JAN 1st, 2024

An Overview On A proposed Business Enterprise In Construction &Maintenace of

Swimming Pools .

Presented by : AYMAN BABIKIR

To:

Reference to our market research, the present brief study outlines a general perspective to establish a
business operating in the construction and maintenance of swimming pools sector in the principal Saudi
markets Jeddah-Riyadh-Khobar). However, the assumptions used here are projected in the area of Riyadh
for the present.

1. Business Overview

A brief description of the subject business venture is outlined here to serve the purpose of this report which
opt to introduce the concept that our proposed project is all about. However, a detailed business plan will
follow with sales, cash flow forecasts for the upcoming year and the return on the investment expected for
the 3-5 years to come.

1.1.The Market

As part of the leisure market, in the swimming pools construction and maintenance, the upper high income
earning class is targeted. This market sect with its high standard of living and an ever increasing awareness
and want to enjoy and taste the good tidings of modern technology and relieve the tense as well .Therefore,
the average spending in this sect is witnessed by encountering high demand on these products.

Our concept and Key of Success

We will be the first Saudi company that has its unique path in leisure industry by introducing and using the
newest pool technology in pool industry which will change the traditional pool concept in all way of the
industry nor construction or, maintenance
Thus will implement a concept of eco-friendly and sustainability which will match
Saudi vision 2030

Eco-swimming pool:
With widespread drought, swimming pools are seen as
luxury indulgences. But from natural and moss-filtered
pools to pool sharing - there are ways to be more
sustainable
 Eco-Friendly And More Sustainable Pool

Swimming pools don’t have a reputation for being eco-friendly. In fact, they’re one of our nation’s biggest
energy guzzlers – right behind hot water systems and air conditioners. This can have a detrimental effect on
our natural resources, not to mention your back pocket.

You can still make your pool more sustainable by reduce energy, save water and minimise the use of
chemicals in your pool.

- Put a cover on your pool - Use an energy-saving pool pump - Choose an inverter heat pump or use solar to
heat your pool - Use a robotic cleaner - Choose glass media for your sand filter - Use LED lights - . Automate
your pool

1.2.Main Players and Market Share

As a matter of fact, this market, huge though, few players –dominate the market, mainly
due to their persistence and commitment to high standards in the industry and good planning in
products differentiation and keeping abreast with the innovations worldwide
and most importantly keeping a vision and mission to their trade and style.

1.2.1.Bin Talib- a well known name in this market with 30-45 % market share, but mainly in Riyadh and
Khobar. This share mainly contributed by an active retail business in the same field as supplier of
swimming pools equipments. He is hardly present in the western region, currently loosing some of his share
to new players notably in Riyadh.

1.2.2.Reza Pools and Courts- Major player in the western region with 50 –65% market share,
beginning to establish its foot in Riyadh with annual turnover of 30-40 million Riyals
with 85% contribution from pools construction and maintenance, the rest being from Courts and Jacuzzi,
Saunas Steams.

1.2.3. Dewaigri- Small market share , though old in the business with vast geographic coverage, suffering
from administrative problems with overburdened staff doing all the jobs !
Other pools subcontractors e.g Hattan, Blue Line, Alsalam..etc. have limited market share in Jeddah, Makka
and operate on both construction and maintenance lines. Recently a big name in contracting entered the
market (Isam Kabbani) with the french Desjoyeux agency !

There are other specialized subcontractors with Electromechanical only jobs like Souhaily, Aquareous..etc

2. Expected Market Share

At present, the growth in the market is reflected in the number of pools constructed kingdom wide with a
booming retail market for equipment – as stated by Hayward – a world giant manufacturer of pumps, filters
etc. 2400 Filter was imported in the first quarter of last year
besides other manufacturers in the industry. In short a potential market exist and a good share
of it could be collected with the right approach and planning.

We shall opt at this stage to enter two major territories simultaneously-Riyadh and Jeddah-
both constitute 75% of the business with well over an 80 million Riyals per annum. However,
a challenge presents itself to the investor in relation to his capabilities to invest generously and
anticipate in return a gradual increase in his share as he follows the norms of investment and good
management with proper marketing plan.

In my view, the new business will have a good chance to penetrate the market with the resolve of its owner,
management and a highly trained, experienced staff well acquainted with the secrets of the industry and
having good contacts with clients and oriented in this direction-building a good image for a selected
customer to offer complete satisfaction.

3. Products Range & Services

As we approach the market to launch our new business, we suggest to define our products in the following
sequence :

a- Construction of pre-designed set of Standard Pools.

b- Maintenance of pools & Small repair jobs.
c- Selling of Chemical, equipments, fittings, spare parts..etc ( Via Showroom ).

A cost center of each of the above will follow shortly.

