Sky Lakes Auto Sales Service Centre Business Plan 15th January 2018

BUSINESS PLAN:
SET UP & OPERATION
OF A JAPANESE
AUTO SALES &
COMPREHENSIVE SERVICE CENTRE
BASED IN UGANDA
BY
SKY & LAKES AUTO SALES & SERVICE CENTRE

P.O. BOX 828,
KAMPALA,
UGANDA.
Cell Phone: +256-776-808111/772-422453
Landline: +256-312-800 689
Fax: +256-312-800 689
E‐Mail: emmabarigye@gmail.com
AUGUST 2016
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A. TABLE OF CONTENTS
S/NO. DESCRIPTION PAGE
1.0 EXECUTIVE SUMMARY 1

1.1 Overview 1
1.2 Statement of Purpose 2
1.3 The Problem and Solution 2
1.4 The Business Model 3
1.5 Business Objectives 6
1.6 Vision 7
1.7 Mission 7
1.8 Keys to Success 7
2.0 PURPOSE OF BUSINESS PLAN 8

2.1 Introduction 8
2.2 Methodology for Business Planning 8
2.3 Developing the Business Plan 8
2.4 Five Objectives of Sky & Lakes 9
2.5 Rationale for Japanese Auto Dealership 9
2.6 Plan to Achieve Target 9
3.0 BUSINESS DESCRIPTION 10

3.1 General Description of the Business 10
3.2 The Opportunity 11
3.3 Background of Uganda’s Import and Export Situation 12
3.4 The Business Process 13
3.5 Differentiation Strategy 13
4.0 THE ORGANIZATION/COMPANY 15

4.1 Company Ownership 15
4.2 Vision 15
4.3 Mission 15
4.4 Business Objectives 15
4.5 Start-up Summary 16
4.6 Company Locations and Facilities 17
4.7 Management and Organization Summary 17
4.8 Business Structure 17
4.9 Board Structure 18
4.10 Corporate Development Plan 18
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5.0 PRODUCTS & SERVICES 19
5.1 Products 19
5.2 Types of Product/Product Description 20
5.3 Competitive Advantage/Comparison 25
5.4 Sourcing 26
6.0 UGANDA AUTO INDUSTRY ANALYSIS 27

6.1 History of the Automobile and Auto Parts Industry in Uganda 27
6.2 The Uganda Automobile Industry Overview 28
6.3 Vehicles in Use 29
6.4 Vehicle Sales 30
6.5 Market Characteristics 31
6.6 Production and Assembly 31
6.7 Uganda Auto Industry STEEPLE Analysis 32
6.8 Policy Environment 36
6.9 Industry Analysis 39
7.0 MARKET ANALYSIS 41

7.1 Overview 41
7.2 Market Segmentation 41
7.3 Target Market Segment Strategy 42
7.4 Competitive Environment Summary 43
7.5 Market Research Summary 44
8.0 MARKET STRATEGY AND IMPLEMENTATION PLAN 46

8.1 Target Market and Customers 46
8.2 Marketing Strategy 47
8.3 Channels of Distribution and Supply Chain Strategy 57
8.4 Sales Strategy & Forecast 58
8.5 Evaluation and Control Strategies 62
8.6 Customer Lifecycle in Vehicle Maintenance Services 62
8.7 Strategic Alliances 63
8.8 Milestones 63
9.0 OPERATIONS PLAN 66

9.1 JV Partnership 66
9.2 Business Location 66
9.3 Facility Layout Plan 66
9.4 Equipment Requirements 67
9.5 Parts Supplies 67
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9.6 Inventory 67
9.7 Accounts Payable 68
9.8 Accounts Receivable 68
9.9 Business Operations 68
9.10 Customer Support Service 70
9.11 Quality Control 70
9.12 Management Information Systems 71
10.0 MANAGEMENT AND ORGANIZATION 72

10.1 Board of Directors (Governance) 72
10.2 Management Team 73
10.3 Governance and Organizational Structure 76
10.4 Personnel Plan 78
10.5 Training Requirement 79
10.6 Feedback and Control 79
11.0 FINANCIAL PLAN 81

11.1 Capital Requirements 81
11.2 Important Assumptions 82
11.3 Key Financial Indicators 83
11.4 Projected Profit and Loss 83
12.0 RISK ANALYSIS AND CONTINGENCY PLAN 84

12.1 Ability to Attract and Retain Qualified Staff 84
12.2 Ability to Generate Adequate Volume in the Target Market 84
12.3 Ability to Expand 85
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B. LIST OF TABLES
T/NO. DESCRIPTION PAGE
1 Financial forecast extract for the first 5 years 6
2 Start-up Cost Summary 16
3 Types of Auto Repair Services 21
4 Sky & Lakes’ Advantages 26
5 Autos Indicators for Uganda 29
6 Uganda Vehicle Sales Market Share (2014 – 2015) 30
7 Duty Rates for Imported Vehicles, 2016 38
8 Sky & Lakes Marketing Messages to Customer Demands 50
Advertisement and promotion expenditure forecast for the first five

9 years 53
10 Advertisement and promotion analysis for Year 1 54
11 Sales Forecast (in units) 59
12 Sales Forecast 61
13 Milestones 64
Utilities, administration and Miscellaneous expenses for the first five

14 years 69
15 Basic Sky & Lakes Scheduling 69
16 Personnel (labour) expenditure for the first five years 79
17 Personnel Plan & Payroll Structure 80
18 Initial Project Capital Investment Costs 82
19 Employee Bonus Funding 84

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C. LIST OF FIGURES
F/NO. DESCRIPTION PAGE
1 Estimated New Vehicle Sales in Uganda, 2004 – 2015 31
Factors in Selecting a Vehicle Maintenance Vendor in Uganda

40
2 (2015)
3 Pricing Management Model 56
4 Sky & Lakes Auto Service Centre Pricing Structure 55
5 Milestones 65
6 Governance and Organizational Structure of Sky and Lakes 77

1.0 EXECUTIVE SUMMARY
1.1 Overview
Sky & Lakes is a start-up in the auto-dealership business in Uganda and is

incorporated as a private limited company. Its strategy is to serve the premium class
niche market of the auto industry with the middle class also being the key focus market
segment. The company would like to be the dealer of Japanese auto brands that are
quite popular on the Uganda market and continue to enjoy the largest market share of
the autos market segment in Uganda. There are many untapped potential markets
within the industry that desires the high quality, stylish and world class cars from
Japan. The company is starting business in Uganda itself because of the consistently
high potential that exists in the Uganda autos market that ranks only second to
petroleum products in the country‘s annual import trade statistics and is a dynamic
growth sector owing to the steady growth of the economy and rapid increase in
population demographics.
The company management of Sky & Lakes has extensive and solid investment
experience and market connections in a number of business fields in Uganda and
would like to venture into the area of auto sales and services by working in partnership
with a prospective auto Japanese JV Partner/Franchisor who will be responsible for the
technical, financial, operational and vehicle supply aspects of the JV partnership, while
Sky & Lakes takes care of securing the facility site in Uganda, providing the investment
guarantees, hiring and recruiting company personnel, as well as providing managerial
expertise and handling the routine sales and marketing aspects of the business
investment. Sky & Lakes will continue to develop its excellent working relationship
with the Japanese JV Partner/Franchisor to bring the savings to the customer.
The foundation for the plan is a combination of primary and secondary research upon
which the marketing strategies are built. Discussions and interviews were held with a
variety of individuals and businesses to understand why and how they might consider
using a new and good quality auto sales and vehicle maintenance service. Uganda
public statistical data, county business patterns, and other publications were consulted
to develop the market potential and competitive situation.
As a start-up business, Sky & Lakes shall specialize in corporate, government, as well
as individual and business clientele needs for sales and leasing of executive-driven and
new high-line vehicles. Management has determined that presently this market niche,
in Uganda, is underserved in terms of offering a complete package of auto sales and a
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range of after-sales and customer support vehicle maintenance service options under
one roof. As growth warrants, additional staffing and/or additional service locations
can be realized (Phase II).
We will be successful because we offer something different; a pleasant car buying

experience. We will create a purchasing environment that caters to the customer's
needs. We are selling a professional service and an experience in car buying and vehicle
maintenance that will bring customers back again, as well as referring friends and
family. We estimate an optimistic gross margin over the industry average. We will be
successful because of the excellent team we have assembled and the drive and
determination of the owners.
1.2 Statement of Purpose
This business plan has been developed to obtain a start-up capital for the operations of
Sky & Lakes – an auto trading and services Company based in Uganda. It also serves as
an operational outline and plan for the first five years. The founding entrepreneurs
intend to raise a start-up capital of US$ 40 million. The founding entrepreneurs of Sky
& Lakes Uganda are able and willing to contribute industrial land for the proposed
auto sales and services dealership centre worth US$ 600,000.The balance of US$
39,600,000 shall be accounted for in terms of the physical, inventory and financial
investments of the Joint Venture Partnership between Sky & Lakes and the prospective
Japanese JV Partner/Franchisor. The business plan uses the following exchange:
Uganda Shillings 3,400 = US$ 1 for clarity and simplicity of conversion.
1.3 The Problem and Solution
In Uganda, the existing car dealing companies are apparently doing great but are
mainly focused on auto trading activities without offering the complementary services
that go with it such as after-sales, customer support, and other value-added services
like vehicle worthiness inspection and certification services, tyre servicing, and/or the
provision of mobile service vehicles (car-carriers) for vehicle retrieval and instant
servicing/repair of vehicles in remote or distant locations from Kampala. Some of these
auto services may be available on the market but they operate as discrete, stand-alone
business units rather than functioning as consolidated auto service operations and
thereby end up inconveniencing vehicle owners in terms of cost, time, and effort in
running around to different auto service providers to fix various auto-mechanical
problem(s). At the same time, they also lack the modern technical expertise, skill,
training, know-how and sophisticated equipment to deal with the new vehicle brands
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or keep abreast with emerging auto market trends in a rapidly-changing global
technological environment.
Sky & Lakes is a result of the observation of these trends, intuition and chance thanks
to the favourable circumstances surrounding the entrepreneurs. This favourable
circumstance has resulted to the availability of a network and exposure to a market
aimed at solving this problem through the creation of the Sky & Lakes JV Partnership.
The Sky & Lakes JV Partnership is built on the founders‘ recognition of this
opportunity gap – A gap between what is currently on the market and the possibility
for a new or significantly improved product, service, or business that results from
emerging trends. Sky & Lakes will be the only Company in Uganda offering a
comprehensive suite of auto sales and vehicle maintenance services as prescribed in this
Business Plan as a one-stop Japanese vehicle dealership centre that meets with the full
expectations and needs of the market.
1.4 The Business Model
1.4.1 Product/Service
Sky & Lakes will deal exclusively in Japanese vehicle brands which will both be new
and used to be able to effectively cater to the needs of the autos market in Uganda. The
observed trend is that Government MDAs (Ministries, Departments and Agencies) will
always acquire new vehicles in their procurement operations, while a good proportion
of vehicle consumers in Uganda place more preference on used (pre-driven) cars which
may not have to be more than 10 years old since the first year of manufacture. The sale
of vehicles to the market will be done through on-site Customs-Bonded warehouses
(Car Bonds) that will stock a range of Japanese brands including Luxury vehicles,
Sedans, Pick-Ups, Crossovers (Compact SUVs) and Light and Medium Duty
Commercial Vehicles (Buses & Trucks).
Because the Company wants to fill a gap in the market of providing a comprehensive
vehicle sales and maintenance services to the customer, it will also offer a range of
complementary after-sales and customer support services including auto servicing and
sale of parts, tyre servicing, automated car washing services, vehicle road worthiness
testing and certification services, the sale of tractors and assorted agricultural
equipment (including top-line irrigation systems), and operating a petrol-filling station
that will fuel customer‘s vehicle with pure unadulterated fuel products, and also
operate an on-site quick –service restaurant. Sky & Lakes shall supply the entire range
of Japanese vehicles to its customers including Toyota, Isuzu, Lexus, Acura, Honda,
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Mazda, Nissan, Subaru, Daihatsu, Hino and Suzuki to mention but a few to its
customers.
1.4.2 Target Market and Customers
Sky & Lakes shall operate one head office and auto service centre at the Kampala
Industrial Business Park (KIBP) in the eastern suburbs of Kampala. The targeted
customers are: Government Ministries, Departments and Agencies (MDAs),
international organizations and diplomatic missions based in Uganda, companies and
faith-based religious organizations and NGOs, newly employed workers in the
corporate and informal business sector, young professionals, progressive families,
business owners who want a car for status and recognition, taxi fleet operators, and
local government administrations.
1.4.3 Core Competence
The founding entrepreneurs are all business-oriented and have lots of experience in
various business dealings and investment activities in Uganda, DR Congo and other
parts of Africa meaning that implementation of the business plan will not be a problem.
Furthermore, the founding entrepreneurs have a broad network including potential
suppliers and agents in Japan which shall serve as a competitive advantage over its
Ugandan competitors. More so, Sky & Lakes will overcome the problem of most
businesses in Uganda, which is usually late declaration and under-declaration of taxes
that leads to tax penalties, which at times goes up to 100% and more.
1.4.4 Management Team
The management team shall have a Board of Directors (BoD) made up seven directors
including three Ugandan directors from Sky & Lakes Uganda, three Japanese directors
from the Japanese JV Partner/Franchisor while the remaining one member of the BOD
will have no affiliation with Sky & Lakes and will be selected from a broader
community pool. Sky & Lakes will appoint an interim board chair, with the final chair
to be elected by consensus between Sky & Lakes Uganda and the Japanese JV
Partner/Franchisor. The Sky & Lakes corporate management team will include the
CEO/MD, the General Manager (GM), the Assistant General Manager, the Chief
Accountant, the Director in-charge of Logistics & Purchases, the Sales & Marketing
Manager, an Office assistant to the General Manager, three Sales & Marketing
Executives, twenty well-trained mechanics and scores of complementary business
support service staff. Such a team will be very useful when the company starts to
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witness growing pains, because it shall be easily handled leading to future growth of
the business venture.
1.4.5 The Business Process
Sky & Lakes shall be a Medium- to Large-sized enterprise. It shall be in the indirect
channel for the companies sourcing and trading in all the major brands of Japanese
vehicles on the Uganda market. It shall be a car dealing company in the indirect channel
of distribution of the five brands of vehicles. The distribution strategy of Sky & Lakes
will be quite simple, based on customer‘s request the products are sourced/acquired
from the Japanese manufacturer in Japan, transported to the Japan export sea port and
shipped through the Sea of Japan and Indian Ocean to the Kenyan port of Mombasa
from where they will be dispatched by overland transportation to Kampala – the
Ugandan capital where Sky & Lakes is based. From here, they shall be driven to the
packing space in the Sky & Lakes Car Bonds at the Kampala Industrial Business Park.
Here the car(s) will be checked, washed and made clean for exposure at Head
Office/Auto Service Centre in Kampala for public viewing.
1.4.6 Strategy
Sky & Lakes shall create a customer based management system (CRM) for the existing
customers in one computer by using a Microsoft access program. It shall also use its
auto service centre to provide vehicle maintenance services to customers for the first
three months at 10% discounts. Furthermore, the founding entrepreneurs of Sky &
Lakes are convinced that this company will also go a long way to boost the economy of
Uganda as the company tax will be used to develop the community and its presence
will serve as a catalyst for other business opportunities to be transformed into full
fleshed businesses. More so, the founding entrepreneurs are very ready to start up this
business and have already done some research on how much it is going cost to legally
obtain a business licence and get the cars to the Ugandan market. Hence all that is
needed is the money to start up the business and acquire of the cars (inventory) needed.
1.4.7 Financial Forecasts
The financial projection shows that Sky & Lakes show a high potential for success and
growth with the car industry of Uganda. It shall be profitable by the end of the first year
with a positive cash flow of US$ 281,762 as seen in Table 1 below. From the second
through the fifth year Sky & Lakes shall continue making both profit and positive cash
flows in an exponential manner. Sky & Lakes shall also pay off any financial liabilities
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during this period and also have strong financial capacity to pay dividends to its
shareholders.
Table 1: Financial forecast extract for the first 5 years (US$)

Year Year 1 Year 2 Year 3 Year 4 Year 5
Sales Turnover 21,065,000 29,018,000 41,878,100 43,972,005 46,170,605
COGS1 11,804,800 16,327,080 23,228,128 24,389,534 25,609,011
GROSS PROFIT 9,260,200 12,690,920 18,649,972 19,582,471 20,561,594
EBITDA2 7,602,517 10,985,397 16,894,167 17,773,812 18,697,378
Loan Refund 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000
Earnings Before Tax 402,517 4,105,397 10,334,167 11,533,812 12,777,378
Taxes 120,755 1,231,619 3,100,250 3,460,144 3,833,213
Surplus ()/Deficit (-) 281,762 2,873,778 7,233,917 8,073,668 8,944,165
1.5 Business Objectives
The objective and goal of the company would be as follows:

 To give the superior quality auto products and services with affordable prices.
 Grow the annual number of new customers each year.
 100% customer satisfaction, measured through repeat customers, referrals and
surveys.
 Develop a reputation that will exceed competitors in every area.
 To achieve above 800 unit sales of automobiles in Year One.
 To increase number of dealership outlets in future.
 Achieve excellent customer loyalty by placing strong emphasis in the areas
of outstanding service and support.
 To convert traditional new automobile buyers into conscientious consumers who
are aware of external as well as internal costs associated with automobile
transportation.
 To get the highest selling of cars with the trust of customers. And attract younger
generation people who are quality conscious.
 Hire and maintain an experienced and professionally trained staff.
 To achieve and surpass the industry average profit margin within the first two-
years.
1 COGS: Cost of Goods Sold

2 EBITDA: Earnings Before Interest, tax, Depreciation and Amortization
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1.6 Vision
To be a leading automobile dealer and comprehensive auto services provider in Uganda

in the forthcoming years within the car dealership industry.
1.7 Mission
Our mission will be to acquire and empower the consumers‘ loyalty towards our
company through quality auto sales, advice and superior vehicle maintenance service
and after-sales customer support service. Our goal is to provide the customer with an
enjoyable, honest service by satisfying individual customers‘ practical transportation
needs with a quality product and service. We shall thereby endeavour to provide our
products and services in a comprehensive and cost-competitive manner.
Our company will make a profit by generating sales. It will provide job satisfaction and
fair compensation to its employees, and a fair return to its owners. Hard work and
performance will be rewarded through bonuses and commissions. Job satisfaction is
very important for employees and owners, we will create a work environment that is
enjoyable and profitable for all.
1.8 Keys to Success
To succeed in this business, we must:
 Put together a team of experienced professionals.

