Business Plan for a Roofing Solutions Company

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Company Business Plan

KZN ROOFING SOLUTIONS

  1. Executive Summary

KZN ROOFING SOLUTIONS is a roofing materials supplier and contractors which was established in 2014 by five members who have a solid background in the built environment.

The company currently operates in the Coastal and Midlands areas of KwaZulu Natal but its vision is to expand country wide.

KZN ROOFING SOLUTIONS supplies with IBR, Chromadek, and Aluminium roofing material and roofing sundries, we also give expertise roofing advice and solutions to our clients.

Currently, the company has a staff compliment of twelve (12) suitably qualified individuals. The company is currently active in Ethekwini Municipality where we are providing roof sheeting services. Due to the demand of roof sheeting, the company is currently active in all districts within KwaZulu-Natal Province.

1.1 Products & Services

The Company is specializing in manufacturing sheet metal to specification on behalf of its customers, which will include manufacturing for other companies as well as roof sheeting contractors that have needs for roofing sheeting and gutters.

Our company strongest aspects is to be able to maintain profitability in almost any economic climate as law require building owners have properly installed and maintained roofing and gutter systems, which require quality fabrication of sheet metal.

We supply IBR, Chromadek, Zinc Alum and Harvey Tile roofing material and we also do roof installations

1.2 Objective

  • Develop KZN Roofing Solutions PTY (LTD) as a premier manufacturer and distributor of ecologically friendly construction materials.
  • Maintain stringent standards that comply with all OSHA laws as it relates to manufacturing.
  • Maintain LEED certification for all KZN Roofing Solution products.
  • Develop ongoing licensing and distribution relationships with companies that operate on an international basis.

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1.3 Financing

  • The start-up and initial investment into the company was provided by each of the five directors purchasing 5000 shares at R500.00 per share which equated to R2, 500,000.00 investments per director and therefore R12, 500,000.00 in total investment into the company for 30,000 shares.
  • The company has been allowed to issue 50,000 shares; therefore 20,000 remain to be issued for future investments if required.

1.4 Mission statement

We built our business around a commitment in meeting many needs required in constructing roofs. We know that with a combination of competitive prices and quality of goods services, we will be the roofing solution company of choice.

We will address our client’s needs through the Batho Pele principles; adhere to the codes of South African National Standards in order to provide quality service

Our mandate is to:

  • build a sustainable and professional organisation that will be a preferred leader in roofing industry;
  • Strive to achieve consumer satisfaction by achieving and exceeding customer expectations.
  • Create job opportunities that will contribute positively to the development of the country

1.5 Vision Statement

  • Our vision is to be amongst the leading innovative South African group of companies with considerable growth in built environment.
  • We plan to be the preferred roofing company in all roofing customers and Contractors.
  • We will ensure our quality of good and services and ensure our recognition increases from our dedication to excellence.
  • In delivering a high level of satisfaction with create a huge bond between our company and our customers
  • In additions to the above we will ensure that we bring this mandate to fulfillment by:
  • Ensuring disciplined systems and good financial management
  • Empowering our staff and previously disadvantaged people by applying management experience of the industry a
  • Demonstrating inspirational and dynamic leadership that will be a good example to other companies;
  • Maintaining excellence and loyalty that is upheld will be rewarded.

1.6 Management Team

KZN ROOFING SOLUTIONS PTY (LTD) was founded, established in 2014 by 5 members that have a number of years of experience in construction. Through their expertise we are planning to bring our operations of the business to profitability within the first year of operations.

  1. Market Analysis

The industry of roofing, manufacturing and installation is very large and the total annual sales in this company amount to approximately R 000000.00 and we project it to remain unchanged or to increase. One of the reasons we started this company is because of the large market where we targeting all construction developments.

2.1. Market Segmentation

  • Roof sheeting manufacturing is only a part of the overall roofing company which includes installation, advising other roofing contractors; give advice and training to our clients and customers. E.g. on roofs for new buildings and alteration to existing roofs.
  • Build a large referral network of clients that consist of roofing contractors, construction companies, construction management companies, general contractors, and product distributors.
  • Establish connections with nationwide distributors of roofing construction materials.

2.2 Marketing Strategies

As Management our intention is to use qualified advertising and marketing firm to help KZN Roofing Solution reach its intended audience of roofing contractors and construction based businesses. We will include traditional print and media advertising methods as well as the Internet.

Construction trade shows, online advertising activities, sales development and viral marketing campaigns will follow carefully orchestrated strategies by marketing personnel experts.

Timely coverage of KZN Roofing Solutions innovations will be further directed through ongoing media liaisons and other media outlets

The business will create a broad networking for sales agents to contact and develop relationships within major construction companies and roofing contractors.

The Company intends to develop an independent sales network that will operate on a commission basis. At this time, Management is developing a commission schedule that will provide agents with 5% (for large orders) to 15% (for small orders) commission for each sales order. Prior to launching operations, Management expects to have three to four sales agents that will operate within the KZN province office. One of the keys in ensuring that the business is successful is to provide adequate roofing solution product line to as many distribution channels as possible.

On a regular basis, the Senior Management Team and Sales Agents will attend industry conventions with a focus on the construction and roofing contracting industry. In regards to conventions, the business will regularly rent booths at exhibitions targeted at these businesses. Sales packages and literature regarding the Company’s website, the KZN Roofing Solutions products, and the costs associated with products will be featured.

