INTRODUCTION

1.1

ACKNOWLEDGMENT
Alhamdullillah, thanks to our Almighty Allah S.W.T. that has given us good health and

mind in conducting our Business Planning and we have finally completed this business planning on time. We have passed a lot of experience along the process on preparing this Business Planning. We would like to express out gratitude to Mr. Fader bin Abdullah as our lecturer for all supervision in preparing this business. He is also who has taught and guided us on how to set up this business planning and support student that make up our mind on business. We also would like to thanks to our parents, friends that are directly or indirectly involved in this business plan making by giving information, advices and support. We hope this project will give us benefit in our future life especially when we are really wanted to get involve in entrepreneurship. May Allah S.W.T. bless all of you, InsyaAllah.

1.2 LOGO AND EXPLAINATION

The Tree and Arrow : Signify our company name. The Globe The Green colour : Representing our beloved Earth. : Our company run a eco-friendly business. Hence, Green colour represent our Mother Nature. The White colour : Shows that we promised to run our business in a very legal way according to our religious and entrepreneur ethics and at the same time aim to preserve our Mother Nature.

1.3 OBJECTIVE, VISION AND MISSION

Tree Cycle Sdn Bhd. has own objective in order to expand business to achieve our goal. Below are our objective, vision and mission. OBJECTIVE As new company, our main objective is to develop initiative and reliable products in meeting market utmost demand while preserving our Mother Nature. VISION Our company vision is to expand our target market in whole Malaysia. MISION Want to maximum the profit by using low cost, ensure that our business can be accepted through all level and enlarge market size until to several districts while ensuring the sustainable of environment.

1.5 PARTNERSHIP/CONTRACT AGREEMENT

One partnership agreement has been signed between 5 partners to avoid any misunderstanding that may occur among the partners. Below are the individuals involved in managing the partnership business: NAME ADDRESS I.C. NO. PHONE NO. NAME ADDRESS I.C. NO. PHONE NO. NAME ADDRESS I.C. NO. PHONE NO. NAME ADDRESS I.C. NO. PHONE NO. NAME ADDRESS I.C. NO. PHONE NO. : ALIA DIANATI BT MOHD MUSTAFA KAMAL. : 182, PERSIARAN CINTA SAYANG, 08000 SUNGAI PETANI, KEDAH. : 901204-07-5118 : 013-5326398 : JUAINI BINTI JAMIL. : D-7-17 FLAT UDA, TANJONG TOKONG, 10470 GEORGETOWN, PENANG. : 900228-07-5310 : 012-4008174 : NURUL SHAZWANI BT. ZAINAL. : 8466 KG. SETOL, PERMATANG BULOH, 13200 KEPALA BATAS, SEBERANG PERAI UTARA, PENANG. : 900922-07-5142 : 013-4495835 : NURUL ZURAFIKA BT. MAHAMAD RAFFI. : NO.1546 LORONG SERAI WANGI 14/6, TAMAN SERAI WANGI II, 09400 PADANG SERAI, KEDAH. : 900919-07-5184 : 017-4096057 : SAFIRAH BT. ABD HASSAN. : NO.4 JALAN 4/4, SEKSYEN 4, 43650 BANDAR BARU BANGI, SELANGOR. : 900626-08-5696 : 019-2662993

Confirmation permitted that we are the partners of the Tree Cycle Sdn Bhd. that will start to operate on January 2011. This business is incorporated under Business Registration Act 1956 (Amendment 1978). We promise to fulfill all conditions that accepted by our partners. Every partner is considered the companys representative and acts on behalf of the company. The terms of condition as follow: a) Partnership Business Name All share partners agreed and has choose Tree Cycle as our business name. b) Operation/duration of the partnership This agreement was enforced start from the date accepted by partners and will be dissolve if one of the partner passes away or withdraws from the partnership unless there is an agreement otherwise. c) Type and Business Location Our business located at Lot 12, Jalan Permatang Pauh Taman Ampang Jajar, Butterworth, Pulau Pinang. This business runs as manufacturing promotional item. d) Capital Refer to conditions that accepted the partners are contributed e) Distribution Distribution of profit is subject to the percentage of the capital given by partners. f) Finance Institution All partnership agreed to choose MARA to manage all the business financial. g) Company Account Financial working connected with the specific account will manage by finance manager that is Nurulzurafika Binti Mahamad Raffi. h) Partnership

Profits or losses are to be shared equally. All business accounts books need to be kept at the main business premises. Partnership is allowed to check through the books and they have the right to keep a copy of the books. According to the agreement nobody from the partnership can: Gone bad debt and money that must be pay to partnership. As a guarantee to another party or involve in any action that can disturb partnership must not trusted or give a debt on the name of partnership accept daily business.

1.6 EXECUTIVE SUMMARY

Tree Cycle Sdn. Bhd. is a partnership business that based on the promotional item and located at Lot 12, Jalan Permatang Pauh Taman Ampang Jajar, Butterworth, Pulau Pinang. Our business located in a strategic area because in development area and close to main road, shop lot, restaurants, schools and housing area. In addition, the business area already provide with infrastructures and facilities. Our business provides non-woven bag. Tree Cycle Sdn. Bhd. has our own strategies and potential. Almost all of our competitors provide same products but we have our own style to compete with others and to attract customer. By having a proper management, we believe our business will earn profit and be successful.

