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Business Plan

The document provides a business plan for Harafiee Coconut Enterprise, which aims to be the biggest supplier of virgin coconut oil worldwide. The business plan details the company's background, including its location in Ampang, Malaysia. It was established in April 2016 and supplies readily packaged virgin coconut oil. The plan outlines the company's goals to expand internationally and commercialize coconut oil like other common oils. It also introduces the two co-founders, Muhammad Hail Haris and Muhammad Syarafuddin, and their qualifications and roles within the company.

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0% found this document useful (0 votes)
108 views73 pages

Business Plan

The document provides a business plan for Harafiee Coconut Enterprise, which aims to be the biggest supplier of virgin coconut oil worldwide. The business plan details the company's background, including its location in Ampang, Malaysia. It was established in April 2016 and supplies readily packaged virgin coconut oil. The plan outlines the company's goals to expand internationally and commercialize coconut oil like other common oils. It also introduces the two co-founders, Muhammad Hail Haris and Muhammad Syarafuddin, and their qualifications and roles within the company.

Uploaded by

Azri Hafiz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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FUNDAMENTALS OF ENTREPRENUERSHIP (ENT300)

BUSINESS PLAN

HARAFIEE COCONUT ENTERPRISE


(PRODUCT SUPPLIER)

PREPARED BY
FACULTY & PROGRAMME : -Diploma in Food Technology (AS116)
-Diploma in Microbiology (AS118)

SEMESTER :5

PROJECT TITLE : Business Plan (HARAFIEE Coconut Enterprise)

GROUP MEMBERS : 1. Muhammad Hail Haris Bin Muhammad Hakim


(2015856158)
2. Muhammad Syarafuddin Bin Abdul Shukor
(2015270726)
3. Mohamad Shafiee Bin Mohammad Kamal Wong
(2015851476)

PREPARED FOR
Madam Nur Syahira Binti Abd Latif

SUBMISSION DATE
22/12/2017
1
1.0 INTRODUCTION

1.1 Name of business

HARAFIEE Coconut Enterprise

1.2 Nature of business.

Malaysia, a country full of diversity. We are well known in the eyes of the world not
just because of our uniqueness in multiracial, religions and cultures, but also because of the
richness in our flora and fauna. Flora and fauna are one of the greatest gifts by god. It gave us
life and thought us to be grateful. Despite having all sorts of uniqueness points, we would like
to highlights the flora as our core business project which is fruits and to be more specific, we
are attracted to one of the famous fruits in the world which is coconut. Coconut is not just an
ordinary fruits; we can extract it to produce oil - virgin coconut oil. It contains numerous
benefits for us than anyone can imagine, from the deepest part of our body until the most
outer layer of our skin.

Therefore, in correlation with the idea of the business, we came to an idea to build our
own company called HARAFIEE COCONUT ENTERPRISE, a combination name of our
group members. With the existence of the company, we would like to be the biggest supplier
of virgin coconut oil around the world and to be the consultant to the public about the benefit
of virgin coconut oil.

1.3 Industry Profile

In Malaysia, there are hundreds and thousands of health product. It came from the
very far place from the world, until us ourselves the local itself. Health product have various
kind of type depend on the originality of the product. Examples, some maybe suitable for our
skin, hair, inner body and many more. As we Harafiee Coconut Enterprise, we are in the
world of virgin coconut oil industry. Virgin coconut oil industry always have high demand in
the market as it is suitable for health, beauty care and 100 percent organic product. When it
comes to beauty, people would sacrifice a lot of things to fulfil their desire. Therefore, virgin
coconut oil industry is one of industry that will always rise through-out the world and it also
is a profitable industry as it fulfil our market demand.

2
1.4 Location of business

Following this, the location of our business covered around the capital city of
Malaysia which is Kuala Lumpur and our headquarters are located in Ampang. The main
reason why Kuala Lumpur was chosen as our business location was due to it being the centre
of business transactions and tourists’ attraction. Furthermore, the abundance of convenient
facilities i.e. ease-of-access public transportation. Point of supply for our products would not
just be in retail stores or stand-alone spa, pharmacies and hotels are also in our supply list. In
Kuala Lumpur, hotels only are around 1,235 hotels; these together with all other supply
options would bring forward our products to the eyes of the user, creating our own name as
the major supplier.

1.5 Date of commencement

We had just started our operation one year ago on 5th April 2016.

1.6 Factors in selecting the proposed venture

One of the factors for us to choose this as our business because Malaysian people
really love foods. On top of that, we would love to see one day, virgin coconut oil will be
commercialize same as other oils in the market now. We are still new in the business world
hence; the numerous benefits of virgin coconut oil are still unknown to many people. Here,
some of the benefits of Virgin Coconut oil are it can boost our brain function, moisturize our
skin, improves blood cholesterol, slimming the body, increase cell generation and countless
more of the benefits.

1.7 Future prospect of the business.

In future, our business prospect we are expecting to be one of the virgin coconut oil
suppliers to other Asian countries. For centuries, country like China, they are still applying
traditional treatment, due to that, it will be such a great opportunity for us to expand our
business not only for local but also international. This opportunity also would be stepping
stones for us to be better and known in the future as we are providing healthy and organic
product. Our main reason also was to ensure that, virgin coconut oil would be the biggest
market sale of oil used in the market.

3
4
2.0 Purpose of preparing a business plan

To provide guidance in managing a business. A business plan can be utilized as


guidance in managing a business. It can be used as a basis by the management to carry out
daily business functions. Explanation through a business plan will improve workers’
relationship with the management and enhance better understanding of the business. It also
guides the company’s operations by charting its future course and devising for following
items such as mission statement, goals, objectives, budget, financial forecasts, target markets
and strategies. For example, this business plan is prepared by Eleven N’s Sdn Bhd as a
guideline for managing the proposed venture by establishing timelines and milestones to
gauge the company’s progress and compare its business projections to actual
accomplishments.

Furthermore, is to allocate business resources effectively. The development of a


comprehensive business plan illustrate whether the business has a potential to generate
profits. Preparation of a business plan requires a realistic look at every phase of a business
and allows an entrepreneur to show that he has worked out all the problems and has decided
on the potential alternatives before actually launching his business. For example, the purpose
of having this business plan is to allocate business resources effectively and to specialise the
allocation of labour.

Lastly, to convince relevant parties of the investment potential in the project. A business plan
acts as a communicative tool for an entrepreneur to explain a particular business project to
other people. By having a proper document, it is easier to attract the interest of the investor to
finance the project. As a whole, the business plan will represent the entrepreneur in
convincing the investor towards providing fund for the business. A business plan is used to
attract capital investment, secure loans, and assist in attracting strategic business partners. For
example, this business plan is prepared by Eleven N’s Sdn Bhd for the purpose of convincing
the viability of the proposed venture to potential investors.

