REPORTS

August 2007

PAK Business Incubator Nairobi, March to August 2007
Incubator Status Report August, 2007
The Incubator Status Report seeks to summarize the strides taken and developments made in the incubator since its inception to date.

• PAK  Summary

Possibilities Africa (Kenya) is an organization whose mission is to “Develop capacity for society’s transformation”. As one of our Core strategies, we believe in small businesses as the future of Africa’s economy. As thus, we seek to help ambitious, self driven young entrepreneurs grow their business. Given the high levels of unemployment among the youth (15-25 years of age who make up 22% of Kenya’s population) it is our sole desire to continually develop capacity to support the development of small business entrepreneurial initiatives. This we believe is a necessary alternative to unemployment and a needed catalyst to economic empowerment.

• Project Description.

We at Possibilities Africa Kenya (Hereby referred to as PAK) identified the concept of a business incubator as one of the practical means of doing this. The business incubator is a facility designed to assist businesses to become established and profitable during their start up phase. This is achieved by providing shared premises, business advice, business services, networking and mentoring opportunities.

As a result of our (PAK) initiative and the support of our USA board and CBMC partners and other several local business advisors (who give their time to support incubatees from time to time) we have seen this project bear fruit for the individual businesses incubated. Here is a brief report of what is happening with each businesses incubated:

IDENTITY MEDIA:
Identity Media is a media company whose primary focus is development of audio-visual materials.

Business challenges

• In the first few months their cash flow was negative but have now started showing positive financial growth
• Marketing strategy was not yielding much hence volume of business was low.
• Their internal structure was not well streamlined and hence efficiency was hard to achieve.
• Their lack of adequate equipment made them slow in service delivery, and reduced profit margin because of the need to hire equipment. This still poses a challenge even as they break into new markets.

Business achievements.

• Improved Marketing Strategy.  A proactive approach has been assumed and this has translated into more business streaming in.
• The company has been expanding its client portfolio. Over the last couple of months, they have offered video / editing services to the following clients.
• Presbyterian Church of East Africa (PCEA).
• World Concern International.
• World Vision International.
• Presbyterian Church of East Africa (PCEA).
• Nepad Kenya.
• Rugby Players fellowship (RPF).
• Reorganisation of their internal structure resulted in one of the partners (Kevin) quitting his job in order join Dan who has been on ground since inception. This was necessary given the volume of work and the fact that the other two are currently in school.
• They were able to make a total of Kenya Shillings 6,847 (about US$ 100 ) profit during the month of August having made Kenya Shillings 24, 500 (About US$ 370)
• They also have regular internal meetings that help to constantly bring all members to par with new developments. The following entails what role each individual plays in the company.
• Kabinda Lemba: Marketing.
• Kevin Ouma: Administration
• Noreen Waithaka
• Dan Omondi: Project management.
• Acquisition of Knowledge (Business / production skills). Prior to the start of the company, some of the members had not worked with any editing interface that was not non –linear (digital). Dan can now edit on both Adobe premier & Final Cut Pro programs.
• Slowly learning the ropes about the dynamics of operating a business. (Working on Cash flows, profitability ratios and Profit & Loss Accounts, Report writing, networking e.t.c).

B2M:
B2M is a marketing media company whose core business is developing marketing channels that have the highest ability to capture targeted audiences. Their core marketing service is an online catalogue of cars and car accessories. (www.autosokoni.com)

Business experiences.

• Despite the interest generated by many in this product, few are willing to pay in order to advertise in www.autosokoni. Hence cash-returns from it are yet to be realised
•  Most cash inflow has been from the designing jobs that stream in. A large portion of which is normally diverted to the marketing efforts for autosokoni.
• To date about Kenya Shillings (Ksh.) 60,000 (Just under US$ 1000)  has been spent in the development of this product.
• Their greatest challenge they face is adequate financial and human resource to market their core marketing service autosokoni.
• Have had challenges with their cash inflow, which has resulted in slow progress of the business. In the month of August they had a total inflow of Ksh. 6000 and a profit of Ksh. 1794. This was lower than what was experienced the previous month.

Achievements

• The company has a well laid out internal structure with a couple of partners and support team that provide technical assistance from time to time.

• Benard Osapiri- Business Developer.
• Stratton-Marketing and product development.
• Favour-Marketing Intern.

