BUSINESS PLAN FOR

SALMA ENTERPRISES
SUBMITTED

BY

ANTO ADAMU JATAU

TO
KADUNA BUSINESS SCHOOL
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS
FOR THE AWARD OF DIPLOMA IN INOVATION AND
ENTREPRENEURIAL FINANCE

AUTHORS
MR. ANTO ADAMU JATAU
Email:

TABLE OF CONTENTS
CHAPTER 1
1.0
Executive Summary
1.1 Objectives
1.2
Mission, Vision and value
1.3
Key to success
CHAPTER 2
2 Company Summary
2.1 Company Ownership
2.2
Start Up Summary
2.3
Company Location
2.4
Legal Issues
CHAPTER 3
3.0 Business Description
3.1
Product
3.2
Quality Of Product
3.3
Affordability Of the product
3.4
SWOT Analysis
3.5
Competitive Comparison
CHAPTER 4
4.0
Market Analysis
4.1Target Market
4.2Marketing Strategies
4.3 Positioning
4.4 Marketing Mix
CHAPTER 5
5.0
Human Resource
CHAPTER 6
6.0
Financial Plan
6.1 Cash Flow Projection
6.2 Income Statement Projection
6.3 Balance Sheet projection
6.4 Break-even Analysis
6.5 Ratio Analysis
6.6 Conclusion

CHAPTER 1
1.0 EXECUTIVE SUMMARY
SALMA Enterprises is a start-up seeking N 4,000,000. The business produces
bricks with a slightly different composition but makes a bigger impact on cost of
manufacturing and utilizing industrial waste. These bricks use the usual cement,
sand and water mixture with the compliment of incinerated (burnt) industrial
waste, which reduces the usage of cement by more than 25% but still making
these bricks more durable. This means it provides three major benefits, reduction
of cost by as much as N 15 per brick, more durability and utilization of industrial
waste for which there is no viable solution in Kaduna.
The idea of business is to gain the advantage of cost reducing innovation. This
idea is a product of highly talented personalityAnto Adamu Jatau. We are
starting with standard size bricks but plan to introduce customize option to our
customers as well. The waste of marble industry is also utilized in our product.
We hope for this idea to succeed in short and long term as it provides benefits to
all from constructors to society.

1.1 OBJECTIVES
The Key objectives for SALMA Enterprises are:
1. To be recognized as safe and durable brick manufacturers throughout the
regional market in the first two years.
2. To achieve the sales target of 69,000 bricks in first year of operation and
145,000 bricks in 2017 (second year of operation).
3. To exceed the breakeven point of 131,055 Bricks before the end of the 2nd
quarter of second year.
4. To become profitable to minimum level of N 4,000,000 in third year.
5. To gain the support of international environmental protection agencies in
research and further product development.
6. To gain the government contractors of large project..
7. To become the first priority of brick purchasers who want bricks for
construction on large scale.

1.2 KEYS TO SUCCESS

Increase gross margin to more than 40%. Keys to Success

Excellent product and service that will build and maintain customer loyalty.

A business location that will assure high company visibility and a high flow
of customers.

Our commitment to continuous improvement and total quality services.

Increase our sales and expand our current customer base.

1.3 MISSION:
We are a business entity
We use the industrial waste in innovative ways and form practical reliable
products.
To research, create and promote solutions that are valuable to customers, which
are high in quality, environmentally safe and long lived.
Core Values:
Our core values are:
I. Social responsibility and commitment .We do Business for betterment
II. Continuous improvement .Finding more effective solutions
III. Creativity and innovation. Finding novel ways to use the industrial waste
IV. Human resource development .People are the most valuable asset in our
business.

CHAPTER 2
2.0 COMPANY SUMMARY
2.1 COMPANY OWNERSHIP
SALMA Enterprises is a Sole Proprietorship business that is owned by Anto
Adamu Jatau.
2.2 START UP SUMMARY
Start-up capital of N 4,000,000 will be raised by the Kaduna State
Government through Bank Of Industry. The equipment needed for this start
up is:

6 Inch Machine

9 Inch Machine

Wheel Barrows

N 30,000

Shovels

N 25,000

Power Generator

N 150,000

Trays

N 200,000

N 400,000
N 500,000

TOTAL

N 1,305,000

SALMA Enterprises is mainly concerned with manufacturing low-cost and

environment-friendly bricks. However, with the passage of time, we also plan to
expand if feasible opportunity comes up in the future. We will also look forward
to entering the other market if the situation permits.
2.3 COMPANY LOCATION
The place for this facility will be in No. 5 Freedom Street, Ungwan Masaran
Road, Bayan Loko Kafanchan. Initially, our business will focus on city-wide
customers and operations

2.4 Legal Issues

The company has obtained the licence to operate. All the needed documents
have been obtained and is therefore legal to operate.

