Professional Documents
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T049 Business Plan
T049 Business Plan
T049 Business Plan
I.
Mission Statement
II.
To develop an integrated system into the existing zebra crossing light system
To improve the safety of road users
To reduce traffic accidents occurring at zebra crossing
To gradually incorporate this system worldwide
Our Product
The Pedestrian Advance Warning System (PAWS) warns pedestrians of
oncoming vehicles approaching zebra crossings. When installed at pedestrian
zebra crossings, pedestrians will be warned of vehicles approaching by a
buzzer and light display. The warning system will be activated when
approaching vehicles are 20 metres away from the crossing.
III.
IV.
V.
Competitive Niche
Our product is easily installed thus there is no need for a total revamp of the
current zebra crossing light system.
It is projected to be able to reduce zebra crossing related traffic accidents by a
significant percentage.
Our zebra crossing light system is easy to comprehend.
It is a cheap method to improve road safety.
VI.
Our Proposal
The start-up cost of our company is estimated at SGD 500,000. Out of the total
amount, 70% comes from the 12 members of the Board of Directors while the
remaining 30% comes from bank loans and investment financial solutions
programs. We predict to be able to break even within the first 24 months of our
opening after we have generated enough product recognition.
Table of Contents
1. COMPANY PROFILE
1.1 OVERVIEW
1.2 OUR MISSION STATEMENT
1.3
OUR OBJECTIVES
3
3
3
4
2. PRODUCT DESCRIPTION
2.1 CURRENT CIRCUMSTANCES
2.2 SOLUTION
5
5
5
3. MARKET ANALYSIS
4. ORGANIZATION STRUCTURE
5. FINANCIAL PLAN
5.1 ASSUMPTIONS
5.2 PROJECT COST
5.3 PROJECTED SALES BUDGET
5.4 BREAKEVEN ANALYSIS
5.5 PROJECTED PROFIT AND LOSS STATEMENT
5.6 EXIT STRATEGY
10
10
10
10
11
11
12
6. SURVEY ANALYSIS
13
7. APPENDICES
7.1 APPENDIX A
7.2 APPENDIX B
Balance Sheet for First year
Sales Forecast
7.3 APPENDIX C
BREAK EVEN ANALYSIS
7.4 APPENDIX D
16
16
18
18
21
22
22
23
8. ACKNOWLEDGEMENT
26
1. Company Profile
1.1
Overview
ELFNYS Group started out as a limited liability partnership in 1987, by a
group of passionate friends looking to engineer innovative designs and
products for Singaporean families and homes. Over the past 23 years,
ELFNYS Group has seen rapid growth, expanding and acquiring firms
strategically. Today, we are a major global corporation specialising in
innovative products, extending to the fields of civil aerospace, electronics and
mechanical engineering. ELFNYS Group has a network of 288 offices in 28
countries and projects in Eastern Europe, North America, and Asia-Pacific.
The Group was incorporated in Singapore on 2nd June 2001 under the name of
KK and Associates. LLP. and was later renamed to ELFNYS Group.
ELFNYS Group is committed to growing its business globally, through
strategic acquisitions, diversifications and collaborations. Through strategic
collaborations, acquisitions and diversification, ELFNYS Group is set to grow
globally and steadily. The Group is determined to steadily increase its market
share in the civil technology arena and aims to be the most profitable firm in
the world by 2025.
Registered Office:
ELFNYS Group
1 ELFNYS Ave
Singapore 301087
Telephone: (65) 6690-0001
Fax: (65) 6690-0002
E-mail: general@elfynsgroup.com
Website: http://www.elfnysgroup.com
Auditors
Pricewaterhouse Coopers
1.2
1.3
Our Objectives
Be the top consumer choice for innovative products and solutions worldwide.
Be recognised as a leader in the electronics, mechanical and civil engineering
field within the Asia-Pacific region.
Create shareholder value by:
Adopting a cost-effective capital structure and optimising the use of capital
Achieving a Cash Return On Equity (ROE) of 30% by 2025
Be the main provider of creative and innovative products in China and Europe
by 2020.
To establish good relationships with the governments of the countries we work
with.
To be an eco-friendly corporation, minimising impact to the environment
while providing quality products at the same time.
