Executive Summary Healthline is a company that offers basic personal health consultation and offer to design a diet plan

according to customer needs subsequently prepare the meal for customer. The main service offered include a basic health check that measures the customer blood pressure, basal metabolism rate, body mass index, and glucose and cholesterol level. The nutritionist will then design a diet plan according to the patient needs and the meal will be prepared according to the customer budget. With a solid background in nutritional science and a notable experience in the food industry, we are confident to offer a new idea to customer what healthcare is all about. Most people are aware that they need a nutritious diet to remain healthy but most claims that it is too troublesome therefore would rather opt for processed food and food prepared at restaurants. On top of that, the young professionals these days are simply too busy to prepare their own meals and most of the restaurant prepared meals are loaded with oil, salt and monosodium glutamate (MSG). Therefore we are offering a simple path to a healthy diet for these people. We set ourselves apart from our competitors by offering a customized set of diet plan for every customer according to their diet needs and budget. Most personal menu planners did not plan the customer diet according to the needs of the customer health. We also have our nutritionist to discuss with them on how to adjust their lifestyle to include in their diet plan. We have a variety of menu to ensure that customer would be able to enjoy unrepeated menu for a whole fortnight even if they dine in daily. The main target customer for our business would be the working class or the upper middle class. These groups of working professionals are those who spent more time working that being at home. They are also more likely to be willing to spend on professional service to provide them a meal rather than cooking after a long day at work. They are also more aware of the importance of a healthy diet compared to housewives and the lower income group. Based on the size of our business, the startup cost would be RM 3 916 800.00. This includes the rent of the location and all cost of all equipment and necessary materials. We obtained a loan of RM 1.5Milllon from the bank to start of the business and each partner invested RM 805 000 into the business during startup. The cost is high because a big portion is spent on purchasing modern medical equipment for health screening. We believe that the return of investment would be able to atone for it as the business condition is very optimistic so far.

Company History Healthline is a start-up business that offers basic health consultation and prepares a food for customer according to their health needs and nutrition requirements. Healthline is co-owned by Le Ngoc Ha, Chik Ee Mun, nutritionist with a minimum of 5 years working experience in health and diet consultation at the government hospital. The business started off with the idea of to offer everyone a healthy diet even if one leads a hectic lifestyle. With modern day living that comes with convenient and processed foods that are overly sweet and oily; the modern living groups are putting their health in jeopardy. Since more than two-third of Malaysian do not exercise, it is imperative that the diet is controlled to prevent all the disease related to unhealthy lifestyle. Realising the situation, the owner wants to offer a healthier alternative to the modern living group that eat out rather than cook their own meal. Competitive Advantage When the business first established, it offers only a menu of set meals that allows customer to choose their desired meal according to their own preference. The owner then realise that consumer viewed their restaurant in the same league as restaurant that offers organic food and vegetarian meal. With so many competitors, the owner decides to include the concept of offering health consultation and designing a customized menu for customer to increase the business competitive advantage. Irene Chin Suk Dheng, a chef that have more than 10 years experience working in an organic food restaurant joined the partnership 6 months later and offers her expertise in preparing healthy and delicious food according to the diet plan designed by the nutritionist. After the idea of offering health consultation was introduced, Healthline business increased significantly by 30%. This shows that consumer would have preferred a healthier option if they are aware of the importance of having a healthy diet plan. Most consumers opt for fast food and processed food due to its convenience. If the business continues to expand, the owners consider offering delivery service for the customer who have already conducted their health analysis and does not have time to dine in everyday.

Business and Industry Profile Industry Analysis Although the idea of healthy living had been taught since we were young but it was not really emphasised until the obvious escalation in the rate of disease related to unhealthy lifestyle such as diabetes, hypertension, fatty liver, heart disease, obesity et cetera. Research shows that the number of diabetic patient in Asia had increased 2.5 - 3.0 times for the past 20 years. With the high cholesterol coconut milk, butter and cane sugar, traditional Malaysian cuisine can easily be classified as the most unhealthy cuisine in the world and a huge part of Malaysian diet still consist of the famous Nasi Lemak, rice cooked with coconut milk and mostly consumed with curry or fried chicken. The idea of opening a restaurant based on healthy dining had only been established somewhere 10 years ago when all the disease related to unhealthy lifestyle had shown to lead to decreasing of a person lifetime. The healthy dining industry started off with vegetarian restaurants as its pioneer, followed by organic food restaurants offering only organically produced foodstuff. Then to attract the younger generations the idea of salad bars and cereal bars had been opened to cater those who prefers light meals. With the increasing number of healthy dining restaurants, gone were the days that rice were the only option to fill up a hungry stomach during lunchtime. With the healthy alternative, people can now eat away without feeling that they are loaded with calories. However, the location of healthy dining restaurants focuses mainly in large cities such as Kuala Lumpur, Georgetown, and Johor Bahru. They can hardly be found in small town in other parts of the countries. This may be due to the fact that the lack of acceptance of the new dining concept in the small town. The citizens in the small town are too accustomed to the diet of traditional food might find it hard to change their eating habits in a short time. However, it can be easily noticed that many restaurants had been trying to take advantage of the name healthy dining. To date, there is not restrictions or any standards to certify whether a restaurant qualify to claim as a healthy dining restaurant. Therefore many restaurants in the industry are trying to claim as healthy dining restaurant just to gain more market share even if the food serve cannot be grouped together with the other healthy dining restaurants which serves food that are low in cholesterol, sugar and salt.

