Are you about starting a mustard oil company? If YES, here is a complete sample mustard oil production business plan template & feasibility report you can use for FREE. Okay, so we have considered all the requirements for starting a mustard oil production company. We also took it further by analyzing and drafting a sample mustard oil marketing plan template backed up by actionable guerrilla marketing ideas for mustard oil production companies. So let’s proceed to the business planning section.
Why Start a Mustard Oil Production Business?
There is hardly any entrepreneur who would want to go into a business if they know the chances of making profit from the business is slim hence the need to start a business whose products or services is generally accepted and one of such business is the production of mustard oil. It is fact that homes and restaurants cum hotel related businesses make use of cooking oil on a daily basis.
To start a mustard oil production company, you have to conduct detailed research in order to find out what it takes to set up such company and how to leverage on the existing market to sell your products and also how to create new market channels.
Starting a mustard oil production company is capital intensive, but it is a money spinning business if you are able to create a robust distribution network.
So, if you have decided to start your own mustard oil production business, then you should ensure that you carry out feasibility studies and also market survey. Business plan is yet another very important business document that you should not take for granted when launching your business.
Below is a sample mustard oil production business plan template that can help you to successfully write your own with little or no difficulty.
A Sample Mustard Oil Production Business Plan Template
1. Industry Overview
Mustard oil production business is a subset of the Margarine and Cooking Oil Processing industry and players in this industry process a variety of oilseeds, including sunflower, canola, flaxseed, and safflower seeds.
A close observation of happenings in this industry shows that the price of oilseeds declined, leading revenue for the margarine and cooking oil processing 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 vegetable oils will continue to help improve demand from the US consumer. Biofuel production will also increase, which is anticipated to generate steady demand for oilseeds as part of the Renewable Fuels Program. Low prices as a result of overproduction in the past will likely make industry operators leery of over-planting over the next five years.
A recent report released 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 skewered revenue figures in both directions.
Meanwhile, due to growing health consciousness among consumers, demand for edible vegetable 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 and margarine.
Statistics has it that in the united states of America alone, there are about 344 licensed and registered margarine and cooking oil production companies (mustard oil production companies inclusive) responsible for employing about 22,762 employees and the industry rakes in a whooping 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 available market in the industry.
Please note that the barriers to entry for 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 the leading processors in the industry can also represent a barrier to entry for prospective entrants.
In summary, the mustard oil production line of business is profitable and it is open for any aspiring entrepreneur to come in and establish his or her business; you can choose to start on a small scale servicing a community or you can choose to start on a large scale with several distribution outlets in key cities all around the United States of America.
2. Executive Summary
Chef Pro™ Mustard Oil Production Company is a licensed vegetable oil production company that will be located in between a farming community and an industrial estate in Providence – Rhode Island. 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 mustard oil production business to produce healthy edible vegetable/mustard oil 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 want to give people and businesses who patronize our mustard oil the opportunity to be part of the success story of Chef Pro.
We know that there are several mustard oil production companies scattered all around the United States and Canada whose products can be found in grocery stores all across 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. 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 Providence – Rhode Island and the United States of America.
Beyond producing quality and heart friendly mustard 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.
Chef Pro™ Mustard Oil Production Company 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 (wholesale distributors) no matter how large they may grow to. We will ensure that we get our customers involved when making some business decisions that will directly or indirectly affect them.
Chef Pro™ Mustard Oil Production Company is family business that will be owned by Elena Pedro and her immediate family members. Elena Pedro who is the Chief Executive Officer of the Company has a BSc. in Business Administration from the University of Arkansas; MBA in Finance from the University of Tulsa. Elena, a native of Jonesboro, Arkansas, began her career at Walmart as a summer associate at the company’s distribution center. She was also an assistant manager and a buyer trainee. She will be working with a team of professionals to build the business.
3. Our Products and Services
Chef Pro™ Mustard Oil Production Company is going to operate a standard and licensed mustard oil production company whose product will not only be sold in Providence – Rhode Island but also throughout the United States of America.
We are producing mustard oil 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 corporate goals. We will be engaged in the production of;
- Mustard oil
- Canola oil
- Flaxseed oil
- Sunflower seed oil
- Safflower oil
- Peanuts oil
- Rapeseed oil
4. Our Mission and Vision Statement
- We want to build a company whose products and brands will be accepted in Providence – Rhode Island and also throughout the United States of America.
