PALM OIL SALESAND DISTRIBUTION

BUSINESS PLAN

GLOBAL FEEDERS LIMITED (Proposed

company name)
A farmers group…
CONTACT INFORMATION :

Name: OLAJIDE TAOHEED KOLAWOLE

Company: Global Feeders Limited (Proposed name)

Address: No. 28 University Road Tanke Ilorin Nigeria.

Phone: 08063553987

Email: [email protected]
Table of Contents
1.0 Executive Summary.....................................................................................................................1
1.1 Objectives....................................................................................................................................2
1.2 Mission...........................................................................................................................................2
1.3 Keys to Success.........................................................................................................................2
2.0 Company Summary......................................................................................................................3
2.1 Company Ownership................................................................................................................3
2.3 Location and facilities..............................................................................................................3
2.4 Start-Up Summary...................................................................................................................3
2.4.1 Required Funds..................................................................................................................4
3.0 Product Description......................................................................................................................6
3.1 Services.........................................................................................................................................6
4.0 Market Analysis Summary.........................................................................................................6
4.1 Market Segmentation..............................................................................................................7
4.2 Target Market Segment Analysis........................................................................................7
4.3 Industry Analysis.......................................................................................................................8
4.4 Challenges Facing the Palm Oil Industry.........................................................................8
4.5 SWOT Analysis...........................................................................................................................8
4.6 External Environmental Analysis.........................................................................................8
4.7 Competition and Buying Patterns.......................................................................................9
4.7.1 Main Competitors..............................................................................................................9
Table: Market Analysis..............................................................................................................10
4.8 Target Market Segment Strategy.....................................................................................10
4.9 Sales Strategy..........................................................................................................................11
4.9.1 Sales Forecast..................................................................................................................11
5.0 Strategy and Implementation Summary...........................................................................12
5.1 Competitive Edge....................................................................................................................12
6.0 Marketing Strategy.....................................................................................................................13
6.1 Web Plan Summary................................................................................................................13
6.2 Website Marketing Strategy...............................................................................................13
6.3 Development Requirements................................................................................................13
7.0 Management Summary.............................................................................................................14
7.1 Organizational Structure......................................................................................................14
7.2 Management Team.................................................................................................................14
7.3 Personnel Plan..........................................................................................................................14
Table: Salaries and Wages......................................................................................................15
8.0 Financial Plan................................................................................................................................15
8.1 Important Assumptions........................................................................................................15
8.2 Break-even Analysis...............................................................................................................16
Table: Break-even Analysis....................................................................................................16
8.3 Projected Profit and Loss.....................................................................................................17
Table: Profit and Loss 3 years summary...........................................................................18
8.4 Projected Cash Flow...............................................................................................................19
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 Chart: Cash Flow.........................................................................................................................19
Table: Cash Flow Year Two.....................................................................................................20
Table: Cash Flow Year Three..................................................................................................21
Pay Back Plans 22
8.5 Vision Statement.....................................................................................................................22

8.6 Corporate Objectives.............................................................................................................22

8.6.2

Page 2
1.0 Executive Summary

Global feeders limited (proposed) is a farmers group, we specialize in sales of

farm produce, we help get Local farmer’s produce from there locality to the
Urban or area where it is needed, help repackage the produce for a better
distribution.

The main goal is to provide a quality palm oil for our consumers in a way that is
more sustainable, and more cost effective than our competitors. We target
areas where Palm oil is not readily available and we supply them with palm oil
which is much cheaper than competitors through our research and good
understanding of the business we can help to relieve the local producers of
palm oil, by buying their already processed palm oil and get it to the targeted
customers.

Our focus will predominantly be on business to business selling whereby we will

work as a channel between the Local producers and the consumers or other
retailers.

We will operate from Ilorin, Kwara state where we have a large warehouse to
store the palm oil when we buy from the farmers, before we transport to the
targeted part of the nation we intend to do business. Reasons behind this
choice in location are because Ilorin is a close corner to the Location of the local
farmers of palm oil, and Ilorin is a center point in the nation and goods can
easily be distributed to other region which is cost effective. Our major goal is
also to buy from the local farmers directly without delay and distribute
nationwide.

We have a conducive environment as warehouse which helps preserve and

keeps the palm oil fresh and healthy.

Our unique selling point is producing a more environmentally friendly, high

quality palm that is rich in nutrients and affordable will be the driving force
behind generating interest and sales from consumers all over the nation.

