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Grain Business Plan

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Plateau State University
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 CHIATECH GLOBAL LIMITED

CHIATECH GLOBAL LIMITED

7, LANDURA CRESCENT, TUDUN WADA, JOS
TEL: (07) 67887802
Email: tachiacharles@gmail.com

BUSINESS PROPOSAL

Quality Grains for Better Health

AUGUST, 2021
prepared by

Gwaska Daspan Mike M.Sc., A.C.A. Business Consultant

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7, LANDURA CRESCENT, TUDUN WADA, JOS
TEL: (07) 67887802Email: tachiacharles@gmail.com
 CHIATECH GLOBAL LIMITED

EXECUTIVE SUMMARY

Chiatech Global Limited is primarily a wholesaler of various grains and agro

products in Nigeria, located in Jos, plateau State. This company is intended to

provide customers with the finest quality grains. The business is primarily

wholesale to retailers who want to buy in large quantity. We will purchase our

grains directly from local farmers and sole distributors. This allows us to buy from

the farmers with the finest output available anywhere. We plan to sell to countless

numbers of customers who are always in need of wholesale price for most of the

grain we sell in our location.

Chiatech Global Limited plans to expand her storefront and sell direct to company

in nearest future. In our expanded market, we will bring our commitment of quality,

freshness and great prices to the public. By purchasing in large quantities, we are

able to pass the savings on to our customers.

The planned set up cost of the business will cost ₦1,287,000. This is for renting of

store, buying of stock, equipments and payment of staff cost. A short-term loan

of ₦432,000 will be secured from a client for initial startup.

Chiatech Global Limited will rely on the proven knowledge, skills and experience of

its Management, who brings over a decade managerial experience to the business.

Chiatech Global Limited is established for the primary purpose of providing high

quality grains of the best Rice, Guinea Corn, Maize, Soya beans and Beans to

retailers which are considered the bread basket of the country. The enterprise

has a potential to gain reputation for offering quality grains that provides great

value to retailers.

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7, LANDURA CRESCENT, TUDUN WADA, JOS
TEL: (07) 67887802Email: tachiacharles@gmail.com
 CHIATECH GLOBAL LIMITED

Chiatech Global Limited will establish its base of operations at Jos, the capital of

Plateau State, which is highly populated with a fast-growing market for grains.

Chiatech Global Limited will therefore be in a good position to capture a significant

portion of the local market for grains, since it will introduce new and better

marketing techniques.

Chiatech Global Limited will differentiate itself from other suppliers through

favourable pricing and unique promotional techniques. By specializing in just a few

of the most popular varieties, Chiatech Global Limited will gain access to the

largest segment of grain market for Rice,Wheat,Maize,Soya Beans and Beans. This

tightly focused approach will also make it easier for Chiatech Global Limited to

establish and attain the position of a grain industry leader.

This business is projected to return a profit margin of 20% in its very first month

of operations, due to the large size of the market, a competitive price for grains,

and the relatively low investment required to begin operations. The first year

(2021) sales revenue is projected to exceed 1,500,000. The profit that is

generated will be used for reinvestment in the enterprise.

OBJECTIVES

• To establish Chiatech Global Limited as the leader in selling grain in Nigeria.

• Increase the number of customers buying from Chiatech Global Limited by

20% over the next two months.

MISSION

The mission of Chiatech Global Limited is to offer customers the best grains at a

reasonable price.

KEYS TO SUCCESS

• Superior products will promote customer loyalty.

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 CHIATECH GLOBAL LIMITED

• A location that will assure walk-in traffic.

• A program that will create customer loyalty.

BUSINESS OWNERSHIP

Chiatech Global Limited is privately owned by Mr. Charles Tachia and managed by

him. Mr. Charles Tachia leveraged his wealth of knowledge in trading agricultural

produce. Due to our dream for the business, other investors may be allowed to co-

owned the business.

OPERATING PLAN:

Based on a survey of wholesalers, it has been determined that the current total

annual requirement for wheat seed is about 125,000 tonnes and 10,000 tonnes for

rice seed.

Chiatech Global Limited plans to enter the market and sell a reasonable bags of

grains in a year, an average of Fifty bags of grains in a month.

Chiatech Global Limited will carry out the following key operations:

- Purchasing of quality grains

- Cleaning, packaging, treatment and storage of the grains

- Grains distribution, marketing and sales

FINANCIAL PLAN

This plan outlines the amount of money Chiatech global Limited will need to cover

both its startup and operating costs, and how much income the business expects to

generate after sales of its first batch of grains.

The total establishment and first month operational costs of Chiatech Global

Limited will amount to 1,287,000 as summarized in the following table:

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7, LANDURA CRESCENT, TUDUN WADA, JOS
TEL: (07) 67887802Email: tachiacharles@gmail.com
 CHIATECH GLOBAL LIMITED

ITEM COST (₦) (₦)

MACHINERY AND EQUIPMENT COST (FIXED COST)
Store 100,000
Transport Van 650,000
Furniture and Fittings 50,000
Total 800,000
ADMINISTRATIVE CHARGES
Van operation 20,000
Promotion and Marketing 15,000
Office Supplies 10,000
Total 45,000
GRAIN MULTIPLICATION COST (VARIABLE COST)
Purchase of 2bags of Rice @ 58,000 per bag 116,000
Purchase of 2bags of Guinea Corn @ 38,000 per bag 76,000
Purchase of 2bags of Maize @ 25,000 per bag 50,000
Purchase of 2bags of Soya beans @ 40,000 per bag 80,000
Purchase of 2bags of Beans @ 55,000 per bag 110,000
Grain storage/Transport 10,000
Total 442,000
Grand Total 1,287,000

As regards revenue Chiatech global Limited intends to clean and sell up to 10 bags

of grains in the first month of operation.

