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EUW 224 Engineering Entrepreneurship “Razl Pen”
1.0 Executive Summary
Razl Pen (M) Sdn Bhd was founded in early 2009 as an locally-based smart pen
manufacturer to help modern youths and working adults to cope with daily task and
at the same time, enjoy music. We have a proven strength of financial resources
coupled with collaboration with local as well as foreign stationery agents and
manufacturers. We are focused on expanding our business as well as fulfilling the
demands of modern society.
1.1 Objective of company
Achieve the sales target of at least RM250, 000 in a year and increase the
amount of revenues and profit by a staggering 50% in the next 2 fiscal years and
expand the product manufacturing across Asia and Middle-East.
1.2 Products and Services being offered
Products being offered by our current company are inclusive of a Pen which
carries the function of playing Mp3, voice/sound recording and timer; a headphone
set and an USB cable. Refill ink can be bought from the main branch or from the
agents all across Peninsular Malaysia. Services provided by us inclusive of the
repairing or compensation for pen which shows signs of mechanical problem,
money-back guarantee , a warranty of 2 years and a 7 days trial period.
1.3 Market potential
Based on the survey conducted by our market analysts, our manufactured
product deemed as in-demand because of the technology evolving from time to
time. The survey also showed that tech-savvy either students or working adults
closely monitoring such stationery set available in market. So, our target market
consists of students whose age ranging from 13-21 and working adults preferably
aged 24-35.
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EUW 224 Engineering Entrepreneurship “Razl Pen”
1.4 Project cost
Project costs including the manufacturing of Razl Pen, headphone set, USB
cable and refill ink are estimated at RM 30,000 till date, with changes in raw
materials’ prices affecting the project costs from time-to-time basis. Other costs
include the purchasing of furniture, machineries, the maintenance of
machineries, utilities bill, workers salary, marketing costs and etc. Other owners’
costs consist of owners’ administrative costs, legal/due diligence cost, permitting
fees and owners’ contingency. In addition, Design, testing & related costs are
subjected to change depending on the Research and Development (R&D)
conducted by our current mother-company.
1.5 Expected returns
Based on the figures and facts provided by the head company and its Research
and Development (R&D) Department, Financial Department & Marketing
Department, and the review of current economic situation, it is concluded that the
sales can hit 160 pens in its introductory month which will bring revenues of
approximately RM20, 000 with a profit margin of a staggering 92.3% excluding
the likes of promotion, discounts and early-bird rebate. So, the profit in the first
month can be seen stand at RM9, 600. And the sales are expected to grow by
approximately 20 % a month with a lower profit margin considering the promotion
which will be done by the marketing department. Profit margin can be seen
maintained throughout the introductory year .And it is confirmed by the financial
department that the sales will easily cope with the expenses generated by the
manufacturing of the pen.
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EUW 224 Engineering Entrepreneurship “Razl Pen”
2.0 Main body of the Business Plan
2.1 INTRODUCTION
Name of the company : RAZL PEN (M) Sdn Bhd
Nature of business : Retailing and whole selling via Peninsular Malaysia’s agents.
Industry profile: The current head-company was established in early 2009 in
peninsular Malaysia with 6 shareholders who have a good track record of financial
muscle.The industry is specialized in producing state-of-art pen to
satisfy the needs of customer around peninsular and west Malaysia .
Location of the business : Lot 26, Jalan Perdana Barat 3,
Kawasan Perindustrian Sri Edaran,
52100, Kuala Lumpur.
Date of business commencement : 01/04/09
Factors in selecting the purposed venture:
The factors considered when this venture was selected among them were the capital
requirements to start the business because of the nature of the business. The fact
that our product doesn’t require much investment made the proposed venture more
suitable and reliable in term of generating profit. In addition, the product is
considered as one of the latest gadget for tech-savvies and that is why the purposed
venture can be a big hit among students and working adults.Last but not least, the
product designed by our current company ,in term of price and affordability, is quite
reasonable among our main competitors whose product share the utmost similarity.
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EUW 224 Engineering Entrepreneurship “Razl Pen”
Future prospects of the business:
This business is deemed as really profitable and capable of doubling the revenues in
a long term time because of the nature of the product.Product designed by us is
technology based which is common among youths and adults these days. So, like
other gadgets,the company can expect the sales of the product to grow with a
healthy ratio throughout its introductory and maturity stages.Furthermore, the
product is expected to hit the peak in its second year of introduction with the demand
of its refill ink grow at the same pace.
