1.0 Executive Summary
The purpose of this business plan is to raise $350,000 for the development of a trucking and transportation company while showcasing the expected financial results and operations over the next three years. Matt’s Long Haul, Inc. (“the Company”) is a Houston, Texas based corporation that will provide long and short haul transportation services for its clients regionally and nationally. The Company was founded by Matthew Deutsch.
1.1 The Services
The Company will generate substantial revenues from the ongoing transportation of merchandise on behalf of retailers, wholesalers, and distributors. At the onset of operations, Matt’s Long Haul, Inc. intends to directly acquire three trucks with the capital sought in this document. The Company anticipates that each vehicle will travel 12,000 miles per month. Furthermore, the business expects that it will receive fees of $2.50 per mile.
At this time, Management is sourcing the trucks that it will purchase in order to provide services to its customer base. The business will also develop strong relationships with freight brokerages to ensure that the business is able to operate at 100% capacity at all times.
The third section of the business plan will further describe the services offered by the Matt’s Long Haul.
1.2 Financing
Mr. Deutsch is seeking to acquire $350,000 via a bank loan. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a 10 year loan with a 5% fixed interest rate. The financing will be used for the following:
• Acquisition of three trucks
• Location development
• Furniture, fixtures, and equipment purchases
• General working capital
Mr. Deutsch will contribute $50,000 to the venture. In the future, the Company would be an excellent candidate for a working capital line of credit or business expansion loan given the large tangible asset base and highly predictable streams of revenue generated. However, this business plan assumes that no further capital will be used during the first five years of operation and that all growth will be financed with the retained earnings of the business.
1.3 Mission Statement
Matt’s Long Haul’s mission is to become the recognized leader in its targeted market for long and short haul trucking and transportation services.
1.4 Management Team
The Company was founded by Matthew Deutsch. Mr. Deutsch has more than 10 years of experience in the transportation industry. Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations.
1.5 Expansion Plan
The Founder expects that the business will aggressively expand during the first five years of operation. Mr. Deutsch intends to implement marketing campaigns that will effectively target businesses while concurrently acquiring additional trucks/vehicles for transportation services.
1.6 Revenue Forecasts
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Matt’s Long Haul, Inc. The Company is registered as a corporation in the State of Texas.
2.2 Required Funds
At this time, the Matt’s Long Haul requires $350,000 of debt funds. Below is a breakdown of how these funds will be used:
2.3 Investor Equity
Mr. Deutsch is not seeking an investment from a third party at this time.
2.4 Management Equity
Matthew Deutsch owns 100% of the Matt’s Long Haul, Inc.
2.5 Exit Strategy
If the business is very successful, Mr. Deutsch may seek to sell the business to a third party for a significant earnings multiple. Most likely, the Company will hire a qualified business broker to sell the business on behalf of the Matt’s Long Haul.
Based on historical data, the business could fetch a sales premium of up to three times earnings. It should be noted that Mr. Deutsch intends to operate this business for a significant period of time, and a potential exit strategy would not be executed for at least five to seven years.
3.0 Operations
As stated in the executive summary, the Company will operate with six trucks at the start of business operations. The business will be able to transportation merchandise throughout the entirety of the United States. In order to ensure that full capacity is reached quickly, the Company will partner with freight brokerages that will call upon Matt’s Long Haul, Inc. in order to have specific orders fulfilled. Mr. Deutsch anticipates that the business will reach profitability quickly given the enormous demand for freight transportation at this time (which will be further discussed in the next section of the business plan).
In regards to drivers, the Company will generally directly hire drivers to work for the business. Approximately 15% of the Company’s workforce will be independently contracted, which has been factored into the business’ cost of services.
Moving forward, the Company intends to acquire one new truck in each year of operation. The business will use its retained earnings to acquire these vehicles.
4.0 Overview of the Organization
4.1 Registered Name
Matt’s Long Haul Inc. The business is registered as a for profit corporation in the State of Texas.
4.2 Commencement of Operations
The Company will launch full scale operations in 2025.
4.3 Mission Statement
Matt’s Long Haul’s mission is to provide timely and cost-effective logistics services for its clients throughout Texas and the United States.
4.4 Vision Statement
The Founder of the Company expects to build a business that will achieve $2.7 million of revenue by the fifth year of operations.
4.5 Organizational Objectives
• Maintain strong relationships with freight brokerages that will route transportation orders to the business on an ongoing basis.
• Develop a moderate scale online presence to foster dedicated lane relationships with companies in Houston.
• Hire qualified drivers to operate the Company’s fleet.
• Maintain relationships with truck driving schools to reduce recruitment costs.
• Acquire a new truck for the Company’s fleet in each operating year.
• Integrate the latest in GPS technology so that the Company can properly monitor all activities.
