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EXECUTIVE SUMMARY
Clemence Kalombola Wholesale will be a new destination for the Mitundu grocery retailers and
Lilongwe at large. It will supply high quality and affordable groceries and services year round for
residents in Lilongwe and even those outside Lilongwe and offer a new level of business style not
currently or slightly available in Lilongwe. It will be standard wholesale distribution business
comprising of local stock as well as international stock. The business is located in the township of
Mitundu; Mitundu is located in the central region of Malawi some 31 kilometers or 19 miles south of
Lilongwe. Lilongwe is the Malawi’s capital and alternatively the highly populated district in the
country with a population of about 1,122,000 people thereby creating a huge demand for groceries
and consumables within the city. By the virtue of being the capital city, there is always an influx of
people across the country that flock the city on a number of reasons and among the several reasons,
making purchases is one of them.

The current market is somewhat depressed, due to the economic downturn and restrictions being
made on corporate travel within Malawi and globally. This threat is critical to business and could be
considered as short to medium term, as indications of a return to business travel are observed.
Therefore, the group has decided to expand its operations in the local market and continue to focus on
delivering an exemplary business service, at affordable rates, in order to develop the customer
relationship beyond the Malawi borders.

Clemence Kalombola Wholesale will be a sole proprietorship business company in which the owner
will have unlimited liability. The company will provide the facilities to offer, groceries and other
consumables on daily basis. Differentiating the kind of service that will be offered, from that of the
competition, is an important factor to success. It will not only build The Clemence Kalombola
Wholesale as a recognized brand in the market place, but also will be an important fact to attract
frequent business travelers, who require a higher level of satisfaction and recognition.

For Kalombola Wholesale to be completed and become operational it needs a minimum investment of
K8, 200,000.00 which would translate into K10, 650, 00.00 revenue in the year of 2021 (projected year
of commencing operations) and continued growing revenue of K11, 320, 00.00 in the succeeding year
of operation. However, the developer of this business plan, is of the view that even if operations kick

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start later than 2021 the business would still register higher revenues and profits as exhibited in the
succeeding chapters.

BUSINESS CONCEPT

Mr. Kalombola recognized a need for a wholesale store (after making economic and business
consultations with the consultant, herein ‘The Economic Eye’) in the area after a neighbouring store
closed and some stores operation inefficiently. The Economic Eye conducted a resident's survey asking
about the need for a corner store and the result was the community overwhelmingly supported the
concept. The target market will include local residents both on and off reserve.

Mr Kalombola has extensive retail and wholesale experience in both grocery and sundry sales, and has
identified four primary categories of product; pop/chips; toys; taxable cigarettes and food products.
The Principal, Mr. Kalombola will, upon approval of funding, renovate the building, and purchase the
necessary equipment and inventory.

BUSINESS OPERATIONS

(EQUIPMENT, FACILITY etc)

The store will be open 7 days a week, 7:00 a.m.-8:00 p.m. Kalombola’s Wholesale store will be a
convenience store located at in Mitundu at the center of the township. This is centrally located in the
heart of the southern part of the Malawi’s capital, Lilongwe on the residential property of the
Principal.

The store will be situated in a 700 square foot building that is owned by the principal. It will be
renovated with the appropriate shelving, refrigeration and cash counters required for operation. The
building will consist of 3 rooms, an office, a washroom, and the main store area.

Number of Employees Kalombola Wholesale will have two employees, one full-time and one part-
time. Mr. Kalombola will be the sole owner and primary operator of the store. Mr. Kalombola has
extensive retail and wholesale experience in the retail grocery business as a supervisor for a local
supermarket and has worked at a high volume hardware store and also a government liquor store.

Mrs. Kalombola will assist in daily operations of the store, and will handle bookkeeping and financial
reporting. Within five years it is anticipated that the company would analyze the viability of hiring a

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another part-time employee for 4 hours per day however at this time there are no plans to hire any
more employees within the first three years of business.

Management team background and experiences

Mr. Kalmbola has extensive wholesaling experience that is crucial to the type of business he is
opening. Mr. Kalombola’s experience includes work at a retail grocery store, a high volume hardware
store (sundry) sales, and liquor store sales. He has worked in retail sales for 5 years and is experienced
with all aspects of daily operations including ordering, receiving, budgeting, merchandising, and daily
banking. Mr. Kalombola is particularly skilled in public relations, is very organized, is able to work
independently, and is reliable, dependable and hardworking.

Market Niche Local Need:

The customers that the store will target are the local residents and those that flock the Malawi’s
capital. The area has a relatively few number of other such stores in an 8 block radius, local residents’
grocery needs being filled by Salatiel Investments, or Botalisi Food Market, all in the town of Lilongwe,
Mitundu.

