THE TECHNICAL UNIVERSITY OF KENYA

SCHOOL OF HOSPITALITY AND HUMAN DEVELOPMENT

DEPARTMENT OF PSYCHOLOGY AND HUMAN ECOLOGY

ENTREPRENEURSHIP

BUSINESS PLAN

PRESENTED BY :

NAME: NAOMI KANGWAA

ADM NO: AHPM/00760/2021

Email: [email protected]

Cell number: 0740837942

PRESENTED TO: DR. RUTH RUHIU

DATE PRESENTED: 06/08/2024

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 TABLE OF CONTENT

TABLE OF CONTENT...................................................................................................................2
TABLE OF ABBREVIATION.......................................................................................................5
TABLE OF FIGURES.....................................................................................................................6
EXECUTIVE SUMMARY.............................................................................................................7
Business Description...................................................................................................................7
ACKNOWLEDGEMENT...............................................................................................................9
DECLARATION...........................................................................................................................10
DEDICATION...............................................................................................................................11
APPENDIX....................................................................................................................................12
Cash flow projection..............................................................................................................12
CHAPTER ONE............................................................................................................................13
Introduction................................................................................................................................13
1.0 Business Description.......................................................................................................13
1.2 Legal Form of Business Ownership................................................................................13
1.3 General Goal...................................................................................................................13
1.4 Product/Service...............................................................................................................14
1.5 The Industry....................................................................................................................14
1.6 Business Opportunities Justification...............................................................................14
1.7.0 Entry and Growth Strategies.......................................................................................15
1.7.1 Growth Strategy..........................................................................................................16
1.8 Potential Risks.................................................................................................................16
CHAPTER TWO...........................................................................................................................18
2.0 MARKETING PLAN.....................................................................................................18
2.1 MARKET RESEARCH AND ANALYSIS...................................................................18
2.2 CUSTOMERS.................................................................................................................19
2.3 MARKET SIZE..............................................................................................................19
2.4. COMPETITION..............................................................................................................19

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 2.4.1 S.W.O.T ANALYSIS..................................................................................................20
2.5. PRICING STRATEGY...................................................................................................20
2.5.1 SALES TACTICS.......................................................................................................21
CHAPTER 3..................................................................................................................................22
3.0 ORGANIZATIONAL AND MANAGEMENT PLAN..................................................22
3.0.1 Ownership...................................................................................................................22
3.0.2 Reporting Channel.......................................................................................................22
3.1 ORGANISATIONAL STRUCTURE.............................................................................22
3.2 KEY MANAGEMENT PERSONNEL..........................................................................24
3.3 SUPPORTING ADVISORS AND SERVICES.............................................................25
3.3 RECRUITMENT, TRAINING, AND PROMOTION POLICIES.................................25
3.3.1 Recruitment Policy......................................................................................................25
3.3.2 Training Policy............................................................................................................26
3.3.3 Promotion Policy.........................................................................................................26
3.3.4 Staffing & Separation Policy.......................................................................................27
3.4 REMUNERATION AND INCENTIVE.........................................................................27
3.5 PERMIT, LICENSING, AND BY-LAWS FOR RENOTEX KENYA..........................28
3.5.1 Permit:.........................................................................................................................28
3.5.2 Licensing:....................................................................................................................28
3.5.3 By-Laws:.....................................................................................................................30
CHAPTER FOUR.........................................................................................................................31
4.0 PRODUCTION AND OPERATION PLAN OVERVIEW........................................31
4.1 PRODUCTION FACILITIES AND CAPACITY..........................................................31
4.2 PRODUCTION STRATEGIES......................................................................................33
4.3 PRODUCTION PROCESS.............................................................................................34
4.4 RULES AND REGULATIONS AFFECTING OPERATIONS....................................35
4.4.1 Internal Rules..............................................................................................................35
4.4.2 External Regulations...................................................................................................35
CHAPTER 5..................................................................................................................................36
5.0 Financial Plan..................................................................................................................36
5.1 Pre-operational Costs......................................................................................................36

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5.2 Working Capital Requirement........................................................................................37
5.3 Pro-forma Income Statement..........................................................................................37
5.4 Pro-forma Balance Sheet................................................................................................38
5.5 Projected Cash Flow Statement......................................................................................38
5.6 Break-even Level............................................................................................................39

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 TABLE OF ABBREVIATION
1. Eng. – Engineer
2. S.W.O.T – Strengths , Weaknesses, Opportunities, Threats
3. C.E.O. – Chief Executive Officer
4. C.O.O. – Chief Operations Officer
5. B.O.D. – Board Of Directors

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 TABLE OF FIGURES
Figure 1: Organizational Structure
Figure 2: Production Process

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 EXECUTIVE SUMMARY

Business Description

Renotex Kenya emerges as a prominent player in the construction sector, specializing in high-
quality renovation services. Our mission is to redefine spaces, enrich living experiences, and
contribute to sustainable development. With a commitment to craftsmanship and innovation, we
aim to transcend conventional renovation norms, delivering projects that seamlessly blend
aesthetic appeal with functional excellence. Renotex Kenya envisions becoming a leading force
in Kenya's construction industry, setting new standards for quality and client satisfaction.

