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TRANSCRIPT
FREEWAYBUSINESS PROPOSAL.
PRESENTED TO: ASHOKA CHANGEMAKERS.
BY:
1. GEORGE ARINGO: PROPRIETOR.
Address: Nairobi, Kenya.Email: [email protected]. No: 0705060997Date: 16th NOVEMBER 2015.
All Rights Reserved. This proposal may not be reproduced in whole or in part by photocopy or other means, without the permission of the author.
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1. Executive Summary.
Freeway is simply a warehouse that contains computer equipment capable of connecting to the
Internet. The terminals are strategically located in high-traffic community gathering places such as
malls and sports complexes, and are FREE to use for visitors of the location.
Due to the fact that the Internet terminals are free to use, we will SELL ADVERTISING SPACE
on the warehouse to local companies to generate sales and profits for the business. Participating
businesses will benefit from increased foot traffic as a result of the free Internet terminals being
installed on the site.
Free-way's goal is to provide the community with a FREE educational, social and entertaining
atmosphere for worldwide communication thereby bridging the digital divide that’s experienced in
most African countries.
Free-way is the answer to an increasing demand. The public wants:
(1) Free access to the methods of communication and volumes of information now available on the
Internet, and
(2) Internet access in such a way that they aren't socially, economically, or politically isolated.
Free-way seeks to generate income through provision of advertising space to the Private sector, the
Government and Non-Governmental Organizations to advertise their products or services within
our premises through provision of Television Infomercials, Kiosk space, Banner space etc. This
initiative allows companies to advertise/sponsor with a purpose, the purpose being to help the
community have FREE computer and Internet access.
Participating businesses will benefit from:-
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Heightened Visibility: A newsworthy cause can yield positive media coverage worth many
thousands of dollars, at a fraction of the cost of advertising thereby realizing value and
attaining visibility beyond mere advertising equivalents.
Lifestyle validation: When sponsors make a lifestyle experience “possible”, they validate
the things their customer’s value and trigger a cycle of reciprocity in which the consumer
rewards the company by purchasing its products.
Authenticity: By affiliating with this cause that will grow authentically from a communal
desire to share an experience, they will inspire trust and goodwill.
Interaction: Beyond banners and signage, our sponsors will become a meaningful part of
our company. They will offer samples, display their wares and provide participants with an
interactive environment that they enjoy.
Emotional Appeal: More than anything else that attracts attention of the people to the
product is by emotional appeal. Non-profits elicit emotional responses from their members.
The sponsor’s target sales can increase due to this emotional response.
Efficiency: The era of mass audience is passing. By zeroing in and tailoring specific
messages to a target audience or niche, sponsors can reduce their costs dramatically.
Valuable insights: Sponsors can learn valuable insights into the demographic it serves.
They can gather data and conduct research to increase their sales.
Opportunity to showcase products: Sponsors will have excellent opportunities to
showcase their products through displays and interaction with our members.
Opportunity for On-site Sales: Sponsors prefer exclusivity and are willing to pay a
premium for this benefit, as they will be able to recoup their costs through incremental sales.
Commitment: The gathering power of our organization provides sponsors with a shortcut to
target audiences, target audiences defined by the values our members have in common and
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not what research companies’ dictates they should have.
Free-way gives companies an opportunity of launching new products and services through
infomercials that targets this niche market at the same time our sponsors get a chance to give back
to the society through Corporate Social Responsibility.
This business plan is prepared to obtain direct financial support to the tune of € 50,000. The
supplemental financing is required to begin work on site preparation and modifications, and
equipment purchases.
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Free-way will be incorporated as a Private company. The Owner George Aringo will be the
Manager and C.E.O. of the company. This financing, will allow Free-way to successfully open and
maintain operations within the 1st 6 months. The large initial capital investment will allow Free-way
to provide its customers with a fully fledged Internet cafe.
A unique, upscale, and innovative environment is required to provide the customers with an
atmosphere that will spawn socialization. Successful operation in year one will provide Free-way
with a customer base that will allow it to be self sufficient in year two.
Describe the location of your business and the significance of the location if relevant
A site will be chosen within downtown Nairobi. This site was chosen for various reasons, including:
Security around the location, Proximity to the Central Business District business community,
Proximity to Colleges and Universities, Proximity to Bus Station, Parking availability, Low cost
Rent and High visibility. All of these qualities are consistent with Free-way's goal of providing a
central hub of communication and socialization for the Nairobi community.
Describe the market need your business will address and how the product(s)/service
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will meet the need
The rapid growth of the Internet and on-line services, that has been witnessed worldwide, is only
the tip of the iceberg. There is a need for the public to access Internet and computer for free. At the
same time there is need for companies to target niche markets with infomercials about their
products/services.