Advertising campaign of other health products also contributed to the increase in demand for health dining because while promoting their products, the advertisement also increase consumer awareness on healthy lifestyle.

Key success factors in the industry The main factor that contributed to the success of the health dining industries is: 1. Focuses on the benefits of consumer Healthy dining is different from other dining industry because they focus on the health benefits of the consumer rather than solely providing food with empty calories. Healthline extra service that provides basic health check and consultation also another extra factor that contributed to the success of the business. 2. Convenience It offers services according to the convenience of the customer. In Healthline, customer can call ahead of time to request for their food to be prepared and customer can pick up and take away when they arrive to save time. Future outlook of the industry Healthcare is a lifetime career for everyone. There is no dateline for one to stop taking care of their health therefore the business will continue to strive for as long as people continue to be health conscious and the Healthline continue to hold on to the principles and values. In the future, Healthline will expand the business to more office areas in the capital such as Damansara, Bangsar, Ampang and then move on to other big cities such as Johor and Penang. One day, we will have at least one branch in every state to spread awareness in the citizen on healthy dining. We will also add delivery system to our list of services in the future. We will also expand our target market from individual consumers to obtaining tender to provide food for hospital patients and old folks home. Since Healthline is focusing on providing healthy food for consumer, it is possible for us to approach hospital management and request for the tender to provide the patient food. The similar concept goes to old folks home.

Company goals and objectives 1. Goals To be the pioneer in healthy dining industry that provide health check and consultation service and continue to lead the industry in spreading awareness in healthy dining 2. Objectives To be the most renowned health dining service provider that offers health screening and consultation together with nutritious and wholesome food To develop a profitable business while not discounting on the quality on food and services. To be sure to provide service that meets and exceeds customer satisfaction on every visit. To increase the sales by 5% every year by maintaining a good customer and supplier relationship. To ensure customer return by providing good after sales services and increase the switching cost for customer.

Business Strategy: A) Desired image in the market: A healthcare consultant business combined with a food store that can give customers the best solution for their health.

B) SWOT Analysis: Strengths: A new service that is not popular in the market. Caring about health, which is the precious asset of people. Affordable price and high quality services. Good management skills, which support us in running the business well. Good ability to extract information from the market and analyze it: can help control the business and can make crucial decisions to change the strategy to adapt quickly to customers needs. Weaknesses:
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The firm is new and has not been open yet: credibility problem may affect initial sales.

Lack of systems: we have not had a complete system yet. Thus, the

company needs to develop systematised operational & sales techniques or sacrifice profits Opportunities: People are more concerning about their health, especially for

those who find hard to have healthy meals outside. Growing market segments: our company should target these

segments. Threats: Increasing supplier prices due to the change of economy that can

leads to the reduction in companys profit. The declining size of target segments: company needs to focus on

growing segments to spread the company's portfolio together with finding new market for our products and services. The presence of new competitors that can follow the model of our

company.

C)

Competitive Strategy:

Competitive Strategy Cost leadership

Required Skills and Resources Sustained capital investment and access to capital Low-cost

Organization elements

Associated Risks

Freq

Inability

uent and detailed reports to control the operation

to see the change of required market when too focus on

7

distribution system Low-cost suppliers Guerrilla marketing strategies.

of the company.

cost. Inflation

Struc

in costs that narrow the firms ability to maintain the image of cost leadership company.

tured organizatio n and a complete system.

