A Business Plan to introduce Clean City Ltd

A Business Plan to introduce modify metropolis LtdThis document serves as a Business Plan to introduce wakeful City Ltd, a registered Limited Company that was formed in January 2010. The sole aspiration of Clean Citys business allow be to solely engage/enforce the block outing of garbage, its collection, transportation and deli rattling/disposal to recycling computer programmets and dumping sites, our main focussing being recycling plants. What is Waste concern? Waste management is the collection, transportation, processing, recycling or disposal, and monitoring of waste materials, while Recycling is the process of re-using a apt(p) product (beyond its intended use), or producing a new product from a reclaimable material.capital of Kenyas population is approximately 4 million, 44% Kenyans fall on a lower floor the destitution line, meaning approximately three quarters of capital of Kenyas population falls under the urban poor category. In Nairobi, approximately 1,530 tonne s of garbage is generated daily and as illustrated in the Pie Chart below, approximately 1,130 tonnes of garbage rots uncollected close to its source, or is burnt in homesteads, dumped at embezzled landfills or dumpsites or is collected by Non political Organisations and Community showd groups.Due to economic hardships and the high rate of unemployment, we buzz rack up seen an increase of people migrating from rural to urban areas in search of better prospects to station upright their immediate families and/or dependants, and more often than not, most of these people eventually reside in low class areas such(prenominal) as the Kibera Slums or Peri-urban areas such as Gachie, Ongata Rongai, etcetera. Approximately half of the Kenyan population is based in Nairobi, and most of these migrants find themselves close to fragile areas such as rivers, valleys, steep slopes and bordering to sewers or dumps. Nairobi City Council whose mandate is to provide and sustain a clean and heal thy purlieu in Kenya has been unsuccessful due to its failure to hypothesize and adopt clear and comprehensive strategies that take into account all aspects of waste management its reluctance to call for stakeholders and to naturalise the general public on winning responsibility for their garbage disposal and its style in which it has disseminated information on the inherent dangers of inadequate attention given to waste management, or lack thitherof. The Councils Systems and Methods espouse to manage solid waste perplex failed to conform to the minimum requirements stipulated in the Environment wariness and Co-ordination Act (EMCA) 1999, Part 11, Section 3(i). Generally it is poor governance.It is real sad indeed to witness adult pedestrians, motorists and passengers alike, ditching rubbish on footpaths, streets and roads without giving a bit thought to the negative effects of their actions and having no bet for the beauty of Kenyans Capital, the Green City in the Sun. Majority of our young citizens, that is, our children, who are our leaders of tomorrow, innocently litter anywhere and everywhere outside their homes and/or instill premises, and in many instances this habit grows uncorrected because these young impressionable children mirror what many of us adults do resulting in a vicious cycle. Many of Nairobi streets and footpaths are littered with rubbish ranging from maize cobs, cigarette butts, fruit skins to plastic papers.City Council of Nairobi owns and operates Nairobis only official landfill disposal site that is located in Dandoras high density residential neighbourhood where a quarter of low income voiceless Kenyans reside. The Dandora landfill is currently filled with approximately 1.3 million cubic meters of waste spread head over approximately 30 acres. Dandora is approximately 7.5 km away from the Central Business District, out of sight out of mind. This has serious health consequences to the d riseers and the urban environment a t large. In addition, low income areas are largely affected by uncollected rubbish due to poor infrastructure or geographically unobtainable areas and also due to the residents inability to pay for garbage collection services rendered by the Private firms.With the burgeoning population or in this case urban escalation, there is an urgent need for an operational mechanism to be put in place by the Council with the backing of the Kenyan Government to enable the formulation of structures that entrust encourage the participation of the private sector and the general public in waste management initiatives.Clean Citys