The Business Plan Structure - BMOM5203 Part 2

Name: Mohd. Norizam Md.
Salleh (CGS00534317)
Table of Contents
1.0 EXECUTIVE SUMMARY ........................................................................... 3
1.1 INTRODUCTION ......................................................................................... 3

1.2 THE COMPANY ......................................................................................... 3
1.3 COMPANY HISTORY .................................................................................. 4
2.0 CURRENT SERVICES .............................................................................. 6
2.1 COMPANY MISSION ................................................................................... 6

2.2 KEYS TO SUCCESS ................................................................................... 6
3.0 SITUATION ANALYSIS............................................................................. 7
3.1 COMPETITIVE ADVANTAGES ....................................................................... 7

3.2 ECONOMIC FORCES .................................................................................. 7
3.3 TECHNOLOGICAL FORCES ......................................................................... 8
3.4 SOSIO- CULTURAL FORCES...................................................................... 12
3.5 LEGAL AND REGULATORY FORCES ........................................................... 12
4.0 BUSINESS ANALYSIS............................................................................ 15
4.1 OPPORTUNITIES ..................................................................................... 15

4.2 STRENGTH ............................................................................................. 15
4.3 W EAKNESS ............................................................................................ 16
4.4 TREAT ................................................................................................... 16
5.0 MARKET ANALYSIS SUMMARY ........................................................... 17
5.1 MARKET SEGMENTATION ......................................................................... 17
6.0 STRATEGY AND IMPLEMENTATION SUMMARY ................................ 19
6.1 COMPETITIVE EDGE ................................................................................ 19

6.2 MARKETING STRATEGY ........................................................................... 19
6.3 SALES STRATEGY ................................................................................... 20
6.4 SALES FORECAST ................................................................................... 20
7.0 MANAGEMENT SUMMARY.................................................................... 22
7.1 PERSONNEL PLAN .................................................................................. 22
Part 2: Page 1 of 40
Name: Mohd. Norizam Md. Salleh (CGS00534317)
7.2 MACHINERIES/EQUIPMENTS PLAN ............................................................ 23

7.3 EXPERIENCE AND EXPERTISE ................................................................... 23
8.0 FINANCIAL PLAN ................................................................................... 24
8.1 IMPORTANT ASSUMPTIONS ...................................................................... 24

8.2 BREAK-EVEN ANALYSIS ........................................................................... 24
(FAST4CAST BUSINESS PLAN) ...................................................................... 25
8.3 PROJECTED PROFIT AND LOSS ................................................................ 25
8.4 PROJECTED CASH FLOW AND FUNDING OPTION........................................ 29
8.5 PROJECTED BALANCE SHEET .................................................................. 29
8.6 BUSINESS RATIOS .................................................................................. 31
9.0 PROJECT CONTROLS AND EVALUATIONS........................................ 32
9.1 FINANCIAL CONTROLS ............................................................................. 32

9.2 PERFORMANCE STANDARDS .................................................................... 32
9.3 MONITORING PROCEDURES .................................................................... 33
9.4 PERFORMANCE AUDIT ............................................................................ 34
9.5 PERFORMANCE ANALYSIS ....................................................................... 35
10.0 CONCLUSION ....................................................................................... 36
APPENDIX A: CASH FLOW FOR THE PAST 3 YEARS PERIOD. .............. 37
APPENDIX B: PRO FORMA CASH FLOW FOR NEXT 3 YEARS PERIOD. 38
APPENDIX C: BALANCE SHEET FOR THE PAST 3 YEARS. .................... 39
APPENDIX D: PRESENTATION SIDES. ...................................................... 40
1.0 Executive Summary
1.1 Introduction
The objective of this paper is to study and determine the new market/technology
that the company can invest for its future growth and expansion. A Business Plan
for 2011 Proposal is to be submitted to seek a mandate and approval from the top
management.
Our proposal is for the company participate to participate in “High Speed Broad
Band to Homes” project and invest in a new technology, which is the installation of
infrastructure fiber optic using micro trenching method.
For the past ten years the company core business are installation of varies types of
telecommunication cables and carry out maintenance works for some
telecommunication company (“Telcos”) using conventional methods namely “open
cut” or using “horizontal directional drilling” method. These industries were quite
established and there is no room for further expansion.
But since most of the “Telcos” are now turn to provide “High Speed Broad Band to
Homes” e.g. Telecom, Maxis, Time and etc. the new management had instructed a
group of employees to study the potential field and to grab the opportunity in line
with national vision to increase the internet speed to business and to household.
The “High Speed Broad Band to Homes” not only will increase the internet speed at
par to the develop countries but it also offers additional content e.g. telephone line,
cable TV, games and others. These sharing facilities not only shall reduce the
customer time in managing lesser utilities bills (one stop centre) but in the same
time they also can enjoy some saving especially in the long run.
1.2 The Company
Established in year 2000, Cableconst Sdn Bhd has grown to become one of the
leading specialised contractors in the telecommunication infrastructure works.
Cableconst has a wide range of experience and excellent track record in the
installation and lying of telecommunications, civil engineering and horizontal
directional drilling works.
With more than 70 well trained permanent employees, Cableconst has to date
completed more than 500 km of fibres optic cable construction works throughout
Malaysia, all involving the Survey and Design and Outside Plant works that serve
the industrial, commercial and residential users.
Poses it’s own a few horizontal directional drilling (HDD) machines are an
advantages to Cableconst.. With these machineries Cableconst is capable of
carrying out works at the most rigorous and busy interchange or commercial district
with minimal disruption to traffic e.g. crossing railways and highways and activities
at the local area.
Cableconst is a certified ISO 9000: 2000 company, a class “B” contractor

