When it comes to starting a new business, one easy to set up business that requires minimum startup capital which an aspiring entrepreneur can start is a cement distribution company. It should be noted that this business is very viable in all parts of Nigeria.
All you need to do to launch this type of business is to register the business, secure a warehouse and then have a steady supply of cement from cement manufacturers. This type of business is highly suitable in locations where construction work is ongoing; a developing area.
One other thing that you ought to have in mind is that you have to undertake an exhaustive market research and feasibility studies. Why is this so? Well, this is because you will need all the information you can get to build a standard and profitable cement distribution business.
Lastly, you should look towards drawing up a good and workable business plan. Business plans are like maps that help businesses to chart a good and profitable course for their business. These plans have to be thoroughly adhered to in order to make headway in the most appropriate way.
Below is a sample cement distribution company business plan template that will guide you towards crafting yours with little or no stress.
A Sample Cement Distribution Company Business Plan Template
Table of Content
- 1. Industry Overview
- 2. Executive Summary
- 3. Our Products and Services
- 4. Our Mission and Vision Statement
- 5. Job Roles and Responsibilities
- 6. SWOT Analysis
- 7. MARKET ANALYSIS
- 8. Our Target Market
- 9. SALES AND MARKETING STRATEGY
- 10. Sales Forecast
- 11. Publicity and Advertising Strategy
- 12. Our Pricing Strategy
- 13. Startup Expenditure (Budget)
- 14. Sustainability and Expansion Strategy
1. Industry Overview
Cement is one product that is key in the construction industry; as a matter of fact, there is hardly any building or structure that cement is not part of the building materials used during its construction. This is the reason why cement distribution business is a thriving business enterprise in developing and underdeveloped countries scattered all across Africa, Asia and South America.
Businesses that are involved in the distribution of cement basically get their supply of cement from cement manufacturers like Dangote Cement, Ibeto Cement and Lafarge Cement et al and then supply to construction sites and building contractors.
The cement distribution line of business is indeed a thriving line of business and pretty much active in Africa, Asia and South America, and it generates several billions of US dollars annually from several registered and unregistered cement distribution businesses. This line of business is responsible for the employment loads of people directly and indirectly all around the world.
Any aspiring entrepreneur who is considering starting a cement distribution business whether on a small scale or large scale should ensure that he or she conducts thorough market survey and feasibility studies so as to get it right. The truth is that this type of business does pretty well when it is strategically positioned. Places where there are loads of construction works going on is ideal for this type of business.
Over and above, the cement distribution business is a profitable business venture 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 with just a shop in a street corner or if you have the capital and business exposure, then you can choose to start on a large scale importing and distributing cement all across construction sites in Nigeria.
2. Executive Summary
Johnson Ojukwu & Sons® Cement Distribution Company is a standard cement and building materials distribution business that will be based in Ajah – Lagos State, Nigeria. We are registered under the Nigerian Corporate Affairs Commission (CAC).
Although we intend starting out from a warehouse in Ajah servicing construction sites in an around Ajah, but that will not in any way stop us from maximizing our potential in the cement distribution line of business. We hope to grow the business beyond Ajah – Lagos State to other cities in Nigeria and throughout the West African Coast.
Our business goal as a cement distribution company is to become the number one choice for construction companies in Nigeria. As a business, we are willing to go the extra mile to invest in building a standard cement distribution company that won’t in any way go against the law of Nigeria and also to hire efficient and dedicated employees. We have been able to secure permits from all relevant departments both at the local government, state and national level.
Johnson Ojukwu & Sons® Cement Distribution Company is set to redefine how standard cement distribution businesses should be run, not just in Ajah – Lagos State, but also in the whole of the Nigeria.
The demand for cement is not going to plummet any time soon because there will always be construction of new facilities, roads and even renovation works in and around Ajah – Lagos States, which is why we have put plans in place to continue to explore all available markets around the communities where we intend retailing our cement.
In the nearest future, we will ensure that we create a wide range of distribution channels all across Nigeria and the West African market. With that, we know we will be able to maximize profits in our business.
Our strongest selling point at Johnson Ojukwu & Sons® Cement Distribution Company is our unique distribution channels. There is hardly any customer that will purchase our cement who would not want to come back and make more purchases.
Johnson Ojukwu & Sons® Cement Distribution Company will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible. We will ensure that we hold ourselves accountable to the highest standards by meeting our customers’ needs precisely and completely.
