BUSINESS PLANFOR SUPER CLEAN ENTERPRISESES

2012-2013

SUPER CLEAN ENTERPRISES

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TABLE OF CONTENTS PAGE

1.0 BUSINESS DESCRIPTION...............................................................31.1 INTRODUCTION .........................................................................................................................................31.3 STRATEGIC PARTNERS.............................................................................................................................31.4 ASSUMPTIONS.............................................................................................................................................41.5 CORPORATE INFORMATION..................................................................................................................41.6 GOALS & OBJECTIVES...............................................................................................................................41.7 SWOT ANALYSIS 1.7 BUSINESS CONCEPT...................................................................................................................................81.8 SWOT MATRIX – SUPER CLEAN LIMITED........................................................................................121.9 PRODUCT....................................................................................................................................................141.10 SERVICING...............................................................................................................................................14

2.0 MARKETING PLAN........................................................................152.1 CUSTOMER.................................................................................................................................................15

Target customers are mostly based in Nairobi and its environs that commute daily to work and taxi companies, corporate with fleet of vehicles, parastatals and private companies.........................................15

2.2 COMPETITION...........................................................................................................................................152.3 ENTRY & GROWTH STATEGY..............................................................................................................152.4 VALUE PROPOSITION.............................................................................................................................16

3.0 ORGANIZATION PLAN.................................................................173.1 ORGANIZATIONAL CHART....................................................................................................................173.2 MANAGEMENT..........................................................................................................................................173.4 CONTACTS..................................................................................................................................................18

4.0 OPERATIONAL PLAN...................................................................194.1 SERVICE & REPAIRS................................................................................................................................194.2 MONTHLY DIRECT ..................................................................................................................................194.3 OPERATING EXPENSES..........................................................................................................................19

5.0 FINANCIAL PLAN...........................................................................215.1 ASSUMPTIONS..........................................................................................................................................215.2 PRE-OPERATIONAL EXPENSES...........................................................................................................215.3 MONTLY OPERATING COST..................................................................................................................225.4 CASHFLOW STATEMENT.......................................................................................................................225.4.1 PROJECTED CASHFLOW STATEMENT (12 MONTHS)..............................................................235.5 TRADING PROFIT & LOSS ACCOUNT.................................................................................................235.6 BALANCE SHEET......................................................................................................................................255.7 BREAK EVEN ANALYSIS.........................................................................................................................265.8 RATIO ANALYSIS......................................................................................................................................27

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1.0 BUSINESS DESCRIPTION

1.1 INTRODUCTION

Super Clean enterprise is a small micro enterprise with a vision of

revolutionizing the carwash industry in Nairobi city; create a satisfied

and royal clientele by introducing reliable, low risk automated carwash.

It’s a limited liability company limited by paid up share capital. Super

clean mission is to establish a well managed network of auto car wash

facilities that offer integrated and value added car maintenance

services that will give value for money to the customer. The company

will provide the cleaning services in Nairobi to begin with and expand

to other towns to great lakes region soon.

An automated car wash machine is a facility used to clean the interior,

under and exterior of a vehicle using automated mechanism.

The company is hoping to raise Kshs 5 Million for the purchase of an

automatic car washing machine fully automated at Kshs 2.19 Million.

The rest will be used to pay for pre operational expenses. Projected

revenue for year 2012/13 to 2014/15 is Ksh. 7.917 Million, 8.577 Million

and 8.835 Million.

The mission of Super Clean Ltd. is to be the leading automatic car

wash Company in Eastern Africa. It will be the second automatic car

washing venture in the region. The machine will have capacity of

washing 30-40 vehicles per hour. Each vehicle will take 5minutes to

get the job done.

1.3 STRATEGIC PARTNERS

Co-op bank finance institution that specializes in extending

finance to Small Micro Enterprises will be the main financier

accounting for 80 % of the total capital. The bank will withhold

the ownership documents and signed Transfer documents until

the whole amount is settled i.e. after four years.

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1.4 ASSUMPTIONS

It’s generally assumed that the demand for car wash services will

continue to be high in a distance future and the target sponsors

will give the necessary support to the business consistently to

support growth.

Interest rates, tax rates and personal burden are based on

conservative assumptions.

