Universiti Teknologi Mara

3 in 1 Vacuum Cleaner






March 2012 July 2012

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Group Members:-
Muhammad Azim Bin Mohd Nor 2008400794
Muhammad Zulfadli Bin Mohd Noor 2008400862
Muhammad Ali Bin Ahmad Seburi 2008400638
Mohd Faizal Bin Mohamed 2008400834





Bachelor of Engineering (HONS.) Mechanical
Group: EMD8M10

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Table of Content
Contents Page
1.0 Executive summary
- Brief description of the business and product concepts
- The target market and projections
- The competitive advantages
- The profitability
- The management
5 - 8
2.0 Product or service description.
2.1 Describe the product or service to be produced or sold
2.2 Application of the product or service
2.3 Emphasize unique features of the product or service
2.4 Define the presence and state of development of the product or
service
2.5 Describe any patent or other proprietary features of
the product or service
2.6 Opportunities for the product line or the development of related
product or service
8 - 11
3.0 Technology description. 12 - 14
4.0 Market research and analysis.
4.1 Customer
4.2 Market size and trends
4.3 Competition and competitive edges
4.4 Estimated market share and sales
4.5 Marketing strategy
15 - 21
5.0 Management team.
5.1 Organization chart
5.2 Key management personnel
5.3 Management compensation and ownership
5.4 Supporting professional advisor and services
22 - 29


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6.0 Financial plan.
6.1 Start-up cost
6.2 Working capital
6.3 Start-up capital and financing
6.4 Cash flow statement
6.5 Income statement
6.6 Balance sheet
30 - 37
7.0 Project milestones. 38 - 39
8.0 Conclusions. 39
9.0 Appendices. 40


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1.0 EXECUTIVE SUMMARY
This product is a based on the incremental innovation for the vacuum. This
electronic equipment is chosen based on the dirt problems occur in the house and
vehicle like car. It is because of the high possibility that these places will be dirty
due to times and how the persons used their place. An example is that, sometimes
the water can be spill at the car seat, the old usage unclean carpet and sometimes
from shoes that we uses for car foot pad. These problems will become worse
especially for house usages and traveller peoples because the water that spill in a car
seat or carpet will produce unpleasant odour that happens from the evaporation
process inside the house and car. The main objective of this incremental innovation
design for this vacuum is to help the peoples and community to solve these
problems. The common portable vacuum is only capable to perform a suction
process and less durability of batteries. The three components of creativity that is
knowledge, motivation and creative thinking had introduced to the different
common vacuum that is 3 in 1 vacuum that capable to perform a suction, blower and
as odour to the house and car. Therefore, this equipment will help the parent to solve
dirt problem.
The concept of 3 in 1 vacuum is it can be used to remove a dust, help to
solve the spill of water problem and odour a car. This product has a three mode that
is suction, blower and odour mode. There are two fan that is suction fan and blower
fan. This two fan will produce a suction process when customer needs to remove a
dust. Besides that the chosen of the fan that capable to perform up to 3 times faster
than conventional motors and will creates the most power-efficient cordless vacuum
cleaner. The second fan that is blower fan for a second mode is a blower fan that is a
small fan but can produce a greater power to dry any moist surface. Besides that, the
heat inside the vacuum will be blow into the working area and help to dry and moist
a surface. After that area is completely dry, the odour mode is used to make sure that
area is clean and feel comfortable.


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Our target market is a housewife because of the higher potential to this
community to face dirt problem at home and vehicle. For the short range planning,
we try to get the trust from Malaysian population and for long term range, we target
in between 2 years, we will export our product to Indonesia, Thailand and
Singapore.
This product is different from the common portable vacuum that consists of
three modes that is suction, blower and odour with a reasonable price and good
features. It will take as a good advantage rather than others vacuum company or our
competitor because of this product is a new innovation for the common vacuum by
addition of blower and odour mode. Adapting the function of the blower, suction of
typical vacuum and combining with fragrance and aroma scent into one functional
home appliance. The ergonomic aspect also had been adapted in this design because
it had equipped a wheel, gripper, easy to use and lightweight.
This product will give a good profit to our company because of the
increasing of Malaysian peoples about 27.6 million will increase the possibility to
this product to be sold in this country. The market trend for this product is related on
the two levels of age that is adult and children. This product can be applied at home
and vehicle. The common problems for adult at home are dust problems and
children commonly caused dirt at a car. This product had been design to solve that
kind of problems and it will increase a potential to the Malaysian people to buy our
product and can increase our company profit.






