A Marketing & Financial Report on Habibi Transportation

Published:

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.

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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 “HABIBI TRANSPORTATION”. 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

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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

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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 advantage 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, will 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 extremely 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 shipping between the two areas.

Raw Material Suppliers dispatch extensive amounts of materials to huge manufacturers in the northwestern states. These materials by and large don't 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 don't 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 organization's 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 it’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.

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