A BUSINESS PLAN FOR A MOUSE

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BUSINESS ENVIROMENT REPORT

MCSOFT FLY MOUSE

GROUP NO 14

N.I.B.M

BSc BUSINESS MANAGEMENT (Sp)-UGC

GROUP 14- BUSINESS ENVIROMENT REPORT MCSOFT FLY MOUSE

COMPANY PROFILE

MC SOFT Company was formed in the year 2011 to cater to the Computer and IT industry. The company's main focus is to strive towards providing enhanced superior quality computer appliances at an affordable price. The top management consists of seven members who have a vast knowledge& experience in the Computer and IT industry. The Board of Directors is as follows.

The Chairman- Mr Lalindra De Silva BSc BusinessManagement (Harvard), MSc Marketing Management (Cambridge) PHD Computer Science (Oxford)

Deputy Chairperson - Ms. Thilini Bhagya BSc Business Management (NIBM), MBA HRM (Colombo) MSc Computer Science (oxford)

Managing Director- Mr DimuthHeshan BSc Business Management (NIBM), MBA Industrial Management (Colombo)

Finance Director - Mr Imran Imthiaz BSc Accounting (Sp) (First Class Honors) (Colombo), MSc Business Finance (Harvard) CIMA, AAT,

Executive Director- Ms. Awanthi BSc in business management (Special) Kelaniya, CIMA, CIM

Executive Director- Mr Gayan Sandaruwan BSc Management (Hon)(Sp)(SRI J'PURA),CMA

Page 1


EXECUTIVE SUMMARY

MCSoft is a company based in the city of Colombo with a growing reputation in the computer industry. The company strives to provide enhanced, superior quality computer appliances at an affordable price. Since beginning in 2011, the company has successfully established itself in the computer industry and is known to provide products with excellent quality. Our main objective is to provide innovative products which benefit all computer users. This time we have developed a revolutionary product which will benefit gamers, graphic designers and all computer users alike.

Fly Mouse is a unique, one of a kind revolutionary product which can change the whole

concept of using computer mouse’s. The constant technology advancement in the world has

ensured that things which were thought to be “basic” such as computer mouse’s, keyboards,

earphones and other items etc..have all been “upgraded” to a totally new level. This product

will be like a precious jewel to hardcore gamers, graphic designers and also to anyone who

enjoys using computers.

We at MCSOFT believe this product will be a huge success because we know everyone who

uses a computer should be using a mouse and also that this type of mouse has never been sold

previously.

Fly Mouse is the first mouse which is capable of operating in 3-D and operates by levitating

in air. It is the latest invention of MCSOFT. and also provides an excellent opportunity for

investors to invest in. Fly Mouse is the first of its kind in the whole world and will thus allow

MCSOFT. to be the only supplier in the market. This will allow us a strong position in the

market and thus make us a monopoly. High profits and high return on investment can be

expected once the product is fully launched.

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MARKET OPPORTUNITY

Generally computer mousers have been categorized as pointing devices. It can be moved

wherever you take it across a computer screen and when you click it various tasks can be

performed. Slowly and surely as technology advanced, mousses were used to do more

advanced things like drawings and graphic designing etc….Also people like to use it when

playing games. The above mentioned things all do occur up to now but there is no major

advancement in any particular category that offers ease of access to any specific user.

We will be mainly targeting computer users who would like to do drawings and paintings on

the computer, graphic designers, hardcore gamers and other specialist field designers etc. We

will also be targeting the entire segment of general computer users.

The main target market is a constantly evolving one since more and more people are now

constantly seeking job opportunities in the IT sector.

The decision to invest in this particular product now is because we feel the available market

has grown to a significant proportion as such that we need not worry about having to think

twice about launching the product.

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BUSINESS CONCEPT

MCSOFTis a new company entering the computer & IT industry. We at MCSOFT believe in

providing customers with innovative products so that they can do things easier. We mainly

sell hardware products such as keyboards, mouses, headsets and hard drives etc. We believe

that we have the capacity to provide an innovative solution to all hardware products that

currently exist. We know it is an extremely challenging task but we are up to it always.