registered with Pusat Khidmat Kontractor (PKK) and registered Grade G5
contractor with CIDB.
Executive Director Dato’ Sukri Ahmad and Ir. Razali Awang the Managing Director
is currently hold the company’s stock.
1.3 Company History
Dato’ Sukri Ahmad and Ir. Razali Awang started the company back in year 2000
when both of them had leave Telecom Malaysia. With a good connection and
technology know how, they had started the business from one telecommunication
company to another.
Starting with RM 100 thousand as paid up capital the company had grew
tremendously and now their paid up had reach RM 3 Million.
But since last couple of years the company growth had reduced and their profit
margin had started to decline. The after tax net profit for the year 2008, 2009 and
2010 had reduced from 435,875.00, 360,333.00 and 270,785 respectively.
In 2010 the company's management realised that the company have no more
grown sufficiently. Although the sales are increases by 5% annually but the after
tax net profit are decline each years. Therefore they had came to the conclusion
that the firm have to explore a new market in order keep grow.
Figure 1: Three Years Past Performances.
Table 1: Three Years Past Performances.

2008 2009 2010
(RM) (RM) (RM)
Sales 3,500,000 3,675,000 3,858,750
TOTAL SALES 3,500,000 3,675,000 3,858,750
Less : Cost of sales
Purchases 105,000 110,250 115,763
Sub-total 105,000 110,250 115,763
Less : Project cost

Site office 24,000 26,400 29,040
Project insurances 7,000 7,700 8,470
Staff (site) salary 600,000 660,000 726,000
EPS/Socsp/PCB 84,000 92,400 101,640
SALES 5,000 5,500 6,050
Water and electricity 5,000 5,500 6,050
Pettycash 60,000 66,000 72,600
Extra-ordinary expenses 5,000 5,500 6,050
Suppliers 700,000 770,000 847,000
Sub-contractors 700,000 770,000 847,000
Sub-total 2,190,000 2,409,000 2,649,900
Gross profit / (loss) 1,205,000 1,155,750 1,093,088
Less : Management Cost

Director's remuneration 192,000 211,200 232,320
Insurance 10,000 11,000 12,100
Office rental 48,000 52,800 58,080
Printing and stationeries 2,400 2,640 2,904
Staff (office) salary 180,000 198,000 217,800
EPS/Socsp/PCB 52,080 57,288 63,017
Telephone and fax 12,000 13,200 14,520
Sub-total 501,480 551,628 606,791
Depreciation
Depreciation of fixed assets 50,000 50,000 50,000
Finance cost
Interest on loan 80,000 80,000 80,000
Total expenses 631,480 681,628 736,791

Net Profit / (Loss) Before Tax 573,520 474,122 356,297
Net Profit / (Loss) After Tax 435,875 360,333 270,785
% GROSS PROFITS 34% 31% 28%
% NET PROFIT / (LOSS) 12% 10% 7%
GROSS PROFITS PER MONTH 100,417 96,313 91,091
NET PROFIT / (LOSS) PER MONTH 36,323 30,028 22,565
2.0 Current Services
Cableconst currently is an OSP maintenance contractor to Messrs Fibercomm Sdn

Bhd. and panel contractor to other “Telcos” namely Celcom, Telecom, Maxis,
Fiberail and Digi. Currently Cableconst offers the following comprehensive works;
1) Survey and design works for telecommunication works.

2) Installation of telecommunication cables using overhead poles, open cut
and HDD methods
3) Blowing, pulling and slicing cables and all it associated works.
4) Connection to customer premises.
5) Civil works.
6) OSP maintenance works.
7) Emergency repair works.
2.1 Company Mission
In the past, implementation works usually carried out using the open cut and HDD
method, with the buying of micro trenching machine the company shall have the
capability to also offer to use micro trenching techniques in their works and the
most crucial one is to get participate in this business as this new techniques had
become a new era for telecommunication installation works.
Therefore the company's management came to the conclusion that the firm need to
alter its primary target market segment and allowing greater access to investment
funds to further fuel its growth.This step shall allow the company to grow further.
Shall this proposal is approved by the management we plan to implement this
change by early of 2010.
2.2 Keys to Success
The “High Speed Broad Band to Homes” is booming at the moment. In order to
achieve a defendable position in this environment, Cableconst must concentrate
on the following tasks.
• To participate in “High Speed Broad Band to Homes”.

• Secure at least five large scale commercial contracts over the next three
years.
• Expand our customer base through expansion into other geographic areas
to retain a sufficient level of profitability.
• Increase marketing expenditures by 300% in the first year to increase profit.
3.0 Situation Analysis
3.1 Competitive Advantages
Having our HQ in Kuala Lumpur is an advantage to us as it is a central position.