Our plan is to position Johnson Ojukwu & Sons® Cement Distribution Company to become the leading brand in the cement distribution line of business. This might look too tall a dream but we are optimistic that this will surely come to pass because we have done our research and feasibility studies and we are confident that Ajah – Lagos State which has loads of construction works going on is the right place to launch this type of business before spreading to other cities in Nigeria.
Johnson Ojukwu & Sons® Cement Distribution Company is a family business that will be owned and managed by Mr. Johnson Ojukwu and his immediate family members. Mr. Johnson Ojukwu is an astute business man who has been able to start and grow several businesses before starting Johnson Ojukwu & Sons® Cement Distribution Company. He has a degree in business administration from the University of Lagos and is also an alumnus of Lagos Business School.
3. Our Products and Services
We are very much aware of the importance of having very good products and services. At Johnson Ojukwu & Sons® Cement Distribution Company, we distribute cement from different cement production companies all across Nigeria and the West African market.
Our intention of starting Johnson Ojukwu & Sons® Cement Distribution Company is to make profits from the cement distribution line of business and we will do all that is permitted by the law in Nigeria to achieve our business aims and ambition.
4. Our Mission and Vision Statement
- Our vision as a cement distribution business is to become the leading company in this line of business in Nigeria and the West African Coast.
- Our mission is to build a highly profitable and thriving cement distribution company whose distribution channels spreads all across construction sites in major cities in Nigeria and the West African Coast. We want to build a business that will be one of the biggest cement and building materials distributor in West Africa.
Our Business Structure
Ordinarily, we would have established a cement distribution business with few employees, but as part of our plans to build a top flight cement distribution business in Ajah – Lagos State, we have perfected plans to get it right from the onset which is why we are going the extra mile to ensure that we have competent employees to occupy all the available positions in our company.
The picture of the kind of cement distribution business we intend building and the business goals we want to achieve is what informed the amount we are ready to spend to ensure that we build a standard business and robust distribution network.
In view of that, we have decided to hire qualified and competent hands to occupy the following positions at Johnson Ojukwu & Sons® Cement Distribution Company;
- Chief Executive Officer (Owner)
- Warehouse Manager
- Human Resources and Amin Manager
- Merchandize Manager
- Sales and Marketing Manager
- Information Technologist
- Accountants / Cashiers
- Customer Services Executive
- Drivers / Distributors
5. Job Roles and Responsibilities
Chief Executive Officer – CEO:
- 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; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
- 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
- Creating, communicating, and implementing the organization’s vision, mission, and Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
Admin and HR 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
- Responsible for arranging travel, meetings and appointments
- Oversees the smooth running of the daily office activities.
- Responsible for organizing the safe and efficient receipt, storage and dispatch of warehoused goods (cements and building materials)
- Responsible for liaising with customers, suppliers and transport companies
- In charge of planning, coordinating and monitoring the receipt, orderly assembly and dispatch of cement and building materials.
- In charge of coordinating the use of automated and computerized systems where necessary.
- Responsible for producing regular reports and statistics on a daily, weekly and monthly basis.
- Ensure that the warehouse facility is in tip top shape and goods are properly arranged and easy to locate
- Supervise the workforce in the warehouse floor.
- Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams.
- Responsible for the purchase of cements and building materials for the organizations.
- Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors.
- Ensures that the organization operates within stipulated budget.
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
- Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Develops, executes and evaluates new plans for expanding sales
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps to increase sales and growth for the company
- Manages the organization’s website
- Handles ecommerce aspect of the business
- Responsible for installing and maintenance of computer software and hardware for the organization
- Manages logistics and supply chain software, Web servers, e-commerce software and POS (points of sale) systems
- Manages the organization’s CCTV
- Handles any other technological and IT related duties.
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
- 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
- Answerable to 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 clients (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 human resources and admin manager in an effective and timely manner
- Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to customers when they make enquiries
Distribution Truck Drivers
- Assist in loading and unloading cement and building materials
- 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 distribution schedule.
- Local-delivery drivers may be required to sell products or services to stores and businesses on their route, obtain signatures from recipients and collect cash.
- Inspect 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
- Collects and verifies delivery instructions
- Reports defects, accidents or violations
6. SWOT Analysis
Due to our drive for excellence when it comes to running a standard cement distribution business, we were able to engage some of the finest business consultants in Lagos State – Nigeria to look through our business concept and together we were able to critically examine the business and access ourselves to be sure we have what it takes to run a standard cement distribution business that can compete favorably in the cement distribution line of business.