We will mainly be focusing to sell our product to the following categories of people.

1. People who do drawings and paintings on a computer

2. Graphic designers

3. Gamers

4. Other industry designers

5. People who use ECAD software

Initially we will be distributing the product across various parts of Asia and Europe.

Thereafter based on the response and feedback we will be hoping to go worldwide.

The above mentioned categories of people would all prefer to have more degree of freedom

with regard to the specific applications each of them use. Designers, people who do drawings

and people using ECAD software would really like this product since it operates in 3-D. This

will enable them to create an exact replica of whatever image they were attempting to

recreate. The users do not have to purchase light pens or any other equipment to produce the

relevant image on to the screen.

For gamers, we have a whole new level in store for them. Fly Mouse can be used as a gaming

console since it operates in 3-D and there will also be forced-feedback and multiple buttons

just like as in a gaming console. This will eliminate the need of the user purchasing a separate

mouse and gaming console and will thus be a cost saving for the user.

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BUSINESS MODEL

In business strategy, a business model should be planned and developed since this helps in

figuring out the probability of profitability of a new product such as Fly Mouse. It will

provide a means of identifying different paths of revenue generation and profit maximization

that Megabyte can pursue with regard to the product Fly Mouse. It also provides an insight

into the current market situation, competitor profiles and existing market competition.

CUSTOMER VALUE PROPOSITION

A value proposition is carried out to depict all the potential benefits that will be enjoyed by

the users of Fly Mouse.

One of the most important beliefs of MCSOFT is to build a strong, trustworthy, everlasting

relationship with each and every one of its customers. This is achieved by providing our

customers with excellent, innovative, quality products that are unique and durable.

In our perspective to provide efficient, innovative and reliable products to our customers, we

have constantly carried out market research to identify specific needs of each user category.

We at MCSOFT have realized the fact that technology can enhance the day-to-day lives of all

computer users. With the invention of Fly Mouse, all of our target customers would benefit

greatly.

Through the distinct advantages that lay around Fly Mouse, we believe that this product will

bring along huge customer satisfaction.

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COMPETITION

When launching a new product it is extremely important to consider the competition that

exists within an industry so as to determine the amount of profits we can reap from that

particular industry. Competition influences the marketing strategies a company will take in

order to maximize revenue and thus profit.

SWOT ANALYSIS

The SWOT analysis is a tool which can be used to highlight the strengths and weaknesses of

our particular product. Analysing the strengths of our product will help us to find out any

business opportunities that will enable our company to have a stronger market position. Also

being aware of any weaknesses that exist in our product will help us to minimize any threats

that may reduce the demand for the product. Therefore SWOT analysis proves to be a useful

tool that helps to carve business strategies in order to keep a sustainable share in the market.

While the strengths and weaknesses are affected by factors internal to the company, the

opportunities and threats are related to the external environment which can be defined by the

PEST (Political, Economic, Socio-cultural and Technological) factors.

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POSITIVE

NEG

ATITIVE

INTERNAL

EXTERNAL

STRENGTHS- Once launched will be a monopoly in the market- Design product according to users’ needs, innovation technology- High quality standards, global workforce & customer service

WEAKNESSES- Low economic activities due to global economic situation- Restricted market- Need to improve sales and marketing expertise

OPPORTUNITIES- Few or no economies of scale

- Technological innovation

THREATS- Global economic crisis, difficulty to obtain investment-

MCSOFT


The above diagram shows the SWOT analysis of Fly Mouse. It shows the strengths,

weaknesses, opportunities and threats that will be faced by Fly Mouse once launched fully in

to the market.