 Secure an excellent high-traffic location.
 Establish a strong source of supply, in order to buy and sell auto products that
are of the highest reliability and quality, at a competitive price.
 Ensure that products are delivered on time, overhead and operational costs are
controlled, and marketing budgets managed.
 Ensure customer satisfaction by encouraging the two most important values,
honor and integrity.
 Create high morale by rewarding employee success with monetary
compensation.
 Encourage regular and customer feedback.
 Grow and maintain a referral network of customers.
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2.0 PURPOSE OF BUSINESS PLAN
2.1 Introduction
In today's highly competitive environment, formal business planning is an essential

element in achieving business success. A well-written business plan is primarily a
communication tool to be used in obtaining financing. In certain instances, particularly
with an early stage company, this business plan also serves as a strategic plan.
Considering that lenders and investment partners are inundated by numerous

investment opportunities from which they choose only a few, this business plan
describes our story and how we intend to grow with your assistance. The Sky & Lakes
management team has made an in-depth analysis of its opportunities and weaknesses
and it has concluded that the company has an excellent chance to succeed.
2.2 Methodology for Business Planning
Sophisticated business planning helps management answer questions such as: What
will be our record of achievement? How have we fared compared to our competitors?
Are we setting realistic and attainable goals and objectives?
Constructive and useful business planning requires a broad-based understanding of

changes taking place in the marketplace in which the company competes, or plans to
compete, and the ever-changing financial markets. In-depth technical skills in a variety
of disciplines such as tax, financial analysis, sales, marketing, and managing growth are
critical components in assessing a company's opportunities and risks.
2.3 Developing the Business Plan
The management of Sky & Lakes has developed this disciplined

planning methodology to help the company anticipate its start-up economic
requirements and other critical information, and arrive at this realistic plan.
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2.4 Five Objectives of Sky & Lakes
1. Attract construction and start-up investment capital

2. Focus ideas and establish goals
3. Identify and quantify objectives
4. Track and direct growth
5. Create benchmarks for measuring success
Sky & Lakes was formed to market and service executive "high end" new and pre-
driven vehicles to individual and business customers. The integration of these
disciplines results in a comprehensive service for the discriminating vehicle buyer.
2.5 Rationale for Japanese Auto Dealership
 Strong financial background

 Strong knowledge of the Uganda auto sales and servicing market
 Technical knowledge
 Market goodwill
 Relation and identity in high society in Uganda and East Africa region
 Dealer (Owner) can pay 100% attention
 Skilled manpower available
 Aim and passion for automobile industry
2.6 Plan to Achieve Target
 Excellent dealer location in Uganda

 Expert sales and service staff
 Good customer relationship
 Funding facilities through various financial agencies
 Able to provide instant CS Feedback Request
 Opinions of Partners to be Reflected in Products and Services
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3.0 BUSINESS DESCRIPTION
3.1 General Description of the Business
Sky & Lakes shall be an import, export, car trading and vehicle maintenance service
limited liability Company taking advantage of an opportunity by a novel combination
of resources and marketing innovations, in ways which will have impact on the
automobiles market of Uganda. Through this business plan the founding entrepreneurs
intend to transform this opportunity into an operational company thanks to the
enabling economic environment for this new venture and the willingness and
capabilities of the founding entrepreneurs.
With the distinct and significant advantage of having one of its promoters living and
working in Japan, transforming the opportunity into action has given birth to Sky &
Lakes auto sales and service centre as a solution to the current challenges of
convenience, cost, and economies-of-scale that are presently prevalent in the Uganda
auto industry. Sky & Lakes shall be a Medium-to Large-sized Enterprise.
Sky & Lakes as Medium-sized enterprise will import a wide range of Japanese vintage
brand vehicles from Japan to Uganda that will include brands like Toyota, Isuzu, Lexus,
Acura, Honda, Mazda, Nissan, Subaru, Daihatsu, Hino and Suzuki. The business shall
conduct its auto sales and vehicle maintenance services from one sales point at the
Kampala Industrial Business Park (KIBP) located along the major highway from
Kenya in the eastern suburbs of Kampala and only 10 kms from the city centre. This
location will also feature as its head office and auto sales and servicing centre and shall
focus mainly on customers from within Uganda and also the regional markets like DR
Congo and South Sudan with a staff of less than 10 members. The auto sales centre will
have four warehouses (car bonds) that will feature both as car parking lots and product
display areas. The founding entrepreneurs have experience in selling cars, extensive
knowledge in international business and adequate accounting know-how which
happens to be among the most important elements in this business sector especially in
Uganda. This is because the taxation authority in Uganda can impose a fine/penalty of
up to 100% on tax due but not declared on time or under-declared, therefore this risk
area is reduced or minimized right from the start because it falls within the core
competence of the founding entrepreneurs.
The founding members of Sky & Lakes already have a powerful network in Japan and
Uganda that will be difficult to copy or replicate by her competitors. The Board of
Directors (BOD) shall include a General Manager of a company to serve as a strong
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management resource, when it comes to the active role of the board. More so the
Japanese auto market is a very good supply source because of the country‘s high output
volume of all classes and types of vehicles and its dedicated investment in R&D that
enables it to quickly innovate and put out a variety of vehicle models on the global
market each year. The section that follows highlights the potential for entrepreneurship
in Uganda. Entrepreneurship is defined as the process by which individuals pursue
opportunities without regards to resources they currently control, driven by an
individual or a team and typically requires creativity, drive and willingness to take
risks.
Sky & Lakes will be staffed by 86 dedicated employees from the start (Year 1), who will
enable Sky & Lakes to deliver on its mission of a comprehensive auto sales and vehicle
maintenance services centre to the Ugandan autos market.
3.2 The Opportunity
In Uganda, the existing car dealing companies are apparently doing great but are
mainly focused on auto trading activities without offering the complementary services
that go with it such as after-sales, customer support, and other value-added services
like vehicle worthiness inspection and certification services, tyre servicing, and/or the
provision of mobile service vehicles (car-carriers) for vehicle retrieval and instant
servicing/repair of vehicles in remote or distant locations from Kampala. Some of these
auto services may be available on the market but they operate as discrete, stand-alone
business units rather than functioning as consolidated auto service operations and
thereby end up inconveniencing vehicle owners in terms of cost, time, and effort in
running around to different auto service providers to fix various auto-mechanical
problem(s). At the same time, they also lack the modern technical expertise, skill,
training, know-how and sophisticated equipment to deal with the new vehicle brands
or keep abreast with emerging auto market trends in a rapidly-changing global
technological environment.
By offering a comprehensive and complementary range of auto sales and vehicle

maintenance services in one single location as a one-stop service centre, Sky & Lakes
will be the only auto dealership company in Uganda to successfully plug this glaring
gap in the local market. Sky & Lakes therefore expects to attract and retain a large
customer base through the provision of a full range of vehicle maintenance and car-care
services including auto servicing and the sale of parts, tyre servicing and replacement,
automated car washing services, the sale of tractors and assorted agricultural
equipment (including top-line irrigation systems), besides operating a petrol-filling
11
station that will fuel customer‘s vehicle with pure unadulterated fuel products. The
market will also be attracted by the operation of an on-site quick –service restaurant
where they can take a quick snack or refreshment as their vehicles are being attended
to. Sky & Lakes will also provide value-added services such as vehicle road worthiness
and inspection and certification services which is now a defunct area of auto services in
Uganda as it used to be the preserve of government that collapsed in the 1980s owing to
lack of appropriate testing equipment and trained personnel to man it and has never
been revived ever since. The Company wants to take the initiative in this prime area of
vehicle inspection and certification by equipping the auto sales and service centre with
state-of-the-art equipment and highly-skilled technical personnel to man it.
In addition to the auto services aspect, Sky & Lakes will also stock a large inventory of
spare parts which may sometimes be difficult to find in one single shop in Kampala.
Other unique selling points and strengths of the business proposition will include the
use of highly-experienced Japanese auto technicians at the centre who will inspire
public confidence with the range of skills and expertise in auto sales and vehicle
maintenance services that they will be offering to the customers and also the installation
and use of sophisticated vehicle maintenance and repair equipment and machinery –
which of course will be the direct benefit of its JV partnership with the Japanese JV
Partner/Franchisor.
Therefore, having a comprehensively-equipped one-stop auto sales and vehicle

maintenance company in Uganda will be a unique opportunity that offers a
comprehensive package of auto-related services under one roof at great convenience
and affordable cost and will be a great relief to them. The sections that follow present
the situation of auto sales and servicing in Uganda and give a guide on why this
opportunity is selected among others.
3.3 Background of Uganda’s Import and Export Situation
The population of Uganda is 35,918,915 living on the total land area of 241,038 sq. km.
Uganda is a landlocked country located in East Africa and has a population growth rate
of 3.24%. Its gross domestic product (GDP) is US$ 26.631 billion with a yearly growth
rate of about 4.5% and GDP per capita of US$ 680. The natural resources of Uganda are
petroleum, copper, cobalt, hydropower, limestone, salt, arable land, and gold among
others.
Uganda‘s major exports are: coffee, fish and fish products, tea, cotton, flowers,
horticultural products; gold giving about US$ 6.074 billion in exports of goods and
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services. Its major export trading partners are Kenya 11.5%, Rwanda 11.2%, South
Sudan 10.6%, DR Congo 7.7% and Netherlands 6.4%. Capital equipment, vehicles,
petroleum, medical supplies; cereals are major imports. Total import of goods and
services of Uganda is up to about US$ 2.34 billion. The major import trading partners
are India 23.2%, China 12.3%, Kenya 9.4%, UAE 6.4% and Japan 5.6%. Uganda had a
foreign direct investment (net) of 148.9 million Euros in the year 2004. China and Japan
are also among Uganda‘s major import partners.
(http://www.indexmundi.com/uganda/).
3.4 The Business Process
Sky & Lakes shall be a Medium- to Large-sized enterprise. It shall be in the indirect
channel for the companies sourcing and trading in all the major brands of Japanese
vehicles on the Uganda market. It shall be a car dealing company in the indirect channel
of distribution of the five brands of vehicles. The distribution strategy of Sky & Lakes
will be quite simple, based on customer‘s request the products are sourced/acquired
from the Japanese manufacturer in Japan, transported to the Japan export sea port and
shipped through the Sea of Japan and Indian Ocean to the Kenyan port of Mombasa
from where they will be dispatched by overland transportation to Kampala – the
Ugandan capital where Sky & Lakes is based. From here, they shall be driven to the
packing space in the Sky & Lakes Car Bonds at the Kampala Industrial Business Park.
Here the car(s) will be checked, washed and made clean for exposure at Head
Office/Auto Service Centre in Kampala for public viewing.
3.5 Differentiation Strategy
Successful entrepreneurs look for differentiation and a competitive advantage in

operational excellence, new product, service innovation or customer intimacy. This can
be created by excellence in sales or marketing, customer relationship, cost and pricing,
niche markets, operational efficiencies or wrapping services around the product. As a
strategy for differentiation, Sky & Lakes shall source the latest brand of vehicles from
the Japanese market that will be of a premium quality and at prices that are unknown to
most Ugandan business people, thereby making it different from its competitors in the
market. This concept differs in the sense that it shall focus on sourcing premium quality
vehicles from the Japanese auto market and backing it up with high quality Japanese
after-sales technical support based in Uganda and in the process providing the
customers with something that is refreshingly new from what they have been used to in
the traditional Uganda auto industry.
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Apart from that, the target market is a niche market because it is presently underserved
in terms of not having any centralized one-stop auto service centre. More so, Sky &
Lakes shall use its strength of having an in-house comprehensive auto service facility
offering a broad range of after-sales services including comprehensive vehicle
maintenance services and auto parts sales, tyre repair services, provision of mobile
service vehicles for vehicle-retrieval and servicing in remote locations, automated car
washing services, and provision of road worthiness inspection and certification services
for all vehicles. Also Sky & Lakes shall have a strong managerial and marketing team
that knows the importance of having a good customer relationship and cost efficiency
objectives. As an extra-ordinary service within this business model a customized service
facility shall be available for those who want to purchase car brands like Toyota, Isuzu,
Lexus, Acura, Honda, Mazda, Nissan, Subaru, Daihatsu, Hino and Suzuki and other
popular ones found in the Japanese new and used car market. Sky & Lakes shall offer it
to them as a customized service option though on a pre-payment basis as a strategy to
cut down financial and operational risk involved in such dealings since the cars are still
to have brand loyalist in Uganda.
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4.0 THE ORGANIZATION/COMPANY
4.1 Company Ownership
Sky & Lakes is a privately limited company. It will be a JV partnership between

Ugandan investors 51% and Japanese investors holding 49% stake in the company.
4.2 Vision
To be a leading automobile dealer and comprehensive auto services provider in Uganda

in the forthcoming years within the car dealership industry.
4.3 Mission
Our mission will be to acquire and empower the consumers‘ loyalty towards our
company through quality auto sales, advice and superior vehicle maintenance service
and after-sales customer support service. Our goal is to provide the customer with an
enjoyable, honest service by satisfying individual customers‘ practical transportation
needs with a quality product and service. We shall thereby endeavour to provide our
products and services in a comprehensive and cost-competitive manner.
Our company will make a profit by generating sales. It will provide job satisfaction and
fair compensation to its employees, and a fair return to its owners. Hard work and
performance will be rewarded through bonuses and commissions. Job satisfaction is
very important for employees and owners, we will create a work environment that is
enjoyable and profitable for all.
4.4 Business Objectives
The objective and goal of the company would be as follows:
 To give the superior quality auto products and services with affordable prices.
 Grow the annual number of new customers each year.
 100% customer satisfaction, measured through repeat customers, referrals and
surveys.
 Develop a reputation that will exceed competitors in every area.
 To achieve above 800 unit sales of automobiles in year one.
 To increase number of dealership outlets in future.
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 Achieve excellent customer loyalty by placing strong emphasis in the
areas of outstanding service and support.
 To convert traditional new automobile buyers into conscientious consumers who
are aware of external as well as internal costs associated with automobile
transportation.
 To get the highest selling of cars with the trust of customers. And attract younger
generation people who are quality conscious.
 Hire and maintain an experienced and professionally trained staff.
 To achieve and surpass the industry average profit margin within the first two-
years.
4.5 Start-up Summary
Table 2:Start-up Cost Summary

Particulars Start-up Cost in US$
Fixed Costs
Industrial Land (3 Acres) 900,000
Car Bonds and Back Office (square metres) 7,200,000
Workshop Area (square metres) 3,000,000
Integrated site area for 3-S Facility (square metres) 8,400,000
Workshop Tools & Equipment 500,000
Utilities (power & water connection) 100,000
Miscellaneous Investments: Computers/Dealer
Identity/Software/Support vehicles 2,000,000
Sub-Total Fixed Costs 22,100,000
Working Capital
Stock of Vehicles 6,000,000
Stock of Spare Parts and Accessories 3,000,000
Stock of Tires 3,000,000
Stock of Fuel 100,000
Stock of Agro-Section Equipment 2,000,000
Sub-Total Working Capital 14,100,000
Additional Investment Costs
Installation & Commissioning 30,000
Pre-Operational Expenses 1,500,000
Sub-Total 1,530,000
TOTAL 37,730,000
Physical Contingencies (7%) 2,641,100
GRAND TOTAL 40,371,100
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4.6 Company Locations and Facilities
Sky & Lakes has already acquired suitable business space in the Kampala Industrial
Business Park at Namanve in the eastern suburbs of Kampala to support its operations.
This space will include a reception area, administrative offices, car bonding and car
parking lots, petrol filling station, auto work/repair areas (mechanical workshops), tyre
service area, vehicle road worthiness inspection and testing area and a quick-service
restaurant area. It will provide easy access to customers/employees with ample free
parking.
The site will be in an attractive area of town. Customers will be able to access the site
easily.
4.7 Management and Organization Summary
Mr --------------- will manage all aspects of the auto sales and vehicle maintenance
services business and lease departments to ensure effective customer responsiveness.
Additional after-sales and customer support services will be provided by qualified sales
and technical consultants. Support staff will be added as client workload factors
mandate.
4.8 Business Structure
The proposed business structure is:
Sky & Lakes

(Uganda International
Management Investor (Japanese
team’s company) Auto Company)
49%
51%
Sky & Lakes JV