- We want to become the people’s choice whenever it comes to healthy and heart friendly oil; we have a mission to ensure that our mustard oil brand becomes a household name.
Our Business Structure
Chef Pro™ Mustard Oil Production Company is established with the aim of competing favorably with other leading mustard oil brands in the United States of America. 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.
Chef Pro™ Mustard Oil Production Company will make sure that we only hire people that are qualified, honest, hardworking, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders.
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
- Merchandize Manager
- Sales and Marketing Manager
- Information Technologist
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
- 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 fixing prices and signing business deals
- Accountable for providing direction for the business
- 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 mustard oil production plant
- Part of the team that determines the quantity of mustard 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 plant workers
- Ensures that the steady flow of both raw materials (mustard seeds) to the plant and easy flow of finished products (mustard 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 standards at all times.
Human Resources and Admin Manager
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Defining job positions for recruitment and managing interviewing process
- Carrying out induction for new team members
- Responsible for training, evaluation and assessment of employees
- Oversee the smooth running of the daily office and factory activities.
- Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
- Helps to ensure consistent quality of mustard oil
- Responsible for the purchase of raw materials and packaging materials (drums, bottles, and plastics et al)
- Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
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
- Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps to 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 Company 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 mustard 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
- Assist the transport and logistics manager in planning their route according to a delivery schedule.
- Transport finished goods and raw materials to and from manufacturing plants or retail and distribution centers
- Inspect vehicles for mechanical items and safety issues and perform preventative maintenance
- Comply with truck driving rules and regulations (size, weight, route designations, parking, break periods etc.) as well as with company policies and procedures
- Collect and verify delivery instructions
- Report defects, accidents or violations
6. SWOT Analysis
At Chef Pro™ Mustard Oil Production Company, we aware that there are several mustard oil production companies in the United States of America whose products can be found in grocery stores all across the cities 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.
Chef Pro™ Mustard Oil Production Company employed the services of an expert HR and Business Analyst with bias in startups 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 Chef Pro™ Mustard Oil Production Company;
The strength that we are bring to the business is of course the vast experience of our management team, we have people on board who are highly experienced. So also our large national distribution network and of course our excellent customer service culture will definitely count as a strong strength for the business.
We came to the conclusion that one major weakness that may count against us is the fact that we are a new mustard oil production company and we don’t have the financial capacity to leverage on mass production and also to engage in massive advertisement of products.
The opportunities in the mustard oil industry are enormous. This is due to the fact that there are loads of wholesalers and retailers who rely on the supply of mustard 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 and also to create our own market. We know that it is going to require hard work, and we are determined to achieve it.
We know that we are likely going to be confronted with unfriendly weather conditions, and unfriendly weather conditions directly affect crop yield, and therefore, harvest volumes. The onset of extreme weather patterns such as floods and droughts significantly diminish oilseed production levels. Besides, in the United States of America, the natural disaster index is expected to remain volatile in 2018, presenting the industry with a potential threat.
7. MARKET ANALYSIS
- Market Trends
A notable trend in the margarine and cooking oil production industry reveals that operators are restructuring product lines to better fit demand for health and not ignoring the fact that organic products and rising health concerns have stimulated demand for edible vegetable oils. No doubt, regulations will incentivize restaurants and households to use healthier cooking oils.
As a matter of fact, the price of oilseed plays a role in determining the value of sales in the local market. An increase in the price of oilseeds positively affects returns at the farm gate. Higher returns encourage growers to devote more resources to oilseed growing, thereby raising production. The price of oilseeds is anticipated to increase in 2018, presenting a potential opportunity for the industry.
Lastly, the price of oilseeds is typically the most reliable driver of industry performance. It is important to state the part of what affect productivity output in this industry is the fact that oilseed farming is vulnerable to unpredictable weather conditions, and the demand for high-quality vegetable oil in key foreign markets will boost exports.
8. Our Target Market
When it comes to selling mustard oil and other healthy vegetable oil, there is indeed a wide range of available customers. In essence, our target market can’t be restricted to just a group of people or organization, but all those who reside in our target market locations.