The plan is based on more than 5 years of experience in palm oil sales and
distribution. It is highly focused and promises to follow a path of prosperity for
its owners and staff. The projections contained herein are authentic and will be
used as the budget for the business. 

The marketing research and tailored marketing strategy described in this

business plan will result in after-tax profits of 30% in Year 1 and increasing as
time goes on.
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1.1 Objectives

We have identified the following objectives to pursue in the upcoming years:

1. Become a major player in the palm oil industry
2. Have our business be the go-to place to purchase cheap, environmentally
friendly palm oil
3. Reach profitability within 24 months from when we start full distribution of
our product.
4. Expand our customer base through direct referrals and aggressive direct
sales. 
5. Expand our product line gradually, based on customer requests.
6. Expand our custom feed mill to meet the growing sales market.
7. Expand the types of services offered to our customers, as their desires are
identified.

1.2 Mission

Our mission is to meet customers’ increasing demands for a more sustainable

palm oil by providing them with a clean, more environmentally friendly and
nutrients rich palm oil. We will offer all of our customers the direct personal
attention they deserve. Our commitment to customer service and satisfaction
assures us that our customers are 100% satisfied with our products and
services.

1.3 Keys to Success

Our keys to making this venture a success is:

1. Maintaining our core-values to only provide a more sustainable quality to

the palm oil supplied by competitors
2. Maintain low operating costs.
3. Keep the supply chain to a minimum number of steps to ensure
convenience for our target market.
4. Product freshness and quality.
5. Constant research of industry to keep knowledgeable of market needs.
6. Management: products delivered on time, professional customer
service, managing budgets.
7. Constant evaluation of strengths and weaknesses with adjustments made
as warranted.

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2.0 Company Summary

The company is a startup that is be located in Ilorin, Kwara state.

The community is known for its interconnectivity with other states and regions
of the country which makes it a good location for distribution. Warehouse is in a
good and accessible location which aids the loading and offloading

The team has spent, in total, hundreds of man hours in the research and study
of the market from development of the product and the method of production
and plantation, best oil source and location that will provide us a good palm oil
supply.

To date we have studied and developed a fully functional method of supply, and
distribution of our product.

As a team largely composed of personnel who are experienced and educated in

the field of Palm oil processing and plantation, together we form a powerful
unit.

2.1 Company Ownership

The company is 100% own by Olajide Taoheed Kolawole

2.3 Location and facilities

The Warehouse location is at No.28 University Road, Tanke Ilorin Kwara State.

We are trading from this spot because is it a great place to reach our target
market. We think the population base is large enough for our business and it
has a stable economic base that ensures healthy environment for the products.
Also we think it is a spot that could tap a healthy workforce. We also
considered pedestrian traffic and we think a large percentage of them are
potential customers. The location will help us reach customers in Kaduna,
Sokoto, Kano and other targeted states.

2.4 Start-Up Summary

This section of the plan shows projected startup costs.

Start-up expenses for Global feeders limited include initial insurance payments
covering both general liability and product liability, pre-launch marketing to
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 cover flyers, a direct mail campaign, and advertisements in local papers, the
development of a website for customer interaction, and the normal legal
expenses for consultation and permitting. Other current assets include office
and store furniture, shelving, a computer, phone system, and tools. Long-term
assets include the land, building, equipment, delivery van among others.

We are hoping to get loan of N 7,500,000. From our analysis, we are looking at
a total startup budget of N7,365,750 . Details are provided in the tables below.

2.4.1 Required Funds

Required Start-Up Funds Amount Totals

Fixed Assets
₦
Warehouse 300,000.00

Equipment 260,000.00

Furniture and Fixtures 50,000 .00

Vehicles 3,500,000 .00

Other Fixed Assets 100,000 .00  

Total Fixed Assets 4,210,000

Operating Capital
Pre-Opening Salaries
and Wages 215,000 .00
Prepaid Insurance
Premiums 10,750 .00

Inventory 100,000 .00

Legal and Accounting
Fees 30,000 .00

Utility Deposits 10,000 .00

Advertising and
Promotions 50,000 .00
Licenses and CAC

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 registration 150,000 .00
Other Initial Start-Up
Costs 40,000.00
Working Capital (Cash
On Hand) 2,550,000 .00  

Total Operating Capital 3,105,750

 
₦
Total Required Funds 7,365,750.00

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3.0 Product Description

We will offer our customers products and supplies (processed and well-
packaged palm oil in various sizes ranging from 1litre to 25litres for home
usage and 50 liters and above for commercial or industrial usage, fiber and
palm nuts.

