Company Profile
Content
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Sample of company profile
(information communication technology segment)
Macro Lynx (Malaysia) Sdn Bhd
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EXECUTIVE SUMMARY 1.0 Executive Summary Macro Lynx Sdn Bhd (Web Solutions) is the expert in Broadband, Wireless and Web Solutions. We constantly stay ahead in information communication technology to provide our customers with wireless solutions for sustainable competitive advantage. The company is lead by a strong management team and knowledgeable IT knowledge workers with experience in various areas of the information and communication technology (ICT) industry covering broadband internet network integration, wired & wireless solutions, e-Business applications solutions and others internet related systems. With the experience, Macro Lynx Sdn Bhd (Web Solutions) will be able to help our customers to define and implement their e-business strategies successfully. Macro Lynx Sdn Bhd (Web Solutions) offers the following services to its customers: a) b) c) d) e) f) g) h) i) Dialup and dedicated Internet access (up to 64 Kbps). High bandwidth Internet access (128 Kbps). Integrated Services Digital Network (ISDN). Digital Subscriber Line (DSL). Wireless. Website and virtual domain hosting. Server collocation. Network design, installation, and administration services. Web design (currently outsourced).
Macro Lynx Sdn Bhd (Web Solutions) is a company driven to provide customers with a complete solution to their entire current and future Internet and private network needs. The company's customer base includes all consumers and all small- to medium-sized businesses, including start-ups. Macro Lynx Sdn Bhd (Web Solutions) has a world-class management team with direct knowledge of the industry, extensive research experience, and unique administration skills. Most competitors in Malaysia offer solutions for Windows, and perhaps Macintosh, but ignore all other operating systems. With the rise of Linux and other alternative operating systems, there is potential for Macro Lynx Sdn Bhd (Web Solutions) to surpass its competitors. Macro Lynx Sdn Bhd (Web Solutions) benefits from several strategic alliances by receiving very competitive pricing on most services, allowing the company to offer competitive pricing on its services to customers.
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ISPs offer a way for people to enter the Internet. According to International Data Corporation (IDC), an information technology research and consulting firm located in Framingham, Massachusetts, the consumer ISP market in South East Asia and Asia Pacific will expand from USD $10.7 billion in 2004 to USD $37 billion in 2008. Projected revenues for 2008 through 2010 are RM1.5 million, RM4.5 million, and RM7.5 million, respectively. The company is seeking an investment of RM1.5 million. The company primarily needs capital to fund four areas of growth in the company: a) Increase personnel to handle sales, service, and development efforts. b) Increases marketing to assure future customers are aware of our offerings and aggressive pricing. c) Expand our base of operations (using wholesale providers, partnerships, and other mechanisms) to include at least the top 100 Asia markets for dialup and dedicated Internet access. d) Perform research and development to bring new products to market.
1.1 Mission The mission of Macro Lynx Sdn Bhd (Web Solutions) is to provide customers with a complete solution to all their current and future Internet and private network needs. Macro Lynx Sdn Bhd (Web Solutions) has established a reputation for quality work and plans to continue to enhance its image in the industry. The company seeks to become a well-known and respected provider of advanced network solutions by: a) Increasing service offerings. b) Increasing availability and accessibility to current and future customers. c) Creating innovative, unique, and cost-effective solutions to problems currently faced by customers.
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COMPANY SUMMARY 2.0 Company Summary Macro Lynx Sdn Bhd (Web Solutions) was incorporated on 24 May 2006. Prior to that, Macro Lynx Sdn Bhd (Web Solutions) was a division of Macro Lynx Group of Companies Bhd, a mission-oriented research and development (R&D) corporation. The company's principal offices are currently located in Cyberjaya, Selangor. All operations, from administration to product development, take place at this leased office location. The company plans to move to a bigger facility as it expands and its staff grows beyond its current four full-time employees.
Chart One: Past Performance Index
Table One: Past Performance Performance Sales Gross Margin Gross Margin % Operating Expenses Collection Period (days) Inventory Turnover Balance Sheet Current Assets Cash Accounts Receivable Inventory Other Current Assets Total Current Assets Long-term Assets Capital Assets RM147,400 RM221,100 RM331,650 RM50,050 RM10,875 RM284,900 RM15,400 RM361,225 RM75,075 RM15,400 RM427,350 RM23,100 RM540,925 RM112,613 RM23,500 RM641,025 RM34,650 RM811,788 2006 RM550,000 RM490,000 89.09% RM160,100 0 0.00 2006 2007 $825,000 $765,000 92.73% $180,100 0 0.00 2007 2008 $1,237,500 $1,177,500 95.15% $200,100 0 0.00 2008
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Accumulated Depreciation Total Long-term Assets Total Assets Capital& Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Capital and Liabilities Other Inputs Payment Days Sales on Credit Receivables Turnover
RM0 RM147,400 RM508,625 2006 RM50,750 RM40,150 RM40,150 RM131,050 RM287,100 RM418,150 RM0 RM90,475 RM0 RM90,475 RM508,625 2006 0 $0 0.00
RM0 RM221,100 RM762,025 2007 RM65,125 RM60,225 RM60,225 RM185,575 RM430,650 RM616,225 RM0 RM145,800 RM0 RM145,800 RM762,025 2007 0 $0 0.00
RM0 RM331,650 RM1,143,438 2008 RM70,688 RM90,338 RM90,338 RM251,363 RM645,975 RM897,338 RM0 RM246,100 RM0 RM246,100 RM1,143,438 2008 0 $0 0.00
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SERVICES 3.0 Services Macro Lynx Sdn Bhd (Web Solutions) currently delivers Internet service to dialup and ISDN customers, and will commence to sell DSL services by July of this year. The company currently hosts approximately 30 websites and has five collocated servers. Additionally, the company is evaluating e-commerce software, looking for the solution which provides the greatest flexibility while allowing operations to remain simple for its customers. All services are competitively price and targeted to small "Mom-and-Pop" businesses and small office/home office (SOHO) customers. Web Solutions feels that this market segment has largely been neglected because of the amount of "hand-holding" required by this segment, and the inability to pay the astronomical fees charged by many ISPs for typically poor service and user support. By working to simplify the creation, management, and support of our services, the company will enable customers to perform many tasks themselves, or automating these tasks based on the customer's stated needs. This will make our pricing more competitive, the customer’s perception of service high, and the operation as a whole more reliable and profitable. With current hardware and facilities, the company can do the following: 1) Handle an unlimited number of dialup users. 2) Handle up to 46 dedicated channels. 3) Handle up to 1,000 email users. 3.1 Service Description Macro Lynx Sdn Bhd (Web Solutions) is a traditional, full-service ISP, offering dialup and dedicated Internet access, Web and virtual domain hosting, server collocation, and network-related professional solutions (design, installation, management, etc.). The company allows people and companies to access and publish documents on the World Wide Web without the need to hire full-time system administrators, costly high-speed network connections, dedicated servers, and other similar expenses or expertise. The company provides many of the services that customers need to get online. The company provides both connectivity and consulting on topics ranging from office automation to Web server planning. The company has ongoing research and development to provide solutions to current customer issues (e-commerce, ease-of-use features, etc.) and to develop new products and services which enable the company to enter and compete in new markets and attract new customers.
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Macro Lynx Sdn Bhd (Web Solutions) selects products which meet the following criterion: 1. Benefit to customers/company: the product must materially benefit the customer or the company in some way. This may manifest itself as a side benefit, an improvement on current services, or additional revenue stream to the company. Cost/benefit ratio: the benefits realized must be at least as great as the cost of implementation, production, and maintenance of the product. Maintainability: the product must be maintainable by Macro Lynx Sdn Bhd (Web Solutions) personnel in Cyberjaya. The company has had some experience with products where source code and other maintenance resources are unavailable and has had major difficulties with these restrictions. The company has a strong preference for Open Source and similar distribution methods where source code is available to personnel to correct problems which vendors consider too unimportant to warrant effort on.
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Macro Lynx Sdn Bhd (Web Solutions) makes a concerted effort to keep customers informed and to remedy problems in the shortest possible times. The company has lost very few customers to technical support issues, and will continue to make high quality support one of its primary goals. Macro Lynx Sdn Bhd (Web Solutions) offers telephone support during extended business hours (8 a.m. to 8 p.m.) and has an on-call pager for emergencies (network-down and server-down situations). In the future, the company plans to implement a 24/7 network operations center (NOC) and a toll-free technical support phone number. When the voice/video/data (VVD) product goes into production, the company plans to have constant monitoring of network connectivity and take preemptive measures to solve developing problems before the customer even notices them. For instance, if it is determined that there is a failing component on the customer's premise equipment, it would trigger a call to the customer and the scheduling of a replacement part before the customer even realizes that the problem exists. 3.2 Fulfillment Currently, all products are implementations of Open Source products. The groupware product will be based upon OpenDesk.com's software, which is available under an Open Source license. Macro Lynx Sdn Bhd (Web Solutions) will be extending the functionality of this product, and release those changes back to the development community.
