A Marketing Financial Report on Habibi Transportation - Free Essay Example

EXECUTIVE SUMMARY: Habibi transportation is a company that will be based in Al Ain. Habibi will provide transportation and logistics services to the business customers in Al Ain, Abu Dhabi and all other cities of UAE. The company will take materials and goods from supplier and deliver it to manufactures and then take products from manufacturers and deliver it to the wholesalers or retailers. It will be partnership business. Habibi transportation empowers somebody to rent a truck, of any size, for any extend that needs pulling. The logistics and transportation industry is making fast strides in the UAE, and specifically in Dubai. With framework and realty improvement tasks blasting and new real ventures being reported day by day over the UAE, it is clear that the industry will keep on growing in the close medium term. In the first year the business will get a loss of 87605 AED. The startup requirements of the business are AED 2530500. INTRODUCTION: Transportation industry in UAE is a flourishing industry. As the demand for tourism is increase the air and land transportation is also increase. The land transportation is also used for many manufacturing business to deliver raw materials and heavy materials from one place to another. The business that we are going to launch is transportation business through trucking. Trucking is a terrifying industry to be in at this time. Yet top trucking executives say the economic downturn is no time to take a route that is excessively expedient on service as they adapt to industry overcapacity and shippers wanting rock bottom rates. The name of our trucking transportation business is à ¢Ã¢â€š ¬Ã…“HABIBI TRANSPORTATIONà ¢Ã¢â€š ¬Ã‚ . The business will be based in al ain UAE. OBJECTIVES: The objectives of habibi transportation for the next three years include: Getting highest annual revenue every year Hire more truck driver Expand the business by expanding market Targeting the other cities of UAE as well Purchasing more advanced vehicle for transportation SALES OBJECTIVES: Sales Forecast JAN FEB MAR APRIL JUNE JULY AUG SEPT OCT NOV DEC Unit Sales Miles of Shipping 12,000 18,000 27,000 37,800 52,920 55,566 58,344 61,262 64,325 67,541 70,918 Customer accounts 0 1 2 4 7 8 9 10 10 11 12 Total Unit Sales 12,000 18,001 27,002 37,804 52,927 55,574 58,353 61,272 64,335 67,552 70,930 Unit Prices Miles of Shipping 5 5 5 5 5 5 5 5 5 5 5 Customer accounts 3500 3500 3500 3500 3500 3500 3500 3500 3500 3500 3500 Sales Miles of Shipping 54600 81900 122850 171990 240786 252826 265468 278740 292677 307311 322676 Customer accounts 0 3500 7000 14000 24500 28000 31500 35000 35000 38500 42000 Total Sales 54600 85400 129850 185990 265286 280826 296968 313740 327677 345811 364676 Direct Unit Costs Miles of Shipping 50.00% 2 2 2 2 2 2 2 2 2 2 2 Customer accounts 10.00% 350 350 350 350 350 350 350 350 350 350 350 Direct Cost of Sales Miles of Shipping 27300 40950 61425 85995 120393 126413 132734 139370 146339 153657 161340 Customer accounts 0 350 700 1400 2450 2800 3150 3500 3500 3850 4200 Subtotal Direct Cost of Sales 27300 41300 62125 87395 122843 129213 135884 142870 149839 157507 165540 MISSION: The mission of habibi transportation is to become the partner of business and help them in operating efficiently through effective distribution services. For this purpose the company will use best management to give accurate and timely deliveries to the customers. KEY TO SUCCESS: The key success factor for habibi transportation includes: Proper deliver schedules will be made to give timely delivery Recruiting reliable drivers who can drive safely Forming an accurate communication channel between drivers, company and customers. COMPANY SUMMARY: Habibi transportation is a company that will be based in al ain. Habibi will provide transportation and logistics services to the business customers in al ain , abu dhabi and all other cities of UAE. The company will take materials and goods from supplier and deliver it to manufactures and then take products from manufacturers and deliver it to the wholesalers or retailers. COMPANY OWNERSHIP: The habibi transportation will be a partnership business between two friends. The company will be owned by me and my friend. After the years the business will changes its type of ownership to Limited Liability Company because the company will expand and we will share the ownership of the company with the investors and we will give them approximately 20% share. STARTUP SUMMARY: Start-up Requirements AED Start-up Expenses Stationery 10500 Legal 