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Marketing and Alliances

Marketing Objectives

Ever since the establishment of the company, MCSOFT.has launched a great variety of

successful products that are used and trusted by its customers. The first and foremost

marketing objective of our company is to gain the trust of customers and end users within a

short period of time. With over 5 years of experience in the research and development of

products for the hardcore gamers and high end graphic designers, the company is confident

that its latest invention will be readily accepted by its customers and would greatly aid to

their convenience.

The company intends to launch the ultimate product, TheFly Mouse, in the European as well

as the Asian market simultaneously in an attempt to earn quite a noteworthy reputation and

increase brand equity from every possible perspective of customers. This is because the

product would face greater competition in the Europe, while Asia is still quite a fresh market

for such products. However, due to relatively high price of the product, the scope of sales in

Europe might be better. Another potential market could be The United States. However, due

to the economic slowdown, the demand of the product might be affected.

Target customer segment

The main target market segment would be hardcore gamers and professional high end graphic

designers. Another minority target user would be those wanting to learn or experience newer

technologies. The product could be sold to general public as well as CAD software

companies, gamers and 3-D designers.

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Gamers40%

CAD Users 40%

Multimedia Users15%

General purpose users5%

Target Market

Chart 1 Target Market

Unfair Advantages

It is quite obvious that humans always look forward to own any product which houses the

latest technology and which has the capability to make their lives simpler. The following are

the aspects which boosts our confidence on selling this product in the current market.

The first and foremost benefit for the Fly Mouse is that, it is the first of its kind, to be

released into the market.

The Fly Mouse can be used in 3-D graphic designing which was a tough job till now.

Due to the added accelerometer, it provides the motion along the missing z-axis.

Also whenever necessary, it can be used as a normal mouse.

Due to the added features and the extra option buttons, the necessity of a joystick is

omitted for the hardcore gamers.

Provides almost everything a multimedia user needs. Especially DJs will definitely

find it impossible to be successful without this Fly mouse.

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Market Research Strategy

Market Research is a key aspect in the development of any new product. It helps us to get a

much clearer picture of the wants and needs of the customers and hence provide them with

better solutions; thus reducing the risk of product failure. Considering this fact, it was

intended to carry out both primary and secondary market research that would provide the

company, with business intelligence to make informed decisions.

Secondary research would enable, to gather information gleaned from studies previously

performed by government agencies, game manufacturers and graphic designing software

manufacturers. This in turn would provide statistics about the population of potential Fly

Mouse users. Secondary research would also include study of existing products and their

limitations.

Primary research would be carried out through questionnaires and personal interviews with

potential customers. This would enable the company to identify the difficulties which the

customers face with the existing products and how they can be resolved. This would also help

to get a good idea about which pricing strategies to be used and how much the customers will

be willing to pay for the product.

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Marketing Mix

The marketing mix for Fly Mouse is intended to generate a positive response in the target

market by blending the four P’s in an optimal manner.

The marketing management plan would be strategized in following manner.

Product

The Fly Mouse is the latest innovation of MCSOFT, incorporating the newest assistive

technology. It can be categorised under speciality goods that are of interest to a niche market

of specialized PC users like CAD designers and gamers but also to the general computer

users. MCSOFT has successfully provided PC related solutions and has been able to build a

fairly good reputation amongst its customers in the past 5 years. This is mainly due to

company’s main focus on excellent quality and reliability of its products.

With its latest invention The Fly Mouse, MCSOFT has once again taken one step further in

bringing the employment sector closer to the dominating, PC based world. This is the first

ever floating mouse which is built, incorporating four types of leading technologies

integrated onto a single device (optical, wireless, accelerometer and electro-magnetism). And

this would be a unique selling point of the product.

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Price

Due to four main latest technologies being used, assuring quality and reliability, the cost of

the Fly Mouse is expected to be relatively high. But it is still cost-effective, considering the

benefits that it offers. This would be reflected in the price. The pricing objectives to be

considered when setting the price of the Fly Mouse can be prioritised in the following

manner.

