THIPE EXPRESS BUSINESS

PLAN
A TRANSPORTING COMPANY BUSINESS PLAN

THIPE EXPRESS (PTY) LTD

Prepared By: Uyapo Machacha
THIPE EXPRESS BUSINESS PLAN

TABLE OF CONTENTS

CHAPTER CONTENTS PAGE

1.1.0 TABLE OF CONTENTS _______________________ 2

1.2.0 EXECUTIVE SUMMARY __________________________ 3

1.3.0 OBJECTIVES ______________________________ 4

1.4.0 MISSION ___________________________________ 4
1.5.0 VISION ____________________________________ 4

2.1.0 COMPANY SUMMARY _______________________ 5

3.1.0 SERVICES __________________________ 7
4.1.0 MARKET ANALYSIS SUMMARY _____________ 7

5.0.0 WEB PLAN SUMMARY ________________________ 10

6.0.0 MANAGEMENT SUMMARY __________________ 15

7.0.0 FINANCIAL PLAN __________________________ 16

8.0.0 APPENDIX ______________________________________ 22

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THIPE EXPRESS BUSINESS PLAN

Thipe Express
Executive Summary
Thipe Express is a transportation service company based in Francistown and founded by
entrepreneur Mr.Thipe Tlhase. Thipe Express will serve companies in Northern Botswana
(eventually growing to include Southern Botswana, Zimbabwe, South Africa, Namibia and
Zambia) with goods transportation and distribution services. The company will grow a reputation
for it’s on time and precise service as well as allowing clients to align their company with Thipe
Express's scheduling. The company will be run by Mr.Tlhase as CEO, and Mr. Uyapo Machacha
as Chief Operating Officer.

Thipe Express can be launched for about P1, 500,000, partly with the investment of Mr.Tlhase,
and auto loans from financial institutions. The company will be launched with one cab and two
trailers and will expand its operations to utilize six cabs and trailers by the end of its third year,
using auto loans to finance this expansion. Gross margins will be around 60%, allowing for
significant profit by the end of the third year as the company scales up.

Beyond three years, the company will seek to expand to additional bases of operation in
Botswana and to add trucks with refrigerated and temperature-controlled trailers. The company
will be positioned for sale to a national freight-hauling service seeking to expand to, or add
operations in, the Botswana.

Highlights
3500000
3000000
2500000
2000000
Sales
1500000
Gross Margin
1000000 Net Profit
500000
0
Year 1
Year 2
Year 3

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THIPE EXPRESS BUSINESS PLAN

Objectives

Thipe Express intends to serve companies in Botswana, Southern Africa (Francistown,

Gaborone, Maun, and Mahalapye) with truck-based distribution services.

Over the first three years of operations, Thipe Express will seek to meet the following objectives:

 Establish bases in Francistown, Gaborone, Maun, and Mahalapye

 Purchase six cabs and trailers with dry van trailers
 Hire eight full time truck drivers
 Achieve strong annual revenue  based on 1/2 million kilometers of haulage in the third
year

Mission

Thipe Express will simplify distribution of goods for Botswana based companies, becoming their
partner in operating efficiently and reliably. Thipe Express will use management of logistics, on
time, accurate deliveries from destination to destination in Botswana, in partnerships with
distribution centers and warehousing companies to achieve its goals.

Keys to Success

The keys to success in the logistics company are:

1. Strong communication systems between drivers, bases, and customers

2. Setting delivery timetables that can be met (i.e. setting accurate expectations)
3. Hiring and keeping of reliable, experienced, safe drivers.
4. Understanding what customers are trying to accomplish, and helping them find the
correct distribution solution to create long term relationships.

Vision
Thipe Express will be a company that will add graciousness to every man it touches. Thipe
Express will not only offer efficiency but a universal feeling of unmatched gracious experience.
Thipe Express will grow to form smaller companies, and offer leadership in creating a
conglomerate that transcends history, not only in Botswana but in the international company
community.

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THIPE EXPRESS BUSINESS PLAN

Company Summary
Thipe Express, which is a startup company, specializing in logistics and headquartered in
Francistown, Botswana, will provide trucking and logistics management solutions for company
clients in Botswana and neighboring Zimbabwe and South Africa. Beginning with operations in
Francistown and Gaborone, the company will transport cargo from suppliers to manufacturers to
distributors and retailers, working in partnerships with distribution centers, warehouses, and
wholesalers.

Company Ownership

Thipe Express was founded by Mr.Tlhase, also a current owner of a small bus company which he
has 30 years experience in transport operations and management. Thipe Express has
been established as a private limited company with Mr.Tlhase possessing 100% ownership.

Start-up Summary

The start up expenses consists of some of the basic set up costs for the Thipe Express office
stationery (letterhead and company cards), rent for the office at P6, 000 per month, and computer
equipment. Marketing costs includes leaflets and website development (see website plan for
more details). Other expenses comprise legal consultation fees to make sure that all safety
measures are taken to reduce the risk of the company and to create templates for customer and
partner contracts, insurance payments for the first year of company to cover liability related with
the office, the service, the trucks, licenses and permits for the company.

