business plan
TRANSCRIPT
“SHOPNO TRAINING & OVERSEAS LIMITED”
VOCATIONAL TRAINING INSTITUTE AND MANPOWER AGENCY
Presented to: Mrs. Dilara Afroz Khan (DAK)
Presented By:
Name ID Section
Mir Razin Mahmud 083-264-530 4
Farazi Sayeed Ahmed 091-0155-030 7
Maliha Tasnim 091-0221-030 7
Sadia Rahman Nitu 091-0450-030 4
Rubayat Mahmud 091-0595-030 7
Date: 31/ 07/ 2012
1. EXECUTIVE SUMMARY 0 | P a g e
Shopno Training and Overseas Limited is a training institute that will provide
training skills on beautification, driving and cooking. It will exclusively cater to meet the
needs of the lower middle class female sector of the society. The training centre will be
standing at Bashabo because it is a place where beside this area there live many helpless poor
women, which means we can easily serve the helpless females on becoming self sufficient.
Our training centre has been divided into two major parts; the first one will provide cooking
training following the beautification training. We will contact with an outsource company to
provide training facilities to those females who want to establish their career on driving
profession. Aside from the vocational skills Shopno Training and Overseas Limited will
also provide soft skills to the candidates. This is because; the soft skills are required for the
scope of long term sustainable skills for jobs. As per soft skills Shopno Training and
Overseas Limited aims to provide basic knowledge about writing and reading, general
knowledge on lifestyle, health awareness, how to behave professionally, and basic computing
knowledge to the students. Technologically fast paced era demands some knowledge of the
computer at least to some extent. This is because we have decided to provide them with the
knowledge of computer so that when our students can use these skills for their own
convenience and also for job purposes. For any type jobs in abroad a driving license is a must
therefore we have come to the decision of providing driving skills to our students by making
an agreement with a professional driving company. Shopno Training and Overseas
Limited will hire good expertise on the above mentioned vocational and technical so that
practical demonstration along with theoretical knowledge can train the students well. Trainers
of cooking and beautification will be chosen prior to their experience in this field and their
own academic qualifications. Moreover, we will have agreements with the companies of
Malaysia and Singapore. When our candidates will be eligible we will contact with them to
judge the qualification of our candidates for working over there. We will help our candidates
to make contact for job over there to earn better, we have five members who are the initial
investors and we are equally paying the principal of the training centre. All the operations
will be carried out under our inspection. We will be solely liable for the running of the
training centre and we will be liable for carrying out major decisions regarding the betterment
of our training centre. We are planning to launch ourselves as the community member who
will try to reduce the poverty and illiteracy burden of the society especially for women.
2. PROFILE OF THE TEAM
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Maliha Tasnim
Sadia Rahman Nitu
Mir Razin Mahmud
Rubayat Mahmud
Farazi Sayeed Ahmed
Figure 1- List of the Board of Directors
The Principal of the institute and the person who will synchronize all the activities of
the institute is one of our board of directors, Ms. Maliha Tasnim.
Finance: Ms. Sadia Rahman Nitu will be the head of the finance department. She
has sound knowledge about finance and he has competent knowledge about how to
procure funds and make productive use of them.
Human Resource: Mr. Mir Razin Mahmud will be the head of human resource
management department. He has got adequate knowledge about managing the most
important resource of the institute, its people. Their salaries and incentives will be
handled by him and he will supervise them. He will also be responsible for the entire
grievance handling mechanism.
Marketing and sales: Ms. Rubayat Mahmud will be responsible for all the
promotional activities and she will be also be in charge of all the sources of revenue
generating activities. Her interactive skills and her interpersonal competence will be
highly aligned with the marketing goals of the institute.
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Procurement and materials management: Mr. Farazi Sayeed Ahmed will be the
head of this department. His bargaining power and his communication skills will
enable him to carry out the functions of this department well.
Information systems: Ms. Rubayat Mahmud will be the head of the information
systems of the institute. Her sound knowledge about technology and information
systems will be well acknowledged by her supervision in this department. She will be
responsible for all the managing of the students’ database and their personal
information.
3. INDUSTRY OVERVIEW
Bangladesh, a country with a population of over 160 million people has one of the
highest populations in the world. We are operating in a country where the population is the
steering wheel of the economy. It is one of the highest exchequers in the foreign exchange
reserve of this country. Since the inception of the Recruitment industry in 1976, Bangladesh
has export over 7 million people abroad and earned over $100 billion over the last 35 years.
The Apex trade body of the Recruitment Agency is BAIRA which is Bangladesh Association
of International Recruiting Agencies, is an association of national level with its international
reputation of co-operation and welfare of the migrant workforce as well as its approximately
700 member agencies in collaboration with and support from the Government of Bangladesh.
With the increase in demand for Bangladesh’s Human Resource abroad, another
complimentary industry to the recruitment industry that grew over time in the Vocational
training industry. It is the industry where unskilled or semi-skilled workforce is provided
training through public and public organizations in order to increase the competencies of the
workforce that will enhance in creating a better workforce. This workforce will then be
utilized to full capacity by exporting them to foreign countries where it will earn remittance
for the government. Bangladesh’s economic development and integration in the world
markets clearly show that its population has the capability to reduce poverty through their
own efforts (swisscontact, 2012).
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According to the Labor Ministry of Bangladesh, in a research survey that they have
conducted in many different countries, they have found that there is a potential industry for
skilled that is yet to be tapped by the Bangladeshi Recruitment Agencies in countries like
Malaysia, Middle-East and Asia Pacific, Singapore to be more precise. They said that there is
a high demand for Bangladesh skilled workers as they put on huge effort on their work. To
develop these skilled workers, Bangladesh needs to set-up Vocational Training institute with
adequate technology, expertise and knowledge (mole, 2006).
Ever since Bangladesh started exporting its manpower, it has sent workers to Saudi
Arabia, Kuwait, UAE, Qatar, Iraq, Libya, Bahrain, Oman, Malaysia, Korea, Singapore,
Brunei, Mauritius, Laos, Spain, Lebanon, Libya, USA and others. The recruitment agencies
have been exporting unskilled and semi-skilled workers. While now the industry for skilled
workers in emerging in the same foreign markets from Bangladesh. Singapore and Malaysia
have opened its gateway for skilled Bangladeshi workers (wikipedia, 2012).
Our Position in the Industry
Malaysia and Singapore is a high potential Market for skilled Bangladesh Workers
and Employee. Currently the workers who are exported to these countries are either unskilled
or semi-skilled. But we have differentiated into the skilled market segment of the Industry
which is in the early adapter’s stage. Therefore the demand for the workers and employees
from our company will be in a leading position as very few companies have entered into this
market segment as we will be providing the vocational training as well as the recruitment
services for the employees.
Our Competition
Since our industry is in the early adapter’s stage, the competition will not be as fierce
as it exists in the unskilled or semi-skilled sector. There are very limited vocational training
institute in the public as well as the private sector. But it is developing rapidly. Currently
there is not any institute that is providing the training facilitates that we will be providing. So
the competition is not stiff yet. Once we are set-up, we will take the first movers advantage in
the skilled employees sector in the industry and will be in the lead by the time competition
emerges in the industry.
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4. COMPANY OVERVIEW
COMPANY NAME:
Shopno Training & Overseas
Limited
4.1 MISSION STATEMENT
“We are ‘Shopno Training and Overseas Limited’ and we are here to provide quality
training for those female individuals in our society who wish to acquire vocational skills
and build a career with those skills. We will achieve this by employing qualified and
experienced trainers who will be capable to deliver to the trainees according to the
standards that we set.”
Our Values
Qualified Trainers: Our qualified trainers are our most important resource. We
encourage females to be self sufficient through acquiring qualified training and
initiative.
Customer Focus: We are committed to understanding our trainee’s needs and
exceeding their expectations through acquiring skilled training.
Adaptability: We are ready to meet the ever-changing demands of manpower
industry for providing female skilled manpower.
Teamwork: We understand that good decision-making, innovation and creativity
are cultivated in respectful exchanges of thoughts, ideas, opinions and advice. We will
create strong teamwork to make those underprivileged women become self sufficient
which will help to improve country’s overall economy.
Integrity: We are committed to the highest level of ethics and professional
standards.
Accountability: We accept personal and professional responsibility for our actions
and results; we focus on finding solutions and achieving excellence in all that we do.
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4.2 VISION STATEMENT
“To be the most trusted female training institution in the country for creating and
transferring skilled manpower”
Our main concern is to be the trusted female training institution in Bangladesh for
transferring them to make them self sufficient by transferring them in countries like
Singapore and Malaysia. In our country there have been ethical problems of serious concern
over the past few years regarding the injustice done by many individuals who get sent abroad
by organizations for work. Ethical issues such as promising innocent females for jobs that
they will later on go abroad and find out that they will never have. Most often these
individuals come back to Bangladesh with no more money than they had before leaving, if
not less. Also there is a security question for female workers who has faced insecurity and
also faced physical harassment in abroad. An even more important issue related to our vision
is that, many a times, individuals go abroad for work however they cannot perform and they
do not possess the adequate skills for this we are committed to provide them the best training
service in Bangladesh.
The above mentioned reasons are why being the most trusted institution (nationally
and internationally) for creating and transferring skilled manpower with female group is of
utmost importance to us as a business and it is exactly what we want to achieve.
4.3 SERVICES OFFERED
We provide all services for the recruitment of female workers from Bangladesh as
required by our overseas clients including giving the workers necessary training. We will
give them vocational training on cooking, beautification and driving then we will fulfill all
the necessary arrangements for the workers to send them overseas without any hassle. The
services that we are currently offering are:
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The products that we are offering to our students are:
3 Months Training on Cooking and Beautification and 1 month training on
Driving (Only for female)
Grooming on professional attitude and health and hygiene
Language Course on English
Compulsory Technical Skill courses
[Cooking+ Beautification]
Duration
->Grooming
->English)
Cooking 3 month+ 1 month Practice
-> 5 class/weekBeautification
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->Health & Hygiene -> 2 hour class/day
-> 20 hour/month
-> 100 hr./5 month
Driving
Table 1: Training Program
The above table shows the content and duration of our training (short) programs.
Basically trainees have the option of getting driving, beautification and cooking. However
with either training grooming, English and Health and Hygiene are compulsory courses.
Every offered training program lasts a total of 3 months, in which one month will be
allocated for examinations. Sessions will be held 5 times a week and 1 hour a day, which
sums up to 20 hours a month and 100 hours throughout the program.