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In order to manage our company to produce this high quality product, we
already organized our team members which are:











The chief executive officer (CEO) is to provide leadership to position the
company at the forefront of the industry. Develop a strategic plan to advance the
company's mission and objectives and to promote revenue, profitability and growth
as an organization. Oversee company operations to insure production efficiency,
quality, service, and cost-effective management of resources.

The chief technology officer (CTO) reports to the CEO and is responsible for
establishing the companys technical vision and leading all aspects of the companys
technology development. The CTO is the company top technology executive,
playing an integral role in the companys strategic direction, development, and
future growth.

The chief marketing officer (CMO) has responsibility for all areas of
marketing, including sales, customer experience, public policy, media relations,
promotion, web and electronic services and the corporate programs of a company or
foundation.
Chief Executive Officer
Muhammad Azim Bin
Mohd Nor
Chief Marketing Officer
Muhammad Ali Bin
Ahmad Seburi
CEO
Chief Technology Officer
Muhammad Zulfadli Bin
Mohd Noor
Chief Financial Officer
Mohd Faizal Bin
Mohamed
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The chief financial officer (CFO) has responsibility for overseeing and
directing the organization's financial goals, objectives, and budgets. Meets with the
Board and other company executives to develop financial goals and budgets

2. 0 PRODUCT DESCRIPTION

2.1 Description of the Product to Be Produces or Sold


Figure 2.1: 3 in 1 Vacuum Cleaner

Nowadays, most of home are using vacuum cleaner as a importance home
appliance. Most of the vacuum for home usage are big and heavy, difficult to handle
and not a portable. That means conventional vacuum need a power cord to be run.

Introduce the 3 in 1 vacuum cleaner which is portable, easy to handle and
more stronger and power suction. 3 in 1 vacuum cleaner has all the entity for
cleaning process in the house and car vehicle. It has vacuum for suction the
unwanted dust and dirt, blower for dried off the wet surfaces and a fragrance for
make the clean place smell well. Our product can be described as a multipurpose
Vacuum. Adapting the function of the blower, suction of typical vacuum and
combining with fragrance and aroma scent into one functional home appliance. This
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multipurpose vacuum are small in it shape, batteries charging method and easy to
handle.

2.2 Application of the Product

Multipurpose vacuum can be used in two difference place like house and vehicle
like car and van. By using the batteries, it does not require any extension of wire to
be run. By only charge it batteries it can be take to any place. House can be
describes as the place where most of the people enjoy themselves. This circumstance
can only be achieved with clean and fresh air on it. The existence of carpet in house
is essential especially at the place that is cold (but now the hot place also uses carpet
in their house). We knows that the bacteria exist in the carpet can only be remove by
using a vacuum cleaner. This is due to the suction produce by the vacuum are so
powerful that can suck small bacteria.

The furniture that used in some of the house is a lot with make difficult the
process of cleaning especially by using big extension wire vacuum. The flow air also
trap in the house with would make the lower percentage of fresh air and difficulty
for dried any kind of water spill such in the carpet. The location of difficult to reach
such a small and high space is the place where a lot of dust can be trap. This
problem can be solving using a small handy vacuum cleaner as we proposed.

Second place where most of the people are spending their life are inside their
vehicle. When travelling using car or van many people are attempting to bring their
food and drink into vehicle. These make the vehicle the place such a dump place.
All the unwanted and remnants are put into the vehicle. Sometimes, the drinks also
are spilled into the vehicle sit and carpet that would make an unpleasant smell. Food
and drink that are leave in the vehicle will make a secure place to breed the insect
such cockroach. In the vehicle also have the tight space like at the car door
compartment. This difficult space can be only reach using a small tool to remove the
dust and unwanted thing.

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2.3 Description of Unique Features of the Product

Our 3 in 1 vacuum has the latest features compare to other vacuum that available
in the markets today. Compared to the other product, most of the vacuum that has
the blower that can do a cleaning process by water is not portable, big and heavy.
Our product let the customer to experience the easy way in handling the vacuum
cleaner. With the parameter of this vacuum such 0.29 m x 0.20 m x 0.20 m are small
but have high power produces. The feature as listed as below.
The future component in vacuum:
1. Electric motor
2. Suction and blower fan
3. Perfume bottle and fragrance
4. Batteries
5. Different connecting tool
6. Dust compartment
7. Filter
8. Casing

The main part of our product is the suction, blower and fragrance. For the
suction and blower, we used different types of fan which for suction we used more
power and for blower less power but enough for it function. The suction fan are
covered with the filter that will avoid the dust and dirt from enter to it. The dust
compartment used a mechanism that will make the dust for collect away from the
filter so that the power produce will remain until the dust compartment is full of dust
and dirt.

