You are on page 1of 18

3.1.

MARKET ANALYSIS SUMMARY Net-Zone is faced with the exciting opportunity of being the first-mover in the Mohammadpur cyber-cafe market. The consistent popularity of free FTP in the Internet has been proven to be a winning concept in other markets and will produce the same results in Mohammadpur.

3.2. TARGET MARKET SEGMENT STRATEGY Net-Zone intends to capture to people who want a high speed connection around the Internet and to serve users by providing various services such as FTP and also membership services. Furthermore, Net-Zone will be an important source of best internet for local people who desire to work or check their email messages and also desire for new movie collection in a friendly atmosphere. These residents will either use Net-Zones's PCs, or plug their notebooks into Internet connections. Net-Zone's target market covers a wide range of ages: from members of young generation who are growing up surrounded by computers, to professionals who have come to the realization that people today cannot afford to ignore computers. 3.3. MARKET NEEDS Factors such as current trends of free FTP service ensure that the high demand for low cost internet service will remain constant over the next five years. The rapid growth of the Internet and online services are increasing day by day. The potential growth of the Internet is vast, to the point where one day, people cannot think any source of getting information without using Internet. Being the second cyber-cafe in Mohammadpur, Net-Zone will establish itself as the first-mover advantages of best service in the regional area.

3.4. MARKET SEGMENTATION Net-Zone's customers can be divided into two groups. The first group is familiar with the Internet. The second group is not familiar with the Internet, yet, and is just waiting for the right opportunity to enter the online community. Net-Zone's target market falls anywhere between the ages of 18 to 50. In addition to these two broad categories, Net-Zone's target market can be divided into more specific market segments. The majority of these individuals are students and business people. See the Market Analysis chart and table below for more specifics.

3.5. SERVICE BUSINESS ANALYSIS The popularity of the Internet is growing exponentially. Those who are familiar with the Internet are well aware of how fun and addictive surfing the Net can be. Those who have not yet experienced the Internet need a convenient, relaxed atmosphere where they can feel comfortable learning about and utilizing the current technologies. Net-Zone seeks to provide its customers with affordable Internet access in an innovative and supportive environment.

The founder of Net-Zone realizes the need for differentiation and strongly believes that combining a cafe with complete Internet service is the key to success. The fact that no cybercafes are established in Mohammadpur with the service of ISP and also memebership, presents Net-Zone with a chance to enter the window of opportunity and enter into a profitable niche in the market. 3.6. COMPETITION AND BUYING PATTERNS The main competitor in the internet service provider is Rupali Business Centre. These businesses are located in or near the Noorzahan Road, and target a similar segment to Net-Zone's. Competition from online service providers comes from locally-owned. There are approximately eight, local, online service providers in Mohammadpur. This number is expected to grow with the increasing demand for Internet access. Due to the nature of the Internet, there are no geographical boundaries restricting competition. 3.7. STRATEGY AND IMPLEMENTATION SUMMARY Net-Zone has 2 main strategies. The first strategy focuses on attracting novice Internet users. By providing a novice friendly environment, Net-Zone hopes to educate and train a loyal customer base. The second, and most important, strategy focuses on pulling in power Internet users. Power Internet users are extremely familiar with the Internet and its offerings. This group of customers serves an important function at Net-Zone. Power users have knowledge and web-browsing experience that novice Internet users find attractive and exciting. 3.8. STRATEGY PYRAMID The following subtopics provide an overview of Net-Zone's 2 key strategies. Strategy pyramid graphics are presented in the appendix of this plan.

3.8.1. ATTRACT POWER INTERNET USERS Net-Zone's second strategy will be focused on attracting power Internet users. Power Internet users provide an important function at Net-Zone. Net-Zone plans on attracting this type of customer by:

Providing the latest in computing technology. Providing scanning and printing services. Providing access to powerful software applications.

