Karibu Loo is off to a very strong start in 2018, largely due to several significant long-term rentals. Here are the highlights:
Long-term rentals. The portable sanitation business in the U.S. is primarily based upon long-term rentals. It is virtually impossible to build a successful portable sanitation business by only supplying to events, however events have constituted most of our business to date in Kenya. Long-term rentals are an essential ingredient to profits as they ensure a steady stream of revenue to cover costs.
In January, Karibu Loo rented out 66 units for about 15 days to a unit of the British Army that is training the Kenyan Army and another 10 units to a Chinese construction firm for the entire month. Both of these clients are candidates for long-term contracts. In addition, we have weekend long-term rentals at several churches. Together, these long-term contracts plus normal event business generated just over $2,000 of profit in January.
Employment. Five of our graduates are employed by Karibu Loo in marketing (1), operations (3), and accounting (1). In addition we employ many recent high school graduates as “sales and operations associates” whose responsibilities include keeping the loos clean and well supplied at events around Nairobi. This is a good way to provide income for these students and teach them basic workplace etiquette – showing up on time, dressing appropriately, speaking confidently with clients, and following through on responsibilities.
Issues. The biggest challenge faced by the business today is that our only truck has become very unreliable. The truck has served us well for the past several years but is increasingly prone to breakdowns. We have had to outsource movement of loos and cleaning services when the truck was not functional which cuts into our margins. We are building a new trailer that will be pulled by our pickup truck and can carry six loos.
A second challenge faced by the business is receivables. We have worked hard to reduce receivables, but getting customers to pay on a timely basis in Kenya is a recurring problem.
Growing the business. We are considering ordering more cabins and an additional exhauster. We have had many days in January and February when the constraint on business volume was lack of available cabins and the logistics of having only one exhauster and truck has become too risky. Meanwhile, we are raising funds to replace the old truck immediately.