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BUSINESS DESCRIPTION

In This Chapter I Will Talk About: Background of The Owner (Sponsor), Nature of Business,
Product (S) Or Service (S), Goals and Objective, Entry Strategy, Growth Strategy.

A) BACKGROUND OF OWNER

Penta Hardware Stores is a business that is owned by Emmanuel Akolo. Emmanuel Akolo is a
young enthusiastic entrepreneur (born in 1993) who decided to hold the status of his business at
par, after completing his university education at Technical university of Kenya. Emmanuel
Akolo has a Diploma in Building Technology (Building Construction) with over 2 years of
experience in the retailing stores industry, working for some of the leading brands in Kenya.
Emmanuel lives in Eastleigh-Nairobi and is single.

The table below shows how the capital would be raised.

Source of Capital Amount in Kshs. (3,500,000)

Owner’s equity 2,000,000

Loan 1,500,000

B) NATURE OF BUSINESS

Penta Hardware Store, is a standard hardware store that will be located in Eastleigh 4th street,
Diamond Plaza. I have been able to lease a facility that is big enough (a 4 thousand square foot
facility) to fit into the design of the kind of standard hardware store that I intend launching and
the facility is located in a corner piece along a major road close to one of the largest residential
estates in Nairobi.

The business shall be a sole proprietorship form where Emmanuel Akolo will be the liable
person to run and oversee the growth of the business. The major activities are;

Retailing hardware

Retailing tools and equipment

Retailing plumbing fixtures and fittings

Retailing electrical supplies

Retailing paint and supplies

Retailing garden products and equipment

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Preparing and maintaining buildings

Other activities include import and export of construction materials, consultancy services,
running of construction material workshop among many others.

Eastleigh is the next heart of lower Nairobi with a lot of investors with a need to construct
residential houses to meet the high demand of residential houses, this will be the best location in
terms of customer for Penta Hardware store.

C) PRODUCT AND SERVICES

Penta Hardware Stores, is in the hardware stores industry to service a wide range of clients and of course
to make profits, which is why I will go all the way to make available a wide range of hardware and other
related products from top manufacturing brands in Kenya and other countries of the world.

My product offerings are listed below;

Retailing tools and equipment

Retailing plumbing fixtures and fittings

Retailing electrical supplies

Retailing paint and supplies

Retailing garden products and equipment

My services are listed below;

Consultancy services

Transportation services

Repair and maintenance

Construction among others.

Main feature of product

Penta Hardware store offer original products from genuine and most trusted manufacturers and suppliers
all over Kenya and other parts of the world.

Penta Hardware store offers a variety of products; at an affordable cost, genuine products that
will serve the purpose intended, the products that will serve you for a long time.

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The 21st century offers the best in terms of technology. It’s a technological error. Penta brings
technology to clients and with proper advice from my experts, the final render of the products
becomes much interesting.

D) GOALS AND OBJECTIVES

Goal

To be my boss and to make money.

Objectives

To increase my capital by 10% by end of the year.

Employ two more employees every year.

Increase sales by 10% every month.

Attract a pull of loyal customers by the end of the year.

Open other branches in every two years.

SWOT Analysis

My intention of starting just one outlet of my hardware retail store in Eastleigh is to test run the business
for a period of 2 to 4 years to know if I will invest more money, expand the business and then open other
outlets all over major towns in Nairobi and key cities in Kenya.

I am quite aware that there are several hardware retails stores all over Nairobi and even in the same
location where I intend locating mine, which is why I am following the due process of establishing a
business.

I know that if a proper SWOT analysis is conducted for my business, I will be able to position my
business to maximize my strength, leverage on the opportunities that will be available to me, mitigate my
risks and be equipped to confront my threats.

Penta Hardware Stores employed the services of a Business Analyst with bias in retailing to help me
conduct a thorough SWOT analysis and to help me create a business model that will help me achieve my
business goals and objectives. This is the summary of the SWOT analysis that was conducted for Penta
Hardware Stores.

Strength:

Ability to control stock on hand, experienced work force and having a loyal customer base are some of
my core strength. So also, my location, the business model I will be operating, varieties of payment

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options, wide range of hardware and other related products from different manufacturing brand and my
excellent customer service culture will definitely count as a plus for Penta Hardware Stores.

Weakness:

A major weakness that may count against us is the fact that I am a new hardware retail store outlet in
Eastleigh and I don’t have the financial capacity to compete with multi – million dollars’ hardware retail
store outlets like Sango and Kikay Hardware, Jomba and Mathenge and Son Hardware when it comes to
retailing at rock bottom prices.

Opportunities:

The fact that I am going to be operating my hardware retail store in a corner piece property along a major
road close to one of the largest residential estates in Nairobi provides us with unlimited opportunities to
sell my hardware and other related products to a large number of individuals.

I have been able to conduct thorough feasibility studies and market survey and I know what my potential
clients will be looking for when they visit my hardware store outlets.

Threat:

Just like any other business, one of the major threats that I am likely going to face is economic downturn.
Another threat that may likely confront us is the arrival of a new hardware store in same location where
mine is located. So also, unfavorable government policies may also pose a threat to businesses such as
mine.

Penta Hardware Stores do not intend to start a hardware retail store business like the usual mom and pop
business around the street corner; my intention of starting a hardware retail store business is to build a
standard retail store outlet in Nairobi.

Although my hardware retail store business might not be as big as Sango and Kikay Hardware, Jomba
and Mathenge and Son Hardware, but will ensure that I put the right structures in place that will support
the kind of growth that I have in mind while setting up the business.

I will ensure that I hire people that are qualified, honest, customer centric and are ready to work to help us
build a prosperous business that will benefit all the stakeholders.