Chapter One
In Chapter One, Renotex Kenya's journey begins with a comprehensive introduction, delving
into the background of the business owner, the vision, and the mission. The legal form of
ownership is carefully chosen, aligning with the objectives of the business. Goals, both short-
term and long-term, are articulated with a keen focus on being Specific, Measurable, Achievable,
Relevant, and Time-bound (SMART). A thorough analysis of the industry's trends,
characteristics, and future prospects sets the stage for justifying the business opportunity. Entry
and growth strategies are strategically outlined, showcasing a commitment to market penetration
and expansion.

Chapter Two
This chapter unfolds Renotex Kenya's Marketing Plan, rooted in meticulous market research and
analysis techniques. The identification of potential customers, market size calculation, and a
detailed examination of competitors through SWOT analysis shape our targeted marketing
approach. Aspects of pricing strategy, sales tactics, and customer classification bring depth to our
marketing initiatives. This chapter positions Renotex Kenya to not only understand its market
intricacies but also to proactively engage and capture a significant share.

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Chapter Three

Chapter Three, the Organizational and Management Plan, navigates through the business
structure, key management roles, and detailed personnel policies. Ownership structures and
reporting channels are established for clarity and efficiency. Recruitment, training, and
promotion policies ensure a skilled, motivated, and growing workforce. The Remuneration and
Incentive section outlines a competitive package for the management team, aligning with
industry standards. Lastly, the chapter explores the regulatory landscape, securing permits,
licenses, and adhering to essential by-laws.
Chapter Four

Chapter Four, Production and Operation Plan, unveils Renotex Kenya's operational intricacies.
From production facilities and strategies to a detailed process flowchart, every element is
designed for efficiency and quality. Internal rules and external regulations, including licenses and
local taxes, are meticulously addressed, ensuring smooth operations. The chapter concludes by
emphasizing the company's commitment to adherence and compliance.

Chapter Five

Chapter Five presents the Financial Plan, a crucial segment illustrating Renotex Kenya's fiscal
roadmap. Pre-operational costs, working capital requirements, and detailed financial statements
are articulated, providing investors with a comprehensive understanding of the company's
financial health. The desired financing and proposed capitalization underscore the business's
financial needs and strategy for sustainable growth. Calculating the break-even level and
outlining profitability ratios further demonstrate Renotex Kenya's financial viability and
potential for success in the competitive construction industry.

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 ACKNOWLEDGEMENT

I would like to express my sincere appreciation to Dr. Ruth Ruhiu for his invaluable guidance
and mentorship throughout the development of this business plan. His expertise and support have
been instrumental in shaping the strategic direction of our endeavor. I also extend my thanks to
[mention any other contributors] for their valuable insights. Additionally, I am grateful for the
support of my colleagues and the understanding of my family, who have been a constant source
of motivation.

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 DECLARATION
I Naomi Kangwaa do declare that the submitted business plan of Renotex Kenya is exclusively
my own work and there wasn’t any form of cheating or duplication

Name: Naomi Kangwaa

Reg. No.: AHPM/00760/2021

Signature …………………………………… Date ……………………………..

This business plan has been submitted with my approval as supervisor

Signature ……………………………… Date………………………………

Name: Dr. Ruth Ruhiu

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 DEDICATION
This business plan is dedicated to the unwavering spirit of innovation and collaboration. To my
family, whose support has been my foundation, and to my friends whose encouragement fuels
my vision.

