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JOHANNES INVESTMENT(PTY) LTD

Business proposal
Taxi service Masole Johannes 10/6/2011

This business proposal is intended to give a detailed description of how the contemplated taxi business is going to be run by the aforementioned junior son express.

Business Idea Basically, services provided by Johannes investment shall specifically be transporting passengers to and from desired places (which will be approved by DRTS in Botswana) on a 16 seater vehicle. That is to say transport services. This will be done for a fee which will be determined by the department of road transport and safety. Johannes investment will comply with all stipulated rules and guidelines for transport operation with regards to fares, routes, times of operation, customer care and all the requirements of the vehicle. The favorable market condition and low competition in this industry in Botswana gives Johannes investment an advantage to give the best transport services to the increasingly growing demand.

Our services are geared towards offering an unforgettable driving and passenger services experience which will be the main distinguishing factor between Johannes investments from rival competitors. A quality service to passenger is the main motive behind this enterprise and ultimately individual attention, honesty and sincerity should always be demonstrated at every contact with customers.

The marketing strategy of Johannes investment is centered on providing quality service to lure customers and plead for repeat visits. The strategy is extremely important and serves as pillar of Johannes investment. Providing quality services to passengers is probably the best way to promote and successfully market a business in the transport industry. Johannes investment highly values word of mouth advertising and would ensure that the business would dominate the market through word of mouth advertising. Johannes investment will also keep contact with customers to ensure a satisfying and regular service to passengers. The pricing aspect is not that much of a concern since is recommended by the government.

2. Business Structure
Management, ownership and staff All the operations of Johannes investment shall be headed and fully managed by the managing director of the company. The managing director is also the owner of the company and also holds 100% of the shares. The daily running of the business will be run and managed by the driver who is employed by the company of a full time basis. All the resources contributed to finance the start up of the company were supplied by the managing director. The management of Johannes investment shall be wholly responsible for a consistent delivery of quality service to passengers. This will be done through reinforcing the recommended professional code of conduct and all the policies and regulations governing the transport industry. This will be done by the managing director and implemented by the driver. Due to the small size of the business and overall limited scope operation Johannes investment will be managed by the owner who is also the managing director of the company. The following management responsibilities will be carried out by the managing director: Liaison with all relevant government department in conjunction with operations of Johannes investment. Enforce and oversee the delivery of quality and professional services to all customers. Responsible for the maintenance of the vehicle and ensure its roadworthiness at all times and liaise with department of road transport and safety to inspect the vehicle on a regular basis. Responsible for records keeping and financial management of the company. Security and management of the car to ensure its mechanical soundness. Overall business management of operations and all management functions to ensure the smooth running of the business. Acts as the company spokesperson and representative in all external matters.

As already mentioned, Johannes investment shall engage the services of a licensed full time driver who will be solely responsible for the daily operations and management of the vehicle and all other issues which arise on daily basis which he or she can handle. The driver must be experienced and has basic knowledge of customer service and should have served in the transport industry before. The following gives a snapshot of daily duties and responsibilities of the driver: Pick up and drop passengers to and from desired places within the geographical boundary stipulated by the department of road transport and safety. Ensure the safety and comfort of passengers at all times. Responsible for the cleanliness of the vehicle at all times. Report any mechanical fault on the vehicle to the managing director, however if the fault is a minor it can be fixed at any nearby workshop and receipts produced afterwards. Ensure that all the vehicle documents including driving licenses are in the car before the driver departs to start the day. The management structure of Johannes investment presented in a graphical format looks like the following diagram

Managing director (Johannes Masole)

Driver (*******)

3. Staff welfare
Johannes investment embrace and fully comprehend the significance of staff welfare in its entire operations and its fully committed to take good care of staff as a way of enhance its core principle of quality and consistent professional service. Staff welfare issues will be handled by the managing director. All the wages, staff benefits, working hours and any other incentives will be determined by the managing director guided by the existing labour laws. Wages Johannes investment has three employees. The three employees are the managing director, the driver and the conductor. The driver and conductor has not been employed yet and upon the granting of the permit to operate the driver shall be employed. The wages has been determined looking at the quality of services to be delivered and professionalism as well as experience and the overall responsibility of the employee. The following table summarizes the wages and working hours of the two employees of Johannes investment.

Employee Johannes Masole ****************** ******************

Wages (Monthly) BWP 2000.00 BWP 2500.00 BWP 1500.00

Working hours (per day) 10 10 10

Benefits Johannes investment sees the staff benefits as away to motivate staff and keep them in the company to reduce employee turnover. The company has two prime incentives or benefits entitled to staff members.

a) 20% annual bonus. All the two employees of Johannes investment are entitled to an additional 20% of their salary on the last month of every year. This is unconditional and every employee shall get the bonus irrespective of when he or she joined the company. b) The company is committed to pay 40% of the medical bills of all its employees. All other factors which are not mentioned here will be governed by the labour laws and all the benefits entitled to every employee will be offered unconditionally.

4. Financial information
Establishment cost Johannes investment has contributed a sum of BWP 40 000 to purchase the vehicle which is a main asset in the business. The second biggest factor which involves high cost in the company formation. The process includes a number of formalities which involves monetary cost. All other miscellaneous cost like testing the vehicle for roadworthiness application fees for permit have been covered as well. In conclusion, the cost of establishing Johannes investment is BWP 50 000. Projected Profits From daily operations of Johannes investment, we anticipate the monthly financial information to be as follows: we anticipate the gross profit to be at BWP 28 672. The total salaries for three employees shall be BWP 6000. Fuel costs will stand at BWP 4000 while the net profit shall be BWP18 672. The net profit has been calculated by deducting all the business costs from the gross profit realized during the operations of that particular month.

