Startup Project of Consultancy Business For Stainless-Steel MSME Sector

Startup Project of Consultancy Business for Stainless- Steel MSME Sector
Technical, Techno-Commercial, and Others end-to-end Services to
Upstream and Downstream Industries
CAPSTONE PROJECT
Singapore Business School
[UMENDRA PRATAP SINGH]

[umendra72@gmail.com]
[17th January- 2022]
pg. 1
Table of Contents

1.0 Executive Summary 3
1.1 Short Description of Product/Service 4
1.2 Target Market 7
1.3 Competitors 7
1.4 Pricing Strategy 8
2.0 Business Description 8
2.1 Customers need 8
2.2 Problem Solving 9
2.3 Better Products/ Cheap Product 9
3.0 Market Analysis 9
4.0 Competition 10
4.1 Competitive Analysis 10
4.2 SWOT Analysis 11
5.0 Sales and Marketing 12
5.1 Product or Service Offerings 12
5.2 Pricing Strategy 12
5.3 Marketing Strategy 13
5.4 Sales and Distribution 14
6.0 Operating Plan 14
6.1 Project Timeline 14
6.2 Production and Equipment 15
6.3 Daily Activities 15
6.4 Outside Services 15
7.0 Financial Plan 16
7.1 Product/ Service Cost 16
7.2 Marketing Plan and Budget 17
7.3 Extra Service Costs 17
7.4 Project Forecast 18
7.5 Successful 18
7.6 Moderately Successful 20
7.7 Failure 21
7.8 Break Even Point 23
8.0 Conclusion 23
9.0 Appendices and Exhibits 24
1.0 Executive Summary:
pg. 2
Purpose:
To launch a startup Project of Consultancy Business to serve the Stainless-Steel Industries
among the MSME Industries. The idea is to provide Technical, Techno commercial services
to MSME Industries to improve the overall performance and resultant in improving in Plant
operational efficiency, supply chain, Marketing Channels, and Profitability.
Scope:
The scope of the consultancy business will be to provide an end-to-end platform for MSME
Industries and need to address their chronic issues in a timebound and cost-effective
manner. Some of the burning issues of MSME Industries are as below:
1. To provide technological support for the smooth running of operations.
2. To provide a strong supply chain mechanism for seamless operation.
3. To Provide networking for managing financial issues.
4. To Provide a Marketing network/Sales Channel for the selling of finished goods.
5. To provide Research & Development support for the innovation of new products and
looking for value-added Products.
6. To Improve the overall financial statement by a reduction in cost and efficient plant
operations.
Background:
Indonesia is the world’s largest group of islands and the world's largest country comprised
solely of islands. Around 6,000 islands are inhabited. Only 3,000 of the islands have
significant populations.
Most of the Indonesian city is situated close to the coastal areas and surrounded by sea and
this kind of environment is highly corrosive for normal carbon steel. In this kind of
environment stainless steel is the best material for uses of various outdoor applications. The
per capita consumption of stainless- steel in Indonesia is one of the lowest among the
ASEAN region which provides clear evidence that there is a huge potential available to
increase the consumption of stainless steel by creating more awareness in the Business
community, creating a new application, and taking the help from government agencies to
enhance the uses for stainless steel and reduce the maintenance cost and improve the
overall life cycle of the product. The per capita consumption of the stainless-steel for ASEAN
countries are given below:
Country Population (Million) SS Consumption (MT/Annum) Per Capita
Malaysia 26 200,000 7.7 Kg

Thailand 65 200,000 3.1 Kg
Vietnam 88 300,000 3.4 Kg
Indonesia 240 165,000 0.6 Kg
pg. 3
The growth of the MSME sector in any developing country helps to increase the
consumption of stainless steel and contributes to maximizing employment. Indonesian
stainless-steel sector is one of the most prominent growing markets in the world due to the
availability of Nickle ore which is one of the costliest elements used for the manufacturing
of Stainless- steel.
Indonesia's total export of stainless steel grew by 41.9% to the US $ 3.26 billion in
2019 whereas in 2018 was the only US $ 2.3 billion. The five years trend from 2015 to 2019
has a growth of 188.14% per year where the export value reached the US $ 91.3 million in
2015 then significantly increased to the US $ 3.26 billion in 2019.
Global stainless-steel production is set to grow again, next year. MEPS forecasts an annual
total of 58.2 million tons in 2022 – an increase of 2.5 percent. The government of Indonesia
in the Budget 2021-22 has reduced the customs duty uniformly to 7.5 percent on Semis, Flat
and Long products of non-alloy, alloy, and stainless steels to alleviate domestic tightness.
This is intended to benefit metal re-cyclers who are mostly small and medium enterprises.
The idea is to promote all the industries engaged in Stainless-steel to do well.
Issues:
Most of the MSME sectors industries in Indonesia are un-organized sectors therefore
they always need local government support and other kinds of outside support to
manage the various business requirements to provide the most appropriate and
sustainable solutions. The role of Consultancy Business becomes very important to
provide all possible technical and techno-commercial support to grow the MSME
sector. The MSME sector is having lack technical knowledge, skills, and understanding
of the economic impact to compete with major players in the domestic market and
against cheap import from Export especially China. China and ASEAN countries are
having free trade agreements therefore it is difficult to stop cheap imports from China.
Indonesian production has soared, this year. Mills in the country are expected to
manufacture more than 4.5 million tonnes, in the current twelve-month period. As a result,
Indonesia is set to surpass India as the second largest stainless-steel producer in the world.
In this kind of Business environment upstream and downstream industries are getting
enough opportunities to grow if they are supported by the right kind of technical Knowledge
and address their raw material sourcing and marketing issues.
In China, government directives to restrict melting activity, introduced in the first six months
of 2021, were subsequently enforced more strictly. Power rationing in October-21, caused
by coal shortages, further curtailed output. Moreover, the crisis at Chinese real estate
company, Evergrande, is negatively affecting steel consumption in the construction sector.
This kind of situation can be seen as an opportunity to boost the domestic production of
stainless steel in Indonesia.
1.1 Short Description of Product/Service:
Stainless steels are iron alloys with a minimum of 10.5% chromium. A thin layer of oxide is
produced (known as 'passive layer) on the surface by Chromium. Chromium helps in
pg. 4
improving corrosion resistance. Other metals which might be added to stainless steel
include Nickel, Molybdenum, Titanium, and Copper.
Apart from the excellent corrosion resistance this magical material also possesses the
following properties which make it superior to carbon steel.
 STRENGTH  HEAT RESISTANCE