The second parts are blower. When the switch of the blower is on, there are
mechanisms that will make the air blower not entering the suction compartment. As
the blower is on, the third part fragrance can be set automatically to spray it aroma
in the required surface. But if the customers want to spray manually also can. So the
switch for the fragrance has auto, off, and on.

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2.4 The Present and State Of Development of the Product or Service

Our 3 in 1 vacuum portable product is still in the paper stage where this stage
can be upgrade to implement it. By our research for latest design, we see that our
product can be develop due to most of the technology are available in the market
such as the long period batteries usage and small motor for air blower with greater
power that we want to put in our product. To make our product are available and can
be acceptance to the customer the promotion of our product would cost RM 85,000
that will generate income RM 2,000,000.

2.5 Any Patents or Other Proprietary Features of the Product

We will patent the idea and concept of our 3 in 1 vacuum to be ours. Other
related part that we also want to patent is the vacuum itself where the innovation and
creativity need to be research and develop. The blower, dust compartment and
fragmented bottle of the product we will find from other supplier that we know most
of it have in the market. So there is two things we want to patent first is the idea and
the concept of 3 in 1 portable vacuum and the vacuum that we want to develop. The
registration of the patent may be made at the Registry of Patents, Intellectual
Property Corporation of Malaysia.


2.6 Opportunities for the Product Line or the Development of Related
Product

The opportunities for the product line to be develop after this is that we want to
recommend to implementing the robotic application to this vacuum. These 3 in 1
vacuum can be automated, find, clean and spray the fragmented where are the dust
and dirt has but the manual configuration is still needed for vehicle purpose.
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3.0 TECHNOLOGY DESCRIPTION


Figure 3.1: Overall view


Figure 3.2: Rear view


Figure 3.3: Bottom view


Dust
compartment
Perfume &
water bottle
Cord plug
Hand gripper
Vacuum fan
Wheel
Blower fan
Batteries
Other electrical
and
mechanical
component
Switch
Filter
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Our 3 in 1 vacuum portable cleaner are very innovative and creative idea. By
combining all the method of cleaning a house and vehicle in one element is very
innovative. Our product uses the latest technology that available in the market. Such
as shown above the parts are switch, hand gripper, dust compartment, perfume and
bottles, vacuum fan, filter, cord plug, wheel, blower fan, batteries and other
electrical and mechanical component.

Vacuum technology
A vacuums suction is course by a difference in air pressure. An electrical fan
reduces the pressure inside the machine by produce a high velocity. Atmospheric
pressure then pushed the air through the carpet and into the nozzle, and so the dust is
literally pushed into the dust compartment

Blower technology
The process is by using the heat and dry air. When the blower fan is push the heat
air out from the tool connector it will create the dry and hot air that can dried the
moist surface.



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No Item Description
1 Switch Start and stop for suction and blower, and switch for
perfumes.
2 Hand gripper Used foam gripper.
3 Dust compartment Radix Cyclone technology, patented technology that
doesnt lose suction as you vacuum.
4 Bottle (perfume and
water)
Can be refill depend on the customer need.
5 Vacuum fan motor Digital motor, up to 3 times faster than conventional
motors. Creates the most power-efficient cordless
vacuum cleaner.
6 Filter Hygienic one-touch bin empty.
7 Cord plug Can be connected with directly to the power supply or
to the charging stand to charge batteries.
8 Wheel Used polymer as it material.
9 Blower fan Small fan but have greater power to dries any moist
surface.
10 Batteries Lithium-ion batteries. Charging up to 12 hour. Can be
used up to 4 hour continuously.
11 Electrical and
mechanical
component
Motherboard of the vacuum.

