Are you about starting a soybean oil production business? If YES, here is a complete sample soybean oil production business plan template & feasibility report you can use for FREE.
Okay, so we have considered all the requirements for starting a soybean oil production business. We also took it further by analyzing and drafting a sample soybean oil production company marketing plan template backed up by actionable guerrilla marketing ideas for soybean oil production businesses.
So let’s proceed to the business planning section. The soybean oil business is one very lucrative business in the United State of America as the oil is widely consumed by Americans. Soybean oil is contained in products such as salad dressings, mayonnaise, most margarines, shortenings, imitation diary as well as baked foods. The oil is also used domestically in cooking and frying.
Soybean oil production might be a lucrative business; however, the processing procedures are quite complicated. The soybean is usually dehulled, cleaned, and then dried before extraction process can be started.
The extraction process involves cutting the soybeans into flakes, putting them in a percolating extractor before immersing in a solvent. The oil is then refined to remove the impurities and so as to make it edible. This usually requires a lot of machines and equipment.
Due to this fact, in addition to needing experience to run and succeed in this business; hiring a business consultant who has knowledge of this industry is also important, as the consultant will not only help you draw out strategies and help kick start your business, but will also offer suggestions and tips that will improve your business in the long run.
It is for this purpose that a business plan is usually written, as it acts as a guide that will help influence the actions and decisions to be taken during the course of running the business. Below is a sample soybean oil production business plan;
A Sample Soybean Oil Production Business Plan Template
1. Industry Overview
According to a 2014 report, Soybean oil is the most consumed edible oil in the united states, with a 55% market share of the whole market.
Soybean oil is also contained in household food products such as margarine and shortenings. It is also used by food manufacturers in mayonnaise, meat products, commercially baked goods as well as salad dressings. The little flavor that soybean oil has whereby it doesn’t change the taste of the food is the reason why it is such a huge hit with customers.
Soybean oil does not only enhance the flavors of already prepared foods, it also adapts to other ingredients that contains fats and oils, which is why it is a favorite for salad dressings, sauces and mayonnaise. Soybean oil when compared to other vegetable oils has a good emulsifying ability.
Due to the fact that soybean oil is high in mono and poly saturated fats, low in saturated fat and has no trans fat; it makes it a favorite amongst health nuts. Also, its possession of omega-3 fatty acids and Vitamins E makes it a healthy choice for consumers all over.
Soybean oil is available all year round and this is due to the fact that there is an abundant and steady supply of soybeans because the crop is not only easy to grow for farmers but it is economical as well, making the oil available and cheap.
Soybean oil is the second largest consumed oil globally, and asides the United States of America, China are the second largest consumer of this oil. According to health nutritionists, soybean oil helps improve the heart, lowers cholesterol, increase immunity, as well as reduce cognitive disorders.
As at 2011, soybean recorded high prices which had a heavy impact on the products that relied heavily on soybean oil; the food industry was affected and it caused an increase in the end products for consumers. Also, according to analysts, as at 2011, some farmers had begun to plant other crops that were deemed profitable, which caused the South Americans to become the largest soybean producers globally.
Most of the global demand for the soybean oil (83%) comes from the food industry, with a large percentage of these demands used mostly for domestic purposes. The industrial demand for the soybean oil is used in lubricants, paints, adhesives, solvents, bio-diesel, and cleaners.
It is also suitable for printing inks as well as formulations for oil paints. The demand for the soybean oil is expected to grow annually at 4% for the next five years.
Soybean is the largest source of animal feed globally and the second largest source of vegetable oil as most vegetable oils in the market are actually soybean oil. The leading producer and exporter of soybean is the United States and while there are other seed oils being produced, soybeans accounts for 90% of the country’s oilseed production.
2. Executive Summary
Strum Soybean Oil Production Company is a renowned establishment that will be based in Raleigh, North Carolina in the United States with the intention of selling refined soybean oil to domestic and industrial clients. Our location is conspicuous and it offers our customers easy access to and from our facility.
Asides selling refined soybean oil, we also intend to sell high-protein fiber for livestock feed producers and also offer consultancy and training services while selling our franchise.
