Project PaperIndividual work.Choose a simple business related to aviation.Choose a business which easy to do research.Develops a plan to start up the business in

the following year with 5 years forecasted figures.

Start with Chap 2 – Marketing Management.Then chapter 3, 4, 5 and then write chapter 1.

Project Paper ScheduleChapter 2 – Mktg. Mgt 20th December 2011Chapter 3 – HRM 10th January 2011Chapter 4 – Ops. Mgt 31st Jan. 2011Chapter 5 & 1 Fin. Mgt & Intro 21st February

2011Presentation. 8 & 9 March 2011Submission of hard copy paper 16th March

2011

Oral Presentation AssessmentPresentation – fluency, vocab. & off text 10%Slides (x 10)– adequacy & graphics 10%Dressing – corporate-look 5%Questions & Answers – ad hock on

presentations about 10 questions 15%TOTAL 40%Time For Presentation – 10 minutes and Q&A

10 minutes

BP Paper AssessmentChapter 1 – 10% Chapter 2 – 10%Chapter 3 - 10%Chapter 4 – 10%Chapter 5 – 10% TOTAL – 50% (Content 7%; Structure, Flow and Grammar

3% for each chapter)

Business planLine spacing 1.5Align margins both sides.Table of Content.Each chapter on new page.Each chapter 10 – 15 pages.Declaration format frontName of students in front.Bibliography Hard cover binded

Other Assessment

Face to Face Meeting 5%

What Is A Business PlanOverall blue print to start a business.Includes information and forecasts of the potential

business. Prevents failure and increases chances of success

of the potential business.To attract investors to invest in the business.To apply of loan from banks for the business.Overall management functions.Reason to be realistic, sensible and practicable.If you fail to plan you plan to fail.

Chapter 1Company’s missionCompany core valuesCompany’s goals Type of business – products & servicesType of business – organization SP, P, Sdn. Bhd. LicensingSummary of Company’s capital and gearing (borrowing

required)Top management team Project Schedule, deadlines; renovations, buying hiring, set

up, commencement etc. Major business risks.Key success factors Summary of financial returns – ROI. IRR & payback

Chapter 2Marketing PlanSWOT Analysis Target market – size, segments, customers, Competitors in market.Product. Description, packaging, features, Price. Cost, competition, value, margins.Place. Location distribution, down line.Promotions – Advertisement, Sales Promotion,

Personal Selling, Public Relations.USP, marketing strategies & CRM.Marketing & sales job positions. Forecasted sales – 5 years (monthly and basis).Forecasted profits – monthly and yearly

Chapter 3Human Capital PlanOverall organization chart – in line with

business needs. Job positions – as per Org ChartJob descriptions – as per Org ChartJob specifications – as per Org Chart Total salaries and incentives; compensation –

monthly and annually.Recruitment & Selection Training & developing Performance management.

Chapter 4Operations Management Type of operations – job, batch, assembly,

continuous flow, Renovations and start up works Equipments, machines, tools, utensils, Transformation process flows.Receiving, logistics and storing.Quality control – input & output. Safety and security. Procurement, vendors & suppliers, raw materials.Operations system – POS, EDI, MRP, ERP.

Chapter 5Financial Management Financial job positions and job descriptions.System Summary of sales target. Summary of costs including start up.Summary of profits targeted.Summary of capital and borrowing.Summary of payment and collection terms.Monthly Cash flows for the 1st year plus 4 yearsIncome statements for 5 yearsBalance Sheet for 5 yearsSummary of Returns – ROI, IRR, paybackBasis or reasons for loan required.