Survival of the product

Quality leadership

Maximise profit margin

The demand for the Fly Mouse is expected to be elastic, due to the current unstable economic

situation. Therefore a lot of strategic planning and analysis was needed to be carried out

before setting the price of the Fly Mouse. In addition, due to rapid technological

advancement, high competency and short life-cycle of electronic products, its value is

expected to depreciate over time. In order to overcome this, the company intends to

improvise the product at a later stage to overcome the limitations and hence stay competent in

the market for a longer time.

The price would be set, based on a combination of cost-plus and value-based pricing method.

Cost-plus pricing would ensure that the costs are covered up, plus a certain percentage of

profit is earned on each unit sold. Value-based pricing on the other hand, will pass on the

effective value relative to alternative products; thus ensuring that the product is not under-

valued.

Placement

The product is targeted mainly at a niche market though it is open to the general market as

well. Therefore, the volume of sales is expected to be low. The most appropriate distribution

channel that could be used is manufacturer-retailer-customer. In addition, to save

development costs, it was intended to make use of assembly factories whereby, ready-made

spare parts are bought and the product can be assembled. Due to low volume of sales, there is

no necessity for wholesalers. This would save cost because the shorter the distribution

channel, lower the cost. The Fly Mouse would be placed in leading electronic outlets and PC

fairs in the international market.

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Customer Relationship Management

Customer relationship management (CRM) consists of the processes a company uses to track

and organize its contacts with its current and prospective customers. CRM software is used to

support these processes. Information about customers and customer interactions can be

entered, stored and accessed by employees in different company departments. The main goals

of CRM include improvement of services provided to customers and to use customer contact

information for targeted marketing. The company is currently using Relational Database

Management System (RDBMS) in all its departments for storing information related to

customers and orders. RDBMS stores data in the form of related tables. It is a powerful tool

because it allows various departments to share and relate information; thus ensuring good

connectivity among departments.

MCSOFT values all its customers’ suggestions and comments. Therefore the customer

feedback is constantly monitored. This is to ensure that customer requirements are catered by

identifying any design faults, increasing durability of the product, reducing prices, enhancing

features presently available on the Fly Mouse and any other modification the customer

requires from the company.

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http://en.wikipedia.org/wiki/Customer


Technical Description

Floating mouse working under the concept of magnetic induction.

Basic Concept

Inspiration – since the evolution of mouse design which evolved from it’s basic

design of the track ball to the current optical technology, all has a certain degree of friction

which mainly depends on what kind of surface you use on. This can be a bit of a hassle in

certain instance such as gaming or sensitive drawings which need precision. So to avoid this

& for comfort we came up with this idea, which we think would revolutionize the idea of the

mouse. What we have created is an ingenious way to make the mouse which levitates in air

defying gravity eliminating friction.

The technology behind this comes from magnets. Since like poles of a magnet repel each

other, this enables us to provide lift to the mouse & maintain levitation. Instead of using

permanent magnets which are uncontrollable & provides a constant lift for a certain weight,

we use electromagnets which are fully controllable & it provides a variable lift for any

weights. Exploiting this we are able to create the ultimate mouse. Magnetic induction isn’t a

new technology, it has been around for nearly a century & totally reliable. Products based on

this technology such as floating globe, maglev train & many other products are currently

available.

Products based on magnetic induction

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The induction pad(float pad) contains two different coils with two different purpose. while coil 1 produces a magnetic field of a fixed polarity, coil 2 produces a varying magnetic field to power the mouse & to charge it’s battery

Strong permanent magnet of fixed pole can also be used to provide additional lift.

As you can see in the above diagram, the basic product includes two components, the mouse

& the float pad. The float pad appears to be like a normal mouse pad. The bottom of the

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mouse also contains conduction coils to provide an opposing magnetic field & to obtain

power for its operation.

Illustration of the concept on how it works

If the power output of the USB port is not sufficient, additional adaptors can be used to attach

it to the mains.

Comfort

Due to long term usage of a normal PC mouse your hands are exposed to stress &

fatigue. Therefore our products’ design tends to provide maximum comfort. The best part of

it is that our customers would feel the floating sensation.