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EUW 224 Engineering Entrepreneurship “Razl Pen”
2.2 PURPOSE OF PREPARING A BUSINESS PLAN
Every company should require a business for any operating group, division, or
subsidiary being formed and some businesses require a business plan for every new
product or project.
The Business Plan identifies the amount of financing or outside investment required
and when it is needed. This business plan is prepared by RAZL Company in purpose
obtaining working capital loan from CIMB for the amount of RM 100,000.
A business plan serves three functions. First, determining the future projects. It is a
plan that can be used to develop ideas about how the business should be
conducted. It is a chance to find strategies and “make mistakes on paper” rather than
in the real world, by examining the company from all perspectives, such as
marketing, finance, and operations. Second, determining how well goals have been
met. It is a retrospective tool against which a businessperson can assess a
company’s actual performance over time. For example, the financial part of a
business plan can be used as the basis for an operating budget, and can be
monitored carefully to see how closely the business is sticking to that budget. The
plan can and should be used as the basis for a new plan and a new goal. After some
time has elapsed, and thereafter on a periodic basis, the business plan should be
examined to see where and even why the company strayed, whether that straying
was helpful or harmful, and how the business should operate in the future. Thirdly,
raise the money. Most lenders or investors will not put money into a business without
seeing a business plan. There are stories of wild-eyed entrepreneurs and venture
capitalists with pens at the ready, who meet, scribble some projections on a wet
cocktail napkin, shake hands, and become “partners” in a hot technology business,
but most of those stories are urban legends.
First impressions are important. A well-organized plan is essential for a lender or
investor to assess your financing proposal and to assess you as a business
manager. A business plan may have allowed “teaming” with others, who could have
helped raise the necessary funds. Many less significant opportunities get funded.
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EUW 224 Engineering Entrepreneurship “Razl Pen”
By committing your plans to paper, your overall ability to manage the business will
improve. You will be able to concentrate your efforts on the deviations from plan
before conditions become critical. You will also have time to look ahead and avoid
problems before they arise. It encourages realism.
It helps you to identify your customers, your market area, your pricing strategy and
the competitive conditions under which you must operate to succeed. This process
often leads to the discovery of a competitive advantage or new opportunity as well as
deficiencies in your plan.
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EUW 224 Engineering Entrepreneurship “Razl Pen”
2.3 BUSINESS/COMPANY BACKGROUND
Name of the business : RAZL Company
Business Address : Lot 26, Jalan Metro Perdana Barat 3,
Kawasan Perindustrian Sri Edaran.
52100, Kuala Lumpur.
Telephone/fax number : 03-8905121
Form of business ownership: Partnership
Date of commencement:01/04/09
Date of registration:01/02/09
Registration number: 5366-9
Initial (own) capital: RM100 000
Name of bank: CIMB Bank
Bank account number: 10002387245998-5
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EUW 224 Engineering Entrepreneurship “Razl Pen”
2.4 BACKGROUND OF SHAREHOLDERS
Chief Executive Officer
Name : Mufaddal Bin Ali Husin
Identity card number : 770613-05-5117
Company permanent address : Lot 26, Jalan Metro Perdana Barat 3,
Kawasan Perindustrian Sri Edaran,
52100, Kuala Lumpur.
Website address : www.razl.com
Electronic mail (E-mail) address : [email protected]
Telephone Number : 016-2768952
Date of birth : 13 June 1977
Age : 32 years old
Marital status : Single
Academic qualification : Diploma in Mechanical Engineering (University
Malaya)
Degree in Mechanical Engineering (University
Malaya)
Masters of Business Administration (University
Malaya)
Courses attended : Enhancing business skill course in Nevada,
United States
Skills :The main skill possessed is ability to handle
company’s big and critical issues with perfect
solutions
Experience : Worked in various multi-national companies
namely in Middle-east and Asia as a general
manager.
Present occupation : Shareholder and Chief Executive Officer in RAZL
Pen (M) Sdn. Bhd
Previous business experience : Experience, worked in various multi-nationals
Company namely in middle-east and Asia as a
General Manager.