main objective is to act as a catalyst towards the green movement, to eradicate the negative effects of environmental degradation where it ordain promote a cleaner, air pollution-free, urban environment and habitat by equipping the Public with facilities, knowledge and tools, in order to effortlessly segregate their garbage at source, meaning to sort out their garbage at t he flush of disposal basically to make this practice a part of their lifestyle.Recyclables are treasures buried in our landfills and Clean Citys underlying desire is to promote the re-use, to enhance well organised and structured recycling arrangements instead of waste been burnt or dumped in landfills. Recycling is a pollution-reduction strategy and at the same time lead save land that is currently being used as landfills. There is an urgent need for the public to unlearn the poor garbage disposal habits and to ascribe that the sorting out of garbage is a proactive approach to a clean habitat that depart at long last be beneficial to them at diametrical demographical levels.1.1 ObjectivesClean City Limiteds endeavour is to have established a extensivey fledged Garbage sorting business by the year 2012 that bequeath have desegregated the following ObjectivesTo run an ethical business that involves Corporate Social Responsibility in all aspects of our business activities.T o aim for a return on investment of at least 15% yearlyTo achieve an operating remuneration of 10% of our enumerate salesIn corporal or win the privilege of the public and private sector in promoting waste management in NairobiTo advocate for the withdrawal of Dandora as a landfill plus former(a) illegal dumpsites within Nairobi and to reallocate them to isolated land away from residential areas and to convince the Council to allow privately owned landfills.To expand our horizons in the wider part of Nairobi and eventually to Kenyan major towns like Mombasa, Kisumu and Eldoret and to further penetrate regionally to our neighbouring East Africa such as Uganda, Tanzania and Rwanda.To exemplify to Kenyan citizens the benefits of garbage sorting.To educate Kenyans on the benefits of untapped or low key recycling business that dope be used as a source of income, where scarce natural resources can be obtained, which are currently hampered by the landfill dumping.To introduce Leaf-it D epots where organic waste such as garden waste, grass, food, leaves, wood shavings can be deposited for compostingMost importantly, to honor Nairobis slogan, The Green City in the Sun and to encourage and educate Kenyans on the paramount importance of living in a clean and healthy environment. 1.2 missionary workClean City Limiteds mission is to provide a garbage sorting framework that will encourage and promote effective and efficient methods of disposing of garbage by using our garbage sorting systems that would eventually enhance the current skeletal recycling business. Our labelled coloured/categorized recycling dust stack aways equipped with appealing advertisements and educational campaigns will be used as a conduit to achieve this mission.2.0 Our Business IdeaCurrently, there are a few privately owned Garbage assemblage firms that collect garbage once a week. These firms distribute between 8 12 bags per household for the months use and their charges range from between Ks hs.400 Kshs.800.00. The current system involves households paying a monthly fee for garbage collection through their monthly service charge contributions to either an external management company or to their internal management committee, whom in turn organise for garbage collection services. Standalone/Bungalows would directly pay to the service provider.Once the garbage is collected, it is directly delivered to landfills where human scavengers sort out the garbage and sell to recycling plants. The vehicles used for collection and transportation are Lorries without canvas or any other material that can spinal column the back, therefore the back is left open with the stinky garbage out in the open for all to see and garbage spillage on the roads.Where does Clean City come in?Clean City will deliver an efficient and effective collecting/transporting service but at a bounty cost. We shall diffuse in the minds of our clients the idea of an organised disposal/collecting/transportatio n system, a value for money service that will be a valued added benefit.We shall provide communal huge categorized Dumpsters that will be stationed on communal ground of households that constitute more than 6 units in a compound, where full thrash plastic bags from individual