Othman Yeop Abdullah, Graduate School of Business
TERM PAPER : Group Project For BJMP 5023
OJAH SDN BHD : Creating Competitive Priorities Through Strategic Operation Management.
Lecturer: Dr Nor Hasni Othman
UUM College of Business
Universiti Utara Malaysia
Jamalul Abidin Mohd Rom-
Mahfuza Mustapha – 810288
Norliza Mohamad Sani - 810298
Norul Hizad Baharudin - 810299
Siti Rohaya Mohamad Nor - 810304
MBA - Cohort 6
Date of Submission: 06 April 2013
1 | P a g e
TABLE OF CONTENT PAGE
1.0 INTRODUCTION 4
2.0 OBJECTIVES OF STUDY 5
3.0 COMPANY BACKGROUND
i. Business Objective
ii. Business Background
iii. Company Background
iv. Owner’s Background
v. Product & Services
5
5
6
6
7
9
4.0 MANAGEMENT AND ORGANIZATIONAL PLAN
4.1 Organizational identification
4.2 Organizational Chart
4.3 Management Strategies
4.4 Strategies and Formulation
4.5 Strategies Implementation
4.6 Evaluation and Control
4.7 Administration Expenses
10
10
11
11
13
13
14
15
5.0 OPERATIONAL PLAN AND MANAGEMENT
5.1 Operational Process
5.2 Operational Expenses
5.3 Staffing
5.4 Proposed Factory Location
5.5 Supplier
5.6 Inventory
5.7 Credit Policies
15
16
16
16
17
17
17
17
6.0 MARKETING PLAN
6.1 Price
6.2 Place
6.3 Promotion
18
18
19
19
2 | P a g e
6.4 Target Market/ Market Segmentation
6.5 Market Sizes
6.6 Competitors
6.7 Distributions Channels
6.8 Sales forecast
6.9 Customer Benefit Packages
20
20
20
21
22
22
7.0 FINANCIAL PLAN (Assumption)
5.1 Financial Objectives
5.2 Financial Assumptions
5.3 Projected Income Statement
5.4 Start-up cost
5.5 Balance Sheet Forecast
5.6 Profit and Loss Forecast
5.7 Expected Cash Flow
23
24
24
25
26
27
29
30
8.0 CONCLUSIONS 31
9.0 APPENDIX 32
3 | P a g e
1.0 Introduction
Setting up a new business in manufacturing industry or the service industry, Operations
Management is the key in achieving competitive advantage for organisations. It deals with
several aspects of Operation Management such as the choice of products and manufacturing
technology, maintenance of quality, utilization of capacity, costing and sourcing of materials
and customer handling policies. Operations Management is a systematic approach to
addressing issues in the transformation process that converts inputs into useful, revenue-
generating outputs.
Venturing into new food product development is a challenge that requires innovation, an
understanding of customer preferences and tastes, and the capacity to translate these into the
final product through the right choice of raw materials, blend and production. In today’s
technology-driven economy, market demand and globalization are driving changes that
require companies to be faster and more responsive than ever before. Increased competitive
pressures are shortening product life cycles.
Ojah Sdn Bhd is a company established to meet the needs of consumers in the production of
snack and traditional foods that have been commercialized in order to success in business.
Production of snack and traditional foods in a commercial scale has been rapidly expending
with the growing demand from time to time. Busy schedule lifestyles nowadays are also
encouraging this form of business additionally with delicious flavour that could attract many
people to try. Ojah Sdn Bhd with the own brand “IZZ Best” will penetrate the traditional
foods and snacks market with innovative, varieties and high quality end products With the 4 | P a g e
establishment of marketing strategy and planning, Ojah Sdn Bhd expected to easily exceed
the financial forecast.
2.0 OBJECTIVES OF STUDY
This paper attempts to study;
i. The operations management issues at OJAH Sdn Bhd
ii. The exploitation of operation process and decisions by OJAH Sdn Bhd and its
relation to the creation of competitive priorities.
iii. The correlation between the operation management at OJAH Sdn Bhd with
marketing management and financial management.
iv. The continuous improvement process and decisions at OJAH Sdn Bhd for
distinctive competence of the business and its sustainability
3.0 COMPANY BACKGROUND
i. Business Objective
The business plan was created as a guide for starting a new business for entrepreneurs to
identify the things that need to be done in terms of service management, operational, financial
and market potential as well to estimate the cost in developing a snack manufacturing
business by using modern and advanced equipment. This type of food industry shall fully
utilize the skilled and experienced workers in order to be the best snacks producers in
Malaysia.