Company
(Operating Entity)
17
4.9 Board Structure
The International Investor (International JV Partner), in addition to the capital

introduced to the venture, will also have a depth of experience and the requisite
expertise in auto trading and auto service areas as well as the related supply chain
management operations – especially for the afore-mentioned range of Japanese vehicle
models that are quite popular on the Uganda market.
Sky & Lakes company will have three directors on the Board, and the Japanese JV
Partner/Franchisor will also be represented by three directors on the same Board –
adding up to six directors.
4.10 Corporate Development Plan
For purposes of this Business Plan document, Sky & Lakes — Phase I and Phase II for
developmental growth are defined below:
Phase I — This phase involves planning, site clearance, and development of the Sky & Lakes of
its 3-Acre site at the Kampala Industrial Business Park in Namanve – east of Kampala. Sky &
Lakes will in conjunction with the Japanese JV Partner/Franchisor establish its own identity,
management directives, and capital. Incorporating a total quality management approach, Sky &
Lakes will develop key "base" businesses which require automobiles for its employees on a
recurring basis and call upon management's established customer base. Through word-of-
mouth and advertising, new and pre-driven quality car buyers will be sold to the market.
Phase I build-out, start-up, and development credit line needs are documented in this business
plan.
Phase II — Continue implementation of sales, advertising, and marketing strategies developed

in Phase I. Identify and pursue other business support markets. Sky & Lakes will target other
communities for expansion.
Sky & Lakes anticipates the need for a bigger sales and support team to be added during this
phase.
Initially, Sky & Lakes management will focus its efforts in Phase I activities. Phase II efforts
depend upon the timely development of Phase I and the analysis of its customer service base.
The availability of Sky & Lakes' growth funding capital will directly impact the growth rate of
this company.
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5.0 PRODUCTS AND SERVICES
Sky & Lakes will sell top-quality new and pre-driven (used) vehicles at a competitive
price. Sky & Lakes will be sourcing its inventory of pre-inspected vehicles wholesale
from Japan through the Japan market sourcing network of its Japanese JV
Partner/Franchisor. Sky & Lakes will continually maintain a diverse stock of vehicles,
providing the widest selection for individual needs.
Vehicles will be purchased weekly, to add to the staring stock of 200 units. Each vehicle
will be thoroughly inspected by a Japan-certified mechanic with over 25 years of
experience at the source point. Only vehicles that pass this critical 26-point inspection
will be sold on site.
5.1 Types of Product/Product Description
Sky & Lakes will import, stock and sell both new and pre-driven (used) vehicles ranging
from sports cars to RVs to the market through its 4 car bonds. We will also buy only the
best new and pre-driven (used) vehicles at or below wholesale in order to bring the
savings to the customers. Each vehicle will be thoroughly inspected by a Japan-certified
mechanic with over 25 years of experience at the source point. The Company will also
offer an auto finding service to customers. If we do not have the vehicle they want in
stock, we will find one for them.
The cars for sale will distributed in the car bonds according to their size or engine-
capacity and these will be:
1. Small Cars Bond: For the display and sales of small passenger cars including
Sedans and Luxury Cars manufactured in Japan;
2. Medium/Large Cars Bond: For SUVs, pick-ups, medium-sized Recreational

Vehicles (RVs), Off-road Recreational Vehicles (ORVs), and other medium- to
large-sized utility vehicles manufactured in Japan;
3. Trucks/Buses Bond: For the display and sales of trucks and buses made in Japan;
4. Tractors and Agro-equipment Bond: For the display and sales of tractors and a
wide assortment of agricultural equipment and systems.
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5.2 Services Description
The Concept: The auto repair market has a lot of competition, however, almost all only
offer service. Sky & Lakes vehicle maintenance service centre will differentiate
themselves by not only offering a hassle-free repair service, but a fully stocked parts
store. Not only will this serve a wide range of customers for both service and parts, but
the parts department will support the service department by allowing the service
department to turnaround jobs far faster than the competition with generally all of the
needed parts in stock and on location.
Sky & Lakes vehicle maintenance service centre will also differentiates themselves by
having 10 mechanical service bays at its location site at the Kampala Business
Industrial Park in the eastern suburbs of Kampala. This will offer incredible value to
customers who need their cars fixed right away. Waits for service and parts are ideas
that will not entertained by Sky & Lakes vehicle maintenance service centre. Lastly,
Sky & Lakes vehicle maintenance service centre will offer unlimited shuttle service
and stand-by convenience cars for repair customers (especially for the VIPs with busy
work schedules) making the entire service experience as painless and convenient as
possible.
Sky & Lakes vehicle maintenance service centre will attract and maintain a loyal
customer base through their customer-oriented focus on business. All employees will be
trained and held responsible for providing superior service, developing a long lasting
trust bond with customers. This is very important, especially in the auto repair industry
where trust and honesty are not the image of most auto repair facilities in Uganda.
Sky & Lakes vehicle maintenance service centre will have the core competencies
amongst its large crew to work on all makes and models of Japanese vehicles. With ten
service bays at site, all employees will focus on superior customer service, and quick
turnaround will always the standard at Sky & Lakes. Sky & Lakes will always strive to
be accurate and honest with customers in terms of quoting cost estimates and repair
completion time estimates. Sky & Lakes will ensure that its employees focus on
delivering what they promise. This focus on building strong customer relationships
based on trust and integrity will be the catalyst in establishing a strong regular
customer base.
Acquisition: Sky & Lakes will also work with Government ministries, departments and
agencies (MDAs) and international NGOs and diplomatic missions based in Uganda to
procure vehicles to meet their operational requirements. This service includes meeting
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with clients and market research to determine requirements, writing specifications,
tendering, procuring, inspecting, branding, licensing and modifications for job specific
requirements (e.g. police packages, shelving).
Centralized Fleet Management Services: Sky & Lakes will offer clients the benefit of
volume discounts received on parts, fuel, the internal labour rate, vehicle insurance and
tendered vehicle purchases. Sky & Lakes will also track the vehicle from purchase to
disposal and offer clients consolidated billings and information on repairs, usage, fuel
consumption, costs, etc. Sky & Lakes will also develop software systems such as the
―web-based‖ Fleet Management System, the Automated Insurance System, the
Automated Inventory System and the Automated Fuel Dispensing System. These
systems will also provide links to key corporate systems such as the Financial
Information Management System and the corporate Human Resource System.
Auto Repair Services: The Sky & Lakes vehicle maintenance service centre will
operate 10 mechanical service bays offering a full range of services from general
maintenance to major overhauls. Specialty repairs, including glass repair, exhaust work,
front-end alignment, automatic transmission repair, upholstery repair and body repair
will also be carried out at the site. Table 3 below provides a full listing of the vehicle
maintenance services that will be offered by the centre:
Table 3: Types of Auto Repair Services

Vacuum Cleaning Water Battery servicing
Brakes & clutches Brakes repairs Car air conditioning
Car batteries Car brakes Car plug-in diagnostics
Car electrics Car engines Car puncture repairs
Car repairs Car servicing Car suspension adjustment
Clutch repairs Commercial engines Cylinder head repairs
Cylinder heads Diesel engines Diesel fuel injection
Engine diagnostics Engine parts Exhaust systems
Fuel injection Gear boxes MOT testing
Petrol engines Oil change Steering adjustment
Air conditioning Scheduled maintenance Transmission
Comprehensive engine repair Wheel alignments, tires and rims
Each mechanical service bay manager will be required to closely monitor the costs of
services rendered at all repair facilities to ensure that repairs are provided in the most
economical manner available. The mechanical service bay manager must also work
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closely with the Director in-charge of Logistics & Purchases to obtain goods and
services on a timely economical basis.
Sky & Lakes will also operate a ―call centre‖ at the auto service centre to coordinate the
repair activities of its customers‘ vehicles. Each client will be provided with a toll free
telephone number that must be accessed either by the Assistant General Manager or
the client before and after any services have been rendered by Sky & Lakes auto service
centre.
Each job or project will be on a reservation basis, although we will accept a small
percentage of drive in repair work.
Mobile Service Vehicles: Sky & Lakes will also operate a fleet of 10 mobile service
vehicles fully-equipped with auto parts and competent service mechanics to provide
instant vehicle maintenance services to calling clients stuck with vehicles with
mechanical problems in any distant or remote locations that are far from Kampala. The
same fleet of Mobile Service Vehicles will also include 2 Car-Carriers to retrieve and
instantly transport any vehicle that cannot be serviced at the break-down site to the
Company‘s Kampala central vehicle service maintenance centre at KIBP – Namanve.
Vehicle Fuel: Sky & Lakes vehicle maintenance service centre will have an on-site
fuel-filling station that will offer clean and unadulterated fuel products to its customers
such that the quality of work delivered by the competent mechanics at the auto service
centre is not compromised by the quality of petrol of diesel fuel consumed from the site.
The site will have a card lock access (Computrol) for diesel and/or gasoline products
and will be accessible on a 24-hour basis by clients.
Auto Parts: Sky & Lakes will utilize the highest degree of technology in managing a full
range of auto parts inventory. The Company intends to sell standard car parts as well as
performance enhancing and aesthetically enhancing automotive products to the
Uganda market. The goal is to never be out of a specific part, while maximizing
inventory turnover. Strong vendor relationships have been established with the most
reputable vendors in terms of shipping time of major parts.
Sky & Lakes will assist its customers in selecting the best parts for their application at a
price that meets or exceeds their expectations. In the event of a problem, we will be
there to assist and counsel the customer to a speedy solution.
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We will carry or have quick access to most major lines of Japanese-made auto
equipment and parts. We will also carry generic "plain label" merchandise that we will
market under our own performance name. Private labeling will allow us, in most cases,
to greatly increase our profit margins since the procurement costs are much lower for
these types of items.
Our experience in Uganda has shown that most car-owners‘ preference is for low prices.
We believe we can offer products that indeed are lower in price without sacrificing the
performance and safety concerns that our customers will demand. Sky & Lakes will
provide precisely the level of service that today's car-owner in Uganda requires.
Tyre Sales & Servicing: Sky & Lakes will stock and offer to its customers the complete
range of tyres required by the Ugandan automotive industry, except for aero tyres and
some specialized tyres. These will include: tyres for trucks, buses, passenger cars and
SUVs, jeeps, light trucks, tractors (front, rear and trailer), and off-the-road vehicles and
special defence vehicles. We will also offer a range of tyre services at the fast-fit centre
including: tyre pressure balancing, tyre-fitting, and a variety of tyre repairs and services
to our customers at the most competitive and compelling prices. Sky & Lakes will also
stock and publicize the complete range of Japanese-made tyres such as Bridgestone,
Sumitomo, Toyo, and Yokohama brands.
Car Washing: Sky & Lakes Car Wash will offer technologically advanced, frictionless,
touch free exterior in-bay automatic and self-service car wash facilities at site. The basic
automobile wash will consist of the self-service wash options. In-bay automatic upgrade
washes will consist of an under chassis wash, tire scrubber/gloss and in-bay automatic
upgrade wash with extended drying, carpet and mat shampoo, boot wash, and steam
bath. Sky & Lakes Car Wash will not only offer the cleanest and technologically
advanced car wash, it will offer remote video security and monitoring.
Automatic car wash is the modern way in which the cars are not washed by hands. In
this new technology the cars are washed by a sophisticated high impact pressure jet
wash technology. This modern technology of car wash will provide the car owners a car
wash for which they will not need to wait for a long time. The Sky & Lakes Car Wash
automatic car washing system will wash a car within a few minutes. It will use latest
proven and successful technology in washing vehicles. It is so fast a process that the
owner or drivers need not to leave the car. They can just wait ten minutes and take the
delivery of a fresh and clean car. Our equipment will use high-pressure water for
cleaning. We will also use friction / brush type of equipment with specially made soft
brushes that don‘t scratch our customer‘s car paint.
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Sky & Lakes Car Wash will also offer a valet service that will consist of full upholstery
wash, seats and carpet wash, floor mate cleaning, engine wash, degreaser, aluminium
cleaner, stainless steel cleaner, tyre polish, vacuuming, dashboard polishing, car
waxing, window bright polishing, tar removal and spot cleaning.
Sky & Lakes Car Wash will operate from 7:00 am – 7:00 pm on weekdays, and 8:00 am
to 7:00 pm on weekends.
The target market consists of all vehicle operators and owners that pass through, visit or
are located in the area of Kampala.
Quick Service Restaurant: Sky & Lakes Quick-Service Restaurant will be a snack and
quick-service refreshment restaurant that will offer customers coming over to the Sky &
Lakes auto sales and vehicle maintenance services centre a range of restaurant
services including: deli items, coffee beverages, soft drinks, bakery goods and patisserie,
and organic produce to the consumers.
Road Worthiness Vehicle Inspection and Certification: Sky & Lakes’ roadworthiness
inspections will involve a post-shipment mechanical and structural inspection of both
new used vehicles to ensure acceptable levels of road safety and emission levels thus
protecting road users at in Uganda from the dumping of sub-standard end-of-life
vehicles (ELVs).
Not being a customs agent or freight forwarder; Sky & Lakes will not have any conflict
of interest in the supply of vehicle inspections.
Inspections will be carried out by trained, qualified Inspectors (licensed mechanics)

working in a world-class facility with state-of-the-art vehicle inspection equipment, and
detailed to detect aspects such as mechanical faults, structural damage and the quality
of any repairs.
Using this system, Sky & Lakes expects to carry out Roadworthiness Inspections after
shipment from Japan, Dubai, the United Kingdom, Singapore and South Africa. By
carrying out thorough vehicle roadworthiness inspection and certification, Sky & Lakes
will greatly minimize the risk of unsafe and substandard vehicles entering the Ugandan
market, the overarching aim is to protect the health and safety of all road users and to
protect the environment in Uganda.
The standard of inspections will be compliant with the Uganda vehicle road worthiness
24
regulations, common factors being age limitations, driving side, and the vehicle must
pass a safety and mechanical technical inspection.
Sky & Lakes will obtain Franchise rights from a Japanese vehicle roadworthiness
inspection agency through its JV Partnership arrangement with the Japanese JV
Partner/Franchisor to develop and equip a world-class vehicle inspection facility at its
KIBP Namanve site and to carry out comprehensive vehicle roadworthiness inspection
services and be certified to issue vehicle roadworthiness certifications for all vehicles
that are imported into Uganda.
Car-Hire Service: Sky & Lakes will provide its customers with the convenience of
hiring cars around the clock (24/7). It aims to provide its customers a mix of cost-
convenience and comfort. Sky & Lakes will provide the latest high-end cars at
competitive prices to meet the various requirements of its valuable customers. It will
employ efficient and experienced chauffeurs to provide quality service to its customers
as they come in direct contact with them.
5.3 Competitive Advantage/Comparison
Sky & Lakes will have a competitive advantage, including value-added approach,
commitment to customer satisfaction, and doing business as a market-oriented
comprehensive auto sales and services provider. Sky & Lakes believes that it can
compete effectively in this market. Several factors that will drive its competitive
advantage include:
 Being able to source vehicles and parts directly from Japan manufacturers
rather through middle-men
 Experienced technicians/mechanics
 Priority service
 Best customer service
 Competitive pricing
Other stand-out competitive advantages of the Sky & Lakes auto sales and services
centre are summarized in Table 4 below:
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Table 4: Sky & Lakes’ Advantages
What Makes Sky & Lakes Unique? Advantage to Customer
A reputation for uncompromising quality Confidence that the vehicle will be
and service repaired right the first time
Long-term expertise with specialized Sky & Lakes has a competitive advantage
transit services. Sky & Lakes will work with because they understand the needs of the
internationally renowned Japanese auto customer
company with several decades experience
in the auto sales and service industry.
One-stop shop with a comprehensive Better service, faster turnaround, and less
array of specialized vehicle maintenance downtime
and repair services.
Personal, one-on-one service, including Fewer major repairs costs, less vehicle
individualized preventive maintenance downtime, and increased fleet efficiency
programs.
Reliable certified vehicle inspectors. Increased customer confidence,
satisfaction and vehicle safety
Customers are billed for actual time rather Customers incur actual costs for repairs,
than at pre-established ‗book rate‘. not inflated cost.
Parts are marked up at a standard20% Customers receive more equitable
margin across the board rather than a treatment and pay less for parts
fluctuating rate based on the part.
Sky & Lakes will use past experience to The customer will often pay less for a part
select the highest value part for the that lasts longer
vehicle, not the highest price part.
Sky & Lakes mechanics are not paid on The customer is confident they will not
commission, removing any incentive for pay for unnecessary parts or repairs
them to add unnecessary parts or labor
5.4 Sourcing
Sourcing is critical for any enterprise, and has a direct impact on vehicle pricing. Our
primary source for new and pre-drive Japanese vehicles will be sourced directly from
auto manufacturers in Japan thus giving us a head-start advantage on pricing and
quality of vehicles and parts that we will be selling on the Uganda market. This also
means that Sky & Lakes will be to offer its vehicles at price rates that significantly
lower than those of vehicles that are sold by other car bond dealerships operating in
Kampala at the moment.
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6.0 UGANDA AUTO INDUSTRY ANALYSIS
6.1 History of the Automobile and Auto Parts Industry in Uganda
Uganda has a small but very long established market for motor vehicles. The vehicle
population has been increasing by about 9% per annum. But it is not expected to
continue.
All dealerships arc held in respect of exclusive country-wide sales, plus official spares
service, repairs and servicing. The latter are conditions a dealer must undertake/fulfill
when given the Franchise by the manufacturer, and with vehicle stocks, are the largest
capital outlay to be faced. Stocks of spares alone range from US$ 35,000 to almost US$
260,000, depending on unit sales and the number of snakes and models. Smaller dealers
who handle several franchises to increase turnover are hard hit by having to carry a
wide range of skates.
The companies holding dealerships in Uganda have sprung from a variety of

backgrounds. The earliest was formed in 1908 to import cotton seed and to plant cotton.
It developed into a general trading company, and as one of several enterprises acquired
the Ford franchise in 1922. The British Motor Corporation franchise is also held by a
general trading company whose other interests include bicycles and caterpillar tractors.
A third company entered the motor trade via tractors for sugar production. A second
group of four large companies, all holding more than one franchise, were formed
expressly as motor dealers. All these companies were originally based in Kenya and
extended to Uganda at about the time of independence but maintained some
operational contact with Nairobi. A third group of six dealers, all hut one operating on a
smaller scale than those above, started as small motor repair garages, graduating via
second hand car sales to acquiring one or more, dealerships. All these companies are
Asian owned, with owner-manager, family type organization, and hold franchises
obtained during the past ten years. The remaining two dealerships were manufacturer-
owned Fiat selling cars and trucks, Leyland trucks and buses.
Excepting Fiat and Leyland, the motor dealers in Uganda are locally financed in that
there is no capital investment by overseas manufacturers. Initiative in obtaining the
dealership usually also came from the local firm.
Location: All the 15 dealers are based in Kampala, although they hold exclusive rights
to sell their respective makes of vehicles throughout Uganda. Only one has up- country
branches at Jinja and Mbale, and these arise from the wider trading function of the
27
company rather than from the motor trade itself. All these dealers have agents in most
towns outside Kampala, and most also have agents within the capital city too. Almost
all dealers told of efforts to extend up-country agent sales, but with the exception of the
Uganda Company, all estimated that at least 90 percent of sales were made in Kampala.
This is borne out by the fact that 84 percent of all new vehicles in Uganda are registered
in Kampala),
This amazing degree of centrality arises from several functions. Transportation