households can be disposed of for collection.We shall also provide our residential clients with service contracts stipulating the standards of proper sorting and disposal. Also included in our contract will be the probability of our refusal to collect garbage that has not been correctly sorted.2.1 Target Market residential and Commercial in Upmarket AreasResidential We have taken into consideration that not many apartments are provided with a provision for waste bins which normally is situated in the laundry/balcony area contiguous to the Kitchen and if they are, the quadruplet is too poseed to accommodate 3-1 recycling bins. However, we still intend to approach apartments and suggest they use 1 bins with compartments, that is, for nut case/metal/plastic recyclables and the other for organic/wet and paper, and others. Please see images below.Standalone/Town Houses/Maisonettes have the advantage of spacious verandas and balconies for terminal.Shopping Malls, Major Airports, 3-5 Star Hotels, Hotel Apartments, Golf and Social/Sports Clubs and Shopping Complexes we shall place huge Dumpsters in strategic positions please refer to images below.Schools Of paramount importance is to educate the young on the benefits of disposing of garbage in an organised and hygienic manner and to enlighten them on recycling materials.Upcoming Housing we shall also lay aside a keen eye on upcoming apartments so as to educate developers/real estate dealers on the need to have provisions in households for storing bins. We shall also approach newly completed apartments/standalone housing to enable us incorporate our services before tenants occupy them.Recyclers We have approached 4 major recycling co mpaniesPET Recycling Company for plastic wasteCentral Glass Industries for glass wasteRoll Mill Limited for metal wastePan Africa for paper wasteCommunity based groups for organic matterHowever, we shall not limit our sale of recyclables to the above mentioned companies.2.2 Business baby-sitOnce we have equipped our clients with the necessary bins and accessories, our Business model which is solely manually based will involve the following process severally weekday will have a designated Zone or Region for Waste for once a week collections.We shall start off with 3 rear load trucks that have been equipped with a rear hydraulic conveyor lift that will lift Thrush bags into the main hold of the truck. Each truck will have a driver and two support staff, who will assist each other to lift the bags onto the hydraulic conveyor. All the 3 trucks will be dispatched together at any one time to their different zonal schedules. All waste will be delivered to our Waste belongings Site i n Karen, where Waste will undergo a final segregation phase. Purchasing hydraulic trucks is a massive investment however this cost will compensate for the reduction in labour expenses in the long term.Classified Recyclables will be bribed and collected from us by Recycling Plants on a weekly basis while non-recyclable waste will be dumped at official landfills. ply Working HoursWorking hours will be from 8 am to 5 pm from Mondays to Saturdays. We do not foresee overtime issues, however, in the event of overtime, staff shall be compensated accordingly.No of Supporting Staff 3 drivers6 staff to accompany drivers4 staff to be based at our holding siteMain Equipment/AccessoriesWe have identified 3 reconditioned Trucks from the United Kingdom, modelPersonal Protective EquipmentBins and DumpstersPlastic Garbage BagsOccupational Health and precaution MeasuresTo avoid any job site hazards, we shall comprehensively assure our staff on health and safety measures while on duty and also pr ovide them with Personal Protective Equipment that will consist of the followingA pair of heavy duty gloves Jungle GreenA pair of high top heavy duty boots/shoes Jungle Green climb down weight safety helmet (for comfort due to tropical weather) Lime GreenSafety Vest Lime GreenOveralls Jungle GreenThe table below shows the total cost of the safety equipment.ITEMQUANTITYCOST PER UNIT sum of money COSTGloves13 degree Celsius1300Boots135006500Helmet137509750Safety Vests135006500Overalls136007800The Bins will be sell to residential clients while the Dumpsters that come in big sizes will be on term of a contract to commercial clients.The dominant green colour will speak for itself, Clean Citys Green Footprint and the same principle will be applied to our trucks.Our logotype and Corporate coloursThe following Recycle symbol will be our logo and brand that will be pasted on all our equipment, uniforms and stationery. Our corporate colours