We are in business to engage in the production and wholesale distribution of mustard oil to the following groups of organizations;
- Households who make use of healthy edible vegetable oil for cooking
- Restaurants and canteens that make use of edible vegetable oil for cooking
- Small scale businesses that make use of edible vegetable oil as part of their raw material.
Our competitive advantage
A close study of the 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 mustard oil production companies in Providence – Rhode Island.
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.
Chef Pro™ Mustard Oil Production Company is launching a standard mustard oil production brand that will indeed become the preferred choice for businesses and households that make use of mustard oil in Providence – Rhode Island and other states in the United States of America where we intend marketing our oil.
So also, we have people on board who are highly experienced and understands how to grow 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 our business.
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
Chef Pro™ Mustard Oil Production Company 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 product to a wide range of customers. Chef Pro™ Mustard Oil Production Company will generate income by simply selling;
- Mustard oil
- Canola oil
- Flaxseed oil
- Mustard seed oil
- Safflower oil
- Peanuts oil
- Rapeseed oil
10. Sales Forecast
One thing is certain when it comes to mustard oil production business, if your mustard oil is properly packaged and branded and if your production plant is easily accessible, you will always attract customers cum sales.
We are well positioned to take on the available market in Providence – Rhode Island and every city where our mustard 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 mustard 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 Chef Pro™ Mustard Oil Production Company, it is based on the location of our business and other factors as it relates to small and medium scale mustard oil production startups in the United States;
- First Fiscal Year: $250,000
- Second Fiscal Year: $520,000
- Third Fiscal Year: $920,000
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 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
Before choosing a location for Chef Pro™ Mustard Oil Production Company we conducted a thorough market survey and feasibility studies in order for us to penetrate the available market in our target market location and also to easily access raw materials. 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.
We hired experts who have good understanding of the industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Providence – Rhode Island and other cities in the United States of America.
In summary, Chef Pro™ Mustard Oil Production Company will adopt the following sales and marketing approach to sell our mustard oil;
- Introduce our mustard oil brand by sending introductory letters to households, restaurants, mustard oil merchants and other stakeholders in Providence – Rhode Island and other cities in the United States of America
- 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 mustard oil brand
- Engage in direct marketing and sales
- Encourage the use of Word of mouth marketing (referrals)
11. Publicity and Advertising Strategy
Notwithstanding the fact that our mustard 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.
Chef Pro™ Mustard Oil Production Company has a long term plan of distributing our mustard oil in various locations all around the United States of America and other countries of the world which is why we will deliberately build our brand to be well accepted in Providence – Rhode Island before venturing out.
Here are the platforms we intend leveraging on to promote and advertise Chef Pro™ Mustard Oil Production Company;
- Places adverts on both print (community based newspapers and magazines) and electronic media platforms
- Sponsors relevant community programs
- Leverages on the internet and social media platforms like; Instagram, Facebook, twitter, et al to promote our mustard oil brand
- Installs our billboards in strategic locations all around major cities in the United States of America
- Engages in roadshow from time to time in targeted communities
- Distributes 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.
- Ensures that our mustard oil is well branded and that all our staff members wear our customized clothes, and all our official cars and distribution vans are customized.
12. Our Pricing Strategy
Our prices will conform to what is obtainable in the mustard oil production industry but will ensure that within the first 6 to 12 months, our products are sold a little bit below the average market prices of mustard oil. 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 brands.
- Payment Options
The payment policy adopted by Chef Pro™ Mustard Oil Production Company 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 Chef Pro™ Mustard Oil Production Company 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)
We are well informed when it comes to starting a standard mustard oil production company and we know that it is indeed a capital intensive business because the amount required to set up a mustard oil production plant is not cheap.
The bulk of the startup capital will be sent on leasing or acquiring a facility and also in purchasing oil extracting and processing machines. 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 Chef Pro™ Mustard Oil Production Company 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 $95,400.
- The total cost for construction of a standard mustard 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 oilseeds 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 mustard oil production plant in Providence – Rhode Island.
Generating Startup Capital for Chef Pro™ Mustard Oil Production Company
Chef Pro™ Mustard Oil Production Company is a family business that is owned and financed by Elena Pedro 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 Chef Pro™ Mustard Oil Production Company 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 mustard 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.
Chef Pro™ Mustard Oil Production Company 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 mustard 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.