ecowave business plan 3.0
TRANSCRIPT
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B U S I N E S S P L A N
BR ID G ING THE GA P BE T WEEN
TH E D IG ITA L & AN A LO G UE WORLD
THRO UG H INN OVATION
E C O W A V E E N T E P R I S E (S A 0 1 8 1 3 1 7 - A )
A V E N U E B U S I N E S S C E N T R E – S E T I A W A L K
5 T H F L O O R , B L O C K I , S E T I A W A L K ,
I - 0 1 - 0 5 , P E R S I A R A N W A W A S A N ,
P U S A T B A N D A R P U C H O N G , 4 7 1 6 0 P U C H O N G , S E L A N G O R D A R U L E H S A N
W E B S I T E : W W W . E C O W A V E . C O M
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CONTENTS
EXECUTIVE SUMMARY ............................................................................................ 5
INDUSTRY ANALYSIS ................................................................................................ 7
INTRODUCTION ......................................................................................................... 7
ENTREPRENEURSHIP ........................................................................................................ 8
INDUSTRY STRUCTURE & SIZE ........................................................................................ 10
INDUSTRY GROWTH RATE IN THE 21ST CENTURY ......................................................... 11
NATURE OF PARTICIPANTS & SUCCESS FACTORS ............................................................ 12
INDUSTRY TRENDS ......................................................................................................... 14
LONG-TERM PROSPECTS ................................................................................................. 14
MARKET ANALYSIS ................................................................................................. 16
MARKET SIZE ................................................................................................................. 16
POTENTIAL GROWTH ..................................................................................................... 18
TARGET MARKET ........................................................................................................... 18
TARGETED MARKET SIZE ............................................................................................... 20
COMPETITION ................................................................................................................ 21
BUSINESS DETAILS .................................................................................................. 25
OVERVIEW OF BUSINESS ................................................................................................. 25
COMPANY NAME ............................................................................................................ 25
MISSION ......................................................................................................................... 25
VISION ........................................................................................................................... 26
GOALS & OBJECTIVES ..................................................................................................... 26
COMPANY INFORMATION ............................................................................................... 26
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DATE OF COMMENCEMENT ........................................................................................... 27
FORM OF BUSINESS ........................................................................................................ 27
SSM BUSINESS REGISTRATION CERTIFICATION .............................................................. 28
MANAGEMENT TEAM ..................................................................................................... 29
TASK & RESPONSIBILITY ................................................................................................ 29
PRODUCT ....................................................................................................................... 32
MARKETING PLAN .................................................................................................. 37
HOW WILL YOU REACH YOU CUSTOMERS AND YOUR SALES GOALS ? ............................... 37
MARKETING STRATEGY .................................................................................................. 38
MARKETING BUDGET .................................................................................................... 41
MARKETING MIX – PRODUCT, PRICE, PROMOTION, PLACE ............................................ 42
OPERATIONAL PLAN .............................................................................................. 46
OPERATION FLOW ......................................................................................................... 46
SUPPLY CHAIN LIFECYCLE SCHEDULE ............................................................................ 47
MATERIAL REQUIREMENTS ............................................................................................. 47
MANPOWER REQUIREMENTS .......................................................................................... 47
MACHINE AND REQUIREMENTS ..................................................................................... 48
BUSINESS LOCATION, FACILITY & EQUIPMENTS. ............................................................ 48
VIRTUAL OFFICE ............................................................................................................ 48
STORAGE LOCATION & AREA ........................................................................................ 51
SUPPLY CHAIN STRUCTURE ............................................................................................ 53
FINANCIAL PLAN ..................................................................................................... 55
SOURCES AND USES OF FUNDS OF STATEMENTS .............................................................. 55
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LOAN AMORTISATION REPAYMENT SCHEDULE .............................................................. 55
ASSUMPTIONS SHEET ...................................................................................................... 56
SALES FORECAST ............................................................................................................ 59
INCOME STATEMENTS / CASH FLOW ............................................................................... 61
BALANCE SHEETS ........................................................................................................... 63
BREAK-EVEN ANALYSIS .................................................................................................. 64
RATIO ANALYSIS ............................................................................................................ 65
APPENDICES ............................................................................................................... 68
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EXECUTIVE SUMMARY
Ecowave Enterprise was founded in October, 2015 aims to provide new innovation
experience into Malaysia and later into ASEAN region. Located in a virtual office situated at at
Avenue Business Centre, Setiawalk, Puchong and renting extra space in Segambut as our
product storage room, this nature of business is to become the technology innovator in digital
industry through Rocketbook. Ecowave Enterprise are the sole distributor of the product in
Malaysia.
The Rocketbook System is a combination of a special notebook and a mobile app. The
notebook is used to write notes and create designs using pen and paper. Then, use the app to
effortlessly blast them in to the cloud perfectly organized inside your online services, such as
Dropbox or Evernote. Each page is processed for quality and then sent to the specific destination
that you indicate by marking an icon on the bottom of each page. The Rocketbook notebook
contains unique pages that allow for easy organization in the cloud. The pages all feature a dot
grid pattern that allows for true creativity and are great for writing text notes, sketches, and
designs. The Rocketbook Wave is also a special reusable notebook. With your notes stored
safely in the cloud, and when you use Pilot Frixion pens, you can erase your Rocketbook using
your microwave oven. One set of product will consist of one unit of Rocketbook and three units
of Pilot Frixon Pens. The selling price for one set of the product is at RM 230 including of RM30
for postage to customers.
Rocketbook target’s anyone with smart phones in need to organize they daily task in life
from age 15-64 years old Ranging from school children to the university undergrads, corporate
people, creative people and even anybody that need to organize they daily life. These has then
been by categorized into two separate categories which are the need market and the fun market.
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Since Rocketbook is the pioneer and the first company in the world ever that producing
Cloudy-Ready Microwavable Notebook, we will develop the brand image and market
positioning primarily through the product itself. We will focus our competitive review on that
segment of the market. Our market positioning will be in the affordable price compared to other
storage gadgets option such as tablet and smartphone. Ecowave Enterprise will utilize a brand
building and push strategy as the basis for marketing plan such as advertising print out/Leaflet,
Online and media social advertising, promotions and search engine.
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INDUSTRY ANALYSIS
INTRODUCTION
Going back to the 1970’s the global economy thrived on a bureaucratically structured
corporate world that emphasized products and services. However once industrialization suffered
a decline innovative measures were turned to and the globalized world comprised of young risk-
takers ruthlessly pursued long hours for the potentially magnanimous success offered by
entrepreneurial opportunities. This led to an entrepreneurially inspired business culture founded
by innovation.
According to Peter Drucker in his book Management Challenges for 21st Century, “The
center of a modern society, economy and community is not technology. It is not information. It is
not productivity. It is the managed institution as the organ of society to produce results.
Management is the specific function, the specific instrument to make institutions capable of
producing results.”
Thus being said, user innovation and entrepreneurship is an important phenomenon,
which competes with and may displace producer innovation in many areas (Baldwin & Von
Hippel, 2011). Although, there is a growing interest in this field we know very little about its
applicability in the developing economies. The body of research to date has focused almost
entirely on developed economy settings (Enos, 1962; Knight, 1963; Freeman, 1968; Von Hippel,
1988, 2005; Shah & Tripas, 2007).
Innovation is simply defined as a new way of doing something. It may refer to
incremental, radical and revolutionary changes in thinking, products, processes or organizations.
A distinction is typically made between invention, an idea made manifest, and innovation, ideas
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applied successfully. Innovation is also viewed as the tool or instrument used by entrepreneurs to
exploit change as an opportunity.
Von Hippel's (1988) defines user innovators as a firm or individual that creates an
innovation to use it. For example, a surgeon inventing a new medical device for medical use.
Studies in many fields have documented the importance of user innovation. As an example, user
firms in oil refining, science, semiconductor processing and sports equipment have been found to
have innovated a great majority of innovations (Enos, 1962; Von Hippel, 1976; Hippel, 1998;
Hienarth, 2006). In Britain, user firms mostly innovated in-house usable inventions. Other
empirical studies revealed that 6% to 40% of users develop and modify products (Baldwin &
Von Hippel, 2011). This highlights the fact that users are developers of a significant number of
innovations that exist in the world today. A particular argument that has surfaced posits that
traditional producer model of innovation is turning into a user-centered, open collaborative
model thus reflecting the needs of a larger population (Baldwin & Von Hippel, 2011; Von
Hippel, 1986).
Drucker identified two main options for innovation to occur. Disruptive innovation and
systematic innovation. The former involves improvement of a product or service in ways that the
market does not expect (e.g., lower prices, designed to appeal to a new customer, etc.) by
intimidating existing market leaders because they represent competition coming from an
unexpected direction which is a long practice of recognizing radical technical change. The latter
is based upon the concept, “accidents happen.” Popular innovations discovered by accident
include cellophane, Cornflakes, nylon, penicillin, Teflon and so many more.
ENTREPRENEURSHIP
We define user entrepreneurs as firms or individuals that initially create an innovation for
their own use and then later commercialize the innovation for sale in the marketplace. The
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conventional understanding of entrepreneurship suggests that recognition of a commercial
marketplace opportunity precedes prototype development (Venkataraman, 1997). In contrast, the
emerging literature on user innovation and entrepreneurship suggests that the process can be
reverse. That is, user entrepreneurs first develop prototypes and subsequently recognize the
commercialization potential of their product or service (Shah & Tripsas, 2007; Haefliger et al.,
2010). User innovators develop this insight into commercial potential by using and gaining
experience with the product or service they have developed for their own use (Haefliger et al.,
2010).