Resp

onsibilities of all members in the company

Tight

costcontrol Differentiation

Strong marketing abilities

Amenities to attract highly skilled employees Subjective measuremen t and incentives instead of quantitative measures

Buyers need for the differentiating factor falls. This can occur as buyers become more sophisticated. Imitatio

Strong capability in basic research

Corporate reputation for quality or technologic al leadership

n narrows perceived differentiation , a common occurrence as industries mature.

Focus

Combinat

Com

The cost
8

ion of the above policies directed at the particular strategic target

bination of the above policies directed at the particular strategic target

differential between broadrange competitors and the focused firm widens to eliminate the cost advantages of serving a narrow target or to offset the differentiation achieved by focus. The differences in desired products or services between the strategic target and the market as a whole narrows. Compet

itors find submarkets within the strategic target and out focus the focuser.

Firms Product and Services: A) Description: Healthline consulting company is opened to be a solution for customers who cannot have proper meals and worry about their health. When customers come to our company for the first time, our experienced professionals and nurses will do a basic health analysis for customers. Body fat mass, glucose, cholesterol check will be available in our healthcare store to help customers control their own health conditions. After that, a scientific diet plan suitable for customers health condition will be designed. Our company will prepare food for customers according to the designed diet plan and customers can go and have meals in our shop during breakfast and lunchtime. Our manager carefully arranges the proper execution of the kitchen, so that all food comes out prepared perfectly, followed the diet plan ,and on time. Another manager attends to the flow of the dining room, there to facilitate outstanding customer service and satisfaction. For dinner, depending on customers need, it can be takeaway. For those workers who do not have time to go to have meals in our shop, we will offer delivery service but it is a requirement for customers to call us 3 hours in advance. Customer benefits: Customers benefits are important in ensuring that customers will come back for more. We have to create a suitable approach that will benefit both customers and the business. With a good customer benefit program, a business can attract more customers in the future. Low prices, high quality service and interesting promotion strategy are what we try to pursue to make our customers become happy when doing business with us.

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Warranties and guarantees: Money back guarantee are provided for customers who are not satisfied with the services. This is to ensure that the customer can rely on the management to take responsibility for any problems faced. By having customer friendly oriented staff, we will be able to win the customers heart. This is the key that will make the customers prefer to our service. Moreover, all of customers complaints are highly appreciated by our company because this is a good chance for us to know what we need to improve more and to avoid repeating this mistake.

Marketing Strategy Marketing provides a guiding philosophy - the marketing concept that suggests that the company strategy should resolve around building profitable relationships with important consumer groups. It also provides inputs to strategic planners by helping to identify attractive market opportunities and by assessing the firms potential to take advantage of them. Within individual business units, marketing designs strategies for reaching the units objectives and help carry them out profitably. Most of us know about marketing strategy through its involvement firstly managing customers, then managing employees, and lastly managing competitors. The Healthline consulting intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies of the business. A) Target Customers: One of the first steps for an entrepreneur to start a business is identifying the target market to serve. The thing is that the whole market is very huge and many kinds of customers have different needs and wants. There is no company that can serve the best all these customers. Therefore, the word target market is used to define one or more groups of customers who have loyal
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buying habit and potential ability to bring back long-term profit to the company. Hence, determining to choose only target market to serve and building profitable customer relationship with them is the outstanding aim of any entrepreneur. Ages: Baby boomers, Generation X, Generation Y are our targeted customers. Gender : We will equally target both sexes because their demands are the same. A slight skew for men because they usually have a higher tendency to have health problem and usually they have a higher consumption of food Income : We will appeal to the high side of middle and high income individuals Occupation : We will target the white-collar workers, who are usually too busy to prepare their own meals.

B) Customers Motivation To Buy: As health is the precious asset of people, and today we are too busy to prepare a healthy and nutritious meals, our company will give a solution for customers. When coming to our service, customers can have a medical check-up and at the same time, can be provided with a healthy diet plan designed for an individual need.