Cash required will be used to finance the months of company before cash flow break even is
accomplished and to allow for adequate cash reserves to lessen the risk of running low on cash if
targets are not met. Other current assets include industrial plot for truck parking space,
mechanical equipment for truck maintenance. Other assets that need to be purchased are software
for scheduling, accounting, and resource management and light equipment. Long-term assets
include two new cabs and trailers, estimated at P1, 500,000 each (approximately P1, 200,000 for
the cabs and P300, 000 for the trailer). The company will buy new in order to better guarantee
that deliveries are made on time and that the common risks of aging equipment are
circumvented.  P150, 000 is budgeted for two fork lifts estimated at P75, 000 each, one per truck.
An additional P75, 000 is budgeted for long term assets including additional repair equipment
and tools which it is cost effective to own in house, satellite tracking equipment for each
truck, and office furniture. Thipe Express will maintain greater control over the service it offers
by owning the trucks, ensuring that it always lives up to its name.

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THIPE EXPRESS BUSINESS PLAN

Start-up Requirements

Start-up Expenses

P10,000
Legal
Stationery P1,000
Insurance P10,000
Rent P0
Computer P6,000
Licenses and Permits P2,000
Website Development P5,000
Brochures P2,000
Total Start-up Expenses P36,000
Start-up Assets
Cash Required P20,000
Other Current Assets P40,000
Long-term Assets P1,500,000
Total Assets P1,560,000
Total Requirements P1,596,000

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THIPE EXPRESS BUSINESS PLAN

Services

Thipe Express will offer the following services for companies in Botswana:

 Pick up and delivery of goods with a minimum per delivery weight of 10,000 tonnes
from and to locations in its geographic range by cabs and trailers moving dry van trailers
 Online tracking information detailing the location of all GPS tagged trucks and the status
of deliveries, including expected arrival times for pick-up or delivery
 Both "less than a truck load" and "truck load" services
 Preferred customer services including online accounts, regular schedules of transporting,
or linking of customer order information directly to Thipe Express's scheduling software
to allow for seamless logistics
 Phone support for all customer questions, delivery changes, and scheduling

To maintain its competitiveness in its core services, Thipe Express will NOT offer:

 Storage or warehousing of goods awaiting delivery (goods can remain in storage in trucks
for short periods, but at relatively high cost to customers)
 Packaging and crating

In the future, Thipe Express will add the following services:

 Temperature controlled transporting to expand the range of customers timely can appeal
to perishables industry.
 Trucks are operated by qualified and well-trained drivers with spotless records. Drivers
are safety trained and re-tested for knowledge of laws as they change. A dedicated suite
of software and communication systems will allow for the logistical management
mentioned above.

Market Analysis Summary

The Botswana commercial trucking industry serves as a key link between raw material suppliers,
manufacturers, wholesalers, distributors, and retailers in most industries. Thipe Express will
compete in the market for medium and long haul dry van trucking in Botswana. This market
serves companies ranging from the packaged goods/grocery industry to the clothing industry to
high-tech equipment, as well as commercial relocations.

Customers which require frequent dry van transporting generally have the appropriate-sized
loading dock for the standard 9' high, 8' 6" wide, 53' length dry van cargo area.

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THIPE EXPRESS BUSINESS PLAN

Market Segmentation

The market analysis table covers likely market segments within the Southern African Regions
which Thipe Express will serve.

Raw Material Suppliers ship large quantities of materials to large wholesalers in Botswana.
These materials generally do not require refrigeration or temperature control. Wholesalers
maintain some on-site storage for these supplies and generally have some leeway as to when
deliveries can be received, except when projections are mistaken and supplies drop low.
Packaging supplies also must be shipped to manufacturers and are included in this group.

Manufacturers often outsource the distribution of their goods to companies that specialize in
serving one the type of retailer or company. Their packaged goods are often moved to only one
wholesaler/distributor, creating a regular company in transporting between the two locations.

Wholesalers/Distributors that serve large retailers assemble truckloads of goods from the many
manufacturers/suppliers they serve. While they often have their own trucks or distribution
means, some of these firms do not either because they are smaller or because they attempt to
limit their investment in assets. Others may require additional trucking support when they are
operating at capacity but not prepared to expand their transporting capacity.

Market Analysis (Pie)

18%
Raw Materials Suppliers
Manufacturers
Wholesalers /
50% Distributors

33%

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THIPE EXPRESS BUSINESS PLAN

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Raw Materials Suppliers 1% 1,000 1,015 1,030 1,045 1,560 0.99%
Wholesalers/Distributors 1% 2,000 2,025 2,050 2,076 2,102 1.00%
Manufacturers 1% 500 510 520 1,030 540 0.99%
Total 1.00% 4,500 5,550 4,600 4,651 4,702 1.00%

Target Market Segment Strategy

Thipe Express will begin by focusing specifically on the segment of wholesalers / Distributors in
Northern Botswana, expanding after the first year to the entire country and neighboring
Zimbabwe & South Africa. By serving wholesalers / Distributors, Thipe Express can provide an
affordable transporting solution for new and growing wholesalers / Distributors over purchasing
their own trucks.

Cargo sometimes requires flatbed or bulk/tank trucking which will not be an initial service
offered by Thipe Express and wholesalers often have their own trucks. These segments are
expected to yield some customers, but by focusing first on the middle of the supply chain with
wholesalers / Distributors, Thipe Express will be introduced to suppliers and distributors who
may require their services without having to engage in full marketing campaigns to these
segments.

Service Company Analysis

It’s important to note that:

 The Botswana trucking industry includes about 5,000 for hire carriers and 2,500
independent owner operators.
 Total industry revenue is nearly P20 billion yearly.
 Major players in the industry include Seabelo Carriers, J.H Zikhale Motorways, Ihawu
Holdings, and Truck Hire.
 The industry is fragmented, with the 10 largest companies accounting for less than 30%
of the market.

