Professional Documents
Culture Documents
Uttara, Dhaka
www.xpressconnections.com
Co- Owners: Sanwal Mofiz, Shamsul Arifeen, Nahidul Islam, Kazi Ishtiak Bin Yusuf,
Mohammad Tayub Ullah Khan & Faisal Hossain.
Description of business:
This business will provide internet connection through optical fiber cable networking to
consumers and businesses (Universities, corporate houses etc.) Initially this business will cover
in areas like Uttara, Tongi and Board Bazar (of Gazipur) as there is a huge demand of high speed
internet in these areas. The service will include internet connections ranging in different
bandwidth with a maximum speed of 128 kilo byte per seconds (Downloading). For consumers
and businesses this service will have different packages.
Financing:
Initially each of the co-owners of the business has invested 10, 00,000 (10 lakh BDT) and as a
result the total invested amount on this business is 60, 00,000 (60 lakh BDT). The capital
structure does not include any debt therefore.
This report is strictly confidential and is the property of the co-owners listed above. It is intended
only for the use by the persons to whom it is transmitted and any reproduction or divulgence of
any of its contents without the prior written consent of the company is prohibited.
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Table of Contents
Description of Venture…………………………………
………………...10
Service plan………………………………………………
……………………17
Marketing Plan……………………………………………
…………………23
Organizational plan……………………………………
………………….29
Assessment of risk………………………………………
………………….33
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Financial Plan………………………………………………
………………..33
SWOT analysis……………………………………………
………………….36
This report basically has all the information regarding the Internet Service Provider
named Xpress (Pronounced Xpress). Xpress ISP will provide internet connection through optical
fiber cable network using the VPN technology. The maximum bandwidth is 1024 kilo bit per
second which gives a downloading speed of 128 kilo bytes per second. Because of this prime
speed, this service will include Internet Connectivity, Business E-mailing & Hosting, Hosted
Spam Firewall, Network Monitoring, video conferencing etc. This business will serve from
business to business and business to consumers as well. Serving the consumers after giving
them the connection will be strictly monitored so that proper service is ensured. Packages and
services for consumer and businesses will differ. Some of our competitors are BracNet, Aamra
Networks etc. Xpress will follow a market penetration strategy to be a market leader. The
prime positioning in the marketing strategy is the speed of the internet. This business will have a
significant amount of investments in marketing and advertising of the brand. In the production
planning, this business will need technical equipments like router, network switches, hubs etc.
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This organization will be basically a decentralized organization. Although new technologies
are coming, but the speed of Xpress internet will ensure that the business sustains in the market.
A brief description about the financial planning is given in this report. The political and
environmental threat to this business will be there and that is also briefly analyzed in the report.
It is important to know the present and present the environmental and industry condition because
this will have a great impact on our new venture. Environmental factors are consists of political,
economy, culture, policy and other things. We will consider the first four of them.
Bangladesh has Parliamentary form of government, where PRESIDENT is head of the State and PRIME
MINISTER is head of government. It’s a democratic country. But the present condition is not
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looking too good for the whole country because the condition is now changing day by day. The
care taker government is now trying to make a situation where the entire political group can
participate in the coming election procedure.
For us it’s important because we will be starting our venture from the January, 2009. In that time
we are expecting a new political government and where they can maintain a stable condition for
business. Their important causes with out a stable condition we cant maintain our business.
The judiciary system has been separated from the government. So we expect we will have a fair
case ending if any thing goes wrong. But still government has to check and reduce the
corruption. If the corruption is not reduced in the coming year we will have to face a difficult
time because the business cost will be gone up.
The economic situation of Bangladesh is motionless at this moment under the power of caretaker
government. Recently, Chief Adviser (CA) Fakhruddin Ahmed said at a press conference that the
country's current economic slowdown will be over as the interim government has already taken
some measures, including formation of a private-public business forum, to address the situation.
We are very much optimistic like our Chief Adviser that the problem will be reduced in the
coming year.
But still we have to recognize the fact that the purchasing power of general people has been
reduced, though our target market has not been affected by a great deal. The business companies
which we are targeting have made some profit during these 2 to 3 years. And in the next year we
are expecting that the economic condition will be better for every one cause their will be a new
elected government who will take charge for every economic factors.