3.8.2. ATTRACT NOVICE INTERNET USERS Net-Zone's first strategy focuses on attracting novice Internet users. Net-Zone plans on attracting these customers by:

Providing a novice friendly environment. Net-Zone will be staffed by knowledgeable employees focused on serving the customer's needs.

A customer service desk will always be staffed. If a customer has any type of question or concern, a Net-Zone will always be available to assist.

Net-Zone will offer introductory classes on the Internet and email. These classes will be designed to help novice users familiarize themselves with these key tools and the NetZone computer systems.

3.9. SWOT ANALYSIS The SWOT analysis provides us with an opportunity to examine the internal strengths and weaknesses Net-Zone must address. It also allows us to examine the opportunities presented to Net-Zone as well as potential threats. Net-Zone has a valuable inventory of strengths that will help it succeed. These strengths include: a knowledgeable and friendly staff, state-of-the-art computer hardware, and a clear vision of the

market need. Strengths are valuable, but it is also important to realize the weaknesses Net-Zone must address. These weaknesses include: a dependence on quickly changing technology, and the cost factor associated with keeping state-of-the art computer hardware. Net-Zone's strengths will help it capitalize on emerging opportunities. These opportunities include, but are not limited to, a growing population of daily Internet users, and the growing social bonds fostered by the new Internet communities. Threats that Net-Zone should be aware of include, the rapidly falling cost of Internet access, and emerging local competitors. 3.9.1. WEAKNESSES 1. A dependence on quickly changing technology. Net-Zone is a place for people to experience the technology of the Internet. The technology that is the Internet changes rapidly. Net-Zone needs to keep up with the technology because a lot of the Net-Zone experience is technology. 2. Cost factor associated with keeping state-of-the-art hardware. Keeping up with the technology of the Internet is an expensive undertaking. Net-Zone needs to balance technology needs with the other needs of the business. 3.9.2. OPPORTUNITIES 1. Growing population of daily Internet users. The importance of the Internet almost equals that of the telephone. As the population of daily Internet users increases, so will the need for the services Net-Zone offers. 2. Social bonds fostered by the new Internet communities. The Internet is bringing people from across the world together unlike any other communication medium. Net-Zone will capitalize on this social trend by providing a place for smaller and local Internet communities to meet in person. Net-Zone will grow some of these communities on its

own by establishing chat areas and community programs. These programs will be designed to build customer loyalty. 3.9.3. THREATS 1. Emerging local competitors. Currently, Net-Zone is enjoying a first-mover advantage in the local cyber-cafe market. Many of our programs will be designed to build customer loyalty, and it is our hope that our quality service. 3.9.4. STRENGTHS 1. Knowledgeable and friendly staff. 2. State-of-the art equipment. Part of the Net-Zone experience includes access to state-ofthe-art computer equipment. 3. Clear vision of the market need. Net-Zone knows what it takes to build an upscale cyber cafe. We know the customers, we know the technology, and we know how to build the service that will bring the two together. 3.10. MARKETING STRATEGY Net-Zone will position itself as an Internet service provider. It will serve high-quality speed of internet service at a competitive price. Due to the number of internet service providers in Mohammadpur, Noorzahan Road, it is important that Net-Zone sets fair prices for its service. Net-Zone will use advertising as its main source of promotion. Ads placed in the wall of Noorzahan Road and it will help build more customers. 3.11. PRICING STRATEGY Determining a fair market, hourly price, for online use is more difficult because there is no direct competition from another cyber-cafe in Mohammadpur. Therefore, Net-Zone considered three sources to determine the hourly charge rate. First, we considered the cost to use other Internet

servers, whether it is a local networking firm or a provider. Internet access providers use different pricing schemes. Charges are in monthly fee. In addition, some providers use this strategy for pricing schemes. Thus, it can quickly become a high monthly cost for the individual. Second, Net-Zone looked at how cyber-cafes in other markets went about pricing Internet access. 3.12. SALES STRATEGY Net-Zone employs people to handle sales transactions. Computer literacy is a requirement for Net-Zone employees. If an employee does not possess basic computer skills when they are hired, they are trained by our full-time technician. Our full-time technician is also available for customers in need of assistance. Net-Zone's commitment to friendly, helpful service is one of the key factors that distinguish Net-Zone from other Internet cafes.