infrastructure in the roads sector is good. To get facilitation and financial assistance to
facilitate the deal, the customer must come to the capital city Kampala. Within Kampala
there are 11 dealers who have premises Kampala‘s industrial area with greatest
concentration at its eastern side – popularly known as the Ntinda Industrial Area.
6.2 The Uganda Automobile Industry Overview
Uganda‘s GDP per capita was estimated at US$673 in 2015 and to grow at a CAGR of
7.5% between 2000 and 2020.3 This is expected to result in an increase in private
consumption and amongst other things, drive the sales of motor vehicles. Expenditure
on the purchase of cars, motorcycles and other vehicles accounted for 1.5% of total
consumer expenditure in 2015 and is expected to remain relatively stable to 2025 as
incomes rise.4
The volume of imported cars and motor-cycles has been on the increase due to the
availability of attractive credit from financial institutions and the rise of the middle
class. According to the Uganda Revenue Authority (URA) the volume of imported
vehicles between 2004 and 2014 have grown at over 1,840% from 3,505 units to 64,556
units. Vehicles (of all types) were Uganda‘s second largest import overall in 2014,
valued at US$544 million and making up 8.95% of total imports (by value) after
petroleum products that were valued at US$1,341 million (22.07% of total imports).5 If
the current trend of 8% to9% growth per annum on vehicle imports is to be maintained,
Uganda will have five million vehicles on the road by the year 2030.Uganda has
traditionally been importing large numbers of used vehicles since the early 1990s as a
result of the World Bank-imposed structural adjustment programmes (SAPs) during the
period. The importation of FBUs (used vehicles) was largely aided by the removal of a
large number of trade restrictions as the economy underwent liberalization. In Uganda,
there is no age limit imposed on imported vehicles as it is done in Kenya, meaning that
3 IMF, 2015
4 Euromonitor, 2015
5 UNCTAD, 2015
28
second-hand imports, some up to 20 years old, used to flood the market. Recently,
however, the URA put a restraining Environmental Tax Levy that penalizes 50% on the
CIF value of the imported vehicle if its above ten years and 35% on its CIF import value
if its above 5 years from the current year.
To date, Uganda is still highly dependent on imports to meet domestic demand, with
imports making up 94% of bilateral automotive trade and second-hand vehicles
accounting for over 80% of those imports. Both passenger and commercial vehicles
feature in Uganda‘s top ten imports by value.
Although Uganda used to have large volumes of grey and illegal imports, this has been
reduced through a number of government interventions, and as a result the used
imported market is now more regulated. The Uganda Revenue Authority and the
Uganda National Bureau of Standards (UNBS) are situated at entry ports such as the
Busia, Malaba and Entebbe International Airport to monitor and record the arrival of
vehicles. Vehicles entering through these ports that are destined for countries other than
Uganda, such as DR Congo and South Sudan, have to receive their clearance and
payment confirmation of registration fees from the destination country before they are
able to leave the port of entry.6
Table 5: Autos Indicators for Uganda

Indicator (unit) Values
Fleet size 300,000
Sales of new vehicles (p.a.) 7,533
Light vehicles (% new sales) 60
Passenger vehicles (% new sales) 24
New vehicles (% total fleet) 20
Second hand vehicles (% total fleet) 80
Motorization rate (/1 000 people) 12
6.3 Vehicles in Use
It is estimated that approximately 85% of Uganda‘s total vehicle fleet are second-hand
vehicles, with a total vehicle fleet of around 1.3 million units in 2014. In 2012, the
average age of vehicles on Kenya‘s roads was 15 years, which has resulted in high levels
of pollution, frequent break-downs of vehicles, and a large non-genuine spare parts
industry developing.
6 Interview, Kampala, July 2016

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The total number of vehicles in use grew at a CAGR of 7.6% between 2005 and 2014.
Figures for Uganda‘s motorization rate differ depending on the source, and range
between 10 and 12 vehicles per 1 000 persons.7 This is forecast to increase to 13.5 in
2019, reflecting vehicle ownership growing faster than Uganda‘s population.
6.4 Vehicle Sales
According to the Uganda Revenue Authority (URA), a total of 69,720 vehicles were
registered in 2015 – this included newly registered and re-registered vehicles.8URA does
not differentiate between the registration of new vehicles and the re-registration of used
vehicles, whereas the Uganda Ministry of Works and Transport (MoWT) only records new
vehicles sold. MoWT states that 7,533 new vehicles were sold in Uganda in 2015, reflecting
the dominance of used vehicles in the retail market. In 2015, pick-ups and light vehicles
combined accounted for about 45% of total vehicle sales, highlighting the importance of
larger vehicles, such as light commercial vehicles, minibuses, heavy trucks, and buses.
Sedans and SUVs made up 25%.9Heavy commercial vehicles too saw the highest growth,
with a CAGR of 17.5% between 2005 and 2015 and thus were key drivers underpinning
new vehicle sales growth over that period.
Sales of new vehicles in Uganda are driven by the demand for transportation in the
construction, mining, agri-business, tourism, energy and retail sectors. The government
and in particular its law enforcement and defence/security authorities are significant
buyers of new vehicles.
Table 6: Uganda Vehicle Sales Market Share (2014 – 2015)

Rank Rank Brand 2015 Sales 2014 Sales %age Share
2015 2014 2015
1 1 Toyota 2,930 3,602 38.90%
2 5 Tata 1,348 270 17.90%
3 2 Mitsubishi 937 1,174 12.44%
4 3 Nissan 934 1,170 12.40%
5 4 Ford 667 452 8.85%
6 6 Isuzu 276 88 3.66%
7 6 Mercedes 138 88 1.83%
8 7 Scania 113 44 1.50%
9 7 Jeep 103 44 1.37%
10 7 Renault 87 44 1.15%
7
Interview, Kampala, July 2016
8 URA, 2016
9 URA, 2016
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Figure 1: Estimated New Vehicle Sales in Uganda, 2004 – 2015
New Vehicle Sales

8,000
7,000
6,000
5,000
Units
4,000
3,000
2,000
1,000
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Passenger Vehicle Sales Light Vehicle Sales Heavy Commercial Vehicle Sales
In light of current growth drivers, business fleet purchases make up a significant

proportion of total vehicle sales. It is expected that firms investing in Uganda‘s
economy will drive stronger demand for business fleet purchases, particularly given the
number of major infrastructure investments in the country in recent years, notably in
the oil and gas sector and the recurrent public road infrastructure works countrywide.
The Uganda decentralized local governance statute has also given greater budgetary
autonomy to local governments (Districts), resulting in District governments expanding
their vehicle fleets and further driving local demand.
6.5 Market Characteristics
• 4x4‘s, SUVs and Pick-ups continue to dominate across the autos market in
Uganda.
• Government and corporate sales for major industries remain dominant channels.
• Japanese and Korean brands occupy the top spots for vehicle sales in Uganda.
• Competition is intense on the Uganda auto‘s market with new entrants from
emerging brands from China and India.
6.6 Production and Assembly
Uganda‘s automotive market is largely focused on retail and distribution of vehicles,

and after-sales support in servicing and spare parts sales. However, the country‘s
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improved infrastructure, as well as its relatively strong economic position within the
East Africa Community (EAC), make it a potential hub for automotive assembly and
production in the region.
In December 2015, Uganda‘s Kiira Motors Corporation (KMC) unveiled its Kayoola
prototype electric bus in Kampala. The vision, it is reported, is that by 2039 the
company can manufacture all the parts and assemble the vehicle in Uganda.
As of February 2016, the company had produced three prototypes: Kiira EV, a two-
seater electric car; Kiira EV SMACK, a 5-seater sedan hybrid car, which uses lithium
batteries and petrol; and the latest, a 35-seater bus, which operates exclusively on solar
power.
Kiira Motors Corporation is a Presidential Initiative for Science and Technology

Innovations aimed at establishing vehicle (Pickups, SUVs, Sedans, Light & Medium
Duty Trucks, and Buses) manufacturing capabilities in Uganda. The Kiira Motors
Corporation was incorporated as a Limited Liability Company with Certificate No.
181052. The Equity Partners in Kiira Motors Corporation are Makerere University and
Uganda Development Corporation on behalf of Government. Uganda Development
Corporation (UDC) is an investment institution fully owned by the Government of
Uganda under the Ministry of Trade Industry and Cooperatives, established to facilitate
industrial and economic development by making long-term investments in strategic
sectors of the economy in order to stimulate industrial and economic development and
thus spur private sector growth.
The product profile will consist of Sedans, Pick-Ups, Crossovers (Compact SUVs) and
Light and Medium Duty Commercial Vehicles (Buses & Trucks) providing a complete
and consistent model mix differentiated by functionality, size, performance and level of
comfort while maintaining a distinct common brand profile. These vehicles will initially
be Internal Combustion Engines (ICEs) – running on gasoline and diesel. Production
starts in 2018 with 305 vehicles and production is expected to be at full capacity of
60,000 vehicles per year in 2-shifts by 2039.
6.7 Uganda Auto Industry STEEPLE Analysis
Social:
• Lifestyle and preferences of people that impact on their choice of types of

automobiles.
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• Social norms that impacts on the decision to own and use of automobiles versus
other means of transport.
• With various types of automobile industry coming to Uganda, choice and

preferences of the people changes for the automobile they purchase.
• Lifestyle of the people changes as with the new automobile industries coming to
the country there is an increase in employment opportunities in the country.
• The changing dynamics of the automobile industry in Uganda will change the
preferences of consumers towards their car status. Lifestyles and the living
standards of the people improve.
• As Uganda is famous for its cheap labour cost, more and more foreign
companies are considering investing in the country and will as result bring about
a diversity of different cultures into Uganda.
Technological:
Technology relating to automobile designs; Technology of automobile manufacture;

Information technological developments that may increase or decrease use of
automobiles. For example, Internet increases the number of people working from home
and thus reduces automobile use for commuting.
With the entry of new companies into the country there are also changes in the
emergence of new automobile technologies as companies innovate and produce new
vehicle designs to be able to effectively compete in the market place.
With changes in technology, there will be both advantages and disadvantages for
Ugandan consumers.
Advantages:
 Better products with low cost as new technology are introduced into market.
 Technology brings new innovation and leads to higher education level as they
are about to learn new things about the new technology.
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 Technology brings advancement into society and ultimately it leads to new
perspectives for the society.
 Technological impact will also avail better perspectives and scope about the
automotive industry to all nations in the world and will attract more companies
into the industry which will result into more growth and development.
 Technological changes bring efficiency in industry which leads to improvement

in products manufactured by the industry.
Disadvantages:
 Technological changes bring revolution into the industry which leads to more
automation and less of manual labour.
 Technological changes lead to unemployment as machine will do the work of

many people and ultimately it will lead to mass unemployment in the auto
industry.
Economic:
 Economic impact of the automobile industry is like an injection into the

economy.
 With the entry of various companies into the automobile sector, the economy of
the country expands and grows.
 Economically, the country will boost its hard currency earnings from automobile
exports which will lead to strengthening of Uganda‘s economy.
 The automobile industry contributes to GDP growth as it grows by about 8% per

annum in Uganda.
 Economically, the growth of the automobile sector will support the economic
development and growth of Uganda since its economy still has a very small
industrial sector.
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Political:
• Once upon a time when dictator Idi Amin ruled Uganda, the economy was in
ruins as he forced all foreign investors out of the country and all trade and
investment practically ground to a halt.
• As a result of Idi Amin‘s poor economic policies, Uganda got starved of any
meaningful developmental investment opportunities.
• The local population was unable to find work and this resulted into massive
unemployment and widespread poverty in Ugandan society.
• It shows that how the quality of political leadership can change the economic
fortunes of a country.
• In Uganda there is now there is now political stability and a sound economic
platform for meaningful development of the automobile industry as the current
government‘s economic policy framework supports Foreign Direct
Investment(FDI) in Uganda among other business investment incentives and
opportunities for growth.
• The present also guarantees political and economic stability and supports foreign
investors with viable business investment projects.
Legal:
• Ignition test of the car to prevent fire.
• Provide batteries with safety of physical damage.
• The need to publicize the strengths and qualities of a vehicle in the existing mass
media advertising channels including newspapers and FM radios.
• Meeting up with vehicle safety standards.
• Insure the manufactured vehicles from the factory.
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Ethical:
• Equip and fit any manufactured car with low- or zero-polluting technologies.
• Provide a good product that is good-value-for-money to the customer.
• Fulfill corporate social responsibility.
• Provide good after-sales customer service support for total customer satisfaction.
6.8 Policy Environment
Industrial development is an integral and important part of the Government‘s overall

development strategy. This development strategy is to be achieved through
transforming Uganda into a modern and Industrial Country through, among other
things; adding value by processing to reduce post-harvest losses and by increasing
exports of higher value products, especially from agricultural and mineral resources.
Industrialization also offers greater prospects for increased employment, more export
earnings, wider tax base, increased purchasing power, increased integration with
Agriculture, product diversification, greater efficiency, and technical skills for
modernization and higher productivity throughout the whole economy. While
significant growth has been registered over the last 15 years, the recent manufacturing
performance has been less than average. This reflects, in part, the continuing presence
of binding constraints, especially insufficient hydro-electric power, poor transport
infrastructure and weak institutional frame work for industrial development. In turn,
these constraints have resulted in less investment in the sector and less adjustment and
integration along the value chains.
The National Industrial Policy sets out the strategic direction for industrial
development in Uganda for the next ten years and the set principles are expected to be
sufficiently robust to guide Uganda well beyond that period.
6.8.1 Policy Vision
The vision of the Policy is to build the industrial sector into a modern, competitive and
dynamic sector fully integrated into the domestic, regional and global economies.
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6.8.2 Policy Objectives
The extent to which industrialization fulfils its role and contributes to the overall
development of the country will depend on the strategies and policies which Uganda
pursues. Consequently the principle focus of this policy will be:-
(i) Exploiting and developing natural domestic resource- based industries such as
petroleum, cement, and fertilizer industries; and promoting competitive
industries that use local raw materials.
(ii) Agro-processing; focusing on food processing, leather and leather products,
textiles and garments, sugar, dairy products, and value addition in niche exports.
(iii) Knowledge-based industries such as: ICT, call centres, and pharmaceuticals that
exploit knowledge in science, technology and innovation.
(iv) Engineering for capital goods, agricultural implements, construction materials,
and fabrication / Jua Kali operations.
The specific objectives of the Industrial Policy will be to:
i. Create a business friendly environment for private sector-led industrialization in

which industries will develop, improve productivity and the quality of products
through, inter alia, creativity and innovation and become more competitive in
the global economy.
ii. Improve infrastructure development for effective and efficient industrialization
program
iii. Encourage and foster innovation, entrepreneurship, adjustment and adoption of
best management practices in the quest for improved competitiveness.
iv. Create a framework that supports joint participation of the public and private
sectors in the development of scientific and technological competencies for the
production of more and higher value added goods and services for domestic
consumption and export; widen the tax base; and increase integration with
Agriculture
v. Facilitate improved supply chain efficiency and market responsive product and
brand development.
vi. Encourage foreign direct investment in industry and industry related services.
vii. Promote environmentally sustainable industrial development to reinforce
national goals of long-term growth and development.
viii. Support the growth and development of a skilled and productive labour force
and to ensure that a body of experienced entrepreneurs and trained managers
are particularly focused on industrial development.
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ix. Promote safe work place practices in all industry sub-sectors.
x. Promote the participation of disadvantaged sections of society in industrial
development activities.
xi. Create support systems for sustainable micro and small industries development.
xii. To create jobs for the widest section of the population.
6.8.3 Duty Rates for Imported Vehicles
Uganda Revenue Authority uses its own Car Values as a basis for Tax assessment. It is
this price that forms the basis of import duty, not the price you paid for the car at
auction or anywhere else. This price reflects URA‘s view of the price when the vehicle
arrives in Uganda. The Uganda Revenue Authority (URA) charges the sum of five
different fees / duty which are summarized in the table below.
Table 7: Duty Rates for Imported Vehicles, 2016