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THIPE EXPRESS BUSINESS PLAN

The industry includes carriers that use commercial motor vehicles and doesn't include couriers
like Sprinter Couriers and FedEx or private carriers (companies that transport their own products
and cargo).

It’s important to note that demand is driven by consumer spending and manufacturing output.
The profitability of individual companies depends on efficient operations. Large companies have
advantages in account relationships, bulk fuel purchasing, fleet size, and access to drivers. Small
operations can compete effectively by providing quick turnaround, serving a local market, or
transporting unusually sized goods.

The industry is broken into "truckload (TL) shipments that dedicate trailers to a single shipper's
cargo" and "less-than-truckload (LTL) shipments, which transport the consolidated cargo of
several shippers on one truck, dropping off goods at multiple delivery points".

Competition and Buying Patterns

In addition to competing with other trucking companies, including national carriers, Thipe
Express will compete with rail and air cargo transportation. However, for the distances it intends
to travel, and due to the few rail lines in Botswana, trucking is at an advantage.

Shippers choose between trucking companies based on:

 Their track record of on-time and accurate deliveries

 Their price
 Their ability to partner with the shipper to offer logistics expertise and added services.

Web Plan Summary

The Thipe Express website will in the future run as a provider of basic information for those who
find it through the Internet, as well as a complicated account management gateway for
customers. For potential customers, the website will run as a deeper enlightenment of the
services and background of the company than a leaflet or advertisement can give. Particular calls
to action on the website will request users to call and speak with a salesperson or to fill up a form
with their basic information and a good time to speak with them, so that a salesperson can
contact them. Even one time customers will be able to access up to date information about the
ETA and current location of their deliveries. Customers who subscribe to preferred services will
completely have access to more advanced information and utilities

Website Marketing Strategy

Thipe Express will employ the following ways to promote its website as a marketing tool:

 Preliminary and continuing search engine optimization by the Web developer.

 Google Adwords drive which can be abridged or defunded if natural search rankings are
high enough.

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THIPE EXPRESS BUSINESS PLAN

 Profiles and listings on ten industry and trucking company online databases.
 Citation of the website URL in all leaflets and advertisements.

Development Requirements

The website's mechanism will have the following requirements:

Front End

 Homepage - Imitating a basic brochure about Thipe Express.

 Services – Detailed description of the service choices along with photographs of the
trucks and a map of the area served.
 About Us - Background on the allies, mission, and fundamentals of the company.
 Contact - Form to submit information and phone number to contact a salesperson during
operation hours.

Delivery Tracking

 Form - To enter delivery code which was chosen for the delivery.
 Map - Confirm up to date location of the delivery on a map.
 Statistics - Gives ETA, minutes late or ahead of schedules, position of pick up or drop
off, other remarks about the order.

Account Management

 Login - Login form for customer password and username.

 Account Profile - Basic customer information, settings connected to interface between
customer systems and Thipe Express if direct links have been recognized.
 Scheduling - Chart on which pickups and deliveries can be scheduled and rescheduled.
 Alerts - Settings for email or text alerts about deliveries which can be sent to customer.

Back End

 Database Entry - Capability to investigate within and make changes and edits to the
customer and scheduling information in the database.
 Billing Interface - Website send billing information for completed jobs directly to
accounting software for bill creation.

The website will be developed over a three month period and will require P20, 000. Many
elements can be adapted from off the shelf or open source software, but others must be
developed from scratch to interface between customer software and the Thipe Express database.

Thipe Express will concentrate its strategy on the following areas:

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THIPE EXPRESS BUSINESS PLAN

 Establishing a tough software/Web element to its company to drive acceptance of its

ideal customer services.
 Building and retaining its on time standing to command revenue per mile slightly over
the industry average.
 Marking wholesalers in Botswana in the launching of marketing as the segment mainly in
call for Thipe Express's services

Competitive Edge

Thipe Express will create a competitive border through its persistent focus on on-time deliveries
for its particular target market. Software and communication systems, operational options and
marketing resources will all be leaning around this objective. By making customers more
confident of on-time delivery with Thipe Express than with the rivals, they will be more prone to
use the company generally, as they cannot at all be certain when a few hours can make an
inconceivable difference to their possible revenues or expenses.

Marketing Strategy

Thipe Express will attempt to rapidly achieve awareness in Botswana about its company in the
first year, followed with awareness in Southern Botswana in future years. It will seek to position
itself not as the most inexpensive carrier, but as a carrier with the best on-time record coupled
with advanced systems to help clients manage their logistics better. Smaller companies may feel
more comfortable working with a smaller carrier as they fear being lost in the shuffle by bigger
carriers who also handle huge accounts.

 Building a website with visibility on search engines and in databases of trucking

companies (see Web plan)
 Creating a compelling brochure of Thipe Express services which will be distributed
through direct mail, and kept in stock for networking events
 Exhibiting at Botswana company service conferences, especially for sectors of the
manufacturing industry.
 Advertisements in trade publications.
 Public relations efforts including press releases related to the company launch and its
unique preferred customer account management package.

Sales Strategy

Mr. Tlhase will manage sales for the company, making appointments with and traveling to
customer business in the region when necessary to establish relationships based on an
understanding of the customer’s needs for transporting. Mr.Tlhase will prospect from a list of
wholesaler business in the country, starting with small and new companies which may not have
an established long term relationship with a transporter yet.

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THIPE EXPRESS BUSINESS PLAN

Sales Forecast

The cost of sales listed here for per-mile transporting is approximately 25% for fuel based on the
estimated 10 mpg for loaded trucks, and another 25% for truck driver labor hours that can be
assigned to the jobs based on P16/hour rate. Cost of sales for preferred accounts is much smaller
as it consists only of set-up and maintenance labor for hourly operators.