2. Product Description
2.1
Current Circumstances
As pedestrian vehicles accidents still occur at zebra crossings, there is a
growing concern to make zebra crossings safer for pedestrian use. The
pedestrian right-of-way at zebra crossing is recognised by both pedestrian and
drivers. However, it may not mean that it is safe to cross. Currently, despite the
slightly decreasing trend in the traffic accident rates in Singapore, especially
those that result in fatalities, in the recent years, it cannot be denied that the
numbers are still quite significantly large. There is still room for improvement,
on top of the already aggressive campaigning done by the Traffic Police to
raise awareness about the dangers of speeding, drink-driving and other forms
of reckless behaviors on the roads and to promote road courtesy, since the
psyche of the typical Singaporean driver was not taken into account.
2.2
Solution
From our survey results (refer to 6. Survey Analysis), almost 50% of the
respondents admitted that they do not look out for traffic at pedestrian
crossings, whether or not they are in a rush. 38% of the respondents are
preoccupied with their phones and devices at pedestrian crossings. Hence, the
PAWS is introduced to help pedestrians be aware of traffic conditions and
thereby making a safe crossing. The aim of PAWS is to reduce the number of
accidents caused by negligent pedestrians. This solution is targeted at
scenarios whereby pedestrians are unaware of the traffic conditions, putting
their lives and that of others in danger. The PAWS works by alerting
pedestrians of incoming traffic by an LED display and buzzer. This is achieved
by designing a circuit of magnetic sensors about 15m away from the crossing.
The pedestrians can then be warned of incoming vehicles and thus, judge
whether or not to cross as they are not to assume that motorists will always
look out for them. The circuits are German-made with Japanese controllers
and sensors. The sensors are magnetic and will close the circuit when vehicles
enter the loop of the input as shown in Appendix 7.1.
3. Market Analysis
3.1
Road accident casualties have increased steadily over the years together with the
increasing human population. Though the casualties per capita is relatively constant
over the years, but total casualties is in fact increasing and every single human life is
precious, therefore there is a need to find ways to curb the increasing casualties.
PAWS is targeted at safeguarding pedestrians life on the road.
Year
Human
Population
Total
Casualties Casualtie
Casualties (Fatalities) s
(Injured)
Casualties
per 100,000
Human
Population
(Fatalities)
Casualties
per 100,000
Human
Population
(Injured)
2005
4,265,800
8,399
173
8,226
4.1
192.8
2006
4,401,400
9,896
190
9,706
4.3
220.5
2007
4,588,600
10,566
214
10,352
4.7
225.6
2008
4,839,400
10,981
221
10,760
4.6
222.3
2009
4,987,600
10,931
183
10,748
3.7
215.5
2010
5,076,700
11,258
193
11,065
3.8
218.0
3.2
Americas
Europe
Asia Pacific
Prices
79%
70%
74%
Performance
43%
42%
49%
Fuel Consumption
31%
38%
Safety
36%
In the modern digitized environment, more often than not a smartphone will be in the
hands of the pedestrian be it texting, calling, or enjoying the multimedia (music,
video, etc.) features of the phone. Survey results in Figure 4 confirm this assertion, as
38% of pedestrians are engaged in the above-mentioned activities when crossing the
road. These activities distracts our attention or lower our awareness of the
surrounding which has come to make simple road crossing at the zebra crossing a
much dangerous affair than it should be. Coupled with the recklessness of certain
drivers and blind spot of certain locations, the risk compounds further. A look into the
current zebra crossing system reveals that no warning device was available. The
orange blinking light simply signals to the driver the existence of a zebra crossing, not
when a pedestrian is engaging the road. Vice-versa, nothing was available to warn the
pedestrian of incoming cars. It is thus identified that there is a possible need for
warning device. In careful consideration of the above mentioned factors contributing
to risk, we conceptualise that the warning device should engage two senses (sight,
hearing) and the warning audience be pedestrian.
In Singapore, the statutory board under Ministry of Transport, the Land Transport
Authority, takes the charge of delivering a land transport network to meet the nations
needs. Our company aligns herself with the objectives of LTA in providing costeffective and sustainable solutions that ensure optimal use of our transport measures
and safeguarding the wellbeing of the travelling public. We enjoy close ties with LTA
subsidiary MSI Global in engineering solutions for public welfare. We are currently
working with MSI Global towards installing 200 of our products on public roads by
December 2013.
4. Organization Structure
Lo Kar Koon Chief Executive Officer
Mr. Lo was appointed as the CEO in 2008. He was awarded the Land Transport
Authority Scholarship and earned his Bachelors degree in Mechanical Engineering
from Nanyang Technological University, Singapore in 1997. He earned his Masters
Business Administration from Wharton Business School, Pennsylvania in 2005.