We are giving training in the following category. Our vocational training will be
4.4 STRATEGIC GOALS AND OBJECTIVES
Strategic Goals and objectives are the different kind of milestones the company has to
put up to overcome the long-run vision. They are divided between long term criteria’s placed
by our company to set the targets alongside. Our institutes goal and objectives are mainly
listed separately on the following.
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Goals: To sustain the trustworthy position in manpower agency market, in terms of high performance and quality service by underprivileged female group.
To explore market potential for a huge number of unemployed Bangladeshi
youth especially women who has potentiality in driving tailoring cooking or
beautification
To find better job opportunities for skilled, semi skilled trained Bangladeshi
manpower.
Our goal is to provide best possible Bangladeshi manpower to the manpower
sourcing countries like Singapore, Thailand and Malaysia
As per the company demand our objective is to supply of competent and
disciplined youth which will be provided by our vocational training course.
Our objective is also to negotiate for better positions for Bangladeshi workers
in the country importing Bangladeshi workforce.
To establish Bangladeshi workers as the most competent and honest workforce
Headhunting for professional manpower for outbound employment
To reduce the country’s unemployment burden
To ensure safe and secure international job opportunity for female workers.
Objectives: We have divided our objectives based on timeframe, which are short-term and
long -term objectives. Details are given bellow –
Short-term objectives:
Increase the number of trainees by at least 10% per year through
advertisements and word-of mouth referrals
Increase revenue by 10% each year
The advertisement cost will reduce to 10% per year after the third month of
the first year
Long-term objectives: We want to survive in the market and make a brand image in the eyes
of our target customer by establishing a trustworthy company for transferring female
workers.
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4.5 OVERALL STRATEGY
Strategy, narrowly defined, means "the art of the general." It is a combination of the ends
(goals) for which the firm is striving and the means (policies) by which it is seeking to get
there. The strategies of our company is listed and taken as a whole and broken down in to
short and long term goals to recognize the targets of efficient advertising schedule and the
others following it. A strategy is sometimes called a roadmap which is the path chosen to
plow towards the end vision. The most important part of implementing the strategy is
ensuring the company is going in the right direction which is towards the end vision.
Short term goals:
Our foremost short term goal is to make our vocational training centre an ambience
where selected candidates will not only become professionally sound but also will get to
increase their technical, analytical and communication skills as they will be overwhelmed
with countless opportunities to do so.
We will polish the talents and capabilities of our students in such a manner that they
become effable and we thus hope to become efficacious in our journey of effectively shaping
the career of the potential candidate. Our utmost try would be to differentiate ourselves from
the stereotypical manpower agency that is just sending manpower only for profitability.
Our target is to become recognizable through positive word of mouth effects so that
we can capture as many potential candidates as possible so that we can bring a difference in
the lives of a mass number of underprivileged working woman.
Long term goals:
Our long term target is to capture 20% market share in leading vocational and
manpower agency institute by year 5 and also it is our long term goal to achieve sales
revenue of TK in order to break even and earn profit by end of year 3.
Also our long term strategy is to form strategic partnership with foreign firm in
order to establish our company brand as trustworthy manpower and vocational training
agency. In the time span of five years for increasing brand awareness we will also become
partners of social activities like awareness in female health and education facilities.
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We are also planning to become strategic partner of events in universities and schools
of Dhaka to target professional potential students who are eligible to work in foreign
countries by year 8 when our company will be established in the market. This will help us to
attract a new target market to outsource skilled and professional manpower.
5. INDUSTRY OVERVIEW AND ANALYSIS
5.1 FIVE FORCES
Porter’s Five Forces include the possible threat of new entrants, the threat of substitute
products and the bargaining power of buyers and suppliers with the competitive rivalry
among the industry. They determine the competitive position of our company, and are listed
as follows:
Risk of new entrants
As our school has lots of potentiality to do far better than other institutes and there is a
market demand for vocational training, so there is always a threat of new entrants. For this,
we have to make our business competitive with the current market and as our target market is
lower income level, we will provide the best teaching service and study materials at a very
low cost possible. This means, we will make sure that we are in the economics of scale. The
threat of new entrants is a function of both barriers to entry and the reaction from existing
competitors. There are several types of entry barriers like-
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Economies of scale:
Economies of scale refer to the decline in unit costs of a product or service (a function
that goes into producing a product or service). Here we can attain EOS through “utilizing
maximum number of experienced teachers with a minimum quantity”. It means fewer
teachers but all of them are extremely qualified which means “effective and efficient” both.
Now as we have experienced faculties so our unit cost will be low because of their experience
and productivity regarding the service.
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5 Forces
Bargaining Power of CustomersVery high in the market, as the target market can swtich to other institutions (especailly garments sector)
Threat of New Entrants Threat is high in the businessPositive for us, as the traget market is only women
Threat of Substitute ProductsOther training centersGarments industry of Bangladesh
Bargaining Power of SuppliersSupplier of human resource has high powerSupplier of equipment has low power
Competitive Rivalry within industryHigh in this industryExit barrier is low, as less number of employees and customers in the initial stage
Figure 2: Five forces
Product differentiation
New entrants must spend a great deal of money and time to overcome this barrier. The
main difference of our services is that we are focusing only on women, so that they can lead
their life with self-respect. We, ourselves, can also differentiate the service by shaping
students in such a manner that every student can tell the world that she is not just an ordinary
girl as she has some other identity which can increase her level of dignity. We will give our
candidates a perfect vocational training which they can utilize further in their lives in the
future.
Cost advantages independent of scale
Cost advantages can include access to the best and cheapest raw materials, possession of
patents and proprietary technological know-how, the benefits of learning and experience
curve effects, having built and equipped plants years earlier at lower costs, favorable
locations, and lower borrowing costs. Here our cost advantage is that we are focusing only
four types of vocational training. The main motto behind this is that we will provide fewer
types of training, but highly efficient and quality service. On the other hand we have
experienced curve effect too because of our extremely qualified teachers. Also, we can
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reduce our cost, as we will select those female candidates only who will pass the medical
examination.
In terms of this business, switching cost is high because our customers or students can
switch from one school to another whenever they want. We will become the most “cost
effective” in the market, where general people will get benefit higher than their expenses.
Competitive rivalry within the industry
As the business is emerging day by day and it has a large potential market, naturally
there will be competitive rivalry within the industry. But for our school the competition is
much more intense because our target is lower middle class and these are the people who
keep on switching their products and services in hot pursuit for money value. We will try to
grab female students from the rural areas and will make them understand that how beneficial
is our program is. The exit barrier is comparatively low in this market, as if we switch off,
students can easily move on to other companies. And the employees of Shopno can get
another job according to their quality.
Bargaining power of supplier
Suppliers can exert power over firms in an industry by raising prices or reducing the
quality of purchased goods and services, which will reduce profitability. For our school we
have two types supplier one is human resource supplier who supplies faculties and employees
and the second one is supplier of equipment’s e.g. chairs, tables etc.
Here, human resource suppliers are dominated by few firms where equipment’s
suppliers are dominated by many firms. So the bargaining power of supplier for human
resource is high but bargaining power of supplier for equipment is low. In educational
industry suppliers' products are not differentiated to such an extent that it is difficult or costly
for us to switch from one supplier to another. We can produce or manage things by ourselves.
But if it’s about our teachers and employees then it’s really costly and can’t be differentiated
so for this underlying reason, our bargaining power of supplier is high here.
Bargaining power of customers
As the customers or parents have lots of options regarding the admission of his /her child
and there are lots of other renowned schools that are providing low-cost vocational training
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therefore there is a high bargaining power of customer exists here cost therefore plays a huge
factor here and thus we will try to keep out costs low and competitive. The garments industry
of Bangladesh is quite powerful, so the female students have the opportunity to go and work
there. Though they are not in this industry, but they gave the bargaining power to the female
students.
Threat of substitute
Our school has other substitute too in our country. Our main focus area is “learning
proper vocational training” not for grabbing so called certificate. Here the proper vocational
training means providing them with the knowledge that is sustainable for the future and
through which they can earn a living. But there is some other institute who has the same thing
named “extra-curricular activities” for developing students’ potentiality to do something and
“vocational training center” where they trained their students technologically or giving
students’ lesson about sewing, plumbing, designing and enhancing wooden furniture’s etc.
Complementary
This is our sixth one where we complement our service through additional benefits and
services. Our core service is “giving a quality training” where the complementary is creating
path for students where they can identify themselves or can achieve something through
vocational training. It means our language program will be free and in that course we will
also help them to boost up their confidence level, dignity level, and will enhance their ways
of living as well.
5.2 Pest Analysis of Malaysia & Singapore
PEST analysis stands for "Political, Economic, Social, and Technological analysis" and
describes a framework of macro-environmental factors used in the environmental scanning
component of strategic management. It is a part of the external analysis when conducting a
strategic analysis or doing market research, and gives an overview of the different macro-
environmental factors that the company has to take into consideration. It is a useful strategic
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tool for understanding market growth or decline, business position, potential and direction for
operations.
Political Situation of Malaysia and Singapore-
Malaysia political situation is attractive for foreigners. It is a developed country and
currently political situation of Malaysia for overseas is good. The politics of Singapore takes
the form of a parliamentary representative democratic republic country. Political factors have
a big role to play in our business. It could be the sole determinant of whether we will stay in
business or shut down. It is true that expansion of export labor depends on whether the
government allows it or not, however, fortunately at the moment the government has no such
restrictions so starting and running our business should not be a problem in terms of the
legality involved. The national laws and regulations change can affect the basic service or
methods of processing trainees. There are so many acts and provision followed by the
government and law enforcement authorities relating to the business and marketing
communications which affects the business and marketing communications in particular. The
government has relaxed and licensed many institutes for labor supply with ease and at low
cost.
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POLITICAL
The expansion of export of labor depends upon whether the government allows it or not.From Malaysia and Singapore point of view political environment is positive for our business.
ECONOMIC
Persistent rise in the price level (inflation) will reduce the revenue for the Institute. A fall in income per capita due to recession will actually diminish our institute's revenue.Recent economic crisis in economy indicates negativity on our business.
TECHNOLOGICAL
Can influence the quality of learning and the ease of teaching butstill technology advance ment can influence negatively on our business as human needs decreases as the technology advanced.
SOCIAL
Today’s trend is to go abroad and earn some moneyIn Malaysia social envirnment is good to live for foreign workersIn Thailand social environment is also positive for foreign workers.
Figure 3- PEST Analysis
Economical Situation of Malaysia and Singapore -
Malaysia, a middle-income country, has transformed itself since the 1970s from a
producer of raw materials into an emerging multi-sector economy. Malaysian people
achieved a high-income status by 2020 and to move farther up the value-added production
chain by attracting investments in Islamic finance, high technology industries, biotechnology,
and services.