The Asian Development Bank (ADB) forecasts six per cent GDP growth in the current fiscal
year (FY), which is slightly lower than 6.7 per cent growth of the last FY. Despite the generally
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positive outlook though, substantial under pricing of energy products is continuing to build large
financial imbalances, which are posing a growing threat to both fiscal and monetary stability.
Other risks include political uncertainty that could disrupt the economy in the lead up to general
elections due in January next year, it said, adding that conditions for expansion in industry as
well as in services are expected to be favorable, though the frequent power disruptions need to be
addressed. Despite the central bank’s indication of a continuing tight monetary policy, the
elections suggest that a broadly accommodative stance will continue and, with the legacy of large
rises in monetary aggregates in FY2006, only a slight moderation in inflation is expected during
the year. Apart from international price rises, inflationary pressures include likely further upward
adjustments to domestic oil prices, though these may well come only after the January elections
and expected further depreciation of the taka. Developing Asia’s strong economic expansion is
expected to continue, with growth projected at 7.7% in 2006 before easing to 7.1%, the ADB
report said.
3.1.3 Technology:
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The ISP and data processing industry is now being considered a rapidly changing industry due to
continuous technological innovation. The duration period of the change is very short and that’s
why we have to make careful short term marketing decisions as well as to be prepared with
contingency plans given any new technological developments which may affect our services.
The government has taken development type policy towards the ICT sector. Short description of
policy is given below,
This Policy aims at building an ICT-driven nation comprising of knowledge-based society by the
year 2006. In view of this, a country-wide ICT-infrastructure will be developed to ensure access
to information by every citizen to facilitate empowerment of people and enhance democratic
values and norms for sustainable economic development by using the infrastructure for human
resources development, governance, e-commerce, banking, public utility services and all sorts of
on-line ICT-enabled services.
Bangladesh, having the advantage of cost-effective labour, must endeavor for expansion and
export of ICT-enabled services such as medical transcription, data entry, data processing, call
centers etc. at home and abroad. NGOs interested to contribute for the expansion of ICT sector,
will be provided with facilities.
Competitive threats come from other ISPs, including the following companies: Global, Grameen
Cyber net, Bangladesh Online and Brac Net. Most of our competitors offer solutions for
Windows, and perhaps Mac, but ignore all other operating systems. With the rise of Linux and
other alternative operating systems, there is potential for Web Revolution to surpass its
competitors.
Bangladesh Online
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Bangladesh Online offers a wide variety of services to match customer needs. They have split
information into two categories:
1. Basic service: for customers looking for a simple, inexpensive way to connect their home or
business to the Internet.
2. Complete details: for customers who need a custom solution for unique requirements, it offers
the following services:
Connectivity:
• Modem service.
• ISDN.
• Special Services:
• FTP services.
• Leased lines.
• Web hosting.
Brac Net
Brac Net is one of the largest ISP. Locally owned and operated since 1998, Arizona.Net
specializes in modem dial-up, ISDN, dedicated local area network (LAN) access and T1 (a high-
speed network link that transmits data at 1.5 Mbps) to the Internet.
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For dialup connections, Brac Net uses an all-digital modem pool consisting of equipment from
US Robotics, Ascend, and Livingston. All of their locations maintain a full 56k modem pool,
upgraded to the latest version of the v.90 standard. These digital modems allow for a more
reliable connection, and enable them to make ISDN connections on the same equipment, so they
can offer 64k ISDN service with all dialup accounts. To make sure that customers can get to their
services, Arizona.Net maintains a no-busy-signal policy.
If customers report a busy signal, Brac Net has the ability to connect as many telephone lines as
necessary to relieve the problem. Currently, none of their locations are having any problems with
busy signals. Brac Net maintains multiple separate T3 (a high-speed network link that transmits
data at 45 Mbps) connections to the Internet backbone through multiple backbone providers.
These separate connections give Brac Net more than enough bandwidth to handle future growth
as well as provide the security of uninterrupted service.
Grameen CyberNet
Grameen CyberNet helps its members have an enjoyable and productive Internet experience by
providing reliable, unlimited Internet access and Web hosting services, outstanding technical
support, useful information, and innovative services. Prices are among the lowest in the industry.
EarthLink offers the following services:
• Internet access.
• High-speed access.
• Web hosting.
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AAMRA NETWORKS
Global delivers complete Business Internet Solutions for any small business backed with its
award winning service and support. Its business plans--whether Web Hosting, e-commerce, high
speed dedicated access or Web Design--are packaged to fit customer needs today and are tailored
to grow along with business for tomorrow. Global offers the following business solutions:
• Web hosting.