1.5 CORPORATE INFORMATION

The corporate information is outlined as below:-

NAME: SUPER CLEAN LIMITED ®2012

LOCATION: LANGATA ROAD.

TEL ; 0722 755046, 0736 549488, 0731 502895

P.O. BOX : 79221 00200 NAIROBI

EMAIL: cleanwash@gmai l.com

FORM OF OWNERSHIP: LIMITED LIABILITY COMPANY

INCORPORATED IN KENYA

AUDITORS:

BANKERS: CO-OPERATIVE BANK

ADVOCATES:

TYPE OF BUSINESS/NATURE: AUTO CAR WASH.

1.6 GOALS & OBJECTIVES

The company’s goal is to start up with one brand new automatic

car washing machine and then increase its machines so as to

diversify its clientele to cover even the other cities in the region.

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The company will also employ competent personnel to facilitate

the achievement of the said goals.

Establish and periodically review its quality objective in line with

changing needs of its customers

1.7 SWOT ANALYSIS

(a)STRENTH:Car washing services in Nairobi is manual and mostly of informal

nature where professionalism lacks. The business is highly

disorganized, time consuming and thus frustrating to the customers. In

most cases it takes 1 to two hours to get the work done in manual car

wash, in contrast it only takes less than five minutes to get the same

done with an automated car wash. It is the newest electric devised

plant that can wash, wax, dry and polish a car in less than 5 minutes

shampoo, wash and dry. Further more a new sophisticated water

recycling unit ensures that 85% of car wash water is reused-clean,

odour free and biologically treated to the specified German car wash

water standards, there will be a huge saving on water bill. Most car

wash facilities are found on open city grounds and a few petrol

stations. It is due to this realization that professional and automated

car wash facilities have been found to be necessary establishments in

Nairobi. These will offer professional low risk services and a

comprehensive and integrated car wash services. With the manual car

wash it is a common occurrence for one vehicle to get damage during

car wash and no compensation mechanism is in place for it is done at

owner’s risk.

(b)WEAKNESSES:

As it have been observed in most cases good things are expensive,

and auto car wash come with both fixed and variable cost. Also

standard recommended detergents are expensive; these costs have to

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be incorporated to the charges given to the customer. In contrast the

most manual car wash doesn’t incur such huge cost and as such

customers opt to get their services from there, without considering the

long term benefits.

With one machine once there is a break down it will inconvenience the

royal customers. It’s not also possible to predict how the trainee by the

Hanna company will take to catch up.

It is a common occurrence of power black out and without a stand by

generator by the time it is installed there is loss of revenue. There is

also a bit of a challenge of an interrupted water supply for a long

period should the reserve be exalted. All the same the benefits by far

outweigh the weakness.

(c)OPPORTUNITIES:

Recent report shows that 84,000 vehicles are bought per year in Kenya

and half of all vehicles are in Nairobi. Kenyans are becoming

increasingly time conscious and this where the super clean is taking

advantage of the existing huge market and has come to their rescue.

With the projected coming up of Konza and Tatu cities, these will

create a huge market for expansion in the next few years for players in

the market. The recent discovery of oil in Kenya also create a huge

market as fuel cost will come down, people opting for private

transport. This will also trigger industrialization in the country

impacting growth to most if not all sectors of the economy.

Most of manual car wash has illegal water connections or operating on

rivers risking closer any time by local authority.

Since independence there is only one automatic car washing business

in the region located in Lovington Nairobi installed in 2011. The

response by customers has been surprisingly overwhelming. The time

taken in the manual car washing operating business is so much that if

converted in monetary terms leaves one wondering how on earth with

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the amazing growth in technology, this has escaped the eye of an

entrepreneur.

(d)THREATS

The government intends to introduce commuter trains in future and

regulate the vehicles in the city to deal with traffic jams. However this

might take year for it’s a heavy investment.

Entry by other players in the market specifically starting with several

machines hence cutting down on their over all costs. Such a service

provider will charge less making it take long to recover capital

employed on small scale players. We are in an increasing competitive

business world, driven by new technology; new invention and all may

render a business obsolete in short time.

With a world driven by technology, new invention may render a

business obsolete.