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With the VVD product, the company will have to design and manufacture custom equipment for customers to receive the data and convert it to video or voice. Currently, the company has no products to return. The company's usage policy states that it will refund a portion of the customers' monthly access fee if there are extended network outages due to events within our control. The company gives technical advice to pre-sales customers and technical support is offered for all purchases by the customer. These services are offered by Macro Lynx Sdn Bhd (Web Solutions) at no cost to our clientele. 3.3 Future Services Free (advertiser supported) back-office service with email, file sharing, calendaring/scheduling, and other applications are options for future services from Macro Lynx Sdn Bhd (Web Solutions). This would allow groups (both for-profit and nonprofit) to have the collaboration enjoyed by major corporations with management information systems (MIS) budgets for little or no cost. It also would produce an avenue through which to offer future free and pay services. Macro Lynx Sdn Bhd (Web Solutions) plans to have the initial launch of the back-office product by August 31st. The company currently has a potential customer (a local radio station) who wishes to privately brand this product and offer it to their customers. Macro Lynx Sdn Bhd (Web Solutions) is in the process of researching a future service of integrated voice, video, and data over high speed TCP/IP network connections (DSL, etc.) so as to merge the traditional telephone, cable, and ISP functionalilities, extend them, and affordably offer them to consumers. This product would compete directly with traditional cable and telephone companies, and provide new and innovative revenue streams. Current plans for this product are to price the consumer product very aggressively and take the profit from secondary services such as advertising. Macro Lynx Sdn Bhd (Web Solutions) plans to have a working prototype of the server and clients needed for the VVD product by October 1, 2008, and a limited launch by March 1, 2009.
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MARKET ANALYSIS 4.0 Market Analysis The topics which follow discuss our customers, our competitors, and conditions within our industry.
Chart One: Market Segmentation
Table One: Market Analysis (RM) Potential Customers Household Consumers Small Office/Home Office Total 8.94% 128,448,169 139,894,038 152,440,015 8.94% 3% 17,404,110 17,856,617 18,320,889 2.60% 10% 111,044,059 122,037,421 134,119,126 9.90% Growth 2008 2009 2010 CAGR
4.1 Customers and Target Markets The company's customer base includes all consumers and all small- to medium-sized businesses, including start-ups. The company plans to concentrate on SOHO clients, as these are perfect targets for our new high-speed offerings, and hold the greatest growth potential for the company. Web Solutions feels that these market segments have special pricing and service needs, and make more dedicated, reliable customers. 4.2 Service Business Analysis The following sub-topics look at the size and concentration of businesses in this group, the way services are bought and sold, and specific competitors. 4.2.1 Business Participants The company is competing in the low-cost Internet access and website hosting niche of the industry. The industry is moving in the direction of a fusion of VVD services over a single common media. This is where all media players must move in order to compete in the coming decade.
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The alternative is to be a content provider. This is a less desirable position as it leaves the company too much at the whim of the public and forces the company to renew its efforts continuously to provide usable content. The ISP industry has begun the process of specialization. Many companies who began by filling all needs (as we do today) have moved into areas which utilize their strengths. These specializations include: 1) 2) 3) 4) Collocation ("Server Hotel") facilities. Web hosting. Dialup access. Content provision.
Additionally, there are a few new markets emerging, such as Applications Service Providers. 1) Access services ISPs offer a way for people to enter the Internet. According to IDC, America Online has approximately a 43% share of the total subscribers in the ISP segment, followed by Microsoft's MSN, and AT&T Corporation's WorldNet. After these major players, roughly 5,000 ISPs fight over the remainder of the market. IDC estimates that the consumer ISP market in South East Asia and Asia Pacific will expand from USD $10.7 billion in 2004 to USD $37 billion in 2010. When users access the Internet, they dial into the local point of presence (POP) of an ISP or online service provider (OSP). ISPs offer basic, flat-rate Internet access to customers, either through their own networks, or through networks leased from other ISPs. Users dial into an ISP's network through ordinary phone lines and, using a browser, access the Web. OSPs, such as Yahoo and Google, provide original content in areas such as shopping, news groups, gaming groups, investor information, and magazines. Access fees for both ISPs and OSPs in South East Asia including Malaysia and Asia Pacific typically range from USD $9.95 to USD $21.95 per month for unlimited Internet use. The flat rate system has led to an explosion of subscribers. Flat rates have also served to increase the amount of time that users spend online, which has forced many local telephone service companies to upgrade capacity in order to accommodate the heavy usage. 2) A taxing issue One nettlesome issue that could potentially slow the growth of e-commerce is the taxation of goods and services. Currently, fees paid to ISPs and OSPs are tax-free, except in a few nation. Purchases, however, are subject to the same taxes that apply to goods sold in a store or catalog. When online purchases are made, purchasers are
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technically responsible for remitting state and local taxes. The only exception occurs when a consumer buys from a corporation with a physical presence in that consumer's home state. In actuality, however, online shoppers rarely pay this cyber-taxation. 3) ISPs face challenges The rise in Internet users has proven to be a boon for Internet service providers, which charge monthly subscription fees in return for providing access. While business has been good for many of these ISPs, a number of challenges threaten the long-term growth and profitability of these companies. 4) Broad access becomes more prevalent Today, most residential Internet users gain access to the Web via commonplace copper telephone wires. Download speeds are limited to a maximum 56 Kbps and are often significantly slower than that, resulting in frustration among impatient Web surfers. The lack of speed has provided an opportunity for broadband service providers to gain market share. Broadband technology, which provides high-speed online access, has begun to attract users who desire more speed and are willing to pay a higher price. As of the second quarter of 2007, wireless and cable modem users numbered over 1 million, still a small percentage of total Internet users, but growing very rapidly. 5) "Free" Internet access proves viable While most headlines or advertisements proclaiming free Internet service are actually a bit misleading, the impact of this business model is starting to be felt. The following is a list of services which various websites provide: a) Destinations. Destinations are places, or websites, located on the Internet where people can go for information, entertainment, or commerce. Content providers. This type of website offers mostly original content (like news articles) to subscribers. Some of the major content providers include ESPN Sports Zone (a joint venture between Infoseek Corp. and Walt Disney Co.), SportsLine USA Inc., privately held The Motley Fool Inc., and MSNBC (a joint venture between Microsoft and NBC). With new websites being established every day, it's difficult to come up with a reasonable estimate for the size of this market. Portals. These websites tend to gather content into one place rather than creating it themselves. Some of the major portals include Yahoo! Inc. (2004 sales of USD $206 million), Google Corporation ($63 million in fiscal year 2004), and Lycos Inc. (USD$56 million in fiscal year 2004). Although e-commerce has started to become a larger promotion of these companies' business, portals typically rely on the sale of advertising space to generate revenue.
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Communities. Communities are similar to portals, in that their primary revenue streams come from advertisers. Some of the major community sites include Geocities (2004 sales of USD $18.4 million), now a part of Yahoo! Xoom.com Inc. (USD $8.3 million), and FRIENSTER.com Inc. (USD $5.5 million). Business-to-consumer e-commerce. Estimates for the amount of online spending by consumers in 2004 range from USD $7 billion to USD $13 billion, with at least 25% occurring during the Christmas shopping season. Some of the major publicly traded online retailers included Amazon.com Inc. (2004 sales of USD $610 million), CDnow Inc. (USD $98 million), barnesandnoble. com Inc. (USD $62 million), and Beyond.com corp. (USD $37 million). A variety of "real-world" companies including Gap Inc., Lands' End Inc., and Macy's have established retail operations on the Internet. Business-to-business e-commerce. Although there are very few pure business-to-business e-commerce firms, this segment dwarfs the business-to-consumer sector. Forrester believes that this market, which totaled USD $43 billion in 1998, should rise to $8.3 trillion by 2010. Most companies in this category, like Cisco Systems and Dell Computer Corporation, have other sales channels, but are increasingly using the Internet to lower costs and reach a wider customer base. Dell generates an estimated USD $30 million in sales every day via the Internet, while Cisco estimates that it produces approximately USD $33 million a day in sales through the Internet. Auctions. The online market for auctions is headed by eBay Inc., (2007 revenues of USD $126.1 million, with USD $945 million of gross merchandise sales). Hardware: networking equipment. The hardware sector provides the infrastructure on which the Internet is built. Hardware companies provide the equipment that forms the interconnections between the networks that comprise the Internet. Their products steer traffic through a spider web of routes to the correct destination. One critical piece of networking equipment is the router, which acts as a traffic officer by directing data to the proper destination. Another key element of the Internet infrastructure is a remote access concentrator. Access concentrators link employees and customers to an organization's internal network, and link consumers to the Internet via their ISP.