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 APPENDIX
CASH FLOW
MONTH Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec TOTAL
CASH IN-FLOW
Cash Sales 15,000,000 14,500,000 10,000,000 12,000,000 15,678,900 16,000,000 13,500,000 15,000,000 13,500,000 12,450,000 16,500,000 17,000,000 171,128,900
Debtors 0 100,000 50,000 10,000 6,000 13,000 30,000 15,000 10,000 5,000 8,000 9,000 256000
Others 0 0 0 0 0 0 0 0 0 0 0 0 0
Total Cash inflow 15,000,000 14,600,000 10,050,000 12,010,000 15,684,900 16,013,000 13,530,000 15,015,000 13,510,000 12,455,000 16,508,000 17,009,000 171,384,900
CASH OUT-FLOW 8,000,000 7,200,000 6,000,000 7,500,000 8,650,700 10,000,000 7,000,000 8,250,760 7,600,000 6,000,000 8,400,000 9,000,000 93,601,460
Advertising 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 1,200,000
Wages and Salaries 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 36,000,000
Rent 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 2,400,000
Utilities 50,000 45,000 40,000 43,000 46,000 54,000 40,000 50,000 42,500 38,000 45,000 53,000 546,500
Transportation 30,000 31,000 28,000 29,000 30,240 32,500 31,450 35,000 33,200 31,000 36,000 37,900 385,290
Stationery 20,000 15,000 16,000 13,000 16,570 1,400 10,000 13,000 17,453 12,567 18,000 18,500 171,490
Total Cash Out-flow 11,400,000 10,591,000 9,384,000 10,885,000 12,043,510 13,387,900 10,381,450 11,648,760 10,993,153 9,381,567 11,799,000 12,409,400 134,304,740
NET CASH OF THE MONTH 3,600,000 4,009,000 616,000 1,125,000 3,641,390 2,625,100 3,148,550 3,366,240 2,516,847 3,063,433 4,709,000 4,590,600 37,011,160

Cash flow projection

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 CHAPTER ONE

Introduction.

1.0 Business Description

Renotex Kenya has a strong background in construction and renovation services. With over a

decade of experience in the industry, Renotex Kenya has developed a keen understanding of the

renovation market in Kenya. A passion for transforming spaces and commitment to quality

craftsmanship has driven the company to establish Renotex Kenya. The vision of Renotex Kenya

is to ensure everybody has a chance to live their dream in the spaces they are in. The mission of

Renotex is to offer renovation services to middle and low-income earners who would love to

have their dream spaces come to life.

1.2 Legal Form of Business Ownership

Renotex Kenya is registered as a limited company (Ltd) in Kenya. This legal form provides

liability protection and facilitates potential investments and partnerships.

1.3 General Goal

Renotex Kenya aims to become a leading renovation company in Nairobi, Kenya, specializing in
providing high-quality living spaces for middle and low-income earners. The general goal is to
be recognized as a trusted and affordable partner in enhancing the quality of living environments.
The following are the general goals :

1. Complete ten successful residential renovation projects within the first year.

2. Establish partnerships with local suppliers to ensure a steady supply of quality materials.

3. Achieve a customer satisfaction rate of 90% in the first year.

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 4. Expand our service offerings to include commercial renovation projects within three

years.

5. Increase annual revenue by 20% for three consecutive years.

6. Become a recognized leader in sustainable and eco-friendly renovation practices within

five years.

1.4 Product/Service

Renotex Kenya specializes in providing comprehensive renovation services for residential and

commercial properties. Our services include interior and exterior renovations, remodeling, and

repairs. Our commitment to quality craftsmanship and attention to detail sets us apart in the

industry.

1.5 The Industry

Renotex Kenya operates in the construction and renovation industry in Kenya. Key aspects of the

industry include:

i) Industrial Trends:

i)Growing demand for sustainable and eco-friendly renovation solutions.

ii)Increasing preference for modern and functional living spaces.

iii)Technological advancements in construction materials and methods.

ii) Future of the Industry:

i)Continued urbanization driving the need for renovation and remodeling services.

ii)Government incentives for green building practices.

iii)Increasing awareness of the importance of property maintenance and improvement.

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1.6 Business Opportunities Justification

Our business opportunity in the industry is justified by:

i) Market Demand:

● A substantial market for renovation and remodeling services in Nairobi due to urban
growth.
● A need for professional renovation services to revitalize older properties.

ii) Access to Raw Materials:

● Availability of construction materials and supplies from local suppliers and

manufacturers.

iii) Skilled and Unskilled Labor:

● Access to a skilled workforce in the construction and renovation sector.

1.7.0 Entry and Growth Strategies

Entry Strategy:

i) Partnering:

● Collaborate with local architects and interior designers to offer integrated renovation
solutions.

ii). Joint Ventures:

● Form partnerships with real estate developers to provide renovation services for their
properties.

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iii). Turnkey Projects:

● Offer complete renovation solutions, from design to execution, to simplify the renovation
process for clients.

1.7.1 Growth Strategy

Our growth strategies include:

i). Geographic Expansion:

● Expand our service areas to cover major cities and regions in Kenya.

ii). Product Diversification:

● Introduce specialized renovation services such as green renovations and energy-efficient

upgrades.

iii). Customer Acquisition:

● Invest in marketing and customer relationship management to attract and retain new
clients.