17500 Brochures 17500 Insurance 35000 Rent 42000 Licenses and Permits 17500 Computer 10500 Website Development 70000 Total Start-up Expenses 220500 Start-up Assets Cash 315000 Long-term Assets 1925000 Other Current Assets 70000 Total Assets 2310000 Total Requirements 2530500 COMPANY LOCATION AND FACILITIES: The location of habibi transportation is in al Ain , united Arab emirates. The company is located near the factories areas. The services that company will provide to its customers will be available 24 hours. The facility of the company will be located near its target market. SERVICES: The trucking industry gives transportation services to persons or organizations looking to pull overwhelming things. Habibi transportation empowers somebody to rent a truck, of any size, for any extend that needs pulling. We will give this service to the entire of the al ain range, and want to stretch from this base zone inside the initial five years of operation. This service is given on two bases: for-contract and private bearers. Of these two fragments, Habibi Transportation will focus on the for-contract bearers, and, all the more particularly, the truckload (TL) and short of what truckload (LTL) portions. COMPETITIVE ADVANTAGE: The competitive ad vantage of habibi transportation is the inconceivable industry experience and robust notoriety of its manager. His organization is likewise well known around its customers for going that additional mile in the client service division. COMPETITIVE COMPARISON: The competitors of habibi transportation includesal sahra heavy equipments , al walid equipment rental, bronze beach general contracting , Bkler dubai etc. all these transportation companies are performing good in the industry and the entrance of habibi transportation in industry may force them to take an aggressive action. INDUSTRY ANALYSIS: The logistics and transportation industry is making fast strides in the UAE, and specifically in Dubai. With framework and realty improvement tasks blasting and new real ventures being reported day by day over the UAE, it is clear that the industry will keep on growwing in the close medium term. Such development of construction in the UAE, anticipated for at least 10 years, wil l generate a steady appeal for totals and sand; this, thus, produces a consistent and climbing interest for tipper haulage services in an officially extended supply commercial center. One of the greatest giver to UAE economy is the shipping and logistics industry which takes a obligation in transporting of items, for example, petroleum mining, hardware, sustenance stuff and other significant products either transported in or locally made crosswise over industrial facilities in UAE. The transport of these to the following end, which could be local or to ends of the line crosswise over other world markets. The local and global shipping and Logistics suppliers in UAE offer different sorts of trucking to convey cargo by way. They convey everything from letters to houses to cargo compartments, substantial hardware, refrigerated , haz to live creatures crosswise over outskirts Emirates or GCC The transport suppliers in UAE, support an exclusive requirement of service, generally extr emely dependable and resolved to convey products securely to the end client. With flourishing general store business crosswise over UAE. The great illustration of street cargo is nourishment stuff conveyance. MARKET ANALYSIS: The economy in the UAE is ended up more assorted and shows confirmation of power to withstand outer stun. Solid financing in transport base and the worldwide desire of organizations like Emirates Airlines and DP World will additionally be solid positive components. In spite of the fact that the current oil price blast is maneuvering, the organization anticipates that the UAE economy will develop by 4.1% for every annum throughout the following five years, which will help the logistics industry. Manufacturers frequently outsource the circulation of their products to organizations that work in serving one the kind of retailer or business. Their bundled products are regularly delivered to stand out wholesaler/merchant, making a consistent business in ship ping between the two areas. Raw Material Suppliers dispatch extensive amounts of materials to huge manufacturers in the northwestern states. These materials by and large dont oblige refrigeration or temperature control. Manufacturers support some on location stockpiling for these supplies and by and large have some breathing space in the matter of when conveyances could be accepted, with the exception of