Table 1: Vacuum Part

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4.0 MARKET RESEARCH AND ANALYSIS
4.1 Customer
After seeing the current problems, we know which customers we need to
focus on, especially our main target market that will buy our products and
automatically will give profit to our company. Firstly, the potential customers that
we target are the car user and housewives. Besides that, we also try to target on the
retailers. As we know, the car user will have problem in cleaning their car interior
because of very narrow space. For the housewives and retailers, they must need a
tool that makes their work easy in cleaning their homes and shops. We will supply
our product to the customer by distribute it to the electrical shop and wholesale.
Moreover, we will use internet as a medium to spread info about our product. We
also will try to market our product to the nearest country such as Indonesia, Thailand
and Singapore.
4.2 Market Size and Trends
The market size that we set to target is about 5,000 per year. Our strategy is
to make 2 in 1 product that is different from the vacuum that the user have
nowadays. The vacuum that user have only can suck up the trash and small rubbish.
But by using our product, the user not only can suck up the trash, but they also can
blow the rubbish that cannot suck up. We also try to give a reasonable price to the
customer to overcome the current market share. Usually in current market, the price
for a normal vacuum is about RM 200 RM 500. In our vision, we try to increase
our market share about 10% each year. The major factors affecting the market
growth are industry and socio-economic trends.

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Figure 4.1: The normal vacuum price on market RM 206(left) and
RM 399(right)
The price and target units for our product :
Potential sale (units) : 5,000
Cost per unit (RM) : x 400
Potential sale (RM) : 2,000,000
After around 2 years, we try to distribute these products to Indonesia, Thailand
and Singapore. The main factors that affect the market growth are the market size,
because it will change the demand also. Increasing the size of the market is to ensure
continuity of support on this product and to provide opportunities for market growth
of this product. Furthermore, the market acceptance also is a part of important thing
in market growth because it involves the interests of the market to purchase our
product. New technology need acceptance by customers because it is difficult for the
market to find the value of this product.

4.3 Competition and Competitive Edges
Our main competitors in the market now is the usual vacuum that user
always use. The user has so many choices of vacuum in the market and the prices
depend on the brand, design and it function. The quality of the product is the
important thing in the eyes of customer, even the price is expensive, and sometimes
the user will to pay because of the products quality. There are some weaknesses and
differences of our competitor:
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Table 2: Differences and weaknesses of our product compare to existing
product.
Our new vacuum Old vacuum in market Robotics Vacuum



We have 3 in 1 function, firstly to
vacuum the rubbish and secondly
to blow the rubbish that cannot
vacuum.
Only can vacuum the rubbish Automatic vacuum
We have extra part at the vacuum
that can spray perfume to the
floor or carpet.
Not have perfume sprayer Not have perfume sprayer
This vacuum is design in suitable
size so that the user also can use
in narrow place.
Design is so big and difficult
to use at narrow place.
Design just for flat surface.
Not suitable for car.

We also put battery, so that the
user can have portable vacuum.
Need electric source power to
switch on the vacuum.
Use fully battery and can
charge.
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Table 3: Comparison of products properties








Properties/Product. Our product Existing product
Market share
New product, need
acceptance by customers
Almost the user use nowadays
Quality
Good quality because have 3
in 1 function
Quality depends on brands
and price
Price RM 400 RM 200-500
Performance High performance Depends on price
Market place
User can find in electric shop
and can order by internet
User can find in electric shop
and sometimes can order in
internet
Timing For long time use Depend on product quality
Service and warranty Warranty for 3 years Depend on product price
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4.4 Estimated Market Share and Sales
Market share refers to estimated potential sales of the business after taking into
consideration the market size and the competitors influences in the same market.
Market share is often quoted in terms of percentage.

YEAR 2013 2014 2015
SHARE (%) 20 30 60
SALES (UNIT) 5,000 7,500 15,000
SALES (RM) 2,000,000 3,833,333 7,499,999
Table 4: Target market share in terms of 3 years

Name Of Company Market Share
LG 30%
Panasonic 25%
Toshiba 15%
Others 30%
Table 5: Companies market share that always used by customers





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4.5 Marketing Strategy
The marketing concept recognizes that the company's knowledge and skill in
designing products may not always be meeting the needs of customers. It also
recognizes that even a good sales department cannot sell every product that does not
meet consumers' needs. When customers have many choices, they will choose the
one that best meets their needs. So, we have decided that the type of customers
group that we mostly target is housewives, car users, and retailers.
This is our specific marketing philosophy and strategy of the company:
Our mission is to fulfil the needs of customer that will makes their homes
work faster and besides, we can earn good profit from our product.
The customer satisfaction is our main priority that we will ask the customer
feedback after using our product and try to improve our product.
For the short range planning, we try to get the trust from Malaysian
population. For long term range, we target in between 2 years, we will export
our product to Indonesia, Thailand and Singapore.
We try to make marketing strategies so that our product going to fit in the
market place. There are some important things that we should consider to
makes sure our business will not failure:

4.5.1 Price
The price that we put after consider all of the cost of production is reasonable
in the market. Refer to the analyze of the market price, we take some range of the
price in the current market is around RM 200 RM 500 and more than that for
better quality. The new vacuum that we produce is RM400 that will have 3 in 1
function. This is better compare to the other competitors price and function.


