MPACT UGANDA RECYCLERS

5 YEAR BUSINESS PLAN ON PAPER RECYCLING

TO MAKE PAPER PRODUCTS

Prepared By
Sajja Phillip
Graduate of Bachelor of Entrepreneurship &
Small Business Management
Makerere University Business School
Tel: +256-703363984
Email:[email protected]

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Table of Contents
EXECUTIVE SUMMARY............................................................................................................iv
COMPANY OVERVIEW...............................................................................................................1
1.0 Introduction................................................................................................................................1
1.1Opportunity.................................................................................................................................1
1.2 Vision.........................................................................................................................................2
1.3 Mission......................................................................................................................................3
1.4 Goal............................................................................................................................................3
1.5 Objectives..................................................................................................................................3
1.5.1 Long-term Objective...............................................................................................................3
1.5.2 Medium-term Objectives........................................................................................................3
1.5.3 Short-term Objectives.............................................................................................................3
1.6 Core Values...............................................................................................................................4
PRODUCT DESCRIPTION............................................................................................................5
2.0Introduction.................................................................................................................................5
2.1 Product features.........................................................................................................................5
2.2 Product benefits.........................................................................................................................8
MARKET AND INDUSTRY ANALYSIS.....................................................................................9
3.0 Introduction................................................................................................................................9
3.1 Market size and growth.............................................................................................................9
3.2 Target market.............................................................................................................................9
3.3 Industry structure.....................................................................................................................10
Porter five forces analysis..............................................................................................................10
COMPETITOR ANALYSIS.........................................................................................................13
4.1 Competitor profile...................................................................................................................13
4.3 Competitive advantage............................................................................................................14
MARKETING PLAN....................................................................................................................18
5.0 Introduction..............................................................................................................................18
5.1 Target market strategy.............................................................................................................18
5.2 Product/service strategy...........................................................................................................18
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5.3 Pricing strategy........................................................................................................................19
5.5 Positioning...............................................................................................................................19
5.5 Communication strategy..........................................................................................................20
5.6Channel strategy.......................................................................................................................21
5.7Sales strategy............................................................................................................................21
5.8 Revenue model........................................................................................................................21
OPERATIONS PLAN...................................................................................................................22
6.1 Input factors.............................................................................................................................22
6.1.1 Raw materials and suppliers:................................................................................................22
6.1.2 Machinery, Tools and Equipment.........................................................................................23
6.2 Premises...................................................................................................................................26
6.3 Production process...................................................................................................................26
6.3 Quality control.........................................................................................................................29
6.4 Record keeping and procedures...............................................................................................30
6.5 Billing and collection policies and procedures........................................................................31
MANAGEMENT PLAN...............................................................................................................32
7.0 Introduction..............................................................................................................................32
7.1 Ownership................................................................................................................................32
7.2 Company organization.............................................................................................................32
7.2.1 Advisors................................................................................................................................32
7.2.2 Potential Partners and Stakeholders......................................................................................32
7.2.3 Organization Structure..........................................................................................................33
7.3 Management Team..................................................................................................................33
7.4 Reward structure......................................................................................................................37
FINANCIAL PLAN......................................................................................................................38
8.0 Introduction..............................................................................................................................38
8.1 Investment requirements..........................................................................................................38
8.2 Financing plan.........................................................................................................................38
8.3 Financial assumptions and projections....................................................................................38
8.4 Financial sustainability strategy.........................................................................................39
8.5 Risk and opportunity................................................................................................................40

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DEVELOPMENT PLAN..............................................................................................................42
9.0 Introduction..............................................................................................................................42
9.1 Implementation plan................................................................................................................42
9.3 The Gantt chart........................................................................................................................43
APPENDICES...............................................................................................................................44
Appendix A: Sample Picture of Paper Waste Problem in Uganda................................................44
Appendix B: Financial Assumptions.............................................................................................45
Appendix C: Initial Investment Costs............................................................................................46
Appendix D: Revenue Projections.................................................................................................47
Appendix E: Depreciation Schedule..............................................................................................48
Appendix F: Salaries Projections...................................................................................................49
Appendix G: Loan Amortization Schedule...................................................................................50
Appendix H: Expenditure Projections...........................................................................................51
AppendixI: Working Capital Schedule..........................................................................................52
AppendixJ: Income Statement.......................................................................................................53
AppendixK: Cash Flow Statement................................................................................................54
AppendixL: Balance Sheet............................................................................................................55
AppendixM: Financial Ratios........................................................................................................56
Appendix N: Net Present Value....................................................................................................57

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 EXECUTIVE SUMMARY
Mpact Uganda Recyclers will be unmasked as a limited liability company in Uganda by early
2017.It will make use of paper waste to make various paper products such as toilet papers, egg
trays and paper bags, gift wrappers, shopping bags, pencil rods, flash disk rods, bins, napkin
boxes and napkins, egg trays, wall hangings, paper files, among others. The business will be
located in Mpererwe in Kampala (Uganda).

The motivation behind the establishment of this enterprise relies heavily on the presence of paper
wastes in the environment. Garbage is increasingly becoming a big problem in many cities of the
world and Uganda is no exception. It is estimated that about 1,200–1,500 tons of garbage are
generated per day in Kampala, and out of this, only 400-500 tons are collected, giving a
collection efficiency of only 40 per cent. Paper wastes contributes more than 5.4 per cent of the
total solid waste collected, which closely translates to about 64.8 – 81 tons of the total garbage
generated per day in Kampala.

Mpact Uganda Recyclers targets various markets depending on the products it makes for
example it targets schools and retail shops with its toilet papers; gift shops with its gift wrappers;
shopping centres and food processing industries with its paper bags; shopping centres with its
shopping bags; and poultry farmers with egg trays. The company intends to reach its target
markets through using advertising on television, radio and newspapers; company website,
customer referrals; exhibitions and conferences; printing and distributing brochures, catalogs,
specifications, manuals, business cards, and fliers among others.

The business will face competition from Mafuco Paper Products, Mondi Paper Products and
several small scale workshops, among others but it will derive its competitive advantage from
low costs of operations because of low costs of raw materials, rent and costs of production;
having diverse distribution channels comprising of the company show room, personal salesmen,
and outlets; all new, affordable and quality product in a virgin market; best customer service; and
the product possesses very attractive designs, colors, shapes and formations. The company’s
management team comprise of young and ambitious enterprising professionals eager to join and
conquer the paper recycling industry. The business requires an initial investment cost of Ushs20
million to start business on a small scale and provide for fixed assets, working capital and pre-
operating expenses.
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 COMPANY OVERVIEW

1.0 Introduction
Mpact Uganda Recyclers will be unmasked as a limited liability company by two upcoming
entrepreneurs. The Company will be formed by December this year (2016) and is expected to
commercialize its operations by early next year (2017). The company plans to emerge as the
leading firm in corrugated packaging, recycled-based cartonboard and containerboard as well as
recovered paper collection. It will make use of paper waste to make various paper packaging
products such as gift wrappers, construction papers, tracing papers, toilet tissue, gift boxes and
wall papers among others. The business will be located in Mpererwe in Kampala (Uganda).

1.1Opportunity
Sooner or later, everything we use and consume becomes waste, including all these nice paper
items we use every day. The use of paper is rising and with it is the amount of paper ending up as
waste. Since time immemorial, paper has been used for various activities, including but certainly
not limited to, packaging and for communication for instance schools operate daily on some
form of communication and print media for example notes, pamphlets, examinations papers, test
papers, past papers, memos, notices, among others. These can be read only once or a couple of
times and thrown away. Like schools, other organizations (Government, Non-Governmental,
SMEs and Private Sector, etc.) communicate on some level by use of more elaborate means such
as leaflets, brochures, business cards, signposts, banners, invitations/announcements, catalogues,
labels and stickers, letterheads, certificates, magazines, and promotional products among others.
All these are used for some time and discarded after a particular time period.

Managing paper waste is a global problem with increasing amounts of waste in developing
countries as well as industrialized nations. The opportunity for recycling relies heavily on the
presence of paper wastes in the environment. Garbage is increasingly becoming a big problem in
many cities of the world and Uganda is no exception. ‘’Kasasilo’’ is the local term that refers to
garbage or unwanted or undesired waste material. It is estimated that about 1,200–1,500 tons of
garbage are generated per day in Kampala, and out of this, only 400-500 tons are collected,
giving a collection efficiency of only 40 per cent. KCCA attributes the enormous increase in

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solid waste to rapid urbanization and population growth coupled with the lack of a
comprehensive national urban policy and frameworks to regulate waste. It is estimated that
KCCA spends $1.53 million per month to remove only 30 per cent of the total waste generated.
This implies that the amount of waste generated overwhelms the capacity of the authority in
terms of cost. The imbalance between solid waste generation and collection results into littered
settlements, drainage channels and roads all of which present public health challenges.

The evaluation report of urban solid waste management system in Kampala reveals that paper
wastes contributes more than 5.4 per cent of the total solid waste collected, which closely
translates to about 64.8 – 81 tons of the total garbage generated per day in Kampala. So far, only
about one third of it is collected and recycled. There is only very limited possibility to recycle
waste paper and therefore, most of the waste paper is recycled outside of Uganda. Recovered
paper sources include pre- and post-consumer material sourced from a multitude of paper pickup
programs including paper production houses, printing and publishing enterprises, commercial
buildings,shopping complexes, schools, churches, communities, housing complexes, offices and
an extensive network of agents and dealers.

