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TABLE OF CONTENT
Title page
Dedication
Acknowledgement
Executive summary
Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
DEDICATION
These Business plan research Project is dedicated tomy beloved parents Mr. and Mrs. Ngugi for their
financial support and moral which made this project a
success. My wife and Daughter for their support.
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Above all, I thank the Almighty God for giving me
strength and good health to live each day at time
through out this entire period.
ACKNOWLEDGEMENT
I would like to acknowledge with sincere gratitude
the following people who assistance made this
project a success
To my classmate for their critism and
encouragement.
To my supervisor Mr.Phelix whose effort,
encouragement, knowledge and moral counsel form
the basis of this project.
To all these people, I am humbled by your assistance
and may God bless you abundantly
Executive summary
Builders and Holding Company (BNH) will be apartnership joint company with ten partners. Each
partner will contribute Kshs 2 million each to come
up with twenty million starting capital from their
saving or other sources. Then they will apply a long-
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term bank loan of Kshs10 million from equity Bank
of Kenya. The vision of BNH will to best
construction and holding company in central and East
Africa in General. Mission will be to construct lower
and affordable houses by all sorts of clients.
BNH will be situated in Juja town found along Thika
road in Thika County. It will be approximately 30
kilometers from Nairobi central Business District.
Partners selected Thika county because it gotundeveloped Land and got a lot of clay soil for
Making bricks and tiles. The company Address will
be BUILDERS AND HOLDING COMPANY.P.O
BOX 25718-01000THIKA, TELPHONE NUMBER
254-20-3044211, EMAIL ADDRESS;INFO@BNH
AC.KE, and WEBSITE.WWW.BNH.CO.KE.It will
be managed by partners themselves whereby Mr.Patrick Thiong`o will be General Manager whom will
be contacted on his cell phone 0723564748.The
offices will be located strategically on the 2nd floor of
Juja plaza and be always be opened from 8am to 8
pm.
BNH will be operating under construction industry. It
will be constructing Residential houses and
apartments using bricks blocks and roof tiles. Then it
will construct a factory for brick production and tiles.
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Three bedrooms residential house will cost Kshs 4.5
million and apartments will cost Kshs 2.5 million .It
will be registered by end of June 2015 and will then
obtain a permit /trading license from Thika city
Council later start operating on December same
year.BNH will be managed by seven partner, Patrick
Thiongo Managing Director, Susan njeri Finace,
Derric kinyua Marketing manager, Daniel kuria
Technical, James Wanyoike Human resource, Patrick
Njau Administration .The rest Three others will jointhe business later during expansion phase.
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1. BUSINESS
DESCRIPTION
1.1 BUSINESS NAME
The name of the proposed venture will be
BUILDERS AND HOLDING COMPANY
LIMITED (BNH). It will be a joint partnership
business between seven people namely: PatrickThiong`o, Daniel kuria, Susan Njeri, James
wanyoike,Derrick kinyua,Samuel kageni , James
wathigo,Patrick Njau , Regina gathoni,and Henri
Mwangi the name builders and holding relate to
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construction and selling of houses which our
customers will know what we are offering them. The
company will be able to construct modern houses
which will be affordable to our clients.
Vision and Mission
To build many bricks houses in unique and modern
way in Kenya and neighboring country. For five
years to have constructed over fifty houses in majorcities in central and east Africa. Our main aim will be
to see all sort of people either self employed or
employed could afford to purchase their own houses.
Our mission is to construct many houses at lower
rates which will be affordable by our customers. The
houses will be made out of bricks which are locked toeach other and dont need uses of cement and with
these we will build almost five hundred houses in a
month.
1.2 FORM OF OWNERSHIP
The legal form of ownership will be joint partnership.
The business will be registered by the end of June
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2015 after applying for registration and permit from
Nairobi city council upon production of business
registration certificate.
Since the BNH will be partnership, it consults the
services of R.M Machache and Co. Advocates to
prepare a partnership deed that will detail the rights
and privileges of each of the partners, ratio of sharing
profit and losses, admission and exit of partners
among other things.Thereafter, BNH will be formallystarted in December 2015.
The total cost of starting the business will be Kshs 20
million which will be raised in the following manner;
each member will contribute two million each from
their personal savings or other sources. Partners will
then apply for along term loan amounting to Kshs tenmillion from Equity bank.