1.8 Potential Risks

To ensure the success of Renovate Kenya, we have identified and will address the following

potential risks:

i). Strategic Risk:

● Competition from established renovation companies in the region.

ii). Technology Risk:

● Keeping up with technological advancements in construction methods and materials.

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iii). Competitive Risk:

● New entrants in the renovation market may pose a threat.

iv). Reputational Risk:

● Ensuring consistent quality and customer satisfaction to maintain a positive reputation.

We will implement risk management strategies to minimize these potential risks and ensure the

long-term success of our renovation company.

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 CHAPTER TWO

2.0 MARKETING PLAN

The marketing plan for Renotex Kenya is crucial for achieving business goals, enhancing brand
visibility, and attracting the target audience. The following strategies will add value to Renotex
Kenya:
 Value proposition
 marketing mix
 customer relationship management
 market research
 collaboration and partnership
 monitoring and evaluation.
By incorporating these marketing strategies, Renotex Kenya aims to create a strong brand
presence, attract its target audience, and establish itself as the go-to renovation company for
middle and low-income earners in Nairobi. The plan aligns with Kotler's marketing principles,
focusing on customer needs, integrated communication, and continuous improvement.

2.1 MARKET RESEARCH AND ANALYSIS

Market research and analysis are essential for understanding our target market and its growth

prospects. Techniques used include:

● Surveys
● focus groups
● data analysis.

This research aims to determine the market size and growth potential.

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2.2 CUSTOMERS

In this section, we identify potential customers and classify them into different categories:

2.2.1 Principal Customers:

● Homeowners seeking residential renovation services.

● Commercial property owners or managers in need of commercial renovation.

2.2.2 Institutional Customers:

● Real estate developers looking to renovate properties for resale.

● Government agencies or institutions requiring renovation for public facilities.

2.3 MARKET SIZE

We will primarily depend on the urban renovation market in Nairobi, Kenya. To calculate our

market share, we will assess the target population within our service areas and determine the

percentage we aim to capture.

2.4. COMPETITION

The competition in the renovation industry in Nairobi is diverse and includes established

renovation companies, independent contractors, and specialized firms. We will analyze the

nature of competition and identify key competitors in the local market.

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2.4.1 S.W.O.T ANALYSIS

Strengths:

● Technical Knowledge and Expertise in Renovation.

● Availability of Sufficient Capital.
● Industry Experience and Reputation.

Weaknesses:

● Limited Brand Awareness as a New Entrant.

● Resource Limitations in Terms of Equipment and Workforce.
● Need to Establish a Client Base.

Opportunities:

● Underserved Market for Eco-Friendly Renovations.

● Few Competitors Offering Sustainable Renovation Solutions.
● Positive Media Image and Environmental Awareness.

Threats:

● Emerging Competitors Entering the Market.

● Changing Regulatory Environment for Construction and Renovation.
● Potential Negative Publicity or Press.

2.5. PRICING STRATEGY

Our pricing strategy will be influenced by several factors, including competitors' prices, cost of

materials, labor, and our desired profit margin. We aim to offer competitive pricing while

maintaining quality. Credit terms will be offered to commercial clients upon approval.

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2.5.1 SALES TACTICS

In reaching our customers, we will employ various selling methods, including direct selling

through our sales team, personal selling during client meetings and consultations, and possible

utilization of distributors or agents for materials procurement. Media such as online marketing,

social media, and industry-related publications will be used to promote our services and reach a

wider audience.

The Marketing Plan is a dynamic document, and we will regularly review and adapt our

strategies to respond to changing market conditions and customer preferences.

Regenerate

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 CHAPTER 3

3.0 ORGANIZATIONAL AND MANAGEMENT PLAN

Renotex Kenya's organizational and management plan outlines the company's structure and
introduces key members of the team, providing insights into how the company is poised for
success.

3.0.1 Ownership

Renotex Kenya is privately owned by Arnold Nadecho Odera, who serves as the Chief Executive
Officer (CEO) and actively contributes to the company's strategic direction. Arnold Nadecho
Odera brings his expertise in the construction industry to drive Renotex Kenya's success.

3.0.2 Reporting Channel

The reporting structure within Renotex Kenya is designed to ensure efficient communication and
decision-making processes. The reporting channels are as follows:
 CEO (Arnold Nadecho Odera): As the founder and CEO, Arnold Nadecho Odera oversees
the entire company's operations, providing leadership and strategic direction.
 Chief Operations Officer: Reporting directly to the CEO, the Chief Operations Officer is
responsible for coordinating day-to-day operations, and ensuring smooth workflow across
different departments.
Departments Reporting to the Chief Operations Officer:
 Project Management
 Administration
 Operations
 Human Resources

3.1 ORGANISATIONAL STRUCTURE

Renotex Kenya adopts a Matrix organizational structure to optimize efficiency and streamline
operations. Each department plays a crucial role in the overall success of the company.

