April 7, 2020 [TREDAK PETROLEUM LIMITED: BUSINESS PLAN ON COOKING GAS PLANT]
BUSINESS PLAN ON
COOKING GAS PLANT
PREPARED
BY
TREDAK PETROLEUM LIMITED
(SME PROMOTER)
April, 2020
April 7, 2020 [TREDAK PETROLEUM LIMITED: BUSINESS PLAN ON COOKING GAS PLANT]
Table of Contents
1. Executive summary/introduction.
The business name
Background information
2. Company Profile
3. Business Overview
Mission statement
Vision
Objectives/target/goals
List of product offered
Nature of the industry
opportunities
4. SWOT Analysis
Strength
Weakness
Opportunities
Threat
5. Market
Market Strength
Market Segmentation
Societal and economic characteristics (population size)
6. Marketing plan.
Reading final consumers
Strategies involved in influencing potential buyers
Intermediaries
Channel of distribution
April 7, 2020 [TREDAK PETROLEUM LIMITED: BUSINESS PLAN ON COOKING GAS PLANT]
7. Financial and economic plan.
Capital & Operating Expenditure (Budget)
Generating Funding / Start-up Capital
Sources of Income
Sales Forecast
April 7, 2020 [TREDAK PETROLEUM LIMITED: BUSINESS PLAN ON COOKING GAS PLANT]
1. Executive Summary
This 3-year business plan/projection is for Tredak Petroleum Limited. Tredak Petroleum
Limited is a fully registered and licensed Oil & Gas Company that operates a standard
cooking gas plant in Badagry, Lagos, Nigeria. We have been able to secure all required
business licensing from both Badagry Local Government and the Lagos State Government.
Furthermore, as a cooking gas plant, our basic service to our customers and the public in
general is the sale of both retail and wholesale cooking gas to individuals and small
businesses. We also run associated related businesses services like procurement and
marketing of cooking gas cylinders, gas cooker accessories and gas cooker repair and
servicing workshop.
Tredak Petroleum Limited is fully owned by the Managing Director; Johnson Olakunle. The
capital outlay of this business is twenty-one million Naira which belongs solely to Johnson
Olakunle. Having over 25 years of work experience in the oil and gas industry both in
Nigeria and the USA, he will be bringing his wealth of experience to build Tredak Petroleum
Limited to favorably compete with other leaders in the industry.
Consequently, this business plan and feasibility analysis reveals that there is a total of
N30,000,000 (thirty million Naira) turnover in the first year and growth is maintained at 30%
in year two and three. This gives a total net profit of N13,500,000 after paying all mandatory
tax liabilities totaling N15,000,000.00 in the first year and N21,060,000.00 profit in the
second year. The growth is sustained in the 3rd year too.
This business plan is intended to guide the operations of the business for the next three
years.
April 7, 2020 [TREDAK PETROLEUM LIMITED: BUSINESS PLAN ON COOKING GAS PLANT]
2. Company Profile
The trial operations started in the last six months. Our operation is open to use of latest
technology in cooking gas business. No doubt our excellent customer service and the range
of additional complementary services we offer will position us to become one of the most
preferred cooking gas plants in the whole of Lagos.
At Tredak Petroleum Limited, we are passionate in pursuit of excellence and financial
success with uncompromising services and integrity. We are in the industry to make a
positive mark. Therefore, we are quite optimistic that our values and quality of products
and service offering will help us drive our cooking gas plant business to enviable heights.
That will also help us attract the number of clients that will make the business highly
profitable. We are a company that is dedicated to establishing and maintaining best
practices as it relates to cooking gas plants’ business.
Consequently, Tredak Petroleum Limited will ensure that customers are given first class
treatment whenever they visit our cooking gas plant for refill or to make enquiries. We have
CRM software that will enable us manage a one on one relationship with our customers no
matter how large the number of our customer base may grow to. We will ensure that we
get our customers involved when making some business decisions that will directly or
indirectly affect them.