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4.5.2 Service and Warranty Policy
Our product has a warranty for 3 years and only will cover when the product
not have any damaged or broken. We will repair back the vacuum if have minor
damage such as electric shock or same like that and surely will not take any charge.
We try to repair back the product around 1 week from the product was send. If not,
we will repay back the customer money, or replace back the vacuum with another
new vacuum to satisfy the customer. The customers need to show back the receipt to
us, so that we can accept the customer complain. All the repair and replacement will
be done at our factory.
4.5.3 Advertising and promotion
The using of media to advertising and promotion is one of the best way, we
also will promote our product by using this medium also. Firstly, we try to advertise
and promote our product in the newspaper. This is one of the top advertising
because all peoples like to read newspaper. We also will make some banner and give
to the electric shop so that, they can put in front of their shop. This to medium is
enough for us, so that we not use too much money for the starting time. Maybe when
we get some profit, we will try to promote on television also.
4.5.4 Distribution
This product we will sell to the retailers and electric shop. Besides that, we
also will try to get the market on the supermarket such as Giant, Tesco, Carrefour
and others. The product will supply to them by lorry. The cost of the transportation
we will charge by the distance from our company. We also will accept the order
from customer from the internet, but the orders must more than 10.



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5.0 MANAGEMENT TEAM
5.1 Organization Chart











5.1.1 Key Management Roles

Key Management Roles Name
Chief Executive Officer Muhammad Azim Bin Mohd Nor
Chief Marketing Officer Muhammad Ali Bin Ahmad Seburi
Chief technology Officer Muhammad Zulfadli Bin Mohd Noor
Chief Financial Officer Mohd Faizal Bin Mohamed



Chief Executive Officer
Muhammad Azim Bin
Mohd Nor
Chief Marketing Officer
Muhammad Ali Bin
Ahmad Seburi
CEO
Chief Technology Officer
Muhammad Zulfadli Bin
Mohd Noor
Chief Financial Officer
Mohd Faizal Bin
Mohamed
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5.2 Key Management Personnel

Name & Position Career Highlight
Muhammad Azim Bin Mod Nor
Chief Executive Officer (CEO)
Educations:
- Bachelor of Engineering (HONS)
Mechanical, UiTM Shah Alam.
- Masters degree in Business
Administration (MBA), UiTM
Shah Alam
Career Past Experience:
- Has 7 years experience as a
Research and Design Engineer at
DEFTECH SDN BHD
Muhammad Zulfadli Bin Mohd Noor
Chief Technology Officer (CTO)
Educations:
- Bachelor of Engineering (HONS)
Mechanical, UiTM Shah Alam.
- Masters degree in Mechanical
Engineering, UiTM Shah Alam.
Career Past Experience:
- Has 7 years experience as a
Research and Design Engineer at
Panasonic (M) SDN BHD






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Muhammad Ali Bin Ahmad Seburi
Chief Marketing Officer (CMO)
Educations:
- Bachelor of Engineering (HONS)
Mechanical, UiTM Shah Alam.
- Masters in Business
Administration (MBA), UiTM
Shah Alam.
Career Past Experience:
- Has 7 years experience as a
Marketing Manager at Solar Alert
SDN BHD.
Mohd Faizal Bin Mohamed
Chief Financial Officer (CFO)
Educations:
- Bachelor of Engineering (HONS)
Mechanical, UiTM Shah Alam.
- Bachelor of Accountacy,
UiTM Shah Alam.
Career Past Experience:
- Has 5 years experience as a
Marketing Manager at
- Has 2 years experience as a
lecturer at UTM Skudai.