By setting up this free internet terminal that provides Wi-Fi, computer and Internet access for free
thereby creating a niche market, Free-way will be able to attract Companies to come and publicize
their products through Sales promotions, banners, rack cards, computer screens, Stickers, fliers,
Product placement on our staff uniform, audio/visual advertisements and announcements within the
building.
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Identify your target market/major customers/potential users
Our target market will be divided in two.
First, the general public aged between the ages of 15-45 years. They will be the ones we target with
free internet. This is due to the fact that the Internet appeals to a huge variety of people. They will
visit our services ensuring we have a steady flow of human traffic within our premises.
The second group will be the Government, Private sector and Non Governmental Organizations.
They will be able to target the users of our Computer & Internet services by describing, displaying
and demonstrating their product features. By creating more awareness to themselves and assisting
our internet clients’ access free internet, they will create a loyal clientele of their products and
services.
a. Competitive environment
Who are your significant existing business competitors and potential/new entrants
Our Internet competitors are the Internet service providers who target users at home. And local
cyber-cafes who provide Internet access at a fee. Due to the huge population of Nairobi, we believe
we will be able to share clients and not make the current Internet service providers solvent.
The main competitors in the advertisement industry are the Televisions, Billboards and Radio
Stations due to their wide area of coverage. We hope to create our own niche by presenting
companies with an opportunity of marketing their products and services to a specific niche market.
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What are the challenges and barriers to entering into this industry
The major challenge facing Free-way is access to funding. The company requires amounts to the
tune of twenty thousand Euros (€ 50,000) equivalent to five million (5,000,000) Kenya shillings.
The other challenges are location of a huge facility/room, as well as the right location to set up the
business.
What makes your product/service distinctive (differentiates them)
This form of advertisement can be used to inform, educate and motivate the public about non-
commercial issues, such as HIV/AIDS, political ideology, energy conservation and deforestation et
cetera.
By providing free Computer and Internet access, Free-way separates itself from all other cafes in
Nairobi. By combining this method with advertisement, Free-way provides for a unique and trendy
way for companies to reach new markets.
b. Viability of business
How will your determine product or service pricing
Determining a fair market price is difficult because this is a new venture and there are no direct
competitors.
First, we considered the cost of setting up our business in terms of fixed costs (rent, salaries,
benefits etc.) and variable costs (energy, supplies, etc.) and how much it will be fair to charge in
case we get a single client to advertise with us.
Second, we considered the cost of advertising on other advertisement mediums, such as
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Newspaper, Television and Radio. We concluded that charges would vary depending on the size of
company advertising, the location of the advertisement in terms on positioning within our premises.
In addition some advertising companies used a strategy with a combination of both pricing
schemes.
Third, Free-way looked at how advertising companies in other areas of expertise such as the
entertainment industry went about pricing their advertisement costs.
Evaluating these three factors resulted in Free-ways monthly advertising fee of € 5,000 or Ksh
500,000 shillings for big companies/organizations such as Universities and Colleges. And a
monthly advertisement fee of € 200 or Ksh 20,000 for smaller companies e.g. Computer shops,
Boutiques, Salons et cetera.
How will you reach your target market and distribute/ deliver your product/service
To target the Internet and computer users, Free-way will rely mostly on word of mouth, Newspapers
and partly the radio. But when dealing with potential advertisers within the company, Free-way will
rely on the human traffic within our premises to convince them to advertise us.
What are your employment projection for the first three years of operations
Free-way plans on employing 4 employees to help with work within the premises. This is within the
six months of operation, by the second year we expect to add more employees into our organization
to enhance efficiency. Those who will be employed indirectly due to the operations of Free-way
such as employees within the kiosks are expected to increase
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After successful operations have begun. By the third year, Free-way plans to add more employees
to the band wagon as we hope to expand our services to all major towns and provinces in Kenya.
How will your business make money and how long will it take to become profitable
Free-way’s main source of income will be advertisements. Organizations will pay a certain amount
in order for them to advertise within the premises. Charges will vary depending on the type of
service as well as the location of the advertisement within the building. We hope to start being
profitable within the first six months.
What are your sales revenue projections for the first three years of operation on an
annual basis
Yearly Sales.
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How much investment will you need and which strategy do you have in place to source
for funding
To put this business into operation, Free-way will require approximately fifty thousand euros (€
50,000) or five million (5,000,000) Kenya shillings. The strategies put in place to acquire this
Amount are through business competitions, funding/sponsorship from companies or organizations,
grants from sponsors, contributions from family and friends as well as loans from banks.
c. Entrepreneur’s experience and commitment
Briefly describe your education background, skills competence and experience as it
relates to the business idea.
