BUSINESS PLAN 'Operator of 3PL-Services' (with financial model)
Project Description
Project idea: startup of enterprise-operator of 3PL-services.
Project specificity: range of transport and logistics services, starting from transportation or shipping of cargo (goods) and ending with the delivery of processed and packaged cargo (goods) to end consumer. Complex of 3PL of enterprise includes: organization of shipping, maintaining of support documentation of cargo, accounting and tracking of cargo ant its stocks in warehouses, warehousing, processing of cargo as well as bringing of goods to the final consumer.
Project geography: Moscow and Moscow Region.
Consumers of project services: private Internet stores.
State of the market: at the current moment Russian market of transport and logistics services is fragmented highly. There are about 3.8 thsd companies operated in it, which offer the transport and forwarding services (the companies registered on the territory of the Russian Federation with their subsidiaries in regions), including 2.8 thsd carriers and 1 thsd forwarders (operators or agencies). In 2013 the volume of market of transport and logistics services in Russia was estimated at about 80 bln USD (excluding pipeline transport). The market is formed by independent transport and logistics companies as well as affiliated companies of large shippers.
Excerpts from Research
The main clients of the company will be private Internet stores operated on the territory of Moscow and Moscow Region.
So, the basic directions of provided complex will be:
1. Complex approach: the company implements the idea holistically – from the wish of Charterer to start up the Internet store to the delivery and transfer of goods to the Final Client.
2. Assisting in the choice of ready sites of the Internet stores, consultation on selection of the necessary tools for effective functioning, helping in sites development and promotion, etc.
3. Support in finding of producers and suppliers of goods according to the Charterer’s needs, negotiation with supplier, signing up the contracts for the supply of production, which is interesting for the Costumer (Russia, China, Turkey and European countries).
4. Implementation of process of goods purchase from suppliers according to the Charterer’s needs.
5. Responsibility for decision of all issues associated with goods delivery from producers and suppliers to the company’s warehouse.
6. Possibility of processing and storing of goods in the company’s warehouse.
7. Processing of applications for the shipment of goods, complectation and delivery of goods to the final Client according to the objective of our Charterer.
8. Organization of products delivery from Charterer to the final Client, obtaining and encashment of received funds for goods.
Expert estimation of outsourcing level of logistics function on the Russian market is confirmed by data of the market participations. 73% of interviewed market participants answered in the negative or were undecided to the question «Are you ready to transfer the part of logistics processes to outsource?» The more vivid contrast is observed by the answer to question «Are you ready to transfer all logistic functions to outsourcing?»: 68% of the interviewed answered in negative, 22% were undecided. Herewith only 10% of respondents are ready to transfer all logistics functions to outsourcing.
Concerning the segment of raw cargo transportation and segment of goods with high added value which are interesting for project author, these categories will develop differently.
The segment of goods with high added value, which characterizes the project company, has its own specificity.
Demand for the complex logistics services in segment of cargos with high added value is growing.
Such tendency is explained by the fact that volumes of consumption of goods with high added value is growing, but shippers of such cargo have shifted their attention to the services of transport companies renouncing of independent logistics.
Development of e-commerce is the main tendency under the influence of which the market changes the most strongly. It is not the exaggeration to say that the significant part of offline-retail goes online, and the logistics companies must offer the online-decisions, since for the last five years the overwhelming majority of the largest companies has provided oneself with own Internet projects.
For the last three years the transport and logistics market of Russia has been growing actively with the annual rate more than 19%, herewith the maximum growth rate was accounted for cargo forwarding. It is expected that the average annual growth rate of market of transport and logistics services will amount to 15% in the next 10 years.
Project idea: startup of enterprise-operator of 3PL-services.
Project specificity: range of transport and logistics services, starting from transportation or shipping of cargo (goods) and ending with the delivery of processed and packaged cargo (goods) to end consumer. Complex of 3PL of enterprise includes: organization of shipping, maintaining of support documentation of cargo, accounting and tracking of cargo ant its stocks in warehouses, warehousing, processing of cargo as well as bringing of goods to the final consumer.
Project geography: Moscow and Moscow Region.
Consumers of project services: private Internet stores.