are green and white.Our notesWe shall be loca ted in Karen on a 1 acre plot that will be on rental, where most trading operations will take place. The site will consist of an Admin Office while most of the land will be an open air field with a shed, for sorting purposes. The monthly rental for the 1 acre office in Karen will be Ksh. 75,000/=3.0 Management TeamCity Clean is owned by 3 partners, namely Regina Maru, Sheily Shah and Maureen Adhiambo, in the capacities of Managing Director, Financial and Human visions Director and Sales, PR and Marketing Director, respectively. Once we have our operations running we shall bring on board an Office Manager.Structure, Ownership and Intellectual propertyCity Clean is owned by 3 partners namely Regina Maru, Sheily Shah and Maureen AdhiamboFlat StructureManaging DirectorFinance Human Resource DirectorSales, PR Marketing DirectorAccounts ClerkSales RepresentativeAdmin ManagerSupport StaffManaging Director4.0 Industry Analysis 5 Forces Model flagellum of new entrants Already the marke t is flooded with waste collection businesses that are not following the Waste collection regulations, and the National Environment Management Authority has introduced more stringent regulations and measures to our contests. NEMA further assured us that they shall not allow new entrants until the Clean Citys sorting/recycling concept has been fully established.Threat of Substitutes Clean Citys existing competitors offer an inferior service. We shall charge our residential clients a one-off fee for the cost of the bins however our service, that is, collection of weekly garbage will be Kshs.500.00 which is similar to what most of our competitors charge per month.Buyer Power Bargaining power of our customers will be low as City Clean has no competitor offering a similar product and service.Supplier Power Bargaining power of our suppliers, in this case, Kenpoly Industries who specialise in plastic, will be low as we are able to source the Bins and Dumpsters from other suppliers both locally and internationally, for example in China.Rivalry the degree of rivalry in the waste collection assiduity is low as City Clean is introducing a new and superior product and service.5.0 Marketing Plan5.1 Our Product and ServiceClean City is entranceway a niche market as this concept has not been introduced in Kenya, in fact countries worldwide that practice this healthy habit are few and far in between. It will be a new phenomenon in Kenya that we know will be received with mixed reactions however, we are also very confident that we shall eventually have a good footing. Clean City will have a competitive advantage as no other Company in Kenya or even East Africa offers a similar product or service, neither do any of the other garbage collecting companies have automated hydraulic trucks that shall be in use.Our marketing strategy focuses on differentiation due to its nature of providing a value added benefit, uniqueness, affordability, profitability, superiority and ultimat ely giving us a competitive edge.Clean City is two-fold as it shall provide both a product and service. Our product has 4 facets that are mutually beneficial of each other and these are the Bins, Garbage plastic bags, Dumpsters and Trucks while our service will involve the collection of pre-sorted waste that will be delivered to Recycling Plants and Landfills.Clean City shall have 5 or more classes of beneficiaries/customers at both ends of its supply chain as follows. The following table illustrates that Customers falling under 2 will benefit from our product while the rest will be benefit from our service.CustomerDescription of Benefit1Nairobi City Councilstep by step reducing the size of the Dandora Landfill and assisting and advocating for its reallocation.2 menage and CommercialProviding education and tools to sort waste3Compost ManufacturersProviding pre-sorted green waste4Recycling PlantsProviding pre-sorted recyclable material5Animal Farms, example Pig FarmsProving pre-sort ed food waste5.2 Product DescriptionOur Bins and Dumpsters will be custom-made to match the quality of trade Bins that are used in developed countries however, City Cleans will be available at lower prices. The Bins that shall be rectangular in shape will come in 2 varieties either with 2 or 3 partitions for recyclable waste which will be influenced by the amount of storage space available.A sample of TruckLeyland truck each 6500.00 CIF. The government has kindly granted us freight clearance charges and government tax subsidies.Specifications4 tonnes62 middleliftHydraulic liftVulture bodyDouble