Capital contributes : RM100,000
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EUW 224 Engineering Entrepreneurship “Razl Pen”
General Manager
Name : Chia Shi Long
Identity card number : 780103-04-5381
Company permanent address : Lot 26, Jalan Metro Perdana Barat 3,
Kawasan Perindustrian Sri Edaran,
52100, Kuala Lumpur.
Website address : www.razl.com
Electronic mail (E-mail) address : [email protected]
Telephone Number : 016-3468977
Date of birth : 03 January 1978
Age : 31 years old
Marital status : Single
Academic qualification : Degree in Business Administration in University
Malaya
Courses attended : Workshop For Asia-Pacific’s General Manager .
held in Manila, Philipines.
Skills : Ability to manage staff under him with a good
leadership and management skills to increase the
productivity of the staff.In addition, posses a good
critical thinking skills to solve problems on daily-
basis.
Experience : Worked in various multi-national company
namely in Middle-east and Asia as a general
manager.
Present occupation : Shareholder and General Manager in RAZL Pen
(M) Sdn. Bhd
Previous business experience : Experience, worked in various multi-nationals
Company as a General Manager.
Capital contributes : RM100,000
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EUW 224 Engineering Entrepreneurship “Razl Pen”
Marketing Manager
Name : Lee Wan Xin
Identity card number : 781031-08-5978
Company permanent address : Lot 26, Jalan Metro Perdana Barat 3,
Kawasan Perindustrian Sri Edaran,
52100, Kuala Lumpur.
Website address : www.razl.com
Electronic mail (E-mail) address : [email protected]
Telephone number : 014-9041127
Date of birth : 31 October 1978
Age : 31 years old
Marital status : Single
Academic Qualification : Degree of Polymer Engineering in National
University of Singapore
Courses Attended : Chemical Reactor Seminar in UniMAP.
Skills :-
Experience : Work as a teacher in a tuition centre.
Present occupation : Shareholder and marketing manager in RAZL
Pen (M) Sdn. Bhd
Previous business experience : No experience
Capital contribution : RM100,000
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EUW 224 Engineering Entrepreneurship “Razl Pen”
Accountant
Name : Tan Guan Chyi
Identity card number : 790401-14-6404
Company permanent address : Lot 26, Jalan Metro Perdana Barat 3,
Kawasan Perindustrian Sri Edaran,
52100, Kuala Lumpur.
Correspondence address :
Website address : www.razl.com
Electronic mail (E-mail) address : [email protected]
Telephone number : 012-6781239
Date of birth : 1 April 1979
Age : 30 years old
Marital status : Single
Academic Qualification : ACCA certificate
Courses Attended : Degree in Accounting from Northern University of
Malaysia
Skills : Ability to use-of-art softwares to evaluate the
financial capabilities of company,thus,enhancing
the performance of financial sector in the head-
company.
Experience : Worked in state-owned company in Malaysia for
several years before joining RAZL company.
Present occupation : Shareholder and Accounting manager in RAZL
Pen (M) Sdn.Bhd
Previous business experience : -
Capital contribution : RM100,000
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EUW 224 Engineering Entrepreneurship “Razl Pen”
Human Resource Manager
Name : Nurshila Binti Meterang
Identity card number : 790528-13-5366
Company permanent address : Lot 26, Jalan Metro Perdana Barat 3,
Kawasan Perindustrian Sri Edaran,
52100, Kuala Lumpur.
Website address : www.razl.com
Electronic mail (E-mail) address : [email protected]
Telephone number : 019-8783542
Date of birth : 28 May 1979
Age : 30 years old
Marital status : Single
Academic Qualification : Degree in Human Resource from Malaysian
Technological University (UTM)
Courses Attended : Human Resource Management in
Singapore.
Skills : Ability to manage staff in the company with
brilliant communication and interpersonal skill to
avoid any problems among the workers within the
company.
Experience : Worked in several multinational companies.
Present occupation : Shareholder and HRM Manager in RAZL Pen (M)
Sdn Bhd
Previous business experience : No experience
Capital contribution : RM100,000
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EUW 224 Engineering Entrepreneurship “Razl Pen”
Production Manager
Name : Marcus Goh Kwok Tong
Identity card number : 790302-13-5376
Company permanent address : Lot 26, Jalan Metro Perdana Barat 3,
Kawasan Perindustrian Sri Edaran,
52100, Kuala Lumpur.