This shall ease us to mobilise our team to every part of the country.
This is important as most of the “Telcos” having their project almost every part of
peninsular Malaysia. We also have a counterpart in Sarawak and Sabah which will
help us to participate in the Borneo Island.
With a good track record in carry out our past job especially within the urban areas,
customer satisfaction and a good relation with most of the local authorities,
Cableconst has all the advantages to win some job.
With intention to procure minimum four unit micro trenching machine in which not
many contractor are willing to do so shall add to our advantages.
With most of the “Telcos” are participating, the market is growing so fast that the
demands are currently greater than the supply. At least RM 15 Billion is to be spent
to build up the infrastructure and the entire system in the next 10 to 15 years.
Currently the contractors are insufficient and this is an excellent opportunity for us
to gain the market share and a defensible position in the industry.
Since to grow a specialist contractor technically know how and have a good
reputation with the local authorities is not an overnight job therefore we foresee the
future is
3.2 Economic Forces
We shall require about RM 500,000.00 thousand to buy the necessary machineries

and equipments.
On top of that we also need to source some funding preferably “revolving working
capital” to finance the additional increase sales.
The SME bank is top priority despite it offers facilities for infrastructure companies
at a good interest rate Cableconst had already have some facilities. This shall
expedite the additional loan since we have a good track record.
Since “High Speed Broad Band to Homes” is inspired by our Federal Government
we might enjoy a lower interest rate. Due to the same reason we do not anticipate
3.3 Technological Forces
Participating in “High Speed Broad Band to Homes” works shall involve some new
technology and machineries. Some part of the cable laying works shall require
micro trencher in order to lay micro ducts using micro trenching techniques and the
balance the conventional method still be applied.
This technology is new to our country but it has been used in developed country
since the past five years. A company in engineering and construction field need to
evolve and keep adapting to new technologies to move forward and to survive.
3.4 Sosio- cultural Forces
This new technology is very environmental friendly whereby big trench

excavations are no more required or shall be limited especially within the
commercial and residential areas, noise level are low because only involve small
cutting machines, less disturbance to traffic as less import/export of
excavated/backfill material are required, less dump trucks, less excavation
machines, less dust and etc. This is in conjunction to S. Prakash Sethi’s
management approaches to Corporate Social Responsibilities.
Therefore we anticipate the complaint from public and the local authorities are
much lesser to the conventional method.
In other words despite the “High Speed Broad Bans to Homes” will prosper the
economy, IT industries and business communities this new technology shall bring
benefit to the customer, public and the environment.
3.5 Legal and Regulatory Forces
Knowing that this technology is new to our country, Cableconst through our
good relation with the local authorities had taken our initiatives to approach some
of them to propose for the new method. As anticipated the results are very
welcoming.
“High Speed Broad Band to Homes” is inspired by our Federal Government

therefore we do not anticipate government will give any decision that might affect
this industry. In the other hand currently the “Telcos” are enjoying a lot of
incentive and subsidies.
Below are one of the approval received for this technique;
i) Approval letter from MPS, MPSJ/KEJ/JL-SJ/100-7/15 Jld. 12( ) dated

28/10/2010.
ii) Approved micro trenching typical drawing; RGSB/HUAWEI/SD/LAT/2 rev. 0.
4.0 Business Analysis
“High Speed Broad Band to Homes” is booming at this moment, the business
growths for the past one year are tremendously. Most of the “Telcos” are
participating and do not to be left out from this race. This growth level is expected to
continue for at least the next five years within the urban areas and another 5-10
more years throughout Malaysia.
One of the prime reasons for this growth is because the high speed broad
band/internet has become a necessities and the way of life. Nowadays IT base
market and the information technology has become very important in our life.
4.1 Opportunities
With most of the “Telcos” are participating in “High Speed Broad Band to Homes”,
the market is growing so fast that the demand is currently greater than the supply.
The contractors are currently insufficient. This is an excellent opportunity to gain
market share and a defensible position in the industry.
4.2 Strength
Our strength is we have been in this line for the past ten over years. We not only
have trained and high qualified and professional workers but we also owned related
machineries and equipments.
“High Speed Broad Band to Homes” is not a totally using new technology as most of
it works are actually requires a mixture with the conventional ways.
We have a good contact with the entire industries player, all the “Telcos” and even
with many of the local authorities.
Part B: Page 15 of 40
4.3 Weakness
Our setbacks are currently we do not own any micro trenching machine and train
workers to handle the machine.
But the good news is we have source the machines suppliers e.g. Husqvarna, MK
Cutter, Ditch Witch (all are US brand) and Eastern Environmental (Local Company
that fabricate their own machine in China).
Shall we require the machine urgently we can buy the machine and the working
tools from Eastern Environmental which only requires two weeks to be delivered.
On the man powers we believed our experience in using the normal road cutter shall
be applied here as the machines are quite similar except the cutting capacity and the
cutting blade are bigger.
4.4 Treat
Being a specialist contractor, currently it is not many competitors are there in this
field. The competitors namely Komasi, Kosi, Drill Ditch, Panca Delima and maybe
ten more companies but not many are willing to invest on machineries and
equipment.
With a good track record in carry out our past job especially within the urban areas,
customer satisfaction and a good relation with the local authorities, Cableconst has
all the advantages to penetrate the market, especially when we bought the micro
trenching machine in which not many contractors had owned and willing to invest on
new technology.
With most of the “Telcos” are participating the market is growing so fast that the
demand is currently greater than the supply. The contractors are not enough. This is
an excellent opportunity to gain market share and a defensible position in the
industry.
One of the greatest limiting factors in telecommunication industry one day the
technology used will be end. But we anticipate, this will only happen at least in 10 to
15 years from now. By then we are also need to keep evolve to keep track to the
newer technologies.
5.0 Market Analysis Summary
Due to highly demand forecast on this business especially on the economic point of
view, the life style is changing towards IT base, the services and the contents offer,
our expectation is this project shall increase the company revenue at 10% per
annum in the next five years.
This forecast is also base on the market announcements where the company like
Telecom and Maxis had announced they are going to spend RM 13 Billion and RM 5
Billions in their five years expansion plan on “High Speed Broad Band to Homes”.
This is yet to consider the investment that going to be made by the other “Telcos”.
This makes this business are very attractive and sexy. We shall be concentrating on
the customers that will provide us with the greatest margin, in other words those
clients who offer a good price. This is because most of the “Telcos” are practicing a
standard Schedule of Rates (SOR) and once the panel contractor are selected the
new registration are freeze.
Theoretically the business is very big but we would propose for Cableconst not to
be greedy. There shall be a big jump on the first year as we anticipate increasing of
company sales from RM 4 Million to RM 12 Million.
Reason for this increase is because currently there are not many contractors
available as most of them are occupied by all the “Telcos”.
5.1 Market Segmentation
We anticipate that all our present clients (all the “Telcos”) shall sooner or later use
this new installation method.
For time being we shall concentrate on Telecom and Maxis as they had started to
use this method. In long run we shall concentrate to the customers that can provide
us with the greatest margin, and those that can offer us a continuously contract e.g.
can offer us a long term contract.
Therefore all “Telcos” e.g. Telecom, Maxis, Time Telecom, Jalenas, Fibercomm and
etc shall be approached and we shall register our company with them.
Figure 2: Market Analysis (Pie)
Table 2: Market Analysis (Pie) and Annul Forecast Increament.
Forcast
Year 2011 2012 2013 2014 2015
RM RM RM RM RM
Project Yearly
Provider Growth (Million) (Million) (Million) (Million) (Million)
Telecom 10% 4.00 4.40 4.84 5.32 5.86
Maxis 10% 3.00 3.30 3.63 3.99 4.39
Jalenas 10% 2.10 2.31 2.54 2.80 3.07
Others 10% 3.00 3.30 3.63 3.99 4.39
Total 10% 12.10 13.31 14.64 16.11 17.72
6.0 Strategy and Implementation Summary
Cableconst plans to market itself through a variety of methods. We will also

