BUSINESS PLAN FOR THE ESTABLISHMENT OF TRICYCLE TRANSPORT COMPANY


1          BUSINESS OBJECTIVE
To establish the most reliable Tricycle Transport Company in Ebonyi State that will meet the increasing demand on safer intra-city transportation services and creation of job opportunities.
2.         BUSINESS OPERATION ENVIRONMENT/OVERVIEW  
The business will be situated at Abakaliki Capital territory. It will improve on the availability of transportation services at all times in the Capital and environs, with the restriction on motorcycles well known as “Okada” by the State Government because of high rate of accidents and records of crime committed by some motorcyclists, and the approval of tricycles to operate on major roads within the Capital. Another factors is the high cost of maintaining cars used as taxis, most drivers resorted to
driving tricycles for business.
3.         PRODUCE AND SERVICE OFFERED
Tricycle has highest safety record among other means of intra-city transportation in the state. It is very convenient to customers and can penetrate parts of the city that cannot be reached by taxes due to rough terrain or narrow pathway. Its loading capacity also out-weights that of motorcycles.
4.         OVERALL BUSINESS STRATEGY      
We shall employ 5 drivers to drive 5 tricycles which when purchased are registered with the State Licensing office and Keke Owners and Drivers Union. The essence of the later registration is that the Union complement in the monitoring and evaluation of the drivers and usage of the tricycles daily as well as their general conduct. 
The drivers and their guarantors are to sign a Hire Purchase agreement with us which will be prepared by our lawyer. The drivers do not make any payment before signing the agreement. It is required that at end of a year and seven months, the transaction will be concluded with each driver paying a total of N750,000.00 for each tricycle and assume the ownership of the tricycles.
A day within the weeks is fixed for the weekly return of N10,500.00 for each driver. A penalty fee of N500.00 is paid by any defaulter, it is a measure to ensure strict adherence to terms.
The maintenance is the drivers responsibility, he will be assigned to a trained mechanic certified by the tricycle dealer with maintenance booklet for each tricycle.
5.         MANAGEMENT TEAM                
i.          A Manager: He is a TC2 holder. He retried as Principle Post Officer in NIPOST. He manages the activities of the office. He liaises with the Union in recording the daily monitoring and evaluation of the driver activities.
ii.         A Cashier: SSCE holder. She keeps the books of account, receives and pays money to the Bank.


6.         CASH FLOW PROJECTIONS     
A.        COSTING/LOGISTICS OF TRICYCLES
i.          1 piece of tricycle                    -           360,000.00
ii.         Registration of number plate      -              7,500.00
iii.        Registration with Union             -             23,090:00
iv.        Initial service charge                 -                2000.00
v.         Acid for battery                       -                  500.00
vi.        Sealed engine oil                       -                  500.00
vii.       Fuel                                        -                1000.00
viii.      Total cost for a tricycle              -         N394,590.00

B.        TOTAL CASH FLOW FOR 2 YEARS
At the end of 2 years of this Business plan, there will be a positive cash flow of N5,040,000.00 (Five million, forty thousand naira only)
i.          5 Tricycles per week                      -      N52,500.00
ii.         5 Tricycles per month of 4 weeks    -     N210,000.00
iii.        5 Tricycles for one year                  -           N2,520,000.00
iv.        5 tricycles for 2 years                     -           N5,040,000.00
C.        CASH FLOW ANALYSIS
Bi.       Each tricycle is to return to the office on the agreed day of the week the sum of N10,500.00. The total returns of the 5 tricycles for one week with be N52,500.00
Bii.      Each tricycle is to return to the office a total of N42,000.00 in one month. The 5 tricycles are expected to return the total sum of N210,000.00 in a month.
Biii.     Each tricycle is expected to return to the office the total sum of N504,000.00 in one year. 5 tricycles are expected to return the total sum of N2,520,000.00 in one year.
Biv.     Each tricycles is expected to return to the office the total sum of N1,008,000.00 in 2 years. 5 tricycles are expected to return the total sum of N5,040,000.00 in 2 years.
D.        ASSUMPTIONS  
i.          We assume that there will be consistency in the terms of agreement by all parties in this business. This will enable us sustain the cash flow projections as stated and the payment of the loan as projected. To achieve this, we are to buy at least 3 tricycles within the first year of receiving the loan to start the replacement of the initial 5 tricycles purchased which the drivers are expected to complete their payment after a year and seven months.
Each months total                                           -             210,000.00
Monthly payment to Bank                              -              56,000.00
Balance                                                           -           N154,000.00
We shall have N616,000.00 every month. From this amount we can purchase a tricycle and run the routing administration of the office for 4 months.
ii.         The State Government will continually sustain the approval of tricycles operating in the State because of the highest road safety records they have so far, the reduction of motorcycle operation related crime in the State, and the revenue the State and Local Government generate daily from each tricycle.
iii.        Any of the drivers could have personal related health challenges or family related issues that my affect his consistency for a short period depending on the nature of the issue or challenge.

PROPOSED PAYMENT SCHEDULE      
We propose to pay back the loan of N2m to the Bank in 3 years.
At the rate of N56,000.00 per month from the date the loan is granted in cash, are shall pay back the sum of N2m in 36 months, which is 3 years.
Schedule is as follows:-
i.          Proposed amount to pay for each week                                -           N14,000.00    
ii.         Proposed amount to pay for a each month (4 weeks)             -           N56,000.00
iii.        Proposed amount to pay for one year (12months)               -              N672,000.00
iv.        Proposed amount to pay for 3 years (36 months        )           -           N2,016.000.00

From the schedule, we have an over plus of N16,000.00 which we shall with hold to make the required payment of the loan to be N2m.
The schedule implies that we can make the total loan payment in 2 years, 11 months and 3 weeks. 
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