In view of that, we were able to take stock of our strengths, our weakness, our opportunities and also the threats that we are likely going to be exposed to in Ajah – Lagos State, Nigeria and also in other cities that we intend distributing our cements and building materials.
Here is a of what we got from the critically conducted SWOT Analysis Johnson Ojukwu & Sons® Cement Distribution Company;
Our strength lies in the fact that we have a robust distribution network that is spread all across Nigeria. We have good business relationship with major cement production companies in Nigeria, and that has positioned us to meet the demand for cement in Nigeria even if the demand tripled over night.
Another factor that counts to our advantage is the background of our Chief Executive Officer; he has a robust experience in the industry and also a pretty good academic qualification to match the experience acquired which has placed him amongst top flight businessmen in Nigeria. We are not ignoring the fact that our team of highly qualified workers will also serve as strength for our organization.
We do not take for granted the facts that we have weaknesses. In fact, the reality that we are setting up a cement distribution business in a city with other cement retailing businesses might likely pose a challenge for us in breaking into the already saturated market in Ajah- Lagos State. In essence our chosen location might be our weakness.
The opportunities available to us are unlimited. There are loads of construction projects going on everyday and all what we are going to do to push our cement to them is already perfected. Ajah and other similar towns in Nigeria is just ideal for the cement distribution business because there are loads of construction projects in these locations.
The threat that is likely going to confront us is the fact that we are competing with already established cement distribution businesses in Ajah – Lagos State and also there are other entrepreneurs who are likely going to launch similar businesses within the location of our business. Of course, they will compete with us in winning over the available market.
Another threat that we are likely going to face is unfavorable government policies and economic downturn. Usually economic downturn affects the construction cum real estate industry which in turn will affect the purchase of cement or other building materials.
7. MARKET ANALYSIS
- Market Trends
It is common trend in the cement distribution business to find cement distribution companies positioning their business in locations and communities where construction projects are ongoing. If you make the mistake of positioning this type of business in highbrow areas or already developed areas, you are going to struggle to make headway in the business.
Lastly, in the bid to stay afloat and continue to make profits from this business, most people that distribute cements and building materials tends to look beyond the market in their immediate community. This is why you will find standard cement distribution companies engage in the distribution of cement to different states of the Federation.
8. Our Target Market
When it comes to retailing or distributing cements and other building materials, there is indeed a wide range of available customers. In essence, our target market can’t be restricted to just a group of people, but to all players in the construction industry.
In view of that, we have conducted our market research and we have ideas of what our target market would be expecting from us.
Our Competitive Advantage
The fact that anybody with a business cum retailing skills and the required startup capital can decide to start cement distribution business means that the business is open to all and sundry hence it is expected that there will be much competition in the industry. There is hardly any community that you won’t find one or more people retailing cement especially on a small scale level.
As a standard cement distribution company, we know that gaining a competitive edge requires a detailed analysis of the demographics of the surrounding area and the nature of existing competitors. And even if you are successful at first, new competitors could enter your market at any time to steal your regular customers. Hence we will not hesitate to adopt successful and workable strategies from our competitors.
Another competitive advantage that we have 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. Our large and robust distribution network and of course our excellent customer service culture will definitely count as a strong strength for the 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
Johnson Ojukwu & Sons® Cement Distribution Company is established with the aim of maximizing profits in the cement distribution line of business both in Lagos State and throughout key cities in Nigeria and we are going to go all the way to ensure that we do all it takes to sell our cement to a wide range of customers who are engage in construction and building projects.
10. Sales Forecast
One thing is certain when it comes to a cement distribution business, if your shop is centrally positioned and easily accessible, then you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.
We are well positioned to take on the available market in Ajah – Lagos State and every other states in Nigeria where our cement and building materials will be sold and we are quite optimistic that we will meet our set target of generating enough profits from our first six months of operation and grow the business and our clientele base.
We have been able to critically examine the cement distribution line of business, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in Lagos State – Nigeria.
Below are the sales projections for Johnson Ojukwu & Sons® Cement Distribution Company;
- First Fiscal Year: N240, 000
- Second Fiscal Year: N550, 000
- Third Fiscal Year: N1 Million
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 products as we do within the 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 to launch Johnson Ojukwu & Sons® Cement Distribution Company, we conducted a thorough market survey and feasibility studies in order for us to be able to penetrate the available market in Ajah – Lagos State and other cities where we intend positioning our business. 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 cement distribution line of business to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Lagos State and Nigeria at large.