Shah and Tripsas (2007) classify user entrepreneurs as professional-user entrepreneurs
and end-user entrepreneurs. Professional-user entrepreneurs are individuals who use a
product/service in their professional lives while remaining embedded in the organization. And
end-user entrepreneurs are those individuals who use a product/service in their daily life and then
commercialize it. Professional-user entrepreneurs have been studied in the ice-harvesting
industry (Utterback, 1994) and in probe microscopy (Mody, 2006). End-user entrepreneurs have
been studied in rodeo kayaking (Baldwin et al., 2006), mountain bicycle (Luthje et al., 2005),
and automobile industries (Franz, 2005), among others.
Three main conceptual approaches to entrepreneurship are found in the literature. The
first, a functional approach, is concerned with the dynamic actors that make key decisions on
investment, production, innovation, location, research and development. From this perspective,
entrepreneurship is a psychological trait referring to dynamism, creativity and originality. This
approach also includes managers of multi-national firms, state enterprises or non-profit
organizations, and a variety of dynamic entrepreneurs within organizations.
The second approach focuses on the firm as the key economic actor. The firms included
here are owner-operated firms, incorporated joint stock companies, state-owned firms’ joint
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ventures and subsidiaries of multinationals. These firms are the units that make the key decisions
on investment, on branching into new activities or sectors, or relocating to other countries. There
exists a large literature on firm-level behavior in developing countries which examine firm
characteristics, including their economic performance, innovative performance, capabilities and
business strategies.
The third conceptual approach focuses on owner-operated enterprises. Within this
approach, the entrepreneur is the person who is both owner and is actively involved in running
the business. This relates to mainly small and medium-sized enterprises (SMEs), start-ups and
self-employment.
INDUSTRY STRUCTURE & SIZE
One strand of entrepreneurial economics looks at how differences in regional
characteristics and preconditions influence entrepreneurship. Low transportation costs,
concentration of human capital and extensive R&D activities together with availability to
financial capital, seems to be the most critical factors. Population demand, employment and
income growth are also important determinants of entrepreneurship (Acs & Armington 2002).
In terms of the industry level the most prominent factors that have been identified to
impact entrepreneurship are the level of profits, entry barriers, level of demand, and the extent of
agglomerated or urbanized production structures (Reynolds, 1992; Reynolds & Storey, 1993).
There are mixed results for different variables in different countries but basically profits,
industry growth and industry size are positively related to startups while increasing capital
requirements and need for product differentiation seem to negatively impact entrepreneurship.
In terms of human capital, education shows up as one of the fundamental variables
explaining entrepreneurship (Evans & Leighton, 1990; Kim et al., 2006). Overall, the likelihood
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of becoming an entrepreneur is strongest for skilled individuals. Human capital signals quality,
works as a sorting mechanism, helps overcome barriers in obtaining credit/equity, and improves
network forming. Social networks can in turn be expected to reduce transaction costs
(Williamson, 1971). Regulation as such has been shown to influence entrepreneurship and size
of startups (Ciccone & Papaionnou, 2006, Ardagna & Lusardi, 2009).
Particularly detrimental effects are attributed high startup costs (Fonseca et al., 2001,
2007). Glaeser and Kerr (2009) presents regional evidence that cost levels are one of the major
impediments to entrepreneurship, while Gordon (1998), and Cullen and Gordon (2007),
conclude that higher taxes have a distinct and significant negative impact on entrepreneurship.
Moreover, indirect effects have been reported through the effects of taxes on wealth formation
(Evans & Jovanovic, 1989; Banerjee & Newman, 1993). Individual wealth has been shown to be
a robust predictor of the probability of starting a firm.
INDUSTRY GROWTH RATE IN THE 21ST CENTURY
With the proliferation of elaborate think tanks and R&D facilities overseas, it is evident
that companies today are striving for an innovative climate. Yet, based on a comparative study of
innovation practices, the practice of innovation is not without its extreme challenges. (Harper &
Becker, 2004). Using a series of interviews with corporate executives and senior innovation
officers in four of the largest Chicago-area, publicly traded companies (Chicago Tribune Top 50
List, January 2003) and one government agency, the study found that there is a key difference
between those companies that referred to their culture as “highly innovative” and those that did
not. All of the highly innovative companies had innovative processes in place. While each
process had its strengths and weaknesses, the simple act of articulating a process was enough to
communicate the importance of innovation to the whole company.
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In the book, Webs of Innovation: The Networked Economy Demands New Ways to
Innovate author Alexander Loudon (2001) argued that even during recessionary times, the need
for innovation persists. He recommended a concept of “networked innovation” as the way to
help corporations adapt to carrying out innovation in the Information Age. Companies with
ongoing commitment to innovation, he noted, are both able to take greater advantage of new
markets and opportunities during boom times, and to maintain and grow existing business during
downward cycles. Companies that don’t take charge of their innovation processes cannot expect
to profit from innovation, he concludes.
NATURE OF PARTICIPANTS & SUCCESS FACTORS
Ranked by number of start-ups, the top three countries are the United States (#1), Israel
(#2), and Switzerland (#3). The innovative strengths and challenges of three distinctive
countries, all with comprehensive ratings within the GII’s top 20, provide further insight to
innovation and entrepreneurial potential in the global marketplace.
Beginning with an analysis of the United States its major strengths are; a strong
environment for innovation, superiority in exploiting this environment, constantly building on its
human capital, top thinkers in universities and research sectors, generous funding opportunities
and aptitude at deploying technology. In terms of challenges, the United States; must stay aware
of global landscape changes as China and India emerge as economic powers, needs to produce
more scientists and engineers from within, must improve the quality of an aging communication
and transportation infrastructure and tends to exhibit hostility since 9/11, which shows through in
diminished enthusiasm when welcoming newcomers.
Looking at Switzerland, the country’s strengths are; innovative performance has been
amongst the best, occupies a top position in knowledge-intensive market services which attracts
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many people trained in science and engineering, has a very strong basic research capacity, public
funding is widely available. Some of the barriers the Swiss are working on removing include
lack of innovation education, excessive regulation and risk-aversion. Other challenges include;
innovative performance has weakened in recent years, increased globalization of R&D, boosting
innovative capacity of SMEs and removing obstacles to their growth, tertiary education
participation is very low meaning reforms to university system are necessary and falls short with
respect to academic staff.
Moving on to Israel, a country that faces warlike conditions daily, with little hope of
resolve yet, that seems only to drive its motive to innovate. The country’s real strength is in
developing cutting edge products that are also creative. They set up small companies and work
effortlessly to make it profitable for five to six years, only then to move on to a new project.
Other innovative strengths characteristic of Israel include; supportive of risk-taking with a
powerful drive to succeed, highest number of engineers per capita, powerful economy from the
ground up, pioneering technology sector – boasting the highest concentration of high-tech
companies in the world outside of Silicon Valley, strong ties to Silicon Valley and U.S. academic
and research institutions, successive governments have invested in education, fostered the
highest R&D spending of any industrialized nation, developed effective investment incentives.
One of the best moves Israel could make right now would be to focus on narrowing the time gap
between R&D and final product. Other innovative challenges include; political situation drags
down competitiveness rating, sales, distribution and marketing capabilities are weak and no
domestic markets for its products as majority of sales are abroad.
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INDUSTRY TRENDS
Innovative performance has been measured in a variety of ways: using patents,
trademarks, R&D inputs and other secondary indicators such as publications or citations. Since
the 1980s, increasing use has been made of innovation surveys amongst firms. The main focus in
most innovation surveys is on technological innovations resulting in new products or new
production processes.
Measuring innovation performance internally, nationally and/or globally is a prudent
method for determining the rights and wrongs of innovation strategy and for determining under
what conditions the strong companies thrive.
LONG-TERM PROSPECTS
Based on the current information available, innovation and entrepreneurship will
continue to expand in the future across borders, because of the existence of these six
circumstances: global market conditions, entrepreneurial mindset, eroding confidence in
established institutions, shifting business environment, international collaboration and
environmental/technological advancements.
In terms of global market conditions trade barriers are easing, economies are
interdependent and communication via the Internet has never been easier or more accessible.
These conditions drive political reform, cultural transparency, social progress and a great deal of
wealth creation. The entrepreneurial mindset which is the ability to see, understand and take
advantage of evolving markets using insights, seeing what others don’t, envisioning what doesn’t
yet exist and identifying opportunities when it’s ripe are the prized qualities of today’s
entrepreneur.
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Thirdly, eroding confidence in established institutions as a result of the recent world
economic meltdown refers to diminishing confidence that most people had in governments and
large enterprise banks and other financial entities. The resulting mistrust will lead to reinventing
ourselves as individuals, communities, countries and societies. As such, many more
entrepreneurs will be joining the field. Furthermore, the shifting business environment to
accommodate the needs of its rapidly changing market players ensures that innovation and
entrepreneurship are beginning to flourish around the world and will likely take the form of
much smaller, yet bolder companies.
Also, on a global scale, there will be more entrepreneurial collaboration, which in turn
will make shared innovation between countries a far more common occurrence at the company to
company level – not just at universities and research institutions. One of China’s approaches for
creating an innovative nation is the Technology Business Incubator (TBI). China’s mission is to
nurture “technopreneurs” and technology-based start-ups. Business incubation is considered a
viable option for countries that want to expand economic opportunities. Finally, a growing
consciousness about the value of protecting our world will fuel the demand for products and
services that can accomplish this goal. According to Drucker, innovation and entrepreneurship
will adapt to accommodate the changing focus of living a better life, doing good, saving the
planet and making money. It is going to be about building a better world and a better life through
innovation with a purpose.