approach and try to get registered as a panel contractor to the new “Telcos”
company and to those we have yet to be registered. We will also maintain our
present client in order to ensure continues job from them.
Cableconst has been able to gain a very advantageous supplier contract that will
allow Fosse to obtain its materials at a significant discount. This will allow the
company to underbid its rivals and make better margin.
6.1 Competitive Edge
In the construction industry the primary ways to compete are through low cost or
better project management. One of the most important processes for winning a
contract is the bid process.
Cableconst has a unique competitive edge over most of its competitors. En. Abu
Seman, is the nephew of Ir. Razali Awang, he is the General Manager to one of the
major construction material suppliers. Through this relationship, has been able to
gain a very advantageous supplier contract allowing Cableconst to obtain its
materials at a significant discount. With this edge the company can underbid its
rivals and achieve a low cost leadership role.
Owned HDD machine and the new micro trenching machine is also an advantages
to Cableconst as less sub let works is required and they can control their work
themselves and less relying on outside resources.
6.2 Marketing Strategy
Cableconst shall remain service all the “Telcos” that it’s has been registered and
also plans to register with the others and the new coming “Telcos” as well.
First, we will leverage our pre-existing contacts with all the “Telcos” that we are
registered with. While lobbying and participate in tenders we shall approach the
“Telcos” and try to get Cableconst to be registered with them. We will also publish
advertisement in commercial construction trade magazines, engineering and
telecommunication bulletin e.g. IEM, Board of Engineers Bulletin and etc.
6.3 Sales Strategy
The most critical part of sales is not the marketing, but the bidding process, in which
companies offer their designs, services, material quality, project timeline estimates,
and costs. The company that offers the best combination of these variables is the
most likely to get the contract. Therefore very detailed project planning, including
supply agreements, labour needs, subcontractors, presentation, and other factors, is
crucial for Cableconst in winning contracts. We will be designing a standardized
method for doing this with all our contracts, with an emphasis on quality, timeliness,
and low cost to outbid our competitors.
6.4 Sales Forecast
Although the sales forecasts are based on conservative estimates but due to the
very strong demand we expected the sales in 2011 to have a big jump by 300% from
the sale of year 2009.
After that, we plan sales growth to be more consistently by 10% increment for each
year.
Figure 3: Forecast Sale for Three Years.
Table 3: Forecast Sales for Next Three Years
2011 2012 2013

(RM) (RM) (RM)
Sales 12,100,000 13,310,000 14,640,000
TOTAL SALES 12,100,000 13,310,000 14,640,000
Purchases 363,000 381,150 400,208
Sub-total 363,000 381,150 400,208
Less : Project cost
Site office 48,000 52,800 58,080
Staff (site) salary 2,057,000 2,262,700 2,488,970
EPS/Socsp/PCB 287,980 316,778 348,456
Traveling expenses 20,000 22,000 24,200
Pettycash 100,000 110,000 121,000
Extra-ordinary expenses 30,000 33,000 36,300
Suppliers 2,783,000 3,061,300 3,367,430
Sub-contractors 2,783,000 3,061,300 3,367,430
Sub-total 8,153,180 8,968,498 9,865,348
Insurance 12,100 13,310 14,641
Office rental 58,080 63,888 70,277
EPS/Socsp/PCB 63,017 69,318 76,250
Sub-total 606,791 667,470 734,217
Depreciation
Finance cost
Interest on loan 280,000 280,000 280,000
Total expenses 1,036,791 1,097,470 1,164,217
Net Profit / (Loss) Before Tax 2,547,029 2,862,882 3,210,228
Net Profit / (Loss) After Tax 1,884,802 2,118,533 2,375,569
% NET PROFIT / (LOSS) 16% 16% 16%
7.0 Management Summary
Cableconst's management consists of Executive Director Dato’ Sukri Ahmad and Ir.
Razali Awang the Managing Director will concentrate on client contacts and bidding
along with overall management of the company.
En Zaman Samsuri the company's Senior Project Manager shall coordinating all
project management and concentrating on cost controls, suppliers, day-to-day
project supervision, labour relations, etc..
En Rahmat Osman our contract/procurement manager will handle client satisfaction,

invoicing, permitting, and general book keeping. Most of our labour needs will be
met through direct intake.
The company is planning to expand it personnel to add a few project manager,

project engineer, quantity surveyor, supervisors and safety officers as soon as the
number of projects increases. These additional staff will have the following duties:
• Plan, manage and supervise the projects

