Petrol Station Business Plan
Petrol Station Business Plan
Petrol Station Business Plan
BUSINESS LOGO:
EMAIL ADDRESS :
PRESENTED BY:
SUPERVISOR:
I declare that this is my own business plan, written out of my own capacity and ideas which
whatsoever has never been presented to The Kenya National Examination Council for the
award of any academic certificate. This will be though first time for it to be submitted.
Student name:
Sign ……………………………………………………….
Date ………………………………………………………
Supervisor name:
Sign ………………………………………………………………
Date………………………………………………………………
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ACKNOWLEDGEMENT
I would first like to thank The Almighty for enabling me to have the idea, strength and
guidance to complete my business plan.
I would also like to thank my supervisor for guiding me throughout my business plan.
I also give special thanks to my Family and Friends for being with me and encouraging me
throughout the process of completing my business plan.
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DEDICATION
I would like to dedicate this business plan my Father who took part in guiding me and
encouraged me as I was compiling my business plan.
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TABLE OF CONTENTS
DECLARATION.......................................................................................................................ii
ACKNOWLEDGEMENT........................................................................................................iii
DEDICATION..........................................................................................................................iv
EXECUTIVE SUMMARY....................................................................................................viii
1.0 BUSINESS DESCRIPTION.........................................................................................viii
2.0 MARKET PLAN..........................................................................................................viii
3.0 MANAGEMENT PLAN..............................................................................................viii
4.0 PRODUCTION PLAN...................................................................................................ix
5.0 FINANCIAL PLAN........................................................................................................ix
CHAPTER ONE......................................................................................................................10
1.0 BUSINESS DESCRIPTION..............................................................................................10
1.1 BUSINESS NAME........................................................................................................10
1.2 BUSINESS LOCATION AND ADDRESS...................................................................10
1.2.1BUSINESS ADDRESS services..................................................................................11
1.3 OWNERS PROFILE AND ADDRESS.........................................................................12
1.4 form OF OWNERSHIP..................................................................................................12
1.5 TYPE OF THE BUSINESS...........................................................................................12
1.6 PRODUCTS OR SERVICES........................................................................................12
1.7 INDUSTRY....................................................................................................................13
1.8 BUSINESS GOALS AND OBJECTIVES..................................................................13
1.8.1 SHORT TERM GOALS.........................................................................................13
1.8.2. MEDIUM TERM GOALS.....................................................................................14
1.8.3. LONG TERM GOALS..........................................................................................14
CHAPTER TWO.....................................................................................................................15
2.0 MARKETING PLAN......................................................................................................15
2.1 POTENTIAL CUSTOMERS......................................................................................15
2.2 MARKET SHARE.......................................................................................................15
2.3 COMPETITORS..........................................................................................................16
2.4 METHODS OF PROMOTION AND ADVERTISING...........................................17
2.4.1 ADVERTISEMENT...............................................................................................17
2.4.2 PROMOTION.........................................................................................................17
2.5 PRICING STRATEGY..................................................................................................17
2.6 SALES TACTICS..........................................................................................................18
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2.7DISTRIBUTION STRATEGY.......................................................................................18
CHAPTER THREE..................................................................................................................19
3.0 ORGANIZATIONAL /MANAGEMENT PLAN..........................................................19
3.1 ORGANISATION STRUCTURE.................................................................................19
3.3 OTHER BUSINESS PERSONNEL............................................................................20
3.4 RECRUITMENT, TRAINING AND PROMOTION RECRUITMENT...............20
3.4.1 RECRUITMENT..................................................................................................20
3.4.2 TRAINING............................................................................................................21
3.4.3 PROMOTION.......................................................................................................21
3.5 RENUMERATION AND INCENTIVES..................................................................21
3.6 LICENSES, PERMITS & BY-LAWS........................................................................21
CHAPTER Four.......................................................................................................................24
4.0 PRODUCTION PLAN...................................................................................................24
4.1 PRODUCTION FACILITIES........................................................................................24
4.2 PRODUCTION STRATEGY........................................................................................24
4.3 PRODUCTION PROCESS............................................................................................25
BUYING OF STOCK..............................................................................................................25
INSPECTION OF THE PRODUCTS......................................................................................25