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MARKET ANALYSIS
MARKET SIZE
Ecowave Enterprise will target on two groups of market. One which is called as the “the
need market”. The need market consist of four types of groups, fashion designers,
architects/interior designers, creative people and students. On the other hand, we classify as “The
Fun Market”. The fun market we indicate that people purchase the product not for their needs,
but as for present to someone else. Based on Malaysian population for 2015, shows that
Malaysia consists of 31.027 millions of people. While the percentage of Malaysian age structure
distribution for population between 15 and 64 years old with the absolute figures estimation:
Table 1: Number of Malaysian population between male and females age 15 to 64 years old
The total population for male and female age range 15 to 64 years old is about 2 million,
with the distribution 1.017 million males and 0.987million female. The age group chosen 15 to
64 years old due to the target market defined; which we classified as the need market and the fun
market. These two groups age majority fall under between 15 to 64 years old.
Male
• 10.17 Million
Female
• 9.87 Million
Total population Age group of 15-64 Years Old
•20.05 Million
•65.4 % of total Population
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Table 2: Malaysian Population Pyramid 2015
Based on the table 1 and 2, it indicates that the population male and female ranges from
15-64 years are dominant which 64 years old. The age structure of the population tells that these
countries would invest more on school and learning tools which would be such a good
opportunity for Rocketbook compared to a countries that citizenship majority who is more on
pensioner age, as they would spent much on health more than spending on educational . Table 2
illustrates the age and sex structure of a country`s population with the male and female when
males are place on the right and females on the left. The genders have been broken down into 5
year age of groups represented along horizontal bars and the vertical axis with the youngest age
groups at the bottom and the eldest at the top. The shape of population pyramid gradually
evolves over time based on fertility, mortality and international migration trends.
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POTENTIAL GROWTH
The population was estimated to be 30.6 million as for January 1, 2015. Results shows
the increase of 1.58% (0.475 million people) compare to the population 0.301 million previous
year of 2014. Therefore it is going to be projected with the same increase by 0.482 million
people and reach 0.311 million in the beginning of 2016. The natural increase will be expected
the same, if the number of birth exceeds the numbers of death and the numbers of migration
decreased. With these numbers of increasing it also shows that, there is a potential for
Rocketbook to grow.
TARGET MARKET
From the table we could see that there is not much percentage different between male and
female population with range of 25% only by each. It shows that Malaysian had a balance of
male and female ratio and the target market that we approach had the largest group of population
with 65.4%. We have choose the range age from 15years old until 64 years old as they are the
generation who have used or own smart phones as well as know how to operate microwave.
Furthermore this range of age is the populations that have the buying power and ability to
purchase the product. Below is the list of target markets and top ten of company that perform in
their industries.
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The Need Market:
Table 3: Showing the top 10 of College/Universities, Fashion Designers, Architect/Interior,
Designer and Creative people in Malaysia
Fun market:
Others as known as the fun market, when it is projected as the alternative market.
Considerable that Rocketbook is edgy and as the new trend of notebook now days, people might
buy it for fun and as for ideal gift to someone else. This target market are large and it could be by
anybody that interested to buy it not for themselves, but as a present to someone else, compared
to the need market that going to used the product for their needs.
Basically the targeted end user around age 15-64, literally a person can operates and have
smart phones, so they can organized they daily task in life ranging from school children to the
university undergrads, corporate people, creative people and even anybody that need to organize
they daily life. Also they been by categorized by two subjects which is the need market and the
fun market.
College/Universities
•Universiti Sains Malaysia
•Universiti Malaya
•Universiti Teknologi Mara
•Universiti Teknologi Malaysia
•Universiti Putra Malaysia
•Multimedia University
•Help University
•Universiti Kuala Lumpur
•Taylors University
• INTI International University
Fashion Designers
•Bernard Chandran
•Dexter Wong
•Edmund Ser
•Farah Khan
•House of Toi by Zang Toi
•Jendela KL
•Jimmy Choo
•Lewre
•Melinda Looi
•Salabianca
Architect/Interior
•Eleena Jamil
•Lim Teng Ngiom
•Ng Sek San
•Che Wee Boon
•Hijjas Kasturi
•Paul&Pris
•Fusionwave
•Studio Bikin
•Jurema Creations
•Lain
Creative People
•Maximus
•VJG Interactive
•Bike Bear Sdn Bhd
•Optima Innovations
•MAD Technologies
• I Concept Solutions
•OrangeSoft Web Design
•ezzWeb Design
•Elite Web Solutions
•NetBuilder(M) Sdn Bhd
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TARGETED MARKET SIZE
For the purpose of this business plan, we will focus on a total market size of the age
group 15-64 years old out of the total 2015 Malaysian population which accounts about 20.25
million people.
Graph 1: Number of target markets for the Need Market and Fun Market
From the percentage given, we could see that the need market hold the biggest percentage
with 66% from population given (Refer graph 1 for illustration). While the fun market hold 34%
as they are the consumer that have the purchasing power as well. They all could be classifying as
the professionals, managers, executives and businessman. With the needs that we created
together with the spending power of Malaysian, Rocketbook could secure a place in the
Malaysian market.
202468.82 10%
526418.93 26%
263209.47 13%
344196.99 17%
688393.99 34%
Target Market
Students
Designers
Architects
Creative People
Others
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COMPETITION
Since Rocketbook is the pioneer and the first company in the world ever that producing
Cloudy-Ready Microwavable Notebook, we will develop the brand image and market
positioning primarily through the product itself. We will focus our competitive review on that
segment of the market. Our market positioning will be in the affordable price compared to other
storage gadgets option. Our primary competitors are Tablets and Smartphones.
Tablet
A short form name for tablet computer, which is a mobile computer with a touch screen
display and a battery in a single device when it is functioning as a general purpose computer
contained in a touch screen panel, although as started it has used pen or stylus as device, but now
a days the product no longer used and solely rely on touch screen. As it started back in 2000,
Microsoft has introduced a tablet version of Windows, but not been used widely until Windows 8
started in 2012. Meanwhile in 2010, Apple`s iPad has created a tablet revolution as dramatic it is
with iPhone .However Android tablets has surpassed and giving hard times for Apple`s by giving
to consumer the similar products with more affordable price. As similar to smart phones, tablet
does comes with a web browser and a variety of installed apps free or paid available in vendor
store.When people can access and manage their task with it, when it comes bigger in size
compared to smart phones, but cannot access to telecommunication lines and it does not give the
feeling of using traditional book and at the same time having things organize well, lack of human
touch.
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Table 4: Market Share for Tablets Vs Smartphones for Samsung and Apple
Table 4 shows the percentage of two different competitors of Tablet sales in Malaysia. As
the penetration rate of tablets continues to rise, although not rapid as that of smartphones, the
large screen size has added better experience to the user but with the price point comparatively
higher than smart phones which would have equal or better overall specifications and features.
Samsung has still remain the dominant in market share 26% compared to Apple`s hold 23%
Samsung maintain the number of sales with more than RM43 thousand per month while Apple`s
hold more than RM38 thousands per month. Samsung remain the numbers by providing faster
and easier technology while Apple`s offering their products towards certain target market.
Overall by looking at the market percentage share of both competitor products in
Malaysia market it does show that these two products have their own stability in the market.
Upon that however these products also have disabilities that can’t compensate the weaknesses;
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Tablet Smartphones
23%
11%
26%
28%
Samsung
Apple
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therefore Rocketbook would fulfill the needed hole in order to complete the cycle of humans
need.
Smartphones
Smart phones does refer to a multi functional mobile handset that pack in everything
from a camera and a web browser to a high density display, together with other some key smart
phones features included storage space, microSD card slots to allow you to upgrade further and
touch screen interfaces as we can access to the great functions to handset quickly and easily.The
powerful micro processors and advanced operating systems allows smart phones run smoothly
for users experience. Some of the operating systems such as Symbian OS from Nokia, iPhone
OS from Apple, Android from Google, Blackberry OS from Research In Motion(RIM) and
Windows Phone from Microsoft. The apps that is build in or can be purchased such as calendar,
cloud storage and others does helps user in organizing their task, however with limited screen
and inhuman touch, decreasing the mental capabilities for human to sketch, draw and brainstorm
their ideas, though the future of smart phones is expected to see the rise of 3D phones that comes
in slimmer, slicker dimension.
Therefore, although there is an advantage here and there towards smart phones and
tablets, however the limitations towards human touch make it less efficient towards the needy
people especially people in the creative industry. With the positioning and market research,
tablet and smart phones has their own strength towards market share in the industry. Below are
the description of market share smart phones and tablets in Malaysia.
Table 4 showing the comparison of two competitors that hold the highest market share in
Malaysia, with Samsung monopoly the highest market of 28% followed by Apple`s that only
hold 11% of market share with more than RM700 thousands sold for every month and while
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Samsungs hold it with record of more than RM1 millions products sold per month (mchoong,
2015). Samsung has remain the sales due to the products that is affordable in price and move so
well into the market, while Apple`s maintaining their brand image. (Refer Graph 3 for better
illustration of percentage)
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BUSINESS DETAILS
OVERVIEW OF BUSINESS
Founded in October, 2015 our company aims to provide new innovation experience into
Malaysia and later into ASEAN region. The nature of business is to become the technology
innovator in digital industry through Rocketbook which is will be our first product. For this time
being, we are just dirstributing the supplier’s product within Malaysia. Moving forwards, inline
with our country mission to embark upon a new phase of development towards realizing its
aspiration of becoming a developed nation by 2020 AND to promote Malaysia’s innovations
globally, we will explore and invest further in R&D which is focusing in latest technology for
our own product development.
