BUILDMAT SOLUTIONS LIMITED

TOM MBOYA STREET, ON THE THIRD FLOOR OF TOM MBOYA BUILDING

P.O. BOX 123-456, NAIROBI, KENYA.

BUSINESS PLAN OF CONSTRUCTION MATERIAL DISTRIBUTION FIRM.

PRESENTER: GROUP THREE MEMBERS

PATRICIA NDETO MUTUA EABI/00996/2019
RONNIE OTIENO OLUOCH EABI/01007/2019
DENNIS MWANGI GITAHI EABI/00989/2019
SHADRACK CHITONDO MWATEMO EABI/00983/2019
PETER WAMBUNGU NGUYO EABI/00991/2019

PRESENTED TO:Dr WAMBUI KING’ONG’O

 A Business plan submitted to the school of construction and property studies in partial
fullfillment of the requirements of the award of the Degree in Bachelor of Technology in
Building Construction of the Technical University of Kenya.

MAY, 2023
 DECLARATION
This Business plan is our original work prepared with no other than the indicated sources and
support and has not been presented anywhere, in any university or institution of higher learning
for the award of any certificate, diploma or degree.
Signature……………………………..………… Date…………………………………
GROUP 3 MEMBERS

APPROVAL
The undersigned certify that they have read and hereby recommend for approval of the Technical
University of Kenya ,a business plan entitled “business plan of construction material distribution”.

Signature ………………………………. Date……………………………………

Dr. Omukaga O. Panyako
Department building construction and technology,
The Technical University of Kenya
 DEDICATION
The work is dedicated to our families and our teachers for their continued love, support and
encouragement in carrying out our research and also giving us the reason and motivation to pursue
this education.
 ACKNOWLEDGEMENT

First of all, we thank God for provision, health, strength and sustenance for the years we have
studied in TUK that have led to establishing this business plan.

Secondly, to the families and friends for the care and understanding we received on a daily basis.
Daily affirmations, financial, emotional and mental support that they have given us in difficult
times. I appreciate you wholeheartedly.

Finally, to the department of Building of Science and Technology, who have impacted us with
knowledge and skills for the years we have been attending The Technical University of Kenya.
Through supervision by Dr. Omukaga, and Mdm Wambui King’o ng’o, . From the skills gained
in this process, we have moved a step closer to being an impacting member of the construction
industry in Kenya and for that I am grateful.
 TABLE OF CONTENTS

Contents
DECLARATION ............................................................................................................................ 4
DEDICATION ................................................................................................................................ 5
ACKNOWLEDGEMENT .............................................................................................................. 6
TABLE OF CONTENTS ................................................................................................................ 7
EXECUTIVE SUMMARY ............................................................................................................ 9
CHAPTER 1. .................................................................................................................................. 1
1.0 INTRODUCTION .................................................................................................................... 1
1.1 BUSINESS SPONSORS ....................................................................................................... 1
1.2 BUSINESS NAME ............................................................................................................... 1
1.3 BUSINESS LOCATION AND ADDRESS.......................................................................... 1
1.4 FORM OF BUSINESS LEGAL OWNERSHIP ................................................................... 2
1.5 TYPE OF BUSINESS ........................................................................................................... 2
1.6 PRODUCT/SERVICES ........................................................................................................ 2
1.7 JUSTIFICATION OF BUSINESS OPPORTUNITY ........................................................... 2
1.8 INDUSTRY........................................................................................................................... 3
1.9 BUSINESS GOALS .............................................................................................................. 3
1.10 ENTRY AND GROWTH STRATEGY ............................................................................. 3
CHAPTER TWO ............................................................................................................................ 5
2.0 MARKETING PLAN ............................................................................................................... 5
2.1 CUSTOMERS ....................................................................................................................... 5
2.2 MARKET SHARE ................................................................................................................ 6
2.3 COMPETITORS ................................................................................................................... 6
2.4 METHOD OF PROMOTION ............................................................................................. 11
2.5 PRICING STRATEGY ....................................................................................................... 11
2.6 SALES TACTICS ............................................................................................................... 12
2.7 DISTRIBUTION STRATEGY ........................................................................................... 13
CHAPTER THREE ...................................................................................................................... 15
3.0 ORGANIZATION AND MANAGEMENT PLAN ............................................................... 15
3.1 BUSINESS MANAGER ..................................................................................................... 15
3.2 OTHER PERSONNEL ....................................................................................................... 15
3.3 RECRUITMENT,TRAINING AND PROMOTION RECRUITMENT ............................ 16
3.4 REMUNERATION AND INCENTIVE ............................................................................. 16
3.5 LICENSES, LAWS AND PERMITS ................................................................................. 18
CHAPTER FOUR ......................................................................................................................... 20
4.0 PRODUCTION/OPERATIONAL PLAN .............................................................................. 20
4.1 PRODUCTION/OPERATIONAL FACILITIES & CAPACITY ...................................... 20
4.2 PRODUCTION/OPERATIONAL STRATEGY ................................................................ 22
4.3 PRODUCTION/OPERATIONAL PROCESS .................................................................... 24
4.4 REGULATIONS AFFECTING OPERATION .................................................................. 26
CHAPTER FIVE .......................................................................................................................... 28
5.0 CHAPTER FIVE: FINANCIAL PLAN ................................................................................ 28
5.1. PRE-OPERATIONAL COSTS .......................................................................................... 28
5.2 WORKING CAPITAL....................................................................................................... 28
5.3 PROJECTED CASH FLOW STATEMENT ..................................................................... 29
5.4. PRO-FORMA INCOME STATEMENT (Profit & Loss Account) ................................... 30
5.5. PRO-FORMA BALANCE SHEET ................................................................................... 31
5.7. PROFITABILITY RATIOS ............................................................................................... 33
5.8. DESIRED FINANCING .................................................................................................... 34
5.9. PROPOSED CAPITALIZATION ..................................................................................... 34
6.0 POTENTIAL RISKS AND MEASURES TO MITIGATE ................................................ 34
APPENDICES .............................................................................................................................. 36
 CONSTRUCTION MATERIAL DISTRIBUTION FIRM BUSINESS PLAN

EXECUTIVE SUMMARY
It is documented that there is a rapid increase in the distribution of construction materials. Our
business will focus on the sales of high quality and assorted building materials from local and
international manufacturers for domestic and industrial uses.The use and opening of a
Construction material distribution firm have, from research, shown a socioeconomic and welfare
improvement of the target group in various dimensions.Rising consumer confidence and house
hold income have helped ignite remodeling activity forestalled during the recession and
providing other building materials used in improving projects.Even so, rising competition from
large home improvement firms has stiffled revenue growth for construction material
firms.However the adoption of the idea on establishing construction material distribution firm
that distributes construction materials within the Industrial area of Kenya would offer a big
challenge for firms already established within the reach of the area though the firms could easily
cooperate without fear of closure. The firm will adopt online services option to the customers
and the outlet well secured with various payment options. The purpose of this proposal is to
analyze the creation construction material distribution firm within the industrial area and its
effects on the economic lifestyle of people within the premises. The construction distribution
firm will retail a wide range of building materials such lumber and other structural building
materials, hardware tool, plumbing and electrical supplies, doors and windows .We are set to
services a wide range of client in and out of the industrial area. The target market will include
individuals in one construction, building.
 CHAPTER 1.
BUSINESS DESCRIPTION

1.0 INTRODUCTION

1.1 BUSINESS SPONSORS

The proposed Construction Material Business plan is a partnership venture among five
individuals; Ronny, Patricia, Dennis, Brian, Peter and Shadrack. All the partners possess degrees
in Building Construction from reputable universities in Kenya. Each partner brings a unique set
of skills and experience relevant to the operation of the business, including project management,
construction supervision, and business administration. The team has a combined experience of
over 30 years in the construction industry, which will be instrumental in driving the success of
the business.