Our soybean oil company is established not only with the aim of making profit but to also compete with other established soybean oil producers in the industry. Our aim is to be renowned not only in North Carolina but also in the whole of the United States as well.
We have plans, structures and strategies in place to ensure our business grows to an enviable standard. We know that this can be achieved if we invest in human resources and so we have hired the best professionals and with vast experience in the field to help in running our soybean oil production company.
Even though this is a lucrative business, it is also a very difficult business to go into. First off, the machines for extracting the oil from the soybeans are very important and we hope to get the best. Also, the environment also has to be conducive and hygienic enough for the oils to be extracted in. Asides the machines, we intend to source only for reliable vendors for our raw materials and also packaging materials.
One of our strongest suits in giving excellent customer service as we believe this is one of the strategies that would be needed in retaining our numerous clients. Clients are more loyal when they not only get products at affordable prices but when they have their complaints, inquiries and orders attended to as quickly as possible.
We intend to ensure that our company and what it stands for is deeply etched into the community and state where we would be operating from by participating in community events and fairs and sponsoring programmes and events to show our corporate social responsibility. This of course will increase patronage for our products and services.
Knowing how soybean oil is being consumed by most Americans, we intend to ensure that our oils are of the best quality. This we would ensure by employing a quality assurance manager that will help in ensuring we produce oils of the highest quality all the time.
Strum Soybean Oil Production Company is owned and run by two Veterans, Michael Burton and Shawn Phelps. Michael is a food technologist, while Shawn is an entrepreneur with vast knowledge in the industry.
3. Our Products and Services
We intend to offer various products and services at Strum Soybean Oil Production Company; however our main products will be refined soybean oil for domestic use and crude soybean oil for industrial use.
We, however, are aware of the fact that having multiple sources of income will improve the bottom line of our company and ensure that we remain in business for a long time while also growing and expanding at our pace. Therefore, we intend to make as much profit as is legally permissible under the laws of the United States of America.
Listed below are some of our products and services;
- Refined Soybean oil for domestic consumption
- Soybean oil for industrial consumption
- High-protein fiber for animal feed
- Consultancy services
- Training services
4. Our Mission and Vision Statement
- Our vision is to produce soybean oil that have gone under the best extraction method while becoming one of the leading soybean oil industries in the United States of America in five years.
- Our mission in achieving our vision is to ensure that we offer our customers quality soybean oil by using up-to-date refining machine and employing the best hands in ensuring that all the needs of our clients are made.
Our Business Structure
Having the right business structure is very important in building a soybean oil production company that will be of standard; this would mean ensuring that all the important factors are in place to achieve the vision of the company.
In every business, asides the financial resources, the human resources are regarded as very important and so it is vital that we employ not only the best hands to help run the business but also those who would thoroughly understand the vision of the company and ensure that they strive to achieve this vision all the time. We also intend to ensure that our employees have an enviable welfare package that would motivate them into increasing their efficiency as well as their effectiveness.
Asides, the sales of our refined soybean oil for edible and industrial consumption, we also intend to engage in the sales of high-protein fibre, a by-product of soybean oil extraction for livestock farmers and feed producers. We also intend to offer quality franchises and consultancy as well as training services as well. To achieve this, various employees with varied knowledge in these fields will be needed.