COMPANY NAME
The name of the company is Ecowave Enterprise. The name was inspired from ‘Eco’
which is means not harmful to the environment, safe towards our ecosystem. While “Wave’ is a
short sentence of the microwave.
MISSION
Ecowave Enterprise mission is to deliver the quality product, cause no unnecessary harm,
use business to inspire and implement solutions to environmental crisis. The product will
innovates with a technology platform that does some amazing things where as nobody will notice
its technology. People will be amazed because it is simply do what comes naturally. We also
strive by our commitment to deliver to our customer an extraordinary experience. We take an
active, responsible role in the community to become valued entrepreneurs.
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VISION
“Inspired people through innovations”
GOALS & OBJECTIVES
This business plan serves to detail the direction, vision, and planning to achieve our goal to be
sole distributor to market Roacketbook in Malaysia industry. Our plan objectives are:
• Attract RM 100,000.00 revenue within 6 months
• Focus ideas and establish goals
• Identify and quantify long-term expansion
• Track and direct growth
• Create benchmarks for measuring success
COMPANY INFORMATION
REGISTERED NAME OF COMPANY ECOWAVE ENTERPRISE
REGISTRATION NO SA0181317-A
DATE OF INCORPORATION 14th October 2015
CONTACT DETAILS T: 03-74935050 F: 03-79435000
WEBSITE www.ecowave.com
EMAIL [email protected]
SHARE CAPITAL Authorized Capital: RM 100,000.00
BANK Maybank Berhad
ASSOCIATE LAWYERS Bernard Chandran Partners & Co.
SUBJECT PROPERTY Virtual Office
Unit I-01-05, Level 5,
Block I,
Setiawalk Persiaran Wawasan,
Pusat Bandar Puchong,
47160. Puchong.
Selangor. Malaysia
Storage Room
No. 144, Jalan
Segambut,
52100 Kuala Lumpur,
Malaysia.
Table 4.1: Company Information
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DATE OF COMMENCEMENT
Ecowave Enterprise Company was registered to Companies Commissions of Malaysia
(Suruhanjaya Syarikat Malaysia) as a Partnership on 14th
October 2015.
FORM OF BUSINESS
Our form of business is partnership between five founding partners. We choose
partnership for the following reason:
two heads (or more) are better than one
easy to establish and start-up costs are low
more capital is available for the business
greater borrowing capacity
partners’ business affairs are private
there is limited external regulation
it’s easy to change legal structure later if circumstances change.
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SSM BUSINESS REGISTRATION CERTIFICATION
Figure 4.2: Company SSM Form
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MANAGEMENT TEAM
Figure 4.3: Company Matrix Organization Chart
TASK & RESPONSIBILITY
Designation Responsibilities
Director To lead development of company strategy
To lead and oversee the implementation of the Company’s long and short
term plans in accordance with its strategy
To ensure that expenditures of the Company are within the authorized
annual budget of the Company
To assess the principal risks of the Company and to ensure that these risks
are being monitored and managed
To ensure effective internal controls and management information systems
are in place
to ensure that the Company has appropriate systems to enable it to conduct
its activities both lawfully and ethically
Marketing & Sales Finance & Tax
Operation, Logistic & Procument
Legal
Director
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Sales &
Marketing
Manager
To carry out market research to gain a clear understanding of what an
organization's customers really want.
To develop marketing strategies for their organizations
To perform the function of championing customer relationship management
in the organization
analyse market trends with an aim of identifying unexploited or new
markets for the organization's products and services
To Maintains sales volume, product mix, and selling price by keeping
current with supply and demand, changing trends, economic indicators, and
competitors
Finance
Manager
Allocating the financial resources of a company in a way that maximizes its
wealth and profitability.
Providing and interpreting financial information, monitoring and
interpreting cash flows and predicting future trends;
Analyzing change and advising accordingly, formulating strategic and long-
term business plans.
Managing a company's financial accounting, monitoring and reporting
systems
To develop external relationships with appropriate contacts, e.g. auditors,
solicitors, bankers and statutory organizations such as the Inland Revenue;
Operation
Manager
Operations managers play a key role in budgeting, controlling costs and
keeping the organization on track financially. Their management of the
supply chain and other resources helps minimize costs of production
The operations manager also helps plan and coordinate activities between
various departments such as determining what types of sales promotions the
company will engage in.
To communicate with other management within the organization to keep the
company running smoothly, and communicating with other companies and
organizations with which the company does business
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Legal
Manager
Preparing subpoenas and other legal documents
Handling legal research
Preparing memos and other correspondence
Creating client files
Table 4.4: Company Job Description
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PRODUCT
The Rocketbook System is a combination of a customized notebook and a mobile
app. Use the notebook to write notes and create designs using pen and paper. Then, use the app
to effortlessly blast them in to the cloud perfectly organized inside your online services, such as
Dropbox or Evernote. Each page is processed for quality and then sent to the specific destination
that you indicate by marking an icon on the bottom of each page. The Rocketbook notebook
contains unique pages that allow for easy organization in the cloud. The pages all feature a dot
grid pattern that allows for true creativity and are great for writing text notes, sketches, and
designs.
Figure 4.5: The Rocketbook Wave
The cover of the book is enforced by a carbon bonding with hydrogen material known as
polypropylene(thermoplastic fiver reinforced composite) which able to withstand high melting
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point up to 320ºC, does not absorb water, light weight and flexible. Rocketbook Wave papers are
made of acid free, fine grain material which uses 100% recycle paper pulp. Applying the
“Rocket” technology, the paper is made reusable and erasable without being yellow and brittle
over time. . With your notes stored safely in the cloud, and when you use Pilot Frixion pens, you
can erase the information in the Rocketbook using your microwave oven as the book withstands
temperatures up to 250ºC leaving the book safe to be used in microwave. There is also an
attached polypropylene heat indicator which turns from blue to white once done microwaving.
Figure 4.6: Pilot Frixion Pens
Even more, when you use Rocketbook wave with Pilot FriXion pens, you can erase your
entire Rocketbook by heating it in a microwave oven. This way you can enjoy a fresh new
notebook over and over again. The binding on the Rocketbook is made from microwave-
friendly polypropylene so there won't be any sparks. Each Rocketbook wave comes with one
black FriXion pen.
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The seven icons at the bottom of each page are the magic “buttons” behind Rocketbook’s
quick and easy cloud organization. You assign each icon to the place of your choice, any folder
inside Dropbox, Evernote, Google Docs, OneNote or your email address. Then, you simply
launch the Rocketbook app on your phone and hold it over each two-page spread of the
notebook. The app automatically captures the pages and loads them to the places in the cloud
you've designated. There's no need to click any capture button; the app does it thing
automatically as you flip the pages. This unique notebook is perfectly suits for the boardroom,
classroom, art studio and more. It is the size of a traditional sheet of paper, and is compatible
with any traditional pen.
Figure 4.6: The Rocketbook Wave Technology
The ability to erase your Rocketbook Wave is ideal for busy and creative people who
might fill up their 100 pages. With little effort, users can easily send each page to the cloud and
then microwave Rocketbook and begin filling it again.
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.
Figure 4.7: The Rocketbook Wave Editions
Using patent-pending image capturing technology, the Rocketbook app is able to
accurately and quickly convert your handwritten notes and drawings into digital images and store
them in predetermined cloud locations. The app is available for Apple iOS and Android.
Using the Rocketbook app, which comes free with any Rocketbook purchase, you may
also scan in non-Rocketbook pages but performance may be limited.
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Figure 4.8: The Rocketbook Wave Application
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MARKETING PLAN
HOW WILL YOU REACH YOU CUSTOMERS AND YOUR SALES GOALS ?
Marketing Plan:
A comprehensive blue-print are determined by the organization that will implement the
strategy and tactics from the marketing mixed of four P`s (Product, Place, Price, Promotion) and
together by data collected from the market survey will determined the marketing plan
Meanwhile we also conducted an online survey in order to indicate product demand from
consumers. Based from that information we will determine our marketing plan based on the four
P`s (Product, Place, Price, Promotion).We also projected forecast sales for the first year of
2016.As the number started from 100 units and increasing for the first quarter until month of
march 2016.However second and third quarter expected to be saturated with decreasing numbers
from the first quarter and last quarter will boost back due to seasonal time such as Christmas
celebration. Total number of projected to be sold is 1800 products. The number of 1800 products
to be sold is determine due to first year of sales and from the respond of questionnaire collected
.With number of sample size of 196 by confidence level 95% and confidence interval 7%, data
collected indicated that 98.7% of population do own smart phones with 47.8% having
complication poor vision issue towards used of smart phones and 69.2% aware of “Computer
Vision syndrome” therefore 79.9% of sample population would consider to use re-usable paper
in order to save themselves from health complications. Furthermore 87.9% would choose to use
paper& pen in order to be creative with their drawings and sketches. From this information by
the law of demand and supply we choose to control the supply in order to create higher demand
in future and decrease our cost from purchasing supply in big amount. From the questionnaire
also indicates that 49.6% would spent RM150 on a paper/notebook/diary/organizer that can save
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all the hard-copy notes, organize it & structure according to your computer folders/e-filling (See
Exhibit 2 for better illustrations).From here it proves as well the law of demands that after all the
factors, if the higher the price of a good, the less demand people for the goods sold (Economics
Basics: Supply and Demand, 2015), as people would avoid spent on product that will forgo them
on other products that they value more (Economics Basics: Supply and Demand, 2015). Example
our products price couldn’t exceed higher than the price of a smart phones, although it is
considered as our competitor but the usage of smart phones are wider compared to Rocketbook
and it compliment both. Total revenue to be projected for the first year is RM360,000 with the
most increasing in first quarter the highest is RM90,000 month of march, after that market
saturated and decrease until third quarter and bounce back slightly on fourth quarter.