 TOUGHNESS  BETTER AESTHETIC LOOK
 IMPACT RESISTANCE  LOW ON MAINTENANCE
 FORMABILITY  LONG TERM VALUE
Short Description of Service
Most of the MSME industries are coming under unorganized sector and they are
underutilizing their installed capacities or even struggling for getting smooth feeding of
Raw material. The job of the consultancy agency is to prepare a list of all these
industries and arrange a meeting to understand their difficulties for the smooth running
of Business.
As per market research, many small industries are struggling for technical know-how to
compete with a major player, issue of the right quality of Raw material at the right time
and right price, Supply chain issues, Marketing related issues to identify the most
appropriate market, innovating value-added products as per the current requirement of
the market, etc.
We are going to provide exclusive service to the individual industry as per the
requirement of each Industry with the contract of end-to-end service till all the
Technical, Techno-Commercial, and Marketing related issues are identified and prepare
the time-bound action plan to address each issue. To start with we will be keeping a few
potential customers where the scope of improvements is high, and the result can be
achieved in a short period.
Type of Products/Industries going to be targeted by our Consultancy Services:
The MSME sector industries in Stainless Steel Business are engaged in the following
areas:
1. Stainless Steel Induction Furnace Melting.
2. Stainless Steel Cold Rolling Mills.
3. Stainless Steel Foundries and Casting.
pg. 5
4. Pipe and Tube Manufacturing.
5. Stainless steel Component & Water Tank.
6. Stainless Steel utensil, cutlery, and knife.
7. Stainless Steel Industrial Impeller, Pump casing, and other small components.
8. Stainless Steel service center & Trading.
9. Stainless Steel Re-rolling.
10. Stainless Steel Auto Exhaust.
Stainless Steel Valve Flapper Stainless- Steel Pump Parts
Pump Impeller Pipe Joints & fitting
Pipe and Sections used in ABC, Kitchen and Furniture Auto Exhaust of Two-Wheeler
pg. 6
1.2 Target Market:
Java Island is the hub of all the industries including MSME Industries and 58.15% of the
entire Indonesia Business Revenue generate from Java Island only. The Java province is
the hub for Steel and Stainless-Steel manufacturing for the MSME sector and my target
market would be to contact all these industries to understand their chronic/burning
issues and address them successfully to build confidence and create a success story.
We are going to utilize our network of Steel and Stainless- Steel Industries to identify all
the manufacturers and then arrange a virtual or face-to-face meeting to understand
their Business Issues and list down their chronic problems. This kind of MSME industry
needs major support on the technical front, Procurement of Raw material, and support
for the Marketing network to sell their product at the Right Price. We as a consultancy
firm going to provide a platform to resolve each kind of problem and ensure the smooth
running of their operations. For sample purposes some of the target Industries located
in Java Island are as below:
1. PT Zenith All Mart
2. PT Metinca Prima Industrial Work
3. PT Citra Masindo Sukses
4. PT Aneka Banu Sakti
5. PT Itokoh Ceperindo
6. PT Korindo Stainless Steel
By providing the marketing network to their finished products to sell in the Domestic &
Export market will help to boost the overall performance of the industry. Indonesia is a
member of the ASEAN free trade group of countries therefore export to all the ASEAN
countries is much easy without any hassles. Most of the SME sectors are finding the major
issue of Marketing networks to sell their product consistently.
1.3 Competitors:
As a consultancy firm, we will not be having any direct competition with any manufacturing
facilities, but we are going to represent the MSME sector to support their business for
consistent and profitable operations, therefore our competition will be with the same
agencies who are competing with our customer’s.
pg. 7
The competitor of MSME industries is a mostly cheap import from China or sometimes the
major/bulk producer of the domestic market. These MSME companies are fighting on two
fronts first for high Price Raw material and second Sales of finished goods against cheap
imports. I will explain a small research study of the Tube & Pipe Market of Indonesia to
explain the same for better clarity.
The imported stainless-steel Tube & Pipe from China is sometimes cheaper than buying raw
material from the domestic market and manufacturing pipe & tubes in Indonesia. This leads
to several traders’ communities preferring to import pipe from China and sell in the
domestic market. In such cases, even a trader makes a higher profit margin than a domestic
producer of tubes and pipes.
The same case is also for generic pipe & tube fittings because these products are produced
in mass in China and imported at a cheaper price and giving unfair competition to SME
sectors. SME sectors are forced to produce non-generic engineering products so that they
should be able to get consistent business with lower competition.
In the case of the MSME sector, it has a wide range of customers like OEM’s, Auto
manufacturers, Spare parts in various Industries, Pump & Chemical equipment
manufacturers, Food and beverage Industries, Pulp and Paper, and Textile are some very
common and regular customer.
1.4 Pricing Strategy:

In most consultancy businesses, consultancy Fees are calculated on additional revenue
earned and profitability increased with the support of a Consultancy firm. The pricing
strategy in the consultancy business is either on an hourly basis, lump-sum basis, and
turnkey basis. In all the cases the initial Pricing strategy for an MSME project will be as
below:
a. Project/Business Size of the Customer - USD 200,000- USD 500,000 per month
b. Hourly Based and Task-based.
c. Profit Margin Sharing Basis - 1- 2% of the Project turnover.
d. Lump-sum Basis – USD 5,000- 10,000 per month
e. Revenue Earned or Improve in Profitability of the customer.
2.0 Business Description

