BUSINESS PLAN

CONFIDENTIALITY

Please note that all information provided in this Business Plan document in all respect are confidential in nature. Disclosure of any of these information to a third party or for any other purpose other than the processing of the loan request without the express written permission of the Owners and SDL will be a breach of contract.

Management of SDL

1.0 Table of Contents

1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 Table of Contents 3 The Business Concept 4 Vision Mission Company Philosophy Core Values 5 Set-Up Cost and Profitability 6 Market Analysis 6 Marketing Plan Strategy 7 8 Total Sales Sales Forecast Cash Position Plan Start-up Projected Cash flow Analysis Loan Repayment Plan Breakdown of Start-up Expenses Start-up Cost Investments Personnel Plan 14 15
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5 5 5

10.0 Financials Fig. Fig. Fig. 9 Fig. Fig. Fig. Fig. 13 Fig. 14 Fig. 14 Fig. 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 10.9 10.10

8 9 10 11 12

11.0 Assumptions on Cash flow

12.0 Management Team 16 13.0 Board Advisory Committee (Voluntary) 17

EXECUTIVE SUMMARY

2.0 The Business Concept SDL is a hi-tech automobile services business located at 1b, Perchstone & Graeys Close, off Remi Olowude Way, 2nd Roundabout, Lekki Phase 1, Lagos, Nigeria. The business is strategically located with the intent for effective visibility to our proposed high profile clients. Our target clients are individuals with luxury cars, sourcing for a one stop auto mechanic outfit with modern technology and excellent service delivery. We also provide automobile services to indigenous and multinational corporate organizations. SDL is built upon a solid foundation of honesty, reliability, quality and prompt service delivery. The auto repair market in Nigeria has a small number of players and majority offer only repair services. At SDL, we distinguish ourselves by providing up to date hi-tech diagnostic and repair services. SDL offers two main services:
I.

Automobile Service; which is expected to generate 60% gross profit margin of the business. It includes computer-based diagnostics, brakes, suspension, exhaust and electrical services on cars, SUVs, buses and light trucks.

II.

The second service platform is in the area of vulcanizing, tyre changing, wheel balancing and alignment.
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These services will be supported with towing service and sale of tyres. The spare parts, equipments and products are of high quality brands. We have established a direct relationship with major automobile companies for direct importation as well as partnering local importers of spare parts and equipments to ensure quality and good turnaround time. This ensures servicing parts are readily available in our workshop at all times. To support a quick turnaround service delivery to our clients, we also within the shortest possible time import spare parts that are not readily available in Nigeria. In general, we aspire to be the first choice when it comes to supply of quality and genuine spare-parts. Lastly, we offer shuttle service to our customers making the entire service experience as painless and convenient as possible. SDL will attract and maintain a loyal customer base through personalized customer-oriented focus to business. All employees are trained to ensure both long lasting relationships and superior service delivery.

3.0

Vision

To be a leader in the Nigerian Automobile Service Industry, while providing related global standard service to our clients. 4.0 Mission

To build and sustain a strong Nigerian Automobile Service organization dedicated to providing superior service of high quality to our customers through continuous improvement, driven by our corporate philosophy. 5.0 Company philosophy

The company philosophy will be based on the following:

1. 2. 3. 4. 5. 6.

Outstanding customer service delivery. Reasonable and affordable pricing system. Reputed for professionalism, honesty and sincerity with the clientele Reputed for quality service Knowledgeable, professional and experienced technicians/mechanics. Creating a friendly, attractive and ambient atmosphere for the employees and clients.
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6.0

Core Values

Derived from the above corporate philosophy are the firms core values TRICE. T R I C E 7.0 Team spirit Responsiveness Integrity Competence Empathy

