Kekeke Transport Business Plan

TABLE OF CONTENTS
Funding Application Summary.............................................................................................................3
Executive Summary.............................................................................................................................4
1. Purpose of the business plan.......................................................................................................6
2. Strategic Intent..............................................................................................................................6
3. Industry Analysis...........................................................................................................................7
4. Market Analysis............................................................................................................................8
5. S.W.O.T Analysis........................................................................................................................10
6. Business Strategy.......................................................................................................................11
7. Organisational Structure.............................................................................................................13
8. Financial Plan.............................................................................................................................15
9. Risks and Issues.........................................................................................................................21

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Funding Application Summary
Name of Business Kekeke Transport CC
Type of Business Freight and Cargo Transportation
Industry/ Sector Transportation Services Industry
Establishment date February 2014
Legal Entity Close Corporation (CC)
Business Phase Start-up phase
Applicant Adelaide N Daniel
Applicant's Email [email protected]
Number of Employees 4, potential to employ more
Business Physical Address Unit 3, 2nd Floor, Obowi Centre, Levinson Arcade, CBD, Independence
Avenue, Windhoek, Windhoek
Seed Capital Amount N$ 6,417,115 Less a 20% Deposit (N$ 1,283,423)
Loan Period 5 Years at PRIME Rate (9.25%)
Proposed Security 20% Deposit
Owner ceding the House owned by her and registered in Forty Aquamarine
Street Investments CC (CC/95/00495)
Erf 487 Eros Park
Deed of Transfer T5498/1995
Application of Term Loan The seed capital will be used to purchase trucks that will be used in the
Funds transportation business
Source of Loan Repayment The positive cash flows of the business will be the source of the loan
repayment

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Executive Summary
The Business
Kekeke Transport CC was formally registered in 2014 to provide freight and cargo distribution (transportation)
services. It was conceptualised by an ambitious entrepreneur, Ms Adelaide N Daniel, an Angolan resident who
frequents Namibia on a regular interval and owns a fixed property in one of the suburbs in Windhoek, Namibia
who is also owns 100% of the members’ interest. This exciting start up business will be located in Windhoek
As a start-up company, I intend to provide freight and containerised cargo transportation to its intended
destination as safely as possible, and in the shortest possible lead times. It is the company’s mission to
become one of the largest trucking companies operating on local and regional road networks. Our core focus
will be on the local and regional distribution of freight and cargo.

The solutions that the business will offer will be value driven as the value proposition of the business will be as
follows:
- To have a competitive pricing structure.
- To provide a high level of customer service and unflinching professionalism.
- To ensure reliable, convenient and timely deliveries – therefore resulting in improved margins and market
share for our clients.

The business opportunity

The business opportunity was realised by the member of the business, Adelaide N Daniel. There is currently a
notable growth in logistics and trade within Namibia and surrounding regions. The opportunity is also noted by
the momentum gained in the increased volume in trade on transport corridors especially the Trans-Caprivi and
Trans-Cunene corridor transport networks, as well as Fast Moving Consumer Goods (FMCG) between Namibia
and South Africa. Angola is a country that mostly imports its consumer goods from South Africa, and since the
owner has trucking business in Angola, Kekeke Transport will serve as the feeding transportation services from
South Africa (Johannesburg & Cape Town) to the Namibia/Angola border of Oshikango from which the existing
trucks from Angola will take over the cargo for distribution in Angola. Although from time to time the Kekeke
Transport trucks will proceed to destinations within Angola.

The competition
Competition for Kekeke Transport will emanate from both direct and indirect competitors. The freight and
containerised cargo transportation industry is a competitive industry and requires the development of business
strategies and solutions aimed at combating competition. Most of the competitors are well established; they
include Wesbank Transport, P. Weakly Transport and Slabbert Burger companies.

The competitive strategies

In order to compete efficiently and effectively, the business will develop a comprehensive Marketing Plan and
Strategy so as to better understand the market and assess as to how to better satisfy the customers.
Understanding the customers better than the competitors will be instrumental to the competitiveness of Kekeke
Transport. It will be important for the business to establish value laden relationships with its clientele; therefore,
customer intimacy will be of the essence. To win customers, the business understands that today’s customers
want exactly the solution they have in mind and therefore understanding them will be imperative.

The Management Team

Kekeke Transport recognises the importance of having an experienced management team. The quality and
track record of the management team is a crucial factor in determining the success of the company. The
organisational structure of Kekeke Transport will be made up of the following positions:
 Managing Director – Ms. Adelaide N Daniel
 Operations Manager – Mr. Celestino J. Sakupaula

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  Accounting Officer – Mr. Faizel V. Uaendere
 Outsourced Bookkeeping & HR Services – provided by Don Consulting Services CC
 Drivers – x 3

The Strategies
The business will employ various strategies and these will take into account all the identified functional areas in
the business. The functional areas include marketing, operations, human resource, finance and administration.
The strategies identified are on three levels; namely, short-term or functional strategies, medium-term
(competitive or business) strategies and long-term strategies. The business will focus on implementing the
functional strategies in the short-term and these will be aimed at covering all operational features of the
business. The business strategies will be focused on the medium-term and these will be aimed at being
competitive and capturing a considerable market share. Long-term strategies will be aimed at achieving the
vision of the business and will look into diversification and growth.