PURPOSE

2.1 BUSINESS BACKGROUND

Name of business Address Phone numbers Email Type of business Main activity Capital Name of bank Company account number

: Tree Cycle Sdn. Bhd. : Lot 12, Jalan Permatang Pauh Taman Ampang Jajar, Butterworth, Pulau Pinang : 04 - 3895885 : tree_cycle@yahoo.com : Partnership : Manufacturing and supplying non-woven bag. : RM 500, 000. : Bank Pertanian Malaysia : (will be registered)

2.2 PARTNERS BACKGROUND

Full name I.C. number Permanent address Telephone number E-mail address D.O.B. Age Martial status Academic qualification Work experience Current Job

: Alia Dianati Binti Mohamad Mustafa Kamal. : 901204-07-5118 : 182, Persiaran Cinta Sayang, 08000 Sungai Petani, Kedah. : 013-5326398 : rdctvstarnochy@yahoo.com : 4th December 1990 : 20 years old : Single : Diploma in Investment Analysis Leadership. : Marketing Assistant Manager at Textile Company,Business Consultant : General Manager

Skills : Computer literacy, fluencies in English, Malay and Arab.

Full name I.C. number Permanent address Telephone number E-mail address D.O.B. Age Martial status Academic qualification

: Juaini Binti Jamil : 900228-07-5310 : D-7-17 Flat Uda, Tanjong Tokong,

10470 Georgetown, Penang.

: 012-4008174 : juainijamil@yahoo.com : 28th February 1985 : 25 years old : Single. : Diploma in Investment Analysis Bachelor in Marketing (B. HONS) fluencies in English

Skills : Ability using Microsoft Office, strong in public ability, and Malay. Work experience Present occupation : Saleswoman : Marketing Manager

Full name I.C. number Permanent address Telephone number E-mail address D.O.B. Age Martial status Academic qualification Work experience Present occupation

: Nurul Shazwani Bt. Zainal. : 900920-07-5142 : 8466 Kg. Setol, Permatang Buloh,
13200 Kepala Batas, Seberang Perai Utara, Penang. : 013-4495835

: wany_shaz@yahoo.com : 20nd September 1990 : 20 years old : Single : Diploma in Investment Analysis : Assistance Manager at MARDI : Administration Manager

Skills : Computer software. Strong in public ability, fluently speaks in English and Malay.

Full name I.C. number Permanent address

: Nurulzurafika Bt. Mahamad Raffi : 900919-07-5184 : No.1546 Lorong Serai Wangi 14/6,
Taman Serai Wangi II, 09400 Padang Serai, Kedah.

Telephone number E-mail address D.O.B. Age Martial status Academic qualification Work experience Present occupation

: 017-4096057 : nurulzurafikamahamadraffi@yahoo.com : 19th September 1990 : 20 years old : Single : Diploma in Investment Analysis : Penang Port Corporate Finance : Financial Manager

Skills : Fluencies in English and Malay, literacy in computer.

Full name I.C. number Permanent address Telephone number E-mail address D.O.B. Age Martial status Academic qualification Skills Work experience Present occupation

: Safirah Bt. Abd Hassan. : 900626-08-5696 : No.4 Jalan 4/4, Seksyen 4,

43650 Bandar Baru Bangi, Selangor.

: 019-2662993 : : 26th June 1990 : 20 years old : Single : Diploma on Investment Analysis : Strong in public ability, literacy in computer, good communication in English and Malay : HICOM Bhd. : Operation Manager

ADMINSTRATION PLAN

3.0 INTRODUCTION

Effective management is one of the factors that predict success. To achieve all this, we need to plan, organize and control everything in the company. General Manager, Administration Manager, Operating Manager, Marketing Manager, Financial Manager and other employees need to work as one team to achieve the goal. Good administration plan will achieve the office management no matter either the business is small or large. Function of administration part in each business is related to the office facilities and necessities such as water, electricity, telephone, computer, workers salaries and other items. The importance factors that determine the success or failure of planning strategies depend on how the organization is arranged. This is because the strength and successful of the organization is depend on the efficiency on how the board of director manage it. Also, to attempt the mission, each organization must have mission and objective to make sure their business achieve the target.

3.1 BUSINESS ADDRESS Tree Cycle Sdn. Bhd. Lot 12, Jalan Permatang Pauh Taman Ampang Jajar, Butterworth, Pulau Pinang. 3.2 LOCATION OF THE BUSINESS

Physical location Building

We rent all of the buildings involved in our business including factory and office. Building information is: o Type of building : shop house o Payment per month (rent payment) : RM2 000.00 o Basic infrastructure : water, electricity, telephone lines.

