Oakridge Esso Business Plan

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York University *

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PERS 2800

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Business

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Feb 20, 2024

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docx

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Uploaded by ProfessorInternet7955

Oakfield Service Station Corp. BUSINESS PLAN ANIL MALL

Oakfield Service Station Corp. Table of Contents 1.0 Executive Summary ..................................................................................................... 2 1.1 The Services .............................................................................................................. 3 1.2 Financing .................................................................................................................. 3 1.3 Mission Statement .................................................................................................... 3 1.4 Management Team .................................................................................................. 3 1.5 Sales Forecasts ......................................................................................................... 4 1.6 Expansion Plan ......................................................................................................... 4 2.0 Company and Financing Summary ........................................................................... 4 2.1 Registered Name and Corporate Structure .......................................................... 5 2.2 Required Funds ........................................................................................................ 5 2.3 Investor Equity ......................................................................................................... 5 2.4 Management Equity ................................................................................................ 6 3.0 Products and Services .................................................................................................. 6 3.1 Gasoline Sales ........................................................................................................... 7 3.2 Food, Beverage, Merchandise Sales ....................................................................... 7 3.3 Lottery Ticket Sales ................................................................................................. 7 4.0 Strategic and Market Analysis ................................................................................... 7 4.1 Economic Outlook ................................................................................................... 8 4.2 Industry Analysis ..................................................................................................... 8 4.3 Customer Profile ...................................................................................................... 9 4.4 Competition ............................................................................................................ 10 5.0 Marketing Plan .......................................................................................................... 12 5.1 Marketing Objectives ............................................................................................ 12 5.2 Marketing Strategies ............................................................................................. 12 5.3 Pricing ..................................................................................................................... 12 6.1 Organizational Plan and Personnel Summary ........................................................ 14 6.2 Organizational Budget .......................................................................................... 14 6.3 Management Biographies ..................................................................................... 15 7.0 Financial Plan ............................................................................................................. 16 7.1 Underlying Assumptions ....................................................................................... 16 7.2 Sensitivity Analysis ................................................................................................ 16 7.3 Source of Funds ...................................................................................................... 16 7.5 Profit and Loss Statements ................................................................................... 17 7.6 Cash Flow Analysis ................................................................................................ 18 7.8 Breakeven Analysis ................................................................................................ 20 Three Year Profit and Loss Statement .......................................................................... 21 1.0 Executive Summary 1

Oakfield Service Station Corp. The purpose of this business plan is to raise $2,812,500 in financing for the development of a gas station and convenience store while showcasing the expected financials and operations over the next three years. The following business plan will highlight all the different aspects of completing the national branded service station under the Esso brand. It will be created to identify all the potential strengths, weaknesses, opportunities, and threats . One ultimately being to delve into the regulatory constraints, strategic analysis, marketing advantages and ultimately the financial feasibility. Located in the Southwest part of the city in one of the mature residential communities. Oakfield Service Station Corp. (OSSC) is perfectly positioned to add value to the neighborhood and capitalize on the lack of supply currently in the SW. The Convenience store is being designed to maximize space and offer a wide plethora of products to its customers. Oakfield service station will be serviced by one of Canada’s largest oil companies with multiple brand names under its management Parkland Corporation. Ensuring a consistent flow of gasoline and diesel in various octane levels. The gas station business is highly competitive and as such location, convenience, and service plays a predominant role in the project’s success. The proposed OSSC is situated along an extremely busy arterial thoroughfare that consists of slow to moderate rate of traffic speed and consistent flow of traffic through the day. OSSC site is located on a busy T Intersection across from a school. The OSSC site could easily be considered to be in the heart of the community of Oakfield. Through careful deliberation, sound research and statistical analysis. The OSSC is positioned for success by its premiere location, optimal traffic speed, massive developmental growth, demographic diversity and convenience factor. The main objective of this business plan is to assess the opportunity presented by this specific location, at this time with the current economic, social environmental and market conditions to warrant the required financial investment to bring this project into fruition. 1.1 The Services 2