5 | P a g e
Furthermore the primary business objective is to generate consistent and lucrative income to
the company and at the same time able to provide jobs for local communities to improve their
capacity in terms of socio-economic status. In addition, this business is in response to the
hope of the government to increase the numbers of Bumiputra entrepreneurs in Malaysia.
Our products can meet the demands of plural society in Malaysia especially in demand of a
quality goods and Halal with delicious taste. By using a quality raw material, then a good
product can be produced. This is compatible with the government's aspiration to become a
world HUB for Halal foods production.
ii. Business Background
Ojah Sdn Bhd was established to meet the demands of the government to increase the number
of Bumiputra entrepreneurs in the manufacturing sector. The company was founded in
collaboration of five individuals with different work experience but have a strong desire to
succeed in the business world. By leveraging own capital of RM150,000, we have
successfully established the company that produces snacks and traditional foods for Malaysia
market and shall probably expend into foreign market as planned.
All of us are holding a Masters Degree from the University Utara Malaysia (UUM) in
Business Administration course. We have vast experience in various fields during our tenure
in certain companies such as in accounting, finance, auditing and human resource
management. This business was established based on our belief that nothing is impossible to
be achieved in this world.
iii. Company background
The implementation of this business will begin at Bukit Sentosa, Rawang. Selection for this
location is intended to save the cost of building rental. As we know the rental rates for a
6 | P a g e
building in this area is relatively low when compared with other places close to urban centers.
This place can promise a huge market opportunity with the support of the local residents. Our
preferred location can be considered as a strategic location, where it is located in the middle
between Kuala Lumpur and other areas with high population density.
The business is planned to commence full operation on 1 December 2013. Full details of the
background are as follows:
Type of Business : Snack and traditional foods manufacturer
Company Name : Ojah Sdn Bhd
Brand Name : IZZ Best
Address : No, 22, Bukit Sentosa 2/1
48000 Bukit Sentosa,
Rawang, Selangor Darul Ehsan
Telephone No. : 019- 9868997 / 03 60722677
Forms of Business : Syarikat Sendirian Berhad
Date of Registration : 31 January 2013
Capital : RM150,000
Bank Name : AmBank Malaysia
Ownership : Bumiputra
iv. Owners Background
Chairman
Name : Mahfuza binti Mustapha
Correspondance Addres : No 13, Jalan Abadi 13, Jalan Gasing, Petaling Jaya, Selangor
7 | P a g e
Previous Employment : Manager
Experience : 15 years experience in Human Resources Management
Total Share : 30%
Position held : CEO
Board of Director
Name : Noliza binti Mohamad Sani
Correspondance Addres : No 42, Jalan Cekal 7, Taman Sri Lambak, Kluang Johor
Previous Employment : Manager
Experience : 10 years experience in Financial Institution.
Total Share : 15%
Position held : Operation Director
Name : Siti Rohaya binti Mohamad Nor
Correspondance Addres : No 1007, Jalan 8/27 F, Seksyen 6, Wangsa Maju
Previous Employment : Senior Manager
Experience : 12 years experience in Accounting
Total Share : 15%
Position held : Human Resources Director
Name : Jamalul Abidin bin Mohd Rom
Correspondence Addres : No 101, Jalan G2, Taman Malawati, 53100, Kuala Lumpur
Previous Employment : Manager
Experience : 20 years experience in auditing
Total Share : 15%
Position held : Promotion logistic / RND Director
8 | P a g e
Name : Norul Hizad bin Baharudin
Correspondence Address : No 231, Jalan SP 5/9, Sri Pristana, Sungai Buloh, Selangor
Previous Employment : Senior Manager
Experience : 16 years experience in Finance and Credit.
Total Share : 15%
Position held : Financial Director
v. Products
Below is a list of the products manufactured by our company. All these products are
produced entirely using local raw materials. Most of the products produced are the types of
foods that have been commercialized by our company. Our company is trying from time to
time producing foods with good taste by using the latest technology.