Funding Requirements
The business will require N$6,319,365 in total in order to acquire the necessary assets for the business venture.

Risks and issues

The risks and issues associated with the business include: financial risk, event risk, market risk, technology risk
and human resource risk likely to emanate from the management and team. A financial risk is posed by the fact
that the financier will carry 80% of the start-up costs needed by Kekeke Transport. Event risks emanate from
the possible road accidents where our trucks are involved, while the market risk may emanate from strong well
established competitors controlling a considerable portion of the lucrative market share. Technology risks arise
due to the potential of data loss should the company’s information be stored on computer systems as these
could be vulnerable to viruses and malicious attacks. Lastly, the human resource risk is posed by the lack of
skilled, knowledgeable and experienced expertise in the transportation & logistics industry. Highly experienced
staff might be too costly to recruit and maintain by a start-up business such as Kekeke Transport. The business
has come up with comprehensive mitigation strategies to address the aforementioned risks.

Industry Associations
As a newcomer on the scene, we find it beneficial to associate ourselves with relevant industry bodies like the
Association of Freight Forwarders (AFF), Namibia Chamber of Commerce & Industry (NCCI), Walvis Bay
Corridor Group (WBCG) and the Namibia Logistics Association (NLA). Affiliations to the bodies provide strategic
advantages to our company as a source of potential business and more importantly, give credibility to the
company.

Risk Management
There are several risks associated with the cargo transportation hence to mitigate risks we intent to deploy
strategies amongst them training drivers to the highest possible safety standards, reduce accidents by limiting
driving to daylight and servicing our trucks after every 10,000/15,000 km as per manufacturers requirements.

The company is also going to protect truck and cargo with a comprehensive all risk insurance policy, which
includes third party cover for accidents that might be caused by our drivers.

Location of the Business

Kekeke Transport will seek a suitable location to render its services from Windhoek, Namibia. The business will
ensure that the location is such that it provides easy access to consumers, suppliers and other business
stakeholders. The location, Windhoek is estimated to have some over 600 000 inhabitants as shown by the
National Planning Commission. The figure has almost doubled to date. The city is the country’s business hub,
where a majority of business entities base their operations. Windhoek contributes lucratively to Namibia’s
manufacturing and services industries.

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Purpose of the business plan
The purpose of this business plan is to develop a comprehensive guideline or road map to ensure the
smooth launch and sustainability of Kekeke Transport. This business plan is essentially a concrete foundation
that will assist us, as the business owners and potential management team members to explore the identified
business opportunity. The business plan is also aimed at serving as a motivation document to acquire funding
so as to finance the capital equipment/assets and the working capital requirements of the entity. The business
plan encompasses key areas such as the External Environment, Internal Environment, The Industry, Market,
Marketing Strategy and Plan, Human Resource Plan, and Finance and Administration Plan. Moreover, it covers
the technical aspects, financial requirements and projections of the business.

Strategic Intent
2.1 Vision
To be recognised as a preferred partner in supply chain and transport logistics solutions and rated as a leader
in our selected specialised markets.

2.2 Mission
The mission of the business is to enhance the lives of its stakeholders by providing value based freight and
cargo transportation services.

2.3 Values and Principles

Values will play a crucial role in guiding the actions of the business and will be pivotal in terms of team spirit and
drive hallmarks such as the team working together to achieve the objectives or goals of the business. The
values of Kekeke Transport are as follows:
 Timeliness
 Reliability
 Convenience
 Customer satisfaction
 Efficiency
 Effectiveness
 Teamwork
 Communication
 Honesty
 Integrity
 Trustworthiness
 Accountability
 Responsibility

2.4 Value Propositions

Kekeke Transport offers the following advantages to our clients:
 Quality Service: We provide our customers with courteous, prompt, and dependable service. The
company strives to have a reputation for timely deliveries and the best drivers in the industry, and
intends to build upon that.
 Competitive rates: We provide competitive rates for our customers because we have low cost inputs.

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  Package handling and Cargo insurance: By maintaining dependable and safe equipment, we will
ensure that there is no damage to customer's cargo and insure the cargo should there be any
unfortunate events, to prevent loss to our clients.

2.5 Targeted Routes

Windhoek will serve as the central hub for procuring business, Oshikango, Cape Town and Johannesburg. With
the organic expansion of our fleet, we plan on transporting goods via Trans-Caprivi and Trans-Cunene corridors
to other SADC countries such as Angola, DRC and Zambia.

2.6 Strategic Objectives

2.6.1 Long Term Objectives
 The long term objective of Kekeke Transport is to grow its market base and presence so as to cover
regions other than Namibia.
 To diversify its service base so as to offer warehousing and distribution services such as advanced
logistics and complex warehousing solutions.

2.6.2 Medium Term Objectives

The medium term objectives will be competitive edged; they include:
 To establish value laden relationships with strategic alliances
 To penetrate the market and establish a competitive edge

2.6.3 Short Term Objectives

In the short term, Kekeke Transport will endeavour to achieve the following:
 To obtain funding
 To identify and assemble a skilled, competent and experienced team
 Set up systems for each functional area of the business
 Identify and secure a suitable location
 Procure capital equipment

Industry Analysis
3.1 Industry Overview, Size and Growth

The freight and cargo transportation industry in Namibia has been steadily growing over the last decade, citing
increased trade volumes and improved road infrastructure. The warehousing and distribution industry is a
considerably large industry with an estimated size of over 1.1 billion Namibian Dollars. The growth rate is
estimated at 6% per annum. Cargo transportation is dependent on import/export activity, which in turn is
sensitive to major global countries. Volatility in mining output and demand for commodities dictates the volume
of business conducted by the transportation & logistics sector. Also, there is a direct correlation with the
manufacturing and wholesaling sectors.