1.2 BUSINESS NAME

The proposed business name is "Buildmat Solutions." The name reflects our mission of
providing quality and reliable construction materials to the Kenyan construction industry. We
chose this name because it is relevant, easy to remember and appealing to our target customers. It
is a new firm which will be providing full services geared towards full customer satisfaction.
This will be ensured through excellent products, services and quality staff purely motivated
towards producing excellent results. The environment will be furnished to provide the customers
with fairness in terms of prices, hospitality considering and respects diversity, ideas and hard
work. The start-up capital will be used for the design, leasehold improvements, and equipment
used in the firm .The name is suitable because it is unique and attracts customers.

1.3 BUSINESS LOCATION AND ADDRESS

Buildmat Solutions will be located in Nairobi's central business district, specifically along Tom
Mboya Street, on the third floor of Tom Mboya Building. The central location provides easy
access to our customers and suppliers. The building is strategically located near major
transportation routes, such as the Nairobi Central Bus Station and the Nairobi Railway Station.
Our postal address will be P.O. Box 123-456, Nairobi, Kenya. Our telephone number will be

1
0720-123-456 .This location is chosen because it is easily accessible, has high visibility, and is a
busy commercial area.

1.4 FORM OF BUSINESS LEGAL OWNERSHIP

Buildmat Solutions will be a private limited company. All the partners will have an equal share
in the business, and each partner will play an active role in the day-to-day operations of the
company. A partnership agreement will be developed to guide the operations of the business and
to ensure that all partners have a clear understanding of their roles and responsibilities.

1.5 TYPE OF BUSINESS

Buildmat Solutions is a startup business that aims to grow into a leading supplier of quality
construction materials in Kenya. We plan to start small and gradually expand our operations as
we establish ourselves in the market.

1.6 PRODUCT/SERVICES

Buildmat Solutions will specialize in the supply of quality construction materials such as cement,
steel, sand, bricks, and roofing materials. Our products will be sourced from reputable
manufacturers and suppliers to ensure quality and reliability. We will offer a wide range of
products, including various types, sizes, and colors to cater to the diverse needs of our customers.
Our competitive edge will be in the quality of our products, competitive pricing, and reliable
delivery services.

1.7 JUSTIFICATION OF BUSINESS OPPORTUNITY

There are several reasons why we chose the construction material business. First, the
construction industry in Kenya is growing rapidly, driven by the country's rapid urbanization and
infrastructure development. Secondly, there is a growing demand for quality construction
materials in the market, with most suppliers unable to meet this demand. Thirdly, the
construction industry is highly lucrative, with good profit margins. Fourthly, we possess the
necessary skills, experience, and passion to run a successful construction material business.
Finally, we believe that our business model, which emphasizes quality and reliability, will enable
us to establish ourselves as a leading supplier of construction materials in the market.

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1.8 INDUSTRY

Buildmat Solutions operates in the construction industry, which is one of the key drivers of the
Kenyan economy. The industry has experienced steady growth in recent years, driven by the
government's focus on infrastructure development and private sector investments in real estate.
The industry's size is estimated to be worth over Ksh. 200 billion, with an annual growth rate of
6.2%. The industry has embraced modern technology, with most construction companies
adopting new construction techniques, such as prefabrication and modular construction, to
reduce construction costs.The success of this company will be achieved through proper
marketting strategies which will involve production of quality products which will attract
individuals to buy them.

1.9 BUSINESS GOALS

The short-term goal of our Construction Material Business is to establish a strong presence in the
local market and achieve a monthly revenue of KES 2 million within the first year of operation.
The medium-term goal is to expand our customer base and increase our revenue to KES 5
million by the end of the second year. The long-term goal is to become the leading supplier of
construction materials in the region, with a projected revenue of KES 10 million by the end of
the fifth year.

1.10 ENTRY AND GROWTH STRATEGY

To gain entry into the market, we plan to offer competitive pricing, high-quality products, and
excellent customer service. We will also establish partnerships with construction companies,
architects, and engineers in the area to expand our network and increase our customer base. We
will invest in marketing and advertising campaigns through various media platforms such as
social media, local newspapers, and radio stations to increase our brand awareness and attract
more customers.

In terms of growth strategy, we plan to open additional branches in neighboring regions within
the second year of operation to expand our reach and increase our customer base. We also intend
to introduce new products to our portfolio to meet the evolving needs of the construction

3
industry. We will invest in research and development to ensure we stay up-to-date with the latest
industry trends and technological advancements. Our long-term plan is to become a leading
supplier of construction materials in the country by expanding our operations to other regions
and even internationally.

By adhering to these regulations, we aim to maintain the integrity of our operations, protect the
health and safety of our employees and customers, and contribute positively to the overall
development of the construction industry in Kenya.

4
 CHAPTER TWO

2.0 MARKETING PLAN

2.1 CUSTOMERS

Our potential customers are primarily individuals, businesses and other firms involved in the
construction industry, including building contractors, developers, architects, and engineers.

Individuals

These are individual personal customers who will be purchasing small quantities of our materials
for their building projects such as bungalow or businesses such as hardware stores. These
customers can be located in urban centers such as Nairobi and other major towns and cities in
Kenya. The quantity of materials and type m these customers will purchase will depend on their
income and choice. These customers have different levels of income and these only affects the
quantity of materials purchased and not the quality of the materials.

Commercial customers

These are customers looking for large quantities of building materials for their building projects
and for purposes of retail distribution. These customers can include contracting firms and
contractors undertaking huge building projects that require large supply of materials in one go.
These customers are mostly located in major cities and towns like Nairobi where there are large
constructions of buildings taking place.

Institutional customers

These will include customers from institutions such as schools and hospitals who have building
projects they oversee. These institutions will be the ones purchasing the materials from us and
the quantity of the building materials will depend on the size of their projects and the budget for
the project. Most of these institutional customers are located in major towns in Kenya where
most of the schools and hospitals are located.