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4.2.2 Competition and Buying Patterns Macro Lynx Sdn Bhd (Web Solutions) believes that its customers choose its products and services based on the following criteria: a) b) c) d) e) Price. Experience. Reputation. Service. Accessibility.
4.2.3 Main Competitors Most of our competitors offer solutions for Windows, and perhaps Mac, but ignore all other operating systems. With the rise of Linux and other alternative operating systems, there is potential for Web Solutions to surpass its competitors. 4.2.4 Risks The company recognizes that it is subject to both market and industry risks. The company's view of its risks, as well as how each is being addressed, is as follows: a) Regulations. Possible problems caused by a sudden increase in regulation by local authorities. One way the company can reduce this risk is to diversify into several different, but related, business areas. If one area becomes too heavily regulated it may be sold and the profit rolled back into the company to bolster the remaining business or start a new venture. Monopolistic pricing. Aggressive or monopolistic pricing by large or heavily-funded providers. By holding prices down, it becomes difficult for competitors to "low-ball" the company. By diversifying, we can protect business in one area by bundling it with offerings from another area, meeting the needs of the customers and strengthening their ties to the company. Legal matters. Lawsuits stemming from user abuse or accessibility of pornographic or questionable materials. The courts have historically classified ISP's as "carriers" unless the ISP made an incomplete effort to actively filter material posted by or made available to its users. The company's usage policy clearly states that illegal behavior will result in termination of service, but we do not otherwise attempt to control the access of its users or their content, thus maintaining the company's stance as a "carrier" in the eyes of the law. If the legal environment should change, the company will modify its policies and procedures to conform to the prevailing legal environment.
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Technology. Sudden and unexpected shifts in technology or the popularity of the Internet. The company will maintain an active research and development effort, as well as ongoing review of forthcoming technologies from competitors and vendors, in order to stay near the top of the technological curve. Also, the diversification of the company's business allows it to respond to shifts in revenue by redistributing material and personnel into those efforts most likely to generate the highest return on investment.
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STRATEGY 5.0 Business Strategy The Macro Lynx Sdn Bhd (Web Solutions) strategy is to achieve name recognition and attract customers by aggressively pricing its services. Once customers have been acquired, the company will seek to offer them additional services which will increase margins and provide them with useful solutions they would not otherwise find. The company will also implement a low-cost strategy. This will be achieved by working to establish and develop agreements with local media companies to exchange services for discounted advertising and other exposures. Web Solutions' market strategy is to build on its core portfolio of products and services using the company's expertise in the ISP industry. The company will leverage its discounted services to help provide secondary income streams. For instance, the company plans to launch free email services, business directories, and other similar services which will attract current and potential customers to our Web pages. These "page views" will be used to generate advertising revenue, as well as increase exposure of our own products and services. Macro Lynx Sdn Bhd (Web Solutions) will be able to excel in the market because the company is small, highly focused, and motivated. The company can respond quickly to changing opportunities and take advantage of the latest technologies. The company plans to expand its marketing efforts, service offerings, and production. It is anticipated that additional services will be offered and more personnel hired within 30 days of initial capital funding. Macro Lynx Sdn Bhd (Web Solutions) plans to capitalize on the following areas of growth: a) High-speed Internet connectivity via DSL, Wireless, and other technologies. b) Web hosting and design tailored to small, local businesses. c) E-commerce and associated online databases. 5.1 Competitive Advantages Macro Lynx Sdn Bhd (Web Solutions) is currently the lowest-priced provider in Malaysia for most commercial services, and its reputation has been consistently high. Size gives the company a competitive advantage, in that it can see where the industry is going and move in that direction more quickly than the competition. This also allows the company to be more efficient at recruiting and hiring highly creative and talented individuals who tend to shy away from large "corporate" environments. The company has worked to overcome old mistakes made by existing ISPs by hiring technically-savvy individuals.
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5.2 Marketing Plan The concentrated marketing activities of Macro Lynx Sdn Bhd (Web Solutions) focuses on the business mission and are comprehensive in nature. The following activities are the marketing department's mission: a) b) c) d) e) f) g) h) i) Advertising design and placement. Public relations schedules and press releases throughout each year. Creation of annual advertorial (advertisement/tutorial) themes for trade journals and industry conferences. Planning and execution of all industry conferences, including the reservation of space, booths, personnel, messages, literature, etc. Collection, analysis, and internal dissemination of competitive information. Creation and maintenance of all corporate literature. Design, maintenance, and monitoring of websites. Design and creation of sales support material. Collection and dissemination of client testimonials.
5.2.1 Marketing Strategy To generate sales, the company uses direct marketing, computer reseller and repair facilities, and high-traffic areas (e.g. store checkout stands). Currently, several local companies display the company's CD-ROMs at their checkout stands in exchange for free Web hosting. Marketing initiatives will focus on four areas: Collocation ("Server Hotel") facilities, Web hosting, dialup access, and content provision. Marketing activities will be concentrated in the following categories: 1. Contact Campaigns. This initiative will encompass various methods of reaching potential customers to generate interest, followed by direct mail to the potential customer. Print Advertising. Ads will be developed and placed in several industry publications. Trade Shows. The company will participate in selected local and national shows that will provide an opportunity to develop exposure. This is a very effective tool in creating awareness and stimulating lead activity. Industry Organizations and Associates. The recommendation is to join a number of organizations that are relevant to the company as a whole. This initiative will create awareness of the company within the industry, and provide networking opportunities.
2.
3.
4.
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5.
Telemarketing Campaign. Telemarketing activities geared to identify qualified leads, follow-up on sales progress to the qualified leads, and assurance that new potential contact lists are current and accurate. Promotional GiveAways. This is a traditional way of advertising a company's name by giving something away. This will be used in conjunction with community service organization fund-raising efforts and traditional advertising.
6.
5.3 Strategic Relationships Macro Lynx Sdn Bhd (Web Solutions) currently has strategic relationships with: 1) 2) 3) TMnet for Internet service. Mynic DSL Networks for DSL resale. TM Bhd and Maxis Communications for high-speed wireless.
Macro Lynx Sdn Bhd (Web Solutions) benefits from these relationships by receiving very competitive pricing on most of these services, allowing the company to offer competitive pricing on its services to customers. The company is currently pursuing an agreement with a local radio station such as Era.FM to provide Web-hosting services which will eventually include extended email services and dial-up access offered to their listeners under a co-branding agreement. There have also been discussions about this becoming a nationwide collaboration with the stations' parent company, Astro. The company plans to develop community calendaring and groupware applications for use by the company and the afore-mentioned radio station. This will provide a simple, useful tool for organizations, businesses, and individuals to organize, plan, announce, and track projects and events. This is being based on the Open Source project maintained at www.opendesk.com and will most likely be developed to contain both Open Source and proprietary components. In the future, the company plans to partner with backbone providers, wholesale carriers, and other strategic organizations to: 1) 2) 3) Reduce cost of goods and services utilized. Increase the number and variety of goods and services offered to customers. Chart the growth of the company into new territories.
At this time, the company is establishing re-seller agreements with DSL and Wireless high-bandwidth providers, and other services which will allow the company to compete in these markets, thus allowing for broader consumer recognition.
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ORGANIZATION 6.0 Organization The company's management philosophy is based on responsibility and mutual respect. Macro Lynx Sdn Bhd (Web Solutions has an environment and structure that encourages productivity and respect for customers and fellow employees. The company's goal is to create an environment where: a) b) c) d) Creativity can flourish. Generating new ideas and products is well rewarded. Management structure is relatively flat and communication is encouraged. Mutual respect and sharing of knowledge is encouraged.