3.4 ORGANIZATION STRUCTURE Organization structure is important part in business.Selection of this structure make because: Every inividual had given a job not taken more power that limited for them

 The bridle of the business can be easier to get profit & identfy the weakness in the business. An equalization can be made between officer for make the individual easy in the job given

Table 3.1: List of Position and Number of Workers NO 1 2 3 POSITION GENERAL MANAGER PRODUCTION MANAGER MARKETING MANAGER NO OF WORKER 1 1 1

ADMINISTRATION

1 1 5

MANAGER 5 FINANCIAL MANAGER TOTAL

SCHEDULE OF TASK AND RESPONSIBILITIES JOB General Manager RESPONSIBILITY Administration Manager Coordinate all departments to achieve business goal. Control company organization Solved problem with logical decision Ensure all activities related to business plan Choose the workers and specify them. Prepare information regarding premises location to running business. As secretary to the company. Make decision on behalf of General Manager in case of any emergency happened to General Manager. Operation Manager Ensure all the needs for production enough and complete time to time. Make sure supplier can supply high quality raw material with suitable price.

Marketing Manager

Identify and analyze the effective promotion strategy Drafting the market strategy to ensure services given are effective and systematic Attract new customers and new marketing opportunities to increase no. of sales from time to time by doing promotion Manage at the sales marketing part To recognize competitors and find strategies to compete with them Specify the operation time according to sales budget

Financial Manager

Provide and manage report on the companys financial. Record all the financial activities from time to time. Ensure the financial achieve the companys target.

SCHEDULE OF REMUNERATION Table 3.3: Remuneration and employees incentive POSITION NO OF WORKER General Manager Administration Manager Operation Manager Marketing Manager Financial Manager Total (RM) 1 1 1 1 1 5 MONTHLY SALARY (RM) 2,500 2,000 2,000 2,000 2,000 10,500 EPF (12%) 300 240 240 240 240 1,260 SOCSO (2%) 50 40 40 40 40 210 MONTHLY SALARY (RM) 2,150 1,720 1,720 1,720 1,720 9,030 YEARLY SALARY (RM) 25,800 20,640 20,640 20,640 20,640 108,360

Table 3.4: List of office equipment

TYPE Computer Table set Air Conditioner Telephone set First Aid Fire Extinguisher Chair TOTAL

NO. 1 3 1 1 1 1 6 14

Table 3.5: Administration Budget

ITEM A) FIXED ASSET Computer Table set

NO. OF ITEM

PRICE/UNIT (RM)

TOTAL PRICE (RM) 500 300

1 3

500 100

Air Conditioner Telephone set First Aid Fire Extinguisher Chair White board B) MONTHLY EXPENSES Building (rent) Administration Personnel -Salary -EPF&SOCSO Utilities Telephone Bill C) OTHER EXPENSES Deposit Registration TOTAL

1 1 1 1 6 1

1,000 50 50 150 80 130

1,000 50 50 150 480 130 2,000 10,500 1,470 300 200 4,000 2,500 23,630

MARKETING PLAN

2.1

INTRODUCTION Marketing is defined as the activities that are carried out systematically to encourage and

increase sales of products or services as long as it is in line with religious and ethical practices. Marketing analysis is made to analyses market size, target market, customer, competitors, price strategies, promotion and market share. The main objective of marketing plan and analysis is to increase important aspects such as total sales, quality of services, number of customers and profit. As well as contributing profit for business with good marketing management activities, it will provide satisfaction to customers and indirectly benefit the society at large. Refer to the marketings information, Tree Cycle Sdn. Bhd. had plan and organized some strategies to attract the customers to buy our product and to make a successful business. Our company distributes all kinds of non-woven bags such as non-woven packaging bag, printed bag, grocery bag, fashion bag and foldable bag. This mission is started with implementation of GREEN from the world leader. In Malaysia, Penang Island (internationally recognize island) has implemented the use of ECO-BAG since 2009.

2.2 i. ii. iii. iv.

MARKETING OBJECTIVE Enhance customer's products brand name and packaging standard. Provide Total Customer's Satisfaction by ensuring product quality and services that value for investment. Improve public awareness about the importance of using eco-friendly product that can ensure the sustainable of the environment. Develop initiative and reliable products in meeting market utmost demand while preserving our Mother Nature.

v.

SMART : Specific - Market share objectives : obtain 40% market share by Measurable - To increase profit: An objective maybe to increase sales 3% from 20112013. Achievable - To survive: The hard times the business is currently in. Realistic - To grow: The business may set an objective to grow on year for the next 3 years. Time - To increase brand and environmental awareness over a specified period of time

2.3

PRODUCT DESCRIPTION

Our company, Tree cycle Sdn. Bhd. is offering non-woven bags for promotional purpose. Non-woven bag is ideal for promoting company which is developing, expanding their product's market and will need non-woven bag to promote their products and brand name. Non-woven bag can also increase a company's sales, image and markets by giving elegance and delicate nonwoven bag as free gift or corporate gift. It is not expensive and therefore can save advertising cost

but still can provide great benefit for companies. The application of non-woven fabrics is wide and varied because it is not weaved like the traditional cloth, they provide strength and characteristics superior than common cloth yet at the same time the fabric is soft from its flexibility. Our ranges of non-woven bags are manufactured with good quality propylene material which is environmental friendly and it is used to serve various purposes. These bags are 100% recycled and are manufactured with a durable, liquid resisting and dehumidifying fabric which can be recycled. These are available in desired color, shape, design and sizes. It can be reused several times and non-woven bag act as an alternative of single use of paper or plastic bags.