Meanwhile we projected in 5 years of plan every year would be increasing of 5% of
growth base on product demand using questionnaire collected by market surveys, budget and our
estimations.
MARKETING STRATEGY
Ecowave Enterprise will utilize a brand building and push strategy as the basis for
marketing plan. Our strategy is to develop Ecowave Enterprise as a sole distributor for a brand
that is edgy and hi tech as presented below:
1) Advertising print out/Leaflet
We will position our print media in the leading magazines such as Female
magazine, SME & Entrepreneurship magazine, B&1 magazine, Vision KL, CLEO, KL
Lifestyle, and Juice. These are the same publications retail buyers and trend analyst scour
to find emerging brands or trends. Advertising print out will focus on the uniqueness of
our product; both physically and emotionally. The product will speak to the lifestyle our
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target consumers aspire to have. Leaflet will explain our product and our philosophy in an
informative and interesting format and to create brand awareness in new market
2) Online and media social advertising
i. Sponsors & Banners Website
Sponsors banners would appear on search pages and on volunteer opportunity,
while banner advertisement would appear on above search results this opportunity
would bring more awareness to customers about Rocketbook
Placing our online advertisements on web pages such as Google, Yahoo
ii. Social platforms
Online advertising on Social Media such as Facebook, Twitter, You Tube,
Instagram, LinkedIn, Pinterest and We Chat are the most trending social platform
with millions of users and viewers per day
iii. Email
An introduction message on our product will be delivered straight to the
recipient’s inbox, where our consumer can absorb it in a relaxed setting.
iv. Endorsement
According to social bakers study, social media platform are heavily used in
Malaysia, these bloggers have millions of followers and using them as
endorsement is such a strategic way of low cost marketing with wide exposure.
Top bloggers Facebook in Malaysia will be chosen, since Facebook dominates as
a source of social traffic and sales when nearly two thirds of all social media visits
to Shopify stores comes from Facebook and average of 85% of all orders from
social media come from Facebook. Below are the the top 10 Facebook Page that
have more than million followers by August 2015:
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Pages Total Fans
PenMerah(dot)com 5408822
My Networks 4016958
Zizan Razak 3557338
Aaron Aziz 2768119
Lisa Surihani 2763013
Berita Harian Online 2731610
Oh Media Network 2568211
Scha alyahya 2465989
Roti Kaya 2263202
Yuna 1908033
Table 5: Facebook pages in Malaysia with the total number of fans August 2015
From the table it stated that most of pages were Malay ethnicity favorite’s artist and
Malays favorite blogs as well as newspapers. This could be due of total population of Malaysia
demographics that contains 50.1% were Malay, therefore although Malaysia is a multi racial
countries but dominant are Malays and we would like to target this group of market.
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3) Search engine
Explain our product and our philosophy in an informative and interesting format and to
create brand awareness in new market
i. Pay per click
Advertising fee would only pay when users click the advertisement, this method
are cost friendly as well and deliver stronger result
ii. Buffer
It would gather multiple of social platform in order to boost on marketing strategy
by managing the advertisement, this way will help us to schedule our post by
planning and automatically
MARKETING BUDGET
Marketing
Budget
Allocation Details Activity Allocation Budgeted
Cost (RM)
Advertizing 10% Printed Flyers 8% 1600
Magazine 2% 400
Online &
Social Media
Advertizing
80% Banners& Websites 20% 4000
Digital magazines 10% 2000
Facebook 10% 2000
Twitter 6% 1200
Youtube 10% 2000
Instagram 10% 2000
LinkedIn 4% 800
Pinterest 4% 800
We Chat 6% 1200
SEO (Search
Engine
Optimization)
10% Pay per Click 5% 1000
Buffer 5% 1000
Total 100% 100% RM20000
Table 6: The marketing budget for the business is as follows
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Graph 4: Marketing budget expenditure
The allocation given are based on priority as we believe to minimize the cost and
maximize the profits as possible (See Graph 4 for better illustrations).Furthermore with the mass
growing of social media and 96.7% of Malaysian population owned a smart phones, so budget
allocation are heavy on the social media advertisement instead with the fact of cost friendly and
effective results.
MARKETING MIX – PRODUCT, PRICE, PROMOTION, PLACE
Our strategy is to develop Ecowave enterprise as a sole distributor for a brand that is edgy
and hi tech as presented below:
PRODUCT
Continually develop and introduce an innovative product that benefited the consumer-
value proposition to the consumer. For example the next stage is incoming product called
Rocketboard to be implemented after the successful of Rocketbook
Advertizing 10%
Online & Social Media Advertizing
80%
SEO (Search Enginer
Optimization) 10%
Marketing Budget
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PRICE
Aside from our goal as to maximizing profits, we choose the price for our products based
on three things which are product quality, market share and were also taken look into sheer
survival. Were only offer quality product as we don’t want just to be the cheapest in market or
the highest in price but the product didn’t deliver well and will cost the brand image on long term
effect..Market share lead to network effect that will bring a huge impact on product demand and
revenue, in this case were holding on to smart phones and tablet market share, the more product
demand for these products, the more demand on our product as well. In this case we can save our
cost that contribute to price consideration. We also look into consideration on our price
competitors as well, example as follows:
Product Lowest Price(RM) Highest Price(RM)
Smart phones 500 4, 699
Tablet 439 4,899
Notebook planner 150 350
Table 7: Price comparison on smart phones, tablet and Notebook Planner
From table 7 it shows the price comparison on smart phones and tablet in Malaysia, with
the indication of lowest price for smart phones is RM500 and can go up to RM4,699 per piece,
while tablet started with the lowet price RM439 and can go up until RM4,899 the highest based
on their storage and other functions to offer. The price range chosen on the best of smart phones
and tablets in market.
Based on table 11, price comparison showing that our product is still leading by offering
the lowest in market with price RM230 per unit. Although Notebook planner offer lower price
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than Rocketbook, however it does not offer the cloud storage system, which Rocketbook offer
both, traditional handwriting and cloud management storage with cheapest price.
PLACE
In order to decide where do our customers will look the product to purchase, we choose
online platform as a medium that is cost friendly and effective towards marketing prospective.
We used three allocation which are advertising, online & media social advertising and search
engine. This medium act as information and place for customers to purchase Rocketbook. From
here physical evidence will be collected through customers testimonials and act as viral of
mouth from a person to a person. By comparison, Online platform only needed RM14,300 per
year compared choosing flagship store or retail chain that cost starting from RM3500 and which
can go for up until millions of ringgit Malaysia. Virtual office and social platform will work as
sales force as well in order to maintain the rapport with customers
PROMOTION
In order to send the marketing messages to customers, we decided to throw some price
discount on seasonal time that will create enthusiasm towards customers and bring in more sales
and revenue income. Again we will reach the customers for our promotions based on the three
items which is advertising, online& social media advertising as well as search engine. The
promotions decided only to happened quarter per year .The promotions will be happened early
month of the year, during the saturation time and lastly seasonal end of year time. Promotions
plan for year as per below:
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Month Promotions Discount Price
Before(RM)
Offer price(RM)
January Buy 10 free 1 10% 230 Buy 10 free 1 item
July July Madness 8% 230 211.60
October October Fest 8% 230 211.6
December Combo deals 25% 230 172.50
Table 8: Selected monthly promotions
Table 8 shows allocation number of percentage of discount been offered according to the
selected month. The percentage given is by the discount piece of a product. We choose to have
buy in bulk promotion for the first month as to generates more sales for the first projection and to
boost 25% discount at the end of year in order to complete our projections for a year and
according to seasonal month as well create excitement for next year projection which is 2017.
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OPERATIONAL PLAN
OPERATION FLOW
Figure 6.1: The Rocketbook Wave Operation Flows
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SUPPLY CHAIN LIFECYCLE SCHEDULE
Stages Schedule
Import
1 Month
Clearing and Declaration
1 – 2 days
Transport to store
1 day
Stock in the storage and place on shelves for display
2 hours
Prepare for Distribution for order made
1 day
Re-stock when product in storage is about 30% of
original max storage limit left
1-2 months
Receive order from customer
1 day
Drop the product off to be delivered to the customers to
the post office or delivery service
1 day
Table 6.2: The Rocketbook Wave Supply Chain Cycle
MATERIAL REQUIREMENTS
As a sole distributor of the Rocketbook, we would not be in much needed of material as
we are mainly acting as a distributor of the product within Malaysia. For the beginning, we only
stock up the book at 2000 units. Following stock up will be depending on the growing market
demand.
MANPOWER REQUIREMENTS
Since we are focusing not to spend so much on the budget, there is no manpower are
required. The entire task will be done by the partners. We will be considering to hiring
manpower once our business achieves an steady order of 2000 units per month continuously.
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MACHINE AND REQUIREMENTS
Name Purpose
Computer System Would be used for our day to day operations, including, logging time
and reports from calls, inventory management, and schedule
appointments.
