Business Plan
For:
Good-Link Power Engineering Co. Ltd
No. 10, Seidu Giwa Street
Ira Quarters, Ojo
Lagos State
Telephone: 0803 304 0449
E-Mail: goodlinkpowertld.com
‘let light be’
&
Astor Transformator ve Energi San. Ltd. Sti. Ramazanoglu Mehallesi Transtek Caddesi No. 18
P.K. 51, Pendik 34906
Istanbul
Turkey
www.astorpower.com
Motto: Partnering With Astor To Provide Uninterrupted Electrici
ty
I. Table of Contents
I. Table of Contents 2
II. Preamble 3
III. General Company Description 65
IV. Products and Services ………10
V. Marketing Plan Error! Bookmark not defined.5
VI. Operational Plan 21
VII. Management and Organization 25
VIII. Appendices 33
II. PREAMBLE
GOOD-LINK POWER ENGINEERING CO. LIMITED (herein after referred to as GPEL) is a company established as a private limited liability business engaged in the trading and maintenance of Power and Distribution transformers in Nigeria. ASTOR TRANSFORMATOR ve ENERGY SAN.TIC. LTD STI (herein after referred to as ASTOR) is a company that manufactures world class; top grade Power and Distribution Transformers. It is well known to almost everyone on earth that Nigeria is suffering acute power shortage. This problem is seriously affecting all components of life in this country to the point of damaging our national psyche. Lack of power has a great domino effect especially on the socio-economic factors of the Nigerian state and it is a major contributor to the present vicious circle of poverty in Nigeria. With this scenario at the back of the mind of the present administration of the Federal Government of Nigeria, President Umaru Yar’adua made the provision of adequate power supply the first issue of his seven 7-point Agenda; and his government is voting an unprecedented large sum of money into the industry. As a result, an investment into any aspect of the power industry will surely yield profit. GPEL was established as a trading company mainly involved in the supply, importation, installation and maintenance of power & distribution transformers across Nigeria and the West African Sub region. Over the years we have imported several transformers into Nigeria and sold same to various entities in. We have an excellent after sales program that is unbeatable in the industry. This program begins with our mandatory basic two (2) years guarantee program which includes periodic servicing and general maintenance, if need arises. We also have an extended maintenance program which covers up to 10 years depending on the customer’s agreement at a minimal cost. Our products will be sourced directly Astor in Istanbul, Turkey. It is ironical to state here that PHCN demand the best standard for transformers. After carefully studying PHCN standards, we make sure that our transformers exceed these standards. We supply brand new transformers from 50KVA to 70MVA and we are capable of customizing any transformer for the specific needs of our customers. (A). Our Obligation
• GPEL is obligated to providing clean electricity to all facets of this country through the provision of solid and reliable power and distribution transformers as well as generators.
• To partner with government at all levels (Federal, State and Local) to install these transformers in any power sub-station.
• As a result of our relationship with many Astor, we can supply special customized transformers for any purpose.
• To work with our customers in the most viable and cost efficient way in order to achieve complete customer satisfaction.
• To cautiously operate with environment-friendly ideology. III. General Company Description
(A). Introduction
GPEL is in the business of providing world class power and distribution transformers as well as solid generating plants for the entire Nigerian market. We will import these products sole and mainly from Astor ONLY. (B). Mission Statement:
To provide first class power and distribution transformers for personal, business and community needs; to partner with our customers in order to provide technical support which will certify that the particular product purchased meet the specific need of the end user; to guarantee every product we supply for a period of not less than two (2) years; to ensure that all our products meet the strictest environmentally friendly standard. (c). Goals and Objectives:
1. To establish a successful company that will grow to be the leader in the business of trading in transformers in the country.
2. To provide technical and maintenance support program for all our products as well as other similar products in the industry.