The Najib administration also is continuing efforts to boost domestic demand and
reduce the economy's dependence on exports. Nevertheless, exports; particularly of
electronics, oil and gas, palm oil and rubber which remain a significant driver of the
economy. Malaysia could be vulnerable to a fall in commodity prices or a general slowdown
in global economic activity because exports are a major component of GDP.
So, overall economy of Malaysia for recruitment of foreign workers is not positive.
Economic factors currently are not in our favor. Although there is an existing demand for our
products, economic factors namely inflation and per capita GDP are not in our favor.
Inflation is increasing annually and per capita GDP is decreasing, this leaves our potential
customer s with very little ability to purchase.
Singapore enjoys a system of free economy. It is, however, a social democratic country
where government plays a major and crucial role in directing economy, trade, and commerce.
Its government also has an active hand in infrastructure support.
Social Analysis of Malaysia and Singapore -
There are four main Ethnic groups in Malaysia. The main Language of Malaysia is
Bahasa Malaysia which is their official language. English and Chinese is very widely spoken
all across Malaysia. Tamil, Malayalam, Punjabi Thai are spoken in some parts of the eastern
region. There are several indigenous languages; most widely spoken are Iban and Kadazan.
Language is a big factor to meet the social challenge.
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The major social factor that affects the business is the growing trend of youngsters going
abroad for work. This trend will be of great advantage for us and if we capitalize on it
effectively we can generate a lot of profit.
Technology Analysis of Malaysia and Singapore -
Malaysia is a very technologically advanced country. There is a widespread use of
internet all over the country. Energy such as electricity, gas and water is available is almost
all across the country. The telephone communication services is available everywhere.
Technological forces can influence our business in the sense that it can significantly
influence the quality of the students’ learning and significantly facilitate the teacher’s
teaching and trainers’ training.
Singapore is a very small country but leads as an example in the information highway.
There is a widespread use of internet all over the country. Energy such as electricity, gas and
water is available is almost all across the country.
Indicating Favorable condition Indicating unfavorable condition
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Figure 4- PEST in a glance of Malaysia & Singapor
5.3 INDUSTRY LIFE-CYCLE
A concept relating to the different stages an industry will go through, from the first product
entry to its eventual decline. Like other living creatures, industry also has its circle of life.
The industry lifecycle imitates the human lifecycle. The stages of industry lifecycle include
embryonic, growth,, shake-out, maturity and decline.
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PEST
Figure 5- Industry Life-cycle
When we compare our strategy towards the five levels of the life cycle, we are at the
moment on the “Growth” stage of the life cycle. This means that the vocational training
service of ours is on a market with an expanding and positive growth. We have a bright future
of increasing growth ahead of us as the industry is still yet to prosper fully. Therefore our aim
is to gather as much market share and increase our profitability. We are also willing to
increase our expertise and efficiency so that we can reduce the overheads involved in running
the training services business. The reduction in costs will increase our comparative advantage
as competition will begin to increase with a few new other companies providing similar
services in the establishing market. The increasing competition as well as the rise in
efficiency will lead to a fall in price or the charge recorded in services.
We are projecting an increase in our number of female recipients due to our distinct
competencies of offering a variety of services for a minimum charge. Our ‘focus’ generic
strategy increases this advantage and helps the firm to stay in better shape with the tight
pressure of competition around the manpower market. We will also invest heavily on
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Currently Operating!
advertising since we need our voices and strategies to reach the determined and independent
women all over the country. All these advertising and other overheads of running the strategy
needs us to keep a significant amount of investment cost which is although less then what we
do needed on the Embryonic stage. Overall with the intense level of competition as well as
our locked-in core and distinctive competencies, we can expect for very high returns over the
following years.
5.4STRATEGIC GROUP ANALYSIS
Every year a total of 400 youths are being provided the following training in 12
Vocational Training Centers located in the various local YMCAs in Bangladesh.
Vocational Training is offered to men and women in the trades of Sewing &
Tailoring, Carpentry, Agro-Mechanics, Electronics, Electrical House Wiring and Motor
Winding.
After completion these trade courses many of them have been working
different Tailoring shops, Garments Factories, Engineering & Electrical Workshops and
Furniture Marts for earning their livelihood and to help their family to lead a better life.
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5.5SUMMARY SWOT
Strength Weakness Opportunities Threats
Five Forces
Target market is only female candidates.
Provide proper lessons with job security.
Other industries are also quite powerful.
Bargain power is high for buyers.
One successful batch can open huge opportunity.
Bangladesh government can provide subsidy to promote this.
New training institutions and manpower agencies can come in the industry any time.
Industry Life
Cycle
“Growth” stage so high demand on our service
Other new entrants emerging on the market
Lock in a profit fixing position and get hold of the niche market share of
High Competition will be faced to regain the target market share
PEST
Many rights groups which speak for the people on their behalf. They are very powerful as well.
Legal system is a mixture of legal system of English common law, Islamic law, and customary law that is very similar to the Bangladeshi Laws.
Singapore is a high income economy and Malaysia is a middle income economy
Malaysia and Singapore is a very technologically advanced country.
The net migration is negative in Malaysia.
The main Language of Singapore is Mandarin which is also the official language.
The State controls the media in Singapore.
The land area is very small in Singapore.
Singapore is very expensive.
Singapore enjoys a system of free economy.
There will be changes in the economic policies that will reduce the biasness.
The net migration is very high in Singapore.
Foreign direct investment (FDI) is now 12.5% of GDP. Foreign investors appreciate the country’s efficient and transparent bureaucracy, eradication of red tape, and a highly effective human capital base.
The literacy rate is very high.
The society is dominated by the Chinese in Singapore.
Loneliness is a big threat to the societies of Singapore
People have to be very skilled in order to live in those societies.
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6. Internal Analysis
6.1 COMPANY VALUE CHAIN ANALYSIS
Value chain analysis is the process of analyzing each area of a company's operations that
bring materials one step closer to finished goods and consumption. The major links in a value
chain include inbound and outbound logistics, operations and sales activities. Using value
chain analysis involves mapping out all operational activities and assessing their
effectiveness and efficiency in an attempt to reduce costs and improve product quality.
Value-chain analysis looks at every step a business goes through, from raw materials to the
eventual end-user. The goal is to deliver maximum value for the least possible total cost.
Figure 6: Value Chain
Primary Activities-
Teaching & Training:
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INPUT (Students)
OUTPUT (Students)
Teaching and Training
Human Resource
AdministrationFinancing
MarketingEmploying
Primary activities
Support activities
The first and foremost primary activity that we have is the teaching and training. In
our school, we are planning to give three types of training and they are- cooking, beauty
training and driving. As our school is concentrated in women, so we have chose to give these
types of training and driving is included because of the high demand of drivers in those
countries. The language course will be also offered so that they can enhance themselves in
English and our trainers will help them to develop their knowledge about the norms and
values of those countries.
At the same time, we will also provide the students training about various
materialistic courses, which will make them competent about how they can manage with their
income and lead a healthier life. This training will be given systematically, so that they can
get everything and apply in their future life.
Employing:
This activity is very important for us, as making those women’s future secure is the
primary motto of our school. After they are done with their education and training with us,
then we will send them to those specific countries and will place them to various jobs
according to their skills. In addition, we will also provide apprenticeships to various parlors,
tailors, restaurants, etc. so that they can use their skills at hand, while they are in Bangladesh.
This will make them more confident and competent about their work.
Marketing:
We will be doing some marketing activities so that the students actually think that we
are worthy enough to give them facilities which can make their future secure. What will do is
actually promoting our institution to the customers so that they get to know we are here for
them. We have to make people aware about their situations and tell them what can be done to
remove those miseries from their lives. For those reasons, marketing will be done
extensively. And we will have a strong marketing strategy which will try to attract the village
women heavily, as they are the sufferers of the poverty line. We will also do the followings:
More advertising to get more investments and customers (students)
Promotional activities to sustain the current rate
Handle the competition by taking initiatives
Support Activities-
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We need the support activities for fulfilling the primary activities. The activities of support
units are described below:
Finance Unit:
In this unit, we will be having both short-term and long-term goals that will be helpful to
establish our institution for future. We will be trying to focus on these objectives:
Increase sales and profit through economies of scale.
Try to keep operations cost low.
Keep the debt/equity ratio as low as possible.
Prioritize expenditures in order to allocate resources efficiently and equitably.
Make better use of budgeted resources to achieve outcomes and produce
outputs at the lowest possible cost.
Try to attract long-term investments (more than 1 year)
Financial reports
Human Resource Unit:
This unit will basically work for establishing suitable working environment and engage in
recruiting employees. We will be trying to focus on these objectives:
Use experience curve system in the organization.
Hire the skilled and experienced teachers both academic and vocational.
Ensure customer responsive culture in the organization.
Periodic review of employee satisfaction
Performance Management and Incentive Awards
Development programmes
Wellness and Employee Assistance Programs
Administrative Unit:
The short-term and long-term objectives of the administrative unit of this institution are
described below:
Maintain a simplified acquisition program for supplies and services
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Positioning
Coordinates services and supplies
Organization Management
Maintain training information
Provide training information
Coordinate agency training program
6.2 EXISTING CORE COMPETENCIES AND
FUTURE COMPETENCIES
Core competence
Our core competency is represented by our human resources, in other words, by the
qualified teachers and technical instructors. On the other hand we are going to provide
personal development programs which is our another core competence.
Future competencies
Our target market is female students. In our country there are so many government
and non-government institution are available who wants to promote female empowerment. So
we will get soul advantage from those organizations in future.
Figure 7- Core competenc
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Resources
Capabilities
Competitive
Advantage
Efficiency (High-Moderate)Innovation (Low)Quality (High)Customer Responsiveness (High)
Differentiation Strategy Increased Value
Superior Profitability
Strategy Building Block
6.3 SUMMARY SWOT
Strength Weakness Opportunities Threats
Company
Value Chain
Analysis
Teaching and employing together.
Strong communication among the members.
Providing all training in one building.
There are many materials needed for the processing which lead to higher costs.
If anyone breaks the partnership, the business may fall apart
A rising demand in the domestic and international market.
Extension of export employees to more countries.
Entrance of new vocational institute.
Since the students belong socioeconomic class is below C, there may be risk of quitting in the meantime.
Existing Core
Competencies
High quality training
Expensive than
others
Expansion of
future market
Regulation
instability
Future
Competencies
Huge patron opportunity & flexibility
Quality can be hampered
Become the largest women training center
Regulation
instability
]
7. MARKET OVERVIEW
7.1 POTENTIAL CUSTOMERS
Our potential customers are females of lower to lower-middle class on our society.
