SM BALA ENTERPRISE HAULAGE AND

LOGISTICS BUSINESS PLAN

NIGERIA

SUBMITTED BY
S. M . ENTERPRISE & CO
in association with
SANI JIBO Consults
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It is acknowledged by the reader that information to be furnished in this business plan is in

all respects confidential in nature, other than information that is in the public domain
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Table of Contents
Executive Summary ............................................................................................... 4

General Company Description ............................................................................ ..2

Products and Services............................................................................................5

Marketing Plan ......................................................................................................9

Nigeria ICT Market ............................................................................................... 16

Sales Plan………………………………………………………………………………………………………….19

Inventory………………………………………………………………………………………………………….21

Staffing ……………………………………………………………………………………………………………21

Facility …………………………………………………………………………………………………………….22

Legal Environment ………………………………………………………………………………………….23

Management and Organization ......................................................................... .21

Financial Plan .....................................................................................................24

Technical Specification …………………………………………………………………………………………………..29

Schedules and appendices................................................................................................... 27

I. Projected Fixed Asset

II. Projected working capital requirement
III. Projected income statement
IV. Projected Cashflow Statement
V. Projected balance sheet
VI. Projected fixed asset schedule
VII. Projected fixed asset depreciation

VIII. Projected Capital allowance

IX. Projected taxation

X. Projected Debt amortization

XI. Projected operating & sales computation

XII. Projected purchases

XIII. Note of Accounts

Executive Summary
This business plan is meant to articulate the vision and future of S. M BALA ENTERPRISE
Haulage and Logistics business, and to appeal to investors and external stakeholders to get
involved in this business and help with its funding as it is a capital intensive business. We
also hope that it will serve as a guideline for the owner to move towards the goals of the
community.

That a lot of opportunities exist in the Haulage and Logistics business subsector in Nigeria is
unarguable. Scholars are unanimous in their agreement that there exist a large untapped
market for Haulage and Logistics business buttresses this by pointing out that about 70% of the
Nigerian population is engaged in the informal sector or agricultural production. Going by the
country’s population of over one hundred and fifty million people we can deduce that about
one hundred and five million are in this sector. In the same line though differing in figures,
held that Haulage and Logistics business in Nigeria only serve less than ten million people
against the over 40 million that require their services. The gap in this subsector was further
demonstrated by when it showed that Haulage and Logistics business facilities in Nigeria
account for about 0.2 percent of GDP and less than one percent of total credit to the
economy.

The scenario above is indicative of an enormous market which Haulage and Logistics business
can take advantage of. This large untapped market in the Haulage and Logistics business
subsector is further enhanced by the fact that over 65% of the entire farming population of
Nigeria has no access to Haulage and Logistics services. To say that this leaves a lot of room
for existing Haulage and Logistics business to expand their scope of operations and for new
ones to enter will be stating the obvious.

HAULAGE AND LOGISTICS BUSINESS

Haulage means transporting of goods (products) from one place to another. This distance (mileage)
between the places of origin to the final destination is what the haulage business charges for. The
Haulage business is therefore the business of making goods available when and where they are
needed. This haulage business plan and sample proposal will be of great value for anyone interested in
haulage business.

Haulage starts from the point of extraction or loading to the point of delivery of the goods (products)
for the satisfaction of the final consumers.

goods that are Usually Carried Include:

 Petroleum products such as Premium Motor Spirit (PMS), Dual Purpose Kerosene (DPK),
Automotive Gas Oil (AGO), Low Pour Fuel Oil (LPFO) and other Petrochemicals.
 Building materials such as sand, clay, granite, cement, iron rods etc.
 Agricultural products
 Containers/cargoes from the ports
 Heavy duty equipments like generators, transformers, pole etc
 Solid minerals and other finished products
 Commodities like sugar, flour, salt etc.
Haulage distance charged can be within the state of operation e.g. Kaduna and is called (Local) or
outside the state called (Interstate) or within a geographical region e.g. Southwest, South south etc.

The Economic Value of Haulage Business

Haulage involves the movement of goods by both rail and road, but since the collapse of rail system in
Nigeria, road haulage has taken the lead. The country has enough population and a good network of
roads linking the 36 states and Abuja, though not in very good condition.

The transport sector is an important component of the economy impacting on the development and the
welfare of the huge population of about 140 million. When transport systems are efficient, they
provide economic and social opportunities and benefits that result in positive multipliers effects such
as better accessibility to markets and additional investments. Transport also carries an important
social and environmental load, which cannot be neglected.