Table One: Personnel Salary Plan (RM) 2008 Donald Chia Raini Nasuruddin Wai Khai Loong Dialup Services Manager R & D Manager R & D Researcher Technical Support Personnel Technical Support Personnel Total People Total Payroll 8 RM307,800 8 RM342,400 8 RM392,400 15,600 31,200 31,200 60,000 60,000 31,200 60,000 60,000 31,200 70,000 70,000 31,200 36,000 30,000 30,000 45,000 2009 45,000 30,000 30,000 55,000 2010 45,000 40,000 40,000 65,000
6.1 Officers and Key Employees Macro Lynx Sdn Bhd (Web Solutions) ‘s management is highly experienced and qualified. Key members of its management teams are listed below. Donald Chia Raini Nasuruddin Wai Khai Loong – Chief Executive Officer – Chief Operation Officer – Chief Finanicial Officer
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Financials 7.0 Financials This section presents our financial projections for the term of the plan. 7.1 Untitled The sales forecast chart and table are presented below. Final sales forecasts are based on predictions mentioned in the Executive Summary.
Chart One: Sales Monthly
7.2 Funding Uses and General Assumptions The company is raising RM1.5 million for the purpose of growth and operations. This funding will cover operating expenses and product development during this period. The following is a breakdown of how the funds will be used.
Table One: Expenses/Costs Expenses Advertising Legal Fees Office Working Capital Miscellaneous Sub-total Product Development: Total Costs (RM) 50,000 10,000 40,000 100,000 50,000 250,000 1,250,000 RM1,500,000
7.2.1 Significant Assumptions a) Nature and Limitation of Projections. This financial projection is based on sales volume at the levels described in the revenue section and presents, to the best of management's knowledge and belief, the company's expected assets, liabilities, capital, revenues, and expenses. The projections reflect management's judgment of the expected conditions and its expected course of action, given the hypothetical assumptions.
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b) Revenues. The company's revenue is derived primarily from subscriptions. Revenue projections are based on the 1999 sales in the comparable market nationwide, based on industry average. The exact numbers can be found in the Sales Forecast table and chart section.
c) Expenses. The company's expenses are primarily those of salaries, sales commissions, and administrative costs. Other expenses are based on management's estimates and industry averages. The table below outlines the general assumptions of Macro Lynx Sdn Bhd (Web Solutions). 7.2.2 General Assumptions
Table One: General Assumptions 2008 Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Sales on Credit % Other 25.42% 15.00% 0 25.00% 15.00% 0 25.42% 15.00% 0 10.00% 10.00% 10.00% 1 10.00% 2009 2 10.00% 2010 3 10.00%
7.3 Company's Break-Even Estimates The following table and chart reflect the company's break-even estimates. These are based on fixed and variable cost estimates derived from past income statement data. Given that Macro Lynx Sdn Bhd (Web Solutions) has little in the way of marginal costs, the break even analysis reflects the industry's high gross margins. Unless one of the potential future risks seriously impacts profitability, or the company loses its ability to rapidly adjust to changing market conditions, the company does not see this as a serious issue.
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7.3.1 Break-even Analysis
Table One: Break-even Analysis (RM) Monthly Units Break-even Monthly Revenue Break-even 41,368 41,368
Assumptions: Average Per-Unit Revenue Average Per-Unit Variable Cost Estimated Monthly Fixed Cost 1.00 0.05 39,228
7.4 Projected Profit and Loss Macro Lynx Sdn Bhd (Web Solutions) is in the early stage of development, thus initial projections have only been made on accounts that are believed to most drive the income statement. The following table provides the management’s projected income statements for 2008-2010.
Table One: Profit and Loss 2008 (RM) Sales Direct Cost of Sales Other 1,500,000 77,596 0 -----------Total Cost of Sales Gross Margin Gross Margin % Expenses: Payroll Sales and Marketing and Other Expenses Depreciation Legal Fees Utilities Insurance Mortgage Payroll Taxes Other 0 300 3,600 4,200 67,200 46,170 0 -----------Total Operating Expenses 470,738 0 300 3,600 4,200 67,200 51,360 0 -----------510,528 0 300 3,600 4,200 67,200 58,860 0 -----------568,028 307,800 41,468 342,400 41,468 392,400 41,468 77,596 1,422,404 94.83% 2009 (RM) 4,500,000 84,296 0 -----------84,296 4,415,704 98.13% 2010 (RM) 7,500,000 88,796 0 -----------88,796 7,411,204 98.82%
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Profit Before Interest and Taxes Interest Expense Taxes Incurred Net Profit Net Profit/Sales
951,666 65,506 225,583 660,577 44.04%
3,905,176 51,131 963,511 2,890,534 64.23%
6,843,176 36,131 1,730,124 5,076,921 67.69%
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7.5 Projected Cash Flow This chart and table show our cash flow and cash balance projections.
Chart One: Cash Flow
Table Two: Cash Flow (RM) 2000 Cash Received Cash from Operations: Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures 2000 2001 2002 1,495,905 4,444,810 7,444,810 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1,275,000 220,905 1,495,905 3,825,000 619,810 4,444,810 6,375,000 1,069,810 7,444,810 2001 2002
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Expenditures from Operations: Cash Spending Payment of Accounts Payable Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance 0 1,027,701 468,204 580,816 0 1,710,033 2,734,777 3,315,593 0 2,524,086 4,920,724 8,236,316 0 0 0 0 0 0 150,000 150,000 150,000 0 0 0 0 0 0 0 0 0 877,701 1,560,033 2,374,086 48,141 829,560 121,571 1,438,462 194,346 2,179,741
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7.6 Balance Sheets - Projected The following table outlines Macro Lynx Sdn Bhd (Web Solutions)’s balance sheets for fiscal years 2000-2002.
Table Three: Balance Sheet (RM) Assets Current Assets Cash Accounts Receivable Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities & Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities 495,975 709,059 345,975 608,492 2000 32,409 90,338 90,338 213,084 2001 81,842 90,338 90,338 262,517 331,650 974,711 331,650 3,764,678 331,650 0 331,650 0 2000 580,816 27,595 34,650 643,061 2001 3,315,593 82,785 34,650 3,433,028
projected
2002 8,236,316 137,975 34,650 8,408,941
331,650 0 331,650 8,740,591
2002 130,835 90,338 90,338 311,510 195,975 507,485
Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth
0 (394,925) 660,577 265,652 974,711 265,652
0 265,652 2,890,534 3,156,186 3,764,678 3,156,186
0 3,156,186 5,076,921 8,233,107 8,740,591 8,233,107
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7.7 Business Ratios Standard business ratios are shown in this table.
Table One: Ratio Analysis 2008 Sales Growth Accounts Receivable Inventory Other Current Assets Total Current Assets Long-term Assets Total Assets 21.21% 2.83% 0.00% 3.55% 65.97% 34.03% 100.00% 2009 200.00% 2.20% 0.00% 0.92% 91.19% 8.81% 100.00% 2010 66.67% 1.58% 0.00% 0.40% 96.21% 3.79% 100.00% Profile 9.70% 25.00% 5.30% 46.30% 76.60% 23.40% 100.00%
Current Liabilities Long-term Liabilities Total Liabilities Net Worth Percent of Sales Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets Additional Ratios Net Profit Margin Return on Equity Activity Ratios Accounts Receivable Turnover Collection Days Inventory Turnover
21.86% 50.88% 72.75% 27.25%
6.97% 9.19% 16.16% 83.84%
3.56% 2.24% 5.81% 94.19%
49.40% 21.20% 70.60% 29.40%
100.00% 94.83% 50.52% 1.67% 63.44%
100.00% 98.13% 33.89% 0.56% 86.78%
100.00% 98.82% 30.75% 0.33% 91.24%
100.00% 0.00% 78.10% 0.90% 1.90%
3.02 3.02 72.75% 333.58% 90.92% 2000 44.04% 248.66%
13.08 13.08 16.16% 122.11% 102.37% 2001 64.23% 91.58%
26.99 26.99 5.81% 82.68% 77.88% 2002 67.69% 61.66%
1.57 1.19 70.60% 4.10% 13.80%
n.a n.a
8.15 48 0.00
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8.15 36 0.00
n.a n.a n.a
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Accounts Payable Turnover Payment Days Total Asset Turnover
24.42 17 1.54
18.18 14 1.20
17.03 17 0.86
n.a n.a n.a
Debt Ratios Debt to Net Worth Current Liab. to Liab. 2.67 0.30 0.19 0.43 0.06 0.61 n.a n.a
Liquidity Ratios Net Working Capital Interest Coverage $429,977 14.53 $3,170,511 76.38 $8,097,432 189.40 n.a n.a
Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout 0.65 22% 2.89 5.65 0.00 0.84 7% 12.76 1.43 0.00 1.17 4% 26.55 0.91 0.00 n.a n.a n.a n.a n.a
8.0 Conclusion The Business Plan covers five years of activities. We consider the financial projections in the Business Plan as conservative, well researched and accurate.
