LB 5207: ENTREPRENEURSHIP

Green Energy Pte Ltd – Business Plan

Sridharan, Praveen (12438941)

Rajendran, Vinoth (12439360)

Subramanian, Kavin (12439082)

Sankarapani, Saran (12439634)

Rajaraman, Vijay Vir (12438863)

Table of Contents
Executive Summary:..............................................................................................................................4
Company Overview...............................................................................................................................5
Mission..............................................................................................................................................5
Vision.................................................................................................................................................5
The Management Team.....................................................................................................................5
Business Description..........................................................................................................................6
The Product/Service:.........................................................................................................................6
Industry Analysis....................................................................................................................................6
Potential Entrants..............................................................................................................................7
Substitutes.........................................................................................................................................8
Suppliers............................................................................................................................................8
Buyers................................................................................................................................................8
Industry Rivalry..................................................................................................................................8
Market Plan...........................................................................................................................................9
Marketing Strategy:.........................................................................................................................10
The Product:................................................................................................................................10
Working:......................................................................................................................................11
Product Design:...........................................................................................................................11
Customer Reach (Place):..................................................................................................................11
Phase 1:.......................................................................................................................................11
Phase 2:.......................................................................................................................................12
Pricing:.............................................................................................................................................12
Promotion:.......................................................................................................................................12
Operations Plan:..................................................................................................................................13
Assembling:.....................................................................................................................................13
Manufacturing Costs:......................................................................................................................13
Location and Facilities:....................................................................................................................13
Staffing and Labour Force:...............................................................................................................14
Time Line:........................................................................................................................................14
Phase 1:.......................................................................................................................................14
Phase 2:.......................................................................................................................................15
Phase 3:.......................................................................................................................................16
Financial Plan.......................................................................................................................................16
Break Even Analysis.............................................................................................................................16
Profit and Loss.....................................................................................................................................17
Balance Sheet......................................................................................................................................18
Projected Cash Flow:...........................................................................................................................19
Ratio Analysis:.....................................................................................................................................20
Risks and Assumptions:.......................................................................................................................20
Risks:................................................................................................................................................20
Assumptions:...................................................................................................................................20
Exit Strategy:.......................................................................................................................................21
Conclusion:..........................................................................................................................................21
Executive Summary:

In 1987, the UN’s World Commission on Environment and Development produced the
Brundtland Report which defined sustainability as: “Development that meets the needs of the
present generation without compromising the ability of future generations to meet their needs."
We Green Energy Pte Ltd are trying to satisfy the need to have environment friendly power by
utilizing light energy. Apple familiarized touch screen phones among people who were at that
time comfortable using keypad phones, they created a need. We are into a similar quest where
we try to bring in a new era of power generation which would not harm the current people and
would be an asset for the future generations.

The company itself is based in Singapore from where it intends to grow its business and expand
to the neighboring regions. Green Energy pte ltd strategically targets its various B2B customers
which are hypermarkets, electronic stores and retail stores their pricing, unique design, and
innovation allowing it to be competitive in the market and build its brand name and create
awareness leading to a growing and sustainable future.

Eco-Charger, the core product of the company is an eco-friendly, on-the-go, and any time energy
provider for electronic gadgets like MP3 players, iPod, Mobile phones, etc. We have planned the
launch of Eco-Charger Maxi by the start of the third year which is an advanced product that
would in future provide the necessary power for households.

Moreover, the management team is well equipped with skills to steer the company into the right
direction. We have experts in every field who have got enough experience under their belt and
would handle situations better. The labors who we have hired are also trained who would be
able to provide the necessary output, and we have also made sure that we don’t have
dependency on any of the workers.

We partners are investing S$ 100000 into the enterprise and with the required amount from the
venture capitalists; we would be achieving our break even in 53280 units which is achieved by
the end of second year. The fixed costs for establishing the units are estimated to be around S$
151200. The assembling cost for the product along with the material cost would come to around
S$ 3.2. The market price of the product is set at S$ 10.00. This would provide us the necessary
margin for investment in R&D.

We expect to win the market having the first mover advantage and with established strategies.
We welcome venture capitalists with ROI achieved in 3 years.
Company Overview

Green Energy Pte Ltd is a company producing Eco friendly products relying basically on energy
produced from photo sensitive panels. The company has a strong objective to produce and
provide innovative, eco friendly products for the end customer’s complete satisfaction. The
company also strives towards its stakeholders benefits. The company thoroughly understands
the need of the end customer and obliges to cater products which are beneficial to the customer
and the environment.