Namibia features a number of commercial warehousing and distribution players. Warehouses are widely used
by manufacturers, wholesalers, retailers, importers, exporters and transport entities. The players in the industry
are primarily engaged in operating warehousing and storage facilities for general commodities or merchandise,
refrigerated goods, and other products. In most instances the parties in the industry do not sell the goods they
handle. Established entities generally handle commodities in containers which are in the form of barrels, boxes
or drums.

This is done with the help of advanced equipment such as forklifts, racks and pallets. Well established
warehousing and distribution entities in Namibia offer a full range of services. They offer advanced distribution

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services commonly referred to as logistics. Their services encompass labelling; breaking bulk, inventory control
and management, assembly of goods, order entry, packaging and transportation arrangements.

3.2 Players
The main players in the industry include:
 Refrigerated merchandise transportation companies
 General merchandise transportation companies
 Local logistics entities
 International logistics entities

3.3 Key Success Factors

The key success factors in the transportation industry are as follows:
 Trustworthiness and reputation
 Ensuring convenient and timely distribution services
 Reliable Trucking and Tracking Technology
 Sufficient capacity and resources

3.4 Barriers to Entry

There are numerous barriers to entry in the industry. The primary barriers are listed below:
 High capital costs to procure assets such as trucks for transportation and office premises.
 There is a general lack of skills, competencies and expertise in the Freight and Cargo
Transportation arena
 The lack of capacity
 Advanced technologies that better aid Freight Tracking.

Market Analysis
The market for freight and cargo transportation in Namibia is very broad and includes key users as listed below:
 Manufacturers
 Wholesalers
 Mining companies
 Retailers
 Import/Exporter agents and distributors
 Individuals

4.1 Market Segments

The main players in the industry include:
 Refrigerated merchandise transportation companies
 General merchandise transportation companies
 Local logistics entities
 International logistics entities

Manufacturers Manufacturers make a considerable proportion of the market. They are engaged in the
production of commodities. In some cases, they require freight transportation services.

Wholesalers Wholesalers buy products from the manufacturers/ suppliers. A number of them have in-
house transportation services. However, during occasions such as Christmas, New Years
Day and others, they normally face transportation capacity constraints and seek the
services of external freight transport solution providers. Some require just in time services or

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 deliveries and therefore outsource the distribution aspect to experts with specialized
technologies, skills and competencies.

Retailers Retailers that source their products from distant locations were also identified as a key
market segment. Major retailers in Namibia include Pick n Pay, Shoprite Checkers and
Spar. They require both general freight transportation services and these are normally
procured on a Just-In-Time basis. Refrigerated goods transportation solutions are needed
for their easily perishable commodities such as meat products and vegetables.

Agents and The majority of these are mainly made up of middle men. They essentially sell products for
Distributors other parties such as manufacturers. The segment is also made up of affiliates or partners.
Depending on the quantity of products that they have for sale, agents and distributors seek
freight and cargo transportation services.

4.2 Market Needs and Preferences

Safety The safety of the products or goods we will transport is a key need and preference for the
clients.
Professionalism Professionalism in terms planning, execution and completion activities related to freight
and cargo transportation are of key importance to clients.
Convenience In terms of convenience, a one stop freight and cargo transportation provider is preferred
by most clients.
Reliability All the market segments seek reliability from freight and cargo transportation providers.
The customers need to know that they can rely on or count on their freight and cargo
transportation partner. Peace of mind is of the essence as they do not want to disappoint
the customers they serve. Therefore, reliability is an important quality to harness when
engaging in freight and cargo transportation services.
Price The market seeks affordable pricing for freight and cargo transportation services
Reputation Reputation is another key importance
Dependability Dependability is another key market preference. Consumers seek freight and cargo
transportation businesses that they can count on from time to time.

4.3 Assessment of Segment Attractiveness

Shown below is an assessment of the segments so as to determine their attractiveness.

Segment Size Profit Growth Potential Risk Competition

Manufacturers Large Medium High Medium Medium
Wholesalers Large High High Medium High
Retailers Medium Medium High Medium Medium
Distributors and Agents Medium Medium Medium Medium Medium
Individuals Low Medium Medium High Medium

4.4 Target Market

Based on the assessment of the segment attractiveness, the business will target the manufacturing segment. It
will target small and medium enterprises that are engaged in manufacturing. The target market for the business
will also include small and medium enterprises that are agents or distributors. This is on the basis that the
segments are attractive as they are characterized by a considerably large size, relatively high profit potential,

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subject to current and potential competition which is relatively medium in the location where the business will be
based and that the company is capable of meeting the needs and preferences of this segment and understands
them quite well. The business will also be open to other market segments in order to increase its revenue share
particularly in the medium to long term.

4.5 Competition Analysis

Competition for Kekeke Transport will emanate from both direct and indirect competitors.