State of the market: at the current moment Russian market of transport and logistics services is fragmented highly. There are about 3.8 thsd companies operated in it, which offer the transport and forwarding services (the companies registered on the territory of the Russian Federation with their subsidiaries in regions), including 2.8 thsd carriers and 1 thsd forwarders (operators or agencies). In 2013 the volume of market of transport and logistics services in Russia was estimated at about 80 bln USD (excluding pipeline transport). The market is formed by independent transport and logistics companies as well as affiliated companies of large shippers.
Excerpts from Research
The main clients of the company will be private Internet stores operated on the territory of Moscow and Moscow Region.
So, the basic directions of provided complex will be:
1. Complex approach: the company implements the idea holistically – from the wish of Charterer to start up the Internet store to the delivery and transfer of goods to the Final Client.
2. Assisting in the choice of ready sites of the Internet stores, consultation on selection of the necessary tools for effective functioning, helping in sites development and promotion, etc.
3. Support in finding of producers and suppliers of goods according to the Charterer’s needs, negotiation with supplier, signing up the contracts for the supply of production, which is interesting for the Costumer (Russia, China, Turkey and European countries).
4. Implementation of process of goods purchase from suppliers according to the Charterer’s needs.
5. Responsibility for decision of all issues associated with goods delivery from producers and suppliers to the company’s warehouse.
6. Possibility of processing and storing of goods in the company’s warehouse.
7. Processing of applications for the shipment of goods, complectation and delivery of goods to the final Client according to the objective of our Charterer.
8. Organization of products delivery from Charterer to the final Client, obtaining and encashment of received funds for goods.
Expert estimation of outsourcing level of logistics function on the Russian market is confirmed by data of the market participations. 73% of interviewed market participants answered in the negative or were undecided to the question «Are you ready to transfer the part of logistics processes to outsource?» The more vivid contrast is observed by the answer to question «Are you ready to transfer all logistic functions to outsourcing?»: 68% of the interviewed answered in negative, 22% were undecided. Herewith only 10% of respondents are ready to transfer all logistics functions to outsourcing.
Concerning the segment of raw cargo transportation and segment of goods with high added value which are interesting for project author, these categories will develop differently.
The segment of goods with high added value, which characterizes the project company, has its own specificity.
Demand for the complex logistics services in segment of cargos with high added value is growing.
Such tendency is explained by the fact that volumes of consumption of goods with high added value is growing, but shippers of such cargo have shifted their attention to the services of transport companies renouncing of independent logistics.
Development of e-commerce is the main tendency under the influence of which the market changes the most strongly. It is not the exaggeration to say that the significant part of offline-retail goes online, and the logistics companies must offer the online-decisions, since for the last five years the overwhelming majority of the largest companies has provided oneself with own Internet projects.
For the last three years the transport and logistics market of Russia has been growing actively with the annual rate more than 19%, herewith the maximum growth rate was accounted for cargo forwarding. It is expected that the average annual growth rate of market of transport and logistics services will amount to 15% in the next 10 years.
1.0. PROJECT DESCRIPTION
1.1.Project Concept
1.2. Essence 3PL-Services
2.0. MARKET ANALYSIS
2.1. Analysis of Market of Transport Logistics in Russia
2.1.1.Demand for Complex Logistics Services in Segment of Cargos with High Added Value (Not Raw Services)
2.1.2. Online-Decisions in Process of Transport Logistic Implementation