General Company Description

S. M BALA ENTERPRISE Haulage and Logistics business site is in Kaduna city, at No 13

KABALA close off Liman Chiroma road Ungwan Rimi , Kaduna, Kaduna State. The
area has plenty open space, road connection, water availability and immediate access to
markets.

S. M BALA ENTERPRISE Haulage and Logistics is a new haul trucking business based in Kaduna,
Kaduna for all non-passenger transportation needs, including freight movement, delivery of goods to
warehouse, warehouses, etc. throughout Nigeria and to neighboring west African nation. As enormous
as this can be, this IS our vision for the future.

We hope to start our haulage business with two low level 6 tyre trucks for the conveyance of
agricultural produce and commodities. This numbers will increase as our business expands and
captures new territories and clients.

S. M BALA ENTERPRISE Haulage and Logistics will mainly serve both farmers and manufacturing
firms in the Kaduna and also serve to carry agricultural produces from the North to the south of the
nation. The business will develop a reputation for its on-time and accurate service as well as
sophisticated Web and software functionality, allowing clients to align their business with S. M
BALA ENTERPRISE Haulage and Logistics’ services and scheduling automatically. The business
will be managed by Alhaji Said Muhammad as CEO

S. M BALA ENTERPRISE Haulage and Logistics is positioned as a low-cost Haulage and Logistics
service provider at affordable cost.

The benefits of our products and services are

 Accurate and on-time distribution of goods throughout the federation and beyond.
 Effective monitoring of freight throughout the period of transportation online.
 Sound and quality management of freight during transportation to ensure optimum delivery
condition, etc.
 We provide excellent customer care services at all times
 All our services are offered at the lowest possible price.
Keys to Success for SM BALA ENETERPRISE Haulage and Logistics Business.

S. M BALA ENTERPRISE Haulage and Logistics’ keys to success over the next three years of its
commencement are as follows

1. Robust communication systems between drivers, bases, and clients

2. Setting delivery schedules that can be met (i.e. setting the right expectations)
3. Hiring and retaining reliable, safe drivers
4. Understanding what clients are trying to achieve, and helping them find the right distribution
solution to create long-term relationships

Objective of SM BALA ENTERPRISE Haulage and Logistics Business

Establish bases in Kano, Kaduna, Makurdi, Port-Harcourt, Ibadan, Onitsha and Aba.

Purchase 8 18-wheeler trucks with dry van trailers

Hire 10 full-time truck drivers

Achieve strong annual revenue based on 1.2 million miles of hauling in the third year

aulage has the Following Importance

1. Moving of material from the natural stage.

2. Conveying raw materials to the factory and helping the producers to convey their goods to
wholesaler or distributors.

3. Helping the producers to reduce the content of the warehouse. An efficient transport system
offering cost, time and reliability advantages permits goods to be transported over longer distances.
This facilitates mass production through economies of scale because larger markets can be accessed.
Thus, the more efficient transportation becomes, the larger the markets that can be serviced and the
larger the scale of production.

4. Helping the wholesalers (distributors) to get their purchased goods to their stores. Improvement in
the efficiency with which firms have access to raw materials and parts as well as to their respective
customers. Thus, transportation expands opportunities to acquires and sell a variety of commodities
necessary for individual and manufacturing systems.

Other Benefits of haulage

5. Increased competition. When transport is efficient, the potential market for a given product and or
service increase, and so does competition. A wider array of goods and services becomes available to
consumers through competition which tends to reduce costs and promote quality and innovation.

6. Increase land value: Land which is adjacent or serviced by good transport services generally has
greater value due to the utility it confers to many activities.

7. Haulage also contributes to economic development through job creation and its derived economic
activities. Accordingly a large number of direct (freighters, managers, shippers) and indirect
(insurance, finance, packaging, handling travel agencies, transit operators) employment are associated
with transport.

Producers and consumers take economic decisions in products markets, cost, location prices which are
based on transport services, their availability costs and capacity.
8. In conclusion, haulage makes goods and services available where and when they are needed. It
provides market accessibility by linking producers and consumers

The market for haulage is wide; hence demand for the services is always per seconds. As a result of
the high rate of importation the demand for the dispatch of containers boxes is high. Also with the
current form or our refineries that rely heavily on the importation of petroleum products the demand
for petroleum products haulage is high. Hence our proposal is based on TRUCKING.

S. M BALA ENTERPRISE Haulage and Logistics will simplify distribution of goods for Nigerians
becoming their partner in operating efficiently and reliably. S. M BALA ENTERPRISE Haulage and
Logistics will use management of logistics, on-time, accurate deliveries from destination to
destination and partnerships with distribution centres and warehousing businesses to achieve its goals.

