http://1.Business  idea Shared by Mr Bokete Mokgosi. As promised I will thread a bit about challenges, opportunities,market barriers and a little background info on some of the business ideas....thread follows below
@) detergent are common household chemicals with cleaning capabilities..eg soaps, sanitizers, Jik, Vim, windolene, Domestos, etc. One of the biggest producers are Tiger Brands and Unilever, Multi-nationals found in South Africa among other countries..
b) since we are importing them, an opportunity for import-substitution exists in the market. Instead of importing them, Batswana can take initiative and set up factories here, reduce our import bill, diversify the economy through using manufacturing of these detergents.
C) these are some of the famous name-brands of detergents. The first step is to decide wether you company is going to service industrial or household market. Are you producing for household consumers or producing for goverment departments and private sector bulk buying.
d) the biggest market is the household or individual consumers. The biggest challenge is access to this market. You cant sell detergents one by one going household to household, you sell through retailers and wholesalers and that is where the headaches starts.
e) Supermarkets retail goods on consignment. Meaning that you make the soaps, then agree with Pick &Pay to sell them through their store, and they will only pay you after they have sold them.could be a month, 2,3,4 months. A lot of new ventures or SMMEs can't wait that long.
f)The only way to be able to survive while waiting for payment is to move high volumes, and that requires a huge manufacturing facility, it also requires a lot of capital that will go towards paying buying equipment,paying workers while awaiting payments.
Factor in the idea that we have a population of 2 million, a low %of middles class, meaning some of the detergents may be luxuries to batswana, you still have to compete with Unilever and Tiger Brands for the same local market. They can push you out easily.
g) I forgot to number thr Tweet above, it's (f). For you to survive in this market you have to produce multiple detergents because You can't compete with Unilever when you are producing a singular product,say Sunlight Liquid , while they produce 18 detergents or product lines.
h) do you know how they are going to push you out? Wena you sales or revenue is dishwashing Liquid, while they have sta-soft, Jik, Domestos, foam bath. They can sell their rival dish washing liquid at a price lower than the manufacturing cost... understand?
I)if the unit cost of making dish washing sunlight Liquid is 10 pula, and the both of you sell it at P15, Unilever drops the price to P8 to suffocate you. Akere they have multiple products, they will recover the P7 differential by adding it to JIK,foam bath and shower gel.
J) in closing you need to be thorough in your approach when you enter such market, they enjoy economies of scale,they gave dedicated distribution outlets,they have capital,they can raise even more though loans and IPOs. We need to control the value chain esp local retailers.END
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