Using the aforementioned marketing strategies, KZN Roofing Solution will focus on the low cost, commercial, environmentally friendly, and structurally secure nature of the Clients. The business will showcase all of these points in all sales literature produced and distributed by the Company. One of the additional focuses will be the tax subsidies and tax credits associated with using environmentally friendly materials.

In terms of distributions, transporting of goods will be outsourced to a third party vendor. After an extensive financial analysis, it was found that it is far less risky and far more cost efficient to contract a private carrier, such as DHL or FedEx, to handle all matters relating to transporting. Both of these companies offer sophisticated and streamlined transportation management and delivery services for manufacturing businesses. All direct sales will be made through retail sales partners, which Management will secure prior to the onset of revenue generating business operations.

3. Strategy and Implementation Summary

The company’s overall strategy is based on a continuous improvement process of setting objective, measuring results, and utilizing feedback to facilitate further growth and progress.

KZN Roofing Solution plans to rapidly develop marketing alliance with industry leaders and pursue new sales of its services to residential and commercial builders.

4. Start-up Summary

Projected Startup Cost

Legal

R 20 000.00

Office Equipment

R 129 600.00

Office Rent

R 34 400.00

Insurance

R 15 000.00

Advertising

R 50 000.00

Machinery

R 785 000.00

Consumables

R 38 000.00

Finance Charge - Forklift

R 21 000.00

Motor vehicle expenses

R 55 000.00

Tools and Equipment

R 50 000.00

Working Capital

R 500 000.00

Total start-up cost

R 1 698 000.00

5. Financial Plan

We expect to raise R1, 698,000.00 of our own capital, and to sell our product so that we will be able to break-even without borrowing from the bank but should we fail to reach the target then we will consider borrowing a loan from the bank. This provides the bulk of the start-up financing provided.

Financing

Equity Contributions

Management Investment:

R 1 698 000.00

Member 1

R 339 600.00

Member 2

R 339 600.00

Member 3

R 339 600.00

Member 4

R 339 600.00

Member 5

R 339 600.00

Total Equity Financing

R 1 698 000.00

Banks and Lenders

Banks and Lenders

R 0.00

Total Debt Financing

R 0.00

Total Financing

R 1 698 000.00

5.1 Projected Profit and Loss

As the profit and loss table shows, we expect to be more profitable in every year of business.

Pro-forma Profit and Loss (Yearly)

Year

1

2

3

Sales

R 6 880 545.00

R 7 499 793.00

R 8 174 775.00

Cost of Goods Sold

R 688 054.50

R 749 979.30

R 817 477.50

Gross margin

90.00%

90.00%

90.00%

Operating Income

R 6 192 490.50

R 6 749 813.70

R 7 357 297.50

Expenses:

Cold Form Rolling Machine

R 735 000.00

Consumables

R 55 000.00

R 60 500.00

R 66 550.00

Depreciation on Equipment

R 43 752.00

R 48 127.20

R 52 939.92

Electricity and water

R 54 000.00

R 59 400.00

R 65 340.00

Finance charges (Vehicles))

R 61 440.00

R 67 584.00

R 74 342.40

General Expenses

R 5 900.00

R 6 490.00

R 7 139.00

Insurance

R 21 600.00

R 23 760.00

R 26 136.00

Motor vehicle expenses

R 23 800.00

R 26 180.00

R 28 798.00

Postage and Stationary

R 1 800.00

R 1 980.00

R 2 178.00

Repairs and Maintenance - Machinery

R 4 800.00

R 5 280.00

R 5 808.00

Rent

R 396 000.00

R 435 600.00

R 479 160.00

Salaries and Wages

R 480 500.00

R 528 550.00

R 581 405.00

Commission - Representatives

R 19 900.00

R 21 890.00

R 24 079.00

Staff Expenses

R 1 500.00

R 1 650.00

R 1 815.00

Telephones

R 12 000.00

R 13 200.00

R 14 520.00

Finance Charges ( Forklift)

R 48 000.00

R 52 800.00

R 58 080.00

Total Operating Costs

R 1 964 992.00

R 1 352 991.20

R 1 488 290.32

EBITDA

R 4 227 498.50

R 5 396 822.50

R 5 869 007.18

Federal Income Tax

R 735 399.00

R 828 051.00

R 917 269.50

State Income Tax

R 111 426.00

R 125 464.50

R 138 978.00

Interest Expense

R 137 623.50

R 128 068.50

R 117 621.00

Depreciation Expenses

R 61 876.50

R 61 876.50

R 61 876.50

Net Profit

R 3 181 173.50

R 4 253 362.00

R 4 633 262.18

Profit Margin

46.23%

56.71%

56.78%

5. 2 Projected Cash Flow

The cash flow projection shows that starting cost and provisions for ongoing expenses are adequate to meet our needs until the business itself generates its own cash flow sufficient to support operations.

Pro-forma Cash flow (Yearly)

Year

1

2

3

Sales

R 6 880 545.00

R 7 502 775.00

R 8 174 775.00

Operating Costs

R 3 964 012.50

R 4 112 493.00

R 4 460 064.00

EBITDA

R 2 228 467.50

R 2 637 316.50

R 2 897 233.50

Taxes, Interest and Depreciation

R 1 046 314.50

R 1 143 460.50

R 1 235 755.50

Net Profit

R 1 182 153.00

R 1 555 732.50

R 1 723 354.50

6. CONCLUSION

As is evident from the information above, we have a thorough knowledge of in the business and the industry within which we operate. We have the ability and the necessary expertise to successfully and project within the construction industry and make an empathetic success of our business.

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