BUSINESS PLAN

FOR
STONE AND STONE PRODUCT
PRODUCTION CORPORATES

MAY, 2018

…………………………………………….......

Kebado Town, Ethiopia

i
Course: Entrepreneurship for Engineering

Academic Year: 2018 G.C.

Semester: 2

Title: Business Plan on the case of Stone & stone products production corporate

Group Members

S.NO NAME ID NO
1. TESFAYE PAULOS FOT(R) 0649/06

2. ADISU SANBATA FOT(R) 0157/06

3. PHILIPOS JUGULA FOT(R) 0562/06

4. TEGENE ABERA FOT(R) 0637/06

5. SHIFERAW EJIGU FOT(R) 0605/06

6. BELAY MOGESIE FOT(R)0218/06

7. WONDIMU ABESHA FOT(R) 0678/06

Submitted to:
Instructor: Mr.SHUMIYE.
Department of Mechanical Engineering
Woldia University

i
 EXECUTIVE SUMMARY
Stone and stone product production is determined to become a daily necessity for local
construction industry; it tries to fulfill the need of stone products for those highly developing
construction industries. With the growing demand for high-quality stone products and great
service, the corporate will capitalize on its proximity to the Kebado to build a core group of
repeat customers. Corporate will offer its customers the best prepared stone products in the area
that will be complimented with pastries. And the quarry site will gate from woreda
administration which should be safe for transportation and accessible.

The owners have secured this location through a three-year lease with an option for extending.
They need the help of government to fulfill the required start up funds.

ii
 1. GENERAL COMPANY DESCRIPTION
1.1. MISSION STATEMENT

The corporate will make its best effort to create qualified products which satisfies the customers
need as well as develop the standard of the construction quality of the area. We will be in the
business of helping our customers to relieve their daily need by providing piece of mind through
great ambience, convenient location, friendly customer service, and products of consistently high
quality. The corporate will invest its profits to increase the employee satisfaction while providing
stable return to its shareholders.

1.2. VISION STATEMENT

The Vision of corporate will be:

 Employee training to insure the qualified stone products.

 Marketing strategies aimed to build a solid base of loyal customers, as well as
maximizing the sales of high margin products, such as Aggregates and sand.

1.3. COMPANY SUMMARY

Corporate, a limited liability company sells Stone, other stone products in its proposed site. The
corporate major investors are the members of partnership that cumulatively own 100% of the
company. The start-up loss of the company is assumed in the amount of 27,000.

iii
1.4. COMPANY OWNERSHIP
The corporate is registered as a Limited Liability partnership Corporation in the Kebado town.

1.5. OBJECTIVES
Corporate’s objectives for the first year of operations are:

 Become selected as the "Best new stone product producer in the area" by the local guide.
 Turn in profits from the first month of operations.
 Maintain a 65% gross margin.

iv
 2. PRODUCTS AND SERVICES

2.1. INTRODUCTION

The corporate will offer its customers the best quality stone products in the area. This will be
achieved by using high-quality materials and strictly following preparation guidelines. The store
place, transportation means and marketing activities will be focused on maximizing the sales of
qualified aggregates. Along with the qualified aggregates, prepared stones and sand will be sold
in the area.

2.2. COMPETITIVE COMPARISON

There may be a number of indirect competitors who offer a product similar to ours. Our research
indicates that with the additional capacity we would become one of the top three/3, in terms of
quantity and quality, providers. We have the advantage of established distribution channels and
reputation. In addition, improvements to our marketing efforts will further separate us from the
larger market and from our close competitors.

2.3. SALES LITERATURE

The woreda administration will advertise the product and prepare the market opportunity by
contacting us with local construction companies, in addition to that we prepare five hundred
flyers and distributed in the adjacent neighborhood at selected area within two weeks.

v
 3. MARKETING PLAN

3.1. GENERAL

Ethiopian construction industry has shown steady growth, spatially around woreda towns
different structures like road, building and companies were constructing early know, those active
projects needs high amount of stone and its product. The product of stone need is most demand
gate service.