The Indonesian Stainless-Steel industry could grow aggressively over the next few years as
demand from infrastructure projects is forecast to surge, according to the Indonesian Iron
and Steel Industry Association (IISIA). The government is currently urging all domestic
industries to boost their output of downstream products made from mineral resources and
thereby add more value to their production. The burgeoning importance of SMEs in the
Stainless-Steel sector is due to their significant contribution to the key factors of the
growing Indonesian economy.
The idea of the Consultancy Business is to provide all Technical and Techno-commercial
support to the MSME sector Industries so that they should be able to compete with all the
major domestic industries. The idea here is to provide all the needful support to the MSME
industries to focus on innovative and non-generic products, Improve Productivity, Cost
pg. 8
Control, and high product yield so that the sustainability of the MSME industries shall be
ensured. The details and range of services being offered by Consultancy Business are as
below:
2.1 Customers Need
 Provide technical support for critical and Chronic Problems.
 To provide support and network for arranging the right quality of Raw Material at
the Right Price.
 To provide all technical solutions to manufacture Products to meet all the
requirements of the customer.
 Final Product Quality and Packaging Requirement.
 Cost Reduction in the entire value chain and implement the concept of Lean
Manufacturing.
 Providing a Marketing network to sell the Product in the Domestic and Export
Market.
 Any new Upstream or Downstream Project Expansion and Feasibility.
 Development of new Product as per market requirements.
 Providing Training & Mentoring to the Team.
2.2 Problem Solving:

 Problem-solving requirements are varying based on customer-to-customer needs
and every kind of problem will be having different actionable points. Some of the
very common needs of the customers in Indonesia areas mentioned above and our
focus will be providing time-bound actionable solutions.
2.3 Better Product/ Cheaper Product:

 The market requirement in Indonesia is more focused on infrastructure, Metal and
Mining, Textile, Pulp and Paper, Agricultural Equipment, Palm Oil are some important
areas focus on proving their requirements.
 Stainless Steel products are light in weight, the high Life cycle of the Product,
therefore, a lot of possibilities are available for the introduction of a new and better
product to replace the old traditional product.
 Product cost sometimes appears high in the beginning but if we compare product life
then the same product starts looking cheaper or sometimes the running &
maintenance costs of the product or services are very low compared to the initial
cost.
 Bus or Automotive bodies and various possible parts are nowadays changed to
Stainless-Steel looking to the advantage of low maintenance, light in weight means
lower running cost and overall life cycle of the Product.
 Providing new applications, innovative ideas, New Product development, Cost-
cutting by uses of Energy conservation, Lean manufacturing practices to minimize
Process time and wastage, providing marketing channels are going to attract any
MSME customer to take the support of Consultancy services.
3.0 Market Analysis:
pg. 9
According to our research report and article found confirming that as per Cooperatives and
SME Minister Teten Masduki, the target is particularly challenging due to the 100% growth
target. "The export value of MSME products, which currently stands at 14.5%, has to rise to
30% by 2024," which gives a clear indication for the opportunity available in the Stainless-
Steel sector. The dynamics of the world stainless steel market are evolving rapidly.
Production has been rising in recent years and the trend is expected to continue into 2022.
Despite being the world’s largest producer by far, China’s production is seen constrained by
State regulations; but elsewhere in the world production is set to rise.
Indonesian Steel and Stainless-steel market, the expected growth is going to remain strong
due to coal shortage in China and many Melting facilities has been put down due to scarcity
of Energy sources. Indonesia is having rich in Natural resources of Energy & Nickel therefore
Indonesian market will be more aggressive towards export and getting advantage of lower
imports from China due to Energy crises.
The key customer for our consultancy business will be from a wide range of segments,
Market size and Approximate number of People employed are as mentioned below:
S.No. Type of Industries/Segment Market Size/People Employed
Small Melting Facilities manufacturing various
1. 500-600Ton/ Month & 800-900
kind of Casting & Machining Products
Stainless-steel Fabrication and manufacturing
2 800-1000 Ton/Month & 1500-1800
Agricultural Products
3 Tube and Pipe Segments 2000-2500 Ton/ Month & 500-600
Automotive Parts including OEM’s and
4 200-250 Ton/Month & 800-1000
Automotive Body Builders
5 Water Tank and Furniture Industries 800-1000 Ton/Month & 500-600
Pumps, Valve and Pipe Fitting for Chemical &
6 200-300 Ton/Month & 600-700
Food Processing Industries
4.0 Competition:
The core of consultancy Business is to focus on the MSME, Stainless-Steel segment

