BUSINESS PLAN

KALAI FREIGHT TRANSPORTATION

Kalaiselvan A/L
(Address)
014 – 220 4459
(Email)
 Table of Contents
Executive Summary 1
Statement of Purpose 2
Company History 3-5
- Mission
- Vision
Business Description 6
Products & Service 7–9
Market Analysis 10 – 14
Management Planning 15 - 16
Operation Planning 17
- Size of business
- Ownership
Financial Plan 18 – 28
Marketing Planning 29
Key Success 30
Appendices

i
 Executive Summary

Kalai Freight Transportation Service is a trucking company based in location that aims to

be one of the most successful trucking companies in Malaysia. Kalai Freight

Transportation will initially apply its focus to the services industry, it will diversify the

industries it serves as time passes. Kalai Freight Transportation has selected the trucking

industry because the prospects of growth are encouraging and stable, and trucking dominates

the freight industry in Malaysia.

Kalai Freight Transportation will offer services for rent, or hire trucking and private

carriers, with most of its business being derived from private carriers. For the private carrier

segment, truck load (‘TL’) and less than truck load (‘LTL’) will be offered. It bears repeating

that the services of Kalai Freight Transportation will be geared towards the services

industry, as participants in that industry typically use reputation, referrals, and customer

service as purchasing variables.

Kalai Freight Transportation will serve four different market segments, with the first being

the service industry. This segment is rapidly growing at an annual rate of 3% with 3,000

potential customers identified. The second segment is the logistic industry with a 5% growth

rate and 1,500 potential customers. The third segment is the raw material industry with a 2%

growth rate and 1,500 potential customers. The fourth and final segment is a catch of all

‘other’ segment with a 2% growth rate and 500 potential customers.

1
 Statement of Purpose

This purpose of this report is to describe the prospects of growth are encouraging and stable,

and trucking dominates the freight industry in Malaysia.

Slogan:

Don’t get stuck with the rest, TRUCK with the best.

(insert few pictures of ur business)

Company History
2
Kalai Freight Transportation is an established road transport and courier company, located

in Selangor, Malaysia. The business transports various general packages or even the use of

moving furniture from one place to another. From its humble beginnings in 2003, the

company began as a home-based transportation business with the acquisition of a medium-

sized truck, initially transporting household furniture for people moving house. Over a period

of several years the company opened its first office to manage and handle all bookings

efficiently and clearly. We managed to cover more areas close to our office such as Negeri

Sembilan, Melaka, and all of Selangor. But the business has grown significantly and even had

to open another branch in Negeri Sembilan to accommodate the growing demand for its

services. The company also had to increase its fleet of trucks which currently number 1 ton, 3

ton, and 5 ton. Here are the few images of our truck that we use commonly for house shifting,

wedding preparations, and so on.

3
Due to the development of the business, we had to move to a more suitable larger premises in

Port Klang to accommodate the operation, as we also recently bought another 5-ton lorry to

support the demand.

4
Mission

Its goal is to provide the highest level of transportation services and safe and timely delivery,

at fair and competitive prices while providing a safe workplace for employees and

maintaining integrity, fairness and honesty with customers and business partners.

Vision

Kalai Freight Transportation's vision is to be recognized as the first transport industry for

long and short distance truck transport and freight transport.

5
 Business Description

Kalai Freight Transportation, established road transport and courier, mainly located at

Selangor, Malaysia since 2003 until now because of its safe and timely delivery, at fair and

competitive prices while maintaining integrity, fairness and honesty with customers and

business partners.

The business transports various general packages or even the use of moving furniture from

one place to another. We opened our first main office back in 2003, and successfully

managed to opened our very first branch in Negeri Sembilan in 2005. The demand was so

high that we even bought new trucks to cover the bookings.

Now, we are located at Port Klang as we bought a bigger place to run the business. The

business keeps getting bigger and bigger, we had to buy new trucks to support the demand

and supply.

6
 Products & Services

1-ton truck (10 feet)

The 1-ton rental trucks provided by us are divided into 2 types. The first one measures 10 feet

long. The second one measures 12 feet long. For a 1 ton (10 feet) rental truck, the items that

can be included are very limited due to its short length which is only 10 feet. Among the

suitable items are moving items, boxes, small furniture and others. This type of truck has a

height of only 5 feet. If there are items that exceed that height, the item should be laid down

and placed carefully. We will place a cloth on the bottom of the items, this is to ensure that

the items are not scratched and it also serves as a protector to protect the items from being

exposed to other damages. 1-ton rental trucks are also suitable for carrying frozen goods

because they are equipped with a cooler at the back.