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Figure 1: Organizational Structure

BOARD OF
DIRECTORS

C.E.O

BUSINESS
OPERATIONS DEVELOPER
FINANCE
MANAGER MANAGER

SITE
HUMAN RESOURCE
MANAGER
MANAGER

CHIEF ENG.

HUMAN RESOURCE
SPECIALIST

LEAD ENG.

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3.2 KEY MANAGEMENT PERSONNEL

Renotex Kenya's management team is composed of skilled professionals with diverse expertise,
ensuring comprehensive coverage of all aspects of the business. Key management personnel
include:

No. Title Duties Number of

employees
1 Project Manager Oversees individual renovation projects, 1
ensuring successful completion.
2 Finance Manager Manages financial aspects, including 1
budgets, accounting, and financial planning.
3 Operations Manager Manages overall construction operations, 1
including project management and site
supervision.
4 Human Resouce Handles HR functions, including 2
Manager recruitment, employee relations, and
training.
5 Business Development Identifies and develops business 1
Manager opportunities and partnerships.
6 Chief Engineer Heads the engineering department and 1
ensures technical excellence.
7 Lead Engineer Heads the engineering team, providing 1
technical leadership and expertise.
8 Marketing Specialist Develops marketing strategies to promote 1
the company and attract clients.
9 Marketing Coordinator Supports marketing efforts, including 1
coordinating promotional activities.
10 Site Supervisors Oversee day-to-day construction activities 2

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 at specific project sites.

3.3 SUPPORTING ADVISORS AND SERVICES

Renotex Kenya recognizes the importance of external support and has engaged various advisors
and services to ensure operational efficiency. These include:
 Banking Services: Open a current account at Kenya Commercial Bank
 Accounting Services: Deloit and Touche
 Legal Services: law firms in Kenya
 Business/Management Services: ICEA Lion
 Other Supporting Services: Security firm

3.3 RECRUITMENT, TRAINING, AND PROMOTION POLICIES

3.3.1 Recruitment Policy

1. Equal Opportunity Policy:

 Renotex Kenya is committed to providing equal employment opportunities. Our
recruitment process ensures fair and equal treatment of all candidates, regardless of
race, gender, age, religion, or any other protected characteristic. We actively
encourage a diverse workforce to promote innovation and creativity.
2. Transparent Hiring Process:
 Our recruitment process is transparent, providing clear communication at each stage.
All job vacancies are posted internally and externally to encourage internal career
growth and attract external talent. We maintain open channels of communication with
candidates, providing timely updates on their application status.
3. Compliance with Labor Laws:
 Renotex Kenya strictly adheres to local labor laws and regulations throughout the
recruitment process. All hiring decisions are made in compliance with these laws,
ensuring a legally sound and ethical hiring process.

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26
3.3.2 Training Policy

1. Continuous Professional Development:

 Renotex Kenya is committed to the continuous professional development of its
employees. Our training programs are designed to enhance skills, foster innovation,
and keep employees abreast of industry trends. Regular training sessions, workshops,
and access to relevant resources are provided to support employees' growth.
2. Skill Enhancement Programs:
 To ensure our team stays ahead in the dynamic renovation industry, Renotex Kenya
invests in skill enhancement programs. These programs focus on both technical and
soft skills, empowering employees to excel in their roles and contribute effectively to
the company's success.
3. Mentorship Opportunities:
 Renotex Kenya encourages mentorship programs where experienced employees guide
and support newer team members. This fosters a culture of collaboration and
knowledge-sharing, contributing to the overall development and growth of our
workforce.

3.3.3 Promotion Policy

1. Internal Career Growth:

 Renotex Kenya values internal career growth and provides opportunities for
employees to advance within the organization. Vacancies are advertised internally,
and employees are encouraged to apply for positions that align with their skills and
career aspirations.
2. Performance-Based Promotions:
 Promotions at Renotex Kenya are based on merit and performance. Employees who
consistently demonstrate exceptional performance, contribute to the company's goals,
and exhibit leadership qualities are considered for advancement within the
organization.

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3. Fair and Impartial Evaluation:
 Our promotion policies ensure fair and impartial evaluation of all candidates.
Promotion decisions are based on objective criteria, and the process is transparent,
promoting a culture of equal opportunity and rewarding excellence.