1. Kuah Kacang / Kuah Pecal
2. Kuah Rojak
3. Pelbagai jenis bahulu
4. Pelbagai jenis rempeyek
5. Kuah Ros
6. Kuih Bangkit Santan
7. Biskut Mazola
8. Dodol
9. Jejari Udang
10. Jejari Bilis
11. Kerepek Ubi Masin
12. Kerepek Ubi Pedas Kering
13. Kerepek Ubi Pedas Basah
9 | P a g e
14. Kerepek Ubi Berperisa BBQ
15. kepek Ubi Berperisa Lada Hitam
16. Kerepek Ubi Halus
17. Kerepek Bawang
18. Maruku
19. Kerepek Pisang
Ojah Sdn Bhd plans to aggressively enhance the existing line in the future. The immediate
plan is to upgrade the production machine and diverse products in order to fulfil the needs
and wants of the various consumers. As we know, nowadays consumers are very choosey in
selecting foods. They only look for delicious food at the cheaper price. Therefore our
company needs to understand them by finding the effective and efficient ways in producing
products in order to reduce the operation costs which indirectly make our products can be
offered at a reasonable price.
4.0. MANAGEMENT AND ORGANIZATIONAL PLAN
Our management team is comprised of people with many years of experience in the long-
term care in human resource and banking industries. Our philosophy is focus on the
customer’s needs as well as promoting traditional food heritage to Malaysian. We have a
Chief Financial Officer and two directors reporting to the CEO. Operation staffing the
customer support desk will be filled as needed and reporting to the Director of Operations.
Their roles such as convert raw material to finish products, packaging, labelling, promoting,
logistic, and basic record of day to day cash/debt sales. All roles shall be performed by them
in an orderly ways which will result an effective management that can save cost.
10 | P a g e
4.1 Organizational identification
Organizational identification basically is a set of degree of shared values, goals, desires,
and aims between a person and an organization. As CEO embrace our organization had
strong fundamental of human interaction and communication since we specialize on monitor
the employee according their skills. This level of organizational between employees and a
company can be crucial to the success of an organization achievement. In order to encourage
organizational identification, individuals must take care to meet the needs and desire for
personal fulfillment of each individual member. An overly strong sense of organizational
identification, however, can have consequences, as members may feel pressured to take part
in unethical behavior, or be afraid to blow the shriek on inappropriate actions. No doubt the
relationship between management and employees is a very important thing that might help
the company to grow. Therefore our company will keep at our best each of our employees
with the hope that they may be more motivated and better relationship between workers and
our management can be maintained.
4.2 Organizational Chart
11 | P a g e
4.3 Management Strategies
Is a set of managerial decisions and actions that determines the long-run performance of our
company. It’s includes:
i. Environmental scanning.
Community at Bukit Sentosa, Rawang starve for employment because the urban area around
Klang valley is too far from this location. Selection for this location is intended to save the
cost of building rental and labour wages. Target worker is among villager. Who’s
experienced in making kerepek. Relatively local industry based on furniture, food industry
based on chips. Mostly our competitor is well establishing in term of promotion and
marketing is Masri food industry. Their long set foot in producing variety. For internal
resource we rely much on man power, attractive incentive offer to them, and machinery for
processing goods for example multiple uses Batch Fryer which can be customize by the
vendor. Motivate our promoter is essential to increasing product sales.
Overall organization will be top to down pattern. It starts from Promoting Director it will
channeling order from his department to Operations department for processing. After product
complete for processing it going to Promoting Director to manage logistic for delivering
goods to target Place. Human Resource Director will design employees’ incentive and
commission from each department. All purchasing raw materials, transportation, rent and
including all cost and credit will be handling by Finance Department. Finance Department
will be responsible in term of expenses as well as providing accurate budget so that wastage
can be avoided.
ii. Manpower / Resource
12 | P a g e
For internal resource we rely much on man power, attractive incentive offer to them, and
machinery for processing goods for example multiple uses Batch Fryer which can be
customize by the vendor. Motivate our promoter is essential to increasing product sales.