Proven Market:

A small convenience store, Tikhalenawo located 6 blocks away, did exist until 6 months ago, when it
was forced to close due to the high rent/lease costs. This business had a proven market that
Kalombola Wholesale will capitalize upon.

Management Experience:

The experience that Mr. Kalombola brings to the endeavor is invaluable, he has product knowledge, is
familiar with large chain pricing and techniques, and their sales strategies. While working for the local
grocery store Mr. Kalombola established valuable wholesale contacts he will utilize in the new
business.

Community Support:

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The Economic Eye, on behalf of Mr. Kalombola conducted a survey within the Mitundu Township (35
households) and the results indicated that a small convenience store has overwhelming support for
the concept. A copy of the survey is attached in the appendices of this business plan.

Client Base Kalombola Wholesale has a potential target market, as follows:

 800 local residents within the 10-block radius  108 on-reserve residents (304 registered to band,
196 off reserve)  1300 students from Mitundu Secondary School, parents & staff  850 students
from surrounding Secondary Schools, parents & staff  30 Warehouse employees (1/2 block away)

Client demographics include local residents from all age groups and socio-economic ranges, consisting
primarily of families. A large secondary target group will be children and teens that regularly purchase
candy, soft drinks and other fast-grab foods.

Factors for Success

The business will succeed due to a variety of factors.

 There is no competition in the targeted neighbourhood

 Strong management work ethic; currently holds 2 jobs, and has excellent references from both
Mr. Kalombola experience in retail grocery sales
 Mr. Kalombola’s wholesale contacts.
 Proven Market.
 Local need.
 Proven community support.

Financial information for this Operation

Business Startup Costs Item Cost

1. Renovations K250, 000

2. Inventory K2,930,000
3. Shelving K350, 000
4. Air Conditioner (fan) K210,000
5. Signage K120,000

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 6. Cash Counter K1,000,000
7. Operating Capital K280,000
8. Total K4,200,000

TACC Loan: K8, 000,000.00

Equity Contribution: K1, 200, 000.00

Total Project Cost: K4, 200,000.00

Expected sales from the first three years of operations:

Year 1 Year 2 Year 3

K25,150,000.00 K31,320,000.00 K41,560,300.00

Products or services the business will provide

The wholesale will be a full-time convenience store operating 7 days a week, from 7:00 a.m.-10:00
p.m. selling; pop/chips; toys; taxable cigarettes; and food products. The store will offer friendly and
personalized service, reasonably priced merchandise, tax exemption for status customers and a
convenient location. The wholesale will strive to provide superior customer service and the highest
quality groceries at an affordable price, while operating as a profit and growth oriented business.

Over the last century, wholesale stores have provided a thriving service to local neighborhoods.
Typically, corner stores are defined as neighbourhood retail shops that specialize in a limited selection
of merchandise, such as milk, bread and other household necessities. Wholesale stores are largely a
cash-based business conveniently located for quick in and out shopping, and can be operated by one
clerk. The consumer usually requires the services and products that the corner store offers on a daily,
weekly or bi-weekly basis. Wholesale stores provide quick checkout times, extended hours of business
and convenient locations. Considered a mature industry, convenience stores are a powerful retailing
group in Malawi.

Current size & demand

Mr. Kalombola through the consulting firm conducted a survey among 220 Lilongwe residents. The
question asked was “Would you be in favor and buy at a store located on the reserve?” The response

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was extremely favourable. This community support is crucial when the primary target customers are
220 Mitundu and Lilongwe members. There are 220 on-reserve residents in the vicinity. According to
National Statistics Office (2018) there are 1,220,150 persons that live in the city of Lilongwe (on and off
reserve).

The businesses secondary target client groups are local residents within an 8 block radius, or
approximately 10,000 people.

Currently there are 35 households on the Mitundu Township reserve(s), and an additional 560-800
households within an 8-block radius and approximately 29,345 households in the Lilongwe south.
Resulting in a total household client base of 595-935 homes within an 8-block radius.

According to the NSO report (2018), average (urban) Malawian residents spend K156, 230.00 per year
on grocery store and other food products. Based upon the number of households and the average
spending, Mitundu residents spend K36, 714,050.00 per year on grocery store and other food
products. Calculating the average spending based upon 235 homes in the local area at 5% of average
spending, it is estimated that Kalombola Wholesale could conservatively gross K15, 835,702.00 per
year.