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Sample of company profile
(information communication technology segment)
Macro Lynx (Malaysia) Sdn Bhd
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EXECUTIVE SUMMARY 1.0 Executive Summary Macro Lynx Sdn Bhd (Web Solutions) is the expert in Broadband, Wireless and Web Solutions. We constantly stay ahead in information communication technology to provide our customers with wireless solutions for sustainable competitive advantage. The company is lead by a strong management team and knowledgeable IT knowledge workers with experience in various areas of the information and communication technology (ICT) industry covering broadband internet network integration, wired & wireless solutions, e-Business applications solutions and others internet related systems. With the experience, Macro Lynx Sdn Bhd (Web Solutions) will be able to help our customers to define and implement their e-business strategies successfully. Macro Lynx Sdn Bhd (Web Solutions) offers the following services to its customers: a) b) c) d) e) f) g) h) i) Dialup and dedicated Internet access (up to 64 Kbps). High bandwidth Internet access (128 Kbps). Integrated Services Digital Network (ISDN). Digital Subscriber Line (DSL). Wireless. Website and virtual domain hosting. Server collocation. Network design, installation, and administration services. Web design (currently outsourced).
Macro Lynx Sdn Bhd (Web Solutions) is a company driven to provide customers with a complete solution to their entire current and future Internet and private network needs. The company's customer base includes all consumers and all small- to medium-sized businesses, including start-ups. Macro Lynx Sdn Bhd (Web Solutions) has a world-class management team with direct knowledge of the industry, extensive research experience, and unique administration skills. Most competitors in Malaysia offer solutions for Windows, and perhaps Macintosh, but ignore all other operating systems. With the rise of Linux and other alternative operating systems, there is potential for Macro Lynx Sdn Bhd (Web Solutions) to surpass its competitors. Macro Lynx Sdn Bhd (Web Solutions) benefits from several strategic alliances by receiving very competitive pricing on most services, allowing the company to offer competitive pricing on its services to customers.
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ISPs offer a way for people to enter the Internet. According to International Data Corporation (IDC), an information technology research and consulting firm located in Framingham, Massachusetts, the consumer ISP market in South East Asia and Asia Pacific will expand from USD $10.7 billion in 2004 to USD $37 billion in 2008. Projected revenues for 2008 through 2010 are RM1.5 million, RM4.5 million, and RM7.5 million, respectively. The company is seeking an investment of RM1.5 million. The company primarily needs capital to fund four areas of growth in the company: a) Increase personnel to handle sales, service, and development efforts. b) Increases marketing to assure future customers are aware of our offerings and aggressive pricing. c) Expand our base of operations (using wholesale providers, partnerships, and other mechanisms) to include at least the top 100 Asia markets for dialup and dedicated Internet access. d) Perform research and development to bring new products to market.
1.1 Mission The mission of Macro Lynx Sdn Bhd (Web Solutions) is to provide customers with a complete solution to all their current and future Internet and private network needs. Macro Lynx Sdn Bhd (Web Solutions) has established a reputation for quality work and plans to continue to enhance its image in the industry. The company seeks to become a well-known and respected provider of advanced network solutions by: a) Increasing service offerings. b) Increasing availability and accessibility to current and future customers. c) Creating innovative, unique, and cost-effective solutions to problems currently faced by customers.
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COMPANY SUMMARY 2.0 Company Summary Macro Lynx Sdn Bhd (Web Solutions) was incorporated on 24 May 2006. Prior to that, Macro Lynx Sdn Bhd (Web Solutions) was a division of Macro Lynx Group of Companies Bhd, a mission-oriented research and development (R&D) corporation. The company's principal offices are currently located in Cyberjaya, Selangor. All operations, from administration to product development, take place at this leased office location. The company plans to move to a bigger facility as it expands and its staff grows beyond its current four full-time employees.
Chart One: Past Performance Index
Table One: Past Performance Performance Sales Gross Margin Gross Margin % Operating Expenses Collection Period (days) Inventory Turnover Balance Sheet Current Assets Cash Accounts Receivable Inventory Other Current Assets Total Current Assets Long-term Assets Capital Assets RM147,400 RM221,100 RM331,650 RM50,050 RM10,875 RM284,900 RM15,400 RM361,225 RM75,075 RM15,400 RM427,350 RM23,100 RM540,925 RM112,613 RM23,500 RM641,025 RM34,650 RM811,788 2006 RM550,000 RM490,000 89.09% RM160,100 0 0.00 2006 2007 $825,000 $765,000 92.73% $180,100 0 0.00 2007 2008 $1,237,500 $1,177,500 95.15% $200,100 0 0.00 2008
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Accumulated Depreciation Total Long-term Assets Total Assets Capital& Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Capital and Liabilities Other Inputs Payment Days Sales on Credit Receivables Turnover
RM0 RM147,400 RM508,625 2006 RM50,750 RM40,150 RM40,150 RM131,050 RM287,100 RM418,150 RM0 RM90,475 RM0 RM90,475 RM508,625 2006 0 $0 0.00
RM0 RM221,100 RM762,025 2007 RM65,125 RM60,225 RM60,225 RM185,575 RM430,650 RM616,225 RM0 RM145,800 RM0 RM145,800 RM762,025 2007 0 $0 0.00
RM0 RM331,650 RM1,143,438 2008 RM70,688 RM90,338 RM90,338 RM251,363 RM645,975 RM897,338 RM0 RM246,100 RM0 RM246,100 RM1,143,438 2008 0 $0 0.00
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SERVICES 3.0 Services Macro Lynx Sdn Bhd (Web Solutions) currently delivers Internet service to dialup and ISDN customers, and will commence to sell DSL services by July of this year. The company currently hosts approximately 30 websites and has five collocated servers. Additionally, the company is evaluating e-commerce software, looking for the solution which provides the greatest flexibility while allowing operations to remain simple for its customers. All services are competitively price and targeted to small "Mom-and-Pop" businesses and small office/home office (SOHO) customers. Web Solutions feels that this market segment has largely been neglected because of the amount of "hand-holding" required by this segment, and the inability to pay the astronomical fees charged by many ISPs for typically poor service and user support. By working to simplify the creation, management, and support of our services, the company will enable customers to perform many tasks themselves, or automating these tasks based on the customer's stated needs. This will make our pricing more competitive, the customer’s perception of service high, and the operation as a whole more reliable and profitable. With current hardware and facilities, the company can do the following: 1) Handle an unlimited number of dialup users. 2) Handle up to 46 dedicated channels. 3) Handle up to 1,000 email users. 3.1 Service Description Macro Lynx Sdn Bhd (Web Solutions) is a traditional, full-service ISP, offering dialup and dedicated Internet access, Web and virtual domain hosting, server collocation, and network-related professional solutions (design, installation, management, etc.). The company allows people and companies to access and publish documents on the World Wide Web without the need to hire full-time system administrators, costly high-speed network connections, dedicated servers, and other similar expenses or expertise. The company provides many of the services that customers need to get online. The company provides both connectivity and consulting on topics ranging from office automation to Web server planning. The company has ongoing research and development to provide solutions to current customer issues (e-commerce, ease-of-use features, etc.) and to develop new products and services which enable the company to enter and compete in new markets and attract new customers.
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Macro Lynx Sdn Bhd (Web Solutions) selects products which meet the following criterion: 1. Benefit to customers/company: the product must materially benefit the customer or the company in some way. This may manifest itself as a side benefit, an improvement on current services, or additional revenue stream to the company. Cost/benefit ratio: the benefits realized must be at least as great as the cost of implementation, production, and maintenance of the product. Maintainability: the product must be maintainable by Macro Lynx Sdn Bhd (Web Solutions) personnel in Cyberjaya. The company has had some experience with products where source code and other maintenance resources are unavailable and has had major difficulties with these restrictions. The company has a strong preference for Open Source and similar distribution methods where source code is available to personnel to correct problems which vendors consider too unimportant to warrant effort on.
2.
3.
Macro Lynx Sdn Bhd (Web Solutions) makes a concerted effort to keep customers informed and to remedy problems in the shortest possible times. The company has lost very few customers to technical support issues, and will continue to make high quality support one of its primary goals. Macro Lynx Sdn Bhd (Web Solutions) offers telephone support during extended business hours (8 a.m. to 8 p.m.) and has an on-call pager for emergencies (network-down and server-down situations). In the future, the company plans to implement a 24/7 network operations center (NOC) and a toll-free technical support phone number. When the voice/video/data (VVD) product goes into production, the company plans to have constant monitoring of network connectivity and take preemptive measures to solve developing problems before the customer even notices them. For instance, if it is determined that there is a failing component on the customer's premise equipment, it would trigger a call to the customer and the scheduling of a replacement part before the customer even realizes that the problem exists. 3.2 Fulfillment Currently, all products are implementations of Open Source products. The groupware product will be based upon OpenDesk.com's software, which is available under an Open Source license. Macro Lynx Sdn Bhd (Web Solutions) will be extending the functionality of this product, and release those changes back to the development community.