He has extensive management and operational experience in Land Transport
Authority, Temasek Holdings Pte Ltd, and SMRT Corporation Ltd. Under his
leadership, ELFNYSGroup was awarded the prestigious Singapore Innovation Award
in 2009 and 2011 respectively.
Mr. Liew was appointed as the Chief Financial Controller in 2007. He earned his
Bachelors degree in Accountancy from Nanyang Technological University,
Singapore in 1998. He sat on the Board Committee for SMRT Corporation Ltds
listing on SGX in June 2000 before working with Citigroup Inc in 2001 and Barclays
Investment Bank in 2003. Since 2005, he founded Fund and Liew Partner, providing
actuarial and financial services. He is also a member of the Institute of Certified
Public Accountants Singapore Executive/Board Committee.
Mr. Ng was appointed as the Research & Development Director in 2009. He earned
his Bachelors degree in Mechanical Engineering from Nanyang Technological
University, Singapore in 2000.
Since graduation, he has been involved in the management of product innovation and
research at the Singapore Institute of Manufacturing Technology, Agency for Science,
Technology and Research, A*STAR. He was under A*STARs scholarship during his
term in NTU. Currently, he is also a member of the A*STAR Executive/Board
Committee.
Miss Lee was appointed as the Human Resource Manager in 2007. She earned her
Bachelors degree in Business from Nanyang Technological University, Singapore in
2000.
Since graduation, she has been involved in the management of human resource
planning. She worked in the HR department of Ministry of Transport, MSI Global and
Land Transport Authority (LTA) before joining the company.
Mr. Lim was appointed as the Marketing & Sales Manager in 2008. He earned his
Bachelors degree in Business from Nanyang Technological University, Singapore in
2004.
Since 2004, he has been involved in the management of Goh and Lim Marketing
Consultancy Pte Ltd, property brokerage and product marketing consultancy services.
During his service, the firm received the Best Company Award from the Economic
Development Board, Singapore for the marketing contract of Jurong Island.
Fuad was appointed as the Design & Graphics Manager in 2009. He earned his
Bachelors degree in Art, Design and Media (ADM), from Nanyang Technological
University, Singapore in 2003.
Upon graduation, he has been involved in interior designing, furniture designing and
designing of mass production manufacturing processes. His other experience includes
working at the management level of Nuvo Designs Pte Ltd where his design team
won several internationally acclaimed awards during his stay. His awards include
Interior Design Awards Australia 2008 and the European Innovation and Design
10
Awards in 2006. In 2004, he won the bid to design several MRT stations of the NorthEast Line. In 2005, his design team was contracted to design the living and
physiological rehabilitation lounge for Tan Tock Seng Hospital.
Mr. Yap was appointed as the Corporate Relations & Communications Manager in
2006. He earned his Bachelors degree in Business from Nanyang Technological
University, Singapore in 2002.
His first job after he graduated was in the corporate relations and communication for
Singapore Airlines Ltd. His other terms include Temasek Holdings Pte Ltd from 20042005 and the Land Transport Authority from 2005-2006.
11
5. FINANCIAL PLAN
5.1
Assumptions
5.2
Project Cost
The start-up cost for this project under ELFNYS Group is estimated to be
around SGD 500,000. Our financing policy is to make use of as much equity
as possible. As such our main expense should be in marketing and installation
of our product. Hence, we intend to keep our interest expense from debt to be
as low as possible. High debt ratio would mean additional financial risk, which
will reduce our profit margin in its initial fledgling years.
Out of the total amount, 70% of this start-up cost, which amounts to SGD 350,
000, comes from the 12 members of the Board of Directors while the
remaining 30%, which amounts to SGD 150, 000 comes from bank loans and
investment financial solutions programs. Venture Investment Support for Startups (VISS) fund from the National Science & Technology Board (NSTB),
which amounts to SGD 100,000 will also contribute to the start-up cost of
ELFNYSGroup. In addition, a loan of SGD 20,000 will be made from a local
bank, at an interest rate of 10% per annum. The remaining sum will be raised
through other operating activities. This start-up cost is needed to finance the
raw materials, manpower and product marketing cost. (Refer to APPENDIX B
for Balance Sheet)
5.3
5.4
Breakeven Analysis
During the first year of the introduction of the PAWS, there will be a net loss
expected. However, as the company strives to install PAWS on all zebra
crossings across the country, the cost of production will decrease due to the
increase in production of the units. The drop in production cost is mainly due
to the production, reaching economies of scale, and the various material and
labour overheads reaching an optimal level. The break-even point will be
reached when the cost of production equals to the revenue earned from the
sales of the units. The break-even point is expected to be reached within a
year, due to low initial production and mandatory distribution of product.