3.3.4 Staffing & Separation Policy

1. Clear Termination Procedures:

 Renotex Kenya follows clear and documented procedures for employee termination.
This includes providing advance notice, where applicable, and clearly communicating
the reasons for termination. The company is committed to treating departing
employees with respect and dignity.
2. Exit Interviews:
 To understand employee perspectives and continuously improve our workplace,
Renotex Kenya conducts exit interviews with departing employees. This process
helps identify areas for improvement and provides valuable insights into the
employee experience.
3. Severance Packages and Benefits:
 In the event of employee separation, Renotex Kenya ensures compliance with labor
laws regarding severance packages and benefits. We strive to make the transition as
smooth as possible for both the departing employee and the remaining team.

3.4 REMUNERATION AND INCENTIVE

No. Title Salary (Per Incentive

Month in
Ksh.)
1 Project Manager 350,000 Performance-based bonus
2 Finance Manager 300,000 Stock options
3 Operations Manager 300,000 Annual performance bonus
4 Human Resource 280,000 Tuition reimbursement and career
Manager development support
5 Business Development 320,000 Commission on successful business deals

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 Manager
6 Chief Engineer 330,000 Profit-sharing based on project success
7 Lead Engineer 280,000 Performance-based bonuses and
recognition
8 Marketing Specialist 280,000 Quarterly performance bonuses
9 Marketing Coordinator 250,000 Additional commission on marketing
success
10 Site Supervisors 200,000 Project completion bonuses

3.5 PERMIT, LICENSING, AND BY-LAWS FOR RENOTEX KENYA

3.5.1 Permit:

Renotex Kenya will obtain the necessary permits to operate legally and ensure compliance with
local regulations. This includes obtaining a Construction Permit from the relevant municipal or
county authorities. The Construction Permit will cover all renovation activities and ensure that
Renotex Kenya has the legal authorization to undertake construction and renovation projects.

3.5.2 Licensing:

Renotex Kenya will obtain the following licenses to operate within the legal framework:
1. Contractor's License:
 Issued by the National Construction Authority (NCA), the Contractor's License is
mandatory for Renotex Kenya. It ensures that the company meets the required
standards, possesses the necessary competence, and adheres to building codes for
renovation projects.
2. Business Operating License:
 Obtained from the local county government, the Business Operating License
authorizes Renotex Kenya to conduct renovation business within the specific
jurisdiction. It is a fundamental requirement for legal business operation.
3. Environmental Impact Assessment (EIA) License:
 For renovation projects with potential environmental impacts, Renotex Kenya will
obtain an EIA license from the National Environment Management Authority
(NEMA). This ensures responsible management of environmental aspects during
renovations.

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4. Occupational Safety and Health (OSH) Certificate:
 Renotex Kenya will secure an OSH certificate from the Directorate of
Occupational Safety and Health Services to ensure the safety and well-being of
workers and the public at renovation sites.
5. Fire Safety Certificate:
 Especially important for renovation projects involving structural changes,
Renotex Kenya will obtain a fire safety certificate from the county fire
department. This certifies compliance with fire prevention and safety measures.
6. Tax Compliance Certificate:
 Renotex Kenya will maintain a valid Tax Compliance Certificate issued by the
Kenya Revenue Authority (KRA). This ensures compliance with all tax
obligations, including income tax, VAT, and other relevant taxes.
7. County Development Permit:
 For specific renovation projects, Renotex Kenya may obtain a County
Development Permit from the respective county governments. This ensures
compliance with local zoning and land-use regulations.
8. Water Resource Management Authority (WRMA) Permit:
 If renovation projects involve alterations to water resources, Renotex Kenya will
secure a WRMA permit. This ensures responsible management of water resources
during renovation activities.
9. National Environmental Management Authority (NEMA) Construction Noise
Permit:
 For renovation projects likely to generate noise, Renotex Kenya will obtain a
Construction Noise Permit from NEMA. This ensures compliance with noise
pollution regulations.

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3.5.3 By-Laws:

 Safety and Quality Assurance By-Law:

Renotex Kenya is committed to maintaining high safety and quality standards in all renovation
projects. This by-law outlines strict safety protocols, quality control measures, and compliance
with relevant building codes and standards. Violation of safety and quality guidelines may result
in disciplinary actions, including fines and project suspension.

 Ethical Business Practices By-Law:

Renotex Kenya upholds ethical business practices, and this by-law outlines guidelines for fair
business dealings, transparent transactions, and avoidance of conflicts of interest. Adherence to
ethical standards is mandatory for all employees, and violations may result in disciplinary
actions, including termination.
 Community Engagement and Impact By-Law:
Renotex Kenya recognizes the importance of positive community engagement and minimizing
the environmental impact of its activities. This by-law outlines the company's commitment to
community involvement, environmental sustainability, and responsible corporate citizenship.
Failure to comply may result in penalties, community service requirements, or project
suspension.