Website address : www.razl.com
Electronic mail(E-mail) address : [email protected]
Telephone number : 017-8756542
Date of birth : 2 Mac 1979
Age : 30 years old
Marital status : Single
Academic Qualification : Degree of Manufacturing engineering From
UniMAP.
Courses Attended : Quality Control briefing in Kuala Lumpur.
Skills : Ability to manage and control the production of
manufactured goods to a certain level so that the
company can avoid unnecessary losses.
Experience : Worked in several multinational companies.
Present occupation : Shareholder and Production Manager in RAZL
Pen (M) Sdn Bhd
Previous business experience : No experience
Capital contribution : RM100000
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EUW 224 Engineering Entrepreneurship “Razl Pen”
2.5 Location of the Business
Razl Pen (M) Sdn. Bhd
Address: Lot 26, Jalan Metro Perdana Barat 3,
Kawasan Perindustrian Sri Edaran,52100, Kuala Lumpur.
Building: Single-storey factory with attached main operating office which will be
located in Sri Edaran Industrial Area. The factory was previously used by Mufurry
(M) Sdn. Bhd. and now has been purchased by our company .It has been
renovated and all faulty area has been repaired .The factory covers an area of
25m x 20m excluding the office area. The building was estimated at RM 800,000
by our company’s evaluator.
Razl Pen (M) Sdn.Bhd
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EUW 224 Engineering Entrepreneurship “Razl Pen”
2.6 Organization / Management /administrative plan
a. Introduction to the Organization
Organization’s mission
Our organization mission is to experience the joy of advancing and applying technology for the benefit of the public. Our organization is to create some different idea of how to applying newest technology into our daily life nowadays. Our organization is trying to use the lowest cost material to create new technology so that everybody can own the newest technology.
Vision
Razl recognizes that global environmental improvement is the most important issue for humanity in the 21st century.
Razl aims, through continuous technological innovation and new business initiatives, to contribute positively to the natural environment and the dreams of future generations.
Recognizing the utmost importance of our natural life-support systems, sustainable economic development is the top business priority for the Razl. Sustainable economic development means utilizing our environmental resources in a manner that will also allow future generations to achieve their potential for health, wealth and happiness.
Razl aims to show that it is possible to achieve a new balance between humankind and nature by doing more with less, reducing the environmental impact arising from our use of energy and resources while providing high quality, high performing products and services to our customers.
Objective
To reduce power use of products by an average of 30% by 2005 (against figures for 2000).
To achieve a standby power consumption of 0.1 W or less for all products by 2009.
To achieve a 15% reduction in energy use (relative to sales) at our manufacturing and non-manufacturing sites (against figures for 2009).
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EUW 224 Engineering Entrepreneurship “Razl Pen”
b. Organization chat
c. Manpower planning
Position Number of employeesChief Executive Officer 1General manager 1Production manager 1Marketing manager 1Human resource manager 1Accounting manager 1workers 10
Chief Executive OfficerMufaddal bin Ali Hussein
Production managerMarcus Goh Kwok Tong
Marketing managerLee Wan Xin
Human Resourse managerNurshila binti Meterang
Acccounting managerTan Guan Chyi
General manager Chia Shi Long
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EUW 224 Engineering Entrepreneurship “Razl Pen”
d. Schedule of Tasks and Responsibilities
Position Main TaskGeneral manager decide on the organisation's objectives, policies
and programs and set standards and targets assess the performance of the organisation and
its activities provide overall direction and management of
the organisation's utilisation of resources, including personnel, technology and physical assets such as buildings
Chief executive office provide a monthly task list and timesheet to the Board
liaise with and report to the Board of Directors participate in Board meetings and discussions support the Board with its business identify, appoint and manage staff, contractors
and volunteers develop and oversee implementation of
strategic plan, business plan & risk management plan
oversee policy development and implementation
communicate operational decisions to the membership
liaise with key external stakeholders, in particular WFDF and the ASC
fulfil duties and responsibilities of any key executive officers when absent
any other directions or delegations from the Board
Production manager overseeing the production process, drawing up a production schedule;
ensuring that the production is cost effective; making sure that products are produced on time
and are of good quality; working out the human and material resources
needed; drafting a timescale for the job; estimating costs and setting the quality
standards; monitoring the production processes and
adjusting schedules as needed; being responsible for the selection and
maintenance of equipment;
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EUW 224 Engineering Entrepreneurship “Razl Pen”
monitoring product standards and implementing quality-control programmes;
liaising among different departments, e.g. suppliers, managers;
working with managers to implement the company's policies and goals;
ensuring that health and safety guidelines are followed;
supervising and motivating a team of workers; reviewing the performance of subordinates; Identifying training needs.