• Acquire electric trucks once it is economically viable to do so.
• Develop Matt’s Long Haul as a wealth creating enterprise for Matthew Deutsch.
• Provide substantial financial incentives to staff members that further the operations of the business alongside Management.
• Potentially expand the Company’s operations to include hazardous materials and refrigerated services to further increase revenue.
5.0 Strategic and Market Analysis
5.1 Economic Outlook
This section of the analysis will detail the economic climate, the transportation industry, the customer profile, and the competition that the business will face as it progresses through its business operations.
Currently, the economic climate in the United States is strong. The issues a result of the pandemic have ended. Interest rates are now declining as prices have returned to more normalized levels.
Any issues with the economy will not impact the Company’s ability to generate revenue. As more people are working from home, the demand for delivery of merchandise has increased considerably. Additionally, the Company has highly controllable operating costs, which will further contribute to the ongoing stability of the business. It should be noted that even when interest rates and inflation were at substantial levels, the demand for long haul transportation remained strong,
5.2 Industry Analysis
Fright transportation is one of the country’s highest gross industries. Given that the United States has a large landmass and highly developed interstate infrastructure, transportation via truck is the most economically viable way of transporting merchandise. Each year, nearly $1 trillion is spent on freight transportation and logistics. The industry employs nearly 7.8 million people.
Over the next twenty years, it is expected that there will be a number of changes that face the industry. Foremost, over the next ten years, many more large scale trucks and delivery vehicles will operate on electric motors rather than combustion engines. This is expected to greatly improve the gross margins of trucking companies given that there will be far less volatility in regard to fuel prices (which fluctuate on a number of factors including demand and political stability within oil producing nations).
5.3 Customer Profile
Matt’s Long Haul, given its planned operating infrastructure, will be able to provide services to any company that requires transportation of merchandise throughout the country. As discussed earlier, the business intends to work closely with freight brokerages, retailers, wholesalers, and product distributors. The Company will also be able to provide its services to individuals that are relocating on a local, regional, or long distance basis. The business anticipates that approximately 10% of its customers will be individuals that are in need of these services.
5.4 Competition
The ongoing competitive issues that the Company will face are moderate. Given the massive demand for trucking and transportation services in the United States, the Company is in strong position to offer its services on both a short haul and long haul basis. Additionally, the Company intends to retain a significant competitive advantage by maintaining a low cost operating and overhead infrastructure. This will allow Matt’s Long Haul, Inc. to remain profitable and cash flow positive at all times despite any volatility that occurs with the pricing of diesel fuels.
6.0 Key Strategic Issues
6.1 Sustainable Operations
The Company will be able to maintain successful business operations because of the following:
• Low operating costs will allow for ongoing expansion of the Company’s fleet.
• Strong demand for national level transportation services.
• The Company will be able to effectively recruit drivers from regional truck driving schools.
• A motivated Founder, Matthew Deutsch, that has extensive experience in the logistics and trucking industry.
• The Company is highly scalable, and Management can easily acquire additional capital as needed to further expand growth.
• The business intends to acquire electric vehicles, which will reduce operational costs (this will occur once it is economically viable).
6.2 Basis for Growth
Matt’s Long Haul Inc. will grow through four main avenues:
• Acquire additional trucks for the Company’s fleet.
• Expand operations to include hazardous materials and refrigerated freight.
• Expand operations to include other types of logistics services.
• Potential acquisition of additional rounds of capital to further expand operations.
7.0 Marketing Plan
Matt’s Long Haul intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of the Matt’s Long Haul.
7.1 Marketing Objectives
• Develop an online presence by developing a website and placing the Company’s name and contact information with online directories.
• Establish relationships with freight brokerages within the targeted market.
• Implement a localized marketing campaign that targets individuals that are moving to a different residence.
7.2 Revenue Overview
7.3 Revenue Assumptions
Year 1
• The Company will commence operations with three transportation vehicles.
• Revenues will reach $1.08 million.
Year 2
• During this time, the Company will focus on creating dedicated lane relationships.
• A fourth truck will be acquired.
• Revenues will reach $1.45 million.
Years 3 to 5
• By the fifth year of operation, the Company will have seven trucks in operation.
• Revenues will exceed $2.7 million.
• At this time, the Company will further expand its operations by integrating new types of transportation services (with a focus on refrigerated freight).
7.4 Marketing Strategies
The Company will use a number of marketing strategies in order to ensure that its operational capacity remains at near 100% at all times. Foremost, Management has already begun to develop ongoing relationships with freight brokerages throughout Texas and in surrounding area markets. These brokerages have been made aware of the Company’s anticipated operational capacity. Mr. Deutsch fully anticipates that the business will receive substantial transportation orders from these entities once the vehicles have been acquired.