bin liftCummins engineA sample of Dumpsters. Size Specifications for Dumpsters Length 72 inches, Width 16 inches, Height 40 inches -For General Waste, Organic/Food, Glass, Metal Cans, Plastic Bottles/Containers.Each dumpster costs Ksh. 3500/=A sample Bins we shall supply both the 3-in-1 and 2-in-1 depending on household storage space. The size specifications for the Bins per partition Len gth 12 inches Width 12 inches Height 24 inchesGreen will symbolize organic and food waste embrown will symbolize general wasteYellow will symbolize glass and plastic bottles/containers and metal example Metal and Aluminium Cans/Tins.5.3 Marketing reckon KES.Designing and Printing of Fliers 100,000 500,000.00Mazingira campaignments A4 size quarterly 80,000.00Facebook Advertisements 15 days per month for 3 months 7,200.00Purchase of .com Website and Design 20,000.00Roadshows 4 times a month 40,000.005.4 be of Official Launch of City CleanTo facilitate the official launching of Clean City, we have humbly requested the presence of Minister for Environment and mineral Resources, Hon. John Michuki, the Environmentalist Activist and Nobel Peace Price Winner 2004, Ms. Wangari Maathai and the Director General of NEMA, Mr. Muusya Mwinzi and UNEP top officials, just to name a few.The launch programme will be brief and will mainly consist of a few speeches and refreshments. The venue wi ll be at our Karen site. embodys of Tents 20,000.00Refreshments 10,000.005.5 Promotional and advertising planTo build a customer database of a minimum of 2000 households within the next 12 monthsTo build leads of at least 50 households and 10 Firms per weekAdvertise our services by distributing 1000 pamphlets/fliers to 50 households per weekGive a personal touch by sending seasonal promotional representatives to deliver our Bins and Dumpsters access to door and illustrate the use, features and benefits of the Bins and plastic bags to our customers, with an aim to minimise resistance.Advertise our services on Facebook, Twitter Myspace and send out e-shots to a minimum of 50 per weekLaunch our website www.cleancity.com and invite internet users to joinAdvertise on Environmental magazines such as MazingiraWe have already received backing on fiscal sponsorships from organisations we plan to partner with, UNEP has so far given us a pledge.5.6 Pricing StrategyThe pricing strategy of clea n city will be quite similar to those of the prevailing competitor firms. The following figures depict the pricing strategy. For the services the company will charge households Ksh. 500 per month and Firms Ksh. 800 per month. A crime syndicate of a months supply for households bin bags will cost Ksh. 150 and those for firms will cost Ksh. 200. During the first month, households will have to purchase bins which will be sold in 2 varieties, 2 in 1 and 3 in 1. The 2 in 1 will be sold for Ksh. 700 and 3 in 1 for Ksh. 850. The firms will have to purchase huge dumpsters which will cost them Ksh. 3400. We will assure that the quality of all these materials is high and durable.5.7 Market SegmentationOur orchestrate market is solely in upmarket areas that include residential homes, shopping malls, Cineplexes, 4 and 5-Star hotels and upmarket schools.6.0 Operations Plan6.1 Licensing and Registration RequirementsNEMA The National Environment Management Authority, who is Kenyas Government Pa rastatal that has been given the mandate to act as Kenyas Environment Authority, has given us the required framework for all the certifys and waste management policies, procedures and regulations. NEMA officials were very move and assured us of their full support. The cost of acquiring the licence and other regulations would be a total of Ksh. 65000.6.2 Operating and Control SystemsIn order to have the operating and control system in place, we will purchase 2 computers and softwares. Our staff is already well trained in maintaining these systems and thus we will not spend on training more staff. Each computer will cost Ksh. 35000 and each software will cost Ksh. 100006.3 Accounting and address Cutting ControlsWe shall have computerized accounting systems with Software designed for book-keeping purposes. We also shall have an Electronic Tax Register that can calculate Value Added Tax and keep a record of our stock and daily sales.Fuel Consumption We shall sign contracts with only one force out station close to our Site in Karen, where our Trucks will be fuelled using fuel cards, to avoid cash changing hands and to keep abreast with our fuel consumption. We shall also fit in all our trucks an anti-fuel stealth device to stop any