In summary, Johnson Ojukwu & Sons® Cement Distribution Company will adopt the following sales and marketing approach to sell our products;
- Introduce our cement distribution business by sending introductory letters to construction companies, building contractors, merchants and other stakeholders both in Lagos State and other states in Nigeria.
- Advertise our products in community based newspapers, local TV and radio stations
- Leverage on the internet to promote our cement distribution business
- Engage in direct marketing and sales
- Encourage the use of Word of mouth marketing (referrals)
11. Publicity and Advertising Strategy
Regardless of the fact that our cement distribution business can favorably compete with other leading cement distribution businesses in Nigeria as a whole, we will still go ahead to intensify publicity for all our products and brand.
Johnson Ojukwu & Sons® Cement Distribution Company has a long term plan of opening outlets in various locations all around Lagos State and other key cities in Nigeria which is why we will deliberately build our brand to be well accepted in Ajah – Lagos State before venturing out to other cities in Nigeria.
As a matter of fact, our publicity and advertising strategy is not solely for selling our products but to also effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Johnson Ojukwu & Sons® Cement Distribution Company;
- 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 brand
- Install our billboards on strategic locations all around major communities in Lagos State
- Distribute our fliers and handbills in target areas in Lagos State
- Position our Flexi Banners at strategic positions in the location where we intend getting customers to start patronizing our cement and other building materials
- Ensure that all our staff members wear our customized clothes, and all our official cars and distribution trucks are customized and well branded
12. Our Pricing Strategy
To a large extent, the price of cement is controlled in Nigeria. In view of that, our prices will conform to what is obtainable in the industry but we will ensure that within the first 3 to 6 months, our cements and other building materials will be sold a little bit below the average prices when compared to other cements distribution businesses in Lagos State – Nigeria.
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 Johnson Ojukwu & Sons® Cement Distribution 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 Federal Republic of Nigeria.
Here are the payment options that Johnson Ojukwu & Sons® Cement Distribution Company will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via mobile money platform
- Payment via Point of Sale Machine (POS machines)
- Payment via check
In view of the above, we have chosen banking platforms that will enable our client make payment for the purchase of cements and building materials without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.
13. Startup Expenditure (Budget)
In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting a place, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.
The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked. As for the detailed cost analysis for starting a cement distribution business; it might differ in other countries due to the value of their money.
We know that no matter where we intend starting our cement distribution business, we would be required to fulfill most of the items listed below;
- The Fee for registering the business (venture) in Lagos State – Nigeria – N15,000
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – N30,000
- Cost for hiring Business Consultant – N20,000
- Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – N20,000
- Cost for payment of rent for 12 month and renovation inclusive – N500,000
- Other start-up expenses including stationery and phone and utility deposits – N5,000
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – N200,000
- The cost for Start-up inventory (cements and other building materials et al) – N500,000
- Cost for store equipment (cash register, security, ventilation, signage) – N10,000
- Cost of purchase of distribution trucks – N1,200,000
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, Fax Machines, tables and chairs et al) – N15,000
- The cost of launching a website – N25,000
- The cost for our opening party – N10,000
- Miscellaneous – N10,000
We would need an estimate of two million, seven hundred thousand naira (N2.7 million) to successfully set up a standard cement distribution company.
Generating Startup Capital for Johnson Ojukwu & Sons® Cement Distribution Company
No matter how fantastic your business idea might be, if you don’t have the required money to finance the business, the business might not become a reality. Finance is a very important factor when it comes to starting a cement distribution business.
Johnson Ojukwu & Sons® Cement Distribution Company is a family business that is owned and financed by Mr. Johnson Ojukwu and his immediate family members. They do not intend to welcome any external business partners which is why he has decided to restrict the sourcing of the startup capital to 3 major sources.
These are the areas we intend generating our startup capital;
- 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 N700, 000 (Personal savings N200, 000 and soft loan from family members N50, 000) and we are at the final stages of obtaining a loan facility of N2 million 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 close shop.
One of our major goals of starting Johnson Ojukwu & Sons® Cement Distribution 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 cement and other building materials a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.
Johnson Ojukwu & Sons® Cement Distribution 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.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. 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 a warehouse facility and renovating the facility as well: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members: 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 – manufacturers of cements and players in the construction cum real estate industry: In Progress
- Purchase of delivery trucks: Completed
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