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 I – ton truck (12 feet)

The 1 ton (12 feet) rental truck is still in the same category as the 1 ton (10 feet), only it has

an extra space of 2 feet and can carry items of the same length. For example, a cupboard that

is 6 feet high can be placed 2 pieces if arranged on the bottom left side of the truck. In

addition, long items such as poles for events and weddings can also be carried by this truck.

8
 3 – ton truck (14 feet)

A 3-ton rental truck is 14 feet long. This truck is suitable for carrying heavy goods, industrial

goods, moving house with a large amount of goods. The price of a 3-ton rental truck is quite

different from a 3-ton rental truck. Due to its relatively large size, so the price is also quite

large. Maybe 30% to 70% more expensive than the price of a 1-ton truck. For customers who

want to use a 3-ton rental truck, there are several packages offered. That is:

1 driver (No manpower)

1 driver + 2 manpower

1 driver + 3 manpower

The minimum amount of manpower is 2 people. Provided that the goods are not full of 1

truck. If the item is full, the customer is required to take 3 or more people. The use of 1

manpower for a 3-ton truck is not allowed at all. The number of 3-ton trucks is very limited,

so customers are advised to book in advance to avoid the slot being booked full.

9
 Market Analysis

The Malaysian commercial trucking industry serves as a key link between raw material

suppliers, manufacturers, wholesalers, distributors and retailers in most industries. According

to the Malaysian Transport Association, the industry includes dry vans, flatbeds, refrigerators

and bulk/tank trucks. Kalai Freight Transportations will compete in the market for medium

and long-distance dry van trucks in Malaysia. The market provides business services from the

goods/retail industry to the apparel industry to high-tech equipment, as well as commercial

relocation.

Market Segmentation

The market analysis table covers possible market segments in the five states that will be

provided by Kalai Freight Transportation.

Raw Material Suppliers ship large quantities of materials to large manufacturers in the

northern states. These materials usually do not require refrigeration or temperature control.

Manufacturers maintain some on-site storage for these supplies and usually have some

flexibility as to when shipments can be accepted, except when projections are wrong and

supplies fall short. Packaging supplies must also be sent to the manufacturer and included in

this group.

Manufacturers often outsource the distribution of their goods to businesses that specialize in

serving one type of retailer or business. Their packaged goods are often shipped to only one

wholesaler/distributor, creating a steady business in shipping between the two locations.

Wholesalers or Distributors serving large retailers assemble truckloads of goods from the

many manufacturers they stock. Although they often have their own trucks or means of

distribution, some of these firms do not either because they are smaller or because they try to

limit their investment in assets. Others may need additional truck support when they are

operating at capacity but are not ready to expand their delivery capacity.

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 Market Analysis

Whole
salers

Raw ma-
terials

Manu-
facturer

Potential Growt CAGR

Customers h

Raw Materials 1% 1500 1515 1530 1545 1560 0.99%

Suppliers
Manufacturers 1% 2500 2525 2550 2576 2602 1.00%

Wholesalers / 1% 1000 1010 1020 1030 1040 0.99%

Distributors
Total 1.00% 5000 5050 5100 5151 5202 1.00%

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Target Market Segmentation Strategy

Kalai Freight Transportation will start by focusing specifically on the manufacturing segment

in Negeri Sembilan and Melaka, expanding after the first year to the entire five regions of the

intended state. By servicing manufacturers, Kalai Freight Transportation can provide

affordable shipping solutions for new and growing manufacturers versus purchasing their

own trucks.

Raw material suppliers sometimes require flatbed or bulk/tank trucks which would not be an

initial service offered by Kalai Freight Transportation and wholesalers often have their own

trucks. This segment is expected to generate some customers, but by focusing first on the

middle of the supply chain with manufacturers, Kalai Freight Transportation will be

introduced to suppliers and distributors who may need their services without having to

engage in a full marketing campaign for this segment.

