Gladys

Dairy Selling Business

Entrepreneur BackgroundContacts/network Supportive family, strong social (friend) network in Sinai (Hometwon), University of Kisii

Skills Ability to make milk and mala, good social skills Resources Her family has 4 cows (produce 9 litres a day), land for cows, strong social network, accommodation and

kitchen to make milk and mala, land to grow cabbage and maize, supportive parents (all expenses paid i.e. school/transport/rent fees, food)

Qualifications Studying a diploma in social work, finished primary and secondary education

Experience Internship at Ampath - working with US Aid concerning people with Aids and the HIV Virus, took part in the Education for Life program also working with individuals with HIV Virus and AIDS . Has experience in family milk business who have been selling milk for 2 years.

Means of making money

No means at the moment. She receives pocket money from family.

Family arrangements Lives with family, Family finances her and provides her with housing, school fees, pocket money etc.

Aspirations Having own business and be independent

Average day Going to school, seeing friends, swimming, cooking food, looking after nieces and nephews, doing household chores

Business Ideas1. Selling milk to individual

consumers 6. Making fast foods

2. Selling milk to businesses 7. Opening up a store selling more food

3. Selling Mala to individual consumers

8. Selling clothes (mtumba) - second hand bulk clothing

4. Selling Mala to businesses 9. Selling accessories e.g. earrings

5. Baking bread 10. Selling other things in shop e.g. credit

Idea EvaluationThe market research which Gladys conducted highlighted that the going rate of milk is 50 shillings for consumers and 45 shillings for local businesses.

-Gladys spoke to 10 customers during initial market research - 9/10 consumed milk and in most cases required more milk than they were currently supplied. Gladys gained 3 customers during this market research.

-Gladys later did market research into Mala where she spoke to 8 customers - all of which desired Mala as well. Gladys gained 3 new customers during this research.

-Sinai population - 850 -Potential customers - Approximately 300

Customers are very accessible. They can be found in a number of different scenarios. Customers can be gained through word of mouth, networking, promotion (advertising, posters, business cards), emailing or phoning Gladys. Gladys also has a good location where there lots of potential customers in the area.

Yes - Gladys has already managed to sell 15 litres of milk during her fist ever week of business. As a result of the training, marketing and finance planning Gladys should see a big increase in awareness and demand for her milk production. This should result in high rates of return and profit and help her become financially independent.

nCustomer Consumers wanting milk for their daily diet e.g. tea in the morning B2B - local businesses selling milk onto customers for a profit

Current Solution Individuals go to shops where milks sold and businesses may go to wholesalers to get their large quantity.

Costs Consumers waste time to get their daily milk and sometimes the quality may not be good.

What Goes Wrong Consumers have to take time from day to go out and buy their milk. Market research has shown that vendors sometimes mix milk an water when making milk and so the quality is inferior.

New Solution Gladys is able to deliver high quality milk to her customers (individual and business)

Rewards Individuals and businesses are satisfied with the milk they receive and the method they can buy milk through

What Goes Right Consumers and local businesses are able to have access to high quality milk and don't have to go to the shops themselves as it is delivered

Desired Outcome Consumers are able to buy milk at a reasonable price for their meal demands Local businesses are able to buy milk in bulk so as to generate a profit from milk sales !

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Before and After Canvas

Key partners- Labourer who helps with cows - Transport (motorbike) to get milk from upcountry - Farmers

Key activities - Boiling milk - Transportation of milk from one area to another - Selling

Value proposition- Reliable - Cheap

Get- Word of mouth - Using Friends Keep- Discount - Customer Service Grow Opening up a cafe for tea and snacks - Breads - Eggs - Possible Maize in

December

Customer- Students - Families - Hotels - Schools - Bakeries

Key resourcesJencan - Sufuria - Jiko - Charcoal - Seeve - Polythene bags electricity

Channels- Phone Call - Turning up - Deliver

CostsCost: -Transportation Freezer - charcoal - bills e.g. electricity - freezer - rent - cow maintenance - food, vets etc. -labour -containers - bils

Revenue:

Mpesa Cash - pay per go subscription - pay per week

Initial BMC

1. Background Gladys conducted market research in her community (Sinai) to assess the feasibility of her business idea. She developed 7 questions enquiring about customer preferences, level of competition, whether they get milk delivered, whether they buy mala (full list available on next page). Gladys’ market research would highlight if there was sufficient demand for milk for her to start supplying milk. Gladys would also ask competing milk businesses about their suppliers, prices, sales etc. in order to find out the going rate of milk so that she can price her milk accordingly.