C) Market Size and Trends: How large is the market? The market that our firm focuses on is only within the scope of Kuala Lumpur, Malaysia. We want to introduce service to clients and provide to them our best services. Our market may be a niche market with limited number of customers. But with this market size, we could focus to the quality of service we provide. Is it growing or shrinking? How fast? At first, our company may be new to customers and we may not attract many customers. However, after 3 months, when we can make customers satisfied with our services, I personally believe that the market will grow with a fast speed.
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D) Advertising and Promotion: Media used reader, viewer, listener profiles Our Healthline consulting intends to use an online based marketing campaign to develop its sales. We need to hire a web developer to create a website for our company. Information about our services will be update frequently. Moreover, the company will take advantage of the development of internet and the increasing number of internet users to advertise. Social networks and blogs are useful in spreading our new services to potential customers. The business will also maintain a moderate level of print advertising in selected local area newspapers and circulars, which will display the services of the Company along with relevant contact information. The Company will also begin to market directly to advertising agencies and marketing firms. Management expects that the business will receive a significant amount of referral business after the fifth year of operation. Media costs According to advertising strategy we have stated above, we plan to spend around RM 5,000 for this strategy. RM 5,000 is just an initial investment. Maybe later, we will double the figure to boost up promoting. There is no free lunch, and there is nothing which is called free-cost advertising strategy. We may spend much for advertisement but it will help public pay more attention to our company. And then after we can obtain some contracts with clients, we will use our best quality of service as evidence to raise our companys reputation. Frequency of usage Ads about our company on radio and newspapers will be shown everyday within 3 months.Information on social networks and blogs will be spread within 3 months. Our website will be updated every week. About direct marketing to potential client the white-collar workers in Kuala Lumpur , we will try to approach as much clients as possible. Plans for generating publicity In order generating publicity, we will focus on quality of service to build trust in clients. Once they satisfy with our service and also, the quality of meals we provide, they will tell their friends and partners to come to us (word-of-mouth marketing).
13

E) Pricing: Cost structure Fixed Fixed cost will include Rent cost to rent our office Office equipment cost to buy necessary equipment in our office Salary cost to pay to staffs. Taxes

Variable Variable cost will include: Cost of raw materials and energy needed to run business

Comparison against competitors prices Our prices are about the same as other competitors and we try to reduce the price to give customers the best quality with the most suitable price.

F) Distribution Strategy: Channels of distribution used Customers are very welcomed to have meals in our office. However, depending on customers wants, we also offer take-away food for dinners. Also, for those who do not have much free time to go for meals, we offer delivery services to their offices with the condition that customers call us 3 hours before the meals. Sales techniques and incentives To improve sales, firstly we focus on how to approach potential clients. Next we will focus on the quality of service we have to provide to clients. In order to attract clients, we will give some incentives such as discount for customers during the first month, or discount for more than two customers coming to our firm together. We will use payroll system to evaluate staffs performance based on their activities, hours of work each day. Depend on the result we receive from payroll system, we decide correspondent amount of salary for each staff
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member. We will have a suitable promotion/demotion system based on the staffs performance.

Location and Layout: A)Location:

15

Our company locate at 6 Jalan 23/70a, Desa Sri Hartamas, Kuala Lumpur, Malaysia. Demographic analysis Based on location, our office is near with our target market which near with most of the offices. Our location is in Kuala Lumpur where there are many business companies set up their offices nearby our location. Usually employees from these companies are potential customers for our services. Traffic count Our business hour will be started from 9am till 10pm and will be opened six days a week. That means 11 hours business for each day. From the research, we can say that the traffic will be quite busy during the morning, lunch hour and evening. There is no visible traffic that occurs during high peak hours and this will ensure the comfort for our customers to visit our office. Additionally most of our target customers are very near to our office.

Lease/rental rates The rental rate for that area is RM2000 per month which is very affordable for a lot in Kuala Lumpur as well as the size of the office. For the time being we signed the lease for two years and will re-signed the contract if the business is successful in the area to avoid a long term contract that would not benefit us. B)Layout: Our business is the combination of a healthcare center and a small restaurant catering for our customers. Therefore, we have two layouts for our company. The first one is the design of our healthcare consulting area.

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When designing the layout for our company, we also consider ergonomics issue. We can say that ergonomics matters give a big effect to attract our customer. Because of that, we try our best to design the best arrangement for each part of corners such as, the table arrangement, toilet, and interior design decorations. Thus, we may provide comfortable atmosphere for clients to go and work with us. In addition, hygiene factor is important. Hand sanitizers are available in our office and our equipment or tools are cleaned frequently.

Another one is the design for our food court.

17

For the food court area, the ergonomics design such as safety issue is vital. This including slips trips and falls, fire place to cook and air ventilation. We will use rough surface floor to prevent too slippery floor. The fire place also will be located close to fire extinguishers and near to exit door. The air ventilation system comprises air conditioners, air freshener and fan to suck out the smog from fire place.

Competitor Analysis There are two types of competitors that we need to consider when opening this photography studio: existing competitors and potential competitors: A) Existing competitors: Currently, our services are new and right now we do not have any direct competitors who offer exactly the same service like us. In the market, there are many healthcare services that can analyze customers health condition and suggest them a suitable diet plan but they do not have offer meals for customers. We are innovative and this is one advantage that we should focus on to develop our business.