• Business access.
• E-commerce.
• Domain reservation.
• Dedicated access.
• Dialup access.
• Promotional solutions.
• Help desk.
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Dedicated Bandwidth Internet is the flagship product of Xpress networks limited. Dedicated link
is established using fiber optic or wireless radios between the state-of-the-art POPs and NOCs
and the gateway that connects customer LAN. Our network ensures excellent quality, high
capacity, and low latency Internet connectivity.
Xpress networks maintains redundancy of all hardware used in the network along with its SEA-
ME-WE-4 (email backup by VSAT) to ensure fast access to the World Wide Web.
Main Features
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success and failure. Business Email & Hosting Services by Xpress networks limited gives a
business the expertise, reliability, and support to effectively compete with larger organizations.
Our set of features, in the brand name Total Office, offer you "big company capabilities" in user
and domain creation and customization, email collaboration, and the assurance that your
communications are reliable and secure. The service offers state-of-the-art data security measures
spanning physical monitoring, redundant, continuous and protected power infrastructure, as well
as fire prevention, detection and suppression systems. The policies and practices used by Total
Office help prevent sabotage, accidental loss and the resulting unnecessary downtime. Thus, one
can leverage own resources with a premium outsourced email solution that's priced to give you a
real return on what may be the most important investment: communication.
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influx of unwanted, dangerous junk mail, it is necessary for organizations to broaden the efforts
at combating spam by applying a new generation of anti-spam solutions that leverage multiple
layers of protection, including maintenance services. After years of R&D, Xpress networks has
designed an anti-spam solution named NOSPAM, suitable for small to large enterprises.
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benefits. Xpress networks limited has brought the Videoconferencing Service in conjunction with
the internationally renowned brand POLYCOM. With Polycom's crystal-clear audio sharp
visuals and intelligent voice tracking, group video meetings have become even more efficient
and productive. The team of Xpress networks is always ready to demonstrate the value of video
conferencing and show the benefits it can bring to your organization.
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Xpress networks’ IT Infrastructure Management Service is designed to help organizations
manage, secure and support all IT assets. With this service, organizations can reduce operational
costs, increase operational efficiencies, set the foundation for future growth, and align IT with
business priorities. This, single-source services, is designed to help keep multi supplier
environment operating at peak performance. We specialize in identifying redundancies,
recognizing bottlenecks, and staying technologically current by providing One-Stop-Solution.
We focus not only on your Existing Network through Helpdesk, Server, Storage and Network
Management but also all Probable Future Networks through Project Management and
Provisioning. Thus, this One-Stop-Solution of IT Infrastructure Management Service of Xpress
networks would simplify your IT Infrastructure with improved reliability and availability.
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4.9 Size of Business
Office Equipments:
• Office Furnishing
• Lighting
• Fans and Air coolers
• Computers
• Internet service provider
• Stationery
• Utilities
• Others
Furnishing
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OTOBI Limited
14 Dilkusha C/A, Dhaka-1000, Bangladesh
Tel: 9563931-2, 9666747
Electrical Appliances
World Electronics.
36 Nawabpur road, Nawabpur
Dhaka-1215, Bangladesh
Tel: 8119625, 8118052
Telephones
Dhaka Phone Ltd.
91, Mohakhali, Dhaka, Bangladesh
Tel: 9332000, 9348594, and 9348566
Fax: 8314867, 8314193
Stationery
Gyankosh
10-11, Mumtaj Plaza, Dhanmondi, Dhaka
Tel: 8623251
Others
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FOOD / TOILETRIES / TOOLS/ CAR WASHER/
From Local departmental stores
To run the business we need to appoint some employees that include one manager who will be in
charge officer, One Accountant (Accounts, finance and operational) who will look after about
accounts and finance, Two sales people who will be working under the showroom manager and
take care of our customers, in this case at the first year sales person will be one and rest of years
will be two. On the other hand, we will appoint one car mechanics and one assistant who helps
technician. We also need one caretaker. Manager and Accountant may come from the partners.
Sales people and other workers will hired from outside.
5. Service plan:
BTCL (supplier)
Xpress Network
• Internet Connectivity
B2B B2C
• Business Email & Hosting
Surveillance cameras
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not comfortable for humans. CCTV systems may operate continuously or only as required to
monitor a particular event.