5
6
3.0 Company Background

Diagram 3.0.1: Company logo of HARAFIEE Coconut Enterprise

3.1 Name of business HARAFIEE Coconut Enterprise


3.2 Address 5, Jalan Page Ukay Heights, 68000 Ampang Selangor
Malaysia
3.3 Telephone number 012-3456789

Fax number 03-45678910

E-mail address [email protected]


3.4 Form of business Product supplier
3.5 Main business - Supply readily packaged Virgin Coconut Oil
activities
3.6 Date of 5th April 2016
commencement
3.7 Date of registration 1st January 2017

Registration number
3.8 Name of bank Bank Islam

Bank account 12345678910121

7
8
4.1 Personal particulars of owner

CEO/Founder/Marketing Manager/Administration Manager


Name Muhammad Hail Haris Bin Muhammad Hakim
Identity card number 970109-10-5269
Permanent address No. 3, Jalan Taman Riana Ukay 3, Taman Riana Ukay, Bukit
Antarabangsa, 68000 Ampang Selangor
Correspondent address 5, Jalan Page Ukay Heights, 68000 Ampang Selangor Malaysia
E-mail address [email protected]
Telephone number 013-6319143
Date of birth 9th January 1997
Age 20 years old
Marital status Single
Academic qualification Diploma in Food Technology
Skills - Good speaker
- Good leadership skills
- Advanced business education
Experience - President of student council UiTM Negeri Sembilan
Session 16/17
- Certified facilitator
- General manager of PETRONAS Company
Present occupation - CEO of HARAFIEE Coconut Enterprise

9
Co-founder/Financial Manager
Name Muhammad Syarafuddin Bin Abdul Shukor
Identity card number 961219-14-6059
Permanent address No. 18 Jalan Au 1a/3A Taman Keramat Permai 54200, Wilayah
Persekutuan, Kuala Lumpur
Correspondent address 5, Jalan Page Ukay Heights, 68000 Ampang Selangor Malaysia
E-mail address [email protected]
Telephone number 0193264029
Date of birth 12th Disember 1996
Age 27 years old
Marital status Married
Academic qualification Diploma in Food Technology
Skills - Tracking Budget Expense
- Computer skills
- Good in accounting management
- Ability to auditing the financial management
Experience Financial Assistant Manager at Al-Hadramaut Food Enterprise
Present occupation Financial Manager of HARAFIEE COCONUT ENTERPRISEE

10
Co-Founder/Operational Manager
Name Mohamad Shafiee bin Mohammad Kamal Wong
Identity card number 950401145399
Permanent address Jalan Sikamat, No 14 Lorong 11 Taman Sikamat, 70400
Seremban, Negeri Sembilan
Correspondent address
E-mail address [email protected]
Telephone number 0111234987
Date of birth 01/04/1995
Age 22
Marital status Single
Academic qualification Diploma in Computer Science
Skills Photo editing (Photoshop)
Video editing (Adobe Premier, Davinci Resolve)
Basic task (Word, Excel, Publisher, Power Point)
Basic programming (JAVA, C++)
Experience Senior Officer at SA Agro Sdn Bhd
Present occupation CEO/Operation Manager at Harafiee Coconut Enterprise

11
12
5.0 Background of purpose project

5.1 Physical location

Address: No 5, Jalan Page Ukay Heights,

68000 Ampang

Selangor Darul Ehsan,

Malaysia.

Diagram 5.1.1: Map of Ampang area

13
5.2 Price of premise

The capital will be bought from our own financial manager Mr Syarafuddin bin
Abdul Shukor at the price of RM 35,000. The building will be built within 2 months
in the year of 2016 with the price of RM 30.000 (refer diagram 5.2.1).

Diagram 5.2.1: Premise of HARAFIEE Coconut Plantation

14
5.3 Distance from the sources of raw material

Our main supplier of the virgin coconut oil is the SMN Global Marketing located at
Taman Puteri Wangsa, Ulu Tiram, Johor (refer diagram 5.3.1). The distance between
HARAFIEE Coconut Enterprise and the supplier of raw virgin coconut oil, SMN Global
Marketing is around 339 km or 3 hours and 34 minutes’ drive via the Utara-Selatan Plus
Highway

Address : SMN Global Marketing

No 18, Jalan Lading 29, Taman Putri Wangsa,

81800, Ulu Tiram,

Johor

Contact : 012 726 7647

Diagram 5.3.1: Map of SMN Global Marketing

15
5.4 Availability of manpower

Since this business involve in food handling, we obtain manpower from the International
Malaysia Training Centre in Kuala Lumpur to maintain the best quality of the virgin
coconut oils (refer table 5.4.1). Skilful manpower also needed to reduce the accident that
can happened due to negligence during the work flow.

Name Citizenship Role


1 Abdul Gaphur bin Ahmad Tutu Malaysia Bottling
Labelling
Packaging
2 Amirul Ghaul bin Ammirudinshah Indonesia Bottling
Labelling
Packaging
3 Nue Alkilation A/L Muturagami Malaysia Bottling
Labelling
Packaging
Table 5.4.1: List of manpower

5.5 Transportation facilities

Customers can reach our premise by bus, taxi and LRT. The location of our premise also
near to the MRR2 highway providing a direct route for the supplier to deliver the raw
materials (refer diagram 5.5.1).

Diagram 5.5.1: Map of Jalan Page Ukays Height to MRR2 Highway.

16
5.6 Distance from customer

Our company is located around 10 kilometre from the nearest hotel, spa and pharmacy
which make any business meeting or customer services easier (refer diagram 5.6.1). The
company also located around 500 meters to the nearest housing area which make it is
very easy to frequent.

Diagram 5.6.1 Distance between Bukit Bintang and HARAFIEE Coconut Enterprise

17
5.7 Basic amenities

Our office is complete with water and electrical supplies, internet connection, and
telephone lines to enable the work flow is undisturbed and the communication between
our company and the customer is as easy as possible through online services. This basic
amenity is provided in order for all workers to perform and accomplish their jobs more
efficient and productive. The electrical power will be supplied by the Tenaga Nasional
Berhad (refer diagram 5.7.1) while the water supplies will be provided by Syarikat
Bekalan Air Selangor Sdn Bhd (refer diagram 5.7.2). The telephone line and internet
service will be provided by Telekom Malaysia Berhad (refer diagram 5.7.3).

Diagram 5.7.1: Tenaga Nasional Berhad

Diagram 5.7.2: Telekom Malaysia Berhad

Diagram 5.7.3: Syarikat Bekalan Air Selangor Sdn Bhd

18
19
6.1 Organization’s mission, vision and objectives

Table 6.1.1: Logo, vision, mission and objectives of HARAFIEE Coconut Enterprise
Logo of the business

Company’s Vision To become a worldwide Coconut Company specialist in supplying


virgin coconut oil.
Company’s Mission  We would like to be the biggest supplier of Virgin Coconut Oil
worldwide.
 To provide better acknowledgement to community about the
health benefits of our product.
 To make Virgin Coconut Oil one of the commercial oil of the
market.
Company’s  To maximise profit in our business to ensure that our company
Objectives have a good cash flow for a smooth running business.
 To offer an affordable price for our customer because our
product in the market can be categorised as expensive product.
 To satisfy our customer and also to increase the desire of our
customer towards our products until the target sale achieved our
company stable condition.

