TABLE OF CONTENTS

Contents Page Number

1. EXECUTIVE SUMMARY

2. PRODUCT DESCRIPTION

3. TECHNOLOGY DESCRIPTION

4. MARKET ANALYSIS AND STRATEGIES

5. MANAGEMENT TEAM

6. FINANCIAL ESTIMATES

7. PROJECT MILESTONES

8. CONCLUSIONS

9. APPENDICES

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1.0 EXECUTIVE SUMMARY

1.1 Description of the business and product concepts

1.2 The target market and projections

1.3 The competitive advantages

1.4 The profitability

1.5 The management team

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2. PRODUCT DESCRIPTION

2.1 Detail of the product or service to be produced/sold.

2.2 The application of the product or service and the primary end use as well
any significant secondary applications.

2.3 Unique features of the product and how these will create or add significant
value; also, highlight any differences between what is currently on the market and
what we will offer that will account for our market penetration.

2.4 The present state of development of the product and how much time and
money will be required to fully develop, test, and introduce the product or service.
Provide a summary of the functional specifications and photographs, if available,
of the product.

2.5 Patents or other proprietary features of the product.

2.6 Opportunities for the expansion of the product line or the development of
related product.

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3.0 TECHNOLOGY DESCRIPTION

Areas to be covered are the key components related to the product or

technology, the intellectual property involved, specialized knowledge,
experience and skills involved and regulations that may govern the use of the
technology to deliver the product. It should also cover research & development
(which outlines our plans for the future), and future technology trends that we
and the market can foresee.

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4.0 MARKET RESEARCH AND ANALYSIS

4.1 Customers

a. The customers for the product are or will be. Potential customers need to
be classified by relatively homogeneous groups having common, identifiable
characteristics (e.g., by major market segment).

b. Who and where the major purchasers for the product are in the market
segment. Include national regions and foreign countries, as appropriate.

c. Indicate whether customers are easily reached and receptive, how

customers buy (wholesale, through manufacturers representative, etc.).

4.2 Market Size and Trends

a. Three years the size of the current total market and the share we will have,
by market segment, and/or region, and/or country for the product we will offer, in
units, ringgit, and potential profitability.

b. The potential annual growth for at least three years of total market for our
product or service for each major customer group, region or country, as
appropriate.

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c. The major factors affecting the market growth (e.g. industry trends, socio-
economic trends, government policy, and population shifts).

4.3 Competition and Competitive Edges

a. A realistic assessment of the strengths and weaknesses of competitors.

Competitors Strengths Weaknesses

b. Compare competing and substitute products on the basis of market share,

quality, price, performance, delivery, timing, service warranties, and other
pertinent features.

c. Compare the fundamental value that is added or created by our product, in

terms of economic benefits to the customer and to our competitors.

d. The current advantages and disadvantages of these products and why they
are not meeting customers needs.

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4.4 Estimated Market Share and Sales

a. Based on our assessment of the advantages of our product, the market size
and trends, customers, competitors and their products, estimate the share of the
market and the sales in units and ringgit that we will acquire in each of the next
three years. Remember to show assumptions used.

Product/service Market Share and Sales

Year
2018 2019 2020

Market share (%)

Total sales in units

Total sales in RM

4.5 Marketing Strategy

a. Overall marketing strategy. Description of the specific marketing

philosophy and strategy of the company, given the value chain and channel of
distribution in the target market. Include, for example, a discussion of the types of
customer groups that we are targeting for initial intensive selling effort those that
we are targeting for later selling efforts.

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 b. Pricing. Discussion of the pricing strategy, including the prices to be
charged for our product and service, and differentiation our pricing policy with
those of our major competitors.

c. Sales tactics. Description of the method (e.g., own sales force, sales
representatives, direct mail, or distributors) that will be used to make sales and
distribute the product.

d. Service and warranty policy. If your company will offer product that will
require service, warranties, or training, indicate the importance of these to
customers purchasing decisions and discuss your method of handling service
problems; also, highlight the kind and term of any warranties to be offered,
whether service will be handled by company service people, agencies, dealers and
distributors, or return to the factory.

e. Advertising and promotion. Describe the approaches the company will use
to bring its product or service to the attention of prospective buyers.

f. Distribution. Describe the methods and channels of distribution you will

employ.