Cat 5
Optical Fiber
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illumination, and are wrapped in bundles so they can be used to carry images, thus allowing
viewing in tight spaces. Specially designed fibers are used for a variety of other applications,
including sensors and fiber lasers.
LAN Adapter
Router
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a home internet service. With appropriate software (such as Untangle, SmoothWall, XORP or
Quagga), a standard PC can act as a router.
Network Hub
Hubs also often come with a BNC and/or AUI connector to allow connection to legacy
10BASE2 or 10BASE5 network segments. The availability of low-priced network switches has
largely rendered hubs obsolete but they are still seen in older installations and more specialized
applications.
Network Switch
The term commonly refers to a Network bridge that processes and routes data at the Data link
layer (layer 2) of the OSI model. Switches that additionally process data at the Network layer
(layer 3) (and above) are often referred to as Layer 3 switches or Multilayer switches.
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The term Network switch does not generally encompass unintelligent or passive network devices
such as hubs and repeaters.
Repeater
Amplifier
In popular use, the term today usually refers to an electronic amplifier, often as in audio
applications. The relationship of the input to the output of an amplifier — usually expressed as a
function of the input frequency — is called the transfer function of the amplifier, and the
magnitude of the transfer function is termed the gain. A related device that emphasizes
conversion of signals of one type to another (for example, a light signal in photons to a DC
signal in amperes) is a transducer, or a sensor. However, a transducer does not amplify power.
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Server
A server is a computer dedicated to providing one or more services over a computer network,
typically through a request-response routine. These services are furnished by specialized server
applications, which are computer programs designed to handle multiple concurrent requests.[1]
Examples of server applications include mail servers, file servers, web servers, and proxy
servers.
6.1.1 Services
We are offering internet services for two segments, firstly the consumers and secondly the
businesses. The services of our Business to Consumers (B2C) will be:
• Fixed Bandwidth
o 32 Kilo bit per second to 128 Kilo bit per second (Downloading speed: From 4
Kilo byte per second to 16 Kilo byte per second) Price: 800BDT
o 192 Kilo bit per second to 448 Kilo bit per second (Downloading speed: From 24
Kilo byte per second to 56 Kilo byte per second ) Price: 1000BDT
o 512 Kilo bit per second to 704 Kilo bit per second (Downloading speed: From 64
Kilo byte per second to 88 Kilo byte per second) Price: 1200BDT
o 864 Kilo bit per second to 1024 Kilo bit per second (Downloading speed: From
108 Kilo byte per second to 128 Kilo byte per second) Price: 1800BDT
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This fixed bandwidth will provide excellent flexibility in terms of the requirement to the
consumer. Our services will be backed by the Cisco software engineers who will ensure that we
are providing our consumers with the service that we have promised.
We will be providing internet connection to the three universities in Board Bazar Gazipur
(Which are Open University, National University and Islamic Institute of Technology) as there is
a huge demand for high speed internet. However we will be providing internet connections to
offices in Tongi and Uttara as well. The services for our Business to Business (B2B) will be a
fixed bandwidth of 512 to 1024 Kilo Bit per second. This bandwidth will provide a downloading
speed of 64 kilo byte per second to 128 kilo byte per second. As we will be using VPN (Virtual
Private Network) technology, the additional features of this B2B service is mentioned below:
6.2 Distribution
• Tongi
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• Board Bazar, Gazipur (Consumers plus three universities which are National University,
Open University and Islamic Institute of Technology).
We will have our main office in Uttara. But we will have two regional offices in both Tongi and
Board Bazar. Our marketing and Promotion will be initiated in these areas only we are focusing
on these niche segments of the market.
According to some information we got from the internet, the market in the specific areas that we
have targeted (Uttara, Tongi and Board Bazaar) have number of consumers given below:
Potential
Growth 2004 2005 2006 2007 2008
Customers
Household
10% 101,041 111,044 122,037 134,119 147,396
Consumers
Small
Office/Home 5% 16,963 17,404 17,856 18,320 18,797
Office
Corporate
3% 2112 2764 3046 3316 3809
Consumers
The following shows the segments of the market (of 2008) of the specific area that we have
targeted:
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6.3.2 Target Market
Our distribution of the service is divided into two parts- firstly consumers and secondly the
businesses which includes universities and offices. However, initially our target market will be
based on the demographics and we are targeting the young adults (Age 18 to 40), as they are the
major internet users in both houses and offices.
