NET CONNECT

Connect to the World.

A Cyber Caf with Coffee Shop House No 03, Road No 10 Sector No 06, Uttara Model Town, Uttara, Dhaka - 1230

Address:

Hotlines: +8801715176252, +880671047887

www.netconnectbd.com E-Mail: nbhshaon@gmail.com

TABLE OF CONTENTS
CONTENTS 1.0 INTRODUCTION
Origin of the report
1.1 OBJECTIVES
1.2 MISSION 1.3 RISKS

PAGES
03

2.0 COMPANY SUMMARY

2.1 COMPANY OWNERSHIP 2.2 START-UP SUMMARY 2.3 COMPANY LOCATION

05

3.0 SERVICES
3.1 SERVICE DESCRIPTION 3.2 COMPETITIVE COMPARISON 3.3 FULLFILLMENT 3.4 TECHNOLOGY

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4.0 MARKET ANALYSIS

4.1 MARKET SEGMENTATION 4.2 TARGET MARKET SEGMENT STRATEGY 4.3 MARKET TRENDS 4.4 ATTRACT NOVICE INTERNET USERS 4.5 ATTRACT POWER INTERNET USERS 4.6 SCOIAL HUB 4.7 MARKET NEEDS

10

5.0 SERVICE BUSINESS ANALYSIS

13

5.1 COMPETITION AND BUYING PATTERNS 5.2 DISTRIBUTING A SERVICE 6.0 MARKETING STRATEGY
6.1 PROMOTION STRATEGY 6.2 PRICING STRATEGY 6.3 SALES STRATEGY 6.4 SALES FORECAST

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7.0 MANAGEMENT SUMMARY

7.1 PERSONNEL PLAN

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8.0 FINANCIAL PLAN

8.1 START-UP FUNDING 8.2 PROJECTED PROFIT AND LOSS 8.3 PROJECTED PROFIT AND LOSS DATA 8.4 PROJECTED CASH FLOW 8.5 PROJECTED BALANCE SHEET

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EXECUTIVE SUMMARY

Net Connct, a cyber caf will be located in Uttara Model Town, Dhaka, offers a perfect spot for the public in social gathering and leisure. It will provide customers free access to the Internet as well as an area for to meet together in a casual environment under an economical manner.

The business intends to obtain finance from external equity in the amount of Tk. 720,000 (approximately), for which the application will be for commencing work on shop renovation, equipment purchases, and as operating cash flow. Preliminary capital injection has already been secured by the initial owners, Shaon and Mahmud Hassan, in the amounts of Tk. 285,000 and Tk. 180,000 respectively.

Net Connct will be incorporated as a limited liability company. The two initial owners will be the shareholders and their personal liabilities will be subject to a ceiling at the amount of their respective investments.

The finance acquired through this business proposal will allow Net Connct to successfully open and operate as a cyber caf. A comfortable and innovative environment is provided to the customers with a casual atmosphere. Operations in year one will generate Net Connct a regular customer base that allowed it to be self-maintained in year two.

1. Introduction:
Origin of the report: The course instruction Entrepreneurship Development, and the course instructor Anannay Chakma has authorized the data of writing. This report was given to a group of 6 members. Topic was selected and authorized by teacher. Submission date was27thJuly 2013. Purpose: This report shows Human Resource Practices of Robi Axiata Limited.

OBJECTIVES

Net Conncts objectives for the first year of operation include:

Connct from other coffee shops and cyber caf.

different interests and backgrounds together for socialization. High-quality coffee and bakeries at a reasonable price. Free access to online services. Educating the community on what the Internet has to offer.

1.2 MISSION As Internet has become more popular and grown at an expeditious pace, easy access has become a part of life. Net Connct provides the public free access to the Internet, highquality food and beverages in a comfortable environment. People from different backgrounds will come to enjoy the exclusive, stylish, and innovative environment that Net Connct offers. 1.3 RISKS
The risks involved with Net Conncts business are:

2.0 COMPANY SUMMARY

Net Connect, soon to be opened at Alaul Avenue in Uttara Model Town, Dhaka, and will provide the public free access to the Internet and a special and innovative environment for enjoying top quality coffee and bakeries.

Individuals of all ages and backgrounds will find Net Connct appealing. The staffs of Net Connect provide not only top quality service but also helpful instructions to customers in computer usage. This educational aspect attracted elderly customers and youngsters who do not own computers at home. The easy access location also provides residents in the same area convenience to their gourmet and online needs.