We will offer the supply of high quality and well-packaged palm oil to
resellers/wholesale and companies in Nigeria.

Our distinctive unique selling point of providing high quality palm oil and is
well-processed and packaged that will be approved by NAFDAC and endorsed
by Standard Organization of Nigeria and a product barcode at affordable price
compare to our competitors will be sufficient enough to secure our company’s
survival in a competitive market.

We offer all of the above great products, while evaluating the desire and need
by our customers for improvement and other products.

3.1 Services

With our well refined palm oil, preservative and storage facilities, we distribute
to all regions of the nation.

4.0 Market Analysis Summary

We are a highly technical niche player offering the supply of strong product that
is in great demand. We have identified that our target market are the brokers
and distributors who have established relationships with large corporations who
order palm oil on mass to be utilized in the production of their own goods for
resale.

Firstly, most of the small scale business persons in Ilorin and its environs will
patronize us. Wholesalers, hotels, palm kernel oil and palm oil sellers in the
area can buy directly from us in bulk.

Secondly, the various soap, cosmetics and food industries within Imo State can
come to us for their raw materials. This will result in increase in profit and
profitability since there are not too many competitors in the north region
market.

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4.1 Market Segmentation

We have identified the following segments which make up our market:

1. Distributors and Wholesalers: Since our major sales objective is business to

business, we will sell more to wholesalers and distributors who will then sell
to the final consumers.

2. Drug makers/manufacturer

3. Cosmetics manufacturers

4. Food manufacturers

4.2 Target Market Segment Analysis

Distributors and Wholesalers: This is potentially our greatest market

opportunity. Distributors and Wholesalers buy in bulk and sell to small stores,
for home use etc. This is a growing market in terms of its palm oil use.
Therefore it seems logical to exploit this opportunity and devote the majority of
our time and palm oil supply meeting this demand. This market will potentially
be the basis of our growth.

Cosmetics/Personal Care Industry: Palm oil and associated products are present
in over 70% of cosmetic products. The growing demand for personal care
products has contributed to the high demand of palm oil. As a non-food
product, palm oil makes an important raw material in the production of soaps,
detergents.

Food Production Industry: In the food industry, palm oil is used as a cooking oil
and shortening and in the manufacture of margarine, non-dairy creamers and
ice cream. About 80 % of the palm oil produced is used in the food industry
globally. It can be found in a wide range of food products such as cooking oils,
margarine, fats for baking, pastries, biscuits, ice cream and various other kinds
of foods.

4.3 Industry Analysis

The palm oil industry is characterized by a multi-step supply chain:

Smallholders and large estate holders, millers, refiners, traders, manufacturers,
retailer. Unlike the end consumer, the big purchasing bodies of palm oil have
full visibility of the supply chain.

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 4.4 Challenges Facing the Palm Oil Industry

The palm oil industry is faced with some challenges. Below are some of the
common challenges that are faced by producer:

1. Inadequate storage facilities result in low cultivation of oil palm in Nigeria.

2. Agriculture has suffered from years of mismanagement, inconsistent and
poorly conceived government policies, and the lack of basic infrastructure.
3. Bulk of Nigerian palm oil comes from dispersed and semi-wild groves, and
through the use of highly outdated manual processing techniques.

4.5 SWOT Analysis

Strengths Weaknesses
 Consistent quality: We will  Lack of funding: We will need up
constantly supply palm oil that is to N7.5m in fund to kick-start fully
of high quality, well package and  No reputation yet: We haven’t
rich in nutrients. established ourselves as a
 Experience: The owner is highly reputable firm yet.
experience with over 5years in the
industry
 Saleable Palm oil: We produce a
high ratio of healthy(saleable)
palm oil
Opportunities Threats
 Customer Loyalty: Customers are  Similar size competitors:
looking company that supply individuals with similar plant have
quality oil with long shelve life being in business
 Growing market: The palm oil  Weather: poor weather will
market is an ever green growing adversely affect yield.
commodity and the demand is  Pests: Pest are thread to our
very high. ability to provide healthy plant or
access fresh kernel

4.6 External Environmental Analysis

Socio-cultural – habits of our consumers will definitely affect our business. Also, the successes of food
manufacturing firms, soap, etc that order our products will indirectly affect our business.

