Are you aware that the construction sector is the fastest growing industry in Kenya currently? According to the recently released data from the Kenya National Bureau of Statistics, construction industry grew at 13.6% faster than the financial and agriculture sectors which grew at 8.7% and 5.6% respectively.
You don’t need rocket science to know where the big money is. Going by the recent trends, an investment in this massive industry would certainly be timely as well as rewarding especially due to factors such as devolution, discovery of oil and a growing middle class.
But sorry for boring you with heavy jargon and numbers, I was just trying to help you see the opportunities that exist around you and what the future holds. Talking about opportunities, one incredible business idea from the construction industry is the one of scaffolding rentals.
Our research has shown that Kenya has a serious shortage of scaffolds. Not many people have realized that it is possible to set up a small scaffolding rentals business with small amounts of capital. In our opinion, this is a ripe opportunity that is still under-exploited.
What Is Scaffolding Rentals Business All About
A scaffold is a temporary structure on the outside of a building that is being constructed. This structure can be used by workers to climb as they perform specialized tasks such as paint-work, building repairs or construction. Another job of a scaffold is to hold concrete together in order to allow for formation of slab and pillars of a house under construction. Most constructors prefer to rent scaffolds as opposed to buying them as a way to save on cost and minimize liability. (Understood?)
Step 1: Getting Started
A picture showing timber for scaffolding use. Courtesy/ topobiavi
If you are planning to start on a small budget then its far much easier to start with wooden trappers and then you can advance to steel scaffolds as your business expands. So step one will be to find good quality pine/eucalyptus wood from the local timber yards. Kitengela would be a good place to begin your search although you can always expand your search to other parts of the region in order to get cheaper prices.
Tip: Ask for high quality 8 by 1 or 9 by 1 wood. Also ask for props.
Step 2: Look For A Yard
A yard is basically an empty plot of land where you can keep your wood and props as you await customers to come rent them. This doesn’t have to be anything fancy. Just a central area from where you will be running your operations from. So if you have an idle piece of land near a growing town center then this could be a brilliant way to put it to good use. Alternatively you can lease one.
Tip: Look for a minimum 20x30ft piece of land that is accessible by motorized transport.
Step 3: Plan For Transport
Because scaffolds are heavy items, it is important to plan on how you are going to be picking and delivering them to your clients. If you have a pick-up truck or a small lorry then you will have a slight advantage. However, if you are just a small investor looking to start from scratch, then you will need to talk to transporters in your area an negotiate prices in advance.
Tip: Typically it costs about Ksh2000 to hire a pickup truck for about 1 hour.
Step 4: Print Brochures and Business Cards
Now that you have everything catered for, you can boldly start approaching prospective customers and handing them your business cards and price list. Your customers will mostly be foremen, commercial and residential property developers and so forth.
Tip: Your price list should be based on the duration of rental period. For instance, a popular price tag on the Kenyan market is Ksh100 for each wooden scaffold rented for 40 days.
Important Facts
Picture showing a building under construction using a combination of wooden and steel scaffolds. Courtesy/ causeeyeengineering
*Consistent marketing and good service are important ingredients for reaching a wider market.
*For short distance deliveries you can use a cart (mkokoteni) to deliver. A new mkokoteni will costs you Ksh20,000 to acquire.
*Consider charging delivery/pickup fees to boost your revenue. Alternatively, consider providing free transport to woo new customers if there is competition.
*As you advance you can switch to steel scaffolds which have longer life than wooden ones. Each unit will cost you about Ksh1,000 to acquire although the price varies depending on the international price of steel.
*You can expect to lose about 10% of wooden scaffolds due to wear and tear during each rental period. Essentially that means you can re-use a load of wooden scaffolds for a maximum of 10 times before they get worn out completely.
*Steel scaffolds can be re-used for a much longer time and they are preferred where unique building shapes are required (e.g. dome shaped buildings).
*The average rental price for wooden scaffolds is Ksh100, steel scaffolds Ksh150 and props Ksh25 so you can think out your pricing on that basis.
*Apart from scaffolds other items that you can add to your rentals list include: bucket hoists, concrete mixers, shovels, vibrators, ladders and wheelbarrows.
*Consider insuring your equipment to avoid unexpected loses.
*Demand for scaffoldings rental is available throughout the country particularly due to the effects of devolution. Some prime areas include: Nairobi Metro region, Mombasa, Kisumu, Nakuru and Meru.
*The only mandatory license required is the county single business permit which will cost you about Ksh10,000 per year at most.
How Much To Invest
Minimum Estimates For Wooden Scaffolds
200 Pieces of Eucalyptus Timber – Ksh50,000 (Ksh250 per piece)
200 Pieces of Eucalyptus Props – Ksh16,000 (Ksh80 per piece)
Transport To Your Yard – Ksh10,000
Others (Marketing, Miscellaneous) – Ksh24,000
TOTAL BUDGET = Ksh100,000
How Much To Expect
You can make a decent Ksh1 Million per year on a small yard.
Final Word
The good thing about this business is that you don’t have to be involved in its day to day running. That means you can continue doing what you do best even as you leave this business to run in the background (provided there’s good marketing involved). Best of all, there is room for growth. The transport sector is a multi-billion venture and the future looks bright. So don’t hesitate, if you feel this is the kind of business that would resonate with your needs and passion, go ahead and give it a try.