when projections are mixed up and supplies drop low. Bundling supplies likewise must be transported to manufacturers and are incorporated in this aggregation. Wholesalers/Distributors that serve extensive retailers amass truckloads of products from the numerous manufacturers they serve. While they regularly have their trucks or dispersion implies, some of these organizations dont either in light of the fact that they are more modest or in light of the fact that they endeavor to utmost their speculation in holdings. Others may oblige extra trucking backing when they are working at limit however not ready to extend their shipping limit. Market Analysis Year 1 Year 2 Year 3 Potential Customers Growth Manufacturers 2% 5,000 5,100 5,202 raw material suppleir 1% 6,000 6,060 6,121 Wholesalers/Distributors 3% 5,500 5,665 5,835 Total 1.00% 16,500 16,825 17,158 MARKETING MIX: Price: The pricing of habibi transportation is dependent upon miles for every many dirham of cargo transported. We will be capable charge aggressive rates, as we have negligible overhead contrasted with our rival. Promotion: Notwithstanding standard commercial practices, Habibi Transportation will pick up significant distinguishment through these extra promotional mediums: Press news sent to radio stations, daily papers, and magazines. we plan to promote broadly, in magazines and daily papers, on TV and radio, and on announcements. Radio advertising on auxiliary stations As an additional motivation for clients and potential clients to recall the name, Habibi Transportation arrangements to circulate espresso mugs, T-shirts, pens, and other advertising claims to fame with the organization logo. The destination of a leaflet is to depict the organizations objectives and items as an alluring usefulness. Habibi Transportation will create three handouts: one to be utilized to push sales, one to report the item in another market, and the third to enroll sales copar Place: The place of habibi transportation is in alain in UAE, Product/ service: Habibi transportation is providing trucking and logistics services to the business customers. FINANCIAL PLAN: Pro Forma Profit and Loss 2015 2016 2017 Sales 3038630 5087992 8242430 Direct Cost of Sales 1396115 2155916 3308095 Total Cost of Sales 1396115 2155916 3308095 Gross Margin 1642515 2932076 4934335 Expenses Marketing/Promotion 357000 280000 350000 Payroll 692864 910000 1015000 Truck Maintenance/Repair 27300 42000 66150 Depreciation 207669 314832 437304 Rent 126000 132300 138915 Utilities 12600 13230 13892 Payroll Taxes 208639 298193 400358 Insurance 42000 63000 87500 Licenses and Permitting 28000 35000 35000 Web Hosting and Development 14438 25200 26460 Total Operating Expenses 1716509 2113755 2570579 Profit Before Interest and Taxes -73994 818321 2363757 EBITDA 133676 1133153 2801061 Interest Expense 13612 76913 123375 Net Profit -87605 518987 1568270 Pro Forma Balance Sheet 2015 2016 2017 Assets Current Assets Cash 80350 64253 879711 Accounts Receivable 418495 700742 1135187 Other Current Assets 70000 70000 70000 Total Current Assets 568845 834995 2084898 Long-term Assets Long-term Assets 2537500 3762500 4987500 Accumulated Depreciation 207669 522501 959805 Total Long-term Assets 2329831 3239999 4027695 Total Assets 2898676 4074994 6112593 Liabilities and Capital 2015 2016 2017 Current Liabilities Accounts Payable 237031 274862 429195 Current Borrowing 10500 0 0 Subtotal Current Liabilities 247531 274862 429195 Long-term Liabilities 446250 1076250 1391250 Total Liabilities 693781 1351112 1820445 Paid-in Capital 2513000 2513000 2513000 Retained Earnings -220500 -308105 210882 Earnings -87605 518987 1568270 Total Capital 2204895 2723882 4292148 Total Liabilities and Capital 2898676 4074994 6112593 CONCLUSION: From the above financial analysis and market analysis, it has been concluded that opening a transportation business in UAE is a good decision. The demand for logistics and transportation services is increasing in UAE. The number of construction projects increase so the demand of the delivering raw material and heavy equipment from one place to another is also increasing. RECOMMENDATION From the above plan and research, it is recommended that company should expand its business to other cities of UAE also as the demand is increasing and ità ¢Ã¢â€š ¬Ã¢â€ž ¢s a good opportunity for business. Before starting this business, it is recommended that company should set attractive prices to gain customers as there are many competitors in the market so with high price, habibi transports cannot make a position in UAE transportation industry. REFERENCES: