BUS101 Group Report on Business Plan- WALI

WALI THE SMART WATER LEVEL INDICATOR 1

Business Plan

28th April, 2015

WALI

-The Smart

Water Level Indicator

I6

Incorp

ora

tion

Innovative Six

Submitted To MS. TAHERA AHSAN

Lecturer

School of Business

Submitted By

GAULIB HAIDAR 151-0898-630

SUDIPTA BALA 151-0885-630

ARANNITA SAHA 151-2042-030

SUDIPTA DEBNATH 151-2019-030

TASNEEM NOVA 151-0512-630

KANTA CHATTERJEE 151-1097-630

On:


7/2, Purana Paltan, Dhaka, Bangladesh

+88-02-910-00-00

[email protected] www.innovativesix.com

WALI -The Smart

Water Level Indicator


Table of Contents

I. Executive Summary .............................................................. 4

II. Company Description ............................................................ 4

Company Details

Location and Factories

Internal management structure of company

Product Descriptions and Rationale

Service

Production details and costs

SWOT Analysis

III. Industry and Market analysis ................................................. 11

Industry

Market Analysis

Future competition

Marketing Strategies

Pricing and Distribution

Operations

IV. Finance & Funding ............................................................. 13

Financial requirements

Start-Up Expenses

Projected Financial Statements

Projected Sales forecast from 2015 to 2017

Profit and Loss forecast from 2015-2017

Breakeven Analysis

Taxation

https://d.docs.live.net/a789988bd99278bc/Public/Business%20Plan%20(New2).docx#_Toc418027670


Executive Summary

The I6 Incorporation aims to create an innovation in the market of traditional water tanks of

Bangladesh. For the successful implementation of our goals and objective, we will market our

products both as business and consumer products.

We will be marketing a technology called WALI: The Smart Water Level Indicator. It is an

electronic device which will free the customers from switching the water supply off manually

when the water tank is full and thus eliminate wastage of both water and power.

As our technology is ecofriendly, we will be possessing the green advantage. Our technology

being cost effective and within the budget of our targeted market will also play a role of great

advantage for us.

We are marketing such a technology that has never before been launched in our country, so we

will not have to compete with anyone at the first time. Again as we have made a patent of our

technology, we will not have to worry about competitors for the next 10 years. So undoubtedly,

we will possess a monopoly over the market for the time being.

We have assembled a management team of elite and expert men from all the fields necessary.

These men are not only enthusiastic but also efficient and motivated to their assigned jobs as

well as the overall goal of our company.

Initially each of the 6 entrepreneurs has contributed a sum of BDT. 5,000,000. All the necessary

capitals are provided by the entrepreneurs and thus we do not require to depend on loans from

any source at the beginning. Our projections say that we will reach breakeven point within 1.5

years of going into operation and expect returns after that.

Company Description

Company Details

The name of our business is I6 Incorporation. It is a privately held corporation, aiming to joint-

venture with top water-pump producers of the country.

We have selected Private Ltd as our form of business due to the followings:

We want our organization to have a separate legal entity from the owners.

We do not want the owners to have any personal liability for the debts of the company.

As Private Limited Companies are legally registered and regulated, this will portray a

prestigious and professional image to our consumers.

It easier to obtain credit from banks with a limited corporate structure.

Private limited companies are able to raise funds as a result of issuing shares privately.

Tax advantages gained through effective tax planning – as dividends are taxed at a

lower rate than income.

If such situation arises, it would probably be easier to sell a Limited Company rather

than a sole trader or partnership business.


Until now, we have received the Certificate of Incorporation from the company registrar by

fulfilling all the legal procedures including submission of the Memorandum and Articles of

Association, directors’ particulars and the registered address.

Our mission is to create a revolution in consumers that will ensure no wastage of water and

power.

Our vision is to ensure sufficient water for our children, grandchildren and their grandchildren.

Our goal is to convert all the traditional water tank in our country into Smart Water Tanks by

2023.

Location and Factories

Our company will have one factory and one office which will include a showroom.

We have signed off a deal with Gazi Tank of Gazi Group who intends to directly purchase our

product and use it in their future production line for resale, as a Business (B2B) product.

Considering this, we have acquired a factory considerably near the Gazi Tank’s factory in

Narayanganj for manufacturing our products. For our office space and showroom, we have

rented the 2nd floor of Gazi Tank’s corporate office at Purana Paltan, Dhaka. For our office

space and showroom, we have rented the 2nd floor of Gazi Tank’s corporate office at Purana

Paltan, Dhaka.

As Gazi Tank is our main business partner, the factory and office being near to Gazi Tank’s

will allow us better transportation and communication, availability of labor, supply of energy,

condition of customers, presence of complementary businesses, proximity to market and future

prospect.

Internal management structure of company

We will have six departments:

1. Production and quality control: This department will be divided into two sub-

departments, one looking after the production and the other ensuring quality.

2. Sales and marketing: This department also be divided into two sub-departments, one

responsible for sales and the other marketing our products.

3. Research and development: This department will focus on our current product and look

for ways to develop them and make them more consumer oriented.

4. Human resource: As all HR departments, ours will also be responsible for recruitment

new employees, training and developing new as well as the existing employees,

providing adequate and reasonable benefits and compensation to the employees and

ensuring legal compliance with labor, tax and employment laws.

5. Finance: This department will work to ensure regular and adequate supply of funds to

the concern, adequate returns to the shareholders which will depend upon the earning

capacity, market price of the share, expectations of the shareholders, optimum funds

utilization, and safety on investment and plan a sound capital structure to maintain

balance between debt and equity capital.

6. Accounts: This department will watch over the functions of the organization related to

accounting, for example - accounts Receivable and revenue tracking, reporting and

preparing financial statements, etc.


Below presented are the detailed management and employee information of I6 Incorporation:

Management

Level Designation

Number of

Employees Salary(Primarily)

Top Level

Board of Directors 6 N/A

CEO 1 160,000

CFO 1 145,000

COO 1 145,000

Top Level (Staff) Company Secretary 1 120,000

Legal Advisor 1 120,000

Mid-Level General Manager (GM) 6 100,000

Lower-Level

Deputy General Manager (DGM) 12 60,000

Staff 24 30,000

Research and Development Staff 2 20,000

Security Staff 4 8,000

Factory Worker 25 6,000

Sales Worker 7 6,000

*All amounts in BDT


Organizational Chart

Company Secretary

Board of Directors

CEO

COO

GM

(Production & QC)

DGM(Production)

DGM

(Quality Control)

GM

(Sales & Marketing)

DGM

(Sales)

DGM(Production)

GM

(R&D)

DGM

DGM

GM

(HR)

DGM

DGM

CFO

GM

(Finance)

DGM

DGM

GM

(Accounting)

DGM

DGM

Legal

Advisor


Products and Services

In I6 Incorporation, we aim to produce goods which are environment friendly as it is our social

responsibility to ensure the sustainability of our environment and make proper use of our scarce

resources.

Product Descriptions and Rationale

We are focusing on one single product initially – WALI: The Smart Indicator.

It is a technology which saves water by switching off the power supply line when the water

reaches to the pick point of the water tank.

This product will introduce such a technology which has never before been launched in our

country. So we will have no competitors and possess a monopoly over the market for a time

being. As it is going to reduce the wastage of energy and a scarce natural resource – water, it

is likely going to be well accepted by the people all over the country resulting in more and

more increase in the number of our customers. Another main reason that will likely increase

its demand is its cost effectiveness. Also, its low cost maintenance will cause its increase in

demands.

We will provide 1 year full replacement and service warranty for our technology and also have

plans to introduce a warranty purchasing service for our customers. The warranty purchasing

service will work like a general insurance service, where the customers will pay a small amount

of money with the actual price of the technology. In exchange of the extra sum of money, we

will provide them with extended replacement and service warranty for 4 more years.

Service

Our goal is to provide our customers with the most advanced form of technology in the aspect

of market of water tanks. We will bring revolution in this market.

We will guide our customers with unbiased point of view, disclose all the features, the pros

and cons of our technology and let them decide whether to go for it or not.

We will make sure they are able to use our technology adequately and answer all of their

queries about it.

We will have a 24/7 helpline always open to answer to the queries of our existing and future

customers.

Any complain about our technology will be dealt within 24 hours of receiving.

Any servicing required during the first year of purchase will be free including full free product

replacement if required.

Those who will purchase our special warranty will receive an extended 4 year after sales

services than the normal customers.


Production details and costs

As we have mentioned above in the product and services section, we will be focusing on one

single product called - the smart indicator. Our company will produce this product in our own

factory with its own management.

This product is a simple but versatile circuit which indicates the level of water in a tank. We

have divided water tanks into three levels:

1. L1 = Lowest level of the tank

2. L2 = Level holding all of the water, the place between L1 and L2

3. L3 = Highest peak of the tank

The circuit sounds alarm when water level is below L1 and also when water exceeds L3.

However, these levels can be increased or decreased depending upon the level resolution

required. This can be done by increasing or decreasing the number of level detector metal strips

(L1 through L3) and their associate components.

The raw materials (in the following list) will be collected from several suppliers of Narayanganj

and will be delivered to our factory via our pick up vans. Our employees there, will assemble

the product according to the instructions.

*All prices are in Taka

I6 Inc. will produce six thousand pieces on the first month & our joint venture will require at

least ten thousand of our products.

Raw Materials Quantity Price per unit Total Price

(For 1 product)

Total Cost

(per 1000 unit)

Led color Bulb 3 0.5 1.5 1,500

Buzzer 1 10 10 10,000

Transistor BC 548 4 1 4 4,000

Resistors 220 Ω 6 11 66 66,000

PCB Board 1 1.8 (Per square inch) 1.8 1,800

Soldering flux 1 60 60 60,000

DC Cable 1 15 15 15,000

TOTAL COST 159.30 158,300


SWOT Analysis

Strengths

1. We have acquired our own factory considerably near the Gazi Tank’ factory in

Narayanganj, which is highly suitable for our business.

2. We have a strong focused management staff with high expertise, skills, efficiency and

educational background.

3. We have our own transports for distribution and official use, allowing us reduce

unnecessary transportation cost and dependence on a third party.

Weakness

1. Unwillingness of people to change habits and accepting new and sustainable technology

can play the role of the main weakness of our business.

2. The constant price over the competitive market and the raise in price of water tanks due

to the installment of this new technology may hamper our business growth.

Opportunities

1. Since we are the one and only provider of this service in Bangladesh, our product will

face no competition and have a great potential to rule the whole market for a time being.

2. As our business product possesses a green marketing advantage, there is a huge chance

of rapid growth in the industry.

3. Our technology is used in water tanks, the one most vital and irreplaceable object in

every building. So the more the number of buildings, the more the number of water

tanks and the more opportunity we get to market our technology.

Threats

1. Economic slowdown may have a great impact on the reduction of our product demand.

2. Successful business venture invites more competition. So we will face potential new

competitors in near future and will certainly have to set a high competitive advantage.


Industry and Market analysis

Industry

We will be operating in the Water Tank industry of the country. It is a very much competitive

industry with lots of customers and a number of producers.

We will introduce a completely new line of product, a new technology, an innovation in the

traditional water tanks available in the market. Thus we will attract new customers not only for

the technology being new but also for its being ecofriendly as it eliminates water and power

wastage.

Market Analysis

If we look at the demographics, we will find that every building owner/land lord inside Dhaka

city has a minimum of one water tank installed in his/her building. So we are targeting the

middle class and the higher class people who have the capacity and need of purchasing their

own water tank or already own one.

Our marketing will be conducted both as Business (B2B) product and Consumer (B2C) product.

Gazi Tank of Gazi Group has signed a deal with us for directly purchasing our product and

using it in their future production line for resale, as a Business (B2B) product. We have also

received offers from couple of more lead water tank producers in our country willing to use

our technology in their future productions.

On the contrary, as our goal is to convert all the traditional water tanks in our country into

Smart Water Tanks by 2023, we will also market our technology directly to the consumers as

a Consumer (B2C) product.

We will attract our new customers through promotions and advertisements of our product. As

our product is ecofriendly and provides environment sustainability, customers will be

encouraged to avail our product.

Every apartment building needs water tanks, the mother product of our technology. Below

represented is the market size and the uptrend in number of apartments in Dhaka city:


Future competition

We have completed all the formalities and now hold the patent of our technology for the term

of 10 years from 1st April, 2015 under the Patents and Designs Act, 1911.

This means, any organization who wants to market our technology within 10 years from today,

needs to come under our terms before hovering in the market.

Marketing Strategies

Primarily, we intend to advertise our products using the co-marketing strategy along with Gazi

Group. Gazi Group and I6 Inc. will jointly hold campaigns that will promote “SAVE WATER”

along with our products.

Other than co-marketing with Gazi Group, we will launch our own marketing campaign by

taking the following measures:

We will market our products through social media and internet advertisement.

We will have a well-developed website, official pages in the popular social-media

platforms like facebook, twitter, google+, etc., all enriched with necessary information

about our products and services as well as our company and its goals and visions.

We will regularly maintain a social media advertisement policy but as well as continue

to hold campaigns for social purpose and raise awareness to stop water wastage through

adopting new technology.

We will deliver and install our technology without any cost.

We will have a 24/7 helpline always open to answer to the queries of our existing and

future customers. Any complain about our technology will be dealt within 24 hours of

receiving.

Another unique form of our marketing policy will be 3 months free testing for the

customers who already own a traditional water tank.

Other than these, we will follow the traditional form of marketing through advertising

in newspapers and television commercials.

As an implementation of converting all the traditional water tanks in our country into

Smart Water Tanks by 2023, we will firstly go door-to-door to the building owners or

land lords of Gulshan, Banani and Dhanmondi inside Dhaka and raise awareness about

reducing wastage of water and motivate to use our technology as an aid to stop water

wastage.

Pricing and Distribution

Our pricing strategy is absorption pricing in which all costs are recovered. The price of the

product includes the variable costs of each item plus a proportionate amount of the fixed costs.

Our total startup cost is BDT. 15,375.30 (in thousand tk) and as we do not have any competitor

in the business market, we set the prices of our products accordingly.

Our business will go for direct selling because we have access to the customer and keep all

revenue under the control of the company. We will have our pick up van through which we

will get our product to the consumer.


Operations

Our factory is located a couple of blocks beside the factory of Gazi Tank at Narayanganj and

our office is on the 2nd floor of the office building of Gazi Tank at Purana Paltan. As we are

starting mostly as a Business-to-business (B2B), we have located our factory and office both

to the nearest possible location to our largest customer, our business partner Gazi Tank so that

we can communicate with them easily, quickly and supply our goods with maximum comfort

and minimum time as well as cost.

As we are working to achieve a very high goal within 2023, we have bought a factory in

Narayanganj and renovated it as per requirement of our operations.

For production we will need soldering iron, soldering flux, screws, screw drivers, testers,

voltage meters, computers, etc. We will start off with 2 motor-vans for distributing our products.

We will also require generators, refrigerators, air-conditions, etc. as supplementary equipment.

For official transportation we will need 2 microbuses initially.

We will collect our raw materials from local electronic parts and hardware wholesalers in the

Narayanganj industrial area.

Finance & Funding

Financial requirements

We, the six entrepreneurs of I6 Inc., have supplied the star-up capital 30 million to meet the

start-up expenses and the initial operating capital. Our startup cost is given below in the table:

Start-Up Expenses

Item Name Price in taka

Business Licenses 10,000

Factory 12,000,000

Office(Rent) 150,000

Equipment/Machinery Required:

Soldering Iron 18,900

Work Table & Bench 32,000

Delivery Van 1,400,000

Others 2,500

Insurance 120,500

Office Interior:

Cubicle 270,000

Furniture 189,000

Cabinet 40,000

Computer and printer 744,000

Patent 500,000

Supplies 10,000

Pre-Opening Advertising 200,000

Opening Inventory 19,116,000

Startup utilities 15,000

Employee training 15,000.00

Total Startup Expenses 34,832,900

We have also calculated our operating cost approximately Tk-1,769,000 per month.