SALES FORECAST Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Year 1

UNIT SALES Monthly Memberships Monthly Internet service Total Unit Sales 100 130 230 120 156 276 144 187 331 173 225 397 207 270 477 249 323 572 299 388 687 358 466 824 430 559 989 516 671 1187 619 805 1424 743 966 1709 3958 5145 9104

UNIT PRICES Monthly Memberships Monthly Internet Fees Tk.200 Tk.700 Tk.200 Tk.700 Tk.200 Tk.700 Tk.200 Tk.700 Tk.200 Tk.700 Tk.200 Tk.700 SALES Monthly Memberships Monthly Internet Fees Total Sales Tk.20,000 Tk.91,000 Tk.111,00 0 Tk.24,000 Tk.109,200 Tk.133,200 Tk.28,800 Tk.131,04 0 Tk.159,84 0 Tk.34,560 Tk.157,248 Tk.191,808 Tk.41,472 Tk.188,698 Tk.230,170 Tk.49,766 Tk.226,437 Tk.276,204 Tk.59,720 Tk.271,725 Tk.331,444 Tk.71,664 Tk.326,069 Tk.397,733 Tk.85,996 Tk.391,283 Tk.477,280 Tk.103,196 Tk.469,540 Tk.572,736 Tk.123,835 Tk.563,448 Tk.687,283 Tk.148,60 2 Tk.676,13 8 Tk.824,73 9 Tk.791,610 Tk.3,601,82 6 Tk.4,393,43 6 Tk.200 Tk.700 Tk.200 Tk.700 Tk.200 Tk.700 Tk.200 Tk.700 Tk.200 Tk.700 Tk.200 Tk.700

CHAPTER 5 FINANCIAL PART

5.1. FINANCIAL PLAN The following sections lay out the details of our financial plan for the next three years. 5.2. START-UP FUNDING This business plan is prepared to obtain financing in the amount of $542,000. The supplemental financing is required to begin work on site preparation and modifications, equipment purchases, and to cover expenses in the first year of operations.

Start-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required Assets Non-cash Assets from Start-up Cash Requirements from Start-up Total Assets Capital Planned Investment Bishawjit Roy Abdullah al Mamun Iqram Total Planned Investment Loss at Start-up (Start-up Expenses) Total Capital Total Capital and Liabilities Total Funding

Tk.542,000 Tk.544,500 Tk.1,086,500 Tk.979,500 Tk.200,000 Tk.1,179,500

Tk.600,000 Tk.350,000 Tk.350,000 Tk.1,300,000 Tk.542,000 Tk.758,000 Tk.758,000 Tk.1,086,500

5.3. BREAK-EVEN ANALYSIS Break-even data is presented in the chart below. Therefore we have to provide 1640 units in combination of membership and internet service both. And we can complete it within 12 months of our business operation.

5.4. PROJECTED PROFIT AND LOSS


Pro Forma Profit and Loss Month 10 Tk.572, 736 Month 11 Tk.687, 283 Month 12 Tk.824, 739