This picture shows how your hand would be positioned to provide extra comfort & precision eliminating stress. The bottom part of the mouse is equipped with a cushion to make handling more easier.

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we could produce float mouse of different sizes to suite different hand sizes so that two

maximize comfort.

Extra features

Additionally we provide extra buttons depending on the customer’s needs or purpose.

For example a graphic designer would need a different set of buttons aligned at different

position varying from a gamers needs. And all of these buttons would be customizable by the

software we provide.

Due to the floatation of the mouse the bottom part of

it would be decorated with small LED’s to give the float pad

a neon effect, or the float pad can be decorated by the

customer’s request to provide mood lighting. All our

products are fully customizable at the request of the

customer.

buttons which can be Customized by the software provide to satisfy the customers needs.

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All mouses we produce are equipped with an

optical sensor, a digital compass &a

accelerometer. This enhances the mouse

capability to get rid of the current concept of

2D motion & transforms it into a exciting

new 3D space maneuverable mouse. This

works similar to the Nintendo Wii gaming

system by it use’s the current mobile phone

technology for GPS & motion detection. This

enables you to take the mouse away from the

floatpad& use it in space in any direction for

the cursor movement. Exploit this capability to increase productivity in CAD systems,

maximize gaming performance.

Extended wireless connectivity

Instead of using Bluetooth technology we are integrating Wi-Fi into float mouse so that it would have an extended rage & minimum interference.

Force feedback

For gaming enthusiast we could provide force feedback capabilities to the mouse so that it would improve gaming experience

Variable size floatpad

Depending on the customer’s needs they could choose the floatpad size so that the floating range of the mouse can be extended.

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Visual customization

Custom made covers for the mouse on demand by the customers can be provided.

Dual (Left, right) handed users

No worries for left hander users since we provide float mouse for both users.

Any surface usage

Can be used on any surface when it’s away from the float pad & serves as an ordinary mouse.

Key benefits

Greater comfort. No wire hassle. Friction free. Can be used anywhere & any surface (toggles between optical & gyroscopic sensors). No need to change batteries. Greater range. More precision

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Intellectual Property

You need to consider the protection of your

intellectual property early in the formation of the

business. It is heartbreaking to find that the idea

you’ve worked so hard to conceptualize and develop

is stolen by other people and companies. Float mouse

is the first ever mouse with floating capability using

viable current technologies into a single integrated

device to provide an ultimate new experience in

pointer technology.

The design of the product is truly unique and hence the company plans to patent the

design under the World Intellectual Property Organization (WIPO). This would be achieved

using the industrial design rights, which provides protection against replicating the design of

Float mouse. The industrial design of Float mouse consists of implementation of current

existing technologies & integrating them into a new product.

Float mouse is not just an ordinary mouse, but it can also be used for various purposes

as an interactive & entertaining device incorporating the latest smart technologies.

It can be used as a DJ equipment.

Total control of PC gaming getting rid of the keyboard (ex:- by tilting the mouse it

can be used to move forward & backward)

No more surface needed for operation except when it’s on float mode.

Extended wireless freedom (greater range).

Maximum comfort.

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Future Initiatives

Greater force feedback.

Improve pointing precision.

More software to take advantage of the mouse capabilities.

Replace buttons with touch sensitive surface.

Small LCD on mouse to indicate battery level & connectivity strength.

Price Range

The products’ price depend on the additional features & customization on the product. But all float mouse has the basic feature of floating & is Rs 1990 onwards.

Functions (all are included 21x18 cm floatpad)

Price (Rs)

2button float mouse Basic) 500

3 button, scroll (normal) 1000

4 button, scroll wheel with digital compass & accelerometer (premium)

1500

6button scroll wheel with digital compass & accelerometer + button customizable

software (ultra)

2000

6button scroll wheel with digital compass & accelerometer + button customizable software + force feedback (ultimate)

2500

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All mouse are customizable with LED’s, comfort cushion, & top covers. Also the area of the float pad can be extended for an extra sum.