Sale of grains for the First Month.

Sale of grains Amount(₦)

2 bags of Rice @ 68,000 per bag 136,000

2 bags of Guinea Corn @ 50,000 per bag 100,000

2 bags of Maize @ 33,000 per bag 66,000

2 bags of Soya beans @ 60,000 per bag 120,000

2 bags of beans @ 65,000 per bag 130,000

Total 552,000

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7, LANDURA CRESCENT, TUDUN WADA, JOS
TEL: (07) 67887802Email: tachiacharles@gmail.com
 CHIATECH GLOBAL LIMITED

On the basis of monthly production cost of N442,000, Chiatech Global limited will

earn a profit of equivalent to a margin of 20%.

CASH FLOW

The cash flow is planned on the basis of operational plan of Chiatech Global Limited

for the First month of operation

(₦) (₦)
Beginning cash position 432,000
CASH RECEIVED
Sales of Rice 136,000
Sales of Guinea Corn 100,000
Sales of Maize 66,000
Sales of Soya beans 120,000
Sales of Beans 130,000
Total Cash Received 552,000
CASH PAID OUT
Purchase of Rice 116,000
Purchase of Guinea Corn 76,000
Purchase of Maize 50,000
Purchase of Soya beans 80,000
Purchase of Beans 110,000
Grain Storage/Transport 10,000
Office supplies 10,000
Van operation 20,000
Marketing 15,000
Total Cash Paid out 487,000
Net Cash in hand 65,000
Cash at Month end 497,000

Chiatech Global Limited will record and present all its financial transactions in

suitable and acceptable manner that will be used for monitoring and control.

Account statements will be prepared periodically to measure performance in terms

of profit or loss that is being generated and what actions could be taken.

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7, LANDURA CRESCENT, TUDUN WADA, JOS
TEL: (07) 67887802Email: tachiacharles@gmail.com
 CHIATECH GLOBAL LIMITED

A forecast profit and loss account for Chiatech Global Limited at the end of the

first month indicates a good profit of ₦65,000 from its operations. The cash flow

forecast analyzed based on the first month of operation shows cash balance of

₦497,000. These statements show that Chiatech Global Limited will have more

than sufficient cash that will be required to put its planned operations into effect

and to also meet its capital needs.

Profit & Loss Account of Chiatech Global Limited as at 31st December Year 1
Sales 552,000

Opening Inventory -

Purchases 432,000

Closing Inventory -

Cost of Sales (432,000)

Gross Profit 120,000

Expenses:

Admin Expenses 45,000

Storage 10,000 55,000

Net Profit 65,000

The financial transactions outlined in the profit and loss account and the cash

account are supplemented by a projected balance sheet, which shows the assets

and liabilities of Chiatech Global Limited or its financial viability at the end of Year

1. Chiatech Global Limited will have nil accounts payable, since grains and other

direct material purchase will be paid for fully during Year 1. Similarly, accounts

receivable will be nil because all seed will be sold by end of Year 1. The balance

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 CHIATECH GLOBAL LIMITED

sheet also indicates a healthy net worth or owner’s equity of ₦1,297,000. This is

what the enterprise will be worth in financial terms at the end of Year 1.

Chiatech Global Limited Balance Sheet as at 31st December Year 1

₦ ₦
ASSETS
Non-Current Assets
Transport Van 650,000
Furniture and Fittings 50,000
Store 100,000
Current Assets
Cash in hand 497,000
TOTAL ASSETS 1,297,000
EQUITY AND LIABILITIES
Owner‘s equity 1,297,000
TOTAL EQUITY AND LIABILITIES 1,297,000

Break Even Point

BEP= Fixed Cost

Contribution Margin

= 800,000
10,200
=78 bags

The analysis above shows that Chiatech Global Limited needs to sell a total of

about 78 bags of grains such that the revenue from sales equals exactly the total

costs incurred. The planned number of bags to be sold need to be increased to

achieve the target combined output level of 78 bags of grains.

MARKETING AND SALES PLAN

Chiatech Global Limited will offer the same or better quality seed than other

suppliers in the market, but sell at a more reasonable price.

The enterprise will charge significantly less for its grains than other companies

because of its lower overhead expenses and fewer employees it will engage.

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7, LANDURA CRESCENT, TUDUN WADA, JOS
TEL: (07) 67887802Email: tachiacharles@gmail.com
 CHIATECH GLOBAL LIMITED

As part of this strategy, Chiatech Global Limited will promote its grains in the

market using a preferred mode of word-of-mouth advertising.

The enterprise will popularize its brand image in the form of attractive spikes of

grain and the associated slogan of “Quality Grains for better Health”, which will

be promoted vigorously.

MANAGEMENT PLAN

Chiatech Global Limited plans to keep wage and salary expenses low, at least

initially. To achieve this objective, all job functions will be performed by the

Director since he posses the required skills and experience. The remaining staff

will be daily waged workers, and casual Labourers who will be hired during the busy

periods.The business will use its profit to provide attractive working conditions and

appropriate incentives that will keep its dedicated staff in the enterprise in the

long run.

CONCLUSIONS

Chiatech Global Limited will endeavour to attain leadership in the supply of quality

grains in the market. The pursuit of high quality grains will be the driving force in

the business. To achieve this, the enterprise will use the dedication, experience

and skill of its management. Extensive promotional activity will help to ensure that

Chiatech Global Limited customers perceive that they are buying the best quality

grains, on time, and at a reasonable price. Chiatech Global Limited is poised and

positioned to take advantage of this commercial opportunity in buying and selling of

grains.

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7, LANDURA CRESCENT, TUDUN WADA, JOS
TEL: (07) 67887802Email: tachiacharles@gmail.com

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