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SWOT Analysis (Kalai Freight Transportation)

Safe Shortage of manpower

On time delivery High in demand but low supply (shortage
Fair Prices of truck)
Highly motivated workforce Lack of marketing exposure

Strength Weakness

Opportunity Threat
Expand service capacity
Branch all over Malaysia Emerging competition
Improve marketing strategies Intense price wars
Introduce new package or promotions Economic downturn (Covid Lockdown)

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SWOT Analysis Competitor (Hafiz Haris Truck Service)

Very fast Late reply to customers

Safe and timely delivery Price expensive
Highly motivated workforce Lack of variety in package or promotions

Strength Weakness

Opportunity Threat
Trained their manpower A lot of competitors that are better than
Be more efficient to customers them
Improve marketing strategies Intense price wars

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 Management Hierarchy

Mr. Kalaiselvan
A/L
CEO of Kalai FrieghtTransportation

Name Name
Admin Name

Name Name Name

Manpower 1 Manpower 2 Manpower 3
Kalai Freight Transportation is owned and operated by Mr. Kalaiselvan A/L . He has hired 2

key staff to work in the administration and operations department. (admin staff name) will

manage everything related to Administration and HR matters such as payments, bills,

salaries, and employee allowances. Meanwhile, (name of operations staff) manages the

details of truck maintenance, labor duties, and also follows up the delivery process until

completion. Mr. Kalaiselvan is a graduate (University) with a Bachelor's degree in Business

Management. He has worked for a local trucking company for over two decades as a

Transportation Manager, and is well versed in all aspects of the trucking industry.

Kalaiselvan's organizational skills and customer-centric approach have earned him a

reputation as a cost-effective logistics manager with high standards for customer service.

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Team Background Details

1. (admin staff)

2. Operation Staff

3. Manpower 1

4. Manpower 2

5. Manpower 3

Masukkan nama penuh, umur, lepasan sijil ape, dr kolej mana, brape tahun kerja dgn

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 Operation Plan

Here is the operational plan for Kalai Freight Transportation. The company is a small

business company. A small business is the smallest size of business. However, they weren't

always a bunch of struggling workers working in the basement. Typically, a small business

generates a maximum of RM10,000 in monthly revenue, and has no more than 10 employees.

Operational Functions:

- Mr. Kalaiselvan will be the Owner and President of the company. He will

supervise all staff and manage customer relations. Michael has spent the past year

recruiting the following staff:

- (Administrative Staff Name) – who will be responsible for everything related to

Administration and HR matters such as payments, bills, salaries, and employee

allowances.

- (Operations staff) – who will provide oversight of all truck and driver

maintenance and safety checks.

- Mr. Kalaiselvan will have to recruit a staff for Marketing purposes so that the

company can have a wide marketing and attract more customers or clients.

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 Financial Plan

Kalai Freight Transportation will set up its business with three trucks and a launch funded by

owners and equity investors. Starting with no debt will allow the business to take on debt

once it has established cash flow to purchase additional trucks within the first three years.

The profit will turn positive in the second year after the loss in the first year. After the first

three years, the business can maintain the growth of at least three additional trucks per year,

and start adding additional operational bases throughout the region so that truck drivers who

do not live in the Selangor area can be hired and the trucks do not have to return to this base

after all the work. Dividends will not be paid, as the cash will be used in the business to

provide for expansion into additional offices and purchase equipment on better terms in the

future. After five years of operation, the business will seek a strategic sale to a national cargo

truck operator for which Kalai Freight Transportation's geographic focus and technology will

be a good match.

Kalai Freight Transportation is seeking RM800,000 in debt financing to launch its trucking

business. The funding will be dedicated towards securing the warehouse and purchasing the

trucks. Funding will also be dedicated towards three months of overhead costs to include

payroll of the staff, rent, and marketing costs for the print ads and association memberships.

The breakout of the funding is below:

Warehouse build-out: RM50,000 - RM100,000

Trucks, equipment, and supplies: RM20,000

Three months of overhead expenses (payroll, rent, utilities): RM180,000

Marketing costs (banner, bunting, billboards, media): RM30,000

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 Working capital: RM20,000

The following graph below outlines the pro forma financial projections for Kalai Freight

Transportation.

Kalai Freight Transportation

RM160,000

RM140,000

RM120,000

RM100,000

RM80,000

RM60,000

RM40,000

RM20,000

RM0
Year 1 Year 2 Year 3 Year 4

Revenue EBITDA Net Income

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost

numbers in the financials and in order to pay off the startup business loan.

Number of Trucks in Fleet: 10

Average Fees per Truck per Month: RM20,000

Warehouse Lease per Year: RM100,000

Start Up Funding

Kalaiselvan will provide most of the start-up funding from savings from the sale of his

previous business. Additional investment is from investment partners who will be given a

20% stake in the business for their investment. Below are the table for every cash flow in

Kalai Freight Transportation.