Set-Up Cost and Profitability

Initial capital for the project is approximately N 109m for the land, administrative building, workshop and major equipments for both the diagnostics and vulcanizing shops. The initial equity also covers the cost of land, initial operational expenses, professional and approval expenses. N 94 million of the initial capital has been provided by the principal owners, while the balance of N15 Million will be funded via a bank loan. SDL expects to gain a profitable market share within a short period of time. The attached financial analysis below shows that SDL will have a positive cash flow by the end of the first quarter of operation and the loan will be fully paid back within two years with three months moratorium. The switching cost for the hi-tech automobile services sector is quite high, since most of the competitors in the industry are substitutes, thus creating a big market opportunity for new entrants with modern technology and diagnostic equipments. SDL plans to achieve a low cost leadership principal by not only using modern technology but also creating excellent customer relationships to a point where the switching costs for our customers are raised. This will be achieved by aggressive marketing and providing global standard services to our customers through continuous improvement drive and excellent customer service delivery. 8.0 Market Analysis

In Nigeria today, the automobile repair and service industry is evolving. In the past, any mechanic could repair most cars. Today, the least modern cars have enormous technological capabilities with one to seven computers controlling the engine systems and subsystems. Computer modules control and coordinate ignition systems, fuel injection, suspension, air conditioning and heating, automatic transmission, cruise control, braking systems, air bags, sun roofs,
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power windows and more. There are computers whose sole function is to coordinate inter-computer communications; e.g. the Lexus GS430 and most modern SUVs have 17 computers, the least expensive of which costs over N500, 000 to replace. These hi-tech vehicles use control systems that are almost as sophisticated as military stealth fighters. Modern cars no longer have carburetors or distributors. The new hybrid cars have dual electric-gasoline technology for high fuel efficiency. As a result of the continuous improvement in the sophistication of cars, qualified repair technicians require many years of training classes coupled with on the job supervised experience to be able to repair the newer cars. Today, many mechanics have not kept up with this technology growth and most car owners are just beginning to realize how hi-tech their cars really are; 20 25% of cars that come to a typical modern shop are as a result of owners using sub-standard roadside mechanics to repair their cars which complicate malfunctions of their vehicles. 9.0 Marketing Plan Strategy

Our strategy is to take advantage of the prime location of the Lekki-Epe highbrow environment to create an inviting and stunning workshop to attract our clients using a well positioned signage in vibrant colors for easy location and awareness whilst providing virtual documentary in a relaxed atmosphere to clients on automobile knowledge. Our marketing strategy will include, but not limited to the following:

Identify high profile clients Sell the company through recognized and high traffic media means. Market our high profile clients with branded brochure and CDs. Direct Mails and meetings with our target group. Approach businesses within the environment with flyers for the awareness of the companies and employees. Sponsor television and radio automobile related programs as well as events. Offer discounts for an initial period of the business to encourage customers. Customer pick-up and drop-off at a minimum charge. Request constant feedback through customer satisfaction surveys. Follow up emails to our customers reminding them of their vehicles next scheduled service.
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Keep data base of all customers to enable us send out regular information, and well wishes during festive periods. SDL will develop strong customer loyalty programs. SDL will build and optimize its web site to attract prospective customers. The web site will be attractive and easy to navigate. It will also provide testimonials of satisfied customers. SDL will develop referral programs whereby existing customers receive incentives to refer friends or associates as customers.

The above will position SDL as Customer focused. Competitively priced Reputed for honesty and quality Highly trained and certified technicians Our preferred target customers, apart from individuals are major companies in the manufacturing, banking and oil industry with fleet of modern vehicles. These groups can definitely afford repair services for their vehicles as they understand the culture of maintenance. 10.0 Financials The financial graph below indicates the following:

The cash flow statement shows a sales growth of N 18.5 million (179.6%) within three years; N2.4 million in the first year, N 7.4 million in the second year, and N 8.7 million in the third year. SDL is a profitable company. SDL will have enough cash flow to start a second phase at the beginning of the second year of operation and the third phase by the end of the third year.