From the second year onwards, ELFNYSGroup will make positive cumulative
profit as the number of PAWS sold increases. (Refer to APPENDIX C for
Break Even Analysis)
5.5
13
The cost of sales and operating expenses in the first year will be high since
start-up cost is needed for the purchase of assets like equipment and computers
as well as operating costs. These costs will be recovered as the number of
PAWS units sold increase and the profit from the sales of the units will offset
the fixed cost.
With our close ties with Land Transport Authority and Competition
Commission of Singapore, there is unlikely to have rival firms. However, rival
competition do arise, we have plans expand our marketing campaign and
further strengthen relations with the relevant government bodies to maintain
our share of the market. Needless to say, the cost of sales and operating
expenses may increase since greater resources will be needed to put into the
marketing and Research & Development of the product. In retrospect, the drop
in sales will result in reduction of the selling price of PAWS in order to be
competitive, thus profit margin will be adversely affected.
5.6
Exit Strategy
The potential exit strategy for investors is by acquisition merger with private
or government-linked corporations which will aim to increase the funds of
ELFNYSGroup allowing PAWS gain ground and establish a stronger foothold
in the South East Asia market. Research of Asst/Prof Chia Wai Mun from
NTU suggests that GLCs perform better during times of recession, and thus
sharing a stake with GLC can buoy ELFNYS through bearish market. In
addition, potential partnerships with app makers like Zynga to create simulator
games for PAWS will further boost the effectiveness and public acceptance of
PAWS and thus
14
6. Survey Analysis
The survey was conducted on 100 pedestrians island-wide. Pedestrians aged between
18 and 60 did them.
Survey Result
Q1: I think the current system is sufficient and there is no need for the new warning
system.
15
Q2:
Accidents
rarely
happens
at
zebra
crossings.
Q3: Vehicles need to give way to pedestrians at zebra crossing and therefore they will
always
slow
down
at
zebra
crossings.
16
Q4:
believe
PAWS
will
not
enhance
safety
on
the
roads.
Q5: I will feel more safe with the PAWS installed at zebra crossings.
From the above results, it can be seen that the general pedestrians are aware of the
potential hazards which zebra crossings possess although most of the time these
hazards are kept at minimal.
17
Majority of the interviewed pedestrians felt that the current zebra warning system
which consist of two huge yellow bulbs are not sufficient. A new warning system
would therefore be welcomed. Although zebra crossings are installed in places where
traffic is relatively light, most of the interviewed still feels that accidents can happen
at such places. It is a good and safe driving habit to slow down upon reaching zebra
crossings but it is reflected that not all drivers practise this habit and a speeding
vehicle can therefore endanger the lives of an unaware pedestrian. Of those
interviewed, a substantial level of confidence can be seen in the implementation of
PAWS to enhance the safety of zebra crossing pedestrians.
18
7. Appendices
7.1
Appendix A
Figure A. Schematic Diagram of PAWS
19
20
7.2
APPENDIX B
Balance Sheet
April 30 2010
Assets
Current Assets:
500,000
Cash
$120,000
Accounts Receivable
Less:
$0
(20,000)
Total Current
Assets
100,000
$620,000
Fixed Assets:
Vehicles
100,000
21
Less:
Accumulated
Depreciation
Furniture and
Fixtures
Less:
Accumulated
Depreciation
(1,000)
4,500
50,000
Accumulated
Depreciation
(5,000)
45,000
200,000
Buildings
Less:
90,000
5,000
Equipment
Less:
(10,000)
Accumulated
Depreciation
Land
(50,000)
150,000
500,000
500,000
$794,000
Other Assets:
Goodwill
