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CALEDONIAN COLLEGE OF

ENGINEERING
Department of Educational and Professional
Development

Advanced Life Skills Development


(EPDO 301)

BUSINESS PLAN FOR SME


BUSINESS NAME
Prepared by
AHSAN AHMED
08709
ECE
21/12/2011

Advanced Life Skills Development Module


Department of Educational and Professional Development

Table of Contents
Table of Contents................................................................................................2
1.0 EXECUTIVE SUMMARY...............................................................................4
2.0 THE BUSINESS CONCEPT AND APPROACH USED................................5
3.0 BUSINESS VISION, MISSION & OBJECTIVES...........................................6
3.1 Business Vision..........................................................................................6
3.2 Business Mission.......................................................................................6
3.3 Business Objectives/Goals........................................................................6
4.0 MARKET ANALYSIS.....................................................................................7
4.1 PEST Analysis and Conclusions...............................................................7
4.2 SWOT Analysis and Conclusions..............................................................7
4.3 Product and / or Service Description.........................................................8
4.4 Target Customers......................................................................................9
4.5 Competitor Analysis & Competitive Advantage.........................................9
4.6 Marketing Strategies................................................................................10
5.0 BUSINESS OPERATIONS..........................................................................11
5.1 Legal Status and Approvals required.......................................................11
5.2 Scope of Business Operations ...............................................................12
6.0 THE ORGANISATION.................................................................................14
6.1 Organisational Structure and Key Management Personnel....................14
7.0 FINANCIAL PROJECTIONS.......................................................................16
7.1 Pre-operation / Establishment Cost Projection........................................16
7.2 Five Year Annual Sales & Profit Projection..........................................17
AHSAN AHMED

08709

ECE

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Advanced Life Skills Development Module


Department of Educational and Professional Development

8.0 RISK ASSESSMENT...................................................................................17


8.1 Risks.........................................................................................................17
These risks can affect my business both the ways in good way or in bad way
as well. If I take a risk and its outcome is positive so it can be profitable for
me and the company as well and the company can make some name of
itself in this field. But if the risk which we took has a negative effect on the
company so we can lose some amount of money and can loss our gained
reputation. ..................................................................................................17
8.2 Contingency Plan.....................................................................................17
9.0 APPENDICES..............................................................................................18
Appendix A: PEST Analysis...........................................................................18
Appendix B: SWOT Analysis.........................................................................19
Appendix C: Complete Financial Projections ................................................22
Appendix D: Curriculum Vitae of Key Management Personnel.....................28
Personal Profile:....................................................................................................29
Education and Qualifications:................................................................................29
Skills: ....................................................................................................................31
Interests and Activities:.........................................................................................31
References:........................................................................................................32
Mr. Afzal Shah...................................................................................................32

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08709

ECE

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Advanced Life Skills Development Module


Department of Educational and Professional Development

1.0 EXECUTIVE SUMMARY


The name given to the business is ARABIAN CONSTRUCTION. The concept to
start the business is by analysing and observing trends. It is a sole proprietary
firm. The major goals are to become recognized company in Oman within a time
period of 4-6 years, to provide the quality and service in the construction industry
by which customer is satisfied, to expand the company internationally and
increase our profit and reputation in 10 years and to create at least 3-5 job
opportunities for Omanis and 8-10 job opportunity for expats in first 3 years.
The company is offering services to the pupil who wants to build something like
flats, villas etc. The company is more customers friendly. The window of
opportunity is open as the country is developing. Too many projects are on-going.
Before entering the market the company will be promoted. As the quality of the
product or services is decided by the customers the company will fulfil their
needs. The selling price will be low compare to other construction companies.
Services offered are Site Preparations, Architecture Plans, Site Plans,
Foundations, Alterations, Interior and Exterior Renovations, Finishes like painting
and Final Inspection.
Pupil who wants to build their own home will hire the companys services. Target
customers are from Muscat region both male and females ageing around 30 to
60 because the standard of living is higher than other regions. They prefer quality
instead of quantity.
Construction is business is on boom and it is expected to grow more. Competition
will be tough but the customer is god he will decide everything.
The company will be promoted by Website, E-mails, Television, Radio,
Newspapers, Magazines, Leafleting, Brochures, Posters, Banners, Signage,
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08709

ECE

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Advanced Life Skills Development Module


Department of Educational and Professional Development

SMS, Caps and T-Shirts. And the strategy is to form the best relation with the
customer.
The management comprises of Engineer, Architect, QS, Accountant, Contractor,
Labours and Cleaner. As most of them are professionals and will be experienced,
this will help the company to achieve our goals. The quality, service and the
experience of the staff will help ARABIAN CONSTRUCTION to be a successful
company in coming years.

