Are you about starting a cooking oil company? If YES, here is a complete sample cooking oil production business plan template & feasibility report you can use for FREE.
Okay, so we have considered all the requirements for starting a cooking oil production business. We also took it further by analyzing and drafting a sample cooking oil business marketing plan template backed up by actionable guerrilla marketing ideas for cooking oil businesses. So let’s proceed to the business planning section.
If you aim at starting an Agro processing business, then one of your best bets is to start a cooking oil production business. This is one business that will sell irrespective of the season because all homes and restaurants make use of cooking oil on a daily basis.
To start this business, it is important that you conduct detailed research in order to find out what it takes to setup a cooking oil production company, how to leverage on the existing market to sell your products and also how to create new market channels.
Starting a cooking oil production company is capital intensive, but it is indeed a money-spinning business if it is well located and if you are able to create a robust distribution network.
If you are certain that starting a cooking oil production business is what you want to do after you must have conducted your market research and feasibility studies, then the next step to follow is to write a good business plan; a detailed blueprint of how you intend raising your seed capital, setting up the business, managing the flow of the business, sorting out tax and marketing your products.
The truth is that it is one thing to have a fantastic idea cum business plan, but another thing for the business plan to translate to profits, that is why it is important to assemble a team of experts to work with if you want to be successful with your cooking oil production business.
Here is a sample cooking oil production business plan template that will help you successfully write yours without stress.
A Sample Cooking Oil Production Business Plan Template
1. Industry Overview
In the united states, cooking oil production business is grouped under the Margarine and Cooking Oil Processing industry and companies in this industry process a variety of oilseeds including canola seeds, sunflower seeds, flaxseeds, safflower seeds, mustard seeds, rapeseed oil, peanut oil, cottonseed oil and other edible oilseeds.
If you observe happenings in the margarine and cooking oil industry, you will notice that the price of oilseeds declined, leading revenue for the industry to fall. On the other hand, the revenue generated in this industry is expected to rebound over the five years to 2022 as oilseed prices stabilize.
Besides, the growing acceptance and adoption of cooking oils will continue to help improve demand from the US consumer. Biofuel production will also increase, which is anticipated to generate steady demand, though low prices as a result of overproduction in the past will likely make industry operators leery of overplanting over the next five years.
A research conducted by IBISWorld shows that the Margarine and Cooking Oil Processing industry experienced significant revenue volatility over the last five years due to fluctuations in the price of inputs such as soybeans, oilseeds and corn.
Producers responded by rising and dropping product prices in line with commodity costs, which skewed revenue figures in both directions.
Meanwhile, due to growing health consciousness among consumers, demand for edible cooking oils strengthened, while demand for animal-derived fats declined. As a result, producers introduced a greater variety of edible oils that are marketed as healthier alternatives to traditional cooking oil.
Statistics has it that in the United States of America alone, there are about 344 licensed and registered margarine and cooking oil production companies responsible for employing about 22,762 employees and the industry rakes in a whopping sum of $61 billion annually with an annual growth rate projected at -4.1 percent within 2012 and 2017. Archer Daniels Midland Company happens to be the company with the lion share of the industry.
Please note that the barriers to entry into the Margarine and Cooking Oil Processing industry are moderate, with the most significant barrier being the ability to raise capital. Capital investments are needed to purchase machinery and equipment and purchase or rent facilities.
While the amount of capital needed to enter the industry depends on the scale of operations an entrant is pursuing, even small – scale facilities require significant capital.
Other barriers include securing supply contracts with upstream suppliers of soybeans, oilseeds and other ingredients used to produce margarine, cooking oil and other industry goods. The well-entrenched position of leading processors in the industry can also represent a barrier to entry for prospective entrants.
To sum it up, the cooking oil production business is profitable and it is open for any aspiring entrepreneur that has the capacity to compete with other players for the available market share to come in and establish his or her business.
2. Executive Summary
Queens Oil© Cooking Oil Production Company is a licensed cooking oil company that will be located in an industrial area in La Crosse – Wisconsin.
We have been able to secure a long – term lease for a facility in a strategic location with an option of a long – term renewal on agreed terms and conditions. The facility has government approval for the kind of business we want to run and it is easily accessible.
We are in the cooking oil production business to produce a wide variety of edible cooking oils manufactured from different oil seeds in commercial quantities for retail outlets, food businesses and households. We are also in business to make profits at the same to give our customers value for their money.
We are aware that there are several cooking oil production companies scattered all around the United States, which is why we spent time and resources to conduct our feasibility studies and market survey so as to enable us locate the business in an area that will support the growth of the business and also for us to offer much more than our competitors will be offering.