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 Start-up Funding RM

Start-up Expenses to Fund RM63,000

Start-up Assets to Fund RM660,000

Total Funding Required RM723,000

Assets RM

Non-cash Assets from Start-up RM570,000

Cash Requirements from Start-up RM90,000

Additional Cash Raised RM0

Cash Balance on Starting Date RM90,000

Total Assets RM660,000

Liabilities RM

Current Borrowing RM5,000

Long-term Liabilities RM0

Accounts Payable (Outstanding Bills) RM0

Other Current Liabilities (interest-free) RM0

Total Liabilities RM5,000

20
 Capital RM

Planned Investment

Kalaiselvan RM500,000

Investors RM218,000

Additional Investment Requirement RM0

Total Planned Investment 718,000

Loss at Start-up (Start-up Expenses) (RM63,000)

Total Capital RM655,000

Total Capital and Liabilities RM660,000

Total Funding RM723,000

Profit and Loss Projection

Major expenses include:

 Salary: Covers management, staff and truck driver salaries (when not directly linked

to employment)

 Marketing/Promotion: Projected to be higher in the first year and then decline due to

additional marketing devoted to the launch and discontinuation of search engine

marketing over time

 Depreciation: Reflects the growing investment in trucks and equipment over the

years. Trucks are depreciated on a 10-year straight-line schedule. Depreciation is

RM1,250 per month per truck or RM1,458 per month including additional equipment

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 purchased with each truck. The business will grow from four trucks at the end of year

1 to six at the end of year 2 to eight at the end of year 3.

 Truck Maintenance/Repair: Estimated RM200 per month per truck to start and

increase to RM225 in year 3 due to aging of the first few trucks purchased.

 Rent & Utilities: Projected to increase slightly due to increased inflation

 Insurance: Will grow with number of trucks and size of operation

 Payroll Tax: Applies to payroll as listed and half of direct selling costs (trucker

wages)

 Licensing and Permits: Include ongoing license renewals and additional licenses for

new trucks as they are purchased

Yearly Profit
500,000

450,000

400,000

350,000

300,000

250,000

200,000

150,000

100,000

50,000

0
Year 1 Year 2 Year 3

Profit

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 Monthly Profit

20,000

15,000

10,000

5,000

-5,000

-10,000

-15,000

-20,000

-25,000

-30,000
Profit

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6

Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Pro Forma Profit and Loss

Sales RM868,180 RM1,453,712 RM2,354,980

Direct Cost of Sales RM398,890 RM615,976 RM945,170

Other Costs of Sales RM0 RM0 RM0

Total Cost of Sales RM398,890 RM615,976 RM945,170

Gross Margin RM469,290 RM837,736 RM1,409,810

Gross Margin % 54.05% 57.63% 59.87%

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 Expenses

Payroll RM197,961 RM260,000 RM290,000

Marketing/Promotion RM102,000 RM80,000 RM100,000

Depreciation RM59,334 RM89,952 RM124,944

Truck Maintenance/Repair RM7,800 RM12,000 RM18,900

Rent RM36,000 RM37,800 RM39,690

Utilities RM3,600 RM3,780 RM3,969

Insurance RM12,000 RM18,000 RM25,000

Payroll Taxes RM59,611 RM85,198 RM114,388

Licenses and Permitting RM8,000 RM10,000 RM10,000

Web Hosting and Development RM4,125 RM7,200 RM7,560

Total Operating Expenses RM490,431 RM603,930 RM734,451

Profit Before Interest and Taxes (RM21,141) RM233,806 RM675,359

EBITDA RM38,193 RM323,758 RM800,303

Interest Expense RM3,889 RM21,975 RM35,250

Taxes Incurred RM0 RM63,549 RM192,033

Net Profit (RM25,030) RM148,282 RM448,077

Net Profit/Sales -2.88% 10.20% 19.03%

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Pro Forma Cash Flow
Cash Received

Cash from Operations

Cash Sales RM217,045 RM363,428 RM588,745

Cash from Receivables RM531,566 RM1,009,642 RM1,642,109

Subtotal Cash from Operations RM748,611 RM1,373,070 RM2,230,854

Additional Cash Received

Sales Tax, VAT, HST/GST Received RM69,454 RM116,297 RM188,398

New Current Borrowing RM0 RM0 RM0

New Other Liabilities (interest-free) RM0 RM0 RM0

New Long-term Liabilities RM135,000 RM270,000 RM270,000

Sales of Other Current Assets RM0 RM0 RM0

Sales of Long-term Assets RM0 RM0 RM0

New Investment Received RM0 RM0 RM0

Subtotal Cash Received RM953,065 RM1,759,367 RM2,689,252

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 Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending RM197,961 RM260,000 RM290,000