Below is the business structure we intend to build for our Strum Soybean Oil Production Company:
- Managing Directors
- Plant Manager
- Quality Assurance Manager
- Purchasing Manager
- Human resources and Admin Manager
- Marketing Executives
- Customer Service Executives
- Maintenance Team
- Truck Driver
- Security Guard
5. Job Roles and Responsibilities
- Responsible for overall strategy of the company
- Hires and build an effective management team
- Develops the overall budget
- In charge of hiring, training and firing manufacturing personnel
- Carries out a review of production schedules
- Oversees the day-to-day operation of the facility and ensures it is successful
- Develops and implements the manufacturing budget
- Ensures that the environment is conducive enough for manufacturing workers
Quality Assurance Manager
- Checks raw materials to be used for production and ensures its quality
- Responsible for the final product before it can be packaged and sold
- Corrects faults found in manufacturing process
- Carries out the preparation and analysis of accounting records and ensures it conforms to accounting practices
- Reviews business operations, budgets and expenses and uses this for future projections
- Responsible for computing tax reports and ensuring it complies tax requirements
- Develops and execute budget for purchase of inventory
- Ensures that records of goods that have been bought, received and returned
- Sources for reliable vendors and interview them
- Reviews purchase order claims in conforming with the company’s policies
Human Resources and Admin Manager
- Responsible for hiring and giving orientation to employees
- Responsible for employee welfare and incentive packages
- Works with management to determine the budget for this department
- Carries out regular appraisals on employees to effect promotion
- Develops and implements marketing strategies
- Carries out research on the target market
- Helps to employer develop company brand
Customer Service Executives
- Sets up and manage the accounts of customers
- Deals with customers by handling requests, resolving complaints and responding to inquiries on behalf of the company
- Ensures that appropriate feedback is given to customers
- Maintains accurate databases of customers
- Responsible for maintaining the machineries and equipment and its components
- Understands the proper operation of an equipment or machine and ensure that they are operating at optimum efficiency
- Carries out repairs on machines
- Carries out inspections on truck, and is responsible for the condition of the vehicle
- Ensures that essential supplies such as tires, lights, oil, gas, and water are available and in place
- Maintains log records according to regulations
- Responsible for greasing their trucks every week
- Ensures that supplies gets to the right destination
- Patrols the interior and exterior of the facility
- Prepares activity logs and submits to the admin Manager
- Passes security tips and information to staff
- Ensures the safety of the facility after working hours
6. SWOT Analysis
As a serious business, we know that while having a business concept is fantastic, there are various challenges we will likely face when it comes to running the business proper, from retaining and attracting clients, to having the best hands to help run the business.
It is for this reason that we have hired a reputable business consultant in North Carolina to help us carry out an extensive analysis on if we have what it takes to go into the soybean oil production industry. The analysis will allow us know how we can compete favorably against our competitors in the soybean oil production industry.
The analysis allowed us determine our strengths, weaknesses that we would need to work on as well as what opportunities were available to us and what threats we were likely to face in North Carolina as well as in The whole of the United States. The results from the thoroughly conducted SWOT analysis for Strum Soybean Oil Production Company are;
Our strength lies in the fact that we are not only refining soybean oil for domestic and industrial use but also selling other products such as high-protein fiber for livestock feed producers as well as offering other services that will shore up our revenue base as well. This means that we would be catering to a wide range of customers due to our diverse products and offerings.
However, our strength also lies in the fact that we have experienced professionals who understand the business as well as our vision thoroughly working for us. Our employees have the best welfare and incentive packages that is the envy of others in the industry.
Also, our owners have the required experience in production and in business, which is necessary to not only make strategic decisions that will move the company forward but also ensure that we grow at a steady pace as well.
Our weakness lies in the fact that we are not the only soybean oil production company in North Carolina, and therefore breaking into this market might be a bit difficult as we would be competing against already established businesses that already have a share of the target market. However, we are not daunted by this as we have strategies in place that will help us compete with our competitors whilst creating a favorable impression with our clients.
The opportunities that abound in this industry from the sale of soybean oil and its by-products to various clients and also the various services are limitless. We therefore plan to ensure that we seize the opportunities whenever they present themselves and shore up our revenue base while also enjoying more patronage from our clients.
The threats we are likely to face in this business are likely to come from a change in government policies, slowing demand, or entry of new competitors into the industry and in particularly, our location. However, as a business with a vision in sight, we will be able to handle any threats that might crop up during the course of starting or running the soybean oil production business.
7. MARKET ANALYSIS
- Market Trends
Soybean oil is one of the most consumed edible oils in the United States of America as it is used by a variety of people for different uses and is also contained in most products that are used in the home. Asides domestic use, soybean oil is also used in industrial factories to produce edible foods, as well as biodiesel for engines. There are also various purposes for which the oil can be used.