This is a great opportunity for recycling of paper wastes and a virgin market niche for minting
money from a range of products which can be made from recycled papers; actually ‘’paper
wastes is gold’’ which is lying disguised currently, yet with a lot of potential to provide a number
of jobs from collection to processing; and help Uganda move towards achieving one Millennium
development goal (No. 8) of ensuring environmental sustainability. Mpact Uganda Recyclers is
considering taking advantage of this opportunity and establishing itself as a multibillion
investment company in paper waste recycling in Uganda.

1.2 Vision
Mpact Uganda Recyclers intend to be the leading firm in recycling and the supply of paper
packaging, delivering exceptional value for our customers, employees, communities and
shareholders in the region.

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1.3 Mission
Mpact Uganda Recyclers intend to ensure customer satisfaction through the production and
distribution of quality paper products at affordable prices.

1.4 Goal
To provide a long lasting and sustainable solution to pollution from waste paper products by
providing an avenue for collection and reuse of waste papers.

1.5 Objectives
Mpact Uganda Recyclers intend to put up three broad objectives as broken down into long term,
medium term and short term as shown below;-

1.5.1 Long-term Objective

(i) To save the environment and benefit the community through its interest in paper
recycling and reducing reliance on virgin pulp which is manufactured through the
consumption of forest trees by 2030.
(ii) To establish waste paper collection centers in 1000 busy places across the country to
reduce environmental pollution caused by wasteful dumping of old papers and boards
within 2025.
(iii) To train 500 local men, women and youths with skills of making products from
paper recycling by 2020.

1.5.2 Medium-term Objectives

(i) To obtain 60% returns on investment by 2019.
(ii) To obtain 50% increase in market share by 2019.
(iii) To venture into other environmental conservation campaigns by 2018.

1.5.3 Short-term Objectives

(i) To mobilize 100 suppliers and individual collectors/dealers of old papers by 2017.

(ii) To promote the use of Mpact products across the region by 2017.

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 (iii) To lobby for local partners/environmental activists in a bid to promote environmental
conservation by 2017.

1.6 Core Values

Mpact Uganda Recyclers plans to put in place an array of values to which it will execute its
operations; such values include;-

i) Respect within all relationships, between the company and its partners, between staff
and management and between management and the rest of the company stakeholders.
ii) Empowerment: the company will seek every opportunity to create work,
entrepreneurship opportunities and hope for the disadvantaged people including
women, men and children for whom recovery of waste for recycling may well be a
lifetime.
iii) Integrity: The company will operate with a belief that all its activities must be carried
out with honesty, sincerity, care and reliability; taking precaution to protect
confidentiality and business advantage.
iv) Professionalism: The Company intends at all times to implement business practices
which are environmentally and socially sustainable, in recognition of its
responsibility to current and future generations.

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 PRODUCT DESCRIPTION

2.0Introduction
This section of the business plan consists of the product features and benefits. These are as
shown below;-

2.1 Product features

Mpact Uganda Recyclers will manufacture and distribute a vast number of products made from
recycled waste papers. The products will be identified by the name ‘Mpact’’. Example of the
products which will be made at MPACT includes toilet papers, gift wrappers, paper bags,
shopping bags, pencil rods, flash disk rods, paper files, napkin boxes, egg trays, wall hangings,
bins, paper hangers, and napkins among many more. The features of these products are shown in
the product feature and description table 1 below;

Table 1: Showing Product Feature & Description

Product features Description
Makeup
The products will be a fully made comprising of assembled materials of
scrap paper that have been recycled from scrap paper which have been
discarded.
Durability Just like the parent material, scrap paperis manufactured using strong
materials that make it last the taste of time. The products will possess the
quality of being in use for as long as possible. But it depends on the usage
level and the care given to it by the owners
Price The products will attract a competitive price that is very affordable to all
categories of customers
Size The product will be made of varying sizes for children and adults
Shapes The product will be made in varying shapes and designs to suit the diverse
needs of the clients

Colour Different colours will be used to make the product attractive. The product
will bear colours of red, yellow, blue, black, cyan, and magenta, among
others or a mixture of two or more of the colors. Some of the colors will be
customized according to different needs of consumers for example blue
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 Colourwith red stripes, among others.
Uses/Functionality The product will be used for various indoor and outdoor functions like
seating, relaxation; children play ground, and recreational activities.
Flexibility The product can be fixed in a permanent place but it is also flexible in a
way that it can be moved from one place to another depending on the
various needs
Branding The product will use two branding options that is Standardized branding-
with company details (logo, brand name, and Customized branding, having
details of the buying company (ies).
Weight The products will be of very light for ease of portability; ease of movement
from one place to another in comfort. It will weigh up to a maximum of 1
kilogram depending on the size of the original scrap paper.
Technical support The product will attract technical support services (after sale services) like
services transportation for bulk purchases, door to door deliveries, follow–up
mechanisms, provision of user manuals, training, installations, repair,
maintenance and replacements.

The samples of the MPACT Uganda Products are shown below.

Figure 1: MPACT Uganda Products Samples

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2.2 Product benefits

The benefits of the MPACT Uganda Products are as described in the features and benefits table
shown below.

Table 2: Product Benefits

Products Benefits

Toilet Papers  The paper products are an ideal recycling option to dumping of scrap
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 Gift Wrappers paper, designed to last a lifetime making it an economical long-term
solution.
Paper Bags
 Variety of sizes of the product will cater for various size requirements of
Shopping Bags different categories of consumers hence helping to widen the impact on
environmental conservation
Pencil Rods
 These products will be used in a wide variety of applications from
Flash Disk Rods beautification, to creative design, and events.

Paper Files  The customer service which accompany the product will enable the
business ensure that the consumers have the best experience with the
Napkin Boxes products before, during and after the buying the product.

Egg Trays  The products can last the taste of time. It will never rot or require
treatment for the weather saving time and money over the longer term.
Wall Hangings
 The products are easy to install, maintain, repair and replace.
Bins
 Recycling paper wastes will help reduce the amount of virgin forests
Paper Hangers
cleared to make virgin paper thereby contributing to the conservation of
existing forests in the country, while at the same time enhancing
Napkins
cleanliness in urban areas.

 The products offers long term cost effectiveness due to reduced

maintenance and replacement.
 Through the supply of raw materials and the final product, the company
will be able to create opportunities for unemployed men, women and the
youth, who will make a living by collecting and supplying scrap paper
for reselling.
 Mpact Uganda Recyclers plans to work in partnership with about 100
collectors of waste scrap paper and buys the waste from them at a rate per
piece hence helping to create jobs to the youth.

MARKET AND INDUSTRY ANALYSIS

3.0 Introduction

This section contains the market size and growth, target market, and industry structure.

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3.1 Market size and growth

The market for recycled products is diverse and rapidly growing at a very fast rate. Various
companies are at different stages of recycling endeavoring to satisfy their market niches. Paper
recycling is very young in Uganda but is continuously attracting attention from environmental
conscious bodies due to the growing need to conserve the environment through recycling among
others scrap papers. This shows a large market which is growing and promising both in the short
run and long run.

3.2 Target market

The target market for the business is dependent upon each product and is shown in the table
below

Table 3: Target Market

Product Target market

Toilet Papers Schools, retail shops

Gift Wrappers Gift shops

Paper Bags Shopping centers, Food processing industries

Shopping Bags Shopping centers

Pencil Rods Stationery shops

Flash Disk Rods Computer stores

Paper Files, Stationery shops

Napkin Boxes And Napkins Restaurants

Egg Trays Poultry farmers

Wall Hangings, Individual home

Bins Retail shops

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3.3 Industry structure
To determine industry profitability and attractiveness, Michael porter’s Five Forces
Model/Analysis was used.

Porter five forces analysis

Porter’s five forces is a framework for industry analysis and business strategy development. It
draws upon industrial organization economics to derive five forces that determine the
competitive intensity and therefore attractiveness of a market. Attractiveness in this context
refers to the overall industry profitability. An "unattractive" industry is one in which the
combination of these five forces acts to drive down overall profitability. A very unattractive
industry would be one approaching "pure competition", in which available profits for all firms
are driven to normal profit. Porter's five forces include - three forces from 'horizontal'
competition: the threat of substitute products or services, the threat of established rivals, and the
threat of new entrants; and two forces from 'vertical' competition: the bargaining power of
suppliers and the bargaining power of customers.

Figure 1: Illustration of Michael Porter’s Five Forces Model

Threat of new entrants

Bargaining
Rivalry within the Bargaining power of
power of
industry suppliers
customers

Threat of substitutes

Threat of new entrants

The provision of modern recycled products has great likeliness of attracting limited new entrants
because it has a number of barriers to entry. It requires huge initial capital to start and provide for
the capital expenditures, pre-operating expenses and working capital. Establishing a light
industry for making the recycled products requires more than Uganda shillings20million which
can be afforded by only few entrepreneurs. Government policy on industrialization is too tight.
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Entry to the industry requires meeting the requirements of Uganda Investment Authority. To
operate, one must get a trading license from Registrar of companies, quality standard from
Uganda bureau of standards and an environmental impact assessment from National
Environmental Management Authority, among other requirements.