1.3 BUSINESS LOCATION AND ADDRESS
BNH will be situated in juja town along thika road
and the offices will be at juja plaza. Itsapproximately 30 kilometers from Nairobi central
business district. Partners selected juja because there
is a lot of clay soil for making bricks and tiles in the
area.furtermore the juja is low populated place with
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approximates the population to be 500,000
inhabitants. Most land there is undeveloped and
cheap which will be suitable for our company to set a
factory and houses for sale. However, from the
market survey in June 2012 the partners realized that
70% of Nairobi residents dont own houses and
dream of owning one. With the completion of thika
super highway it will be easier to access CBD.The
address will be
BUILDERS AND HOLDING COMPANY
LIMITED (BNH)
P.O BOX, 13269-00100,
THIKA.
TELEPHONE 254-20-3044211, CELLPHONE
0716751428
EMAIL;[email protected]
WEBSITE; www.bnh.co.ke
1.4 PRODUCT AND SERVICES
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BNH will be involved in construction of residential
our bricks will be designed to interlock in a way that
there is no need of cement to join them which will
make construction faster and houses cheaper for our
clients.
Houses and apartments using brick blocks. We will
create a factory for production of bricks where clay
soil is plenty in juja and some of the bricks will be
purchased from clay Works Company which will be10Kms away.
Almost 70% of people working in thika and Nairobi
dont own their houses so BNH will construct
cheaper houses affordable by middle classs and
lower income earners cost Kshs 4.5 million for three
bedrooms and an apartment Kshs 2.5 millions.Compared to others company three bedroom house
with a compound will selling same houses above
Kshs 7 million and these will help us in gaining the
larger market share.
1.5 JUSTIFICATION OF OPPURTUNITY
According to our research carried out by partners, it
indicated that the business goals will be archived.
There is big demand for affordable houses .The basic
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reason we choose juja is because Nairobi is highly
populated and land is extremely expensive compared
to juja where most land is undeveloped and cheaper.
Still there is clay soil suitable for making bricks and
tiles.
In two years in operation we will be able to repay our
loan, debts considering is a new company with highly
profitable margins of 40% each year.
1.6 INDUSTRY
BNH will be operating under the construction
industry and will concentrate on modern houses and
high quality houses in the market .These industry
aims at decongesting Nairobi and developing other
towns in Kenya. The reason we choose these industryis to improve the living standards of Nairobi residents
and its environs. With new constitution and
introductions of countys most industry will be
located in other major towns like Thika which will
change the living of most residence in juja mostly.
2. MARKETING PLAN
2.1 CUSTOMER
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BNH will serve all sorts of clients base ranging from
individuals to corporate organizations who are
willing to own their houses. Research market
conducted by BNH partners,it indicates that every
person working in Nairobi dreams of owning a house
mainly from 25-40 years of age and most of them
rent houses whose rent keeps rising. Further, 50% of
the customers will be employed and self employed
who work in companies mainly in the industrial area
and numerous companies located along MombassaRoad. Their main objective will be to acquire a home
before they retire that will help them work
effectively.
Majority of clients have joined saving and credit
groups which will facilitate them with loans at lower
interest rates so they will be able to purchase ourhouses. They will prefer houses at quiet and lower
populated areas so juja will be suitable for them
considering the thika sub highway transportation will
available, no traffic jam so accessing their working
places will be fast .Further more there is railway lines
which operates on daily basis from Nairobi to
juja.They will prefer be able to report between 7 am
and be home at 7 p.m daily. Considering Thika town
is next to juja town and has many industrial
companies so many clients can still access the town
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All clients will be treated as special cases whereby
for those customer with their own designs will be
considered and BNH will work hard to meet their
demands after carefully scrutiny of their needs.
