MEGGA HARDWARE

1.0 BUSINESS DESCRIPTION

MEGGA Hardware stores will be a basically retail shops that sell tools and construction
materials needed to build, renovate, or maintain any structure such as houses and
buildings. The store will sell hardware of all kinds, quality tools, paints, and house wares.
The business will make revenue and profit by servicing its customers, with not only needed
hardware but also with expert advice in the use of any product it sells. It will sell its
products in the local market so as to provide free advice to its customer on all the products
it sells.

1.1 BUSINESS NAME

MEGGA Hardware is a business which is going to establish a retail hardware store near
Westend Mall in Sagana. MEGGA hardware will be owned by Dickson Kinyua Mwaniki, a 22-
year-old quantity surveying student. My education background is I started at Arch Bishop Gitari
primary school where I started in 2004 to 2013 and completed my primary level. I then joined
Chuka High School from 2014 to 2017 and completed my secondary school level. I then joined
Railways Training Institute in 2019 to date.

YEAR INSTITUTION
2004-2013 ARCH BISHOP GITARI
PRIMARY SCHOOL
2014-2017 CHUKA HIGH SCHOOL
2019 TO DATE RAILWAYS TRAINING
INSTITUTE
Since I have some knowledge on the materials used in construction, it will be easier to start the
hardware business. Having no experience in the business sector, I will compensate by making
consultancy from experts and experienced personnel in the business sector. My sponsors, The
Chandaria industries will contribute 300,000 constituting of 30%, family and friends who will
contribute 250,000 which will constitute 34%, a 300,000 loan from cooperative bank
constituting of 40% and 200,000 personal savings constituting of 26%.

CONTRIBUTORS AMOUNT(SHS) PERCENTAGE%

Personal savings 200,000 20
Family and friends 200,000 20
Loan from Cooperative bank 300,000 30
Chandaria industries 300,000 30
 1.2 LOCATION
MEGGA Hardware, retail outlet will be located at the West end mall, newly built mall, on the
ground floor, located in Sagana along Nairobi-Sagana-Nyeri highway. Our location helps
facilitate accessibility from all parts of the town and the surrounding town whose rate of
growth is immensely increasing. The ongoing construction of Nairobi-Sagana Highway will
facilitate ease in transportation of products from manufacturers. Since the business is on the
highway transportation of products in bulk will be easier. Since the town is at the centre of
three counties i.e. Nyeri, Kirinyaga and Muranga, it will attract many customers because of
immense growth of infrastructure in these counties.

1.3 FORM OF OWNERSHIP

The business is a sole proprietorship. I will be the sole owner of the business.
ADVANTAGES OF SOLE PROPRIATORSHIP
1. It is easy to form since it does not require complex and detailed legal formalities to start and
operate hence no much expenses are required.
2. The is the decision maker and therefore takes fill control of the business without
consultations.
3. Exercises direct personal control of the business at all the time and this leads to having
direct control contact with the customers.
4. Ability to maintain his secrets.
5. It is a simple business since one is exempted from paying high taxes.

1.4 TYPE OF BUSINESS

The business will be mainly retail i.e. the sale of goods to various customers in relatively small
quantities for use rather than for resale since it will venture in the local market. It will sell
hardware of all kinds, quality tools, paint, and housewares. If there are special orders, we will
be able to make overnight deliveries. The business will also be servicing our customers not only
with needed hardware but also with expert advice in the use of any product as well.

1.5 PRODUCTS AND SERVICES

MEGGA Hardware offers the parts, materials, and advice to tackle any home repairs and the
general building construction. The products dealt in are building materials, equipment, and
paints. All the size, shape and colour will depend on the customer preferences. Overall quality
and packaging will rely heavily on the wholesalers who will be providing products in bulk. We
will buy our products from the top manufacturing brands in the country. We will give our
customers the highest quality products and services at a fair competitive price. We will offer
warranty to products so that if the customer is not fully satisfied by the product, they can have
an alternative replacement. Our products will be clean and be on full display and proper
lighting for a clear view to our customers. We will also wrap our products carefully to fully
satisfy our customers. Our products offerings are listed below:
• retailing hardware e.g. iron sheets, nails, screws, nuts, cement, BRC, tiles.
• retailing tools and equipment e.g. hammers, tape measures, plumb bobs, spirit level,
squares, saws.
• retailing plumbing fixtures and fittings e.g. elbows, tees, pipes, flange, cross, cap, nipple
fittings, valves, taps.
• retailing electrical supplies e.g. wires, meter boxes, bulb holders, wiring pipes
• retailing paint and supplies e.g. emulsion paint, oil paint, enamel paint.
• retailing garden products and equipment e.g. rakes, shovels, wheel barrow, trowel,
watering cans, hose pipes.