A. Standard Pools

Below is a brief description of the system of standard pools and commission plans and also some ideas on
the marketing concepts. However, detailed plans need to be worked out meticulously to prepare for the next
stage where operation will start when our shotcrete machines arrive in, meanwhile a lot of work is to be
done in preparation for that stage in marketing, staffing..etc.

A.1. Introduction

In a bid to enter the swimming pools market, which witnesses a growing demand, a differentiation in the
products we offer is by far the most urgent and critical drive that we should be heading to. So, in addition to
the customized Pools (projects) another pre-designed set of standard pools is introduced.

A.1.2. Concept
Standard Pools concept has stemmed mainly from a strong trend in the market where a medium income
class with limited space (villas) and budget is greatly encouraged to select a pre-designed model from a
series of different forms and shapes with varying depths and dimensions. The design is structurally simple,
and the system offers electromechanical and finishing features uniformly maintained with minimum or no
changes.

Following is a scheme describing the Standard pools series :

(An attractive image enhancing name will be assigned to each series)

Series (A):
Shapes: Rectangular, Oval, Kidney, Roman (6-8 forms)
Size: 15.00-26.00 m2
Depths: 0.8-1.80 m
Prices: SR.20,000.00-37,000.00 this series the lower medium income class is targeted.

Series (B):

Shapes: Rectangular, Oval, Kidney, Roman , Double Roman, Eight and variations
(4-6 forms)
Size: 28.00-38..00 m2
Depths: 09-2.00 m (depth could be increased to 2.30 if Diving board required)
Prices: SR.39.00.00-55.00
With this series the high to medium income class is targeted

Series (C):
Shapes: Rectangular, Oval, Kidney, Roman, Double Roman, Eight (4-6 forms)
Size: 40.00-75.00 m2
Depths: 09-2.00 m (depth could be increased to 2.30 if Diving board required)
Prices: SR.56.00.00-105..00
With this series the high medium income class is targeted.

4. Marketing:

The marketing plan of Pools is two fold:

1- A general approach undertaken by the sales reps ,throughout the year and as part of their
daily sales& marketing activity, to get our range of products introduced to Contractors,
Engineering offices and individuals and tours at construction sites. This step requires
preparation of a presentable leaflet and division brochures to be ready with every
salesman and distribute as many as possible to those categories.

2- A seasonal campaign (e.g. summer season) is carried out with extensive social to cover
the market with special and early preparation to get the maximum of the business during
 this period, which also serves our full introduction to the market until we progressively
impose our presence in the market.

3- Preparation of catalogues for maintenance services and standard pools.

4- Building of a website with innovative approach to enhance customers’ involvements in

the selection of their pool shape, finishings.etc.

5- Participation in Events and Exhibitions of the pools industery held locally and abroad to
enhance our new name in the business and get it known to customers and suppliers.

5. Pricing Structure :

Because of the tough competition nowadays, Standard pools will be priced following the patterns of
compeition in the market, untill our name is established in the market. However, we will maintain a margin
between 25-30 % net profit !

As for custom large pools and projects, pricing & discount policy shall depend on the specifications
required, competition..etc.

6. Targets and Commissions Plan

a- Swimming Pools Construction (SPC):

Overall, with all the resources and means made available our yearly target will be as follows for the first
year of operations :
( A persisting policy of gradual increase of market share will be maintained
as experience and market penetration accumulate consistantly )

For each Sales Engineer {(2) : 1 ,200,000.00 } 2 x 1200000 = 2,400,000.00 SR.

(this revenue will be collected from sales of standard pools, custom pools and small
repair jobs ).

Assuming 25-30 % margin :

Net Profit : SR. 720,000.00

b- Maintenance (SPM):

Given the appropriate conditions in marketing and supportive means a yearly target
is set to be maintained at 400 pools. Gross income/ revenue breakdown as follows
(As the number of contracted pools increase, a policy of adjusting resources to offset the targeted number
of pools contracts)

Resources :

Two (2) Salesmen: (Experienced, customer – oriented, self- driven.. )

4 pools/week 16 pools say 17 pools /month
17x2 (sales) 34 pools/month 408 pools

Assume an average of SR. 400/pool/month:

@ one year SR. 1,958,400.00

@monthly Gross Incom SR. 163,200.00

Important Note : This Target is gradullay reached as resources are being built up throughout the
first and second years of operations

As the net profit is usually set @ 55-65% :

Net Profit Expected : SR.1,272,960.0

SPM SR.1,272,960.00
SPC SR. 720,000.00
Total Net Profit from SPM&SPC SR.1,992,960.00

Commissions plan is suggested as follows:

A) Custom Pools are commissioned on quarterly basis as follows :

0 - 50,000 = 0.5%
50,000 - 400,000 = 1.5%
400,000 - 600,000 = 2.0%
600,000 - 1,000,000 = 2,5%
Above 1,000,000 = 3.5%

B) Standard Pools
Series (A) SR.400
Series (B) SR.500
Series (C) SR.600

For more than five (5) pools in one month from any category commission a sum of
SR.150 will be added.
*- For projects( standard pools) where the price is below the lowest category (Series A) the
commission will be SR.300.
 SPM/SRJ Commission Plan

Commissions for maintenance depend on payment :

One month No commission

Three month 10% of monthly value
Six month 60% of monthly value
One year 100% of monthly value
For small repair jobs (SRJ) sales will be added to quarterly SPC sales and commissions.