STORAGE OF THE PRODUCTS...........................................................................................25
DISPLAYING OF PRODUCTS IN METAL CAGES............................................................26
ELLING TO CUSTOMERS....................................................................................................26
4.4 REGULATIONS AFFECTING PRODUCTION..............................................................28
BUSINESS PERMIT...............................................................................................................28
INSURANCE...........................................................................................................................28
HEALTH REGULATIONS.....................................................................................................28
Chapter five..............................................................................................................................29
5.0 FINANCIAL PLAN...........................................................................................................29
5.1 Pre-operational costs......................................................................................................29
5.2 estimation of working capital.........................................................................................29
5.3 pre-operational cash flow projection..............................................................................30
5.3.2 preparation of cash flow projection yearly..............................................................32
5.4 preparation of pro-forma income statement...................................................................33
5.4.1 preparation of pro-forma income statement presented monthly.............................33
5.4.2 preparation of pro-forma income statement presented yearly...................................1
5.5 preparation of pro-forma balance sheet............................................................................1
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5.5.1 pro-forma balance sheet as at start of the business...................................................1
5.5.2 pro-forma balance sheet............................................................................................1
5.6 calculation of break-even point........................................................................................2
5.7 calculation of profitability ratios......................................................................................2
5.7.1 percentage gross profit..............................................................................................2
5.7.2 return on equity.........................................................................................................2
5.8 working capital.................................................................................................................3
5.9 proposed capitalization.....................................................................................................3
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EXECUTIVE SUMMARY
The business name will be Tereki Petrol station. The main reason for choosing that name for
the business is because from the it shows the customers that the products of the business are
here for them. The name also enables one to have an idea of what the business
Our basic services and products offering to our highly esteemed customers as a standard
Petro station are retailing of petrololine (petrol), diesel and lubricants for motor vehicles. We
will make sure that we give our consumers nothing short of the very best. We will also run a
convenience store, car wash, vulcanizing services, wheel balancing services, wheel alignment
services and other related automobile repair services.
We are quite aware that in order to become the number one choice for automobile owners
who play the route where our petrol stations will be located, we must continue to make our
Petro station welcoming, easy to operate and that is exactly what we will do.
We are open to the use of latest technology in the petrol station industry. No doubt our
excellent customer service and the range of additional complementary services we offer will
position us to become one of the most preferred petrol stations in Kiambu.
As the business starts, it will be targeting the residents around its area of operation within a
radius of 10-15kms max. The potential customers will be the residents, hospitals that will
need petrol for their impatient and the hotels around the area of operations. The business will
have a market share of 7.5% when it starts operation. The owner intends to advertise the
business through placing stickers on the petrol cylinders. The products will be sold directly to
customers. This is to ensure that the owner can interact with the customers and know the
customers’ views and feeling about the products sold.
The business will have a management team and subordinate member with the right
qualifications that suits their roles around the business area. The team will comprise of a
manager, account officer, two security officer and a laborer. The business will recruit its
employees and afterward they will be trained to expand their knowledge and experience
around their area of work. Employees who perform well in their duties will be promoted as
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the business expands. The salaries and other privileges of the employees will also be
highlighted in this chapter.
The business will have operational facilities such as offices which will be highlighted in this
chapter. The business strategy which consists of the acquiring of facilities, market research,
stocking up of products, acquiring qualified personnel and selling of products will all be
explained into details in this chapter. The whole production strategy is also outlined in the
chapter. It also explains the regulation that may affect the business production.
The business finances are all outlined here from the pre-operational cost. The business will
have a starting capital of Shs.500000 acquired through personal savings. The projected cash
flow and the Proforma income statement are well outlined in this chapter. Then afterwards
the statement of financial position of the business and the breakeven point are well
highlighted together with the profitability ratios.
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CHAPTER ONE
The business name will be Tereki Petrol station. The main reason for choosing that name for
the business is because from the it shows the customers that the products of the business are
here for them. The name also enables one to have an idea of what the business
Our basic services and products offering to our highly esteemed customers as a standard
Petro station are retailing of petroleum (petrol), diesel and lubricants for motor vehicles. We
will make sure that we give our consumers nothing short of the very best. We will also run a
convenience store, car wash, vulcanizing services, wheel balancing services, wheel alignment
services and other related automobile repair services.
The business will be located at Thika shopping center on ground floor next to Jordan college.
The reasons for my business location are:
Availability of market
Availability of room for expansion
Good infrastructure
Availability of security
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A SKETCH MAP LEADING TO THE BUSINESS LOCATION
TEREKI
PETROL JORDAN COLLEGE
SERVICES
D
R
I
V
E
I
BIN AGIL N
Safaricom shop
CATERING
R
D
P.O BOX 17
KIAMBU
TELEPHONE 0710828603
EMAIL: terekipetrolservices@gmail.com
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1.3 OWNERS PROFILE AND ADDRESS
The owner of the business will be who is 20 years old and lives in Thika Kiambu
county. He is a student at THIKA TECHNICAL TRAINING INSTITUTE (TTTI) where he
is pursuing a diploma in
The business will be conducted as a sole proprietorship. This is because it has many benefits
some of them being:
The business will be registered under Energy Act regulations on December 14th 2020.
Tereki Petrol station is a fully registered and licensed standard Petrol station that is
positioned in the Petrol station industry in Kenya to maximize profits. Aside from the
point that we will be retailing petrololine and diesel, we will also engage in other
complimentary services that will help us maximize profits.
We have designed products and services that will not only help to meet the demands of the
people, but also to put good money in our pockets. These are the products and services that
will be made available to our customers;
Petrol ( premium )
Petrol
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Diesel
1.7 INDUSTRY
The business falls under the Petrol station industry. The energy industry is a big and
profitable industry as it has a wide range of market, for example petroleum energy is used in
our day-to-day activities and also industrial machineries and cars depend on if. Petroleum
energy has been a lucrative sector as it has grown rapidly over
Petroleum energy has been a lucrative sector as it has grown rapidly over the past decade
attracting many investors from different parts of the world
The industry has a bright future as renewable sources of energy in form of biofuels will be
available and commonly used across the world as it is an environmentally friendly fuel, thus
having a large market. For example, Bio LPG which is a renewable energy source, will be
preferred over LPG in years to come.
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In a years’ time the business should be able to depend on itself and have a website where
customers should be able to know the products sold by the business.
In 5-10 years’, time the owner should have two more Petrol station in the large Kiambu
county.
In 20-25 years’ the owner should be able to have a retail Petrol station, where he will buy
huge amounts of petrol products, store it in tanks and sell it to individuals that will use it for
domestic use as well as industries that require large quantities of petrol.
The business will fully depend on its capital which will only be acquired through personal
savings and a family fund raising. It should not acquire any loan as it might bring serious
consequences to the business if not paid in time.
As the business grows, it should have 5 employees who would be helping in around in
packing and removing the petrol cylinders in their steal cages. The business will gradually
expand its customer targets to the whole of the constituency and eventually to the whole of
Kiambu County. The business should also be able to adapt to the changes in the future
market.
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CHAPTER TWO
RESIDENTS
As the owner starts the business, it will be targeting the Thika residents within a radius of 10-
15kms max. As the business expands and the 2 more retail shops for petrol begin operation,
both Kenol constituency residents will be targeted.
SCHOOLS
The business will also be supplying petrol to the hotels near its area of operations.
The schools will also be regular customers as they are constantly using the petrol to run their
standby generators.
HOSPITALS
Hospitals around the business will be in need of petrol. The petrol will be used to run standby
generators in case of electricity shortage or failure.
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ur+Table1[[#Headers],[Market share]]
7.50%
22.50%
42.50%
27.50%
2.3 COMPETITORS
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Customer care Poor customer Charges on Does not deliver Free delivery of
relations delivery to products to products to
customers and customers. customers and
helps first time helps first time
users with users with
connecting the connecting the
petrol regulators petrol regulators
and petrol pipes and petrol pipes
to the petrol to the petrol.
Operations Opens from Opened 24hrs a Opens from Opens from
6am – 6pm day 6am – 6pm 6am – 10 pm
Location Along Chai Outside Thika Opposite Kithimani
Road town. Kithimani shopping centre.
heights.
2.4.1 ADVERTISEMENT
The business owner intends to use direct approach method since he will get the chance to
understand the customers and what they need. The business owner also intends to advertise
the business by placing stickers on the petrol cylinders and by giving out brochures to
customers. Through the customer calling the owner for services and addition of more
customers coming to his business the owner will be able to know people are listening his
advertisement.
2.4.2 PROMOTION
The business owner intends to deliver the petrol cylinder for free to customers within a radius
of 10-15 km maximum when the business starts as the business blows customers will be
given 25% discount on the total price whenever they buy a petrol cylinder and a petrol
regulator
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PRODUCT COST(KSH)
1 Liter (petrol) 130
5 litres 600
10 litres 1200
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2.6 SALES TACTICS
In order to conduct a smooth work flow of the business the owner will be deploy at direct
flow of sales tactics. direct selling will capture more attention of customers targeted by the
business. Direct selling will also create awareness to the people outside about the product that
the business will be selling .