The Target Customers

The average customer that the business will target will be from all age groups, with an average
household income of approximately K67, 500.00 (NSO, 2018). Some households have both parents in
the work force. 36% of Malawian women with children younger than six works outside the home
(NSO, 2018).

Based upon an average pooling of clients it is estimated that Kalombola Wholesale’s client breakdown
based upon 1200 clients will be as follows:

 800 local residents within the 10-block radius

 108 on-reserve residents (304 registered to band, 196 off reserve)
 700 students from surrounding schools, parents & staff
 30 Warehouse employees (1/2 block away)

Potential market growth

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Kalombola Wholesale anticipates growth to be based upon two primary client groups, Lilongwe
(Mitundu) Reserve residents and business people outside Lilongwe who come to Lilongwe to buy
business goods. Local business will be generated through an aggressive marketing campaign to local
residents, the band office, the local hall, and local pre-schools.

It is anticipated that the market penetration will increase over the next 1 and half years from 5% of
local residents spending to 10%, and the client market area will increase to a 15-block radius.

Direct and Indirect Competition

The direct competition for Kalombola Wholesale consists of one company which at the moment is run
by a Burundian trading as Chilungamo Shopping.

Years in Business : 3 years

Market Share : 10%

Price/Strategy : Same

Product/Service: Same product, lower levels of client service.

Advantages : Longer hours, greater purchasing power, variety of products, gas-bar, lottery
license.

Disadvantages: Distance

Kalombola Wholesale’s indirect competition is 2 large grocery retailers, as listed below;

Chigumula Wholesale

Years in Business: 1 and half years

Market Share: 10%

Price/Strategy: Same

Product/Service: same

Advantages: Greater buying power and variety of products available

Longer hours, more products, large promotional sales and industry names.

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Disadvantage: Distance

Soko General Dealer’s

Years in Business : 3 years

Market Share : 10%

Price/Strategy: Same

Product/Service: Greater buying power and variety of products

Advantages: Longer hours, more products, large promotional sales, and industry name.

Disadvantage : Distance

Operational Plan

Location and Facilities

T e store will be located in a building that will be renovated and equipped with the necessary
furnishings, shelving, and plumbing. The approximate square footage of the unit is 700 square feet.
The unit will have 3 rooms consisting of an office, washroom, and the retail store area. A floor plan is
attached in the appendices of this document.

The building was built by Mr Kalombola with funds from previous job and other savings and is fully
wired for electrical, security and phones, and is on the residential property of Mr Kalombola. The
Mitundu Township Chairperson and Council have provided their full support and verbally agreed to
support this venture. A formal BCR will be issued upon review of this business plan.

Description of facility requirements:

Cost of Computer K220, 000.00

Air Conditioner K210, 000.00

Printer K80, 000.00

Software K30, 000.00

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Total: K330,000.00

Furniture/ Fixtures

Required Furniture/ Fixtures Budget Cost

Shelving K350, 000

Signage K120, 000

Cash Counter K60, 000

Total: K530, 000

Production Process

Daily retail operations will consist of the following: Open store, disarm alarm, Cash count, turn on
necessary machinery, debit machine, etc. Do books from previous day, check inventory, order as
necessary, Handle sales, Close out cash and balance, Close store and arm alarm

Action plan Business will commence operations based on the following work plan;

 Secure BCR. Gut /renovate building.

 Installation of equipment necessary for business operations;
 Store shelving
 Cash counter
 Cash register
 Debit machine
 2 door cooler
 1 door cooler
 Freezer.
 Stocking merchandise for retail sales.
 Marketing promotion
 Hand deliver promotional flyers to prospective customers
 Fax grand opening specials, flyers to local band offices, businesses

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Is an environmental audit required for your business? If so by who? An environmental audit is not
required for this business.

Will your company hire a bookkeeper or accountant? If so who? Mrs. Kalombola will handle
bookkeeping, and an accountant will be hired to handle yearly financials and taxes.

Major Suppliers

The suppliers have been identified as Airtel Malawi & TNM, Lilongwe Airtime vouchers C.O.D. Most
Shoppings Lilongwe Canned & dry goods C.O.D. H & Adams Wholesalers Lilongwe Canned goods, dry
goods, frozen C.O.D. Nyasa Manufacturing Company Lilongwe Cigarettes, tobacco products C.O.D.

Coca Cola Bottling Co. Lilongwe Soft Drinks C.O.D. Many suppliers demand C.O.D., until credit checks
are completed and terms are established.