Most of these women workers cannot afford higher degree education of driving, cooking and
beautification and, moreover, they are willing to start working as soon as possible in
countries like Malaysia and Singapore. Most of them prefer to go to these specific countries
for valuable work hence these are our potential customers. They have the highest demand for
our services and hence we will best sell our services to them. We want to make sure that we
are providing supply where there is substantial demand.
In order to best identify our target customers and understand their demand, we
conducted a survey:-
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Survey Result and Analysis: Determining Demand
Total sample size: 25 female workers
1. Do you think vocational education will create better job opportunities for you?
(a) Yes: 22 response (b) No: 3 response
Yes No0
5
10
15
20
25
22
3
Vocational institute create better job opportunity
Figure 8- Response- Survey Q1
Analysis: From the above data, we can see that majority (more than 80%) respondents have
shown interest in vocational education and think that it can obtain them better job
opportunity. This result valued from our sample is of high importance because it makes our
project proposal stronger.
2. Do you want to go abroad for working?
(a) Yes: 18 response (b) No: 7 response
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Yes No0
2
4
6
8
10
12
14
16
18
18
7
Going abroad for working
Figure 9- Response- Survey Q2
Analysis: The above data shows that majority (72% to be exact) of the female workers want
to work abroad from our service center towards Malaysia and Singapore. This indicates a
demand of 72 out of 100 students. The rest 28 % were not that much interested in going
abroad.
3. Will you pay a little extra compared to the existing cost if we ensure your job in
a foreign land?
(a) Yes: 16 response
(b) No: 9 responses
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Yes No0
2
4
6
8
10
12
14
16
16
9
Paying extra for foreign job
Figure 10- Response- Survey Q3
Analysis: 64% female workers are willing to pay extra money if job is ensured abroad. 36%
female workers were reluctant to pay for ensure foreign job. But the irregularity here is that
those students who did not wanted to go abroad for working answered negatively this
question.
4. Will you pay extra money for additional courses aside the skill courses?
(a) Yes: 19 response
(b) No: 6 response
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Yes No0
2
4
6
8
10
12
14
16
18
20
19
6
Extra money for added course
Figure 11- Response- Survey Q4
Analysis: 76% female workers are willing to pay for additional courses aside skill courses
whereas 24% of the respondents did not want to pay extra.
5. What skill do you wish to learn from vocational institution?
(a) Driving : 5 response
(b) Cooking: 12 response
(c) Beautification: 8 response
Analysis: An average of 20% of the female workers wants to learn driving from our
vocational training institution. Almost 50% of the sample target customers want to be
involved in cooking and the rest is up to getting regular spa training sessions for
beautification.
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Driving Cooking Beautification0
2
4
6
8
10
12
5
12
8
Skills Preferred
Figure 12- Response- Survey Q5
6. Preferred Day Shift, Evening Shift or Night Shift?
(a) Day Shift: 14 response
(b) Evening Shift: 6 response
(c) Night Shift: 5 response
Analysis: Maximum female workers (over 50%) prefer day shift rather than evening or night.
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Day Evening Night0
2
4
6
8
10
12
14
14
65
Preferred Shift
Figure 13- Response- Survey Q6
7.2 SIZE AND GROWTH OF THE MARKET
The size of the market is very much moderate. Hundreds of female workers are willing
to learn the basics of driving, cooking and do advanced beautification and then go abroad for
a better career aspect. This paired up with the lack of jobs in the country; these female
workers are in desperate need of jobs. There is also a growing trend that is characterized by
individuals going out to Middle Eastern and South Asian countries for job opportunities.
Many young female individuals are enthusiastic about the idea of going abroad because there
are few job opportunities within national borders and their perception promotes the idea that
going abroad is their best option. So the size of the market we will to serve is very much
modest and reasonable.
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7.3 MARKETING PLAN
The marketing strategy for us for the 1st year would be as follows-
Table 2- Marketing schedule for year 1
For the 2nd year the advertising will huge than the 1st year in order to get familiar our
services to the people. In the 3rd year, advertising cost will be less this year in intensity. Few
effective activities will be spread out over the months. At this point, our institute is already
known among our target market and their peers, so we only need to inform them about new
offerings, if there any. The following years, we will continue the advertising but not that
much like the first two years, as we are established company on that time.
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Initially no adveritising expenses will be incurredWord of Mouth of last three months publicizing involvedJAN 2013Extensive advertisement through leaflets and newspaper addsPersonal Communication on advertisementFEB 2013The process will be continued the same as previous month to attract the studentsMAR 2013No additional expnse for month 4, as we already got some students to start the journeyAPR 2013Increase the advertising through a higher number of leafletsMAY 2013Continue the advertising, also through postersJUNE 2013No advertising for month 7, as we already got some students to start the next batchJULY 2013Immense advertising to attract the next batch of studnets from october 2013AUG 2013Continue the process of high advertising to attract the customersSEP 2013No advertising for month 10, as we already got some students to start the next batchOCT 2013Significant advertising for the next batch of the next year NOV 2013Advertising expenses continued for the batch of Jan 2014DEC 2013
Advertisement
No advertisement
Figure 14- Advertisement schedule
Marketing MIX:
Figure 15- Marketing Mix
Product (Training and Teaching)
Cooking (Initial level) Beauty training (Spa training) Driving English and Grooming
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Training and Teaching Shopno overseas limited
Ranges from Tk6000- Tk 8000
Advertising
PRODUCT PLACE
PRICEPROMOTION
Ja Fe M MaAp
Se Au Jul
Ju
OcNoDe
Place (Shopno overseas ltd.)
We have decided to set our office space and training center in North Basabo, as it is a
convenient place to attract the customers, as there are many slums around that area. Even
many lower and lower-middle class people have their homes in those surroundings. So it
would be easy for them to come over here, and it would be helpful for us to attract customers.
Also, the place is less expensive and e can give more investment in grooming the students.
Price
Our products are quite superior to others in the market, so our charges start from BDT
6000 TK to 8000 TK per month. All the courses are for 3 months. So, overall costing would
be BDT 18000TK to 24000TK, but excluding the additional expenses (Visa, licensing and so
on). Moreover there is an admission cost of 500 taka per student which is to be paid when the
student is taking admission to the firm.
Promotion
Our only promotional activity will be advertising, which we will conduct across
different media mixes to achieve wide geographic coverage and high reach.
Customer services
Students (also prospective students) are welcome to our counseling service where we
have the latest and reliable news about jobs abroad. We will investigate students; expertise,
are of interest and scope and match them with suitable jobs. Also prospective students can
take our help to find out what course is suitable.
Not only will the counseling be academic but it would also be motivational. We will
also work on instilling more hope and enthusiasm in our customers.
Foreign Affiliation:
We will start our networking in foreign countries (Singapore and Thailand) through
personal contacts. Foreign establish HR agencies post job openings and we will affiliate as
such that they ensure high salary jobs and we ensure trained personnel
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Service Marketing:
Internal and external marketing is crucial to the ultimate long term success of the
business. In our case, the external marketing describes the extrinsic benefits that our
educational and vocational institute will offer.
Internal Marketing describes training and motivating employees to serve students and
other vocational trainees well. This might include the joint collaboration of the entire
operational unit and the departmental functions to jointly work to produce a greater
harmonization of the running of our school. Once the goal is communicated well and we
have a well spirited team we know that we can now march down the line to serve our
customers well.
8. OPERATIONAL PLAN
8.1. PRODUCTION AND OPERATIONS
To run our training institution smoothly, the three primary activities of our value
chain: Teaching, Training and Counseling & Career Service have been aggregated into one
department, operations. Operations department is dependent on procurement and staffing
rather than working in isolate
TEACHING AND TRAINING (PROCESS)
In the first year (starting from January 2013), we have to plan the course contents of
the short course, make necessary registrations for these courses, schedule the course and
deliver the finance department with our monthly cost requirement. Also, we will give the
procurement department the material requirement list. By the first year, we will be
responsible for providing staffing department with trainer requirements, attaining
accreditation for skill training on beautification, cooking and driving. Beautification and
cooking training will be provided for 3 months and driving training will be providing for 1
month.driving.
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Table 3- Training Schedule
Capacity utilization current utilization
Year total capacity
Beautification Cooking Total Capital Utilization
% of utilization
Jan-12 120 10 10 20 17%Apr-12 120 20 20 40 33%Jul-12 120 26 26 52 43%
Oct-12 120 30 30 60 50%Jan-13 120 32 32 64 53%Apr-13 120 34 36 70 58%Jul-13 120 38 40 78 65%
Oct-13 120 40 42 82 68%Jan-14 120 44 44 88 73%Apr-14 120 44 44 88 73%Jul-14 120 46 40 86 72%
Oct-14 120 48 44 92 77%Jan-15 120 48 44 92 77%Apr-15 120 50 48 98 82%Jul-15 120 50 50 100 83%
Oct-15 120 52 52 104 87%Jan-16 120 52 54 106 88%Apr-16 120 56 56 112 93%Jul-16 120 58 58 116 97%
Oct-16 120 60 60 120 100%Table 4- Capacity Utilization
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Weekday Session
Weekend Session
DAYS 9 AM – 11 AM 1 PM – 3 PM 6 PM – 8 PM
UNIT 1 UNIT 2 UNIT 1& 2 UNIT 1 UNIT 2
MONDAY Cooking Class
Beauty Training
Grooming Session (Unit 1)
Cooking Class
Beauty Training
WEDNESDAY Cooking Class
Beauty Training
Grooming Session (Unit 2)
Cooking Class
Beauty Training
FRIDAY Cooking Class
Beauty Training
Grooming Session (Unit 1)
Cooking Class
Beauty Training
SATURDAY Cooking Class
Beauty Training
Grooming Session (Unit 2)
Cooking Class
Beauty Training
The second year will consist of adding on extra trainers for new batches of 2nd, 3rd, 4th
batches for beautification and cooking. Also a new monthly operating cost and material
requirement list will be handed to financial department and procurement. The new trainer
requirements will be passed on to staffing department. So to sum up, that year’s activities will
include: conducting admission for short course for new batches. Also we will carry on with
our first batch to transfer them to Singapore and Malaysia.
The third year (2015) will be just adding up two training courses like food processing
and tailoring. 5th, 6th, 7th batch enrollment will be continued in this year for cooking and
beautification. Driving courses will be continued in each month.
The fourth year (2016) will consist of enrolling of short course batch 8 th, 9th and 10th
batch and also the processing of previous batches will be continued to transfer abroad.