fuel siphoning.The fuel cost per month will be Ksh. 30,000 for each truck Therefore for 3 trucks a total of Ksh. 90,000.Mileage We shall take down Mileage readings of our trucks on departure and arrival on a daily basis.Performance ControlsApplying Total Quality Management by incorporating benchmarking, through regular collections and comparisons of customer data in form of surveys and focus groupsFor effective communication purposes, our trucks will be equipped with VHF radios and a base station radio at our Site.Our trucks will undergo regular servicing to ensure effectiveness and efficiencyWe shall adhere to all the Governments regulations and ensure timely licence renewals6.4 Financial planAccompanied summaryCompany was formed in January and no revenue was earned during this period, therefore the financial projections commence from the month February 2010 when substantial operations start.Target of having a customer base of 2000 households in a year and 500 firms in a year.10 dumpsters will be purchased initially. come on dumpsters will be purchased as demand increases.Utility costs include telephone, water, electricity and internet.Salary Structure 3 drivers 15,000/= each, 6 support staff 12,000/= each, 4 staff at holding site 12,000/= each.Each truck costs 6500 6500*127.945449 (exchange rate) = Ksh831, 645/=During the first month, we expect to have a customer base of 200 households and 10 firms we expect these figures to gradually increase by 35% each month.Households will be supercharged 500 a month and Firms will be charged 800 per month.Sale of recyclables per Kg Ksh 10/=. We assume each household accumulates waste of approximately 2kg everyday out of which 1.5kg is renewable. Each firm accu mulates 10kg of renewable waste per day.A pack of one Bin bag for households (medium size) that contains 30 bin bags for a month supply costs Ksh 150 /=A pack of one bin bag for Firms (Large size) that contains 30 bin bags for a month supply costs Ksh 200/=We assume each month half the new household customers purchase 2 in 1 bin whereas the other half purchase 3 in 1. Therefore initially we expect total households customers of 200 100 will purchase 2 in 1, the other 100 3 in 1. Consequently each month the 25% increase in customer base will follow the same trend. The 2 in 1 Bin will be sold for 700/= whereas the 3 in 1 will be sold for 850/=.Dumpsters are purchased for each firm 3500/= per dumpster.Break Even point i.e. when total revenue is equal to total costs and net profit is zero. After Break even point Clean City will start making profits. From the graph, the Break Even point is marked as 5.5 which is mid May 2010.After the 1st year, in the projections for the 2nd and 3rd year , we expect the number of customer base for both households and firms to increase by 15% annually.From the second year, we will depreciate the trucks and the office furniture on a straight line basis. The percentage annual depreciation will be 5%.The fuel cost for the 2nd and 3rd year will increase by 15% each year. This is attributed to increases in oil prices as well as change magnitude demand of services and therefore more distance to be covered by the trucks.The initial cost of set up is presented in the table belowItemQuantityCost per Unit (Ksh)Total cost (Ksh)Hydraulic Trucks3831,6452,494,935Gloves131001300Boots135006500Helmet137509750Safety Vests135006500Overalls136007800Acre Plot in Karen175,00075,000Purchase of website120,00020,000Cost of purchasing office furniture150,00050,000Cost of computers235,00070,000Cost of software for each computer210,00020,000Licensing and registration165,00065,000Anti siphoning device for each truck3500015,000Cost of Launch130,00030,000TOTAL ST ART UP COST2,871,785PROFIT AND LOSS ACCOUNT PROJECTIONSYEAR123RevenueNo of Households155451787720558Price charged per Household500500500Total revenue from households7772500893837510279131No of Firms101311651340Price charged per Firm800800800Total revenue from Firms8104009319601071754Sales of recyclables729915083940239653126TOTAL REVENUE158820501826435821004011Expenses bring900000900000900000Salary198000019800001980000Utility840008400084000Security600006000060000Administration CostsStationary cost240002400024000depreciation of office furniture250025002500loan repayment565357565357565357Truck expensedisparagement of trucks124747124747124747Fuel (30,000 per month per truck)108000012420001428300servicing charges (10,000 per truck)360000360000360000Cost of Purchasing Bin bags253435029145033351678Cost of purchasing Bins3 in 144327599099411396432 in 1365050816113938529Dumpsters245,000531825611599