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5.2.1 Duties and responsibilities of the key members of the management team.
Name & Position Duties and Responsibilities
Muhammad Azim Bin Mohd Nor
Chief Executive Officer (CEO)
- To implement the strategic goals and
objective of the company.
- To give direction and leadership
towards the achievement of the
company philosophy, mission, strategy,
and its annual goals and objectives.
- To make a good relationship between
the customer and the company.
Muhammad Zulfadli Bin Mohd Noor
Chief Technology Officer (CTO)
- Lead the execution of technology
strategy for technology platforms,
partnerships, and external
relationships.
- Build and manage a top-flight t
technology team and oversee
research and development, as well as
project management.
- Anticipate and react to major
technology changes to ensure the
maintenance of company leadership in
the competitive landscape.
Muhammad Ali Bin Ahmad Seburi
Chief Marketing Officer (CMO)
- Facilitate growth, sales, and marketing
strategies at our company
- Develop competitive analysis/market
intelligence, prospecting, product and
market development, pricing,
promotions, communications and
budgets, sales force effectiveness,
strategic planning, services units and
revenue retention and growth.
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Mohd Faizal Bin Mohamed
Chief Financial Officer (CFO)
- Develop and implement and
organization's financial goals.
- Oversee the investment of funds and
manage associated risks.
- Develop and monitor policies and
procedures within generally accepted
accounting principles and corporate
guidelines to ensure sufficient cash
flow, reduced operating costs, and
increased revenues.


5.3 Management Compensation and Ownership
5.3.1 Management Ownership
Name Monthly Salary Share of
Ownership
Amount of Equity
Investment
Muhammad Azim Bin
Mohd Nor
RM 3,900 28% RM 162,251
Muhammad Zulfadli
Bin Mohd Noor
RM 2,700 24% RM 139,073
Muhammad Ali Bin
Ahmad Seburi
RM 2,700 24% RM 139,073
Mohd Faizal Bin
Mohamed
RM 2,700 24% RM 139,073
TOTAL RM 12,000 100% RM 579,470



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5.3.2 Management Compensation
5.3.2.1 Monetary Compensation
No. Compensation
1 Salary increment per year
2 Six months bonus to all company staff
3 Sales commission to all company staff
4 Allowance after working hour job
5 Employee Health Insurance Plan
6 Paid Sick Leave
7 Dental Insurance

5.3.2.2 Non Monetary Compensation
No. Compensation
1 Wellness Program
2 Parking Privileges
3 Business Cards & Title
4 Education Plan








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5.4 Supporting Professional Advisor and Services
Supporting professional advisor and services is a support or observer from
the others organization to help the company management. In the design and
fabrication field, there are several major things that needed to be focus and support
from others organization such as in term of law and regulations advisor, financial
advisor, quality advisor and transportation advisor.
Law and regulations advisor is functions to help our company to prepare the
rules and regulations that involve with our product that important to protect our
company from the legal action such as about a warranty that our company can cover
is anything happens or accident to the customers while using our product, Besides
that, it also important to protect our company property, staff, health and safety
environment (HSE) insurance and product patent.
Financial advisor is important to play a role as an adviser and monitor to the
company financial management. The company financial advisor will educated our
staff especially a financial department about the best ways to manage company
financial by make a seminar or events to our company. By using a financial advisor,
it will ensure that our company financial is managing in a proper ways.
Quality advisor is functions to help our company to check and ensure our
product quality before being patent and sell to our customer. Quality advisor will
give an advice in terms of the product design that includes the design, ergonomic
and safety aspects. Besides that, it also will give a new knowledge to our company
by introduce the latest technology that will increase our productivity.
Transportation advisor is to play a role as an adviser of the transportation
management. They will help our company to educate about the transportation
management and it is important because the product delivery need to be on time to
satisfy the customers needed. They will educate our transportation management in
term of to reduce the time to deliver our product by make sure all the transport
vehicle is always in good condition to avoid any delay.
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5.4.1 List of Professional Advisor
Name of Professional Advisor Service Provided
Kuala Lumpur Legal Aid
Centre
Tingkat 9, Wisma Kraftangan,
No. 9, Jalan Tun Perak,
50050 Kuala Lumpur
- As a advisor for the rules and term for
the company staffs, company property,
insurance, customers and product.
Malaysia Venture Capital
Management Berhad (545446-U)
Level 10, Menara Bank
Pembangunan Bandar Wawasan
1016, Jalan Sultan Ismail 50300
Kuala Lumpur Malaysia
- Main investor of the company
- To monitor and advise company
management.
SIRIM BHD
No.1, Persiaran Dato'
Menteri,Section 2, P.O.Box 7035,
40700 Shah Alam, Selangor
Darul Ehsan.
- As a advisor for the research and design
(R&D) management.
-Give new information and training
about the latest technology.
- Help to check a quality of our product.
Ministry of Transport Malaysia
Block D5, Parcel D, Federal
Government Administrative
Centre, 62616
Putrajaya,Malaysia.
- Help to identifying and monitoring
legal issues, service and safety
standards.
- Advise in determining the pricing
policy.
- Monitoring of policies and
concessionaire / government linked
companies.
-Providing Licensing Services to our company :
a. Service provider licenses and concessionaires
b. Individual vehicle licenses - private cars, business,
pilot for aviation and maritime and others.
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c. Domestic Shipping Licenses.