Duty Type As a percentage of URA Valuation of the
Vehicle
Import Duty 25% of CIF Value
VAT 18% of (CIF Value + Import Duty)
Withholding Tax 6% of (CIF Value + Import Duty)
Environmental Tax if older than 10 years 50% or 35% of Import Duty Value if older
than 5 years
Registration fees UGX 1,200,000 (below 3,000 c.c.)
UGX 1,700,000 (3,000c.c. and above)
There are four key factors that are used to calculate the Taxes:
1. The Customs Value (CIF Value): Uganda Revenue Authority releases fixed
customs values almost every month. These are available on their website to Used
Motor Vehicle Indicative Value Guide under Customs Tax Guide.
2. The Engine Size: The URA levies duty on engine size – the bigger the engine, the
greater the duty. This reflects the cost / value to the Ugandan economy of cars
with greater engine capacity which acts as a proxy for higher fuel consumption.
38
3. The Manufacturing Age of the Car: All imported cars above 10 years from the
current year are levied an environmental penalty tax of 50% of the value of the
car while those above 5 years but below 10 years are taxed at 35%. However, in
addition to computation of taxes, newer cars are valued higher, and therefore
attract a higher overall tax than old ones.
4. The monthly exchange rate: URA values the cars for tax purposes in US dollars
to obtain the customs value in Uganda shillings. The exchange rate is adjusted
every month. The lower or a depreciating dollar means a relatively lower tax bill
and the reverse is true.
5. Registration Fees: This fee is around UShs 1,200,000 for a standard car and UShs
1,700,000/- for heavy engine cars. It is best thought of as the tax fee for number
plates.
6.9 Industry Analysis
The automobile industry today is the most lucrative industry. The growth trend of the
automobile industry in Uganda is rapidly growing with around 8-9 % per annum. This
industry contributes 4% to the GDP in Uganda. The industry is the tenth largest in the
world in context of production i.e. approximately 2 million units. So it is high potential
that the scope of Dealers and their requirements would be very high to sell off such a
huge volume of production. The growth rate is predicted to double by 2018. The car
market is tremendously changing because of higher demand in the market.
Industry Highlights:
 The new and used car sales industry in Uganda is continuing to grow at or above
population increases. Vehicles are the second largest purchase most consumers
make, and more people are buying new and used vehicles than ever.
 Relatively good margins have resulted in some success in the local new and used
car industry.
6.9.1 Competition and Buying Patterns
Used car dealers in Uganda are notorious for unethical sales practices. Customers are
inherently cautious and untrusting as a result. The more we can provide a high-quality
sales experience for new and used vehicles and auto parts & services, the more
successful we will be. Our salesmen will provide a friendly and personal experience for
39
the buyer. We will follow up and ensure customer satisfaction. We will rely on these
customers for an excellent reference to other car buyers. This company will build an
excellent working relationship with our suppliers and customers.
6.9.2 Industry Participants
New and used car sales companies in Uganda are still relatively average in size. Dealers
have varying degrees of success based primarily on location, products, and the sales
team assembled. Quality sales personnel are usually not adequately compensated for
their services, and as a result they tend to move from one dealer to the next.
6.9.3 Current Customer Profile
In 2015, a telephone survey of current vehicle maintenance customers was carried out in
Uganda by a leading market survey firm. Customers were asked to rank the qualities
that were most important to them in selecting a maintenance vendor for their vehicles.
Turnaround time and customer service were listed as the most important attributes.
Trust and quality were next. While price is a concern, only 15% of the respondents
listed it as their primary concern in selecting a maintenance vendor. The results are
depicted in the pie-chart (Figure 2) below.
Figure 2: Factors in Selecting a Vehicle Maintenance Vendor in Uganda (2015)
Ranking of Factors
18%
23%
4%
18%
22%
15%
Turnaround Time Convenience Customer Service Price Quality Trust
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7.0 MARKET ANALYSIS
7.1 Overview
Sky & Lakes, like all businesses, is affected by forces and trends in the market
environment. These include economic, competitive, legal/political, technology, and
customer issues.
Economic Environment — Positive forces include the generally prosperous economy

that is currently in place, rising employment, rising wages, and low inflation, leading
more people and businesses to be willing and able to treat themselves to a top-line
vehicle. The growing stock market means people are making more money, primarily in
the form of capital gains.
Legal/Political Environment — The new Environmental Tax Levy on used vehicles

older than 5 years has complicated the situation for vehicle buyers with a limited
budget to purchase new cars, also the new tax laws for imported automobiles, are
becoming very complicated for the average sales person/small business to stay current
with and understand. Auto servicing is a way to save money and taxes especially for
those people who cannot afford to have a high turnover of vehicle purchases.
Technology Environment — Computer programs will greatly simplify the financial

record-keeping and tax preparation for controlling the output of the Sky & Lakes
business. The business promoters have developed the expertise necessary to run the
financial end of the business, including learning and updating auto sales and servicing
software. Outsourcing of business functions to an outside accounting expert will ensure
the financial data will be done.
7.2 Market Segmentation
Customer Segments
The customers of the company would be divided into various segments as per the types
of cars. It is based on SUVs, Small cars, sedan cars and luxury cars.
 SUV cars:
The customers of such would be younger generation within 20 to 35-year age
peoples.
 Small cars:
The customers of the small cars would be professional peoples and also middle
class people who are price conscious.
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 Sedan cars:
The customers of the sedan cars would be the people who are more space
conscious and often travelling long run.
 Luxury cars:
The customers of the luxury cars would be the business class peoples and
executives, higher class people.
7.3 Target Market Segment Strategy
We focus on providing for the average car buyer first. Our focus will be on those most
likely to purchase both low-end and top-end, low-cost/medium-cost vehicles (highest
profit margin). The young professionals, business people and corporate individuals,
families, retired, and singles have very different needs and wants. We will focus on
each group separately, and prioritize our efforts. We will look at every customer as a
potential repeat customer, reference, or spokesperson for other car buyers.
7.3.1 Market Needs
There are two important underlying needs: quality vehicles at competitive prices, and a
large supply of available vehicles.
1. There is a real need for a highly professional used car dealer who can provide
quality vehicles at competitive prices, in a pleasant purchasing environment.
2. There is also a practical need for new car dealers to move a large used car inventory
that takes up valuable space on their lots.
7.3.2 Market Trends
We have four major trends that help us:
1. New car sales have boomed over the last five years. This has contributed to a large
supply of quality new and used cars and a 14% growth in used car sales – especially
in the private sector market. Consumers recognize the value of a good used car, and
are willing to pay for it. Even those consumers who would be more prone to
purchasing a new vehicle are now purchasing used.
2. As the Uganda economy grows and expands, consumer savings and spending on
luxury goods like cars is rising in Uganda and this means that the ratio of purchases
42
of new cars compared to used cars is also growing in the same proportion.
Government vehicle procurements for the large public sector including the law and
enforcement and security sector has also expanded quite significantly in the recent
past and is still growing in direct proportion to the growth in the delivery of public
goods and services.
3. Specific vehicles, like SUVs and pick-ups are more popular and have sold better
than passenger cars over the last few years.
4. Recreational vehicles are becoming more popular for travel in Uganda and the
wider Eastern African region. Travelers are choosing to travel shorter distances and
enjoy local destinations. This includes increased use of recreational vehicles (RVs),
and off-road recreational vehicles (ORVs).
7.3.3 Market Growth
According to available market information, new car sales have risen by about 14%.
Spending on new cars continues to rise, despite a slow growth economy. As population
increases in Uganda, so will the need for vehicles. Another strength is the fact that
people are keeping cars for a shorter period of time before trading or selling. The
average driver buys a new (or used) vehicle every four years. Vehicles are also
maintaining more value. The result is continued increases in sales and profit margins.
7.4 Competitive Environment Summary
Generally, an auto sales and vehicle maintenance service company would like to target
those customers of upscale demographics and who can afford the luxury car market—
even though some of the cars offered will be pre-driven (used). This customer
appreciates the reliability and stature associated with the following Japanese
nameplates:
Toyota Isuzu Honda

Acura Lexus Mazda
Nissan Subaru Daihatsu
Suzuki Hino Fuso
A review of competitors' marketing strategies reveals no one launching a serious attack

on the upscale new car market in Uganda. The general approach to get new business is
through networking, referrals, and personal selling. Auto sales and vehicle maintenance
service is a referral-driven business.
43
Other strategies to build customer sales include tele-marketing and encouraging and
rewarding present clients to refer future clients. Networking within business groups,
civic groups, church groups, etc. is important, even if the business results are not
immediately felt. People want to obtain financial and auto sales and vehicle
maintenance service services from someone they trust; and that can be someone they
knew from past membership in a group. Groups may also offer the opportunity for the
business person to give a talk to the membership—an excellent public relations
opportunity.
7.5 Market Research Summary
A hypothetical behavior sequence model for a showroom (not private) car buying
individual using an auto sales and auto service for the first time might look something
like the following: (based on discussions and interviews with potential clients):
Individual decides to obtain a luxury automobile. This may happen as a result of a

change in the individual's life situation (marry, divorce, lose a spouse, move, win the
lottery) or investment/tax situation (sell house, large wage increase, receive
inheritance). The need can arise anytime of the year in Uganda especially after making a
good deal and people are thinking about upgrading their transportation.
Individual investigates the pre-driven auto sales and auto services. In most cases, this
means the individual will consider walking through the car dealerships where they
have shopped in the past (favorable) and/or a place that has been highly
recommended. Those buyers who do not know any dealer lots personally, will begin
asking their friends, family, co-workers, etc., for recommendations. If the individual is
new to the area or otherwise has not made any close connections with people, he/she
would look in the Monitor Business Directory for a listing, go to one of the various Car
Bonds in Kampala‘s Industrial Area in Ntinda/Nakawa area for a physical visit, or
would look in a newspaper for advertising.
Acting on the advice of friends (or his/her own knowledge), the individual will tour or
call on the recommended auto sales company to obtain information that will help
him/her decide. Criteria for selection include: performance (can the car meet customer‘s
expectations); reputation (quality); reliability (can the car be counted upon); courtesy
(sales force); and value (is the product affordable?).
Based on the information received, the individual makes a decision and test drives the
vehicle.
44
The individual's satisfaction with his/her decision and with the dealership's service
itself is largely a function of their interaction with the dealership‘s consultant and the
potential vehicle during their meeting. The consultant should do everything possible to
ensure a satisfactory experience for the customer, so that future business (and future
referrals) is not at risk.
An investment is made on behalf of the consultant to understand the car buyers, listen,
communicate, and retain information from their discussions.
Marketing strategies will build on this model, taking advantage of precipitating events,
fostering word-of-mouth recommendations, and creating satisfaction through
interacting with the client.
Summary of Opportunities and Threats in the Environment
Overall, the environment appears very positive for Sky & Lakes auto sales and service
centre. The forces driving market demand, mainly economic and political/legal are
strong, with new businesses forming, new residents moving into the county, and more
complicated tax regulations requiring a knowledgeable accountant to keep company car
records in order. On the negative side, barriers to entry are low.
45
8.0 MARKETING STRATEGY AND IMPLEMENTATION PLAN
Our location is a very important competitive edge. We are in Junction City because
people travel from all over the area to buy vehicles there.
The other competitive edge we need to develop is the buying experience and reputation
as a local leader in customer satisfaction. This advantage is important to us because we
rely on word of mouth to generate additional customers. Integrity is our difference.
8.1 Target Market and Customers
The market for new and used Japanese cars is a generally huge and lucrative one in
Uganda and this is well supported by the fact that auto imports currently rank as the
second highest country imports in value terms as well as the presence of more than 50
auto dealers and car bonds in the Kampala area alone, it clearly shows that there is a
strong and thriving market for auto sales and servicing for all these companies to
survive and thrive in an increasing fiercely competitive market environment. The
customers that are being targeted in this market comprise of the following categories:
• Newly employed workers in the corporate and informal business sector,

• Young professionals,
• Progressive farmers,
• Families and singles,
• Retired people,
• Business owners who want a car for status and recognition,
• Taxi business owners who want to increase on their fleet of cars,
• Officials and independents who want to buy cars for their spouses,
• Companies, Faith-based religious Organizations and Non-Governmental
Organizations (N.G.O.s) who need a car(s) to help in carrying out their activities
in a better way, especially for inspection and control.
• Government Ministries, Departments and Agencies,
• Local government administrations,
• International Organizations and Diplomatic Missions based in Uganda.
Findings through observation of trends and focus groups interviews revealed that the
estimated target market is as follows: 50% of the targeted customers in Uganda would
most likely buy cars costing from US$ 3,500 to US$ 10,000, 40% of them would buy cars
costing from US$ 10,000 to US$ 20,000 and 10 % or less will buy cars costing more than
46
US$ 20,000, which is in line with feed backs from the clients of some friends who have
been active in the Uganda auto dealership market.
With these estimates as a base and with the natural advantage of being located in
Uganda‘s capital city which is the hub of the country‘s economic activity, Sky & Lakes
shall target customers that are able and willing to buy cars in all the indicated price
ranges right from the start. The market for auto sales and auto services is still predicted
to grow with time as demographics increase and the economy also expands. Sky &
Lakes shall have a niche market and the first mover advantages in a niche market for
Japanese auto brands by being the only auto dealership in Uganda offering a
comprehensive one-stop auto sales and service package with unique features that are
currently not being offered by the existing auto dealers in the market such as mobile
auto and tyre services, provision of stand-by VIP vehicles, provision of road worthiness
inspection and certification services, provision of car-tracking systems, and fueling of
vehicles on-station with quality fuel products among other ancillary services and
products.
8.2 Marketing Strategy
The business is driven by referrals, so for the first few years Sky & Lakes will need to
be more aggressive in getting new customers, who will then pass the word on, and the
business can begin to experience organic growth.
Our marketing strategy will also focus on two segments. Those segments are described
in the following sub-topics. We will implement a strategy that treats customers as a
community. This means our marketing resources will be centered around advertising
both sales promotions (events) and personal sales (after-sales and hands-on customer
service, friendly atmosphere).
 The marketing budget will not exceed US$ 6,000 per year.
 Marketing promotions will be consistent with the Mission Statement and support
the following objectives:
a. 100% customer satisfaction, measured through repeat customers, referrals
and surveys.
b. To achieve a respectable profit margin within the first three-years.
c. To achieve a healthy net profit by year two.
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8.2.1 Marketing Strategies
Advertising is one of the most common ways to make a car buyer or a car enthusiast
aware of the new car with special price. The company will organize campaigns, agent,
and road shows. The videos are expected to be launched on Facebook, YouTube, and on
the car company‘s website as well. Other important marketing strategies would be the
packaging, auto service innovations, and quality control. Another more important way
of advertising is to create an image or brand image by giving continuous
advertisements on print media, television, internet, radio, yellow pages, mail
marketing.
Marketing Strategies for Vehicle Maintenance Services
Strategy: Direct Marketing Campaign
Sky & Lakes will conduct a targeted marketing campaign to attract new customers. Sky
& Lakes will:
1. Conduct targeted marketing to organizations based on (a) proximity and (b)

number of vehicles. Sky & Lakes will target the closest agencies with the largest
fleets.
2. Make an initial contact via a direct mailing followed by a phone call (or the
reverse: a phone call followed by a direct mailing). The goal of the initial contact
will be to set up an in-person meeting and tour of the Sky & Lakes facility.
3. Encourage organizations to try Sky & Lakes auto services for a limited number of
vehicles with specific problems. Based on the Company‘s industry experience
with customer life cycle, a customer won't immediately move their vehicles to
Sky & Lakes auto service centre for all service needs without a trial period.
4. Survey first-time customers either by phone or mail and encourage them to use
the service again. This may include special promotional offerings, such as (a) free
vehicle safety inspections, (b) free pick-up and delivery (c) 10% off the next
vehicle serviced.
Strategy: Word of Mouth/ Referral
In addition to direct marketing, Sky & Lakes auto service center will use a word-of-
mouth and referral campaign.
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This will be Sky & Lakes’ primary advertising method to this point. A word-of-mouth
and referral campaign will be successful for Sky & Lakes auto service center because:
1. Sky & Lakes will offer a quality product. Sky & Lakes is dedicated to offering a
quality product at a reasonable price. Customers will tell prospective customers
about this service.
2. Sky & Lakes will have a level of credibility and trust that other maintenance
facilities simply don‘t have.
3. Incentives. Sky & Lakes will offer incentives to current customers for successful
referrals, such as:
 A 5% labor discount for a specified amount of time.
 A discount on a scheduled preventive maintenance services.
 Free training through Sky & Lakes professional driver training.
 Discount on Sky & Lakes other professional services.
Strategy: Deepen Relationships with Existing Customers
Sky & Lakes will target existing partial service customers to turn them into full-service
customers.
Sky & Lakes will do this by:

1. Creating marketing material that specifically addresses the advantages of using
Sky & Lakes as a full-service provider, including full-service testimonials.
2. More closely tracking non-full-service customers on a regular basis.
3. More aggressively targeting and marketing non-full-service customers using (a)

marketing literature, (b) testimonials, (c) site visits, (d) personal meetings.
Marketing Messages
Sky & Lakes will use testimonials and historical data from the Company‘s database of
maintenance customers to develop marketing materials and messages that promote Sky
& Lakes’ excellence in the following areas.
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Table 8:Sky & Lakes Marketing Messages to Customer Demands
Key Areas Possible Testimonials/Messages
Turnaround time • Finally, a vendor who understands how important
your bus is to your clients.
• Have your vehicles serviced while you wait.
• ―The work is always done in a timely fashion.‖
Customer service • ―They bend over backwards for us. They make us seem
like we are their only customers‖
Trust • Fair, honest, and accurate every time
• ―I like the no nonsense approach; I have great trust in
everyone there.‖
Quality • 100% of Sky & Lakes‘ customers rate the service good or
excellent
• It‘s your bus/vehicle, but it‘s our reputation
• ―You are great! Wonderful job! We couldn‘t be more
pleased.‖
Price • Pay only for the work that‘s done.
• Exceptional service for a competitive price.
Preventive maintenance • Sky & Lakes can service all of your vehicles all the time
• Preventive maintenance costs decrease downtime
Marketing & Communication Work plan
As a contracted management service, the Sky & Lakes' Communications Director will
work closely with Company staff to design and structure a marketing/communication
campaign with consistent key messages and will train key spokespersons on these
messages. Sky & Lakes' graphic designer and print vendor will facilitate production of
print materials. The Sky & Lakes Director will oversee the sales and marketing effort
for Sky & Lakes. Sky & Lakes' Director of Transit Solutions will promote Sky & Lakes
to potential customers as well as Sky & Lakes' transit-related consulting, software, and
professional staff development and training services. The Sky & Lakes General
Manager will handle direct contact and follow-up with Sky & Lakes customers.
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8.2.2 Positioning and Product Strategy
For both business and consumer clients, Sky & Lakes will be positioned as a full-service
auto sales and leasing service that takes the time to get to know the customer's situation
and become a partner in their decision making process.
Because Sky & Lakes will be a community-based, expert leader in governmental and
organizational vehicle management, service delivery, and high-quality transit services,
Sky & Lakes will be the first choice of governmental and organizational service
providers seeking reliable, full-service vehicle repair and maintenance. Sky & Lakes
understands the needs and challenges of the specialized transit provider and will be
responsive to all their transportation issues, ensuring customer satisfaction and loyalty.
8.2.3 Promotion & Advertising Strategy
Promotion strategies will vary depending on the target market segment. Given the
importance of word-of-mouth/referrals among all market segments when choosing a
new or pre-driven car dealership, efforts are designed to create awareness, stimulate
trial, and build referrals. A cost-effective campaign, focused on direct marketing,
publicity, Internet web page, and advertising is being proposed.
Sky & Lakes will also launch promotional offers like gifts and festival offers, discounting
offers, participation in trade fairs and exhibitions, sponsorship, special credit, extended
services and warranty of the cars. The company‘s representatives will hand out T-shirts
and caps to the people during such promotional events.
Promotion
The goal of the promotional strategy should be to reach the greatest number of potential
customers through the most economical use of one‘s resources-money, personnel, and
facilities. This entails using advertising and publicity to tune in to those channels of
communication most widely used by your target customers. Sky & Lakes shall use a
variety of promotional avenues as a means of gaining community interest and also
ensure that the target customers buy from it.
Bill Boards and official cars: Sky & Lakes shall have four billboards with its name
written and painted on them. Three billboards shall be positioned at strategic locations
and street junctions in Kampala – the capital city of Uganda and one shall be erected at
the entrance of the Company‘s head office and auto service centre location in Kampala
Industrial Business Park in the eastern suburbs of Kampala city. It shall also have two
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official cars (all new cars from the Japanese Market) with the name Sky & Lakes(Auto
Sales and Services Company) inscribed on them. Those seeing the cars and those
entering into and going out of Kampala will always see and know that there is such a
company offering a comprehensive range of auto sales and services and will
immediately keep some information in mind. The monthly advertising company cost
for the billboards will be treated as monthly promotional expenses while the cost of
making and erecting the billboards will be as part of the pre-opening cost.
Awards: Sky & Lakes shall offer a best student award during the graduation ceremony
at one of the top two universities (Makerere University or Kyambogo Univeristy) in
Uganda for US$ 1,000 yearly. This award shall be given to the best Engineering student
in the Department of Mechanical Engineering. This is an event a consulate officers and
representatives of business entities within Uganda.
T-shirts: Sky & Lakes shall also make 100 T-shirts with its name on them so that when
put it will be clearly read by the viewer. This strategy is used for making at about 100 T-
shirts in year one. It shall cost US$ 3 per T-shirt. T-shirts shall be given for the first 80
purchases and servicing of cars and the rest shall go to the operational team and ten
members of the general public for the first year.
Public Relations efforts: Knowing that Entrepreneurship is a very young field of