Preferred customer accounts are paid for once a year and a 90% retention rate is projected.

Monthly Sales
Month 12
Month 11
Month 10
Month 9
Month 8
Month 7
Month 6 Sales
Month 5
Month 4
Month 3
Month 2
Month 1
0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000
PROJECTED SALES IN PULAS

Milestones

The milestones chart covers the early marketing actions illustrated in the marketing strategy
summary. The initial two milestones (brochure and website) are budgeted under start-up
expenses and the rest is accounted for in the first year marketing budget for operations.

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THIPE EXPRESS BUSINESS PLAN

Milestones
Milestone Start Date End Date Budget Manager Department
Create Brochure 11/1/2011 11/30/2010 P5,000 Tlhase Marketing
Create Website 10/1/2011 12/31/2010 P20,000 Tlhase Marketing
Generate Mailing List 12/1/2011 12/15/2010 P1,000 Tlhase Marketing
Direct Mail Distribution 12/15/2011 12/31/2010 P5,000 Tlhase Marketing
Run First
Advertisements
1/1/2012 1/31/2012 P10,000 Tlhase Marketing
Launch Press Release 1/1/2012 1/31/2012 P2,000 Tlhase Marketing
First Trade Show (Pre
2/15/2012 2/28/2012 P10,000 Tlhase Marketing
and Run)
Totals P53,000

Management Summary

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THIPE EXPRESS BUSINESS PLAN

Mr.Thipe Tlhase, CEO, will manage the strategic direction, sales and marketing of Thipe
Express. He developed experience in every one of these areas during work in his preceding
transportation company, which he launched and ran for over 30 years.

The Chief Operating Officer position will be filled by an associate who will be offered up to
10% of shares in the company after meeting certain objectives. Extra shares will be offered if the
COO contributes capital to the company. The COO will handle operations, finances, human
resources, and procurement.

The company will require extra staff including an overseer/dispatch center operator and a
sales/marketing support partner. These persons will be managed by the COO and the CEO,
respectively. Two part-time truck drivers will be hired at first.

Personnel Plan

Truck driver income listed here covers only earnings paid which are not unswervingly
attributable to customer jobs. This consists of training, repair work, profits from deliveries, and
other necessary driving with empty trucks. It is anticipated that this will be less than 20% of
driver earnings. Truck drivers will develop from two part-time at start-up to two full-time by the
end of first year, three full-time by the end of the second year, and 6 full-time by the end of the
third year. There will be extra full-time truck drivers than trucks as the company will try to
develop the power of the trucks at least 60 hours per week and will reduce overtime of drivers.

The sales/marketing partner will be employed in the fourth month after the CEO has directly
implemented all sales and marketing functions for the first three months.

Personnel Plan
Year 1 Year 2 Year 3
CEO P48,000 P70,000 P75,000
COO P60,000 P70,000 P75,000
Sales/Marketing Associate P27,000 P40,000 P45,000
Administrator P36,000 P40,000 P45,000
Truck Drivers (Non-Job
P26,961 P40,000 P50,000
Payroll)
Total People 8 12 14

Financial Plan

Thipe Express will establish its company with three trucks and a launch financed by the owner
and investor's equity. Starting with debt will enable the company to expand and offer efficient
service and not take short- cut operations. This will help the company to have established cash

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THIPE EXPRESS BUSINESS PLAN

flows to purchase additional trucks over the first three years. Profits will swing positive in the
second year after a loss in the first year.

After the first three years, the company can sustain growth of at least three additional trucks per
year, and begin to add additional bases of operation throughout the region so that truck drivers
who do not live in Botswana’s major cities can be hired and trucks do not have to return to this
base after all jobs.

Dividends will not be paid out, as cash will be used in the company to prepare for expansion to
additional offices and purchase equipment on better terms going forward. Loans will be paid as
soon as the grace period awarded by the financiers is due. After five years of operation, the
company will seek merger with another national freight trucking operator for which Thipe
Express's geographic and technological focus will be a good match.

Start-up Funding

Financial Institutions will provide the majority of start-up funding. Additional investment will be
from investing partners who will be granted 20% of shares in the company for their investment.

Start-up Funding
Start-up Expenses to Fund P63,000
Start-up Assets to Fund P660,000
Total Funding Required P723,000
Assets
Non-cash Assets from Start-up P570,000
Cash Requirements from Start-up P90,000
Additional Cash Raised P0
Cash Balance on Starting Date P90,000
Total Assets P660,000
Liabilities and Capital
Liabilities
Current Borrowing P5,000
Long-term Liabilities P0
Accounts Payable (Outstanding Bills) P0
Other Current Liabilities (interest-free) P0
Total Liabilities P5,000
Capital
Planned Investment
Mr.T.Tlhase P500,000
Investors P218,000
Additional Investment Requirement P0
Total Planned Investment P718,000
Loss at Start-up (Start-up Expenses) (P63,000)

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THIPE EXPRESS BUSINESS PLAN

Total Capital P655,000

Total Capital and Liabilities P660,000
Total Funding P723,000

Important Assumptions

The company assumes the cost of fuel at an average of the past two years, faintly higher than
today's fuel prices. This is regarded a conservative approximation as it is possible that fuel will
stay below this amount during at least part of the start-up stage. However, if fuel becomes
extensively more expensive, the gross margins of the company will drop.