The fifth year (2017) will consist of continuation of the previous batches to send them
abroad. Also we will try to help the females who did not get chance in abroad. We will help
them to build their career domestically in hotels, beauty parlors or companies to give them
recruitment in driving.
8.2 FACILITIES
Our facility for Shopno Training and Overseas Limited is that we will take a building
on rent for our company. There will be two floors. In 1st floor we will take rent 1 unit and in
2nd floor we will take 2 units for providing our training facilities and office work. Our office
location will be in Bashabo. Many fixed equipments are needed such as AC, Stoves, Fan, and
Lights. We will buy two micro buses from the Eastern Motors for driving facility to our
trainees.
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8.3 PRODUCT/ SERVICE OVERVIEW
Cooking-
Singapore and Thailand, both the markets have huge demand for Bangladeshi food, so
we will prepare our students according to that demand, but that would be initial stage of
cooking. As top chefs are highly qualified, so our students will be their right hand which is
actually helpers. They will be qualified with various Bengali food items, as well as some
Indian, Chinese and continental food items. We will also provide some lessons on pastry
making, so that they can help the top chefs in these critical food items.
Beauty training-
Beauty training has a wide range of demand not only in the targeted market, also in to
whole world. We will provide necessary training to be a beautician, which will include eye-
brows pluck, facial message, and some sort of hair cutting. We will mainly focus on the spa
training, especially the foot message. It is because both the cities have nearly 5 spa centre on
a single road, so it is a huge market. These are some techniques only, by which our students
can earn money and can support their families’ bank home.
Driving-
Nearly, 35%-40% taxi drivers are female drivers in both the countries. We will
provide them driving lessons for 1 month, and then will apply for the license. When they will
receive the initial learner card, which is valid for three months, they will be driving our cars,
as there is no market for female drivers in our country. The night session female students will
be dropped in their homes by our cars, and the female students will drive them off. In case of
safety, there will be one security guard in one car to protect the female driver.
Grooming session-
This service is free for the students. We the entrepreneurs will take those classes,
where we will teach them the Basic English knowledge and the manner to behave in a foreign
country. We will also teach them the culture of those two countries, so that they can be
familiar with the atmosphere. We will also make them confident through various grooming
sessions, which will be helpful for them in their career life.
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Input (Unskilled Manpower)
Output (Skilled Manpower)
Input (Unskilled Manpower)
Output (Skilled Manpower)
Figure 16-Process of Driving Training
Figure 17-Process of Cooking Training
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Registation Admission Form
Theoretical Knowledge about
Traffic Law & Vehicle Policy
Start of Practical Training
Evaluation Test
Training Continued
Final Practical Training Test
Re Training who have Failed to Meet Criteria
Re Test of Final Practical
Training Test
R e g ista ti o n A d m issio n Fo rm
O rie n ta ti o nB asic K n o w le d ge
a b o u t K itch e n E q u ip m e n t
Sta rt o f Fo rm a l T ra in in gT e st
1 st E va lu a ti o n T e st
T ra in in g C o n ti n u e d
F in a l E va lu a ti o n T e st
R e T ra in in g w h o h a ve F a ile d to M e e t
C rite riaF in a l T e st
Input (Unskilled Manpower)
Output (Skilled Manpower)
Output (Skilled Manpower)
Figure 18-Process of Beautification Training
Jan1st
Feb2nd
Mar3rd
Apr4th
May 5th
Jun6th
July7th
Aug8th
Sep9th
Oct10th
Nov11th
Dec12th
Registration
Admission Form Fill UpOrientation
Basic KnowledgeSharingStart of Formal Training Test
1st Evaluation TestTraining ContinuedFinal Evaluation TestRe Training who failed to Meet CriteriaFinal Test
Table 5- Activity planning
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R e g ista ti o n A d m issio n Fo rm
O rie n ta ti o nB a sic K n o w le d g e
a b o u t B e a u ty T ra in in g E q u ip m e n t
Sta rt o f Fo rm a l T ra in in gT e st
1 st E va lu a ti o n T e st
T ra in in g C o n ti n u e d
F in a l E va lu a ti o n T e st
R e T ra in in g w h o h a ve F a ile d to M e e t
C rite riaF in a l T e st
8.4 EQUIPMENT
Equipments are tangible property (other than land or buildings) that is used in
the operations of a business.
The main task of Procurement Department is to purchase necessary equipments and
machineries for every department of our institution and assure their quality. Very beginning
year we purchased most of the products and we continue this task for five years more or less.
But department also doing another job, it sold some of these used products which were
expired so that we can get some profits at the end of the periods.
At first Procurement Department divided itself into three categories and then decided what
type of equipments would be sold for which category.
Details list of equipment are given in appendix
Kitchen Equipment
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Kithchen Equipment
Beauti tr aining Equipment
Office Equipment
Equipment Quantity Image
Stove 2
Sink 2
Deep freezer 2
Gas Cylinder 6
Exhaust fans 2
Beauty Training Equipment
Equipment Quantity Image
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Saddle Cutting Stool 4
Facial Steamer 2
Portable massage bed 6
Hair dryers & Hair straightener
2
Spa vanity Case & Basalt Stone
4
Scissor & Spray Bottles
6
Office Equipment
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Equipment Quantity Chairs 30Tables 6Fans 10AC 2Clock 10Telephones 3Lights 50Computer 2Printer 2Micro bus 2200 CC 2
8.5 QUALITY ASSURANCE
Quality assurance (QA) refers to the planned and systematic activities implemented in
a quality system so that quality requirements for a product or service will be fulfilled. It is the
systematic measurement, comparison with a standard, monitoring of processes and an
associated feedback loop that confers error prevention. This can be contrasted with quality
control which is focused on process outputs. To get customer responses our main task is
assure the quality of the products .Our teachers will require a minimum HSC level degree to
obtain employment, and all technical/vocational instructors must have a certain level of
education, not to mention expertise in their chosen fields. A part from all that we will follow
some steps for quality assurance.
We provide effective cooking courses so that students can become cook and when
everybody considers cooking skill it will be easier for them to get good job in the restaurants.
Our institution provides certificates to the students after completing their beauty
training course. These certificates will help them to get good jobs both in home and abroad.
We will try to arrange a government approval on the certificate, so it will easier for our
students to get license in abroad. When they will receive the initial learner card, which is
valid for three months, they will be driving our cars, as there is no market for female drivers
in our country. The night session female students will be dropped in their homes by our cars,
and the female students will drive them off. In case of safety, there will be one security guard
in one car to protect the female driver. We will teach them the Basic English knowledge and
the manner to behave in a foreign country. We will also teach them the culture of those two
countries, so that they can be familiar with the atmosphere. We will also make them
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confident through various grooming sessions, which will be helpful for them in their career
life.
9. THE HUMAN RESOURCE MANAGEMENT
Human Resource Management is the strategic planning to manage the organizations
employees and workforce to efficiently operate the entire organization. The prime task is to
align competencies of employees to job designs, responsibilities and duties. It is responsible
for the attraction, selection, training, assessment, and rewarding of employees, while also
overseeing organizational leadership and culture. Human Resource Management also
leverages the quality of skills and quality of life on employees.
Human Resource Management is basically the process of engineering human
capabilities in the organization to increase the efficiency of human activities leading to
sustainable organization.
Human Resources Management designs, develops and implements strategies in the areas
such as:
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Recruitments, hiring and selection of Employees
Employee Training and development
Career Development
Performance Appraisal System
Promotion and Demotion of Employees.
Designing and implementing job analysis
Design the pay system- base salary, wage, incentives and bonuses.
Human Resource planning
9.1 THE KEY HUMAN RESOURCES ISSUES
The key human resource issues that we will be dealing with are as follows:
1. Employee recruitment, hiring and selection the right person who will be job fit as well
as organization fit.
2. Determining the major Human Resource Needs and developing strategies to meet the
needs and demands.
3. To match people and their career needs and capabilities to jobs in the organization.
4. It is the job of Human Resource to define the tasks, authority and systems of the
organization and integrate it across the organization.
5. To develop a healthy inter and intra unit relationships and helping groups initiate and
manage changes in the organization.
6. The final issue is to identify, assess and through planned learning, helping to develop
key competencies that will enable employees to perform current and future tasks
better.
7. It is also the task of HR to provide personal assistance, counseling to individual
employees in the organization to increase the overall efficiency of the organization
and making it more sustainable.
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9.2 THE STAFF REQUIREMENT AND
EXPECTATIONS
1. Cooking Facility- two kitchens
Two training Chefs- 3 year experience with certification from reputed organizations.
Base Salary- Tk. 25000/-
Two Training assistants- 1 year experience. Should be trained from a certified vocational
training institute.
Base Salary: Tk. 5000/-
2. Beautification Facility
Two training Beauticians-3 year experience with certification from reputed organizations.
Base Salary: Tk. 12000/-
Two Training assistants-1 year experience. Should be trained from a certified vocational
training institute.
Base Salary: Tk. 4000/-
3. Driving- Should have proper government license.
Outsourced to a private driving firm Cost (negotiating stage)
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Chairman
T&D Director
Officer
Cook
Beautificaiton
Driving
HR Director
Officer
Mkt Director
Officer
Act Director
Officer
Admin Director
Officer
Office Attendant
Office Peon
9.3 THE STRUCTURE
Figure 20- Organogram
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Assistant (2)
10. Risk analysis
10.1 Foreseeable and unforeseeable barriers
Every business faces various kinds of risks which are required to be solved in order
to run the business properly. Therefore, an efficient management should analyze the risks
extensively and take effective measures to be prepared beforehand. Risks can come from both
within the firm or from outside the firm.
Internal risk-
These risks include:
Default Risk
Liquidity Risk
Operational Risk
Model Risk
Default risk-
This is the risk of having trainees not being able to pay for the fees. In this case, we
need to check whether the trainees have the affordability power to study under our program.
In order to help them pay the entire tuition fees we would set our terms flexible. We would
take the greater amount of money after their jobs are ensured and when they actually start
working. However, in this case we need to have a strong control of these trainees even after
their placements. Also it is required to check the trainees whether they have the ability to pay
the fees or not.
Liquidity risk-
Sometimes we may fall short of cash and experience liquidity risk. In order to avoid
this risk we need to have efficient liquidity management. We need to forecast our liquidity
requirement and keep a certain amount of money in the back as cushion. We will save 5% of
the total invest to protect from liquidity risk.
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Operational risk-
Operational risk mainly consists of legal risk, technological risk and reputational risk.