2.0 THE BUSINESS CONCEPT AND APPROACH USED

ARABIAN CONSTRUCTION is the name of the construction company. As


Oman is a country which is under development so the construction business is on
boom right now and it is considered to rise in the coming years. So it is very good
opportunity to start our own construction business. Everyone is looking to build
his own home instead of living in a flat and pay the rent of the flat which are
touching the sky.
The approach used to start the business is by observing the trend. As many new
construction companies are being registered so the window of opportunity is
open to join the business. By seeing and analysing the trend of people opening
construction companies the idea came to my mind to open and own a
construction company.
As the company will be having experienced engineers and skilled workers and
the quality of the construction will be good and reliable so the business will create
a good customer value.

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08709

ECE

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Advanced Life Skills Development Module


Department of Educational and Professional Development

3.0 BUSINESS VISION, MISSION & OBJECTIVES


3.1 Business Vision
To be the pre-eminent, unique and reliable construction companies in Oman and
in the Middle East by providing the standard of service customers need and
timely completion.
After 5 years the company should gain good reputation and should be recognized
internationally.

3.2 Business Mission


To offer our clients finest, unique and innovative quality of designs and
construction by the means of best resources and technology available and
provide quality services in competitive price and help the economy of Oman and
to implement practices for the health and safety of the employees.

3.3 Business Objectives/Goals

To become a one of the most popular and recognized company in


Oman within a time period of 4-6 years.

To provide the quality and service in the construction industry by


which customer is satisfied.

To expand the company internationally, to improve our profit and


increase our reputation in around 10 years.

To create at least 5 job opportunities for Omanis and 10 job


opportunity for expats in first 2 years.

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08709

ECE

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Department of Educational and Professional Development

4.0 MARKET ANALYSIS


4.1 PEST Analysis and Conclusions
The entered industry is Construction/Development. The industry in Oman is really
on the boom. As Oman is under development so the construction business is
profitable. Alubond and glass are taking a step forward. Most of the buildings are
being finished by either glass or alubond or both. As the finishing is done by
these stuffs, so the look of the building is really nice. Construction on large scale
is going on in Oman. Too many projects are on-going such as Royal Opera
House, Muscat Grand Mall. The window of opportunity is open as too much of
development is going on. As the company dont have any reputation so the
starting of the business will be slow but it will increase gradually when the
company will gain reputation and customers will give our reference to other
customers looking for a construction company.

4.2 SWOT Analysis and Conclusions

The strengths and weaknesses of the company are as follows.


STRENTHS

WEAKNESS

New brand name

Recruitment

Low selling price (keeping less profit)

Competition

Experienced engineers

No reputation

Skilled workers

Small warehouse

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08709

ECE

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Department of Educational and Professional Development

By keeping less profit in the start of the business the cost price will be low for
the customers. Other companies are charging too much for construction. So
my idea will attract many customers. In this why the company can take an
advantage on other established companies.
Threats by which the company can be affected are.

Recession

Weather conditions

Competition

Change is law

Rules and regulations

Ill gain some more knowledge about my field so that I could help my company in
every way I can.

4.3 Product and / or Service Description

Arabian Construction offers many services designed to allow the customer


to work with our managers and create a project that the company can carry
forward to the way of completion. Our designs will be unique and reliable.
Company deals with Commercial, Residential, Roads and Dams Construction.
Some of the services which are offered are:

Site Preparations

Architecture Plans

Site Plans

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08709

ECE

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Advanced Life Skills Development Module


Department of Educational and Professional Development

Foundations

Alterations

Interior and Exterior Renovations

Finishes like painting

Final Inspection

4.4 Target Customers

As the customers who wants to build their own home are married and had been
working for around 10-15 years, so the age limit will be between 30 years - 60
years of both the genders male and female. As the company will be located in
Muscat region so the customers living there or wants to build their home in
Muscat will be preferred over the customers living far away or wants to build their
home in some other region. The company will deal with the customers according
to their living lifestyle. The company will also deal with the government sector for
their projects.