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 CHAPTER FOUR

4.0 PRODUCTION AND OPERATION PLAN OVERVIEW

The Production and Operation Plan for Renotex Kenya outlines the key aspects necessary for the
effective functioning of our construction and renovation business. This chapter details our
production facilities, capacity, strategies, production process, and addresses both internal and
external rules and regulations.

4.1 PRODUCTION FACILITIES AND CAPACITY

To ensure efficient operations, Renotex Kenya will utilize modern machinery and equipment.
The following table presents a list of machinery, their capacities, the number of workers
required, and the corresponding skills needed.

Phase Machinery/Equipment Workers Skills Requirements

Required
Demolition Jackhammers, 2-3 General labor, basic
sledgehammers, crowbars safety training
Waste Disposal Bins 1-2 -
Construction Power Tools: Drills, saws, 2-3 Skilled tradesmen,
nail guns, screwdrivers relevant certifications
Construction Equipment: 3-5 Certified heavy
Excavators, loaders, equipment operators
bulldozers
Welding Equipment 1-2 Certified welders
Concrete Mixers 1 Trained operator, basic
maintenance
Finishing Painting Tools: Brushes, 2-3 Skilled painters,
rollers, paint sprayers understanding of paint
application

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 Flooring Tools: Tile cutters, 2-3 Skilled flooring
flooring nailers installers
Finishing Tools: Sanders, 1-2 Skilled craftsmen,
polishers knowledge of finishing
techniques
Plumbing Tools: Pipe 1-2 Certified plumbers,
wrenches, plumbing fittings understanding of
plumbing systems
Electrical Tools: Wiring 1-2 Certified electricians,
tools, electrical testers understanding of
electrical systems
Safety Equipment Personal Protective All Workers Adherence to safety
Equipment (PPE): Helmets, protocols
gloves
Dust Masks and Respirators All Workers Protection during
specific tasks
Transportation Vehicles: Trucks or vans 1-2 (Drivers) Valid driver's license,
knowledge of
transportation safety
Surveying and Laser levels, measuring tapes 1-2 Trained surveyors,
Measurement understanding of
measurements
Moisture meters, stud finders 1 Trained inspectors,
knowledge of building
conditions
General Site Scaffolding 2-3 Certified scaffolders,
Equipment understanding of safety
standards
Ladders 1-2 Basic ladder safety
training
Temporary Fencing 1-2 Installation and

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 maintenance skills
Cleaning Industrial Vacuums 1-2 Trained cleaning staff,
Equipment understanding of dust
removal
Cleaning Supplies: Brooms, 2-3 General labor,
mops, trash bags cleanliness standards
Communication Two-way Radios All Workers Effective
Tools communication on
larger sites
Mobile Phones All Workers General communication
skills
Technology and Project Management 1-2 (Project Understanding of project
Software Software Managers) management processes
Design Software 1 (Designers) Proficiency in design
software, understanding
of project requirements

4.2 PRODUCTION STRATEGIES

In developing our production strategy, Renotex Kenya will focus on unique approaches to
sourcing materials and strategic supplier relationships. This involves:
 Material Sourcing: Establishing partnerships with reliable suppliers for quality
construction materials.
 Procurement Strategies: Implementing strategic procurement methods to ensure timely
and cost-effective material acquisition. Strategies like : Vendor prequalification, long-
term agreement, bulk purchasing, centralized procurement and supplier relationship
management are some of the strategies we will employ.

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4.3 PRODUCTION PROCESS

Renotex Kenya's production process is designed for efficiency and quality. The following flow
chart illustrates the steps involved in our construction and renovation projects:

Project initiation

Design Phase

Material
Procurement

Site Preparation

Demolition

Foundation and
Structure

Utilities
installation

Interior and
Exterior Finishing

Cabinetry and
Fixtures

Final inspection

Client walk-
through

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Figure 2: Production Process

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4.4 RULES AND REGULATIONS AFFECTING OPERATIONS

4.4.1 Internal Rules

To maintain a high level of efficiency, the following internal rules will govern our employees:
I. All employees are required to adhere to safety protocols and use provided safety gear. II.
Regular attendance and punctuality are mandatory. III. Any equipment issues must be reported
promptly to the supervisor.

4.4.2 External Regulations

I. Licenses Required: Renotex Kenya will adhere to all relevant licenses required for
construction and renovation projects, including compliance with building regulations.
II. Local Taxes: Ensuring compliance with local tax regulations to avoid any legal
complications.