Projected Profit and Loss

Major expenses include:

 Payroll: Includes the management, staff, and truck driver earnings (when not directly
attributed to jobs)
 Promotion / Marketing: Expected higher in the opening year and then reducing due to
further marketing dedicated to the commence and the weaning off of search engine
marketing over time
 Depreciation: Mirrors the rising investment in trucks and equipment over the years.
Trucks are depreciated on a 10 year straight-line calendar. The depreciation is P1,250 per
month per truck or P1,458 per month including the extra equipment acquired with each
truck. The company will grow from two trucks at the end of the first year to four at the
end of the second year to six at the end of the third year.
 Truck Repair/ Maintenance: Projected at P2,000 per month per truck to start and
increasing to P3,000 in the third year because of aging of some of the first trucks
acquired.
 Rent & Utilities: Estimated to rise to some extent due to inflationary increases.
 Insurance: Will increase with the number of trucks and size of operations.
 Licensing and Permitting: Include continuous renewals of licenses and additional
licenses for new trucks as they are acquired.

Projected Cash Flow

Purchases of new trucks will be made with 3 year loans for 90% of the acquisition price. The
remaining P250, 000 plus P250, 000 in extra equipment (forklift, etc) for each buy will be made
in cash. Costs on these loans will be P30, 750 per month, per truck loan for the life of the loans.

One additional truck will be purchased in the first year with a loan, two in the second year, and
two in the third year.

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THIPE EXPRESS BUSINESS PLAN

Projected Balance Sheet

The balance sheet illustrates the launch of the company on equity financing and augmented by
safe debt over its first three years of operation to purchase additional trucks. This will allow cash
and assets, as well as net worth, to continue to grow.

Retained earnings will be negative due to the loss sustained in the first year of operation and the
start-up phase, but will move closer to positive in the third year after a profitable second year.

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets
Current Assets
Cash P220,957 P180,358 P2,051,346
Accounts Receivable P1,019,570 P2,000,212 P3,024,339
Other Current Assets P200,000 P200,000 P200,000
Total Current Assets P1,062,527 P2,038,570 P5,095,685
Long-term Assets
Long-term Assets P7,025,000 P10,075,000 P10,425,000
Accumulated Depreciation P509,334 P1,049,286 P2,074,230
Total Long-term Assets P6,065,666 P9,025,714 P10,150,770
Total Assets
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable P607,723 P708,532 P1,022,627
Current Borrowing P30,000 P0 P0
Other Current Liabilities P0 P0 P0
Subtotal Current Liabilities P700,723 P708,532 P1,022,627
Long-term Liabilities P1,027,500 P3,007,500 P3,097,500
Total Liabilities P1,098,223 P3,086,032 P5,020,127
Paid-in Capital P7,018,000 P7,018,000 P7,018,000
Retained Earnings (P603,000) (P808,030) P600,252
Earnings (P205,030) P1,048,282 P4,048,077
Total Capital P6,029,970 P7,078,252 P10,226,328
Total Liabilities and Capital P8,028,193 P10,164,284 P10,746,455
Net Worth P6,029,970 P7,078,252 P10,226,328

Company Ratios

The ratios of the company are compared to General Freight/Long-Distance Trucking for
companies of P1 million to P5 million in revenues.

Ratio Analysis

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THIPE EXPRESS BUSINESS PLAN

Industry
Year 1 Year 2 Year 3
Profile
Sales Growth n.a. 67.44% 62.00% -0.08%
Percent of Total Assets
Accounts Receivable 14.44% 17.20% 18.57% 28.96%
Other Current Assets 2.41% 1.72% 1.15% 28.54%
Total Current Assets 19.62% 20.49% 34.11% 58.36%
Long-term Assets 80.38% 79.51% 65.89% 41.64%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 8.54% 6.75% 7.02% 34.65%
Long-term Liabilities 15.39% 26.41% 22.76% 34.50%
Total Liabilities 23.93% 33.16% 29.78% 69.15%
Net Worth 76.07% 66.84% 70.22% 30.85%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 54.05% 57.63% 59.87% 59.90%
Selling, General & Administrative
56.94% 47.43% 40.84% 15.68%
Expenses
Advertising Expenses 11.75% 5.50% 4.25% 0.24%
Profit Before Interest and Taxes -2.44% 16.08% 28.68% 4.09%
Main Ratios
Current 2.30 3.04 4.86 1.36
Quick 2.30 3.04 4.86 1.34
Total Debt to Total Assets 23.93% 33.16% 29.78% 69.15%
Pre-tax Return on Net Worth -3.97% 27.22% 52.20% 42.38%
Pre-tax Return on Assets -3.02% 18.19% 36.65% 13.08%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -2.88% 10.20% 19.03% n.a
Return on Equity -3.97% 19.05% 36.54% n.a
Activity Ratios
Accounts Receivable Turnover 5.45 5.45 5.45 n.a
Collection Days 43 54 54 n.a
Accounts Payable Turnover 9.39 12.17 12.17 n.a
Payment Days 27 28 25 n.a
Total Asset Turnover 1.05 1.25 1.35 n.a
Debt Ratios
Debt to Net Worth 0.31 0.50 0.42 n.a
Current Liab. to Liab. 0.36 0.20 0.24 n.a
Liquidity Ratios
Net Working Capital P91,804 P160,038 P473,058 n.a
Interest Coverage -5.44 10.64 19.16 n.a
Additional Ratios

19
THIPE EXPRESS BUSINESS PLAN

Assets to Sales 0.95 0.80 0.74 n.a

Current Debt/Total Assets 9% 7% 7% n.a
Acid Test 0.61 0.49 2.21 n.a
Sales/Net Worth 1.38 1.87 1.92 n.a
Dividend Payout 0.00 0.00 0.00 n.a

Valuation

The valuation of the company after three years is estimated at an average between two methods
of valuation, based on an earnings multiple and based on a sales multiple. Both methods yield
similar results. The average valuation is P4.53 million.