Technological - A good technical infrastructure would lead to better production and hence lower costs.
Technology will also mean more effective business marketing.

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Economic – economic trends such as demand and supply will determine the sustenance and profitability
of the business. Also inflation rates will affect the way we pay our employees and the price of the
product.

Political – this will include government policies concerning inspection by the ministry of health and
agencies like NAFDAC.

4.7 Competition and Buying Patterns

There has been a strong demand (sellers' market) for high quality and uniquely
packaged palm oil for several years. Traditional buying patterns in this industry
are based on quality, price, reputation of the producer, delivery times and
proximity to markets. During such a sellers' market, buying patterns are often
more influenced by availability.

The buying patterns of the different customers are typically based on these
variables:

 Price
 Availability
 Ability to deliver consistently on long-term contracts
 Consistency.

4.7.1 Main Competitors

Currently, there is a shortage of 700,000 metric tons of palm oil in Nigeria, the
demand is high and the local producers are unable to meet demand, due to
unavailability means of transportation or large storage facility. But the demand
for palm oil is so high and the market is still buoyant.

Some of the competitors are

Local Traders :

These are local palm oil sellers who buy in bits and sell in bit, our aim is to be
a head of the chain. There are very common and they are scattered all Ilorin
markets.

Well-Known Brand and Established Companies:

1) Okomu Oil Palm Company

2) Presco Plc
3) OKITIPUPA Oil Palm Plc

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Table: Market Analysis

Market Analysis
2017 2018 2019
Potential Customers Growth CAGR
Distributors/wholesaler 5% 9,846 10,338 10,855 5.00%
s
Drug 2% 1,450 1,479 1,508 2.00%
makers/manufacturer
Cosmetics 5% 2,750 2,887 3,032 5.00%
manufacturers
Food manufacturers 8% 20,434 22,068 23,834 8.00%
Total 6.63% 35,129 37,440 63,062 6.63%

4.8 Target Market Segment Strategy

Strategically targeting the entire market segment to increase sales, position our

brand and build a good customer base. We will also carry out marketing
activities assessments to determine how effective the strategies we will employ
is to the success of the business.

From our analysis, we will focus more:

1. Distributors and Wholesalers: from our marketing plan we will have deep
commitment to the segment. Base on over 5years experience working in this
field, I have discovered that majority of the buyers are those that come from
the Northern part of the nation to buy in drums and 25litres to go and
resell ,we would break that channel and be the channel and save them time
and cost of coming down southwest to get their products by doing the
distribution.
2. Our 2nd segment is cosmetics manufacturers: The demand for personal care
product is increasing with quality palm oil and industrial palm oil, we will
make these segment one of our targets. This is because palm oil and
associated products are present in over 70% of cosmetic products.

3. The other segment we will target is food manufacturer and drug

manufacture.

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4.9 Sales Strategy

We will use direct sales strategy. We will approach members of our target

markets via phone and with direct visits. We will tell them about our current
products and services, and then ask them clearly what we need to do to earn
their business. We will listen to their desires and individual goals. We will then
mirror back to them what they have said to be sure we understand their needs.
Finally, we will create an individualized sales proposal with their specific needs
(products, volumes, frequency, price, other services) included.

We will present the proposal as a written agreement ready for signature by

both parties to begin doing business.

Details for each order will be entered into our customer database. Deliveries
will be automatically scheduled through our point of sale/delivery database or
base on customer’s specific requirement. Each customer price grid, conditions
and all specific comments will be clearly maintained for all to review and to
guarantee complete customer satisfaction. Each order will be reviewed by one
of the owners prior to delivery to guarantee quality, accuracy and
completeness. Terms for payment will be COD and an invoice for each shipment
will be faxed or called to each customer the day prior to delivery to ensure
payment is ready at the time of delivery. (This will all be part of the agreement
terms.)

Follow up calls will go to each customer within 24 hours of each delivery to

ensure satisfaction. If for any reason there is an issue, it will be handled
immediately by one of the owners directly with the customer.

4.9.1 Sales Forecast

The sales forecast indicates that growth will be slow but steady. Growth will be
slow because of the time and effort needed to develop the customers and build
good customer base. The premier element to our financial plan is initiating,
maintaining, and improving the factors that create, stabilize and increase our
cash flow

There are a few risks that could have a negative impact on sales. The first is
transportation hazards. Another risk that could affect sales is some sort of poor
packaging, poor quality among others. We have put in place measure to curtail
these.