Bill Payments RM568,192 RM944,669 RM1,447,865

Subtotal Spent on Operations RM766,154 RM1,204,669 RM1,737,865

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out RM69,454 RM116,297 RM188,398

Principal Repayment of Current Borrowing RM2,000 RM3,000 RM0

Other Liabilities Principal Repayment RM0 RM0 RM0

Long-term Liabilities Principal Repayment RM7,500 RM90,000 RM180,000

Purchase Other Current Assets RM0 RM0 RM0

Purchase Long-term Assets RM175,000 RM350,000 RM350,000

Dividends RM0 RM0 RM0

Subtotal Cash Spent RM1,020,108 RM1,763,966 RM2,456,264

Net Cash Flow (RM67,043) (RM4,599) RM232,988

Cash Balance RM22,957 RM18,358 RM251,346

Projected Balance Sheet

The balance sheet reflects the launch of the business on equity financing and supplemented

by secured debt during its first three years of operation to purchase additional trucks. This

will allow cash and assets, as well as net worth, to continue to grow. Retained earnings will

be negative due to losses incurred in the first year of operations and the start-up phase, but

will approach positive in the third year after a profitable second year.

Pro Forma Balance Sheet

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 Assets

Current Assets

Cash RM22,957 RM18,358 RM251,346

Accounts Receivable RM119,570 RM200,212 RM324,339

Other Current Assets RM20,000 RM20,000 RM20,000

Total Current Assets RM162,527 RM238,570 RM595,685

Long-term Assets

Long-term Assets RM725,000 RM1,075,000 RM1,425,000

Accumulated Depreciation RM59,334 RM149,286 RM274,230

Total Long-term Assets RM665,666 RM925,714 RM1,150,770

Total Assets RM828,193 RM1,164,284 RM1,746,455

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

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Accounts Payable RM67,723 RM78,532 RM122,627

Current Borrowing RM3,000 RM0 RM0

Other Current Liabilities RM0 RM0 RM0

Subtotal Current Liabilities RM70,723 RM78,532 RM122,627

Long-term Liabilities RM127,500 RM307,500 RM397,500

Total Liabilities RM198,223 RM386,032 RM520,127

Paid-in Capital RM718,000 RM718,000 RM718,000

Retained Earnings (RM63,000) (RM88,030) RM60,252

Earnings (RM25,030) RM148,282 RM448,077

Total Capital RM629,970 RM778,252 RM1,226,328

Total Liabilities and Capital RM828,193 RM1,164,284 RM1,746,455

Net Worth RM629,970 RM778,252 RM1,226,328

Ratio Analysis

Sales Growth n.a. 67.44% 62.00% -0.08%

Marketing Strategy

Kalai Freight Transportation use traditional and also online marketing strategies. Through

traditional way, we advertise the business in few famous newspapers such as, Harian Metro,

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Mingguan Malaysia, Makkal Osai, The Star, Utusan, NSTP, Malaysia Nanban dan juga

Nanyang Siang Pau.

Moving forward to online marketing strategies, we use social media platforms as the main

ideas as nowadays, people are more invested in social media such as Facebook, Instagram,

Twitter, YouTube, and Tiktok.

KEY SUCCESS FACTORS

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In order for Kalai Freight Transportation to be successful and a leader in the trucking service

market, the management team has formulated a strategy for the target market and identified

the success factors required for the business in the long term:

a) Competitive prices

Lower operating costs of trucking services have given our company a competitive advantage

over other indirect competitors.

b) A facility-oriented society

Humans tend to take the easiest path in their daily lives and it has become a habit in our

society nowadays. Traffic jams at peak places especially on holidays bring hassle when they

work shifts. An introduction to our services shines a light on them because we can make their

work easier.

c) Innovative

The trucking service industry is always facing fierce competition from imitators or new

market entrants; thus, companies need to maintain innovative promotions or packages to

sustain the trucking business in the long run. Although our trucking business is still on the

way to great success, the team will not be able to prevent new challenges from imitators.

Kalai Freight Transportation needs to improve packages, prices and improve security,

warranty and on-time delivery.

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