Oakfield Service Station Corp. Through the Gas Station’s retail location (where most profits are realized), the store will provide an expansive variety of food, beverage products, packaged food goods, bottled beverages, and ancillary merchandise such as toiletries, automotive products, and other small life essentials. A vast majority of the revenues will be from the sale of gasoline products and diesel fuel. The third section of the business plan will further describe the services offered by the Gas Station. 1.2 Financing The borrower is seeking to raise $2,812,500 by way of a term loan over 25 years. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a 25-year with a 9% fixed interest rate. The financing will be used for the following:  Purchase of the existing Centex gas station land and building.  Re-development of the current gas station to re-brand to Esso fuel station and On the Run convenience store. Shareholders will contribute $940,000 to the venture and will receive a $450,000 forgivable loan from Parkland Corporation. Parkland Corporation is giving the loan based on projected earnings from gasoline sales. Estimating that the OSSC location will sell at minimum 2.5million litres of Esso branded fuel in each year of its operation, the management team believes that this location can achieve a sales volume that is much higher than the minimum required due to the strategic location of this business. 1.3 Mission Statement The mission statement of the OSSC is to provide the consumer with a safe, convenient location to fuel up their vehicle with several grades of gasoline and diesel options. To provide coffee, confectionery items, snacks, and essentials to a wide spectrum of customers from all walks of life. 1.4 Management Team OSSC will be owned and operated by Anil Mall and Bakhtawar Dharani, Anil Mall and Bakhtawar will be accompanied by his Anil’s father Krishan Mall. Krishan has owned and operated various businesses throughout his lifetime from restaurants to carwashes and hotels. This wide spectrum of business knowledge has been passed down to his two sons Sunil and Anil who have operated the various businesses alongside their father. Krishan Mall will act as the chief financial officer using his business knowledge to ensure financials are up to date and all income and expenses are accounted for. Anil Mall, the 3

Oakfield Service Station Corp. proposed owner of OSSC will use his business knowledge, acumen, and business degree to own and operate the service station and convenience store. Acting as the general manager of the privately held corporation. Anil’s wide spectrum of knowledge from accounting, inventory management, marketing, and organizational skills will ensure the success of OSSC and will permit all investors to receive compensation on schedule. 1.5 Sales Forecasts Anil Mall expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years. Proforma Profit and Loss (Yearly) Year 2024 2025 2026 Sales $6,337,500 $7,605,000 $9,886,500 Operating Costs $257,872 $298,748 $302,052 EBITDA $589,628 $718,252 $1,020,048 Taxes, Interest, and Depreciation $107,276 $115,836 $138,161 Net Profit $482,352 $602,416 $881,886 2023 2024 2025 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 $10,000,000 Sales, Operating Costs, and Profit Forecast Sales EBITDA Net Profit Year 1.6 Expansion Plan Anil Mall expects that the business will aggressively expand during the first three years of operation. Anil Mall intends to implement marketing campaigns with support from Parkland Corporation (Esso) that will effectively target individuals within the target market. 4

Oakfield Service Station Corp. 2.0 Company and Financing Summary 2.1 Registered Name and Corporate Structure Oakfield Service Station Corp. The Company is registered as a corporation in Calgary Alberta. 2.2 Required Funds $3,750,000 will be the total startup cost, but costs will be offset with a $450,000 forgivable loan from Parkland Corporation and $940,000 Owner Investment. Leaving $2,475,000 to be funded by long term bank financing and $450,000 to be funded by way of short term bank financing until the $450,000 from forgivable loan funds are received from Parkland Corporation. Below is a breakdown of how these funds will be used: TOTAL PROJECT COSTS Land and building acquisition $2,250,00 0 Additional improvements to site Bunn-O Matic Machine $9,933 DSL Frozen Drink machine $48,865 National Energy Equipment (dispensers) $186,000 Site work (E-Jay Petroleum services) $272,475 Site Work (Unicus General Contracting) $325,596 WashTech (Car wash) $190,125 Initial Inventory $250,000 miscellaneous (contingency for cost overruns) $217,000 Total Project cost $3,749,99 4 Contingency funds for cost overruns are set at a high level due to the possible foreign currency exchange rates and any cost overruns that may be incurred due to changes in pricing estimates provided by suppliers. 5

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