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With the VVD product, the company will have to design and manufacture custom equipment for customers to receive the data and convert it to video or voice. Currently, the company has no products to return. The company's usage policy states that it will refund a portion of the customers' monthly access fee if there are extended network outages due to events within our control. The company gives technical advice to pre-sales customers and technical support is offered for all purchases by the customer. These services are offered by Macro Lynx Sdn Bhd (Web Solutions) at no cost to our clientele. 3.3 Future Services Free (advertiser supported) back-office service with email, file sharing, calendaring/scheduling, and other applications are options for future services from Macro Lynx Sdn Bhd (Web Solutions). This would allow groups (both for-profit and nonprofit) to have the collaboration enjoyed by major corporations with management information systems (MIS) budgets for little or no cost. It also would produce an avenue through which to offer future free and pay services. Macro Lynx Sdn Bhd (Web Solutions) plans to have the initial launch of the back-office product by August 31st. The company currently has a potential customer (a local radio station) who wishes to privately brand this product and offer it to their customers. Macro Lynx Sdn Bhd (Web Solutions) is in the process of researching a future service of integrated voice, video, and data over high speed TCP/IP network connections (DSL, etc.) so as to merge the traditional telephone, cable, and ISP functionalilities, extend them, and affordably offer them to consumers. This product would compete directly with traditional cable and telephone companies, and provide new and innovative revenue streams. Current plans for this product are to price the consumer product very aggressively and take the profit from secondary services such as advertising. Macro Lynx Sdn Bhd (Web Solutions) plans to have a working prototype of the server and clients needed for the VVD product by October 1, 2008, and a limited launch by March 1, 2009.
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MARKET ANALYSIS 4.0 Market Analysis The topics which follow discuss our customers, our competitors, and conditions within our industry.
Chart One: Market Segmentation
Table One: Market Analysis (RM) Potential Customers Household Consumers Small Office/Home Office Total 8.94% 128,448,169 139,894,038 152,440,015 8.94% 3% 17,404,110 17,856,617 18,320,889 2.60% 10% 111,044,059 122,037,421 134,119,126 9.90% Growth 2008 2009 2010 CAGR
4.1 Customers and Target Markets The company's customer base includes all consumers and all small- to medium-sized businesses, including start-ups. The company plans to concentrate on SOHO clients, as these are perfect targets for our new high-speed offerings, and hold the greatest growth potential for the company. Web Solutions feels that these market segments have special pricing and service needs, and make more dedicated, reliable customers. 4.2 Service Business Analysis The following sub-topics look at the size and concentration of businesses in this group, the way services are bought and sold, and specific competitors. 4.2.1 Business Participants The company is competing in the low-cost Internet access and website hosting niche of the industry. The industry is moving in the direction of a fusion of VVD services over a single common media. This is where all media players must move in order to compete in the coming decade.
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The alternative is to be a content provider. This is a less desirable position as it leaves the company too much at the whim of the public and forces the company to renew its efforts continuously to provide usable content. The ISP industry has begun the process of specialization. Many companies who began by filling all needs (as we do today) have moved into areas which utilize their strengths. These specializations include: 1) 2) 3) 4) Collocation ("Server Hotel") facilities. Web hosting. Dialup access. Content provision.
Additionally, there are a few new markets emerging, such as Applications Service Providers. 1) Access services ISPs offer a way for people to enter the Internet. According to IDC, America Online has approximately a 43% share of the total subscribers in the ISP segment, followed by Microsoft's MSN, and AT&T Corporation's WorldNet. After these major players, roughly 5,000 ISPs fight over the remainder of the market. IDC estimates that the consumer ISP market in South East Asia and Asia Pacific will expand from USD $10.7 billion in 2004 to USD $37 billion in 2010. When users access the Internet, they dial into the local point of presence (POP) of an ISP or online service provider (OSP). ISPs offer basic, flat-rate Internet access to customers, either through their own networks, or through networks leased from other ISPs. Users dial into an ISP's network through ordinary phone lines and, using a browser, access the Web. OSPs, such as Yahoo and Google, provide original content in areas such as shopping, news groups, gaming groups, investor information, and magazines. Access fees for both ISPs and OSPs in South East Asia including Malaysia and Asia Pacific typically range from USD $9.95 to USD $21.95 per month for unlimited Internet use. The flat rate system has led to an explosion of subscribers. Flat rates have also served to increase the amount of time that users spend online, which has forced many local telephone service companies to upgrade capacity in order to accommodate the heavy usage. 2) A taxing issue One nettlesome issue that could potentially slow the growth of e-commerce is the taxation of goods and services. Currently, fees paid to ISPs and OSPs are tax-free, except in a few nation. Purchases, however, are subject to the same taxes that apply to goods sold in a store or catalog. When online purchases are made, purchasers are
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technically responsible for remitting state and local taxes. The only exception occurs when a consumer buys from a corporation with a physical presence in that consumer's home state. In actuality, however, online shoppers rarely pay this cyber-taxation. 3) ISPs face challenges The rise in Internet users has proven to be a boon for Internet service providers, which charge monthly subscription fees in return for providing access. While business has been good for many of these ISPs, a number of challenges threaten the long-term growth and profitability of these companies. 4) Broad access becomes more prevalent Today, most residential Internet users gain access to the Web via commonplace copper telephone wires. Download speeds are limited to a maximum 56 Kbps and are often significantly slower than that, resulting in frustration among impatient Web surfers. The lack of speed has provided an opportunity for broadband service providers to gain market share. Broadband technology, which provides high-speed online access, has begun to attract users who desire more speed and are willing to pay a higher price. As of the second quarter of 2007, wireless and cable modem users numbered over 1 million, still a small percentage of total Internet users, but growing very rapidly. 5) "Free" Internet access proves viable While most headlines or advertisements proclaiming free Internet service are actually a bit misleading, the impact of this business model is starting to be felt. The following is a list of services which various websites provide: a) Destinations. Destinations are places, or websites, located on the Internet where people can go for information, entertainment, or commerce. Content providers. This type of website offers mostly original content (like news articles) to subscribers. Some of the major content providers include ESPN Sports Zone (a joint venture between Infoseek Corp. and Walt Disney Co.), SportsLine USA Inc., privately held The Motley Fool Inc., and MSNBC (a joint venture between Microsoft and NBC). With new websites being established every day, it's difficult to come up with a reasonable estimate for the size of this market. Portals. These websites tend to gather content into one place rather than creating it themselves. Some of the major portals include Yahoo! Inc. (2004 sales of USD $206 million), Google Corporation ($63 million in fiscal year 2004), and Lycos Inc. (USD$56 million in fiscal year 2004). Although e-commerce has started to become a larger promotion of these companies' business, portals typically rely on the sale of advertising space to generate revenue.
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Communities. Communities are similar to portals, in that their primary revenue streams come from advertisers. Some of the major community sites include Geocities (2004 sales of USD $18.4 million), now a part of Yahoo! Xoom.com Inc. (USD $8.3 million), and FRIENSTER.com Inc. (USD $5.5 million). Business-to-consumer e-commerce. Estimates for the amount of online spending by consumers in 2004 range from USD $7 billion to USD $13 billion, with at least 25% occurring during the Christmas shopping season. Some of the major publicly traded online retailers included Amazon.com Inc. (2004 sales of USD $610 million), CDnow Inc. (USD $98 million), barnesandnoble. com Inc. (USD $62 million), and Beyond.com corp. (USD $37 million). A variety of "real-world" companies including Gap Inc., Lands' End Inc., and Macy's have established retail operations on the Internet. Business-to-business e-commerce. Although there are very few pure business-to-business e-commerce firms, this segment dwarfs the business-to-consumer sector. Forrester believes that this market, which totaled USD $43 billion in 1998, should rise to $8.3 trillion by 2010. Most companies in this category, like Cisco Systems and Dell Computer Corporation, have other sales channels, but are increasingly using the Internet to lower costs and reach a wider customer base. Dell generates an estimated USD $30 million in sales every day via the Internet, while Cisco estimates that it produces approximately USD $33 million a day in sales through the Internet. Auctions. The online market for auctions is headed by eBay Inc., (2007 revenues of USD $126.1 million, with USD $945 million of gross merchandise sales). Hardware: networking equipment. The hardware sector provides the infrastructure on which the Internet is built. Hardware companies provide the equipment that forms the interconnections between the networks that comprise the Internet. Their products steer traffic through a spider web of routes to the correct destination. One critical piece of networking equipment is the router, which acts as a traffic officer by directing data to the proper destination. Another key element of the Internet infrastructure is a remote access concentrator. Access concentrators link employees and customers to an organization's internal network, and link consumers to the Internet via their ISP.
e)
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4.2.2 Competition and Buying Patterns Macro Lynx Sdn Bhd (Web Solutions) believes that its customers choose its products and services based on the following criteria: a) b) c) d) e) Price. Experience. Reputation. Service. Accessibility.
