MASTER THESIS- BUSINESS PLAN -BEFCO TRADING LTD

1 J NK PING INTERNATIONAL BUSINESS SCHOOL J NK PING UNIVERSITY B U S I N E S S P L A N (Import, export and Car TRADING Company) MASTER thesis IN ENTREPRENEURIAL MANAGEMENT Author: Fred Tanyi Besong Tutor: Johan Wiklund J nk ping June 2007 i ii Table of Contents iv DEDICATION .. v 1 Executive 1 Statement of purpose ..1 The problem and solution ..1 The BUSINESS Model ..2 Product ..2 Target Market and Customers..2 Core competence ..2 Management Team ..3 Key Success The BUSINESS process ..3 Strategy ..4 Financial Forecasts ..4 2 BUSINESS DESCRIPTION .. 5 General Description of the BUSINESS ..5 The Employment History of Cameroon and possibilities for The Background of Cameroon s Import and Exports The situation of Sweden s second hand-car market.

2 9 Product Scope ..10 The BUSINESS process ..11 Differentiation Strategy ..11 3 INDUSTRY 12 Industry Buyers (Customers)..13 Potential Entrants ..14 Suppliers ..14 Industry Competitors (Rivalry among existing firms) ..15 4 MARKETING plan .. 16 Target Market and Customers ..16 Pricing Channels of Distribution and Supply-Chain strategy ..19 Promotion and Advertising Promotion ..19 Advertisement ..20 Sales strategy and Sales Sales 5 OPERATIONS plan .. 23 BUSINESS iii BUSINESS Location and BUSINESS Operations ..24 Customer support 6 25 Board of Directors (Governance)..25 Management Team ..26 Governance and Organizational Structure ..27 Reporting Relationships ..28 7 FINANCIALS .. 29 Capital requirements.

3 29 Income Expenditure and Cash Flow statement ..30 8 Critical Risks and 31 Excessive Direct and Indirect Competition ..31 Financial Risk ..31 Operational and Management Risk ..31 9 GROWTH PROSPECTS AND EXIT OPTIONS .. 32 Growth prospects ..32 Exit 10 Conclusion .. 34 11 References .. 35 12 Appendices .. 38 Appendix I: Appendix I: Appendix I: Appendix I: Swedish Second-hand market ( ) .. 38 Paying Taxes in Cameroon .. 45 iv ACKNOWLEDGEMENTS Many individuals played a significant role towards the realisation of this thesis , some gave moral support and provided the facilities for me to study in an international environment, others gave financial support while some others transferred knowledge both implicit and tacit knowledge and they all deserve my special recognition.

4 Firstly, I express my deepest love and gratitude to my parents for their constant support and encouragement through out my edu-cational career. Special thanks also go to my uncle Mr. Abange William, General Manager of McMillan Ltd. Cameroon, for serving as a role model and for his encouragement towards my acceptance of the offer based on how significant it would be to have some one with entrepre-neurial knowledge in the family. I am equally thanking the programme coordinators of the MASTER of Entrepreneurship in the persons of Olof Brunninge and Leona Achtenhagen for their role in shaping the programme, providing moral support through their open minded nature. I also wish to thank the Presbyterian Church in Cameroon (PCC) in general and the PCC Internal Audit Department in particular for allowing me to pursue my studies on the basis of a study leave and guaranteeing a job security up till 2010.

5 I also wish to express my profound gratitude to all who taught, trained and provided me with a wider cognitive mindset in the Department of Entrepreneurship, Marketing and Manage-ment (EMM) of JIBS. I am thinking of Professor Leif Melin, Professor Tim Habbershon and my supervisor Professor Johan Wiklund for their inspirational articles and lectures in en-trepreneurship. A special thanks to my supervisor for his technical support, guidance and en-couragement in the realisation of this thesis . I am also thanking Jonkoping University and Jonkoping International BUSINESS School in particular for given me the opportunity to be among the few selected for this MASTER pro-gramme. Finally, I am equally grateful to the Swedish Government for this wonderful opportunity to study within a peaceful and loving community.