3. To provide general logistic services including transportation, on loading and off loading, for our customers as well as others in the industry at a reasonable cost. (d). Business Philosophy:
The power industry in Nigeria is presently in an epileptic state and this is very sad. One major cause of this problem is the lack of adequate power and distribution transformers. Another factor responsible for this is fraud and deceit on the part of transformer contractors/PHCN staffs. However, the present government of President Umaru Yar’adua seems to be very serious and genuinely interested in tackling this problem once and for all. Power is the first issue in this government’s “7-point Agenda”, and in two (2) years the Federal Government has voted an unprecedented amount of money (over N500 billion) in ameliorating this problem; the bulk of this vote is for purchasing power and distribution transformers. It is GPEL vision to capitalize on this government initiative and assist our nation by importing solid-world class transformers from Astor at a reasonable price. (E). Opportunity for Growth
Nigeria power industry will continue to grow forever. GPEL will also grow as the industry grows. At the moment Nigeria is producing only about 2,000 Megawatts of electricity. This is grossly inadequate. Ghana is producing about 10,000 Megawatts while Cote d’ Ivoire is producing about 15,000 Megawatts. South Africa is producing about 35,000 Megawatts. The present administration of President Yar’adua intends to achieve a mere 6,000 Megawatts before the end of this year. However the ideal electricity need of Nigeria is about 20,000 Megawatts. Therefore in the next 100 years, the power industry in Nigeria will continue to experience unprecedented growth and investment. This will ensure that GPEL grows along with the industry. (F). Company Strengths:
Our most important strength is a versatile knowledge of the industry. We have a broad knowledge of the transformer needs of the country which will strategically place us in advantage position compared to our competitors. Over the last 12 years we have assisted some companies in Nigeria to source transformers from various transformer manufacturing companies in Europe. Our experience in this regard puts us in a strategic advantage in this industry. Some transformer companies we have traded with in the past are:
1. Impressum 2. Conrad transformers GmbH
Agentur Trafo-Umwelt Cathedral Mountain 5
Büro Brandenburg 55566 bath
Winterfeldallee 7 Sobernheim
D/15834 Rangsdorf Germany
Contact Person: Mr. Astrid Leipold
Tel:++49(0)33708 20041
Fax:++49(0)33708 90676
3. Geier Starkstromtechnik GmbH 4. Geier Starkstromtechnik GmbH
Friedrich-Ebert-Straße 15 Märkersteig 18 - 22
35745 Herborn 14974 Ludwigsfelde
Germany Germany
Telephone: +49(27 72) 92 48 0 Telephone: +49(0 33 78) 82 02 61
Telefax: +49(27 72) 92 48 20 Telefax: ++49(0 33 78) 82 02 60
E-Mail: [email protected]
Internet: www.geier-starkstromtechnik.de
5. Vatechetg Transformers 6. Mijkenbroek 30 –
Elingasse 3 4824 AB Breda
Elingasse 3, Postbox 3286 - 4800 DG Breda,
8160 Weiz The Netherlands
Austria, Tel: 00-31-76-541 15 44
Europe Fax: 00-31-76-541 96 94
Telephone: +43 5 1707-0 e-Mail: [email protected]
Fax: +43 5 1707 55451
E-Mail: [email protected]
7. Smit Transformatoren B.V. 8. Sächsisch-Bayerische Starkstrom GmbH
Groenestraat 336 Ohmstr. 1
NL-6531 JC Nijmegen 08496 Neumark
Netherlands Germany
Contact Person: Mr. Erik de Vries Tel: + 49 37600 83 0
Tel: + 31/24- 35 68 639 Fax: + 49 37600 3414
Fax: + 31/24- 35 68 764 E-mail: [email protected]
[email protected]
(g). Factors For Success:
The major factors that will make our company to succeed are price and quality. We will supply the best transformers in the world from Astor. They are prepared to supply us the best transformers at a comparatively lower cost than anywhere in the world. After having assisted various companies to buy transformers in Europe, we believe that we have gathered enough experience and skills to propel GPEL to success within the shortest possible time. Secondly, we will do what is lacking in Nigeria, i.e. – ‘After-Sales Services’ - to back up each product we sell with a minimum of two (2) guarantee against part or labor defect. Each product we sell will be issued with a ‘warranty certificate’. This certificate binds us to the product for a minimum of two (2) years. We will guarantee all our products against part, material and labor defect during this period. If our customer wishes, we can also enter into an agreement for an extended guarantee of 5 years or 10 years for a small fee. Our policy is called Follow-Our-Product. (FOP). (h). Company Formulation:
GPEL is a Private Limited Liability company. We are registered with Corporate Affairs Commission (C.A.C), Abuja. We decided to operate as a private limited liability because of the many advantages that accrue to limited liabilities companies. IV. Products and Services
(A). Products:
The major products that BEPL will be trading on are:-
1. Transformers
2. Transformer accessories such as transformer oil, tap changers, hermetic protecting relays, alcohol thermometers, Pressure Relief Valve, Oil thermometers, Buchhol Relay, etc. Transformers: There are basically two types of transformers – a. Power transformers and b. distribution transformers. Power transformers (such as 33/11kv) are specifically used by PHCN to inject more power to an existing grid. They are also used by some companies, institutions and communities to step down the available power supply to consumable level. Distribution transformers are also used by PHCN but specifically by private owners; communities and individuals. Product (Customers’ Perspective)
Here we wish to redefine our product from our customers’ point of view. Features and Benefits. Transformers
Important features: -
Astor transformers meet and/or exceed world standards. They are built and tested under rugged conditions and passed all quality control as satisfactory. Our after-sales service will be the industry leader. Where a service contract is available, we will service our products without any additional cost to our customers. We will also carry out intermittent follow-up inspection of our products to make sure that they are used according to specification. As a result of the points mentioned above, our products will give the consumer peace of mind while providing quality service and the customer enjoying long guarantee from the company. In the unlikely event of refunds, we will refund the entire funds paid by the customer without hassles. Pricing Of Our Products
This industry is a dynamic one. It is one whereby intending customers make their decisions mostly on price. Therefore pricing our product is a major decision where a lot of factors need to come to play. We know also that pricing of our products is one avenue where we intend to make our initial customers base. However we also know that we cannot under price ourselves and eventually starve the company out of funds. Therefore we will maintain an average price compared to our competitors and compete more on quality and service. One advantage we have is that over the years we have assisted numerous companies to source for transformers and generators from various countries in Europe. As a result, we have a good knowledge of sourcing our products from relatively cheaper sources. For this reason our products will be lower in price than the industrial average. Our prices will be set after considering these various costs:
1. Cost of purchase
2. Cost of shipping
3. Cost of clearing
4. Cost of funds
5. Cost of transportation
6. Other cost:
a. Warehousing
b. Loading and off loading
c. Administrative
d. Promotional
e. Incidental, etc
We will also be mindful of the market prices in other that we do not operate at a loss as the real motive of setting up this business is for profit making.
**It is important that we state here that we do not have a credit policy. No purchases will be made from us without outright cash payment. V. Marketing Plan
The business of trading in transformers is dynamic, therefore to have a continuous edge over our competitors, we need to outline an extensive marketing strategy that will involve a careful, continuous and systematic marketing research. This will assist us to make a meaningful Marketing Plan. Therefore, before purchasing our products, we will carry out a thorough marketing research and survey in order to know the product(s) that are currently in high demand. This will assist us to know the particular product(s) to purchase so that our goods do not remain in stock for long period of time. We will try as much as possible to get orders from customers before proceeding to make purchases. Market research