Government customers

5
These customers will include both the national and county government agencies who have
various building projects such as construction of schools and hospitals which require supply of
building materials. The agencies are located throughout the forty seven counties in Kenya. The
quantity of materials purchased will depend on the size of the project being undertaken. For these
agencies to procure these materials mostly there is open bidding where the one with most
reasonable bid is awarded the tender to supply the materials.

The needs of the potential customers are high quality building materials that are durable and
affordable.

of the project and the use of the material in the construction of the building. For example for
construction of residential bungalow the quantity of cement required is not the same as for a high
rise building which requires large quantity of cement bags.

Frequency of purchase: The frequency of purchasing building materials will depend on the
number of customers we have and how fast the building projects are being constructed.

Method of payment: These will depend on customers preference method of payment which will
include petty cash, credit/debit cards and bank transfers. The payments will be made before
delivering the materials to the customer.

Terms of sale: the terms of sale are that once the materials are sold the money cannot be
refunded and the materials cannot be exchanged after sale.

2.2 MARKET SHARE

We intend to operate in the Kenyan construction materials market, which is estimated to be

worth KES 300 billion annually. Our initial goal is to capture 5% of the market share, which is
equivalent to KES 15 billion annually.

2.3 COMPETITORS

Our main competitors in the construction materials market include:

Kenkom Construction Company:

6
Location: Kenkom Construction Company is located in the same city as Buildmat Construction
Company.
Details:

Methods of Operation/Production:
Kenkom Construction Company utilizes advanced technology and modern construction methods
in their operations. They may use automated machinery and software systems for efficient
project management.
Capital Outlay:
Kenkom Construction Company has made significant investments in its operations, including
purchasing high-end construction equipment and establishing a well-equipped production
facility.
Market Share:
Kenkom Construction Company holds a considerable market share in the construction materials
supply industry, primarily due to its long-standing presence and established reputation.
Quality of Products/Services:
Kenkom Construction Company is known for delivering high-quality construction materials that
meet industry standards. They prioritize quality control measures and maintain a reputation for
reliable products.
Variety of Products/Services:
They offer a wide range of construction materials, including cement, steel, bricks, and other
essential supplies. They cater to various construction needs.
Pricing Techniques:
Kenkom Construction Company employs competitive pricing strategies, often offering
competitive rates and discounts to attract customers.
Distribution Strategies:
They have a well-established distribution network that ensures efficient delivery of construction
materials to their customers.
Competitive Edge/Advantage:
Buildmat Construction Company can establish a competitive edge over Kenkom Construction
Company by focusing on personalized customer service and offering unique value-added
services, such as on-site consultations, customized material recommendations, and expedited

7
delivery options. By emphasizing customer satisfaction and building strong relationships,
Buildmat can differentiate itself from Kenkom.

Archives Construction Company:

Location: Archives Construction Company is located in a neighboring town, approximately 20
miles away from Buildmat Construction Company.
Details:

Methods of Operation/Production: Archives Construction Company relies on traditional

construction methods and may not have incorporated advanced technology extensively into their
operations.
Capital Outlay: Archives Construction Company may have a moderate capital outlay, investing
in essential equipment and facilities required for their operations.
Market Share: Archives Construction Company holds a smaller market share compared to
Kenkom and Koja Construction Companies.
Quality of Products/Services: The quality of their products and services is satisfactory but may
not match the standards set by larger competitors.
Variety of Products/Services: Archives Construction Company offers a limited range of
construction materials and may not have an extensive inventory.
Pricing Techniques: Their pricing techniques might be moderately competitive, but they may not
heavily rely on aggressive pricing strategies.
Distribution Strategies: Archives Construction Company may have a local distribution network,
primarily serving customers within their vicinity.
Competitive Edge/Advantage: Buildmat Construction Company can position itself as a reliable
and convenient alternative to Archives Construction Company by offering a broader range of
construction materials, maintaining competitive pricing, and providing efficient delivery services
to customers in the neighboring town. By emphasizing the quality and diversity of its products,
Buildmat can attract customers who value a comprehensive selection of construction materials.

Koja Construction Company:

Location: Koja Construction Company is located in a different city, approximately 50 miles
away from Buildmat Construction Company.

8
Details:

Methods of Operation/Production:
Koja Construction Company is known for its efficient and technologically advanced construction
methods. They may utilize cutting-edge equipment and software systems to streamline their
operations.
Capital Outlay:
Koja Construction Company has made substantial investments in state-of-the-art infrastructure,
machinery, and production facilities, giving them a competitive advantage.
Market Share:
Koja Construction Company holds a significant market share in their city and surrounding areas
due to their established reputation and extensive customer base.
Quality of Products/Services:
They are known for delivering high-quality construction materials and providing excellent
service to their customers.
Variety of Products/Services:
They offer a wide range of construction materials, including cement, steel, bricks, roofing
materials, electrical supplies, plumbing fixtures, etc.
Pricing Techniques:
Koja Company may employ various pricing strategies, such as volume discounts, promotional
pricing, or bundle deals to attract customers.
Distribution Strategies and Competitive Areas:
They have established a robust distribution network and partnerships with suppliers and
manufacturers to ensure a steady supply of construction materials. They may also focus on
providing excellent customer service, technical support, and after-sales service to differentiate
themselves.

Pauwai Construction Company:

Location: Pauwai Construction Company is located in the same city as Buildmat Construction
Company.
Description:

9
Methods of Operation/Production (Technology):
Pauwai Construction Company utilizes modern construction methods and technologies to
streamline their operations and improve efficiency. They may use advanced equipment and
software for project management and planning.
Capital Outlay (Invested):
Pauwai Construction Company has made significant investments in their construction
equipment, machinery, and technology. They have a substantial capital outlay to support their
operations and projects.
Market Share:
Pauwai Construction Company currently holds a significant market share in the construction
materials supply industry. They have established relationships with major contractors and
developers.
Quality of Products/Services:
Pauwai Construction Company is known for providing high-quality construction materials to
their customers. They prioritize quality control and ensure that their products meet industry
standards.
Variety of Products/Services:
They offer a wide range of construction materials, including cement, steel, bricks, electrical
supplies, plumbing fixtures, etc.
Pricing Techniques:
Pauwai Construction Company may employ various pricing strategies, such as competitive
pricing, bulk discounts, or value-added services to attract customers.
Distribution Strategies and Competitive Areas:
They have established distribution channels and partnerships with suppliers and manufacturers to
ensure a steady supply of construction materials. Additionally, they may focus on customer
service and after-sales support to differentiate themselves.

Our competitive edge is our team's expertise in building construction, which allows us to provide
personalized advice and recommendations to our customers. We also plan to offer a wider range
of construction materials, including steel bars, roofing sheets, and plumbing supplies, to meet the
diverse needs of our customers. To cope with competition, we plan to offer competitive pricing,
efficient distribution, and excellent customer service.
10
2.4 METHOD OF PROMOTION

To create awareness for our products, we plan to attend construction trade shows and
conferences to show case our products. This will help build our network among contractors and
people who are interested in the construction industry.