Overall organization will be top to down pattern. It starts from Promoting Director it will
channeling order from his department to Operations department for processing. After product
complete for processing it going to Promoting Director to manage logistic for delivering
goods to target Place. Human Resource Director will design employees’ incentive and
commission from each department. All purchasing raw materials, transportation, rent and
including all cost and credit will be handling by Finance Department. Generally our company
may provide appropriate incentives either monitory or non-monitory to increase the level of
employee’s motivation. All this is for giving hope to the employees so that they felt needed
by our company. Manpower is the most important matter that should be emphasized to ensure
the development is always on the move.
4.4 Strategy formulation
Our mission is to be most establishing traditional foods, chips and Snacks Company
in Selangor. Our vision in 5 years is to increase the number of branches. Our main
headquarters will remain as factory and integrated marketing place. We also want to bid state
tourists department to include our place to be most visit location or include it in Rawang one
stop centre in Selangor map brochure. Our objective is to obtain financing of RM700, 000
from the National Corporation Berhad to enable us to fulfill our desire to compete to the
outside world. As we know overseas market shall increase market opportunities for our
products. We believe that our intention to commercialize these traditional foods will get full
support from the government. The loan is also to make some improvements in manufacturing
technology in order becoming more effective in production operations.
13 | P a g e
4.5 Strategy implementation
So what we are going to do now is recruit people to handle machine based on manual. For
peeling potato skin we use man power since for starter using machine it may costly same
goes to fry packaging and labeling all using manual machine and semi auto machine. as we
know automatic machines are expensive to buy, but we try to have a little more time in line
with our business expansion. All processes perform in factory as we are able to do so. For
marketing purposes we try to involve in several events such as “sure Heboh” and also various
expos or carnivals held throughout Malaysia.
We are also trying to market our products in school canteens and supermarkets all over
Malaysia. We also open homestead near to our factory to promote our brand among tourist.
We also plan to take practical student from university as Management Trainee exposing them
to the management experience. In time we train them, we could also minimize the salary
payment for using their service We also participate in small part of wedding day event by
supplying souvenir to guest just to diversify our turnover in business.
For employees who involved in sales or promotion, incentive given to employee is based on
commission on sale. If our promoter can generate sale above RM1,000 we will give he or she
7% from total sale. This is to enhance the spirit in sales to get the incentives provided by our
company.At this stage our employees’ opinion in generating more sales are welcome because
the views expressed by employees sometimes can be used to increase revenue. Other than
that we will try to penetrate hot spot for market our product especially in supermarket such as
Jaya Jusco, Tesco and Giant.
4.6 Evaluation and control
14 | P a g e
It focuses on integrating management, marketing, finance, production, research and
development to achieve organizational success. The process of monitoring corporate
activities and performance results so that actual performance can be compared with desired
performance. All department output will be monitored and will be carried out for every
month to encounter miscalculated in any area of department. By doing this enables all the
expenses can be spent wisely and prudently. All the provisions can be measured accurately
and avoided overspending.
4.7 Administration Expenses
Administrative expenses are part of the operating expenses along with selling expenses.
Administrative expenses include expenses associated with the general administration of the
business. Examples include the salaries and fringe benefits of the company president, human
resource personnel, accounting, information technology, the depreciation expense for
equipment and space used in administration, as well as supplies, utilities, etc. Administration
expenses will be concentrating more on rental, raw material, labour, transportation,
packaging, and cost of warehouse. The management must manage company’s expenses with
wisely in order to reduce the operation costs. With low operating costs will able to increase
profits and remain competitive in the market
5.0 OPERATIONAL PLAN AND MANAGEMENT
We have to segregate our operation to for a particular cause. For example peeling/cutting
department, making dough/ flavouring, fryer, bake, packages, and labelling department. We
have separated each department to perform a specific task in order to improve the process
chain. With this specialization, it will be able to increase production efficiency in our
company. with this efficiency, all orders by customers can be processed according to the
schedule.
15 | P a g e
5.1 Operational Process
5.2 Operational Expenses
Operational expenses will be related to Material cost, Labor, Building rent, Utility,
Electricity, and Water.