4.5 Competitor Analysis & Competitive Advantage

The two major companies in our business line are.

Galfar Engineering &Contracting S.A.O.G.

Al Hassan Engineering Co. S.A.O.G.

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ECE

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Department of Educational and Professional Development

Their strengths are the reputation, reliability and services. Both are in top class
companies. Galfar was established in 1972 and Al Hassan was established in
1975. So both the companies are well known.
Their weaknesses are the selling price. Many of the customers cant afford their
designs and constructions.
As the cost price will be low in the starting era we will keep less profit to attract
more customers.
The quality of the design and construction are really good these days. Prices are
high due to lot of demand and the service is getting better day by day.
So the selling price of the company will be giving will be better than both the
companies in this sector the company can compete with them.
There are some other SMEs as well which can affect the companys growth such
as Al-Hatmy, Al-Hajiry etc.

4.6 Marketing Strategies


Strategy is to create excellent relationship with our customers and the dealer
from which the company will deal for the construction materials and so that we
can deal with them in credits. The market strategies to aware people or create a
buzz about the company and promote it by as follows.

Internet Website, E-mail.

Training Exercises Fresh graduates, Diploma holders.

Broadcast Advertisement - Television, Radio.

Print Advertisement - Newspapers, Magazines, Leafleting,


Brochures, Posters, Banners, Signage.

Telecom SMS.

Caps and T-Shirts.

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08709

ECE

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Department of Educational and Professional Development

The first 3 customers will be given a discount of 7%.

5.0 BUSINESS OPERATIONS


5.1 Legal Status and Approvals required
As the business is only owned by me so the nature of my business will be Sole
trader. My position in the business will be the Owner/CEO/Manger of the
company. Rules and regulations will be strictly followed like No Drinking and
Smoking, Late comer will be fined and Dress code etc.
Approvals needed are as follows.
Approval from Ministry of Environment and Climate Affairs (MOECA).
Obtain clearance of formal land commitments from the Ministry of Housing
(MOH).
Approval, Permits and Licenses from the Municipality of Muscat and Ministry of
Commerce and Industry.
Approval from Ministry of Health and Safety.

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08709

ECE

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Department of Educational and Professional Development

5.2 Scope of Business Operations

Company deals with Commercial, Residential, Roads and Dams Construction. As


the Company develops and gains reputation among the society so the company
will get more projects so to cope with that we will increase the employees. The
company will buy its own land and build a store for the products. The scope of the
business will be to remain in Muscat region for at least 5 years but after that it
can be expanded to any other region as well. The business will be started in
Muscat region. I choose this location because the population is more here and
the people are more educated if you compare that with other regions. We require
an office area for around 100sqm and a store of around 100sqm. Electricity and
water is one of the basic necessities of the company. Security will be required so
that no one can breach into the company. As we are renting the office and the
store, so the total cost for both lands per month will be around R.O 1500. For the
office we need at least 10-15 chairs and 3-5 tables. Cost of the chairs will be
around R.O 100 and for tables around R.O 100.
Plant and equipment necessary to start the business are.

Concrete mixer

Generator

Spades

Buckets

Ladders

Wheelbarrows

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08709

ECE

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Advanced Life Skills Development Module


Department of Educational and Professional Development

Time to get the equipment and machinery will be approx. 2-3 weeks
The equipment will be bought new.
Vehicles required are as follows.

1 Van (R.O 6000)

1 Pickup (R.O 3500)

2 Cars (R.O 5000)

These vehicles will by bought used from the source of used car market.
Materials which are required for the business are.

Cement

Concrete

Frame work

Scaffoldings

Helmets

Safety Boots

Gloves

Tiles

High Yield Steel

Chairs

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08709

ECE

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Department of Educational and Professional Development

Tables

Computers

Printers

Scanner

Stationary etc.

These all materials can be purchased from Local Omani suppliers.

