 YEAR 3
Sales $2,500,000 $12,500,000 $22,500,000
Cost of sales $1,150,000 $7,050,000 $5,900,000
Gross margin $1,350,000 $5,450,000 $16,600,000Expenses
Pay roll $296,650 $321,650 $346,650
Sales and marketing $919;950 919,950 $69,950
Depreciation 425,000 450,000 $25,000
Utilities $700 $900 $1100
Pay roll taxes $44,498 $69,498 $94,498
Total expenses $1,286,798 $1,361,998 $537,198
Profit before interest and
tax
$63,203 $666,203 $1,163,203
PBITDA $88,203 $688,203 $1,163,203
Interest expenses $35,277 $35,277 $35,277
Taxes incurred $6,981 $2,81981 $281,981
NET PROFIT $1,286,798 $1,546,664 $2,668,664
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Subtotal cash spent $35,217,641 $39,792,263 $50,160,747
Net cash flow $5,317,122 $11,475,962 $15,268,307
Cash Balance $6,817,122 $18,293,084 $33,561,391
8.7 BUSINESS RATIOS
The following table presents important ratios from the construction industry, as determined by the
standard industry classification (SIC) index #1542, Non residential construction.
YCSC (U) LTD RATIO ANALYSIS FOR THREE YEARS
Year1 year2 year3 industry
profile
Sales Growth 0.00% 26.48% 27.62% 2.30%
Present of total assets
Other current assets 0.89% 0.40% 0.23% 37.80%
Total current assets 61.67% 73.01% 76.22% 86.20%
Long-term Assets 38.33% 26.99% 23.78% 86.20%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current liabilities 10.41% 10.98% 7.62% 47.40%
Non current liabilities 37.73% 15.22% 7.32% 12.90%
Total liabilities 48.14% 26.19% 14.94% 60.30%
Net worth 51.86% 73.81% 85.06% 39.70%
Percent of sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross margin 54.62% 56.69% 58.62% 16.30%
Selling, General& 38.29% 31.76% 29.63% 8.80%
Administrative expenses
Advertising expenses 0.15% 0.20% 0.20% 0.30%
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Profit before interest 22.82% 34.02% 39.20% 1.50%
And Taxes
Main ratios
Current 5.93 6.65 10.00 1.83
Quick 5.93 6.65 10.00 0.92
Total Debt to Total 48.14% 26.19% 14.94% 60.30%
Assets
Pre-tax Return on 151.75% 91.62% 67.33% 3.20%
Net worth
Pre-tax return on 78.69% 67.62% 57.27% 8.10%
Assets
Additional Ratios
Net profit margin 16.33% 24.92% 28.99% n.a
Return on Equity 113.81% 68.72% 50.50% n.a
Activity Ratios
Accounts payable 25.75 12.17 12.17 n.a
Turnover
Payment Days 27 21 27 n.a
Total Assets 3.61 2.04 1.48 n.a
Turnover
Debt Ratios
Debt to Net worth 0.93 0.35 0.18 n.a
Current liab to liab 0.22 0.42 0.51 n.a
Liquidity Ratios
Net working $5,749,963 $15,627,055 $30,296,910 n.a
Capital
Interest coverage 21.83 43.24 72.59 n.aAdditional Ratios
Asset to sales 0.28 0.49 0.67 n.a
Current Debt/ 10% 11% 8% n.a
Total Assets
Acid Test 5.93 6.65 10.00 n.a
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APPENDIX 1
C.V OF THE PROJECT DIRRECTOR
CURRICULUM VIATE
BIO DATA
Name: Mr. PATEL SINGH
Date of birth; 24th July, 1957
Marital status: married
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Telephone: 0774494263
Email address: [email protected]
Language spoken: English, Luganda
ACADEMIC QUALIFICATIONS
YEAR INSTITUTION AWARD
1990-1991 University of India Master in Business Administration
1987-1989 University of India Degree in Civil Engineering
1986-1987 Cavendish University Diploma in project management
1984-1985 Mackay college school Uganda Advanced Certificate of Education
1980-1983 Bulo Citizen school Uganda Certificate of Education1973-1979 Hill preparatory p/s Primary Leaving Examination
WORK EXPERIENCE
I worked with several firms such as Trupati state highway system as the general manager for four
years, JOMAYI property consultants as a financial analyst for three years and as an equipment
operator with UMEME for seven years.
KEY SKILLS
Analytical skills
Communication skills
Computer skills
HOBBIES
Reading news papers
Listening to current news
Discovering new ideas
REFEREES;
a) Mr.Musana Desire
Managing Director-Trupati state highway system.
07728889999
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b) Mr. Nsubuga Martin.
Managing Director-orange Free State
0772-345678
c) Madam Mukoli Grace
Managing Director JOMAYI
0712-567890
I declare that the above is the real truth about me.
Signature..
PATEL SINGH
Project director
APPENDIX 2
APPLICATION FOR A LOAN
YAWEH CONSTRUCTION AND SURVEYING COMPANY (U) LTD
P.O BOX 21812
Kampala (U)
Tel:
Fax:
E-mail:
Our ref:
Your ref: Date:
To:The Manager
Small Business Association
Kampala (U)
Through:
Loan Manager
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Small Business Association
Kampala (U)
Dear sir/Madam,
RE: APPLICATION FOR A LOAN
As the project director of Yaweh Construction and survey Company (U) Ltd, I hereby request for
a loan worth $4.2 million. This will be part of the capital sought to be invested to facilitate the
funds reserve available for our operations.
It is a pleasure to inform you that your funds will be put to productive investments so as to gain
our core objectives. I promise to abide by the written terms of the contract.
I will be very grateful if my application meets your positive consideration.
Yours faithful,
PATEL SINGH
Project Director
APPENDIX 3
21812
The republic of Uganda
Certificate of incorporation
I certify that YAWEH CONSTRUCTION AND SURVEY COMPANY.
has this day incorporated with limited liability.
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Dated at Kampala, this 8thday ofJune the year2016
..
Registrar of companies.
KYAMBOGO UNIVERSITY
SUBMITTED IN BY; FILLY JOHN PAUL
REGISTRATION NO; 10/ U/13904/SBD/PD
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SIGNATURE;
TOPIC; BUSINESS PLAN
DATE; 10th October, 2012.
LECTURER; MRS. BAKIA WAMALA