By adhering to both internal rules and external regulations, Renotex Kenya aims to operate
seamlessly within the legal framework and contribute to the growth of the construction and
renovation industry in Kenya.
This Production and Operation Plan sets the foundation for the successful execution of Renotex
Kenya's projects, ensuring quality, efficiency, and compliance in every aspect of our operations.

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 CHAPTER 5

5.0 Financial Plan

The financial plan is integral for Renotex Kenya in the construction industry as it serves the
following purposes:
1. Resource Allocation: Guides allocation of funds for construction projects, equipment,
and operational needs.
2. Investor Attraction: Provides potential investors with insights into the company's
financial viability and growth potential in the construction sector.
3. Risk Mitigation: Identifies and addresses financial risks associated with construction
projects and market dynamics.
4. Cost Management: Assists in managing costs efficiently during construction operations.
5. Strategic Decision Making: Informs strategic decisions related to project bidding,
subcontracting, and overall financial strategy.

5.1 Pre-operational Costs

Pre-operational Costs
Items Amount (Ksh)
Construction Equipment Purchase 1,500,000
Utility Setup (Water & Electricity) 150,000
Waste Disposal Management 50,000
Communication Infrastructure Setup 200,000
Office Renovations 500,000
Market Research 100,000
Initial Inventory 2,000,000
Legal and Professional Fees 80,000
Advertising 120,000
Contingency for Miscellaneous 300,000
TOTAL 5,000,000

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5.2 Working Capital Requirement

Working Capital Requirement

Item Amount (Ksh)
Construction Materials Stock 4,000,000
Work in Progress 1,500,000
Finished Goods Stock 2,000,000
Debtors 100,000
Cash 300,000
Total Current Assets 7,900,000
Liabilities
Loans & Creditors (CA - CL = W.C) 7,300,000

5.3 Pro-forma Income Statement

Renotex Kenya Pro-forma Income Statement

Item Amount (Ksh)
Construction Project Sales 15,000,000
Cost of Construction 8,000,000
Gross Profit (C/D) 7,000,000
Operating Expenses
- Wages and Salaries 3,000,000
- Utilities 50,000
- Transportation 30,000
- Rent 200,000
- Advertising 100,000
- Stationery, etc. 20,000
Provision for Tax (Sales) 16% 2,240,000
Total Expenses (Sub-Total) 5,640,000
Net Profit After Tax (C/D) 1,360,000

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5.4 Pro-forma Balance Sheet

Renotex Kenya Pro-forma Balance Sheet

Item Amount (Ksh)
Assets
- Current Assets
-- Cash 1,000,000
-- Debtors 80,000
-- Finished Goods Stock 3,000,000
-- Raw Materials Stock 2,500,000
Sub-totals (Current Assets) 6,580,000
- Fixed Assets
-- Construction Equipment 3,000,000
-- Vehicles 2,000,000
-- Office Furniture and Equipment 500,000
Sub-totals (Fixed Assets) 5,500,000
Total Assets (Current + Fixed) 12,080,000
Liabilities
- Current Liabilities
-- Creditors 150,000
-- Other Liabilities (Loans) 7,300,000
Total Current Liabilities 7,450,000
- Long-term Liabilities
-- Bank Loan (5 years) 2,000,000
- Owner’s Equity 2,630,000
Sub-total 4,630,000
Net Assets (C/D) 7,630,000

5.5 Projected Cash Flow Statement

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5.6 Break-even Level

Break-even Level
 Total Contribution Margin = Sales - Total Variable Costs
171,384,900 – 1,103,280 = 170,281,620

 Variable Costs
Details Amt(Ksh)
Utilities 546,500
Transportation 385,290
Stationery 171,490
Total 1,103,280

Contribution margin

170,281,620 x 100 = 99.36%

171,384,900

Total Fixed Cost

Details Amt(Ksh)
Advertisement 1,200,000
Rent 2,400,000
Wages and salaries 36,000,000
Total 39,600000

Break-Even Level

39,600,000 x 100 = 23.1%

171,384,900

= Ksh. 39,600,000
DESIRED FINANCING
Total Desired Financing
Item Amount (Ksh)
Pre-operational costs 5,000,000
Working capital 7,300,000
Fixed assets 5,500,000
Total Desired Financing 17,800,000

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PROPOSED CAPITALIZATION
Proposed Capitalization
Total Investment Amount (Ksh)
Owner's Contribution 5,000,000
Funds from Borrowing 12,800,000
TOTAL 17,800,000

EXPECTED PROFITABILITY RATIOS

Expected Profitability Ratios
 Gross Profit Percentage
7,000,000 x 100 = 46.66%
15,000,000
 Return on Equity
1,360,000 x 100 = 51.71%
2,630,000

 Return on Investment

1,360,000 x 100 = 7.64%

17,800,000

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