However despite all those barriers, the industry is very profitable and the already existing firms
enjoy high economies of scale. This is because there is ready market, there is high access to
cheap inputs/raw materials, costs of production are minimal, the government through Uganda
investments authority, private sector foundation, enterprise Uganda among other bodies, is
supportive of new entrepreneurial establishments, and the already existing firms compete on
other features rather than price. This is an indication that the industry is very attractive and
potential entrants do not pose a threat because they have to first meet the requirements.

Threat of substitute products or services

The existence of products/services outside the realm of the common product/service boundaries
increases the propensity of customers to switch to alternatives. Recycled products do not have
direct competition in the market, but a number of indirect competitors dealing in a number of
virgin products in the market today. This therefore shows that there is presence of substitute
products that can compare with MPACT Uganda Products.

Bargaining power of customers (buyers)

The customers in this industry are so many and available everywhere in Uganda. In Kampala
alone, they are varieties of recreational centers, porch and rich neighborhoods and educational
institutions almost along every street and suburbs, which will become the businesses target
markets. This shows that the bargaining power of customers is somehow high because they are
the king and the reason for every business to exist. They can quickly change to other competitors
if they feel they are not satisfied in terms of quality or if they feel they are cheated in any way or
denied real value for money for the product they have consumed.

Bargaining power of suppliers

Suppliers of raw materials, components, labor, and services (such as expertise) to the firms in
this industry have low bargaining power. Scrap paper for example can be obtained from many
suppliers like local dealers, individual collectors, and distributors like City Scrap paper, Garages,
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and mechanical workshops at cheap prices. In some places, people are even willing to offer for
free because they feel no use for scrap paper.

Intensity of competitive rivalry

For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry. Mpact Uganda Recyclers is entering an industry which is
growing steadily and few firms are joining. Recycling industry in Uganda is one which is not
very inviting compared to other sectors, except for a few environmentally motivated
entrepreneurs who are determined to cause change. There is brand identity and brand loyalty to
the best player who provides the most excellent product and service. There is freedom of exit in
that a firm which has reached its maturity can easily exit business.

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 COMPETITOR ANALYSIS
4.1 Competitor profile
Whereas there a few companies carrying out recycling businesses, making products from
recycled scrap paper (scrap paper) has no competition in Uganda at the moment. There is
therefore no firm that is making the same product (recycled products) in Uganda at the moment.
However Mpact Uganda Recyclers will face some indirect competition from some firms dealing
in substitute products. The business is therefore likely to face indirect competition from
companies like Mafuco Paper Products, Mondi Paper Productsand several small scale
workshops, among others. It is also important to note that whereas there are companies dealing
in these substitute products, there are a number of individuals or enterprises that can that make
other products from scrap paper. Comparing Mpact Uganda Recyclers with indirect competitors
is shown in the competitive profile matrix below.

Table 4: Showing competitor profile matrix

The competitor profile matrix is made in a scale of 1-5, where 1 represents poor, 2 represents
fair, 3 represents good, 4 represents very good and 5 represents excellent performance, in respect
of the different attributes.

Attributes Mpact Uganda Mafuco Paper Mondi Paper

Recyclers Products Products

Product Durability 3 5 2

Product Attractiveness 3 4 1

Product variety 5 5 2

Location of premises 4 5 3

Prices 5 1 3

Target market 3 1 1

Distribution channels 2 2 2

Environmental friendliness 5 1 2

Management 2 5 1
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 Prices 2 3 2

Operations 2 3 1

Market share 1 4 2

Strategic alliances 1 5 1

Number of customers 4 5 2

Revenues 2 5 1

Profitability 4 5 3

User friendliness 5 5 5

Customer service 4 5 2

Uniqueness 5 2 1

4.3 Competitive advantage

Successfully growing a business is often dependent upon a strong competitive edge that
gradually builds a core of loyal customers, which can be expanded over time. On summarizing
the competitive profile matrix above, the most strong points for Mpact Uganda Recyclers leading
to its competitive advantage is shown in the table 4 below.

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Table 5: Showing competitive advantage matrix

Main Their strengths over Mpact Their weaknesses over Mpact Mpact Uganda Recycler’s competitive
competitors Uganda Recyclers Uganda Recyclers advantage over competitors

Have a strong financial back borne They face high costs of operation in Low costs of operations because of low
from their foreign owners and the form of high tariffs, rent and rates as costs of raw materials, rent and costs of
Mafuco Paper accumulated reserves resulting from well as other expenses production
Products their long time of operations

Strategic location within Nakasero Have only one outlet in its prime Having diverse distribution channels
opposite Kampala Serena Hotel, location from which it makes its comprising of the company show room,
with up close and luxurious distributions personal salesmen, and outlets
neighborhoods and easy
accessibility

Great product quality Very expensive products which can Very affordable product for all categories of
be afforded by a few wealthy buyers customers

User friendly product with After use the product is dumped The product is 100% recyclable and can be
adjustable options and back support causing pollution and accumulation repainted to change colors and designs
in the landfills

A lot of experience in making the The product is not unique in any way All new product in a virgin market.
product.

Best customer service

Very attractive designs, shapes and The product is not durable and can The product possesses very attractive
formations become waste after use for less than a designs, colors, shapes and formations.
month due to wear and tear
Superior quality product that has been tested
for durability and greater performance

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 Mondi Paper Large market share country wide Only one target market that is foot Three target markets that is recreational
Products wear centers, residential homes and schools
hence larger customer base

However the business’s SWOT Analysis is as shown in the table below.

Table 6: SWOT Analysis of Mpact Uganda Recyclers

STRENGTHS WEAKNESSES
 Adequate skills and experience of management team  Low Market Share since the business will just be established and will
 Strong financial muscle of the business brought by start from scratch in developing its own market share.
the Founder of the Business, Ms. Konso Eseza and  High Production Costs of raw materials owing to low capital at the
Mr. Wasswa Nelson. start of production.
 Presence of many customers who are not willing and  Limited Product Range at the start of business operations
able to purchase the products.  Lack of Market Information: There is lack of adequate market
 Indigenous crafting skills in the local communities. information regarding available markets, product specifications,
The art and crafts industry has been in existence market access requirements, and price trends.
since time immemorial and hence there is rich  Low Entry barriers: There are no significant barriers to entry
indigenous knowledge and skills that can be easily especially at the production level with regard to technical expertise,
developed through training. production technology, capital requirement, and experiential and
 Strong marketing skills of the sales team learning curve requirements. This, in the long run, implies an influx of
 Advanced technology to be used in production. The producers in the sector which will reduce profitability at the farm
machines will be obtained locally and some will also level.

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 be imported.
OPPORTUNITIES THREATS
 Presence of advanced technology that can be used to  Weak marketing image because of lack of brand recognition
make quality products. These technologies can be  Presence of better competitors dealing in substitute products
obtained from developed countries.  Changes in consumer tastes and preferences
 Large and ever growing market locally, regionally  High taxes, rates and rent, business license and incorporating a
and internationally. Global demands for art and company and other costs of doing business in Uganda.
crafts are rising because of people’s perception and  Weak marketing image because of few established distribution
demand for luxurious and beautification products. channels and networks for the newly established business
 strategic location of the business near major markets
in Kampala city and other urban centers
 presence of willing suppliers of cheap and quality
raw materials
 Government support for entrepreneurial investments
through The Ministry of Trade and Industry.

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 MARKETING PLAN

5.0 Introduction
This section contains the Target market strategy, Product strategy, Pricing strategy, Positioning,
Communication strategy, Channel strategy, Sales strategy and Revenue model.

5.1 Target market strategy

The business’s target market is defined by psychographics segmentation. Psychographics
segmentation consists of dividing the market into groups based on variables such as lifestyles.

The business will offer its products to all different lifestyles of customers and their specific
requirements for example events places, bars and restaurants, recreational parks, residential
homes, kindergartens, nursery and primary schools. These places have been in need of stylish
and attractive products for their clients who pay for their services.

The business will focus on marketing its products that appeal directly to consumers with
relatively low incomes, middle incomes as well as high income earners. Their buying decision is
influenced by the general attractiveness, ease of use and affordability of the product. It is this that
the business is bringing to them and will continue inventing new designs and traditional African
prints and colors on the products to win customer trust, satisfaction and eventual customer
loyalty.

5.2 Product/service strategy

The business initial offer is quality and beautiful products made from recycled scrap paper. The
customers are buying a product that can guarantee them beautification that is unique from other
existing products. The specific product design and performance characteristics include durability,
attractive features like prints, branding, and labeling. The products will be carefully made under
special care and attention to ensure that it meets its design specifications and be able to perform
for a long period of time before it gets spoilt. The product will be designed to look very beautiful
and attractive; with the materials blended with natural colors and dyes for it to achieve that
stylish look and bear beautiful finish. The finished products will be branded according to the
specifications of the buyers and will also bear the company’s brand name, term, sign, symbol or

18
design so that we can be easily identified in the market. The labeling of the products will take the
form of a tie-on tag hanged on each product. We shall also put in place an effective customer
service mechanism to ensure our customers are treated fairly, responded to in time and are
satisfied. In future, we shall provide trainings on how to make our products to women, men and
youth groups to help solve the problem of unemployment among these groups of people.

