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ENTREPRENEURSHIP
Prepared for:
DR. YAP CHUAI YAN
Prepared by:
EXECUTIVE SUMMARY
The purpose of this project is for the KPA1153 Innovation Management & Entrepreneurship
project team (namely OPTIMAL BUSINESS SOLUTION to expose with and study the
entrepreneurship real practice, to do business analysis and to provide suggestions on improving
the business operation and other possible areas that can give better return on investment and
business sustainability.
Looking at macro perspectives, the development of entrepreneurship, as both concept and activity,
has been growing in importance in Malaysia. According to a report by SME Corp Malaysia in
2016 in their website title `SME Are The Backbones Of The Economy’, 98.5% business
establishments in Malaysia are SMEs, cut across all sizes and sectors. From 907,065
establishments, 76.2% belongs to microenterprises and only 4.2% are from Pahang (Source:
Economic Census 2016, Department of Statistics Malaysia (DOSM).
INTRODUCTION
Further to the macro aspect of entrepreneurship in Malaysia, this proposal of the project is to have
a more explicit understanding at micro level of entrepreneurship, by engaging CYECAH
CYECAH ENTERPRISE (later will be referred as CYECAH), a food-processed base
entrepreneur (specifically black bilimbi sambal- dried chilly sauces) based in Kuantan, Pahang.
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b. Changes in consumer lifestyles, rising per capita income, increasing urban population
raises demand for processed convenience foods.
d. Established infrastructure, including cold storage and port facilities allows companies to
establish supply chain.
e. Modern retail sector offers pathways to complete supply chain and venues to display and
market processed dry goods, and chilled and frozen goods, and perishables.
f. Global market penetration - Recent trend in using Online Marketing, make it easier for the
products to reach beyond local market.
Important components of the project are to learn the current CYECAH business operation, which
include raw material supplies, the process equipment, stock control, financing support, sales and
marketing mix activities including supply chain and branding, and business growth.
The project team members will further conduct analysis based on primary data information as well
as secondary data gathering. Primary data collection shall involve opinion or survey from the
public and relevant agencies in order to come out with more accurate and realistic suggestion.
Relevant agencies are those involve in the supply chain, packaging, food quality, financial or
equipment support. We will also conduct industrial analysis and competitor analysis.
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BACKGROUND
Cyecah Cyecah Enterprise is a local based company that was registered with Suruhanjaya Syarikat
Malaysia (Ccommission of Malaysia) on 4th august 2015. the base is addressed at 137 baru 4 ½
jalan gambang 25150 kuantan Pahang. The company is focusing to be ‘sambal’-based products
manufacturer. the products will be marketed through stockists and agents, outlets and as souveniers
or door-gifts for the company’s events.
With the aim of providing an add-on of authentic food for each house in Malaysia, CYECAH
wants to spread the taste buds of Sambal Hitam Pahang which is willing to enticing for the whole
family members and help the housewife and working wife in hand over the food for family.
CYECAH is a small medium enterprise (SME) on sole proprietorship for serving food already
displayed in 7-Elevan, petrol station such Petronas and Shell and also through vendors. They also
provide orders for specific events. CYECAH had established the business around 2 years ago
(August 2015). They have one stockist in Kuantan, Pahang and have more than 30 agents in
Malaysia, most of them are housewives and working woman who are seeking for side income.
CYECAH aimed to have an improvement packaging quality system then they can market their
product in selected outlets. They also want to upgrade in attending workshop to get MALAYSIAN
HALAL STANDARD CERTIFICATE AND AUDITING for the food industry.
OPTIMAL BUSINESS SOLUTION’s project case study proposes the SWOT Analysis for
marketing analysis, market feasibility research to get the detail information about potential market
segment, customer demands, and their suggestions for future business opportunity.
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OPTIMAL BUSINESS SOLUTION also proposes the uses of Business Model Canvas as business
model and Balanced Scorecard for the strategic and operational planning. We decided to use Mix
Marketing of 4P’s and 7P’s as a marketing strategy.
For the financial model we would conduct the Pro Forma Income Statement, Pro Forma Balance
Sheet and Pro Forma Cash Flow for the three consecutive years on the behalf of CYECAH. We
also carry out financial ratio analysis to measure the profitability and liquidity from financial
resource.
ORGANIZATION STRUCTURE
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TRANSPORTATION • Buy and pickup raw materials from suppliers from one
point to another.
• Provide cash on delivery service to customer (Kuantan
residences
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MATERIAL REQUIREMENT
MATERIAL REQUIREMENT
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SWOT ANALYSIS
STRENGTH WEAKNESSES
OPPORTUNITY THREAT
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PESTLE ANALYSIS
Political Factor
Political factor can play a major role in promoting or demoting a business. Tax policy, control on
oil prices, and government stability, give high impact especially on the price of the raw materials,
thus it affect the cost of production. For the purpose of exporting the product overseas, Cyecah2
might face some restriction to export food product to some country, based on the country’s political
factor, laws and regulations.
Economic Factor
Malaysia currently facing economic recession which can change buying behavior of consumers.
Some might opt for cheaper food product, or homecooked, and some might go for smaller size
packaging of product. Cyecah2 needs to turn this problem to an opportunity by opening new job
opportunity by offering to be the agent of Sambal Hitam Cyecah2 for a side income, and by
introducing smaller packed Sambal Hitam.
Socio-cultural Factor
Consumer preferences, changing work pattern and lifestyle affects the demand for Sambal Hitam
Cyecah2. In different state in Malaysia, consumer preferences on the taste of Sambal Hitam is
different, especially in Kelantan and Terengganu, where the people tend to eat less spicy food.
This has become a challenge for Cyecah2 to penetrate the market in that places. However,
changing work pattern and lifestyle nowadays open an opportunity to sell Sambal Hitam as they
will go for instant and quick meal preparation.
Technological Factor
Technological factor has greatly bring change in business. The wide use of internet, especially
social media and online banking transactions brings in customers from all over the world.
Advertising and marketing, selling and buying, and money transfer can easily be done and is very
convenient.
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Environmental Factor
Environmental factor might affect the production of Sambal Hitam Cyecah2 on the process of
acquiring the raw material. For example, bad weather and rainy season can decrease the production
of ‘belimbing buluh’ thus can cause increase in price, and later will give impact on the total profit
gained because the cost for the raw material has increased.
Legal Factor
In production of Sambal Hitam Cyecah2, it needs to follow the laws and regulations that has been
enforced in Malaysia. For example, in the production itself, Cyecah2 has to abide by the food
safety standard and regulation, as stated in Food Act 1983. The regulations under this act includes
Food Regulations 1985, which main focus is on food labelling requirement, and Food Hygiene
Regulation 2009, which provides an infrastructure to control the hygiene and safety of food sold
in the country to protect public health.
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BUSINESS CANVAS
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POSITIONING MAP
Indication
1. Purple: Sambal Hitam Original Pahang 4. Blue: Sambal Hitam Cyecah-Cyecah
2. Green: Sambal Hitam Pahang Famous 5. Brown: Sambal Hitam Ori
3. Black: Sambal Hitam Little Pahang 6. Red: Sambal Pahang Zaty’s di hati
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ANSOFF MATRIX
This strategy is aimed to increase market share within the existing industry by increasing the sale
of Sambal Hitam Pahang Cyecah2 Normal Size Packed. Market penetration is focusing on
increasing the number of agent by having them located in each state in Malaysia. Currently,
Cyecah2 already has their agent in every state except Penang, Perak, Terengganu, and Kelantan.
Cyecah2 needs to have product development to meet customer needs in the existing market and
set a new level higher than the current competitors for product of Sambal Hitam. New product
development that has been made is on the production of Sambal Ketuk and Sambal Bilis Tempoyak,
and Sambal Petai Tempoyak is planned to be produced in the near future.
Market Development (New Market, Existing Product)
Market development strategy is to find new target customers for the existing product, which is
Sambal Hitam. Previously, Cyecah2 only sells the product in normal size packaging which is
suitable when eating with family or small group and mainly target housewives. Now, the product
is also being produced in individual or small packaging, which is suitable for individual meal or
single person.
Besides focusing on selling of Sambal Hitam, Cyecah2 also diverse into the selling, provide
recipes, and demonstrate cooking of authentic Pahang cuisine. This can help the company to utilize
medium such as television and magazine to promote the brand of Cyecah2 to be known and
continue growing within the industry.
MARKET SURVEY
A market survey has been conducted from 8th December 2017 until 12th December 2017, and
number of respondents are 281.
A financial plan is important for the overall success of Cyecah Cyecah Enterprise because it helps
to determine the size of investment that is the project implementation cost. Financial plan also
important for the owner company to identify and propose the relevant source of finance. Financial
plan can ensure that initial capital is sufficient. It appraises the viability of the project before actual
investment is committed. Financial plan is really important to guide the implementation of
business plans.
NOTES :- Description
Type of Business
i) Food Service (Cyecah Cyecah Enterprise)
Schedule of Production
iii) Monthly Production
Note:
Salvage Value =
The amount the machine is worth after 5 years of use = RM 15,000/5= RM 3000.00
MONTH 1 2 3 4 5 6 7 8 9 10 11 12 TOTAL
CASH INFLOWS
Cash $ 5,000.00 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 5,000.00
Bank Loan $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Cash Sales $ 18,000.00 $ 14,400.00 $ 12,600.00 $ 16,080.00 $ 24,000.00 $ 26,400.00 $ 12,000.00 $ 13,200.00 $ 16,800.00 $ 18,000.00 $ 14,400.00 $ 7,680.00 $ 193,560.00
Collection of Accounts Receivable $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
TOTAL CASH INFLOWS $ 23,000.00 $ 14,400.00 $ 12,600.00 $ 16,080.00 $ 24,000.00 $ 26,400.00 $ 12,000.00 $ 13,200.00 $ 16,800.00 $ 18,000.00 $ 14,400.00 $ 7,680.00 $ 198,560.00
CASH PAYMENTS
Manufacturing Expenses
Raw Materials $ 4,500.00 $ 3,600.00 $ 3,150.00 $ 4,020.00 $ 6,000.00 $ 6,600.00 $ 3,000.00 $ 3,300.00 $ 4,200.00 $ 4,500.00 $ 3,500.00 $ 1,920.00 $ 48,290.00
Packaging $ 1,800.00 $ 1,440.00 $ 1,260.00 $ 1,608.00 $ 2,400.00 $ 2,640.00 $ 1,200.00 $ 1,320.00 $ 1,680.00 $ 1,800.00 $ 1,400.00 $ 768.00 $ 19,316.00
Labor (wages and payroll) $ 600.00 $ 600.00 $ 600.00 $ 600.00 $ 600.00 $ 600.00 $ 600.00 $ 600.00 $ 600.00 $ 600.00 $ 600.00 $ 300.00 $ 6,900.00
Other $ 180.00 $ 144.00 $ 126.00 $ 160.80 $ 240.00 $ 264.00 $ 120.00 $ 132.00 $ 168.00 $ 180.00 $ 140.00 $ 76.80 $ 1,931.60
TOTAL $ 7,080.00 $ 5,784.00 $ 5,136.00 $ 6,388.80 $ 9,240.00 $ 10,104.00 $ 4,920.00 $ 5,352.00 $ 6,648.00 $ 7,080.00 $ 5,640.00 $ 3,064.80 $ 76,437.60
Operating Expenses
Advertising $ 300.00 $ 300.00 $ 300.00 $ 300.00 $ 300.00 $ 300.00 $ 300.00 $ 300.00 $ 300.00 $ 300.00 $ 300.00 $ 300.00 $ 3,600.00
Depreciation $ 2,400.00 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 2,400.00
Maintenance and Repairs $ 1,859.00 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 1,859.00
Office Supplies $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 600.00
Payroll Expenses (EPF & SOCSO) $ 270.00 $ 270.00 $ 270.00 $ 270.00 $ 270.00 $ 270.00 $ 270.00 $ 270.00 $ 270.00 $ 270.00 $ 270.00 $ 270.00 $ 3,240.00
Salaries and Wages $ 3,600.00 $ 3,600.00 $ 3,600.00 $ 3,600.00 $ 3,600.00 $ 3,600.00 $ 3,600.00 $ 3,600.00 $ 3,600.00 $ 3,600.00 $ 3,600.00 $ 3,600.00 $ 43,200.00
Taxes and Licenses $ 70.00 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 70.00
Telephone $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 1,200.00
Travel $ 400.00 $ 400.00 $ 400.00 $ 400.00 $ 400.00 $ 400.00 $ 400.00 $ 400.00 $ 400.00 $ 400.00 $ 400.00 $ 400.00 $ 4,800.00