Industries. Most of these Industries' Businesses were highly impacted due to the lockdown
during the Pandemic of Covid-19 and leads to severe unemployment and loss in business.
Some new startup projects were coming in various areas of Stainless-Steel production &
distribution that were put on hold.
There are very few consultancy firms available to provide a complete package for the
Stainless-Steel manufacturing Business from the Raw Material stage to the final finish
goods. My competition will be with all the major consultancy companies having large
infrastructure and better equipped for providing multiple solutions & strong financial
background.
4.1 Competitive Analysis:
The Stainless-Steel sector in the MSME segment is coming with many startup projects and
many existing projects also looking for support to survive in this competitive market. The
pg. 10
major competitor for my consultancy business is Chinese companies, who are having very
good infrastructure from equipment design, capacity calculation, and supply of equipment
and provide complete technical support for the erection and commissioning of the
equipment or facilities.
The domestic sector consultancy firms are huge but unable to provide an end-to-end
solution to most of the MSME industries. I am going to represent on the behalf of MSME
Industries to provide varieties of services to run their business seamlessly. I am listing down
some of the Domestic consultancy firms that are engaged in multi-disciplinary business but
not focused on only Stainless Steel.
Quality of Competitive
Name of the Industries Consultancy Fee
Product/Service Advantage
PT Yokogawa Indonesia 60-70% High Limited to Steel and No experience of
Large size Project Stainless Steel MSME
PT Jatim Bromo Steel 20-30% High Limited to Steel Fab. Limited Fab. & Design
& Design Experience
Krakatau Engineering & 75-90% High Limited to Steel and No experience of
Construction Large size Project Stainless Steel MSME
4.2 SWOT Analysis:
In developing MSMEs, it needs the strategy to defend and develop the importance of
MSMEs in the future. Generally, the strategy has some components. It is considered to
decide the strategy that will work in long term. In arranging the strategy, one activity that
must do is internal and external situation analysis. This analysis needs to analyze the
strength and weaknesses, also opportunities and threats. One approach to analyze this
situation is a SWOT analysis, abbreviation from Strength, Weakness, Opportunities, and
Threat.
For helping to formulate the next plan, it is used the SWOT analysis instruments are. SWOT
analysis is a systematic way to identify the internal and external factors of the consultancy
business. It is the strategic form that illustrates the best appropriateness. This analysis
assumes that the strategy will make the strength and opportunities maximum and it
appears the weakness and threat. This is the result of SWOT analysis:
STRENGTHS WEAKNESSES
 MSME sector in Steel & Stainless-Steel is  This is a new consultancy business so initial
growing fast. market penetration and realization to the
 As per the research data in the next 5 SME sector industries will be tough until
years, the growth in the MSME sector will crated few success stories.
be double-digit due to the focus of the  The initial Market sentiments not to take a
government on Infrastructure. risk for extra expenditure to get the
 The competition will be less because support from Consultancy firms due to lack
Stainless-steel SMEs are not having enough of working capital & reluctant behaviour of
consultancy to provide end-to-end management.
solutions.  The training of employees and process
 We will be keeping target to occupy 15- initiatives to improve quality will be
20% of the SME Business within 3-5 Years another area where the SME sector will be
of Span and provide end-to-end supports having lack interest in allocating extra
pg. 11
for new establishment and bring cost- funds for such improvements. Some of the
effectiveness & quality awareness among SME’s are not keen on the COPQ concept
the existing industries to make them and improve overall quality in the entire
more competitive and profitable in the value chain.
Domestic Market.
OPPORTUNITIES THREATS
 The state and central governments both  The major Industries always trying to buy
are providing lower bank interest for the SME Industries in case their financial
SMSs segment to motivate higher numbers are not strong and struggling for
investment. working capital.
 The initial growth & Boost in Infrastructure  The major Industries create threats by
is going to help to provide a major their monopoly and trying to regulate the
opportunity to improve the turnover of the market price and not allowing the SMEs
Business and Maximize Profitability. sector to grow fast.
 The Republic of China is struggling for the  Some of the existing players may create
availability of Power and several melting hurdles for new upcoming projects and
and Metal Industries have been put down asking to our Consultancy firm not to
and it will directly help to minimize the support the new Projects. This may lead to
cheap import from China and provide a negative competition and unfair growth of
new window of opportunity to the SME SMEs sectors Industries.
Industries to improve the Business.
5.0 Sales and Marketing:
As a Consultant of MSME sector sales and marketing advise businesses on how to develop

and execute sales and marketing strategies. These are methods to spread awareness of a
product or service to potential customers and persuade them to purchase it. Here the most
important part of the Business is to develop confidence and present the data or comparison
study to illustrate how the consultancy business will going to help on the different aspects
of the Sales and Marketing or as a complete package to turn around the business by
providing the needful support to the customer.
5.1 Product or Service Offerings
The product and service offering will be very specific, and it may vary from customer to
customer based on their chronic issues related to Product, Product Quality, Cost Reductions,
Energy conservation, Raw Material Supply Chain Issue, Plant Operations (Technical Matters),
Sales and Marketing related issues, Uses of New Technologies, and Digitalization of Business
for quick and easy accessibility.
The idea of the consultancy business is to maximize the profitability of the MSME Industries
by providing the following support:
1. The product and service provided by the consultancy business will be dealing with
end–to–end solutions and the fee will be charged only after achieving a certain
milestone. This kind of initial support will be necessary to create a success story and
win the confidence of the customers.
2. In consultancy Business, many consultants’ charges on an hourly basis to provide the
service for any specific issues raised by the customers. Most of the consultancy are
pg. 12
having a larger setup and they have area-specific experts to resolve the issues. In our
case, we will be providing a holistic approach by understanding the entire Business
process and preparing a list of suggestions and recommendations cost-effectively.
3. Our Consultancy Business size will be small therefore the overall fixed cost will be
also very low compared to the Jumbo size consultancy firm in the domestic market
of Indonesia. Here most of the consultancy businesses work for profit margins 10-
15% of the contracted Business volume which is difficult for many MSME industries
to use such jumbo Consultants.
4. Market Price transparency is specific to the unique product range and Requirements.
5. Budget Planning support and Market entry advice and identification of new value-
adding opportunities for SME Producers.
5.2 Pricing Strategy:
Pricing strategy is again a market-driven factor, and it is highly dynamic. Since we are a new
player in this Business segment then our approach shall be more scientific and well-studied
the market sentiments, profit margin of the SMEs sectors, and affordability of the revenue
for various improvements expected by the management. Looking at all the aspects of the
Business and current market conditions, I would suggest following 5 important pricing
strategies.
1. Price Skimming: Price skimming is a product pricing strategy by which a firm charges
the highest initial price that customers will pay and then lowers it over time. The
skimming strategy gets its name from "skimming" successive layers of cream, or
customer segments, as prices are lowered over time.
2. Penetration Pricing: A penetration pricing strategy prioritizes market share over
profits for a given period. The goal is to generate demand, rapidly build a customer
base, and maximize brand loyalty in a short time. Penetration pricing is when
businesses introduce a low price for their new product or service.
3. Competitive Pricing: An effective pricing strategy is essential to help a business set
an offer price which is in line with the competition and will maximize revenue and
deliver a good profit. Competition determines market price because the more it is in
demand (which is the competition among the buyers), the higher price the consumer
will pay and the more money a producer stands to make.
4. Value-Based Pricing: Value-based pricing is a means of price-setting wherein a
company primarily relies on its customers' perceived value of the goods or services
being sold—also known as customers' willingness to pay—to determine the price it
will charge.
5. Dynamic Pricing: A dynamic pricing strategy is a type of price discrimination that
tries to find the optimum price point at any time. Price changes can be based on the
perception of how much a consumer is willing to pay at a specific time for an item,
competitor's pricing, and other variables.
5.3 Marketing Strategy:
With a population of more than 263 million people, Indonesia holds tremendous potential