• Autosokoni has been launched.
• They have been able to develop and implement an aggressive marketing strategy. This has attracted interest from major players from the motor industry, UAP Insurance, Caltex, Volvo, Shell Bp, Monroe Shock absorbers.
• Nevertheless after critical market analysis there has been a change in focus to small scale and middle sized motor dealers.
• Has also been able to train and sustain two interns one of whom has been able to get a placement with a local bank (Barclays bank) as a sales executive.
• There has been an increase in Design projects over the months. This has enabled more capital injection. Although they still need a more proactive approach in seeking these jobs that will facilitate achievement of their bigger goals. This is currently not happening due to limited human resource.
• Developed relationships with small and middle size vehicle and part dealers in Nairobi.
• Have also been able to develop links with foreign vehicle dealers that were made possible by their participation in an international auto parts exhibition held in Kenyatta International Conference Center.

OVAL PUBLICITY:
This is a communications company whose core business is public relations, Marketing and Events Organization and Management. Titus Mwangi is the business developer, with training in Media and communications the art of public relation and mass communication is an art he has continually mastered by the day.

Business Experience.

• Having joined the incubator a month later, he has in effect been in the programme for 5 months. His experience in business, having done this for a while gave him a boost in his start-up phase.
• When he entered the incubator he already had clients and had a track record of having organised events for some major firms e.g. Toyota Kenya.
• Nevertheless lack of an aggressive marketing strategy resulted in slow progress in the first few months of his incubation.
• Currently there has been a shift in strategy with a more proactive approach being employed. More emphasis is being laid in seeking new clients and ensuring a high standard in service delivery. In order to ensure that this pace does not slacken, a weekly log of his marketing efforts and the results of the weeks achievements are submitted to the secretariat and his strategy constantly reviewed. There is a greater sense of determination, more productivity and direction. The increased number of projects he is working on, is evidence to this.

Business Achievements.

• Has been able to develop a greater sense of direction and purpose in his business.
• A more aggressive, marketing strategy has been employed and this has resulted to greater inflow of business. This includes:

• Event organisation for Toyota Kenya- Who is having a demonstration to safaricom (The leading local mobile phone that should be held on the 22nd of Sep.
• Celtel-Kenya (A major mobile phone service provider in the east and central African region) that have shown interest in his services and have expressed desire to have him organise some of their Christmas events.

• He is currently handling the public relations for a Non profit Org called Shinda. That seeks to help children and girls from marginalised communities like the Maasai community.
• Developing the PR strategy for a couple of political aspirants and should be in charge of all their PR issue during the election period. He will be in Nyanza province for a week gauging the political atmosphere of one of the aspirant’s constituency developing/testing their communication and public relation strategy.
• In the month of July a total of Ksh. 7,000 (Just above US$ 100) profit was made. A figure which is anticipated to rise once payment for work done in August is done.

INNOVATIVE DESIGNS:
Innovative Designs, formerly known, as Divine Designs is a start up company that seeks to spur children towards exploring the richness of biblical principles by using art and design. The first products under the company name.. Sho Shweet entails the use of Art and design on children’s clothes, beddings, and other clothing accessories targeting children between the ages of 2 to 9 years.

Despite the numerous established competitors in this market, not to mention the influx of second hand clothes, they do stand out because they are majoring on the creation of a brand that is Bible based, creative and of high quality.

Business experiences.

• Of all the incubated businesses they have the most brilliant idea with great potential for sustained growth.
• Lack of commitment form the partner, none of whom attends to the business on a full time basis, has resulted in a slow take off.
• Lack of a clear direction and failure to understand the textile industry also contributed to the stalling evidenced. Their initial strategy involved importation of their raw materials from India an approach that was resource hungry hence the limited nature of fund s became another impediment to their progress.
• It therefore forced the Pak leadership to start a weekly accountability system that involved discussions that sought to help them rethink and work out a pragmatic strategy.
• Towards this end a local designer (Steve), who owns a clothing label called unsigned, was approached and agreed to show the budding designers the ropes of the trade. A lot of growth has been displayed since then. A radical change in strategy from importation to use of locally available resources was assumed.
• The team finally made significant strides to the point of securing a major deal to supply their products to a daily vocational bible school that was hosted by Nairobi Pentecostal Church. Unfortunately due to lack of adequate preparation and financial resources they were unable to deliver their products on time.
• Despite the considerable financial investments they still have not reached a point of reaping from their investments. In month of August they spent 22,500 in developing their product and company. They still have to invest a further 39000 ksh in order to produce and market the 50 t-shirts they target to make.

Business Achievements.

• Registration of the company (which has been achieved) and eventual patenting of their brand.
• There has been a crystallisation of their business idea and a revolution of their business strategy.

