Block Industry
Block Industry Business Plan – On daily basis, factories, offices and residential houses are erected. This is why a block moulding industry is a venture that yields good profit as there is an increasing demand for cement blocks from individuals, the government, companies, multi-national contractors, etc, for building purposes.
Table of content Page
Executive Summary 3
Introduction 4
Business Description 5
Products and services 7
Market Research 8
Competitor Analysis 11
Sales and Marketing Plan 12
Operational Plan 13
Management and Structure 15
Financial Plan and Projections 18
Executive Summary
ABC BLOCKS is a business involved in the manufacturing of building concrete, bricks and blocks for masonry, builders association, housing consultant, development agencies, construction workers etc.
We make block of uniform quality and sell them at a price high enough to cover costs and make a reasonable profit.
Cement concrete blocks are modern construction materials and as such are use in all the construction viz: residential, commercial, and industrial building construction.
The business is owned by Moses Daniel with over 15 years experience in Block making and construction works industry.
The project set up cost is N5 million using imported machines.
The project is very profitable. With aggressive marketing strategies, good management, and the payback period would be less than 2 years. The return on investment is very encouraging at 25 per cent of profit.
We forecasted a 40% market share. The business will generate a very high gross margin and a modest net margin after year one and comfortable margin after year three. By year three the business will have developed a respectable yearly net profit.
INTRODUCTION
Business Opportunity
The increasing need to build new residential houses, factories and offices to accommodate Nigeria’s large population has made cement block production a very lucrative business in the country. Over the last 10 years, building and construction sector has undergone strong growth rates in the range of 8-10% in Nigeria (Source: National Bureau of Statistics, 2013). Housing and construction is one of the major drivers of growth in more than 40 allied industries, the cement block industry included. Demand for cement blocks has also risen tremendously as a result of the demand for it in the housing and construction industry. In addition to this, there is also increasing demand of cement blocks from government and multi-national contractors for building purposes.
A potential cement block producer must have a good level of patience and must have time for the job. He must also know or be willing to know about building business, as this will help a great deal and increase his profitability in the long run. Also, the business owner must have good networking relationship with individuals and corporate customers; he must possess the necessary skills to:
Manufacture concrete blocks with highest quality cement that dries quickly for commercial production,
Recruit skilled workforce,
Set up the business on a dry land,
Ensure availability of truck to deliver goods to customers’ desired location,
Provide reliable and durable equipment for the successful operation of the business
Ironically, the market is still relatively small. There is strong competition, and the cost of preparing cement block is high. The industry is also affected by non-availability of modern machinery in the local market at an affordable rate. Local customs traditions, and non-availability of infrastructural facilities are also other major hurdles in the development of the sector. The main risks associated with the business include inability of production staff to wet the blocks on the second day of production thereby preventing the blocks to command high market value, frequent rainfall to prevent blocks to congeal as at when due and inability to service vibrating machine regularly. Volatility of the price of cement is a huge threat in the blocking making industry. However, the business owner should ensure close supervision of production staff and regular servicing of vibrating block molding machine.
As a start-up business, the categories of cement blocks for production are four inches block, six inches block and nine inches block.
The business is expected to be registered with all the relevant agencies such as Corporate Affairs Commission and Concrete Blocks Manufacturer Association of Nigeria. The business is starting up with =N=5,000,000 (five million naira) in cash part of which would be used to finance fixed assets, expenses and other running cost.
Business Description
ABC BLOCKS is a business involved in the manufacturing of building concrete, bricks and blocks for masonry, builders association, housing consultant, development agencies, construction workers etc.
We make block of uniform quality and sell them at a price high enough to cover costs and make a reasonable profit.
Cement concrete blocks are modern construction materials and as such are use in all the construction viz: residential, commercial, and industrial building construction
Form of business: A sole proprietorship.
Owner of business: Moses Daniel
State of business: The business is a new business
Opening days: Mondays – Saturdays 8am- 6pm
Business Development
Consultant: Emeka Njoku (MBA, PMP)
Hundred And Five Academy
Legal Adviser: Barister ******
Board of Directors: Isiaah *****
Oludare *****
Bunmi *****
Folashade ******
Our Vision
Too be among the top 3 BLOCK Making company in Nigeria by 2025
Our Objective
Constant growth in sales in 12 months.
To generate customer satisfaction so that at least 60% of our customer base is repeat business.
To provide quality product at reasonable prices with exemplary services.
Our Goal
– To be a one stop-shop for building materials in Nigeria
– To run business as a profitably
– Our Mission
To exceed the customers’ expectations in every sense by providing quality produce in a sustainable way.
-Success Factor
Land Most Block Industry owners do not own the land they work from. It mostly belongs to farmers who they pay a lease to. Make sure you are close to a water source like river,stream or water way or dig a well. Water is the life blood of the business. Do not under any circumstance entertain the idea of buying water or the business will crash before it takes of!
