Fw: Interest from an investor
Shaka ,Robert
Folks-
The dutch want answers. We need to fine tune this Business Plan like yesterday.
I am working on the answers that I will post both on the BidNetwork profile as well as this list.
It was an elaborate document but the questions are guiding. Atleast I know what investors want in specific detail and the level of clarity.
Paul & John, please scratch your heads for answers. Keep you posted.
Shaka
----- Original Message -----
From: Maarten de Jong <Maarten...@bidnetwork.org>
To: in...@rockfordharris.com <in...@rockfordharris.com>
Cc: Warren Byabashaija <wby...@yahoo.com>; Audrey Kawuki <aka...@yahoo.com>
Sent: Tue Oct 06 20:24:37 2009
Subject: Interest from an investor
Dear Robert,
How are you doing? How have things progressed over the last months?
An investor showed interest in your plan, studied on your business plan and now wants an update and answers to a number of questions. I hope you are able to answer them by email. After that, I will forward your answers to him and according to his opinion then, I will setup a skype/phone call between you and him.
Find his questions below. Please put your answers in the text and mark them with another color.
Hope to hear from you.
Kind regards,
Maarten
Maarten de Jong
investor matchmaking | BiD Network | <http://www.bidnetwork.org> www.bidnetwork.org | +31 20 7555 004 | cell: +31 6 419 524 10 | skype: bid_maarten.dejong
Thanks for the business plan. I have had a read through it and have a bunch of questions and comments:
- What progress has there been since the plan was written this time last year (I must say that it would be hard to invest in a plan that is more than a year old).
- What has Robert been doing during the last year?
- I would like to understand more clearly how the rice processing and retailing company will be set up relative to Rockford Harris Group: Will it be the same entity or will RHG continue with its other activities? How much time would Robert expect to be involved with the rice company? How much time would the named management be involved? Where did this name come from?!
- I am a little confused by the Market numbers, which seem to vary throughout the plan: Rice production in Uganda is reported to be 170k tonnes per year, but the details explaining the market split show a total of just 5k tonnes +. The planned share of the market varies from 3 to 5 % at different parts of the document, and 5k tonnes is said to be a 5% share of the domestic market at one point although the market is then said to be 200k tonnes two pages later. Also the plan says that their share will increase by 12% a year at one point and by 18% a year three pages later.
- The document does not state whether the Tilda brand is available in Eastern Uganda, nor what the consumer perception of it is: If the new brand has a USP of quality, then we should expect that Tilda rice is thought to be of low quality.
- I am not clear from the plan what the role of this organization is in the process. The plan mentions that the firm will do milling and drying, but then it says that it will buy 'processed' rice at $0.70 (or 0.75 at other places).
- It would be good to understand how they will deal with some of the challenges identified in the SWOT analysis, in particular: What will happen as 'Prices starting to go high'? How will they deal with the 'Limited business expansion capability'? How can they protect themselves against 'Public intervention'?
In terms of the finances:
- How much money do they need to start the company? How much have they already got secured?
- Why do they need to keep investing $50k a year in rice milling and drying equipment, and $30-40k a year in warehouse space?
- The layout of the expenses is not clear - not all the expenses shown as capital investment are capital investment, some are ongoing operational expenses
- I do not understand the income model: They show gross sales and commission amounts and add these together to show gross revenue at the firm gate, and then they add branding and other revenus and come up with $2 per KG, to get a net gross revenue amount after branding and distribution of $7 million. The total expenses are then shown as just $1.67 million for an unbelievable net revenue of over $5 million in year 1!
As you can see, I have a lot of fundamental concerns and questions that are not explained clearly in (or I do not understand from) the business plan. I understand that Robert may not be trained in writing business plans so I am not expecting a perfect plan, but I do need to get a sense that the numbers are real and understood, and I do need to clearly udnerstand the business model. I am familiar with the Ashoka fellow selection process and know that anyone who gets through this has been more than carefully evaluated, but what idea is it that Robert was awarded his Ashoka fekllowship for?