Marketing manager Create and manage customers, campaigns,
advertisements, discounts, coupons/promotion
codes, expressions, direct mail, and lists.
Personalize the buying experience with
targeted merchandising.
Create and schedule campaigns for customers
who compete in the same industry. The
competing ads never appear on the same
page.
Create direct mail to distribute e-mail message
ads to a targeted group of users. Direct
mailings can include attachments, such as
pictures, discounts, or URLs.
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EUW 224 Engineering Entrepreneurship “Razl Pen”
Human resource manager develop human resources plans that are aligned to the organisation's strategic plan
advise management on staff and job matters
train managers to take on human resources tasks such as selecting job candidates
write job descriptions
analyse and advise on wage and salary plans
consult with management, staff and unions over pay and conditions
check the company is complying with employment legislation
manage the human resources team
work with health and safety consultants on health and safety procedures
interview and select staff and design staff training courses
keep staff records up to date
manage the payroll
manage the personnel filing systems and the organisation's human resources information systems.
Accounting manager manage the cash flow in and out of the organisation
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EUW 224 Engineering Entrepreneurship “Razl Pen”
be involved in deciding on the financial and business viability of new and existing projects and programmes
analyse financial records such as payroll and income trends
plan and prepare budgets and documents, such as the annual report, according to organisational goals
analyse and monitor the effect of budget or policy changes on the organisation's productivity
plan and manage computer systems that record and store information
ensure staff have suitable workloads and materials, and that they produce appropriate information
advise on the use of staff and resources
evaluate the efficiency of work practices and administration
ensure statutory requirements are met; for example, making sure IRD payments are paid on time
ensure financial accounts are completed
be responsible for insuring company assets
ensure money owed to the organisation is collected
advise on legal matters.
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EUW 224 Engineering Entrepreneurship “Razl Pen”
e. Schedule of Remuneration
Position Number of employees
Monthly salary(RM)
EPF contribution/SOCSO
Total(RM)
Chief Executive Officer
1 3000.00 240.00 2760.00
General Manager
1 2800.00 224.00 2576.00
Production manager
1 2000.00 160.00 1840.00
Marketing manager
1 2000.00 160.00 1840.00
Human resource manager
1 2000.00 160.00 1840.00
Accounting manager
1 2000.00 160.00 1840.00
workers 10 6000.00 480.00 5520.00
f. List of office equipment
Type of equipment Quantity Price per unit(RM) Total cost (RM)Furniture and fixtures
16 500.00 8000.00
stationary 6 10.00 60.00
h. Administrative Budget
Fixed asset expenses
Monthly expenses(RM)
Other expenses(RM)
Furniture and fixtures
8,000.00 - -
Salaries - 19,800 -Rental - - -Rental deposit - - -Utilities - 3,000.00Total 8,000.00 19,800 3,000.00
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EUW 224 Engineering Entrepreneurship “Razl Pen”
2.7 Marketing Plan/Analysis
a. Description of product
Razl pen is a new product specially designed and manufactured by our company. It is a pen which combines 3 functions which is ability to play mp3 songs, timer and voice-recording function.It is specially designed for modern tech-savvy students and working adults and allows them to get access to music anytime, anywhere.
b. Target market
Teenager between age 13-21. Working Adults University student
c. Market size
There is about 30,000 people that include in the target market.
d. Competition
Name and address Strength weaknessFoong Long TradingNo.23,Jln Pecah Batu,Kawasan perindustrian sri maju,52100, KualaLumpur.
Operate more than 3 years
Price of product very high
Sri JayaNo,50,Jln Harimau ,Kawasan perindustrian Sri Edaran,52100,Kuala Lumpur
Price of product is low Product will be easily broken
Gemilang Sdn BhdNo, 56 Jln King,Kawasan perindustrian Yuni,521000, Kuala Lumpur.