4.5.1 Direct Competition

Key competitors within Windhoek were identified and analyzed below:

Competitor Advantages Disadvantages

Wesbank  Established and reputable  Caters to a limited regional
Tansport  Good Customer Service clients base
 Offers warehousing solutions

Slabbert  Has a local and national presence  Has a limited specialisation;

Burger and offers Transportation services they cannot transport
Transport to a majority of areas throughout specialized abnormal loads
Namibia
P. Weakley  Established and sought-after  Specializes in mostly
Transport  Have an online presence containerised cargo
transportation

4.5.2 Indirect Competition

Indirect competition will emanate from the various manufacturers, wholesalers, retailers and distributors that
have their own in-house distribution trucks. Essentially these parties need not outsource transportation services.

S.W.O.T Analysis
5.1 Strengths
The strengths listed below were identified in the business:
 Competitive pricing structure.
 Strong focus on exceptional service delivery of our client’s goods.
 Brand new reliable trucks with strong technical support throughout SADC
 The experience and track record demonstrated by the management team
 The business has done a study of the market and identified potential customers for their business
 The management of the business is committed, dedicated and passionate about providing freight and
cargo transportation services.

5.2 Weaknesses
The identified weaknesses for Kekeke Transport are as follows:
 Number of established competitors in industry and in targeted areas.
 Totally reliant on the good health of our drivers. (Drivers will be part of the company’s medical aid
scheme)
 A lack of warehousing and cold storage facilities may result the business losing out on lucrative
opportunities.

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5.3 Opportunities
 The growing local manufacturing and mining industries presents a significant market opportunity.
 There are opportunities for Namibians to export products. This may bring about a market for
warehousing services as some goods need to be stored in a reliable warehouse prior to being exported
 Namibia’s economy has grown due to the upgrading of road and port infrastructure. This allows an influx of trade
for the country and the rest of the SADC community. There has been a growth in trade volumes between
landlocked countries and foreign markets, positioning our company to take advantage of these trends.
 Other opportunities include the discovery of oil and gas off the coast of Walvis Bay.

5.4 Threats
 There is a threat from well established competitors that have a solid goodwill
 The threat from substitute services
 The exchange rate fluctuations could affect world oil prices and ultimately harm our cash flow.
 Strike action in industries connected to our operations, road accidents and hi-jacking.
 Under investment.

Business Strategy
6.1 Long Term Strategies
The long term strategies of Kekeke Transport will focus on building on the business model and looking into
growth and diversification avenues.

6.1.1 Business Model

In the long term, the business model will be such that it encapsulates complete supply chain solutions where
logistics and warehousing solutions will be integrated. The model will include transportation Logistics of the
following:
 Freight
 Containerised Cargo
 Fast Moving Consumer Goods
 Refrigerated goods
 General Loads – Beer, Cement, Maize, Steel and Plastic Products etc.

6.1.2 Growth Strategy

The growth strategy of the business will be aimed at expansion, growth and diversification. The business will
focus on expanding its operations by acquiring more trucks, expanding its footprint to neighbouring SADC
states, offering more value addition services like warehousing, customs clearing and freight forwarding services.

6.2 Competitive Strategies

 The competitive strategies of the business will be to understand the clients better than the competitors
of the business
 To target a specific market and serve them well as opposed to mass marketing
 To employ the use of electronic marketing by means of having a business website that is capable of
creating a strong online presence for the business, as well as facilitate easy customer enquiries and
orders.

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6.3 Functional Strategies

6.3.1 Finance Strategies

 Financial strategies will include the use of proper costing approaches so as to always price the
services of the business in a manner that results in profits
 To attain a Return on Investment that is higher than the cost of borrowing or interest rates

6.3.2 Marketing Strategies

The marketing strategies will include the following:
 Comprehensive consumer surveys will be conducted on a quarterly basis so as to get the
customers’ opinion on the services of the business as well as get input aimed at helping the
business work towards 100% customer satisfaction
 The business will actively promote itself and employ various branding articles such as a
business logo, website, flyers, brochures and decals on all company commercial vehicles.
 The business will also initiate market intelligence initiative to study to the competitors in order
to better compete with them

6.3.3 Operational Strategies

The operational strategies of the business will include:
 The business will standardize the processes and procedures with regard to transportation of
client goods.
 The business will ensure that the operations of the business are in line with Namibian
regulations.
 Make use of intelligent software to facilitate the proper management of our fleet and the
tracking of freight and cargo.

6.3.4 Apprenticeship and Employee Development Strategies

The apprenticeship and employee development strategies of Kekeke Transport will include the
following:
 The implementation of efficient and effective recruitment procedures in order to ensure that the
right employees are recruited
 The business will ensure that it bases its selection criteria of new candidates on values,
principles and overall personality. The focus will not just be on education and experience.
 The business will implement Performance Management Systems in which rewards such as
bonuses are given to deserving employees

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Organisational Structure
The company's management philosophy is based on professionalism and exceptional service delivery. Kekeke Transport
maintains an environment that stimulates productivity and emphasizes respect for customers and fellow employees. The
organisational structure for Kekeke Transport provides a guideline for communication and authority within the
business. It also acts as a framework to facilitate leadership, communication and strategic management. The
organisational structure is as shown below:

Outsourced
Accounting Officer Bookkeeping & HR
Services
Managing Director

Operations Manager Drivers x 3

7.1 Roles and Responsibilities

Position Responsibilities
Managing The managing director of the business is Ms Adelaide N Daniel. Ms. Daniel brings with her a wealth of
Director experience, insight and invaluable industry knowledge and understanding. She has over 10 years of
relevant industry experience by owning her own trucking and logistics business in Angola. Her
responsibilities will encompass all management functions, these include: planning, leading, organizing,
controlling and coordinating. She will have a strategic role in the entity and manage the team,
processes and systems in the business. She will ensure that targets in terms of operations, human
resource, finance, marketing and so forth are met. Ultimately implementing the business plan

Operations Mr. Celestino J Sakupaula will ensure that safety requirements are met. He will also ensure that
Manager accountability aspects relating to the security of the transported goods are met. In addition, his duties
will essentially encompass the following:
 Financial and Sales Targets are met
 Staff Recruitment
 Monitoring the performance and progress of staff
 Activity management
 Overseeing distribution
 Planning future capacity requirements
 Ensuring customer satisfaction
 Overseeing the planned maintenance of distribution vehicles

Drivers Three experienced drivers will be employed by the business. They will be thoroughly screened to
make sure they have no prior criminal conviction or outstanding traffic tickets. Our drivers will go
medical check-ups to make sure they are in top condition as they will be responsible for
transportation the goods to their destinations.

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Accounting The Accounting Officer for the corporation will be Mr. Faizel V. Uaendere who is a registered Business
Officer Accountant with the following practice no. 1291.
& Outsourced
Accounting TERTIARY EDUCATION
and HR B.Com (Hons) (Accounting) - University of South Africa [UNISA]
Services H. Dip Tax Law (Income Tax Law) - University of Cape Town [UCT], South Africa
B.Com (Accounting) - University of Cape Town [UCT], South Africa
PROFESSIONAL QUALIFICATION & MEMBERSHIP
Certified Internal Auditor [CIA] - Institute of Internal Auditors of South Africa [IIA]
Certificate in Control Self-Assessment [CCSA] - Institute of Internal Auditors of South Africa
[IIA]
Certified Information Systems Auditor [CISA] – passed the exam and awaiting certification
Institute of Internal Auditors [IIA] Membership No. 90515
Information Systems and Control Association [ISACA] Membership No. 665516
Southern Institute for Business Accountants [SAIBA] Practice No. 1291
CONTACT DETAILS
Email: [email protected]
Cell: 081 221 9010
Founded in February 2011 by Faizel V. Uaendere, DON CONSULTING SERVICES CC is the supplier
of professional consulting services that includes amongst others the following:
 Bookkeeping services;
 Company secretarial services;
 Financial consulting services;
 Human resource consultancy and payroll related services;
 Management consulting services;
 Project management;
 Risk advisory;
 The provision of accounting officer duties; and
 Training and business development;

Don Consulting Services provides a wide range of accounting and financial outsourcing solutions to
small and medium businesses and organisations. Our outsourcing services help our customers in
reducing cost, increasing the productivity and operational efficiency of their accounting processes.

Don Consulting Services CC is owned and managed by two members, Mr Faizel V Uaendere and his
business partner Mr. Donovan A. Pokolo.
TERTIARY EDUCATION
B.Com (Hons) (Accounting) – University of Kwazulu Natal [UKZN]
B.Com (Accounting) - Nelson Mandela Metropolitan University [NMMU]
B.B.A - University of Namibia [UNAM]
PROFESSIONAL QUALIFICATION & MEMBERSHIP
Chartered Accountant [CA (Nam)]
Institute of Chartered Accountant in Namibia [ICAN] Practice No. 487
CONTACT DETAILS
Email: [email protected]
Cell: 081 423 2120
 Financial Plan
8.1 Assumptions
Business days per week 5 days
Interest rate 9.25% (PRIME)
Price Regime N$45,000 per trip (route) per truck including VAT at 0%
VAT rate 15%
Corporate Tax rate 33%
Debtors collection period 1 day (collected upon each completed trip)
Creditors payment period 30 days
Depreciation: Trucks 20%
Depreciation: Trailers 20%

Item Qty Amount VAT Total

(N$) (N$) (N$)
Truck 3 1,421,700 213,255 4,904,865
Trailers (Tautliner Interlink & Flatdeck
2 465,000 69,750 534,750
Interlink (Dropside))
Trailer (Flatdeck Interlink) 1 385,000 57,750 442,750
Custom Fleet Management Software 1 * * *
Trace and Tracking Technologies * * *
Corporate Branding * * *
Professional fees (Consultant, Legal and * * *
Accounting)
Total 5,495,100 824,265 6,319,365
8.2 Funding Requirements

Personnel Qty Unit Total Monthly

N$ N$

Managing Director 1 ** **
Operations Manager 1 11,00 11,000
Accounting Officer & Outsourced Accounting & HR Services N/A 1,900 1,900
Drivers 3 10,000 30,000
Total 5
Legend: (*) amounts excluded as this will be paid by the owner separately as part of their members’ interest.

Legend: (**) Managing Director will not be earning a salary and will only receive a dividend yearly at a
distribution rate of 70% of retained income yearly, but will be entitled to re-imbursement of expenses incurred
on-behalf of the business.