Most soybean oil extraction companies are no longer limiting themselves to selling just soybean oil for domestic and industrial consumers but are also selling to livestock farmers and animal feed sellers. Most have also gone into the business of retailing their products by participating in trade fairs and other events that allow for clients to directly buy from them, which not only increase patronage but also ensure that a huge share of the market is gained whilst also increasing awareness for the company.
The internet has now been used in greatly promoting businesses and the soybean oil production companies are no different as massive efforts are made online to not only source for reliable vendors but to also ensure that customers are aware of the benefits of getting quality soybean oil that has been extracted under the right amount of factors. Therefore, to remain relevant and become well known in the industry, we intend to explore these three trends and use them to our advantage.
8. Our Target Market
Due to the wide use of soybean oil for various purposes and intents, there are a wide range of available customers. This means that while some products are usually restricted to certain age groups or market segments, the target market for our soybean oil is everyone. This is why we intend to partner with certain strategically placed food and grocery stores in Raleigh, North Carolina and also around the United States of America.
Regardless of the fact that soybean oil is consumed by almost everyone, we have carried out a market research so that we could not only specifically identify our target market but also know what our clients expect from us.
Our aim is to ensure that we extract and refine quality soybean oil as well as its by-products that will be sold in wholesale and in retail to our various clients according to their requirements;
- Grocery stores
- Food chains
- Restaurants and hotels
- Livestock farmers
- Furniture makers
Our Competitive Advantage
Every business that is established to make profit knows that it needs strategies that will allow it has competitive advantage over others in the same industry. At Strum Soybean Oil Production Company, we intend to become a renowned company not only in North Carolina but in the entire United States as well, and we have drafted competitive advantage strategies that will ensure that we achieve our vision.
We are going to be one of the few soybean production oil companies that will retail its products to end user consumers as well as distributors. This we intend to do so as to encourage increased patronage and increase awareness for our company as well.
We have hired the best hands to help us run this business and they not only have the vast experience that is needed to kick start our company and carry it forward but they also have keyed into our vision and are determined to project the company’s corporate culture internally and also externally to clients.
We also intend to deploy effective publicity strategies that will increase our awareness in North Carolina by participating in community programmes and sponsoring events and people to achieve their dreams. This way, we are the first company clients come to instead of our competitors.
Lastly, we intend to offer excellent customer service that will attend to the various needs of our clients, from order processing, inquiries, complaints as well as suggestions. We also intend to keep in touch with our existing and potential customers through our various social media platforms and our website that will be handled by the best customer service executives in the industry.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Strum Soybean Oils Production Company’s aim as an established business is to maximize profit in the food industry. Soybean oil is the most edible oil that is consumed in the United States of America, and so we are going to ensure that our soybean oils are produced and refined at a very high quality so as to meet the health demands of our numerous customers.
Strum Soybean Oils Production intends to generate income by engaging in the sales of the below listed products and services:
- Refined Soybean oil for domestic consumption
- Soybean oil for industrial consumption
- High-protein fiber for animal feed
- Consultancy services
- Training services
10. Sales Forecast
Due to the increasing demand for soybean oil by domestic and industrial customers in the United States, our sales forecast is that there will always be sales of the product no matter what.
Our strategic location in Raleigh, North Carolina has primed us into ensuring that we meet our various targets of generating enough revenue within one year that will not only grow the business but expand it at our own pace as well.
Our hired business consultant has gathered information and data from various market and sales researches that has allowed us come up with accurate predictions that has favored our soybean oil production company. The projections were done based on similar start-ups in North Carolina as well as certain other assumptions peculiar to soybean oil production companies.
Below are the sales projections for Strum Soybean Oil Production Company which is entirely based on our strategic location and other factors;
- First Fiscal Year-: $350,000
- Second Fiscal Year-: $700,000
- Third Fiscal Year-: $1,500,000
N.B: The projections and figures aren’t fictitious but are done based on facts. However, these projections might increase or decrease as the current projections were done based on the certain factors such as the economy and our location. A change in any of these factors will likely trigger an increase or decrease.