business activity in Uganda, the focus of the day will be on new venture creation and
development. Because the CEO will be running a unique and first-of-its-kind one-stop
auto sales and service centre in Uganda, he will definitely become a public figure. This
is because the CEO will be invited to give motivational speeches in many workshops
and seminars that are usually organized in Uganda from time to time. The advantage
here is that most often the information will be published and the name of the CEO and
Sky & Lakes will be published as well free of charge. Also, the other founding members
will have a similar opportunity.
Advertisement
Advertising involves the purchase of time or space in various communications media

for the purpose of promoting the business. This involves two categories namely:
institutional and product advertisement. Institutional advertisement promotes the
business in general, emphasizing its good name and any contribution that it has made
to the well-being of the community. Product advertising promotes specific products or
services you sell, emphasizing the benefits associated with buying them from business.
Sky & Lakes will carefully develop an advertisement campaign to gain goodwill and
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public recognition. The following advertisement methods will be the primary means
used to spread the news and increase public awareness of the existence of Sky & Lakes
and its offerings.
Radio and TV advertisements: Sky & Lakes will purchase radio and TV ads on local cable
channels and on local FM radio stations. This shall be done once a week within the first
year of business commencement to publicize and popularize the Company and its
products/services to the targeted consumer market.
Newspapers: The Company will take out ads in local publications including
newspapers and magazines that are matched to its targeted audiences. The two leading
dailies in Uganda: “New Vision” and “Daily Monitor” offer news both on the Web and
through daily sales of hard copies. Those willing to read without buying, can do read
on the internet whereas those who wish to buy the hard copies can do so through the
sales agents of “New Vision” and “Daily Monitor”.
According to the prevailing advertisement rates in Uganda, an online business

advertisement would cost about US$ 2,700 per advert and this advert will stay there for
at least one year on the internet and covers viewers all over the world. Sky & Lakes
shall advertise two times a year through this medium. The following Tables 9 and 10
below depict the first years and the analyses for the first year‘s cost for advertisement
and promotion respectively. This expense head is expected to increase yearly on a 5%
basis.
Table 9: Advertisement and promotion expenditure forecast for the first five years on
Year Year 1 Year 2 Year 3 Year 4 Year 5 Notes
Advertising/promotion 94,000 98,700 103,635 108,817 114,258 5% increase
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Table 10: Advertisement and promotion analysis for Year 1
Description Monthly Rate Yearly Rate
(USD) (USD)
Radio announcements 1,500 18,000
TV Advertisement 3,000 36,000
Billboard publicity fee 400 4,800
Newspaper advertisement 2,000 24,000
Online advertising _ 2,700
Magazine advertising 600 7,200
T-shirts _ 300
Prizes award _ 1,000
Total expenditure advertisement/promotion 94,000
All advertising will be demographically analyzed to maximize exposure effect and

response.
Marketing Plan
1. Marketing Overview —Sky & Lakes plans to focus on young first-time auto
buyers, professionals and corporate class workers, business owners, small-,
medium- and large-sized companies, government MDAs (ministries
departments, agencies), international agencies and diplomatic missions in
Uganda, and taxi operators. To capture this market we plan to advertise with the
local newspaper and radio. But, more importantly, is the support and
participation that we will show in community activities.
2. Marketing Objectives — Sky & Lakes’ main marketing objective is to focus on

the customers' wants and needs and, at the same time, maintain a marketable
selection of vehicles at all times. This will allow us to effectively influence and
persuade them to buy.
3. Marketing Strategy
a) Advertising — Our main advertising strategy is to let our potential
customer know that we are aware of their wants and needs and have
quality inventory and prices. To prove it, we will let them know that if we
don't have what they're looking for, we'll get it.
b) Marketing Budget — From the time that Sky & Lakes takes possession,
until the point of sale, the marketing budget will average $300.00 per unit.
This includes the driver's expense, a safety check, repair work, if needed,
reconditioning, and all forms and documents used to track market trends.
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Marketing Activities
Sky & Lakes will implement various marketing efforts to attract customers including:
 Customer loyalty programs

The Company will develop strong customer loyalty programs. Sky & Lakes
will implement and manage programs that reward a customer for repeat
business with the Company.
 Build and optimize its web site to describe and promote the business
The Company will build and optimize its web site to attract prospective
customers. The web site will be attractive and easy to navigate. It will also
provide testimonials of satisfied customers
 Print advertising
The Company will take out ads in local publications that are matched to its
targeted audiences.
 TV and Radio Ads

The Company will purchase TV ads on local cable channels and radio ads on
local stations.
 Signage and posters

Sky & Lakes will utilize billboards, signage and posters that will be
displayed at local sites to promote the Company and establish name
recognition and builds awareness about its products and services.
 Search engine optimization (SEO)

The Company will optimize its web site so that it will in improve its yield in
search engine results. Sky & Lakes will continually improve its SEO scores
by optimizing the search words and by establishing link programs whereby
the number of sites linking to it increase.
 Referrals
Sky & Lakes will develop referral programs whereby existing customers
receive incentives to refer friends or associates as customers as a means of
building repeat business. This can be accomplished by offering a discount
special price to past customers who returned.
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8.2.4 Pricing Strategy
Our pricing strategy will be based on competitive Blue Book values (wholesale and
retail) plus vehicle handling fees. We will not exceed competitive retail prices, and will
attempt to sell at wholesale plus a fair profit, generally 15-25%. Quality and price say a
lot about our vehicles. The vehicles that are rare or not readily available to meet
demand will be priced accordingly. The average industry mark-up for similar vehicles
is 20-30%.
With the above concept as a base, the pricing strategy of Sky & Lakes shall be managed
based on the four separate items that follows: product cost, transportation (transport
and shipping) cost, clearing (custom duties) charges, and a mark-up percentage. Figure
3shows a physical representation of the pricing management model of Sky & Lakes.
Figure 3: Pricing Management Model
Product Transportation Clearing

cost
+ cost
+ charges
+ Mark-up = The Final Price
This model has the advantages of that it is easier to monitor, change and adopt the
prices for each component depending on the changes of internal and external market
forces and depending on the profit objectives of Sky & Lakes. Based on its marketing
mix objective, a company they can employ one or more of the following pricing
strategies: Skimming; penetration; price lining; promotional pricing; price bundling;
time-period pricing; value-added pricing and captive pricing. With this model in place,
there is need to align the profit objective and the marketing mix objective. Sky & Lakes
shall use the price lining strategy with the following five categories:
a) US$ 3,500 – less than US$ 7,000

b) US$ 7,000 – less than US$ 10,000
c) US$ 10,000 – less than US$ 15,000
d) US$ 15,000 – less than US$ 20,000 and
e) Above US$ 20,000
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8.2.5 Pricing on Vehicle Maintenance Services
The Sky & Lakes auto service centre rate will be established with four factors in mind.
1) Covering vehicle mechanical services cost to provide service

2) Generating a financial return for Sky & Lakes
3) Generating a social return on investment for the community
4) Maintaining a competitive advantage by pricing below the average market rate.
Given these considerations, the labor rate for Sky & Lakes auto service centre will be
set at US$ 67.40. Sky & Lakes auto service centre will continually evaluate this rate
based on the four criteria outlined above. The rate will reflect changes in the vehicle
service market as necessary.
Figure 4:Sky & Lakes Auto Service Centre Pricing Structure

Market Rate
Ceiling
Market Rate Floor

Social Return
Community
Sky & Lakes Rate
Social Return
Social Return Sky &

Lakes
Sky & Lakes Costs
8.3 Channels of Distribution and Supply Chain Strategy
A channel of distribution is the route taken by a commodity or service from the point of
manufacture through to the final consumption. This channel of distribution can either
be direct or indirect. A direct channel would be one which takes goods or services
directly to the customer whereas an indirect channel is one which conveys goods to the
customers via middlemen (intermediaries).
Sky & Lakes falls under this category; it shall be in the indirect channel for the
companies producing the Japanese brands of cars. It shall be a company in the indirect
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channel of distribution of the Japanese brands of vehicles in Uganda but shall a direct
channel from time of purchase to delivery of its business model. The distribution
strategy of Sky & Lakes will be quite simple, based on customers‘ requests for new and
used cars, they are acquired from the Japan auto Franchisor, transported to the Japan
dispatch sea port(s) and through the Indian Ocean to Mombasa Port in Kenya and then
transported overland through Kenya to their final destination in Kampala, Uganda.
When the vehicles finally get to the Sky & Lakes head office/auto service centre they
shall be ready for distribution and sale to the consumers after being inspected and
certified by the Sky & Lakes company mechanics. Sky & Lakes shall have no
intermediaries in its distribution chain.
It is also worth noting that unlike products which are produced, then distributed and
sold, auto sales and mechanical services are produced and consumed simultaneously in
a real-time environment. Thus, distribution issues center on making the services
available in a convenient manner to the most number of potential clients.
8.4 Sales Strategy & Forecast
8.4.1 Sales Strategy
In year one, Sky & Lakes shall employ two sales or marketing executives to add to the
already existing sales force of the founding team. In addition to the other tasks carried
out the CEO, the Logistics Director and the Chief Accountant, they shall all be in-charge
of marketing and sales of the cars. At the beginning of the second year, the
Sales/Marketing officers will be the major people in-charge of the sales of the new and
used cars. The Marketing/Sales executives will collaborate and coordinate their vehicle
sales activities under the supervision of the Sales and Marketing Manager and the Chief
Executive Officer (CEO) who are by virtue of their functions, marketers of the Business
entity towards the public. The strategy is to offer the best possible service on the market
through the sales of Japanese brands sourced through the Franchisor on the Uganda
market giving Sky & Lakes the head-start advantage of after sales services& customer
support and better customer service.
Sales compensation is based on a percent of profits. We will invest adequate time and
resources into training each member of the sales team into good customer relations.
Salesmen will be paid a portion of their salary based on commission. Good performance
is rewarded with increased commission and bonuses. However, integrity will not be
sacrificed for sales. Customer satisfaction will continue to be a top priority. All potential
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sales will be attended to in a timely fashion and long-term salesperson-customer
relationships will take precedence over sales closure.
8.4.2 Sales Forecast
Table 11 shows the sales forecast by type of vehicle of Sky & Lakes for the first five
years. The sales are expected to increase on a 10% basis for the first five years.
Table 11: Sales Forecast (in units)

Sales Year 1 Year 2 Year 3
SUVs 100 120 150
Small cars 250 300 350
Sedan cars 180 220 300
Luxury Cars 60 80 120
Pick Ups 200 250 300
Tractors 50 70 120
Trucks & Buses 40 60 110
Total Sales 880 1,100 1,450
The following table and charts give a run-down on forecasted sales. We expect sales to
increase at a slow rate per month for each product in the first year. From June through
September we expect minimal growth during our start-up period. October through
December we expect decreased sales due to historical trends, and a depreciation in value
based on less demand. February through August we expect increased sales growth
again. In Year 2 and Year 3, we expect solid steady sales growth as Sky & Lakes claims a
larger market share. We expect increased sales in lower-priced vehicles, and this will be
our primary product that yields the highest margin. We feel this sales forecast is realistic
based on the market analysis of similar businesses performance. The opportunities for
used car sales has increased with the high sales of new vehicles, increasing the number
of quality late model used vehicles in the market. More new car buyers directly affect the
number of used cars available. The current low interest rates also have a positive impact
on the high-end vehicle purchases. The Uganda average population growth rate of 3.2%
per annum creates a need for more vehicles as well.
The risks involved with this forecast include technology and the need for low impact
environment friendly transportation. Older used cars tend to be less efficient, and will
become less popular. Current hybrid vehicles are priced extremely high, and car makers
have not found an economical answer for consumers. We estimate conservative earnings
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from selling extended warranties and from selling loans (we will sell the loan for the
lender).
Note: For vehicle purchases, the per-unit price of inventory purchases includes the cost
of detailing vehicles.
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Table 12: Sales Forecast
Sales Forecast
Year 1 Year 2 Year 3
Unit Sales
Low-end vehicles 298 378 498
Average vehicles 154 190 245
High-end vehicles 78 100 130
Loan sales 166 207 289
Warranty sales 136 165 216
Other/consignments 48 60 72
Total Unit Sales 880 1,100 1,450
Unit Prices Year 1 Year 2 Year 3

Low-end vehicles 17,500 19,250 21,175
Average vehicles 35,000 38,500 42,350
High-end vehicles 50,000 55,000 60,500
Loan sales 20,000 22,000 24,200
Warranty sales 15,000 16,500 18,150
Other/consignments 25,000 27,500 30,250
Sales
Low-end vehicles 5,215,000 7,276,500 10,545,150
Average vehicles 5,390,000 7,315,000 10,375,750
High-end vehicles 3,900,000 5,500,000 7,865,000
Loan sales 3,320,000 4,554,000 6,993,800
Warranty sales 2,040,000 2,722,500 3,920,400
Other/consignments 1,200,000 1,650,000 2,178,000
Total Sales 21,065,000 29,018,000 41,878,100
Direct Unit Costs Year 1 Year 2 Year 3

Low-end vehicles 12,600 13,860 15,246
Average vehicles 28,000 30,800 33,880
High-end vehicles 35,000 38,500 42,350
Loan sales 0 0 0
Other/consignments 21,000 23,100 25,410
Direct Cost of Sales

Low-end vehicles 3,754,800 5,239,080 7,592,508
Average vehicles 4,312,000 5,852,000 8,300,600
High-end vehicles 2,730,000 3,850,000 5,505,500
Loan sales 0 0 0
Other/consignments 1,008,000 1,386,000 1,829,520
Subtotal Direct Cost of Sales 11,804,800 16,327,080 23,228,128
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8.4.3 Sales Programs
Sales programs will include sales awards for the highest sales, bonuses, and customer
service awards for those employees who best exemplify Integrity's commitment to
customers.
We will provide quarterly training and educational opportunities by sending

employees to professional development training in Japan for their respective area.
8.5 Evaluation and Control Strategies
Objectives have been established for Sky & Lakes so that actual performance can be
measured against them. Thus, at the end of Year 2, Sky & Lakes should have:
 US$ 29,018,000 in total vehicle sales revenue

 Sold 1,100 vehicles and serviced 330 cars (30% of sales volume)
Each subsequent year, new objectives will be set for these benchmarks, and actual
performance will be measured against them. If actual performance falls short of
objectives, investigation will be made into the cause, and plans adjusted accordingly.
In addition, Sky & Lakes will keep track of the source of all new clients ("Where did
you hear of me?") in order to measure the effectiveness of each type of promotion. Each
subsequent year's budget should adjust spending accordingly.
8.6 Customer Lifecycle in Vehicle Maintenance Services
Vehicle maintenance and repair is ultimately more than maintaining and repairing
vehicles. It's building relationships and establishing trust. Often a new customer will try
Sky & Lakes’ maintenance service because a specific problem wasn‘t resolved
elsewhere. Sky & Lakes will repair the vehicle to their satisfaction and they will often
use Sky & Lakes again for another specific vehicle repair. Sky & Lakes auto service
centre will build a relationship with the customer that encourages preventive
maintenance as well as specialized repairs.
The Sky & Lakes auto service centre preventive maintenance program will turn an
occasional customer into a regular full-service customer. When new customers adopt
the Sky & Lakes auto service centre preventive maintenance program, the increased
preventive maintenance costs they incur will be more than offset by decreases in major
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vehicle repair costs, vehicle downtime, and cost per mile. Routine preventive
maintenance means minor problems are repaired before they become major problems
that cause the vehicle to be out of service.
The goal of Sky & Lakes auto service centre will be that all customers bring all vehicles
to Sky & Lakes auto service centre all of the time. This will ensure reduced costs for
customers and a steady flow of reliable work for Sky & Lakes auto service centre,
allowing better scheduling and higher productivity for Sky & Lakes auto service
centre. Based on empirical data, Sky & Lakes auto service centre projects that it will
take 3 to 6 months on average for a first-time Sky & Lakes auto service centre customer
to become a full-time, full-service customer.
8.7 Strategic Alliances
Sky & Lakes will depend on its alliance with its Japanese JV Partner/Franchisor to
maintain its inventory. This relationship is crucial to our success and will be placed
ahead of petty differences. Our financial relations with the Japanese JV
Partner/Franchisor will be handled in a timely and accurate manner. We need to make
sure that the personnel, and especially the ownership, of our allies are aware of our
support and reciprocation. We will also depend on outside sources for professional
development of our sales staff.
8.8 Milestones
The accompanying table lists important program milestones, with dates, managers in
charge, and budgets for each. The milestone schedule indicates our emphasis on
planning for implementation.
The milestone table shows purchasing, and marketing goals. What the table doesn't
show is the commitment behind it. Our business plan includes complete provisions for
plan-vs.-actual analysis, and we will hold follow-up meetings every month to discuss
the variance and course corrections, and a final plan review on 1st July 2017.
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Table13: Milestones
Milestones
Milestone Start Date End Date Budget Manager Department