2. Assumption * It was assumed that there would be high demand for milk given its necessity in making popular drinks like tea and Mala.

* It was also assumed that there would be other businesses already selling milk to consumers

3. Test Method Gladys would aim to ask 10-15 customers and organisations (families, individual consumers, hotels, bakeries) and 10 competing milk businesses around her hometown questions in order to get reliable information about the milk business and competitive factors for her to successfully start up her now business.

4. Validated The market research results supported the hypothesis that there is demand for milk which isn't currently being met by suppliers. Everyone (except one school) Gladys spoke to required milk for their day and many spoke of how they didn't have access to enough and would be willing to buy more. It was also found that there was competition in town in the form of milk stores and milk vendors (delivering milk on motorbikes)

5. Invalidated

6. Points of Interest…! - The going rate of milk seemed to be 50 shilling for consumers and 40-45 shillings to businesses (such as milk shops, hotels, bakeries) - - There seemed to be a high demand for Mala, particularly black Mala, and customers said that they would buy this in shops if it was available

- - Customers expressed a strong interest in getting milk delivered to their homes if this was an option as not all milk businesses offer delivery

Test 1: Market Research

1 - Where do you get your milk from now? 2 - How much do you pay? 3 - What time do you get it? 4 - Is it delivered 5 - How many litres a day? Do you need more? 6 - Are your current suppliers reliable? 7 - What do you value - quality/price/customer relations 8 - How do you pay 9 - Do you use subscription

Market Research QuestionsCustomer Segments: Families, Hotels, Bakeries, Schools

1- 1 - Gets milk from mum - 2 -She doesn't pay for it (gets it free) - 3 - Evening (6pm) - 4 - 1 litre a day - 5 - Ys - 6- Quality - 7 - Doesn't Pay - No - *Interested in buying Mala (have number to Gladys)

4 (School)- Don't buy milk since don't make tea

2- Shop - Milk for 50 shillings per litre, 60 shillings Mala 1 litre - Mala in the evening, Milk in the morning (8am) - Not delivered - 1 litre for Mala 1 litre for milk - They don't need more - They are reliable - They value quality - Pay in shop - No

5- Get milk from neighbourhood (neighbours) - Not delivered - 50 shillings , 1 litre - Get it in the evening (6pm) - Reliable - Value quality and customer relations - Pay monthly - Pay at the end of the month

3- Gets milk from shop - Not delivered - 50 shillings for 1 litre - Get it in the morning (8am) - 1.5 litres - Not reliable (sometimes go to shop and told no milk) - Pay per go - No subscription

6-Get Milk from Shops -Not delivered -50 shillings per litre -Get in morning around 8am -Reliable -Price and quality -Pay per go -No subscription

ConsumersMarket Research Results

Shilli

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0

15

30

45

60

Customers

Customer 1 Customer 2 Customer 3 Customer 4 Customer 5 Customer 6 Customer 7

Market Research Results1- They get milk from Vendors (and its delivered) - 40 shillings for 1 litre - 8am in the morning - Delivered - Buys 5 litres - Sell it to 50 shillings to consumers - Yes they are reliable - They value price and quality - They pay at the beginning of the week - Yes

4-Get milk from shops -Costs 40 - -Buys 3 litres -Suppliers are reliable -Value quality and custom relations -Pay per go

2-They get milk from vendors -45 shillings each -8am in the morning -5 litres -Unreliable -Value customer relations, quality and price -Pay as go

5- Get milk from neighbourhood (neighbours) - Not delivered - 50 shillings , 1 litre - Get it in the evening (6pm) - Reliable - Value quality and customer relations - Pay monthly - Pay at the end of the month