Additional features Extra fee (Rs)

For every additional 10 square cm of floatpad 50

LED around bottom of the mouse 200

LED around floatpad 200

Financials

The financials for this company will be done quarterly for 2 years, 5 years in total. In order to prepare a financials table the incomes and expenses of the company have to be known so that the margins may be then calculated.

The following are all the incomes which the company may obtain during the period of 5 years. Certainly, not all incomes would be incurred during the beginning years but as time passes incomes would continue building up.

Product Sales Advertisements – These advertisements are when the product is remarkable to the

majority and hence other companies would like to use this product to advertise theirs and hence they will have to pay for that.

Promotional Offer – These offers will make more consumers to go for the product hence greatly raising the Turn over though there would be fewer profits.

Royalties – This income might also come in after some time. After observing the Mcsoft product reviews, other companies may like to purchase the new innovated copyright technology hence giving an income to the company.

Contracts – There would be some retail companies which might want to sign a contract for sales for some years hence paying in advance for this.

For any company to go in a loss, the expenses continually are more than the income. Therefore in order for a company to become successful, it has to ensure it earns more then it spends. The following are the expenses which would be incurred by MCSOFT.

Factory Rent

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Raw materials – This includes all necessary equipments to manufacture a complete product.

License Research and development costs Salaries Transportation – This may include product transportation to the customers.

During the first quarter of the first year, the expenses to income ratio would be quite high; this is because the product would not yet be known amongst the people and therefore not much sales. As time goes on, the product would be more advertised mainly using free publicity and known more amongst the people hence more sales. Utilizing all business tactics like promotional offers would as well enhance sales. The following are the financials tables for the five upcoming years. All values are in Sri Lankan Rupees (LKR).

Balance Sheet

Year 2011

Quarter1 Quarter

2Quarter3 Quarter4 Total

AssetsCash 410616 226623 120729 127536 50000 EquityCapital 522613 267721 155877 105813 216520Profit/loss -111927 -41098 -35148 21732 16652Total 50000

Year 2012

Quarter1 Quarter


AssetsCash 183498 192225 263898 289069 93500 EquityCapital 161844 203591 222276 297479 50000Profit/loss 21654 -11366 41622 -8396 43500Total 93500

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Year 2013

Quarter1 Quarter2 Quarter3 Quarter4 Total

AssetsCash 310851 436095 561339 686591 240500 EquityCapital 289103 394347 859616 948960 93500Profit/loss 24776 41748 41748 41748 147000Total 240500

Year 2014

Quarter1 Quarter



Year 2015

Quarter1 Quarter



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Income Statement

YEAR 2011Incomes Quarter 1 Quarter 2 Quarter 3 Quarter 4 Totals

Sales 0 19900 29850 53730 103480Contracts 0 0 0 50000 50000

Total 153480Expenses - - - -

Factory Rent 5000 5000 5000 5000 20000Raw Materials 10000 10000 15000 27000 62000

License 10000 0 0 0 10000Research and Development

costs

50000 5000 0 0 55000

Salaries 36000 38000 40000 44000 158000Transportatio

n1000 3000 5000 6000 15000

Total 320000Margin -166520

Year 2012BalB/f -166520

Incomes Quarter 1 Quarter 2 Quarter 3 Quarter 4Sales 69650 73630 75620 79600 298500

Contracts 60000 20000 70000 20000 170000Total 468500

Expenses - - - -Factory Rent 5000 5000 8000 8000 26000

Raw Materials 35000 37000 38000 40000 150000License 10000 0 0 0 10000

Research and Development

costs

5000 8000 0 2000 15000

Salaries 46000 48000 50000 50000 194000Transportation 7000 7000 8000 8000 30000

Total 425000Margin -123020

Page 25


Year 2013Bal B/f -123020Incomes Quarter1 Quarter

2Quarter3 Quarter4

Sales 112500 112500 112500 112500 450000Contracts 42500 42500 42500 42500 170000Royalties 4998 4998 4998 4998 20000