Month 1 Tk.111, 000

Month 2 Tk.133, 200

Month 3 Tk.159, 840

Month 4 Tk.191, 808

Month 5 Tk.230, 170

Month 6 Tk.276, 204

Month 7 Tk.331, 444

Month 8 Tk.397, 733

Month 9 Tk.477, 280

Year 1 Tk.4,393,43 6

Sales Other Costs of Sales Total Cost of Sales Expenses

Tk.0.00 Tk.111, 000

Tk.0.00 Tk.133, 200

Tk.0.00 Tk.159, 840

Tk.0.00 Tk.191, 808

Tk.0.00 Tk.230, 170

Tk.0.00 Tk.276, 204

Tk.0.00 Tk.331, 444

Tk.0.00 Tk.397, 733

Tk.0.00 Tk.477, 280

Tk.0.00 Tk.572, 736

Tk.0.00 Tk.687, 283

Tk.0.00 Tk.824, 739

Tk.0.00 Tk.4,393,43 6

Payroll Marketing/Pro motion Utilities

Tk.22,0 00 Tk.10,0 00

Tk.22,0 00

Tk.22,0 00

Tk.22,0 00

Tk.22,0 00

Tk.22,0 00

Tk.22,0 00

Tk.22,0 00

Tk.22,0 00

Tk.22,0 00

Tk.22,0 00

Tk.22,0 00

Tk.264,000. 00 Tk.10,000.0 0

Tk.0

Tk.0

Tk.0

Tk.0

Tk.0

Tk.0

Tk.0

Tk.0

Tk.0

Tk.0

Tk.0

Electricity Bill

Tk.5,00 0 Tk.2,00 0 Tk.1,00 0 Tk.40,0 00

Tk.5,00 0 Tk.2,00 0 Tk.1,00 0 Tk.30,0 00

Tk.5,00 0 Tk.2,00 0 Tk.1,00 0 Tk.30,0 00

Tk.5,00 0 Tk.2,00 0 Tk.1,00 0 Tk.30,0 00

Tk.5,00 0 Tk.2,00 0 Tk.1,00 0 Tk.30,0 00

Tk.5,00 0 Tk.2,00 0 Tk.1,00 0 Tk.30,0 00

Tk.5,00 0 Tk.2,00 0 Tk.1,00 0 Tk.30,0 00

Tk.5,00 0 Tk.2,00 0 Tk.1,00 0 Tk.30,0 00

Tk.5,00 0 Tk.2,00 0 Tk.1,00 0 Tk.30,0 00

Tk.5,00 0 Tk.2,00 0 Tk.1,00 0 Tk.30,0 00

Tk.5,00 0 Tk.2,00 0 Tk.1,00 0 Tk.30,0 00

Tk.5,00 0 Tk.2,00 0 Tk.1,00 0 Tk.30,0 00

Tk.60,000.0 0 Tk.24,000.0 0 Tk.12,000.0 0 Tk.370,000. 00

Telephone Bill

Other Total Operating Expenses Profit Before Interest and Taxes

Tk.71,0 00 Tk.7,10 0 Tk.63,9 00 Tk.63,9 00

Tk.103, 200 Tk.10,3 20 Tk.92,8 80 Tk.92,8 80

Tk.129, 840 Tk.12,9 84 Tk.116, 856 Tk.116, 856

Tk.161, 808 Tk.16,1 81 Tk.145, 627 Tk.145, 627

Tk.200, 170 Tk.20,0 17 Tk.180, 153 Tk.180, 153

Tk.246, 204 Tk.24,6 20 Tk.221, 583 Tk.221, 583

Tk.301, 444 Tk.30,1 44 Tk.271, 300 Tk.271, 300

Tk.367, 733 Tk.36,7 73 Tk.330, 960 Tk.330, 960

Tk.447, 280 Tk.44,7 28 Tk.402, 552 Tk.402, 552

Tk.542, 736 Tk.54,2 74 Tk.488, 462 Tk.488, 462

Tk.657, 283 Tk.65,7 28 Tk.591, 554 Tk.591, 554

Tk.794, 739 Tk.79,4 74 Tk.715, 265 Tk.715, 265

Tk.4,023,43 5.75

Tax 10%

Tk.402,344 Tk.3,621,09 2 Tk.4,023,43 5.75

Total

Net Profit

5.5. PROJECTED CASH FLOW


PRO FORMA CASH FLOW Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Year 1