2.1 COMPANY OWNERSHIP

Net Connct privately owned by Nadiruzzaman Bhuiyan, the founder and CEO, and Prince Mahmud Hassan, a second shareholder.

2.2 START-UP SUMMARY

Net Connects start-up costs will cover renovation, furniture, computers, coffee machines and cooking equipment, and running capital to cover expenses in the first year.

The equipment provided to Net Connects customers with high-speed connection to the Internet forms a large portion of the start-up costs. These costs will include computers, two laser printers and a scanner.

Net Connct will also provide customers with a unique and innovative environment for enjoying great coffee, specialty beverages, and bakery items. Besides, the start-up costs will comprise the coffee machines such as one espresso machine, one automatic coffee grinder, and other additional equipment.

Start-up Costs

Tk.

Legal Fee Stationeries Tableware Consultants Insurance Rent Coffee Machines Bean Grinder Computer Systems (x11), Software, Printer, Scanner Internet Lines Fixtures/Renovation

7,500 7,500 7,500 30,000 10,500 21,675 160,500 11,925 364,650 12,600 300,000

Total Start-up Costs

934,350

Start-up Assets

Running Cash Start-up Inventory

360,000 30,000

Total Assets

390,000

Total Requirements

1,324,350

2.3 COMPANY LOCATION

A site has been chosen in Alaul Avenue Road in Uttara Model Town for the following reasons: Nearness to the close-by residents. Proximity to stylish, upscale restaurants in the same area. High visibility. The location map is here:

3.0 SERVICES
Net Connct will provide free access to the Internet and computer services such as printing, scanning to customers. It will also provide customers with a unique and innovative environment for enjoying top quality coffee and bakeries.

3.1 SERVICE DESCRIPTION

Net Connect will provide its customers free access to the Internet and common computer software and hardware. Some of the Internet and computing services available to Net Connects customers are listed below:

Access to external POP3 email accounts. FTP, Telnet, Gopher, and other popular Internet utilities will be available.

Net Connect will also provide its customers with access to introductory Internet and email classes. These classes will be held in the afternoon and late in the evening. By providing these classes, Net Connect will build a client base familiar with its services. The computers, Internet access, and classes wouldn't mean half as much if taken out of the environment Net Connect will provide. Good coffee, specialty drinks, bakery goods, and a comfortable environment will provide Net Connect customers with a home away from home. A place to enjoy the benefits of computing in a comfortable and well-kept environment.

3.2 COMPETITIVE COMPARISON

Net Connct will be the first cyber caf in Uttara Model Town. It will differentiate itself from other ordinary coffee shops in the same area by providing its customers with free Internet and computing services.

3.3 FULLFILLMENT Net Connect will obtain computer support and Internet access from ZIP Fiber Optic Network located in Banani, Dhaka. ZIP Fiber Optic Network will provide the Internet connections, network consulting, and the hardware required to run the Net Connect Network. Nescafe will provide Net Connct with coffee equipment, bulk coffee, and paper supplies. At this time, a contract for the bakery items has not been completed. Net Connect is currently negotiating with French Cakes & Pastry Shops and the Delicious Bakery and Pastry Shop to fulfill the requirement.

3.4 TECHNOLOGY
Net Connect will invest in high-speed computers to

provide its customers with a fast and efficient connection to the Internet. The

computers will be reliable and fun to work with. Net Connect will continue to upgrade and modify the

systems to stay with current technologies.

4.0 MARKET ANALYSIS

Net Connect is facing the opportunity of being the pioneer in the Uttara Model Town cyber caf market. The consistent popularity of coffee, combined with the growing interest in the Internet,

4.1 MARKET SEGMENTATION

Net Conncts customers can be divided into two groups. The first group is familiar with the Internet and desires a progressive and inviting atmosphere where they can get out of their offices or bedrooms and enjoy a great cup of coffee. The second group is not familiar with the Internet, yet, and is just waiting for the right opportunity to enter the online community. Net Conncts target market falls anywhere between the ages of 15 and 70. This extremely wide range of ages is due to the fact that both coffee and the Internet appeal to a variety of people. In addition to these two broad categories, Net Conncts target market can be divided into more specific market segments. The majority of these individuals are students and business people. See the Market Analysis table below for more specifics. Market Analysis
2009 2010 2011 2012 2013