Mission of SM BALA ENTERPRISE Haulage and Logistics Business

To provide high quality, convenient and comprehensive Haulage and Logistics service operations at
the lowest cost and exceptional customer care services in a loving and caring way with strong
emphasis on on-time delivery and sound condition of freight upon delivery.

Owners

Alhaji SAID MUHAMMAD

MrS FATEEMA MUHAMMAD SEED

Management Team
Mal Ibrahim Muhammed General Manager
Mal IB Bambale stores
Francis Njoku Accountant
Bukar Ibrahim Garba Marketing Manager
Mal Mohammed Almai Chief Security Officer
SANI JIBO, Senior Consultant

STAFF
Number of basic Sal Monthly Salary Annual Salary in (N)
Personnel
N N
    0
Scheduling 1 30,000 30000 360,000
Manager
 Accountant/Cashier 1 30,000 30000 360,000

Store keeper 1 20,000 20,000 240,000

        0
Secretary 1 20,000 20,000 240,000
Security 1 15,000 15000 180,000

      0 0
Total 5 115,000 115,000 1,380,000

We brought to the business:

 Long term exposure to prospective clients and leaders in the manufacturing and import
business.
 Capacity to consistently provide on-time, accurate, and reliable haulage and logistics services
at the lowest possible price.
 Effective cost management while offering the exceptional and high quality services.
 Our staff brings operational, marketing and promotional skills to the business.

Materials and Machine

At least three 18-wheeler trucks, conducive office space, furniture, office stationeries including
brochures, files, etc., a large parking lot, computer equipment, website, software application, freight
weighing technology, etc.

Trucks for haulage can be short framed. Trucks cost varies between N3m – N12m depending on the
size and age of trucks.

Competitor Analysis

People PREFARE OUR SERVICES because of the following reasons:

 On-time, accurate, and reliable haulage and logistics services.

 Use of ICT in monitoring movement of freights
 Excellent communication and interpersonal relations from our staffs and drivers.
 Services offered at very affordable prices.
 Outstanding customer services and willing correspondence.

COMPETITIVE ADVANTAGE

Our two major competitive advantages are:

 On-time, accurate, and reliable haulage and logistics services

 Excellent communication and interpersonal relations from our staffs and drivers.
 Lowest possible prices.

The Market

The users of truck services are: companies, individuals, agencies among others.

Transport business in Nigeria is as old as the nation itself and there is no doubt that those in the
business have been known to have contributed in no small way to the economic development of the
country. Transport plays an important role in most business activities. Efficient transport is an
essential component in the production and distribution process – commonly referred to as supply
chain logistics. Starting a Trucking business – Haulage and Logistics Starting a haulage business is
just like starting a wild fire. The returns are enormous, but it greatly depends on what your truck will
be doing. Haulage is a broad area and all spheres of haulage have its specific intricacies, the good
news is that it is not so difficult to learn. You may decide to haul products for oil majors like TOTAL,
OANDO, CONOIL or Telecoms companies like MTN, ZAIN, ETISALAT, GLO, etc. However, all
these companies have stringent entry procedure and requirements, so your option going in as an
individual may mean merging with some other persons in the business.

One interesting fact about this business is that if it is properly set up, all you need to do is sit back and
wait for your monthly earning which can be up to N800,000k (depending on the type, age and tonnage
of your truck). My research took me to some firms and I discovered how some Nigerians have been
consistently collecting money from big haulage contracting companies, I saw a long list of signatures
with a corresponding amount. I also noted that even the Trucks in the Country now are not enough to
satisfy the need of this sector

The Income Analysis

A simple dispatch of commodities to eastern or southern Nigeria goes for the rate of 100,000 per trip
if the truck travels 10 trips per month, you will have

80,000 x 10 = 800,000 a month.

With two light trucks, we will be having a total of 1,600,000 per month.

Note: these estimates are based on reasonable market estimates. The fares can reduces or increase
depending of time of year and economics situation and availability of gas.

POPULAR RISKS IN HAULAGE BUSINESS

Just like any high yielding business, haulage has it’s own problems too. Some of the challenges facing
this business opportunity are:

The Drivers: This is a major problem with this great business

 Your manager
 The state of your truck
 The Mechanic handling the repairs of the truck
 Winning Tricks

The solution to these problems are:

Get a good driver, or put you truck under a fleet manager that will take care of the running of the
truck on your behalf at an agreed fee.

Tracker: If you put all your trucks on a trucker, the moment your driver put on the ignition for the day
you will get all his movement through, text messages.

You can also seek the service of an experience mechanic to inspect your trucks before purchase. Also
seek counsel from people already in the business.
Have a central mechanic to do all your repair jobs.Also to ensure that all your trucks are of the same
brand.