April 7, 2020 [TREDAK PETROLEUM LIMITED: BUSINESS PLAN ON COOKING GAS PLANT]
3. Business Overview
As you may know, a cooking gas plant is a place where both individual and small businesses
that deals with the retail of cooking gas go to refill cooking gas cylinders. It is usually more
organized and bigger than the average small scale gas shops that you can find around street
corners.
Another fact is; the Cooking Gas Plants business over the years has experienced modest
amount of volatility. As a matter of fact, many Nigerians have switched from kerosene
stoves to gas cookers, thereby increasing demands for cooking gas accordingly. Another
factor is the effect of growth in per capita disposable income. This is so felt that
households, even smaller ones and individuals in smaller apartments would choose to go
for gas cooker no matter how small. Besides, in Nigeria of today, it is now known to be
more economical to use cooking gas.
Just like other industry, cooking gas plant operations has also experienced its fair share of
ups and downs over the last five years. This is due to incessant restiveness in Niger Delta
area of Nigeria and also recent fall in global oil and gas prices.
The Cooking Gas Plant industry is indeed a very large industry and is thriving in all parts of
the world especially in Africa. In Nigeria alone, there are lots of cooking gas stations
scattered all around metropolitan cities such as Lagos, Abuja, Port Harcourt, Ibadan, Kaduna
and Calabar et al.
Additionally, the industry employs several thousands of people. There is no cooking gas
plant company that can boast of having the lion share of Nigerian market, more so, the
industry is an open one due to federal government’s liberalisation policy on the sector. This
is why residential estates and busy cities with growing population are attracting cooking
gas plants steadily.
April 7, 2020 [TREDAK PETROLEUM LIMITED: BUSINESS PLAN ON COOKING GAS PLANT]
Our Products and Services
Tredak Petroleum Limited is a fully registered and licensed cooking gas plant. As a
commercial enterprise, one of its objectives is to maximize profits. Therefore, aside from
the fact that we will be retailing cooking gas to households and small businesses, we will
also engage in other complimentary services that will help us maximize profits in the
business.
Consequently, the products and services that will be made available will include;
Cooking Gas at filling plant
Gas Cookers
Cooking Gas Cylinders
Gas Cooker Accessories
Gas Cooker Repair and Servicing Workshop
Our Vision Statement
The Vision is to operate chains of cooking gas plants in strategic locations all round Lagos
and in other nearby major cities.
Our Mission Statement
The mission is to develop highly successful and profitable chains of cooking gas plants with
state of the art facility using latest technology; a business that will not only meet the needs
of her clients but also supersede their expectations.
Our Business Structure
Tredak Petroleum Limited is set to become one of the leading cooking gas plant businesses
in the whole of Lagos and other cities where our chains of cooking gas plants will be
April 7, 2020 [TREDAK PETROLEUM LIMITED: BUSINESS PLAN ON COOKING GAS PLANT]
located. This is why there is need for us to build solid business foundation and business
structure that will enable us achieve our aims and objectives.
We are poised to building efficient workforce; a dedicated workforce that will work
together to help the organization achieve its set targets. Tredak Petroleum Limited will
employ customer centric and skilled people to occupy the following position;
Gas Plant Manager
Accountant / Cashier
Human Resource and Admin Manager
Pump Attendant
Store Manager
Gas Cooker Repairs and Maintenance Manager
Truck Driver
Security Guards
April 7, 2020 [TREDAK PETROLEUM LIMITED: BUSINESS PLAN ON COOKING GAS PLANT]
4. SWOT Analysis
Starting a cooking gas plant is indeed capital intensive especially for start-up entrepreneurs
who may not have huge sums of money saved in banks. From our experience, we are aware
that it will require a lots of capital to set up a standard cooking gas plant .
Moreover, one of the analytical tools that is required to position us in building a successful
cooking gas plant business is SWOT Analysis. To ascertain what our challenges and
opportunities are in this business, we hired the services of a business consultant who is
based in Lagos to carry out a research and analyse what the challenges are and to what
extent they will affect our business. Complete Full Marks Consultants limited did a nice
work and the findings are enumerated in this business plan.
Below is the result we got from the SWOT analysis that was conducted on behalf of Tredak
Petroleum Limited, Lagos.