B) Potential competitors: other companies that may enter into the market Who are they? Potential competitors may rise anytime. They may be a group of young people who have some new ideas about healthcare consulting company like us. Or they are some companies who want to imitate our business when they see new opportunities. There are even some company that would take advantage of the trend of healthy dining and claim to serve the same range of food without taking into consideration of the health factor. 18

Impact on your business if they enter Once they enter the market, we will have to face with few problems such as pricing matter. If competitors want to offer lower price than us, then we have to find a way to cut cost, offer more discount rate, promotion but still have to maintain and enhance quality of service If the impostor company succeed they might spoil the image of all restaurants that offers healthy dining food that actually strive to serve healthy food to promote a healthy diet. It will give a very bad impact on the industry

DESCRIPTION OF MANAGEMENT BODY A good management team is highly essential in a business. Our team encompasses of 3 persons who has several years of experience background of business management and healthcare. We came out with a healthcare consultant business to provide good advice on food consumption based on the profile of the customer. We have three main partners in this business which are 2 co-owners and one chef. Co-owners are Chik Ee Mun and Le Ngoc Ha which both are nutritionist consultant of 5 years working experience and a chef of 10 years background who is Irene Chin Suk Dheng. All of them are specialized in managing and producing a best product based on organic food for customers.

Nutritionist

Background in health and diet consultant. Able to come out with a good plan for customer. Motivates customer to goes according to the plan provided to ensure a good healthcare. A good communication skill for communication, advices and inform customer. Able to manage and order supplies needed for the customer. Background in cooking and preparing meals. 19

Chef

Plan and prepare decided meals for customers. Has a good background on managing food. Has a broad knowledge regarding organic food management. Has a background of health n diet consultant. Background of working experience relating to organic food preparation. Good time management skills

Job scope of Key managers and Employees Chik Ee Mun & Le Ngoc Ha Co-Owner of HealthLine Has 5 years of experience in health and diet consultant at government hospital. Able to prepare a best plan for each customer based on the customer profile. Ensure customers are able to complete the plan decided for them by informing and reminding them. Motivates customer to consume healthy meal Prepare food for customer Chef prepare meal for customer Able to prepare a delicious meal to motivate customer to consume and at the same time able to take care the health of customer Manage, combine, and prepare a good organic meal. Meal produced must comply to 20

Irene Chin Suk Dheng Chef HealthLine

the health and nutritionist advice and plan. Able to manage time well during meal preparation.

PLAN OF OPERATION A. Form of Ownership

Healthline is a type of Limited Liability Partnership (LLP) Company. There will be a perpetual flexibility regardless to how the member of the company to arrange their business internally. It offers its partners limited liability which each partner is not responsible or liable for the misconduct or negligence act of other partners. In this case, each partners liability will be limited to the amount of their capital investment. LLP differs from limited partnership because for LLP, all partners can have limited liability and still play an active role in the management of the business. Therefore, each partner of HealthLine is protected against any negligence claims. Profits are distributed evenly among partners as it is not taxed separately which avoids double taxation like the corporations. All income and losses are reported on their individual income tax. Apart from that, LLP is also somewhat similar to corporations due to its separate legal entity from its partners and has a continuing legal existence independent of its members. This means that HealthLine has a continuing legal existence independent of its partners instead of having the partnership terms
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which have a legal existence dependent on the membership. This way, our business can continue its business regardless of the partners existence. B. Decision making authority Since HealthLine is a small start-up company, we will be having a flat organizational structure where there will be lesser levels of management between the executive level and the front-line employees. This is to allow each employee to be directly involved in the decision making process. This can make employee feel important and willing to strive for the company. We ensure that our corporate integrity is maintained despite the fact that we implement a decentralized hierarchy which allows more freedom of decision making authority for employees. A flatter organizational structure also allows comment and feedbacks to reach the employees faster and more effective. In this case, employees and the management level are able to improve and get back to customer in a better manner. HealthLine also decides to give each director the opportunity to decide on what is the best for the company. Directors are free to propose ideas and they are required to report to the CEO once their proposal is done for approval. For example, Director of Marketing shall decide on marketing strategy of how to find, reach and attract new customers and maintain the old customer by providing plans to maintain their loyalty. On the other hand, the chief financial officer shall decide on companys budgets for any activities or purchasing of materials which to be done. Then, CFO should report to CEO the financial budget for each activities or monetary transactions to be done. However, all executives and directors need to abide to the rules and policy while making decision as well. Every important activities and decisions should be finalized and approved by the Chief Executive Officer so that correct and precise decision can be made. If there is any suggestion of ideas which involves money, the board should consult financial assistance from Chief Financial Officer in order for business decisions and process to run well.