The company is a Singapore based company and its business is carried throughout the country.
The company looks forward to venture into other neighboring countries of Singapore like
Malaysia, Thailand, and Indonesia.etc, in the times to come.

Mission

“To produce green energy products those do not harness the environment and harvest’s
renewable source of energy”

Vision

“To be a world leader in producing high quality, eco friendly and highly innovative products
supplementing the ecology”

The Management Team

Rajaraman, Vijay Vir - Head - Finance

B.Com, MBA (Finance)

Rajendran, Vinoth - Head - Operations

B.Com, MBA (Finance)

Sankarapani, Saran - Head – Marketing

B.Tech (IT), MBA (Marketing)

Sridharan, Praveen - Head - Supply Chain Management

B.E. (Computer Science), MBA (International Business)

Subramanian, Kavin - Head – Customer Relations

B.Sc. Hospitality & Tourism Management, MBA (Marketing)

Business Description

Green Energy Pte ltd aims at satisfying various customers through its unique products, eco
friendly motto and the innovations it develops in order to sustain competitiveness in the
market. It also look forward to build its brand as a unique company providing eco friendly
products which is the need of the hour backing the environment and creating awareness about
the product’s need.

The Product/Service:

The company is into assembling green products supported by Eco-Charger as its core product.
Eco-Charger helps charging of all portable electronic devices on the go in an eco friendly way
consuming only the light energy. The Eco-Charger is targeted towards various customers
through its unique product design, price and eco friendly nature.

Industry Analysis

The lifestyle of people is drastically undergoing changes. This emerging and prevailing lifestyle
needs products that make people’s life simple and easy. People demand more convenience
products. And with increase in awareness of environmental issues the demand for eco friendly
products is expected to increase drastically.

The industry consists of products using photo voltaic panels as the source of producing power.
As electronic devices have become parts of people’s lifestyle and with the scarcity for fuel and
coal in the near future.

Coal Depletion

Source: National Geographic

 Source: National Geographic

The need for eco friendly and renewable source of energy has immensely increased. With the
industry comprising players producing products which uses energy from photo sensitive
panels, the industry is considered unique and high demand incurring in the near future.

With a gap in the industry as players concern less about environmental friendly products and
rage in competition concentrating much on the product attributes and less on the
environmental issues.

The Industry is best analysed using Porter’s five forces.

Potential Entrants
Potential Entrants means the competitors who may start manufacturing similar kind of
products. Since our product is manufactured by just assembling the products that are already
available in the market, anyone can enter in to the market by manufacturing similar kind of
product. So, we recognize the threat of potential entrants as higher.
In order to compete and sustain in the market with the potential entrants/competitors we are
planning to invest a huge amount of money in the R&D. By investing a huge sum of amount in
the R&D we will be in the process of manufacturing chargers which can be used to charge the
laptops and other similar kind of larger gadgets which need to be charged. So, by this way we
will be able to sustain and compete with them in the market.

Substitutes
Substitutes in our case are the charging equipments that can be charged using other form of
sources like wind energy and hydro energy. Since, these kind of chargers are not compactable
and cannot be carried in the hands, where as our product can be carried anywhere in the hands.
So, we believe that the threat of substitutes to be lower.

Suppliers
Suppliers are those companies that supply the products like the photo electric boards, circuits,
batteries, panels, charging pins, wire and the screws. At the moment we get these products from
Suntech solar enterprises, Wizlogix, ADELMO, ABC industries respectively.

These products are easily available in the market and there are many suppliers supplying these
kinds of products already. Since we have more suppliers in the market we believe that, the
threat of suppliers to be lower.

Buyers
Buyers are the consumers are the customers who buy the product. We have a Business to
Business model, which means supplying to other business operators like Seven Eleven, Fair
Price, Cheers, and Mustafa. By keeping our products in their stores, people will be visiting their
stores to buy our product and that might in-turn help these stores to sell their other products.
The suppliers will welcome our product rather than causing trouble to our company because of
the above mentioned reasons. So we believe that, the threat of buyers to be lower.

Industry Rivalry
Eco-Charger is a new product in the market and at the moment there are no competitors for our
product in the Singapore market. We may have competitors entering in to the market in the
future and we will be following the above mentioned strategies to sustain the competition from
them.
 Porter’s Forces – Green Energy Pte Ltd (http://notesdesk.com/notes/strategy/porters-five-
forces-model-porters-model/)

Market Plan

Our target market would be the people who are using gadgets like MP3 players, Mobile phones,
etc. We would like to divide our target market into three segments.

 Teenagers and young people using MP3 gadgets.