• Direct supervision of all work at the job site.
• Quality control.
• Scheduling subcontractors and material deliveries.
• Verifying and insuring that all work is done in accordance with plans.
• Insuring that all work is performed in accordance with all OSHA guidelines.
In addition, as business increases, we will hire additional project managers, project

engineers, quantity surveyor, safety officers and supervisors as needed.
7.1 Personnel Plan
Our personnel expansion will be focused on the number of temporary labourers we

will employ. The table below gives our estimate of labour costs.
Table 4: Additional Personnel Plan
No 2011 2012 2013

Project Manager 2 168,000.00 168,000.00 168,000.00
Project Engineer 4 144,000.00 144,000.00 144,000.00
Quantity Surveyor 2 72,000.00 72,000.00 72,000.00
Safety Officer 2 144,000.00 144,000.00 144,000.00
Supervisor 8 288,000.00 288,000.00 288,000.00
General Workers 40 720,000.00 720,000.00 720,000.00
Total of Workers 58 58 58 58
Total Additional Payroll 1,536,000.00 1,536,000.00 1,536,000.00
7.2 Machineries/Equipments Plan
Our machineries/equipment expansion will be based how many micro trenching

machine that we will buy. The table below gives our estimate of additional labour
costs.
Table 5: Investment on Additional Machineries/Vehicles.
No 2011 2012 2013

Micro Trencher 4 218,000.00 60,000.00 60,000.00
One Tone Lorry 4 200,000.00 50,000.00 50,000.00
Road cutter 4 14,000.00 3,500.00 3,500.00
Water pump 4 8,000.00 2,000.00 2,000.00
Water tank 4 4,000.00 1,000.00 1,000.00
Generator 4 12,000.00 3,000.00 3,000.00
Total of Workers 24 24 6 6
Total Additional 478,000.00 119,500.00 119,500.00
Payroll
7.3 Experience and expertise
Being an OSP contractor for the past ten years, Cableconst had almost enough
experiences and expertises to participate in the High Speed Broad Band to Homes
projects.
The works are mostly the same, except for a few new equipments, some different
method of construction and some fine tune on overall works process. All in all the
conventional method using open cut and HDD are still required to be used in some
areas.
8.0 Financial Plan
The following sections are Cableconst financial projections for next three years.
These tables represent a conservative estimate of revenues, expenses, and growth.
As mentioned earlier due to the very strong demand and insufficient of OSP
contractors, we expected the sales in 2011 to have a big jump by 245% from the
sale of year 2009.
After that, we anticipate the sales growth to be more consistently by 10% increment
for each year.
We plan on basing dividend payouts on overall performance and health of the

company and may decide to retain such earnings for future growth.
8.1 Important Assumptions
The following is our estimate of our financial assumptions based on previous

experience.
Table 6: General Assumptions

Plan Years 2011 2012 2013
Current Interest Rate 8.00% 8.00% 8.00%
Long-term/Leasing Interest Rate 8.00% 8.00% 8.00%
Tax Rate 26.00% 26.00% 26.00%
Other 0 0 0
8.2 Break-even Analysis
Our break even analysis is based on average monthly fixed costs, which in turn, is
based on historical figures, plus our average cost per sales. This estimate is also
based on experiences however because of our wide range of potential projects, its
accuracy lessens. The average variable costs are based on industry standards.
(Fast4Cast Business Plan)
8.3 Projected Profit and Loss
The following is our best estimate of future revenues and costs, based on current
market trends, past performance, and perceived revenue of our new target market.
It is a norm in construction line that the claims will only comes 90 to 120 days from
the day we started works. That is why we forecast the first claim will only reach us
on the fourth month (April).
However, we have anticipated this by buffering ourselves with sufficient cash

reserves previously. Expected sales in 2011 will have a big jump of 245% from the
sale of year 2010. The net profit percentage for the next three years shall be 16%
consistently compared to 12%, 10% and 7% for the year 2008, 2009 and 2010
respectively.
Figure 4: 2011 Forecast Monthly Profit/Loss
Figure 5: Forecast Sales by Year
Figure 6: 2011 Forecast Gross Margin/Loss Monthly
Figure 7: Forecast Gross Margin/Loss Yearly
Table 7: Pro Forma Profit and Loss for Next Three Years
2011 2012 2013

(RM) (RM) (RM)
Sales 12,100,000 13,310,000 14,640,000
TOTAL SALES 12,100,000 13,310,000 14,640,000
Purchases 363,000 399,300 439,200
Sub-total 363,000 399,300 439,200
Less : Project cost

Site office 48,000 52,800 58,080
Staff (site) salary 2,057,000 2,262,700 2,488,970
EPS/Socsp/PCB 287,980 316,778 348,456
Traveling expenses 20,000 22,000 24,200
Pettycash 100,000 110,000 121,000
Extra-ordinary expenses+B59 30,000 33,000 36,300
Suppliers 2,783,000 3,061,300 3,367,430
Sub-contractors 2,783,000 3,061,300 3,367,430
Sub-total 8,153,180 8,968,498 9,865,348

