SUPER CLEAN ENTERPRISES

BUSINESS PLAN FOR SUPER CLEAN ENTERPRISESES 2012-2013

TABLE OF CONTENTS PAGE 1.0 BUSINESS DESCRIPTION ............................................................... 3

1.1 INTRODUCTION ..........................................................................................................................................3 1.3 STRATEGIC PARTNERS ..............................................................................................................................3 1.4 ASSUMPTIONS ..............................................................................................................................................4 1.5 CORPORATE INFORMATION ...................................................................................................................4 1.6 GOALS & OBJECTIVES.................................................................................................................................4 1.7 SWOT ANALYSIS 1.7 BUSINESS CONCEPT ....................................................................................................................................8 1.8 SWOT MATRIX SUPER CLEAN LIMITED ........................................................................................ 12 1.9 PRODUCT .................................................................................................................................................... 14 1.10 SERVICING ................................................................................................................................................ 14

2.0 MARKETING PLAN ........................................................................15

2.1 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 ........................................................................................................................................... 15 2.3 ENTRY & GROWTH STATEGY ............................................................................................................... 15 2.4 VALUE PROPOSITION ............................................................................................................................. 16

3.0 ORGANIZATION PLAN .................................................................17

3.1 ORGANIZATIONAL CHART .................................................................................................................... 17 3.2 MANAGEMENT ........................................................................................................................................... 17 3.4 CONTACTS ................................................................................................................................................... 18

4.0 OPERATIONAL PLAN ....................................................................19

4.1 SERVICE & REPAIRS ................................................................................................................................. 19 4.2 MONTHLY DIRECT .................................................................................................................................. 19 4.3 OPERATING EXPENSES ........................................................................................................................... 19

5.0 FINANCIAL PLAN ...........................................................................21

5.1 ASSUMPTIONS ........................................................................................................................................... 21 5.2 PRE-OPERATIONAL EXPENSES ............................................................................................................ 21 5.3 MONTLY OPERATING COST .................................................................................................................. 22 5.4 CASHFLOW STATEMENT ....................................................................................................................... 22 5.4.1 PROJECTED CASHFLOW STATEMENT (12 MONTHS)............................................................... 23 5.5 TRADING PROFIT & LOSS ACCOUNT ................................................................................................. 23 5.6 BALANCE SHEET ....................................................................................................................................... 25 5.7 BREAK EVEN ANALYSIS .......................................................................................................................... 26 5.8 RATIO ANALYSIS ....................................................................................................................................... 27

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. Its 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.

1.4 ASSUMPTIONS Its 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 LOCATION: LANGATA ROAD. TEL ; 0722 755046, 0736 549488, 0731 502895 P.O. BOX : 79221 00200 NAIROBI EMAIL: cleanwash@gmail.com FORM OF OWNERSHIP: LIMITED LIABILITY COMPANY INCORPORATED IN KENYA AUDITORS: BANKERS: CO-OPERATIVE BANK ADVOCATES: TYPE OF BUSINESS/NATURE: AUTO CAR WASH.

2012

1.6 GOALS & OBJECTIVES The companys 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. 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 owners 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 be incorporated to the charges given to the customer. In contrast the most manual car wash doesnt 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. Its 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 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 its 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 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 whats 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 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. 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 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.

1.8

SWOT MATRIX SUPER CLEAN LIMITED

MAIN COMPETITOR GECO AUTO CAR WASH The one with similar standards

STRENGHS -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. -In-house technical expertise

WEAKNESSES -Lack of capacity to meet demand. -High fixed cost absorption. -Problems of a new business.

OPPORTUNITY -Very high un exploited demand in efficient services has one machine located in Lovington -Increasing number of middle class citizenry

THREATS -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

11

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 companys 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 companys 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 companys 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 inhouse 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 19

4.2 MONTHLY DIRECT EXPENSES INCLUDE:EXPENSE Power bills Water Bills Detergents AMOUNT (KSHS) 20,000 25,000 40,000

4.3 OPERATING EXPENSES EXPENSE Repairs & Maintenance Salaries & Wages others Salaries & Wages Directors/Manager Insurance AMOUNT (KSHS) 20,000 40,000* 100,000 4,000