Web Site The sight would be a source for marketing as well as providing
customers with necessary information about both company and products
we have on promotion
Company Phone This would be used for keeping in touch with our customers and a source
of getting feedback from our customers. They can call in if they have
any questions.
They can also use this to book appointments, get support for items
purchased and also make orders.
Table 6.3: Company Machine & Requirements
BUSINESS LOCATION, FACILITY & EQUIPMENTS.
VIRTUAL OFFICE
Figure 6.4: Company Virtual Office Location
As a startup with limited funding, the constraint of having a permanent office has lead us
to an innovative solution of outsourcing. The result, a virtual office where it acts as our
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professional mailing address for the office with other vital amenities without being in a physical
manner.
Our virtual office is located at Setiawalk, Puchong. There are 50 office suites, each
equipped with the fastest fibre broadband and wi-fi internet bandwidth we will be able surf the
internet quickly or do video conferencing without lag as and when needed with our overseas
supplier. Strategically located Avenue Business Centre at SetiaWalk, Pusat Bandar Puchong is
well connected through a variety of methods including private transport from the Lebuhraya
Damanasara Puchong Highway (LDP) and via public transport.
Figure 6.5: Virtual Office Layout Plan
The physical place will only be used as and when required as to have a meeting and for our
corporate mailing address. We decided to choose this option as if to reduce our overheads and
operational costs associated with having one. As start-up, we don’t have the cash flow to make
big forward purchases. A head office setup can be extremely detrimental to cash flow but a
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monthly fee with a virtual office can help to spread the costs over a period of time. A virtual
office is also much cheaper than renting a physical office premises.
Figure 6.6: Virtual Office Facilities
Virtual Office:
Unit I-01-05, Level 5,
Block I, SetiaWalk Persiaran Wawasan,
Pusat Bandar Puchong,
47160 Puchong, Selangor, Malaysia
Facilities :
Corporate mailing address
Dedicated telephone line
Professional receptionists to answer your calls in
your business name
Personal mail handling
Use of center’s fax line
3 hours meeting room usage per month
(Mon- Fri, 9am-6pm only. Subject to
availability)
Free 15 hours access to business lounge per
month
Wifi Access
Table 6.6.1: Virtual Office Facilities
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STORAGE LOCATION & AREA
Other than our virtual office, our organization also rent an extra space in Segambut as our
product storage room. We found out that this idea is much more economical compared with
renting more office or shop space. As business look to trim expenses, extra storage services help
us to reduce overhead while keeping the professionalism and keep the expenses to a minimum.
Figure 6.7: Company Storage Location
Figure 6.8: Extra Space Building
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Figure 6.9: Company Extra Space Storage View
Storage Room:
No. 144, Jalan Segambut
51200 Kuala Lumpur, Malaysia
Facilities :
Unlimited 24 hours x 7 days access via pincode
access
Round the clock security CCTV
Individually alarmed storage room
Free parking
Free use of trolleys and pallet jack
Table 6.10: Extra Space Facilities
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SUPPLY CHAIN STRUCTURE
The supply chain includes movement of product from our supplier Rocketbook in US to
us until it safely reaches our customer doorstep. It is also includes movement of information,
fund and product in both direction. As for Ecowave Enterprise, we are as a distributor company
that take inventory in bulk from suppliers and deliver a bundle of related product lines to
customers. We buffer the producers from fluctuations in product demand by stocking inventory
and doing much of the sales work to find and service customers. For the customer, we shall
fulfill the “Time and Place” function—to deliver products when and where the customer wants
them. In addition to product promotion and sales, other functions we perform are inventory
management, warehouse operations, and product transportation as well as customer support and
service.
Figure 6.11: Ecowave Enterprise Supply Chain Structure
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The supply chain process inclusive of three simple phases as follows:
Sup
plie
r •Ecowave receives Rocketbook from supplier below list price with certain volume fulfilled
Dis
trib
uto
r •Ecowave takes in bulk from supplier and deliver a bundle of related product lines to customers and will restock the product as and when necessary based on orders from customer.
Cu
sto
me
rs
•Customer may be the final end user of a product who buys the product in order to use it.
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FINANCIAL PLAN
This section is to describe the financial plan of Rocketbook for Ecowave Enterprise. The
analyses are being performed based on sales forecast and financial projections for 5 years; from
year 2016 to 2020. The financial plan gives an insight to potential investors and loaners whether
this business are able to make profit and should the business is viable and worth to be invested
in.
SOURCES AND USES OF FUNDS OF STATEMENTS
The equity investment for Ecowave Enterprise is contributed by each of the share
partners which had invested in RM 20,000 each. The remaining costs are being paid from the
bank loan. The amount of borrowings required is RM 200,000. Table 7.1 explains the amount of
borrowings required.
Start-up capital Cost (RM)
Equity investment (RM 20,000 each partner) 100,000
Borrowings required (Bank Loan) 200,000
Total 300,000
The result
Total set-up costs 242, 106
Surplus funds 57,894
Table 7.1: Amount of Borrowings Required
LOAN AMORTISATION REPAYMENT SCHEDULE
The amount of money borrowed from the bank (SME Bank) will be paid on monthly
basis for period of ten years. The bank interest is at 4% p.a. Total monthly repayment for
Ecowave Enterprise is RM2,024.91 (including interest and principal payment). The loan
amortization repayment schedule is shown in Table 7.2 in Appendix.
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ASSUMPTIONS SHEET
PROJECT IMPLEMENTATION COST SCHEDULE
Project implementation cost schedule describe the sequence of project implementation
plan and the related cost associated with it. Since the business of Rocketbook is a new entrant to
the market, more effort has to be put into the marketing and advertising campaign to introduce
the products to the potential customers. Ecowave Enterprise has identified five key activities in
sequence to start-up the business which is as follows:
1. Setting up the business
2. Setting up the premises
3. Plan and equipment
4. Setting up the storage space
5. Starting operations
1) Setting up the Business
The cost associates with setting up the business are presented in table 9.1.1.
Business registration, insurance premiums and licenses will be done via the Suruhanjaya
Syarikat Malaysia (SSM). A basic company website will be built for easy access of
customers and investors to browse about the products. At the initial stage, the business
does not require any full time workers. It is only being managed by the 5 partners.
Setting up the business Cost (RM)
Solicitor's fees 1,500
Business registration 71
Secretarial and professional fees 300
Company initial bank account opening - Maybank 2,000
Total 3,871
Table 7.3.1: Cost for Setting up the Business
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2) Setting up the Premises
Setting up the premises includes the lease deposit and advance virtual office
rental. Ecowave Enterprise rented a virtual office located at Avenue Business Centre –
SetiaWalk which cost RM 150 monthly. Ecowave Enterprise decided to pay the rental for
one year, and the rental cost have been fixed to RM1,300 for the first year of rental. The
cost will be assumed to increase per year. The package includes a corporate mailing
address, the use on the office facilities such as monthly usage of meeting room. All of the
costs are displayed in Table 7.3.2.
Setting up the premises Cost (RM)
3 months security deposit (refundable)
(Virtual office with monthly rental of RM150) 450
3 months advance rental 450
Sum of rental for the first 3 months due to start-up incentive 900
Total Rental for 1 year 1,300
Table 7.3.2: Cost for Setting up the Premises
3) Plant and Equipment
Ecowave Enterprise only rents virtual office for its operation which includes
facilities such as telecommunications tools and internet. The working partners are using
personal computers or laptops at the beginning of the business.
Plan and equipment Cost (RM)
Equipment (covered under virtual office rental) -
Computer and software (Partners property) -
Miscellaneous Deposit (Refundable) 100
Phone Line Activation (One-time charge) 150
Total 250
Table 7.3.4: Cost for Plant and Eqiupment
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4) Setting up the Storage Space
When the Rocketbook has arrived in Malaysia, it is important for Ecowave
Enterprise to store that product in a safe place. Ecowave Enterprise rents a storage space
for the Rocketbook at Extra Space. The place is located in Segambut and total for one
year rental has been fixed at RM685 due to Ecowave Enterprise decided to pay the cost
for one year rental storage.
Setting up the Storage Space Cost (RM)
Deposit (refundable) 102.00
1st month rent charge (incl. GST) 1.00
2nd
& 3rd
month rent charge (incl. GST) after 30.00% discount 151.36
Administrative Fee (incl. GST) 21.20
Insurance (RM1,000 coverage at RM3.18 per month incl. GST) x 3
months 9.54
Stamp Duty 10.00
Sum of rental for the first 3 months due to start-up incentive 295.10
Total Rental for 1 year 685.00
Table 7.3.3: Cost for Setting up the Storage Space
5) Starting Operations
Rocketbook products are being import directly from Cambridge, United States. In
order to have those products safely arrived in Malaysia, a few cost will incurred.
Ecowave Enterprise purchases 2000 units for the first to starting the operations. Once the
products is in hand, efforts are being focused on advertising and marketing to introduce
the Rocketbook to customers and markets, The costs of starting the operations are
displayed in Table 7.3.5.
Starting operations Cost (RM)
2,000 unit of Products (Rocketbook and Pens) with license @ 25USD
per unit (Conversion to RM4.30 x 25USD = RM107.50 per unit) 215,000
Miscellaneous 1,000
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Marketing and advertising 20,000
Total 236,000
Table 7.3.5: Cost for Starting Operations
In summary, Ecowave Enterprise requires a total of RM242,106 to start-up the business.
The next section explains the equity investment from the share partners and borrowings/funding
required.