20
6.2 Organizational Chart

CEO/FOUNDER
Muhammad Hail Haris Bin
Muhammad Hakim

OPERATIONAL FINANCIAL MARKETING


MANAGER MANAGER ADMINISTRATION
MANAGER MANAGER
Shafiee Muhammad Muhammad Hail
Syarafuddin Haris Bin Muhammad Hail Haris
Bin Abdul Muhammad Bin Muhammah Hakim
Shukor Hakim
Worker/Clerk

Worker/Clerk

Worker/Clerk

Figure 6.2.1: Organizational structure of HARAFIEE Coconut Enterprise

6.3 Manpower Planning

Table 6.3.1: Position and number of personnel of HARAFIEE Coconut Enterprise


Position Number of Personnel
Financial Manager/Administration 1
Manager
Operational Manager 1
Marketing Manager 1
Worker/Clerk 3

21
6.4 Schedule of task and responsibilities

Table 6.4.1: Schedule of task and responsibilities of employees


Task Responsibilities/Job description
Financial Manager  Responsible in managing the company financial report and
cash flow.
 Prepare the company financial report.
 Keep all financial records and business account in a save
place.
Marketing Manager  In charged with advertisement, banners and any signboard
placement.
 Plan out strategies to increase sale.
 Make sure the customers receive good services.
Operational Manager  In charged in buying ingredients.
 Make sure all stock are enough to meet demand.
 Find and place a suitable price for any product to be sold.
 Responsible for supplying product to customer or seller.
Administration Plan  Responsible with all mails and correspondences connected
with the business.
 Determine the salaries and wages of workers and contribution
to EPF and SOCSO.
 Involve in guiding the new worker in case of new recruitment.
Worker/Clerk  Packaging of product.
 Arrange product in storage room.
 Cleanliness of the working place.

22
6.5 Remuneration plan

Table 6.5.1: Remuneration plan for HARAFIEE Coconut Enterprise


Position No. Salary Allowance EPF SOCSO Total
(RM) (RM) 12% 1.75% (RM)
(RM) (RM)
Marketing/Administrative 1 10,000 2,000 1,200 175 13,375
Manager
Financial Manager 1 5,000 1,000 600 87.5 6,687.5
Operational Manager 1 5,000 1,000 600 87.5 6,687.5
Worker 3 4,500 900 540 78.75 6,618.75
TOTAL 3 24,500 4,900 2,940 428.75 33,368.75

6.6 Office layout

Diagram 6.6.1: Office layout

23
6.7 List of office equipment and supplies

Table 6.7.1: List of equipment and supplies


No. Type of equipment Quantity Price per unit Total Amount
(RM) (RM)
OFFICE EQUIPMENT
1 Air conditioner 4 1200 4800
2 Fridge 1 600 600
3 Water dispenser 1 260 260
4 Computer 3 1500 4500
5 Telephone 3 120 360
6 Second-hand fax machine 1 150 150
7 Printer 1 255 255
8 Dustbin 7 10 70
9 Lamp 8 10 80
10 Clock 5 15 75
11 White board 1 50 50
12 Fire alarm 1 125 125
13 Fire extinguisher 2 250 500
14 Security alarm 1 120 120
15 First aid 2 100 200
TOTAL 41 4,765 12,145
OFFICE FURNITURE
1 Sofa set 1 900 800
2 Office table 3 200 600
3 Meeting table 1 500 500
4 Round table 1 550 550
5 Office chair 21 350 7350
6 File cabinet 3 150 450
TOTAL 30 2,650 10,250
TOTAL ALL 22,395

24
6.8 Administrative budget

Table 6.8.1: Administrative expenditure


ADMINISTRATIVE EXPENDITURE
Fixed assets RM Total (RM)
Capital 50,000 50,000
Building 50,000 50,000
Office equipment 12,145 12,145
Furniture and fitting 10,250 10,250
Renovation 1,000 1,000
Vehicle (Lorry) 5,000 5,000
SUB TOTAL 113,395 128,395
Items Monthly (RM) Other Expenses Total (RM)
(RM)
Salary (EPF & SOCSO 24,268.75 24,268.75
include)
Utilities 1,500 1,500
Office supplies 500 500
Business Registration SSM 60 60
Business Licence/Permit 1,000 1,000
Road Tax/Insurance 2,000 2,000
SUB TOTAL 26,268.75 3,060 29,328.75
GRAND TOTAL 157,723.75

25
26
7.1 Description of product and services

Virgin coconut oil is the oil extracted from a mature coconut by a special process
which does not disrupt or destroy the original structure and nutrient content of the natural oil
contain in the coconut. The process does not involve chemical and heat usage as it can
destroy or lower the quality of the oil content in the coconut. There are at least 9 medium
chain fatty acids contained in the coconut oil that are essential for human health such as oleic
acid, decanoic acid, linoleic and many more. Virgin coconut oil is scientifically proven good
for health for all ages either babies, old folks, man and also women. The main advantage of
virgin coconut oil is it use 100% natural materials and resource which is very good to be
taken as supplement especially for the skin. Virgin coconut oil can be use in various ways
mainly as lotion or can also be taken orally. Due to its versatility, virgin coconut oil has a
very high potential to become as one of the most use or taken supplement in the world.

In Malaysia the demand for virgin coconut oil is very high and this provide a
profitable market and business for Malaysian to get involve in. Right now the biggest
production country for virgin coconut oil is Taiwan and India because they have a large
supply of coconut and man power to be able to supply virgin coconut oil worldwide.
Compare to Malaysia, we also produce virgin coconut oil but mainly target only the domestic
target. Thus we as one of the company who supply virgin coconut oil are aiming to export our
product mainly in the domestic market but also the world market.

Our company provide 4 choice of virgin coconut oil that are in 50 ml, 150 ml, 250 ml
and also in litres for those who need to buy in bulk quantities. The 50ml or travellers size
virgin coconut oil bottle is aim for people who always traveling. This is because travellers
usually has a very limited storage space thus a smaller bottle helps them reduce the space
taken from a bigger bottle. A smaller size bottle also makes the usability of the coconut oil
easier as customer can bring the virgin coconut oil anywhere and use it when needed without
needing to hold the bigger bottle everywhere the customer went. This provide an ease of
usability to customer who are travelling or need to use the virgin coconut oil in an
emergency.

For the 150ml virgin coconut oil bottle or known as the personal size, it aims toward
the personal space usage such as at home and office. When customer is not travelling, at work
or at home, the personal size is more suitable as it provides more quantities of virgin coconut
oil to be use. The bottle can be store at the office as it does not take up large space for

27
example store at the drawer of the office table or just leave it on the table. For personal use
the quantities are enough to last for a long time compare to the traveller size which is
relatively small.

For those people who need to share the virgin coconut oil with family or friends, the
250ml family size bottle is suitable as is provide a lot of virgin coconut oil to be use and
share. The family size is the largest bottle sold by our company. This size is aim for the
household use as it come in a large size and need to be store properly to maintain it highest
quality as it usually last for a very long time. This size also aims toward customer who use
the virgin coconut oil orally as this type of application need to higher amount compare to
those who use is a lotion.

Not to be forget for business or company who need the virgin coconut oil in large
quantities such as restaurant and spa, our company also provide virgin coconut oils in litres.
This provide a solution for them from needing to buy the virgin coconut oil by bottles as it
will cause higher price and storage problem. As larger company usually use the virgin
coconut oil in large quantities at a time, we provide a storage container suitable to the
demand of the company to ensure the virgin coconut oil is not contaminated and able to
maintain it highest quality.

28
7.2 Target Market

Target Marketing involves breaking a market into segments and then concentrating your
marketing efforts on one or a few key segments consisting of the customers whose needs and
desires most closely match your product or service offerings. It can be the key to attracting
new business, increasing your sales, and making your business a success. The beauty of
target marketing is that by aiming your marketing efforts at specific groups of consumers it
makes the promotion, pricing, and distribution of your products and/or services easier and
more cost-effective.