The design of product is attractive
The follow-up services not good
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EUW 224 Engineering Entrepreneurship “Razl Pen”
e. Market share
(market share before the entry of our enterprise)
Competitor Market share division (%) Annual sales estimation(RM)
Foong long Trading 25 200,000.00Sri jaya 33 250,000.00Gemilang sdn bhd 42 300,000.00Total 100 750,000.00
(Adjusted market share after the entry of our enterprise)
Competitor Market Share Division(%) Annual Sales Estimation(RM)
Foong Long Trading 20 150,000.00Sri jaya 15 100,000.00Gemilang sdn bhd 25 250,000.00Our company 40 300,000.00Total 100 800,000.00
f. Sales forecast
Year Month Sales Forecast(RM)1 1 20,000.00
2 22,000.003 19,000.004 21,000.005 20,000.006 21,000.007 18,000.008 18,000.009 22,000.0010 20,000.0011 20,000.0012 21,000.00
2 250,000.003 280,000.00
g. Marketing Budget
Item Fixed assets expenses(RM)
Monthly expenses(RM)
Other expenses(RM)
Van 30,000.00Promotion 400.00Vehicle insurance 300.00Total 30,000.00 400.00 300.00
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EUW 224 Engineering Entrepreneurship “Razl Pen”
2.8 Operation Plan/ Production Strategy
Material Requirements
Item Quantity Required
Price per Unit (RM)
Total Purchase
(RM)
Supplier
Stainless Steel Pen Structure
500 RM0.50 RM250 Evershine Stainless Steel Sdn Bhd
Rubber 500 RM0.10 RM50 Hartalega Sdn BhdPlastic 500 RM0.20 RM100 Hartalega Sdn BhdRefill Ink 500 RM0.50 RM250 Pilot Sdn BhdMP3 Chipset 500 RM35.00 RM17500 MEMC Electronic
Materials Sdn BhdCapacitor 500 RM5.00 RM2500 MEMC Electronic
Materials Sdn BhdTin 500 RM0.30 RM150 Evershine Stainless Steel
Sdn BhdL.E.D 500 RM5.00 RM2500 MEMC Electronic
Materials Sdn BhdMicrophone 500 RM3.00 RM1500 MEMC Electronic
Materials Sdn BhdWire 300meter RM0.10
per meterRM30 MEMC Electronic
Materials Sdn Bhd
Manpower Requirements
Position No. of Employees
Job Status Remuneration per Month
EPF Total
Production Manager
1 To manage all the production.
RM2000 RM160 RM1840
Quality Control
1 To make sure all the product are in quality
RM1500 RM120 RM1380
Supervisor 2 To make sure all the worker working
RM1200 RM96 RM1104
Material Supplier
Factory
Shop
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EUW 224 Engineering Entrepreneurship “Razl Pen”
smoothlyWorkers 5 To produce
the productRM600 RM48 RM552
Machine and Equipment
Items Quantity Price per Unit (RM)
Total Costs (RM)
Supplier
Pen Machine 1 RM20,000 RM20,000 Recron (M) Sdn Bhd
Table 10 RM100 RM1000 IKEA Sdn BhdChair 20 RM25 RM500 IKEA Sdn Bhd
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EUW 224 Engineering Entrepreneurship “Razl Pen”
2.9 Financial Plan/Strategy/Analysis
Project Implementation Cost Schedule
A. Capital Expenditure RM RM RMLand and Building (contributed by owner) 800,000 Machinery and Equipment 20,000 Furniture and Fixtures 8,000 Vehicle- Van 30,000 Renovation cost 6,000
Sub-total 864,00
0
B. Working Capital (2 months) Marketing 2,000 Production and Operation 8,000 Administrative 5,000 Sub total 15,000
C. Other Expenditure Pre-operating Business Registration 2,800 Insurance 500 Road tax 200 Sundries 200
3,700 Deposit Utilities(Telephone, water and electricity) 700 Sub-total 700
Grand total 883,400
D. Add: Contingency cost (10%) 88,340TOTAL PROJECT IMPLEMENTATION COST 971,740
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EUW 224 Engineering Entrepreneurship “Razl Pen”
Source of Financial Schedule
RM RMA. Equity Contributions Cash 71,740
Assets(land and building) 800,000 Sub-total 871,740
B. External Sources Term Loan 100,000 Sub-total 100,000
C. Others 0
TOTAL SOURCES OF FINANCE 971,740
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EUW 224 Engineering Entrepreneurship “Razl Pen”