6.3.3 Positioning
Our market positioning will be based on the speed factor with a tagline “Fast…Beshi Fast”. We
are positioning in terms of speed because we believe that when it comes to internet, the only
thing that our target market will be concerned about is speed.
We will be using both Above the Line (ATL) and Below the Line (BTL) mediums to promote our
service. In ATL, our promotion will include print ads- which will be in newspapers and
magazines. We will also promote our service through leaflets, which we will distribute in the
three areas that we have targeted. As we have a plan to expand the business in the future, we are
choosing mediums like newspapers and magazine so that it can create brand awareness. In
BTL, we have a plan to organize a concert, which will be an event to promote our service. We
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will also have a wall paint in some fast food shops (Like Helvetia) in order to promote our
services.
Leaflets 20,000
Event 10,00,000
TOTAL 13,20,000
In order to provide customers with the after sale service, we will have a 24 hour call centre with
three employees for each offices (In total 9 employees for three offices) with different time
shifts. There will be twelve linemen and fifteen software engineers. Each area will be covered by
four linemen and five software engineers. Each software engineer will be in charge of specific
unit (For example, one engineer will be in charge of the monitoring the switches and hubs,
another will be on IP distribution and so forth). If any problem occurs, the software engineer will
be handling the problem from the office and will send the linemen in the area of the problem if
required. Two linemen will be available for the day shift and two will be available for the night
shift. However, if more linemen are required, we will hire more as the business expands.
In order to monitor the marketing activities, one of the co-owners will be the coordinating the
marketing activities. The responsibility of him will be:
• To ensure that all the marketing programs have been implemented correctly
• To ensure that the employee behavior is down to earth towards the customers.
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• To ensure that the marketing activities are resulting in creating brand awareness among
the consumers and creating a word of mouth.
• If any problem occurs, he will take necessary steps immediately or consult with other co-
owners of the company.
7. Organizational plan:
We are going to start new venture on ISP as PARTNERSHIP which is based on the ACT 1932.
Basically we are going to start generally partnership organization. On the base of 1932 act all
partner’s can get equal profit on their investment.
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7.2 About Organization: we are working six members in a group, but we will have five partners
in our business. The name of our partners:
1) SANWAL MOFIZ
2) NAHIDUL ISLAM
3) SHAMSUL ARIFEEN
6) FAISAL HOSSAIN
7.3 Liability of owner’s: As our all partner’s investing same amount so their liability would be
equal as to other partners in our organization. Here all are liable for business liabilities. They all
are liable equally for all profits and losses what our organization can get.
7.4 Cost of starting business: Our cost would be for starting ISP is minimum 50 to 60 lakh.
Which will be enough to start a ISP venture as Partnership. The cost would be for organization
plan are include for:
7.5 Transferability of interest: Based on our agreement, we can transfer our interest only with
consent of all other general partners.
7.6 Capital requirements: We need approximately 6000000 tk to start a venture for ISP. So we
are deciding to investing amount would be 60 lakh .Our capital sources are:
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7.7 Management control: All partners have equal control and majority rules as based on our legal
forms of organization. We all are investing same amount so we have equal rights and power in
our organization.
7.8 Distribute of profit and loses: We all are equal percent partners so we have rights to get equal
amount of profit. If for any cause our company could fail to get profit, we may have to accept the
losses.
The company's management philosophy is based on responsibility and mutual respect. Web
Revolution has an environment and structure that encourages productivity and respect for
customers and fellow employees. The company's goal is to create an environment where:
Here is the brief information about the whole operational strategy that means our employees
designation, number and their salary and wage:
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Designation of Employee Numbers Salary Cost per criteria
Total 220000
Personnel Plan
Designation of
2007 2008 2009
Employee
In our company there will be one fixed consultant who will work two days a week. So we will
not need any outside consultant or advisor.
7.11 Departments
Our main management divisions are Information and Technology, Marketing and selling,
Finance and accounts, and Customer service System support Department.
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• Information and Technology
• Marketing and selling
• Finance and accounts
• Customer service System support
The company recognizes that it is subject to both market and industry risks. The company's view
of its risks, as well as how each is being addressed, is as follows:
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• Technology. Sudden and unexpected shifts in technology or the popularity of the
Internet. The company will maintain an active research and development effort, as well as
ongoing review of forthcoming technologies from competitors and vendors, in order to
stay near the top of the technological curve. Also, the diversification of the company's
business allows it to respond to shifts in revenue by redistributing material and personnel
into those efforts most likely to generate the highest return on investment.
