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Helped the client assess the market potential and financial feasibility of an infrastructure project

Situation

The ambitious project had the potential to transform the lives of people through its greenhouse farming spaces combined with low-cost housing and added value components, such as solar power and food processing facilities. The project required a huge investment for on-time execution and effective implementation which made it imperative for the founders to assess the market to understand the actual scenario of Africa’s food, housing, and employment sector in general and Nigeria in particular.

Furthermore, it was also crucial to understand the project profitability, break-even period, ROI, and IRR to consciously assess the lucrativeness of the project from an investment perspective and precisely understand the quantum of funds required for project completion.

Bizcon was hired by one of the directors to assist them in finding the true market potential and translate them into numbers that can be used to find the monetary benefits of the project apart from the economic and social benefits. Bizcon was also responsible to produce a comprehensive plan to be presented to investors stating every detail about the company, its plan, etc. In addition to the above document, Bizcon had to develop a financial plan and a pitch deck.

Client Context

  • A UK-based company wanted to bring the age-old community-building movement wrapped in technology to fight the food, unemployment, and shelter crisis in Africa.
  • The idea was to develop a self-sustainable community with a controlled environment (greenhouse) farming unit, a residential society, schools, a marketplace, and many other things, in partnership with key stakeholders, forward-thinking partners, and African governments. The houses will be sold to farmers along with greenhouses where owners can do controlled environment agriculture. Mortgage assistance was available for potential buyers.
  • The goal was to develop a total of 100,000 units over 10 years, with phase 1 consist 1162 state-of-the-art greenhouse growing spaces along with houses. The first phase was to start in Nigeria.
  • All farms and houses will have the provision of solar power reducing reliance on the power grid. Each farm will produce a mix of high-value crops, crops that constitutes a major portion of Africa’s food import.

BIZCON’s Approach

  • Assess the African market in general and Nigeria in particular to understand the social and economic impact of the food, shelter, and unemployment crisis along with the factors responsible for these crises. Other macroeconomic factors such as the need for affordable housing and essential food were also explored to understand the market demand.
  • Conduct audience research to find their pain, willingness to farm in a controlled environment, and expectations.
  • Conduct competitor analysis – Exploratory research was done to look into available solutions provided by various government, public and private organizations and the impact they have created to date and their acceptance in the market.
  • Analysis and recommendation post data gathering and sanitization for effective decision-making.
  • Translate market, audience, and competitor analysis into numbers to perform feasibility analysis and to understand other financial implications of the projects such as funding requirements, cash burn rate, etc.
  • Projected financial statements to be presented to investors for them to help in investment decisions.
  • Use previous findings and documents along with insights from experts to create a bespoken Business plan. An operational plan was also developed as part of the business plan focusing on implementation strategy, functioning and project monitoring, and risk management.
  • Use a business plan and financial report to create an investor deck to be presented to potential investors to give a glimpse of the overall ideas and activities.

The Result

It was revealed that Africa was in a dire need of affordable housing with 21 million population having no access to shelter and thousands dying every day due to hunger. Moreover, food shortage is creating a huge dent in GDP as well due to imports. It was also revealed that the measure taken so far were discrete and cannot cope with the issue. People are willing to work and are provided proper training, security, and authority in their life.

  • We provided the client with a comprehensive report on our findings for them to take an informed decision.
  • We also developed the financial feasibility of the project indicating that the fund required to execute the project will be around USD 45 Million with a break-even period ranging from 13-17 years. Few fundamental data related to the project such as average greenhouse size, home size, cost of building a greenhouse and home, etc. were provided by the client.
  • Business plan including an operational plan, financial projections, and investor deck was developed based on the above findings.
  • Management structures were also provided to the client for efficient operations.
  • Mortgage calculator was also provided to the client for them to keep track of their payment schedule to potential lenders in case they opt for debt funding.

The Decision

Understanding the magnitude of the problem prevalent in the region and the quantum of funds required for project development and execution, the directors decided on a few key aspects

  • To take the project ahead as a means to uplift society instead of looking at it as a revenue-creation venture.
  • Management decided to run a pilot phase in Nigeria with 8-11 fully functional premises.
  • Additionally, they shifted their focus from investors to government aid and grant as well as to specialized agencies such as UNO, WHO, etc.
  • They plan to increase the share of produce to farmers.
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