• Although they stared off without any financial resources they have been able to solicit some money that will form part of their working capital. (So far a total of 46,000 ksh. Has been accumulated, with the amount soon to be increased to 80,000 ksh.)

• With the help of Steven, the designer, they have been able to make inroads into the fashion industry and contacts with leading manufacturers plus even produce prototypes of their products. Being a designer, Steven has been instrumental in the process of product development. In spite of all challenges the innovative designers have had and continue to face they are posed to push on. This month they should be producing a batch of upto 50 T-shirts for sale in some of the outlets they have identified. Towards this end extra capital injection has been done, manufacturers contacted and a deal struck with some business outlets where these products will be displayed and sold.

INCUBATOR EXPANSION.     
As PAK leadership, we have desired to use the facilities and resources God has given to us optimally. Thus in a bid to achieve this several steps were taken this month:

• The payback system was finally enacted.

• Recruitment of three new incubatees was finalised.

The board earlier last month instituted the payback system that has been in the pipeline for a while. All incubatees will be required to start some form of paying back for the facilities they enjoy from the secretariat as from the sixth month of incubation. This repayment will be done in cash and kind. In kind, services of benefit to PAK may be rendered and their monetary value debited to the incubatees account. These will only be accepted if of high quality and well priced according to the prevailing market rates. This serves not only to instil a sense of responsibility and financial prudence amongst the budding businesses but also a culture of service and proactive leadership. In light of this every incubatee regardless of length of tenure-ship will be provided with a bill that will give them the expenses per-capita. Alternatively, the team will be required to pay back a percentage of their expenses during the last 6 months of their incubation, and the balances paid after they exit the incubator on a monthly basis agreement.

Incubatee Recruitment:
We have recently added three new incubatees to our facilities as listed below: James Mwaniki

His training is in information technology and has a firm called Cornel Solutions that seeks to offer data management solutions to its prospective clients. Despite his passion for business, he needs direction and guidance in his marketing strategy and support due to financial challenges.

Oscar Kimani.
A business management graduate his firm TransTech Investments provides online marketing options for major players in the tourism industry. It also provides an online database of vital information on tourist facilities in Africa for all interested individuals. His idea is relevant and grand. He will need help with developing a workable plan and maintaining focus in his pursuits.
 
Liz Mwangi. 
A graduate in International Business. Her business focuses on floral designs which she does for weddings and other occasions. . She currently is planning to venture into event planning and wedding organisation through her business, Larz enterprises.

These individuals are all in their start-up phase and will benefit a lot from the training and mentorship opportunities provided in the programme. James, who is venturing into a relatively neglected area in the Kenyan market, will benefit a lot from the availability of computer and internet facilities, plus the networking and mentorship opportunities. The need for the services that Oscar seeks to avail cannot be understated given that Kenya is a key tourist destination. This is especially so, given the fact that most of the current online tourist information sites lack detail. Armed with talent and training Liz looks forward to the mentorship programme within the incubator. Given her experience and exposure in this business field, she stands a high chance of picking up and making profits sooner than the rest.

With the arrival of the new incubatees there is need to also increase in the available infrastructure. This has been done to a small extent.  So as to ensure basic access to necessary facilities and therefore most incubatees share workstation and computer facility. A rota is adhered to, in order to avoid inconveniences. This will persist until a clear picture of just what exactly are the needs of each new incubatee is made.

On the other hand the increase will help achieve optimum operation for the incubator facility without much increase on the monthly overheads. This will also expand on the number of young professionals we can partner with and consequently our networks. We encourage the incubates to be proactive in the search for resource persons while the PAK secretariat also focuses most energy in making this available. To this end the new message board mentorship with CBMC is going to come in handy.

Projections
The projections for the next 4-6months are:

• In 3 months the old incubatees should have achieved sustainability and registered sustained positive growth. They also should be ready to graduate from the incubator in the next 6 months.
• A greater focus on business related workshops across the small towns and villages to stir up young Kenyans to start businesses instead of looking for handouts.
• Expansion of the facility to benefit youth from less privileged backgrounds should be underway. Already a contact person working with such youth in the slums of Nairobi has been contacted.

• Development of a curriculum and a pool of resource persons who will provide constant review, advice and direction to both the incubatee and incubator programme. (Had been started but put on hold briefly to give room for development of structure within the incubator and PAK as a whole.)
• Developed a plan for expansion of the incubator programme outside Nairobi.
• Begin serious consideration of linking the entrepreneurs in the city with those in the communities.

We again thank our partners: the PA USA board, CBMC and all others whose support is transforming lives in Kenya. God bless.