2.2. Projections and Prospects of Development of Russian Logistics Market
2.3. Analysis of Market of E-Commerce in Russia
3.0. PRODUCTION PLAN
3.1. Organization of Logistics Process in Enterprise Warehouse
3.2. Layout of Warehouse Space and Characteristic of the Main Storage Areas
3.2.1. Characteristic of the Main Storage Areas
3.2.2. Definitions of the Main Warehouse Parameters
3.3. Documenting of Enterprise Processes
4.0. OPERATIONAL PLAN
4.1. Core Project Staff
5.0. FINANCIAL PLAN
5.1. Plan of Project Implementation
5.2. Project Parameters (Assumption Used in Calculations)
5.3. Investment Cash Flow
5.3.1.Costs for Command, Payment for Labour
5.3.2. Investments into Organization of Warehouse Operating
5.4. Operational Investment Flow
5.4.1. Project Revenue (Total)
5.4.2. Total Categories of Project Costs
5.4.3. Project Profit Taxes
5.5. Total Cash Flow
5.5. Justification of Project Efficiency (Basic Financial Indicators)
6.0. COMPANY’S RISKS ESTIMATION
INFORMATION ABOUT THE «VTSCONSULTING» COMPANY
1.1.Project Concept
1.2. Essence 3PL-Services
2.0. MARKET ANALYSIS
2.1. Analysis of Market of Transport Logistics in Russia
2.1.1.Demand for Complex Logistics Services in Segment of Cargos with High Added Value (Not Raw Services)
2.1.2. Online-Decisions in Process of Transport Logistic Implementation
2.2. Projections and Prospects of Development of Russian Logistics Market
2.3. Analysis of Market of E-Commerce in Russia
3.0. PRODUCTION PLAN
3.1. Organization of Logistics Process in Enterprise Warehouse
3.2. Layout of Warehouse Space and Characteristic of the Main Storage Areas
3.2.1. Characteristic of the Main Storage Areas
3.2.2. Definitions of the Main Warehouse Parameters
3.3. Documenting of Enterprise Processes
4.0. OPERATIONAL PLAN
4.1. Core Project Staff
5.0. FINANCIAL PLAN
5.1. Plan of Project Implementation
5.2. Project Parameters (Assumption Used in Calculations)
5.3. Investment Cash Flow
5.3.1.Costs for Command, Payment for Labour
5.3.2. Investments into Organization of Warehouse Operating
5.4. Operational Investment Flow
5.4.1. Project Revenue (Total)
5.4.2. Total Categories of Project Costs
5.4.3. Project Profit Taxes
5.5. Total Cash Flow
5.5. Justification of Project Efficiency (Basic Financial Indicators)
6.0. COMPANY’S RISKS ESTIMATION
INFORMATION ABOUT THE «VTSCONSULTING» COMPANY
LIST OF FIGURES, TABLES AND DIAGRAMS
Diagram 1. Readiness of Russian Enterprises to Use Services of Outsourcing Logistics Companies
Diagram 2. Satisfaction of Market Participants with Quality of Provided Logistics Services
Diagram 3. Services of Transport Logistics Purchased by Market Participants at Present Time
Diagram 4. Readiness of Market Participants to Purchase the Certain Direction of Logistics Services in the Future
Diagram 5. Share of Companies’ Costs for Transport and Logistics Services, in % of Price of Manufactures Production
Diagram 6. Ratio of Goods Categories Purchased via Internet Store
Diagram 7. Ratio of Internet Stores by Categories
Diagram 8. Comparison of Goods Categories Turnover of Internet Stores
Diagram 9. Distribution of Orders Accepted by Internet Stores by Federal Districts of the Russian Federation (RF) and Federal Cities, Shares in %
Figure 1. Approximate Internal Location of Warehouse Elements
Table 1. Plan of Project Implementation
Table 2. Project Parameters (Assumption Used in Calculation), 2013-2014
Table 3. Project Parameters (Assumption Used in Calculation), 2019-2023
Table 4. Project Parameters (Assumption Used in Calculation), Areas and Cost
Table 5. Payment for Labor of Project Personnel, January 2014 – June 2014
Table 6. Payment for Labor of Project Personnel, July 2014 – December 2014
Table 7. Investments into Organization of Warehouse Operating, January 2014 – June 2014
Table 8. Investments into Organization of Warehouse Operating, July 2014 – December 2014
Table 9. Project Revenue (Total), January 2014 – June 2014
Table 10. Project Revenue (Total), July 2014 – December 2014
Table 11. Project Revenue (Total), January 2015 – June 2015
Table 12. Project Revenue (Total), July 2015 – December 2015
Table 13. Project Revenue (Total), January 2016 – June 2016
Table 14. Project Revenue (Total), July 2016 – December 2016
Table 15. Project Revenue (Total), January 2017 – June 2017
Table 16. Project Revenue (Total), July 2017 – December 2017
Table 17. Project Costs Categories
Table 18. Project Costs Categories (Continuation)
