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The Thousand Rand Challenge Business Plan Template Edit

Name and Contact details of client:

Bongani Mantile 05 Mdoda St Kwanonqaba Mossel Bay 6500

Description of the business Edit

What exactly is it that is going to be sold or done?

Cleaning Material Retailer I will develop a range of cleaning products with my brand name and will use a agency network to sell and distribute my products.

What skills are needed to do this? Where is this taught and how much will it cost?

I will need product knowledge and information. Knowledge on prices in stores and packaging. Marketing skills and new product ideas.

What tools or equipment are needed? Where can they be bought, and how much will they cost?

I will buy my stock from Vredebest. They will cost the business R100.00 a month. I will need funnels, empty bottles, plus caps. Vredebest packages in Mossel Bay. Wholesaler of all household and industrial packaging and cleaning material.

How much space is needed to work from?

A room with enough space to work from

Where will the space be found, and how much will it cost to rent?

I will be doing business at my spare room at home. Free rental for electricity it will cost me R100.00 per month and water will cost R60.00 per month.

What sort of people will buy the product? Who are they and where do they live?

I will sell my product to anyone in my neighbourhood also at the taxi rank. Spaza shops, households, Industrial (factories/places, schools and other public places)

How much and how often will they buy? Will they come to the shop or will it be necessary to deliver?

This business is in demand in my neighbourhood according to my research. I will sell door to door. Most sales will be from door to door to build a regular client base and then supply material to my client list every week or month.

Upstream Businesses Edit

A list of businesses and ideas that provide the services and products that this business needs:

  • Vredebest
  • Mikeva
  • Lloyds
  • Biochem

Downstream Businesses Edit

A list of businesses and ideas that this business could provide products for:

  • Schools
  • Housewives
  • Municipalities
  • Businesses

Competitors Edit

What major competitors will attract clients spending away from the business products?

The Spaza shops could be competition as they also sell similar products. They buy from Lloyds or Mikeva Wholesalers and re-sell without adding values. So far I really do not have any competitors in my neighbourhood. What prices and products do these companies have?

Small Omo = R5.00 Hand washing soup = R5.00 Dishwashing liquid = R5.00 Etc.

What makes them popular / unpopular?

Trade Names (products) Spaza shop (always available) Client base Their service is poor and they sell everything and I only sell hygienic commodities of exceptional quality and standard.

What do they do to attract customers? Specials? Interesting marketing / advertising?

They don’t necessarily have specials but because they are the only suppliers of the goods in our area the customers have no choice but to buy from them. They also advertise on a regular basis.

Which of the competitors stand out as being particularly good at what they do?

There isn’t one that really stands out against the others.

What can be done to stand out against them? What can be done that is more exciting / more interesting?

They will definitely come to me because I will specialise in hygienic product and my service will be very good. I will have my own Brand name of products and will market the name of products. My agency network will buy and also sell to the public. Spaza shop will sell for me.

Marketing the business to clients Edit

What sort of people will buy the products and how important is product consistency to them (e.g. must every loaf of bread be identical)?

Product consistency is very important, my client need to know that the products work and work all the time. Anyone is welcome to buy. These products that I sell is very important to my clients. They need to clean up the houses every day.

How seasonal or fashion-dependent are their buying habits (do they buy only in summer, only over Christmas, etc.)?

Season will not effect sales.

Do the clients want the products to be the cheapest or the best (low price / low quality or high price / high quality)?

Good quality at the best price. I would say try to price the product lower than the current market price to get a client list build up.

How do the clients decide where to buy the products? What sorts of advertising / promotions attract their interest?

I will do house demos of some of the cleaning materials to get people to buy. My agents will sell from door to door.

Do the clients want the same things sold in the same way, or do they want things to change all the time?

It will be sold in the same way except if the product is upgraded.

What can be done to attract the first clients (the most important and most difficult to get)? How much will it cost?

Home demos. The first day try to get 5 or 10 people together for a demo and ask them to buy. At a special price to become agents.

What will the business be called? Why?

Eyabuntu cleaning materials Because even the name called this is for the people. This business is for my people for the change, something they can be proud of.