GRAPH

The annual projected financial information for Johannes investment is derived from monthly financial forecast and it is as follows

GRAPH

Cash flow At any given point in the time of operation of Johannes investment should be financed by an amount equivalent to or exceeding BWP 344064 yearly. Calculated on monthly basis this figyre is BWP 28672. A close scrutiny on the market growth and conditions in the transport industry led us to come to a conclusion that Johannes investment shall experience the following growth patterns from year to year; From year 1 to year 2: 3.62% From year 2 to year 3: 2.27% From year 3 to year 4: 4.81%

The following table illustrates the pro foma cash flow of Johannes investment for consecutive years of business operations Year 1 Year 2 Year 3 Year 4 -

Other receivables

Cash received from operations Totals

344064

316064

298064

294064

344064

316064

298064

294064

The cash flow management will be the responsibility of the managing director as well as the driver who manage operations on daily basis.

Break even Analysis Our break even analysis is determined at a point where the total cost incurred in starting up the business is met or equivalent to the current amount generated from business operations. Basically it is a point where the generated capital is equivalent to the startup capital. The total amount incurred in starting up Johannes investment is P50.000. The figure include purchasing major business assert[the vehicle], permits and formation of the company. Our financial forecast, based on analyzing demand and market condition in the transport industry indicates that the P50.000 mark shall be reached after 3 months of business operations. If the breakeven point is calculated on monthly basis, it will stand at BWP 28672 which is below the anticipated net profit by 55.8%. This will ensure a healthy cash flow on monthly basis. The variable costs will stand at BWP 10000 per month. So the amount spent in starting Johannes investment should be recovered in the first 11 months of operation taking into account all the other cost factors such as workshop and maintenance, salaries, wages and fuel.

Return on investment (ROI) Return on investment for Johannes investment will be determined by the net profit realized from monthly and annual operation. As already indicated , the projected annual net profit shall be BWP 224064, so return on investment shall be 55.8% of the initial total cost on the first year of operation. The monetary value or benefits of having invested a sum of 50.000 in Johannes investment enterprise is basically going to be fully released after the break even analysis point. As already mentioned, all other factors shall not be composed in order benefit from investing in Johannes investment. So the return on investment shall accumulate from time to time derived from net profit realized after every financial year. As already mentioned the return on investment for Johannes investment shall be calculated as 55.8% on the first year. This amount converted to its monetary value becomes BWP 12672.

5. CUSTOMER SERVICE
Customer service pillar of Johannes investment and serves as an integrate component of the whole operation management. Our customer service philosophy is derived from respect, professionalism and driven by desire to provide quality service. Our customer service will revolve around three core pillars which will serve us the foundation of customer serve at Johannes investment. *Respect The core human value of respect known as botho in Setswana will be the core pillar of our service. These pillars encompass, politeness, using the right language, honesty (especially when dealing with money). Our driver should understand a customer is always right and should always do what he/she can to make the customer feel safe and comfortable. This pillars of respect serve to win customers hearts never be selective or only demonstrated to the elders only. Every customer should be given the respect they deserve. *Professionalism Professionalism entrains providing a service that is rated above normal service common among taxi operators. The basic aim of our professionalism is to satisfy and possibly exceed our customers expectations through implementing values like. Professional code of conduct *Quality The last pillar of our customer service program is the main dimension which Johannes investment intends to offer at any cost. To implement a goal quality strategy, we are guided by the following; *condition and safety of the vehicle *conduct of the driver *was the vehicle driven responsible and instruction from customers followed *feedback from the customers after services has been perfomed

The dimensions will be the route to guide us in our mission to provide a quality and consistent service to our customers. The vehicle should at all times be in good mechanical condition to enable smooth and any faults thereof. The driver should always be kind, polite and positive at all the time when serving customers. This will go a long way in adding to the positive image at the transport industry operations. Obeying road signs and driving in the most acceptable manner constitute driving. Cooperation with other drivers is also of a significant importance. Customers shall always be dropped off at the right place following instruction or request given. Feedback from the customers shall serve as a basic prerequisite for the next delivery operation. The enquiry on the level of service rendered shall be done verbally every time after the service has been delivered. If the feedback from the customers is negative, then the first step is to take a corrective measure to remedy the problem . Conversely if the feedback is positive it will serve as the basic foundation and guide us in the next service delivery encounter.

Workshop and Maintenance


Maintenance Regular maintenance of the vehicle is key to providing an efficient, quality, professional and reliable service we intend to provide at all times. Johannes investment will have the vehicle maintained and checked for mechanical fitness at one local garage or workshop. There shall be an agreement between the workshop owner and Johannes investment and conditions shall laid down to maintain the vehicle every time a mechanical fault is detected. The agreement shall state the condition and the time period of settling the maintenance and workshop bills. More emphasis shall be placed on maintaining the vehicle and not the cost of maintenance because we believe that cost should never compromise quality. The driver is primarily responsible for minor checks on the vehicle such as observing brake fluid and oil levels every time when starting the operations. It is also the responsibility of the driver to report any problem(s) on the vehicle to the workshop and immediately have maintained.

Vehicle standards
The vehicle standards is the determinant factor in the mechanical soundness of the car which will be used on daily basis. The following offers a comprehensive glimpse of the current vehicle standards. The vehicle had previously been owned by one person in Botswana. The vehicle is basically in good mechanical condition and its is reasonably fit to carry passengers for commercial purposes. Age of vehicle:.. Size:. Make and model:.