Assumptions underlying financial projections:

 Depreciation is calculated on all fixed and capital assets assuming five-year lives and straight line
computation.
 The Directors equity contribution should be indicated ………………...
 cost to captured at N …………… which goes to purchases of trucks the head Office. The
equipment requirement should s includes installation costs.
 Salaries are approximately 13% of industry standard (higher at lower personnel levels in the
company).
 Cash purchases are the sum of the previous period’s payable, 20% of inventory purchases for the
period, and current period capital acquisitions.
Detailed budgets underling the financials are available for further review and discussion.
SM BALA ENTERPRISE HAULAGE AND LOGISTIC BUSINESS
2 YEARS PROJECTED CASH FLOW
YEAR 1 YEAR 2 TOTAL
000 000 000
N N N
CASH INFLOW
Income -
Trucks 19,200 28,800 48,000
- - -
Facility 10,000 - 10,000
A 29,200 28,800 58,000
0 - - -
Less Cash outflow - - -
Salary 1,380 2,070 3,450
wages 470 517 987
Purchases 9,000 13,500 22,500
Machines & Equipments 970 1,067 2,037
Repair & Maintenance 270 270 540
loan repaymant (P+I) 3,630 7,260 10,890
Rent 250 500 750
Depreciation 900 990 1,890
Transportation 252 277 529
Taxation 120 132 252
Sundry Expenses 268 295 563
professional/ management
150 165 315
fee
commitment fee - - -
Insurance 197 296 493
B 17,857 27,339 45,196
A-B 11,343 1,462 12,805
Opening Balance - 11,343 12,805
Closing Balance 11,343 12,805

SM BALA ENTERPRISE HAULAGE AND LOGISTIC BUSINESS

PROFIT AND LOSS
 
  000  
  N  
     
-  

INCOME 19,200 -
-  
Total Sales 19,200  
Purchases 9,000  
Gross profit 10,200  
Administrative Expenses    
Salary 1,380  
wages 470
Repair & Maintenance 270  
Rent 250  
Depreciation 900  
Transportation 252  
Sundry Expenses 268  
professional/ management fee 150  
commitment fee -  
Insurance 197  
  4,137  
Net profit 6,063  
Taxation 120  
Net profit after Tax 5,943  
 SM BALA ENTERPRISE HAULAGE AND LOGISTIC BUSINESS
12 MONTHS PROJECTED CASH FLOW STATEMENT
  MONTH MONTH MONTH MONT MONT MONT MONT MONT MONT MONT MONT MONT Total
1 2 3 H4 H5 H6 H7 H8 H9 H 10 H 11 H 12
                           
  000 000 000 000 000 000 000 000 000 000 000 000 000
  N N N N N N N N N N N N N

CASH INFLOW        

Income        

TRUCKS 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 19,200
         
Facility 10,000 0 0 0 0 0 0 0 0 0 0 0 10,000

A 11,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 29,200
        0
Less Cash       0
outflow
Salary 115 115 115 115 115 115 115 115 115 115 115 115 1,380
wages 20 22 20 80 76 55 50 20 10 17 88 12 470
Purchases 9,000 0 0 0 0 0 0 0 0 0 0 0 9,000
Machines & 970 0 0 0 0 0 0 0 0 0 0 970
Equipments
Repair & 0 0 0 120 0 0 0 0 150 0 0 0 270
Maintenance
loan repaymant 0 0 0 0 0 0 605 605 605 605 605 605 3,630
(P+I)
Rent 0 0 0 0 0 0 0 0 250 0 0 0 250
Depreciation 0 0 0 0 0 0 0 0   0 0 900 900
Transportation 110 15 14 10 14 17 10 11 17 14 10 10 252
Taxation 0 0 0 0 0 0 0 0 0 0 120 0 120
Sundry Expenses 37 21 21 21 21 21 21 21 21 21 21 21 268
professional/ - - - - - - - - - 150
management fee 150 - -
commitment fee - - - - - - - - - 0
- - -
Insurance 100 97 0 0 0 0 0 0 0 0 0 197
-
B 10,402 273 267 346 226 208 801 772 1,168 772 959 1,663 17,857
A-B 1,198 1,327 1,333 1,254 1,374 1,392 799 828 432 828 641 -63 11,343
Opening Balance 0 1,198 2,525 3,858 5,112 6,486 7,878 8,677 9,505 9,937 10,765 11,406  
Closing Balance 1,198 2,525 3,858 5,112 6,486 7,878 8,677 9,505 9,937 10,765 11,406 11,343