16 | P a g e
Delivery / warehouse placement
Raw material section
Peeling section
Bakes Section
Quality Control Section
Packaging
Fryer section
Dough making section
Labelling
5.3 Staffing
We selected 8 workers to work with us; they work at working hours from 8 a.m. to 6 p.m. and
all the company’s account are done by our own financial director at this moment. We are still
in the process of recruiting employees to work with our company. We need motivated
employees to work in our administrative and manufacturing divisions.
5.4 Proposed Factory Location
Bukit Sentosa, Rawang. Selection for this location is intended to save the cost of building
rental. As we know the rental rates for a building in this area is relatively low when compared
with other places close to urban centres. With lower rental rates, we not only can get more
space for the processing and administration but also space to store
5.5 Supplier
Rawang mostly, is still a rural area and at most of terrain still using for agriculture. Not hard
for us to find raw material such as banana, potato, flour, and sugar. Most our raw material are
from Anim Agro tech enterprise. Purchase large amounts can reduce the price as well as good
relations with them could give an advantage to us
5.6 Inventory
Our system inventory will implement First in First Out (FIFO) basis, it will record first item
comes and it will take immediately for first delivery.
5.7 Credit Policies
We Accept Credit from our customer, shortest credit are 1 month and longest 90 days. We
give discounts to our customers who buy in bulk if payment is made within one month.
17 | P a g e
6.0 MARKETING PLAN
6.1 Price
Products price/units/100mg (RM)
1. Kuah Kacang / Kuah Pecal 4
2. Kuah Rojak 4
3. Pelbagai jenis bahulu
- Bahulu ikan kecil / besar 6
- Bahulu cermai 6
- Bahulu bunga / bahulu pecah lapan 6
- Bahulu Gulung 6
- Bahulu lapis 6
4. Pelbagai jenis rempeyek
- Rempeyek kacang tanah 2
- Rempeyek kacang dal 2
- Rempeyek kacang hijau 4
5. Kuah Ros 5
6. Kuih Bangkit Santan 5
7. Biskut Mazola 4
8. Dodol 12
9. Jejari Udang 6
10. Jejari Bilis 5
18 | P a g e
11. Kerepek Ubi Masin 5
12. Kerepek Ubi Pedas Kering 5
13. Kerepek Ubi Pedas Basah 5
14. Kerepek Ubi Berperisa BBQ 5
15. kepek Ubi Berperisa Lada Hitam 5
16. Kerepek Ubi Halus 5
17. Kerepek Bawang 5
18. Meruku 5
19. Kerepek Pisang 3
6.2 Place/Location
Bukit Sentosa, Rawang. Selection for this location is intended to save the cost of building
rental. As we know the rental rates for a building in this area is relatively low when compared
with other places close to urban centres. This area is suitable because of large population
density and good transportation system.
6.3 Promotion
For marketing we contacted Sure Heboh to participate into their event. We also look market
at office canteens, small shops, petrol stations and supermarkets throughout Malaysia. We
also open homestead near to our factories to promote our brand among tourist. We also plan
to take practical student from university to train them in company management and to learn
how to make traditional snacks. We also participate in small part of wedding day event by
supplying souvenir to guest. This is to futher increase the profit of our company.
Done with promotion, incentive to employee is based on commission on sale. If our promoter
can generate sale above RM1,000 we will give them 7% from total sale. This is an increase of
19 | P a g e
the company's strategy to promote sales of the company, where the results will be distributed
to salespeople in the form of commission
There are other things that we must to think about, rebranding, how to distribute our snacks
right to customer door, interactive price, marvelous promotion, advertizing of products, the
easy way to advertise our product sometime it expensive however there is also free. Such as:-
1. Newspaper, magazine,
2. Flyer, broucher,
3. Internet, blog, facebook,
4. TV radio,
5. Relative or friend( mouth to mouth promotion)
6.4 Target Market/ Market Segmentation
Our target market is among Malay because this related to Malay traditional culture products;
however other races also begin to eat traditional products such as kerepek pisang and maruku.
Malay like to eat kerepak in hi–tea event while Indian love to eat Maruku, it just like a part
from their traditional snacks. We also can do packaging similar to foreign company such as
Mr. Potato chips. This is to attract consumer to purchase our product.