Our Strength:
Tredak Petroleum Limited location is an advantage. It is centrally located along one of the
busiest area in Badagry, Lagos. Our location is in fact one of our major strengths. Another
source of strength comes from offering basic service that our competitors are not offering.
The vast experience of our management team is another big plus. Our excellent customer
service culture will definitely count as a strong factor for the business.
Weakness:
Our perceived weakness could be;
Tredak Petroleum Limited is a new cooking gas plant,
April 7, 2020 [TREDAK PETROLEUM LIMITED: BUSINESS PLAN ON COOKING GAS PLANT]
Ownership of the business is that of individual
Don’t have the financial capacity to sustain the kind of publicity that can give us
leverage over our competitions immediately and;
Our inability to start operation of other gas plants in various cities in Nigeria as
planned immediately.
Opportunities:
Our centrally located operational plant in Badagry, Lagos means we are open to all
available opportunities that the city has to offer.
Secondly, our business concept positions us to attract people who would like to
service and repair their gas cookers, purchase gas cookers, gas cylinder and
accessories. Badagry which is one of the few densely populated communities in
Abuja with a handful of higher institutions present itself as great business
opportunity.
Threat:
One of the major threats that confront businesses all over the world is economic downturn.
When the economy is bad it affects consumers spending capacity. The downturn of our
economy is in fact affecting business activities. Another threat that we are likely going to
confront is the emergence of a new cooking gas plant, small gas shop or even a filling
station that retail gas within the same location with ours in future.
April 7, 2020 [TREDAK PETROLEUM LIMITED: BUSINESS PLAN ON COOKING GAS PLANT]
5. THE MARKET
Market Trends
A noticeable trend in cooking gas plant business is the high spirit competitive posture of
cooking gas plant owners to keep afloat in business. Therefore, they go extra miles to
ensure that they make their facility welcoming and conducive for customers.
Furthermore, most cooking gas plants now have stores where they retail gas cookers, gas
cylinders, and gas cooker accessories and also a gas cooker repair and servicing workshop
within their facility so as to leverage on the opportunities around them to generate more
income.
Another trend in this line of business is the opening of chains of cooking gas plant in various
locations all around key towns in Badagry. In addition, some cooking gas plant now do
home delivery services in response to clients’ request. This enables creation of clients’
loyalty base.
Our Target Market – Market Segmentation:
Before choosing a location for our cooking gas plant business, we conducted feasibility
studies and market survey. With that, we were able to identify the location that will enjoy
our products and service offerings greatly. Badagry and its environs fits our findings.
Essentially those who will benefit from our service offering re:
Households,
Small businesses that retail cooking gas
Corporate executives,
Business owners like bakeries and restaurants,
Students and caterers et al.
April 7, 2020 [TREDAK PETROLEUM LIMITED: BUSINESS PLAN ON COOKING GAS PLANT]
6. MARKETING STRATEGY
Marketing/Sales Strategy
The marketing strategy adopted by Tredak Petroleum Limited is going to be driven basically by:
Making standard and safe cooking gas, gas cookers, cylinders, accessories etc available.
Excellent customer service and provision of complimentary services will also play key
roles.
To this effect;
We will work hard to build loyalty customer base.
Offer concessional prices for customers who patronize us over and over again,
We want to drive sales via making available easy and safe to use cooking gas pumps
etc.
Our various complementary service offerings such as retailing gas cookers, gas
cylinders and gas cooker accessories, gas cooker repair and servicing workshop.
In addition, other start-up marketing and sales strategies to be adopted include:
Introducing our cooking gas plant by sending introductory letters to residence,
household, caterers, merchants and other stakeholders both in Badagry and other
communities around.
Open our cooking gas plant with a party to capture the attention of residents who
are our first targets
Advertise our cooking gas plant on national dailies, local TV stations and local radio
station
Promote our cooking gas plant online via our official website and all available social
media platforms
April 7, 2020 [TREDAK PETROLEUM LIMITED: BUSINESS PLAN ON COOKING GAS PLANT]
Sustainability marketing and sales strategies will include:
Continuously Improving the performance of our brands
Hiring the services of experts to make our brands the first choice for household and
residents in Abuja,
Delivering consistent customer experiences to all our clients; making our first
impression count positively
Making use of attractive hand bills to create awareness and also to give direction to
our cooking gas plant
Adopt direct mailing coupon marketing approach
Position our signage / flexi banners at strategic places all around Nyanya town,
Create a loyalty plan that will enable us reward our regular customers
Engage on road shows within our neighbourhood to create awareness for our
cooking gas plant.