Investors will be given 20% of shares for their capital contribution. Tlhase will be given 46% for
his capital contribution and 34% for his contribution as founder. Investors will see a 63% internal
rate of return based on this valuation.

The market value of the company will be determined after five years, when the company is best
poised for sale. The valuation of the company is expected to be between P10 and P15 million for
a strategic sale to a national trucking operator at that point.

Investment Analysis

Start Year 1 Year 2 Year 3

Initial Investment
Investment P718,000 P0 P0 P0
Dividends P0 P0 P0 P0
Ending Valuation P0 P0 P0 P3,108,600
Combination as Income
(P718,000) P0 P0 P3,108,600
Stream
Percent Equity Acquired 66%
Net Present Value (NPV) P1,470,488
Internal Rate of Return (IRR) 63%
Assumptions
Discount Rate 10.00%
Valuation Earnings Multiple 10 10 10
Valuation Sales Multiple 2 2 2
Investment (calculated) P718,000 P0 P0 P0
Dividends P0 P0 P0
Calculated Earnings-based
P0 P1,480,000 P4,480,000
Valuation
Calculated Sales-based
P1,740,000 P2,910,000 P4,710,000
Valuation

20
THIPE EXPRESS BUSINESS PLAN

Calculated Average
Valuation

Appendix

Sales Forecast

Month Month Month Month Month Month Month Month Month Month Month
Month 12
1 2 3 4 5 6 7 8 9 10 11

Unit Sales

Miles of
12,000 18,000 27,000 37,800 52,920 55,566 58,344 61,262 64,325 67,541 70,918 74,464
Transporting

Preferred
Customer 0 1 2 4 7 8 9 10 10 11 12 14
Accounts

Total Unit
12,000 18,001 27,002 37,804 52,927 55,574 58,353 61,272 64,335 67,552 70,930 74,478
Sales

Month Month Month Month Month Month Month Month Month Month Month
Unit Prices Month 12
1 2 3 4 5 6 7 8 9 10 11

Miles of
P1.30 P1.30 P1.30 P1.30 P1.30 P1.30 P1.30 P1.30 P1.30 P1.30 P1.30 P1.30
Transporting

Preferred
P1,000. P1,000. P1,000. P1,000. P1,000. P1,000. P1,000. P1,000. P1,000. P1,000.0 P1,000.
Customer P1,000.00
00 00 00 00 00 00 00 00 00 0 00
Accounts

Sales

Miles of P15,60 P23,40 P35,10 P49,14 P68,79 P72,23 P75,84 P79,64 P83,62 P92,19
P87,803 P96,803
Transporting 0 0 0 0 6 6 8 0 2 3

21
THIPE EXPRESS BUSINESS PLAN

Preferred
P10,00 P10,00 P12,00
Customer P0 P1,000 P2,000 P4,000 P7,000 P8,000 P9,000 P11,000 P14,000
0 0 0
Accounts

P15,60 P24,40 P37,10 P53,14 P75,79 P80,23 P84,84 P89,64 P93,62 P104,1
Total Sales P98,803 P110,803
0 0 0 0 6 6 8 0 2 93

Direct Unit Month Month Month Month Month Month Month Month Month Month Month
Month 12
Costs 1 2 3 4 5 6 7 8 9 10 11

50
Miles of .0
P0.65 P0.65 P0.65 P0.65 P0.65 P0.65 P0.65 P0.65 P0.65 P0.65 P0.65 P0.65
Transporting 0
%

10
Preferred
.0 P100.0 P100.0 P100.0 P100.0 P100.0 P100.0 P100.0 P100.0 P100.0 P100.0
Customer P100.00 P100.00
0 0 0 0 0 0 0 0 0 0 0
Accounts
%

Direct Cost
of Sales

Miles of P11,70 P17,55 P24,57 P34,39 P36,11 P37,92 P39,82 P41,81 P46,09
P7,800 P43,902 P48,401
Transporting 0 0 0 8 8 4 0 1 7

Preferred
Customer P0 P100 P200 P400 P700 P800 P900 P1,000 P1,000 P1,100 P1,200 P1,400
Accounts

Subtotal
P11,80 P17,75 P24,97 P35,09 P36,91 P38,82 P40,82 P42,81 P47,29
Direct Cost P7,800 P45,002 P49,801
0 0 0 8 8 4 0 1 7
of Sales

Personnel Plan

Month Month Month Month Month Month Month Month Month Month Month Month
1 2 3 4 5 6 7 8 9 10 11 12

CEO P4,000 P4,000 P4,000 P4,000 P4,000 P4,000 P4,000 P4,000 P4,000 P4,000 P4,000 P4,000

COO P5,000 P5,000 P5,000 P5,000 P5,000 P5,000 P5,000 P5,000 P5,000 P5,000 P5,000 P5,000

Sales/Marketing Associate P0 P0 P0 P3,000 P3,000 P3,000 P3,000 P3,000 P3,000 P3,000 P3,000 P3,000

Administrator P3,000 P3,000 P3,000 P3,000 P3,000 P3,000 P3,000 P3,000 P3,000 P3,000 P3,000 P3,000