2.2 MARKET SHARE
JUJA has about 500,000 inhabitants according to the
central bureau of statistics(CBS)of the ministry of
planning .It has lowest population compared toNairobi province which has population of about 4
million people. Most of the people living there are
low earners coming from informal settlements of
Soweto, mukuru kayabamba south B slum villages
among others .It also comprises of middle earners in
komarock, umoja 1and 2, Don Holm etc.The market
research by the partners found that 80% of thepopulation were renting house and were willing to
purchase their own houses They have opted to save
and join saving groups purchase houses rather than
keep renting houses which they will never own them
in future. . BNH will offer the title deed for the
houses and apartments
Therefore the area has over 75% unexploited market
that is currently taken by 15% has taken by
hassconsult.The competitive advantage that BNH
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will have will be its affordable rates on our houses
for both the lower and middle earners. The houses
will be strategically located for easy accessibility by
both working in town, thika town and other towns
nearby. Our main mission will be able to has capture
60% of market within one year in operation
2.3 COMPETITION
Most of competitors will be Has consult and Mugugacompanies which are located in Ruiru town next to
juja town whom are expanding their business along
the thika highway. According to research conducted
by partners indicates that they have in business for
six years now and they has been constructing houses
made of stone block from ruiru quarry .Their houses
are three bedroom residencies at cost of Kshs 7million whereby the production and extraction the
stone are very high ,mostly they rely from resident to
rent them spaces to quarry their stones which within
years to come they will ferrying raw materials from
others places making their houses to keep harking
which their construction will slower and expensive
then loosing customers to BNH .
They also suffer environmental regulations from
Neema since the mining of stones affect the residence
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houses by cracking the walls due to impact of the
bombs used in mining .Their main competitive
advantages was that they have collaborated with
banks like housing finance whereby they offer
mortgages to client on their houses.
BHN will construct three bedrooms at cost of Kshs
4.5 million and introduce the construction of
apartments at cost of Kshs 2.5 million. The company
will collaborate with Equity bank to offer mortgagesto our clients to those whom prefer mortgages, then it
will negotiate with Delmont Company at thika town
to purchases houses for their managers at a special
rate.
However no other company has ever introduced the
brick houses in juja yet so it will extreme opportunityto introduce the system there and control the market
share and with time client will be able to know about
our product and difference from others companies
2.4 PRODUCTS
BNH houses will be made of bricks blocks and roof
tiles. We will manufacturing bricks and tiles so
construction will faster and compared to stone
blocks. The procedures and method are simple to
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follow therefore it will less supervision and it fasten
the construction. Our houses will be red in color
same as bricks which will not need to be painted
outsides which will make them more unique from
other companies houses. Three bedrooms will cost
Kshs 4.5million and apartment for Kshs 2.5million.
2.5 MARKETING STRATEGIES
BNH intends to invest Kshs 500,000 in the initial 5months in advertising and promotional campaigns in
Juja area and its environs to get a slice of the 80%
market share. It will use the P`s (products, price,
place and promotions) of marketing in the following
manner.
Products
BNH house will be ever in their kind with high
quality and modern designs from Japan to meet our
clients needs. It will construct both residential
houses and apartments both cheaper and affordable
by sort of all customers.However; it will offer titledeeds for houses and apartments on completion of
purchasing houses. Our company will further give 20
first clients discount of 10% each and 7% to those
whom will pay cash.
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Price
BNH will price it based on those whom will be
paying cash and time of occupation .The houses will
cost Kshs 4.5 million and apartment Kshs 2.5 million
and with research done by partners shows that BNH
will be able to offer our products on same price for
more fives in business without wondering
competition from other companies. The prices are
targeting all sorts of clients who are in position to payor be sponsored by their employers. Finally, BNH by
the help of marketing officers who will be in field
most times will monitor the competitors marketing
programmes and pricing and put measures in place to
counter them.
Place
BNH will be located strategically juja town along
busy thika road and our offices at juja plaza 1 km
from houses and factory. This location will provide a
good atmosphere for residential free from congestion
and noise. The place will be be accessed easilycourtesy of the on going upgrading of Thika highway
and its location whereby for those working in CBD
will not be affected by traffic jam since there will
direct route from Nairobi city centre via juja.
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Promotion
BNH will mount a fierce marketing programme that
will be geared to popularizing the company and its
products. It will employ sales people on contracts
basis who will be working with the Marketing officer
to ensure that the products the promotion is done
throughout year, the group will physically visit all the
estate and location in whole juja area and pin posters
and distribute brochures. They will visit popularsocial places where we have gatherings e.g. market
places, churches and mosques and whore people
learning institution, then they will be participating on
tradeshows to markets our products and get feedback
from our clients.