List all of the inputs (products that are required to produce the products):

Buy in bulk and re-package in smaller containers. Buy bulk material, buy small bottles, buy stickers, print pamphlets, order book, etc.

List all the suppliers for the inputs:

  • Vredebest
  • Lloyds
  • Mikeva

List all of your outputs (products created by your business):

  • Dishwasher
  • Bleach
  • Handy Andy
  • Handy Soap
  • Stay soft
  • Air Freshener
  • Toilet blocks
  • Tile and floor Cleaner
  • Polish
  • Heavy duty cleaner
  • Pine Gel
  • Moth balls

What sort of prices can be charged and how much profit will can be made on each item (a rough estimate)?

Product: Selling Price: Total Cost: Profit: I will have 2 sets of prices [a wholesale selling price and a retail-selling price] Wholesale will be the price re-seller will pay (Spaza Shop & Distribution Agents). They will sell to the public and would ad 20% mark-up for their profit. Dishwasher R4.00 - R2.00 Bleach R4.00 - R2.00 Handy Andy R4.00 - R2.00 Handy Soap R4.00 - R2.00 Stay soft R4.00 - R2.00 Air freshener R5.00 (4 in a packet) (All 400ml)

Do the outputs have a shelf life? Must they be sold within a specified time limit before they go off / can't be sold? Which ones?

These products can live longer.

List everything that needs to be done to prepare the business to be ready (list everything needed to have as well, both equipment and stock):

Double check on bulk prices and bottles Design label and brand name Print labels Work out buying and selling price-list for agents Arrange meetings in the community hall for people who would like to become agents Buy first products and re-package Take "Agent pack and kit" to meeting in Community hall Do a "home demo" for everyone Ask to buy and appoint agents Dishwasher 5L Bleach 5L Handy Andy 5L Handy Soap 5L Stay soft 5L Air freshener 5L Empty bottles 400ml Plastic bag (air freshener)

How long will it take to get all of these things and how much will they cost to get?

Two weeks for printing and to get everything ready: Meeting in the Community Hall and advertising and home demo's.

List all the fixed costs to be paid every month even if nothing is sold (things like rent, electricity, telephone, staff wages):

Telephone: R100.00 Taxi Fee to buy my products: R60.00 (Staff wages when applicable)

Total amount for fixed costs: R160.00

How many staff will be needed and how much will each of them be paid (wages must be included in the fixed costs above)?

I will build a good agency network quickly and appoint as many agents as I am able to. I will also go to Spaza Shop so that they can stock my products. I will run all the day-to-day activities myself.

What training will they need, how long will it take and how much will it cost?

Training to my agents is very important. I will motivate them to sell and introduce new products all the time.

The manufacturing or production process Edit

What possible problems may happen during each step of the manufacturing process?

I could spill some of the products and lose quantity and this means losing money.

What solutions can be identified for these problems? How much will they cost and how long will they take to fix?

I will use a funnel and use the right working space so not to spill the products when I do the re-packaging.

What is the maintenance program for all the equipment?

I will not have expensive equipment to service. A thing that would need maintenance is my bicycle for deliveries.

What safety requirements are important for production? Always use hand cloths when cleaning & repacking my products. The quality and cleanness of my product is extremely important at all times.

How will quality control and client feedback be handled?

I will get feedback, directly from clients, agents and Spaza Shop.

Costing and bookkeeping Edit

How many of each of the stock items can reasonably be sold each day (and month)?

I will use an agency network that will sell and distribute all my products. Spaza Shop will act as agencies as well as people that will work for me on a commission basis, i.e. they will sell to their people and earn 20% mark-up on my prices. No, selling even litres and 5 litres.

Will sales volumes be similar number of each item each month, or is their seasonal variation (cold months, hot, or festivals)?

As the client list and agency network gain the quantities sold can increase branding my products will help to gain the sales.

What sort of pricing strategy will be chosen (cheapest or best)?

Cheap but still good quality.

  • 50% mark-up on wholesales
  • 20% mark-up for agents

What profit margin will be chosen for the products?

