LINOLMAR ENTERPRISES
PO Box 10196, Dar es Salaam, Tanzania
Tel.: +255 754 874 170 & 715 876 170
Email: samlmtali@yahoo.com
Business Plan
for Linolmar
Maize Flour and Rice Mill
Project
Business Plan for Linolmar Maize Flour and Rice Mill Project Page 1
LINOLMAR ENTERPRISES
PO Box 10196, Dar es Salaam, Tanzania
Tel.: +255 754 874 170 & 715 876 170
Email: samlmtali@yahoo.com
BUSINESS PLAN
FOR
LINOLMAR MAIZE FLOUR AND RICE MILL PROJECT
TABLE OF CONTENTS
PAGE
1. Introduction
1.1 Purpose of this Business Plan
1.2 Finance Capital Required
1.3 Highlights of Projected Financial Performance
2. Background Information
2.1 Statutory Aspects
2.2 Management Equity
2.3 Investor Equity
3. Tanzania’s Food Industry Outlook and Analysis
3.1 Food Industry Outlook
3.2 Industrial Analysis
4. Linolmar Maize Flour and Rice Mills Project
4.1 Inspiration to undertake the Project
4.2 Project Promoters
4.3 Project Description
4.4 Physical Location of the Project
4.5 Objectives of the Project
5. Technical Aspects of the Project
5.1 Requirements to Execute the Project
5.2 Statutory Requirements to Execute the Project
5.3 Plant & Machinery Requirements
5.4 Sources of Supply Plant & Machinery
5.5 Utilities Requirements
5.6 Skilled and Unskilled Labour Requirement
5.7 Packaging Material Requirements
5.8 Raw Material Requirement & Supply Sources
5.9 Packaging Material Requirement
5.10 The Maize Flour and Rice Milling Operations
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5.11 Projected Daily Production Outputs
5.12 Environmental, Health & Safety Considerations
6. Marketing Management Aspect
6.1 Marketing Aspect Overview
6.2 Products and Services
6.3 Customer Profile
6.4 Demand Situation
6.5 Competitive Situation Analysis
6.6 Marketing Objectives
6.7 Marketing Strategies
7. Organizational and Management Aspects
7.1 Corporate Organization
7.2 Day to Day Management of the Project
7.3 Manpower Projections
7.4 Management Profile
7.5 Organizational Budget
8. Financial Projections
8.1 Capital Investment Cost
8.2 Basic Assumptions
Cost of Land & Building
Plant & Machinery Cost
Motor Vehicle Cost
Office Equipment & Furniture
Pre-operative Expenses
Working Capital Required for(Raw Material,
Packaging Material, Consumable Store)
Cost of Overheads
8.3 Sources of Finance Capital
8.4 Forecasted Sales Revenue
8.5 Projected Financial Statements
8.6 Financial Analysis and Ratios
8.7 Revenue and Expenditure Budget
9. Economic and Social Benefits
9.1 Benefits on Country’s Economic Development
9.2 Employment Creation/Poverty Reduction Benefits
9.3 Financial and Social Benefits
9.4 Benefits to the Community
10. Project Implementation Checklist
11. Conclusion and Recommendations
4 THE GRAIN MILL
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4.1Operational Structure of a Grain Mill
A grain mill is a relatively simple operation, adaptable to both
basic community-level and more sophisticated commercial
contexts. Most common in the rural areas of Northern
Mozambique, and of particular interest to TechnoServe in the
context of the Millennium Mills Project, are small-scale
hammer mills, as illustrated in the figure below.
Typically at these community mills, people bring their grains
in fabric-contained bundles or recycled rice sacks and wait in
line for their turn to mill. Both men and women bring grain to
the mills, about 50/50 in terms of gender distribution
according to interviews.
The first step is to weigh the grain, after which it is deposited
into an input funnel
(1) that controls the flow into the mill. A motor drives rotating
blades
(2) that grind the kernels into a fine-grained flour, which is
then pushed upward through an output funnel by a fan
(3). The flour then passes through the funnel and a sieve
(4) into a catch container.
There are typically two to three employees at a simple
community mill: one to weigh the grain, one to operate the
mill, and one to act as a guard and keep crowds orderly.