April 7, 2020 [TREDAK PETROLEUM LIMITED: BUSINESS PLAN ON COOKING GAS PLANT]
7. FINANCIAL ANALYSIS:
Capital & Operating Expenditure (Budget)
In setting up any business, cost will depend on the approach and scale you want to
undertake. Your goals, vision and aspirations for business counts also. Then comes your
business premises that must be conducive for business facilities and personnel.
The following expenditure is essential for this business. Contingency liabilities are not
envisaged.
The Fee for registering the business at CAC (Achieved)
Legal expenses for obtaining licenses and permits (Achieved)
Installation of accounting services (software, P.O.S machines and other software)
Marketing promotion expenses for the grand opening of the business
Cost for hiring Business Consultant (Achieved)
Insurance (general liability, workers’ compensation and property casualty) coverage,
Cost for payment of rent for first 12 months and renovation inclusive
Other start-up expenses including stationery and phone and utility deposits
Furthermore,
Operational cost for the first 3 months (salaries of employees, payments of bills et
al)
The cost for Start-up inventory (cooking gas, gas cylinders, gas cookers and
accessories et al)
Cost for store equipment (cash register, security, ventilation, signage),
Cost of purchase of distribution truck (fairly used)
The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone,
Fax Machines, tables and chairs et al),
April 7, 2020 [TREDAK PETROLEUM LIMITED: BUSINESS PLAN ON COOKING GAS PLANT]
Website launching expenses,
Our opening party expenses,
Miscellaneous.
This means that we would need an estimated sum of N25 million to successfully set up a
standard cooking gas plant in Badagry, Lagos.
The breakdown is as follow;
N19,000,000.00 for fixed assets (CAPEX)
N2,800,000.00 for Operational expenses (OPEX)
N4,000,000.00 as working capital – cash and cash equivalents.
N200,000.00 as capitalised initial expenses to amortise over 3 years.
The depreciation method here is straight line method.
Generating Funding / Start-up Capital for Tredak Petroleum Limited
Finance is very important factor when it comes to starting business such as cooking gas
business. Start – up capital for a business might not come cheap.
Tredak Petroleum Limited is an individually owned business. We do not intend to welcome
any external business partners. N25,000,000.00 Initial capital is to be sourced from NIRSAL
Microfinance Bank.
Sources of Income
Tredak Petroleum Limited is established with the aim of maximizing profits in cooking gas
plant business in Nigeria. As such, we are going to go all the way to ensure that we do all it
takes to generate enough incomes from both our basic product and services offerings and
our complimentary services to achieve that.
April 7, 2020 [TREDAK PETROLEUM LIMITED: BUSINESS PLAN ON COOKING GAS PLANT]
Tredak Petroleum Limited will generate income by offering the following services and
products;
Cooking Gas
Gas Cookers
Cooking Gas Cylinders
Gas Cooker Accessories
Gas Cooker Repair and Servicing Workshop
Sales Forecast
Business location could mean proximity to market and sources of supplies. Tredak
Petroleum Limited has this as an advantage, and we are doing everything possible to
translate this into increased revenue generation for the business. With this we are quite
optimistic that we will meet our set target of generating enough income/profits from the
first six month of operations and grow the business and our clientele base.
Based on our analysis on sales projection on information gathered on the field and some
assumptions that are peculiar to start-ups in Badagry, the estimated sales figures are:
First Fiscal Year-: N30,000,000.00
Second Fiscal Year-: N39,000,000.00
Third Fiscal Year-: N48,000,000.00
The above projection is based on what is obtainable in the Nigerian Oil & Gas industry. It is
also based on the assumption that there will not be any major economic meltdown and
there will not be any major competitor offering same products and customer care services
as we do within the same location. The growth rate is projected at 30% annually.