- Marketing Strategy and Sales Strategy
Our current location was chosen after several feasibility studies were conducted as to what location would be favorable to our marketing strategies. We know how important marketing is and also how important having the right strategies at the right place is likely to propel our business faster.
Our marketing strategies are intended to not only allow us become a big brand in North Carolina but also in the entire United States as well. Our marketing strategies will also penetrate the market to reach our various customers while also competing favorably with other leading brands as well.
Seeing that marketing serves as a double edged sword – publicity and revenue generation – we have hired a marketing expert that will help our marketing executives draft and deploy effective strategies aimed at achieving our vision and goals as a company. Our marketing expert has a huge understanding of the Soybean Oil industry and knows what it will take to propel us to the forefront in North Carolina and throughout the United States of America.
We do not intend to be limited to physical marketing as we know how effective the internet and technology is in achieving our visions and goals. Our social media platforms will always be manned by professionals who know the right words that will attract potential clients, and who will make the platforms as interactive as possible.
Other strategies are in participating in local community events as well as sponsoring local events that will increase awareness about our company. We also intend to participate in trade fairs so as to bring us closer to our customers. We know how important it is for our marketing executives to be empowered in delivering our corporate sales and marketing goals, and so we will provide them with the necessary tools that will help achieve our goals and objectives.
We at Strum Soybean Oil Production Company intend to leverage on the following strategies in order to generate revenue for our company;
- Introduce all our products and services to our clients via our official website
- Throw an official launch party so as to generate the required awareness for our soybean oil company
- See out reliable soybean farmers and introduce our soybean oil production company, in hopes to get a discount when purchasing soybeans as well as ensure they spread the word about us.
- Participate in community events and in trade shows
- Use our social media platforms such as Facebook, Twitter and LinkedIn to vigorously market our business
- Ensure that we are listed in local directories and yellow pages
- Place adverts in local and national newspapers, radio stations as well as television stations
- Engage in direct one-on-one marketing
- Encourage our loyal customers to help refer other potential customers to us
- Ensure that we come up with promotional offers so as to boost our revenue
11. Publicity and Advertising Strategy
Every company requires publicity no matter how long they have been established. Publicity achieves certain things for a company which includes increased awareness and patronage which then results in increased revenue. Also, engaging in publicity will allow Strum Soybean Oil Production Company to compete favorably with other leading brands in the industry.
Publicizing our soybean oil production business in Raleigh – North Carolina will ensure that our brand is firmly rooted in this state and in preparation for our expansion plans across the United States of America. We hired a publicist who has developed strategies that will not only ensure that our business is thoroughly publicized and advertised but also that people understand what we stand for.
There are certain platforms we intend to use in intensifying our publicity and advertising strategies for Strum Soybean Oil Production Company and they are:
- Partnering with communities in various projects
- Create an attractive but unique logo that will be easily recognizable by clients
- Placing unique adverts in food magazines, local and national newspapers as well as on radio and television
- Massively advertising on the internet by placing ads on popular forums and blogs
- Ensuring that our website is optimized to be able to rank tops amongst searches online
- Using social media platforms such as Facebook, Instagram and Twitter to engage existing and potential customers on the benefits of soybean oil
- Ensuring that we install our billboards in strategic and conspicuous locations all around North Carolina
- Ensure that our business fliers are distributed in target locations
- Introduce our businesses to industries in North Carolina as well as around the state
- Ensure that our trucks are emblazoned conspicuously with our logos
12. Our Pricing Strategy
Setting a price for soybean oil is dependent on so many factors such as what quality of soybeans were gotten, at what price, how much was used in transporting the soybeans to the factory for extraction, the number of competent hands available to handle the extraction, and general overhead costs. All these factors are used to determine what rate the soybean oil would be sold for.
Another factor that determines pricing is the close competitors. Pricing should be set to either be a little bit lower or at same price with the competitors. If your factors result in setting a high price than what should be obtainable, then there will be a need to cut down on certain costs.
Due to the huge demand in this industry from customers, we intend to sell our soybean oil a bit lower than our competitors for at least the first three months of operations to enable us attract the customers and increase awareness about our business.