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5.0 Strategy and Implementation Summary

Emphasize customer service

We will differentiate ourselves with CUSTOMER SERVICE! We will establish our
business as a clear and viable alternative for our target market, from the
scores of competitors known for "do-it yourself," "no we don't offer that
product," and "no delivery available."

Customer service is paramount in our business and our business plan. The

management team will accomplish this goal by training employees and by
providing encouragement.

The new management team believes that an employee who is happy at work
will enjoy working. It is always easier to please customers with staff that cares,
a facility that is clean and equipment that is kept in proper working order.

We will also work toward establishing community involvement programs that

will demonstrate how the business can contribute to a better quality of
community life. Community project groups such as

Build a relationship oriented business

Build long-term relationships with customers, not single-visit deals. Become
their "palm dealer of choice." Teach them the value of the relationship.

Focus on target markets

We need to focus our offerings on specific population groups as the key market
segment we should own. We definitely want to be able to sell to smart, quality
conscious customers.

5.1 Competitive Edge

Global feeders Limited have three competitive edges that will help them
maintain strong growth rates, increasing their market penetration.

The first edge is quality. Our palm oil prides itself on the high quality palm oil
that is well-processed with modern techniques and well-packaged, because we
sort the best from the millers. The products we distribute is hygienic and any
palm oil that do not meet our standard is not bought by us.

Second competitive edge is the affordability. Affordable will be the driving force
behind generating interest and sales. What also makes us unique is that we

Page 14
 delivery on time at our customer’s location helping them to save time and
money.

Third competitive edge is the transportation. We transport and deliver to the

buyer’s location, which helps save the client stress and time.

6.0 Marketing Strategy

Wealth palm will implement the following Marketing Strategies upon the
business transfer in the following order:

1. Direct Marketing: we will personally market (sell face to face) our products
to various palm oil dealers, companies etc

2. Customer Referral: we will provide customer incentives for direct referrals, in

the form of price discounts.

3. Website Marketing: we will implement our web plan and review the outcome
to determine the efficiency it has on our customer base.

4. Event Marketing: we will visit area  agro events to hand out flyers, business
cards, and product catalogs, and to meet potential customers face to face.

Through marketing our products in these ways, we project that Wealth

palm’s will almost double its business within the first 2 years of new ownership.

6.1 Web Plan Summary

Website will enable us to offer customers current information on special sales,
promos, new product releases, events, and public service announcements. We
also plan on utilizing the Web to sell and market our products and services. An
e-store will also be implemented into our web design, allowing customers to
place orders for the feed they need right on our website. We will be able to
accept and process check and credit card orders immediately online. Our
customers will still have the options of paying by cash, check or money order as
well.

6.2 Website Marketing Strategy

Our website will be promoted through the use of sponsor listings and affiliate
memberships. Our site will be registered with all of the major search
engines. We will also share links with our distributors and manufacturers.

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6.3 Development Requirements

Our website will be initially developed with few internal technical resources

7.0 Management Summary

The company's management is highly experienced and qualified. The company

strives to hire qualified people who take pride in their work. The company's
management philosophy is based on responsibility and mutual respect. We
maintain an environment and structure that encourages productivity and
respect for customers and fellow employees.

The following subtopics outline both the management team, and its team of
employees.

7.1 Organizational Structure

The Organizational Structure of Global feeders limited is planned to be a simple

and traditional one. All production and manufacturing operations will report to
the COO. All administrative and finance functions will report to the CFO. Both
the COO and CFO will report to the CEO, who will also have the responsibility
for Sales and Marketing.

7.2 Management Team

Olajide Taoheed Kolawole : Chief Executive Officer:
As the top manager, the CEO, he is responsible for the entire operations of the
company. It is his responsibility to implement decisions and initiatives and to
maintain the smooth operation of the company, with the assistance of the
management team

Mrs Amina Hussaini: Chief Financial Officer:

Also reporting directly to the CEO, she is responsible for analyzing and
reviewing financial data, reporting financial performance, preparing budgets
and monitoring expenditures and costs. The CFO routinely checks the
corporation's financial health and integrity.

