2011

Business plan for the transportation industry in Uganda and East Africa.

Dove group 2/6/2011

Contents Executive summary Background to the business plan. The need for the transportation industry/company. Value drivers critical to the success of the capital investment in the transport business.

The company. Business mission. The company/industry History The opportunity The future Organizational objectives Key success factors Organizational values. The management

The transportation sector analysis. Analysis for transportation industry forces(External) SWOT Analysis Marketing strategies.

Proposed capital expenditure Estimated costs Projections of the transportation sector analysis. Proposed capital expenditure projections.

Capital expenditure Revenue assumptions Operating expenses Projections worksheets.

Executive summary.

BACKGROUND OF THE COMPANY.

Sarge Transporters limited is a company that is founded by Mr. Saladin Muhukya a retired civil servant in the government. As a way of not keeping himself idol He decided to startup a transportation company to keep him busy. The company is to deal in transportation of cargo and passengers around Uganda and it is based in the capital city of Uganda Kampala and that is where its headquarters are located.
The board of directors of Sarge Transporters Limited continues to focus on very closely on the long term strategic niches that the company should pursue in order to maximize its stakeholders wealth. In pursuit of this mission the directors have identified the need to align its operations with the objectives of the shareholders as a strategic value driver for increasing its presence in all parts of Uganda and maximizing the wealth of its stakeholders. Due to the proposed high start up costs, the founder has identified the strategic need to start up and hence desirous to seek finance for initial investment and expansion.

The Need for Transportation Company

Uganda is a country with great and growing trade. International trade has now hit its peak thus creating a high need for transport services especially taxis and trucks. With the East African community in line to be formed more business for transport industry will be created. The biggest number of the population in Uganda especially in Kampala being with a population of more than two million people whose number keeps increasing uses public means , this does not apply to Kampala alone however even Nairobi and dar-es-salamm therefore the great need for public transport which in most cases will be taxis most commonly known as Matatus. As mention above the country s highest population is centered in its capital thus creates a high need for food has to be transported to the city from the different villages within the country. Uganda is now working as a distributing point or agent for the united nation s activities for the Republic of Congo and southern Sudan. This has increased the work for the transport industry.

The founder of the Sarge transporters limited has considered the above factors decided to set up a transport company that will meet the needs. The founder is therefore looking forward to financing this project.

The management of Sarge Transporters Limited has identified the following factors as the key value drivers that are critical to assuring the creation of value in truck and taxi business by undertaking the capital investment in trucks, taxis and buses.

Truck Numbers.
The truck numbers are the key value drivers. The achievement of forecasted figures will largely depend on; y y The existence of sufficient trucks so that they can support each other. Good perception of the business provides towards the predicted performance standards.

Taxi Numbers.
The company considers starting with a minimum of 15 taxis. This is inline with the above mentioned points.

Management Resolution
Management has promised to put in marketing plan to convince the business providers and the rest of the population in its environs and to an extent that big business providers will be willing to get involved with our company as the presence of good services that we shall be offering. Management will embark on recruiting the best technical manpower available to make sure that good transport standards are attained. The long term resolution for the management is to do business on the international level, this will be achieved by the above mentioned points and also the new trends of the world economies that keep emerging especially the growing economies of the world.

The company Business Mission

The company s mission statement is to be one of the preferred providers at competitive and affordable prices of quality transport services.

Business Vision
The company s vision is to stand out of the crowd.

The Future.
The strategic intent for the truck business is to become a house hold transport provider in Uganda by providing excellent services and achieving high quality levels of services. For the taxi and bus business we want to be the first company to offer the best in public transport by establishing the first high class comfort bus services in and around the country. With adequate funding, the founder has envisioned that business will be set up and running by the beginning of September 2011. The business is also to expand to an international level. This is also part of the company s long term future prospects.

Business Objectives.
y y y To exploit the transport business. To acquire the biggest market share in the business community. To achieve the highest transport standards in the different areas of operation.

Key success factors.

Number of trucks Achievement of the founder s finances. Expansion of trade to the international community.

Business values
These include the following; y y y y Values; we instill our business values within ourselves, staff, and our most valuable assets. Integrity; we are honest and strive to fulfill and exceed our commitments. Service; we address our clients needs with the sense of urgency. Investment and Innovation; we invest in the future of our families, clients and staff. We furthermore expect to keep upgrading our business as the new era business trends come in so as to keep top of our game. Commitment; we are committed to better the lives of the communities we operate in and also to fight against environmental degradation.