The following contains the Projected Pro-forma Income Statements and Balance Sheet. The
underlying basis for the projections is:
• Estimated Revenues: Xpress’s sales are predicted to grow at a rate of 12 percent per year
over the first three years before leaving off in year 4. For example, revenue for year 2010
is 2296000 which is 2050000*(1.12)
• Estimated Gross profit: Gross profits are 60 percent of the firm’s sales. For example, the
gross profits for year 2010 are 1378000 which is 2296000*(.60).
• The initial invested capital in the balance sheet is 32 lakh 50 thousand BDT (32,50,000
BDT). Each year we will invest 5 lakh more. The rest (60,00,000-32,50,000 = 27,00,000
BDT) will be in invested in a bank thus there will be an interest income. The profit
according to this projection will start from the year 2011.
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OPERATING EXPENSES
Selling
Salaries and wages $150 $41 $46 $52
Commissions 50 14 16 18
Advertising 1,320 1,350 1,400 1,420
Depreciation 14 15 16 16
Other 5 6 6 7
Total Selling Expenses $1,539 $1,426 $1,484 $1,513
General/Administrative
Salaries and wages $50 $14 $16 $18
Employee benefits 10 5 5 6
Payroll taxes 30 3 3 4
Rent 8 8 9 9
Utilities 2 2 2 3
Office supplies 1 1 1 1
Travel & entertainment 3 3 3 4
Postage 1 3 1 2
Equipment maintenance &
rental 0 0 1 1
Interest 0 1 1 2
Furniture & equipment 3 4 4 5
Total General/Administrative Expenses $108 $44 $46 $55
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Temporary investment BDT 150.00 BDT 188.00 BDT 300.00 BDT 380.00
Prepaid expenses BDT 200.00 BDT 300.00 BDT 513.00 BDT 700.00
BDT
Total Current Assets BDT 450.00 BDT 600.00 BDT 938.44
1,220.49
Fixed Assets
BDT BDT BDT BDT
Office 1,300.00 1,450.00 1,560.00 1,620.00
BDT BDT BDT BDT
Plant & equipment (net) 1,400.00 1,550.00 1,600.00 1,750.00
Furniture & fixtures (net) BDT 100.00 BDT 120.00 BDT 122.00 BDT 130.00
BDT BDT BDT BDT
Total Net Fixed Assets
2,800.00 3,120.00 3,282.00 3,500.00
BDT BDT BDT BDT
TOTAL ASSETS
3,250.00 3,720.00 4,220.44 4,720.49
Invested Capital Each Year BDT 500.00
LIABILITIES
Current Liabilities
Accounts payable BDT 0.00 BDT 0.00 BDT 0.00 BDT 0.00
Short-term notes BDT 0.00 BDT 0.00 BDT 0.00 BDT 0.00
Current portion of long-term notes BDT 0.00 BDT 0.00 BDT 0.00 BDT 0.00
Accruals & other payables BDT 0.00 BDT 0.00 BDT 0.00 BDT 0.00
Total Current Liabilities
Long-term Liabilities
Mortgage BDT 0.00 BDT 0.00 BDT 0.00 BDT 0.00
Other long-term liabilities BDT 0.00 BDT 0.00 BDT 0.00 BDT 0.00
Total Long-term Liabilities
OWNER'S EQUITY
BDT BDT BDT BDT
Equity 3,250.00 3,720.00 4,220.44 4,720.49
BDT BDT BDT BDT
Total Shareholders' Equity
3,250.00 3,720.00 4,220.44 4,720.49
BDT BDT BDT BDT
TOTAL LIABILITIES & EQUITY
3,250.00 3,720.00 4,220.44 4,720.49
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The SWOT analysis is a key factor in the overall success of an organizations’ strategic plan. It
identifies the strengths and weakness of the business entity as well as the opportunities and
threats.