Geography:

1. Country
- Taiwan and China have high demand of virgin coconut oil due to their geography
which does not allow all the growth of coconut tree
2. District
- Area around Bukit Bintang have many spa and hotel which provide vast
marketing opportunities

Demographic:

1. Occupation
- Public figure such as models, singer, artist who show case themselves to the
public need product to maintain their appearance and health
2. Social class
- The product is aim toward the upper class society because our product is classed
as premium health product to high price to maintain the high quality

Psychographic:

1. Preference
- Some customers demand virgin coconut oil product that is odourless and
colourless due to ease of use and for self-comfort
2. Sensitivity to price
- Customer who regularly buy virgin coconut oil know that good quality is hard to
obtain thus high price virgin coconut oils will ensure the good quality of the
3. Motives of purchase
- Many customer now concern about maintaining their wellness and beauty

29
7.3 Market Size

Market size in the number of individuals in a certain market who are potential buyers and/or
sellers of a product or service. Every company must be interested in knowing the market size
before launching a new product or service in that specific area. Analysing the market size is
very important to estimate the market share and ensure the marketing is well planned. The
market share is often quoted in unit of sales or Ringgit for specific period e.g. daily, weekly,
monthly or yearly.

Harafiee coconut enterprise is aiming to be one of the biggest distributer of Virgin Coconut
Oil or known to be called Cocogin in Kuala Lumpur and Selangor area. It is known that our
operation took place at Ampang, Selangor and Bukit Bintang. According to the department of
statistic Malaysia, Selangor has a population of 574,300 while Bukit Bintang has a population
of 742,200 people approximately. We also supply our virgin coconut oil to hotels nearby for
their spa treatment, pharmacies and also herbal shop. It is stated that there are 30 hotels, 20
pharmacies and 10 herbal shops in Selangor while in Bukit Bintang there are 720 hotels, 30
pharmacies and 20 herbal shops. Considering every aspect that we offer, we have targeted
40% from the total population of people also hotels and shops that we can supply for
Selangor and Kuala Lumpur and we narrow it down to Ampang and Bukit Bintang.

With this evaluation, we assumed 1 082 265 of people will be our potential customers in a
month. Our product have 3 ranges of quantity which is 50ml, 150ml and 250ml. For the
quantity of 50ml, 150ml and 250 ml is targeted for families, pharmacies, herbal shop and also
hotels and spa.

Population in Ampang, Selangor + 60


× 1,082,265 = 649,359 𝑝𝑒𝑜𝑝𝑙𝑒
Bukit Bintang, Kuala Lumpur = 100
1,082,265 people

60
× 830 = 581 𝑢𝑛𝑖𝑡
Hotels spa, pharmacies and herbal 100
shops located in Ampang, Selangor +
Bukit Bintang Kuala Lumpur = 830
40
× 649,359 = 259,744 𝑝𝑒𝑜𝑝𝑙𝑒
100
*40% from the population/units willing 40
× 581 = 232 𝑢𝑛𝑖𝑡
to buy the Virgin Coconut Oil 100

30
Estimate potential sale for a month 𝑅𝑀 70 (1 𝑢𝑛𝑖𝑡) × 7,500 𝑢𝑛𝑖𝑡 = 𝑅𝑀 525,000

Estimate potential sale for a year 𝑅𝑀 525,000 × 12 𝑚𝑜𝑛𝑡ℎ = 𝑅𝑀 6,300,000

We assume that the potential sale for a month from the targeted people is RM 393,750 and
from the retailer/wholesaler is RM 131,250.After calculating the target market times with our
products price, the market size for a month estimated as RM 525,000. For a year we target a
potential sale of RM 6,300,000.

31
7.4 Competitors

Based on our survey that been done, our product which is the virgin coconut oil - ‘cocogin’
also have our competitors in the market. The competitors that been observed for supplying oil
in the market were the Argan oil whereas another one is the essential oil. Each type of oils
have their own characteristic and speciality. Therefore table below shows the comparison of
our competitors based on their strengths and weaknesses of their business.

Competitors Strengths Weakness


Cocomune oil  World-wide Brand  Pricy compare to other brands
 Has been operating for long
time
 Highly recommended to
improve scars
Argan oil  Contain moisturizing  Pricy compare to others
properties  No local manufacture
 Contain a lot of vitamins
Minyak kelapa Kak Ros  Pioneer of virgin coconut oil  Strong odour
in the local market  Less advertising
 Can be consume but have strong
bitter taste

32
7.5 Market Share

Market share can be defined as the percentage of total sales volume in a market captured by a
brand, product, or company. Moreover it also refers to a company's portion of sales within
the entire market in which it operates.

BEFORE INVOLVEMENT

No. Company Share Percentage (%) Expected purchase per year


(RM)

1. Cocomune Oil 55 33,721,875

2. Argan oil 22 13,488,750

3. Minyak Kelapa Kak Ros 23 14,101,875

TOTAL 100 61,312,500

Minyak Kelapa Kak


Ros
23%

Cocomune Oil
55%

Argan Oil
22%

Cocomune Oil Argan Oil Minyak Kelapa Kak Ros

33
AFTER INVOLVEMENT

No. Company Share Percentage (%) Expected purchased per year


(RM)

1. Cocomune oil 50 30,656,250

2. Argan oil 20 12,262,500

3. Minyak Kelapa Kak Ros 20 12,262,500

4. Harafiee Enterprise 10 6,131,250

TOTAL 100 61,312,500

Harafiee Enterperise
10%

Minyak Kelapa Kak


Ros
20%

Cocomune Oil
50%

Argan Oil
20%

Cocomune Oil Argan Oil Minyak Kelapa Kak Ros Harafiee Enterperise

34
7.6 Sales Forecast

Sales forecasting is the process of estimating future sales. Accurate sales forecasts enable
companies to make informed business decisions and predict short-term and long-term
performance. Companies can base their forecasts on past sales data, industry-wide
comparisons, and economic trends. Sales forecasting gives insight into how a company
should manage its workforce, cash flow, and resources. In addition to helping a company
allocate its internal resources effectively, predictive sales data is important for businesses
when looking to acquire investment capital.

Table 7.6.1: Sales forecast of Cocogin for a year.


Month Size of Unit Price per Sales (RM) Remarks
product unit (RM)
January 50 ml 1,875 25 46,875
150 ml 3,750 67.50 253,125
250 ml 1,875 112.50 210,937.50
TOTAL 7,500 205 510,937.5
February 50 ml 1,875 25 46,875
150 ml 3,750 67.50 253,125
250 ml 1,875 112.50 210,937.50
TOTAL 7,500 205 510,937.5
March 50 ml 1,875 25 46,875
150 ml 3,750 67.50 253,125
250 ml 1,875 112.50 210,937.50
TOTAL 7,500 205 510,937.5
April 50 ml 1,875 25 46,875
150 ml 3,750 67.50 253,125
250 ml 1,875 112.50 210,937.50
TOTAL 7,500 205 510,937.5
May 50 ml 1,875 25 46,875
150 ml 3,750 67.50 253,125
250 ml 1,875 112.50 210,937.50 Holiday
TOTAL 7,500 205 510,937.5
June 50 ml 1,875 25 46,875
150 ml 3,750 67.50 253,125
250 ml 1,875 112.50 210,937.50
TOTAL 7,500 205 510,937.5
July 50 ml 1,875 25 46,875
150 ml 3,750 67.50 253,125
250 ml 1,875 112.50 210,937.50
TOTAL 7,500 205 510,937.5
August 50 ml 1,875 25 46,875
150 ml 3,750 67.50 253,125
250 ml 1,875 112.50 210,937.50

TOTAL 7,500 205 510,937.5

35
September 50 ml 1,875 25 46,875
150 ml 3,750 67.50 253,125
250 ml 1,875 112.50 210,937.50
TOTAL 7,500 205 510,937.5
October 50 ml 1,875 25 187,500
150 ml 3,750 67.50 1,012,500
250 ml 1,875 112.50 843,750
TOTAL 7,500 205 510,937.5
November 50 ml 1,875 25 46,875
150 ml 3,750 67.50 253,125 Festive
250 ml 1,875 112.50 210,937.50 Month
TOTAL 7,500 205 510,937.5
December 50 ml 1,875 25 46,875
150 ml 3,750 67.50 253,125
250 ml 1,875 112.50 210,937.50 Holiday
TOTAL 7,500 205 510,937.5
TOTAL FOR A YEAR 6,131,250

Table 7.6.2: Sales forecast of Cocogin for three consecutive years.