The financial graph below shows SDL plans to deliver sales of about N 10M in the first quarter, N 11.3M in the second quarter, N 11.8M in the third quarter, and N 12.7M in the fourth quarter

Total Sales (Three Years)

30,000,000.00 25,000,000.00 20,000,000.00 15,000,000.00 10,000,000.00 5,000,000.00 Q1 (First Q4 (First Q3 Q2 (Third Year) Year) (Second Year) Year) Quarterly Sales for Three Years
Towing Computer-based diagnostics Service repairs Tyre changing and balancing

Fig 10.1

Total Sales (Three years)

Fig. 10.2

SALES FORECAST Unit Sales Tyre changing and b Repair services Computer-based dia Towing
Sales Forecast 9

Cash Position Plan

120,000,000 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 (20,000,000) (40,000,000) (60,000,000) Quarterly Cash Position Plan for Three Years Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Total Inflow Total Outflow Surplus/Deficit Bank balance

Fig. 10.3

Cash Position Plan (Three years)

Start-up

70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 Expenses Assets Loans

Fig. 10.4

Start-up

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Projected Cash Flow Analysis

Fig. 10.5

P R O J E C T E D C A S H FFLi rOs W t Q u a r te r ly C A S H IN F L O W =N T O T A L - A U T O R E P A I 1 0S, 2 R TOTAL - AUTO PARTS D T O T A L - O T H E R S D IV

Projected Cash Flow Analysis 11

Loan Repayment Plan

MONTH

QUARTER

REPAYME

Fig. 10.6

1 2 3 4

Loan Repayment Plan 12

Breakdown of Start-up Expenses

Fig. 10.7

Pre-operationa Travel costs Research costs Company regist Permits and lice Deposits
Breakdown of Start-up Expenses 13

Start-up Cost

Fig. 10.8

Investments

Fig. 10.9

Personnel Plan

Fig. 10.10 Personnel Plan

As shown in the personnel plan above, SDL expects to make gradual investments in staffing as several new facilities are opened in the future. In addition to the management team below, SDL will employ a team of Auto mechanics with excellent knowledge, skills and ability to diagnose problems and repair vehicles. We constantly intend to motivate our employees through a robust salary structure, rewards for referrals, bonuses and allowance.
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Description Pre-operational expe Rent Land & buildings Plant & equipment Rent Vehicles PERSONNELs L a n d &furnitureg b u ild in Office Personnel Plant P la n t & ecapital e n Working q u ip m CEO V e h ic le s Total O ffic e fu rn itu re & e q u Managers/Operatio
Start-up Cost Investment

11.0 Assumptions on Cash Flow

1. Total advert and marketing package of N 630, 000 is required for

a year.
2. Rent of N 2m will be paid at the end of the third year. 3. Price of diesel N 150/litre @ 30 liters/day. 4. A work week is 6 days (Monday Saturday) = 24 days/month

5. Bank interest rate = 15% 6. Tenor = 0 36 months 7. Operational hours per day = 8 (9am 5pm) 8. Peak traffic for Diagnostics, Service and Repair, Tyre changing = a. 1 car at 15 mines. /day for Diagnostics. b. 2 cars simultaneously at 1 hour/day for Servicing. c. 1 car at 15 mines. /day for Tyre changing. d. 1 car/day for Towing. 9. Pricing
a. b. c. d.

Tyre changing and Balancing N 2, 500/vehicle Servicing repairs N 10,000/vehicle Diagnostics N 15,000/car Towing N 30, 000/vehicle April June: 2% July Sept: 3% Oct Dec: 4% Jan Mar: 2% April June: 4% July Sept: 2% Oct Dec: 4% Jan Mar: 2% April June: 4% July Sept: 2% Oct Dec: 4%

10. Company Growth Rate (1st year)

a. b. c. a. b. c. d. a. b. c. d.

11. Company Growth Rate (2nd year)

12. Company Growth Rate (3rd year)

13. An investment of N24m (N6m each quarter will be made in the

second year from the companys surplus funds and N60m in the third year towards the companys second phase.