6.5 Market Sizes
Market size is concentrate to whole Malaysian shopping centre. However for now we just
distribute to local groceries stalls, supermarkets and local restaurants to promote our
products.
6.6 Competitors
20 | P a g e
Masri is our main competitor which already establish at Sekinchan area. However, their
market size is small only include areas around Selangor. Therefore we will try to fulfil every
space that has not been filled by them. This is a healthy competition that can fulfil consumer
demand, which is not limited.
6.7 Distributions Channels
In this distribution channel is from us directly to customer to maintain it freshness. Our main
tread is to keep crispiness of kerepek pisang to sustain it flavour more than 6 months. If we
establish home stay it will be appropriate to advertising our product among tourist and travel
agency. It so quickly be fame among the Singaporean and Chinese tourists. Our products can
be their favourite food if appropriate promotions are given to them.
21 | P a g e
For second distribution type it may need cooperation and interest from retailer to purchase
our product and put it into their shelves. At this stage Attractive packaging is most important.
It must be authentic and it can be selling at reasonable price. If we can bypass wholesaler it
would be great because customer will pay less to get delicious Kuih Bahulu from our retailer.
For third stage of distribution happen if we manage to enhance our marketing and high
demand from our customer. Wholesaler will take part to determine price of our product and it
will be threaten our income for monthly. Unless we also act as whole seller and we can
determine price of product from other producer also.
6.8 Sales Forecast
We forecast our sales will be increase as much as 30% next year. And it will be 60% in the
Hari Raya event. And it will be increased from time to time in line with our sales and
marketing strategy that is quite aggressive.
6.9 Customer Benefit Packages
The customer benefit package (CBP) is designed and built to understand the consumer need.
It is important that our company have a strong CBP in competitive market. Our CBP has been
designed and configured to target a particular market and customer, which is Malay
customer.
22 | P a g e
Below table shows our CBP plans:
DEFINED BY CUSTOMERS –EXAMPLE WANTS AND NEEDS
CBP FEATURES BY MANAGEMENT TO FULFILL CUSTOMER WANTS AND NEEDS
DEFINED BY MANAGEMENT –PROCESS TO CREATE OR DELIVER
Easy to get Food / Snack Strategic outlet location Outlet located at housing areas and hypermarkets
Transparent and Halal products
Ingredients are labeled at packaging with Halal logo.
Get Proper or Valid halal certification from the proper authority
Freshness of Product Fresh baked cookies or snack by using fresh raw material such as eggs
Just in Time delivery of Raw Material.Product supplied daily to ensure freshness.
Homemade Taste To use Traditional Recipes No alteration of recipes and strictly no preservatives.
Cleanliness Clean factory and outlets. Regular maintenance of Machines.Regular cleaning of Oven and machines and other utensils.Daily cleaning of factory and baking area.Strict compliance of cleanliness of staff; Cover Hair, Short finger nails, wash hands regularly.
Stable Supply Efficient product supply Provide adequate transportation to send products from factory to outlets.Provide adequate manpower.Provide training to ensure efficiency.
Variety of Snacks Develop new enhance flavor of chips
Develop new recipes or new product line.
7.0 FINANCIAL PLAN
We start with capital of RM150,000. We decided to purchase second-hand small lorry to
delivering our products. From used car dealers here they are willing to sell second-hand lorry 23 | P a g e
at the price of RM 12, 000, while the building owner willing to let us rent the building at RM
400 per month. For the starting point we hire only 5 people to work in the operational side.
Delivering 1 person and promoting is 2. Our starting pay for operational workers is RM 950
for each, delivering is based on trip while promotion staffs will receive basic salary of RM
1,000 and they will enjoy commission if they could generate above RM 1,000 of their sales
which the commission’s payment is based on of 7% from their total sale.
5.1 Financial Objectives
Our objective is to gain sum of RM700, 000 from the National Corporation Berhad to enable
us to fulfill our desire to compete to the outside world. We want to expand to Indonesia and
Brunei market. Not only that, but we want to expand our business by increasing the
efforts to be known among the nations level. Besides that, we also want to have the current
technologies that can speed up production.
5.2 Financial Assumptions
Assumptions made regarding revenues are:
iii. Relationships with key customer will be ongoing.
iv. Sustain income can be obtained
v. Sustain income can be achieved starting in January 2014.