(e)CHARGES

The standard charge for a vehicle rages from Kshs 500 to Kshs. 1,000

depending on the size and make of a vehicle. Also there is a detailed

package where the car is washed under, inside and over inside roof

whose charge rage from Kshs 3,000 to Kshs. 5,000 depending on the

size of the vehicle the machine have capacity of washing 30 to 40

vehicles per hour for 12 hours a day. This translates to a minimum of

360 vehicles a day which is way below the demand. Super Clean will

place itself strategically to exploit the great potential that is available

in the market before becoming saturated.

Super clean will be offering a discounted price to access the market

and lock out competitors. Machine breakdowns will be attended by

Hanna car wash personnel who are conversant with this machine at no

extra cost.

1.7 BUSINESS CONCEPT

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a) INTRODUCTION

Car wash in Nairobi is manual and mostly of informal nature where

professionalism lacks. Most car wash stations are found in open city

grounds which use unhygienic sewage water or drainage water and a

few at petrol stations.

Car wash professionalism is required to take care of car paint work for

exterior, management of car upholstery for interior and engine

protection for Engine wash.

Currently, it is normal to have one's car damaged during car wash and

no compensation mechanisms are in place because the car is washed

at owner's risk.

Due to this realization a professional and automated car wash facilities

have been found to be a necessary establishments in Nairobi to offer

professional low risk service to Nairobi residents and also to offer a

comprehensive and integrated car wash services for the same. Super

clean has what’s it takes to do a perfect and professional job.

b) BISINESS SCOPE;

Nairobi car wash business is highly disorganized, time consuming and

thus frustrating to the customers, on average, one car wash takes up

to two hours. However, it takes less than five minutes to get the job

done on an automated car wash; it therefore saves time, more

comprehensive and with no risk to the car.

Currently, there being no adequate established car wash facility in

Nairobi. The whole city is ready for establishment of this business in all

corners. Most car owners will appreciate such an establishment to save

time and maintenance cost.

c) LOCATIONS

The ideal locations for this establishment of automated car wash

facilities are the busy places such as next to shopping malls and large

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supermarkets. Also busy petrol stations, preferably with mini markets

and cafeterias are also ideal to enable customers engage in other

shopping activities while awaiting their turn to get a car wash.

d) LOCATION SIZE

For the construction of a comprehensive multi bay automated car wash

facility, a plot size of 30 meters by 60 meters (30m x 60m) is required.

Actual building is 45 meters by 6 meters (45m x 6m),

e) BUSINESS ADVANTAGES

In addition to earning profit for the investors, the business will also

make a contribution to the countries exchequer by paying taxes. It will

also contribute to by hiring a significant number of Kenyans and when

fully established, it will undertake corporate responsibility just like

other progressive business entries.

It also is worthy nothing that automated car wash facility is

environment friendly. This is due to its use of recycled water and

treatment of the same for toxins that may be released in the course of

car washing, in this regard; it (the car wash facility) fully conforms to

the International environmental laws governing pollution of

environment.

f) BUSINESS REQUIREMENTS

To enable commencement of setting up of an automated car wash

facility, an ideal location, preferably next to a shopping mall or large

supermarkets is required. A plot size of not less than 30m x 60m is

necessary.

The plot is required on lease Terms a Sub Lease is also acceptable

subject to fulfillment of Government conditions and other local

authority requirements to enable construction of the facility within the

shortest time possible.

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Vital services like water, power (three phase) and an access to a sewer

line are very necessary. In addition, secure parking area and

reasonable security detail are also of great importance.

g) AUTOMATIC CAR WASH

(i)

(ii)

(i) A car inside a tunnel wash in progress (ii) Clean car at the

end of a tunnel

The first automatic car washes appeared in the mid 1950s. Mechanized

car washes consist of tunnel-like bays into which customers drive their

cars. The mechanism inputs the wash PLU into a master computer or a

tunnel master automatically. When the sale is automated, after paying

the car is put into a line-up often called the stack. The stack moves

sequentially, so the wash knows what each car purchased. After pulling

up to the tunnel, an attendant usually guides the customer onto the

track or conveyor. At some washes, both tires will pass over a tire

sensor, and the system will send several rollers. The tire sensor lets

the wash know where the wheels are and how far apart they are. On

other systems, however, the employee may have to guide the

customer on and hit the 'Send Car' button on the Tunnel

While on the conveyor, the attendant will usually ask the customer to

put his or her vehicle into neutral and release all brakes. Failure to do

so will inhibit the conveyor. The rollers catch the tires, pushing the car

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through a photo eye, which measures vehicle length, allowing the

computer to tailor the wash to each individual vehicle. The equipment

frames, or arch, vary in number.