The above suggestions will encourage the sales reps to increase their income greatly and
therefore targets could be met as scheduled. However, discussions on this plan is open and after
approval management should address it in a memorandum to be officially circulated to the
concerned.

Estimated Cost Center for SPM (When fully operational):

1) Materials & Technicians

Nos of SPM technicians 16 persons
== Vehicles (SPM ) 10 units
== s/pools assigned p/tech. 25 pools
== == s/pools cleaning sets 16 sets

Note :
The number of pools attendants will gradually increase to reach
25 persons at the culminating point of targeted number of contracted pools.Also some staff
will be added as work load grows like Draftsman, surveyor etc.

Cleaning sets @605 SR.x16 = 9680 SR.

Volume of Chemicals Required (Max)12 months

1. Chlorine 8 drums 45 kg. Gran/mo X 12 | 400x 96 drums = 38,400 SR
2. Chlorine Tablets | = 10,500 SR
3. PHD | secondary chemicals -------------
4. PHUP | 48,900 SR.
5. 10 % contingency = 4890 SR
----------------
53,790.00 SR
==========
SPM/SPC Personnel :(immediate mobilization)

Nos Job title Basic Annual

salary
1* Operations/Contract/Marketing/ 6500 78000
Sales Manager
1 SPM Head Supervisor 3500 42000

1 SPC Project engineer 3000 36000

2 Sales engineer 3000x2 72000

4 Technicians (pool attend., elec, 1500x4 72000

plumb/mech)
2 Gunniters/masons/tile setters 1500x2 36000

1 Accountant 2500 30000

1 Office attend/Guard 1000 12000

13 nos Total salaries 31500 37800

* This position with the following job description will hold during the founding stage and is
responsible of sourcing the key staff:
(Will be responsible for the operations, administrative, financial control, implementation of
marketing and sales strategy, leading, training and directing the efforts of sales force.
Controlling, tracking of projects budgets to maintain material, labor expenditures, meet projects
schedule and realize profitability of projects in coordination with construction engineers. He will
also build, maintain clients base, and enhance Company image in the market.)

Add some 20% other benefits (tickets, vacations, medic., insurance etc)
Total manpower cost : 378000 + 75600 = 453600 SR/year.

SPM/SPC Staff Accomodation

Four room flat 15000-18000 SR/year)
Beds, utensils, W.machin, cooking range, Refriger. etc (Approx) 6000 SR.

8. Transport :

By lease :
1. Cars (cidan) 4 nos (approx. 1200/month)
2. Spm-supervisor (d.cab) 1 nos =
3. Spm-pool attendants (singl. Cab) 7 nos =
------
12 nos
 Assume car rentals per month : SR. 1200 x12 = 14400 SR/month

Transport Expenses :

Oil- 12 veh x 6 sr. 72 sr/m x 12 = 864 SR

Petrol- = = 12 x 10 sr p/d = 120x30 = 3600x12 = 43200 SR.
-------------
44064 SR/year.
==========

9. SPC Equipments

Major investment will be on the wet mix Shotcrete machine which is practical and economical
in the construction of pools added to its efficiency and time savings. Below is a quote from a
previous study by the writer about this subject :

Blastocrete Co. Ltd. has three models all suitable for our business with technical support and
trainging in their factory in the US as :

1- US$ 39,500 (Model X-10 53 HP)

2- US$ 23,500 ( Model D-65 26 HP-Kubota Diesel )
3. US$ 19,500 (Model D-65 24 HP-Honda Diesel
All prices FOB Anniston, Al USA)
Assume #3 (US$ 19500) add freight, insurance untill clearance :22000 US$
@3.760 x22000
Machine investment approx. = 82720 SR.

Other brands from asian countries could be available with lower prices, but quality isn’t
guaranteed. Other european brands (Italy, German) are available through agents
(Bakheet Putzmeister, Schwing etc.) with yet higher prices.

Other SPC tools :

 Compactor – Rent locally
 Jack Hammer –Rent locally
 Wheel Barron,shovels, Pikmatok,Elec. Drill (Hilti), Hammer,Chisel Flat&Pointed
 Level (multiple), 50-100 Meters measuring tabes etc. Approx. 2000 SR.