6.0 THE ORGANISATION


6.1 Organisational Structure and Key Management Personnel

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08709

ECE

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Department of Educational and Professional Development

Job title

Qualification

Description of the work

Salaries(R.O)

Owner/CEO/
Manager

BSc in
Construction
Engineering

Funding, Decision making,


Attending meeting.

Monthly profit

Architect

BEng in
Architecture
Engineering

Designing.

300

Engineer

BEng in Civil
Engineering

Site Investigating, Land surveying.

400

Contractor

BEng in
Construction
Engineering

Controlling the Labour,


Dealing with Sub-Contractors.

300

Quantity
Surveyor

BEng in Quantity
Surveying

Calculating Budget.

250

Labour

Not Required

Constructing of the project

80

Cleaner

No Required

Cleaning and maintaining the office

60

Accountant

BBA

Handling the accounts


section.

250

ORGANIZATION STRUCTURE

OWNER/CEO/MANAGER

ARCHITECT
AHSAN AHMED

ENGINEER
08709

QUANTITY
SURVEYOR
ECE

ACCOUNTANT
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Department of Educational and Professional Development

CONTRACTOR

LABOURS

CLEANER

The communication between the personnel is done by e-mails, mobile phone,


meetings. The company will hire the employees from local market. Everyone
should have communication skills and time-management skills.

7.0 FINANCIAL PROJECTIONS


7.1 Pre-operation / Establishment Cost Projection
Total Investment required for
starting the business (in Riyal
Omani)

50000

Funds by self (in Riyal Omani)

15000

Required funding (in Riyal Omani)

35000

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08709

ECE

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Department of Educational and Professional Development

7.2 Five Year Annual Sales & Profit Projection


Particulars

Year 1

Year 2

Year 3

Year 4

Year 5

Sales (in Riyal


Omani)

-18185.5

7814.5

7814.5

32086.5

32086.5

Profit /
Loss(in Riyal
Omani)

-18185.5

-10371

-2557

29529.5

61616

8.0 RISK ASSESSMENT


8.1 Risks
The two positive risks arising from business operations are.

More profit

Reputation gained

The two negative risks arising from business operations are.

Loss of money and reputation

Natural Incidents such as cyclones

These risks can affect my business both the ways in good way or in bad way as
well. If I take a risk and its outcome is positive so it can be profitable for
me and the company as well and the company can make some name of
itself in this field. But if the risk which we took has a negative effect on the
company so we can lose some amount of money and can loss our gained
reputation.
8.2 Contingency Plan
If the loss of the company cannot be covered so my backup plan is to sell my
business to those who want to buy my project.

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08709

ECE

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Department of Educational and Professional Development

9.0 APPENDICES
Appendix A: PEST Analysis
POLITICAL FACTORS

ECONOMIC FACTORS

Approval from Ministry of Environment


and Climate Affairs (MOECA).

More labours which will cost you


because of the wages.

Obtain clearance of formal land


commitments from the Ministry of
Housing (MOH).

Omani Ministry grants the license if your


investment for the company is at least
R.O 150,000.

Approval, Permits and Licenses from


the Municipality of Muscat and Ministry
of Commerce and Industry.

Paying Income tax of 12% if your


income is more than 30,000.

SOCIAL FACTORS

Customer taste changes quickly.


Migration of people and people aged
more than 60 cant work in Oman.
Language barrier is a huge factor.

TECHNOLOGICAL FACTORS

Introduction of new machineries by


other company can cost you.
Companies providing better websites to
interact with costumers.
Company advertising through signage
helps to attract the costumers.

CONCLUSIONS
How do these factors affect your start-up venture?

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08709

ECE

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Department of Educational and Professional Development

As we conclude, we see that construction business is becoming common day by


day. To many constructions projects are on-going in Oman. Population factor is
playing a role in the growth of construction business. Families are getting bigger
every day so they need much improved and bigger home to live.
Ministry grants license and permits if you invest at least Rial Omani 150,000
which can be a huge factor which affect your start-up. Hiring labours is really
difficult now a day because they know what they want and how to get that.
Getting approval, permits and licenses from the government consume a lot of
time and cost as well. These are the main factors that affect the start-up venture
of a business.

INT

Appendix B: SWOT Analysis

Strengths:

Weaknesses:

Think of patents, brand names, reputation among


customers, cost advantages, access to resources,
networks, etc.