We ensured that our facility is easy to locate and we have mapped out plans to develop a wide distribution network for wholesalers all around La Crosse – Wisconsin and the United States of America.
Beyond the production of quality and heart friendly cooking oil in commercial quantities, our customer care is going to be second to none. We know that our customers are the reason why we are in business which is why we will go the extra mile to get them satisfied when they purchase our product.
Queens Oil© Cooking Oil Production Company, Inc. will ensure that all our customers (wholesale distributors) are given first class treatment whenever they visit our Depot / Plant. We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large they may grow to.
Queens Oil© Cooking Oil Production Company, Inc. is owned and financed by Goldie Jason and her immediate family members. Mrs. Goldie Jason is a native of Poughkeepsie, New York and she holds a degree in Biochemistry from the University of Nebraska – Lincoln and MBA in Economics from Columbia Business School.
3. Our Products and Services
Queens Oil© Cooking Oil Production Company, Inc. is going to operate a standard and licensed cooking oil production company whose product will not only be sold in La Crosse – Wisconsin but also throughout the United States of America.
We are in the business to make profits and also to give our customers value for their money and we are going to do all that is permitted by the law of the United States of America to achieve our goals. We will be engaged in the production of a wide range of edible and healthy cooking oil such as;
- Canola oil
- Flaxseed oil
- Mustard seed oil
- Safflower oil
- Peanuts oil
- Soybean oil
- Rapeseed oil
- Cottonseed oil
- Olive oil
- Castor oil
- Sesame oil
- Sunflower seed oil
- Corn oil
4. Our Mission and Vision Statement
- We want to launch a standard Cooking oil production Company whose product will be not only be sold in La Crosse – Wisconsin, but also throughout the United States of America.
- Our mission is to establish a standard cooking oil production Company that will favorably compete with leaders in the industry. We want to build a cooking oil production business whose brands will someday become a household name.
Our Business Structure
Queens Oil© Cooking Oil Production Company, Inc. is a business that is established with the aim of competing favorably with other leading cooking oil brands in the industry. This is why we will ensure that we put the right structures in place that will support the kind of growth that we have in mind while setting up the business.
We will make sure that we only employ people that are qualified, honest, hardworking, customer centric and are ready to work to help us build a prosperous business.
As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more depending how fast we meet our set target. In view of that, we have decided to hire qualified and competent hands to occupy the following positions;
- Chief Executive Officer (Owner)
- Plant Manager
- Human Resources and Admin Manager
- Cooking Oil Production/Machine Operators
- Sales and Marketing Manager
- Information Technologist
- Accountants / Cashiers
5. Job Roles and Responsibilities
Chief Executive Officer – CEO (Owner):
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
- Responsible for overseeing the smooth running of the cooking oil production plant
- Part of the team that determines the quantity of cooking oil that are to be produced
- Maps out strategies that will lead to efficiency amongst workers in the plant
- Responsible for training, evaluation and assessment of cooking oil plant workers
- Ensures that the steady flow of both raw materials (oilseeds) to the plant and easy flow of finished products (well – packaged cooking oil) through wholesale distributors to the market
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
- Ensures that the plant meets the expected safety and health standard at all times.
Human Resources and Admin Manager
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Defines job positions for recruitment and managing interviewing process
- Carries out induction for new team members
- Responsible for training, evaluation and assessment of employees
- Oversees the smooth running of the daily office and factory activities.
Cooking Oil Production/Machine Operators
- In charge of operating machines that are used in the production and packaging of cooking oil.
- Responsible for taking care of the machines and equipment in the production plant
- Handles any other duty as assigned by the production manager.
Sales and Marketing Manager
- Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
- Models demographic information and analyze the volumes of transactional data generated by customer purchases
- Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps increase sales and growth for the company
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensures compliance with taxation legislation
- Handles all financial transactions for the organization
- Serves as internal auditor for the organization
Client Service Executive
- Ensures that all contacts with customer (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Manages administrative duties assigned by the store manager in an effective and timely manner
- Consistently stays abreast of any new information on Queens Oil© Cooking Oil Production Company, Inc. products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients when they make enquiries
Distribution Truck Drivers
- Assists in loading and unloading cooking oil meant for distribution.
- Maintains a logbook of their driving activities to ensure compliance with federal regulations governing the rest and work periods for operators.
- Keeps a record of vehicle inspections and make sure the truck is equipped with safety equipment
- Assists the transport and logistics manager in planning their route according to a delivery schedule.
- Transports finished goods and raw materials over land to and from manufacturing plants or retail and distribution centers
- Inspects vehicles for mechanical items and safety issues and perform preventative maintenance
- Complies with truck driving rules and regulations (size, weight, route designations, parking, break periods etc.) as well as with company policies and procedures
- Reports defects, accidents or violations
6. SWOT Analysis
We know that there are several cooking oil production companies in the United States of America whose products can be seen in nooks and crannies of the country, which is why we are following the due process of establishing a business so as to compete favorable with them.