Projected Financial Statements

Projected cash-flow statement for I6 Incorporation from 2015-2017

2015 2016 2017

Item

no. Items

Amount in

Taka

Amount in

Taka

Amount in

Taka

(1) Cash on Hand/Capital

(Beginning) 14,624,800

(2) Cash Receipts 30,000,000 33,000,000 25,500,000

a. Cash Sales 18,000,000 14,400,000 15,300,000

b. Collections from credit sales 12,000,000 9,600,000 10,200,000

c. Loans/Other Cash Inflow 9,000,000

d. Other Cash Inflows (if any)

(3) Total Cash Receipts 44,624,800 33,000,000 25,500,000

(4) Cash Paid Out 26,286,600 31,531,920 21,837,760

a. Purchases (merchandise/inventory) 19,116,000 15,292,800 16,248,600

b. Office 9,000,000

c. Insurance 120,500 120,500 120,500

d. Wages 3,443,100 3,443,100 3,443,100

e. Taxes 343,520 893,560

f. Office Supplies 12,000 12,000 12,000

g. Repairs & Maintenance 9,000 9,000 9,000

h. Office Premises Rent 1,800,000 1,800,000 0

i. Advertising Cost 1,600,000 1,400,000 1,000,000

j. Transport Cost 36,000 36,000 36,000

k. Web hosting and domains 150,000 75,000 75,000

(5) Ending Cash Balance 18,338,200 1,468,080 3,662,240


2015

Category July August September October November December January February March April May June Total

Pricing

WALI 250 250 250 250 250 250 250 250 250 250 250 250 2,750

Units

WALI 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,000

Sales

WALI 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 30,000,000

2016


Pricing

WALI 250 250 250 250 250 250 250 250 250 250 250 250 3,000

Units

WALI 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 96,000

Sales

WALI 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 24,000,000

2017


Pricing

WALI 250 250 250 250 250 250 250 250 250 250 250 250 3,000

Units

WALI 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 102,000

Sales

WALI 2,125,000 2,125,000 2,125,000 2,125,000 2,125,000 2,125,000 2,125,000 2,125,000 2,125,000 2,125,000 2,125,000 2,125,000 25,500,000

Projected Sales forecast from 2015 to 2017


Profit and Loss forecast from 2015-2017

Amount in BDT 2015 2016 2017

Revenue

Sales Revenue 30,000,000 24,000,000 25,500,000

Total Revenue 30,000,000 24,000,000 25,500,000

Expenses

Cost of goods sold 19,116,000 15,196,800 16,146,600

Purchases 19,116,000 15,292,800 16,248,600

Marketing Costs 1,600,000 1,400,000 1,000,000

Camping 1,000,000 1,000,000 600,000

Advertising 200,000

TVC 400,000 400,000 400,000

Overhead Expenses 1,990,000 1,990,000 190,000

Rent 1,800,000 1,800,000

Electricity 120,000 120,000 120,000

Water 60,000 60,000 60,000

Other utilities 10,000 10,000 10,000

Employee costs 3,443,100 3,443,100 3,443,100

Salaries & Wages 2,994,000 2,994,000 2,994,000

Employee Benefits 449,100 449,100 449,100

Other Expenses 7,294,080 252,500 252,500

Web Hosting and

domains 150,000 75,000 75,000

Office Supplies 12,000 12,000 12,000

Repair & Maintenance 9,000 9,000 9,000

Shipping 36,000 36,000 36,000

Insurance 120,500 120,500 120,500

Amortization of Start-up

cost 6,966,580 6,966,580 6,966,580

Total Expenses 33,443,180 22,282,400 21,032,200

Net Profit(Loss) Before Taxes (3,443,180) 1,717,600 4,467,800

Income Tax 343,520 893,560

Net Profit(Loss) (3,443,180) 1,374,080 3,574,240


Breakeven Analysis

Breakeven point (units) = 158,088

Breakeven point (sales) = BDT 39,245,500 Sales

(20,000,000.00)

(10,000,000.00)

0.00

10,000,000.00

20,000,000.00

30,000,000.00

40,000,000.00

50,000,000.00

60,000,000.00

70,000,000.00

BD

T

SALES VOLUME (UNITS)

BREAKEVEN ANALYSIS CHART

FIXED COSTS PER PERIOD TOTAL COSTS TOTAL SALES EARNING NET PROFIT (LOSS)


Taxation

Our Govt. has set a flat tax rate of 20% for all kind of corporate business. So, naturally we have

fallen under the flat tax rate as there is no tax bracket.

Also, not for being an import oriented corporation we are no eligible for getting any kind of tax

benefits as well.

Documents

BUS101 Group Report on Business Plan- WALI