Social media platforms: such as twitter and facebook where will reach a wider audience when we
post about the products we are selling and how we can be contacted to purchase the materials.

We will offer discounts and coupons during peak construction seasons, such as the rainy season
when demand for construction materials is high.

We will also place ads about the materials we are supplying in local construction magazines and
newspapers to ensure that those people without access to smartphones are made aware about our
company.

We will also use incentives for our customers and potential customers , where the company
intends to distribute T-shirts bearing the company logo and contact.

Creating networks with people in the construction industry such as the contractors and engineers
who will also refer our company to their clients when they want to purchase building materials.

The company will also be promoted through filed sales where the company`s field sales
representatives will visit sites under construction to promote the selling of the building materials.

The promotions will be carried out during seasonal celebrations and holidays times such as
Christmas time when the demand for building materials are low to encourage the customers to
buy the building materials.

We estimate the cost of promotions to be approximately KES 1 million during the first year of
operation of the company to help put the company in the market competition but these amount
will gradually decrease over the years when the company has built its name.

2.5 PRICING STRATEGY

The factors to be considered when setting prices for our products include:

11
 i. Market demand: we shall consider the demand for each type of building material to help
come up with the prices depending on the material type.
ii. Competitors pricing: we shall consider how other competitors have priced their materials
to avoid over charging our customers and also to help the company remain competitive
with the prices of other companies.
iii. Profit margins will also be considered so that the company achieves the desired profit
from each of the building materials.
iv. Customer perceived value: we shall consider the customers perceived value on each of
the building materials to aid in adjusting the prices of the materials.

We will use various pricing techniques, such as cost-plus pricing, to appeal to our potential
customers.

We will offer flexible modes of payment which include,cash, credit/ debit cards, mobile money
payments and bank transfers to make it easier for customers to purchase our products.

The terms of sale are :

i. The materials will be delivered once the payments are made and received and a receipt
issued for the materials.
ii. The materials once sold the money cannot be refunded or the materials exchanged.
iii. The customer is to counter check that any of the fragile materials is not broken when
receiving the goods and that all the ordered materials have been delivered.

2.6 SALES TACTICS

We plan to use both direct and indirect selling methods. Direct selling will involve face-to-face
interactions with customers, where we will provide personalized recommendations and advice.
These will involve several of our employees dealing with the customers in the physical store.
Indirect selling will involve using our website and social media platforms to showcase our
products and services and also provide our contact information or how one can order the
materials virtually.

12
We will also offer excellent customer service, including fast response times, accurate product
information, and timely delivery. After sales services, such as maintenance and repair, will also
be offered to ensure customer satisfaction.

2.7 DISTRIBUTION STRATEGY

Our construction material business, which is based in Kenya, aims to provide our customers with
easy access to high-quality construction materials at affordable prices. We plan to use a direct
distribution strategy to ensure that our products are available to our customers whenever and
wherever they need them.

Channels of Distribution: We will utilize multiple channels of distribution to make our products
available to our customers. These channels include our physical store, online store, and delivery
services. Our physical store will be located in a strategic location in Nairobi, Kenya, where we
can easily access our target customers. Our online store will enable our customers to order our
products from anywhere in the country and have them delivered to their preferred location. We
will also offer delivery services to our customers who are unable to visit our physical store.

Possible Problems and Solutions: One possible challenge we may encounter in distribution is
inadequate transportation infrastructure in some parts of the country. To mitigate this challenge,
we will invest in a fleet of trucks that are suitable for the different terrains in the country. We
will also work with reliable logistics companies to ensure that our products are delivered on time
to our customers.

Distribution Costs: Our distribution costs will vary depending on the distance between our
physical store and our customers' locations. We estimate that our monthly distribution costs will
be KES 200,000, which will cover fuel costs, maintenance costs, and salaries for our delivery
staff.

Strategies to Minimize Distribution Costs: To minimize our distribution costs, we will optimize
our delivery routes to ensure that we deliver to as many customers as possible within a single
trip. We will also negotiate with logistics companies to get the best rates for their services. In

13
addition, we will leverage technology to track our trucks and optimize their routes in real-time,
which will help us reduce fuel consumption and delivery times.

Overall, our distribution strategy aims to ensure that our customers have easy access to our
products, while also minimizing our costs and maximizing our efficiency.

14
 CHAPTER THREE

3.0 ORGANIZATION AND MANAGEMENT PLAN

3.1 BUSINESS MANAGER

Our Construction Material Distribution Firm will be managed by a highly qualified and
experienced Business Manager. The Business Manager will be responsible for the overall
management of the business, including planning, organizing, directing and controlling all business
activities.

Qualifications and Duties:

The Business Manager will have a Bachelor’s degree in Business Management, with at least 5
years of experience in the construction industry. He/she will be responsible for:

1) Developing and implementing business strategies and plans.

2) Ensuring that the business is profitable and financially stable.
3) Building and maintaining relationships with customers and suppliers.
4) Hiring, training and supervising employees.
5) Managing the day-to-day operations of the business.
Organization Structure:
Our organization structure will be designed to ensure efficient and effective management of the
business. The Business Manager will be assisted by a team of departmental heads, who will
report directly to him/her. The departmental heads will be responsible for managing their
respective departments and will report on the progress of their departments to the Business
Manager.

Organizational Chart: The organizational chart for our Construction Material Distribution Firm is
as follows:
[Insert Organizational Chart]

3.2 OTHER PERSONNEL

15
We plan to hire the following employees for our Construction Material Distribution Firm:

Job Title Duties and Responsibilities Qualifications and Experience

Sales Rep - Sales of construction materials - Diploma in Sales and Marketing - Customer service
- At least 2 years’ experience - Market research

Storekeeper - Record keeping and inventory - Certificate in Procurement and Supply

management - At least 1 year experience - Stock management

Delivery Driver - Delivery of construction materials - Driving license class BCE - Record
keeping - At least 2 years’ experience - Vehicle maintenance

3.3 RECRUITMENT,TRAINING AND PROMOTION RECRUITMENT

We plan to recruit our employees through advertising on job boards and social media platforms.
We will also rely on referrals from our networks and from existing employees. The recruitment
process will involve shortlisting of candidates based on their qualifications and experience,
followed by a face-to-face interview and reference checks.

Training:

We recognize that training is crucial for the development of our employees and the success of
our business. We plan to provide on-the-job training and organize external training sessions for
our employees. We will conduct regular performance reviews to determine the training needs of
our employees.

Promotion:

Promotions will be based on job performance, experience and qualifications. We will have a
clearly defined promotion policy that outlines the requirements for promotion. Promotion
opportunities will be advertised internally and employees who meet the requirements will be
considered.

3.4 REMUNERATION AND INCENTIVE

In order to attract and retain the best talent, our Construction Material Distribution Firm plans to
offer competitive salaries and incentives to our employees. Our salary structure will be based on

16
job titles, with each employee's compensation package consisting of a basic salary plus specific
allowances.