BNH will run a supplement on its official launch inthe daily newspaper and put press advertisement once
in a week in the same newspapers and key ICT and
business magazines. The company will also advertise
in popular FM stations which are popular with the
city dwellers and more specifically the middle class
people .It will arrange a marathon along thika
highway to CBD after five month to market our
company and products and road shows on weekends
in juja town and its environs. Finally ,the company
will launch its own magazine which will be called
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BNH magz` which will be published every month,
then it will erect a huge sign post along Muthaiga
roundabout along Thika highway to announce BNH
to all travelers coming to and from the Nairobi city.
3. ORGANISATION AND
MANAGEMENT PLAN
3.1 ORGANISATION STRUCTURE.
Managing Director
Mr. Patrick Thiong`o, 45, holds a Bachelor of
Science (Mechanical Engineering) from the
university of Nairobi. He had worked with BamburiCement Company as Plant senior manager for ten
years. He has extensive knowledge in plant and
production machines both mechanically and trouble
shooting them, configuring them. He also holds
professional certificates in Microsoft system
Engineer and currently working with East Africa Portcement as senior manager.
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He will responsible in overseeing the production of
bricks and tiles in the company as well managing all
the constructions of houses and apartments.
Finance Manager
Ms Susan njeri 36 holds a master at bachelor
commerce from jomo Kenyatta University .She had
worked as assistance Permanent secretary in the
treasury in Kenya for four years. She is currentlyworking at Kenya Revenue as manager and among
people in Kenya vision 2030 in management of
funds. She will responsible in finance departments
and all company transaction.
Marketing manager
Mr. Derrick Kinyua 34 holds a Diploma in Marketing
and Sales from IAT institute. He had worked with
Brook Side Company as manager for seven years .He
also holds a certificate in European Business
Competence License (EBCL) in 2008, a business
courses taught at IAT.He is currently pursuing adegree in Entrepreneurships at Kenyatta University.
He will be business Marketing and sales Manager
with help of sales agents.
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Technical Manager
Mr. Daniel kuria 46, Holds a Bachelor of Science
degree from Moi university .He has worked with
Safari COM for Four years managing and supporting
major computer networks. He has of worked with
Nest Technologies an Nairobi online company as
technical trainee .He also holds professional
certificates in Microsoft systems Engineer(MCSE)
and also Cisco certified NetworkAdministrator(CCNA).He is currently a Technical
Manager at YU mobile company .He will be
Technical Manager in the plant and Factory.
Human resources Manager
Mr. James Wanyoike 30 a diploma in Humanresources from Regional College and had worked
with Safari Park as human resource manager for three
years. He also holds professional certificates in
Microsoft system Engineer and Cisco certified
Network Administration .He is currently a resource
manager at Norfolk hotel Kampala and will beHuman resource manager
Architecture Manager
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Mr. Henri Mwangi 29 holds a Bachelor of Science
(physics) degree from Japan University. He has five
years in designing, managing and supporting
Computers Networks. He had worked with Japan
Builders Company in Tanzania for six years and
currently manager in that company .He will senior
designer and architecture in BNH.
Administration Manager
Mr. Patrick Njau 33 holds Diploma in business
administration from College of Business studies in
Kampala, Uganda and had worked with Mayfair
Group of Hotels as an administrator for three years.
He also holds professional certificates in Microsoft
system Engineer and Cisco certified Network
Administration .He is currently a resource manager atNorfolk hotel Kampala and will be administration
manager.
The Rest of three Partners will join the business later
during its expansion phase.
3.2 STAFF LIST AND POSITIONS
BNH will employ fifty staffs, twenty brick ,four
administrator, four mechanics, three salesperson, two
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office assistance, seven technical support offices,
four financial assistances, three watchmen, four
marketing assistance. The brick makers should has
qualified in a construction course and has Manson
certificate with five years experience with any
recognized construction companies in Kenya.
For marketing officers will have a diploma in
marketing and has working experience in any
company for four years. Salesmen will be wellspoken and has diploma in sales, talkative and four
years experiences in sales and will be paid with
commission.
Finance officers will be holding any degree in
Bachelor of education (Business studies and
economics).Has worked in any company in accountsdepartments with experience of five years. Office
assistance that has certificate in international
computer driving license from institute of advance
technology and certificate of secretarial, three years
experiences.