3- Gets milk fro Vendors (different) - Sells over 100 litres - Usually delivered - Buys for 35 shillings and sells for 50 - Suppliers are reliable - They value quality and price - Pay per go - No subscription

6-Get Milk from Shops -Not delivered -50 shillings per litre -Get in morning around 8am -Reliable -Price and quality -Pay per go -No subscription

Businesses

Shillings

0

12

23

35

46

Businesses

Business 1 Business 2 Business 3Business 4

Test 2: Promotion1. Background During the second stage of testing, Gladys started promoting her business through posters and business cards, and selling milk in order to assess the level of demand she receives, to prove her business idea is sound.

2. Assumption It was assumed that Gladys will be able to sell her milk given the high level of demand shown through the market research. Gladys’ cows can produce 6 litres of milk in the morning so we assumed she can realistically sell at least half (3 litres) of her milk to start with to new customers. - In terms of the posters and business cards, we felt these would help increase awareness of Gladys’ business and she would receive numerous knocks on her door and calls from prospective customers.

3. Test Method We provided Gladys with 7 posters to put around town and 40 business cards (20 for individual consumers and families and 20 for businesses like hotels, bakeries and schools etc.) to give out to customers. The amount of cards she can give out (and relationships she can build) and knocks on the doors and calls she receives during this process reflects the amount of demand in her hometown. The amount of litres she sells was the most reliable way to assess business demand because these customers actually pay her for her milk providing demand and the validity of her business.

4. Validated Gladys managed to sell 15 litres of milk during her first week of running her business proving the hypothesis. Gladys also received numerous knocks on her door (as a result of her posters) enquiring about milk. Al of these are indicative of the strong demand for milk in her hometown and supporting the hypothesis that she will be able to get customers.

5. Invalidated

6. Points of Interest…!

1. Background Gladys was also interested in finding out the amount of demand for Mala and whether there was surplus demand which wasn't being met. She was interested in finding this out so that, if demand wasn’t being fully met, she could also start selling Mala to customers.

2. Assumption It was assumed that there was a high demand for Mala in her hometown and that people would pay her for more Mala (if they weren't able to buy enough for their existing supplier(s). Mala went for 60 shillings per litre It was assumed that consumers would prefer black Mala

3. Test Method Gladys tested this hypothesis through conducting market research and started selling Mala to assess the level of demand for this business idea. Gladys asked about 4 questions enquiring about the level of demand for Mala, the costs, the quantity and type of Mala that consumers prefer and the availability of Mala. Gladys also started advertising and selling Mala as a further test used an indicator to see if people would actually pay for her Mala.

4. Validated - Gladys spoke to 9 customers (5 consumers and 3 businesses) all of whom required Mala reflective of the high demand for Mala

- In her first week of testing, Gladys got 3 phone numbers from customs who were interested in buying Mala from her and she also sold 2 litres of Mala - a strong indicator that consumers would demand her Mala.

- It was also found that Mala tended to go for 60-65 shillings per litre

5. Invalidated Most people and businesses interviewed consumed and stocked the plain mala (as opposed to the black mala) which undermined our assumption that black mala was most popular. Not everyone liked black mala so shops tended to sell plain mala since if consumers wanted black mala they could make it black themselves without too much hassle.

6. Points of Interest…! Interestingly, a noticeable amount of people and businesses made Mala themselves. This means that even though there is demand for Mala not everyone will rely on shops to buy and consume Mala which lowers the potential customer base for Mala.