  • 50% mark-up on wholesales
  • 20% mark-up for agents

Write down the cost prices plus the margin for each stock item you will sell, and the selling price:

Dishwasher 5L = R39.10 Bleach 5L = R31.90 Handy Andy 5L = R51.00 Handy Soap 5L = R31.90 Stay soft 5L = 50.00 Air freshener 5L = R120.00 Bicycle R600.00 Empty bottle 400ml = R1.10 x 60 = R66.00 including caps. Plastic bag = R8.00 (See page 14 for detail)

Is this competitive? Will customers pay this much? Do the margins need to be adjusted? By how much?

The retail price is about 20% - 40% lower than the prices asked by other shops today. So, the prices are good.

Now, set a target. How many items for each product need to be sold on a daily (and monthly) basis to be profitable?

Dishwasher 400ml = 10 items per day Bleach 400ml = 7 items per day Handy Andy 400ml = 9 items per day Handy Soap 400ml = 6 items per day Stay soft 400ml = 9 items per day Air freshener (4 in a packet) = 3 items per day The sales will be possible for 2 - 3 Spaza Shops or agents per day. Commission earned by agents = R66.73 (20%)

Set out the products, costs, margins and selling prices:

Dishwasher 400ml = Cost Price: R43.50 Selling Price: R65.20 Profit: R21.70 Bleach 400ml = Cost Price: R26.25 Selling Price: R39.55 Profit: R13.30 Handy Andy 400ml = Cost Price: R47.34 Selling Price: R71.19 Profit: R23.85 Handy Soap 400ml = Cost Price: R22.50 Selling Price: R33.78 Profit: R11.28 Stay soft 400ml = Cost Price: R47.34 Selling Price: R71.01 Profit: R23.67 Air freshener (4 in a packet) = Cost Price: R33.30 Selling Price: R49.95 Profit: R16.65

Item

Daily Target

Monthly Target

Cost Price

Margin

Selling Price

Total per Month

Dishwasher 400ml

10

300

R43.50

R21.70

R65.20

= R19560.00

Bleach 400ml

7

210

R26.25

R13.30

R39.55

= R8305.50

Handy Andy 400ml

9

270

R47.34

R23.85

R71.19

= R19221.30

Handy soap

6

180

R22.50

R11.28

R33.78

= R6080.40

Staysoft 400ml

9

270

R47.34

R23.67

R71.01

= R19172.01

Airfreshner (4 in a pack)

3

90

R33.30

R16.65

R49.95

= R4495.50


What trends are included in the projections?

Prices can change Sales can decrease Transport costs can vary Total sales can increase every month

Projections:

  • Begin with sales as per page 19 - projections
  • Quality increases sales during the year and pick at year-end to R6000.00 p/m
  • Printing and labels cost each term (month 1, 6 and 11)
  • As sales increase cost of products (stock) and bottles also increase
  • Replacement of equipment or new equipment every 3 months
  • Advertising increase during the year
  • Salary to myself increase during the year from R600.00 - R1 000.00
  • Made provision to repay loan in 1 year (start from month 3)
  • Made provision for unexpected costs.

Running the business Edit

What is the process for running the business on a typical day? Who will be responsible for each step? Link this back to the production process:

Make, buy and check stock for the day or week. Go out and do marketing. Find agents, go to Spaza Shop, sell products.

Who will act as backup should the person responsible not be there? What do they need to act as backup?

I will employ someone to help me later on.

What weekly processes need to be performed? Who is responsible, who is backup and what tools are required?

Do financial targets and management every day. Push target and goals.

What monthly processes need to be performed? Who is responsible, who is backup and what tools are required?

Push targets, be financial wise and advertise and look for new agents or shops every day. Check prices and profits everytime new stock is required buy low sell high. Motivate agents to sell, give them advice and look for new products to introduce.

What is the schedule for training and motivating staff?

Agent motivation is very important. Teach agents door-to-door selling skills. Show agents how to do a home demo's with the products and how to get an order/sale.

What processes are required for maintenance and new product creation? Who is responsible and what tools do they need?

Branding will be my number one goal. Everybody must know the "EYABANTY" range of products. I will introduce more products with my logo/name as we go on.

Before beginning Edit

What major laws concern the business, and which government departments should be called to keep up to date (list phone numbers)?

I need to register my Business to DTI or NAFCOC and register to SARS for tax.

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