1.6 JUSTIFICATION OF THE BUSINESS OPPORTUNITY

The main factor for choosing hardware is because of the prevailing construction environment
that allows thriving of such a business. This will ensure that we fully provide products and
services needed by our customers. Our contribution to the community will be to create
employment, give our customers the highest quality products and service at a fair competitive
price.

1.7 THE INDUSTRY

The hardware business is a service which belongs to the construction industry. The industry is
large as the demand for building materials is on the rise in the country due to growth of the real
estate industry. The businesses in the industry are large considering the immense growth of
the real estate. The kind of technology used is capital intensive and it will be modern type of
technology. The average number of employees will be five. The industry has high competition
as it is flooded with high number of retailers. There are high sales by businesses since materials
are on high demand. The seasonal factors may be experienced where customers buy goods in
bulk only for repairs and maintenance but not continuous construction.
The recent trends in the industry that there is immense growth. There is external competition
that has brought about both industry revenue and profit growth. There has been introduction
of franchise and online stores making it easier for a hardware retailer to reach out to a larger
market far beyond the areas where the physical store is located. Hardware stores have shifted
business models to deal with heightened external competition and they will continue to be
pressured by online retailers and larger home improvement stores.
 1.8 OBJECTIVES OF THE BUSINESS
Short term objectives
1. To provide jobs within the community.
2. To successively manage a hardware store.
3. To provide services and products needed by the customers.
Long term objectives
1. Obtain a grant funding to obtain a sales and retail store.
2. Give our customers the highest quality product and service at a fair competitive price.
3. To create a safe environment for people in the community to come for their hardware
store needs.

1.9 ENTRY AND GROWTH STRATEGY

My intention to open the hardware business will be after completion of my college studies, that
will be on 30th august 2022. I will then maybe secure a stable job to help boost my personal
savings. I may then open the business on 1st January 2024 after doing my market research. The
future of a business lies in the number of loyal customers that they have, the capacity and
competence of their employees, their investment strategy, and the business structure. The
major goal of starting MEGGA Hardware is to build that will survive on its own cash flow
without injecting finance from external sources once the business is officially operational.
Competition
Having made a close study, it reveals that the market has become much more competitive. You
have to be highly creative and customer centered to survive in the market. The business is
aware of the stiff competition and we will be well prepared to compete favorably with the
leading hardware stores.
Pricing
This is one of the key factors that gives leverage to hardware retail stores. Our prices will
conform to what is obtainable in the industry but we will ensure that within the first 6 to 8
months, our products will be sold a little bit below the average price of various hardware store
in Kenya. We will have strategies that will help us run on low profits for a period of 6 months.
Distribution
The goods will be made available to the customers through door-to-door delivery. The
distribution will be less costly to the business as the delivery is done for a certain volume whose
profit margin covers the expense incurred from transport.
 Advertising and promotion methods
We shall encourage use of word-of-mouth publicity from our loyal customers. We shall also use
social media platforms to promote our business. We shall position banners and billboards in
strategic positions. As for promotions, we shall brand our official cars and ensure that all our
staff members wear our branded shirts or caps.
Since there is an immense growth in the construction sector there will be opportunities that will
open up the supply of materials required for construction. This will bolster the growth of the
hardware. MEGGA Hardware will make sure that right foundation, structures and processes are
put in place to ensure that our staff welfare are well taken care of. Our business culture will be
designed to drive our business to greater heights and training our workforce to help us build
the business of our dreams.