5.3 Pricing strategy

The business will use penetration pricing where the prices of its products will be initially set at
prices lower than the eventual market price to attract new customers to use. This may make
customers to switch to our brand because of the lower price. Once we have gained our desired
market share, we shall gradually raise the prices overtime.

Table 7: Showing Mpact Uganda Recyclers Products price list

Price indicators Year 1 Year 2 Year 3 Year 4 Year 5

Annual price growth rate 25% 20%

Toilet Papers 400 500 500 600 600
Egg Trays 1,000 1,250 1,250 1,500 1,500
Paper Bags 100 125 125 150 150

5.5 Positioning
Mpact Uganda Recyclers will be located at Mpererwe, just 3 killometres from Kampala – the
Capital of the Republic of Uganda. It is from this venue that the business will sell and distribute
its products to various destinations to access its customers.

Our positioning statement is as follows:

Recycling is vital to environmental sustainability. As Mpact Uganda Recyclers, we are

committed to a healthy and beautiful environment of our customers at home, work and or at their
refreshment places. Our product range offers clients an array of selections of very attractive and
affordable products. A visit of our premises will always leave you in the mood to come again to
continue stocking out products in your home and surrounding.

We are here to provide Uganda with the most innovative design alternatives made from waste
materials (scrap paper). These products will be easily recognized because of their distinctive

19
features, which can be utilitarian, aesthetic, creative, cultural attachments, decorative, functional,
religiously, educative and socially symbolic and significant; and the specific product design and
performance characteristics like quality, features, design, branding, packaging and labeling. We
call ourselves MPACT Uganda Products because we are a genius in what we do, motivated to be
the best and the king in what we do. We consider ourselves and our works supreme to the rest
that is available in the market.

5.5 Communication strategy

The business will engage the target markets through the following.

The objectives of our communication strategy include: providing information; increasing

awareness; encouraging action; building consensus; changing behavior; promoting community
participation, among others. We shall communicate about our products and their benefits using
advertising on television, radio and newspapers. On television, we shall look for opportunity to
feature in the Entrepreneur Programme on NTV, Young entrepreneur on UBC, among others. On
radio, we shall communicate about our operations on selected radio stations country wide. On
newspaper, we shall feature in Pakasa magazine of the New Vision and other cheap media
advertising. We shall also develop and launch a company website where customers can get
informed about some of our new products and other information. We shall print and distribute
brochures, catalogs, specifications, manuals, business cards, fliers among others to our target
markets. We shall engage in exhibitions and conferences and look for opportunities to talk in
such events. We also intend to satisfy our first customers so that we can benefit from word of
mouth advertising from satisfied clients. Company vehicles and those of well-wishers, partners
and other stakeholders will also help advertise. We also intend to use customer referrals where
satisfied customers inform their friends about their experience with our products. We shall
partner with bodies like MUBS Entrepreneurship Centre, Enterprise Uganda, and Private Sector
Foundation among others and participate in their programs, events and publications for publicity.

Table 8: Communication Budget

Communication Strategy Cost (UGX)
Advertising (Print & Electronic Media) 5,000,000
Brochures, Business Cards, Fliers, etc. 1,000,000
Exhibitions, Workshops & Conferences 500,000
Partnerships & Sponsorships 500,000
20
 Total 7,000,000

5.6Channel strategy
Our products will reach the market through the available distribution channels some of which are
currently available and others will be created during our operations. The business will use
distributors using its sales team to find clients, schedule meetings with event’s organizers,
schools administrators and recreational places. The products will also be sold at the business
warehouse/showroom/outlets which shall be spread in strategic parts of the target market.

5.7Sales strategy
The products will be sold through personal selling. The personal sales men will work hard to
create a lead. Generating sales lead is the process of making contact with and collecting
information from prospective clients. The business will generate sales leads through Networking
(contacting your friends, family, former coworkers and existing clients and asking if they know
anyone who may be interested in your product or service). The business will also offer free
samples of the products to some clients for some time and as well ask the customers about what
they prefer most.

5.8 Revenue model

According to the projections, the company will generate sound revenue streams for the next five
years. This is shown in the table below:-

Table 9: Showing Mpact Uganda Recyclers Revenue Model

21
Price indicators Year 1 Year 2 Year 3 Year 4 Year 5

Annual price growth rate 25% 20%

Toilet Papers 400 500 500 600 600
Egg Trays 1,000 1,250 1,250 1,500 1,500
Paper Bags 100 125 125 150 150
Volume indicators Year 1 Year 2 Year 3 Year 4 Year 5
Annual volume growth rate 10% 20% 30% 40%
Toilet Papers 100% 55,000 60,500 72,600 94,380 132,132
Egg Trays 90% 50,000 55,000 66,000 85,800 120,120
Paper Bags 75% 70,000 77,000 92,400 120,120 168,168
Annual Sales Revenue Year 1 Year 2 Year 3 Year 4 Year 5
Toilet Papers 22,000,000 30,250,000 36,300,000 56,628,000 79,279,200
Egg Trays 50,000,000 68,750,000 82,500,000 128,700,000 180,180,000
Paper Bags 7,000,000 9,625,000 11,550,000 18,018,000 25,225,200
Total sales revenue 79,000,000 108,625,000 130,350,000 203,346,000 284,684,400

OPERATIONS PLAN

6.1 Input factors

The business requires a number of raw materials and equipment to operate. This is as shown in
the following sub-headings below;

6.1.1 Raw materials and suppliers:

The business’s basic material from which its products are made are scrap paper. These materials
will be obtained from dumping sites, garages, dealers and automobiles workshops. These
materials are used and dumped and are easily available.

Table 6: Showing Raw material sources and costs

Raw Materials Source Costs (UGX)

Scrap paper (Paper Wastes) Schools, printing press, 1,000 per kilogram
publishing houses, stationery
shops, dumping sites, and
dealers

22
6.1.2 Machinery, Tools and Equipment

Unlike other businesses, our business does not require a special technology, tool or machines.

Machinery
Key among such equipment is the paper recycling machinery commonly known as AB Altpapier
Pop. It consists of the high concentration pump, vibrating screen, pulp collection pump,
propeller, bleaching machine, grinding machine, paper forming machine, rewinding perforating
machine and cutting machine.

Table 10: Description, Cost and Supplier of Paper Recycling Machinery

Machinery Description Cost Supplier

(UGX)
Paper Commonly referred to as 10,000,000 China North Machines Uganda
Recycling AB Altpapier Pop, is a Limited
Machine combination of the pulper,
Zhengzhou Guangmao
siever, deinker, grinder,
Industries China
carton container, and roller

Several dealers in China and

India

A detailed list of all the machinery required in the production process is shown in the figure
below;-

23
Figure 2: Paper Recycling Machinery

Tools and Equipment

24
The other necessary tools for the production process include gum boots, gloves, nose masks,
work wear, helmets, and operating tables, sitting chairs, scissors and glue among others. This is
shown in the table below;-

Table 11: List of Equipment, Description, Costs and Suppliers

Equipment Description Cost Supplier

(UGX)
Protective gear Gum Boots 15,000 Rhino Foot Wear Uganda
Limited
Gloves 5,000
Safequip Safety Company LTD

Abacus Pharma (A) Ltd,

Safety & Business Centre

Limited
Nose Musks 3,000
H.M.Industrial Suppliers;
Several shops, supermarkets and
dealers in Uganda
Work Wear 25,000 Nytil Industries Limited
Nyanza Textile Industries
Limited
Several textile workshops
around major market centers
around Kampala for example St.
Balikudembe, Nakawa,
Downtown Kampala, etc.

25
 Helmets 20,000
Safequip Safety Company LTD
Several shops in market centers,
shops and supermarkets around
Kampala city

6.2 Premises
Mpact Uganda Recyclers will construct its production facility in Mpererwe along Kampala –
Gayaza road in Kampala district. The facility will be located in an area of land covering about 50
meters square feet. This facility will house the administration block, raw materials store, the
production facility, store for paper rolls, and store for finished products, parking lot and
showroom. This is estimated to cost the company about 2.4Million Uganda shillings. The
proposed premises of MPACT Uganda Recyclers is as shown in the figure below;-
Figure 3: Artistic Impression of MPACT Uganda Recyclers Plant

6.3 Production process

The production process is as simple as follows;-

Collection, transportation and storage

The biggest task for paper recycling companies is probably the collection, transporting and
sorting of waste paper.Scrap paper is collected in the household. But also offices and especially
printing companies generate a lot of waste paper that is no longer needed and is then purchased
by recycling factories. This is because, when dumping, papers are always added to other waste
items and get them contaminated with food, plastics and metals. Sometimes collected paper is

26
sent back to the landfills because they are too contaminated for use. Try to keep waste paper in
separate grades at home or in the office —example, do not mix newspapers and corrugated boxes
up. All paper recovered is sent to the recycling center, where it is packed, graded, put into bales
and sent to the paper mill. At the mill, all the paper is stored in a warehouse until it is needed.