Utilities $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00 $ 2,400.00
Web Hosting and Domains $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Other $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 1,200.00
TOTAL $ 9,349.00 $ 5,020.00 $ 5,020.00 $ 5,020.00 $ 5,020.00 $ 5,020.00 $ 5,020.00 $ 5,020.00 $ 5,020.00 $ 5,020.00 $ 5,020.00 $ 5,020.00 $ 64,569.00
NON-RECURRING EXPENSES
Furniture, Machine,Equipment and
Software $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Other $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
TOTAL $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
FINANCIAL EXPENSES
Interest Loan Repayments $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
OTHER EXPENSES
Deposit $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
TOTAL EXPENSES $ 16,429.00 $ 10,804.00 $ 10,156.00 $ 11,408.80 $ 14,260.00 $ 15,124.00 $ 9,940.00 $ 10,372.00 $ 11,668.00 $ 12,100.00 $ 10,660.00 $ 8,084.80 $ 141,006.60
Contingency Plan (5%) $ 768.90 $ 540.20 $ 507.80 $ 570.44 $ 713.00 $ 756.20 $ 497.00 $ 518.60 $ 583.40 $ 605.00 $ 533.00 $ 404.24 $ 6,997.78
TOTAL CASH OUTFLOWS $ 17,197.90 $ 11,344.20 $ 10,663.80 $ 11,979.24 $ 14,973.00 $ 15,880.20 $ 10,437.00 $ 10,890.60 $ 12,251.40 $ 12,705.00 $ 11,193.00 $ 8,489.04 $ 148,004.38
NET CASH FLOWS $ 5,802.10 $ 3,055.80 $ 1,936.20 $ 4,100.76 $ 9,027.00 $ 10,519.80 $ 1,563.00 $ 2,309.40 $ 4,548.60 $ 5,295.00 $ 3,207.00 $ (809.04) $ 50,555.62
OPENING BALANCE $ - $ 5,802.10 $ 8,857.90 $ 10,794.10 $ 14,894.86 $ 23,921.86 $ 34,441.66 $ 36,004.66 $ 38,314.06 $ 42,862.66 $ 48,157.66 $ 51,364.66 $ -
ENDING BALANCE $ 5,802.10 $ 8,857.90 $ 10,794.10 $ 14,894.86 $ 23,921.86 $ 34,441.66 $ 36,004.66 $ 38,314.06 $ 42,862.66 $ 48,157.66 $ 51,364.66 $ 50,555.62 $ 50,555.62
PRO FORMA CASH FLOW
GRAPH
NET CASH FLOWS TOTAL EXPENSES SALES
$600,000.00
$500,000.00 $496,200.00
$400,000.00 $415,500.00
Based on Figure 1.0, the net cash flow increase when total expenses and sales increase. We
suggest Cyecah Cyecah Enterprise to increase more their production units by the following years.
This can cause their total expenses increase when company has to increase their variable cost by
increasing their direct labor cost for manufacturing activities. Fixed cost such as utilities bill also
increase when company use more electrical energy and water supply. Besides that, fixed expense
like advertising also increase for the marketing purpose in order to increase the sales. Through our
financial projection, net cash flow in Cyecah Cyecah Enterprise will increase gradually for three
consecutive years because the total revenues are greater than total expenses.
Cyecah Cyecah Enterprise has a strong positive cash flow. Even though, positive net cash
flow is good for financial health but the excess of unused money does not good for business
development and production activities of company in long term. The balance from cash flow
should be invest in right manner. Thus, from our Pro Forma Cash Flow Statement we recommend
Cyecah Cyecah Enterprise to increase their budget expenses for direct labors, advertising, utilities
bill and web hosting and domains.