Rent Telephone Bills Advertisement Licenses

100,000 5,000 1,500 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) Its 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 Licenses Advertisement- brochures Rent Water deposit Telephone expenses Detergents AMOUNT (KSHS) 80,000 18,000 300,000 10,000 3,000 40,000 TYPE Expense Expense Expense Expense Expense Expense

Alarm installation BM Legal fees TOTAL EXPENSES Oil separator/ recycle unit Installation Charges Furniture & Fittings Plant & Equipment TOTAL ASSETS

6,500 80,000 507,500 80,000 100,000 10,000 2,000,000 2,190,000

Expense Expense

Fixed Assets Fixed Assets Fixed Assets Fixed Assets

5.3 MONTLY OPERATING COST

DETAILED MONTHLY OPERATING EXPENSES ITEM Detergents Advertisement Rent Water Telephone Alarm charges Monthly Salaries & Wages Others AMOUNT (KSHS) 40,000 2,000 100,000 25,000 5,000 700 40,000

Salaries & Wages Management Power Bills Insurance Interest Charges Service & Repairs

150,000 20,000 4,000 67,500 30,000

5.4 CASHFLOW STATEMENT Additional information i. ii. iii. The loan of Kshs.5 Million (Co-Op bank) repayment period is 3 years. The loan is expected to be received at the end of June 2012. The extra Kshs. 500,000 will be injected as owners capital as paid up share capital. iv. v. vi. vii. viii. Operations are expected to commence at the beginning of July 2012. Monthly loan repayment is Kshs.250, 000 at end of every month. Interest rate at the rate of 19 % to be charged on loan outstanding. One month grace period has been granted on loan repayment. 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 KSHS.(000) SALES 7,917

2013/14 KSHS.(000) 8,577

2014/15 KSHS.(000) 9,435

Direct Cost Repairs & maintenance Water bills Detergents Power bills 240 240 440 240 240 300 480 504 240 320 480 540

Total direct cost

(1,160)

(1,524)

(1,580)

Gross Profit

6,717

7,297

7,535

Operating Expenses

Advertisement Rent Telephone Alarm Salaries & wages-Manager Salaries & wages -others Insurance Depreciation-Plant Depreciation-fur /Equip Interest Legal Fees Pre-operational expenses Mis-expenses Total Operating expenses

24 900 24 8.4 1,200 480 48 272.5 1.25 810

24 1,200 24 8.4 1,200 480 48 272.50 1.25 810 80

24 1,200 24 8.4 1,200 480 48 272.50 1.25 810 80 0 60 4,208.15

537.5 60 4,365.65

0 60 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 KSHS. (000) FIXED ASSETS Plant & equipment Less: Accumulation Deprecation 2,180 (272.5) 2,180 (545) 2,180 (750) 2013/14 KSHS. (000) 2014/15 KSHS. (000)

Net Book Value

1,908

1,635

1,363

Furniture & equipment - cost Less: Accumulation Deprecation

10 (1.25)

10 (2.5)

10 (3.75)

Net Book Value Total fixed assets

8.75 1,616.25

7.5 1,642.15

6.25 1,368.75

CURRENT ASSETS Cash at bank Total Current Assets 3,608.5 3,608.5 2,611.4 3,611.4 1,456.1 1,456.1

CURRENT LIABILITY

Working Capital

3912.5

3294.55

2138.35

CAPITAL EMPLOYED Financed by:Paid up share capital Profit after tax Less: Drawings

4,932.75

4,253.55

2,824.85

500 2,995.35 (1,000) 2,495.35

500 3,765.85 (1,000) 3,262.85

500 4,000.85 (1,000) 3,500.85

Long term loan-cop-op Less: repayment

5,000 (1,666.67)

5,000 (3,333.4)

5,000 (5,000)

Outstanding loan

3,333.4

1,666.70

CAPITAL EMPLOYED

4,932.75

4,253.55

2,824.85

5.7 BREAK EVEN ANALYSIS Break - even analysis: Monthly Units Break-even Kshs. 000 968vehicles

5.8 RATIO ANALYSIS Ratio Sales Growth 2012/13 0 2013/14 8% 2014/15 10%

Gross Margin %

Net Profit Margin %

Current Ratio

Pre-Tax Return on Net Worth %

Debt /Equity Ratio Return on Equity %

Interest Coverage Current Assets to Total Assets.

2.8 times

2.8 times

2.6 times

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.