Primary:- One of our staffs will be a Marketing Officer. This person will be a young dynamic male with a minimum of OND Marketing. His major duty is to go out to the market and carry out a survey of the present needs in this industry. The information he provides to us, coupled with other information, will assist us to know the trend of consumption in the market. Secondary:- It is unbelievable the amount of information contained in our national daily newspapers. We will harness this information by investing in daily purchase of several newspapers. Also the Federal Tenders Journal is another source of information concerning orders for transformer and generator sales. This journal is published every two weeks. We will also buy a copy to help us gather information regarding transformer purchases. Targeted Market:
We will market our products in the entire Nigerian Geopolitical Zone. We also target Federal, State and Local governments since each government also purchase transformers. Many companies in Nigeria also purchase their own transformers as well as institutions and other organizations. Our major customer targets are some of the eighteen companies under the Power Holding Company of Nigeria (PHCN). Economics
Facts About The Industry:
Size - The size of the Nigeria power market cannot be determined at this time. However, it is very, very huge. Nigeria is said to have a population of about 130 million. We all have need for power which is in very short supply at this time. The entire nation is sharing the only 2,000 Megawatts we are producing at this time. Percent share of the market for GPEL – for a start, GPEL intends to concentrate in capturing about 10% of the market. However we intend to grow steadily and within the spate of one year we intend to be the industry leader in this field. Current demand in target market – Very High, because the Federal government is spending an unprecedented amount of money in the power industry. This is followed by various State governments as many of them have also made the provision of uninterrupted power supply their major agenda. Trends in target market - growth trends in this industry is guaranteed; also trends in consumer preferences will increase as our products are sold and marketed all over Nigeria. Barriers
High Cost of Start Up: - The initial investment in this business is high. This is because of the nature of the items we carry. Generally, solid and reliable transformers from Europe are expensive. Also the need to locate the business in Lagos which is the commercial capital of Nigeria is another reason that tends to drive up the start up capital. Training and skills: - For a start we will send two of our technicians to Europe for training. We have already finalized with the company that will train them. They will be trained in the basic area of installation and positioning of transformer and generators. Shipping and Clearing: - Because of the specialized nature of transportation of transformers, the cost of shipping is generally high. Transformers are shipped in ‘Open Top Containers’. This method of shipping it makes it easy for loading and off loading. But the cost of shipping is higher. Acceptance of our Products: - We will specialize in Astor’s “TRANSTEK” and “MASTER” as we will develop a franchise and agency agreement with them. ABB transformers are well accepted in Nigerian market. For the fact that our brand is relatively new to Nigeria we will sell ours at a lower price. However, sooner rather than later, our brand will become accepted and expect sales to pick up faster in due course. Overcoming These Barriers: - The barriers mentioned above are basically financial. Some are normal which will change with time. With the availability of funds from the beginning, coupled with more operating funds as well as an adequate marketing strategy, we will easily surmount some of these barriers. Customer Base
As mentioned earlier, our customers are wide range. They are geographically spread all over Nigeria. Also our customers are many government institutions. On the first hand, our targeted customers will be middleman businesses. These are companies that have been issued with contracts to purchase and supply transformers to certain places. When we identify these people, we will provide them with ‘special discounts’. These discounts will serve as incentives to encourage them to bring more businesses to us. Profile of Targeted Customer (Demographics):
Understanding the demographical profile of our targeted customer will assist us to know the characteristics of the sales/marketing staff(s) we need to hire. Below is a brief profile of your customer.