Insurance 12,100 13,310 14,641
Office rental 58,080 63,888 70,277
EPS/Socsp/PCB 63,017 69,318 76,250
Sub-total 606,791 667,470 734,217
Depreciation
Finance cost
Interest on loan 280,000 280,000 280,000
Total expenses 1,036,791 1,097,470 1,164,217

Net Profit / (Loss) Before Tax 2,547,029 2,844,732 3,171,235
Net Profit / (Loss) After Tax 1,884,802 2,105,102 2,346,714
% NET PROFIT / (LOSS) 16% 16% 16%
8.4 Projected Cash Flow and Funding Option.
We do not expect to have any serious cash flow problems running this project
provided the company allocate RM 2 Million surplus cash of 2010 P & L.
This fund is to be used to finance the project temporarily especially during the first
three month.
On the third month we shall have about RM 477,385.00 shortage but this can be
covered by short term loan or by applying “Revolving Working Capitol” from SME
bank or invoice financing from other factoring houses.
In the pro forma cash flow we had also considered the interest loan for the
“Revolving Working Capitol” and as well as the new leasing for the proposed new
machineries/vehicles RM 478,000.00 for 2011 and subsequent RM 119,500.00 each
year for 2012 and 2013.
The leasing commitment will be end in five years.
The Pro Forma cash flow for next three years, please refer to Appendix B.
8.5 Projected Balance Sheet
The following is a presentation of assets and liabilities. Because we have low

debt, our net worth is higher than other comparable companies.
Table 8: Pro Forma Balance Sheet for Next 3 Years.
i FIXED ASSETS 2011 2012 2013

Machineries/Equipment RM 1,200,000.00 RM 1,050,000.00 RM 900,000.00
Accumulated depreciation RM (150,000) RM (150,000) RM (150,000)
Net Book Value RM 1,050,000.00 RM 900,000.00 RM 750,000.00
RM 1,050,000.00 RM 900,000.00 RM 750,000.00
ii CURRENT ASSETS
Cash and bank balance RM 2,184,801.61 RM 4,389,903.38 RM 6,786,617.52

Trade and other debtors RM 500,000.00 RM 450,000.00 RM 300,000.00
RM 2,684,801.61 RM 4,839,903.38 RM 7,086,617.52
iii CURRENT LIABILITIES
Trade and other creditors RM 50,000.00 RM 50,000.00 RM 40,000.00

RM 50,000.00 RM 50,000.00 RM 40,000.00
NET CURRENT ASSETS
iv RM 2,634,801.61 RM 4,789,903.38 RM 7,046,617.52
(ii)-(iii)
v NET ASSET (i) + (iv) RM 3,684,801.61 RM 5,689,903.38 RM 7,796,617.52
vii. FINANCED BY :
Share capital RM 3,100,000.00 RM 3,100,000.00 RM 3,100,000.00
Fund deposits/Additional
RM RM 0.00 RM 0.00
capital
Net profit / (loss) year 1 RM 1,884,801.61 RM 1,884,801.61 RM 1,884,801.61
Net profit / (loss) year 2 RM 2,105,101.77 RM 2,105,101.77
Net profit / (loss) year 3 RM 2,346,714.15
EQUITY RM 4,984,801.61 RM 7,089,903.38 RM 9,436,617.52
vi. LONG TERM LIABILITY
Term Loan RM 300,000.00 RM 600,000.00 RM 1,000,000.00
Leasing RM 1,000,000.00 RM 800,000.00 RM 640,000.00
RM 1,300,000.00 RM 1,400,000.00 RM 1,640,000.00
vii NET EQUITY RM 3,684,801.61 RM 5,689,903.38 RM 7,796,617.52
8.6 Business Ratios
The following is a presentation of industry standard ratios vs. our own projections.
For the most part, we follow the industry averages. We expect to see the growths for
over the next two years to be consistent.
Table 9: Ratio Analysis
2011 2012 2013
Sales Growth 245.71% 10.00% 9.99%
Fixed Asset
Net Book Value 133.33% -14.29% -16.67%
Current Asset -8.65% 80.27% 46.42%
Current Liabilities 25.00% 0.00% 80.00%
Net Current Asset -9.11% 81.79% 47.11%
Net Asset 13.42% 54.42% 37.03%
Equity 23.11% 42.23% 33.10%
Long Term Liability 62.50% 7.69% 17.14%
Net Equity 13.42% 54.42% 37.03%
9.0 Project Controls and Evaluations
9.1 Financial controls

Our computer-based financial management system shall be used. With this system
we can review our sales and marketing activities on regular basis. This will allow us
to analyse the profitability of sales and these data can be use in our future
tender/job.
9.2 Performance standards