2.7DISTRIBUTION STRATEGY
The owner intends to sell the product through direct selling .this because the owner sees a
major benefit of interacting to the customers and also getting to know the customer free about
the product.
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CHAPTER THREE
Manager
Accounting Sales
Officer Person
Security
Labourer
Officer
3.2.1 MANAGER
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FUNCTIONS OF A MANAGER
Coordinating. Ensuring that the employees are performing their duties in the right
way and there is a humble working environment around the business area.
Planning. Come up with a plan on how to maximize profits and make future
adjustments in the business
Staffing. The manager will bring in well skilled personnel that will ensure steady
management of the business.
Controlling. The manager will control the business alone and take necessary measures
where need be.
MANAGER REMUNERATION
The monthly salary paid to the business will be 20,000 and a monthly allowance of Ksh 5000.
A total of Ksh 25,000.
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can easily find skilled personnel in the specific area needed. The business will then interview
the shortlisted candidates and assess them to see if there are any sufficiently skilled and
qualified personnel to fill and perform existing job vacancies.
3.4.2 TRAINING
The business will conduct a job training for all the employees; job rotation which involves
movement of trainees from one job to another to gain knowledge and experience. This is to
enable the employee to acquire new skills, increase their contribution to the business and also
build their self-esteem.
3.4.3 PROMOTION
The business is to reward and promote the employees who perform well in their duties and
responsibilities assigned to them. Promotion of employees will be through increasing their
allowances.
Apart from salary, the business will give extra benefits to its employees such as
Free lunch
End of year barbeque
Mid-year team building
Transport allowances
3.6 LICENSES, PERMITS & BY-LAWS
LICENSES
The license is to be applied in the head office of Kiambu County Council. The certificate is to
indicate that the business premises has been inspected and approved for operation.
INSURANCE
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Insurance protects the business from suffering effects of particular risks such as fire
outbreaks. The business will be insured by Jubilee Insurance.
PERMIT
The business will acquire permit from The Energy and Petroleum regulatory authority of
Kenya. The purpose of the permit is to facilitate a smooth running of the business and
business recognition.
BANKING SERVICES
The business will open a cooperative bank account since it offers low rates and high interests
INSURANCE SERVICES
JUBILEE INSURANCE
TEL; 0708086134
DELIVERY SERVICES
The petrol cylinders will be delivered to the customers' households hence the business will
need help from a motorist.
SECURITY SERVICES
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Kithimani Police Station will offer security to the business as it is nearer to the working
station.
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CHAPTER FOUR
The business will require the following facilities and equipment in order to run effectively.
They include:
Electricity 500
Rent 4,000
Cage 1,500
Maintenance 1,500
Water 300
Furniture 15,000
Totals 22800
The owner intends to use different methods in producing his products. They include:
The owner will first get a working area in Kiambu County at Thika Shopping Center. The
owner’s working area include the offices and stores. He also needs to buy 3 metal cages
which will help in the security of the products then they are put out for display. All this will
be rented monthly during the early age of the business.
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The owner will need various experts to operate around the business premises. They include; a
manger, an account officer, sales person, security officer and a cleaner. The owner will
advertise that the business is searching for skilled personnel to apply for a job in their area of
specialization. After the application the qualified personnel will then be interviewed and
assessed before being placed to their respective posts.
The business will then be advertised as also the selling of the products begins. The customers
are assured of quality products, honesty and their safety our number one priority.
BUYING OF STOCK
Petrol can
Greasing products
Low pressure regulators
High pressure regulators
Low pressure hosepipes
High pressure hosepipes
They will all be bought at TOTAL pump station in Thika constituency. Thereafter they will
be transported to the area of the business operation.
Thereafter with the help of the employees the products will be inspected to ensure that they
are of the desired quality ordered has being delivered.
The products bought will then be stored in the store first. This is to cross-check the products
to ensure that we have the desired amount of products that we had planned for. The storage
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facility will be safe and secure for the safety of the products and also for detection of any
leakage of petrol around the area.
The required amount needed to be placed on display will be put in the metal cages outside the
business facilities for the customers to see. The metal cages will be locked up and also a
security guard will be placed the for extra security purposes.
