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.