- Sex (Mainly male)
- Age (Average age – between 30-45)
- Income (Middle income of about N1m per annum)
- Origin (Mostly from South East Geopolitical Zone)
(f). Competition
There is a school of thought in business that says identifying and understanding your competitors is the key to unlocking your business success. Therefore we will use this section to identify them and to state how we intend to work around them. First we wish to identify some products that will compete with our major brand of ‘Transtek or Master’ transformers are:
o ABB transformers from Poland
o Simetrafo transformers from Italy
o Celme transformers also from Italy
o Smit transformers from Germany
o IOR Breda transformers from The Netherlands. Some companies in Nigeria that will compete with us are:
Elektrint Nigeria Limited
Plot 11, Gbagada Ind. Estate . Gbagada Lagos. Elco Transformers
22, Saka Tinubu Street
Victoria Island, Lagos
These companies will compete with us mainly across the board, which is in terms of products and services. However we shall compete favorably with them having studied their strengths and weaknesses. We also have strength of a full guarantee for all our products from the manufacturers after passing these products through rigorous testing procedures which many of our competitors will not do. Also, many of our competitors carry ‘China’ products which cannot stand the test of time, and Nigerians are beginning to reject them. Table 2: Competitive Analysis
FACTOR GPEL Strength Weakness Competitor A
Elekrint Ltd Competitor B ELCO Ltd Importance to Customer
Products Importation of transformers and generators from Europe Transformers are in very high demand in Nigeria Initial acceptability will be difficult Deals mainly on ABB products that is a brand name Deals on refurbished transformers CRITICAL
Price Prices must be below industry Will assist us to penetrate the market. This will initially affect our income Our prices will be lower than competitor Massive enlightenment to expose ills CRITICAL
Quality Brand new transformers from Europe Products not from China Prices will be higher than China products Products will meet/exceed industry leader Refurbished items are lower in quality CRITICAL
Selection We will stock major range of transformers Availability of stock-in is a major plus It is expensive to carry a huge stock here
Service Availability of several after– sales services Broad 2 years guarantee. Follow-up inspection will increase cost CRITICAL
Customer satisfaction
Expertise Technical competence of our staffs Some technical staffs will be trained abroad This will increase cost CRITICAL
Customer will be pleased
Location Ira Qtrs. Ojo Rd. Lagos. Outright purchase of property High cost of outright purchase CRITICAL
Ease of access
Sales Method Direct Sales (Cash & Carry ONLY) All payments to be made to bank Customers will make bank deposits first NOT IMPORTANT
Advertising Massive advertising for awareness Company/product will be well announced Advertising is expensive analysis Industry leader is basically unknown Another industry leader
Unknown CRITICAL
Providing information
Credit Policies Will operate strictly on cash & carry To guarantee Accountability Industry leaders operate on credit
(h). Promotion
Promotion is the means by which you announce yourself and your products. GPEL will embark on extensive promotion to announce itself. We will do massive advertising via Newspaper and radio. Monday Punch Newspaper is always set out for massive advertising for the power sector. We will participate in advertising on this newspaper at least once every quarter (once every 3 months). To get the most out of our promotional budget, we also need radio gingles. This medium is relatively cheaper and is very effective to meet the desired audience. We will also use other methods other than paid advertising, such as trade shows, catalogs, dealer incentives, word of mouth and network of friends and other professionals’ methods. What image do you want to project? How do you want customers to see you? We will also target repeat customers and systematically build a relationship with them. During festivities like Christmas, New Year, Ed Malud, etc, we will send our repeat customers some gift and promotional items. (I). Proposed Location
The location of a business is one major factor that contributes to its eventual success. Many factors come to play when considering a suitable location. Having considered many factors, we have decided that our first location will be in our newly acquired site 14, Ariyo Street, Ira Quarter, Ojo, Lagos. The criteria for choosing this location are:
o Cost of acquiring property. o Ease of identification by customers
o Cost of Operating in this location
o Distance from competition. o Ease of accessibility. o Nearness to Lagos
Distribution Channels
Our major distribution channels will be by:
1. Retail
2. Wholesale
3. Agents
4. Independent representatives and
5. Bid on contracts
(j). Sales Forecast
Now that you have described your products, services, customers, markets, and marketing plans in detail, it’s time to attach some numbers to your plan. Use a sales forecast spreadsheet to prepare a month-by-month projection. The forecast should be based on your historical sales, the marketing strategies that you have just described, your market research, and industry data, if available. You may want to do two forecasts: 1) a "best guess", which is what you really expect, and 2) a "worst case" low estimate that you are confident you can reach no matter what happens. Remember to keep notes on your research and your assumptions as you build this sales forecast and all subsequent spreadsheets in the plan. This is critical if you are going to present it to funding sources. VI. Operational Plan
Here is our daily operational plan:
We will begin operations by opening our business gates at 8am prompt Mondays to Saturdays. From Mondays to Fridays we will be open from 8am to 5pm. On Saturdays we will be open from 8am to 2pm. Our security personnel will be the ones that will open the business gates at 8am prompt. All staffs must be on seat at this time and they will be required to fill a register as soon as they come into the premises. A daily inventory of all products in-stock will be taken as soon as work resumes in the morning. Another inventory will be taken every evening before the close of the business day. A daily operational guideline will be mapped out for the marketing staff. He will be expected to carry out this assignment and return back to base with meaningful results. His report will be used to outline a short-term marketing strategy as well as a broad marketing plan. Security of our products is of paramount importance to us. For this reason we will have two (2) security staffs that will be living on premises. Apart from this, we will sensitize our surroundings and our neighborhood in order to create consciousness and security friendliness. Production
Our transformers will be imported from Astor Transformertor and Energy Ltd, Ramazanoglu Mahellesi, Pendik, Istanbul, Turkey. We will transport same to our premises and display them for sale. (b). Location
Physical requirements:
• Amount of space: We have identified that we need 2 plots of land. One plot will be developed for maintenance and generators while the other will be used for the display of transformers.