2.4

MARKET ANALYSIS Nowadays, recycle and reusable item has become the pivotal issue in the world. The usage

of plastic bag which derived from oil is harmful to the users. Hence, the non-woven bag has become another alternative in replacing the use of plastic or paper bag in packaging the products. The vision of making the world a better place by GO GREEN- Creation of Green had influence the customer demand where we are become more aware that pollution matters is getting worst all around the world and our earth is confront a serious threat. It took a government awareness scheme to get people to wake up to use alternative packaging material that can be reuse. Hence, here are the example of the country that reduce the usage of plastics and paper bags :Use in the United States First introduced in the US in 1977, plastic shopping bags for bagging groceries at stores flourished in the 1980s and 1990s, replacing paper bags. In 1990s, governments in some countries started to impose taxes on

distribution of disposable plastic bags or to regulate the use of them. Supermarkets increasingly discourage consumers from using disposable plastic bags and offer alternative reusable shopping bags with small prices, providing information on environmental damage associated with plastic bags. Because of these encouragements, reusable shopping bags are gradually taking place beside plastic bags. The shape of reusable shopping bags which are now becoming popular is usually different from what they used to be before the prevalence of plastic bags. The apparel industry promotes reusable shopping bags as sustainable fashion. Many supermarkets encourage the use of reusable shopping bags to increase sales and profit margins. Most non woven polypropylene bags cost $0.10-0.25 to produce and are sold for $0.99-$3.00 in most cases. As stores receive diminishing returns due to saturated markets, there are concerns that prices will drop and they will become the new single use bag. Some major supermarket chains have string or calico bags available for sale. They are sold with announcement of environmental issues in many cases. The ones sold in supermarkets often have designs related to nature, such as prints of trees or that of the earth, in order to emphasize environmental issues. Some supermarkets give points for customers when they bring own shopping bags. When the customers collect a certain amount of points, they can usually get discount coupons or gifts, which motivate customers to reduce plastic bag use. Since 1999, 2.88 billion reusable bags were imported into the United States for resale and giveaway under Harmonized Tariff Code (HTC) 4202923031 as reported by the United States International Trade Commission. Unknown numbers of bags were imported under other HTCs or produced domestically. Annual import reports showed acceleration of bag distribution with the rise of environmental claims of reusable bag reseller in the United States from 130 million in 1999, to 504 million in 2008. Of these, 1.6 Billion bags were imported from China between 2004 and 2008. Legislation and reusable bags Some governments have encouraged the use of reusable shopping bags through the regulation of plastic bags with bans, recycling mandates, taxes or fees. The legislation to discourage plastic bag use has been passed in parts of South Africa, Ireland, Hong Kong and Taiwan. In 2002 the Australian Federal Government studied the use of throwaway plastic bags and threatened to outlaw them if retailers did not voluntarily discourage their use. In 2003 the government negotiated with the Australian Retailers Association a voluntary progressive reduction of plastic bag use which led to a number of initiatives, including the widespread distribution and promotion of Green Bags.

Fashion Trend Because of the encouragement of reusable shopping bags by governments and supermarkets, reusable shopping bags have become one of the new fashion trends. The apparel industry also contributed to make it popular to have fashionable reusable shopping bags instead of disposable plastic bags. Famous designers and popular fashion brand companies are promoting their original shopping bags and release new designs one after another. British designer Anya Hindmarchs $15 "I'm Not A Plastic Bag" (an unbleached cotton bag) sold out in one day, and fetched $800 on the Internet. 2.5 TARGET MARKET The target market is therefore defined as the group of customers with needs and wants that can be satisfied by the business through the supply of goods and/or services. 2.5.1 GEOGRAPHIC Our target is to distribute our product to the footwear and apparel stores in Queensbay Mall, Gurney Plaza, and Sunway Carnival Mall. 2.5.2 DEMOGRAPHIC Our target is firstly to the residency wholesaler where they need the product that can help them to pack things easily while saving the environment and Mother Nature. Moreover, it is not harmful to earth and also children since our product packaging are not made from the plastic. 2.5.3 PSYCHOGRAPHIC

Our product is reasonable and easy handling where everyone loves to have it. Our revolution non-woven bags will attract people who love to help to save Malaysias environment by creating awareness among the public on the dangers of expansive use of plastic, reduce or minimize the plastic usage starting from shopping complexes by using recyclable shopping bags.

2.5.4

MARKET SIZE Market size is the total potential to purchase that is expected from the target market.

The potential purchase includes purchases of the competitors product within the same market. The market size often quoted in unit of sales or ringgit for a specific period.eg: daily, weekly, monthly or yearly. Table 2.1 : Assumption the number of target group Target Group Queensbay Mall Gurney Plaza Sunway Carnival Mall Total Footwear 20 15 10 Apparel 100 35 30 Unit (Monthly) 3,000 3,000 2,500 Total Unit (Monthly) 360,000 150,000 100,000 610,000

Assumption of target market for Tree Cycle Sdn. Bhd.