for local start-ups and foreign enterprises looking to break into the market. Social media
and internet usage rates are rising fast, with one survey recording 201.37 million active
internet users in 2020 means 76.56% of the population using the Internet. Along with
pg. 13
a growing middle-and-affluent-consumer class, the country is dominated by young
people who are tech-savvy and eager to spend their money on new products and services.
We would prefer the following marketing strategy for the uses of Media channels for our
Product/ services marketing purpose:
1. YouTube Marketing
2. WhatsApp Marketing
3. Instagram Marketing
4. Facebook Marketing
5. Business website
6. Email Marketing
7. Indonesian Iron and Steel Industry Association Membership
We prefer to contact each possible company as above stated media channel strategy and try
to identify the most potential customers and request for a virtual or face-to-face meeting to
display our expertise and presentation. On the same hand, we need to listen to the key
area of concern for the customer and prepare short-term and long-term strategies with
minimum capital investment to achieve the low-hanging fruits. Once the customer starts
realizing the benefits on his balance sheet only, we prefer to plan for a long-term strategy so
that customer is willing to participate and share some part of the Business.
5.4 Sales and Distribution:
In our case, since we are going to provide consultancy services to MSME industries
therefore sales of our Business are mostly intangible products/services. These kinds of
Products/Services are mostly discussed and finalized with help of good networking,
developing confidence in the client’s mind, the number reflected in terms of saving should
be highly convincing. In this case, the contract shall be linked with the output or
performance visible in financial numbers that only potential clients can be converted into
successful customers.
We prefer the use of digital media marketing channels and once clients are convinced with
ideas and concepts then email marketing and the virtual meeting could be the sources of
communication. The pandemic of Covid-19 has transformed the physical working to virtual
meeting and discussion and avoid unwanted traveling and cut down the Business
expenditure. WhatsApp is another way of communication where most of the discussions
including 24x7 contact are possible even outside the office hours and intact the Business
communication seamless.
6.0 Operating Plan:
Business Plan Consulting is the process in which an external third-party consultant is

engaged to provide strategic advice. The type of advice provided for a business will depend
on the factors which affect the business. Consulting businesses can be operated similarly to
any other, and every successful business begins with a plan. By developing a business plan
pg. 14
for our consulting business, we provide a formal framework to build the business from the
ground up, and into future expansion.
6.1 Project Timeline
As per my market research and understanding of MSME Business, we are going to form a
company and get registered within a month. Much Business-related activity can be run in
parallel like identifications of key potential customers and informal discussion shall be
continued till all the legal process of establishing of the Consultancy firm formations shall be
completed. Once the company formation process is done then we can start converting our
informal discussion into official discussion and bring our discussion into black and white in
contractual conditions.
Steps to creating a project timeline

Number of Days
Stages Description of Project Activity
3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54
Step-1 Understand the scope of our project
Step-2 Split the project into milestones
Step-3 Estimate the time of each task
Step-4 Assign tasks to our team
Step-5 Choose our project timeline
Step-6 Plot each task on our timeline
Step-7 Risk Assement and Countermeasure
Step-8 Kick off the Project Activity
6.2 Production and Equipment

In Consultancy Business we need to set up an office with few Laptops, Table & Chair,
Telephone, Internet, Printer, and other office equipment so that we should be able to start
communication with our clients and customers. Production and Equipment requirements
only can arise once we discuss and finalize the contract with our customer.
The requirement of Production and Equipment planning becomes equally important in the
case of the customer to achieve desired results as per the agreed term and condition of the
contract. This kind of planning took a few months to finalize any new equipment and the
same need to be imported or produced locally with the support of equipment
manufacturing firms.
6.3 Daily Activities
The daily work of a management consultant includes gathering data and insights (through
research, surveys, interviews), running analyses, making PowerPoint presentations, and
pitching solutions to the clients. The job involves a lot of traveling, and long hours are the
norm.
1. 5:30 AM: Wake Up and Morning Walk
2. 6.00 AM: Coffee, Check-In, and Planning Daily activities
3. 9.00 AM: Reach the office or Head to the Client Site
4. 9:30 AM: Check Emails & WhatsApp
pg. 15
5. 10.00 AM: Meeting with Internal Team
6. 11.00 AM: Grind (Focus on Presentation or Daily Planning activities)
7. 2.00 PM: Client Meetings
8. 4.00 PM: Debrief and Plan with internal Team
9. 4:30 PM: Afternoon Venti (Coffee Break)
10. 5.00 PM: Grind (Important task after free from all activities)
11. 7.00 PM: Client or Project Dinner (Planned occasionally)
12. 9.00 PM: Head Home
13. 10.00 PM: Check Emails and Grind
14. 10.30 PM: Sleep!
6.4 Outside Service

In the case of a small size Consultancy Business, the workload on the entire team is quite
high, which may lead to underperformance of the individual. The workload should be shared
in such a way that all fewer priority activities to be outsourced at lesser cost whenever it is
necessary. Nowadays most of the services are available on outsourcing or daily payment
basis which helps to save the time and energy of core team members.
Outside services are related to hiring Taxi, booking flight or train tickets, arranging office
related requirements, local advertisement, small contractors to provide manpower and
recruitment agencies are few very important requirements can be outsourced and keep our
manpower to be a focus on core activities.
7.0 Financial Plan:
To start any business with a limited budget is always a challenging task because it's always
kept our hands tight therefore to prepare the financial plan very carefully. In the case of our
project, the budget allocated is USD 1000 only to startups with limited resources and later
keep on adding the needful requirements along with the growing business.
7.1 Product/Service Cost:
As per the market conditions in the Indonesian MSME sector the consultancy charges are
majorly on a turnkey basis or hourly basis but the preference is mostly for a turnkey basis.
The customer is looking for a consultancy to resolve their chronic issue completely because
the involvement of multiple agencies leads to blaming the game and affects the agreed
performance.
A. Hourly Basis:
Here is the typical formula for consulting pricing:

Profit + Labour Costs + Overhead = The amount you charge
The time required internally for the planning of the entire Project- 18 Hrs.
Time required at the customer site to resolve the Issues- 48 Hrs.
Rate of the service agreed per/Hr.- USD 30
Total Amount Charges from Customer- 66x30= USD 1980
B. The Turnkey Project:
Need to resolve Supply Chain Issue for Raw Material:
pg. 16
a. Identification of the sourcing of Raw material
b. Inspection of the Quality of the Raw material
c. Price negotiation with Supplier
d. Discussion of Contractual Term & Condition
e. Contingency Plan for the Raw material in case of the supply chain is getting
affected.
f. Alternate supplier and Discussion of Technical, Quality, and Commercial
terms and conditions.
g. Sign the Contract for 1 Year for continuous supply to meet the annual
Requirement of Raw Material.
 Service Cost for seamless Supply Chain- USD 70/ Ton
 The monthly target for the Supply of Raw Material – 100 Ton
 Total Revenue generation per Month- USD 7000
 Total profit per month after deducting all costs – USD 4500
7.2 Marketing Plan and Budget:
A marketing plan and budget is a detailed roadmap that outlines the cost of all marketing
strategies and tactics involved in hitting the projected results. This plan provides visibility
into both the specific goals of the marketing team and how much it will cost to achieve
those goals.
Since this Consultancy Project is a Startup Project and budget is a major concern, therefore,
multiskilling and multitasking have been given the highest priority so that within the
available resources the overall performance shall be achieved successfully.
Estimated
Market Research Total Cost (USD)/year
Cost(USD)/month
Data Analysis 40 480
Web Research 20 240
Independent Research 45 540
Other Research 45 540
Sub-total (USD) 150 1,800

Communication Estimated Cost/month Total Cost
You-tube Communication 60 720
Facebook 45 540
Email 10 120
Online Virtual 15 180
One-to-One Communication 95 1140

Networking Estimated Cost/month Total Cost
Indonesian Steel Association 25 300
Registration with Business
Association 20 240
pg. 17

Office Expenditure Estimated Cost/month Total Cost
Salary & Wages 400 4800
Telephone & Internet 65 780
Laptop/Phone/Printer 40 480
Stationary & Other Expenses 25 300
Sub-total (USD) 530 6360

Total Cost (USD) 950 14,100
7.3 Extra Service Cost:
In case of extra service cost to startup the consultancy business, some expenditure required
one time and those are basically like basic infrastructure, an annual subscription of Steel
Association, registration with a government body for Consultancy Business, registration with
Local Business Community and Membership fee of digital marketing.
In the above marketing expenses budget and plan, some of the expenses are distributed on
a yearly installment basis so that initial startup expenses can be minimized, and once we
start getting growth in business then all such expenses will be easily taken care of.
7.4 Project Forecast:
In my Consultancy Business Project, based on my market research, I have considered the

business scenario of one of my most potential customers (Cold Rolling Mill Operations). This
is a medium category customer and ready to provide the opportunity to help to improve the
Productivity of a newly commissioned factory. The improvement plan is plotted for 7 Years
to show the customer the expected improvement in the income statements, Cash Flow, and
Balance sheets by improvement in plant capacity utilization. This contract is a turnkey
project and sharing of Consultancy fees will be based on performance improvement, which
will be monitored by customer management during the performance review meeting. The
details of the working of all the 3 scenarios like Positive, Moderately Successful, and Failure.
I am sharing the below-working report of my consultancy firm which is jointly agreed with a
customer as a turnkey Project.
7.5 Scenario:1 (Successful Scenario)
Profit Projection for 7 Years

Capacity Net Profit Net Profit Consultanc
Yea Manufacturin Depreciatio
Utilizatio Sales Interest before after Tax y Annual
r g Expenses n
n Tax @ 25% Fee
25,315,43 847,01 1,851,00 1,388,25
1 60% 5 20,353,515 2,263,900 8 2 2 138,825
29,534,67 778,22 3,182,21 2,386,66
2 70% 4 23,745,767 1,828,470 3 4 1 238,666
3 80% 33,753,91 27,138,019 1,478,391 685,34 4,452,15 3,339,11 333,912
pg. 18
3 9 3 5
37,973,15 588,43 5,657,67 4,243,25
4 90% 2 30,530,272 1,196,766 8 6 7 339,461
37,973,15 464,60 6,008,21 4,506,15
5 90% 2 30,530,272 970,061 6 3 9 360,493
42,192,39 314,00 7,168,43 5,376,32
6 100% 1 33,922,524 787,432 1 4 5 430,106
42,192,39 159,21 7,470,46 5,602,84
7 100% 1 33,922,524 640,191 2 4 8 448,228
Cash Flow Statement for 7 Years

Net Profit
Capacity Repayment of
Year after Tax @ Depreciation Cash in Hand Net Surplus
Utilization Instalment
25%
1 60% 1,388,252 2,263,900 3,652,152 1,375,903 2,276,249
2 70% 2,386,661 1,828,470 4,215,131 1,857,469 2,357,661
3 80% 3,339,115 1,478,391 4,817,506 1,938,229 2,879,277
4 90% 4,243,257 1,196,766 5,440,023 2,476,626 2,963,398
5 90% 4,506,159 970,061 5,476,221 3,012,113 2,464,108
6 100% 5,376,325 787,432 6,163,758 3,095,782 3,067,975
7 100% 5,602,848 640,191 6,243,039 3,184,233 3,058,806
Projected Balance Sheet for 7 Years