Month Sales forecast for three consecutive years (RM)
First year Second year Third year Total Remarks
(Increase 4%) (Increase 8%) sales
January 510,937.5 531,375 551,812.5 1,594,125
February 510,937.5 531,375 551,812.5 1,594,125
March 510,937.5 531,375 551,812.5 1,594,125
April 510,937.5 531,375 551,812.5 1,594,125
May 510,937.5 531,375 551,812.5 1,594,125 Holiday
June 510,937.5 531,375 551,812.5 1,594,125
July 510,937.5 531,375 551,812.5 1,594,125
August 510,937.5 531,375 551,812.5 1,594,125
September 510,937.5 531,375 551,812.5 1,594,125
October 510,937.5 531,375 551,812.5 1,594,125
November 510,937.5 531,375 551,812.5 1,594,125 Festive
month
December 510,937.5 531,375 551,812.5 1,594,125 Holiday
TOTAL 6,131,250 6,376,500 6,621,750 19,129,500

36
7.7 Marketing Strategy

Product Strategy

I. Brand
Brand is a name, term, design, symbol or other feature that distinguishes an
organization or product from its rivals in the eyes of the customer. So our products
must be at the very best so that our customer will keep on buying our products and be
our loyal customer. Our brand name which is ‘Cocogin’ combines the meaning of
coconut and virgin reflects about what we are selling that is virgin coconut oil (refer
diagram 7.7.1). This brand name is very catchy and easy to remember or pronounce
by our customer or consumer. Cocogin or virgin coconut oil reflects the benefits of
our product which is, we are conscious about our customers health.

Diagram 7.7.1: Product logo.

II. Quality
In HARAFIEE Coconut Enterprise, we are very concern to use only the high quality
ingredient in our product. The ingredients are only purchase from the trusted coconut
oil manufacture company. Therefore, we are purchasing the virgin coconut oil stock at
only one trusted seller that had been more than 10 years in producing it. Hence, the
product is 100% going through the inspection process before packing. We also
concern about the products hygiene by cleaning and doing maintenance to our
machines. Our cleaning products are also from food graded chemicals. Our products
are also approved by the HACCP (Hazard Analysis and Critical Control Point).

37
III. Packaging and Protection
Our product consists of 3 types of sizes. Those size types are 50ml, 150ml and 250
ml. For 50ml and 150ml, we used plastic bottle which is High-
density polyethylene (HDPE) bottle (refer diagram 7.7.2). This bottle is most widely
used resin for plastic bottles. This material is economical, impact resistant, and
provides a good moisture barrier. HDPE is compatible with a wide range of products
including acids and caustics but is not compatible with solvents. Meanwhile for
250ml packaging, we uses a glass bottle. This is because glass is the trusted and
proven packaging for health, taste and the environment. We use a different style of
packaging for the product so that it is easier for the customer to carry it because of its
heavy load. Our packaging also has our on products logo which is ‘Cocogin’ to
promote our individuality as a virgin coconut oil in the market. It must be clear and
visible to the customer to see and different to our competitors.

50ml 150ml

250ml
Diagram 7.7.2: Type of packaging.

38
IV. Labelling
Label is a part of product which carries verbal information about the product or seller.
It may be a small slip or printed statement and may be a part at package or it may be
attached to the product. It conveys verbal information about the product and seller.
The label enables producer to give a clear instruction, show the ingredients and others
important product details plus to make sure the buyers or consumers can easily
identify the product. We put labelling at our packaging so that the customers will
know the information of our product (refer diagram 7.7.3). The labelling provides
nutrition contents of the ingredients and the instructions to use them. We also provide
the information of our company if the customer wanted to ask any questions regarding
the product.

Diagram 7.7.3: Labelling of product.

39
V. Pricing Strategy
(Price = Fixed cost × profit margin)
Size Fixed cost (RM) × profit margin Price (RM)
15ml 10 × 150% 25
150ml 27 × 150% 67.5
250ml 45 × 150% 112.5

Pricing strategy refer to the methods by which a business calculates how much it will
charge for a product or service. It is based not only on the cost of the product, but also
on profit margin and a holistic view of the market and future viability.

Economic condition

Stable economic growth in Malaysia has been the advantage in our pricing strategy.
We need to consider the increasing of the price of the raw material and the coconut
crisis so that our product will meet the demand as a substitution to coconut oil. We
take advantage on the increasing of coconut oil price by lowering or product price.

Government regulation

The government regulation on our product such as taxes and the controlled price of
our raw material by the government are also the factors that we need to monitored on
pricing our product so that it meet the customer demand.

Consumer group

Consumer groups that we have aimed are also the factors that effecting our product
pricing. Majority of customers that use our product is athletes, model, artists and
upper class people. Our product is kind of product that people will recently use. So
putting the price to high will effecting our customer’s loyalty.

VI. Distribution Strategy


Distribution strategy is a plan created by the management of a manufacturing business
that specifies how the firm intends to transfer its product to intermediaries, retailers
and end consumers. Larger companies involved in making products will usually also
put together a detailed production distribution strategy to guide its entry into its
intended market.

40
Manufacture Consumer
Manufacturer Retailers Consumer
Manufacturer Wholesalers Consumer

Direct to customers

This is one ways channel that we use to sell our product directly to our customer. We
sell it through our social media or contact number.

Selling through retailers

Besides that, we also sell our products through retailers. Selection of numbers and
location of retailers have we identify as a potential retailers in Bukit Bintang area and
Ampang area. Those retailers includes herbal shop and etc.

Selling through wholesalers

Selling through wholesalers also one of our distribution strategy. This is because
wholesalers have better financing to cover the cost of the channel work. Wholesalers
that involve on our selling is hotels, pharmacies, Mydin, Giant and NSK located in
Bukit Bintang and Ampang area.

VII. Promotion Strategy


Sales promotion is the method or techniques for creating public acceptance of or
interest in a product, usually in addition to standard merchandising techniques, as
advertising or personal selling, and generally consisting of the offer of free samples,
gift made to a purchaser, or the like. Sales promotion also is an initiative undertaken
by an organisation to promote an increase in sales, usage or trials of a product.

Social Media:-
- Facebook: HARAFIEECOCONUT
- Instagram: HARAFIEECOCONUT
- Twitter: @harafieecoconut

41
Others:-
- Brochures
- Business card

Diagram 7.7.4: Business card of HARAFIEE Coconut Enterprise.

42
Diagram 7.7.5: Brochure of company.

Public relations and publicity:-

Every once in a year we will join Herbal Asia Exhibition in other state and country to
expose and give a talk on our product. Herbal Asia Exhibition gives chance for us to
introduce our product to the public.