CASH RECEIVED CASH FROM OPERATIONS Cash Sales Tk.111, 000 Tk.133, 200 Tk.159, 840 Tk.191, 808 Tk.230, 170 Tk.276, 204 Tk.331,44 4 EXPENDITURES EXPENDITURES FROM OPERATIONS Cash Spendi ng Electric ity Bill Teleph one Bill Total Tk.22,0 00 Tk.5,00 0 Tk.2,00 0 Tk.29,0 00 Tk.22,0 00 Tk.5,00 0 Tk.2,00 0 Tk.29,0 00 Tk.22,0 00 Tk.5,00 0 Tk.2,00 0 Tk.29,0 00 Tk.22,0 00 Tk.5,00 0 Tk.2,00 0 Tk.29,0 00 Tk.22,0 00 Tk.5,00 0 Tk.2,00 0 Tk.29,0 00 Tk.22,0 00 Tk.5,00 0 Tk.2,00 0 Tk.29,0 00 Tk.22,000 Tk.5,000 Tk.2,000 Tk.29,000 Tk.22,000 Tk.5,000 Tk.2,000 Tk.29,000 Tk.22,000 Tk.5,000 Tk.2,000 Tk.29,000 Tk.22,000 Tk.5,000 Tk.2,000 Tk.29,000 Tk.22,000 Tk.5,000 Tk.2,000 Tk.29,000 Tk.22,000 Tk.5,000 Tk.2,000 Tk.29,000 Tk.264,000. 00 Tk.60,000.0 0 Tk.24,000.0 0 Tk.348,000. 00 Tk.397,73 3 Tk.477,28 0 Tk.572,73 6 Tk.687,28 3 Tk.824,73 9 Tk.4,393,43 6

ADDITIONAL CASH SPENT Other Total Net Cash Flow Cash Balance Tk.1,00 0 Tk.1,00 0 Tk.81,0 00 Tk.119, 000 Tk.1,00 0 Tk.1,00 0 Tk.103, 200 Tk.222, 200 Tk.1,00 0 Tk.1,00 0 Tk.129, 840 Tk.352, 040 Tk.1,00 0 Tk.1,00 0 Tk.161, 808 Tk.513, 848 Tk.1,00 0 Tk.1,00 0 Tk.200, 170 Tk.714, 018 Tk.1,00 0 Tk.1,00 0 Tk.246, 204 Tk.960, 221 Tk.1,000 Tk.1,000 Tk.301,44 4 Tk.1,261, 665 Tk.1,000 Tk.1,000 Tk.367,73 3 Tk.1,629, 398 Tk.1,000 Tk.1,000 Tk.447,28 0 Tk.2,076, 678 Tk.1,000 Tk.1,000 Tk.542,73 6 Tk.2,619, 414 Tk.1,000 Tk.1,000 Tk.657,28 3 Tk.3,276, 696 Tk.1,000 Tk.1,000 Tk.794,73 9 Tk.4,071, 436 Tk.12,000.0 0 Tk.12,000.0 0 Tk.794,739. 29 Tk.4,071,43 5.75

5.6. PROJECTED BALANCE SHEET Our projected balance sheet is presented in the table below.
PRO FORMA BALANCE SHEET Month 1 Mo nth 2 Month 3 Month 4 Month 5 Month 6 ASSETS CURRENT ASSETS Cash A/C Receiva ble Other Current Assets Total Current Assets Longterm Assets Total Longterm Assets Total Assets Tk.119, 000 Tk.265, 500 Tk.7,00 0 Tk.391, 500 Tk.2 22,2 00 Tk.1 99,5 00 Tk.2 ,000 Tk.4 23,7 00 Tk.9 79,5 00 Tk.9 79,5 00 Tk.1 ,403 ,200 Tk.352, 040 Tk.89,3 00.00 Tk.9,00 0 Tk.450, 340 Tk.1,00 0 Tk.514, 848 Tk.2,00 0 Tk.716, 018 Tk.3,00 0 Tk.963, 221 Tk.5,00 0 Tk.1,26 6,665 Tk.6,00 0 Tk.1,63 5,398 Tk.7,00 0 Tk.2,08 3,678 Tk.5,00 0 Tk.2,62 4,414 Tk.1,00 0 Tk.3,27 7,696 Tk.2,00 0 Tk.4,07 3,436 Tk.513, 848 Tk.714, 018 Tk.960, 221 Tk.1,26 1,665 Tk.1,62 9,398 Tk.2,07 6,678 Tk.2,61 9,414 Tk.3,27 6,696 Tk.4,07 1,436 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