5.0 MANAGEMENT TEAM

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5.1 Organization

a. Present the key management roles in the company and the individuals who
will fill each position.

Key Management Roles Name

b. If it is not possible to fill each executive role with a full-time person

without adding excessive overhead, indicate how these functions will be
performed (e.g., using part-time specialists or consultants to perform some
functions), who will perform them, and when they will be replaced by a full-time
staff members.

5.2 Key Management Personnel

a. For each key person, description in detail career highlights, particularly

relevant know-how, skills, and track record of accomplishments that demonstrate
his/her ability to perform the assigned role.

Names & Position Career Highlights

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b. The exact duties and responsibilities of each of the key members of the
management team.

Names & Position Duties & Responsibilities

5.3 Management Compensation and Ownership

a. The salary to be paid, the share ownership planned, and the amount of
equity investment (if any) of each key member of the management team.

Share of Amount of
Names & Position Monthly Salary Ownership Equity
Invested

5.4 Supporting professional advisors and services

a. The supporting services that will be required.

b. The names and affiliations of the legal, accounting, advertising,

consulting, and banking advisors selected for your venture and the services each
will provide.

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 Names of Professional Advisors Services Provided

6.0 FINANCIAL PLAN

6.1 Start-up Cost

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Estimate the costs incurred in conjunction with one-time activities that the venture
undertakes when it opens a new facility, introduces a new product or service,
conducts business in a new territory or with a new class of customer or
beneficiary, initiates a new process in an existing facility or commences some
new operation after considerable research and discussion.

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6.2 Working Capital

Working capital represents the amount of initial expenditure required to finance

the daily operation until the business gets its first sale. The amount of working
capital is therefore dependent upon the period until the firm can generate enough
sales to cover its short-term expenditure.

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6.3 Start-up Capital and Financing

Total start-up capital incorporates both start-up cost and working capital
needed to start a project. The most common source of finance for new venture is
the entrepreneurs own equity contribution. The equity contribution can be in the
form of cash or assets. The next most common source of finance is term loan.
This is a form of long term financing offered by most commercial banks. The
term loan can be used to finance fixed assets as well as working capital
requirements. The interest rate and the loan period depend on the current interest
rate and the amount of loan required respectively.

6.4 Cash Flow Statement

A cash flow pro-forma statement refers to the projected statement of cash inflow
and outflow throughout the planned period. Under normal circumstances, the pro
forma cash flow statement is prepared between three to five consecutive years.
However, longer periods are sometimes needed depending upon the projects
undertaken. The pro forma cash flow statement must be able to show the
following information:
Cash inflows the projected amount of cash flowing into the company.
Cash outflows the projected amount of cash flowing out of the company.
Cash deficit or surplus the difference between cash inflows and cash outflows.
Cash position the beginning and ending cash balances for a particular period.

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6.5 Income Statement

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The next step in developing a financial plan is to prepare the pro forma income
statement which shows the expected profit or loss for the planned period, usually
for three to five consecutive years. Generally, the pro forma income statement
consists of the following elements:
Cost of good manufactured (production cost)
Gross profit
Net profit

Cost of goods manufactured (also known as production costs) refers to the total
production cost involved in producing the finished goods. It includes all costs
such as direct materials, direct labour, manufacturing overheads and the
differential value between the beginning and ending balances of the work-in-
progress (if any). Gross profit is the gross margin realized after deducting the cost
of goods sold from sales. It represents the amount of profit before deducting other
operating expenditure. Net profit (or net loss) is defined as the difference between
gross profit and operating expenses for the planned period.

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6.6 Balance Sheet

While the pro forma income statement shows the financial performance of the
company for the planned period, the pro forma balance sheet shows the financial
position of the company at a specific point in time in terms of assets owned and
how those assets are financed. The pro forma balance sheet is prepared for a
period between three to five years.

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7.0 PROJECT MILESTONES

This section includes a month-by-month schedule that shows the deadlines or milestones
of activities critical to the ventures success. Examples of activities that are critical to the
success of the venture are: Incorporation of the venture, completion of design and
development, completion of prototypes, obtaining of sales representatives, signing of
distributors and dealers, ordering of materials in production quantities, starting of
production or operations, receipt of first orders, delivery of first sales.

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 Activities Deadlines

8.0 CONCLUSIONS

9.0 APPENDICES

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