SALES FORECAST
Sales at Ecowave Enterprise are planned to grow astoundingly from 2016 to 2020. Table
7.4.1 represents the number of unit and total sales forecast for the first 12 months. Total numbers
of projected products to be sold are at 1,800 units. In the first year of business operations, Eco
Wave Enterprise estimate to sell at 1,800 units even though the product been bought at 2,000
units, due to the assumptions of customer acceptance for a new product introduced in the market
with primary competitors of tablets and smartphones in the market as mentioned earlier. Balance
of the unsold units will be carried forward to the next year. Ecowave Enterprise expected an
increasing number of demands in the first quarter as per marketing plan to introduce the product
to the market, and started to stay static in the middle of the year. Sales are expected to boost back
during seasonal or festive season. Table 7.4.2 represents sales forecast of Ecowave Enterprise for
the next 5 years. Year-on-year growth is on incremental trend. This represents a phenomenal
growth rate per year for the first five years.
Month Sales Forecast
# Units Sales (RM)
1st
Yea
r
Gro
wth
Month 1 150 30,000
Month 2 300 60,000
Month 3 450 90,000
Month 4 150 30,000
Month 5 75 15,000
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Month 6 75 15,000
Month 7 75 15,000
Month 8 75 15,000
Month 9 75 15,000
Month 10 75 15,000
Month 11 150 30,000
Month 12 150 30,000
Total 1st Year 1,800 360,000
Table 7.4.1: Sales forecast for the first 12 months
Table 7.4.2: Sales forecast for 5 years
Number of unit purchased in the first 5 years is shown in the table 7.4.3 below. Product
purchased in the first 3 years is stagnant at 2,000 unit as there is balance of stock that is carried
forward in each year as the company purchase the product in bulk to get a cheaper price. In the
fourth year onwards, Ecowave Enterprise estimated to purchase the product more than the earlier
years as the demand has increased based on the historical number of unit sold year on year.
2016 2017 2018 2019 2020
Number of unit purchased 2,000 2,000 2,000 2,500 3,000
Total stock in hand 2,000 2,200 2,310 2,731 3,340
Number of unit sold 1,800 1,890 2,079 2,391 2,869
Balance brought forward 200 310 231 340 471
Table 7.4.3: Product purchased and stock in hand
Based on product demand obtain from survey conducted, a 5% growth increase is
projected as a long term goal (5 years plan). The total number of units sold in fifth year is 2,869
with revenue of RM573, 804.
5 Year Sales Forecast
Year Growth # Units Sales (RM)
1 1,800 360,000
2 5% 1,890 378,000
3 10% 2,079 415,800
4 15% 2,391 478,170
5 20% 2,869 573,804
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Graph 7.4.4: Forecast for number of units sold and revenue per year
INCOME STATEMENTS / CASH FLOW
Ecowave Enterprise profit and loss statement displays whether the intended business is
making profit or loss. The profit and loss forecast has been performed for 1 year and future
projections for 5 years; year 2016 till 2020. In determining the cost of goods sold, Ecowave
considered the cost incurred to purchase the Rocketbook for inventory. The import duties,
shipping cost and taxes were also included in the calculation of cost of goods sold and the cost
per unit is shown as below.
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Product Cost (RM)
Products 25USD
(Shipping cost, import duties, taxes and insurance
all included)
Malaysian Currency at RM4.30 4.30
Product/Good Cost per unit 107.50
One set of product will consist of one unit of Rocketbook and three units of Pilot Frixon
Pens. On the other hand, the selling price per unit is calculated based on the product cost per unit
with a margin of 54% on top of the product cost for mark-up price. The selling price for one set
of the product is at RM 230 including of RM30 for postage to customers.
For the income statement analysis, the numbers of goods sold are based on the sales
forecast discussed above. For year 2016, revenue growth is anticipated at 1800 units’ sales per
year. There are 200 units balance that will be brought forward to the next year and Ecowave
Enterprise will purchase another 2000 units to cater for the demands. For the following year,
Ecowave Enterprise anticipated to double up every year contributing to revenue growth for each
year. Table 7.5 explains the profit and loss statement for Ecowave Enterprise from the first year,
2016 until year 2020.
2016 2017 2018 2019 2020
Revenue 414,000 434,700 478,170 549,896 659,875
Cost of goods sold 215,000 215,000 215,000 268,750 322,500
Gross profit 199,000 219,700 263,170 281,146 337,375
Administrative Expenses
Secretarial and Professional fees 300 350 400 450 500
Bank Loan (10 years with 4% annual
interest) 24,299 24,299 24,299 24,299 24,299
Virtual office and extra space rental 1,985 2,285 2,585 2,885 3,185
Accounting & Audit Fee 3,000 3,300 3,630 3,993 4,392
Bank charges 7,000
Directors Remuneration 25,000 25,000 25,000 25,000
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36,584 55,234 55,914 56,627 57,376
Other Operating Expenses
Advertising and Marketing 20,000 15,000 10,000 10,000 10,000
Postage & telephone 57,000 59,700 65,370 74,726 89,071
77,000 74,700 75,370 84,726 99,071
Net profit 85,416 89,766 131,886 139,793 180,928
Table 7.5: Profit and Loss Statement for year 2016 until year 2020
BALANCE SHEETS
Ecowave Enterprise balance sheet displays the assets, liabilities, and capital of the
business for year 2015 till year 2019, detailing the balance of income and expenditure over the
preceding period. Since all of the equipment and office facilities are being rented by Ecowave
Enterprise, there are no fixed assets for the company.
As of for the first year of 2016, Ecowave Enterprise has recorded a good financial
position. These may be due to the company having no fixed asset in hands and only depends on
the cash and cash equivalents received from the sales of the products. The current liability which
is finance lease contributed only at lower cost of repayment for a year due to Ecowave Enterprise
having a long tenure of 10 years. At the end of financial year 2020, as shown in Table 7.6,
financial position of Ecowave Enterprise stood at 1.1 million. This is a positive sign for the
company and its business.
2016 2017 2018 2019 2020
Fixed Assets
Property, Plant & Equipment - - - - -
0 0 0 0 0
Current Asset
Cash and cash equivalents 385,416 457,047 591,775 785,426 1,020,575
385,416 457,047 591,775 785,426 1,020,575
Current Liabilities
Finance lease liabilities 18,135 17,451 18,162 18,902 19,672
Taxation - - - - -
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18,135 17,451 18,162 18,902 19,672
Net Current Asset 367,281 439,597 573,614 766,525 1,000,903
367,281 439,597 573,614 766,525 1,000,903
Financed by:
Capital and Reserves
Shareholder Capital 100,000 100,000 100,000 100,000 100,000
Retained earnings 85,416 175,182 327,361 539,173 793,223
Shareholder's Equity 185,416 275,182 427,361 639,173 893,223
Long Term and Deferred Liabilities
Finance lease liabilities 181,865 164,414 146,253 127,351 107,680
367,281 439,597 573,614 766,525 1,000,903
Table 7.6: Balance Sheet for year 2016 until year 2020
BREAK-EVEN ANALYSIS
The profit and loss statement gives an indicator of the gross profit margin and fixed costs
which are important to determine the break-even point of the business. The break-even analysis
as shown of Table 7.7 was used to determine the dollar sales and the number of unit sales to
break-even. As for the first year of business operated, monthly number of unit sales to break
even is at 150 units.
Break-even Analysis
Average selling price per unit RM 230.00
Average cost of each unit RM 107.50
Gross profit margin 51%
Fixed costs RM 113,584
Dollar sales to break even RM 414,000
Number of unit sales to break even 150 nos
Table 7.7: Break-even Analysis
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RATIO ANALYSIS
The financial ratios being analysed for Ecowave Enterprise which provides an indication
of the long term solvency of the company. For the purpose of these financial ratios, the data was
taken from the financial projections for the first five years.
2016 2017 2018 2019 2020
Working Capital 367,281 439,597 573,614 766,525 1,000,903
Liquidity Ratio
Current Ratio 21.25 26.19 32.58 41.55 51.88
Activity Ratio
Total Asset Turnover 1.07 0.95 0.81 0.70 0.65
Debt Ratio
Debt Ratio 4.7% 3.8% 3.1% 2.4% 1.9%
Debt to equity ratio 0.10 0.06 0.04 0.03 0.02
Profitability Ratio
Gross profit margin 48.1% 50.5% 55.0% 51.1% 51.1%
Operating profit Margin 42.9% 40.9% 50.1% 49.7% 53.6%
Net Profit Margin 20.6% 20.7% 27.6% 25.4% 27.4%
Returned on Assets (ROA) 22.2% 19.6% 22.3% 17.8% 17.7%
Returned on Equity (ROE) 23.3% 20.4% 23.0% 18.2% 18.1%
Table 7.8: Ratio Analysis
Current ratio indicates the financial health of the company whether the company has
enough cash on an ongoing basis to meet its operational obligations. As per Table 7.8, the figure
shows an increasing trend from 21.25 in year 2016 to 51.88 in year 2020. The cash and cash
equivalent of Ecowave Enterprise are high to support their operational need.
Total assets turnover ratio indicated how efficiency of the company in generating sales on
each dollar of their asset. An increasing ratio indicates that the company is using their assets
more productively. As Ecowave Enterprise having no fixed assets, its shows a reducing ration
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until year 2020, but the company recorded a high amount of cash and bank balances on the 5th
year projection.
Debt Ratio measures the extent of company leverage and can be interpreted as the
proportion of a company’s assets that are financed by debt. Ecowave Enterprise shows a reduce
percentage of ratio due to the company only having one finance lease liabilities throughout the
10 years tenure with lower financial risk.