The following table provides an outline of our proposed remuneration structure for our
employees:

Basic Salary Allowance Total Total

Serial Job Title (Kshs) (Specific)(Kshs) Monthly Annual
Salary Salary

1 Business 100,000 Transport 110,000 1,320,000

Manager Allowance
(10,000)

2 Sales Manager 80,000 Commission Varies Varies

(2% of sales)

3 Warehouse 70,000 Housing 85,000 1,020,000

Manager Allowance
(15,000)

4 Sales 40,000 Mobile 45,000 540,000

Representative Allowance
(5,000)

5 Accountant 30,000 Medical 70,0000 840,000

Allowance
(10,000)

6 Administrative 25,000 None 30,000 360,000

Assistant

7 Deliver Fuel Allowance 35,000 420,000

Drivers (1-,000)

TOTAL 420,000 5,040,000

In addition to salaries and allowances, we plan to offer our employees various incentives, both
financial and non-financial, to motivate them and enhance their job satisfaction. Some of the
incentives we plan to offer include:

17
Financial Incentives:

1. Performance bonuses based on individual and team targets.

2. Health insurance coverage.
3. Retirement benefits scheme.

Non-Financial Incentives:

1. Opportunities for career growth and development.

2. Flexible work hours.

A positive work environment with supportive management.

3.5 LICENSES, LAWS AND PERMITS

To operate our Construction Material Distribution Firm in Kenya, we will need to obtain the
following licenses and permits:

1. Business Permit from the County Government

2. Trade License from the Ministry of Industry, Trade and Cooperatives
3. VAT Registration from the Kenya Revenue Authority

We will also need to comply with various County and National by-laws related to business
operations, taxation, health and safety, environmental management, and employment.

We will ensure that all necessary licenses and permits are obtained in a timely manner and that
we comply with all relevant regulations and by-laws.

3.6 Support services

To ensure the success and efficiency of our business operations, we plan to outsource some
support services, including:

1. Financial Management Consultancy: We will hire a professional accounting firm to

provide us with financial management services such as bookkeeping, tax compliance, and
financial reporting.
2. Legal Services: We will engage the services of a reputable law firm to provide us with
legal advice and representation.

18
3. Banking Services: We will partner with a local bank to provide us with banking services
such as account management, loans, and credit facilities.
4. Insurance: We will purchase insurance policies.

19
 CHAPTER FOUR

4.0 PRODUCTION/OPERATIONAL PLAN

4.1 PRODUCTION/OPERATIONAL FACILITIES & CAPACITY

Our construction material business, "BuildWell Supplies," will require the following facilities
and resources for production:

Facility:

Premises: A warehouse space of approximately 2,000 square meters, divided into different
sections for storage, processing, and packaging.

Office Space: A separate area within the premises for administrative tasks and customer service.

Machines/Tools/Equipment:

Forklifts: 2 units

Concrete Mixers: 3 units

Cutting Machines: 2 units

Saws: 2 units

Weighing Scales: 4 units

Shelves and Racks for Storage

Packaging Equipment

Capacity: The production capacity of our facility will be based on market demand and the
efficiency of our operations. We anticipate an initial capacity to meet the needs of medium-sized
construction projects.

Cost per Unit and Total Cost:

Forklifts: KES 500,000 each (Total: KES 1,000,000)

20
Concrete Mixers: KES 200,000 each (Total: KES 600,000)

Cutting Machines: KES 150,000 each (Total: KES 300,000)

Saws: KES 100,000 each (Total: KES 200,000)

Weighing Scales: KES 50,000 each (Total: KES 200,000)

Shelves and Racks: KES 100,000

Packaging Equipment: KES 150,000

Supplier/Source: We will source the equipment from reputable suppliers in the construction
industry.

Furniture & Fittings:

Office Desks: 5 units

Chairs: 10 units

Cabinets: 4 units

Computer Systems: 3 units

Printers and Scanners: 2 units

Total Furniture & Fittings Cost: Estimated at KES 300,000

Facility
Machines/tools/equipment No. Capacity Cost Total cost
required per unit Supplier/source

Forklifts 2 1,000,000
500,000
Concrete mixers 3 200,000 600,000
Cutting machines 2 300,000
150,000
Saws 2 100,000 200,000
Weighing scales 4 50,000 200,000
Shelves and racks 100,000

21
 Packaging equipments 150,000
Total 2,550,000
Furniture and fittings
Office desks 5 10,000 50,000
Chairs 10 4,000 40,000
Computer systems 3 20,000 90,000
Printers and scanners 2 30,000 60,000
Cabinets 4 15,000 60,000
Total 300,000

TOTAL 2,850,000

Premises Layout: Please refer to the attached sketch for the detailed layout of our premises,
indicating the different sections and their respective functions

4.2 PRODUCTION/OPERATIONAL STRATEGY

Our production and operational strategy for Kenya Construction Material Business focuses on
ensuring effective and efficient operations while minimizing costs and maximizing resource
utilization. The following are the key aspects of our strategy:

Supervision and Resource Optimization:

The production activities and operations will be supervised by experienced professionals from
our team of partners who hold degrees in Building Construction. They will ensure that all
processes and tasks are carried out effectively and in accordance with industry standards.

To minimize costs and eliminate wastage, we will implement strict quality control measures,
regular inspections, and efficient use of resources. Any deviations or inefficiencies will be
promptly addressed through continuous monitoring and corrective actions.

Costs Involved:

22
Cost of Materials: We will maintain a detailed inventory management system to track the cost of
materials used in our production. This includes cement, sand, aggregates, steel, and other
construction materials. The estimated cost of materials per month is as follows:

Cost of materials per month

Item Amount(kshs)
cement 200,000
Aggregates 100,000
Steel 250,000
Sand 150,000
Total costs 700,000

Cost of Labor: Our labor costs will include salaries and wages for our production team,
technicians, and administrative staff. We estimate the cost of labor per month as follows

Cost of labour per month

Item Amount(kshs.)
Technicians 350,000
Administrative staff 150,000

Total costs 500,000

Overhead cost

We will incur overhead costs to support the efficient running of our business. These costs include
electricity, water, telephone, insurance premiums, transportation, and other utilities. The
estimated overhead costs per month are as follows

Item Amount(kshs)
Electricity 50,000
Water 20,000
Telephone 10,000
Insurance premiums 30,000

23
 Transportation 40,000

Total costs 150,000

Total Costs of Production per Month: The total cost of production per month takes into account
the costs of materials, labor, and overheads. The estimated total costs of production per month
are as follows:

Item Amount(kshs)
Cost of materials 700,000
Cost of labour 500,000
Overhead costs 150,000
Total costs 1,350,000

Our operational strategy ensures that we have a comprehensive understanding of the costs
involved in our production activities, and we will continuously monitor and optimize these costs
to improve profitability and sustainability.