 Office goers who are frustrated with the battery getting over soon.
 Out bound travelers who would not be able to find the right socket for their chargeable
devices.

The number of people in the age group 15-64 account to approximately 75% of the total
population in Singapore which is about 3,740,000 people, these are the people who we would
be targeting (www.singstat.gov.sg/stats/themes/people/popinbrief2010.pdf). The teenagers
are more prone to have their mobile phones and MP3 gadgets with them where ever they go.
They would be disappointed if they find their devices run out of battery on the go.
The office goers are people who would be constantly using their mobile phones. They cannot
afford to have their mobile phones switched off or they might lose important calls. They should
carry their charger to the office or instead, they can have our product which would also provide
the same functionality but is eco friendly. People travelling abroad need to have an extra gadget
to ensure that the other country’s socket would help charge their gadgets. With the introduction
of our product, this won’t be necessary as it can be used to charge the gadgets anywhere in the
world.

Marketing Strategy:

The marketing plan infuses not only the product, but also the brand name (company) into the
mind of our customers’, effectiveness and ease of our products is heavily stressed upon and a
strategic based marketing approach is followed. The company also believes in being proactive
to the market conditions.

The Product:
Green Energy Pte Ltd is planning for market penetration with the product Eco-Charger. It is a
portable and handy charger which uses renewable energy without causing any harm to the
environment.

The Eco-Charger
Working:

The Eco-Charger would start working once it is exposed to light. The main source of light being
sun, it is also renewable. Once the light beam falls on the panel, the battery gets charged and the
stored power can be retrieved with the help of pins.

Product Design:

The solar panel is available in various sizes and can be used for differentiated purposes. The
panel and the battery are connected with the help of a circuit board. This is a normal one that is
already available in the market. The Battery is a normal mobile phone battery that would
provide 12V power.

The entire setup is then placed inside a case made of recycled plastic. We have chose plastic as
the material doesn’t conduct and would help prevent external shocks to the circuit.

Customer Reach (Place):

We would segregate our customer reach into two phases, 1 and 2.

Phase 1:

The first phase would consist of the time from the inception of the company to 2 years. In this
time we would be targeting the B2B customers and are planning to make the product available
in 7-Eleven, Cheers, Mustafa and FairPrice.

FairPrice stores Singapore

(http://www.fairprice.com.sg/wcsstore/FairPrice/images/corpcomms/StorLocSingaporeMap.jpg)
Phase 2:

Phase 2 would be when the initial 2 years are over. Now with the established brand name, we
would like to target the customers directly. We would be installing outlets at the places where
people frequent like MRT stations, Bus Interchanges, Changi Airport, Hubs, etc. y doing so, we
would be able to establish our presence and would be able to come up with new products and
go to the consumer directly.

Pricing:

Whatever we do, without the right pricing strategy, the product would not reach the people. We
as entrepreneurs are interested in making money as well as making sure that we create change
by making people go green with an environment friendly product. For this we don’t want to
price the product too high, we want to price it affordably.

We would first introduce the product with a price of S$ 10.00. This will help us reach the
customers. We would also make profits as we have a healthy profit margin of more than 200%.
Since there are no similar products at the time in the market, we can enjoy the whole market.
We would also follow a universal price policy where we would make the product available at
the same price in all the outlets.

Promotion:

We are planning to rope in environmentalists and big names from the environment ministry for
our promotion. We would discuss with Singapore Environment Council (SEC) Chairman Ms.
Isabella Loh for promoting the product. We would also like to discuss our product with Dr Amy
Khor, Senior Parliamentary Secretary, Ministry Of The Environment And Water Resources for
helping us in bringing this product to the Singapore people.

We would also plan campaigns where we would have Lin Peisen from Raffles Junior College
(Young Environmentalist Awardee) talk to people for going green and would present such a
product. This would increase our sales and would help us reach people better in terms of Brand
name and as a company.

Also, we would bundle the products and provide them at an attractive price. We would provide
the bundle of two of our products at S$ 15.00 and three at S$ 20.00. This would not only help us
in achieving better sales but also would help us in reaching people faster.
Operations Plan:

The operations plan describes the ways of achieving milestones and explains why or what
action is being performed to attain the required targets in the given operational period. We
would be majorly interested in the value chain activities, the budget allocation and the location
and the timeline when the products are rolled out.

Assembling:

We are interested in assembling our new product with the materials that are already available
in the market. We would procure the necessary goods and would assemble them in an
assembling unit with the help of man power and roll out the goods in the first phase. Once we
have achieved the required profits, we would invest on automating the assembling process and
also in reducing the dependency on man power. The investment in machines would provide
better output and as well as better quality.