Liabilities Assets
1 Promoters Capital 4,588,449 1 Fixed Assets 12,187,000
2 Term Loans 16,940,356 2 Interest during construction time 609,350
0 3 Surplus 8,732,454
Total 21,528,804 Total 21,528,804
1-Year 60% - Capacity
1 Promoters Capital 4,588,449 1 Depreciated Value of Fixed Assets 9,923,100
2 Net Surplus 2,276,249 2 Working Capital 3,957,628
3 Term Loans 15,564,452 3 Surplus Funds 8,548,422
Total 22,429,149 Total 22,429,149
Total 22,929,341 Total 22,929,341
Total 23,870,389 Total 23,870,389
pg. 19
Total 24,357,161 Total 24,357,161
Total 23,809,157 Total 23,809,157
Total 23,781,350 Total 23,781,350
3 Term Loans 0 3 Surplus Funds 14,980,380
Total 23,655,923 Total 23,655,923
7.6 Scenario:2 (Moderately Successful)

Net Profit
Capacity Manufacturing Net Profit Consultancy
Year Sales Depreciation Interest after Tax @
Utilization Expenses before Tax Annual Fee
25%
1 55% 23,205,815 18,657,388 2,263,900 847,018 1,437,509 1,078,132 43,125
2 60% 25,315,435 20,353,515 1,828,470 778,223 2,355,228 1,766,421 88,321
3 70% 29,534,674 23,745,767 1,478,391 685,349 3,625,167 2,718,875 163,133
4 80% 33,753,913 27,138,019 1,196,766 588,438 4,830,690 3,623,017 253,611
5 85% 35,863,533 28,834,146 970,061 464,606 5,594,719 4,196,039 293,723
6 90% 37,973,152 30,530,272 787,432 314,001 6,341,447 4,756,085 332,926
7 100% 42,192,391 33,922,524 640,191 159,212 7,470,464 5,602,848 392,199

Net Profit
25%
1 55% 1,078,132 2,263,900 3,342,032 1,375,903 1,966,129
2 60% 1,766,421 1,828,470 3,594,891 1,857,469 1,737,421
3 70% 2,718,875 1,478,391 4,197,266 1,938,229 2,259,037
4 80% 3,623,017 1,196,766 4,819,783 2,476,626 2,343,158
5 85% 4,196,039 970,061 5,166,101 3,012,113 2,153,988
6 90% 4,756,085 787,432 5,543,518 3,095,782 2,447,735
7 100% 5,602,848 640,191 6,243,039 3,184,233 3,058,806
pg. 20
Liabilities Assets
0 3 Surplus 8,732,454
Total 21,528,804 Total 21,528,804
Total 22,119,029 Total 22,119,029
Total 21,998,981 Total 21,998,981
Total 22,319,789 Total 22,319,789
Total 22,186,321 Total 22,186,321
Total 21,328,197 Total 21,328,197
Total 20,680,150 Total 20,680,150
Total 20,554,722 Total 20,554,722
7.7 Scenario:3 (Failure)

Yea Capacity Sales Manufacturi Depreciatio Interes Net Net Profit Consulta
pg. 21
Profit
Utilizatio after Tax nt Annual
r ng Expenses n t before
n @ 25% Fee
Tax
21,096,19 847,01 1,024,01
1 50% 6 16,961,262 2,263,900 8 6 768,012 0
23,205,81 778,22 1,941,73
2 55% 5 18,657,388 1,828,470 3 4 1,456,301 43,689
23,205,81 685,34 2,384,68
3 55% 5 18,657,388 1,478,391 9 7 1,788,515 53,655
25,315,43 588,43 3,176,71
4 60% 5 20,353,515 1,196,766 8 6 2,382,537 119,127
29,534,67 464,60 4,354,23
5 70% 4 23,745,767 970,061 6 9 3,265,679 163,284
33,753,91 314,00 5,514,46
6 80% 3 27,138,019 787,432 1 0 4,135,845 248,151
37,973,15 159,21 6,643,47
7 90% 2 30,530,272 640,191 2 8 4,982,608 348,783

Net Profit
25%
1 50% 768,012 2,263,900 3,031,912 1,375,903 1,656,009
2 55% 1,456,301 1,828,470 3,284,771 1,857,469 1,427,301
3 55% 1,788,515 1,478,391 3,266,906 1,938,229 1,328,677
4 60% 2,382,537 1,196,766 3,579,303 2,476,626 1,102,678
5 70% 3,265,679 970,061 4,235,741 3,012,113 1,223,628
6 80% 4,135,845 787,432 4,923,278 3,095,782 1,827,495
7 90% 4,982,608 640,191 5,622,799 3,184,233 2,438,566

Liabilities Assets
0 3 Surplus 8,732,454
Total 21,528,804 Total 21,528,804
Total 21,808,909 Total 21,808,909
Total 21,378,741 Total 21,378,741
pg. 22
Total 20,769,189 Total 20,769,189
Total 19,395,241 Total 19,395,241
Total 17,606,757 Total 17,606,757
Total 16,338,470 Total 16,338,470
Total 15,592,802 Total 15,592,802
7.8 Break-Even Point (BEP) Analysis:
The Breakeven analysis of this project is confirming that the factory needs to run at 47.99%
of capacity utilization to have breakeven. If the capacity utilization is below the Break-Even
Point, I will lead to loss and if our capacity utilization will be higher than Break-Even Point,
the process will be generating Profit.
Fixed Cost & Break-Even Point

SL. No. Item Currency Amount
1 Annual Interests cost USD 1,076,440

2 Annual Depreciation USD 2,263,900

3 Annual Salaries Expenses USD 363,480

4 Annual Overheads cost USD 844,008

Fixed Cost USD 4,547,828

BEP= (Fixed Cost * 100)/(Fixed Cost + Profit)