All these risks are related to the operation of the institution. If there is any problem related to
the placement of the trainees and if the trainees that we sends who turn out to be frauds then
these will tarnish our image. This means that our operation will be hampered and the demand
will reduce. To tackle such risk we need to monitor the operations very closely.
Model risk-
The risk associated with the faults of the model. If the speculation and the forecasting
turn out to be wrong then the business will face danger. As a contingency plan, we need to
consider diversification in different areas.
External risk-
External risks come from external factors like political, environmental and as such.
The biggest external risk that we have is if there is no demand for our trained students in the
countries where we have affiliations with the Human Resource Agencies. This may destroy
the promise that we are giving to the students that we will ensure their jobs. This will, at the
same time, reduce our profits largely since if we cannot ensure a job to a student then s/he
would not pay the money that we are charging after the students have graduated. This will
mean that the money they will pay during their course will not be even enough for our
overhead cost per person. Our profitability will be at risk and thus the future of the business.
No external risks can be handled directly. Neither can we increase the demand of labor
in those countries nor can we force the governments to take our labor even if there is no
demand. In this situation, the best solution is to have affiliations with many different
countries. This is, again, a sort of diversification plan that we can implement. Even under the
global market crisis, the chance of having a no demand in all the countries will be minimized.
Therefore, we need to spread our network in different countries in order to have affiliations
with their human resource agencies.
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11. Financial management plan
11.1 Assumptions
In order to make the financial statement of the company, we have to assume some factors that affect the whole system.
Revenue assumptions:
The sales growth rate of the revenue that has been used throughout the 5 years of the project is as follows:
Year Sales GrowthYear1 7%Year2 12%Year3 15%Year4 20%Year5 21%
The following notes justify the assumptions made-
In the first year, the growth rate has been assumed to be 7%. As our business
model is new and the promotion will be at the beginning stage we have assumed
that the growth rate of customers increasing during the first month will be steady.
As this is a women oriented business, we may see less growth in the first year.
During year 2, we have assumed an increased growth rate than year1 and we have
set the growth rate at to be 12% which was used for entire year. We are assuming
that out of 100 students, minimum 70 students will be satisfied and will eventually
tell 2 persons about our service. So, our student’s number will increase in this rate.
As our product will be advertised, more customers will buy our products and the
incremental growth rate justifies the assumption.
In year 3, as our business will move from the introduction stage towards the
growth stage, and as there will be more promotional activities we have presumed
the growth rate to be 15%. This increased growth rate also justifies for the mouth
to mouth promotion that our business is likely to achieve. Also, we may offer
different discounts on our services and also our customers may be able to pay in
installment.
The following year, we are going to have a sales growth of 20% due to our
product quality and promotional activity. And the growth rate is assumed to be
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20%, because we may successfully send women to Malaysia and Singapore within
that time horizon. So, it is obvious to say that, we will get more students.
The growth rate is assumed to be 21% as our business is approaching to the
industry stake-out phase.
Expenditure assumptions
The costing we have in our expenditure side has different growth rate based on their
need and demand according to the student number. All the assumptions are provided below:
Salary expenses will have a 5% to 7% increase due to entrance of new stuff members,
and we have to that as our students number will increase as well.
Rent expense is assumed to be fixed.
Advertising cost will increase but only for the second year, as we have top attract the
customers. But later, there would be no need for additional advertising as word of
mouth will help us to gain customers.
Utility expenses will have a steady growth rate of 5% and little higher changes may
occur in fourth year, as we will buy new assets.
Freight-out cost is assumed to increase at 5% rate.
Miscellaneous cost will increase at a higher rate, which is assumed to be 11% for the
2nd year; it is because increased number of students will result in purchase of those
additional products.
Other assumptions:
Tuition receivable will increase corresponding with the growth rate.
All the asset values are adjusted with the depreciations, which is given detailed in
notes.
Utilities and salaries payable are assumed to be 5% of the total utility and salary
expense on that year.
For the IRR calculation, we used interpolation method.
The opportunity cost is 12.5%, which is the current FDR rate.
The variable cost includes salaries and miscellaneous expenses.
Income Distribution Assumption
The net income/loss generated by “Shopno Training & Overseas Ltd.” is assumed to
be distributed equally to the owners or partners if not re-invested in the company as Retained
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Earnings. These distributed earnings are then eligible for tax deduction as “Personal Income
Tax”.
Capital Budgeting Assumption
The financing of our company is entirely based on “Equity Financing”. There is no
debt financing involved as a result there is “No Long Term Debt” for the company. Initially,
the business was opened using Tk.6000000 from the Entrepreneurs. There's no WACC for
the absence of any financing cost. No interest-bearing debt and zero dividends to the owners
make the WACC irrelevant.
11.2 Income Statement
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Income statement Notes Year 1
Revenue from Training 1 4182000Revenue from Admission fee 2 102000
Total Revenue 4284000
Expenses 3
Salaries expenses 3.1 2628000
Rent expenses 3.2 672000
Advertising expense 3.3 336000
Utility expense 3.4 540000
Freight-out 3.5 91200
Depreciation expense 3.6 143300
Maintenance expense 3.7 120000
Miscellaneous expense 3.8 401281.0368
Trade expense 3.9 2000
Total expenses 4933781.037
Net income(loss) -649781.0368
11.3 Balance sheet
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Balance Sheet Notes Year 2013
Asset
Cash 4 433118.9632
Tuition Receivables 5 79000
Total current asset 512118.9632
Micro Bus 6 3480000
Computer and Printer 7 48700
Air Condition 8 52000
Deep Freezer 9 38000
Advance payment 10 1200000
Other asset 11 177800
Total Fixed asset 4996500
Total Asset 5508618.963
Liabilities and Shareholder's Equity
Utilities payable 12.1 27000
Salaries payable 12.2 131400
Total Current liabilities 158400
Owners Capital 13 5350218.963
Retained Earnings 0
Total Equity 5350218.963
Total Liabilities and Equity 5508618.963
11.4 Financial notes
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1. Revenue from Training
The revenue is coming from the tuitions fees from the students. The following are the tuition fees. Here from the driving students, we are getting only Tk.1000, though they will pay Tk.6000. The rest part of the money will be given to the affiliated driving school. Also, the tuition fees are little higher than the other vocational training school, because of the service we are going to provide after they get selected and get the chance to go abroad.
Revenue Per studentsFrom Beauty training 8000From Cooking Training 8000From driving 1000Admission fee 500
The following is the first year revenue from training which was calculated based on the different monthly returns, as we will not have the same number of students in every batch.
Months Beauty Cooking Driving RevenueJan 10 10 5 165000Feb 10 10 5 165000March 10 10 5 165000April 20 20 7 327000May 20 20 7 327000June 20 20 7 327000July 25 25 10 410000August 25 25 10 410000September 25 25 10 410000October 30 30 12 492000November 30 30 12 492000December 30 30 12 492000
4182000
2. Revenue from Admission Fee
This part of the revenue is generated from the admission fee, which is Tk.500 for each. So, this income will be earned in four months- January, April, July and October.
Months Beauty Cooking Driving Admission RevenueJan 10 10 5 12500Feb 10 10 5 0March 10 10 5 0April 20 20 7 23500
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May 20 20 7 0June 20 20 7 0July 25 25 10 30000August 25 25 10 0September 25 25 10 0October 30 30 12 36000November 30 30 12 0December 30 30 12 0 102000
3. Expenses
3.1. Salaries Expenses
There will be total of 21 stuff members in the ‘Sopno Training & Overseas Ltd’. Along with the manager, there will be four officers to handle the customers. Two officers will sit in the main office (Ground floor) and other two will be sitting in the cooking and beauty training side (1st floor). There will be three beauty trainers and three chefs for the first year and they will be contracted on the basis that they have to give service to all students of the first year. And later, based on the new students and market demand, the trainee numbers will be increased. We do not need any driver because our driving students will drive our cars for their practice.
Post No. Monthly Salary Yearly amountManager 1 18000 216000Officer 4 12000 576000Beauty Trainee 3 12000 432000Chefs 3 25000 900000Helpers for parlor 4 4000 192000Helpers for kitchen 4 5000 240000Gate-keeper 2 3000 72000
79000 2628000
This salary structure is just the initial costing, later based on the numbers of students, staff members will be increased as well.
3.2. Rent Expenses
Our office and training center is in the same place, which is in Basabo. We will rent the ground floor but one side of the building. And the 1st floor will be rented full for the purpose of cooking and beauty training.
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RentsMonthly rent Yearly Rent
Front Office 20000 240000Beauty Training center 18000 216000Cooking Training center 18000 216000
672000
3.3. Advertising Expense
For the promotional purpose we have chosen to only go for the Banners, leaflets and
posters. The rationale behind choosing this promotional strategy is listed below:
Using banners, leaflets and posters are the most appropriate forms of
advertising because as “Sopno Training & Overseas Ltd.” is primarily
focusing on the lower-level families, mainly the female members of those
families. As, those people cannot afford to buy newspapers and even they are
unable to watch television in some cases, so we are choosing these three forms
of advertising, which will attract the customers easily.
As we are starting our journey from January 2013, our initial customers will
come from the word of mouth advertising, which we will do for the months of
October, November and December. Later, we will advertise every two months
before starting a new batch. As example- to catch the April-month batch, we
will advertise in February and March, and so on.
Leaflets and posters are the most cost-effective method for advertising for our
business. The advertising cost regarding the advertising expense is listed
below:
Advertising Expenses Per Unit cost Monthly Usage Monthly Cost(Tk)Leaflet 6 1500 9000Posters 40 200 8000Banner 500 50 25000
42000
Months Costing(Tk)Jan 0Feb 42000March 42000
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April 0May 42000June 42000July 0August 42000September 42000October 0November 42000December 42000Total Cost (Yearly) 336000
3.4. Utility Expense
The utility expenses consist of the electricity, water, gas, telephone, etc. As we have total
three places, we are assuming that the accumulated monthly cost will be 45000. So, in a year
it will stand to tk. 540000.
3.5. Freight-out
We will have our two micro-buses and it has some costing as well. For cost saving advantage
we have decided to use ‘Compressed Natural Gas (CNG)’ compatible vehicle for our use.
We are assuming that the fuel costing of one month would be Tk.6000 and it can be
fluctuated a little based on the use. The garage rent would be Tk. 800 per month. So, the
yearly costing stands Tk. 91200.