We are planning to have our company ISO 9001 certified to help in better branding and also
having quality management. The basic requirements in having the company ISO 9001 certified
like better management, chartered processes, reviewed value chain, etc are met and are audited.

Manufacturing Costs:

Photo Voltaic Panel S$ 0.25

Circuit Board S$ 0.20
Battery Charger S$ 1.00
Wires S$ 0.05
Recyclable plastic casing S$ 1.00
Other costs S$ 0.70
Total cost of Eco-Charger S$ 3.20

We are planning to procure the materials from more than one supplier to diversify the risk. We
would be having an assembly unit and a warehouse in the same place and would perform the
operations from that place.

Location and Facilities:

We require a place of 6000 Sq ft for our assembling plant and warehouse. We intend to operate
the business from Jurong East. The main reason being the low cost of rentals and also the
presence of large number of industries and it would help us to receive the goods from our
suppliers.
Its proximity to Jurong Port helps us to get the goods directly from the harbour without any
hindrance. It is also necessary that we have a loading and un-loading bay for the movement of
goods.

Staffing and Labour Force:

Assembling is labour intense work. We are planning to hire five people from local market for the
assembling purpose. Proper training would be provided to them so that they handle the
equipments right. These people would be blue collar workers and all the loading, un-loading
and the delivery of goods to outlets would be carried out by these people. We people who have
invested in the business would perform the white collar jobs like inventory control, marketing,
order management, etc.

Time Line:

It is very important to know the time line when the products would be introduced into the
market. In fact this is one of the biggest reasons behind success of companies. We have divided
our entry strategy into various time lines.

Phase 1:

In phase 1 we would be concentrating on obtaining the required approvals and would be setting
up the base for our entry. We would be interested in selecting our suppliers, signing contracts
with our product dealers and also hire people for work. We expect this to happen for one half of
the first year. We would also have a warehouse setup and everything ready for production.
 Time Line – Green Energy Pte Ltd

Phase 2:

This is the phase we will be rolling out our first product. As ours is assembling business, we
would start to produce finished goods from day 1. We would be making these products available
in the market. We intend to penetrate the market as much possible with promotion and ads. We
would be looking at establishing a good relationship with our stakeholders and to promote
business. The second half of the first year and the second year are considered in the second
phase.

Principle behind Eco-Charger Maxi

 Phase 3:

This is the phase we expect competitors. Now that we would be established as a company, we
would be investing in innovation and development of the products to make sure we stay afloat
in the market. We would introduce a new product Eco-Charger Maxi for house hold purposes.

The Eco-Charger Maxi is an advanced product where we would store the Sun’s energy in a
battery which is currently used as backup for house power. With the help of an Inverter we can
use the battery’s energy to power our house needs. Though this may not be of great use in the
Singapore market, it would be of great use in countries like India, Malaysia, Indonesia and
Thailand where power supply is still a problem.

Financial Plan

Eco-Charger has an initial Owner’s Equity of S$ 100,000. This is utilized for the expenses
required to start up the company and cash payments for the first year. With the anticipated
sales the company is expected to make a loss in the first year and profit thereafter. For the first
year the fixed costs are estimated to be 151200. In the second and third year the company
intends to launch an extension of the existing product, due to this the fixed cost changes. The
manufacturing of the product is at S$3.2 per unit including logistics and transport.

Break Even Analysis

In this Break even analysis, it is clearly shown that there are no profits found in the first year
and then in the upcoming years we have found profits.

2
Break Even Point
Profit
0
23 41 72
-2

-4

-6

-8

Sales Revenue
Profit and Loss

The company makes a loss for the first year and makes profit from the mid 2012 onwards. The
first year goes into a loss due to market penetration strategy. In the second year the company
made a profit and there we have shown the breakeven point due to the skimming strategy. With
the commencement of an extended product in the end of second year, the company makes profit
during the end of third year. Pay rolls have been consistently increased and it has made loss in
the first year and then after employing many workers, the wages have been in control so that
we have found profits at the end of third year. This profit and loss statement clearly shows that
during the first year there were no investments in new products. In the following years the
major reason for the profit will be the investment in developing the new products. Rent and
insurance will be constant throughout the year.