Advertisement 1250 1250 1250 1250 5000Total 645000

ExpensesFactory Rent 7500 7500 7500 7500 30000Raw Materials 51625 51625 51625 51625 220000

License 10000 10000Research and Development

costs

10000 10000


Total 498000Margin 21748 41748 41748 41748 23980

Year 2014 Bal B/f 23980Incomes Quarter1 Quarter2 Quarter3 Quarter4

Sales 110000 120000 120000 120000 470000Contracts 42500 42500 42500 42500 170000Royalties 4998 4998 4998 4998 20000

Advertisement 2450 2450 2450 2450 10000Total



costs

5000 5000


Total 577000Margin 5448 30448 30448 26448 116980

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Year 2015 Bal B/f 116980Incomes Quarter1 Quarter2 Quarter3 Quarter4Sales 120000 120000 120000 130000 490000

Contracts 42500 42500 42500 42500 170000Royalties 4998 4998 4998 4998 19992

Advertisement 2450 2450 2450 2450 9800Total



costs

10000 10000


Total 594000Margin -6698 26698 26698 35698 212980

Page 27


Cash flow statements

Year1

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8 Month 9

B/F 16922

113687

2 104523 87657 75541 63425 52209 40243Cash Receipts Capital 216520

Sales 0 0 0 6633 6633 6633 9950 9950 9950Contracts 0 0 0 0 0 0 0 0

Total Cash Payments Factory Rent 1666 1666 1666 1666 1666 1666 1666 1666 1666Raw Materials 3333 3333 3333 3333 3333 3333 5000 5000 5000

License 10000 0 0 0 0 0 0 0Research and Development

costs 20000 15000 15000 5000 0 0 0 0Salaries 12000 12000 12000 12500 12750 12750 13000 13500 13500

Transportation 300 350 350 1000 1000 1000 1500 1750 1750

Total

C/F 16922113687

210452

3 87657 75541 63425 52209 40243 28277

Year2

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8 Month 9

B/F 50000 50678 61166 71654 67862 64075 60288 74022 87966Cash Receipts Capital

Sales 23210 23220 23220 24540 24545 24545 25200 25210 25210Contracts 20000 20000 20000 6600 6700 6700 23000 23500 23500


License 10000

Page 28


Research and Development

costs 1666 1666 1666 2666 2666 2666 Salaries 15300 15350 15350 16000 16000 16000 16600 16700 16700

Transportation 2300 2350 2350 2300 2350 2350 2600 2700 2700

Total C/F 50678 61166 71654 67862 64075 60288 74022 87966 101910

Year3

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8 Month 9

B/F 93500 9198610361

7 11524813373

414536

515699

617548

2 187113Cash Receipts Capital

Sales 37500 37500 37500 37500 37500 37500 37500 37500 37500Contracts 14160 14170 14170 14160 14170 14170 14160 14170 14170Royalties 1666 1666 1666 1666 1666 1666 1666 1666 1666

Advertisement 410 420 420 410 420 420 410 420 420


License 10000 Research and Development

costs 10000 Salaries 14925 18350 18350 14925 18350 18350 14925 18350 18350

Transportation 2900 2925 2925 2900 2925 2925 2900 2925 2925

Total

C/F 9198610361

711524

8 13373414536

515699

617548

218711

3 198744

Year4

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8 Month 9

B/F 24050023063

623579

2 24594825608

426624

027639

628653

2 296688Cash

Page 29


Receipts Capital

Sales 35000 35000 40000 40000 40000 40000 40000 40000 40000Contracts 14160 14170 14170 14160 14170 14170 14160 14170 14170Royalties 1666 1666 1666 1666 1666 1666 1666 1666 1666