Fright-out COST (Tk)Fuel costing 6000Garage rent (800tk for each) 1600Monthly cost 7600Yearly Cost 91200
3.6. Depreciation Expense
Depriciations Value Salvage ValueYears
Depriciation amount
No. of items
Total Depriciation
Micro bus 2200 180000 1200000 10 60000 2 120000
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CC 0Computer 24500 10000 5 2900 2 5800Printer 4500 1000 2 1750 2 3500AC 30000 10000 5 4000 2 8000Deep Freezer 22000 7000 5 3000 2 6000
143300
3.7. Maintenance Expense
The maintenance expenses that are most likely to be incurred by us are mainly based on the
repairs needed for the machines, vehicles, inventory in the store and we assume that the
yearly costing would be approximately Tk. 120000.
3.8. Miscellaneous Expense
Miscellaneous Expense No. Monthly Cost(TK.)Toner 5 600Facial Cream 4 1200Facial Mask 4 2000Bleach Cream 4 700Hair Spray 6 700Spa Cream 4 1500Cooking Materials 20 5000Vegetables Depends 1500Rice 8kg 560Ingredients Depends 5000Spices 10kg 4000Baking Materials Depends 3000
25760
These are some of the miscellaneous costing. This is for the first years monthly costing. But
based on the number of students this cost will be increasing as well. If we assume that for the
first year the monthly costing is 25000 Tk. than it will be wrong, as we are starting with only
25 students and this amount is needed for those only. Based on the numbers of students of the
year 2013, we can say that we may have the following miscellaneous expense for the first
year. The month of April, July and October has increased costing due to the increased
number of students.
Month Miscellaneous ExpensesJan 25760Feb 25760March 25760
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April 27820.8May 27820.8June 27820.8July 36445.248August 36445.248September 36445.248October 43734.2976November 43734.2976December 43734.2976Yearly Cost 401281.0368
3.9. Trade Expense
In order to do the business, we have to give the government these fees to be registered and we
have to renew this every year.
4. Cash
The cash amount in hand for the year 1 is Tk.433118.9632. Initially we are having this
amount so that we can meet all the payable obligations which can come due anytime. Also
our miscellaneous expense is changing on a regular basis, so it is safe to hold some money.
On the other hand, we have to buy the other assets, whenever necessary, so for that reason
this amount is required.
5. Tuition Receivables
Generally, we are taking the salary in advance from the students. So, we are having a
receivable for one month only, and later the receivable may change based on the new entrants
number.
6. Micro-bus
We will have two micro-buses, each for Tk. 1800000. The carrying value of this asset in the
balance sheet is given below:
Year CostYearly Depreciation Expense(Tk) Carrying amount(Tk)
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Year 1 3600000 120000 3480000Year 2 3480000 120000 3360000Year 3 3360000 120000 3240000Year 4 3240000 120000 3120000Year 5 3120000 120000 3000000Year 6 3000000 120000 2880000
7. Computer and Printer
We have two computers and two printers, so their values and deprecation adjusted value is
given below:
Computer 2 30000 60000
Printer 2 4500 9000
Year CostYearly Depreciation Expense(Tk)
Carrying amount(Tk)
Year 1 49000 5800 43200Year 2 43200 5800 37400Year 3 37400 5800 31600Year 4 31600 5800 25800Year 5 25800 5800 20000
Year CostYearly Depreciation Expense(Tk)
Carrying amount(Tk)
Year 1 9000 3500 5500Year 2 5500 3500 2000
8. Air Conditioner
We have two air conditioners for the main office which is in the ground floor. We are not
having in air condition in the 1st floor due to cost effectiveness. Also, the students whom we
are going to teach are not in need of that. The students would be happy enough to have fans,
and proper service.
Year CostYearly Depreciation Expense(Tk)
Carrying amount(Tk)
Year 1 60000 8000 52000Year 2 52000 8000 44000Year 3 44000 8000 36000
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Year 4 36000 8000 28000Year 5 28000 8000 20000
9. Deep Freeze
Our company will have two freezers for the cooking materials. Their carrying value is given
below:
Year CostYearly Depreciation Expense(Tk)
Carrying amount(Tk)
Year 1 44000 6000 38000Year 2 38000 6000 32000Year 3 32000 6000 26000Year 4 26000 6000 20000Year 5 20000 6000 14000
10. Advance Payment
The advance payment would be tk. 1200000 and it is our asset, as after the expiration of the
contract, we will get this amount of money. This amount is also a part of the investment as
we have to give the money to the land-lords. But as we will eventually have the money in our
hand, so it is our asset.
11. Other Assets
There are some other assets which are needed for our training services. Some of them are
listed below and these assets will change accordingly when the student number will increase.
So, this asset’s growth depends on the students enrollment growth.
Others No. of units Per Unit Cost Total CostStove 2 5000 10000Sink 2 8000 16000Exhaust Fan (Large) 2 1500 3000Saddle Cutting stool 4 2500 10000Facial Steamer 2 4000 8000Portable message bed 6 5000 30000Hair dryers 2 1500 3000Hair straighter 2 2000 4000Spa Vanity case and Basalt stone 4 1300 5200Scissors and spray bottles 6 100 600Chair(office) 10 700 7000Chair 20 250 5000
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Tables 9 4000 36000Fans 10 2500 25000Clock 10 100 1000Telephones 3 500 1500Lights 50 250 12500
177800
12.1 Utilities Payable
We are assuming that the utility payable will be 5% of the total utility expense of that year.
We are just approximating this figure.
Utility expenses 540000Utilities payable (5% of total utility expenses) 27000
12.2 Salaries Payable
The salaries payable will also be 5% of the total salary expense.
Salaries Expenses 2628000Salaries Payable (5% of total salary expenses) 131400
13. Capital
The initial investment is Tk. 6000000 for our company “Sopno Training and Overseas Ltd.”
The five owners contributed Tk. 1200000 each to fulfill the business requirement. After
adjusting with the net profit we have the capital for the end of 1st year.
Owner's capital statement Tk. Year 2013Capital 0
Add: Investment 6000000 Net profit or loss -649781.0368
Capital (at the end of 1st year)
5350218.963
11.5 Pro-forma statements
Income statement Year 2013Year 2014
Year 2015
Year 2016
Year 2017
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Revenue from Training 4182000 4683840 5386416 6463699 7821076Revenue from Admission fee 102000 114240 131376 157651.2 190758
Total Revenue 4284000 4798080 5517792 6621350 8011834
Expenses
Salaries expenses 2628000 2759400 2924964 3129711 3286197
Rent expenses 672000 672000 672000 672000 672000
Advertising expense 336000 352800 352800 388080 407484
Utility expense 540000 567000 595350 637024.5 668876
Freight-out 91200 95760 100548 105575.4 110854
Depreciation expense 143300 143300 147950 150950 150950
Maintenance expense 120000 108000 110160 110160 112363
Miscellaneous expense 401281.037 445422 494418.37 568581.1 653868
Trade expense 2000 2000 2000 2000 2000
Total expenses 4933781.04 5145682 5400190.4 5764083 6064592
Net income(loss) -649781.04 -347602 117601.63 857267.9 1947242
Balance Sheet Year 2013 Year 2014 Year 2015 Year 2016 Year 2017AssetCash 433119 200587 321941.85 1303459 3350065
Tuition Receivables 79000 88480 101752 122102.4 147743.9Total current asset 512119 289067 423693.85 1425562 3497808
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Micro Bus 3480000 3360000 3240000 3120000 3000000Computer and Printer 48700 39400 97400 74500 64000
Air Condition 52000 44000 36000 28000 20000Deep Freezer 38000 32000 64000 52000 42000
Advance payment 1200000 1200000 1200000 1200000 1200000Other asset 177800 204470 235140.5 270411.6 310973.3
Total Fixed asset 4996500 4879870 4872540.5 4744912 4636973
Total Asset 5508619 5168937 5296234.3 6170473 8134782
Liabilities and Shareholder's Equity
Utilities payable 27000 28350 29767.5 31851.23 33443.79Salaries payable 131400 137970 146248.2 156485.6 164309.9
Total Current liabilities 158400 166320 176015.7 188336.8 197753
Owners Capital 5350219 5002617 5120218.6 5982137 7937028Total Liabilities and Equity 5508619 5168937 5296234.3 6170473 8134782
Owner's capital statement Year 2013 Year 2014 Year 2015 Year 2016 Year 2017Capital 0
Add: Investment 5350219 5002617 5124869 5989787 Net profit or loss -347602 117601.63 857267.9 1947242
Capital (at the end of 1st year) 5350219 5002617 5120218.6 5982137 7937028
Cash Flow Statement year 2013 year 2014 year 2015 year 2016 year 2017Net Profit After Tax -649781.037 -347602 117601.63 857267.9 1947242Depreciation 143300 143300 147950 150950 150950Increase in Tuition Receivable 0 -9480 -13272 -20350.4 -25641.5Increase in utilities payable 0 1350 1417.5 2083.725 1592.561Increase in salaries payable 0 6570 8278.2 10237.374 7824.279Cash flow from operating -506481.037 -205862 261975.33 1000189.4 2081967
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activities
Purchase of asset -4718700 0 -109950 0 0Purchase of other asset -341700 -26670 -30670.5 -18671.1 -35361.74Cash flow from Investment activities -5060400 -26670 -140620.5 -18671.1 -35361.74
Investment by owners 6000000 0 0 0 0Distribution to owners 0 0 0 0 0Cash flow from Financing activities 6000000 0 0 0 0
Net cash inflow/outflow 433118.9632 -232532 121354.83 981518.28 2046605
11.6 Capital budgeting techniques for feasibility
Net Present Value
Financial feasibility can be determined by calculating Net Present Value. It is the difference
between the present value of cash inflows and the present value of cash outflows. NPV is
used in capital budgeting to analyze the profitability of an investment or project.
NPV analysis is sensitive to the reliability of future cash inflows that an investment or project
will yield. NPV compares the value of a dollar today to the value of that same dollar in the
future, taking inflation and returns into account. If the NPV of a prospective project is
positive, it should be accepted. However, if NPV is negative, the project should probably be
rejected because cash flows will also be negative.
Calculation of NPV Cash Inflow/
(Outflow)Discount rate PV year
Year 0
(Initial Outlay)
(3-month T-bills rate)
(6000000)
2013
(506481.0368)
0.125 (As of Dec 13, 2013)
(450205.366)
1
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2014
(205861.9508)
(162656.356)
2
2015
261975.3346 183993.6506 3
2016
1000189.376 624413.3036 4
2017
2081966.883 1155343.711 5
NPV (4649111.057)
The Net Present Value comes out to be negative. In the first year, however, we would not
generate very high revenue and so the value is quite unlikely to be positive. In usual case
when the Net Present Value is negative you should not invest in that project. But we believe
that the Net Present Values for the next years onwards are going to be positive because the
business has huge potential.