CHAPTER TWO
2.0 MARKET STRATEGY
MEGGA Hardware Stores will operate in the local market. There are 1,500 potential customers
in this market area. We feel we can capture 25% of the market within the next four years. Our
major reason for believing this is that our staff is technically competent to advise our customers
in the correct use of all products we sell.
The reasons our customers will prefer our products is our complete knowledge of their use and
our full refund warranty. We get our information about what products our customers want by
talking to existing customers. There seems to be an increasing demand for our product. The
demand for our product is increasing in size based on the change in population characteristics.
2.1 POTENTIAL CUSTOMERS
The market analysis looks at potential customers and potential businesses. We have conducted
our market research and feasibility studies and we have ideas of what our target market would
be expecting from us. We are a business to retail a wide range of hardware and other related
products to the following groups of people and corporate organizations;

 Construction and Real Estate Companies

 Real Estate Owners, Developers, and Contractors
 Schools (High Schools, Colleges and Universities)
 Hotels
  Individuals and households

For construction and real estate companies they deal with residential properties, commercial
houses like offices. They have enough enough knowledge about the products they are dealing
in and their pricing in the market.
For individuals and households, they will buy equipment that will help perform household
duties. They will also buy products to help in repair and renovations of household equipment.
for schools, since they are old established institutions, they will require to renovate the paint
and will buy in bulk.
Our customers will be looking at quality, flexibility and performance of our products. We will
ensure that our wide range of products will have manuals to enhance performance of the
products to our customers. We will set prices that will be pocket friendly to our customers and
bring growth to the national economy too.
Since we are located in the local market, we will have ability to gain access to our customers.
There are ongoing real estate projects and they will be able to buy products from our hardware.
Since we are surrounded by households from the local area, they will have access to products
that will help in renovations and bring up new structures.
Our hardware store will be open from eight in the morning and close at six in the evening to
facilitate enough access of products to our customers. We will work six days every week to
make sure we make enough sales. Our major target will be the real estate, contractors,
developers who will buy most of our products in bulk. They will also buy goods frequently since
they will have ongoing construction projects. Individuals and household owners will also be part
of us though they wont buy much goods frequently.
2.2 COMPETITION
A close study of the hardware stores industry reveals that the market has become much more
intensely competitive over the last decade. As a matter of fact, you have to be highly creative,
customer centric and proactive if you must survive in this industry. Our competitors are located
at an approximate of 1 to 2kilometers away. Our main advantage is that we are centrally
located at the town and we are in a new building in town. Our competitor stores are relatively
small compared to our store. They also lack enough products and poor shopping presentation.
Their strength is that they were established earlier than our store. Our potential customers’
names are: Tena Hardware store, Thugi Hardware store, Makutano Hardware store.
Location of potential customers;
Name Location
Thugi Hardware 800 metres away
Makutano Hardware 1.5 kilometers away
Tena 1 kilometer away
ADVANTAGES OF OUR LOCATION IN RELATION TO OUR COMPETITORS
1. We are centrally located compared to our competitors’ location.
2. Our business is located in the most famous building in the town.
3. There is a short distance to access our store.
4. The local and urban population supports the hardware business since there is growth of
infrastructure.
DISADVANTAGES OF OUR LOCATION IN RELATION TO OUR COMPETITORS
1. Too much choice for customers.
2. Competition in business decreases an individual companies market share and shrinks
the available customer base, especially if demand is limited.
3. A competitive market can also force lower prices to stay competitive, decreasing profit
margins for each sale or service.
4. When the stock reaches unsustainable levels, too much capital is tied up in product just
sitting in storage, resulting in insufficient funds

Parameter My business Competitor A Competitor B Competitor C

Assets
Sales Volume
No. of
Employees
No. of Brands

Since some of my competitors are well established and have a strong base of supplies from
various manufacturers and expert advice, their goods and services are above ours. But we still
consider to be above some of them since their stores are small in size compared to our newly
established hardware store.
Parameter
Performance
Quality
Reputation
Customer
Service
My goods and services will have the following competitive advantages:
 My goods are more desirable than other competitors goods.
  Ability to sell goods and services more efficiently to customers.
 Unique and higher quality goods and services compared to some competitors.
After conducting an assessment on the overall strengths and weaknesses I find my hard ware store to be
at an average level i.e moderate class.

Parameter My Business Competitor A Competitor B Competitor C

Benefits to
Customer
Technology
Location
Management
Distribution
Channels

Ways to compete with competitors

1. Find and solve customer needs.

2. Set competitive prices.
3. Provide customer some expert advice to customers.
4. ensure your customer care team has access to the best communication tools available.
Parameter My Business Competitor A Competitor B Competitor C
Strength
Weakness
Opportunities
Threats

Plans to capitalize on competitors weaknesses

1. know your market landscape ie knowing where your customers are located.
2. Ensure you talk to your customers so that you capitalize on their weaknesses and also
competitors weaknesses.
3. Look at online reviews so that you can fill in the gaps left by competitors.
4. Ensure you have total knowledge on products on goods being sold.
2.3MARKET SHARE