Potential Customers

Growth

University Students Office Workers Seniors Teenagers Others

4% 3% 5% 2% 0%

15,000 25,000 18,500 12,500 25,000

15,600 25,750 19,425 12,750 25,000

16,224 26,523 20,396 13,005 25,000

16,873 27,319 21,416 13,265 25,000

17,548 28,139 22,487 13,530 25,000

Total

2.68%

96,000

98,525

101,148

103,873

106,704

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4.2 TARGET MARKET SEGMENT STRATEGY Net Connct intends to cater to people who want a guided tour on their first spin around the Internet and to experienced users eager to indulge their passion for computers in a social setting. Furthermore, Net Connct will be a magnet for local and traveling professionals who desire to work or check their email messages in a friendly atmosphere. These professionals will either use Net Conncts PCs, or plug their notebooks into Internet connections.

4.3 MARKET TRENDS A market survey was conducted recently with key questions asked to fifty potential customers in Uttara Model Town. Some key findings include:

40 people said they enjoyed free access to the Internet.

daily basis.

4.4 ATTRACT NOVICE INTERNET USERS Net Connct 's first strategy focuses on attracting novice Internet users. Net Connct plans on attracting these customers by: Providing a novice friendly environment. Net Connct 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 Connct employee will always be available to assist.

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Net Connct 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 Net Connct computer systems. 4.5 ATTRACT POWER INTERNET USERS Net Connct's second strategy will be focused on attracting power Internet users. Power Internet users provide an important function at Net Connct. Net Connct 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. 4.6 SCOIAL HUB The third strategy focuses on building a social environment for Net Connct customers. A social environment, that provides entertainment, will serve to attract customers that wouldn't normally think about using the Internet. Once on location at Net Connct, these customers that came for the more standard entertainment offerings will realize the potential entertainment value the Internet can provide.

4.7 MARKET NEEDS Factors such as current trends, addiction, and historical sales data ensure that the high demand for coffee and Internet access will remain constant over the next five years. Being the first cyber caf in Uttara Model Town, Net Connct will enjoy the pioneer advantages of name recognition and customer loyalty. Initially, Net Connct will hold a 100 percent share of the cyber caf market in Uttara Model Town. In the next five years, competitors will enter the market. Net Connct has set a goal to maintain greater than a 50 percent market share.

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5.0 SERVICE BUSINESS ANALYSIS The retail coffee shop in Uttara Model Town experienced rapid growth from the 1990s and is now moving into the mature stage of its life cycle. Many factors contribute to the large demand for high-quality coffee in Uttara Model Town. The yuppies are the main source of demand for coffee retailers. 5.1 COMPETITION AND BUYING PATTERNS The main competitors in the retail coffee segment within the same location are Coffee Shop and Multimedia Zone. These businesses target a similar segment to Net Conncts (i.e. educated, upwardly-mobile students and business people). However, Net Connct will offer substantial computing services to its customers which these competitors are not providing at the moment. 5.2 DISTRIBUTING A SERVICE The dual product/service nature of Net Conncts business faces competition on two levels. Net Connct competes not only with coffee shops, but also with Internet service providers. The good news is that Net Connct does not currently face any direct competition from other cyber cafs in the Uttara Model Town market.

Heavy competition between coffee shops in Uttara Model Town creates an industry where all firms face the same costs. There is a positive relationship between price and quality of coffee. Some coffees retail at Tk. 30/cup while other, more exotic beans may sell for as high as Tk. 45/cup. Wholesalers sell beans to retailers at an average of a 50 percent discount. For example, a pound of Sumatran beans wholesales for Tk. 105 and retails for Tk. 210. And as in most industries, price decreases as volume increases.

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6.0 MARKETING STRATEGY Net Connct will position itself as a stylish coffee house and Internet service provider. It will serve high-quality coffee and specialty beverages at competitive prices. Due to the number of cafs in Uttara Model Town, it is important that Net Connct sets fair prices for its products. Net Connct will use advertising as its main source of promotion. Ads placed in food magazines will help build customer awareness. Accompanying the ad will be a coupon for discounted coffee and nice bakeries.

6.1 PROMOTION STRATEGY Net Connct will implement a pull strategy in order to build consumer awareness and demand. Initially, Net Connct has budgeted Tk. 75,000 for promotional efforts which will include advertising with food magazines and in-house promotions such as offering customers free drinks.