Sorting
To start the paper recycling process, the waste paper needs to be sorted, such as by newsprint,
computer paper, magazine paper etc., as different types of paper are treated differently during the
paper recycling process to make different types of recycled paper products. For example, finer
paper with multi-colored ink would require additional processing. Effort is taken to ensure that
the waste paper is free of any pins, clips, staples etc.

Repulping and Screening

From the storage shelves, they are moved into a big paper-grinding machine called a vat
(pulper). Here the paper is chopped into tiny pieces, mixed with water and chemicals and heated
up to break it down into organic plant material called fiber. The heating of the paper mixture also
breaks the paper down more quickly into the paper fibers. The paper mixtures turns into a mushy
mix, known as a pulp.

After, the pulp is forced through screens with holes of various shapes and sizes to remove small
contaminants such as bits of plastic and globs of glue. In addition, the pulp may also be spun
around in large cone-shaped cylinders. The smaller contaminants such as paper clips or sand are
separated out by means of large centrifuges (centrifugal separation). Heavy contaminants (e.g.
staples) are thrown out of the cone via centripetal forces, while lighter contaminants collect in
the center of the cone and are removed.

Removing Ink
The next stage in the paper recycling process involves deinking – removing the ink from the
paper fibers of the waste paper. Sticky materials (referred to as “stickies”) like glue residue and
adhesives are also removed at this stage. Deinking is achieved by a combination of mechanical
action (e.g. shredding) as well as chemical means (e.g. additional of chemicals). Small particles

27
of ink are rinsed from the pulp with water. This involves ‘washing’ the pulp with chemicals to
remove printing ink and glue residue. For this purpose air is blown into the paper mash from
below. The printing ink gathers together into a ball agglomerate encased in fine air bubbles and
rises to the surface. From there the deinking sludge is removed. In some cases the paper mash
will also be chemically bleached, thus making the material significantly lighter in color.
Sometimes, a process called floatation is applied to further remove stubborn stains and stickies.
Floatation involves the use of chemicals and air to create bubbles which absorb the stickies in the
pulp.

Refining, Bleaching and Color Stripping

Refining involves beating the recycled pulp to make them ideal for paper-making. After refining,
additional chemicals are added to remove any dyes from the paper. It is then bleached to whiten
and brighten it up. During refining, the pulp is beaten to make the recycled fibers swell, as well
as to separate the individual fibers to facilitate paper making. If the recovered paper is colored
(e.g. color printed paper), color stripping chemicals are added to remove the dyes from the paper.
From this processing, brown paper is obtained. If white recycled paper is to be produced, the
pulp would need to be bleached with hydrogen peroxide, chlorine dioxide, or oxygen to make it
whiter and brighter.

Paper making
At this stage, the pulp is ready to be used for paper. Sometimes new pulp (virgin pulp) is added
to give it extra strength and smoothness. The recycled fiber can be used alone, or blended with
new wood fibers (i.e. virgin fibers) to give it extra strength or smoothness. Water is added to the
pulp and sprayed onto a large metal screen in continuous mode. The pulp is mixed with water
and chemicals, such that the pulp is 99.5% water. This watery pulp mixture then enters the head
box of a paper making machine, and is sprayed in a continuous jet onto a huge wire mesh-like
screen moving very quickly through the paper machine. The water is drained on the screen and
the fibers begin to bond with each other. As it moves through the paper-making machines, press
rollers squeeze out more water, heat them dry and coat them up. They are then finished into
rolls.The production process can be illustrated as shown in the figure 1 below;

28
Figure 4: Showing the Process of Production

6.3 Quality control

Acquire state of the art technology. This machinery will be put in place and well maintained to
ensure continuous production. In case of machine and equipment break down, immediate repair
and maintenance of the machinery or equipment will be done to ensure that production goes on
without any delays.
29
Continuous improvements will be made in the company equipment’s to ensure that more
products are introduced to meet the increasing demands of the workers.

Employ skilled personnel. The business management will hire and give its workers most
especially those in the production department, the best training in machine operations, creative
designing and technical drawing. Having skilled workers in our production process will translate
to good quality products.

Make and follow product exact specifications and drawings. Each product will have its make up
structure or sketch which will be closely followed to ensure each product is made using similar
process and design elements shall be created depending on the specifications.

Constant supervision of workers: Workers will be encouraged to be their own supervisors but
regular supervision will also be done by the head of production department and the general
manager.

General cleanliness: We shall ensure general cleanliness of the production place and storage
facility for the finished products. There will be proper storage of finished products in a well-
designed show room far away from the storage of raw materials to avoid incidences of
contamination.

Customer feedback research: we shall conduct a customer feedback survey using face to face,
over the phone, viaemail or internet, or on handwrittenforms to discover whether or not our
customers are happy or satisfied with the products or services we sell to them. In case of
complaints, we shall quickly look for available and possible control measures to ensure they
continue buying from us.

Workers will be given protective gears like nose masks, gloves, overalls, among others for their
safety within the production process.

6.4 Record keeping and procedures

Creating a system for collecting revenue, paying employees, suppliers, and taxes correctly and
on time is part of operating a small business. The business will put in place an electronic
recordkeeping system to manage records life-cycle, which includes from the time such records
are conceived through to their eventual disposal. This work includes identifying, classifying,
30
prioritizing, storing, securing, archiving, preserving, retrieving, tracking and destroying of
records. The type of records kept will include an up-to-date register of all employees, including
their residential addresses, an up-to-date version of the rules and regulations of the business,
accounting records that correctly record and explain the financial transactions and position of the
association in such a manner that allows true and fair accounts to be prepared, minutes of
meetings, financial records, certificate of incorporation, bank statements, business reports and
manuals, employment records, safety records, sales records, customer databases, insurance
records among others.

The financial reports that will be used to measure and monitor the business condition include
statement of comprehensive income, statement of financial position, and statement of cash flows.
These reports will be extracted monthly basing on the daily records of the business operations,
and compiled to make the final report at the end of the year. Bookkeeping will be done by the
company accounts assistant.

6.5 Billing and collection policies and procedures

Having a billing system is important for keeping track of bills and payments to and from
customers and suppliers or other businesses. The business will use small business billing
software like excel invoicing template, QuickBooks, etc. to keep billing records and information
up-to-date. Sales will be recorded as revenue in the period received or the period in which a
pledge is received. Purchase requisitions may be generated by anyone in the office. The
requisitions are turned in to the General Manager for approval and given to the office assistant
for order placement. The approved purchase requisitions are given to the Accountant and filed in
the open order file. When the goods or services are received, the Accountant pulls the purchase
requisition and compares the order received to the packing slip and the purchase requisition for
accuracy. The packing slip is attached to the purchase requisition and returned to the open order
file until the invoice is received.Invoices are paid on the 1st and the 15th of each month. Prior to
generating checks, a pre-check report is generated which lists all outstanding payables with the
due dates and amounts. Late payments are not tolerated and incentives are given to entice early
payments.

31
 MANAGEMENT PLAN

7.0 Introduction
This section of the business plan covers the organizations ownership, organization structure, and
management team.

7.1 Ownership
The business is a limited liability company limited owned by two young entrepreneurs Ms.
KonsoEseza and Mr. Wasswa Nelson. The table below shows percentage of ownership.

Table 12: Ownership of MPACT Uganda Recyclers

Name of Owner Occupation Percentage Ownership

MsEsezaKonso Entrepreneur 50%
Mr. Wasswa Nelson Entrepreneur 50%
Total 100%

7.2 Company organization

The company is organized in a way that it has a couple of potential advisors, partners and other
organizational stakeholders as shown in the subsequent discussions below;-

7.2.1 Advisors
Mpact Uganda Recyclers will put in place a board of advisors to help get opportunities for expert
advice from such extinguished individuals. The company is negotiating with individuals such as
Dr. Abaho Ernest – Head of Entrepreneurship Department MUBS andDr. Maggie Kigozi.

7.2.2 Potential Partners and Stakeholders

Mpact Uganda Recyclers is also soliciting for potential partners and stakeholders who have
industry expertise, have similar goals and in the same route towards entrepreneurship and
enterprise development. Such potential partners include Kampala Capital City Authority
Enterprise Uganda, Uganda Women Entrepreneurs Association and MUBS Entrepreneurship
Centre. Mpact Uganda Recyclers intends to benefit from networking and market opportunities.