They either apply a low ph with a mild alkali, then a high ph with

mild alkali. Ethically, car washes are designed not to harm a

vehicle's paint at all times.

The customer next encounters tire and wheel nozzles, which the

industry calls CTAs. These apply either a degreaser with a high

alkalinity solution, or even an acid. These remove brake dust

and build up from the surface of the wheels.

The next arch is the entrance wraps usually made of neo-glide

material.

There are two types of foam: polish and wax. Wax is more

expensive, but rinses well and covers the vehicle with a lighter

and puffier foam. It does offer more protection. Finally the

vehicle encounters a spot free rinse of soft water that has been

filtered of chlorine and sent trough semi permeable membranes

to produce highly diluted water that: will not leave spots.

After using spot free water, the vehicle usually does not require

hand drying. The wash often finishes with this drying, and a light

indicates for the customer to leave.

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1.8 SWOT MATRIX – SUPER CLEAN LIMITED

MAIN

COMPETITOR

STRENGHS WEAKNESSES OPPORTUNITY THREATS

GECO AUTO

CAR WASH

The one with

similar standards

-Offering

automated car

wash services with

capacity of

75vehicles per hour

-Charging

discounted price

-Providing values to

customers.

-Fast, efficient &

efficient delivery.

-Being experienced

in motor vehicle

sector for over 7

years.

-Lack of capacity

to meet demand.

-High fixed cost

absorption.

-Problems of a

new business.

-Very high un

exploited demand

in efficient

services has one

machine located in

Lovington

-Increasing

number of middle

class citizenry

-Entry of other small

and medium size

haulage companies.

-Change of

government

regulations on

transportation rules

where commuters

will be using train.

-NEMA regulations

compliance

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-In-house technical

expertise

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1.9 PRODUCT

Super Clean Limited is in service industry particularly in transport

sector. The company will invest initially by buying one brand new

HANNA AUTOMATIC CAR WASHING MACHINE and will be serviced

exclusively by HANNA LTD personnel who also service the

existing one.

The Logistics manager will be in charge of running the core

business operations in daily bases while the general manager will

be soliciting for new customers, new locations for other machines

and overall operations.

1.10 SERVICING

Hanna auto car washing machine has agreed to service maintenance

program of the machine and training one of our own in Kenya. Services

and maintenance program offered by Hanna ltd include the

following;-

Service and maintenance of the machine.

Wide range of Hanna Parts available at all services points.

Parts emergency supply available.

Break down emergency assistance.

Advice and inform on new machine technology.

2.0 MARKETING PLAN

2.1 CUSTOMER

Target customers are mostly based in Nairobi and its environs that

commute daily to work and taxi companies, corporate with fleet of

vehicles, parastatals and private companies.

2.2 COMPETITION

The company’s competitors include the established companies such

as:-

Geco-Carwash Ltd. the first automatic car wash in Kenya at

Kingara-road Nairobi with capacity of 75 vehicles an hour and

maximum of 900 vehicles a day working for 12 hours. Based on

demand this commands a small market share.

By and large, the small manual unstructured car wash

businesses spread all over the city and various petrol stations.

Most of them do not have running overheads.

2.3 ENTRY & GROWTH STRATEGY

Super Clean enterprise has got a golden opportunity to entrench

its competitive position in Nairobi and later in the regional for the

cleaning services focusing on its target market.

It is with view of the above that the company will gain the

competitive advantage by offering quality professional and low

risk services at a competitive charge.

A narrow served market focus will develop in strengthening the

company’s reputation which will generate favorable referrals.

To plough back its profit after tax in a view of consolidating funds

to invest in more automated car wash machines

2.4 VALUE PROPOSITION

Super clean Limited has pledged to offer the following:-

Quality service – This is by providing courteous, prompt and

dependable services. This will greatly boost in building the

company’s reputation.

Reasonable price – super clean will charge reasonable

(discounted) price to customers with fleet of vehicle as in order

to gain entry in the market and give value for money to its

customers.