E) ENTRY STRATEGY

A close study of the hardware stores industry reveals that the market has become much more intensely
competitive over the last decade. I have to be highly creative, customer centric and proactive if i must
survive in this industry.

I am aware of the stiff competition and I am well prepared to compete favorably with other leading stores
in Eastleigh and throughout Nairobi. Penta Hardware Stores is launching a standard one stop hardware

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store that will indeed become the preferred choice of residents of Eastleigh and every other location
where my outlets will be opened.

One thing is certain; I will ensure that I have a wide range of hardware and other related products from
leading manufacturers available in my store at all times. It will be difficult for customers to visit my store
and not see the type of hardware they are looking for. My excellent customer service culture, online store,
various payment options and highly secured facility will serve as a competitive advantage for us.

Lastly, my employees will be well taken care of, and their welfare package will be among the best within
my category in the industry meaning that they will be more than willing to build the business with us and
help deliver my set goals and achieve all my aims and objectives. I will also give good working
conditions and commissions to freelance sales agents that I will recruit from time to time.

Before choosing a location for Penta Hardware I conducted a thorough market survey and feasibility
studies in order for us to penetrate the available market. I have detailed information and data that I was
able to utilize to structure my business to attract the number of customers I want to attract per time.

I hired experts who have good understanding of the hardware retail industry to help us develop marketing
strategies that will help us achieve my business goal of winning a larger percentage of the available
market in Nairobi.

In order to continue to be in business and grow, I must continue to sell the hardware and other related
products that are available in my store which is why I will go all out to empower or sales and marketing
team to deliver.

In summary, Penta Hardware Stores will adopt the following sales and marketing approach to win
customers over;

Open my store in a grand style with a party for all.

Introduce my hardware store by sending introductory letters alongside my brochure to residents,

businesses and other key stakeholders in Eastleigh and Nairobi as a whole.

Ensure that I have a wide range of hardware and other related products from different brands at all times.

Make use of attractive hand bills to create awareness and also to give direction to my store.

Position my signage/flexi banners at strategic places around Eastleigh.

Position my greeters to welcome and direct potential customers.

Create a loyalty plan that will enable us reward my regular customers.

Engage in roadshows within my neighborhood to create awareness for my hardware retail store.

List my business and products on yellow pages ads (local directories).

Leverage on the internet to promote my business.

Engage in direct marketing and sales

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Encourage the use of word of mouth marketing (referrals).

Join local chambers of commerce and industries to network and market my products.

Place adverts on community-based newspapers, radio and TV stations.

My Pricing Strategy

Aside from quality, pricing is one of the key factors that gives leverage to hardware retail stores, it is
normal for consumers to go to places where they can get hardware and other related products at cheaper
price.

In view of that, my prices will conform to what is obtainable in the industry but I will ensure that within
the first 6 to 12 months, my products will be sold a little bit below the average price of various hardware
stores in Nairobi. I have put in place business strategies that will help us run on low profits for a period of
6 months; it is a way of encouraging people to buy into my brand.

Payment Options

The payment policy adopted by Penta Hardware Stores is all inclusive because I am quite aware that
different customers prefer different payment options as it suits them but at the same time, I will ensure
that I abide by the financial rules and regulation of Kenya.

Here are the payment options that Penta Hardware Stores will make available to her clients;

Payment via bank transfer

Payment with cash

Payment via credit cards/Point of Sale Machines (POS Machines)

Payment via online bank transfer

Payment via check

Payment via mobile money transfer

Payment via bank draft

In view of the above, I have chosen banking platforms that will enable my client make payment for my
hardware and other related purchases without any stress on their part. Penta Hardware store bank account
numbers will be made available on my website and promotional materials to clients who may want to
deposit cash or make online transfer for my products.

F) TRENDS THAT SIGNAL GROWTH OR OPPORTUNITIES

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Those who patronize hardware stores cut across all genders above 18 years with the financial means, and
who own an apartment or office/business hence the target market for the hardware store business is all
encompassing. In essence, my target market can’t be restricted to just a group of people but all those who
reside in and around my store location. In view of that, I have positioned my hardware retail store to
service the residents of fourth Street, Eastleigh Nairobi and every other location where franchise and
outlets of my hardware retail stores will be located.

I have conducted my market research and feasibility studies and I have ideas of what my target market
would be expecting from us. I am in business to retail a wide range of hardware and other related
products to the following groups of people and corporate organizations;

Construction and Real Estate Companies

Banks, Insurance Companies and other related Financial Institutions

Real Estate Owners, Developers, and Contractors

The Government (Public works department)

Schools (High Schools, Colleges and Universities)

Hotels

Sport Facilities

Individuals and households

The future of a business lies in the number of loyal customers that I have, the capacity and competence of
my employees, the investment strategy and the business structure. If all of these factors are missing from
a business, then it won’t be too long before the business closes shop.

One of my major goals of starting Penta Hardware Stores is to build a business that will survive off its
own cash flow without the need for injecting finance from external sources once the business is officially
running.

I know that one of the ways of gaining approval and winning customers over is to retail my wide range of
products such as hardware, tools, plumbing and electrical supplies, lawn, garden and farm supplies, paint
and sundries and lumber and other building materials from different manufacturers (brands) a little bit
cheaper than what is obtainable in the market and I am well prepared to survive on lower profit margin
for a while.

Penta Hardware Stores will make sure that the right foundation, structures and processes are put in place
to ensure that my staff welfare are well taken of. My company’s corporate culture is designed to drive my
business to greater heights and training and retraining of my workforce is at the top burner.

I know that if that is put in place, I will be able to successfully hire and retain the best hands I can get in
the industry; they will be more committed to help me build the business of my dreams.

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