The main investment in technology for a basic mill is to
include a hulling machine that pounds the grain prior to
milling so that the outer hull is removed. Hulling results in
finer, whiter flour, which is generally preferred by clients as it
is said to make tastier xima (porridge).
In the absence of a hulling machine, clients will use an
oversized mortar and pestle to pound the grain by hand prior
to bringing it to the mill, a lengthy and tiring process. If given
the option, and assuming they have the available cash,
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clients will almost always prefer to hull their maize
mechanically, even if it means cutting back on spending
somewhere else. As such, having a hulling machine quickly
becomes a differential for success for the community-level
mill.
Opportunities in Poultry Feed Production There is unmet
demand for quality, cost-effective, locally produced poultry
feed in Mozambique. The feed market can be divided into
those growing chickens for their own consumption and small
commercial growers selling at local markets or sale posts
(large commercial producers would not be in the market for
small quantities of feed produced at local hammer mills).
Some small growers will use the “waste” (hull and germ) that
is left after pounding/separating; this waste (farelo) is often
left at the mill site, leaving the miller with the opportunity to
produce a marketable chicken feed – the alternatives are to
discard it or use it to make grain alcohol. Poultry feed is
usually made from a pre-blend of fish/meat meal, vitamins,
minerals, bran, and groundnut/sunflower cake, along with a
maize and soy component.75 Both the soy and pre-blend are
prohibitively costly for small-scale consumers, presumably
because transport costs are high and there is a lack of
economies of scale for bringing these components to
Northern Mozambique‟s markets (usually from South Africa).
Further research needs to be conducted, but the opportunity
to source the pre-blend and soy components from regionally
based, commercial producers of chicken feed may be an
effective solution for both parties (reduce production costs
for the large commercial producer, reduce the price for the
mill owner, and thus allowing the mill owner to produce a
“branded” chicken feed to sell locally).
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BUSINESS PLAN
FOR
LINOLMAR MAIZE FLOUR AND RICE MILL PROJECT
0. Executive Summary
The purpose of this business plan is to raise $100,000 for the
development of an automotive repair shop while showcasing
the expected financials and operations over the next three
years. The Automotive Repair Shop, Inc. (“the Company”) is a
New York based corporation that will provide automotive repair
services and part sales in its targeted market. The Company
was founded in 2009 by John Doe.
0.1 Products and Services
The Automotive Repair Shop will be engaged in the
business of providing automobile repair and other
automotive services to the general public. The Company
has the ability to service almost any domestic or foreign
automobile. The Company will generate revenues from
both the sale of mechanic labour and from after-market
replacement automobile parts. Once Mr. Doe brings the
business to profitability, he intends to further expand the
after-market auto parts revenue centre and increase the
sports tuning services, which command higher premiums
that standard automotive repair. The third section of the
business plan will further describe the services offered by
the Automotive Repair Shop.
0.2 The Financing
Mr. Doe is seeking to raise $100,000 from as a bank loan.
The interest rate and loan agreement are to be further
discussed during negotiation. This business plan assumes
that the business will receive a 10 year loan with a 9%
fixed interest rate.
0.3 Mission Statement
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The Automotive Repair Shop’s mission is to become the
recognized leader in its targeted market for car and truck
repair services.
0.4 Management Team
The Company was founded by John Doe. Mr. Doe has more
than 10 years of experience in the automotive repair
industry. Through his expertise, he will be able to bring
the operations of the business to profitability within its
first year of operations.
0.5 Sales Forecasts
Mr. Doe expects a strong rate of growth at the start of
operations. Below are the expected financials over the
next three years.
0.6 Expansion Plan
As time progresses, Management will continually increase the
scope of the business by developing additional services
that will increase the profitability of the business. This
includes greater development of after-market tuning and
performance enhancing services which generate a larger
margin that standard automotive repair. Mr. Doe will also
increase the marketing and advertising budget of the
business to increase the general repair revenues of the
business.
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1. INTRODUCTION
1.1 PURPOSE OF THIS BUSINESS PLAN
1.2 FINANCE CAPITAL REQUIRED
At this time, the Automotive Repair Shop requires $100,000 of
debt funds. Below is a breakdown of how these funds will be
used:
1.3 HIGHLIGHTS OF PROJECTED FINANCIAL
PERFORMANCE
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2 BACKGROUND INFORMATION
2.1 STATUTORY ASPECTS
2.2 MANAGEMENT EQUITY
John Doe owns 100% of the Automotive Repair Shop, Inc.