32
s
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7.2.3 Organization Structure
Authority flows from the top to bottom. The organization structure is headed by the company
owners/founders who double as the company directors. The Directors are followed by
departmental heads of production, marketing and accounting. This is as shown in the
organization chart below;

Figure 5: Staff structure/organization chart

7.3 Management Team

Mpact Uganda Recyclers comprises of a team of young and motivated individuals as shown in
the table below;

33
Table 13: Management Team of Mpact Uganda Recyclers

Job Titles Duties and Responsibilities Skills Qualification

Company determining the company’s strategic objectives and policies; Financial management skills - Bachelor of
Directors monitoring progress towards achieving the objectives and policies; including cash flow planning, Entrepreneurship and
appointing senior management; accounting for the company’s credit-management and managing Small Business
activities to relevant parties, e.g. shareholders, run the business, to relationships with your bank and Management
interact with the business community and in essence, to seek to accountant, marketing - including
make a profit, which is then either reinvested into the business or advertising, promotion and Public
retained as profits. Relations, sales - including
pricing, negotiating, customer
service and tracking competitors,
personnel - including recruitment,
dispute resolution, motivating
staff and managing training and
personal business skills -
including computer, written and
oral communication, and
organizational skills.
Production planning and organizing production schedules, assessing project and Machine repair and maintenance, Engineering Graduate
manager resources requirements, estimating, negotiating and agreeing confidence, technical skills, – Manufacturing
budgets and timescales with clients and managers, determining organization, interpersonal skills, Engineering, Bio
quality control standards, overseeing production processes, re- problem solving skills, systems Engineering
negotiating timescales or schedules as necessary, selecting, ordering communication skills and team and other related.
34
 and purchasing materials, organizing the repair and routine working skills as well as art and
maintenance of production equipment. craft skills.

Production Identify all issues in team and provide continuous support to all Machine repair and maintenance, Degree in Mechanical
supervisors members according to operating standards on everyday basis, technical skills, interpersonal Engineering – Process
Supervise effective working of production personnel and prepare skills, and communication skills Engineering
effective production schedules and ensure compliance to all
company policies, Coordinate with equipment and process teams
and ensure compliance to all protocols and maintain product quality,
Manage and prioritize all production processes and implement all
production plans as well as Ensure compliance to workplace
policies according to safety objectives and among others.
Production Sorting raw materials (paper waste), Examiningproducts, Fast learners, interpersonal skills, Diploma or Degree in
assistants Observingthe operation of machines, Maintainingcleanliness, good analytical skills, good Engineering
Monitoringmeasurement specifications, Unloadingmaterials from communication skills, Having
conveyors among others. problem solving skills.
Marketing monitoring and analyzing market trends, studying competitors' Marketing Concepts, Positioning, Degree of Science in
manager products and services, exploring ways of improving existing People Management, Territory Marketing
products and services, and increasing profitability, identifying target Management, Sales Planning,
markets and developing strategies to communicate with them, have Competitive Analysis,
knowledge of a wide range of marketing techniques and concepts, Understanding the Customer,
Plan marketing and branding objectives, Expand product solutions Product Development, Client
and offerings, Prepare marketing strategies alongside other company Relationships, and Creative

35
 executives and staff, Analyze market trends and recommend Services.
changes to marketing and business development strategies based on
analysis and feedback, and Develop and lead a marketing team that
will develop and execute new concepts, business models, channels
and partners to position business as innovator and leader and work
with the sales force.
Accounting Reconciling finance accounts, Maintaining spreadsheets, Credit Basic understanding of Diploma of business
Assistant control, Preparing statutory accounts, Cash allocation, Sales order accountancy and book-keeping, administration
processing, Managing daily post in and out, Handling and writing excellent interpersonal skills – to (Accounting)
cheques, Receiving and processing all invoices, expense forms and deal with customers and external
requests for payment, Verifying calculations working with the contacts, Good organizational
Accounts system, Reconciliation of Direct Debit mandates and skills and ability to work to, and
Managing petty cash transactions. sometime implement own
processes.
Collection Collection, transportation and sorting of raw materials (paper scrap), Driving skills, communication Valid driving license
officers delivery of products to various destinations skills, negotiation skills.

36
7.4 Reward structure
The business will put in place an effective reward system to guarantee that the contribution of
employees to the business is recognized by all means with the objective of rewarding employees
fairly, equitably and consistently in correlation to the value of these individuals to the
organization and build a better employment deal, hold on to good employees and to reduce
turnover. They will earn Bonuses, Salaries and wages, Gifts, Promotion and Other kinds of
tangible rewards, in addition to Information / feedback, Recognition, Trust, Relationship and
Empowerment.

The salary structure for the company employees is shown in the table below.

Table 14: Mpact Uganda Recyclers Reward Structure

Category No. of staff Amount p.m Year 1 Year 2 Year 3 Year 4 Year 5

Annual increase in rate per year

Directors 2 500,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000

Operations Manager 1 300,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000
Production Manager 1 250,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000
Marketing Manager 1 200,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000
Assistant Accounts Clerk 1 200,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000
Production Supervisors 1 200,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000
Sales Team 2 80,000 960,000 960,000 960,000 960,000 960,000
Collection Officers 2 100,000 1,200,000 1,200,000 1,200,000 -
Productionn Assistants 4 150,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000
Security Personnel 1 100,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000
Cleaner 1 75,000,000 900,000,000 900,000,000 900,000,000 900,000,000 900,000,000
Total salaries 17 2,080,000 24,960,000 24,960,000 24,960,000 23,760,000 23,760,000

37
 FINANCIAL PLAN

8.0 Introduction
This section of the business plan consists of the investment requirements, financing plan,
financial assumptions and projections, financial sustainability strategy, risk and opportunity.

8.1 Investment requirements

The business venture requires Ushs20million to start and provide for the capital expenditures,
pre-operating expenses and working capital. This is shown in appendix C.

8.2 Financing plan

The initial investment cost will be financed by equity (personal savings, contributions from
friends and family) 25% and debt (Loans)75% as shown in table 15 below.

Table 15: Sources of Funding

Financing structure
Equity 25% 5,000,000
Debt 75% 15,000,000

Total 20,000,000

8.3 Financial assumptions and projections

The company has estimated a number of assumptions and projections as shown below.

i. Capital expenditures: The Company will acquire a number of fixed assets for its
operations including among others machines, tools, and equipment. See appendix C for
more details.
ii. Funding: The business will solicit its funds from equity sources. See appendix C for more
on such sources of funds.
iii. Revenue forecasts: The revenue forecasts for the business will consider 365 working
days;this is shown in appendix D.
iv. Depreciation plan: With the assets above, we intend to follow straight line depreciation
policy and depreciation rates as follows; 20% for the building, 25% for machinery and

38
 equipment, 25% for motor vehicle, 12% for furniture, and 15% for computers. See
appendix E for more details.
v. Salary: Very attractive Salary projections have been designed to not only attract but also
retain quality human resources and reduce staff turnover. See appendix F
vi. Expenditure: The Company has extracted a list of other expenditures (indirect costs of
materials, labor, and so on). See appendix H.
vii. Working capital: The Company’s extracts of inventory, accounts receivable, and accounts
payable have also been shown in appendix I.
viii. Income statement: Our projections show a surplus for the next five years of business
operation. See appendix J.
ix. Balance sheet: The projections show an annual financial strength of the company, which
stretches throughout the five years and beyond. See appendix K for more details.
x. Cash flow: The Company’s cash balances (cash at hand) are sound and promising. See
appendix L for details.

8.4 Financial sustainability strategy

i. Reinvesting profits: We plan to plough back 40% of our profits to the business.
ii. Revenue target: Our projected monthly revenue target is not less than Uganda Shillings 6,
000, 000. This will be communicated to all staff and every day we shall struggle to beat
our daily revenue target.
iii. Partnering with organization interested in recycling like Kampala Capital City Authority,
Enterprise Uganda, among others. Through these organizations we may get connections,
networks and donations.
iv. Diversification of business: We shall diversify sources of revenue to include more
products from paper recycling to raise money. This will include among others offering
space for researchers to undertake their studies, offering training to interns and others.
These exercises will enable the company to raise more money to finance its activities.
v. We shall also opt for short term interest free or no interest rate loans from friend and
family, banks and other lending institutions.

39
8.5 Risk and opportunity
Every business is subject to a number of risks which may either affect it in a certain way, but
may also benefit from a number of opportunities which may be good for its health. The risk and
opportunity matrix below shows a number of risks and opportunities that Mpact Uganda
Recyclers is likely to experience, their potential impact and ways of prevention or capitalizing.

Table 16: Risk and opportunity matrix

Risks Potential impact Prevention/capitalizing
Breakdown of machinery low Regular maintenance, repair and replacement of
and equipment machinery, tools and equipment
Theft/pilferage/embezzlem High A system of double signature requirements for
ent, and fraud checks and invoice and payables verification.
Stringent accounting procedures. A thorough
background check before hiring personnel can
uncover previous offenses in the applicant's
past.
Increased competition High Quality, unique and attractive products
Bad debts created High Give incentives to induce early payments.
customers
Fire outbreak Low Install fire alarms and smoke detectors. Inform
all employees that in the event of emergency
their personal safety takes priority over
everything else. Tell them to leave the building
and abandon all work-associated documents,
equipment and or products. Insure the business
against fire.
Bad behaviors of Low Employees suffering from these conditions will
employees like alcoholism be urged to seek treatment, counseling and
and drug abuse rehabilitation if necessary.
Sickness among the work High Assign and train backup personnel to handle the
force work of critical employees when they are absent
due to illness.

Power outages High Power generators are a good back-up system to

provide electrical energy for lighting and other
functions until utility power is restored.
Failure to satisfy the High Increase production capacity and hire more
market due to expanding workers and distributors.
demand
Opportunities Potential impact Prevention/capitalizing
Indigenous knowledge. Extreme Use the available knowledgeable and skilled
Cushioning, designing, personnel to make products that can take the
painting is an ancient art market by storm
40
 that has been practiced by
mankind for centuries.
Government support for High Lobby for government’s technical, financial
businesses which are support and publicity
solving environmental
problems.
Growing market for Extreme Increase market share in those markets by
products locally, regionally ensuring constant supply and availability of our
and internationally products
Brand loyalty High Maintain quality and increase innovativeness

DEVELOPMENT PLAN

9.0 Introduction

This section of the business plan covers the implementation schedule and the Gantt chart.