15% of footwear shop 25% of apparel shop 15% + 25% = 40% will be the target group 40% x 610,000 units = 244,000 units So, the expected sales = 244,000 units

Target Group Footwear and Apparel shops TOTAL

Quantity x Price per unit 244,000 x RM 2.00

RM 488,000 488,000

2.5.5

MARKET SHARE

Before enter market (monthly) Competitor Company A Company B Percentage (%) 60% 40% 100% RM 366,000 244,000 610,000

After enter market (40%) Competitor Company A Company B Tree Cycle Sdn. Bhd. Percentage (%) 40% 20% 40% 100% RM 244,000 122,000 244,000 610,000

2.6

SALES FORECAST In general, customer awareness of a business that has just started operations will take some

time. While the customers familiarize themselves with the new business and our service, the business can expect sales to be less than the estimated market share. Customer buying patterns can be influenced by certain seasons that occur within a particular business period. Besides that, our product is not a seasonal product. Then the income for every month we can consider it will be constant.

MONTH January February March April May June July August September October November December Year 1 Year 2 (increase 1%) Year 3 (increase 2%)

RM 488,000 488, 000 488, 000 488, 000 488, 000 488, 000 488, 000 488, 000 488, 000 488, 000 488,000 488,000 5,856, 000 5,914,560 6,032,851

2.7 2.8.1

COMPETITORS PRODUCT STRATEGIES Packaging Non-woven bags are everyday essentials for most business establishments. A non-woven bag printed with high quality material can promote our business wherever and whenever the bag is used. Carrying these convenient bags to places means carrying our business name too. With a durable, long-lasting bag to use, customers can easily reuse it and for a longer time as well. Quality The good quality propylene material which is environmental friendly and it is used to serve various purposes. These bags are 100% recycled and are manufactured with a durable, liquid resisting and dehumidifying fabric which can be recycled which became a worldwide phenomenon, capturing the hearts of manufacturers and retail shoppers alike that were drawn to its size and durability.. These are available in desired color, shape, design and sizes. Product Differentiation

The non-woven bag come out in the market in various colors and printed design requests by the customer. It has many range of size and we also offer the metallic gold and silver non-woven bags for the purpose of promotional item. Our non-woven bag is using the ultrasonic sewing method and as for printing we also use eco-friendly ink.

2.8.2

PRICE STRATEGIES Cost based Pricing For pricing strategies, our company decided based on cost pricing. That is because cost-based pricing is the simplest and most commonly used pricing strategy. It is based on the total cost of the product or service plus a standard markup. The mark-up is the profit margin that is desired from the sale of the product. For our product, we chose the current market price. The price of the non-woven bags has been restricted by the authority and we will sell our product according to the price restricted. The price of our product will be different according to the form of product packaging. So our company has decided the price of our product is RM 2.00 per non woven printed bag. Price (non woven printed bag) = Total cost per package + Mark-up = RM 1.80 + RM 0.20 = RM 2.00 Competition based Pricing

The price for our product also based on competitors pricing. There are so many competitors in manufacturing bags, so we have compared the prices and have decided that our product price is RM2.00 for non-woven printed bag. We also think that it is reasonable price and the wholesalers will accept our product after it entry the market.

2.8.3

PLACE STRATEGIES Distribution strategy is aimed at establishing a structured and controllable distribution system to ensure the product offered reaches the target customer. A distribution channel moves goods from producers to consumers. We have decided to distribute product through retailers and wholesalers. Channel : Manufacturer Wholesaler

For the selling through whole sellers, our product will be bought in large amount. Our product will be distributed to all branded store such as Vincci, Clarks, PDI, Crocs, Bonia, Quicksilver, Levis, B.u.m, and many more. 2.8.4 PROMOTION STRATEGIES Campaign The No Plastic Bag Day campaign initiative was kicked off on 2nd January 2010 with the aim to encourage further reduction of plastic bag usage

across the city. Therefore, it better for the shopper to make a habit of using less plastic bags. Customers who insist on plastic bags will have to pay 30 cent per bag for three days from Monday to Wednesday. By encouraging the public to use nonwoven shopping bags, this campaign creates attentiveness among the community on the dangers of extensive usage of plastic as well as the paper bags. Website It is an effective strategy to advertise our product through our website which is http//www.treecycle.com/

2.8 2.8.1

BUDGET MARKETING REMUNERATION BUDGET

Position

No.