LONG-TERM ASSETS Tk.979, 500 Tk.979, 500 Tk.1,37 1,000 Tk.979, 500 Tk.979, 500 Tk.1,42 9,840 Tk.979, 500 Tk.979, 500 Tk.1,49 4,348 Tk.979, 500 Tk.979, 500 Tk.1,69 5,518 Tk.979, 500 Tk.979, 500 Tk.1,94 2,721 Tk.979, 500 Tk.979, 500 Tk.2,24 6,165 Tk.979, 500 Tk.979, 500 Tk.2,61 4,898 Tk.979, 500 Tk.979, 500 Tk.3,06 3,178 Tk.979, 500 Tk.979, 500 Tk.3,60 3,914 Tk.979, 500 Tk.979, 500 Tk.4,25 7,196 Tk.979, 500 Tk.979, 500 Tk.5,05 2,936

LIABILITIES AND CAPITAL A/C Payable Total Capital Net Profit Total Liabiliti es and Capital Tk.1,30 0,000 Tk.63,9 00 Tk.1,36 3,900 Tk.1 ,300 ,000 Tk.9 2,88 0 Tk.1 ,392 ,880 Tk.1,30 0,000 Tk.116, 856 Tk.1,41 6,856 Tk.32,5 40 Tk.1,30 0,000 Tk.145, 627 Tk.1,47 8,167 Tk.195, 348 Tk.1,30 0,000 Tk.180, 153 Tk.1,67 5,501 Tk.396, 518 Tk.1,30 0,000 Tk.221, 583 Tk.1,91 8,101 Tk.644, 721 Tk.1,30 0,000 Tk.271, 300 Tk.2,21 6,021 Tk.947, 165 Tk.1,30 0,000 Tk.330, 960 Tk.2,57 8,125 Tk.1,31 5,898 Tk.1,30 0,000 Tk.402, 552 Tk.3,01 8,450 Tk.1,76 1,178 Tk.1,30 0,000 Tk.488, 462 Tk.3,54 9,640 Tk.2,29 9,914 Tk.1,30 0,000 Tk.591, 554 Tk.4,19 1,468 Tk.2,95 8,196 Tk.1,30 0,000 Tk.715, 265 Tk.4,97 3,462

Net-Zone will provide full access to FTP. The establishment of Net-Zone as entertainment source by free FTP service. The risks involved with starting Net-Zone are: Net-Zone is a partnership business held by 3 owners. Internet service provider charges higher price. Net-Zone will provide FTP service. Net-Zone will be the second Internet cafe in Mohammadpur. Net-Zone will provide its customers with full access to the Internet. Only one Internet services are available to Net-Zone customers are listed below: Customers can sign up for a Net-Zone email account. Net-Zone will also provide its customers with access to introductory Internet and email classes. Net-Zone's customers can be divided into two groups. Net-Zone has 2 main strategies. Net-Zone's second strategy will be focused on attracting power Internet users. Power Internet users provide an important function at Net-Zone. Net-Zone plans on attracting this type of customer by: Net-Zone's first strategy focuses on attracting novice Internet users. Net-Zone plans on attracting these customers by: Net-Zone will offer introductory classes on the Internet and email. Net-Zone is a place for people to experience the technology of the Internet. Net-Zone will

position itself as an Internet service provider. Second, Net-Zone looked at how cyber-cafes in other markets went about pricing Internet access. Net-Zone employs people to handle sales transactions. Computer literacy is a requirement for Net-Zone employees. Net-Zone's commitment to friendly, helpful service is one of the key factors that distinguish Net-Zone from other Internet cafes.