Sakaramenta
The low cost & strong bicycle cart for transporting and selling in Malawi
3 Models: Transport- Ambulance and Sell-cart.JPG
In Malawi the bicycle is the most popular way of transport, due to the high density of the population and expensive fuel. More than 1 million people own a bicycle. But bicycles are not suitable and stable to transport many goods.
Sakaramenta is the company which will produce and sell 3 models of bicycle carts in Malawi. A Sakaramenta cart offers a unique economic potential for Malawians; transport becomes cheaper, higher in volume and more flexible for farmers, vendors, hospitals and communities. And it creates the opportunity for Malawians to become a transport entrepreneur, without the need of a big investment.
Sakaramenta has four distinctive characteristics:
- Low cost: Malawi is one of the poorest countries in the world. The goal is to reach as many people as possible to stimulate entrepreneurship and reduce poverty. To reach a large target group, the use of micro credit will be stimulated and the opportunity will be given to buy a cart with the whole community. With a big sales volume and low profit margin, the price of the carts will be low. Low producing costs will be created by the very low labor costs in Malawi, good connections in the steel industry, grants, advertisements on the carts and direct sales to the end-user.
- Strong, quality design: The carts will be created with the knowledge and expertise of good Dutch design. The Netherlands are frontrunner in the bicycle industry.
- Malawian product: The Sakaramenta carts will be built in Malawi, be sold by Malawians and have an African name. In this way Sakaramenta will differentiate it selves from potential rivals from China or India, because it will be launched as a ‘Malawian product’.
-First mover advantage: Sakaramenta will benefit from the open market without rivals (bicycle carts do not exist yet). To create a logistic network, a well known brand name and the knowledge of the demand of the local customer.
Facts
2009
| Two years ago: | |
| Last year: | |
| This year (forecast): | 36,000 |
| Year 2 (forecast): | 63,000 |
| Year 3 (forecast): | 118,000 |
| Two years ago: | |
| Last year: | |
| This year (forecast): | -4700 |
| Year 2 (forecast): | 2,800 |
| Year 3 (forecast): | 14,800 |
| Two years ago: | |
| Last year: | |
| This year (forecast): | 8 |
| Year 2 (forecast): | 10 |
| Year 3 (forecast): | 14 |
How do you expect this to be financed?
| Own Contribution in cash | 15,000 |
| Loans (debt) | 35,000 |
| Shares in your company that you offer to investors (equity) | |
| Other sources | |
| Total finance needed (US$) | 50,000 |
The Business
The bicycle cart is a trailer which you can link to the rear axle of the bicycle. The three most important characteristics of the bicycle cart: cheap, strong and light. The best materials to meet these demands are steel round tubes, sheets of steel and maybe plywood. The steel will be imported from South-Africa, plywood is available in Malawi. The bicycle wheels will be imported from India or China. The production of the bicycle cart will be done in Malawi.
The idea is to produce three kinds of bicycle carts (see drawings):
1) Sakaramenta Transport. The transport cart is a simple cart, with two wheels, an iron frame, a floor for loading and a tow bar to link to the bicycle. It can be used to transport every kind of product, such as maize, wood, vegetables etc. The target group of the transport cart are farmer/ farmer community, new transport entrepreneur, bicycle taxi driver, post- transport-companies and hotels.
Bicycle taxis are very common in Malawi, these bicycle taxis are normal bicycle with a hardened backseat and a cushion to transport a person. A transport cart has the advantage that a bicycle taxis can transport much more. Target price: 100 $*.
2) Sakaramenta Sell. The sell cart differentiates from the transport cart in having vertical edges and a cover. This cart can also be used as a market stall, with the cover used as a board to show the goods. The target group of the sell cart are the market sellers. The cart enlarges their potential sales market and gives the possibility to sell a wider variety of goods. Target price: 120$*.
3) Sakaramenta Ambulance. The ambulance cart has a simple design with a stretcher on top of it. These ambulance carts already exist in Malawi, but just on small scale. This cart has the advantage that the stretcher can be removed from the cart and will be 50% cheaper then the rivals. Target price: 115$*.
*These prices are excluded VAT. They are based on good research but are indicative.