Depreciation Schedules for Fixed Assets
Annual depreciation = Original Cost of Asset – Scrap Value
Asset’s Economic Life
Annual depreciation (vehicle) = RM30, 000 – RM5,000
5 years
Type of Asset : VanOriginal Cost : RM30,000Economic Life : 5 YearsScrap value : RM 5000Method : Straight line
Year Annual Accumulated Book
Depreciati
onDepreciation Value
(RM) (RM) (RM)0 0 0 30,0001 5,000 5,000 25,0002 5,000 10,000 20,0003 5,000 15,000 15,0004 5,000 20,000 10,0005 5,000 25,000 5,000
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EUW 224 Engineering Entrepreneurship “Razl Pen”
Annual depreciation (Furniture and Fixtures) = RM8, 000 – RM 0
4 years
= RM 2, 000
Type of Asset : Furniture and Fixtures
Original price : RM 8,000Economic life : 4 yearsScrap value : RM 0Method : Straight line
Year Annual Accumulated Book
Depreciati
onDepreciation Value
(RM) (RM) (RM)0 0 0 8,0001 2,000 2,000 6,0002 2,000 4,000 4,0003 2,000 6,000 2,0004 2,000 8,000 0
Annual depreciation (Machines) = RM 20, 000 – RM 2,000
6 Years
= RM 3, 000
Type of Asset : MachinesOriginal Cost : RM20,000Economic Life : 6 YearsScrap value : RM 2000Method : Straight line
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EUW 224 Engineering Entrepreneurship “Razl Pen”
Year Annual
Accumulated
Book
Depreciati
onDepreciatio
n Value
(RM) (RM) (RM)0 0 0 20,0001 3,000 3,000 17,0002 3,000 6,000 14,0003 3,000 9,000 11,0004 3,000 12,000 8,0005 3,000 15,000 5,0006 3,000 18,000 2,000
Pro Forma Income Statement for Razl Pen (M) Sdn. Bhd
RM RMSales 32,500Cost Of Goods Sold: Opening stock for finished goods 0
Add: Cost of goods manufactured15,00
0
Goods available for sale15,00
0 Less: Closing stock for finished goods 7,000 8,000Gross Profit 24,500Less: Operating Expenses Administrative Expenses 5,000 Marketing 2,000 Interest: Term loan 2,000
Depreciation charges10,00
0 Miscellaneous 1,000 Total operating expenses 20,000 Net Profit Before Tax 4,500
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EUW 224 Engineering Entrepreneurship “Razl Pen”
Pro Forma Balance Sheet for Razl Pen (M) Sdn. Bhd
RM RMFIXED ASSETS Land and Building 800,000
Machinery and equipment 20,000
Furniture and fixtures 8,000 Renovation 6,000 Van 30,000 864,000CURRENT ASSETS Cash 20,000 Bank 500,000 Closing stock for raw materials 7,000 Closing stock for finished goods 7,000 534,000OTHER ASSETS Deposits 700 TOTAL ASSETS
1,398,70
0EQUITY
Capital
1,294,200
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EUW 224 Engineering Entrepreneurship “Razl Pen”
Accumulated profit 4,500
1,298,70
0CURRENT LIABILITIES 0LONG TERM LIABILITIES Term loan 100,000
TOTAL EQUITY AND LIABILITIES1,398,70
0
Break Even Analysis
32,500=65 units x RM 500
Break-Even Point:
Break even point (ringgit) = RM19500
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0.631units
= RM 30,900
Contribution margin = RM 32500- RM12000
= RM 20,500
Contribution Margin Ratio= RM 20500
RM32,500
3.0 Design
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4.0 Conclusion
As a conclusion, our company had used the lower capital to produce a useful,
durable product that is Razl Pen. This pen combined three functions which is MP3,
timer and voice recorder. And we believe this pen will bring convenient to the entire
customer who buy our product. Even we still a new company in the marker, but we
believe our product will become popular in 1 day. Not only that, we will always
innovate our Razl Pen to make sure our product keep in update to the global world.
5.0 Reference
1. http://www.lofsa.gov.my/lofsa5/legislation/
LabuanOffshoreLimitedPartnershipAct1997.pdf
2. http://www.smallbusinessnotes.com/operating/legal/samplepartnership.html
3. http://job-search.jobstreet.com.my
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