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8.3 Financial Projections

Assumptions
Kekeke Transport CC
Analysis of income and expenditure
Available Maxim um Maxim um Maxim um
Sales 50% Capacity 70% Capacity 90% Capacity
Trips per Trips a Price per Sales Per Sales Per
No of m onth per truck can trip Month (N$) Annum (N$)
Per Month Per annum Per Month Per annum Per Month Per annum
Truck(s) truck do per per truck per truck
3 3 x Trucks 5 m onth 3 4 48 6 72 8 96 $ 45,000 $ 81,000 $ 972,000 Route 1 - OSH - JHB
3 3 x Trucks 5 3 4 48 6 72 8 96 $ 45,000 $ 81,000 $ 972,000 Route 2 - OSH - CPT
10 6 8 96 12 144 16 192 $ 162,000 $ 1,944,000

Transportation Costs

Fuel Costs Trips per Km per Km per Average cost Monthly Annual
Km per trip
m onth per m onth per annum per of fuel per Diesel Price Diesel Price
per truck
Current Fuel Price truck fleet fleet trip per km per truck per truck
Route 1 3 x Trucks 2,221 3.00 39,978 479,736 $ 4.50 $ 60,000 $ 720,000
Route 2 3 x Trucks 1,947 3.00 35,046 420,552 $ 5.14 $ 60,000 $ 720,000
4,168 75,024 900,288 $ 4.82 120,000 1,440,000

Total Costs to Com pany Pay No. of Per

12 Months
Rate em ployees m onth
Driver $ 10,000.00 per month 3 $ 30,000 $ 360,000
Managing Director $ - $ - $ -
Operations Manager $ 11,000.00 per month 1 $ 11,000 $ 132,000
Social Security Contribution $ 162.00 3 $ 486 $ 5,832
$ 41,486 $ 497,832
Direct Costs to be incurred

Cost VAT Per Month 12 Months

No of Tyres No of Trucks
included
Tyre Costs $ 3,000 26 3 $ 19,500 $ 234,000
Incurred incrementally when sales increases $ 19,500 $ 234,000

Insurance Costs Accounting Costs

Cost VAT No of Per Month 12 Months Cost VAT Per Month 12 Months
included Trucks included
Insurance Costs $ 12,131 3 $ 36,392 $ 436,699 Accounting Costs$ 1,900 1 $ 1,900 $ 22,800
Incurred evenly at all sales levels $ 36,392 $ 436,699 Incurred evenly at all sales levels $ 1,900 $ 22,800

Loan Term
Prim e interest
Loan Repaym ent (No of Per Month 12 Months
rate
Loan years)
$ 5,133,692.00 9.25% 5 $ 107,191 $ 1,286,292

Interest Expense Year 1 $ 439,566

Year 2 $ 357,837
Year 3 $ 268,218
Year 4 $ 169,950
Year 5 $ 62,196
$ 1,297,766

Capital repayment Year 1 $ 846,726

Year 2 $ 928,455
Year 3 $ 1,018,073
Year 4 $ 1,116,342
Year 5 $ 1,223,276
$ 5,132,872
Profit & Loss at Break-even Point (60%)
Kekeke Transport CC

Break even point

Trips per m onth (m axim um 6 trips per m onth per truck)
40% 50% 60% 65% 70% 75% 80% 90% 100%
Sales
Revenue $ 2,332,800 $ 2,916,000 $ 3,499,200 $ 3,790,800 $ 4,082,400 $ 4,374,000 $ 4,665,600 $ 5,248,800 $ 5,832,000
$ 2,332,800 $ 2,916,000 $ 3,499,200 $ 3,790,800 $ 4,082,400 $ 4,374,000 $ 4,665,600 $ 5,248,800 $ 5,832,000

Expenses
Tyre Costs $ -93,600 $ -117,000 $ -140,400 $ -152,100 $ -163,800 $ -175,500 $ -187,200 $ -210,600 $ -234,000
Fuel Costs $ -576,000 $ -720,000 $ -864,000 $ -936,000 $ -1,008,000 $ -1,080,000 $ -1,152,000 $ -1,296,000 $ -1,440,000
Labour Costs $ -497,832 $ -497,832 $ -497,832 $ -497,832 $ -497,832 $ -497,832 $ -497,832 $ -497,832 $ -497,832
Insurance Costs $ -436,699 $ -436,699 $ -436,699 $ -436,699 $ -436,699 $ -436,699 $ -436,699 $ -436,699 $ -436,699
Accounting Costs $ -22,800 $ -22,800 $ -22,800 $ -22,800 $ -22,800 $ -22,800 $ -22,800 $ -22,800 $ -22,800
Depreciation expense $ -1,087,923 $ -1,087,923 $ -1,087,923 $ -1,087,923 $ -1,087,923 $ -1,087,923 $ -1,087,923 $ -1,087,923 $ -1,087,923
$ -2,714,854 $ -2,882,254 $ -3,049,654 $ -3,133,354 $ -3,217,054 $ -3,300,754 $ -3,384,454 $ -3,551,854 $ -3,719,254

Profit/ (Loss) $ -382,054 $ 33,746 $ 449,546 $ 657,446 $ 865,346 $ 1,073,246 $ 1,281,146 $ 1,696,946 $ 2,112,746