2.3 INVESTOR EQUITY
Mr. Doe is not seeking an investment from a third party at this
time.
3 TANZANIA’S FOOD INDUSTRY OUTLOOK AND ANALYSIS
3.1 FOOD INDUSTRY OUTLOOK
This section of the analysis will detail the economic climate, the
automotive repair industry, the customer profile, and the
competition that the business will face as it progresses through
its business operations. Currently, the economic market condition
in the United States is in recession. This slowdown in the
economy has also greatly impacted real estate sales, which has
halted to historical lows. Many economists expect that this
recession will continue until mid-2009, at which point the
economy will begin a prolonged recovery period. However,
automotive repair shops operate with great economic stability as
vehicles are necessity and very few people have the ability to fix
their own vehicles beyond very minor repairs. As such, the
Automotive Repair Shop will be able to maintain profitability
despite the current economic climate.
3.2 INDUSTRIAL ANALYSIS
About 130,000 companies in the US are involved primarily in auto
repair, with combined annual revenue of $65 billion. Only ten
companies have revenue over $100 million, including Midas,
Monroe Muffler Brake, and Diamond Triumph Auto Glass. Some
car repair work is also provided by 45,000 gas stations; 24,000
new car dealerships; and branches of chain stores, like Sears and
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Kmart. The industry is highly fragmented: 10,000 companies have
annual revenue over $1 million, 150 have revenue over $10
million. Demand depends on the number of cars, how much
they're driven, and how complicated they are to fix. The
profitability of individual companies depends on volume, because
many costs are fixed. Large companies are more likely to use
expensive diagnostic equipment efficiently and benefit from
advertising, but the economies of scale aren't large. The typical
repair shop operates one location and has annual revenue
between $250,000 and $1 million. Companies with higher
revenue typically operate more than one location, with revenue
per location close to $1 million. Revenue per location is lower for
large repair chains, like Monroe, that typically provide specialized
but lower-skilled services like muffler and windshield
replacement. About 60 percent of industry revenue comes from
mechanical repair and 40 percent from body shop work. Car
repair shops usually specialize in a particular field of repair
because of the specialized knowledge.
4 LINOLMAR MAIZE FLOUR AND RICE MILLS PROJECT
4.1 INSPIRATION TO UNDERTAKE THE PROJECT
4.2 PROJECT PROMOTERS
4.3 PROJECT DESCRIPTION
4.4 PHYSICAL LOCATION OF THE PROJECT
4.5 OBJECTIVES OF THE PROJECT
5 TECHNICAL ASPECTS OF THE PROJECT
5.1 REQUIREMENTS TO EXECUTE THE PROJECT
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5.2 STATUTORY REQUIREMENTS TO EXECUTE THE
PROJECT
5.3 PLANT & MACHINERY REQUIREMENTS
5.4 SOURCES OF SUPPLY PLANT & MACHINERY
5.5 UTILITIES REQUIREMENTS
5.6 SKILLED AND UNSKILLED LABOUR REQUIREMENT
5.7 PACKAGING MATERIAL REQUIREMENTS
5.8 RAW MATERIAL REQUIREMENT & SUPPLY SOURCES
5.9 PACKAGING MATERIAL REQUIREMENT
5.10 THE MAIZE FLOUR AND RICE MILLING OPERATIONS
5.11 PROJECTED DAILY PRODUCTION OUTPUTS
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5.12 ENVIRONMENTAL, HEALTH & SAFETY
CONSIDERATIONS
6 MARKETING MANAGEMENT ASPECT
6.1 MARKETING ASPECT OVERVIEW
The Automotive Repair Shop intends to maintain an extensive
marketing campaign that will ensure maximum visibility for the
business in its targeted market. Below is an overview of the
marketing strategies and objectives of the Automotive Repair
Shop.
6.2 PRODUCTS AND SERVICES
The primary service offered by the Company is the general repair
of automobiles for the general public. The Company will have the
ability to service most domestic and foreign automobiles. Mr. Doe
will maintain an extensive shop which can fix any automotive
issue. The business generates income from both the sale of the
mechanic’s labour and the sale of after-market parts which may
be needed for the repairs.