10. Showroom & Office :

We have to look for a main street encompassesin the major pools market with all potential competitors
having showrooms as a base in the market and retail oulet for selling consumable items like chemical and
fitttings..etc We should be looking for a good location there. Currently there are 3 commercial buildings
under construction, we should be keen to contact their owner and negotiate a serious intent to acquire one
as soon as they’re finished .(Most rentals of showrooms range between 35000-45000 SR. one opening)

However, we could proceed with our operations in the Maitenance and SPC from an office located near
that area (Gurab and Baladyia Str.)

Office :

1. Rental 15000-20000 SR/Year

2-Furnitures, desks& Filing cabinets for key staff |

3-Computers 6 pc. |
4- Office supplies, stationery |

Rough estimate 25,000.00 SR.

11.Other Expenses :

- Utilities (elec/teleph&fax,water) etc. approx. 1500 SR./month 18000 SR/M

- Uniforms (SPM staff) with cabs 50 SRx40 pcs 2000 SR

12. Marketing & Promotion :

To be distributed throughout the year in different promotional mix (leaflets, brochures, paper ads..etc).
approx : 50,000 SR.

13.Pre-operations Expenses :
- Commercial registration
- Licenses
- Recruitments
- Local hiring sponsorship transfers
- Others
Approx. 15000-20000 SR.

14. Deprecaitions :

Asset Value Rate Annual

Machine&Tools 94400 10% 9440
Cars 172800 20% 34560
Furniture/Comp. 25000 10% 5000
Pre-oper.fees 20000 20% 4000
Utensils.etc. 6000 10% 600
 Total Depreciations : 53600 SR.

15.Total required Investment

A. Fixed Cost Capital :

Rentals&Assets
 Showroom 45000 SR.
 Office Rent 18000 SR.
 Office Setup 25000 SR. (Furniture,computers,office supplies etc)
 Staff Accmd 17000 SR. (4 flat aprtm. For sing. SPM/SPC staff)
 Utensils 6000 SR. (Staff kitchen, beds, Refrig. Etc.)
 Transport 172800 SR
 Shtcrte Mchne 82720 SR
 Cleaning Sets 9680SR.
 SPM uniforms 2000 SR.
 SPC tools 2000 SR.
 Pre-oper.Expns 20000SR.
--------------
Total Fixed Capital 400,200.00 SR.
==========
B. Current Capital ( 6 months of operations):
* Salaries (6 months) 226800 SR. (including benefits, vactions, tickets etc)
* Volume of Chem.Stuff 27720 SR.
* Transport Expenses 22032 SR
* Utilities 9000 SR.
* Marketing &Promotions 25000 SR.
*Administrative Expenses 15000 SR. (Insu.Licenses,Bank.Serv.,etc)
* Deprecaitions 26800 SR.
----------------
Current Capital 352,352.00 SR.
===========

400,200.00 SR.
352,352.00 SR.
-------------------
Total required Capital : 752,552.00 SR.
===========
Seven Hundred Thirty Seven Thousands , Five Hundred Fifty Two Riyals.
16. Financial Indicators :

Total Gross Sales (SPM/SPC/SRJ) : SR. 1,958,400.00

SR. 2,400,000.00
SR. 4,358,400.00
=============
 @55-65% SPM Net Profit SR.1,272,960.00
@25-30% SPC Net Profit SR. 720,000.00
Total net profit SR.1,992,960.00

Assuming Full Operation For One Year :

Total Finance : 1,104,904.00

Obviously, the return on the investment is sound. However, risks of market slowness and unexpected
changes in the pattern of clients’ tastes should be expected and surveyed constantly and cared for with due
changes , if necessay , of company policies to respond in appropriate time and react positively.

17.Conclusion

We have to work out a plan to build a database for all info regarding the materials, equipments and
accessories from local and foreign suppliers as well that we use in our ranges and services, which will
enable us to control our cost effectively and keep abreast with market demands and trends.

In summing up, I would like to draw your attention to the fact that today’s market is selective
and intelligent in making the buying decision, any haste to reap the results prematurely will only
harm the integrity of the business, this a general rule of coarse, but in the leisure market an image of
competitive edge over competitors is essential in order to win the confidence of a clientele base overworked
and troubled by aging businesses and therefore looking forward for new players who can respond to their
legitimate aspiration of a good service, honesty and economic solutions.

The preceeding preliminery prespective needs to be outlined in a business plan to show financial
set up with income flow , sales forcasts and break even analysis. Howevr, the present paper outlines a clear
path to all possible costs incurred and investments needed to step into this growing market.

Please read it thoroughly and I’ll be available to discuss further points and start implementaion, should you
decide to undertake the project.

Best regards

AYMAN BABIKIR