Business Plan 15/07/2016 15/08/2016 US$0 Owner Marketing
Acquire& DevelopCar 1/01/2017 30/06/2017 US$0 Owner Marketing
Lot/Space
Complete Legal 1/01/2017 1/1/2017 US$500 Owners Management
Establish Accounting 1/03/2017 1/07/2017 US$500 Owner, Records
Books admin
Final Plan Review 1/07/2017 1/07/2017 US$0 Owner ALL
Purchase Office 1/07/2017 15/07/2017 US$4,700 Owner Administrative
Supplies/Equip
Purchase Inventory 1/07/2017 1/08/2017 US$50,000 Sales MGR Sales
Grand Opening 1/07/2017 1/08/2017 US$500 Sales MGR Administrative
Advertisement
Hire Employees 15/07/2017 30/07/2017 US$0 Owner Management
Company Party 1/09/2017 1/09/2002 US$200 Owner Administrative
Totals US$56,400
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Figure 5: Milestones
Business Plan
Acquire & Develop Car Lot/Space
Complete Legal
Establish Acctg Books
Final Plan Review
Purchase Office Supplies/Equip
Purchase Inventory
Grand Opening Advertisement
Hire Employees
Company Party
Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep-
2016 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2017 2017 2017 2017
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9.0 OPERATIONS PLAN
9.1 JV Partnership
Sky & Lakes will operate the proposed auto sales and services company as a strategic
JV Partnership with a reputable Japanese auto manufacturer/dealer who will provide
the technical, financial, operational and vehicle supply aspects of the partnership. The
Ugandan partners in the proposed Sky & Lakes JV Partnership will on the other hand
secure the industrial land in a prime location of Kampala, provide the investment
guarantees, hire and recruit company personnel, and provide managerial expertise and
handle the sales and marketing aspects of the business.
9.2 Business Location
The Sky & Lakes will acquire and develop a 3-Acre plot in the Kampala Industrial
Business Park (KIBP) on the eastern fringes of Kampala city as a suitable business
space to support its operations. This space will include a reception area, administrative
offices, car bonding and car parking lots, petrol filling station, auto work/repair areas
(mechanical workshops), tyre service area, vehicle road worthiness inspection and
testing area and a quick-service restaurant area. It will provide easy access to
customers/employees with ample free parking.
The site will be in an attractive area of town and is within 10 kms of Kampala City
centre. Customers will be able to access the site easily since it is located along one of the
main trunk roads linking the Kenyan port of Mombasa to the Ugandan capital.
9.3 Facility Layout Plan
Facility Requirements —The ideal facility for Sky & Lakes is a highly visible location
with a lot large enough to hold up to 300 units and enough space for customer parking.
Also, we will construct a building large enough to house a vehicle maintenance and
servicing center and a sales floor with several private offices.
The facility will be intentionally built with added bays in anticipation of establishing a
maintenance facility for more than Sky & Lakes’ needs.
The vehicle maintenance and service facility will feature:
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• A six bay, 5,000 square foot state-of-the-art facility designed specifically for
vehicle maintenance with a security controlled parts room and storage
mezzanine.
• It will be fully equipped with an alignment rack and mobile lifts, which allow all
stalls to be used more efficiently. The building will also include full power
backup to avoid any downtime due to storm or supply related outages.
9.4 Equipment Requirements
Sky & Lakes will acquire and install all the necessary vehicle maintenance and
servicing equipment and small tools necessary to maintain and repair all types of
Japanese vehicles including specialized vehicles.
Additional equipment will include various types of office equipment for the
administration building/block such as computers/printers, office landline telephone
sets, fax machines, desk calculators, filing cabinets, coffee-making machines, etc.
9.5 Parts Supplies
Because of the anticipated volume of Sky & Lakes’ maintenance business, Sky & Lakes
auto service centre will be able to purchase parts at or near wholesale prices and have
nearly all parts delivered within two hours. Parts shipped from the manufacturer will
be obtained and shipped within 24 hours.
Because turnaround time is vital to Sky & Lakes and its customers, Sky & Lakes auto
service centre will make turn-around time from parts suppliers a vital part of the
customer relationship. ky & Lakes auto service centre will stock common parts
required by the market to ensure they have them on hand and ready for delivery when
needed.
9.6 Inventory
The assistant manager will be responsible for stocking a limited inventory of parts most
frequently serviced in vehicles, including lights, belts, clamps, and tires, and will use its
first contacts with the Japanese JV Partner/Franchisor to keep a rolling inventory of
frequently used parts. Sky & Lakes auto service centre will keep inventory flat even
while doubling the size of the business because (1) Sky & Lakes auto service centre can
change the frequency at which inventory is restocked, (2) Sky & Lakes auto service
centre management believes money is more wisely spent on investments or in savings
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rather than sitting on a shelf and (3) because based on past experience most parts will be
delivered within two hours. The Sky & Lakes auto service centre inventory will be
approximately US$ 100,000.
9.7 Accounts Payable
Sky & Lakes auto service centre will have payment agreements with the Japanese JV
Partner/Franchisor. Accounts may be paid interest free within 30 days‘ delivery. The
Administrative Assistant/Accounting Clerk will do accounts payable weekly or bi-
weekly.
9.8 Accounts Receivable
Sky & Lakes auto service centre mechanics will record their time and parts on a work
order generated by the manager or lead mechanic. This work order will be entered into
Fleetmax, a maintenance tracking software system, by the administrative assistant
immediately following completion of the work. The system will generate an invoice for
review by the General Manager within 24 hours for accuracy and completeness. The
General Manager will make any necessary adjustments after reviewing with the
mechanic as needed. Invoices will be mailed or faxed that day.
The majority of the accounts will be commercial accounts. The term will be net 30 days
upon completion of the work. Sky & Lakes’ auto service centre maintenance expects to
operate this way for a long time with minimal collection problems. It expects to handle
the vast majority of accounts in this manner with very good success. The administrative
assistant will review outstanding payments on a weekly basis and contact those
agencies for payment. By applying this approach, Sky & Lakes projects a bad debt ratio
of less than 1% and unpaid accounts over 30days of less than 3% of sales.
9.9 Business Operations
Sky & Lakes shall be a medium-sized enterprise having 50-150 workers at full capacity.
This business will be operational year–round, with the closing dates respecting the laws
of Uganda. The operating hours will be from 8 AM to 6 PM for Monday to Friday and 8
AM to 3 PM on Saturdays. The strategy of having a single centralized location for both
the head office and auto sales and service centre in Kampala reduces the expenses to be
incurred on office fixtures and fittings which is part of the pre-opening expenses for the
company. This shall further reduce the expenditures incurred on tax declaration and
payment.
68
The utilities shall include water and electricity which is estimated to cost US$ 1,000 per
month for the head office and other auto sales and service centre on-site facilities.
Administrative expenses are estimated to cost about US$ 800 per month for the head
office. Miscellaneous expense shall cover transport, car repairs and fuel. It is estimated
to cost US$ 2,000 per month for both offices. The listed expenditures heads are expected
to increase at a yearly rate of 10%, 5% and 4% respectively.
Table 14: Utilities, administration and Miscellaneous expenses for the first five years
Year Year 1 Year 2 Year 3 Year 4 Year 5 Notes Detail
Utilities 12,000 13,200 14,520 15,972 17,569 10% increase
Administration 9,600 10,080 10,584 11,113 11,669 5% increase
Miscellaneous 24,000 24,960 25,958 26,997 28,077 4% increase
Scheduling
Sky & Lakes auto service centre’s goal will be to regularly run at full capacity. Sky &
Lakes auto service centre will consider full capacity to be two fully staffed shifts of
10mechanics each. To keep all mechanics as productive as possible, Sky & Lakes auto
service centre will effectively schedule its work. In the target market, customer vehicles
are utilized most heavily from7:00 am -10:00 am and then from 2:30 pm – 5:30 pm – the
traditional rush hours. Customers are transporting their clients to work, meeting events,
or other places. As a result, Sky & Lakes auto service centre will establish a fairly
efficient daily schedule to complete incoming work.
Table 15: Basic Sky & Lakes Scheduling

Time Bus/Vehicle Runners Mechanics
6:00 am to • Return vehicles serviced from • Repair vehicles unfinished
10:00 am the day/evening before. from the night before.
• Pick up vehicles scheduled for • Repair Sky & Lakes vehicles
service that day. before they go out.
10:00 am to • Shuttle employees back to work • Begin work on vehicles
6:00 pm if necessary. brought in the morning.
• Pick up new work or return • Repair vehicles that people are
work finished. ‗waiting for.‘
6:00 pm to • Return vehicles that are finished • Repair vehicles still waiting
10:00 pm that day. from the day shift.
• Pick up vehicles for the evening • Repair Sky & Lakes vehicles
shift or service the next morning as they return
69
Second Shift
The second shift will start at launch and ramp up with demand. Overlap of General
Manager and Assistant Manager time between shifts will provide the necessary
supervision to schedule and prepare staff for the evening work. It is expected that Sky
& Lakes’ vehicles will be the primary repair need during the second shift, reducing
unexpected needs that outside customers may present when direct supervision may not
be on-site.
9.10 Customer Support Service
Sky & Lakes will operate a fully-equipped auto service centre with well-trained and
highly-skilled mechanics and technicians to provide a hands-on after-sales customer
support service both as a technical support service for all autos sold by the Company
and any other Japanese vehicle in Uganda that will have been brought to the facility or
serviced from a distant location beyond the physical confines of the auto service centre
by the Company‘s mechanics/technical crew. This customer support strategy will
ensure that Sky & Lakes offers better car-care after-sales support services that what is
currently available on the market in its efforts to win over more customers within a
short space of time from business inception.
The owners of these cars shall pay for their services with the advantage and in the full
knowledge that they shall have specialist mechanics handling/servicing their cars. The
Company will deliberately employ and maintain a range of good quality
technical/mechanical service equipment and skilled human resources that will make it
one of the most sought-after vehicle maintenance service companies in Uganda and the
broader East African region. Sky & Lakes shall therefore bridge this gap because its
customers will be able to have the professional hands and skills of Japanese expatriate
technicians in hand as well as the highly-skilled and dedicated Ugandan auto
mechanics for back-up on their Cars. Furthermore, they shall also receive a price
discount during their repairs for the first three months of 10%. This 10% discount shall
be paid by Sky & Lakes as part of its miscellaneous expense.
9.11 Quality Control
Quality control will be a primary concern for the Sky & Lakes auto service centre.
Negligent repair of a vehicle resulting in an accident can be devastating for the people
and repair vendor involved. To mitigate the chance of this risk, Sky & Lakes auto
service centre will:
70
• Not compromise quality staff to meet sales projections.
• Spot check all mechanics‘ work daily. The General Manager or Assistant
Manager will periodically check every mechanic‘s work on a random basis to
ensure quality work is accomplished.
• Have an annual training regimen that includes a substance abuse refresher
course.
• Offer outside training opportunities for new or continuing mechanics
certifications.
• Maintain a shopkeeper‘s insurance policy for mechanics and a US$1 million
liability umbrella policy in the event that an accident may occur.
9.12 Management Information Systems
Sky & Lakes' information and technology systems will be integrated into the building
where the Sky & Lakes auto service centre will reside. These systems will also include
other key office equipment assets like computers, telephone, and other office services.
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10.0 MANAGEMENT AND ORGANIZATION
10.1 Board of Directors (Governance)
Board size, board composition and the leadership structure of the board are important
characteristics that affect the effectiveness of the board management (corporate
governance). Corporate governance and corporate entrepreneurship are linked through
the Agency theory and corporate ownership and governance systems can affect the
manager‘s willingness to take risk. Ownership determines a company‘s relationship
with shareholders and its investment horizons. When major shareholders exist, they can
monitor executives‘ decisions and ensure attention to corporate entrepreneurship. The
corporate governance system-the mechanism that regulates the relationship between
executives and shareholders – can similarly and profoundly shape manager‘s
commitment.
The General board structure usually consists of a chairman, the chief executive officer,
External/Independent board Members (the Auditor and/or legal consultant) and a
board‘s secretary. This number could move up depending on the need of the firm and
the laws of the country in which it operates. According to Hilb (2005), ideally boards of
small firms should comprise three members, boards of medium size firms five (5) and
large firms seven (7). His findings revealed that in most cases committees with more
than eight members are hard to manage. Based on these findings Sky & Lakes shall
have a board made up of seven (7) members: the six owners and one independent
member. It should be noted that what matters is the know-how (TacitKnowledge),
active role and social characteristics on the board. Sky & Lakes shall have a strong
vigilant board that will encourage, support and facilitate the founding members in
pursuing their entrepreneurial objective.
Board of Directors (BoD): The Board of Directors (BoD) will establish policy, provide
direction, and oversee the actions of the Sky & Lakes CEO. Sky & Lakes will seek
candidates who have experience in establishing, overseeing, or running a successful
business venture.
Initially the Sky & Lakes Board of Directors shall be organized with seven members.
Three shall be appointed from the current Sky & Lakes Uganda board of directors. The
Japanese JV Partner/Franchisor will also nominate three members to the Board of
Directors while the remaining one member of the BOD will have no affiliation with Sky
& Lakes and will be selected from a broader community pool. Sky & Lakes will
appoint an interim board chair, with the final chair to be elected by consensus between
72
Sky & Lakes Uganda and the Japanese JV Partner/Franchisor. No Sky & Lakes
employee will have a seat on the Sky & Lakes Board of Directors.
10.2 Management Team
Sky & Lakes shall be led by its founders comprising of the Sky & Lakes Uganda
spearhead promoters and the Japanese JV Partner/Franchisor investment partners. The
founding entrepreneurs all have a business background and are willing to make this
company one of the most significant in this sector (auto industry) in Uganda. The
founding members know what is entrepreneurial orientation (autonomy,
innovativeness, pro-activeness, competitive aggressiveness, risk taking), and will use
the appropriate combination at the required periods in the life of the business venture.
The founding entrepreneurs are very positive about this opportunity as they would
have instead worked for a company with the same goal but have seen that the risks
involved is limited, success is ultimate and gains will be significant.
The Chief Executive Officer (CEO)
The CEO (MD) of Sky & Lakes will report to the Sky & Lakes Board of Directors and
will be responsible for directing the activity of Sky & Lakes, ensuring its profitability,
financing, marketing, cash flow and lending, as well as supervising the General
Manager. Based on Sky & Lakes‘ working protocols with auto maintenance operations,
this position will require less than 10 hours per week.
General Manager (GM)
The General Manager will be responsible for directing the daily operations of Sky &
Lakes. This will include scheduling customers, assigning work to mechanics,
supervising mechanics, bus/vehicle runners and office staff, ensuring that quality
standards are met, and marketing the service to new customers. In addition, the
General Manager will work with the CEO/MD to ensure the profitability of Sky &
Lakes.
Assistant General Manager
The Assistant Manager shall assist the General Manager with scheduling customers,
supervising and directing the work of mechanics, reviewing invoices for quality, and
managing the daily operations of the Company. In addition, approximately ½ of the
Assistant General Manager‘s time will be spent as an auto mechanic.
73
Sales and Marketing Manager
 Set the short- and long-term objectives of the department and communicate it to
the subordinates.
 Coordinate with the Director of Logistics and Purchases to ensure that auto
procurements, sales and service functions to customers are executed and
delivered on time.
 Follow up on marketing campaigns and ensure that they are directed towards
the targeted market.
 Monitor and follow up with auto sales and service account managers to achieve
sales targets and supervise the sales cycle.
 Make thorough assessments of the demand and supply of auto sales and services
in the Uganda auto industry and as well as the price situations in the same
market.
 Intensively deal with the processing of auto sales and service documentation
including tax payments and follow up with invoicing and receipting of auto sales
and service orders.
The Chief Accountant
 The Chief Account (C/A) will handle the complete account department of Sky
and Lakes and its employees.
 The C/A shall develop accounting procedures that are specific to Sky and Lakes.
 The C/A shall teach the new accounting programs to the new employees of Sky
and Lakesincluding his/her subordinates in the Accounting Department.
 The C/A shall also make recommendations for promotions in Sky and Lakes.
 The C/A will also have to coordinate with the heads of other departments.
 The C/A will also be tasked to come up with financial solutions to improve
profits.
 The C/A will also have a say in the pricing of auto products and services.
 The C/A will present the accounts to the management at quarterly intervals or
whenever express need arises to do so.
 The C/A will help with calculations of the taxes and preparation of books of
account of Sky and Lakes.
 The C/A will have to report any financial discrepancies to the proper authorities
in the Company.
74
Director of Logistics and Purchases
To be responsible for the logistics and warehouse (car bonds) functions company-wide.
To include ensuring adequate processes and procedures are in place throughout all
areas of the warehousing (car bonding) process to ensure accurate and efficient
recording of all warehouse (car bonds) transactions and to ensure adequate stock
holdings are always available. To arrange and structure the Warehouse (Car Bonds) and
Logistical function to effectively organize, distribute and produce the correct stock
requirements to the business as a whole. To implement standard operating procedures
to various warehouse (car bond) and auto service function premises within the
company. To ensure that the Sky & Lakes service delivery is uninterrupted. To ensure
that the Sky & Lakes team of Warehouse (Car Bonds) and auto service function
operatives are working to the best of their ability and fully train, manage and motivate
the team. Procure all the materials necessary to support the business in a timely and
cost effective manner. Negotiate and ensure best value in the purchase of supplies,
equipment and services for the Company. Performing administrative activities in
support of the purchasing, warehouse (car bond) and logistics function and related
work as required. To oversee the planned and unplanned maintenance of vehicle sales
and maintenance service machinery, buildings and equipment. Advocate the Sky &
Lakes vision and values, and to be fully responsible for the quality of service to the
customers and staff. To build relationships with all customers, office staff, sales team,
technicians, supervisors, managers and directors.
Employees
Sky & Lakes’ service will only be as good as its employees. Two action items will
ensure that Sky & Lakes has the ability to attract and retain the best possible staff. First,
the business plan projects 5% wage increases per year for all staff. Second, a staff
incentive plan has been included in the financial model. The incentive plan will share
5% of the gross margin with Sky & Lakes employees. The Sky & Lakes Board of
Directors will determine policies and payout of the incentive plan.
Mechanics
Sky & Lakes will hire experienced diesel and petrol engine mechanics that want to do
quality work. Sky & Lakes will add two mechanics per year for the first three years to
reach capacity. Sky & Lakes‘ vehicle maintenance service will offer a wage that is
competitive with the industry in Kampala metropolitan area. The business plan has
budgeted an average salary of US$ 4,800 per year with 5%increases annually.
75
Office Assistant /AP/AR
Sky & Lakes will have a full-time office assistant who reports to the General Manager.
This position will be responsible for all of the accounts payable and accounts receivable.
In addition, they will assist the General Manager in scheduling work.
Bus/Vehicle Runners
Bus/vehicle runners will be responsible for picking up and delivering vehicles for
service or after service has been completed. They will be required to have a commercials
driver‘s license and a good driving record. When they are not busy running vehicles,
they may assist with parts running, general shop clean up or other duties as assigned.
Management Services
The Sky & Lakes management services human resources will be responsible for initial
accounting start-up supervision, and marketing and communication.
10.3 Governance and Organizational Structure
Entrepreneurial structures are flat, which results in better communication, greater

delegation of authority and faster decision making. Generally, to encourage
entrepreneurship levels or layers of management need to be kept to a minimum to
ensure flexibility and responsiveness. Such organizations typically act in a rapidly
changing environment. To overcome these constantly changing challenges they often
use organic organization structures. An organic structure has a limited hierarchy, is
highly flexible and is decentralized. It is also horizontal rather than vertical.
Power shall be decentralized so that individuals are empowered to make decisions and
authority is linked to expertise and not to role. The structure is more informal than
formal with lose control and broader spans of control and team work is likely to be the
norm. Few bureaucratic rules or standard procedures exist as well as sensitive
information-gathering systems are in place for anticipating and monitoring the external
environment. Sky & Lakes shall operate under such a structure and Figure 6below is
representative.
76
Figure 6: Governance and Organizational Structure of Sky and Lakes
Board of
Directors
CEO/MD
General
Manager
Office Assistant
Sales and Chief