1.3 Pro Forma Income Statement for three consecutive years.
Cost of Goods
Beginning Inventory - - - -
Raw Materials 48,290 80,400 103,875 124,050
Packaging 19,316 32,160 41,550 49,620
Labor (wages and payroll) 6,900 18,000 24,000 26,400
Other 1,932 3,216 4,155 4,962
Less Ending Inventory - - - -
Total Cost of Goods Sold $ 76,438 $ 133,776 $ 173,580 $ 205,032
Non-Operating Income
Interest Income - - - -
Rental Income - - - -
Other - - - -
Total Non-Operating Income $ - $ - $ - $ -
EXPENSES
Operating Expenses
Advertising 3,600 10,000 20,000 30,000
Depreciation 2,400 2,400 2,400 2,400
Maintenance and Repairs 1,859 1,859 1,859 1,859
Office Supplies 600 600 600 600
Payroll Expenses 3,240 3,240 3,240 3,240
Salaries and Wages 43,200 43,200 43,200 43,200
Taxes and Licenses 70 - - -
Telephone 1,200 1,200 1,200 1,200
Travel 4,800 4,800 4,800 4,800
Utilities 2,400 4,800 4,800 4,800
Web Hosting and Domains - 500 1,000 1,000
Other 1,200 1,200 1,200 1,200
Total Operating Expenses $ 64,569 $ 73,799 $ 84,299 $ 94,299
Non-Recurring Expenses
Furniture, Equipment and Software - 10,000 4,000 4,000
Gifts Given - - - -
Other - - - -
Total Non-Recurring Expenses $ - $ 10,000 $ 4,000 $ 4,000
$496,200
$415,500
$321,600
$198,560
$177,702
$140,527
$93,146
$50,556
Figure 2.0: Pro Forma Income Statement for three consecutive years.
Based on Figure 2.0, Cyecah Cyecah Enterprise will gain profit no loss for three consecutive
years. This is because Cyecah Cyecah Enterprise decide to increase their quantity of product sold
for three consecutive years and this may affect their revenue to increase gradually for the
consecutive years.
1.4 Pro Forma Balance Sheet Statement for three consecutive years.
Current Assets:
Cash In Hand $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
Bank $ 35,555.62 $ 126,701.87 $ 269,628.92 $ 449,251.37
Account Receivable $ - $ - $ - $ -
Stock of Finished Goods $ - $ - $ - $ -
Total $ 40,555.62 $ 131,701.87 $ 274,628.92 $ 454,251.37
TOTAL ASSETS $ 55,555.62 $ 143,701.87 $ 284,228.92 $ 461,931.37
Owner's Equity:
Capital $ - $ - $ - $ -
Retained Earnings $ 50,555.62 $ 143,701.87 $ 284,228.92 $ 461,931.37
Total $ 50,555.62 $ 143,701.87 $ 284,228.92 $ 461,931.37
Current Liabilities:
Account Payable $ - $ - $ - $ -
Accrued Wages $ - $ - $ - $ -
Revenue $ - $ - $ - $ -
From Figure 3.0, the Owner’s Equity is increase for the following years. However, the
Total Asset reduce 20% for every year because of depreciation of asset value. Cyecah Cyecah
Enterprise does not have any Liabilities.
Working capital is a measure of both a company's efficiency and its short-term financial
health. From Pro Forma Balance Sheet Statement, we can calculate working capital.
Formula:
Based on our calculation, working capital in 2017 is $40,555.62; for 2018 is $131,701.87, and
increase gradually to $274,628.92 in 2019 and finally $454,251.37 for 2020. These shows that
financial position of Cyecah Cyecah Enterprise for short-term is steady and in good financial
health.
1.5 Financial Statement Analysis
Financial statement analysis is the process of reviewing and evaluating a company's financial
statements (such as the balance sheet or profit and loss statement), thereby gaining an
understanding of the financial health of the company and enabling more effective decision making.
Current Ratio= ∞ ∞ ∞ ∞
Current Asset/Current Liabilities
As highlighted in the analysis above, we would like to recommend Cyecah Cyecah Enterprise to:
1. Penetrate new market in other states by appointing agents for each state, as the demand is
seen there, as well as to market to Malaysians who are studying or working abroad, through their
parents or spouses.
2. Focus on the flavors of interest i.e. hot and sweet, and to add more choices like having
pineapple flavors.
3. To get the assistance of some government agencies who provide assistance in terms of
providing business equipment (like TERAJU) and packaging (SIRIM).
4. Invest more money for manufacturing products, man power, marketing, quality control and
other budgets for business development since the company has great capital balance.
CONCLUSION
We already propose to the owner of Cyecah Cyecah Enterprise on how to organize their structure
management of business in term of operation, strategic marketing and financial control and
planning. Cyecah Cyecah Enterprise has the great product and potential to sustain for long term
business. Their products can meet the international market demand and should be commercialize
into the global market. Thus, from our entrepreneurship project with Cyecah Cyecah Enterprise,
our consultation with them might really helpful for future strategic and planning actions.