As an entrepreneur, I have developed skills that will enable me bring Free-way into fruition. I have
a degree in Information Technology from Jomo Kenyatta University of Agriculture and Technology
(J.K.U.A.T.) and with a C.C.N.A. CISCO Certification in Networking. I have over 7 years of
working experience with cyber-cafés within Nairobi, I have gathered enough experience that will
enable me manage operations at Freeway.
Briefly describe your commitment to accomplishing the start up or expansion
As the proprietor of Free-way, I have full commitment in accomplishing this start-up and seeing it
grow to unimaginable heights. As a sign of my commitment to this business, I will provide a
portion of the money required for the start up through family saving of approximately € 5,000 or
five hundred thousand (500,000) Kenya shillings.
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What is your current occupation (if still employed) and how does it relate to what you
intend to do
My current occupation is with the Directorate of Criminal Investigations. I have gathered hands on
experience in dealing with the daily activities of running a cybercafé and I am therefore confident
that the challenges will be similar.
Is your product/service seasonal? If so describe how and why
No, the service provided by Free-way will not be seasonal and will operate throughout the year.
This is because the internet is not affected by changes in seasons.
d. Financial requirements and needs
State your business source of capital and funding need
The sources of funding for Free-way will be through Business competitions, Sponsorships, Grants,
Loans from Banks, Family and friends Savings/Contributions.
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C.E.O.
General Manager. Tehcnical Manager. Marketing Manager.
Help Staff. Volunteers.
2. Business description
a.a. The nature of the business and industry trends
The nature of the business
Free-way will be an ICT company that provides computer and internet access to the general public
for free. At the same time it will incorporate infomercials/advertisement as a way of earning
revenue by allowing companies to market their products to target our clientele.
By offering sponsorship at different levels i.e. gold, silver or bronze depending on the amount of
sponsorship offered.
The Company structure and Trends
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a.b. The company
Name of the company
The company name will be Free-way. The name was chosen in reference to the company providing
free access to the internet superhighway.
Business vision and mission
Free-way’s vision is to become the leading provider of innovative and beneficial technologies that
improves the quality of life.
Free-way's mission is to deploy innovative and beneficial technologies, while creating values for
all our stakeholders.
Business goals
The goal of Free-way is to eventually provide computer and internet services to the general public
for free in all counties within Kenya.
Type of business ownership and share capital
The owner George Aringo will run the business as a Private Company.
Business location
Free-way will initially be located within Nairobi city centre in view of the huge amount of traffic
within the city.
a.c. The product or service
Type of product or service offered
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Free-way will offer advertisement to companies through audio/visual displays, Banners, one on one
advertisement as well as providing computer and internet access for free. We will also earn income
through provision of other computer related services such as Printing, Photocopying, CD - Writing,
Binding, Lamination, Scanning et cetera.
Specification or characteristics of the product or service
Advertisements will be done through Banners, word of mouth, audio/visual displays that will be
provided; in the future an extra amount will be charged for companies to set up kiosks within our
premises.
Free-way will be characterized by use of the latest machinery and software, Provision of free
internet and computer access as well as other computer related services.
Entry strategies
Free-way will position itself as an up-scale advertisement house and I.S.P. that will provide high
quality indoor advertisements at competitive prices. Through creation of a unique niche that
companies target with infomercials. Free-way will use radio and word of mouth as its main source
of promotion.
In addition to the above mentioned services, Free-way will charge our clientele to access other
related services including Printing, Photocopying, CD - Writing, binding, Lamination, Scanning,
Watching movies et cetera.
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3. Market analysis and marketing plans
a. Market research and analysis
Major customers
Overall, we expect to sell our advertisement spaces to N.G.O.s, the Government and Private
Companies. The vast general public will access Internet for free thus ensuring constant human
traffic within our premises.
Market size
The market size for Free-way is huge and its growth potential is almost unlimited as the population
in urban centres keeps on reaching new high each year. Nairobi has an estimated population of three
million (3,000,000) people in the administrative area of Nairobi, 2,143,254 inhabitants lived within
696 km2.
Trends
A market survey was conducted in March 2008. The report according to I.T.U. (International
Telecommunications Union) stated that there were 3,000,000 Internet users in Kenya; Up from
200,000 Internet users in the year 2000. This trend shows a significant rise in the number of Internet
users.
Major competitors
Our major Competition will come from Television, Radio, and Billboard Advertisements. But by
providing a new and innovative way that will allow marketers to target computer literate users we
hope to change the tide in advertisement.
Barriers to entry
Lack of funds is the major barrier to Free-ways entry into the market.
Lack of open spaces to set-up this huge venture as most buildings are subdivided.