43
7.8 Marketing Budget
Table 7.8.1: Marketing budget
Items Monthly (RM) Other Expenses Total (RM)
(RM)
Brochure 250 250
Signboard 3,000 3,000
Business card 150 150
Bunting 500 500
Banner 1,500 1,500
Grand opening 5,000 5,000
SUB TOTAL 7,400 10,400
GRAND TOTAL 10,400

44
45
8.0 Operational plan

8.1 Operational objectives

The objectives of our operational plan is as follows:

 To ensure the operational of the business runs smoothly.


 To optimize customer satisfaction and fulfil their expectations towards our ability to
provide high quality products and timely services.
 To achieve consistency and stability in our production and services.
 To ensure the quality of our products and services meets the established standards.
 To ensure our business is profitable and successful.

8.2 Business hours

Operational time Business time


Receive order from customer
(10 a.m. – 6 p.m.) Post product to customer
Monday (9 a.m. – 12 p.m.)
Production of Cocogin
(9 a.m. – 6 p.m.)
Receive order from customer
(10 a.m. – 6 p.m.) Post product to customer
Tuesday (9 a.m. – 12 p.m.)
Production of Cocogin
(9 a.m. – 6 p.m.)
Receive order from customer
(10 a.m. – 6 p.m.) Distribute stock to supplier
Wednesday (8 a.m. – 2 p.m.)
Production of Cocogin
(9 a.m. – 6 p.m.)
Receive order from customer
(10 a.m. – 6 p.m.) Distribute stock to supplier
Thursday (8 a.m. – 2 p.m.)
Production of Cocogin
(9 a.m. – 6 p.m.)
Production of Cocogin
(9 a.m. – 6 p.m.) Distribute stock to supplier
Friday (8 a.m. – 2 p.m.)
Purchase new packaging material
(10 a.m. – 12 p.m.)
Production of Cocogin
(9 a.m. – 6 p.m.)
Saturday
Arrival of raw material (virgin coconut oil)
(10 a.m. – 12 p.m.)
Sunday OFF DAY OFF DAY

46
8.3 Operational Process

PRODUCTION FLOW: STAGE 1

Received virgin coconut oil from supplier.

Virgin coconut oil then are transferred into tank

Inspection quality of VCO.

Filling process from storage tank into bottle


(Bottling process).

Capping Process of product

Wrapping process product

Final Inspection of VCO after being process.

47
Products are then put into boxes

Product then stored into storage area.

PRODUCTION FLOW: STAGE 2

Received orders from customer/seller

Inspection of product ordered from customer

Packaging process of product before being transport

Product being stored in storage area before being


post

Transportation of ordered product to delivery places.

Delaying process due to delivery of product to


customer place

48
8.4 Operation Layout

STORAGE AREA
PROCESSING AREA

OFFICE

49
Table 8.4.1: Operation equipment budget.

No. Type of equipment Quantity Price per unit Total Amount


(RM) (RM)
OPERATION EQUIPMENT
1 Product rack 4 114 456
2 Production table 6 100 600
3 Working chairs 6 20 120
TOTAL 16 234 1,176

50
8.5 Production Planning
It is important to make sure that the business is able to produce outputs that are enough to
fulfil the expected market demands or sales. This can be achieving by having a good
production planning. In production planning, the business will determine how much output to
produce for a certain period of time such as in a day, a week or a month.

Average sale forecast per month = RM 510,937.5


Average price per unit = RM 25.00 (50ml)
= RM 67.50 (150ml)
= RM 112.50 (250ml)
Number of output per month For 50ml
RM 46,875 ÷ RM 25.00 = 1,875 unit
For 150ml
RM 253,125 ÷ RM 67.50 = 3,750 unit
For 250ml
RM 210,937.5 ÷ RM 112.50 = 1,875 unit

If the number of working days per month is 26 days


The amount of output to be produced per For 50ml
day is 1,875 ÷ 26 = 72 unit per-day
For 150ml
3,750 ÷ 26 = 144 unit per-day
For 250ml
1,875 ÷ 26 = 72 unit per-day

51
8.6 Material Planning

For our material planning, these are the list of raw materials, quantities and cost needed for
production of virgin coconut oil for 1 month of production (refer table 8.6.1).
Table 8.6.1: Material planning budget.
Materials Price per unit (RM) Quantity Total cost (RM)

Virgin coconut oil 150.00 750 Liter 112,500


Bottle and cap 50 ml 1.50 1875 bottles 28,125
Bottle and cap 150 ml 3.00 3750 bottles 11,250
Bottle and cap 250 ml 5.00 1875 bottles 9,375
Sticker for 50 ml 1.00 1875 pieces 1,875
bottle
Sticker for 50 ml 1.50 3750 pieces 5,625
bottle
Sticker for 50 ml 2.50 1875 pieces 4687.5
bottle
TOTAL 173,437.5

Table 8.6.2: Location of raw material taken.


No Name and Address Type of Material Mode of Payment

1. SMN Global Marketing Virgin Coconut Oil Cash

No 18, Jalan Lading 29, Taman


Puteri Wangsa,
81800, Ulu Tiram, Johor.

2. Polyclass Equities Sdn. Bhd Bottles and Cap Cash

15 Jalan TSB 8, Taman Industri


Sungai Buloh, 47000 Petaling
Jaya,Selangor.

3. Master Label Sdn. Bhd Labels Cash

No. 4, Jalan Aman Batu11, Taman


Desa Aman, Batu 5,
Cheras 56100, Kuala
Lumpur,Malaysia

52
8.7 Machine and Equipment Planning

Next, for our machine and equipment planning, there are few factors that we focus on in
order to achieve good quality of equipment and satisfactory. The first factor is the price.
Buying expensive and many machines will obviously cost our budget and even our factory
space. Therefore, we’ll purchase our machine equipment near our production place as it can
save our budget In terms of transportation cost and luckily our suppliers of equipment is just
few kilometres away. In addition, our machines are made up of stainless steel which is a
really good quality of steel and can stand more than 10 years of production. Besides that, this
machine consist availability of spare part and easy maintenance if break-down. This machine
is also being set up with latest technology and user friendly where it is an automatic machine
thus it does not required a lot of human handling. Furthermore, this machine also is really
suitable for our mass production of product where it can produce hundreds of bottles of virgin
coconut oil per day in order to fulfil the market demand.

Table 8.7.1: Machine and equipment budget


No. Machine Quantity Price (unit Total Price
RM) (RM)
1. Liquid filling machine 3 500 1,500
manual bottling
TOTAL 1,500

53
8.8 Manpower Planning

For the manpower planning, few steps needed in determine the amount of direct labour
required in our company.

Planned rate of production per-day – The production manager manage to achieve of 288
packages of virgin coconut oil per-day based on the filling machine and hand packaging that
are able to produce 32 packages in 1 hour. So, total of 9 working hour, a total of 288
packages of finished product able to be produce. By increasing working hour or adding
another machine the total output are also increase.

The standard time for a worker to produce one unit of product without machinery is 3 hour.
By using machinery, a worker able to produce 32 packages of finished product in 1 hour.

Worker productive time – The workers productive time is usually in the first 3 week of the
month and after the resting time. Total of working hour for the worker is 9 hour per-day.

Formula to calculate the amount of direct labour required

No of Worker required: Planned rate of Production per day x Worker standard

Worker Production time per day Production time/unit

Table 8.8.1: Manpower budget.