CHAPTER 3
3.0 BUSINESS DESCRIPTION
SALMA Enterprises aims to capitalize on the growing construction market
across Kafanchan and beyond through the moulding of high quality bricks.
Located in Kafanchan, the company will become highly profitable through
moulding and sale of cement products products. SALMA Enterprise will own
and control facilities, inflow and outflows, which will enable SALMA Enterprises
to create immediate revenue streams while growing its factory into a large
income generator.
3.1 PRODUCTS
The company will mainly be focused on the high quality standard cements
product that is second to none and these products are:

Bricks

Interlocks

Concrete Realms

3.2 QUALITY OF PRODUCTS

The quality of the product is excellent as the type of sand, cement and other
equipment are high quality equipment with a high standard means of production.
3.3 AFFORDABILITY OF THE PRODUCT
The product is very much affordable compared with the competitors product.
3.4 SWOT ANALYSIS
The SWOT analysis of our business is presented below. S stands for
Strengths, W for Weaknesses, O for Opportunities and T stands for
Threats.

Strengths

Our bricks price on average is less than what competitors offer, due to
the usage of incinerated waste that reduces cement usage up to 25% in
manufacturing.

Our bricks are more durable than those available in the market.

Our bricks are less water absorbent, which will give extra protection from
dampness during rainy seasons.

Our product bricks, are environment friendly as they are formed with
industrial waste. Every brick formed is every unit of earth saved from
being polluted.

No potential aspect has been identified so far that makes our product
inferior to those available in the market.

Weaknesses

Our product and eventually our success depend solely on industrial

wastes supply. If the supply of the waste is stopped due to any reason, we
will not be able to manufacture such bricks.

There are cartels and pressure groups in the market which support certain
business groups (our competitors). If they turn against us, we cannot do
much to prevent them from interfering in our business.

We do not have an up-to-date state-of-the-art research and development

department. It can be difficult for us to reply to any change in the market
resulting from the introduction of substitutes, etc.

Being located in Kafanchan our weakness in that way is that there is

frequent political disturbance here.

We do not have huge investment portfolio, any big problem can question
our existence.

Opportunities

Our unique product opens the vistas of opportunities for us. There is no
other such product in the market, so there is potential chance that we
could easily capture more and more markets.

The availability of tons of industrial waste and its continuous production

offers us the opportunity to set up this business and continue it.

We are located in Kafanchan, which is an urban area. Availability of wellbuilt infrastructure will facilitate us in many operations.

Threats

Threats of new entrants

Threats of substitute.

3.5 COMPETITIVE EDGE

Our unique method of using incinerated ash in brick manufacturing will give us
tremendous competitive edge against competitors. Our method reduces
manufacturing cost, making it possible for us to sell bricks less than the
prevailing market price. Our bricks will also be more durable than those
manufactured by our competitors. Moreover, tons of idle industrial waste will be
brought into utilization, which lends another edge resulting in environmental
protection. Our product will beat the competitors price and quality; hence, there
is a great probability that our product will quickly and easily penetrate the
market making us the market leader.

CHAPTER 4
4.0 MARKETING ANALYSIS
Our focus will be to cover the aspects the local manufacturers often ignore. Long
term agreements and just in time partners of construction projects. Also research
to improve the block strength and letting the customers know what we are doing
to improve our product.
4.1 TARGET MARKET
Initially contractors and builders i.e. business customers will pervade our target
market. The contractors can be of all types requiring bricks for construction.
However, with the passage of time we also intend to penetrate the consumer
market. Hence, looking forward to carrying out both businesses-to-business and
business-to-customer transactions simultaneously. Yet, our prime focus will
remain on business-to-business transactions.
4.2 MARKETING STRATEGY
Our focus will be to cover the aspects the local manufacturers often ignore. Long
term agreements and just in time partners of construction projects. Also research
to improve the block strength and letting the customers know what we are doing
to improve our product.
4.3 POSITIONING
SALMA Enterprises will establish itself as a cost saving, environment friendly,
durable and reliable supplier of raw material to construction contractors.
4.4 MARKETING MIX
Product
Our firm offers bricks as a product to customers. The bricks are made of a
conventional material with addition of incinerated ash (a complement). The
combination results in 25% less cement usage and significantly improves
durability of the bricks as compared to traditionally prevalent bricks. The
incinerated ash is obtained from industrial waste which is easily and abundantly
available, textiles, chemical and marble industry waste is to be utilized. Asias
largest marble market is just a few kilometre from the sites. The waste is in the
form of sludge, which is dried out and burnt to obtain the incinerated ash. The
mixture of incinerated ash, cement and sand is combined with water to obtain
the material to be used for manufacturing. We will initially offer standard blocks
of 6 inch and 9 inch. However, when requested, it can be altered according to the
customer requirements. The quality of our bricks and their durability is much
more than our competitors making our product a low-priced good-quality distinct
offering. We will look forward to get our product certified by international
agencies.
The price of our bricks will be N110 for 6 inch blocks and N170 for 9 inch blocks
it, which is less than the price of bricks in the local market. Hence, our price will
give us the competitive edge against the competitors and will greatly help in

penetrating the market with tremendous growth potential. Moreover, the quality
of our bricks and their durability will be much more than the competitors,
making our product a low-priced good-quality distinct offering.
Other than the regular price, we are offering discounts to our customers in the
form of different packages. Like early-order discounts, early-payment
discounts and bulk discounts. However the extent of discounts will be
dependent on the deals because the raw material rates differ from day to day.
Besides this we will be doing transactions on credit basis too but prompt
payment will be encouraged through discounts. Special discounts will be given to
long-term major project contractors.