6 V DEDICATION This thesis is dedicated to the Besong-Tiku and Baiyendang Family of Upper Banyang community of Manyu Division, South West province, in Cameroon. 1 1 Executive Summary Statement of purpose This BUSINESS plan has been developed to obtain a start up capital for the operations of BEFCO TRADING Limited- an import export and car TRADING company. It also serves as an operational out-line and plan for the first five years. The founding entrepreneurs intend to raise a start up capital of CFA100, 000,000francs. The founding entrepreneurs are able and willing to contribute CFA50, 000,000francs, CFA30, 000,000francs shall be allotted to 30 preference share holders and CFA20, and 000,000francs shall be raised through an investment loan from the bank.

7 Each of the entrepreneurs shall invest CFA10, 000,000francs but the CEO shall invest an additional CFA10, 000,000francs to make up for the amount to be raised by the entrepreneurial team. The BUSINESS plan uses the following exchange: CFA 675francs =1 Euro = 10 SEK for clarity and sim-plicity of conversion. The problem and solution In Cameroon, the existing car dealing companies are apparently doing great but are located mainly in the French speaking provinces of Douala, Yaound and Garoua. Evident from the fact that there are presently about 17 companies selling used and new cars in Cameroon with no one located in the two English speaking provinces of Cameroon indicates there is a problem. This problem is that all these companies are located in the originally French speaking provinces of Cameroon leaving those in the English speaking provinces underserved.

8 BEFCO TRADING Ltd is a result of the observation of trends, intuition and chance thanks to the favourable circumstances surrounding the entrepreneurs. This favourable circumstance has re-sulted to the availability of a network and exposure to a market aimed at solving this problem through the creation of BEFCO TRADING Ltd in line with the reasoning of Barringer and Ireland (2006). BEFCO TRADING Ltd is built on the founders recognition of this opportunity gap - A gap between what is currently on the market and the possibility for a new or significantly im-proved product, service, or BUSINESS that results from emerging trends (Timmons and Spinelli, 2003). BEFCO TRADING ltd will be the only used car Company located in the South-West and North-West provinces of Cameroon thereby serving the niche market at their door steps.

9 2 The BUSINESS Model Product BEFCO TRADING Ltd will sell second hands cars to the people of English speaking South-West and North-West province of Cameroon. The cars shall be of 5 brands among those available in the second hand car market of Sweden. Cars sold shall not be those made from 1990 and above and should be in good condition at the time of sales. The purchase price of the cars shall range from CFA337, 500francs CFA337, 500francs CFA337, 500francs CFA337, 500francs CFA CFA CFA CFA 1,687,500francs1,687,500francs1,687,500f rancs1,687,500francs fromfromfromfrom start that is an average purchase cost of 1,012,500francs.

10 1,012,500francs. 1,012,500francs. 1,012,500francs. This range could increase later depending on the demand. BEFCO TRADING Ltd shall not supply all the cars available in the Swedish market to its customers rather it shall sell only cars of the five following brands: Nissan, Renault, Ford, Mazda and Volkswagen. Target Market and Customers. The BEFCO TRADING Ltd shall operate two branches in the first five years. One shall be in Buea covering Southwest province and the other one shall be in Bamenda, to cover the North West province of Cameroon. The target market is the south west and North West province of Camer-oon. These targeted customers are: Newly employed workers who have been granted car loans; Owners of cocoa farms and palm plantations; BUSINESS owners who want a car for status and rec-ognition; Taxi BUSINESS owners who want to increase their number of cars; Officers who want to buy cars for their wives; Companies, Common Initiative Groups ( ) and Non Governmen-tal Organizations ( ) who need a car(s) to help in carrying out their activities in a better manner, especially for inspection and control.