Advertisement 810 820 820 810 820 820 810 820 820



costs 5000 Salaries 22000 22000 22000 22000 22000 22000 22000 22000 22000

Transportation 3000 3000 3000 3000 3000 3000 3000 3000 3000

Total

C/F 23063623579

224594

8 25608426624

027639

628653

229668

8 306844

Year5

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8 Month 9

B/F 33350032238

633129

2 34019834908

435799

036689

637578

2 3846882

Capital Sales 40000 40000 40000 40000 40000 40000 40000 40000 40000

Contracts 14160 14170 14170 14160 14170 14170 14160 14170 14170Royalties 1666 1666 1666 1666 1666 1666 1666 1666 1666

Advertisement 810 820 820 810 820 820 810 820 820



costs 10000 Salaries 22000 22000 22000 22000 22000 22000 22000 22000 22000

Transportatio 3250 3250 3250 3250 3250 3250 3250 3250 3250

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n Total

C/F 32238633129

234019

8 34908435799

036689

637578

238468

8 393594

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The financial tables above show whole of the expenses and incomes which may incur during the five upcoming years. These values are obtained logically by studying our business strategy of our product. It is seen that as years pass the expense to income ratio keeps on reducing and hence during the 3rd year there is a break point; a point where the business undergoes profits. During the first two years there are negative profits though there surely is some good improvement in the business. During the first quarter of the first year, products were just distributed for tasting purposes hence no sales made during that time, but from the second quarter that’s the time when sales will begin.

Monitoring the expenses deeply, it is observed that nearly all expenses increase during the years, but this increment is not as much as that of the income. The factory rent gradually increases due to expansion of floor area required to produce the product. All other expenses increase as well, each having a reason behind it except the license and research and development. The license certainly remains the same for all years since it is just a constant amount to be paid while for the research and development it depends on how the product is during that year; if the product works well with most then there is no point of making researches for improvement hence the expense for it reduces.

The following diagram shows a plot of profits against year.

2010 2011 2012 2013 2014 2015 2016

-200000

-150000

-100000

-50000

0

50000

100000

150000

200000

250000

Break even point plot

Year

Profi

t inM

alay

sian

ringi

tts

From the above plot it can be said that the company may get back its costs after the 3rd year. There is a reason for this profit and it is that the megabyte fly mouse is the first ever fly mouse produced and hence many would surely love to experience this new technology.

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Key Assumptions

1. The product would be greatly demanded in some years time due to the new innovated technology.

2. In some months, Megabyte Company would get contracts from other companies to ensure continuous sales to the company.

3. A few companies will purchase the right of using our technology for their products (Royalties).

Financing/Uses of funds

The starting capital is gotten from the board of directors who are as well the designers and planners of the product. These directors have experiences in other known companies and that is where they got these funds from to establish another company. As seen from the financial tables, the starting capital has to be at least LKR112000 (total expense during the first quarter of the first year) without which the business would not be able to proceed further. Any further funds required may as well be obtained from banks as loans. These loans have to go on till the business becomes stable and that according to the plot would be in the third year.

It is elaborately explained in the financials section to what expenses there would be and thereby information on the usage of funds. The main starting expenses would be the salaries, factory rent, research and development, transportation, license and other miscellaneous expenses. These expenses are the most necessary ones in order to start operating this business. Especially the research and development would require approximately LKR 50000 at the starting since that is the time when all the research for the product is done.

All the above shows that this would be a nice opportunity for anyone to invest his/her money to this business plan and therefore there were some previous investors who were really interested, but due to the recent financial crisis they had to back out. There also was another group of investors who were to invest in this but back then implementation of this technology was really expensive especially for the components required for this were rarely available and if available too expensive.

Plans at times may not turn out as expected hence there are always some chances of plans to fail. Business planning may also result to a failure therefore this failure has to be taken into consideration and ‘planned’ for as well. The MCSOFT team therefore will sign an agreement (when purchasing the license) with the government to pay off all the loans in case of our product failure hence protecting us from any difficulties.

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Devices & Hardware

A BUSINESS PLAN FOR A MOUSE