2.Machinery You need a Lister engine. These are very expensive, so you want to source for the most affordable you can find.This normally means travelling out of town to buy one. You need a moulding machine. This is what shapes your blocks. These are made to order by local manufacturers. You need a Water Pumping Machine(Looks like a small generator) This brings in water from your source.
3. Materials You need wooden pallets.This is where your blocks stay to dry out after moulding.Bought from local makers. Start with a few hundred pieces (200-500 pieces). You need also 1 x Wheel Barrow 2 x Shovels 2 x Metal drums(To house water for your machines during moulding.) 2 x Security chains to secure items when you leave site.
4.Storage You have two options. Buy wood from the market and ask a carpenter to construct a small hut for you. Alternatively and more expensively you can buy a disused shipping container and convert. This is to store your items like unused bags of cement when you leave for the day.
5. Daily operation It’s profitable depending on a few factors. Location: For obvious reasons Season: During rainy season contructions all over the country slow down meaning less need to buy blocks and less business. Inflation: When a bag of cement rises or falls it affects your ability to mold and customers ability to build or buy blocks for doing so. Capital: The business is very cash intensive.
Every thing you do you will have to pay upfront whilst waiting for sale to recoup cost and profit. This includes the machine operator and labourers who are all paid per block and types of block(there are two types) and on the day! This includes your sand delivery which is paid upfront. This includes your bags of cement which you obviously buy upfront too.
Production capacity- Our capacity to produce is a key success factor in this industry.
Supply of labour- Access to labour will impact the success of the business greatly.
Product /services
Manufacturing of building concrete, bricks and blocks for masonry, builders association, housing consultant, development agencies, construction workers etc.
We produce
9” Block
6” Block-
Cement-
Interlocking-
The benefits of my products and services are
My product is highly needed in the building and construction sector in order to tackle the problem of building collapse cases in my society by producing concrete blocks that are qualitative, durable and strong when compared to the ones being produced by my competitors.
The quality, solidity, reliability, packaging and delivery of my product is one of the benefits that makes it to stand out and unique from the ones being produced for sales by my competitors.
COMPETITIVE ADVANTAGE
Most people in the industry produce an average of 50 9” blocks from one bag of cement which makes block not to be strong enough for building construction and which consequently leads to building collapse
My innovation is to produce 36 solid brocks from a cement which makes it last long.
Despite this high demand for concrete blocks, which makes the business a very lucrative one, the government and high authorities in various countries still advocate that builders should use only certified building materials, of which solid concrete blocks are part of, to ensure that calamities such as the collapse of buildings are avoided.
This is why a potential cement block producer has to be willing to know about the business as this will help a great deal and increase his profitability in the long run.
So if you are interested in owning your own concrete block industry, below are some of the basic tips you need to know, so as to be very successful.
Concrete Cement Block Moulding Industry Business Tips
The first step is to conduct a proper market survey. You cannot just go into a business with out of having a substantive knowledge about it, this is the reason for the market survey as it enables you to know the ways to start up, the cost of recruiting skilled workforce, know equipment that can be reliable and durable amongst other things. All this information can be gotten by reading relevant books, surfing the internet and visiting some notable block moulding industries you can have access to.
The concrete block moulding business, is not one you can run from the comfort of your home. This makes proper documentation and licencsing of the business with the relevant agencies such as Corporate Affairs Commission and Concrete Block Manufacture Association of Nigeria, very necessary.
You also need training, so you can have a firsthand knowledge about the business you are going into, and already existing block moulding industries can be of assistance.
For a place to locate your business, you need a place that can be easily accessible. You also need to consider your proximity to water supply but ensure that the place is not swampy or prone to flood.
Equipments needed for the concrete block moulding business includes; a block processing machine, a sound leister generator, a truck and wooden pallets. If you don’t have enough capital to go for brand new ones, you could opt for the fairly used ones as long as they are reliable for the successful operation of the business. Then as you start making your profits, you could get new ones.
You must not employ a lot of workers when you are beginning your business. You could start with a minimum of five workers, which would mean having two mixers, two carriers and one operator, you can then expand this number as your business grows, but ensure that your workers however small are skillful and diligent.
For the sake of the success of your business and for the sake of your customers, you need to manufacture concrete blocks with highest quality cement that dries quickly for commercial production. This is because every buyer looks out for solid blocks that are of high quality. So your workers have to be aware of the fact, that the quality of the block is paramount and should not be compromised. This will also help to boost your business as it would attract and keep customers for you.
Table of content Page
Executive Summary 3
Introduction 4
Business Description 5
Products and services 7
Market Research 8
Competitor Analysis 11
Sales and Marketing Plan 12
Operational Plan 13
Management and Structure 15
Financial Plan and Projections 18