Monthly Salary (RM)

EPF Contribution (12%) (RM)

SOCSO (2%) (RM)

Total (RM)

Marketing Manager

2,000.00

240.00

40.00

1,720.00

Sales Officer

1,300.00

156.00

26.00

1,118.00

Clerk

800.00

96.00

16.00

688.00

Total (RM)

3,526.00

2.8.2 TYPE

MARKETING BUDGET FIXED ASSET (RM) MONTHLY EXPENSES (RM) OTHER EXPENSES (RM)

LORRIES BUSINESS CARDS SIGNBOARD

140,000.00 RM35x2 = 70.00 1,000.00

SALARIES/EPF/SOCSO MAINTENANCE FUEL PROMOTION

6,156.00 700.00 1,000.00 1,000.00

INSURANCE ROAD TAX

1,600.00 200.00

TOTAL (RM) GRAND TOTAL (RM)

141,070.00

8,856.00

1,800.00 151,726.00

OPERATIONAL PLAN

3.0

INTRODUCTION Operation planning is important to our company to make sure the operation in our company

is working efficiently and can produce good product to our customers. Before the operation started, it has prepared several planning to ensure every process in operation will decibel about all of the operation process from the first it held until the end of the process.

For operation part in our company, it planning and controlling activities of all the resources. When a company has a good planning in operation, a company can gain productivity. Our target is to widen our market to avery parts of Malaysia. Operation management is the process of planning, directing, coordinating and controlling. These are to prevent from wasting raw material. Operational activity production depend on the sale forecast from marketing department. In the operation plan, good planning will help to minimize production cost and maximizing profit.

3.1

DEFINITION Operational plan involve the production of a products or services according to the quantity,

quality, specifications and time to the customers requirements at the lowest possible cost. It comprise: Business inputs Transformation process Output

3.2

PROCESS FLOW CHART Process planning involves identifying the step-by-step processes from beginning to end to

make the product or to provide the services. Sometimes, there are several alternative processes available and the one that is most suitable and cost effective will be choose for the operation. The chosen process can be illustrated by using a flow chart. Before preparing this chart, all the activities involved in the manufacture of the product must be identified.

Beside a flow chart, the sequence of activities can also be shown through a process chart. This is a schematic representation of the step-by-step sequence that takes place in a production process and it uses four universally recognised symbols. 3.2.1 PROCESS CHART SYMBOL

To prepare a process chart, all the operational activities required for the production of the product will need to be identified first. Then, these activities are arranged according to sequence and proceed to draw the process chart.

SYMBOL

ACTIVITY

DESCRIPTION Activities that modify,

OPERATION

transform or give values to the input. Transport activity occurs

TRANSPORTATION

when materials are transported from one point to another.

Activity that measures INSPECTION standard of the in-process material, finished products or services. The symbol is used when STORAGE the in-process materials or finished products are stored in the storage area.

3.3

OPERATING HOUR

Tree Cycle Sdn. Bhd. will be operating 6 days per week and will be close on Sunday. The working hour will be from 8.00am to 5.00pm and 1 hour will be given for rest. Day Monday - Saturday Sunday (Note : not include public holiday) 3.4 PRODUCTIVITY INDEX Operating Time 8.00am 5.00pm close

Productivity Index (PI) = Total Sale per Month / Total Operation Cost Per Month = RM 488,000 / RM 195,200 = 2.5 3.5 CAPACITY PLANNING

We produce 251,160 units of non-woven bag and our working days are 26 days per month. 251,160 units / 26 days = 9,660 units per day Our company will be operating 8 hours per day ; 9,660 units / 8 hours = 1,208 units per hour

3.6

RAW MATERIAL REQUIREMENT IN A MONTH Sources Amount Required 655gsm 4L Price (RM) 1.13 / unit 300/litre Total Price per month (RM) 19,240 31,200 50,440

Non-Woven Fabric Ink Total

3.7

MACHINERY PLANNING 1. Bag Making Machine

Average sale forecast per month = RM 488,000 Price per unit Number of output per month = RM 2.00 = RM 488,000 RM 2.00 = 244,000 units If the number of working days per month is 26 days, the amount of output to be produced per day is : = 251,160 26 days = 9,660 units Num. of machine required = 9,660 x 1 min = 1 machine 420 min 23 units

2. Printing Machine

Total of units be produce per day = 9,660 units The amount of paper bag can be printed per operation time is:Operation time = 1 minutes per 23 units Total of operation each 1 minutes = 9,660 units = 420 times of 23 unit Total minutes per day = 420 x 1 = 420 minutes Total hour per day = 420 = 7 hours 60 Total machine requirement = (9,660 / 420) x (1 / 23) = 1 machine NO. 1 MACHINE Bag QUANTITY 1 PRICE/UNIT (RM) Making 18,855 Machine 2 Printing Machine TOTAL 22,626 1 3,771 3,771 TOTAL (RM) 18,855 PRICE operates

3.8

MANPOWERING PLANNING

No. of worker required = (Worker planned rate of production per day/Worker productive time per day) Worker standards production time per unit Assumed that a worker can produce a finished product in 0.1 minutes. = (9,660 / 420) x 0.1 minutes = 2 workers Position Operational Manager General Worker No. of Personnel 1 2

3.9 Remuneration Table for Operational Department Monthly Position No. Salary (RM) Operational Manager General Workers Total 1 2,000 EPF Contribution (12%) (RM) 240 SOCSO (2%) (RM) 40 Total (RM)

1,720 516 = 1,032 2,752

600

72

12

3.10

OPERATION OVERHEADS

Overhead Maintenance Total

Total (RM) 950.00 950.00

3.11

OPERATION COST

Direct material cost Non-woven fabric Packaging material Direct labour cost Workers salaries Operation managers salary Overhead cost Maintenance RM 950 RM RM 1,032 1,720 RM RM 19,240 200

Therefore, the monthly operation cost is RM 23,142.