PRICE
Sakaramenta transport: People who have a bicycle can make the Sakaramenta Transport profitable in 6 to 9 months. Because bicycle taxis drivers who transport people earn about $3,5 a day. People who transport goods with the Sakaramenta Transport will earn about the same amount. The Sakaramenta Transport will cost the end-user about $ 125-135 (included tax and profit shopkeeper). If the end-user saves $1 per day of his $3,5 daily income, then the Sakaramenta Transport will be profitable in 6 to 9 months.
Sakaramenta Sell: The wholesale price of this cart will be about $125. Compared to the other carts this is a fair price. It is hard to predict how the sales of the vendors with a Sakaramenta Sell will rise. But the sales will definitely grow because the vendors can transport bigger volumes and are not stuck to the market like all the other vendors but can sell their products everywhere.
Sakaramenta Ambulance: This cart has little competition from other ambulance carts. The carts sold in Zambia cost about $ 220 (excl. VAT). But the wholesale price of the Sakaramenta Ambulance (excl. VAT) will be $115.
PROMOTION
-The bicycle carts themselves are very suitable for advertising. The name Sakaramenta and address to buy the carts will be written on the site of the cart. In a later stage companies will be contacted to encourage them to advertise on the carts as well, for example the wholesalers who buy the carts or big companies like Coca Cola or mobile telephone suppliers.
-Eight different kinds of customers can use the cart at a reduced price for a certain period in return for feedback and promotion of the cart.
-Salesmen will visit the shops to promote the Sakaramenta carts. The local manager and I will visit the wholesalers.
-On the main market of the two biggest cities in Malawi two Sakaramenta Sell carts with a salesman will be placed. One cart will be equipped by flyers, photos of the use of the carts and some reduction offers. In this way the cart itself is used as a promoting tool and the utility of the cart is shown. One cart will be shown as a sample cart for potential buyers.
PLACE
To reach the described target groups four different sales channels will be used:
-Shops/ market: The shops in Malawi are small and most of the time independent, some shops have a few bicycles in stock. These shops will be contacted to sell the Sakaramenta bicycle carts.
Bicycles and bicycle parts are often sold on the market. These bicycle vendors will be contacted to sell the Sakaramenta bicycle carts.
-Wholesalers: Malawi has a few wholesalers with a big distribution network, like Metro and Shopright. These supermarkets also sell bicycles. These wholesalers will be contacted to sell big volumes at once.
-Govermental organizations: The Ministry of Health will be contacted to sell a big amount of ambulance carts at once.
-End-users: In a later stage Sakaramenta will sell the carts to the end-user.
The bicycle carts are a unique and very useful product for Malawi, because of the already popularity of bicycles and the high density of population in this country. Bicycle carts offer a unique economic potential; on the one hand it creates employment, on the other hand people can work more efficiently. This niche market is too small for mass or complete production in China or India.
The Entrepreneur & Management
-I have a university degree in BCO, similar like Social Economics, this knowledge I like to use to in this business plan.
-I worked at the international bank ABN AMRO as project manager; I know how to plan and structure big projects.
-I have experience by being my own boss. Last year I started my own consultant company so I know what it is to work for myself, to do administration, to sell my own service and to talk with potential clients. I learned to listen carefully to the demands of the client.
-I have experience in writing a market analyses for different products.
-I have deepened in the bicycle industry. I spoke with product designers, bicycle consultancy companies and tricycle producers.
-I did research in Malawi; visited bicycle assembly factories and spoke with potential clients.
-I have travel-experience in many African and Asian countries.
-It is my own idea to set up to produce and sell bicycle carts in Malawi, which results in a very enthusiastic and motivating attitude.
Development
In my opinion the best foreign aid is stimulating entrepreneurship and creating jobs. This business plan meets those two demands.
1) The bicycle cart will stimulate entrepreneurship. It makes it possible to sell more products at various locations. Because of the bicycle carts transportation will become cheaper. Cheap transportation is an engine for business development.
2) The reason to start the company is development in Malawi. I believe creating direct employment is of enormous importance in development. People having an income, are in turn beneficial for the country economy at large. Employees get training and skills in welling, computer programs and selling opportunities. My goal with the company is to be self-sustainable, not making a loss not making a big profit. My self I will take a fixed income, the profit will be used to lower the prices of the carts or to invest in new products in Malawi, which will stimulate the economy.