The internal rate of return (IRR) is a rate of return used in capital budgeting to measure
and compare the profitability of investments. It is also called the discounted cash flow rate of
return or the rate of return. In the context of savings and loans the IRR is also called the
effective interest rate. The term internal refers to the fact that its calculation does not
incorporate environmental factors.
IRR Calculation
Cash Inflow/ (Outflow)
Discount rate PV
Required Rate (10%) Year 0 (3-month T-bills rate) -6000000 2013 -506481.0368 0.125 -460437
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2014 -205861.9508 -170134 2015 261975.3346 196825.9 2016 1000189.376 683142.8 2017 2081966.883 1292738 NPV @ 10% -4457864.77 Cash Inflow/
(Outflow)Discount rate PV
Required Rate (14%) Year 0 (3-month T-bills rate) -6000000 2013 -506481.0368 0.125 -444282 2014 -205861.9508 -158404 2015 261975.3346 176825.9 2016 1000189.376 592192.4 2017 2081966.883 1081308 NPV @ 14% -4752359.047 With 4% the difference is
-294494.2763
-1.35826E-05 So , IRR =(10%+1.35%)
=11.35%
Break- Even Analysis:
In the linear Cost-Volume-Profit Analysis model, the break-even point (in terms of Unit
Sales (X)) can be directly computed in terms of Total Revenue (TR) and Total Costs (TC) as:
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Where:
TFC is Total Fixed Costs,
P is Unit Sale Price, and
V is Unit Variable Cost
Assumptions:
Revenue per unit (P)= 17500
Variable cost per unit (V) =((262800+401281)/60)=12374.5
Total Fixed cost at (TFC)= 499650
Break-even units 95 units
From the above breakeven result, we
can that our total cost & total revenue will
be same if we are able to train 95 students.
On the other, ww will be in a break even
position if we are able to utilize our 77%
capacity
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Payback Period
\Payback period refers to the time the company will take to give back to its owners the money
that was initially invested in the business. For ‘Shopno Training and Oversees limited” the
initial start-up cost was Tk.6000000 and the payback period for the company is depicted in
the chart below:
Year 2013 2014 2015 2016 2017Net Income (649781) (347602) 117602 857268 1947242Payback (649781) (997383) (879781) (22513) 1924728
From here, the pay-back period cannot be found, because our initial investment is huge. So,
in order to have this, we have to forecast for some more years. That’s it only showing some
amount of recovery, but the initial investment tk. 6000000 is yet to recover.
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11.7 Performance analysis
RETURN ON EQUITY (ROE)
2013 2014 2015 2016 2017
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
-12.14%
-6.95%
2.30%
14.33%
24.53%
Ratios ROE
2013 -12.14%
2014 -6.95%
2015 2.30%
2016 14.33%
2017 24.53%
Interpretation:
The return on equity is the net income generated by the bank in relation to the total
shareholders’ equity the company acquires. In year 1, the company has generated a net loss
of $12.14 for every $100 in total equity. This means that the owners lose $12.14 out of $100
investment. From the time-series analysis, Shopno Training & Overseas Limited has
improved its ROE significantly in the future years. The ROE is -6.95% in year 2, 2.30% in
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year 3, and 14.33% in year 4 and 24.53% in year 5 respectively. In the last three years it has
positive ROE due to increase in net profit.
RETURN ON ASSET (ROA)
2013 2014 2015 2016 2017
-15.00%-10.00%
-5.00%0.00%5.00%
10.00%15.00%20.00%25.00%30.00%
-11.80%-6.72%
2.22% 13.89%
23.94%
Return on Asset (ROA)
Ratios ROA
2013 -11.80%
2014 -6.72%
2015 2.22%
2016 13.89%
2017 23.94%
Interpretation:
ROA signals how much of the net income is being generated from the total assets. In year 1,
the company has generated Net Loss of $11.80 out of every $100 in total assets. From the
time series graph, the ROA has been increasing consistently over the years. In 2014 they also
have a negative return on assets of -6.72%. But from 2015 we have managed to keep a
positive net profit margin of 2.22%. This is good news for the company’s bright future as this
will lead to increasing Net Profits for the future years to come. To increase the ROA we
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should concentrate more on increasing the net profit by reducing expenses and increasing
revenues in comparison to total assets.
NET PROFIT MARGIN
2013 2014 2015 2016 2017
-20.00%-15.00%-10.00%
-5.00%0.00%5.00%
10.00%15.00%20.00%25.00%30.00%
-15.17%-7.24%
2.13%12.95%
24.30%
Net Profit Margin
Ratios NPM
2013 -15.17%
2014 -7.24%
2015 2.13%
2016 12.95%
2017 24.30%
Interpretation:
In year 1, our company has generated Net Loss of $15.17 out of every $100 in sales.
From the time series graph, the Net Profit Margin has been increasing consistently over the
years. In year 2 they also have a negative net profit margin of -7.24%. But from year 3 we
have managed to keep a positive net profit margin of 2.13%. This is good news for the
company’s bright future as this will lead to increasing Net Profits for the future years to
come. To increase the Net Profit Margin we should concentrate more on increasing the net
profit by reducing expenses and increasing revenues.
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CAPITAL RISK:
2013 2014 2015 2016 201796.20%
96.40%
96.60%
96.80%
97.00%
97.20%
97.40%
97.60%
97.80%
97.12%
96.78%96.68%
96.95%
97.57%
Equity capital/total asset
Ratios NPM
2013 97.12%
2014 96.78%
2015 96.68%
2016 96.95%
2017 97.57%
Interpretation:
Capital risk measures the portion of the owner’s equity to the total amount of asset of Shopno
Training & Overseas Limited. For the first three years the capital risk has fallen as the equity capital
gradually decreased when the total assets increased. After the three years from 2016 this risk has
increased because of higher owners’ equity when compared with its total asset. Overall the scenario
felt that Shopno Training & Overseas Limited have experienced a decrease and than increase capital
risk structure as shown in the diagram.
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DEGREE OF ASSET UTILIZATION:
2013 2014 2015 2016 20170.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
77.77%
92.83% 104.18% 107.31%98.49%
Degree of Asset Utilization
Ratios Asset Utilization
2013 77.77%
2014 92.83%
2015 104.18%
2016 107.31%
2017 98.49%
Interpretation:
This ratio has been rising and then gradually falling for our company as the total
operating revenue have been falling or rising very slowly when compared with the total
assets. The first four years starting from 2013 to 2016 and then fell to 98.49% on 2017. It
increased from over 77 % in 2013 to over 107 % in 2016 as the figure above predicted.
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12. Long term sustainability
From the long term aspect, the project needs a bit modification. There can be various
scenarios which can hinder the growth of the firm. These scenarios are listed below:
There can be no demand in the hospitality sector in Malaysia and Singapore
There can be visa problems for the students who got jobs in these countries.
The trainees who do not want to go to Malaysia and Singapore.
The hospitality sector is not profitable enough and there are layoffs.
To deal with these possible scenarios and at the same time grow as a firm we need to either
go for extending the training programs offered or extending the list of countries’ human
resource agencies with who we are affiliated with. However, the best option, according to us,
is to do both at the same time. This means that we will increase the number of countries and
number of affiliations and also we will increase the number of programs offered. This will
ensure our opportunity to explore in the other markets and at the same time work as a
defensive mechanism for tackling worst case scenarios.
Therefore, for the long time sustainability we will:
Extending the Programs Offered
In the first year we are providing only training on becoming Beautification, Driving and Cooking.
From the next year onwards we will also include the diploma course on becoming Chef. We can
utilize the kitchen even more and train some trainees in becoming different kinds of chefs and this
way we can increase the palate of diploma courses.
Nursing Sector:
There is a huge market demand for nursing sector so in future we can capture this demand
and can provide nurses to abroad. We can give them training on nursing to increase our
profitability in this sector.
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Extending the Programs Offered
Extending the Countries
Hotel Management:
We can give training on hotel management to groom women to become successful hotel management. This is a very attracted sector in abroad where hotels required enough workers.
EXTENDING THE LIST OF COUNTRIES’ HUMAN RESOURCE AGENCIES WITH WHO WE ARE AFFILIATED WITH
Currently we are sending our trainees in Singapore and Malaysia. However, from long term
sustainability we can include other countries. This may include Saudi Arabi, Thailand and as
such. This is not only increase the potential of the acceptance of the students but also it will
increase the confidence of the trainees on Shopno Training and Overseas Limited.
13. Conclusion
This is the end of our business plan. We initially invested Tk. 60 lakhs for starting
our institute. We are optimistic of our business therefore we are completely positive of our
operations. Though our investment counts low in terms of monetary options but we are
expecting profits from the third year. We have tried to demonstrate our utmost concern about
trying to serve the economy by giving praiseworthy training to those poor women at an
affordable cost so that no one is deprived of earning. We have even demonstrated our efforts
to make our economy prosperous and skillful by providing vocational and technical skills to
the candidates of our institute to make our female working population more feasible to use
their knowledge for productive output.
We plan to hire knowledgeable teachers and experts for our training side and our
vocational and technical training section. Our trainers are competent and they are down to
earth to act in the most humble manner to teach and give the students utmost attention from
whichever class they come from. We are the five members of the board of directors and we
also plan to check onto the administrative side of the institution. We will ensure clear and
notable administrative measures so as to ensure a highly disciplined and good culture in the
institute.
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Our opportunities regarding our existence is that we plan to reduce women
unemployment in the country due to lack of skills and training and this is the sole reason of
why we wish to provide trainings to our vocational and technical section candidates in a very
cost effective and efficient manner. We also wish to provide training to the women coming
from the lower segment of our society so that they are not seen working on the risky and
unsafe job. We wish to outgrow the capacity of our female from the sixth year so that we can
afford to give quality training to most of the female approaching us.
We plan to outgrow ourselves through expansion and this is only possible if we can
procure funds from the donators. Our purpose of serving the economy by prospering the mind
of our next female generation and our country’s labor force will definitely come to limelight
and we will be able to procure funds for our operations successfully.
There are certain risks that prevail in our operations. We plan to hire competent
trainers and expertise for the training we wish to provide but we are not initially in a position
to give high salary to our employees and staff. Therefore not all of them will be willing to
come and work for us for serving the economy. They will not be in a position to align their
interests with our overall strategic goals and mission. Also employees at time can leave their
jobs for better opportunities as we cannot afford to have an employee job contract with
providing them such a less salary. Also a change in government policy can hamper the
overall operations of our organization. Keeping all these in mind we hope to do better in this
sector and we are optimistic of our future.
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