3.12

OPERATION BUDGET

TYPE MACHINES & EQUIPMENTS STORE RENOVATION RAW MATERIALS SALARIES PACKAGING MATERIALS TOTAL (RM) GRAND TOTAL (RM)

FIXED ASSET (RM) 22,626 10,000

MONTHLY EXPENSES (RM)

OTHER EXPENSES (RM)

50,440 2,752 200 32,626 53,392 86,018

FINANCIAL PLAN

ADMINISTRATIVE BUDGET
Particulars Fixed Assets Land & Building Office Equipment Furniture and Fitting 1,4 60 1,2 00 Working Capital 9,03 Salaries,EPF,and SOCSO Utilities Bill Rental Telephone Bill 0 3 00 2,00 0 2 00 Pre-Operations & Other Expenditure Other Expenditure 4,0 00 2,5 00 2,6 Total 60 0 11,53 00 6,5 0 0 20,69 0 2,50 4,00 00 0 2 00 2,00 0 3 9,03 0 0 1,20 1,46 F.Assets Monthly Exp. Others Total

Deposit (rent, utilities, etc.) Business Registration & Licences Insurance & Road Tax for Motor Vehicle Other Pre-Operations Expenditure

MARKETING BUDGET
Particulars F.Assets Monthly Others Total

Exp.

Fixed Assets 1,0 Signboard Business Cards Vehicle (Van) 00 70 20,0 00 Working Capital 6,1 Salaries, EPF & SOCSO Promotion Fuel Maintenance 56 1,0 00 1,0 00 7 00 Pre-Operations & Other Expenditure Other Expenditure 1,8 00 21,0 Total 70 56 8,8 00 1,8 6 00 31,72 1,8 00 00 7 00 1,0 56 1,0 6,1 0 00 70 20,00 1,0

Deposit (rent, utilities, etc.) Business Registration & Licences Insurance & Road Tax for Motor Vehicle Other Pre-Operations Expenditure

OPERATIONS BUDGET
Particulars F.Assets Monthly Exp. Others Total

Fixed Assets 22,62 Machines and Equipment Renovation 22626 10000 6 10,00 0 Working Capital 50,44 Raw Materials Carriage Inward & Duty Salaries, EPF & SOCSO Packaging Materials 0 2,7 52 2 00 Pre-Operations & Other Expenditure Other Expenditure 32,62 Total 6 2 53,39 8 86,01 00 2 2 0 2,75 50,44

Deposit (rent, utilities, etc.) Business Registration & Licences Insurance & Road Tax for Motor Vehicle Other Pre-Operations Expenditure

TREE CYCLE SDN.BHD DEPRECIATION SCHEDULES Fixed Asset Cost (RM) Method Economic Life (yrs) Office Equipment 1,460 Straight Line 5 Fixed Asset Cost (RM) Method Economic Life (yrs) Furniture and Fitting 1,200 Straight Line 5

Yea r -

Annual Depreciation 29

Accumulated Depreciation 0 29 2 8 58 4 87 6 1,16 8 1,46 0 0 0 0 0 0 Signboard 1,000 Straight Line 5 Accumulated Depreciation 2 00 4 00 6 00 8 00 1,0 00 0 0

Book Value 1,46

Yea r -

Annual Depreciation

Accumulated Depreciation 24 0 48 0 72 0 96 0 1,20 0 0 0 0 0 0 Business Cards 70 Straight Line 5 Accumulated Depreciation 0

Book Value 1,20

1,16 1 87 6 58 4 29 2 2 3 4 5 6 7 8 9 10 0

24 24 0 24 0 24 0 24 0 0 0 0 0 0

96 0 72 0 48 0 24 0 -

1 2 3 4 5 6 7 8 9 10

2 29 2 29 2 29 2 29 2 0 0 0 0 0

Fixed Asset Cost (RM) Method Economic Life (yrs) Annual Yea r Depreciation

1 2 3 4 5 6 7

200 200 200 200 200 0 0

Book Value 1,0 00 8 00 6 00 4 00 2 00 -

Fixed Asset Cost (RM) Method Economic Life (yrs) Annual Yea r Depreciation 1 1 2 3 4 5 6 7 4 1 4 1 4 1 4 1 4 0 0

Book Value 70 56

14 28 42 56 70 0 0

42 28 14 -

Fixed Asset Cost (RM) Method Economic Life (yrs) Annual

Vehicle (Van) 20,000 Straight Line 5 Accumulated

Yea r

Depreciation -

Depreciation 0 4,0

Book Value 20,00 16,00 0 12,00 0 8,0 00 4,0 00 Renovation 10,000 Straight Line 5
Accumulated Depreciation Book Value