Transformation process

19/04/23 13

14

The network perspective

IV.Continuous

Flow

III.Assembly

Line

II.Batch

I.Job

Shop

LowVolume,One of a

Kind

MultipleProducts,

LowVolume

FewMajor

Products,HigherVolume

HighVolume,

HighStandard-

ization

CommercialPrinter

French Restaurant

HeavyEquipment

Coffee Shop

AutomobileAssembly

Burger King

SugarRefinery

Flexibility (High)Unit Cost (High)

Flexibility (Low)Unit Cost (Low)

PROCESS LEVELS

19/04/23 15

Job – Aircraft manufacturing

19/04/23 16

Batching – Roti Canai

19/04/23 17

Assembly line – drink bottling

19/04/23 18

Continuous – fuel refinery

19/04/23 19

SAMPLE OF PROCESS FLOW

19/04/23 21

SAMPLE OF BAR CHARTTask Wk1

Wk2 Wk3

Wk4

Wk5

Wk6

Wk7

Wk8

Wk 9

Wk 10

License

Renovation

Recruiting

Machines

Utilities

Loan

Staff training

Raw materials

Fur &Fittings

M Vehicles

Commencement

SAMPLE GANTT CHART

Sample of Start Up CostsITEM UNIT U. PRICE (RM) TOTAL (RM)

Rental X 6 months 5,000 30,000

Rental Dep. X 2 months 5,000 10,000

Motor Vehicles X1 50,000 50,000

Machines Lump sump 35,000 35,000

Salaries X 6 months 20,000 120,000

Renovation Lump sum 100,000 100,000

Furniture Lump sum 30,000 30,000

Fittings Lump sum 40,000 40,000

Raw materials X 6 months 5,000 30,000

Utilities X 6 months 3,000 18,000

Total 463,000

All figures ‘000 Year 1 Year 2 Year 3 Year 4 Year 5

Sales 2,500 2,800 3.000 3,200 3,400

Less COS 1,750 1,960 2,100 2,240 2,380

750 840 900 960 1,020

Less Expenses

Salaries 160 176 194 213 234

Rental 120 120 120 125 125

Utilities 36 38 40 42 44

Fuel 12 14 14 15 16

M Vehicles 12 14 14 16 18

Stationary 12 14 15 16 17

Depreciation 51 51 51 51 51

Net Profit 374 413 452 482 515

Income Tax 94 103 113 107 128

Net Profit after tax

280 310 339 375 387

Cumulative 280 590 929 1,304 1,691

All figures ‘000 Year 1 Year 2 Year 3 Year 4 Year 5

Stock 30 30 30 30 30

Cash

Debtors

M Vehicles 40 30 20 10 0

Renovation 80 60 40 20 0

Deposits 10 10 10 10 10

Fur Fittings 56 42 28 14 0

Machines 28 21 14 7 0

Capital 400 400 400 400 400

Profits Un 280 590 929 1,304 1,691

Creditors

Loan 80 60 40 20 0

Common Errors Chap.1

Cannot explain type of business – sole proprietor or company (Sdn Bhd) and its relevant law.

Cannot explain the real product or service – how it is produced and sold.

Definition of capital confused.Poor business risks and success factors.Capital much higher than start-up costs.Poor Gantt chart.

Common Errors Chap. 2Poor customer explanation – who are the buyers.Poor explanation how the sales figures is

obtained.Sales figures too high beyond capacity and

target customers.Sales figures different from P&L Chapter 5.Poor explanation how the profits is obtained.Poor explanation on the costs and expenses.Poor explanation on ROI and IRR.Theories cut and paste.

Common Errors Chap. 3Too much generals than soldiers – many

managers than workers.Organization chart different than manpower

tables. Salary scale too low as compared to market

rate.Too many personnel for the business planned. Salary costs different from P & L.Theories cut and paste.

Common Errors Chap 4Confusing work flow charts.Poor layout plan for operations – no

dimensions.Too many machine descriptions than

purchased.Poor quality control measures.Poor start-up cost breakdown.

Common Errors Chap 5P&L (x 5 years)

Too simple did not take start-up expenses.Sales figures differed from Chap 2Profits figures differed Chap.2. No depreciation for assets.Margins too high not realistic.No income tax

Balance Sheet (x 5 years)Too simple did not take start-up assetsCash too much, not realistic.Cash not same as cash flow balance

Common Error Chap 5 (Cont)

Yearly net profits not accumulated Total assets declining at following years.

Cash FlowsCash in flow started earlier than Gantt chart.No cumulative cash flows provided.Too much cash balance because margin too

high (price high and costs low).Failed to derive Payback & IRR from cash flows.Figures no commas and with sen.