know whether farmers find it more acceptable to pay a charge for each bag dried or whether they would prefer to hire the dryer by the day (or half day). A summary of one scenario generated by the model is shown below. The key variables are highlighted in pink. In this scenario, farmers are charged KSh 2,700 per day for hiring one dryer and over a 3 year period this would generate a total of nearly KSh 300,000 of net cash flow for a small business operating 3 dryers as a unit after finance and operating costs are considered and the cash has been recouped. Outline Business Model Components Manufacturing Models Option Strengths Weaknesses Formal Sector Clear channels for quality High overheads control Expensive to tool up Branding Minimum run size Jigs / plasma cutters to Cost estimated at 50% higher standardize parts than in informal sector Bulk ordering of materials Limited interest Easy expansion of supply Fear of rapid replication in Able to produce to a informal sector consistent standard Harder to supply maintenance Marketing support (e.g. heat exchanger) Potential after sales support Informal Sector Lower cost Quality control Make to order Built to order only, no stock Closer to market No consumer protection Closer relationship with Limited after sales support purchaser Cannot build from drawings / Lower transport costs pictures. Need to have examined a physical model Lower inventory costs before they can build a similar Ability to innovate model Close maintenance support
know whether farmers find it more acceptable to pay a charge for each bag dried or whether they would prefer to hire the dryer by the day (or half day). A summary of one scenario generated by the model is shown below. The key variables are highlighted in pink. In this scenario, farmers are charged KSh 2,700 per day for hiring one dryer and over a 3 year period this would generate a total of nearly KSh 300,000 of net cash flow for a small business operating 3 dryers as a unit after finance and operating costs are considered and the cash has been recouped. Outline Business Model Components Manufacturing Models Option Strengths Weaknesses Formal Sector Clear channels for quality control Branding Jigs / plasma cutters to standardize parts Bulk ordering of materials Easy expansion of supply Able to produce to a consistent standard Marketing Potential after sales support High overheads Expensive to tool up Minimum run size Cost estimated at 50% higher than in informal sector Limited interest Fear of rapid replication in informal sector Harder to supply maintenance support (e.g. heat exchanger) Informal Sector Lower cost Make to order Closer to market Closer relationship with purchaser Lower transport costs Lower inventory costs Ability to innovate Close maintenance support Quality control Built to order only, no stock No consumer protection Limited after sales support Cannot build from drawings / pictures. Need to have examined a physical model before they can build a similar model
Easy%20Dry%20M500%20Commercialization%20Strategy%20Final.docx