Sale Milestone

Dear followers

This week I write to you with so much joy. We reached the first milestone which was to sell some of our acquired stock.

In our last post, we set the target for the end of month being the time when we wanted to make our first sale. At the time of writing, we had no firm offer from any buyers, we knew little about the recycling companies in the country or at least what we knew was not good enough to make us comfortable that this target set would be achieved.

We had a plan to identify all the various recycling companies and locate them, understand what their processes and procedures were and in the end, get an appointment to deliver our stock to them. We knew of one company that that had the highest chance on our list to purchase from us. However, getting to them was not straight forward as we thought it would be.

Plastic Recycling industries known as PRI is a company that is known for recycling plastic material in Uganda. They are based in Kampala’s industrial area in Nakawa. PRI operating under the Rwenzori bottling company umbrella is 5he biggest recycling company for PET plastic in Uganda.

Our initial contact with this company was In February but this was to find out about prices. These initial contacts were not serious and we only spoke to the security and front desk. Serious discussions started at the beginning of March and it took us 4 weeks to get a date. Our date to deliver was on the 24th March. This came and past due to some issues which I will share with you soon. But 1st the delivery was delayed for 3 days and we finally delivered on 27th. The complete week has been spent on just finalizing this deal and today the 31st of March we finalized the transaction, our 1st sales transaction. This marks a milestone in the short life of this company and I would like to thank all involved in making this possible for their efforts and encourage them to continue this spirit.

Now to the negative side, as a startup there many things we don’t know and we will find out as we go along. No amount of reading will have shielded us from the issues we faced this week. We had planned well everything. We had given ourselves enough time, time to organize ourselves, stock, logistics and man power. We had assigned 1.5 weeks for the complete transaction. We had a date to deliver as mentioned previously scheduled for the 24th March. On the morning of the shipment, we were informed that the company had received much stock overnight that had not been cleared and therefore we could deliver anything on that day. So we lost the reserved transportation. We were told to deliver on Monday 27th March and so we arranged for our transport truck to Return on Sunday upon calling on the day, there was no response and we were left scampering to find replacement transport.

We got a new transport truck. We delivered on Sunday night and we had an overnight at the company with the belief that we would be dealt with 1st thing. No chance. Some other customers had dropped his shipment on the weekend and we could not even be allowed to unload. The complete day was spent waiting for them to clear the precious pile.

Tuesday work started on us. We were expecting more action but this didn’t happen. Power cuts and rain caused a major delay. Wednesday started with optimism but this quickly disappeared when we found a damp in front of our pile. No explanation why this had happened. But we had to wait out the complete day waiting for this pile to be cleared before they could get to our pile. Thursday we were promised that we would be dealt with to the end. In all honesty by this point I was looking more dejected than anything. I did not believe that the week and half assigned was going to be enough. But by evening all our stock had been packaged.

Friday was a matter of verification of the Weights. As the accountant had left the office we could not completely close the transaction Thursday. We verified the weights to be approx. 1200 kg.

Before this sale I had planned all things and had envisioned how I wanted the whole process to go, but in the end, we had to continuously adjust our plans and be flexible to meet our ultimate objective that was to sell. A lot of lessons learnt by making this first sale. Over the next few weeks we will work to implement our lessons learnt in the hope that the future sales are done better.

One of the things that must be fixed before the next sale would be the transportation issues we faced during the first sale. What we learnt was that the cost of transportation is high. The cost is not calculated based on volume and distance to travel like in most developed nations. Here the cost is calculated per distance and size of truck. With the volume of plastic being much higher than the weight, we will always struggle to maximize weight per shipment. This has become a priority for us to fix.

Another would be to concentrate on the stock piles around the identified recycling plants. The initial shipment took the stock purchased first as I thought this would be fair to the people that collected the material. With the high costs associated to transportation, we would like to concentrate on the stock piles located closest to the recycling plants.

School teaches you that the company has both fixed and variable costs. They emphasize that the company must always cover the variable costs for the business venture to be viable. Our estimates showed that part of the variable costs (i.e. material costs) would always be covered. What we did not know was whether all other costs would be covered. The first sale has confirmed that indeed material costs would always be covered. We must now work hard to minimize all other costs that we have within the company. This is an important lesson that I learnt from school that I can say to anyone without a business background or education but starting a business to understand. It will do them a great good. Of course we are always trying to make money and ensure that all costs are covered but in the beginning there are many costs incurred and not all can be understood by all startup founders. I will not be discouraged that the first sale did not cover all costs but more encouraged that there are opportunities to improve. We will keep learning and improving. Keep this space open…..