4.2.3 Main Competitors Most of our competitors offer solutions for Windows, and perhaps Mac, but ignore all other operating systems. With the rise of Linux and other alternative operating systems, there is potential for Web Solutions to surpass its competitors. 4.2.4 Risks The company recognizes that it is subject to both market and industry risks. The company's view of its risks, as well as how each is being addressed, is as follows: a) Regulations. Possible problems caused by a sudden increase in regulation by local authorities. One way the company can reduce this risk is to diversify into several different, but related, business areas. If one area becomes too heavily regulated it may be sold and the profit rolled back into the company to bolster the remaining business or start a new venture. Monopolistic pricing. Aggressive or monopolistic pricing by large or heavily-funded providers. By holding prices down, it becomes difficult for competitors to "low-ball" the company. By diversifying, we can protect business in one area by bundling it with offerings from another area, meeting the needs of the customers and strengthening their ties to the company. Legal matters. Lawsuits stemming from user abuse or accessibility of pornographic or questionable materials. The courts have historically classified ISP's as "carriers" unless the ISP made an incomplete effort to actively filter material posted by or made available to its users. The company's usage policy clearly states that illegal behavior will result in termination of service, but we do not otherwise attempt to control the access of its users or their content, thus maintaining the company's stance as a "carrier" in the eyes of the law. If the legal environment should change, the company will modify its policies and procedures to conform to the prevailing legal environment.
b)
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Technology. Sudden and unexpected shifts in technology or the popularity of the Internet. The company will maintain an active research and development effort, as well as ongoing review of forthcoming technologies from competitors and vendors, in order to stay near the top of the technological curve. Also, the diversification of the company's business allows it to respond to shifts in revenue by redistributing material and personnel into those efforts most likely to generate the highest return on investment.
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STRATEGY 5.0 Business Strategy The Macro Lynx Sdn Bhd (Web Solutions) strategy is to achieve name recognition and attract customers by aggressively pricing its services. Once customers have been acquired, the company will seek to offer them additional services which will increase margins and provide them with useful solutions they would not otherwise find. The company will also implement a low-cost strategy. This will be achieved by working to establish and develop agreements with local media companies to exchange services for discounted advertising and other exposures. Web Solutions' market strategy is to build on its core portfolio of products and services using the company's expertise in the ISP industry. The company will leverage its discounted services to help provide secondary income streams. For instance, the company plans to launch free email services, business directories, and other similar services which will attract current and potential customers to our Web pages. These "page views" will be used to generate advertising revenue, as well as increase exposure of our own products and services. Macro Lynx Sdn Bhd (Web Solutions) will be able to excel in the market because the company is small, highly focused, and motivated. The company can respond quickly to changing opportunities and take advantage of the latest technologies. The company plans to expand its marketing efforts, service offerings, and production. It is anticipated that additional services will be offered and more personnel hired within 30 days of initial capital funding. Macro Lynx Sdn Bhd (Web Solutions) plans to capitalize on the following areas of growth: a) High-speed Internet connectivity via DSL, Wireless, and other technologies. b) Web hosting and design tailored to small, local businesses. c) E-commerce and associated online databases. 5.1 Competitive Advantages Macro Lynx Sdn Bhd (Web Solutions) is currently the lowest-priced provider in Malaysia for most commercial services, and its reputation has been consistently high. Size gives the company a competitive advantage, in that it can see where the industry is going and move in that direction more quickly than the competition. This also allows the company to be more efficient at recruiting and hiring highly creative and talented individuals who tend to shy away from large "corporate" environments. The company has worked to overcome old mistakes made by existing ISPs by hiring technically-savvy individuals.
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5.2 Marketing Plan The concentrated marketing activities of Macro Lynx Sdn Bhd (Web Solutions) focuses on the business mission and are comprehensive in nature. The following activities are the marketing department's mission: a) b) c) d) e) f) g) h) i) Advertising design and placement. Public relations schedules and press releases throughout each year. Creation of annual advertorial (advertisement/tutorial) themes for trade journals and industry conferences. Planning and execution of all industry conferences, including the reservation of space, booths, personnel, messages, literature, etc. Collection, analysis, and internal dissemination of competitive information. Creation and maintenance of all corporate literature. Design, maintenance, and monitoring of websites. Design and creation of sales support material. Collection and dissemination of client testimonials.
5.2.1 Marketing Strategy To generate sales, the company uses direct marketing, computer reseller and repair facilities, and high-traffic areas (e.g. store checkout stands). Currently, several local companies display the company's CD-ROMs at their checkout stands in exchange for free Web hosting. Marketing initiatives will focus on four areas: Collocation ("Server Hotel") facilities, Web hosting, dialup access, and content provision. Marketing activities will be concentrated in the following categories: 1. Contact Campaigns. This initiative will encompass various methods of reaching potential customers to generate interest, followed by direct mail to the potential customer. Print Advertising. Ads will be developed and placed in several industry publications. Trade Shows. The company will participate in selected local and national shows that will provide an opportunity to develop exposure. This is a very effective tool in creating awareness and stimulating lead activity. Industry Organizations and Associates. The recommendation is to join a number of organizations that are relevant to the company as a whole. This initiative will create awareness of the company within the industry, and provide networking opportunities.
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Telemarketing Campaign. Telemarketing activities geared to identify qualified leads, follow-up on sales progress to the qualified leads, and assurance that new potential contact lists are current and accurate. Promotional GiveAways. This is a traditional way of advertising a company's name by giving something away. This will be used in conjunction with community service organization fund-raising efforts and traditional advertising.
6.
5.3 Strategic Relationships Macro Lynx Sdn Bhd (Web Solutions) currently has strategic relationships with: 1) 2) 3) TMnet for Internet service. Mynic DSL Networks for DSL resale. TM Bhd and Maxis Communications for high-speed wireless.
Macro Lynx Sdn Bhd (Web Solutions) benefits from these relationships by receiving very competitive pricing on most of these services, allowing the company to offer competitive pricing on its services to customers. The company is currently pursuing an agreement with a local radio station such as Era.FM to provide Web-hosting services which will eventually include extended email services and dial-up access offered to their listeners under a co-branding agreement. There have also been discussions about this becoming a nationwide collaboration with the stations' parent company, Astro. The company plans to develop community calendaring and groupware applications for use by the company and the afore-mentioned radio station. This will provide a simple, useful tool for organizations, businesses, and individuals to organize, plan, announce, and track projects and events. This is being based on the Open Source project maintained at www.opendesk.com and will most likely be developed to contain both Open Source and proprietary components. In the future, the company plans to partner with backbone providers, wholesale carriers, and other strategic organizations to: 1) 2) 3) Reduce cost of goods and services utilized. Increase the number and variety of goods and services offered to customers. Chart the growth of the company into new territories.
At this time, the company is establishing re-seller agreements with DSL and Wireless high-bandwidth providers, and other services which will allow the company to compete in these markets, thus allowing for broader consumer recognition.
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ORGANIZATION 6.0 Organization The company's management philosophy is based on responsibility and mutual respect. Macro Lynx Sdn Bhd (Web Solutions has an environment and structure that encourages productivity and respect for customers and fellow employees. The company's goal is to create an environment where: a) b) c) d) Creativity can flourish. Generating new ideas and products is well rewarded. Management structure is relatively flat and communication is encouraged. Mutual respect and sharing of knowledge is encouraged.