9.1 Implementation plan

The implementation plan of the business is as shown in the table 11 below.

Table 17: Showing the implementation plan

WORK BREAKDOWN STRUCTURE

Activity Time frame Person responsible

Feasibility study and business plan 3 months Manager

Company registration 1 month Manager & advisor

Opening company website 1 month Manager

Ordering for materials, machinery and 1 month Manager

equipment
41
 Construction of the premises 2 months Outsourced engineers

Installation of machines, tools, equipment 1 month Outsourced engineers

and utilities like water and electricity

Hiring human resource 1 month Manager

Training human resource 1 month Outsourced trainers & advisor

Making and distributing publicity Continuous Manager

materials like business cards, posters,
flyers, etc.

Sample production of the products 1 month Production team

Test marketing of the product 1 month Marketing team

Launching the business 1 month Manager

Continuous production, marketing and Continuous Production team

distribution of the products

9.3 The Gantt chart

Table 17 below shows the tasks, resources, milestones, dates, and time estimates of the business’
implementation schedule.

Table 18: Showing the Gantt chart

GANTT CHART

ACTIVITY TIME FRAME (MONTHS)

Feasibility study and business plan

42
Company registration

Opening company website

Ordering for materials, machinery

and equipment

Construction of the facility

Installation of utilities

Hiring human resource

Training human resource

Making and distributing publicity

materials like business cards,
flyers, etc.

Sample production of the product

Test marketing of the product

Launching the business

Continuous production, marketing

and distribution of the products

APR MA JU JUL AU SEP OCT DE JA FE

IL Y NE Y GU TE OBE CE NU BR
YEAR 2016/2017 ST MB R M AR UA
EAR BE Y RY
R

43
 APPENDICES

Appendix A: Sample Picture of Paper Waste Problem in Uganda

44
Appendix B: Financial Assumptions
MPACT UGANDA RECYCLERS
Financial Assumptions
Note 1
Number of operational days in a year 365
Number of months in a year 12
Corporation Tax 30%
Discount factor 10%
Note 2 Capacity indicators
At full capacity;
Capacity (Volume) per day
Toilet Papers 100%
Egg Trays 90%
Paper Bags 75%

Note 3 Depreciation policy

Land 0%
Buildings 20.0%
Machinery & Equipment 25%
Motor Vehicles 25%
Furniture, Fixtures 12%
Computers 15%

Note 4 Working capital requirements

Inventory purchases 14 days
Debtors - 1 months' revenue 1 month
Creditors 1 month's expenses (Excluding salaries) 1 month

Note 5 Cost indicators % of revenue

Direct costs
Toilet Papers 12%
Egg Trays 8%
Paper Bags 6%
Indirect costs
Power & lighting 3.00%
Water 1.00%
Airtime, telephone bills 2.00%
Transportation 5.00%
Admin Expenses 4.00%
Business Promotion (advertising, etc) 3.50%
Maintenance & Repairs 4.00%
Security 1.00%
Cleaning 0.50%

Note 6 Financing
Equity 25%
Loan amount( % of initial outlay) 75%
Loan period 5 years
Loan interest 15%

45
Appendix C: Initial Investment Costs
MPACT UGANDA RECYCLERS
Initial Investment (start up costs)
(Amount in UGX)
Investment Item Amount
Year 0
Land & Building:
Land & site development 2,000,000
Building & Civil works 400,000
Total Land & building 2,400,000

Machinery & Equipment:

Equipment 500,000
Machinery 9,500,000
Total Machinery & Equipment 10,000,000

Motor Vehicles:
Delivery van 3,400,000
Total Motor Vehicles 3,400,000

Furniture & Fittings

Furniture & fittings 500,000
Total Furniture, fittings & others 500,000

Computers 1,000,000 1,000,000

Pre- Operating Expenses

Business Plan 150,000
Plant layout 170,000
Legal costs 300,000
General expenses 80,000
Total pre- operating expenses 700,000

Working Capital 2000000 2,000,000

Total Investment cost 20,000,000

Financing structure
Equity 25% 5,000,000
Debt 75% 15,000,000

Total 20,000,000

46
Appendix D: Revenue Projections

MPACT UGANDA RECYCLERS

Revenue projections
(Amount in UGX)

Price indicators Year 1 Year 2 Year 3 Year 4 Year 5

Annual price growth rate 25% 20%

Toilet Papers 400 500 500 600 600
Egg Trays 1,000 1,250 1,250 1,500 1,500
Paper Bags 100 125 125 150 150

Volume indicators Year 1 Year 2 Year 3 Year 4 Year 5

Annual volume growth rate 10% 20% 30% 40%

Toilet Papers 100% 55,000 60,500 72,600 94,380 132,132
Egg Trays 90% 50,000 55,000 66,000 85,800 120,120
Paper Bags 75% 70,000 77,000 92,400 120,120 168,168

Annual Sales Revenue Year 1 Year 2 Year 3 Year 4 Year 5

Toilet Papers 22,000,000 30,250,000 36,300,000 56,628,000 79,279,200

Egg Trays 50,000,000 68,750,000 82,500,000 128,700,000 180,180,000
Paper Bags 7,000,000 9,625,000 11,550,000 18,018,000 25,225,200

Total sales revenue 79,000,000 108,625,000 130,350,000 203,346,000 284,684,400

47
Appendix E: Depreciation Schedule
MPACT UGANDA RECYCLERS
Depreciation schedule
(Amount in UGX)
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
LAND
Opening cost 2,000,000 2,000,000 2,000,000 10,000,000 10,000,000 10,000,000
Additions (Buy Land) - 8,000,000 5,000,000
Depreciation 0%
Net Book Value 2,000,000 2,000,000 10,000,000 10,000,000 10,000,000 15,000,000

BUILDINGS
Opening cost 400,000 400,000 400,000 15,400,000 15,400,000 15,400,000
Additions (New Premises) 15,000,000
Depreciation 20.0% 80,000 3,080,000 3,080,000 3,080,000 3,080,000
Accumulated Depreciation 80,000 3,160,000 6,240,000 9,320,000 12,400,000
Net Book Value 400,000 320,000 12,240,000 9,160,000 6,080,000 3,000,000

MACHINERY AND EQUIPMENT

Opening cost 10,000,000 10,000,000 10,000,000 30,000,000 30,000,000 50,000,000
Additions (Advanced Machinery) 20,000,000 20,000,000
Depreciation 25% 2,500,000 7,500,000 7,500,000 12,500,000 12,500,000
Accumulated Depreciation 2,500,000 10,000,000 17,500,000 30,000,000 42,500,000
Net Book Value 10,000,000 7,500,000 20,000,000 12,500,000 20,000,000 7,500,000

MOTOR VEHICLES
Opening cost 3,400,000 3,400,000 3,400,000 15,400,000 15,400,000 27,400,000
Additions (Pick Up) 12,000,000 12,000,000
Depreciation 25% 850,000 3,850,000 3,850,000 6,850,000 6,850,000
Accumulated Depreciation 850,000 4,700,000 8,550,000 15,400,000 22,250,000
Net Book Value 3,400,000 2,550,000 10,700,000 6,850,000 12,000,000 5,150,000

FURNITURE
Opening cost 500,000 500,000 2,500,000 2,500,000 2,500,000 7,500,000
Additions 2,000,000 5,000,000
Depreciation 12% 300,000 300,000 300,000 900,000 900,000
Accumulated Depreciation
Net Book Value 500,000 2,500,000 2,500,000 2,500,000 7,500,000 7,500,000

Computers
Opening cost 1,000,000 1,000,000 2,000,000 3,000,000 4,000,000 4,000,000
Additions 1,000,000 1,000,000 1,000,000
Depreciation 15% 300,000 450,000 600,000 600,000 600,000
Accumulated Depreciation 300,000 750,000 1,350,000 1,950,000 2,550,000
Net Book Value 1,000,000 1,700,000 2,250,000 2,650,000 2,050,000 1,450,000

TOTALs
Opening cost 17,300,000 17,300,000 20,300,000 76,300,000 77,300,000 114,300,000
Total Additions - 3,000,000 56,000,000 1,000,000 37,000,000 5,000,000
Total Depreciation - 4,030,000 15,180,000 15,330,000 23,930,000 23,930,000
Total Accumulated Depr - 3,730,000 18,610,000 33,640,000 56,670,000 79,700,000
Total Net Book Value 17,300,000 16,570,000 57,690,000 43,660,000 57,630,000 39,600,000

48
Appendix F: Salaries Projections

MPACT UGANDA RECYCLERS

Salaries Expense projections
(Amount in UGX)