The Management Team.

The management team will be led by the managing director who will be responsible for running the transport business. This will be a highly qualified individual who should be able to achieve the objectives and move on the mission and vision of the company. However, they will not work alone since we are

going to be operating around Uganda their will also be regional managers that they will be communicating with for the success of the business. Besides the top management other members include; junior Managers and the entire technical team of drivers, mechanics and cooks etc. At SARGE we believe that if we offer good treatment to our employees they are capable of increasing their productivity and thus the growth of the company in offering quality services. THE TRANSPORT SECTOR ANALYSIS. Analysis of the transport industry forces (external)

Potential Entrants (Threat of new entrants).

Business Providers[clients] (Bargaining power of clients)

Suppliers (Bargaining power of suppliers)

Industry Competitors. And rivalry amongst existing

Substites (Threat of substites products)

Powers of suppliers: The powers of suppliers are quite strong as these comprise of majorly drivers technical personnel (garage mechanics) and the bonds that are going to supply the trucks, buses and Minibuses. However this can be remunerated effectively by the staff appropriately and also chooses from a large number of suppliers to gain value from the procurement process. Threat of new entrants: the barriers to entry into this sector are low because there are very few regulatory requirements to start up a transport business in Uganda. However, the high level of capital

injection required makes it hard to join the business and the founder also plans to set up a business with high quality services. Power of clients: this can viewed from two main perspectives, for the buses and mini buses (taxis) the largest number of Ugandans use the public means of transport this therefore makes us compatible with the available market and clients. Due to the East African community s free movement of labor across the borders of the sister countries introduced last financial year in July 2010, we have more than enough clients moving within the area. The power of clients in the transport industry is quite high due to the presence of numerous transport companies however for our truck business we are looking at introducing very attractive and affordable prices so we can pull in the big companies such as World Food Program, Total and many more. The threat of substitutes: this is very low because the other means such as air, water and railway are very expensive and not readily available. Competition amongst the existing transport companies: this will be very high as these companies are already in market. However, we shall give high quality services to our clients so as to secure operations with them.

SWOT Analysis. An analysis of the Strengths, Weaknesses, Opportunities and Threats (SWOT) of the truck and bus business can not be established because it s a start up business for now, however only opportunities and threats can be evaluated below;

TRUCK AND BUS BUSINESS OPPORTUNITIES AND THREATS ANALYSIS.

Opportunities.
Expansion of trade to international community Uganda being a distribution point for UN activities to southern sudan and congo. Increased need of food from villages to kampala

Maximize opportunities.
Seek to use experienced drivers to provide effecient services Exploit profitable opportunities such as the Congo and the Sudan markets

Threats.
Threats from established transport business. Taxes that keep increasing Threats from less established businesses by undercutting the fees.

Minimize threats.
Continuously improving our services and expanding our business so that we can attract tax relief from the government.

Marketing strategies
We are planning to use the following as our marketing strategies. y Building a brand to reckon with by achieving high quality services.

y y

Having the best transport services in the country through having the most comfortable buses and mini buses and the most reliable trucks to ensure that all our clients are safe . Under taking the market penetration pricing strategy in the short-run so as to have a competitive advantage in the economy. Charging affordable fees for our clients in the taxis and buses. We will introduce coupon selling to our clients as our business grows where clients will be buying coupons that can be used for a month or three months. Promoting the truck and bus business in most parts of the country and the East African community at large through the use of brochures and adverts (Television, Radio) and use of newspapers. Place /distribution; we look to cover the whole country so as to maximize the available market. However, this will be done according to the needs of the market in a given segment for example trucks will be put in areas where bulky transportation is more common like in the industrialized areas of Kampala that require transportation of raw materials and finished goods Having an office in every region of our operation where clients can come and book for reservations and for closing of business deals. Also giving uniforms to our employees that bear the name of the company and their names for easy identification. All this will be in a bid to achieve the strategy of physical evidence. Aim at having a short process that our clients have to go through in their bid to hire our services. This will be done in away that we will have a few documents that one has to fill and making sure that our clients know where to get them from. We will make sure that we build a good relationship with our clients.

y Proposed capital expenditure. Estimated costs. The table below gives the proposed investment required to set up a truck business