Net Connct realizes that in the future, when competition enters the market, additional revenues must be allocated for promotion in order to maintain market share. 6.2 PRICING STRATEGY Determining a fair market for cyber caf is more difficult because there is no direct competition from another cyber caf in Uttara Model Town. Therefore, Net Connct has to base its prices for coffee and specialty drinks on the retail profit analysis provided by the supplier, Nescafe Coffee, which has been in the coffee business for over 50 years and has developed a solid pricing strategy. 6.3 SALES STRATEGY As a retail establishment, Net Connct employs people to handle sales transactions. Computer knowledge is a prerequisite for Net Connct 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 Conncts commitment to friendly, helpful service is one of the key factors that distinguish itself from other cyber cafs.

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6.4 SALES FORECAST

Cost of Sales: The cost of goods sold for coffee-related products was determined by the "retail profit analysis" we obtained from Nescafe Coffee. The cost of bakery items is 20% of the selling price. The cost of Internet access is Tk. 9,600 per month, paid to PCNet for networking fees. 7.0 MANAGEMENT SUMMARY Net Connct is owned and operated by Mr. Titop Rahman. The company, being small in nature, requires a simple organizational structure. Implementation of this organizational form calls for the owner, Titop Rahman, to make all of the major management decisions in addition to monitoring all other business activities. 7.1 PERSONNEL PLAN

The staff will consist of six part-time employees working thirty hours a week at Tk. 80.00 per hour. In addition, one full-time technician (who is more technologically oriented to handle minor terminal repairs/inquiries) will be employed to work forty hours a week at Tk. 150 per hour. The other shareholder, Prince Mahmud Hassan, will not be included in management decisions. This simple structure provides a great deal of flexibility and allows communication to disperse quickly and directly. Because of these characteristics, there are few coordination problems seen at Net Connct that are common within larger organizational chains. This strategy will enable Net Connct to react quickly to changes in the market.

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8.0 FINANCIAL PLAN The following sections lay out the details of our financial plan for the next three years.

8.1 START-UP FUNDING This business plan is prepared to obtain financing in the amount of Tk. 720,000. 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. This amount is planned to be repaid by Tk. 180,000 each year by four years. Owners investments have already been secured as follows:

Tk. 285,000 of personal savings from owner Titop Rahman.

Tk. 180,000 from the second shareholder, Prince Mahmud Hassan.

Tk. 139,350 in the form of short-term bank loans.

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Amount

Start-up Expenses to Fund Start-up Assets to Fund

934,350 390,000

Total Funding Required

1,324,350

Assets

Inventory Cash Balance

30,000 360,000

Total Assets

390,000

Liabilities

Short Term Bank Loans Funds Needed to Raise

139,350 720,000

Total Liabilities

859,350

Capital

Titop Rahman Prince Mahmud Hassan

285,000 180,000

Total Planned Investment

465,000

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8.2 PROJECTED PROFIT AND LOSS

Payroll Expense: The founder of Net Connct, Titop Rahman, will receive a salary of Tk. 360,000 in year one, Tk. 396,000 in year two, and Tk. 435,060 in year three. Net Connct intends to hire six part-time employees in year one at Tk. 82.50/hour and a full-time technician at Tk. 150/hour.

Rent Expense: Net Connct is leasing a 400 square foot facility at Tk. 30,000/month for a total of 36 months. At the end of the third year, the lease is open for negotiations and Net Connct may or may not re-sign the lease depending on the demands of the lesser.

Utilities Expense: As stated in the contract, the lesser is responsible for the payment of utilities including gas, garbage disposal, and real estate taxes. The only utilities expenses that Net Connct must pay are electricity and the phone bill generated by fifteen phone lines; thirteen will be dedicated to broadband and two for business purposes.

Marketing Expense: Net Connct will allocate Tk. 506,250 for promotional expenses over the first year. This amount will be used for advertising in food magazines in order to build consumer awareness.

Insurance Expense: Net Connct has allocated Tk. 21,600 for insurance for the first year. As revenue increases in the second and third year of business, Net Connct intends to invest more money for additional insurance coverage.