Test 3: Mala Demand

Where do you buy Mala from What type of Mala do you like

- buying if you are a consumer / - selling if you are a local business

How much does mala cost - per litre - in bulk

Test 3: Mala Market ResearchQuestions

2: - Buys mala at a nearby shop - She likes the black mala which

is much more sour - 1 litre costs 60 shillings and

1/2 a litre costs 30 shillings

3 - Buys it at the supermarket - Buys plain mala - Buys it at 65 shillings

4: - It’s rare for here to use mala

since the shop which sells mala is far from where she lives

- She was interested in getting Mala though and gave her number to Gladys to supply her with mala

5: - Buys mala at the shop - Buys plain mala - 30 shilling per half a litre and 60

shillings per litre

1: - Busy Mala in a shop - Plain Mala - Sellers usually make it

themselves - 60 shillings per litre, 5

litres at 300 shilling

Shillings

59

61

62

64

65

Costings

Customer 1Customer 2 Customer 3Customer 5

Mala Market Research FindingsConsumers

Shillings

59

61

62

64

65

Businesses

Customer 1Customer 2 Customer 3

1. - They don't buy it they make it themselves so

as to sell - They sell the plain mall since not all the

people will like the black and the plain is better since the consumer can add charcoal if they like

- Sell it at 60 shillings per litre

2.- They sell mala in packet - They sell the plain mala - Sell at 65 shillings per litre

3. - They make it themselves so as to sell - They make the plan mala - sell at 60 shillings per litre

Businesses

Mala Market Research Findings

Gladys’ Promotion

Business Cards Local Business’

Business Cards Customers

Posters

Posters directed customers to Gladys’

House

0

1

2

3

4

5

Price Quantity Bundles

Gladys Milk Venders ShopsMilk ATMsLarge Scale Milk Producers

Strategy Canvas

-The competitive factors we identified, through market research in the milk industry were: price, quality, quantity, delivery channels (flexibility) and product bundles.

-Gladys’ business is favourable in price (50 shillings to consumers and 40 to businesses), has reasonable quantity and is very strong in quality and deliver options - the latter which represent her value proposition.

-Milk Vendors are direct competitors of Gladys. They also charge a good price to businesses (40-45 shillings), they supply a similar (medium) amount of milk as Gladys. They also don't offer a bundle of goods (e.g. mala, bread etc.). Some Vendors deliver milk to individuals and businesses however others don’t. Interestingly the quality of milk is seen as mediocre as they sometimes dilute milk and water.

-Milk ATMs generally charge less favourable prices to consumers (60 shillings), they don’t offer delivery to customers or businesses, they don't offer product bundles (only serve milk), they do however provide high quality milk in large quantities

- Shops charge reasonable prices (around 50 shillings), they stock a large amount of milk, they have mediocre quality of milk (sometimes dilutes milk with water), they have an adequate amount of delivery options, however they excel at offering a bundle of stock.

- Large scale milk producers can produce milk in very large quantities (such as 100 litres) and charge very favourable pricing to businesses (e.g. 35 shillings). Their milk is also high is quality - all of these factors are their value propositions. However they only have reasonable delivery channels in place and do not offer any product bundles (choosing only to specialise in milk).

Gladys can get customers as a result of her high quality milk (which is better than competitors), her ability to deliver a reasonable quality to consumers at the going rate (50 shilling) and businesses at a competitive price (40 shillings).

Final Idea: SummaryProblem

There are many competitors selling milk which make it hard for a new competitor to be successful. There will invariably be bigger competitors who are able to supply more milk, cheaper milk and are well known.

Solution Gladys will focus on her value propositions i.e. high quality milk (which some competitors like vendors and shops may lack), competitively priced milk and the option of delivery (which not that many firms offer but which is highly demanded). We also discussed Gladys focusing on developing a strong brand image to differentiate herself from her competitors. This brand image can comprise of her business cards, posters, having a uniform and bike with the same colour scheme and so on. This will help Gladys stand out in the eyes of customers and grow awareness of her business.

Evidence

During market research it was evident that there were many suppliers of milk which consumers got (at least) some of their milk from. These included: shops, vendors, making it themselves.

Competitive Advantage - Gladys has cows which can produce high quality milk which is an important factor for consumers. - Gladys also offers delivery which a big competitive advantage since not all competitors offer this (for example Milk ATMs, Shops etc.). Gladys also charges a competitive price to businesses (40 shillings) compared to competitors (40-45 shillings) and charges the going rate for consumers (50 shillings). - Gladys will also create a strong brand to enhance her business visibility should improve consumer awareness of her business and also enhance sales - Gladys high quality combined with good pricing and option for delivery all provide her with a good competitive advantage to thrive.