In the future, when our business has expanded throughout Malaysia, the organizational structure will be adjusted accordingly and most of the decision must adhere to companys terms and policies. Final decision and approval should be sought from the Chief Executive Officer when ideas are finalized. All branches of the company shall follow standardized procedure and report to the headquarters if there is any inquires. Nevertheless, they still can make their own decision within their own department accordingly. D. Compensation and benefits package HealthLine believes that employees are the most significant investment for the success of the company. Therefore, we offer comprehensive and attractive rewards for each of our employees to retain them. By having a good
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and attractive compensation and benefit package, that shall increase loyalty of employees and eventually motivates them to strive harder for the company. Compensation o Basic salary Salaries are based on general market pay and also years of experience, skills as well as qualification. o Commission Commission will be given depending on the number of sales that employees can bring for the company. o Bonus Bonuses will be given yearly in addition and based on salary and performance of employees as well as companys profits o Profit sharing Profits gained shall be shared accordingly depending on amount of investment in business

Benefits Package o Training programs Employees will be provided with training to develop and enhance their skills. Training such as communication skills, business acumen, and specialized skills in fields needed. Each year, a certain number of employees will be allocated for further training. o Leave Employees are entitled for 16 paid public holidays each year and annual vacation leave for 10-20 days depending on their length of service. o Vacation/Holiday Employees will be rewarded holiday or vacation package depending on their performance. For example, a team of employees is able to generate a huge amount of profit for the company, and then they are entitled for a holiday package sponsored by the company as reward. o Medical fees Employees medical fees will be covered for accidents that happen when they are working.

FINANCIAL FORECAST A. Forecasted Income Statement 23

All the cost of production is covered in this projected Income Statement of HealthLine. All the projected values are based on the current cost of the items with some margin to allow ad-hoc financing for the items; in case theres a rise in the cost of items in the future. The details are projected as below: Income Statement 2012(RM) Forecasted Revenue Cost of Goods Sold Gross Profit Operating costs (for 12 months) Payroll Premise Rental Fee Overhead Cost (electricity, water etc) Depreciation Marketing and Ads Operating profit (EBIT) Finance costs Interest Cost for 12 months Net Income 2,500*12 = 30,000 ========= 37,000 --------------Year ended 31 December 750,000 (500,000) ---------------250,000 (183,000) 72,000 60,000 11,000 30,000 10,000 --------------67,000 (30,000)

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Income Statement 2013(RM) Forecasted Revenue Cost of Goods Sold Gross Profit

Year ended 31 December 870,000 (580,000) ----------------290,000 (211,000)

Operating costs (for 12 months) Payroll 96,000 Premise Rental Fee 60,000 Overhead Cost (electricity, water etc) 12,000 Depreciation 33,000 Marketing and Ads 10,000 Operating profit (EBIT) 79,000 Finance costs (30,000) Interest Cost for 12 months 2,500*12 = 30,000 Net Income

========== 49,000 --------------------

Income Statement Forecasted Revenue Cost of Goods Sold Gross Profit Operating costs (for 12 months)

Year ended 31 December 2014(RM) 970,700 (630,000) ----------------340,700 (211,000) 25

Payroll 96,000 Premise Rental Fee 60,000 Overhead Cost (electricity, water etc) 12,000 Depreciation 33,000 Marketing and Ads 10,000 Operating profit (EBIT) Finance costs Interest Cost for 12 months Net Income ----------------129,700 (30,000) 2,500*12 = 30,000 ========== 99,700 --------------------

*Notes: Budget for operating costs is vary in different years

BALANCE SHEET Balance Sheet 31 Dec 2014 ASSETS Current assets Cash Inventory Acc. Receivable 101,690 390,200 100,000 200,200 90,000 455,900 508,750 109,300 120,500 250,070 286,560 96,530 26 As at 31 Dec 2012 As at 31 Dec 2013 As at

Non-current assets (net) 212,000 (including goodwill and licence fees) Total assets 602,200

202,900 685,800

190,200 698,950

EQUITIES & LIABILITIES Equity Share capital 25,000 25,000 Share Premium 150,000 Retained earnings 35,715 25,000 150,000 36,800 150,000 37,780