Director I/C Asst. General
Marketing Accountant (1)
Logistics & Manager (1)
Manager (1)
Purchases (1)
Mechanics (20) Sales/Marketing

Car Bonds Staff (10) Executives (3)
Agro-Secn Staff (6)
Tyres Centre Staff (10)
Spare Parts Staff (4)
Car Wash Staff (4)
Bus Runners (5)
Petrol Station Staff (6)
Restaurant Staff (8)
Vehicle Inspection &

Certification Staff (4)
77
10.3.1 Reporting Relationships
Because of the high level of qualifications and skills of the Management team the
structure shall be relatively flat from the beginning since Sky & Lakes shall have just
one centralized head office and shall therefore enjoy the benefits of a very flat structure,
fluid organization which has tremendous flexibility to quickly deploy technical, sales
and managerial resources to the places where they are most needed.
The owners of Sky & Lakes shall give a direction and set laws that are binding the
functioning of the company and also give advices on the technical issues like which
staff to train, how to improve productivity and how to approach and face competitors.
The board shall be made up of seven (7) members who shall meet quarterly.
Discussions will be guided by four different issues: workers training improve
productivity, competitor‘s issue, and salaries of the CEO/MD, major expansion
decisions and ownership issues. The board can meet exceptionally in case of an
emergency.
The CEO/MD shall report directly to the owners on a quarterly basis and at the end of
the financial year, he shall report about the performance of the company with focus on
the most important issues of the company.
10.4 Personnel Plan
Sky & Lakes shall operate with the following human resource: Chief Executive Officer
(CEO), the General Manager, the Assistant General Manager, Chief Accountant,
Director in-charge of Logistics and Purchases, the Sales and Marketing Manager, two
Marketing/sales officers, the auto Mechanics, the Office Assistant, the Bus/Vehicle
Runners and other composite services staff/employees. Salaries are estimated to
increase at a yearly rate of 5%.
The personnel plan and monthly salary is included in the following table. It shows the
CEO‘s/MD‘s monthly salary of US$3,500, followed by the successive lower level
management hierarchy positions ranging between US$ 2,500 to US$ 1,500 and technical
staff with salaries falling in the US$ 1,000 to US$ 300 bracket. Bonuses will be paid for
monthly sales that exceed forecasted sales, to all employees. As the business grows,
additional salesmen and technical services staff will be added.
Tables 16 and 17 shows the salary structure for Sky & Lakes during its first five years
as well as the salary structure for Year 1 respectively.
78
Table 16: Personnel (labour) expenditure for the first five years (In USD)
Year Year 1 Year 2 Year 3 Year 4 Year 5 Notes Detail
Labour 764,400 802,620 842,751 884,889 929,133 5% increase
10.5 Training Requirement
The quality controller and production supervisor should be given on-the-job training
for a period of one month by experts of the supplier of the machinery and equipment.
All the auto mechanics should also obtain a 15 days on–the–job-training on how to
operate the Sky and Lakes auto service centre vehicle maintenance service equipment
and handle the inputs. The estimated training cost is US$ 1,500.
10.6 Feedback and Control
1. Important notices and developments will be continuously communicated to

employees to keep them abreast of developments and promoting a sense of
belonging and oneness in the organization.
2. We will encourage our employees to put forward any suggestions they might
have regarding the improvement of any of the company's functions-an open
door philosophy. Such a culture will enhance innovativeness and creativity, in
turn leading to job satisfaction and enrichment.
3. We intend to make sure that our employees understand the goals of the firm, are
customer focused, proud of their work and work as a team. This will encourage
employees to become entrepreneurial and customer responsible, in addition to
unifying staff in customer focus and values.
79
Table 17: Personnel Plan & Payroll Structure
Position Nos Monthly Total Monthly Annual Salary
CEO/MD 1 3,500 3,500 42,000
General Manager 1 2,500 2,500 30,000
Assistant General Manager 1 2,200 2,200 26,400
Chief Accountant 1 2,200 2,200 26,400
Director I/C Logistics & Purchases 1 2,000 2,000 24,000
Sales & Marketing Manager 1 2,000 2,000 24,000
Office Assistant 1 800 800 9,600
Sales & Marketing Executives 3 1,000 3,000 36,000
Car Bonds Staff 10 400 4,000 48,000
Mechanics 20 400 8,000 96,000
Agro-Section Staff 6 400 2,400 28,800
Tyres Centre Staff 10 400 4,000 48,000
Spare Parts Staff 4 400 1,600 19,200
Car Wash Staff 4 400 1,600 19,200
Bus/Vehicle Runners 5 400 2,000 24,000
Petrol Station Staff 6 400 2,400 28,800
Restaurant Staff 8 400 3,200 38,400
Vehicle Inspection & Certification Staff 4 400 1,600 19,200
TOTAL 86 45,500 546,000
Fringe Benefits (40% of the above) 218,400
TOTAL ANNUAL WAGE BILL 764,400
80
11.0 FINANCIAL PLAN
11.1 Capital Requirements
The initial capital investment costs are projected at US$ 40.37 million. These include
Fixed Costs comprising industrial land in Kampala (the equity contribution of (Sky &
Lakes Uganda), the construction of car bonds and back office space (4,000 square
metres), a workshop area of 2,000 square metres, and integrated site area for a 3-S
facility (comprising of Sales, Service and Spare Parts under one roof and occupying a
space of approx. 5,600 square metres), acquisition cost for assorted workshop tools and
equipment, installation of power and water service utilities at the site, and expenses on
miscellaneous investments including computers, office furniture, furniture, fixtures and
equipment, acquisition of dealer identity, computer software and project support
vehicles. This project budget component is estimated to cost US$ 22.1 million.
Additional initial project capital investment requirements include working capital

expenses on purchases of initial stock of 200 Japanese brand vehicles, spare parts and
accessories, tires, fuel for the fuel-service station, and agro-section machinery and
equipment including tractors. This project initial investment cost component is
estimated to cost US$ 14.1 million.
There are some additional project investment costs including installation and
commissioning charges, pre-operating expenses, and a 7% physical contingency
allowance on the total project budget.
Table 18-- below presents an itemized cost breakdown of the required initial project
investment costs and capital requirements by Sky & Lakes Company.
81
Table 18: Initial Project Capital Investment Costs
Sr No Facility Size/Units Rate (US$) Total (US$)
A. Fixed Costs
1 Industrial Land (3 Acres) 3 300,000 900,000
2 Car Bonds and Back Office (square metres) 4,000 1,800 7,200,000
3 Workshop Area (square metres) 2,000 1,500 3,000,000
4 Integrated site area for 3-S Facility (square metres) 5,600 1,500 8,400,000
5 Workshop Tools & Equipment - - 500,000
6 Utilities (power & water connection) - - 100,000
7 Miscellaneous Investments: Computers/Dealer - - 2,000,000
Identity/Software/Support vehicles
Sub-Total Fixed Costs 22,100,000
B. Working Capital
8 Stock of Vehicles 200 30,000 6,000,000
9 Stock of Spare Parts and Accessories - - 3,000,000
10 Stock of Tires - - 3,000,000
11 Stock of Fuel 100,000 lts 1.00 100,000
12 Stock of Agro-Section Equipment 2,000,000
Sub-Total Working Capital 14,100,000
C. Additional Investment Costs
13 Installation & Commissioning - 30,000
14 Pre-Operational Expenses - 1,500,000
15 Sub-Total - 1,530,000
D. TOTAL 37,730,000
16 Physical Contingencies (7%) 2,641,100
GRAND TOTAL 40,371,100
11.2 Important Assumptions
The following assumptions will be incorporated into the Sky & Lakes financial pro
forma statements.
 All operating costs are based on Sky & Lakes management research of similar
operating companies.
 Automated informational system will reduce Sky & Lakes staff requirements.
 Developmental start-up costs are amortized over a five-year period.
 Overhead and operations costs are calculated on an annual basis.
 Sky & Lakes salaries and wages are based on a fixed salary expense basis.
 All fixed and variable labor costs should rise annually at 5%.
82
 All revenues, past year five are figured to rise annually at 7.5%.
 Fixed annual, administrative, and office expenses rise at an annual rate of 2.5%.
 We assume conservative earnings from selling loans and extended warranties
will be made.
 We assume that current market conditions will remain for the next two to three
years. Low rates will have a positive impact on sales and lending for the short
term.
11.3 Projected Profit and Loss
Table 19: Pro Forma Profit & Loss Statement (Year 1 – Year 5) in US$
Year Year 1 Year 2 Year 3 Year 4 Year 5
Sales Turnover 21,065,000 29,018,000 41,878,100 43,972,005 46,170,605

Cost of Goods Sold 11,804,800 16,327,080 23,228,128 24,389,534 25,609,011
Gross Margin 9,260,200 12,690,920 18,649,972 19,582,471 20,561,594
Operating Expenses
Labour/Payroll 764,400 802,620 842,751 884,889 929,133
Utilities 12,000 13,200 14,520 15,972 17,569
Marketing Expenses 6,000 6,300 6,615 6,946 7,293
Advertising/promotion 94,000 98,700 103,635 108,817 114,258
General Administrative 19,200 20,160 21,168 22,226 23,338
Professional Fees & Licensure 2,083 2,083 2,083 2,083 2,083
Insurance Costs 706,000 706,000 706,000 706,000 706,000
Travel & Vehicle Costs 30,000 31,500 33,075 34,729 36,465
Miscellaneous 24,000 24,960 25,958 26,997 28,077
Total Operating Expenses 1,657,683 1,705,523 1,755,805 1,808,659 1,864,216
EBITDA 7,602,517 10,985,397 16,894,167 17,773,812 18,697,378

Interest on Loan (8% p.a.) 3,200,000 2,880,000 2,560,000 2,240,000 1,920,000
Loan Refund 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000
NET PROFIT/LOSS BEFORE TAX 402,517 4,105,397 10,334,167 11,533,812 12,777,378
Corporation Tax 30% 120,755 1,231,619 3,100,250 3,460,144 3,833,213
Surplus ()/Deficit (-) 281,762 2,873,778 7,233,917 8,073,668 8,944,165
83
12.0 RISK ANALYSIS AND CONTINGENCY PLAN
All of the significant risks associated with Sky & Lakes will center on matching volume
flow to the level of qualified staff. Either the volume won‘t support the number of
mechanics Sky & Lakes will need to be profitable, or the marketing will be ‗too‘
successful and outpace the ability to hire qualified mechanics.
12.1 Ability to Attract and Retain Qualified Staff
Sky & Lakes will have no trouble finding and retaining quality staff because of Sky &
Lakes‘ work environment, benefits, competitive pay rate, and nonprofit reputation.
However, if unable to quickly attract or retain qualified staff, Sky & Lakes auto sales
and service centre will do the following.
• Increase the average base wage. The current average wage for Sky & Lakes‘
maintenance mechanics will be US$ 400 per month. The Sky & Lakes plan calls
for an increase of nearly 10% to an average monthly wage of US$ 400 in year one
with 5% increases per year.
• Implement an employee bonus program for Sky & Lakes employees based on
total sales/revenue. A 5% gross revenue commission rate was built into the
financial model for employee incentives. The table shows the money available for
bonuses per year based on the financial projections.
Table 19: Employee Bonus Funding

Year 1 Year 2 Year 3
US$ 16,280 US$ 24,334 US$ 30,742
• Launch a marketing campaign for qualified mechanics, which highlights the

benefits of working for Sky & Lakes.
• Temporarily reduce or suspend marketing efforts to reduce volume flow until

new mechanics can be hired.
12.2 Ability to Generate Adequate Volume in the Target Market
With the names, addresses, and contact information of over 900 organizations and a
potential vehicle pool of 13,797, inadequate volume is an unlikely scenario. However,
should it occur, Sky & Lakes will:
84
• Expand marketing efforts beyond the target market. While this will decrease the
social return on investment, it will allow Sky & Lakes to ramp up services as it
continues marketing efforts at the target group.
• Implement a new marketing strategy or approach. There are a number of

professional trade publications and newsletters where Sky & Lakes can
purchase advertising to target our market segment.
12.3 Ability to Expand
Given market size and service demand, Sky & Lakes will strategize ways to grow the
business to meet the demands beyond the three years of this plan. As previously stated
however, Sky & Lakes will not grow at the risk of reputation, quality, or care for
customers. Sky & Lakes will explore several options.
85

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BUSINESS PLAN:

SET UP & OPERATION

AUTO SALES &

COMPREHENSIVE SERVICE CENTRE

SKY & LAKES AUTO SALES & SERVICE CENTRE

SKY & LAKES AUTO SALES & SERVICE CENTRE

S/NO. DESCRIPTION PAGE

1.0 EXECUTIVE SUMMARY 1

2.0 PURPOSE OF BUSINESS PLAN 8

3.0 BUSINESS DESCRIPTION 10

4.0 THE ORGANIZATION/COMPANY 15

6.0 UGANDA AUTO INDUSTRY ANALYSIS 27

7.0 MARKET ANALYSIS 41

8.0 MARKET STRATEGY AND IMPLEMENTATION PLAN 46

9.0 OPERATIONS PLAN 66

10.0 MANAGEMENT AND ORGANIZATION 72

11.0 FINANCIAL PLAN 81

12.0 RISK ANALYSIS AND CONTINGENCY PLAN 84

T/NO. DESCRIPTION PAGE

1 Financial forecast extract for the first 5 years 6

2 Start-up Cost Summary 16

3 Types of Auto Repair Services 21

4 Sky & Lakes’ Advantages 26

5 Autos Indicators for Uganda 29

6 Uganda Vehicle Sales Market Share (2014 – 2015) 30

7 Duty Rates for Imported Vehicles, 2016 38

8 Sky & Lakes Marketing Messages to Customer Demands 50

Advertisement and promotion expenditure forecast for the first five

10 Advertisement and promotion analysis for Year 1 54

11 Sales Forecast (in units) 59

Utilities, administration and Miscellaneous expenses for the first five

15 Basic Sky & Lakes Scheduling 69

16 Personnel (labour) expenditure for the first five years 79

17 Personnel Plan & Payroll Structure 80

18 Initial Project Capital Investment Costs 82

19 Employee Bonus Funding 84

F/NO. DESCRIPTION PAGE

1 Estimated New Vehicle Sales in Uganda, 2004 – 2015 31

Factors in Selecting a Vehicle Maintenance Vendor in Uganda

3 Pricing Management Model 56

4 Sky & Lakes Auto Service Centre Pricing Structure 55

6 Governance and Organizational Structure of Sky and Lakes 77

Sky & Lakes is a start-up in the auto-dealership business in Uganda and is

We will be successful because we offer something different; a pleasant car buying

1.2 Statement of Purpose

1.3 The Problem and Solution

1.4 The Business Model

1.4.2 Target Market and Customers

1.4.3 Core Competence

1.4.4 Management Team

1.4.5 The Business Process

1.4.7 Financial Forecasts

Table 1: Financial forecast extract for the first 5 years (US$)

Earnings Before Tax 402,517 4,105,397 10,334,167 11,533,812 12,777,378

Taxes 120,755 1,231,619 3,100,250 3,460,144 3,833,213

Surplus ()/Deficit (-) 281,762 2,873,778 7,233,917 8,073,668 8,944,165

1.5 Business Objectives

The objective and goal of the company would be as follows:

1 COGS: Cost of Goods Sold

To be a leading automobile dealer and comprehensive auto services provider in Uganda

1.8 Keys to Success

To succeed in this business, we must:

 Put together a team of experienced professionals.

In today's highly competitive environment, formal business planning is an essential