• Type of building: A small building will be constructed in the space which will serve mainly as sales outlet as well as customers waiting area.
• Power and other utilities: Whereas PHCN lighting facility will be acquired to provide power to our premises, we will also provide a generator for our facility. A locally constructed borehole will be done in the site to provide water for the premises. Access: the premises will be constructed in a way that will guarantee easy access to our trucks or to customer’s trucks. A expect a trailer to be able to easily access our premises in order to off-load or on-load goods. An easy walk-in access gate will also be constructed. Outside our premises will be well constructed to provide adequate parking spaces for our customers. Adequate parking space will also be constructed for our trucks. Table 3: Outline of our facility
(c). Construction
1. Perimeter Fencing of premises
2. Flooring of entire area. German fencing is advisable.
3. Construction of office area, security house and maintenance department.
4. Construction of front layout including parking areas for customers and our trucks
(e). Legal Environment
Here are some legal documents which we will require:
• Licensing and bonding documents from PHCN
• Permits: From State Governments and Fire Departments
• Health, workplace, or environmental regulations
• Commercial Zoning and building codes approval documents
• Certificate of Occupancy
• Insurance coverage
• Trademarks and patent rights from Federal Ministry of Commerce, copyrights, and Franchise documents from suppliers
(f). Personnel
• Number of employees – Eight (8). Comprising of:
1. Chief Executive (1)
2. Customer service (1)
3. Maintenance worker (2)
4. Driver (1)
5. Marketing (1)
6. Security (1)
7. Helper (1)
• Type of labor: Semi skilled as most employees must possess a minimum of OND.
• Employees will be sourced from the job market.
• Maintenance staff will be sourced from reliable recommendation.
• Maintenance staffs will be sent to Europe for training.
• Pay structure will be in line with industrial average.
• Job schedules and written procedures will be prepared for all staffs by Management. (g). Inventory
Inventory will be taken twice daily and a record of inventory will be kept in the security office. Lead –time for re-ordering will be determined by this inventory as well as by orders made by customers. VII. Management and Organization
The day-to-day management of GPEL will be done by Goodluck Osegi an Electrical Engineer who. He has a vast managerial acumen from working in various organizations in Nigeria. He will bring his expertise to bear in the management of this business. He will also be supported by a team of carefully selected work force who are also experienced in their various fields. As we progress in the business, more staffs will be recruited as deemed needed. Professional and Advisory Support
GPEL will also be receiving managerial support from the following individuals or organizations:
• Management advisory board: Patrick Musa
• Attorney: Unique Law Chambers, Lagos
• Auditors: Abel Agbo & Co.
• Insurance: Standard Alliance Insurance PLC
• Consultant: Mr. I K (xx)
• Bankers: Zenith Bank PLC and UBA PLC
• Mentor /key advisor: Alhaji Aliu Yesufu
VIII. Appendices
Details and studies used in our business plan:
• Punch Newspaper Monday, June 15, 2009
• Brochure: Astor and Master Transformer’s brochure
• Initial Good-link Power Engineering Co. Blueprints and Business plans
• Photos of transformers taken in from Astor Transformers, Istanbul, Turkey
• Federal Government Budget of 2009 and 2010