ELLING TO CUSTOMERS
Once the customers see the goods, they can make enquires of their desired product and when
interested they can purchase them. The business will have a registered M-PESA account to
enable easy payment by the customers.
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Production Flow Chat
Buying of Stock
Displaying of products
Selling to customers
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4.4 REGULATIONS AFFECTING PRODUCTION
BUSINESS PERMIT
The business will acquire a license and permit from The Kiambu City Council and also from
The Energy and Petroleum Regulatory Authority of Kenya. This is to ensure smooth running
of the business and business recognition.
INSURANCE
The business will acquire an insurance so as to protect the business from suffering effects of
particular risks such as fire outbreaks. The business will be insured by Jubilee Insurance.
HEALTH REGULATIONS
The employees in the business must he insured to protect them from suffering from illness or
injuries during working and non-working hours.
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CHAPTER FIVE
Electricity 500
Rent 4,000
Cage 1,500
Maintenance 1,500
Water 300
Furniture 15,000
Totals 22800
= 500,000 – 22,000
= 478,000
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5.3 PRE-OPERATIONAL CASH FLOW PROJECTION
Items Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Beginning 478000 478100 478200 478300 478400 478500 478600 478700 478800 478900 479000 479100 574260
Capital 0
Sales 347000 347100 347200 347300 347400 347500 347600 347700 347800 347900 348000 348100 417060
0
Cash Inflow 825000 825200 825400 825600 825800 826000 826200 826400 826600 826800 827000 827200 991320
0
Cash Outflow
Purchases 120400 120300 120200 120100 120000 120100 120050 120060 120040 120030 120020 120000 144130
0
Electricity 500 500 500 500 500 500 500 500 500 500 500 500 6000
Salaries 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 120000
Rent 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 48000
Cage 1500 1500 1500 1200 900 700 500 600 550 400 300 350 10000
Maintenance 1500 900 1500 900 700 800 600 500 400 300 500 250 8850
Water 300 150 100 120 130 140 100 90 70 120 100 90 1510
Furniture 15000 900 700 800 700 600 800 800 700 400 600 300 22300
Miscellaneous 2000 100 900 3000
Total Cash 155200 138250 138600 137620 136930 136840 136550 136550 136260 136650 136020 135490 166096
Flow 0
Net Cash 669800 686950 686800 687980 688870 689160 689650 689850 690340 690150 690980 691710 825224
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0
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5.3.2 PREPARATION OF CASH FLOW PROJECTION YEARLY
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5.4 PREPARATION OF PRO-FORMA INCOME STATEMENT
Items Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales 347000 347100 347200 347300 347400 347500 347600 347700 347800 347900 348000 348100 4170600
Purchases 120400 120300 120200 120100 120000 120100 120050 120060 120040 120030 120020 120000 1441300
Gross Profit 226600 226800 227000 227200 227400 227400 227550 227640 227760 227870 227980 228100 2729300
Electricity 500 500 500 500 500 500 500 500 500 500 500 500 6000
Salaries 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 120000
Rent 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 48000
Cage 1500 1500 1500 1200 900 700 500 600 550 400 300 350 10000
Maintenance 15000 900 1500 900 700 800 600 500 400 300 500 250 22350
Water 300 150 100 120 130 140 100 90 70 120 100 90 1510
Furniture 15000 900 700 800 700 600 800 800 700 400 600 300 22300
Total Expenses 46300 17950 18300 17520 16930 16740 16500 16490 16220 15720 16000 15490 230160
Net Profit B/D 0 46300 64250 82550 100070 117000 133740 150240 166730 182950 198670 214670 15490
Net Profit C/D 46300 64250 82550 100070 117000 133740 150240 166730 182950 198670 214670 15490
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5.4.2 PREPARATION OF PRO-FORMA INCOME STATEMENT PRESENTED
YEARLY
1
(ksh)
Purchases 185000
Cash at hand 5510 Rent 48000
Electricity 6000
Salaries 120000
Water 1510
Cage 10000
Total assets 185510 Total liabilities 185510
¿ cost
Break even = × 100
contribution
= 347000 – 22000
325000
= × 100
347000
= 93.6%
22000
Breakeven = × 100
93.6
= 23,504
gross profit
= × 100
sales
226600
= × 100
3470000
= 6.53%
2
net profit
Return on equity = × 100
capital employed
150000
× 100
500000
30%
Total 500,000
Owner 300000
Family 200000
Total 500,000