Do you need help starting a diesel supply company? If YES, here is a sample diesel distribution business plan template.
Trading in fuel, whichever kind you decide to pick as trade will always be lucrative as a business, this is because there is always a demand for one purpose or the other and this demand is what makes it a good business to venture into because there is certainty in its success.
First, to begin this business you need a very comprehensive business plan that makes allowance for functional publicity which will cut across all prospective clients even before you open or start your business officially, this is to help you build a chain of clients.
I always say that the best means to get clients is by getting in touch with people on your phone list that will need the service/commodity that you render or have, tell them about the business you just started and how you are hoping that they would be your first customers.
DIESEL DISTRIBUTION & SUPPLY BUSINESS PLAN GUIDE
Diesel is an essential commodity and is at the top of the oil and gas sector in terms of usage and it also has the biggest share in the industry in the world today, this is why it is a key player in the automobile industry.
This is one industry that generates a lot of money daily through distribution and marketing. Although a lot of people venture into this business daily, there is still room for more diesel suppliers because the human need for it increases daily.
READ: About Fuel Pricing Software
Just like any business, you need money to begin, but this business is quite capital intensive, it is a business that requires that you have physical cash and also one where your turnover is your capacity.
As a supplier in this business in the UAE and the Middle East, various entry points are available but this is greatly determined by the capital you have at hand.
An idea of a sector of the diesel business you could venture into is getting involved in a door to door diesel business.
This business requires that you have a dispensing truck which is quite expensive to either buy or even rent, you dispense diesel to people at their homes, offices, etc.
You will also need to also get a meter truck which will help you to count the volume of what to dispense and enable you to give accurate and quality services to your customer. This truck will also help carry products that you buy from the depot. The only problem with this is the start-up cost implication.
That is why I mentioned earlier that this sector is capital intensive.
In a situation where you do not have a huge capital, you could still go into the diesel business in Abuja and other industrialized areas of Nigeria, and this I think is an upside and can be used as such.
An example of how this can work is, you can decide to play in the industry without money, all you have to do is become an independent supplier, and you can run your business by going to companies and organizations that need diesel.
Then contact those who have the truck or those who already supply diesel and also negotiate with them on how much they intend to sell and then you can create your client list and prospective customers.
You build up your business by engaging in intense marketing of the product to companies and individuals that need diesel and you could also make use of the list that you have created to achieve effective results.
In every business venture, it is mandatory to have a target market to help your business grow. The diesel business is not left out, and you need to have a line of customers who you know would be good customers.
You should focus mainly on schools, churches, mosques, hospitals, etc. dwelling mainly on places where there is high use of diesel and you’re sure to get paid on delivery or where you know your money will not be held by your clients.
(This is not only for those who do not have a huge capital to start a diesel business.)
But if you really want to start big and have huge capital then your workload is reduced and your profits will be increased a great deal.
On the decision to go into the diesel wholesale business in South Africa and other African countries, you can decide to check out the bio-diesel opportunities to help you understand and weigh your options to know if you would be able to go on this business.
Diesel happens to be an eligible fuel and the government has helped by creating a reduction on tax programs hence you stand to benefit a lot. A license from the environmental agencies is not necessary because diesel does not have any chemical components that could cause a human hazard.
Here is a sample business plan for starting a diesel distribution company.
DIESEL SUPPLY BUSINESS PLAN EXAMPLE
We have provided a fictional diesel supply business plan to enable you easily follow the steps as revealed here.
As always, we will never stop encouraging you to do the needful. You need to get as much information on your intended fuel wholesale business as you can.
This increases your chance of success. It also enables you to include the right data in your plan.
Automotive Energy is a diesel supply business that seeks to serve the Los Angeles area.
An increasing number of Americans are moving to big cities and California is one such destination. This trend has created a rising demand for fossil fuels, especially diesel.
We have identified this opportunity and are prepared to fully participate by making diesel products conveniently available to consumers.
Our short term target is to focus on spreading our diesel supply services to more end-users across Los Angeles. In the long term (within a year period), we plan on becoming a major supplier of diesel products in the state of California.