Finance cost & tax expense

Interest paid $ -439,566 $ -439,566 $ -439,566 $ -439,566 $ -439,566 $ -439,566 $ -439,566 $ -439,566 $ -439,566
Income tax expense $ - $ - $ - $ - $ - $ - $ -38,378 $ -175,592 $ -312,806

Net Profit/ (Loss) after tax $ -821,620 $ -405,820 $ 9,980 $ 217,880 $ 425,780 $ 633,680 $ 803,202 $ 1,081,788 $ 1,360,374

Calculation of Taxable Incom e

Accounting Profit/(Loss) before tax $ -821,620 $ -405,820 $ 9,980 $ 217,880 $ 425,780 $ 633,680 $ 841,580 $ 1,257,380 $ 1,673,180

Adjust for:
Add Depreciation $ 1,087,923 $ 1,087,923 $ 1,087,923 $ 1,087,923 $ 1,087,923 $ 1,087,923 $ 1,087,923 $ 1,087,923 $ 1,087,923
Less Wear & Tear $ -1,813,205 $ -1,813,205 $ -1,813,205 $ -1,813,205 $ -1,813,205 $ -1,813,205 $ -1,813,205 $ -1,813,205 $ -1,813,205
Taxable Incom e $ -1,546,902 $ -1,131,102 $ -715,302 $ -507,402 $ -299,502 $ -91,602 $ 116,298 $ 532,098 $ 947,898
Tax expense @ 33% $ - $ - $ - $ - $ - $ - $ 38,378 $ 175,592 $ 312,806
$ - $ - $ - $ - $ - $ - $ - $ - $ -

17
Cash flow Projection at Break-even point

Kekeke Transport CC

Break even point

Trips per m onth (m axim um 6 trips per m onth per truck)
40% 50% 60% 65% 70% 75% 80% 90% 100%
Receipts
Revenue $ 2,332,800 $ 2,916,000 $ 3,499,200 $ 3,790,800 $ 4,082,400 $ 4,374,000 $ 4,665,600 $ 5,248,800 $ 5,832,000
$ 2,332,800 $ 2,916,000 $ 3,499,200 $ 3,790,800 $ 4,082,400 $ 4,374,000 $ 4,665,600 $ 5,248,800 $ 5,832,000

Expenditure/Paym ents
Tyre Costs $ -93,600 $ -117,000 $ -140,400 $ -152,100 $ -163,800 $ -175,500 $ -187,200 $ -210,600 $ -234,000
Fuel Costs $ -576,000 $ -720,000 $ -864,000 $ -936,000 $ -1,008,000 $ -1,080,000 $ -1,152,000 $ -1,296,000 $ -1,440,000
Labour Costs $ -497,832 $ -497,832 $ -497,832 $ -497,832 $ -497,832 $ -497,832 $ -497,832 $ -497,832 $ -497,832
Insurance Costs $ -436,699 $ -436,699 $ -436,699 $ -436,699 $ -436,699 $ -436,699 $ -436,699 $ -436,699 $ -436,699
Accounting Costs $ -22,800 $ -22,800 $ -22,800 $ -22,800 $ -22,800 $ -22,800 $ -22,800 $ -22,800 $ -22,800
Finance Costs $ -439,566 $ -439,566 $ -439,566 $ -439,566 $ -439,566 $ -439,566 $ -439,566 $ -439,566 $ -439,566
Income tax expense $ - $ - $ - $ - $ - $ - $ -45,902 $ -183,116 $ -320,330
Nett VAT (claimed)/paid $ - $ - $ - $ - $ - $ - $ - $ - $ -
Loan Repayment (Capital Portion) $ -846,726 $ -846,726 $ -846,726 $ -846,726 $ -846,726 $ -846,726 $ -846,726 $ -846,726 $ -846,726
NETT INFLOW/(OUTFLOW) $ -580,423 $ -164,623 $ 251,177 $ 459,077 $ 666,977 $ 874,877 $ 1,036,875 $ 1,315,461 $ 1,594,047

18
 Profit & Loss at 80% (Company Target for 1st Year)

Kekeke Transport CC
DETAILED STATEMENT OF COMPREHENSIVE INCOME
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
N$ N$ N$ N$ N$

Inflation (estimate) 6.10% 5.80% 5.50% 5.40%

Revenue
Revenue $ 4,665,600 $ 4,950,202 $ 5,237,313 $ 5,525,366 $ 5,823,735
$ 4,665,600 $ 4,950,202 $ 5,237,313 $ 5,525,366 $ 5,823,735

Operating expenses
Tyre Costs $ (187,200) $ (198,619) $ (210,735) $ (223,590) $ (237,229)
Fuel Costs $ (1,152,000) $ (1,222,272) $ (1,296,831) $ (1,375,937) $ (1,459,869)
Labour Costs $ (497,832) $ (528,200) $ (560,420) $ (594,606) $ (630,876)
Insurance Costs $ (436,699) $ (463,338) $ (491,601) $ (521,589) $ (553,406)
Accounting Costs $ (22,800) $ (24,191) $ (25,666) $ (27,232) $ (28,893)
Depreciation expense $ (1,087,923) $ (1,087,923) $ (1,087,923) $ (1,087,923) $ (1,087,923)
$ (3,384,454) $ (3,524,543) $ (3,673,176) $ (3,830,877) $ (3,998,197)