We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be equipped to confront our threats.
Queens Oil© Cooking Oil Production Company, Inc. employed the services of an expert HR and Business Analyst with bias in startup businesses to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives. This is the summary of the SWOT analysis that was conducted for Queens Oil© Cooking Oil Production Company, Inc.;
Part of what is going to count as our strength is the vast experience of our management team, we have people on board who understand how to grow a business from scratch to becoming a national phenomenon. So also, our large distribution network and of course our excellent customer service culture will definitely count as a strong strength for the business.
A major weakness that may count against us is the fact that we are a new cooking oil production company and we don’t have the financial capacity to engage in the kind of publicity that we intend giving the business.
The opportunities for cooking oil industry are enormous because there are loads of wholesalers and retailers who rely on the supply of cooking oil.
As a result of that, we were able to conduct a thorough market survey and feasibility studies so as to position our business to take advantage of the existing market for cooking oil and also to create our own new market. We know that it is going to require hard work, and we are determined to achieve it.
Some of the major threats that we are likely going to face is economic downturn and unfavorable government policies. It is a fact that economic downturn affects purchasing power. Another threat that may likely confront us is the arrival of a new cooking oil production company in same location where ours is located.
7. MARKET ANALYSIS
- Market Trends
A notable trend in the industry reveals that operators are restructuring product lines to better fit demand for rising health concerns. No doubt, regulations will incentivize restaurants and households that use healthier cooking oils.
Lastly, the price of oilseeds is typically the most reliable driver of industry performance. It is important to state the part of what affects productivity output in this industry is the fact that oilseed farming is vulnerable to unpredictable weather conditions, and the demand for high-quality cooking oil in key foreign markets will boost exports.
8. Our Target Market
Or target market can’t be restricted to just a group of people or organization, but all those who reside in our target market locations. In view of that, we have conducted our market research and we have ideas of what our target market would be expecting from us.
We are in business to engage in the production and wholesale distribution of cooking oil to the following groups of organizations;
- Households that make use of oil for cooking
- Restaurants and canteens that make use of oil for cooking
- Small scale businesses that make use of edible cooking oil as part of their raw material.
Our competitive advantage
A close study of the margarine and cooking oil production industry reveals that the market is becoming much more competitive over the last decade.
As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry. We are aware of the stiff competition and we are prepared to compete favorably with other companies in La Crosse – Wisconsin and throughout the United States.
Top on the list of the competitive advantages that we are bringing to the industry are economies of scale, ability to alter goods and services produced in favor of market conditions and appropriate climatic conditions.
Part of what is going to count as competitive advantage for Queens Oil© Cooking Oil Production Company, Inc. is the vast experience of our management team, we have people on board who understand how to grow a business from the scratch to becoming a national phenomenon.
So also, our large national distribution network and of course our excellent customer service culture will definitely count as a strong strength for us.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry, meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.
We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Queens Oil© Cooking Oil Production Company, Inc. is established with the aim of maximizing profits in the industry and we are going to ensure that we do all it takes to sell our cooking oil to a wide range of customers. Queens Oil© Cooking Oil Production Company, Inc. will generate income by simply selling;
- Canola oil
- Flaxseed oil
- Mustard seed oil
- Safflower oil
- Peanuts oil
- Soybean oil
- Rapeseed oil
- Cottonseed oil
- Olive oil
- Castor oil
- Sesame oil
- Sunflower seed oil
- Corn oil
10. Sales Forecast
When it comes to cooking oil production business, if your cooking oil is properly packaged and branded, and if your production plant is centrally positioned and easily accessible, you will always attract customers.
We are well positioned to take on the available market in La Crosse – Wisconsin and every city where our cooking oil will be sold and we are quite optimistic that we will meet our set target of generating enough income/profits from the first six months of operation and grow the business and our clientele base.
We have been able to examine the cooking oil production industry, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast.
Below are the sales projection for Queens Oil© Cooking Oil Production Company, Inc., it is based on the location of our business and other factors as it relates to small and medium scale cooking oil production startups in the United States;
- First Fiscal Year: $240,000
- Second Fiscal Year: $550,000
- Third Fiscal Year: $870,000
N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same product and customer care services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
Prior to choosing a location for Queens Oil© Cooking Oil Production Company, Inc. we conducted a thorough market survey and feasibility studies in order for us to penetrate the available market in our target locations.
We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time and also for our cooking oil to favorable compete with other leading brands in the United States of America.