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Estimated market share and sales projection
Monthly Sales Projections
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b. Marketing plan
Overall marketing strategy
While the market is already size-able, this industry continues to grow. Free-way initially intends to
attract Computer and Internet users. They will comprise both power Internet users who are
extremely familiar with the Internet and its offerings; as well as attracting novice Internet users.
Both these segments are the ones most in need of the services we are about to offer.
Free-way then intends to use our clientele as a potential market for marketers to target with their
products and services by providing organizations, public sector and the government with an
opportunity of advertising their products within our premises at a given cost.
Pricing strategy and policies
The pricing was reached by considering the cost of setting up the business and that of advertising
with other advertisement firms; whether it is through television, radio, sporting events or seminars.
Evaluating these two factors resulted in Free-ways monthly advertising fee of €5,000 or Ksh
500,000 shillings for big companies/organizations such as Colleges, Computer shops. And a
monthly advertisement fee of € 200 or Ksh 20,000 for smaller companies such as Salons, Boutiques
etc.
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Sales tactics
Our sales tactic will be to target a niche market that has the greatest need for computer and internet
access and provide it to them for free. We will then invite companies to target this niche market
with their advertisements in order to generate sales.
Service and warranty policies
The services that will be offered by Free-way will not require service and warranty policies but can
be adjusted appropriately in the future.
Advertising and promotions programs
Free-way will during the first few months of operation rely on leaflet distribution and word of
mouth to attract potential users of our services and eventually phase out to word of mouth.
Distribution plan
Internet and computer access will be through computers provided within our premises.
Advertisements will take the forms of TV advertisements Banners, Computer screens,
Stickers and fliers where companies will in the future set up kiosks to interact with their
potential clientele. Operations will be 6 days a week.
Use of ICT and internet
To streamline the efficiency of our services, Free-way plans on using the latest in cutting edge
technology – not only in Internet provision - but also in advertisement. We will incorporate flat
screen televisions to provide clear picture qualities.
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4. Organizational, management and operational plan
a. Design and development plans
Development status and tasks
To streamline the efficiency of our services, Free-way plans to use the latest in cutting edge
technology – not only in Internet provision - but also in advertisement.
Proprietary issues
The proprietary issue associated with Free-way is finding the right price to charge for our
advertising services as well as securing the proposed location.
Major difficulties and risks
The major difficulties and risks that will be associated with our company is lack of Start-up
Capital/Funds, Availability of a reliable I.S.P. and availability of an open space.
b. Manufacturing and operational plans
Geographical location
The location of Free-way will be within the Central Business District of Nairobi, Kenya.
Facilities and capacity improvement
Free-way will operate at a warehouse located next to railways bus station. The location is huge
and has capacity to improve on its accommodation.
Strategy and plans
Free-way will rely on various strategies to attract potential users of our facility. First is to attract
Internet users who are both familiar with using the internet and those not familiar with its
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benefits. The second strategy is to attract potential advertisers to promote their goods and
services within our premises.
Long term growth strategies
Our long term growth strategy is to expand in all major cities within Kenya and eventually have
a branch in all counties in Kenya.
c. Organizational and management team
Organizational structure and operations
Free-way will be Owned and Managed by the founder George Aringo, whose expertise cover
many of the functional aspects of the business.
The organizational structure is simple. George Aringo will oversee the operations of the
company as the C.E.O. The help and support staff of the company will report to the C.E.O.
directly. The C.E.O. will support the day to day operation of the organization together with the
support staff.
Key management personnel
The key management will be: The C.E.O. who will be making the major decisions in the
company, later on we plan on hiring a marketing manager and other personnel’s as we expand
our business. The C.E.O. will monitor all the business activities as well as provide technical
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support within the company. The Help/Support staff will assist with minor support as well as
assist in marketing our sponsors product/services.
Management compensation and ownership
The organization will compensate its human resources both directly and indirectly through
insurance policies, overtime policies, salaries, bonuses etc.
Incentives and employment agreements
Employees will be employed on a contract basis and have benefits that include insurance policies
and overtime benefits.
Supporting advisers and services
Free-way will provide other supporting services such as Scanning, CD-Writing, Binding,
Lamination, Printing, Photocopying, Movie watching at a small fee.
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5. Financial analysis and plan
a. Proposed company financing
Financing requirements(needs)
For Free-way to be operational, we require € 50,000 or five million (5,000,000) Kenya shillings.
This huge capital is needed to setup the office by buying 100 computer monitors, desks and
renting the building for the first six months.
Capitalization(sources)
Sources of capital will be from Business competition, Company/Organizational sponsorship,
Grants, Loans from Financial Institutions and contributions from family and friends.
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