7.3 Personnel Plan

Global feeders is responsible to its employees, the men and women who work
with the company throughout the state, everyone is considered as an
individual, the company respects their dignity and recognizes their
merit. Employees are encouraged to have a sense of security and pride in their

Page 16
 jobs. Additionally, employees are free to make suggestions and complaints.
The company affords equal opportunity for employment, development, and
advancement for those qualified

Table: Salaries and Wages

S/N TITLE SALARY

1 MANAGER #60,000
2 ACCOUNTANT #40,000
3 STAFF #25,000
1(SECRETARY)
4 STAFF 2 #20,000
5 DRIVER #70,000
TOTAL #215,000

8.0 Financial Plan

8.1 Important Assumptions

This business plan was developed for our palm oil sales and distribution
assuming the following:

 Steady growth from good management, barring any unforeseen local or

national disasters such as...
 An adequate loan amount to allow for initial implementation of plans.
 Competition and buying patterns remain similar to those used for
forecasting.
 Existing customer base maintained.
 Market research is on target and current (received from different state
organizations).
 New customers will be gained through direct sales and advertising.
 VAT is 5%.

8.2 Break-even Analysis

Break-even is based on fixed costs of approximately…

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 .

Table: Break-even Analysis

Breakeven Analysis

Breakeven Analysis Dollars Percent

Annual Sales ₦
Revenue 10,506,000.00 100.00%

Cost of Sales 2,550,000.00 25.00%

Gross profit Margin 7,956,000.00 75.00%

Salaries and Wages 2,580,000

Fixed Operating
Expenses 1,309,000

Total Fixed
Business Expenses 3,889,000

Net profit 4,067,000

Calculatio
n:

Gross profit margin = Gross profit/Turnover X 100%

7,956,000/10,506,000 X 100%= 75%

Net profit margin = Net profit/Sales X 100%

4,067,000/10,506,000 X 100%= 38%

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8.3 Projected Profit and Loss

Outlined below and in the following table and chart, are some of the intrinsic
facets of the projected profit and loss for Wealth palm

Cost of sales reflects our cost to buy the product and purchase all other
materials. Gross margin will continue to rise at a steady pace throughout the
years forecasted.

Payroll expenses currently include income for the one owner. As forecasted,
additional employees will be brought aboard as required to keep up with the
growing pace of our distribution further details are available in our Personnel
table (above).

Advertising and marketing expenses (online ads, radio giggles ads, etc.) are
projected to increase as net profits increase and positive results are
accomplished as a direct result of the same marketing and advertising.

Depreciation forecasted includes normal wear and mechanical tune-ups on

trucks and all equipment in use.

Fuel costs are projected to grow as the amount of sales made that require
delivery increase. This projected expense includes fuel for the trucks,
generator, etc.

Utilities are projected to increase year to year. The current market prices for
utilities will change as the years past.

Payroll taxes include social security, unemployment and workers compensation,

etc. Dealers permit and state tax is projected to be paid in one annual
installment in the month of January as required by law.

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Table: Profit and Loss 3 years summary

YEAR 1 2 3
Currency(Naira) # # #
Sales(TOTAL 10,506,000.00 14,008,000 17,510,000
REVENUE)
Cost of sales 2,550,000.00 3,400,000 4,250,000

GROSS PROFIT 7,956,000.00 10,608,000 13,260,000

Revenue 3,889,000.00 4,274,000 4,769,000
Expenditure(Total
Business
Expenses)
NET PROFIT 4,067,000.00 6,334,000 8,491,000

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8.4 PROJECTED CASH FLOW

Projected Income Statement- Year 1

Fixed Operation Legal Fees #360,000

Expenses
Utility #120,000
Advert #50,000
Tax #50,000
Warehouse #300,000

Car Maintenance #300,000

Pension(Staff #129,000
Insurance)

5% Of Salary
TOTAL FIXED #1,309,000

Salaries and - #2,580,000

Wages
Sales Cost 300 gallons @ #8500 #2,550,000

Gross Profit 12% Of sales for 26 #7,956,000

trips a year
Total Revenue Gross Profit + Sales #10,506,000
Cost
Total Fixed Salaries + Fixed #3,889,000
Business Operation Expenses
Expenses

NET PROFIT Gross Profit – Total #4,067,000

Fixed Business
Expenses

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Projected Income Statement- Year 2

Fixed Operation Legal Fees #260,000

Expenses
Utility #180,000
Advert #60,000
Tax #50,000
Warehouse #300,000

Car Maintenance #400,000

Pension(Staff #144,000
Insurance)