Truck Drivers (Non-Job Payroll) P1,000 P1,200 P1,440 P1,584 P1,901 P2,091 P2,300 P2,530 P2,783 P3,061 P3,367 P3,704

Total People 6 6 6 6 6 6 6 6 7 7 8 8

Total Payroll P13,000 P13,200 P13,440 P16,584 P16,901 P17,091 P17,300 P17,530 P17,783 P18,061 P18,367 P18,704

Pro Forma Profit and Loss

22
THIPE EXPRESS BUSINESS PLAN

Month Month Month Month Month Month

Month 1 Month 2 Month 3 Month 4 Month 7 Month 12
5 6 8 9 10 11

Sales P15,600 P24,400 P37,100 P53,140 P75,796 P80,236 P84,848 P89,640 P93,622 P98,803 P104,193 P110,803

Direct Cost of Sales P7,800 P11,800 P17,750 P24,970 P35,098 P36,918 P38,824 P40,820 P42,811 P45,002 P47,297 P49,801

Other Costs of Sales P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0

Total Cost of Sales P7,800 P11,800 P17,750 P24,970 P35,098 P36,918 P38,824 P40,820 P42,811 P45,002 P47,297 P49,801

Gross Margin P7,800 P12,600 P19,350 P28,170 P40,698 P43,318 P46,024 P48,820 P50,811 P53,802 P56,897 P61,001

Gross Margin % 50.00% 51.64% 52.16% 53.01% 53.69% 53.99% 54.24% 54.46% 54.27% 54.45% 54.61% 55.05%

Expenses

Payroll P13,000 P13,200 P13,440 P16,584 P16,901 P17,091 P17,300 P17,530 P17,783 P18,061 P18,367 P18,704

Marketing/Promotion P6,000 P6,000 P16,000 P6,000 P6,000 P6,000 P16,000 P6,000 P6,000 P16,000 P6,000 P6,000

Depreciation P4,580 P4,580 P4,580 P4,580 P4,580 P4,580 P4,580 P4,580 P4,580 P6,038 P6,038 P6,038

Truck
P600 P600 P600 P600 P600 P600 P600 P600 P600 P800 P800 P800
Maintenance/Repair

Rent P3,000 P3,000 P3,000 P3,000 P3,000 P3,000 P3,000 P3,000 P3,000 P3,000 P3,000 P3,000

Utilities P300 P300 P300 P300 P300 P300 P300 P300 P300 P300 P300 P300

Insurance P1,000 P1,000 P1,000 P1,000 P1,000 P1,000 P1,000 P1,000 P1,000 P1,000 P1,000 P1,000

Payroll Taxes 15% P2,535 P2,865 P3,347 P4,360 P5,167 P5,332 P5,507 P5,691 P5,878 P6,084 P6,302 P6,541

Licenses and
15% P0 P0 P1,000 P0 P0 P1,000 P0 P0 P5,000 P0 P0 P1,000
Permitting

Web Hosting and

P300 P218 P238 P259 P282 P307 P335 P365 P398 P434 P473 P516
Development

Total Operating
P31,315 P31,763 P43,505 P36,683 P37,830 P39,210 P48,622 P39,066 P44,539 P51,718 P42,281 P43,899
Expenses

Profit Before Interest

(P23,515) (P19,163) (P24,155) (P8,513) P2,868 P4,108 (P2,598) P9,754 P6,272 P2,084 P14,616 P17,103
and Taxes

EBITDA (P18,935) (P14,583) (P19,575) (P3,933) P7,448 P8,688 P1,982 P14,334 P10,852 P8,122 P20,654 P23,141

Interest Expense P61 P60 P58 P57 P55 P53 P51 P48 P46 P1,168 P1,133 P1,100

Taxes Incurred P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0

Net Profit (P23,576) (P19,223) (P24,214) (P8,570) P2,813 P4,055 (P2,649) P9,706 P6,226 P916 P13,483 P16,003

Net Profit/Sales -151.13% -78.78% -65.27% -16.13% 3.71% 5.05% -3.12% 10.83% 6.65% 0.93% 12.94% 14.44%

Pro Forma Cash Flow

Month 1 Month 2 Month 3 Month 4 Month 5 Month Month Month Month Month 10 Month Month 12

23
THIPE EXPRESS BUSINESS PLAN

6 7 8 9 11

Cash Received

Cash from Operations

Cash Sales P3,900 P6,100 P9,275 P13,285 P18,949 P20,059 P21,212 P22,410 P23,405 P24,701 P26,048 P27,701

Cash from Receivables P0 P6,240 P15,220 P23,380 P34,241 P48,917 P58,623 P62,022 P65,553 P68,823 P72,289 P76,258

Subtotal Cash from

P3,900 P12,340 P24,495 P36,665 P53,190 P68,976 P79,835 P84,432 P88,958 P93,524 P98,337 P103,959
Operations

Additional Cash
Received

Sales Tax, VAT,

8.00% P1,248 P1,952 P2,968 P4,251 P6,064 P6,419 P6,788 P7,171 P7,490 P7,904 P8,335 P8,864
HST/GST Received

New Current
P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0
Borrowing

New Other Liabilities

P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0
(interest-free)

New Long-term
P0 P0 P0 P0 P0 P0 P0 P0 P0 P135,000 P0 P0
Liabilities

Sales of Other Current

P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0
Assets

Sales of Long-term
P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0
Assets

New Investment
P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0
Received

Subtotal Cash
P5,148 P14,292 P27,463 P40,916 P59,254 P75,395 P86,623 P91,603 P96,448 P236,428 P106,673 P112,823
Received