Table One: Personnel Salary Plan (RM) 2008 Donald Chia Raini Nasuruddin Wai Khai Loong Dialup Services Manager R & D Manager R & D Researcher Technical Support Personnel Technical Support Personnel Total People Total Payroll 8 RM307,800 8 RM342,400 8 RM392,400 15,600 31,200 31,200 60,000 60,000 31,200 60,000 60,000 31,200 70,000 70,000 31,200 36,000 30,000 30,000 45,000 2009 45,000 30,000 30,000 55,000 2010 45,000 40,000 40,000 65,000
6.1 Officers and Key Employees Macro Lynx Sdn Bhd (Web Solutions) ‘s management is highly experienced and qualified. Key members of its management teams are listed below. Donald Chia Raini Nasuruddin Wai Khai Loong – Chief Executive Officer – Chief Operation Officer – Chief Finanicial Officer
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Financials 7.0 Financials This section presents our financial projections for the term of the plan. 7.1 Untitled The sales forecast chart and table are presented below. Final sales forecasts are based on predictions mentioned in the Executive Summary.
Chart One: Sales Monthly
7.2 Funding Uses and General Assumptions The company is raising RM1.5 million for the purpose of growth and operations. This funding will cover operating expenses and product development during this period. The following is a breakdown of how the funds will be used.
Table One: Expenses/Costs Expenses Advertising Legal Fees Office Working Capital Miscellaneous Sub-total Product Development: Total Costs (RM) 50,000 10,000 40,000 100,000 50,000 250,000 1,250,000 RM1,500,000
7.2.1 Significant Assumptions a) Nature and Limitation of Projections. This financial projection is based on sales volume at the levels described in the revenue section and presents, to the best of management's knowledge and belief, the company's expected assets, liabilities, capital, revenues, and expenses. The projections reflect management's judgment of the expected conditions and its expected course of action, given the hypothetical assumptions.
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b) Revenues. The company's revenue is derived primarily from subscriptions. Revenue projections are based on the 1999 sales in the comparable market nationwide, based on industry average. The exact numbers can be found in the Sales Forecast table and chart section.
c) Expenses. The company's expenses are primarily those of salaries, sales commissions, and administrative costs. Other expenses are based on management's estimates and industry averages. The table below outlines the general assumptions of Macro Lynx Sdn Bhd (Web Solutions). 7.2.2 General Assumptions
Table One: General Assumptions 2008 Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Sales on Credit % Other 25.42% 15.00% 0 25.00% 15.00% 0 25.42% 15.00% 0 10.00% 10.00% 10.00% 1 10.00% 2009 2 10.00% 2010 3 10.00%
7.3 Company's Break-Even Estimates The following table and chart reflect the company's break-even estimates. These are based on fixed and variable cost estimates derived from past income statement data. Given that Macro Lynx Sdn Bhd (Web Solutions) has little in the way of marginal costs, the break even analysis reflects the industry's high gross margins. Unless one of the potential future risks seriously impacts profitability, or the company loses its ability to rapidly adjust to changing market conditions, the company does not see this as a serious issue.
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7.3.1 Break-even Analysis
Table One: Break-even Analysis (RM) Monthly Units Break-even Monthly Revenue Break-even 41,368 41,368
Assumptions: Average Per-Unit Revenue Average Per-Unit Variable Cost Estimated Monthly Fixed Cost 1.00 0.05 39,228
7.4 Projected Profit and Loss Macro Lynx Sdn Bhd (Web Solutions) is in the early stage of development, thus initial projections have only been made on accounts that are believed to most drive the income statement. The following table provides the management’s projected income statements for 2008-2010.
Table One: Profit and Loss 2008 (RM) Sales Direct Cost of Sales Other 1,500,000 77,596 0 -----------Total Cost of Sales Gross Margin Gross Margin % Expenses: Payroll Sales and Marketing and Other Expenses Depreciation Legal Fees Utilities Insurance Mortgage Payroll Taxes Other 0 300 3,600 4,200 67,200 46,170 0 -----------Total Operating Expenses 470,738 0 300 3,600 4,200 67,200 51,360 0 -----------510,528 0 300 3,600 4,200 67,200 58,860 0 -----------568,028 307,800 41,468 342,400 41,468 392,400 41,468 77,596 1,422,404 94.83% 2009 (RM) 4,500,000 84,296 0 -----------84,296 4,415,704 98.13% 2010 (RM) 7,500,000 88,796 0 -----------88,796 7,411,204 98.82%
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Profit Before Interest and Taxes Interest Expense Taxes Incurred Net Profit Net Profit/Sales
951,666 65,506 225,583 660,577 44.04%
3,905,176 51,131 963,511 2,890,534 64.23%
6,843,176 36,131 1,730,124 5,076,921 67.69%
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7.5 Projected Cash Flow This chart and table show our cash flow and cash balance projections.
Chart One: Cash Flow
Table Two: Cash Flow (RM) 2000 Cash Received Cash from Operations: Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures 2000 2001 2002 1,495,905 4,444,810 7,444,810 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1,275,000 220,905 1,495,905 3,825,000 619,810 4,444,810 6,375,000 1,069,810 7,444,810 2001 2002
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Expenditures from Operations: Cash Spending Payment of Accounts Payable Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance 0 1,027,701 468,204 580,816 0 1,710,033 2,734,777 3,315,593 0 2,524,086 4,920,724 8,236,316 0 0 0 0 0 0 150,000 150,000 150,000 0 0 0 0 0 0 0 0 0 877,701 1,560,033 2,374,086 48,141 829,560 121,571 1,438,462 194,346 2,179,741
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7.6 Balance Sheets - Projected The following table outlines Macro Lynx Sdn Bhd (Web Solutions)’s balance sheets for fiscal years 2000-2002.
Table Three: Balance Sheet (RM) Assets Current Assets Cash Accounts Receivable Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities & Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities 495,975 709,059 345,975 608,492 2000 32,409 90,338 90,338 213,084 2001 81,842 90,338 90,338 262,517 331,650 974,711 331,650 3,764,678 331,650 0 331,650 0 2000 580,816 27,595 34,650 643,061 2001 3,315,593 82,785 34,650 3,433,028
projected
2002 8,236,316 137,975 34,650 8,408,941
331,650 0 331,650 8,740,591
2002 130,835 90,338 90,338 311,510 195,975 507,485
Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth
0 (394,925) 660,577 265,652 974,711 265,652
0 265,652 2,890,534 3,156,186 3,764,678 3,156,186
0 3,156,186 5,076,921 8,233,107 8,740,591 8,233,107
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7.7 Business Ratios Standard business ratios are shown in this table.
Table One: Ratio Analysis 2008 Sales Growth Accounts Receivable Inventory Other Current Assets Total Current Assets Long-term Assets Total Assets 21.21% 2.83% 0.00% 3.55% 65.97% 34.03% 100.00% 2009 200.00% 2.20% 0.00% 0.92% 91.19% 8.81% 100.00% 2010 66.67% 1.58% 0.00% 0.40% 96.21% 3.79% 100.00% Profile 9.70% 25.00% 5.30% 46.30% 76.60% 23.40% 100.00%
Current Liabilities Long-term Liabilities Total Liabilities Net Worth Percent of Sales Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets Additional Ratios Net Profit Margin Return on Equity Activity Ratios Accounts Receivable Turnover Collection Days Inventory Turnover
21.86% 50.88% 72.75% 27.25%
6.97% 9.19% 16.16% 83.84%
3.56% 2.24% 5.81% 94.19%
49.40% 21.20% 70.60% 29.40%
100.00% 94.83% 50.52% 1.67% 63.44%
100.00% 98.13% 33.89% 0.56% 86.78%
100.00% 98.82% 30.75% 0.33% 91.24%
100.00% 0.00% 78.10% 0.90% 1.90%
3.02 3.02 72.75% 333.58% 90.92% 2000 44.04% 248.66%
13.08 13.08 16.16% 122.11% 102.37% 2001 64.23% 91.58%
26.99 26.99 5.81% 82.68% 77.88% 2002 67.69% 61.66%
1.57 1.19 70.60% 4.10% 13.80%
n.a n.a
8.15 48 0.00
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8.15 36 0.00
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Accounts Payable Turnover Payment Days Total Asset Turnover
24.42 17 1.54
18.18 14 1.20
17.03 17 0.86
n.a n.a n.a
Debt Ratios Debt to Net Worth Current Liab. to Liab. 2.67 0.30 0.19 0.43 0.06 0.61 n.a n.a
Liquidity Ratios Net Working Capital Interest Coverage $429,977 14.53 $3,170,511 76.38 $8,097,432 189.40 n.a n.a
Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout 0.65 22% 2.89 5.65 0.00 0.84 7% 12.76 1.43 0.00 1.17 4% 26.55 0.91 0.00 n.a n.a n.a n.a n.a
8.0 Conclusion The Business Plan covers five years of activities. We consider the financial projections in the Business Plan as conservative, well researched and accurate.
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