Total equity 210,715 211,800 212,780 Minority Interests 94,900 87,000 88,950 _______________________________________________________________________ Total equity Current liabilities Non-current liabilities Total equity and liabilities 305,615 138,750 157,835 602,200 298,800 135,800 251,200 685,800 301,730 145,600 251,620 698,950

Statement of cash flows Cash flows from operating activities: Operating profit 76,000 Less: Finance costs Profit before taxation 46,000 Adjustments:

As at 31 December 2011

(30,000)

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Depreciation

10,100 _________ 11,107 _______ 35,900

Decrease in inventories and trade receivables Increase in trade payable excluding tax _______ Cash generated from operations Tax paid (9,000) _______

9,800 2,500 12,300 _______ 48,200

Net cash from operating activities Cash flows from investing activities: Net purchase of non-current assets Less increase in Minority interest Dividends paid to Minority interests Net cash used in investing activities Cash flows from financing activities: Proceeds from new loan Equity dividends paid Net increase from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at 31 December 2011 60,000

(9,000) ________ 39,200

(22,785) 6,700 (1,073) (17,158)

(42,915) 22,042 _______ 55,738 10,000 __________ 87,420 __________

Cash and cash equivalents at 31 December 2012

Statement of cash flows Cash flows from operating activities: Operating profit 141,700 Less: Finance costs Profit before taxation 111,700 Adjustments: Depreciation

As at 31 December 2011

(30,000)

11,007 28

_________ 11,107 _______ 100,693 Decrease in inventories and trade receivables Increase in trade payable excluding tax _______ Cash generated from operations Tax paid (12,000) _______ (12,000) ________ 84,269 7,424 _______ 96,269 3,404 1,020

Net cash from operating activities Cash flows from investing activities: Net purchase of non-current assets Less increase in Minority interest Dividends paid to Minority interests Net cash used in investing activities Cash flows from financing activities: Proceeds from new loan Equity dividends paid Net increase from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at 31 December 2012 60,000

(33,900) 2,700 (1,050) (32,250)

(42,915) 71,908 _______ 10,803 87,420 __________ 170,131

Cash and cash equivalents at 31 December 2013

Statement of cash flows Cash flows from operating activities: Operating profit 120,000 Less: Finance costs Profit before taxation 90,000 Adjustments: Depreciation

As at 31 December 2011

(30,000)

14,107 _________ 14,107 29

_______ 75,893 Decrease in inventories and trade receivables Increase in trade payable excluding tax _______ Cash generated from operations Tax paid (13,500) _______ (13,500) ________ 70,593 8,200 _______ 84,093 6,700 1,500

Net cash from operating activities Cash flows from investing activities: Net purchase of non-current assets Less increase in Minority interest Dividends paid to Minority interests Net cash used in investing activities Cash flows from financing activities: Proceeds from new loan Equity dividends paid Net increase from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at 31 December 2011 60,000

(15,000) 7,900 (1,575) (8,675)

(42,915) 17,085 _______ 11,875 170,131 __________ 260,991

Cash and cash equivalents at 31 December 2012

BREAKEVEN-ANALYSIS Total Cost = Total Fixed Cost + Total Variable Cost TC = TFC + TVC , Annual TFC = = = = Monthly TVC = = = Shop rent and overhead + Salary + Interest rates and taxes (12 * 6,000 per month) + (12 *6,000) + (12 * 2,500) 72,000 + 72,000 + 30,000 RM 253,200 Raw Materials (including all the readymade items) + Overheads 20(Q) + 4,000 RM 4,000 + 20(Q) per month 30

Annual TVC

= =

12 (4,000 + 20Q) RM 48,000 + 240Q RM 253,200 + RM 48,000 + 240Q RM 301,200 + 240Q Revenue Total Cost RM 0.00 12 (RM 800 per look * Q) 9600Q

Total Cost = = Breakeve n Annual Revenue = = = =

Thus, Breakeven would occur at Q, 800Q - RM 301,200 - RM 301,200 8800Q Q = = = = = = RM 301,200 + 9600Q 800Q 9600Q -8800Q RM 301,200 301,200 / 8800 34 units per month = 408 units annually

*408 units per month would be adequate to generate sales to cover the total operating cost

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LIQUIDITY RATIO: 1. Current Ratio =

2012 Current Assets Current Liabilities 390,20 138,750

2013

2014

508,75 145,60 0 = 2.81 3.36 3. 5 Conclusion: HealthLine is liquid in paying current liabilities out of current assets. 2. Quick Ratio = Quick Assets Current Liabilities 190,000 138,750 1.37