Break Even Point 47.99%
pg. 23
8.0 Conclusion:
The startup Project of launching a Consultancy Business for the MSME sector especially for
Stainless-Steel is going to be a success story. The growth of the domestic market, booming
infrastructure demand, and export market all are providing encouraging evidence that the
Stainless-Steel sector will be having growth in Indonesia for the next decade. Some of the
key points are mentioned below:
1. Indonesia is emerging as the world's second-largest producer of Stainless-Steel.
2. Indonesia's annual per-capita consumption of Stainless-Steel amounts to merely 0.6
kilograms, a far cry from the world's average per-capita consumption of 5.5 kg,
according to IISIA estimates.
3. The administration of the President of the Republic of Indonesia aims to implement
several large-scale infrastructure projects, ranging from energy production to
transportation links, electrical vehicle manufacturing hub and Electrical battery
manufacturing hub all are going to boost the demand oof Stainless-Steel.
4. The ease in Business licensing and Budget 2021-22 has reduced the customs duty
uniformly to 7.5 percent on Semis, Flat and Long products of non-alloy, alloy, and
stainless steels to alleviate domestic tightness lower and other kinds of subsidies is
to promote the MSME industries to generate higher employment.
5. The prevailing power crises in China due to disruption in the supply chain of Coal for
power generations leads to the stoppage of many melting facilities in China.
6. The government of Indonesia is planning to apply the ban on the export of Nickle
and Nickle alloy to China to improve the focus on the Electrical Vehicle market in
Indonesia. This kind of trade ban will also help the Indonesian MSME sector to grow
at a high pace and Chinese imports will be reduced drastically.
7. All the indicators of this research report of the startup of Consultancy Project for
MSME sector are strongly supporting towards the success of the Project.
9.0 Appendices and Exhibits:

1. Indonesia drives global stainless steel output growth
https://mepsinternational.com/gb/en/news/indonesia-drives-global-stainless-steel-output-
growth
2. SME’s demand Analysis on Coil Center Product

https://ukmc.feb.ui.ac.id/2020/04/01/smes-demand-analysis-on-coil-centre-product/
3. Indonesia’s New Year gift to China: All coal exports suspended!

https://tfiglobalnews.com/2022/01/02/indonesias-new-year-gift-to-china-all-coal-exports-
suspended/
pg. 24
4. Indonesia tanks Chinese stocks by cutting Nickel supplies to it
https://tfiglobalnews.com/2022/01/14/indonesia-tanks-chinese-stocks-by-cutting-nickel-
supplies-to-it/
5. Indonesia Economic Development Through Downstream Industries
https://www.bkpm.go.id/en/publication/detail/news/indonesia-economic-development-
through-downstream-industries
6. Gov’t Supports Cooperatives, MSMEs to Join Global Supply Chain

https://setkab.go.id/en/govt-supports-cooperatives-msmes-to-join-global-supply-chain/
7. Stainless steel MSMEs will be on the verge of bankruptcy due to excessive import
dumping from China, Indonesia: ISSDA
https://economictimes.indiatimes.com/industry/indl-goods/svs/steel/stainless-steel-msmes-
will-be-on-the-verge-of-bankruptcy-due-to-excessive-import-dumping-from-china-
indonesia-issda/articleshow/81212911.cms?from=mdr
8. McKinsey: Micro, Small & Medium-Sized Enterprises Can Contribute $140B to

Indonesia's GDP by 2030
https://www.indonesia-investments.com/id/news/todays-headlines/mckinsey-micro-small-
medium-enterprises-can-contribute-140b-to-indonesia-s-gdp-by-2030/item9337
***** The End*****
pg. 25

Startup Project of Consultancy Business For Stainless-Steel MSME Sector

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Startup Project of Consultancy Business for Stainless- Steel MSME Sector

Technical, Techno-Commercial, and Others end-to-end Services to

Upstream and Downstream Industries

[UMENDRA PRATAP SINGH]

1.0 Executive Summary:

Country Population (Million) SS Consumption (MT/Annum) Per Capita

Malaysia 26 200,000 7.7 Kg

1.1 Short Description of Product/Service:

 STRENGTH  HEAT RESISTANCE

Short Description of Service

Stainless Steel Valve Flapper Stainless- Steel Pump Parts

Pump Impeller Pipe Joints & fitting

1.4 Pricing Strategy:

2.0 Business Description

2.2 Problem Solving:

2.3 Better Product/ Cheaper Product:

3.0 Market Analysis:

The core of consultancy Business is to focus on the MSME, Stainless-Steel segment

4.1 Competitive Analysis:

5.0 Sales and Marketing:

As a Consultant of MSME sector sales and marketing advise businesses on how to develop

5.1 Product or Service Offerings

5.3 Marketing Strategy:

With a population of more than 263 million people, Indonesia holds tremendous potential

5.4 Sales and Distribution:

6.0 Operating Plan:

Business Plan Consulting is the process in which an external third-party consultant is

6.1 Project Timeline

Steps to creating a project timeline

6.2 Production and Equipment

6.3 Daily Activities

6.4 Outside Service

7.1 Product/Service Cost:

Here is the typical formula for consulting pricing:

Need to resolve Supply Chain Issue for Raw Material:

7.3 Extra Service Cost:

7.4 Project Forecast:

In my Consultancy Business Project, based on my market research, I have considered the

7.5 Scenario:1 (Successful Scenario)

Profit Projection for 7 Years

Cash Flow Statement for 7 Years

Projected Balance Sheet for 7 Years

7.6 Scenario:2 (Moderately Successful)

Profit Projection for 7 Years

Cash Flow Statement for 7 Years

7.7 Scenario:3 (Failure)

Profit Projection for 7 Years

Cash Flow Statement for 7 Years

Projected Balance Sheet for 7 Years

7.8 Break-Even Point (BEP) Analysis:

Fixed Cost & Break-Even Point

9.0 Appendices and Exhibits:

2. SME’s demand Analysis on Coil Center Product

3. Indonesia’s New Year gift to China: All coal exports suspended!

6. Gov’t Supports Cooperatives, MSMEs to Join Global Supply Chain

8. McKinsey: Micro, Small & Medium-Sized Enterprises Can Contribute $140B to

***** The End*****

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* The End*