3.2. MARKET SEGMENTATION

The corporate will focus its marketing activities on reaching the, surrounding areas of Kebado
town. Our market research shows that these are the customer groups that are most likely to buy
stone and its products.

Since stone product consumption is universal across different income categories and mostly
depends on the level of urbanization, proximity to the Kebado town surrounding will provide
access to the targeted customer audience.

3.3. TARGET MARKET SEGMENT STRATEGY

The corporate will cater to society who wants to get their town development of best qualified and
strengthen structures. Such customers vary in need, although our location close to the town
means that most of our clientele will be people of the town or those comes from the rural area to
the town. Our market research shows that these are discerning customers that gravitate towards
better quality product. Furthermore, a lot of peoples ….

3.4. COMPETITION AND BUYING PATTERNS

3.4.1. COMPETITION

According to our imagination at the surrounding of Kebado town there is not well organized
stone and stone product producers. But there are different individuals who produce the same
vi
products around the woreda. These include Robote aggregate manufacturer and setamo union of
stone importers. Robote aggregate manufacturer will definitely be one of the major competitors
because of its strong financial position and established marketing and operational practices.

However, despite of Robote manufacturer entrenched market position many customers favor
adequate cost and qualified products.

The corporate will position itself as a unique stone product producer that not only offers the best
qualified products and services but also provides transportation facility and authoritative to
deliver the product on the time. This will help us; grow our market share in this competitive
market.

3.4.2. BUYING PATTERNS

The major reason for the customers to return to a specific company is a great workability of its
product, quick service and authoritative. Although as stated before, stone product consumption is
uniform across different income segments. The corporate will price its product offerings
competitively. We strongly believe that selling stone products is a great service in a nice setting
will help us build strong relations among users.

3.5. DISTRIBUTION PATTERNS/MARKET NEEDS

General trend toward quality among Ethiopian consumers definitely plays an important role in
the recent growth in construction industry. Additionally, such factors as desire for small
buildings, for some small projects, provide a good selling opportunity for stone products.

3.6. PRICING STRATEGY

The corporate will position itself as unique stone product producer where its patrons can not only
satisfy its qualified products but also take awareness as how can make business by using local
resources. Comfortable roads and ease accessibility and product quality will help the customers
to relay on it, this will differentiate the corporate from incumbent competitors.

vii
3.7. SALES STRATEGY AND SALES FORECAST

3.7.1. SALES STRATEGY

The corporate baristas will handle the sales transactions. To speed up the customer service, at
least two employees will be servicing clients--while one employee will be preparing the
customer's order, the other one will be taking care of the sales transaction. All sales data logged
on the file based data system will be later analyzed for marketing purposes.

In order to build up its client base, the corporate will use banners and fliers, utilize customer
referrals and cross-promotions with other businesses in the community. At the same time,
customer retention programs will be used to make sure the customers are coming back and
spending more at the production site.

3.7.2. SALES FORECAST

Stone product costs are assumed at 25% for any building structure and 50% for steel cases and
other materials. Proximity to the town will dictate certain sales seasonality with revenues slightly
decreasing during the summer rainy periods.

viii
Table 1Sales Forecasting

Sales Forecast
Year 1 Year 2 Year 3
Sales
Squared stone 350,400 385,440 423,984
Aggregate in different size 87,600 96,360 105,996
Sand, coble stone, etc. 146,000 160,600 176,660
Total Sales 584,000 642,400 706,640
Direct Cost of Sales
Squared stone 87,600 96,360 105,996
Aggregate in different size 43,800 48,180 52,998
Sand, coble stone, etc. 73,000 80,300 88,330
Subtotal Direct Cost of
204,400 224,840 247,324
Sales

ix
 4. OPERATIONAL PLAN
4.1. LOCATIONS AND FACILITIES