Position No. Salary Allowance EPF SOCSO Total
(RM) (RM) 12% 1.75% (RM)
(RM) (RM)
Factory worker 3 4,500 1,500 540 78.75 6,618.75

TOTAL 3 4,500 1,500 540 78.75 6,618.75

54
8.9 Overhead Requirement

In this process, overhead are also included and required in the operation. Overhead is a
requirement that other than direct raw materials and direct labour. From the table below, we
state the estimate amount of expenses that might be used.

NO. TYPE OF EXPENSES AMOUNT PER MONTH


(RM)
1 Maintenance (machinery) 1,000

2 Utilities bills (electricity, water, phone 1,500


and Wi-Fi)

TOTAL 2,600

55
8.10 Location Plan

Address: No 5, Jalan Page Ukay Heights,

68000 Ampang

Selangor Darul Ehsan,

Malaysia.

Diagram 5.1.1: Map of Ampang area

56
Factors that contribute in choosing the location:

Distance with the customer

Our distance with customer suitable and easy for them to come or search.
Located around the business areas, which are one of our advantages. Other
than that, there also other company and factory that located near with us.

Near with the supplier

We are located near with the supplier. That supply us palm oil because our
santan made from palm oil. It easier for both parties to deal. The supply of
the items can arrive quickly as well as save shipping costs because of short
distances.

Other factors

There are many of communities around us. People can buy our product at
distributor/dealer or buy directly from us. In addition, the security at our
location secure and good supervision around the area.

57
8.11 License, Permits & Regulations

Items Remark Types

License for business Majlis Perbandaran Selangor License

Halal Certification Jabatan Kemajuan Islam Malaysia (JAKIM) Regulation

Employee Provided Fund KWSP


Regulation
(EPF) Compulsory to all worker

PERKESO
SOCSO Regulation
Compulsory to all worker

58
License for business
Business includes every form of trade, commerce, craftsmanship, calling, profession or other
activity carried on for the purposes of gain, but does not include any office or employment or
any charitable undertaking or any occupation specified in the schedule under the provisions
of the Business Registration Act 1956 (ROBA 1956). Business that may be registered under
the ROBA 1956 is a business operating in West Malaysia which includes Peninsular
Malaysia and the Federal Territory. The importance of this license is, it will give us
permission to promote our product without any trouble. This license will be provided by
Majlis Perbandaran Selangor. As for our fee, the total payment would be RM 60.00 ringgit
only as we registered our companies using a trade name.

Halal certification

Halal certification is a must to facilitate us to market our product in Malaysia. This is because
in Malaysia the majority of people are Muslim. Without the existence of Halal certificate our
product will be difficult to be marketed because no belief from consumer that are Muslim.
Halal certificate can be applied through JAKIM. JAKIM will examine process palm milk
production in our factory to get Halal certification.

Machine Usage Approval

This need is different follow production activities. Hence the installation also vary from
certain factory site layout. Therefore as an entrepreneur we should take some actions that
with regard to standards of safety, health and where welfare these machines fixed. Steam
boiler design, mix pressure not fiery and machine lift need to be approved first before it fitted
and handled. These approvals will be accessible from Department Factory and machinery
subjected to examination at least every 15 month. This is to ensure the machine that we use is
safe and will not harm any employees.

Employee Provided Fund (EPF) and SOCSO

As our entrepreneur should take attention that employee welfare need to be looked after and
enhanced to create one relationship management form that is good with staff. Workers social
need is a requirements of the law set through Ordinance Employees Provident Fund 1951 and
Akta Keselamatan Sosial Pekerja 1969. All of the employees and employer required to
contribute to EPF and contribution rate is 12% from salary paid by employers and 1.75% is
for SOCSO. The sector involve is KWSP and PERKESO.

59
8.12 Implementation Schedule

ACTIVITIES Deadlines Durations

Incorporation
of business April-Mei 2016 2 months

Application
for permits Mei-Jul 2016 3 months
and license

Searching
for business Aug 2016 1 months
premise

Renovation
of premise Sept-Oct 2016 2 months

Procurement
of machines Oct-Nov 2016 2 months
and raw
material

Recruitment
of labours Dec 2016 1 months

Installation
of machines Dec 2016 1 months

60
8.13 Operation Budget

As other department, operation also have its own operational budget for all the activities
involved. It can be categorizes into three parts which is fixed asset expenditure, monthly
expenses and lastly other expenses.

Table 8.13.1: Table of operation budget.


ITEM FIXED MONTHLY OTHER TOTAL (RM)
ASSETS (RM) EXPENSES EXPENSES
(RM) (RM)
Operation 1,176 1,176
equipment

Machine and 1,500 1,500


equipment

Raw materials 173,437.5 173,437.5

Salary, EPE, 6,618.75


SOCSO

Operational 2,600 2,600


Overhead

Factory 50,000 50,000

TOTAL 52,676 182,656.25 0 228,713.5

61
62
9.0 Financial Plan

9.1 Project Implementation Cost Schedule and Resources of Finance

HARAFIEE Coconut Enterprise

Capital Expenditure Cost Sources of Financing


Land & Building 100,000 Cash
Office Equipment 12,145 Cash
Office Renovations 1,000 Cash
Office Furnitures and Fitting 10,250 Cash
Vehicle (Lory) 5,000 Cash
Cash
Cash
Cash
Cash
Machinery and Equipment 1,500 Cash
Maintanence machinery 1,000 Cash
Operation equipment 1,176 Cash
Cash
Working Capital 1 months
Sales & Marketing Costs (monthly) 13,375 Cash
General & Administrative Costs (monthly) 2,000 Cash
Operations & Technical Costs (monthly) 186,744 Cash
Pre-Operating & Incorporation Costs (one-off) 300 Cash
Other Expenditure (annually) 2,000 Cash
Provision for Contingencies 10% 33,449 Cash
TOTAL 369,939

© 2014 Ismail Ab.Wahab MASMED UiTM

63
HARAFIEE Coconut Enterprise

Own Contributions
Capital Expenditure Cost Loan Hire-Purchase
Cash Existing F. Assets
Land & Building 100,000 100,000
Office Equipment 12,145 12,145
Office Renovations 1,000 1,000
Office Furnitures and Fitting 10,250 10,250
Vehicle (Lory) 5,000 5,000
-
-
-
-
Machinery and Equipment 1,500 1,500
Maintanence machinery 1,000 1,000
Operation equipment 1,176 1,176
-
Working Capital
Sales & Marketing Costs (monthly) 13,375 13,375
General & Administrative Costs (monthly) 2,000 2,000
Operations & Technical Costs (monthly) 186,744 186,744
Pre-Operating & Incorporation Costs (one-off) 300 300
Other Expenditure (annually) 2,000 2,000
Provision for Contingencies 33,449 33,449
TOTAL 369,939 369,939

Proposed Terms of Loan (if required) Proposed Terms of Hire-Purchase (if required)

Annual interest rate 10% Annual interest rate 5%


Loan period (years) 8 Period (years) 7

© 2014 Ismail Ab.Wahab MASMED UiTM

64
9.2 Pro forma cash flow statements

HARAFIEE Coconut Enterprise


STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER

2017 2018 2019 2020 2021


RM RM RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIES


Net Income before tax 4,476,736 3,876,749 4,225,787 4,160,922 4,160,922
Adjustment for:
- Depreciation of fixed assets 6,414 6,414 6,414 6,414 6,414
- Interest expense - - - - -
Operating profit before changes in working capital 4,483,150 3,883,163 4,232,201 4,167,337 4,167,337
(Increase)/decrease in inventories (1,559,250) (31,185) (64,865) - -
(Increase)/decrease in accounts receivable - - - - -
Increase/(decrease) in accounts payable - - - - -
Interest paid - - - - -
Tax paid - - - - -
(Increase)/decrease in other current assets -
Increase/(decrease) in other current liabilities - - - - -
Net cash from operating activities 2,923,900 3,851,978 4,167,337 4,167,337 4,167,337

