Contact: Genesis Ngari, genesi [email protected] Business Proposal Business Proposal Kyangombe Cyber Cafe Kyangombe Cyber Cafe January 2011 January 2011
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Contact: Genesis Ngari, [email protected]
Business ProposalBusiness Proposal
Kyangombe Cyber CafeKyangombe Cyber Cafe
January 2011January 2011
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Business Proposal – Kyangombe Cyber Cafe
Contents
• Executive summary
• Kyangombe opportunity
• Business proposal
• Capital requirements
• Contact information
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Business Proposal – Kyangombe Cyber Cafe
Executive SummaryUnique Opportunity to be First-to-Market Cyber Services Provider in a New Nairobi Slum
• Demand for pay-per-usage access to the Internet is very high in developing
countries where mobile and high capacity bandwidth networks are still being built• Cyber cafes that offer other business services are a thriving business in the Nairobi area• Kyangombe is a newly developing slum settlement a few miles east of Nairobi
– Recent voting results revealed approximately 50,000 people live in the slum – Relative to other slums in Nairobi, Kyangombe is more secure and contains a
higher mix of temporary and permanent structures – There is one main road into Kyangombe that connects to various side roads
• There is a great opportunity to launch the first cyber café in Kyangombe – Numerous other businesses exist on the main arterial roads but no internetproviders
– Nearest cyber café is at the Mombasa Road junction near a supermarket (~2kmfrom Kyangombe) and charges 2-4x the average market rate
• Services to be offered: – Terminal access to Internet or Office suite at 1 ksh per minute (market average) – Scanning and Photocopying services – Lamination services
– Binding services• Numerous permanent structures are available for reasonable rental rates on the main
road into Kyangombe
• Month 1: acquire computers, tables/chairs, scanners / printers, and other equipment andset up 3-5 stations
• Month 2: finalize location and sign contract• Month 3: negotiate Internet service providers, etc.• Month 4: set up location and open business
Market
Business
Plan
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Business Proposal – Kyangombe Cyber Cafe
Kyangombe Opportunity (I)A Captive Audience in a Newly Developed Slum
• Nairobi is a city well-known for its proliferation of slum settlements
– Estimated that ~2M of the city’s 4Mpopulation lives in a slum – Slums are typically dense housing areas with
high population density, few if any publicservices, and numerous informal businesses
• Kyangombe is a newly developing slum located onMombasa Road outside Nairobi – Major highway to major airport (JKIA) – Significant matatu and foot traffic in the
broader area – Land owned either by the city or Kenya
Airways (unclear)
• Kyangombe is relatively more secure than other Nairobi slums – Higher standard of living – Structures are more durable (built from tin
sheets rather than mud)
– Numerous permanent structures frame thearea
• Kyangombe has one major road leading fromMombasa Road to the slum, which in turn connectsto other side roads at various junctions – Numerous small businesses have already
been started in the slum… – …However, to date no cyber café or computer
center has been developed
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Business Proposal – Kyangombe Cyber Cafe
Kyangombe Opportunity (II)Excellent Location in a Dense Area
Main road leading into Kyangombe
Side road in Kyangombe Side road in Kyangombe
Target location
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Business Proposal – Kyangombe Cyber Cafe
Business Plan: Kyangombe Cyber Cafe (I)Overview of Business
• Services: full-service cyber café and business center
– Internet access and computer usage (e.g., Microsoft Word) priced per minute with aminimum
• Target: 1 ksh per minute with minimum of 10 ksh per usage (current market average)
– Business services such as printing, binding, lamination, photocopying, and scanning
– Personal services such as printing, CD burning, etc.
• Location: main road into Kyangombe, where majority of foot and motorbike traffic occurs
– Rent a permanent (cinder block, metal roof, owned by a landlord) structure that will providesecurity for equipment and patrons
– Located near an intersection with a residential side-path
– Prominent signage
– Evaluating multiple options: second floor concrete building near a school, first floor concretebuilding near other businesses, etc.
– Rent estimated to be 4,000-5,000 ksh per month including utilities
• Financial model
– Startup costs ranging from 40,000 ksh to 150,000 ksh ($500-2,000 USD) based on approach
– Monthly revenue potential of 35,000 ksh
– Monthly operating expenses of 8,000 ksh
– Net monthly profit of 27,000 ksh
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Business Plan: Kyangombe Cyber Cafe (II)Example Locations
Option 1
Second floor room with toilet
access on a balconyoverlooking main road.Secure door, tile floors, solidwalls, ample space.
Option 2
First floor shopwith solid door and windownear other shops.Numerousoptions available
for rent.
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Business Plan: Kyangombe Cyber Cafe (III)Revenue and Expense Model
Assumptions Pro forma Profit & Loss
Operating hours per day 8
Days per month 22 Monthly
Revenue
Internet usage Internet usage 26,400
Internet patrons per hour 6 Copying 880
Average usage (minutes) 25 Scanning 1,100
Cost per minute (Ksh) 1 Laminations 2,200
Bindings 660
Business services Total revenue 31,240 Copies per day 20
Cost per copy (Ksh) 2 Expenses
Scans per day 5 Rent 5,000
Cost per scan (Ksh) 10 Internet 3,000
Laminations per day 5 Supplies 1,800
Cost per lamination (Ksh) 20 Wages -
Bindings per day 1 Other miscellaneous 1,000
Cost per binding 30 Total expenses 10,800
Expenses Pre-tax profit 20,440
Monthly rent / utilities 5,000
Monthly internet access 3,000
Ink / toner per month 600
Other supplies 1,200
Salaries None
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Capital Requirements: Three ScenariosInitial Estimates
All dollar figures in Ksh
Description Quantity Unit cost Total Unit cost Total Unit cost Total
Computers 3 15,000 45,000 15,000 45,000 - -
Printers 2 10,000 20,000 5,000 10,000 - -
Seats 5 5,000 25,000 1,500 7,500 5,000 25,000
Shelving 2 5,000 10,000 3,000 6,000 5,000 10,000
Power extension 3 1,500 4,500 667 2,000 1,500 4,500
Lamination machine 1 6,000 6,000 6,000 6,000 6,000 6,000
Binding machine 1 5,000 5,000 5,000 5,000 5,000 5,000 Bulbs 2 500 1,000 150 300 500 1,000
Card reader 2 500 1,000 250 500 500 1,000
Webcam 2 1,000 2,000 500 1,000 - -
Head phone 2 500 1,000 500 1,000 - -
UPS 3 3,000 9,000 2,000 6,000 - -
Network modem 1 5,500 5,500 5,500 5,500 - -
Receiver 1 6,000 6,000 6,000 6,000 6,000 6,000
Network pins 10 25 250 25 250 25 250 Network cables 50 20 1,000 20 1,000 20 1,000
Counter books 2 100 200 100 200 100 200
Miscellaneous 10,000 5,000 5,000
Shipping of donations 5,000
Grand total 152,450 108,250 69,950
Scenario B: Cheaper
equip.
Scenario A: Higher-
end equipment
Scenario C: Some
donated equipment
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Contact Information
• Genesis Njeru Ngari – [email protected]
– Cell: 254 – 0720 – 993509
• Background
– Author, Slum: The People of Kibera (2009)
• Non-fiction book documenting the lives of people living in Kibera,the largest slum in sub-Saharan Africa
• www.peopleofkibera.com
– Co-founder, Blessed Hands Beauty Salon
• Salon and business center located in Laini Saba, Kibera, founded
using funds from book sales of Slum – Translator, Katekisimo (2010)
• Developed a Swahili version of the Children’s Catechism fromEnglish to use in churches in East Africa