Three objectives to measure the project success is whether the project is completed
within estimated time, budgeted cost and within client’s acceptable performance,
safety and sustainability.
Therefore in today’s construction market every project with acceptable sizes shall
have it owns Project Quality Manual Plan.
A good quality plan will identify all of the organization external and internal
customers, cause the design of a process that produce the features desired by the
customers, bring in suppliers early in the process, cause the organization to be
responsive to changing customers need and prove that the process is working and
that quality goals are being met.
Project Quality Plan should be written with the objective to provide project
management with easy access to quality requirements and should have ready
availability of the procedures and standards thus mentioned.
The following list provides you the various Quality Elements that should be included
in a detailed Project Quality Plan:
• Company Quality Policy. Describes and summarized the project’s quality
objectives.
• Quality Objectives. Describes the project’s quality objectives.
• Management Responsibility. Describes the quality responsibilities of all
stakeholders.
• Documented Quality Management System. This refers to the existing
Quality Procedures that have been standardized and used within the
organization.
• Design Control. This specifies the procedures for Design Review, Sign-Off,
Design Changes and Design Waivers of requirements.
• Document Control. This defines the process to control Project Documents
at each Project Phase.
• Purchasing. This defines Quality Control and Quality Requirements for sub-
contracting any part / whole part of the project.
• Method Statement. Defines step by step how to carry out each specified
works.
• Test Plan. Procedures for Test Plan shall indicate the procedure and the
codes/standards used.
• Inspection Testing. This details the plans for Acceptance Testing and
Integration Testing.
• Non-conformance. This defines the procedures to handle any type of non-
conformance work. The procedures include defining responsibilities, defining
conditions and availability of required documentation in such cases.
• Corrective Actions. This describes the procedures for taking Corrective
Actions for the problems encountered during project execution.
• Quality Records. This describes the procedures for maintaining the Quality
Records (metrices, variance reports, executed checklists etc) during project
execution as well as after the project completion.
• Quality Audits. An internal audit should be planned and implemented
during each phase of the project.
• Training. This should specify any training requirements for the project team.
• Handover project. All requirements to close up project e.g. final
inspection/testing, documentation etc.
9.3 Monitoring procedures
Quality Assurances shall be used as monitoring procedures. It is a process of

evaluating the formal activities, managerial process and overall project performance
on a regular basis to ensure that the project will satisfy the required quality
standards.
Quality assurance includes all the activities related to satisfying the relevant quality
standards for a project. Another goal of quality assurance is continuous quality
improvement. Benchmarking can be used to generate ideas for quality
improvements. Quality audits in the other hand helps to identify lessons learned that
can improve performance on current or future projects. It is the quality assurance
function that tries to manage for the project scope, cost and time are fully integrated.
The monitoring procedures must be sufficient to achieve the required objectives
expected by the organization. In this regard the procedures must not only be specific
and detailed listing all the requirements, but also need to include all the steps to be
taken to ensure that those requirements and standards are met. Quality assurance
(i.e. final product testing) should be independent of the project itself (as well as the
project manager). This comes down from the project management guidelines for
effective quality assurance, and builds on a broad-based, organizational approach to
standards-based product testing.
The Project Management Institute Guide to the Body of Knowledge (PMBOK) refers
to quality assurance as the management section of quality management. This is the
area where the project manager can have the greatest impact on the quality of his
project. (Harold Kerzner, 2009)
Therefore the management process and procedures are important and these
processes must be closely observed to guide the project to achieve it’s success.
The process and the result of Quality Assurance shall summarise as follows;
The Input includes: Quality Management Plan, results of quality control
measurements and operational definitions.
Methods used: quality planning tools and techniques and quality audits.
Output includes: quality improvement.
9.4 Performance Audit

Periodic, independent, and documented examination and verification of activities,
records, processes, and other elements of a quality system to determine their
conformity with the requirements of a quality standard such as ISO 9001 : 2008,
established quality procedures and policies.
Any failure in their proper implementation may be published publicly and may lead to
a revocation of quality certification. Quality Audit is also called as conformity
assessment or quality system audit.
The audit shall ensure that the followings are followed;
i) The planned quality for the project will be met.
ii) The products are safe and acceptable for use.
iii) All pertinent laws and regulations are followed.
iv) Whether the project progress is well tracked.
v) Data collection and distribution system are accurate and adequate.
vi) Proper corrective action is taken when required.
vii) Improvement opportunities are identified.
viii)Whether the usage of resources and raw material is follow the budget.
9.5 Performance Analysis
The process of monitoring specific project results shall be determine to comply with
relevant quality standards and identifying ways to eliminate causes of unsatisfactory
performance. Such activities include continually monitoring process, identifying and
eliminating problem cause, use of statistically process control to reduce the
variability and to increase the efficiency of the process.
Buy conducting the Quality Control the organisation’s quality objectives are being
control and are to be met.
A good quality control system shall;

i) Select what to control
ii) Set standards that provide the basis for decisions regarding possible
corrective action
iii) Establish the measurement method used
iv) Compare the actual results to the quality standards
v) Act to bring nonconforming process and material back to the standard based
on the information collected.
vi) Monitor and calibrate measuring devices
vii) Include detailed documentation for all process
Overall the Quality Control shall be summarised as follows;

Input includes: work results, Quality Management Plan, operational definitions, and
checklists.
Methods used include: inspection, quality control charts, and compare to diagrams,
statistical sampling, flowcharting, Six Sigma, Pareto analysis and trend analysis.
Output includes: quality improvements, process improvement, acceptance
decisions, completed checklists, and process adjustments.
With that the company can improve its performance, quality, works process, profit, in
making decisions and etc.
10.0 Conclusion
Our recommendation are as follows;

To participate in “High Speed Broad Band to Homes”.
To invest in the new technology (micro trenching) consist of new/additional
machineries and personel.
The reasons;
Increase sales by 245% in the first year and subsequently 10% each years.
Increase profit by ~612% on the first year and about 11% on subsequent
years.
Due to the shortfall on the capable contractor we anticipate this business is
going to be our “Stars” referring to “BCG Growth – Share Matrix”.
Got very big growth potential if we are willing to invest more.
Appendix A: Cash Flow For the Past 3 Years Period.
Appendix B: Pro Forma Cash Flow for Next 3 Years Period.
Appendix C: Balance Sheet for the Past 3 Years.
Balance Sheet for the Past 3 Years.
i FIXED ASSETS 2008 2009 2010
Machineries/Equipment RM 500,000.00 RM 450,000.00 RM 400,000.00