6.0 FINANCIAL PLAN
The financial planning is a vital in a starts-up business because it could bring
benefit such profitable and long term advantages. Thus, our company will
take this as a challenge and has come out with some planning for the future
such:
i. To determine the size of investment
ii. To identify and propose suitable sources of finance
iii. To ensure that the initial capital is sufficient
iv. To analyze the viability of the project before actual investment is
committed
v. To guide project implementation
A financial plan covers all financial data that derived from the operating
budgets such marketing, production or operations and organization or
administration budgets. The financial information from the operating budgets
is then transformed into a financial budget.
6.1 Start-Up Cost
The start-up cost is an initial investment into the business that might be
includes one-time start-up costs such as research and development cost,
incorporation costs, rental and utilities deposits, fixtures and equipment, and
renovation. Besides that, it also can be determine as an initial working capital
such inventory, rent, utility, advertising and office supplies)



31


Types of fixed assets Estimated cost
(RM)
Estimated Economic
Life
(years)
Administrative/Organisation
- Land & Building
- Office Furniture/Equipment
- Office Renovation
- Transportation

250,000
75,000
100,000
150,000

5
5
5
5
Sales/Marketing
- Advertising
50,000 5
Operations/Technical
- Machinery
- Factory Renovation
- Pattern Tax

500,000
200,000
10,000

5
5
5
Total 1,335,000

6.2 Working Capital
The initial working capital is required at the time to starts of business. These
are the promotion expenses incurred at the earliest stage of formation of the
company which is including the incorporation fees such office expenses,
attorneys fees and other preliminary expenses.
Working Capital (Monthly) Costs (RM)
Pre-Operating and Incorporation Cost (one-
off)
- Development Cost
- Business Incorporation costs
- Deposit (rent and utilities)
- Other Pre-operating and Incorporation costs

25,000
20,000
40,000
3,500
32

Sales and Marketing Costs (monthly)
- Delivery expenses
- Advertising

2,000
1,670
General and Administrative Costs (monthly)
- Salaries, wages, EPF and SOCSO
- Building Rent
- Office utilities
- Office supplies
- Insurance
- Office maintenance

12,000
4,500
1,500
1,500
1,500
1,000
Operations and Technical Costs (monthly)
- Purchase of raw material/goods
- Carriage Inwards
- Salaries, Wages, EPF and SOCSO
- Factory maintenance
- Factory utilities

50,000
5,530
23,000
4,000
5,500
Other Expenditure (annually)
- Insurance
- Road Tax

2,000
500
Total Pre-Operations and Working Capital
Expenditure
204,700

6.3 Start-Up Capital and Financial

The external sources of finance are important that derived from commercial
banks, institutes of finance and government agencies which come in the form of
term loans, hire purchase and grants.
The total amount of funds that have been sourced should be equal or higher
than the total project implementation that been calculated before. This effective way
is important in order to ensure that the project is fully funded and to avoid the risks
under financing laws.
33

Capital Expenditure Cost (RM) Sources of Financing
Land and Building 250,000 Hire-purchase
Office Furniture and
Equipment
75,000 Cash
Office Renovation 100,000 Loan
Transportation 150,000 Existing asset
Advertising 50,000 Loan
Machinery 500,000 Hire-purchase
Factory renovation 200,000 Loan
Pattern tax 10,000 Cash
Working Capital for 3 months
Sales & Marketing Costs 11,010 Cash
General & Administrative
Cost
66,000 Cash
Operations & Technical
Costs
264,090 Cash
Pre-operating &
Incorporation Costs (one-off)
88,500 Cash
Other Expenditure (annually) 2,500 Cash
Provision for contingencies
10%
176,460 Cash
Total 1,943,560






34

Sources of Project Financing Total Cost (RM)
Own contributions
- Cash
- Existing Assets

429,470
150,000
Loan 614,090
Hire Purchase 750,000
Total 1,943,560

Proposed Terms of Loan
- Interest rate with 4%
- Loan tenure (years) =3
Proposed Term of Hire-Purchase
- Interest Rate with 4%
- Tenure (years) = 5

6.3 Cash Flow Statement
Pro forma cash flow statement is the projected statement of cash inflow and
outflow through the planning duration. Under the normal implementation, the
pro forma cash flow statement is prepare for the next three or five consecutive
years. However, when taking a longer period estimation, sometimes it needs
depending upon the project undertaken.