Current Solution Consumers demand milk and mala for their daily lives and businesses demand these products as they are heavily demanded by consumers.

Currently, many consumers buy their milk and Mala at local shops (some get it delivered through a vendor) and many businesses get their milk and mala at shops or delivered through a vendor.

Costs Consumers and businesses have to pay a higher rate for their milk and mala from suppliers such as shops (and sometimes vendors). The quality of milk is not always guaranteed e.g. milk can be diluted with water to produce a larger quantity which isn't in the best interest of consumers. Vendors may not always be reliable i.e. come on time, arrive at all.

What Goes Wrong Consumers and businesses who get their milk and mala from shops have to take time out of their day to go to and from the shop. In addition, many shops charge higher rates for milk and mala which means the consumers have to pay more and will have less money for other things.

Consumers and businesses who get their milk through vendors (for example) may have lower quality milk since many vendors dilute their milk with water. In addition, some vendors may be unreliable and not delver on time or even show up at all.

New Solution Gladys starts business providing high quality milk and mala. Gladys provides the option of delivery to cater to those who don't have much time or would rather not go to a shop on a daily basis. Gladys makes the milk from her cows ensuring high quality milk (and not diluted).

Rewards Consumers have access to high quality milk and mala for their daily needs. Consumers can get their milk and mala delivered which means they dont have to go to shops and pay shop rates for their products(saves times and money).

What Goes Right Consumers and businesses don't have to go to the shop to get their milk and mala on a daily basis because Gladys can deliver it to them when they want. Customers can be confident about the quality of milk since Gladys gets the milk directly from her cows rather than diluting it with water to enhance the quantity. Consumers are able to buy both milk and mala from Glads instead of having to use multiple suppliers which is time consuming and problematic in some cases.

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Before and After Canvas

Final: BMCKey partners- Labourer who helps with cows - Transport (moto bike) - Farmers

Key activities - Boiling milk - Transportation of milk from one area to another - Selling - Making Mala - Making Black Mala from Plain Mala

Value proposition- Reliable - Cheap - Delivery - Selling bundle of

goods (milk and mala)

Get- Word of mouth - Using Friends - Posters - Business CardsKeep- Discount - Customer Service Grow Opening up a cafe for tea and snacks - Breads - Eggs - Possible Maize in

December

Customer- Students - Families - Hotels - Schools - Bakeries - Businesses (sell milk)

Key resourcesJencan - Sufuria - Jiko - Charcoal - Seeve - Polythene bags electricity -Charcoal stick -Ready made Mala (packet)

-Fridge to cool the milk Channels- Phone Call - Turning up - Deliver

Costs-Transportation - Freezer -Jerians charcoal - bills e.g. electricity -making Mala - freezer - rent - cow maintenance - food, vets etc. - labour -containers - bills

Strengths • 4X Cows (produces 6 litres of milk during the day and 3 litres of milk during the night) • Parents land (cabbage, maize) • Supportive Parents (all expenses paid i.e. school/transport/rent fees/food) • Keeps Cash Records for revenues (made through past part-time/one-off jobs) • Strong social network - knows lots of potential customers • Good social skills - can make friends easily • Motivated • Abe to make Milk well and know how to make Mala • Work Experience (donuts, signing construction tools out for Kings Cross, Social work at

Ampath ‘HIV’ and Education for life) • Has a lot of free time (Mon/Tues/Sat are free) (only busy for 4 hours on Wednesday/,

Thursday and /Friday and has church in the morning on Sunday); She is free during the Summer holidays.