Category No. of staff Amount p.m Year 1 Year 2 Year 3 Year 4 Year 5

Annual increase in rate per year

Directors 2 500,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000

Operations Manager 1 300,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000
Production Manager 1 250,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000
Marketing Manager 1 200,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000
Assistant Accounts Clerk 1 200,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000
Production Supervisors 1 200,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000
Sales Team 2 80,000 960,000 960,000 960,000 960,000 960,000
Collection Officers 2 100,000 1,200,000 1,200,000 1,200,000 -
Productionn Assistants 4 150,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000
Security Personnel 1 100,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000
Cleaner 1 75,000,000 900,000,000 900,000,000 900,000,000 900,000,000 900,000,000
Total salaries 17 2,080,000 24,960,000 24,960,000 24,960,000 23,760,000 23,760,000

49
Appendix G: Loan Amortization Schedule

MPACT UGANDA RECYCLERS

Loan Amortisation schedule
(Amount in UGX)

Years Opening balance Interest Principal Closing balance

Year 0 15,000,000 15,000,000
Year 1 15,000,000 2,250,000 3,000,000 12,000,000
Year 2 12,000,000 1,800,000 3,000,000 9,000,000
Year 3 9,000,000 1,350,000 3,000,000 6,000,000
Year 4 6,000,000 900,000 3,000,000 3,000,000
Year 5 3,000,000 450,000 3,000,000 -

50
Appendix H: Expenditure Projections
MPACT UGANDA RECYCLERS
Expenditure projections
(Amount in UGX)

% of sales
Direct costs revenue Year 1 Year 2 Year 3 Year 4 Year 5
Toilet Papers 12% 9,480,000 13,035,000 15,642,000 24,401,520 34,162,128
Egg Trays 8% 6,320,000 8,690,000 10,428,000 16,267,680 22,774,752
Paper Bags 6% 4,740,000 6,517,500 7,821,000 12,200,760 17,081,064

Total direct costs 20,540,000 28,242,500 33,891,000 52,869,960 74,017,944

Indirect costs
Salaries 24,960,000 24,960,000 24,960,000 23,760,000 23,760,000
Power & lighting 3.00% 2,370,000 3,258,750 3,910,500 6,100,380 8,540,532
Water 1.00% 790,000 1,086,250 1,303,500 2,033,460 2,846,844
Airtime, telephone bills 2.00% 1,580,000 2,172,500 2,607,000 4,066,920 5,693,688
Transportation 5.00% 3,950,000 5,431,250 6,517,500 10,167,300 14,234,220
Admin Expenses 4.00% 3,160,000 4,345,000 5,214,000 8,133,840 11,387,376
Business Promotion (advertising, etc) 3.50% 2,765,000 3,801,875 4,562,250 7,117,110 9,963,954
Maintenance & Repairs 4.00% 3,160,000 4,345,000 5,214,000 8,133,840 11,387,376
Security 1.00% 790,000 1,086,250 1,303,500 2,033,460 2,846,844
Cleaning 0.50% 395,000 543,125 651,750 1,016,730 1,423,422

Total indirect costs 43,920,000 51,030,000 56,244,000 72,563,040 92,084,256

Total Expenditure 64,460,000 79,272,500 90,135,000 125,433,000 166,102,200

51
AppendixI: Working Capital Schedule
MPACT UGANDA RECYCLERS
Working capital schedule
(Amount in UGX)

Working capital requirements Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Inventory 1,711,667 2,353,542 2,824,250 4,405,830 6,168,162
Debtors - 1 months' revenue 6,583,333 9,052,083 10,862,500 16,945,500 23,723,700
Creditors 1 month's expenses (Excluding salaries) 3,291,667 4,526,042 5,431,250 8,472,750 11,861,850
Net Working Capital 2,000,000 5,003,333 6,879,583 8,255,500 12,878,580 18,030,012

Incremental Working Capital 2,000,000 3,003,333 1,876,250 1,375,917 4,623,080 5,151,432

52
AppendixJ: Income Statement

MPACT UGANDA RECYCLERS

Income statement
(Amount in UGX)

Year 1 Year 2 Year 3 Year 4 Year 5

Total Sales Revenue 79,000,000 108,625,000 130,350,000 203,346,000 284,684,400

Less: Direct Expenses 20,540,000 28,242,500 33,891,000 52,869,960 74,017,944

Gross profit 58,460,000 80,382,500 96,459,000 150,476,040 210,666,456

Less:
Depreciation 4,030,000 15,180,000 15,330,000 23,930,000 23,930,000
Indirect Expenses 43,920,000 51,030,000 56,244,000 72,563,040 92,084,256

Profit (Loss) Before Interest & Tax 10,510,000 14,172,500 24,885,000 53,983,000 94,652,200
Loan Interest 2,250,000 1,800,000 1,350,000 900,000 450,000
Profit (Loss) Before Tax 8,260,000 12,372,500 23,535,000 53,083,000 94,202,200
Corporate Tax 30% 2,478,000 3,711,750 7,060,500 15,924,900 28,260,660
Profit after Interest and Tax 5,782,000 8,660,750 16,474,500 37,158,100 65,941,540
Dividends 10% 578,200 866,075 1,647,450 3,715,810 6,594,154
Retained Earnings 5,203,800 7,794,675 14,827,050 33,442,290 59,347,386

Cumulative Retained Earnings 5,203,800 12,998,475 27,825,525 61,267,815 120,615,201

53
AppendixK: Cash Flow Statement

MPACT UGANDA RECYCLERS

Cashflow statement
(Amount in UGX)

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Cash Inflows
Opening cash balance 6,058,667 26,244,967 54,157,475 106,875,045
Equity 5,000,000
Revenue 79,000,000 108,625,000 130,350,000 203,346,000 284,684,400
Debt (Loan) 15,000,000
Total Inflows 20,000,000 79,000,000 114,683,667 156,594,967 257,503,475 391,559,445

Cash Outflows
Pre-operating Expenses 700,000
Capital Expenses 17,300,000
Working Capital 2,000,000 3,003,333 1,876,250 1,375,917 4,623,080 5,151,432
Operating expenses 64,460,000 79,272,500 90,135,000 125,433,000 166,102,200
Loan repayments 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000
Taxation 2,478,000 3,711,750 7,060,500 15,924,900 28,260,660
Dividends 578,200 866,075 1,647,450 3,715,810
Total Outflows 20,000,000 72,941,333 88,438,700 102,437,492 150,628,430 206,230,102

Closing cash balance - 6,058,667 26,244,967 54,157,475 106,875,045 185,329,343

54
AppendixL: Balance Sheet

MPACT UGANDA RECYCLERS

Balance sheet
(Amount in UGX)

Year 1 Year 2 Year 3 Year 4 Year 5

ASSETS:
Non current assets
Net non current assets 16,570,000 57,690,000 43,660,000 57,630,000 39,600,000

Current assets
Inventory 1,711,667 2,353,542 2,824,250 4,405,830 6,168,162
Debtors 6,583,333 9,052,083 10,862,500 16,945,500 23,723,700
Cash 6,058,667 26,244,967 54,157,475 106,875,045 185,329,343
Prepayments
Total current assets 14,353,667 37,650,592 67,844,225 128,226,375 215,221,205

Total Assets 30,923,667 95,340,592 111,504,225 185,856,375 254,821,205

Equity and Liabilities

Equity & reserves
Share Capital 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000
Retained Reserves 5,203,800 12,998,475 27,825,525 61,267,815 120,615,201
Owners Equity 10,203,800 17,998,475 32,825,525 66,267,815 125,615,201

Non current liability

Loan (5yr) 12,000,000 9,000,000 6,000,000 3,000,000

Current Liabilties
Accruals 5,428,200 63,816,075 67247450 108,115,810 117,344,154
Creditors 3,291,667 4,526,042 5,431,250 8,472,750 11,861,850
Total current liabilities 8,719,867 68,342,117 72,678,700 116,588,560 129,206,004

Total Equity & Liabilities 30,923,667 95,340,592 111,504,225 185,856,375 254,821,205

55
AppendixM: Financial Ratios

MPACT UGANDA RECYCLERS

Financial ratios

Profitability Ratios IA Year 1 Year 2 Year 3 Year 4 Year 5

Gross Margin 74% 74% 74% 74% 74%
Net Profit/Revenue % age 7% 8% 13% 18% 23%
Return on shareholders' equity 57% 48% 50% 56% 52%
Return on Capital Employed % age 34% 15% 22% 29% 37%

Gearing ratios
Debt: Equity ratio 2.4 1.8 1.2 0.6 0.0
Interest cover (times) 5 8 18 60 210

Liquidity Ratios
Current ratio 1.6 0.6 0.9 1.1 1.7
Acid test ratio 1.4 0.5 0.9 1.1 1.6

56
Appendix N: Net Present Value

MPACT UGANDA RECYCLERS

Net Present Value computation

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Cashflows
Initial Investment (20,000,000)
Net Cashflows 6,058,667 26,244,967 54,157,475 106,875,045 185,329,343
Add dividends 578,200 866,075 1,647,450 3,715,810 6,594,154
(20,000,000) 6,636,867 27,111,042 55,804,925 110,590,855 191,923,497
Discount factor 10% 1.000 0.909 0.826 0.751 0.683 0.621
Present Value (20,000,000) 6,033,515 22,405,820 41,927,066 75,535,042 119,169,392

NPV 245,070,835
IRR 107%

57