Note: The figures provided are for illustrative purposes and may vary based on the specific needs
and scale of the business.

4.3 PRODUCTION/OPERATIONAL PROCESS

Our construction material business, with five partners (Ronny, Patricia, Dennis, Brian, Peter, and
Shadrack), will follow a detailed operational process to ensure efficient production and delivery
of our products to our customers. The following steps outline our production process:

Step 1: Order Placement and Customer Consultation:

Customers can place orders through our physical store, online platform, or via phone calls.

24
Our sales representatives will consult with customers to understand their specific requirements,
including the type and quantity of construction materials needed.

Step 2: Inventory Check and Material Preparation:

Our inventory management team will check the availability of the requested materials.

If the materials are in stock, they will be prepared for delivery or pick-up. In case of any
shortages, our procurement team will initiate the necessary purchasing process to ensure timely
availability.

Step 3: Quality Control and Inspection:

All materials will undergo a thorough quality control process to ensure they meet the required
standards.

Our team of quality inspectors will examine the materials for any defects, damages, or
inconsistencies.

Step 4: Packaging and Labeling:

Once the materials pass the quality control check, they will be properly packaged and labeled.

Packaging will be done in a way that ensures the materials are protected during transportation
and storage.

Step 5: Delivery or Pick-up:

Customers can choose to have the materials delivered to their desired location or collect them
from our physical store.

Our logistics team will coordinate the delivery process, ensuring timely and accurate distribution.

For customers opting for pick-up, our staff will assist in loading the materials onto their vehicles.

Step 6: Payment and Customer Satisfaction:

Customers will be provided with an invoice detailing the cost of the materials and any additional
services.

Payment options include cash, mobile money transfers, or bank transfers.

25
We will prioritize providing exceptional customer service throughout the process, addressing any
concerns or inquiries promptly.

Step 7: Post-Sale Support:

We will offer post-sale support to assist customers with any further queries or assistance
required.

Our customer service team will be available to provide guidance on product usage, maintenance,
or any additional information needed.

By following this operational process, we aim to streamline our production and delivery,
ensuring customer satisfaction and maintaining the highest quality standards.

4.4 REGULATIONS AFFECTING OPERATION

The production and operational activities of our construction material business are subject to
various government laws and regulations. As responsible entrepreneurs, we are committed to
adhering to these regulations to ensure compliance and maintain a smooth operation. The
following are the key regulations that are likely to affect our business:

Licensing and Permits: We will obtain all necessary licenses and permits required to operate a
construction material business in Kenya. This includes business registration, trade licenses, and
any specific permits related to the storage and handling of construction materials. We will
closely follow the requirements set by the relevant government authorities and ensure timely
renewal of licenses.

Health and Safety Regulations: The construction industry is subject to strict health and safety
regulations to protect workers and customers. We will implement measures to ensure a safe
working environment, including providing appropriate personal protective equipment (PPE),
conducting regular safety training, and maintaining proper signage and emergency procedures.
We will also comply with regulations related to fire safety, hazardous material handling, and
waste management.

Environmental Regulations: Our business will comply with environmental regulations to

minimize the impact of our operations on the environment. This includes proper waste disposal

26
practices, prevention of pollution, and compliance with regulations related to air, water, and
noise pollution. We will also explore opportunities to adopt sustainable practices, such as
recycling and energy conservation.

Taxation Laws: We will comply with all tax laws and regulations, including income tax, value-
added tax (VAT), and any other applicable taxes. We will maintain accurate financial records,
file tax returns on time, and fulfill our tax obligations as required by the Kenyan tax authorities.

Employment Regulations: We will adhere to labor laws and regulations governing employment
practices. This includes fair employment practices, minimum wage requirements, employee
benefits, and compliance with regulations related to working hours, overtime, and leave
entitlements. We will also establish proper employment contracts and maintain good employee
relations.

Quality Standards: We will ensure that our construction materials meet relevant quality standards
and certifications. This includes complying with national and international standards for safety,
durability, and performance. We will work with reputable suppliers and manufacturers who
adhere to quality control measures.

To fulfill these regulations, we will:

Regularly monitor updates and changes in relevant laws and regulations.

Allocate resources for compliance activities, including training and hiring professional
consultants if necessary.

Maintain proper documentation and records to demonstrate compliance with regulations.

Establish internal policies and procedures to ensure ongoing adherence to regulatory

requirements.

Collaborate with industry associations and regulatory bodies to stay informed and seek guidance
on compliance matters.

By adhering to these regulations, we aim to maintain the integrity of our operations, protect the
health and safety of our employees and customers, and contribute positively to the overall
development of the construction industry in Kenya.

27
 CHAPTER FIVE

5.0 CHAPTER FIVE: FINANCIAL PLAN

5.1. PRE-OPERATIONAL COSTS

Item costs
Business registration 10,000
Trading licenses and permits 5,000
Rent + rent deposit 50,000
Insurance policy 20,000
Machines, equipment and tools 100,000
Stock 50,000
Installation of electricity 10,000
Water installation 5,000
Telephone installation 5,000
Internet installation 10,000
Total cost 265,000

5.2 WORKING CAPITAL

For a Construction Distribution Firm with 5 partners located in Tom Mboya St, Nairobi, the
assumed expenses for sustaining the business can be estimated as follows:

Item Amount
Cement 200,000
Sand 150,000
aggregates 100,000
steel 250,000
Cost of labour 500,000
Overhead costs 150,000

28
Total Working Capital 1,350,000

5.3 PROJECTED CASH FLOW STATEMENT

Item Jan Feb Ma Apr Ma Jun July Aug Sept Oct Nov Dec Total
r il y e s
Cash
inflow
/receipt
s
Openin 0 0 0 0 0 0 0 0 0 0 0 0 0
g
balance
Cash 50,0 60,0 70,0 80,0 90,0 100, 100, 100, 90,00 80,00 70,00 60,00
sal10es 00 00 00 00 00 000 000 000 0 0 00 0 930,0
00
Other 10,0 10,0 10,0 10,0 10,0 100 10,0 10,0 10,00 10,00 10,00 10,00
cash 00 00 00 00 00 00 00 00 0 0 0 0 120,0
inflows 00
Total 60,0 70,0 80,0 90,0 100, 110, 110, 110, 100,0 90,00 80,00 70,00 1,050
cash 00 00 00 00 000 000 000 000 00 0 0 0 ,000
inflow
Cash
outflow
Cash 30,0 35,0 40,0 45,0 50,0 55,0 55,0 55,0 50,00 45,00 40,00 35,00 535,0
purchas 00 00 00 00 00 00 00 00 0 0 0 0 00
es
Paymen 10,0 10,0 10,0 10,0 10,0 100 10,0 10,0 10,00 10,00 10,00 10,00
t to 00 00 00 00 00 00 00 00 0 0 0 0 120,0
creditor 00
s
Wages/s 100, 100, 100, 100, 100, 100, 100, 100, 100,0 100,0 100,0 100,0 1,200
alaries 000 000 000 000 000 000 000 000 00 00 00 00 ,000
Rent
20,0 20,0 20,0 20,0 20,0 20,0 20,0 20,0 20,00 20,00 20,00 20,00 240,0
00 00 00 00 00 00 00 00 0 0 0 0 00
Water
5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,000 5,000 5,000 5,000 60,00
0 0 0 0 0 0 0 0 0
Telepho
ne 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,000 2,000 2,000 2,000 24,00
0 0 0 0 0 0 0 0 0