Gross Profit Margin ratio use to measure how much profit is earned on the company
product without considering indirect cost. Ecowave Enterprise shows that it had a stable gross
profit margin for the past 5 consecutive years due to cost of goods sold incurred is lower
acceptable by the revenue the made. Operating Profit Margin ratio measures what percentage of
total revenues is made up by operating income. In other words, it demonstrates how much
revenue is left over after all the variable or operating costs have been paid. The ration shows a
good percentage from year 2016 until year 2020 due to the company only paid for the supply of
product at one time only for a year. Net Profit Margin ratio measures the company ability to
cover all operating costs including indirect costs. The ratio shows o positive sign which means
Ecowave Enterprise can cover all the expenses even though at a lower percentage of profit.
Return on Assets measure the ability to turn assets into profit. A low ratio compared to
industry mean that the competitors have found a way to operate more efficiently. Ecowave
Enterprise ratio shows a decreasing percentage throughout the 5 years projection. This must be
due to more competitors arrive and compete with almost the same product function. Thus,
Ecowave Enterprise will need to bust their marketing strategy to increase their return on assets
ratio. Return on Equity ratio is used by investor in measuring rate of return on investment. This
ratio measure whether the company making enough profit to compensate for the risk of being in
the business. Ecowave Enterprise shows a positive percentage of return even though at a lower
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percentage. This will make a good sense for investors to invest in the company to get some
return.
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APPENDICES
Table 7.2: Loan Amortisation Repayment Schedule
Month Beginning
Balance Interest Principal
Ending
Balance Month
Beginning
Balance Interest Principal
Ending
Balance
2015
Oct 200,000.00 666.67 1,358.24 198,641.76
Nov 198,641.76 662.14 1,362.76 197,279.00
Dec 197,279.00 657.60 1,367.31 195,911.69
2016 2017
Jan 195,911.69 653.04 1,371.86 194,539.83 Jan 179,144.14 597.15 1,427.76 177,716.38
Feb 194,539.83 648.47 1,376.44 193,163.39 Feb 177,716.38 592.39 1,432.51 176,283.87
Mar 193,163.39 643.88 1,381.02 191,782.37 Mar 176,283.87 587.61 1,437.29 174,846.58
Apr 191,782.37 639.27 1,385.63 190,396.74 Apr 174,846.58 582.82 1,442.08 173,404.50
May 190,396.74 634.66 1,390.25 189,006.49 May 173,404.50 578.01 1,446.89 171,957.61
Jun 189,006.49 630.02 1,394.88 187,611.61 Jun 171,957.61 573.19 1,451.71 170,505.90
Jul 187,611.61 625.37 1,399.53 186,212.08 Jul 170,505.90 568.35 1,456.55 169,049.35
Aug 186,212.08 620.71 1,404.20 184,807.89 Aug 169,049.35 563.50 1,461.40 167,587.95
Sep 184,807.89 616.03 1,408.88 183,399.01 Sep 167,587.95 558.63 1,466.28 166,121.67
Oct 183,399.01 611.33 1,413.57 181,985.44 Oct 166,121.67 553.74 1,471.16 164,650.51
Nov 181,985.44 606.62 1,418.28 180,567.15 Nov 164,650.51 548.84 1,476.07 163,174.44
Dec 180,567.15 601.89 1,423.01 179,144.14 Dec 163,174.44 543.91 1,480.99 161,693.45
2018 2019
Jan 161,693.45 538.98 1,485.92 160,207.53 Jan 143,531.79 478.44 1,546.46 141,985.33
Feb 160,207.53 534.03 1,490.88 158,716.65 Feb 141,985.33 473.28 1,551.62 140,433.71
Mar 158,716.65 529.06 1,495.85 157,220.80 Mar 140,433.71 468.11 1,556.79 138,876.92
Apr 157,220.80 524.07 1,500.83 155,719.97 Apr 138,876.92 462.92 1,561.98 137,314.94
May 155,719.97 519.07 1,505.84 154,214.13 May 137,314.94 457.72 1,567.19 135,747.75
Jun 154,214.13 514.05 1,510.86 152,703.28 Jun 135,747.75 452.49 1,572.41 134,175.34
Jul 152,703.28 509.01 1,515.89 151,187.38 Jul 134,175.34 447.25 1,577.65 132,597.69
Aug 151,187.38 503.96 1,520.94 149,666.44 Aug 132,597.69 441.99 1,582.91 131,014.78
Sep 149,666.44 498.89 1,526.01 148,140.42 Sep 131,014.78 436.72 1,588.19 129,426.59
Oct 148,140.42 493.80 1,531.10 146,609.32 Oct 129,426.59 431.42 1,593.48 127,833.11
Nov 146,609.32 488.70 1,536.21 145,073.12 Nov 127,833.11 426.11 1,598.79 126,234.32
Dec 145,073.12 483.58 1,541.33 143,531.79 Dec 126,234.32 420.78 1,604.12 124,630.20
2020 2021
Jan 124,630.20 415.43 1,609.47 123,020.73 Jan 104,958.53 349.86 1,675.04 103,283.49
Feb 123,020.73 410.07 1,614.83 121,405.90 Feb 103,283.49 344.28 1,680.62 101,602.86
Mar 121,405.90 404.69 1,620.22 119,785.68 Mar 101,602.86 338.68 1,686.23 99,916.64
Apr 119,785.68 399.29 1,625.62 118,160.06 Apr 99,916.64 333.06 1,691.85 98,224.79
May 118,160.06 393.87 1,631.04 116,529.03 May 98,224.79 327.42 1,697.49 96,527.30
Jun 116,529.03 388.43 1,636.47 114,892.55 Jun 96,527.30 321.76 1,703.15 94,824.16
Jul 114,892.55 382.98 1,641.93 113,250.63 Jul 94,824.16 316.08 1,708.82 93,115.33
Aug 113,250.63 377.50 1,647.40 111,603.23 Aug 93,115.33 310.38 1,714.52 91,400.82
Sep 111,603.23 372.01 1,652.89 109,950.33 Sep 91,400.82 304.67 1,720.23 89,680.58
Oct 109,950.33 366.50 1,658.40 108,291.93 Oct 89,680.58 298.94 1,725.97 87,954.61
Nov 108,291.93 360.97 1,663.93 106,628.00 Nov 87,954.61 293.18 1,731.72 86,222.89
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Dec 106,628.00 355.43 1,669.48 104,958.53 Dec 86,222.89 287.41 1,737.49 84,485.40
2022 2023
Jan 84,485.40 281.62 1,743.28 82,742.12 Jan 63,178.17 210.59 1,814.31 61,363.86
Feb 82,742.12 275.81 1,749.10 80,993.02 Feb 61,363.86 204.55 1,820.36 59,543.50
Mar 80,993.02 269.98 1,754.93 79,238.09 Mar 59,543.50 198.48 1,826.42 57,717.08
Apr 79,238.09 264.13 1,760.78 77,477.32 Apr 57,717.08 192.39 1,832.51 55,884.57
May 77,477.32 258.26 1,766.65 75,710.67 May 55,884.57 186.28 1,838.62 54,045.94
Jun 75,710.67 252.37 1,772.53 73,938.14 Jun 54,045.94 180.15 1,844.75 52,201.19
Jul 73,938.14 246.46 1,778.44 72,159.70 Jul 52,201.19 174.00 1,850.90 50,350.30
Aug 72,159.70 240.53 1,784.37 70,375.33 Aug 50,350.30 167.83 1,857.07 48,493.23
Sep 70,375.33 234.58 1,790.32 68,585.01 Sep 48,493.23 161.64 1,863.26 46,629.97
Oct 68,585.01 228.62 1,796.29 66,788.72 Oct 46,629.97 155.43 1,869.47 44,760.50
Nov 66,788.72 222.63 1,802.27 64,986.45 Nov 44,760.50 149.20 1,875.70 42,884.80
Dec 64,986.45 216.62 1,808.28 63,178.17 Dec 42,884.80 142.95 1,881.95 41,002.84
2024 2025 (End)
Jan 41,002.84 136.68 1,888.23 39,114.62 Jan 17,924.06 59.75 1,965.16 15,958.91
Feb 39,114.62 130.38 1,894.52 37,220.10 Feb 15,958.91 53.20 1,971.71 13,987.20
Mar 37,220.10 124.07 1,900.84 35,319.26 Mar 13,987.20 46.62 1,978.28 12,008.92
Apr 35,319.26 117.73 1,907.17 33,412.09 Apr 12,008.92 40.03 1,984.87 10,024.05
May 33,412.09 111.37 1,913.53 31,498.56 May 10,024.05 33.41 1,991.49 8,032.56
Jun 31,498.56 105.00 1,919.91 29,578.65 Jun 8,032.56 26.78 1,998.13 6,034.43
Jul 29,578.65 98.60 1,926.31 27,652.35 Jul 6,034.43 20.11 2,004.79 4,029.65
Aug 27,652.35 92.17 1,932.73 25,719.62 Aug 4,029.65 13.43 2,011.47 2,018.18
Sep 25,719.62 85.73 1,939.17 23,780.45 Sep 2,018.18 6.73 2,018.18 0.00
Oct 23,780.45 79.27 1,945.63 21,834.81
Nov 21,834.81 72.78 1,952.12 19,882.69
Dec 19,882.69 66.28 1,958.63 17,924.06
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Exhibit 2: Online questionnaire for product responses
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