Administration officers will have diploma in business
management and has four years working experience,
Mechanics diploma in mechanical and experience of
three years.
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3.3 BUSINESS REGISTRATION.
The legal form of ownership will be partnership .The
business will be registered by the end of June 2015
after applying to the general register upon which
BNH will then obtain a trading permit licenses from
Nairobi city council and thika city council and have
business registration certificate. The business will
then opened on December same year.
3.4 SUPPORT SERVICES
For enhanced business operations, BNH will various
support services and these will include banking with
Equity services .We will open both current accounts
and fixed accounts to help in business operations
whereby fixed one will be for further expansion ofcompany in future. Will apply for Kshs 10 million
long term loans for our starting capital .Then will
sign contracts with Equity for them to offer clients
mortgages for BNH houses and apartments.
3.5 LEGAL SERVICES
Since BNH is Partnership Company, it will consult
the services from R.M. Machache and advocates
located in Nairobi city centre opposite electricity
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house to prepare a partnership deed that will detail
the rights and privileges of each of the partners, exit
of partners among other things.
Furthermore it will consult auditing services from
Water cooper Auditing Company for checking
business accounts and position of company.
4. OPERATIONAL FACILITIES
The following machines and equipment will be
acquired before the company starts its operations.
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ITEMS QUANTITIES TOTAL
COST(KSHS)
Diesel
Generator
GB.C-200
2*(400,000) 800,000
Semi-
Automatic
production
Line machine
1*(2 million) 2,000,000
Lorries 4*(2 million) 8,000,000
Roof tile
making
machine
1*(600,000) 600,000
Burning tilesMachine
1*(1.5 million) 1,500,000
Computers 10*(25,000) 250,000
Laptops 5*(20,000) 100,000
Printers(Hp
1018)
3*(40,000) 120,000
Telephone
Landlines
6*(6000) 36,000
Office chairs 20*(1000) 20,000
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BNH will acquire six spacious rooms of the second
floor of the juja plaza. Ten more offices will be
constructed in factory compound for each of the
seven departments and for ours products show room.
It will also purchase four acres of land for setting up
a factory and extraction of clay soil and creation ofback dams incase of water shortage for houses
construction
The computers and desks, chairs will be mostly used
in juja town offices. Computers will then be arranged
on their respective desks and installed with the
relevant software. The same will be done in the
General Managers, Finance officer, Administrativeoffices.
4.2 OPERATION STRATEGY
Offices opening hours will be 8a.m to 8p.m on
weekdays and 8a.m to noon on weekends and
holidays but for Marketing and salesmen offices will
be working 24/7in order to meet with our client and
to market ,promote products since government will
be introducing a 24 hrs economy.
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Semi- Automatic production line with central control
for blocks making will perform the following tasks
1. Automatic scaling and batching
2. Automatic mixing
3. Automatic modeling and block producing
4. Pile stocking
5. Forklifting and transferring
Which will need ten people to operate and working
with it. Making of bricks will be done during the
since Machine will produce 600-15,000 pieces perday on eight working hours.
During the night workers will be burning up tiles and
bricks which will only need four people to control the
machines and lifting them to drying area.
BNH will provide houses for the staff working in the
plants and construction sites to avoid delay in
reporting work .Masonries will be working onconstruction sites from 7am to 5pm and two hours for
lunch break.
In the first year of the operation the business will
occur very minimal repair cost since most of the
facilities will be brand new
To ensure continuity of construction of the houses,
BNH will collaborates with Thika polytechnique for
students attachments for those whom will be doing
mason courses and will offering job for the best
students and certificates to others will not get chances
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Below is table showing labour cost for the BNH
Employees
Designation
Numbers Salary
per
person
Kshs
Total Salary
per
Month(Kshs)
General
Manager
1 100,000 100,000
Finance
manager
1 80,000 80,000
Technical
Manager
2 60,000 120,000
Marketing
Manager
1 55,000 55,000
HumanResources
Manager
1 40,000 40,000
Architectural
manager
1 70,000 70,000
Sales Offices 4 20,000 80,000
Brick Makers 15 10,000 150,000
Fundis 20 20,000 400,000Marketing
offices
5 15,000 75,000
Office
assistances
3 10,000 30,000
Watchmens 4 6,000 24,000
TOTALCOST
1,124,000
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Other expenses
Insurance 100,000
Maintainer and repair 50,000
Fuel 200,000
Electricity 150,000
Total (Kshs) 500,000
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4.3 FACTORS LIKELY TO AFFECT BUSINESS
OPERATIONS
There are factors that will affect normal operations of
the business. Electricity will be vital for the business
to operate smoothly.BNH will therefore purchase
Diesel Generator and uninterruptible power supply
(Ups) for the computer.