6.3 CUSTOMER PROFILE
For automotive service sales, Management anticipates that the
market will be locally based. Management anticipates that its
expected service clientele will be a local, middle to upper middle
income earning male and females between the ages of 25 and
75. As a vast majority of adults in this country own a vehicle, it is
difficult to discern the “average” customer of the Automotive
Repair Shop.
6.4 DEMAND SITUATION
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6.5 COMPETITIVE SITUATION ANALYSIS
This is one of the sections of the business plan that you must
write completely on your own. The key to writing a strong
competitive analysis is that you do your research on the local
competition. Find out who your competitors are by searching
online directories and searching in your local Yellow Pages. If
there are a number of competitors in the same industry (meaning
that it is not feasible to describe each one) then showcase the
number of businesses that compete with you, and why your
business will provide customers with service/products that are of
better quality or less expensive than your competition.
6.6 MARKETING OBJECTIVES
1. Develop an online presence by developing a website and
placing the Company’s name and contact information with online
directories.
2. Implement a local campaign with the Company’s targeted
market via the use of flyers, local newspaper advertisements, and
word of mouth.
6.7 MARKETING STRATEGIES
Mr. Doe intends on using a number of marketing strategies that
will allow the Automotive Repair Shop to easily target men and
women within the target market. These strategies include
traditional print advertisements and ads placed on search
engines on the Internet. Below is a description of how the
business intends to market its services to the general public. The
Automotive Repair Shop will also use an internet based strategy.
This is very important as many people seeking local services,
such as automotive repair businesses, now the Internet to
conduct their preliminary searches. Mr. Doe will register the
Automotive Repair Shop with online portals so that potential
customers can easily reach the business. The Company will also
develop its own online website. The Company will maintain a
sizable amount of print and traditional advertising methods within
local markets to promote the automotive repair services that the
Company is selling.
PRICING
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In this section, describe the pricing of your services and products.
You should provide as much information as possible about your
pricing as possible in this section. However, if you have hundreds
of items, condense your product list categorically. This section of
the business plan should not span more than 1 page.
7 ORGANIZATIONAL AND MANAGEMENT ASPECTS
7.1 CORPORATE ORGANIZATION
7.2 DAY TO DAY MANAGEMENT OF THE PROJECT
7.3 MANPOWER PROJECTIONS
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7.4 MANAGEMENT PROFILE
In this section of the business plan, you should write a
two to four paragraph biography about your work
experience, your education, and your skill set. For each
owner or key employee, you should provide a brief
biography in this section.
7.5 ORGANIZATIONAL BUDGET
8 FINANCIAL PROJECTIONS
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8.1 CAPITAL INVESTMENT COST
8.2 BASIC ASSUMPTIONS
1. The Automotive Repair Shop will have an annual
revenue growth rate of 16% per year.
2. The Owner will acquire $100,000 of debt funds to
develop the business.
3. The loan will have a 10 year term with a 9% interest
rate.
4. General Assumptions
Cost of Land & Building
Plant & Machinery Cost
Motor Vehicle Cost
Office Equipment & Furniture
Pre-operative Expenses
Working Capital Required for(Raw Material,
Packaging Material, Consumable Store)
Cost of Overheads
8.3 SOURCES OF FINANCE CAPITAL
8.4 FORECASTED SALES REVENUE
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8.5 PROJECTED FINANCIAL STATEMENTS
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8.6 FINANCIAL ANALYSIS AND RATIOS
The business’s revenues are only moderately sensitive to
changes in the general economy. Automotive repair
services are an essential service, and many people lack
the ability to fix their cars on their own. As such,
Management does not anticipate that negative changes in
the overall economic climate will impact the Company’s
ability to generate revenues and maintain profitability
8.7 REVENUE AND EXPENDITURE BUDGET
9 ECONOMIC AND SOCIAL BENEFITS
9.1 BENEFITS ON COUNTRY’S ECONOMIC DEVELOPMENT
9.2 EMPLOYMENT CREATION/POVERTY REDUCTION
BENEFITS
9.3 FINANCIAL AND SOCIAL BENEFITS
9.4 BENEFITS TO THE COMMUNITY
10 PROJECT IMPLEMENTATION CHECKLIST
11 CONCLUSION AND RECOMMENDATIONS
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