CASH FLOWS FROM INVESTING ACTIVITIES


Purchase of property, plant & equipment (132,071) - - - -
(Increase)/decrease in other non-current assets - - - - -
Net cash used in investing activities (132,071) - - - -

CASH FLOWS FROM FINANCING ACTIVITIES


Increase in Share Capital 369,939 - - - -
Proceeds from long-term loans - - - - -
Repayment of long-term loans - - - - -
Repayment of hire-purchase - - - - -
Net cash from financing activities 369,939 - - - -

Net increase/(decrease) in cash 3,161,768 3,851,978 4,167,337 4,167,337 4,167,337


CASH AT THE BEGINNING OF THE YEAR - 3,941,393 7,793,371 11,960,707 16,128,044
CASH AT THE END OF THE YEAR 3,161,768 7,793,371 ######### 16,128,044 20,295,381

65
## 6,414
Net cash from
operating activities Net cash used in Net cash from
Cash balance
investing activities financing activities

2017 2923900 (132071) 369939 3161768


2018 3851978 0 0 7793371
2019 4167337 0 0 11960707
2020 4167337 0 0 16128044
2021 4167337 0 0 20295381

2021
2020
2019
2018
2017

(5000) 0 5000 10000 15000 20000 25000


Thousands
Cash balance
Net cash from financing activities
Net cash used in investing activities
Net cash from operating activities

66
9.3 Pro forma income statements

HARAFIEE Coconut Enterprise


PRO-FORMA INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER

Years 2017 2018 2019 2020 2021


Sales 6,131,250 6,376,500 6,886,620 6,886,620 6,886,620
Less: Cost of Sales (Notes 1 & 2) 1,462,035 2,300,112 2,449,556 2,514,421 2,514,421
Gross Income 4,669,215 4,076,388 4,437,064 4,372,199 4,372,199

Expenditure
Pre-Operating & Incorporation Expenditure 300
General & Administrative Expenditure 24,000 24,960 26,458 26,458 26,458
Sales & Marketing Expenditure 160,500 166,920 176,935 176,935 176,935

Depreciation of Fixed Assets 5,679 5,679 5,679 5,679 5,679


Other Expenditure 2,000 2,080 2,205 2,205 2,205
Operating Income 4,476,736 3,876,749 4,225,787 4,160,922 4,160,922
Interest on Hire-Purchase
Interest on Loan
Net Income Before Tax 4,476,736 3,876,749 4,225,787 4,160,922 4,160,922
Income Tax 0 0 0 0 0
Net Income After Tax 4,476,736 3,876,749 4,225,787 4,160,922 4,160,922

Note 1
Cost of Sales
Opening Inventory of Finished Goods 613,125 637,650 688,662 688,662
Add: Total Production Cost (Note 2) 2,075,160 2,324,637 2,500,568 2,514,421 2,514,421

Less: Ending Inventory 613,125 637,650 688,662 688,662 688,662


1,462,035 2,300,112 2,449,556 2,514,421 2,514,421
Note 2
Raw Materials
Opening Inventory 166,500 173,160 187,013 187,013
Add: Current Year Purchases 2,081,250 2,164,500 2,337,660 2,337,660 2,337,660
Add: Carriage Inwards
Less: Ending Inventory 166,500 173,160 187,013 187,013 187,013
Raw Materials Used 1,914,750 2,157,840 2,323,807 2,337,660 2,337,660

Labour
Salaries, Wages, EPF & SOCSO 159,675 166,062 176,026 176,026 176,026

Factory Overhead
Depreciation of Fixed assets (Operations) 735 735 735 735 735

Total Factory Overhead 735 735 735 735 735

Total Production Cost 2,075,160 2,324,637 2,500,568 2,514,421 2,514,421

67
Total Expenditure
Total Sales Net Income

2017 6,131,250 1,654,514 4,476,736


2018 6,376,500 2,499,751 3,876,749
2019 6,886,620 2,660,833 4,225,787
2020 6,886,620 2,725,698 4,160,922
2021 6,886,620 2,725,698 4,160,922

2021

2020

2019

Net Income
Total Expenditure

2018 Total Sales

2017

RM0 RM2,000 RM4,000 RM6,000 RM8,000

Thousands

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9.4 Pro forma balance sheet

HARAFIEE Coconut Enterprise


PRO-FORMA BALANCE SHEET AS AT 31 DECEMBER

2017 2018 2019 2020 2021


ASSETS

Non-Current Assets (Book Value)


Land & Building 100,000 100,000 100,000 100,000 100,000
Other Fixed Assets 25,657 19,243 12,828 6,414 -
Other Non-Current Assets - - - - -
Deposit
125,657 119,243 112,828 106,414 100,000
Current Assets
Inventory of Raw Materials 166,500 173,160 187,013 187,013 187,013
Inventory of Finished Goods & Work-in-Progress 613,125 637,650 688,662 688,662 688,662
Accounts Receivable
Cash Balance 3,941,393 7,793,371 11,960,707 16,128,044 20,295,381
Other Current Assets
4,721,018 8,604,181 12,836,382 17,003,719 21,171,056

TOTAL ASSETS 4,846,675 8,723,423 12,949,211 17,110,133 21,271,056

Net Worth (Equity)


Accumulated Fund 369,939 369,939 369,939 369,939 369,939
Accumulated Income 4,476,736 8,353,485 12,579,272 16,740,194 20,901,117
4,846,675 8,723,423 12,949,211 17,110,133 21,271,056
Long-Term Liabilities
Loan Balance - -
Hire-Purchase Balance
- - -
Current Liabilities
Accounts Payable
Loan Due Within Current Year
Hire-Purchase Due Within Current Year
Other Current Liabilities

TOTAL EQUITY & LIABILITIES 4,846,675 8,723,423 12,949,211 17,110,133 21,271,056

69
Total
SUMMARY Total Assets Total Equity
Liabilities
2017 4,846,675 4,846,675
2018 8,723,423 8,723,423
2019 12,949,211 - 12,949,211
2020 17,110,133 - 17,110,133
2021 21,271,056 - 21,271,056

2021

2020

2019 EQUITY
LIABILITY
ASET
2018

2017

RM- RM10,000 RM20,000 RM30,000

Thousands

70
10.0 Conclusion

In a nut shell, we Harafiee Coconut Enterprise confidently to stand in this industry


and to set up this type of business. We believe that, not just foreign product that can be
market, but we as local product also can be well known if we truly put our heart in what we
do. Moreover, with the strength that we have in our product, it is not possible for us to be the
biggest supplier of high quality of virgin coconut oil in the market.

We also hope that our products will not just satisfy our customer demand but also
really hope they will get the fully benefits of coconut oil by using our product. In addition,
we realized that, there is a high demand of our product among people especially people who
practice healthy lifestyle. Therefore, this is an advantage to us to get opportunity to achieve
large profit.

We also determine to produce virgin coconut oil product that are fresh and healthy so
that we will succeed in changing people’s diet. .Last but not least, we hope our product
Cocogin will enter not just in the local market but also foreign country with successfully and
will be the first choice by customer. We Harafiee Coconut Enterprise will give our full effort
in order to maintain our product quality and to give full satisfactory to our customer.

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