Accumulated depreciation RM (50,000) RM (50,000) RM (50,000)
Net Book Value RM 450,000.00 RM 400,000.00 RM 350,000.00
ii CURRENT ASSETS
Cash and bank balance RM 1,984,404.80 RM 2,235,255.08 RM 2,758,914.64

Trade and other debtors RM 250,000.00 RM 300,000.00 RM 180,000.00
RM 2,234,404.80 RM 2,535,255.08 RM 2,938,914.64
iii CURRENT LIABILITIES
Trade and other creditors RM 50,000.00 RM 50,000.00 RM 40,000.00

RM 50,000.00 RM 50,000.00 RM 40,000.00
NET CURRENT ASSETS
iv RM 2,184,404.80 RM 2,485,255.08 RM 2,898,914.64
(ii)-(iii)
v NET ASSET (i) + (iv) RM 2,634,404.80 RM 2,885,255.08 RM 3,248,914,64
vii. FINANCED BY :
Share capital RM 3,000,000.00 RM 3,010,000.00 RM 3,010,000.00
Fund deposits/Additional
RM 10,000.00 RM 0.00 RM 0.00
capital
Net profit / (loss) year 1 RM RM 424,404.80 RM 424,404.80
Net profit / (loss) year 2 RM 350,850.28 RM 350,850.28
Net profit / (loss) year 3 RM 263,659.56
EQUITY RM 3,434,404.80 RM 3,785,255.08 RM 4,048,914.64
vi. LONG TERM LIABILITY
Term Loan RM 300,000.00 RM 350,000.00 RM 400,000.00
Leasing RM 500,000.00 RM 550,000.00 RM 400,000.00
RM 800,000.00 RM 900,000.00 RM 800,000.00
vii NET EQUITY RM 2,634,404.80 RM 2,885,255.08 RM 3,248,914.64
Appendix D: Presentation Sides.

The Business Plan Structure - BMOM5203 Part 2

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1.0 EXECUTIVE SUMMARY ........................................................................... 3

1.1 INTRODUCTION ......................................................................................... 3

2.0 CURRENT SERVICES .............................................................................. 6

2.1 COMPANY MISSION ................................................................................... 6

3.0 SITUATION ANALYSIS............................................................................. 7

3.1 COMPETITIVE ADVANTAGES ....................................................................... 7

4.0 BUSINESS ANALYSIS............................................................................ 15

4.1 OPPORTUNITIES ..................................................................................... 15

5.0 MARKET ANALYSIS SUMMARY ........................................................... 17

5.1 MARKET SEGMENTATION ......................................................................... 17

6.0 STRATEGY AND IMPLEMENTATION SUMMARY ................................ 19

6.1 COMPETITIVE EDGE ................................................................................ 19

7.0 MANAGEMENT SUMMARY.................................................................... 22

7.1 PERSONNEL PLAN .................................................................................. 22

7.2 MACHINERIES/EQUIPMENTS PLAN ............................................................ 23

8.0 FINANCIAL PLAN ................................................................................... 24

8.1 IMPORTANT ASSUMPTIONS ...................................................................... 24

9.0 PROJECT CONTROLS AND EVALUATIONS........................................ 32

9.1 FINANCIAL CONTROLS ............................................................................. 32

10.0 CONCLUSION ....................................................................................... 36

APPENDIX A: CASH FLOW FOR THE PAST 3 YEARS PERIOD. .............. 37

APPENDIX B: PRO FORMA CASH FLOW FOR NEXT 3 YEARS PERIOD. 38

APPENDIX C: BALANCE SHEET FOR THE PAST 3 YEARS. .................... 39

APPENDIX D: PRESENTATION SIDES. ...................................................... 40

1.0 Executive Summary

1.2 The Company

Cableconst is a certified ISO 9000: 2000 company, a class “B” contractor

1.3 Company History

Figure 1: Three Years Past Performances.

Table 1: Three Years Past Performances.

Less : Project cost

Less : Management Cost

Total expenses 631,480 681,628 736,791

2.0 Current Services

Cableconst currently is an OSP maintenance contractor to Messrs Fibercomm Sdn

1) Survey and design works for telecommunication works.

2.1 Company Mission

2.2 Keys to Success

• To participate in “High Speed Broad Band to Homes”.

3.0 Situation Analysis

3.1 Competitive Advantages

Having our HQ in Kuala Lumpur is an advantage to us as it is a central position.

3.2 Economic Forces

We shall require about RM 500,000.00 thousand to buy the necessary machineries

3.3 Technological Forces

3.4 Sosio- cultural Forces

This new technology is very environmental friendly whereby big trench

3.5 Legal and Regulatory Forces

“High Speed Broad Band to Homes” is inspired by our Federal Government

Below are one of the approval received for this technique;

i) Approval letter from MPS, MPSJ/KEJ/JL-SJ/100-7/15 Jld. 12( ) dated

ii) Approved micro trenching typical drawing; RGSB/HUAWEI/SD/LAT/2 rev. 0.

4.0 Business Analysis

5.0 Market Analysis Summary

5.1 Market Segmentation

Figure 2: Market Analysis (Pie)

Table 2: Market Analysis (Pie) and Annul Forecast Increament.

Telecom 10% 4.00 4.40 4.84 5.32 5.86

Maxis 10% 3.00 3.30 3.63 3.99 4.39

Jalenas 10% 2.10 2.31 2.54 2.80 3.07

Others 10% 3.00 3.30 3.63 3.99 4.39

Total 10% 12.10 13.31 14.64 16.11 17.72