- Payment Options
At Strum Soybean Oil Production Company, we are aware of the fact that our different customers would prefer to have different payment options that they can conveniently choose from and so we have a payment policy that intends to take care of this aspect.
The payment options that will be available to our numerous clients include;
- Payment via bank transfer
- Payment via check
- Payment via Point of Sale (POS) Machines
- Payment via cash
- Payment via bank draft
Our payment options are done in conjunction with a reputable bank that provides the best platforms that are not only free of hitches but offer security as well.
13. Startup Expenditure (Budget)
Every entrepreneur knows how important it is to generate capital for the business. It is usually not a task that can be ignored because without the required funds, the business cannot start up or become operational for long. For our soybean oil production business, the start-up capital we intend to generate will mostly be used for very important aspects of the business such as employee salaries, inventory and equipment.
The important aspects where the generated start-up capital will be used on include;
- Fees for incorporation as well as other legal expenses – $3,000
- Licenses and permits expenses from relevant regulatory authorities – $3,000
- Cost for start-up inventory (soybeans and packaging materials) – $15,000
- Cost of soybean oil extraction and refining machines – $50,000
- Cost for official distribution truck – $50,000
- Running costs for the first six months (employees’ salaries and other operational expenses) – $120,000
- Insurance coverage – $5,000
- Cost of hiring two business consultants – $5,000
- Other start-up expenses (computer, printer, phones, furniture and stationeries) – $8,000
- The cost of launching and official website – $500
- Marketing and promotion expenses which includes grand opening publicity for Strum Soybean Oil Production Company – $5,500
- Cost for grand opening party – $5,000
- Miscellaneous – $10,000
From the above stated report, we would need an estimate of $280,000 to ensure that our soybean oil production company is successfully set up in Raleigh – North Carolina. The amount covers running operations which includes employee salaries for the first six months of operations.
Generating Funding/Startup Capital for Strum Soybean Oil Production Business
Strum Soybean Oil Production Company is a partnership business that is owned and managed by Michael Burton and Shawn Phelps. Michael is a food technologist, while Shawn is an entrepreneur with vast knowledge in the industry. The partners do not intend to bring in external investors just yet and so have stuck to very few ways of sourcing for capital for their business:
Listed below are the areas we intend to source for funds for our soybean oil production business:
- Sourcing for loans from banks
- Applying for loan from the Small Business Administration (SBA) Agency
- Capital generation from personal savings
N.B: We were able to generate the sum of $40,000 from personal savings. We got $40,000 from the SBA government agency and we just got approval from the bank for a sum of $200,000, and we are waiting for our account to be credited which will happen within five working days.
14. Sustainability and Expansion Strategy
Any business whose vision is to become among top leading brands have to ensure that they have sustainability strategies that would ensure that they remain in the game. One of such sustainability strategies is the availability of the required finance necessary to run the business, so that the business doesn’t close shop. We have the required finance necessary to not only start the business but to also keep it in operation till the business starts paying for itself.
Secondly, having competent employees performing the right assigned tasks is very vital if any business intends to compete favorably with others in the same industry. At Strum Soybean Oil Producing Company, we have not only gotten the finest professionals to help run the company, but we have the best welfare packages to ensure that these employees’ productivity rate is high at any point in time. Our employees have keyed into our vision, making our company the envy of other employees in other companies in the industry.
Our business structure was carefully thought out as we know the importance of assigning the right roles to the right position. Our management staff not only understands our vision but also effectively communicate this to the lower end staff, to ensure that we are all on the same page. These are the strategies we know will not only sustain us but also help us expand as well.
We have various investment strategies that will ensure that the business continues to make more money. Asides our external investments, we also intend to offer additional products and services that will ensure that our bottom line remains healthy.
Check List / Milestone
- 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
- 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
- Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
- Recruitment of employees: 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
- Opening party / launching party planning: In Progress
- Establishing business relationship with vendors – wholesale suppliers / merchants: In Progress
- Purchase of distribution trucks: Completed