Net profit/(loss) before finance costs and taxation $ 1,281,146 $ 1,425,659 $ 1,564,137 $ 1,694,489 $ 1,825,538
Finance costs
Interest expense $ (439,566) $ (357,837) $ (268,218) $ (169,950) $ (62,196)

Net profit/(loss) before taxation $ 841,580 $ 1,067,822 $ 1,295,919 $ 1,524,539 $ 1,763,343

Taxation at 33% $ - $ - $ - $ (842,825) $ (1,299,932)
Net profit/(loss) after taxation $ 841,580 $ 1,067,822 $ 1,295,919 $ 681,714 $ 463,410

Tax sum m ary position

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
N$ N$ N$ N$ N$

Accounting incom e / (loss) for the year $ 116,298 $ 342,540 $ 570,637 $ 2,612,462 $ 2,851,266
Add: depreciation $ 1,087,923 $ 1,087,923 $ 1,087,923 $ 1,087,923 $ 1,087,923
Less: w ear & tear $ (1,813,205) $ (1,813,205) $ (1,813,205) $ - $ -
Less: assessable loss of prior year $ - $ (608,984) $ (991,726) $ (1,146,371) $ -

Taxable profit/(loss) for the year $ (608,984) $ (991,726) $ (1,146,371) $ 2,554,014 $ 3,939,189

Tax payable $ - $ - $ - $ (842,825) $ (1,299,932)

Provisional tax paid:

- 1st provisional tax $ - $ - $ - $ (421,412) $ (649,966)
- 2nd provisional tax $ - $ - $ - $ (421,412) $ (649,966)
Final top-up paym ent m ade $ - $ - $ - $ - $ -
Cashflow Projection at 80%
Kekeke Transport CC

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

N$ N$ N$ N$ N$
Receipts
Opening balance $ - $ 1,567,747 $ 2,881,380 $ 4,338,757 $ 5,089,250
Loan received $ 5,133,692
Ow ners contribution $ 1,283,423
Revenue $ 4,665,600 $ 4,950,202 $ 5,237,313 $ 5,525,366 $ 5,823,735
Cash receipts only excluding owner contribution $ 9,799,292 $ 6,517,949 $ 8,118,693 $ 9,864,123 $ 10,912,985

Paym ents
3 x 2014 Scania R410 6x4 Highlines $ (4,904,865) $ - $ - $ - $ -
1 x Tautliner Interlink $ (534,750) $ - $ - $ - $ -
Loan-repayment (Capital) $ (846,726) $ (928,455) $ (1,018,073) $ (1,116,342) $ (1,223,276)
Tyre Costs $ (187,200) $ (198,619) $ (210,735) $ (223,590) $ (237,229)
Fuel Costs $ (1,152,000) $ (1,222,272) $ (1,296,831) $ (1,375,937) $ (1,459,869)
Labour Costs $ (497,832) $ (528,200) $ (560,420) $ (594,606) $ (630,876)
Insurance Costs $ (436,699) $ (463,338) $ (491,601) $ (521,589) $ (553,406)
Accounting Costs $ (22,800) $ (24,191) $ (25,666) $ (27,232) $ (28,893)
Loan-repayment (Interest Expense) $ (439,566) $ (357,837) $ (268,218) $ (169,950) $ (62,196)
Income Tax $ - $ - $ - $ (842,825) $ (1,299,932)
Nett VAT Paid/(Claimed) $ 790,893 $ 86,342 $ 91,609 $ 97,197 $ 103,126
$ (8,231,545) $ (3,636,569) $ (3,779,936) $ (4,774,873) $ (5,392,552)

Net cash inflow /(outflow ) $ 1,567,747 $ 2,881,380 $ 4,338,757 $ 5,089,250 $ 5,520,434

Per month for 3 trucks $ 130,646 $ 240,115 $ 361,563 $ 424,104 $ 460,036

Per truck per month $ 43,549 $ 80,038 $ 120,521 $ 141,368 $ 153,345
Risks and Issues
Risks Description Mitigation of risks
Finance risk The financial risk is observed from the fact that Assets acquire will be provided as
the financier will provide funding amounting to collateral and additional collateral will
80% or the requirement amount, and the owner also be provided as required.
will provide for 20% of the funding requirement
as well as additional collateral for the 80%
exposure.
Market risk The market features well established competitors The business will develop a
and therefore Kekeke Transport will have to comprehensive marketing plan and
compete for market share. The market risk may strategy. The marketing plan and
also surface from the fact that most strategy will help the business compete
manufacturers, wholesalers, retailers and other with greater strength and position it to
parties likely to utilize their own in-house attain a greater customer satisfaction
transportation services. rate.
Human In terms of human resource, the risk may be a The human resource risk will be
resource risk result of the business not being able to recruit the mitigated by incentivising management
right employees and retain quality employees. with above-market remuneration and
High quality employees may prove to be costly to other staff retention mechanisms,
retain.
Operational The business might have capacity and The business will in the initial stages
risk equipment constraints as some goods require focus on transporting goods that do not
special transportation methods. There may also require special equipment and then
be a risk of not being as efficient and effective pursue advanced transportation at a later
due to lack of advanced logistics software and stage. The business will strive to source
other technologies. affordable support technologies.