Careful vehicle handling –cars are highly valued possessions and

it is appropriate to have facility that will offer professional service

reliably.

TQM will be the cornerstone of our services.

3.0 ORGANIZATION PLAN

Super clean philosophy is to embrace The Total Quality Management

and service delivery to the customers.

3.1 ORGANIZATIONAL CHART

ORGANIZATIONAL CHART

3.2 MANAGEMENT

The Management of the business will be led by Mr. Joseph Wanjahi as

the CEO and Mr. Paul Mahugu as the Operations Manger. Their core

function will be to over see a smooth flow of various activities as well

as to oversee the overall operation of the business. Among other

things they will concentrate on the following tasks:-

a. To think strategically and lead the business to achieve its

objectives.

b. To safeguard the company assets.

c. To take calculated risk so as to help the company to achieve its

objectives.

d. To solicit for new customers and assist in maintaining the old

ones.

Having worked in Britain over 10 years Mr. Wanjahi has a firsthand

experience on how a business of this nature operate. This nature of

business is wide spread all over Europe and as such he will bring a

wealth of experience to the company.

3.4 CONTACTS

Joseph Wanjahi

CEO

Tel: 0731 50 28 95

Email: superclean@gmail.com

Paul Mahugu.

Operation Manager

Tel: 0722 75 50 46

Email: superclean@gmail.com

Grace W. Wagai

Customer care

Tel: 0703 65 30 19

Email: superclean@gmail.com

The following services shall be outsourced:-

Legal Services

Accounting & Secretarial Services

Auditing services

4.0 OPERATIONAL PLAN

Super clean enterprise will first invest in Hanna automatic car wash

machine (Brand New)

4.1 SERVICE & REPAIRS

Hanna ltd has agreed to be undertaking services and repairs works

including attending for breakdowns on 24 hours services. They have

also offered to train an in-house employee to effectively manage the

serving of the equipment upon completion of the installation phase at

no extra cost. Contact person in Kenya is Elijah Gachau 07242 46 37

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4.2 MONTHLY DIRECT EXPENSES INCLUDE:-

EXPENSE AMOUNT (KSHS)

Power bills 20,000

Water Bills 25,000

Detergents 40,000

4.3 OPERATING EXPENSES

EXPENSE AMOUNT (KSHS)

Repairs & Maintenance 20,000

Salaries & Wages – others 40,000*

Salaries & Wages – 100,000

Directors/Manager

Insurance 4,000

Rent 100,000

Telephone Bills 5,000

Advertisement 1,500

Licenses 80,000*

* Salaries and wages will be reviewed upwards in proportion to rise in

revenue and the licenses are for the whole year

5.0 FINANCIAL PLAN

5.1 ASSUMPTIONS

a) It’s generally assumed that interest rate will remain at 19 % in

the distant future.

b) Inflation will come down to single digit figure in near future (say

9%)

c) The East Africa Countries will continue co-operating in a distant

future.

5.2 PRE-OPERATIONAL EXPENSES

The table below shows the makeup of the pre-operational costs:-

ITEM AMOUNT (KSHS) TYPE

Licenses 80,000 Expense

Advertisement-

brochures

18,000 Expense

Rent 300,000 Expense

Water deposit 10,000 Expense

Telephone expenses 3,000 Expense

Detergents 40,000 Expense

Alarm installation –

BM

6,500 Expense

Legal fees 80,000 Expense

TOTAL EXPENSES 507,500

Oil separator/ recycle

unit

80,000 Fixed Assets

Installation Charges 100,000 Fixed Assets

Furniture & Fittings 10,000 Fixed Assets

Plant & Equipment 2,000,000 Fixed Assets

TOTAL ASSETS 2,190,000

5.3 MONTLY OPERATING COST

DETAILED MONTHLY OPERATING EXPENSES

ITEM AMOUNT (KSHS)

Detergents 40,000

Advertisement 2,000

Rent 100,000

Water 25,000

Telephone 5,000

Alarm charges – Monthly 700

Salaries & Wages –Others 40,000

Salaries & Wages – Management 150,000

Power Bills 20,000

Insurance 4,000

Interest Charges 67,500

Service & Repairs 30,000

5.4 CASHFLOW STATEMENT

Additional information

i. The loan of Kshs.5 Million (Co-Op bank) repayment period is 3

years.

ii. The loan is expected to be received at the end of June 2012.

iii. The extra Kshs. 500,000 will be injected as owners capital as

paid up share capital.

iv. Operations are expected to commence at the beginning of July

2012.

v. Monthly loan repayment is Kshs.250, 000 at end of every month.

vi. Interest rate at the rate of 19 % to be charged on loan

outstanding.

vii. One month grace period has been granted on loan repayment.

viii. Co-op Bank to finance cash flow deficits by extending overdraft

facilities when need arise.