455,90 135,800

= =

205,83 135,800 1.52

294,19 145,60 0 2..02

Conclusion: HealthLine is liquid when it comes to meeting short term obligations with its quick assets (current assets inventory) for the 3 forecasted years. Leverage Ratios : 1. Debt Ratio = Total Liabilities Total Assets = = 296,585 602,200 0.49 387,00 0 685,80 0 0.56 397,22 0 698,95 0 0.57

Conclusion: HealthLine finances half or more than of its assets by debt. 2. Debt to Net worth ratio = Total Liabilities Tangible Net Worth = 296,585 200,200 = 1.48 387,000 250,070 1.55 397,220 286,560 1.39 32

Conclusion: HealthLine has slightly more leverage than what it is worth

1. Receivables Turnover = = = Average collection period

Credit Sales Accounts Receivables 750,00 0 90,000 8.33 870,00 0 96,530 9.01 970,70 0 101,69 0 9.5

= 365 Receivables Turnover = 43 days 40 days 38 days

Conclusion: HealthLine has adequate receivable turnover ratio which means shorter the time lag between sale & cash collection. 2. Payables Turnover = Purchases Accounts Payable 205,00 251,200 0.82 254,00 251,62 0 0 1.01

= = Average collection period

150,00 157,835 0.95

= 365 Receivables Turnover 445 days 365

= 384 days days

Conclusion: HealthLine has adequate payable turnover ratio which means longer the time lag between purchasing & cash payment Profitability :

1. Net Profit on Total Assets = = =

Net Profit Total Assets 37,000 602,200 0.06

49,000 685,80 0.07 0

99,700 698,95 0.14 0 33

Conclusion: HealthLine average has 6 to 14% profits out of its total assets. 2. Net Profit on Sales = Net Profit

Net Sales = 99,700 750,000 = 0.05 870,000 0.06 920,000 0.11 37,000 49,000

Conclusion: HealthLine has an average of 5 to 11% of profits out of its total sales. 3. Net Profit to Equity = Net Profit

Total Equity = 99,700 305,615 = 0.12 298,800 0.16 301,730 0.33 37,000 49,000

Conclusion: HealthLine has an average of 12%-33% out of its total equity. 4. Net Sales to Working Capital = Net Sales

Working capital = 750,000 251,450 = 2.98 870,000 320,100 2.72 970,700 363,150 2.67

Conclusion: HealthLine manage to generate average 2.75 for every 1 dollar of working capital.

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Loan Proposal

Cover Letter Our reference Date To Through From : MBA/2011/ADMIN/011

: 25th July, 2011 : Who may concern : Le Ngoc Ha (CFO HealthLine) : Chik Ee Mun (Founder HealthLine)

Dear Sir/ Miss/ Mdm, General Loan Request from HealthLine Affairs The above matter is kindly referred 1) Our newly established health consultancy company would like to seek your kind consideration to provide loan for the development of our company. The loan is very important to us for a shop, operational cost as well as advertisement. Please refer to table below for the details of the loan: Price per Unit 150000 30 000 10 000 Total Unit 1 NA NA Total: Total Price 150000 30 000 10 000

Purpos e Store Operation cost Advertisement 190,000

2) With regards to that, HealthLine hope that our company can have a full loan from you as soon as possible. The repayment of the loan will be done according to the repayment schedule
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below:

Yea r 1 2 3 4 5 6 7 8 9 10

Percent (%) of repayment 4 5 6 8 9 12 13 14 14 15 TOTAL : 100 %

We are expecting that at the end of year 10 (according to the period of loan), our company will be able to repay the entire loan.

3) As in any other loan proposal, the owners of HealthLine have agreed to give out collateral of their own property in order to further guarantee success in this company. Hereby, is the collateral that will be given as part of the loan agreement:-

Collateral

Pric e

Quantity

Total price
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Land ownership in Ipoh, Perak Land ownership in Klang, Selangor Housing propertyin Kota Kinabalu, Sabah

60 000 70 000 100 000

3 acres 4 acres 1 unit Total Price :

180 000 280 000 100 000 640 000

4) For further information regarding our company and projected financial analysis, please refer to the previous pages. We really appreciate your support in providing us loan for the sake of opening company. Thank you.

Yours Faithfully,

(Chik Ee Mun) CEO HealthLine

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Reference

Bibliography
Bakri, D. R. (2011, January 31). Retrieved July 20, 2011, from Persatuan Diabetes Malaysia Scarborough, N. M. (2011). Essentials of Entrepreneurship and Small Business Management. New Jersey: Pearson.

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