Think of patents, brand names, reputation among


customers, cost advantages, access to resources,
networks, etc.

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08709

ECE

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Department of Educational and Professional Development

Boom

in

construction

ERNAL

business.

companies.

New Brand name.

Providing

construction

with

No Reputation.

Recruitment of experienced

low cost price (keeping less

personnel.

profit).

Competition with established

Small warehouse.

Experienced engineers and

EXTERNAL

skilled workers.

Opportunities:

Threats:

Think of market gap, customer needs, new


technologies, law & regulations, international trade
options, funding etc

Think of emergnce of substitute products, new laws &


regulations, etc.

Easy to acquire funds.

Earthquake.

Pupil wants their own home.

Standard of the people is high

Popular companies already


existing in the region.

Increase in price of building


materials.

in Muscat.

More companies can come


up and competition can occur.

Network can be hacked.

Virus can affect the progress


of designing in AutoCAD.

During recession it might be


difficult to get projects or

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clients.

How do these factors affect your start-up venture?

As we conclude, these factors can affect your start-up venture really badly.

CONCLUSION

The internal factor consists of Strengths and Weaknesses. By knowing the


business strengths and weaknesses it will be able to face any threats
coming your way. When a new brand name enters the market everyone
talks about it which will create a buzz. Without gaining reputation in the
society you cant be able to compete with other established companies. The
external Factor consists of Opportunity and Threats. It is easy to get funds
for the company by banks and investors. Everyone wants to live in his own
house not in flats. If the company is having a network, you have to be
careful with that because someone can hack that or a virus can damage
your files and the progress of the project. If recession struck it will be really
difficult to get projects.

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08709

ECE

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Department of Educational and Professional Development

Appendix C: Complete Financial Projections

COSTING OF ARABIAN CONSTRUCTION

Staff Salaries
(..2012 to 2014...)

AHSAN AHMED

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(2015 and 2016)

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Department of Educational and Professional Development

Salary Per
Year (R.O.)

After 3 years
of service
10% increase
in salary
(R.O.)

Salary Per
Month (R.O.)

Salary Per
Year (R.O.)

300

3600

30

330

3960

Engineer

400

4800

40

440

5280

Contractor

300

3600

30

330

3960

8 Labours

640

7680

64

704

8448

Q.S

250

3000

25

275

3300

Cleaner

60

720

66

792

Accountant

250

3000

25

275

3300

Job Title

Salary
Per
Month
(R.O.)

Architect

Total Expenses on
Salaries per
annum

Years 2012-2014

Year 2015-2016

R.O. 26400

R.O. 27840

Cost of Furnishing The Office

OWNER/CEO/MANAGER
Item

AHSAN AHMED

Quantity

Price
(R.O.)

08709

ARCHITECT
Item

ECE

Quantity

Price
(R.O.)

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Department of Educational and Professional Development

Shelf

15

Shelf

15

Desk

20

Desk

20

Chairs

1+2

25

Chairs

1+2

25

Laptop

250

Computer

200

25

Printer +
Scanner +
Fax

25

Printer +
Scanner +
Fax

Telephone

15

Telephone

10

Stationery

Stationery

Total = R.O. 355

Total = R.O. 300

ENGINEER

CONTRACTOR
Price

Item

Quantity

Price
(R.O.)

Item

Quantity

Shelf

15

Shelf

15

Desk

20

Desk

20

Chair

1+2

25

Chairs

1+2

25

Computer

200

Computer

200

400

Telephone

10

Stationery

Surveying
tools
Stationery

Total = R.O. 665

AHSAN AHMED

08709

(R.O.)

Total = R.O. 275

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ACCOUNTANT

QUANTITY SURVEYOR

Item

Qty

Price
(R.O.)

Item

Qty

Price
(R.O.)