5.4.1 PROJECTED CASHFLOW STATEMENT (12 MONTHS)

(As attached on appendices 11)

5.5 TRADING PROFIT & LOSS ACCOUNT

SUPER CLEAN LIMITED

PROJECTED TRADING PROFIT & LOSS ACCOUNT

FOR THE YEAR 2012/13, 2013/14, 2014/15

2012/13 2013/14 2014/15KSHS.(000) KSHS.(000) KSHS.(000)

SALES 7,917 8,577 9,435

Direct Cost

Repairs & 240 240 240

maintenance

Water bills 240 300 320

Detergents 440 480 480

Power bills 240 504 540

Total direct cost (1,160) (1,524) (1,580)

Gross Profit 6,717 7,297 7,535

Operating Expenses

Advertisement 24 24 24

Rent 900 1,200 1,200

Telephone 24 24 24

Alarm 8.4 8.4 8.4

Salaries & wages-

Manager

1,200 1,200 1,200

Salaries & wages -

others

480 480 480

Insurance 48 48 48

Depreciation-Plant 272.5 272.50 272.50

Depreciation-fur

/Equip

1.25 1.25 1.25

Interest 810 810 810

Legal Fees 80 80

Pre-operational

expenses

537.5 0 0

Mis-expenses 60 60 60

Total Operating

expenses

4,365.65 4,208.15 4,208.15

Net profit 2,351.35 3,086.85 3,324.85

5.6 BALANCE SHEET

SUPER CLEAN LIMITED

PROJECTED BALANCE SHEET

AS AT END OF 30th JUNE 2012/13, 2013/14, 20144/, 15

2012/13 2013/14 2014/15KSHS.

(000)

KSHS.

(000)

KSHS.

(000)

FIXED ASSETS

Plant & equipment 2,180 2,180 2,180

Less: Accumulation

Deprecation

(272.5) (545) (750)

Net Book Value 1,908 1,635 1,363

Furniture & equipment -

cost

10 10 10

Less: Accumulation

Deprecation

(1.25) (2.5) (3.75)

Net Book Value 8.75 7.5 6.25

Total fixed assets 1,616.25 1,642.15 1,368.75

CURRENT ASSETS

Cash at bank 3,608.5 2,611.4 1,456.1

Total Current Assets 3,608.5 3,611.4 1,456.1

CURRENT LIABILITY

Working Capital 3912.5 3294.55 2138.35

CAPITAL EMPLOYED 4,932.75 4,253.55 2,824.85

Financed by:-

Paid up share capital 500 500 500

Profit after tax 2,995.35 3,765.85 4,000.85

Less: Drawings (1,000) (1,000) (1,000)

2,495.35 3,262.85 3,500.85

Long term loan-cop-op 5,000 5,000 5,000

Less: repayment (1,666.67) (3,333.4) (5,000)

Outstanding loan 3,333.4 1,666.70 0

CAPITAL EMPLOYED 4,932.75 4,253.55 2,824.85

5.7 BREAK EVEN ANALYSIS

Break - even analysis:

Kshs. 000

Monthly Units Break-even

968vehicles

5.8 RATIO ANALYSIS

Ratio 2012/13 2013/14 2014/15

Sales Growth 0 8% 10%

Gross Margin %

Net Profit

Margin %

Current Ratio

Pre-Tax Return

on Net Worth %

Debt /Equity

Ratio

Return on

Equity %

Interest

Coverage

2.8 times 2.8 times 2.6 times

Current Assets

to Total Assets.

APPENDICES

Appendices 1 – Direction guide (Map)

Appendices 11 – Cash flow statement

Appendices 111 – Detailed CVs

REFERENCES

The Finance bill, 2012

Economic Survey, 2012

Vision 2030

Kenya revenue authority web site.