Table 19. Project Costs Categories (Continuation)
Table 20. Project Costs Categories (Continuation)
Table 21. Project Costs Categories (Continuation)
Table 22. Project Costs Categories (Continuation)
Table 23. Project Costs Categories (Continuation)
Table 24. Project Costs Categories (Continuation)
Table 25. Project Costs Categories (Continuation)
Table 26. Project Profit Taxes
Table 27. Project Profit Taxes (Continuation)
Table 28. Project Profit Taxes (Continuation)
Table 29. Project Profit Taxes (Continuation)
Table 30. Project Profit Taxes (Continuation)
Table 31. Project Profit Taxes (Continuation)
Table 32. Project Profit Taxes (Continuation)
Table 33. Project Profit Taxes (Continuation)
Table 34. Total Cash Flow
Table 35. Total Cash Flow (Continuation)
Table 36. Total Cash Flow (Continuation)
Table 37. Total Cash Flow (Continuation)
Table 38. Total Cash Flow (Continuation)
Table 39. Total Cash Flow (Continuation)
Table 40. Total Cash Flow (Continuation)
Table 41. Total Cash Flow (Continuation)
Table 42. Basic Financial Indicators of Project
Table 43. List of Probable Project Risks and Their Content
Table 44. Morphological Table of Logistics Risks of Enterprise
Diagram 1. Readiness of Russian Enterprises to Use Services of Outsourcing Logistics Companies
Diagram 2. Satisfaction of Market Participants with Quality of Provided Logistics Services
Diagram 3. Services of Transport Logistics Purchased by Market Participants at Present Time
Diagram 4. Readiness of Market Participants to Purchase the Certain Direction of Logistics Services in the Future
Diagram 5. Share of Companies’ Costs for Transport and Logistics Services, in % of Price of Manufactures Production
Diagram 6. Ratio of Goods Categories Purchased via Internet Store
Diagram 7. Ratio of Internet Stores by Categories
Diagram 8. Comparison of Goods Categories Turnover of Internet Stores
Diagram 9. Distribution of Orders Accepted by Internet Stores by Federal Districts of the Russian Federation (RF) and Federal Cities, Shares in %
Figure 1. Approximate Internal Location of Warehouse Elements
Table 1. Plan of Project Implementation
Table 2. Project Parameters (Assumption Used in Calculation), 2013-2014
Table 3. Project Parameters (Assumption Used in Calculation), 2019-2023
Table 4. Project Parameters (Assumption Used in Calculation), Areas and Cost
Table 5. Payment for Labor of Project Personnel, January 2014 – June 2014
Table 6. Payment for Labor of Project Personnel, July 2014 – December 2014
Table 7. Investments into Organization of Warehouse Operating, January 2014 – June 2014
Table 8. Investments into Organization of Warehouse Operating, July 2014 – December 2014
Table 9. Project Revenue (Total), January 2014 – June 2014
Table 10. Project Revenue (Total), July 2014 – December 2014
Table 11. Project Revenue (Total), January 2015 – June 2015
Table 12. Project Revenue (Total), July 2015 – December 2015
Table 13. Project Revenue (Total), January 2016 – June 2016
Table 14. Project Revenue (Total), July 2016 – December 2016
Table 15. Project Revenue (Total), January 2017 – June 2017
Table 16. Project Revenue (Total), July 2017 – December 2017
Table 17. Project Costs Categories
Table 18. Project Costs Categories (Continuation)
Table 19. Project Costs Categories (Continuation)
Table 20. Project Costs Categories (Continuation)
Table 21. Project Costs Categories (Continuation)
Table 22. Project Costs Categories (Continuation)
Table 23. Project Costs Categories (Continuation)
Table 24. Project Costs Categories (Continuation)
Table 25. Project Costs Categories (Continuation)
Table 26. Project Profit Taxes
Table 27. Project Profit Taxes (Continuation)
Table 28. Project Profit Taxes (Continuation)
Table 29. Project Profit Taxes (Continuation)
Table 30. Project Profit Taxes (Continuation)
Table 31. Project Profit Taxes (Continuation)
Table 32. Project Profit Taxes (Continuation)
Table 33. Project Profit Taxes (Continuation)
Table 34. Total Cash Flow
Table 35. Total Cash Flow (Continuation)
Table 36. Total Cash Flow (Continuation)
Table 37. Total Cash Flow (Continuation)
Table 38. Total Cash Flow (Continuation)
Table 39. Total Cash Flow (Continuation)
Table 40. Total Cash Flow (Continuation)
Table 41. Total Cash Flow (Continuation)
Table 42. Basic Financial Indicators of Project
Table 43. List of Probable Project Risks and Their Content
Table 44. Morphological Table of Logistics Risks of Enterprise