We hired experts who have good understanding of the industry to help us develop marketing strategies that will help us achieve our goal of winning a larger percentage of the available market in La Crosse – Wisconsin. In summary, Queens Oil© Cooking Oil Production Company, Inc. will adopt the following sales and marketing approach to sell our cooking oil;
- Introduce our cooking oil brand by sending introductory letters to manufacturing companies that make use of cooking oil, households, restaurants, cooking oil merchants and other stakeholders in La Crosse – Wisconsin
- Engage in roadshow in targeted communities from time to time to sell our products
- Advertise our products in community – based newspapers, local TV and radio stations
- List our business and products on yellow pages ads (local directories)
- Leverage on the internet to promote our cooking oil brands
- Engage in direct marketing and sales
- Encourage the use of Word of mouth marketing (referrals)
11. Publicity and Advertising Strategy
Irrespective of the fact that our cooking oil production plant is a standard one with a wide range of products that can favorably compete with other leading brands, we will still go ahead to intensify publicity for all our products and brand.
Queens Oil© Cooking Oil Production Company, Inc. has a long – term plan of distributing our cooking oil in various locations around the United States of America which is why we will deliberately build our brand to be well accepted in La Crosse – Wisconsin before venturing out.
Here are the platforms we intend leveraging on to promote and advertise Queens Oil© Cooking Oil Production Company, Inc.;
- Place adverts on both print (community – based newspapers and magazines) and electronic media platforms
- Sponsor relevant community programs
- Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, et al to promote our cooking oil brand
- Install our billboards in strategic locations all around major cities in the United States of America
- Engage in roadshow from time to time in targeted communities
- Distribute our fliers and handbills in target areas
- Position our Flexi Banners at strategic positions in the location where we intend getting customers to start patronizing our products.
- Ensure that our cooking oil is well branded, that all our staff members wear our customized clothes, and all our official cars and distribution vans are customized.
12. Our Pricing Strategy
We are aware of the pricing trend in the cooking oil production industry which is why we have decided to produce various sizes of cooking oil.
In view of that, our prices will conform to what is obtainable in the industry but we will ensure that within the first 6 to 12 months our products are sold a little bit below the average price. We have put in place business strategies that will help us run on low profits for a period of 6 months; it is a way of encouraging people to buy into our brand.
- Payment Options
The payment policy adopted by Queens Oil© Cooking Oil Production Company, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Queens Oil© Cooking Oil Production Company, Inc. will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via online bank transfer
- Payment via check
- Payment via bank draft
In view of the above, we have chosen banking platforms that will enable our client make payment for product purchase without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.
13. Startup Expenditure (Budget)
Starting a standard cooking oil production company is indeed a capital-intensive business. The bulk of the startup capital will be spent on leasing or acquiring a facility and also in purchasing oil extracting and processing machines. Aside from that, you are expected to purchase distribution trucks, pay your employees and utility bills.
These are the key areas where we will spend our startup capital;
- The Total Fee for Registering the Business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $1,300.
- Marketing promotion expenses for the grand opening of Queens Oil© Cooking Oil Production Company, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of – $3,580.
- The total cost for hiring Business Consultant – $2,500.
- Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
- The total cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $115,300.
- The total cost for construction of a standard cooking oil production plant – $100,000.
- Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $100,000
- The cost for Start-up inventory (raw materials, drums, bottles and packaging materials et al) – $80,000
- The total cost for the purchase of oil extracting and packaging equipment – $100,000
- The total cost for store equipment (cash register, security, ventilation, signage) – $13,750
- The total cost of purchase of distribution vans – $100,000
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, Fax Machines, tables and chairs et al) – $4,000.
- The cost of launching a website – $600
- Miscellaneous – $10,000
We would need an estimate of $500,000 to successfully set up a standard cooking oil production plant in La Crosse – Wisconsin.
Generating Funds/Startup Capital for Queens Oil© Cooking Oil Production Company, Inc.
Queens Oil© Cooking Oil Production Company, Inc. is owned and financed by Goldie Jason and her immediate family members. They do not intend to welcome any external business partners which is why she has decided to restrict the sourcing of the startup capital to 3 major sources.
- Generate part of the startup capital from personal savings and sell of stocks
- Source for soft loans from family members and friends
- Apply for loan from the bank
N.B: We have been able to generate about $200,000 (Personal savings $150,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $300,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.
14. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.
One of our major goals of starting Queens Oil© Cooking Oil Production Company, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to retail our well – branded cooking oil a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.
Queens Oil© Cooking Oil Production Company, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.
We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Leasing of facility and construction of standard cooking oil processing plant: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members and friends: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of the needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Establishing business relationship with vendors – wholesale suppliers / merchants: In Progress.