• Have resources to make milk and mala e.g. kitchen, cows, land, access to up country • God location with lots of customers nearby

Weaknesses

• Goes to school 12hours per week (possibly on busiest days)

• There are costs associated with getting more milk up country - has to pay for delivery

• Time management - if she has a business she’ll have to do classwork over the weekend

Opportunities

• Suppling new businesses which require a supplier for milk • Buying 1-2 acres f land to grow own maize (7-14,000 shillings) • Networking with customers and milk businesses • Linking social work with milk production and supplying milk to

those who are disadvantaged • Having a shop selling drinks and snacks e.g. tea, smoky bun, • Can diversify to Mala (and other products)

Threats • May not rain in some seasons (land/maize at risk of quality drop/

death) • High levels of competition in her hometown(e.g. Milk ATM,) • Seasonal demand • Cows produce less in January-Febuary - up to 1/3rd less (from 9

litres 3 litres) - this can turn away some customers unless dealt with • Cows can become sick • Costs associated with raw material, energy and transport • There is a high demand for powdered milk among students since it

requires less wok (e.g. no boiling, stays longer etc)

Final SWOT

Item Why needed? Number Cost per item

Fridge Cool the milk for both milk and mala business 1 17000

Bicycle For transportation - to delver milk quickly to customers 1 15000

Uniform For identification purposes, to improve brand visibility 1 700

Loan amount needed: 32700

2725 per month

Funding: What is needed

Cash Flow of Gladys’ Business

Milk and Mala Sales

DateOpening Balance Cash In

Cash Out Profit

Closing Balance

2/09 36 200 183 17 53

3/09 53 250 190 60 113

4/9 113 600 540 60 173

5/9 173 150 0 150 323

6/9 323 240 145 95 418

7/9 418 0 50 -50 368

8/9 368 160 0 160 528

9/9 528 750 430 320 848

10/9 848 100 0 100 948

11/0 948 1360 600 760 1708

12/10 1708 850 150 700 2408

13/10 2408 370 310 60 2468

14/10 2468 160 650 490 2958

15/10 2958 100 0 100 3058

Shilli

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0

1000

2000

3000

4000

02/09 05/9 08/9 11/0 14/10

Litre

s

0

2

4

5

7

26/08 28/08 30/08 06/09 08/09 10/09 12/09 14/09

Current Situation

Projections and repayment

Products Cost per litre cost per day Revenue Daily profit Monthly profit Proven?

Public Litre 11 66 300 234 7,117 AssumptionBusiness Litre

11 110 400 290 8,820 Assumption

Mala 30 90 180 90 2,737 Assumption

Salary 232 Proven Total 52 498 880 382 11,619 Assumption

item price

Public Litre 50

Business Litre 40

Mala 60

item capable to sell

Public Litre 6

Business Litre 10

Mala 3

Perfect dayAssumptions

There is demand for Gladys’ milk from consumers and businesses All Gladys’ cows are healthy and can produce their maximum capacity of milk

Projections and repayment

Assumptions Gladys is currently selling a daily average of 8 litres of milk to businesses,

4 litres to consumers and 2 litres of Mala to customers

Average Day

Products Cost per Litre Cost per day price Revenue Daily Profit Monthy Profit Proven?

Public Litre

11 44 50 200 156 4,745 Based on past 5 days of sales

Business Litre

11 88 40 320 232 7,056 Based on past 5 days of sales

Mala 30 60 60 120 60 1,825 Based on past 5 days of sales

Salary 232 13,626 Calculated based on spending

Total 424 640 216 6,570 Based on past 5 days of sales

item price per litre

Public Litre 50

Business Litre 40

Mala 60

item capable to sell

Public Litre 4

Business Litre 8

Mala 2

Bad Day

Projections and repayment

Assumptions • It’s January- February where cows produce less milk • Cows fall ill so don't produce as much milk

item price per litre

Public Litre 50

Business Litre 40

Mala 60

Products Cost per Litre Cost per day price Revenue Daily Profit Monthy Profit Proven?

Public Litre 11 44 50 200 156 4,745 Assumptions

Business Litre

11 66 40 240 174 5,292 Assumptions

Mala 30 60 60 120 60 1,825 Assumptions

Salary 232 390 Assumptions

Total 402 560 158 4,806 Assumptions

item capable to sell

Public Litre 4

Business Litre 6

Mala 2

“I want to start my own business

supplying high quality milk in large

quantities to customers and

eventually open up my own cafe

serving milk and snacks”

Next Steps