Mr. Deutsch will develop ongoing relationships with regional retailing chains, product wholesalers, and distributors. These operations are important as the Company will not incur broker fees.
Matt’s Long Haul, Inc. will also maintain an expansive online presence. Prior to launching revenue generating operations, the Company will have a web development firm create a state-of-the-art platform that showcases the services offered by the business. This website will be mobile friendly, and heavily search engine optimized. The SEO component of marketing operations will ensure that the website appears frequently when searches for regional trucking/transportation service providers are conducted.
The Company, to a more moderate extent, will maintain a presence on social media (with a focus on Facebook and LinkedIn). The business’ social media pages will be geared towards individuals that need specialized freight transportation services.
The business will also maintain strong relationships with real estate agents and brokerages throughout the Houston market. As the Company will provide transportation services to individuals that are relocating, Mr. Deutsch sees a substantial opportunity to foster these relationships with real estate professionals.
8.0 Organizational Plan and Personnel Summary
8.1 Corporate Organization
8.2 Organizational Budget
9.0 Financial Plan
9.1 Underlying Assumptions
The Company has based its proforma financial statements on the following:
• Matt’s Long Haul will have an annual revenue growth rate of 16% per year.
• The Owner will acquire $350,000 of debt funds to develop the business.
• The loan will have a 10 year term with a 5% interest rate.
9.2 Sensitivity Analysis
The Company’s revenues are sensitive to many external factors. Should the cost of oil increase significantly, Management fully expects that its bottom line income will decrease. However, the Company has priced its services so that increases in the price of oil will not severely impact the Company’s ability to operate both profitably and cash flow positive. In the event of a dramatic increase in price, Management will seek to increase the price of its freight Matt’s Long Hauls to reflect the higher transportation costs.
9.3 Access to Capital
Given the highly predictable nature of the Company’s revenues, the business can easily secure additional capital to further its operations. The major underlying assumption in this document is that future vehicle acquisitions will be acquired with retained earnings. However, the Company is a strong candidate for busniess expansion loans or lease financing on an as needed basis. As interest rates continue to decline, Management may use financing if the cost of capital is reasonable.
9.4 Source of Funds
9.5 Profit and Loss Statement
9.6 Common Size Income Statement
9.7 Cash Flow Analysis
9.8 Balance Sheet
9.9 Breakeven Analysis
9.10 Business Ratios
Appendix A – SWOT Analysis
Strengths
• Economically insulated business as certain businesses are going to continue to need ongoing transportation of merchandise throughout the United States.
• High gross margins from ongoing transportation services.
• Recurring streams of revenue on a monthly basis via established accounts.
• The ability to partner with freight brokerages in order to ensure 100% use of trucks at all times.
• A Owner/CEO (Matthew Deutsch) that has extensive experience in the transportation and logistics management industry.
• Very strong demand for transportation services given that more people are remaining at home for work and are making significant online purchases.
Weaknesses
• Many regulatory and compliance issues.
• Profitability may fluctuate as a function of energy prices.
Opportunities
• Expansion of the business to maintain several staff and independently-contracted drivers.
• Development of additional locations in economically viable markets throughout the United States.
• Continued acquisition of additional vehicles for the Company’s fleet.
Threats
• A recurrence of inflation could cause operating costs to increase.
• Changes in regulations could impact the way that the Company conducts business (limited risk at this time).
Appendix B – Risk Analysis
Development Risk – Low
At this time, the Company’s primary development comes from sourcing the necessary capital discussed in this business plan. Management has already begun to source freight brokerages that will provide ongoing transportation orders while concurrently enrolling among numerous load boards.
Financing Risk – Low
Matt’s Long Haul will acquire $350,000 to launch operations. The risks related to this financing are low as nearly all capital will be used for the acquisition of trucks. As discussed earlier, the Company can easily acquire additional capital as needed to acquire additional freight hauling vehicles and trailers.
Marketing Risk – Very Low
The Company will require very little marketing to acquire transportation orders. This is not a consumer facing business. The business will continue to use load boards and freight brokerages while the busniess develops dedicated lane relationships.
Management Risk – Low/Moderate
The Company’s Founder, Matthew Deutsch, is a highly experienced logistics professional that has extensive experience in the field of freight transportation. He will be able to bring the operations of Matt’s Long Haul to profitability.
Valuation Risk – Low
The valuation risk is offset by:
• Immense national level demand for cost effective logistics solutions.
• Low operating costs will provide the business with substantial economic stability.
• The Company can scale its operations through the acquisition of additional trucks.
Exit Risk – Moderate
There is a great demand for established freight transportation companies. In the event that Management wishes to divest the business, a qualified business broker will be hired. The business can have a valuation of up to three times the previous year’s earnings.