- Products and Services
As the name implies, our business will mostly include diesel supply. However, we have a plan to include gasoline products also known as petroleum. However, implementing this plan depends on how attractive this area of diesel depot business is in 4 years. In addition to diesel supply, our services will include the servicing of diesel engines.
To implement this part of our business is a team of dedicated technicians who have been recruited. These experienced hands were laid off after the economic recession hit many companies hard. Their many years of experience will count in providing top quality servicing for heavy-duty engines.
- Vision Statement
Automotive Energy is being set up to become a highly competitive and well-run business entity. While pursuing excellence, we are determined to become a major player in the diesel supply industry.
We aim to be among the top 10 diesel supply businesses and franchises in California.
- Mission Statement
We have a mission to create a business model that satisfies the diesel needs of consumers as well as increase sales through aggressive marketing activities. In doing this, we will be building a brand known for efficiency and excellent customer relationship.
- Start-up Funding
Sufficiently funding our diesel distribution venture is crucial to achieving our objectives. The founders of this company Derek Joy and Cathy Myers have saved up a significant part of the required amount. We need start-up capital of $1,200,000.00. Out of this amount, the owners have been able to realize the sum of $700,000.00.
The balance of $500,000.00 will be raised by applying for bank credit from reputable banks. The owners themselves are customers of these banks. You need to get this section right if you plan to write a business proposal for a diesel supply venture.
- SWOT Analysis
The profitability and growth of our diesel supply business will depend on having an understanding of our areas of advantage as well as weaknesses.
Because of this, we have conducted a strength, weakness, opportunity, and threat analysis of our business. The results have been impressive and reveal the following;
We are well adapted to perform excellently well in the diesel supply industry. This is because our founders and our hired staff have played key roles in the growth of the industry.
The founders have handled managerial roles of top diesel supply businesses in California and New York. This gives them an edge on how to run this business.
The size of our start-up is small. We may not be able to handle all major demands for diesel supply to corporate clients. This puts us at a disadvantage and reduces our level of competitiveness.
However, all hopes are not lost as we will eventually attain such levels by providing excellent diesel supply services to clients within our capacity.
The opportunities are enormous. The economic activities in Los Angeles and California as a whole are driven by diesel. We are presented with tremendous opportunities to break into the market.
Again, the expertise possessed by members of our team means that we can go to the right places and get the right clients.
The diesel supply business is controlled by the forces of demand and supply. In the event of an oil glut, it influences a crash in oil prices.
Therefore, an oversupply of diesel products poses a threat to our business. A financial meltdown will also affect us adversely. This is because credit will be unavailable for businesses like ours.
This stunts growth and brings the whole business to a stand-still.
- Competitive Advantage
In addition to diesel supply, our heavy-duty machine servicing gives us an edge over many similar businesses.
We take the welfare of our staff seriously. This is why we have ensured they are provided with a work-friendly environment in addition to bonus packages and attractive remunerations. Why are we doing this? We do this because a well-motivated staff will treat our customers better.
The business benefits in the long run as a growing number of clients get more comfortable with patronizing our business.
- Sales Projection
We sought to find out our sales and profit potentials. This was achieved by undertaking a study of the market using available data on supply and demand as well as the retail price per liter.
The results were impressive and revealed the following;
- First Financial Year $400,000.00
- Second Financial Year $600,000.00
- Third Financial Year $900,000.00
- Sales and Marketing Strategies
Our sales and marketing activities will be coordinated by our marketing department. This comprises of people with a thorough understanding of how the diesel supply industry works.
Some of the strategies to be used include entering into agreements with transport and haulage companies. We will offer our products to them at better deals than what they get.
We will make use of our wide contacts within the fuel distribution business sector to build on existing clients. As mentioned earlier, we have a formidable team that has been influential in the business.
By bringing their expertise and experience to bear, our business will be better for it.
There you have it! This diesel distribution business plan sample has laid down some of the most important aspects of a plan that shouldn’t be ignored.
With the knowledge obtained from your feasibility studies, you can use this to write a strong plan that will enhance the success of your business.