Month Month Month Month Month

Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 10 Month 12
6 7 8 9 11

Expenditures from
Operations

Cash Spending P13,000 P13,200 P13,440 P16,584 P16,901 P17,091 P17,300 P17,530 P17,783 P18,061 P18,367 P18,704

Bill Payments P720 P21,738 P26,425 P43,202 P40,911 P51,603 P54,880 P65,356 P58,064 P65,325 P73,538 P66,430

Subtotal Spent on
P13,720 P34,938 P39,865 P59,786 P57,812 P68,693 P72,180 P82,886 P75,847 P83,386 P91,905 P85,134
Operations

Additional Cash Spent

Sales Tax, VAT,

P1,248 P1,952 P2,968 P4,251 P6,064 P6,419 P6,788 P7,171 P7,490 P7,904 P8,335 P8,864
HST/GST Paid Out

Principal Repayment
P100 P110 P121 P133 P146 P161 P177 P195 P215 P237 P261 P144
of Current Borrowing

24
THIPE EXPRESS BUSINESS PLAN

Other Liabilities
P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0
Principal Repayment

Long-term Liabilities
P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P3,750 P3,750
Principal Repayment

Purchase Other
P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0
Current Assets

Purchase Long-term
P0 P0 P0 P0 P0 P0 P0 P0 P0 P175,000 P0 P0
Assets

Dividends P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0

Subtotal Cash Spent P15,068 P37,000 P42,954 P64,170 P64,022 P75,273 P79,145 P90,253 P83,552 P266,527 P104,252 P97,892

Net Cash Flow (P9,920) (P22,708) (P15,491) (P23,254) (P4,768) P122 P7,477 P1,350 P12,896 (P30,099) P2,421 P14,931

Cash Balance P80,080 P57,372 P41,882 P18,628 P13,860 P13,982 P21,459 P22,809 P35,705 P5,605 P8,026 P22,957

Pro Forma Balance Sheet

Month Month Month

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9
10 11 12

Starting
Assets
Balances

Current Assets

Cash P90,000 P80,080 P57,372 P41,882 P18,628 P13,860 P13,982 P21,459 P22,809 P35,705 P5,605 P8,026 P22,957

Accounts Receivable P0 P11,700 P23,760 P36,365 P52,840 P75,446 P86,705 P91,718 P96,927 P101,590 P106,870 P112,726 P119,570

Other Current Assets P20,000 P20,000 P20,000 P20,000 P20,000 P20,000 P20,000 P20,000 P20,000 P20,000 P20,000 P20,000 P20,000

Total Current Assets P110,000 P111,780 P101,132 P98,247 P91,468 P109,306 P120,687 P133,177 P139,736 P157,295 P132,475 P140,752 P162,527

Long-term Assets

Long-term Assets P550,000 P550,000 P550,000 P550,000 P550,000 P550,000 P550,000 P550,000 P550,000 P550,000 P725,000 P725,000 P725,000

Accumulated
P0 P4,580 P9,160 P13,740 P18,320 P22,900 P27,480 P32,060 P36,640 P41,220 P47,258 P53,296 P59,334
Depreciation

Total Long-term Assets P550,000 P545,420 P540,840 P536,260 P531,680 P527,100 P522,520 P517,940 P513,360 P508,780 P677,742 P671,704 P665,666

Total Assets P660,000 P657,200 P641,972 P634,507 P623,148 P636,406 P643,207 P651,117 P653,096 P666,075 P810,217 P812,456 P828,193

Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Current Liabilities

Accounts Payable P0 P20,876 P24,981 P41,850 P39,195 P49,786 P52,693 P63,429 P55,897 P62,865 P71,328 P64,095 P67,723

Current Borrowing P5,000 P4,900 P4,790 P4,669 P4,536 P4,390 P4,229 P4,052 P3,857 P3,642 P3,405 P3,144 P3,000

25
THIPE EXPRESS BUSINESS PLAN

Other Current Liabilities P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P0

Subtotal Current
P5,000 P25,776 P29,771 P46,519 P43,731 P54,176 P56,922 P67,481 P59,754 P66,507 P74,733 P67,239 P70,723
Liabilities

Long-term Liabilities P0 P0 P0 P0 P0 P0 P0 P0 P0 P0 P135,000 P131,250 P127,500

Total Liabilities P5,000 P25,776 P29,771 P46,519 P43,731 P54,176 P56,922 P67,481 P59,754 P66,507 P209,733 P198,489 P198,223

Paid-in Capital P718,000 P718,000 P718,000 P718,000 P718,000 P718,000 P718,000 P718,000 P718,000 P718,000 P718,000 P718,000 P718,000

Retained Earnings (P63,000) (P63,000) (P63,000) (P63,000) (P63,000) (P63,000) (P63,000) (P63,000) (P63,000) (P63,000) (P63,000) (P63,000) (P63,000)

Earnings P0 (P23,576) (P42,799) (P67,013) (P75,583) (P72,770) (P68,715) (P71,364) (P61,658) (P55,432) (P54,515) (P41,033) (P25,030)

Total Capital P655,000 P631,424 P612,201 P587,987 P579,417 P582,230 P586,285 P583,636 P593,342 P599,568 P600,485 P613,967 P629,970

Total Liabilities and

P660,000 P657,200 P641,972 P634,507 P623,148 P636,406 P643,207 P651,117 P653,096 P666,075 P810,217 P812,456 P828,193
Capital

Net Worth P655,000 P631,424 P612,201 P587,987 P579,417 P582,230 P586,28

26