Second factor will be fuel rationing and hirk whereby
it will be used in burning bricks and tiles .So it willinstall solar panel for power supply and reduce
Electricity power bills .Environmental regulations,
especially in the areas of fluorine emission .Fluorine
a by product of the brick making process, is highly
reactive element that is dangerous to human
brearthing.To loosen the danger posed by the gas
workers will be insisted to use scrubbers and mask ontheir faces.
Diversion of the main road that will joining factory
with Thika Highway by upgrading going on the
highway will force the company to create another
route to access the factory. Water will be another
problem since the resident in juja depends on
borehole waters so will make four boreholes and
three Dams to provide back up Waters.
Finally will be stiff competition from other
construction companies. To avoid these BNH will
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retain lower prices and pay workers competitive
salaries to avoid mass exodus .While on the hand,
BNH will be affected internally by unfaithfulness,
Workers unrest, absenteeism and other human
relation problems. To curb this, the Human resource
Manager will handle individual workers well and will
be on the look out for any grumbling emerging and
this will be solved before it threatens the smooth
operation of the company.
5.0 FINANCIAL PLAN
5.1 CAPITAL STRUCTURE
BNH will require a start up capital of Kshs 30 million
.The money will be raise as follows: each of the tenpartners will contribute two million each from their
savings or other sources. This will bring in Kshs 20
million. Then the partners will apply for a long term
Loan of 10 million from Equity bank of Kenya.
5.2 PRE-OPERATIONAL COST
These are expenses, which the BNH will occur before
starting the business operation
ITEMS/ AMOUNT
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ACTIVITIES Kshs
Machinery
And Equipment
13,486,000
Rent 120,000
Licenses and Permits 300,000
Electricity installation 500,000
Insurances 200,000
Advertisement 200,000
Total cost 14,806,000
5.3 OPENING BALANCE SHEET
Non-current assets
KshsPlant, property and
equipment 13,486,000
Current Assets
Cash at Bank16,514,000
30,000,000
KshsCapital
20,000,000
Current liabilitiesLoan from Bank
10,000,000
30,000,000
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5.4 PROJECTED INCOME STATEMENT OF BNHAT THE END DECEMBER 2016
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NOTES1
Opening Stock..115,000,000
Closing stock.27, 500,000
=Cost of good sold..87,500,000
ITEMS KSHS KSHS
Revenue 115,000,000
Less, cost of good
sold
Note1 87,500,000
Gross profit 27,500,000
Less expenses
1.Rent 1440000
2.Salaries 13,488,000
3.Insurane 1,200,000
4.Telephone 120,0005.Mantenane &
Repair
600,000
6.Electrcity 1,800,000
Less (18,528,000)
Net profit 8,972,000
8/3/2019 Iat Buru Project
36/38
BUILDERS AND HOLDERS LIMITED COMPANY
5.5 BHN PROJECTED BALANCE SHEET FOR
THE YEAR ENDING 31ST DECEMBER 2016
Assets Amount
Kshs
Liabilities Amount
Kshs
Fixed Assets
Plant
Properties &
Equipment
CurrentAssets
Cash at
Bank
Closing
Stock
13,486,000
17,364,00027,500,000
54,986,000
Capital
Liabilities
Equity
+
Net Profit
Current
Liabilities
Creditors
Long term
Liabilities
Bank Loan
30,000,000
8,972,000
6,014,000
10,000,000
54,986,000
8/3/2019 Iat Buru Project
37/38
BUILDERS AND HOLDERS LIMITED COMPANY
8/3/2019 Iat Buru Project
38/38
BUILDERS AND HOLDERS LIMITED COMPANY