Total Other Assets
22
$1,414,000
Total Assets
Liabilities and
Capital
Current Liabilities:
Accounts Payable
$25,000
170,000
Payroll Taxes
Payable
10,000
Accrued Wages
Payable
10,000
Unearned Revenues
50,000
Short-Term Notes
Payable
20,000
Short-Term Bank
Loan Payable
2,000
Total Current
Liabilities
$287,000
23
Long-Term
Liabilities:
Long-Term Notes
Payable
100,000
Mortgage Payable
50,000
Total Long-Term
Liabilities
150,000
437,000
Total Liabilities
Capital:
Owner's Equity
Total Capital
652,000
652,000
$1,089,000
24
Sales Forecast
2009
2010
9650
1000
2011
10000
1000
2012
2013
11000
12000
1000
1000
Sales Totals
13000
55650
1000
Local TOTAL
7.3
9650000
10000000
11000000
12000000
13000000
55650000
APPENDIX C
Revenue
$80,000
Month
Revenue
Fixed
Variable
Total
Profit
Expenses
Expenses
Expenses
or Loss
$50000
Fixed Expenses
$20000
Variable Expenses
$70000
Total Expenses
$10,000
Profit or Loss
May
$40000
50000
$10000
$60000
($20000)
($20000)
Jun
$56000
50000
$14000
$64000
($8000)
($28000)
Jul
$72000
50000
$18000
$68000
$4000
($24000)
Aug
$80000
50000
$20000
$70000
$10000
($14000)
Sep
$80000
50000
$20000
$70000
$10000
($4000)
Oct
$80000
50000
$20000
$70000
$10000
$6000
Nov
$80000
50000
$20000
$70000
$10000
$16000
Dec
$80000
50000
$20000
$70000
$10000
$26000
7.4
Jan
$80000
50000
$20000
$70000
$10000
$36000
Feb
$80000
50000
$20000
$70000
$10000
$46000
Mar
$80000
50000
$20000
$70000
$10000
$56000
Apr
$80000
50000
$20000
$70000
$10000
$66000
APPENDIX D
2010
% of
2011
% of
2012
% of
2013
% of
revenues
revenues
revenues
revenues
Revenue (Sales)
Local
965000
0
100.0
100000
0
100
120000
0
100
140000
0
100
100.0
100000
0
100
120000
0
100
140000
0
100.0
9650000
Total Revenue (Sales)
Cost of Sales
Local
822000
92.5
920000
92
980,000
81.6
105000
0
75
822000
92.5
920000
92
980,000
81.6
105000
0
75
Gross Profit
66000
80000
220000
18.4
350000
25
Salary expenses
5500
0.67
7000
0.7
8000
0.67
9000
0.64
3,000
0.33
4000
0.4
3000
0.25
3000
0.21
5,000
0.56
7000
0.7
8000
0.67
9000
0.64
Advertising
10,000
1.13
8000
0.8
8000
0.67
9000
0.64
7,000
0.78
7000
0.7
9000
0.75
9500
0.67
Expenses
3,000
0.33
2000
0.2
2000
0.17
200
0.01
Rent
12,000
1.35
16000
1.6
19000
1.58
21000
1.50
Telephone
1,000
0.11
2000
0.2
2000
0.17
3000
0.21
Utilities
2,000
0.25
3500
0.35
4000
0.34
4500
0.32
Insurance
5,000
0.56
6500
0.65
7000
0.58
7500
0.53
50,000
5.63
55000
5.5
65000
5.41
75000
5.35
Interest
2,000
0.25
2000
0.2
2000
0.17
2000
0.14
Depreciation
7,000
0.78
7000
0.7
7000
0.58
7000
0.50
Misc. (unspecified)
5,000
0.56
5000
0.5
6000
0.50
6500
0.46
Total Expenses
118,000
13.2
132000
13.2
150000
12.5
166200
11.8
Net Profit
-52,000
-5.85
-52000
-5.2
70000
31.8
190000
54.2
7.5
Appendix E
Survey Questionnaire
Please read the following description of a new product called Pedestrian
Advanced Warning System (PAWS).
Concept Description:
The new PAWS will be used in zebra crossing areas where locations can be potential
hazards to pedestrians. Basically, when vehicles approaches the PAWS-enhanced
zebra crossing, a light and sound signal will warn pedestrians of the oncoming danger.
Your feedback on our product is highly appreciated.
1. I think the current system is sufficient and there is no need for the new warning
system.
1 Strongly Disagree
3. Vehicles need to give way to pedestrians at zebra crossing and therefore they will
always slow down at zebra crossings.
1 Strongly Disagree
5. I will feel more safe with the PAWS installed at zebra crossings.
1 Strongly Disagree
8. Acknowledgement
ELFNYS Group will like to extend our heartfelt thanks to the following people who
have made this project possible:
David Butler (A/P)
For his guidance in business plans and report writing skills
Teo Ee Chon (A/P)
For his valuable advice and time dedicated to our project
As well as special thanks to participants of our survey!