The SWOT analysis is a key factor in the overall success of an organizations’ strategic plan. It
identifies the strengths and weakness of the business entity as well as the opportunities and
threats. The strengths of a business can be defined as those actions, activities or characteristics
that elevate the business entity above its competition. Strengths include but are not limited to:
10.2 Strengths
Many of these strengths are generally considered intangible in that they are only measurable
through the opinion of the customer. Some of these strengths appear obvious, but often as
business entities mature, they can lose sight of some of the fundamental strengths that aided them
in their success. Entities that recognize, enhance and appreciate their strengths generally
experience long-term success. Entities that ignore what some consider their core basis for
success and venture forward without regard to past success lose focus and quickly fail. Whether
the business entity is profit based or not for profit, such as a Faith Based Organization, these
fundamental principles are applicable; i.e. a church whose strength in attracting congregants is
the fellowship and the local community oriented activities changes their focus toward primarily
missionary functions and outreach activities that involve only a small portion of the population.
The result is that the congregants may feel ignored or worse taken for granted, as the fellowship
that attracted them is ignored or left unattended. Another example; a pizzeria known for the
tastiness of their dishes because the dough was made fresh daily attracts and maintains a steady
volume of customers although their prices are higher than those of the typical chain restaurants
that serve pizza. When they change to ready-made dough the strength of their attraction will be
impacted and the quality of the pizza, now comparable to the large pizza chain businesses, no
longer warrant the cost to the customer, and the business decreases.
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While these examples are not absolutes, they are accurate. The similarity in both instances is that
the strength of the business entity was either ignored or overshadowed by other forces. In many
instances, business entities seeking to change the direction of the organization can successfully
do so over time. Virtually any goal can be achieved when a strategic plan is meticulously
outlined and followed, and typically any effort not thoroughly considered will fail.
For each strength business entities have, a similar and sometimes equal weakness exists. The
goal is to identify, minimize or neutralize the weaknesses while maintaining the strengths. A
short list of strengths versus weaknesses is shown below
10.3 Weaknesses
Time/cost
Employee training
Limited expansion
Competition
Note that the factor considered strength, is reflected as a weakness due to time or cost. In many
service oriented industries, the primary consideration that causes consumers to return or not
return to a business revolve around how they perceive they were treated, and how much time was
dedicated to them or to their situation. If one considers the restaurant business, many people will
generously tip servers who are more attentive, bring extra napkins when needed, correct orders
quickly without argument and present an atmosphere of competence. A business that relies on
personal service largely links its reputation to the persons interacting with the customer. While a
positive service experience will be shared with few people, a negative service experience will be
shared with many. The cost to the business in terms of time and training of its employees often is
directly reflected as a strength or weakness for the business.
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Opportunities can be realized when weaknesses are identified. Some weaknesses in a business
are generic to the industry and as such provide an opportunity for growth or for a business to
elevate itself to a higher level of excellence by minimizing, neutralizing or eliminating the
weakness. For example, a pizza business that prepares pizzas when ordered seeking to compete
with similar businesses may recognize as an industry weakness the number of checks returned
for insufficient funds as the time delay experienced by customers while the cashier validates the
check information. One cost effective method of neutralizing this industry weakness is to accept
credit card, debit card and other similar transfers in lieu of personal checks. Another method may
be to achieve or increase the business’ presence on the Internet by accepting orders and payment
via the Internet. Payment for the product (pizza) is secured prior to the product being provided,
thus minimizing liability for the business, while simultaneously attracting business through a
previously under used market. This practice is currently employed in several service-oriented
businesses. Some correlations between Strengths, Weaknesses and Opportunities include:
10.4 Opportunities
Evaluate operations
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Threats are generally considered those internal and external factors that are most likely to
negatively affect a business entity. Examples include the threat of a dynamic change in
population due to a shift in a major industry; a significant increase in material costs due to global
increase in demand or production cost increases. Threats also come from the activities of the
competition including pricing, quality/quantity, and technology and market availability. One
manner of addressing threats is to contrast the threat against strength, for example, the threat of a
new competitor entering the field brings the possibility of new inventory or increased variety.
The strength of the business that is following a strategic plan likely includes partnering with
complementary business entities that market the business’ variety, availability and reputation.
These strengths aid in offsetting new competition, which must first be considered established in
the industry, before they can expect to grab a share of the market. This is true with the
established chain business entities, as well as the independents.
Essentially, when a SWOT analysis is completed, part of the strategic plan suggests that
Strengths be contrasted with Weaknesses, Weaknesses be contrasted with Opportunities,
Opportunities be contrasted with Threats and Threats be contrasted with Strengths. While the
strategic plan should be developed to capitalize on the Strengths with Opportunities, the business
entity must maintain visibility on its Weaknesses and Threats.
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