Pro Forma Profit and Loss

2011 2012 2013

Sales 232000 415200 720000

Cost of Sales 74240 132864 216000
Gross Profit on Sales 157760 282336 504000
Expenses
Payroll 36000 42000 60000
Marketing and Advertising 35000 36000 40800

Rent 72000 72000 73000

Insurance 36000 36000 36000
Vehicles and Transportation 18000 18000 25200
Electricity and Telephone 7200 7200 9000
Depreciation - 16600 16600
Maintenance 2400 2400 3000
Interest - - 10000
Petty Cash 1200 1200 1500
Compensation to partners 10000 10000 10000
Investment in new product 0 33400 153400
Total Operating Expenses 207800 274800 438500
Operating Income (60040) 7536 65500
Bad Debts 3400 6000 7000
Profit Before Tax (63440) 1536 58500
Taxes Incurred 0 122.88 4680
Net Profit 1414 53820
Balance Sheet

The expected projected balance sheets for the three years are as follows:

Pro Forma Balance Sheet

2011 2012 2013
Assets
Non Current Assets
Furniture 5000 4000 3000
Equipment 1000 800 600
Computer 7000 5600 4200
Vehicle 70000 56000 42000
Current Assets
Accounts Receivable 11600 20760 36000
Investment 33600 153400
Cash 45672 23857 9394
Total Assets 140272 144617 212594
Liability
Debentures 100000 100000 110000
Accounts Payable 3712 6643 10800
Owners’ Equity
Capital 100,000 36560 37974
Profit/ Loss (63440) 1414 53820
Total Liability 140272 144617 212594
 Projected Cash Flow:

I n the first year the company does not face any short term cash flow problems in spite of
operating at a loss. This cash Flow clearly shows how much cash is spent on each activity such
as operating, investing and financing.

Cash Flow Statement for the year ending 2011

Particulars Amount (in S$)

Cash Flow from Operating activities

Cash received from customers 232000

Cash paid to Suppliers -74240
Other Operating expenses -207800

Total operating expenses -50040

Cash Flow from investing activities

Purchase of furniture -5000

Purchase of Equipment -1000
Purchase of Computer -7000
Purchase of Vehicle -70000

Total investing activities -83000

Cash Flow from financing activities

Issue of Debentures 100000

Redemption of dividend 0
Interest paid 0

Total financing activities 100000

Net cash Flow -33040

Cash and cash equivalents at the beginning 100000
Cash and cash equivalents at the end 66960
Ratio Analysis:

The ratios calculated below shows us that the company is doing well.

1. Profitability ratios: ( 2011 )

Current ratio = current assets / current liabilities

= 57272 / 3712

= 15.42

Liquid ratio = liquid assets / current liabilities

= 15.42

2. Debt- Equity ratio (2011) = Debt / Equity

= 100000 / 100000 = 1:1

Risks and Assumptions:

Risks:

It is very essential to discuss the risks that we might encounter before entering into a business.
We have come up with the possible problems that may arise.

 Internal problems among founders - If by any chance there is a person who wants to
separate from the company, then there may be a problem in sustaining the company.
 Copying is possible – Since it’s an electronic good, the chances of seeing a duplicate
product out are possible and that moreover the time taken for duplication would be
relatively less.
 Creating a need – We are providing a solution to an existing problem and people may or
may not receive the product very well. They have substitutes like charging the device for
the whole night before and may not want our product.

Assumptions:

There are some assumptions made from our side for establishing the product.

 The founders of the company would not leave the team before the company gets into a
good position. We would sign a contract stating that there would be full commitment
 from the team members till the end of 3 years or till we sell a certain amount of our
product.
 The approvals that are necessary for setting up the business are got without any
hindrance and there is no capital invested in doing so.
 There are no accidents happening in the period where we would start and run the
business.

Exit Strategy:

Planning to exit at the right time before starting the business is wise. We as entrepreneurs have
come up with an innovative and an out of box product which is not available in the market. We
possibly enjoy the whole market share for the first few years and would be interested in
launching new products down the lane. Though we expect competitors to arise in the coming
years, with our proactive measures, we are sure to be ahead of them and to stay ahead in the
market.

With such a booming business in hand, we would be considering to exit from the industry only
when there are unexpected risks happening and we have no control over them. For the next few
years we are sure not to exit the company.

Conclusion:

Our beliefs and strategies would make it clear that we are a people centred company. We would
strive to make every effort in helping people lives become easier with environment friendly
tools. With assured returns and an attractive market round the world, there are endless
opportunities for investment in going green.

Innovation and development being the main pillars behind our company’s evolution, we intend
to reap the profits as projected and would be more interested in diversifying our portfolio in the
green areas into large scale solar energy production and wind energy. We would resort to other
forms of renewable energy and in ten years from now, we see us as a company able to provide
complete energy solutions which would be more eco-friendly, un-harming and renewable.