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Break-even Analysis
Break-even analysis calculates what is known as a margin of safety, the amount that revenues exceed the break-even point.In economics & business, specifically cost accounting, the breakeven point (BEP) is the point at which cost or expenses and revenue are equal: there is no net loss or gain, and one has "broken even". A profit or a loss has not been made, although opportunity costs have been "paid", and capital has received the risk-adjusted, expected return. In short, all costs that needs to be paid are paid by the firm but the profit is equal to 0. For example, if a business sells fewer than 200 tables each month, it will make a loss, if it sells more, it will be a profit. With this information, the business managers will then need to see if they expect to be able to make and sell 200 tables per month.

Computation
In the linear Cost-Volume-Profit Analysis model, the break-even point (in terms of Unit Sales (X)) can be directly computed in terms of Total Revenue (TR) and Total Costs (TC) as:

where:
TFC is Total Fixed Costs, P is Unit Sale Price, and V is Unit Variable Cost. TR=TC p

The Break-Even Point can alternatively be computed as the point where Contribution equals Fixed Costs.

The quantity, , is of interest in its own right, and is called the Unit Contribution Margin (C): it is the marginal profit per unit, or alternatively the portion of each sale that contributes to Fixed Costs. Thus the break-even point can be more simply computed as the point where Total Contribution = Total Fixed Cost:

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To calculate the break even point in terms of revenue (aka. currency units, aka. sales proceeds) instead of Unit Sales (X), the above calculation can be multiplied by Price, or, equivalently, the Contribution Margin Ratio (Unit Contribution Margin over Price) can be calculated: R=C, Where R is revenue generated, C is cost incurred i.e. Fixed costs + Variable Costs or Q * P(Price per unit) = TFC + Q * VC(Price per unit), Q * P - Q * VC = TFC, Q * (P - VC) = TFC, or, Break Even Analysis Q = TFC/c/s ratio=Break Even

8.4 PROJECTED CASH FLOW: 2014 Tk. Cash Received 2015 Tk. 2016 Tk.

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Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received Capital Investment Short Term Bank Loan Long Term Funding Subtotal Cash Received Expenditures Expenditures from Operations Additional Cash Spent Repayment of Short Term Loan Long-term Liabilities Repayment Subtotal Cash Spent Net Cash Flow Cash Balance 139,350 180,000 4,715,414 341,957 341,957 0 180,000 4,386,188 166,973 508,929 0 180,000 4,569,195 134,955 643,884 4,396,064 4,206,188 4,389,195 465,000 139,350 720,000 5,057,370 0 0 0 4,553,160 0 0 0 4,704,150 3,733,020 3,733,020 4,553,160 4,553,160 4,704,150 4,704,150

RECOMMENDATION AND SUGGESTION

From the business plan of Net Connct, weve learnt that, the internet has become more popular and grown at an expeditious pace, easy access has become a part of life. Therefore, the openings of new cafs in the same area, which can be offer the exact services that Net Connct provides. But, the Net

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Conncts owners not that much aware about the warning. Besides. They didnt do any kind of SWOT analysis for their business. Net Connct will provide full access to email, Web, and other Internet applications such as Voice-over-IP. Printing, scanning, and introductory courses to the Internet will also be available to the customer. Here, their strategy is only to access the people to use the internet as a free. We think this strategy will be fine only for first months, not for the whole lifetime of the business. They showed their start up cost Tk. 934,350, and its a huge amount for two owner partnership business. If they dont take any charge for internet access, they will lost a huge amount profit. Besides, its not a perfect strategy to hold the customer only providing coffee and foods as a primary business objective. Net Connct will provide free access to the Internet and computer services such as printing, scanning to customers. It will also provide customers with a unique and innovative environment for enjoying top quality coffee and bakeries. But, here in uttara, there are lots of cyber caf exists. So, if they take less charge for internet access than other cyber caf charges, more beneficial for them. Net Connct will be the first cyber caf in Uttara Model Town. It will differentiate itself from other ordinary coffee shops in the same area by providing its customers with free Internet and computing services. But in the initial stage of business, owners have to do a tremendous marketing promotion, though they dont do that. They just want to promote their business only in uttara model town. Due to intense competition, caf owners must look for ways to differentiate their place of business from others in order to achieve and maintain a competitive advantage. The founder of Net Connct realizes the need for differentiation and strongly believes that combining a caf with complete Internet service is the key to success. But they will just use magazine and leaflet as a promotional strategy, instead of newspaper, radio and local TV channels.

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