12.0 Management Team

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Dave Ojomo (Chairman/C.E.O.) Dave holds both a BSc and MSc Degree in Applied Mathematics (Operational Research) from Virginia Tech and State University, Blacksburg, USA. Prior to his new position at SDL, he has worked in several Senior Management levels in a number of Financial Institutions in Nigeria and brings over two decades worth of management and analytical experience as well as technical and leadership skills. Before joining the banking industry, he worked as a Corporate Planner in one of the countrys leading steel manufacturing institutions for a period of seven years. Dave has a keen interest in automobiles and has been carrying out vehicle diagnostic activities at his leisure for several years. He has attended automobile servicing workshops in the United States focusing on using modern diagnostic machines. Dave has a passion for detail and excellent service delivery. Leonard N. Ezema (Workshop Manager) Leonard is a creative young man with new ideas and good technical know-how. He has a B.Eng degree (upper class division) in Mechanical Engineering from University of Nigeria, Nsukka. Leonard has diverse experience in the areas of Electrical/Electronic Systems Diagnostics and Circuit Repairs, Overhauling of Automatic Transmission, Mechanical Diagnostics and Repairs, among others. He has obtained the following professional training qualifications: 1. Oracle Certified Professional (OCP) 2. Ford Export Organizations and Global Growth Initiative (E&G) 3. Oracle Certified Associate (OCA) 4. ICT Solution for Africa (AfriHUB) 5. Automated Computer Aided Design (AutoCAD) 6. Ford Export Operations and Global Initiative (E&G) 7. Master in Auto Foundation 8. Master in Auto Engine Repair 9. Master in Brake System 10. Master in Electrical/Electronic System Diagnostics and Circuit Repairs 11. Land Rover Product Knowledge Program 1, 2, & 3 12. Training on Special Machines Balancing of wheels, tyre changing, lathe machine for resurfacing of brake disc and alignment machine.
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Leonard has worked in various big organizations. In the previous organization, Leonard headed the mechanical team in charge of diagnostics, servicing and maintaining of Ford, BMW, Jaguar and Land Rover products. He is a specialist in diagnostic services and stands out among his colleagues. Titilayo O. Laja (Head, Marketing Strategy/Admin) Titi, a graduate of Economics, has a postgraduate experience which spans over a decade in Marketing Strategy and Advertisement Sales. She has worked in several media and advertising organizations including the Nigerian Television Authority (NTA Channel 10), Optima Sports International and MADE magazine. She has been involved in a lot of media projects and FIFA projects/events including the African Nations Cup. She is a promoter of self-development.

13.0 Board Advisory Committee (Voluntary) SDL has a board of advisory committee. This is made up of very experienced personnel in the area of technical, legal and finance. They assist the management of the company in its technical and strategic plans. This team is made up of the following organizations/personnel. 1. Interfinish Motoring Access, Arlington, Texas, USA Richard Ohaike, C.E.O. 2. American Auto Tech Repair Centre, Arlington, Texas, USA Abdul, C.E.O. 3. Andro Tech Limited, Apapa, Lagos, Nigeria Andre Chayeb, M.D. /C.E.O. 4. Remi Oyekola & Co (Accounting), Ikeja, Lagos, Nigeria - Remi Oyekola, Principal Partner. 5. Perchstone & Graeys (Legal), Lekki, Lagos, Nigeria A.O. Eghobamien, Principal Partner and Ibrahim Mambula. 6. Bigstrides Ventures Limited, Lekki, Lagos Nigeria Victor Sada, M.D. /C.E.O. 7. Principal Protection Security Company Limited Omoruyi Umweni-Irikefe, C.E.O. Management September, 2011

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Contacts: SQUARE DEODATE LOGISTICS (SDL) LTD.

LSDPC Femi Okunnu Estate, Phase IV, Lekki-Epe Expressway, Lagos Tel: 01-8112352 & 0803 300 1062 Business Office: 1b, Perchstone & Graeys Close, off Remi Olowude Way, 2nd Roundabout, Lekki Phase 1, Lagos

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