5% Of Salary
TOTAL FIXED #1,394,000

Salaries and - #2,880,000

Wages
Sales Cost 400 gallons @ #8500 #3,400,000

Gross Profit 12% Of sales for 26 #10,608,000

trips a year
Total Revenue Gross Profit + Sales #14,008,000
Cost
Total Fixed Salaries + Fixed #4,274,000
Business Operation Expenses
Expenses

NET PROFIT Gross Profit – Total #6,334,000

Fixed Business
Expenses

Page 22
Projected Income Statement- Year 3

Fixed Operation Legal Fees #260,000

Expenses
Utility #240,000
Advert #80,000
Tax #50,000
Warehouse #300,000

Car Maintenance #500,000

Pension(Staff #159,000
Insurance)

5% Of Salary
TOTAL FIXED #1,589,000

Salaries and - #3,180,000

Wages
Sales Cost 500 gallons @ #8500 #4,250,000

Gross Profit 12% Of sales for 26 #13,260,000

trips a year
Total Revenue Gross Profit + Sales #17,510,000
Cost
Total Fixed Salaries + Fixed #4,769,000
Business Operation Expenses
Expenses

NET PROFIT Gross Profit – Total #8,491,000

Fixed Business
Expenses

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Pay Back Period

YEAR CASH FLOW

1 #1,175,000

2 #1,350,000

3 #1,550,000

4 #1,950,000

5 #2,150,000

8.5 Vision Statement

Our vision is to be the leading palm oil and palm kernel oil distributor in Nigeria in
the next ten years.

8.6 Corporate Objectives

8.6.1 Short to Medium Term Objectives (1 to 5years)

 To provide products that satisfy the needs of our consumers; both households
and industry.

 To create a profitable venture that will ensure high returns for investors.

To open up a processing facility that will ensure high productivity, minimize
processing losses and ensure efficiency.

 To recruit, train and develop a workforce that will help create and add value to
the business.

 To develop a new product line every two years and add value to existing
products as often as possible.

 To hit a distribution level of 10T/day of palm oil in the 5th year of operation.

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8.6.2 Long Term Objectives

 To effectively utilize the end products of processing in order to derive extra

revenue from them or for reducing production cost.

 To establish an oil palm farm

 To export palm oil to other countries.

8.7 Corporate Values

Our values among other things are:

1. Healthy products;

2. Consumer satisfaction;

3. Quality;

4. Environmental sustainability;

5. Integrity and creativity;

6. Protection of workforce and the general public.

8.8 Risk Management

8.8.1 Risks of Palm Oil Sales Business

Our industry is faced with a lot of risks that could result in unexpected outcomes
both at the macro level and the micro level. However, different firms in the
industry face different levels of unsystematic risks and different measures are
undertaken to diversify away or mitigate those risks.
Common risks such as unstable transportation are a major headache to the
industry. Our effort is to have our own truck so as to help ease the risk of delay,
another unfortunate situation is the uncertain change in price of product. Apart
from these risks, other common risks include oil leakage, theft and burglary, and
accidents.. The main output and input price risk that would be faced by Us is
commodity price risk. The commodity price risk which arises from fluctuations in
the prices of the raw material used is a very big problem, since we do not have an
oil palm estate, we depend solely on farmers and other suppliers, if they change
their prices, it will definitely affect our cost of production and eventually our output
price will change.

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8.8.2 Risk Management Strategies
In order to reduce the impact of the above risks, We have decided to adopt the
following strategies:

1. Precautionary measures to prevent the occurrence of the most likely risks such
as oil leakage, theft and burglary and accidents. New and good containers would
be use always and that helps protect the product. The firm would also employ
competent security personnel to take security over business assets and property.
To prevent accidents, there would be no compromise on safety dressing and
movement of people and staff around the premises of production, and our driver
will be taught proper driving lesson and safety measures. Well experienced drivers
would be employed to drive our vehicles, frequent servicing and maintenance of
out truck and other movable assets would also be ensured. Other precautionary
measures would include training and seminars relating to safety at work.

2. Aside the above measures, the firm would take a comprehensive insurance
policy that would cushion the firm of its losses upon the occurrence of any such
risks.

3. To counter our commodity price risks, the firm would ensure bulk purchases
and increased storage whenever the raw materials are available and cheaper to
offset the impact of periods of scarcity and higher prices.

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