1 2 3 4 5 6 7 8 9 10

4,000 4,000 4,000 4,000 4,000 0 0 0 0 0

00 8,0 00 12,0 00 16,0 00 20,0 00 0 0 0 0 0

Fixed Asset Cost (RM) Method Economic Life (yrs)

Annual Yea r Depreciation

Machines and Equipment 22,626 Straight Line 5

Accumulated Depreciation Book Value

Fixed Asset Cost (RM) Method Economic Life (yrs)

Annual Yea r Depreciation

22,6 1 2 3 4 5 6 7 8 9 4,525 4,525 4,525 4,525 4,525 0 0 0 0 4,5 25 9,0 50 13,5 76 18,1 01 22,6 26 0 0 0 0 01 13,5 76 9,0 50 4,5 25 26 18,1 1 2 3 4 5 6 7 8 9 0 2,00 0 2,00 0 2,00 0 2,00 0 0 0 0 0 2,00 00 4,0 00 6,0 00 8,0 00 10,0 00 0 0 0 0 2,0 00 0

10,00 8,0 6,0 00 4,0 00 2,0 00 -

Amount 948,832 LOAN & HIRE-PURCHASE AMMORTISATION SCHEDULES Interest Rate 5% Duration (yrs) 5

LOAN REPAYMENT SCHEDULE TREE CYCLE SDN.BHD

Method
Year Principal

Baki Tahunan
Interest Total Payment Principal Balance

189,76 1 2 3 4 5 6 7 8 9 10 6 189,76 6 189,76 6 189,76 6 189,76 6 0 0 0 0 0

47,44 2 37,95 3 28,46 5 18,97 7 9,48 8 0 0 0 0 0 237,20 8 227,72 0 218,23 1 208,74 3 199,25 5 -

948,832 759,065 569,299 379,533 189,766 -

HIRE-PURCHASE REPAYMENT SCHEDULE

Amount Interest Rate Duration (yrs)
Yea r Principal

5% 10
Interest Total Payment Principal Balance

1 2 3 4 5 6 7 8 9 -

TREE CYCLE SDN.BHD PRO FORMA CASH FLOW STATEMENT

PreOpe rati ons T OT AL YR 1 Y EA R2 YE AR 3

MONTH

10

11

12

CASH INFLOW Capital (Cash) Loan 48,6 60 948, 832 97 ,6 00 97, 60 0 39 0,4 00 997, 492 97 ,6 00 48 8,0 00 97, 60 0 39 0,4 00 48 8,0 00 97, 60 0 39 0,4 00 48 8,0 00 97, 60 0 39 0,4 00 48 8,0 00 97, 60 0 39 0,4 00 48 8,0 00 97, 60 0 39 0,4 00 48 8,0 00 97, 60 0 39 0,4 00 48 8,0 00 97, 60 0 39 0,4 00 48 8,0 00 97, 60 0 39 0,4 00 48 8,0 00 97, 60 0 39 0,4 00 48 8,0 00 97, 600 390 ,40 0 488 ,00 0 48, 66 0 94 8,8 32 1,1 71, 20 0 4,2 94, 40 0 6,4 63, 09 2

Cash Sales Collection of Accounts Receivable TOTAL CASH INFLOW

1,1 82, 91 2 4,7 27, 74 4 5,9 10, 65 6

1,2 06, 570 4,8 18, 395 6,0 24, 965

CASH OUTFLOW Administrative Expenditure Salaries,EPF,and SOCSO Utilities Bill Rental Telephone Bill 9, 03 0 30 0 2, 00 0 20 0 9,0 30 30 0 2,0 00 20 0 9,0 30 30 0 2,0 00 20 0 9,0 30 30 0 2,0 00 20 0 9,0 30 30 0 2,0 00 20 0 9,0 30 30 0 2,0 00 20 0 9,0 30 30 0 2,0 00 20 0 9,0 30 30 0 2,0 00 20 0 9,0 30 30 0 2,0 00 20 0 9,0 30 30 0 2,0 00 20 0 9,0 30 30 0 2,0 00 20 0 9,0 30 300 2,0 00 200 10 8,3 60 3,6 00 24, 00 0 2,4 00 10 8,3 60 3,6 00 24, 00 0 2,4 00 108 ,36 0 3,6 00 24, 000 2,4 00

Marketing Expenditure Salaries, EPF & SOCSO Promotion Fuel Maintenance 6, 15 6 1, 00 0 1, 00 0 70 0 6,1 56 1,0 00 1,0 00 70 0 6,1 56 1,0 00 1,0 00 70 0 6,1 56 1,0 00 1,0 00 70 0 6,1 56 1,0 00 1,0 00 70 0 6,1 56 1,0 00 1,0 00 70 0 6,1 56 1,0 00 1,0 00 70 0 6,1 56 1,0 00 1,0 00 70 0 6,1 56 1,0 00 1,0 00 70 0 6,1 56 1,0 00 1,0 00 70 0 6,1 56 1,0 00 1,0 00 70 0 6,1 56 1,0 00 1,0 00 700 73, 87 2 12, 00 0 12, 00 0 8,4 00 73, 87 2 12, 00 0 12, 00 0 8,4 00 73, 872 12, 000 12, 000 8,4 00