Shelf

15

Shelf

20

Desk

20

Desk

25

Chair

1+2

25

Chair

1+2

20

Computer

200

Computer

200

Printer +
Scanner +
Fax

25

Printer +
Scanner +
Fax

25

Telephone

10

Telephone

10

Stationery

Stationery

Total = R.O. 300

Total Furnishing
Cost

Total = R.O. 300

355 + 300 + 665 + 275 + 300 + 300 = R.O. 2195

Cost of Plant, Machinery & Equipment

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Cost

Plant

Total Cost

(R.O)

(R.O)

24

Spades

15

Ladders

14

Buckets

.500

2.500

Quantity

75

Wheelbarrow

175

(R.O)

Concrete
Mixer
Generator

Cost

Equipment

Total = R.O. 250


TOTAL COST = 250 +
55.500 = 305.500

Total = R.O. 55.500

Cost Of Electric Stuff

Cost Per Piece

Total Price

(R.O.)

(R.O.)

20

60

150

1050

Items

Quantity

Lights
Air
conditioners

Total = R.O. 1110

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Cost Of Vehicles
Item

Qty

Unit price (R.O.)

Total Price (R.O.)

Van

6000

6000

Pickup

3500

3500

Car

5000

5000

Total = R.O.14500

EXPENDITURE PROJECTION FOR NEW SME


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NO.

1.

YEAR

YEAR

YEAR

YEAR

YEAR

2012

2013

2014

2015

2016

26400

26400

26400

27840

27840

2195

305.500

1110

14500

44150.500

26400

26400

27840

27840

PARTICULARS
TOTAL STAFF
SALARIES

(R.O)

OFFICE
2.

FURNISHING COST
(R.O)
PLANT &

3.

EQUIPMENT
(R.O)

4.

5.

ELECTRICAL STUFF
COST

(R.O)

VEHICLE COST
(R.O)
TOTAL

6.

EXPENDITURE
(R.O)

Appendix D: Curriculum Vitae of Key Management Personnel

Curriculum Vitae (CV)

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Name: AHSAN AHMED


Age: 20 years old
Address: P.O Box 1000, P.C 112, Ruwi
Telephone: 24831662 (home)
Telephone: 96414313 / 98444004 (mobile)
E-mail: Ahsan_560@hotmail.com
Religion: Islam

Date of Birth: 03/03/1991

Nationality: Pakistani

Objective:

To utilize my skills and indulge my capabilities to the utmost level, as an


Employee in your Organization.

Personal Profile:

Currently I am a student of Environmental Civil Engineering level 3 in


Caledonian College of Engineering. I have the experience to design anything
on computer. I have the ability to grasp new ideas and concepts, and to
develop innovative and creative solutions to problems. The skills which I have
to offer you are Communication skills, Customer service skills, Enthusiasm
skills, Team work skills.

Education and Qualifications:

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February 2009 Till the day:


Caledonian College of Engineering, Environmental Civil
Engineering, level 3.

August 2006 June 2008:


Graduated from Pakistan School Muscat with
Higher Secondary School Certificate.
Passed in Computer Science with 56.6%.

August 2004 June 2006:


Completed Secondary School in Pakistan School Muscat.
Passed in Computer Science with 66.4%.

Work Experience:

October 2008 January 2009:


Arabian Signs, I was hired as a Trainee designer to design
Sign Boards.

Achievements:

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In my school time I have done a group project of traffic signal. The purpose
was to ensure the pupil safety. Our project was considered the best of all the
other projects and we got a prize for that which was worth R.O 50. Which we
distributed among us.

Skills:

Languages: I can speak fluent Urdu and English and little bit of Arabic
as well.
Customer service skills
Team work skills
Enthusiasm skills

IT and Other details:

Microsoft Office
Adobe Photoshop and Corel Draw
AutoCAD
Internet
Health: Excellent; Non-smoker
Driving License: Yes Licence # 65951446

Interests and Activities:

Collecting information about Cars


Watching Football as I am a diehard fan of CHELSEA FC.
Travelling around different countries and know there languages
Cinema
Playing sports like football, badminton and cricket etc.
Web surfing
Watching TV

AHSAN AHMED

08709

ECE

Page | 31

Advanced Life Skills Development Module


Department of Educational and Professional Development

References:
Mr. Afzal Shah
Designer, Arabian Signs
Phone # 99381198
E-mail: Arabian_signs@yahoo.com

Ms. Trinette Fernandes


Lecturer, Department of Educational and Professional Development,
Caledonian College of Engineering
Phone # 24536165 EXT: 602
E-mail: trinette@caledonian.edu.om

AHSAN AHMED

08709

ECE

Page | 32