29
 Electrici 8,00 8,00 8,00 8,00 8,00 8,00 8,00 8,000 8,000 8,000 8,000
ty 8,000 0 0 0 0 0 0 96,00
0 0
Transpo 10,0 10,0 10,0 10,0 10,0 100 10,0 10,0 10,00 10,00 10,00 10,00
rt 00 00 00 00 00 00 00 00 0 0 0 0 120,0
00
Statione 24,00
ry 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,000 2,000 2,000 2,000 0
0 0 0 0 0 0 0 0
Loan 8,00 8,00 8,00 8,00 8,00 8,00 8,00 8,000 8,000 8,000 8,000
repaym 8,00 0 0 0 0 0 0 0 96,00
ent 0 0
Interest
2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,000 2,000 2,000 2,000 24,00
0 0 0 0 0 0 0 0 0
Repairs 4,00 4,00 4,00 4,00 4,00 4,00 4,00 4,00 4,000 4,000 4,000 4,000
0 0 0 0 0 0 0 0 48,00
0
Adverti 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,000 5,000 5,000 5,000 60,00
sing 0 0 0 0 0 0 0 0 0
Taxes
2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,000 2,000 2,000 2,000 24,00
0 0 0 0 0 0 0 0 0
Other 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,000 5,000 5,000 5,000 60,00
cash 0 0 0 0 0 0 0 0 0
outflow
Total 210, 210, 210, 210, 210, 210, 210, 210, 210,0 210,0 210,0 210,0 2,520
cash 000 000 000 000 000 000 000 000 00 00 00 00 ,000
outflow
Net - - - - - - - - - - - - -
cash 150, 140, 130, 120, 110, 100, 100, 100, 110,0 120,0 130,0 140,0 1,470
000 000 000 000 000 000 000 000 00 00 00 00 ,000
Cumul - - - - - - - - - - - -
ative 150, 290, 420, 540, 650, 750, 850, 950, 1,060 1,180 1,310 1,450
cash 000 000 000 000 000 000 000 000 ,000 ,000 ,000 ,000
flow

5.4. PRO-FORMA INCOME STATEMENT (Profit & Loss Account)

30
Pro-forma income statement for the year ending……….

Item Year 1 Year 2 Year 3

Sales 2,500,000 3,000,000 3,500,000
Less cost of goods 1,200,000 1,500,000 1,800,000
sold/purchases
Gross profit 1,300,000 1,500,000 1,700,000
Less Expenses
Wages 400,000 450,000 500,000
Rent 150,000
Water 30,000 35,000 40,000
Telephone 20,000 25,000 30,000
Electricity 40,000 45,000 50,000
Advertising 80,000 90,000 100,000
Stationery 10,000 12,000 14,000
Postage 5,000 6,000 7,000
Transport 60,000 70,000 80,000
Depreciation 100,000 100,000 100,000
Loan repayment 50,000 50,000 50,000
Interest 30,000 25,000 20,000
Repairs 20,000 25,000 30,000
Total profit before 215,000 412,000 544,000
tax
Tax 64,500 123,600 163,200
Net profit after tax 150,000 288,400 380,800

5.5. PRO-FORMA BALANCE SHEET

Assets At start End of year 1 End of year 2

Current assets
Cash 100,000 250,000 400,000
Debtors 150,000 200,000 250,000
Stock of finished goods 300,000 400,000 500,000
Stock of raw material 200,000 250,000 300,000
Work in progress 100,000 150,000 200,000
Total current assets 850,000 1,250,000 1,650,000

31
 Fixed assets
Machines and equipment 500,000 500,000 500,000
(costs)
Depreciation 100,000 200,000 300,000
Vehicles (cost) 200,000 200,000 200,000
Furniture and fittings 50,000 50,000 50,000
(cost)
Depreciation 10,000 20,000 30,000
Other fixed assets (cost) 100,000 100,000 100,000
Depreciation 20,000 40,000 60,000
Total fixed assets 720,000 790,000 860,000
Total assets 1,570,000 2,040,000 2,510,000

Liabilities
Current liabilities
Creditors 100,000 150,000 200,000
Short-term loans 50,000 30,000 10,000
Bank overdraft 30,000 20,000 10,000
Total current liabilities 180,000 200,000 220,000
Long-term liabilities
Bank loan 400,000 300,000 200,000
Owners’ equity
Net profit (retained) 690,000 1,540,000 2,590,000
Total liabilities & equity 1,570,000 2,040,000 2,510,000

5.6. CALCULATING BREAK-EVEN ANALYSIS

Total Variable Costs from Cash Flow:
Cost of materials: Kshs 700,000
Cost of labor: Kshs 500,000
Overhead costs: Kshs 150,000 Total Variable Costs: Kshs 1,350,000
Sales: Kshs 2,000,000
Calculating the Contribution Margin:

32
Contribution Margin = Sales - Total Variable Costs Contribution Margin = Kshs 2,000,000 -
Kshs 1,350,000 Contribution Margin = Kshs 650,000

Calculating the Contribution Margin Percentage:

Contribution Margin Percentage = (Contribution Margin / Sales) * 100 Contribution Margin

Percentage = (Kshs 650,000 / Kshs 2,000,000) * 100 Contribution Margin Percentage = 32.5%

Total Fixed Costs from Cash Flow for Year 1: Kshs 800,000
Calculating the Break-Even Level of Sales:

Break-Even Level = Fixed Costs / Contribution Margin Percentage Break-Even Level = Kshs
800,000 / 0.325 Break-Even Level = Kshs 2,461,538.46

Break-Even Level of Production at B.E.P: Break-Even Level of Production = Contribution

Margin / Fixed Costs Break-Even Level of Production = Kshs 650,000 / Kshs 800,000 Break-
Even Level of Production = 0.8125

5.7. PROFITABILITY RATIOS

Gross Profit: Kshs 850,000

Net Profit Before Tax: Kshs 450,000

Net Profit After Tax: Kshs 360,000

Sales: Kshs 2,000,000

Owner's Equity: Kshs 1,500,000

Total Investment: Kshs 2,000,000

Calculating the Gross Profit Ratio:

Gross Profit Ratio = (Gross Profit / Sales) * 100 Gross Profit Ratio = (Kshs 850,000 / Kshs
2,000,000) * 100 Gross Profit Ratio = 42.5%

Calculating the Net Profit Ratio:

33
Net Profit Ratio = (Net Profit Before Tax / Sales) * 100 Net Profit Ratio = (Kshs 450,000 / Kshs
2,000,000) * 100 Net Profit Ratio = 22.5%

Calculating the Return on Equity:

Return on Equity = (Net Profit After Tax / Owner's Equity) * 100 Return on Equity = (Kshs
360,000 / Kshs 1,500,000) * 100 Return on Equity = 24%

Calculating the Return on Investment:

Return on Investment = (Net Profit After Tax / Total Investment) * 100 Return on Investment =
(Kshs 360,000 / Kshs 2,000,000) * 100 Return on Investment = 18%

5.8. DESIRED FINANCING

Item Amount (kshs)

Pre-operational costs 500,000
Working capital 1,000,000
Fixed Assets 2,500,000
Contingencies 500,000
Total desired (start-up) financing 4,500,000

5.9. PROPOSED CAPITALIZATION

Source Amount(kshs)
Personal savings 1,000,000
Friends/ relatives contribution 1,500,000
Bank loan 3,000,000
Total Investment 5,500,000

6.0 POTENTIAL RISKS AND MEASURES TO MITIGATE

Risk 1: Economic Downturn Description: A significant economic downturn can lead to reduced
construction activity and decreased demand for construction materials, impacting our sales and
profitability. Mitigation Measures:

34
Diversify customer base: By targeting both residential and commercial construction projects, we
can reduce the impact of a slowdown in a specific sector.

Monitor market trends: Stay informed about market conditions, industry forecasts, and economic
indicators to proactively adjust our business strategies.

Maintain financial reserves: Build up cash reserves to withstand temporary economic challenges
and ensure continuity of operations during tough times.

Risk 2: Supply Chain Disruptions Description: Disruptions in the supply chain, such as delays in
material delivery or shortages, can disrupt our production and impact customer satisfaction.
Mitigation Measures:

Build strong supplier relationships: Develop long-term partnerships with reliable suppliers and
maintain open communication channels to address any potential issues promptly.

Implement inventory management system: Maintain optimal inventory levels and establish
alternative sourcing options to mitigate potential disruptions.

Regularly review and update contingency plans: Develop contingency plans to address potential
supply chain disruptions, including backup suppliers and emergency response protocols.

Risk 3: Competitive Market Description: The construction distribution industry is highly

competitive, with numerous players offering similar products and services, which can affect our
market share and profitability. Mitigation Measures:

Differentiate through product quality and service: Focus on providing superior quality products
and excellent customer service to differentiate ourselves from competitors.

Continuous market research: Stay updated on industry trends, customer preferences, and
emerging technologies to identify new opportunities and stay ahead of the competition.

Develop strategic partnerships: Collaborate with construction firms, contractors, and architects to
build strong relationships and secure long-term business contracts.

Risk 4: Regulatory Compliance Description: Failure to comply with relevant regulations and
legal requirements can lead to penalties, legal issues, and reputational damage. Mitigation
Measures:

35
Stay informed about regulations: Regularly monitor updates in construction-related regulations,
permits, licenses, and safety standards to ensure compliance.

Implement robust compliance processes: Establish internal protocols, training programs, and
documentation procedures to ensure adherence to regulations.

Engage legal and regulatory experts: Consult with legal professionals and regulatory experts to
ensure our operations align with the latest legal requirements and maintain regulatory
compliance.

Risk 5: Health and Safety Incidents Description: Workplace accidents and health incidents can
cause harm to employees, disrupt operations, and lead to legal liabilities. Mitigation Measures:

Implement comprehensive health and safety policies: Develop and enforce strict health and
safety protocols to minimize the risk of accidents and ensure a safe working environment.

Provide training and awareness programs: Conduct regular safety training sessions, raise
awareness about potential hazards, and promote a culture of safety among employees.

Maintain proper insurance coverage: Obtain appropriate insurance coverage, including workers'
compensation and liability insurance, to mitigate potential financial risks associated with
accidents and injuries.

APPENDICES

Appendix A: Business Sponsors

This appendix provides information about the sponsors or investors who are supporting the
business financially or with other resources.

Appendix B: Business Location and Address

This appendix includes details about the physical location of the business, such as the address,
contact information, and any relevant maps or directions.

Appendix C: Form of Business Legal Ownership

36
This appendix outlines the legal structure or ownership type of the business, whether it's a sole
proprietorship, partnership, corporation, or another form of legal entity.

Appendix D: Product/Services

This appendix provides additional information about the products or services offered by the
business, including detailed descriptions, features, and any supporting materials such as
brochures or product samples.

Appendix E: Industry

This appendix offers an overview of the industry in which the business operates, including
market trends, key players, and relevant statistics or research findings.

Appendix F: Entry and Growth Strategy

This appendix details the strategies and plans for entering the market and achieving growth,
including marketing campaigns, expansion plans, partnerships, or acquisitions.

Appendix G: Customers

This appendix provides a profile of the target customers, their demographics, buying behavior,
and any market research or customer surveys conducted.

Appendix H: Market Share

This appendix includes data or analysis related to the business's market share, including market
size, competitors' market share, and the business's projected growth in the market.

Appendix I: Competitors

This appendix presents an analysis of the competitors in the market, their strengths, weaknesses,
and strategies, as well as a comparison of the business's competitive advantage.

Appendix J: Method of Promotion

This appendix outlines the specific methods and channels used for promoting the business, such
as advertising, public relations, digital marketing, social media, or other promotional activities.

Appendix K: Pricing Strategy

37
This appendix provides details about the pricing strategy adopted by the business, including
pricing models, discounts, pricing tiers, and any market research or pricing analysis conducted.

Appendix L: Sales Tactics

This appendix describes the sales tactics employed by the business, including sales strategies,
customer relationship management, sales training, and any supporting sales materials.

Appendix M: Distribution Strategy

This appendix explains the distribution strategy adopted by the business, including channels of
distribution, logistics, warehousing, and any partnerships or agreements with distributors or
retailers.

Appendix N: Business Manager

This appendix provides information about the business manager or the key personnel responsible
for overseeing the overall operations and management of the business.

Appendix O: Other Personnel

This appendix includes details about other personnel or team members involved in the business,
their roles, responsibilities, and qualifications.

Appendix P: Recruitment, Training, and Promotion

This appendix outlines the recruitment and training processes for hiring new employees, as well
as any plans or policies related to employee promotion within the organization.

Appendix Q: Remuneration and Incentive

This appendix provides information about the remuneration packages, incentives, and benefits
offered to employees, including salary structures, bonuses, commission plans, and employee
perks.

Appendix R: Licenses, Laws, and Permits

This appendix includes copies or references to the necessary licenses, laws, permits, or
regulatory requirements relevant to the business's operations.

38
Appendix S: Production/Operational Facilities & Capacity

This appendix provides details about the production or operational facilities of the business,
including equipment, technology, infrastructure, and the production capacity or capabilities.

39