35


Summary Total Cash Inflows Total Cash Outflows Ending Balance
2013 3,043,560 2,319,294 724,266
2014 3,833,333 2,214,869 2,342,730
2015 7,499,999 2,956,036 6,886,693
2016 14,833,331 4,089,376 17,630,648
2017 29,499,995 7,029,030 40,101,612



graph 1





36

Costs
(RM)
Pre-
Operations
2013 2014 2015 2016 2017
Total
cash
Inflow
1,043,560 3,043,560 3,833,333 7,499,999 14,833,331 29,499,995
Total
Cash
Outflow
523,500 2,319,294 2,214,869 2,956,036 4,089,376 7,029,030
Cash
Surplus
(Deficit)
520,060 724,266 1,618,464 4,543,963 10,743,955 22,470,965
Beginnin
g Cash
Balance
0 724,266 2,342,730 6,886,693 17,630,648
Ending
Cash
Balance
520,060 724,266 2,342,730 6,886,693 17,630,648 40,101,612

6.5 Income Statement
The income statement shows the expected profit or loss for the planned
period. Usually the pro forma income statement consists of sales, gross income and
net income before tax.
Sales - Cost of Sales = Gross Profit
Gross Profit - Operating Expenses = Net Income before tax
Net Income Before Tax
2013 RM313,036
2014 RM2,195,069
2015 RM5,862,173
2016 RM13,196,193
2017 RM27,854,956




37

6.5 Balance Sheet

The pro forma balance sheet shows the financial performance of the business
for the planned period and the financial position of the business at a specific point in
time in terms of assets owned and how those assets are financed.
Assets are the economic resources of a business that are expected to be of
benefit in the future. Owners equity refers to capital contributions from the owners
or shareholders in terms of cash or assets plus the accumulated amount of net
income. However, if the business suffers a loss, the amount of loss will be deducted
from the capital contributions.

Liabilities are the amounts owed by the business to outsiders. Current
liabilities refer to the short-term obligations of the business that mature within a
period of less than a year. The most common forms of current liabilities are accounts
payable and accrued payments
Assets = Owners equity + Liabilities
Years Assets (RM) Liabilities (RM)
2013 RM1,882,266 RM1,052,367
2014 RM3,283,730 RM697,775
2015 RM7,610,693 RM335,000
2016 RM18,137,648 RM305,000
2017 RM40,391,612 RM275,000



7.0 PROJECT MILESTONES
Month Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.
Activities 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012
1. Incorporation of
the venture
2. Completion of






design and
development






3. Completion of
prototypes
4. Obtaining of
sales










representatives










5. Signing of
distributors
and dealer
6. Ordering of
materials








in production
quantities








7. Starting of
production
or operations
8. Receipt of first








orders








9. Delivery of first
sales
There are seven activities that our company need to do that starting from
incorporation of the venture until a delivery of first sales. Based on our project
milestone we expected to finish our team management team structure in February
2012 that takes about 2 month. It is important to ensure our team know all their
responsibility to this company.
Completion of design development and completion of prototypes is a major
part for this company because of our engineer need to design and testing our main
product to ensure the quality and safety before proceed to the production line and we
expected to finish it at July 2012.
We sign the contract with distributors and dealers on August that important
to ensure the delivery of our p, and yet we start to order the materials in production
quantities on September. Hence forward, in October and November, we start our
production and operations of the product. We will start to receipt of our first order in
November and then in December the first sales of our product were started to be
delivered to customers.

8.0 CONCLUSION
As a conclusion based on details about our product, it can be concluded that
the 3 in1 vacuum cleaner have a high potential to be sell all around a world because
of their great features, functions and can be apply at the various area. This product
consists three mode that differ from the common vacuum that is a suction, blower
and odour mode. Our target market is a housewife because of the person that always
faces with a dirt at home and vehicle. This product had been design to help the
community to solve a dust and water problems inside vehicle and at home. Besides
that, the financial management had made a prediction that company will get a higher
internal rate of return (IRR) about 121%. It is a theoretical proven that our company
have a great opportunities to success in this field.


40


9.0 Appendices