Moreover, we offer 15% discount if we receive the order one week before the
delivery date. We will also offer 20% discount if our customer uses his own
warehouse for the storage of the ordered bricks.
Placement (Distribution)
Our distribution network will cover entire Kafanchan and beyond. At first, our
distribution network will not be that big, but in the coming years there is a great
potential for the expansion of our network. Our distribution network will expand
as the demand of our bricks increases. Quick delivery will always remain our
preference, at starting we will promise the delivery of bricks in the same day as
the order is received. Later promise to deliver will shrink to within hours. Timely
delivery will be guaranteed. We will charge transportation cost separately from
the cost of bricks. Transportation charges will vary from order to order depending
on the delivery location and other factors.
Promotion
(i)

Word Of Mouth Marketing

Our product is less costly than ordinary blocks and we are targeting specifically
B2B customers who focus on cost plus reliability. These contractors often have
contacts with each other, our satisfied customers will tell others about this
product and we will reward those customers with discounts who bring other
customers to the company.
(ii)

Sign Boards

Sign boards will be displayed on project sites where these bricks will be used
This project is build with Green Bricks.

CHAPTER 5
5.0 HUMAN RESOURCE
The company will operate with 5 staff to start operation where it consists of 1
cashier and 4 labourers. Wages will be paid according to the number of products
moulded.
5.1 Organisational Chart
Sole
Proprietor

Cashier

Labourer

Labourer

Labourer

Labourer

The cashier will responsible for collecting, recording and keeping all cash and
credit sales while the labours will be responsible for mixing and moulding of brick
with the aid of the machine. The cashiers salary is 25,000 per month while the
labourers are paid base on production output.

CHAPTER 6
6.0 FINANCIAL PLAN
In every project found. We have to pass through the financed process. This have
to do with the starting of business, whether the personal income used or term
loans from banks. In our business, the financing structure and ways of doing it is
like the path below.
1) Equity contribution: this cover the land we are using for the brick factor.
2) Bank Of Industry funding of 4 million Naira, which will be used to start-up
the operations.
Projected Income statement
INCOME

YEAR 1(N)
YEAR 3 (N)

Product Sale

10,800,000

Cost of Goods

8,430,000

TOTAL INCOME

2,370,000

16,140,000
9,240,000
6,900,000

YEAR

(N)

15,810,000
8,940,000
6,870,000

EXPENSES/COST
Delivery

123,000

125,000

Labor

1,660,000

2,372,000

Advertisement

10,000

10,000

10,000

Other expenses

100,000

200,000

120,000

TOTAL EXPENSES

1,893,000

2,707,000

2,551,000

Net income before tax

477,000

4,193,000

4,319,000

Taxes

47,700

113,000
2,308,000

419,300

431,900
Depreciation
84,179
NET INCOME

39,150
390,150

63,293
3,710,407

3,802,921

The value of depreciation is 3% ,5% and 7% respectively of assets amount.

Balance Sheet Projection

N
o

Particulars

Year 1 (N)

Year 2 (N)

Year 3 (N)

ASSETS:

1
a

Equipments

1,305,000

1,265,850

1,202,557

1
b

Cash in Hand

2,045,874

4,547,565

2,593,191

TOTAL ASSETS

3,350,874

3,767,541

7,140,756

LIABILITIES:

3
a

Rent (Equity)

200,000

200,000

200,000

3
b

Loan

3,222,216

1,888,872

555,528

3c Interest

161,108

94,436

27,764

3
d

Retained Earnings

232,450

1,584,233

3,012,456

TOTAL LIABILITIES

3,350,874

3,767,541

3,795,748

Break-even Analysis
SALMA ENTERPRISES is expected to reach break even in the third month of the
first year of operations. With the sales of 12,000 units.

Ratio Analysis
YEAR 1

YEAR 2

Return on Equity 51.3%

5.4%

Debt Ratio

52.6%

Current Ratio

6.6

96.6%

158.2%

YEAR 3

5.3%
15.4%
79.3%

22.5%

Conclusion

To have a successful business there are a couple of methods that the business
must consider first.
(1) They must know their target market and by knowing this they have a
competitive advantage that allows them to have an edge on the competitors
(2) They must also know their value chain which is a series of transactions
between all participants that influences the final product. The value chain is a
place where the businesses need to be in order to identify the needs of its target
market