Licences, Permits and Insurance 1. Business License 2. Business Insurance 3. BCR

Organizational Plan

Management and Staffing Management and Personnel

Clemence Kalombola will be the sole owner and primary operator of the business. He will be
responsible all aspects of operations. Mr Kalombolas’s experience includes work at retail grocery
sales, a high volume hardware store (sundry) sales, and liquor store sales. He has worked in retail sales
for 6 years and is experienced with all aspects of daily operations including; ordering, receiving,
budgeting, merchandising, and daily banking. Mr Kalombola is particularly skilled in public relations, is
much organized, is able to work independently, and is reliable, dependable and hardworking.

Mrs. Kalombola will assist in daily operations of the store as needed. Mrs. Kalombola can assist with
bookkeeping and financial reporting, but is not anticipated to draw a wage for this casual work within
the first five years of operation.

The Marketing Plan and Competition Overall Market Currently there are 35 households on the
Mitundu Township reserve(s), and an additional 160- 200 households within an 8-block radius, and

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approximately 29,345 households in the Lilongwe south locale. Resulting in a total household client
base of 195-235 homes within an eight-block radius.

Marketing Strategy Kalombola Wholesale Store will attract local clients and foster loyalty with
competitive pricing, convenient location, and friendly service. In addition, the store will offer tax
exemption to status first nation’s customers, offer monthly specials, draws, and promotions.

Local Advertising Flyer distribution: flyers will be distributed in the local area on a monthly basis
advertising specials, draws and promotions.

Pricing Strategy and Target Sales Pricing will be set at 30%-100% mark-up, dependent upon the
following categories:  Pop/ Chips : 30% mark up  Toys : 100% mark up  Cigarettes : 110% mark up 
Food Products : 40% mark up

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No credit will be offered to customers. Sales will be cash, Airtel money or TNM Mpamba or credit
card.

Purpose of the Loan Mr Kalombola seeks a K3, 000,000.00 loan to establish a wholesale store. In
addition Mr Kalombola will contribute K1,200,000.00 equity for a total project cost of K4,200,000.00,
for which Mr Kalombola will renovate his building, install shelving, a cooler, air conditioner, cash
counter, install signage and purchase inventory.

Suppliers will be on a C.O.D. basis, until 30 net terms can be established.

Business feasibility and SWOT Analysis S.W.O.T Analysis Strengths The advantage that Kalombola’s
wholesale has is that there is no competition within an 8-block radius. The Tikhalenawo Shop was
located in the area until 6 months ago when it went out of business, due to high lease rates at that
location. Mr Kalombola has the advantage of being a business based on reserve, where rent is not a
factor in operations.

In addition, Mr Kalombola, his a strong work ethic and the ability to deal with the public in a friendly
and courteous manner.

Weaknesses One weakness is the location. Due to the fact that the business will be located on
reserve, suppliers may be hesitant to give terms.

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Opportunities There is the opportunity to expand the product line(s) that the store carries.
Kalombola's Wholesale anticipates that within the first two years of operation it may qualify for a tax-
exempt grocery license and lottery goods. There is also the potential that the business may be able to
employ local people part time.

Threats The major threat is the possibility that another corner store will open in the vicinity. Mr
Kalombola will establish a loyal customer base to alleviate transfer of customers to another business.

Risk Assessment Mr Kalombola will maintain one of his jobs to ensure financial obligations are met.
He is considering giving terms to the band office and other residents within Lilongwe to ensure a
positive cash flow.

Viability and Long-Run Plans Long-range plans include the acquisition of a tax-exempt grocery licence
for the reserve, and a lottery licence from the local government. These are time-consuming processes,
but these product lines will be applied for in the first quarter.

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CONCLUSION The Business Plan analysis leads us to the conclusion that a market and financially viable
development can be created at the site, subject to technical feasibility and subsequent refined cost
analysis. Further, the creation of an international standard leisure-led mixed-use development as
proposed in this plan has been identified to provide an attractive return on investment.

We believe this is an exciting project for the investors behind it and an excellent complement to the
business offer of Kalombola Wholesale

Further Advice Subsequent actions have been described in detail in this document. In summary
however, the next steps for the Kalombola Wholesale project are:

a. Progression of preparing the project and the associated studies, design, analysis and negotiations. b.
In relation, specification of responsibilities of the master developer and legal arrangements. c.
Invitation for a master developer to progress the project, and for co-investment with the master
developer.

The Economic Eye would be glad to assist Kalombola Wholesale in our areas of expertise as the project
progresses.

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REFERENCES Comprehensive Atlas for Schools; A Thematic Approach, 2017, Claim Mabuku

Destination Malawi (2019-20) [online], www.destination-malawi.mw

Malawi Population & Housing Census (2018); Preliminary Report, National Statistics Office, Zomba-
Malawi

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