Assumptions made regarding Expenses are:
1. An out-of-home office will not be needed, keeping overhead low.
2. New equipment purchases will be made. However it depreciation is excluded from
account because it will be unreasonable since it used lorry 5 ton, age more than 10
years.
24 | P a g e
3. Marketing expenses will not need to increase significantly in order to maintain sales.
25 | P a g e
5.3 Projected Income Statement
PROFITS AND LOSS AS AT 31 DECEMBER 2014
RM january february march april may june july augustSALES 556,601 46,383 46,383 46,383 46,383 46,383 46,383 46,383 46,383 PURCHASE 290,725 24,227 24,227 24,227 24,227 24,227 24,227 24,227 24,227 RETURN INWARD
- - - - - - - - -
NET STOCK 19,658 1,638 1,638 1,638 1,638 1,638 1,638 1,638 1,638 GROSS PROFITS
246,219 20,518 20,518 20,518 20,518 20,518 20,518 20,518 20,518
EXPENSES
SALARY 44,156 3,680 3,680 3,680 3,680 3,680 3,680 3,680 3,680 UTILITIES 21,378 1,781 1,781 1,781 1,781 1,781 1,781 1,781 1,781 RENTAL(factories and other machines)
13,830 1,153 1,153 1,153 1,153 1,153 1,153 1,153 1,153
EDUCATION 587 49 49 49 49 49 49 49 49 ELECTRICITY 1,808 151 151 151 151 151 151 151 151 Expenses(loan + interest)
43,166 3,597 3,597 3,597 3,597 3,597 3,597 3,597 3,597
WATER 2,831 236 236 236 236 236 236 236 236 OTHER EXPENSES CAR
- - - - - - - - -
INSTALLMENT CAR
- - - - - - - - -
transfer - - - - - - - - - TELEPHONE 17,349 1,446 1,446 1,446 1,446 1,446 1,446 1,446 1,446 house payment
- - - - - - - - -
NET PROFITS 101,114 8,426 8,426 8,426 8,426 8,426 8,426 8,426 8,426
26 | P a g e
PROFITS AND LOSS AS AT 31 DECEMBER 2014september october november december
SALES 46,383 46,383 46,383 46,383 PURCHASE 24,227 24,227 24,227 24,227 RETURN INWARD - - - - NET STOCK 1,638 1,638 1,638 1,638 GROSS PROFITS 20,518 20,518 20,518 20,518
EXPENSES
SALARY 3,680 3,680 3,680 3,680 UTILITIES 1,781 1,781 1,781 1,781 RENTAL (factories and other machines) 1,153 1,153 1,153 1,153 EDUCATION 49 49 49 49 ELECTRICITY 151 151 151 151 expenses 3,597 3,597 3,597 3,597 WATER 236 236 236 236 OTHER EXPENSES CAR - - - - INSTALLMENT CAR - - - - transfer - - - - TELEPHONE 1,446 1,446 1,446 1,446 house payment - - - -
NET PROFITS 8,426 8,426 8,426 8,426
5.4 Start-up cost
Start up cost it will be RM 37, 500 for initial operation and promotion it quite a lot of
money since we need sustain generate our income as much as RM 46 ,000 per month. It
27 | P a g e
will need return on capital per month as much as 8.5% for each month. We bear that cost
is as much as 37.5% from our current Capital.
5.5 Balance Sheet Forecast
BALANCE SHEET AS AT 31 DECEMBER 2014
RMFIXED ASSEThouse 0.00TOTOTA CAFIRO 0.00LORRY 8,000.00GELEN 0.00
CURRENT ASSETBANK 201,114.41DEBTOR 0.00STOCK 19,657.5WORKING CAPITAL 122,342.50NET ASSETS 351,114.41
LONG TERM LIABILITYhousing loan 0SHORT TERM LIABILITY : 0CREDITOR 150,000SHORT TERM LOAN 0.00CAPITAL 100,000P&L 101,114.41TOTAL LIABILITIES 351,114.41
28 | P a g e
Balance Sheet Forecast
BALANCE SHEET AS AT 31 DECEMBER 2014 simulation
RMFIXED ASSEThouse 0.00TOTOTA CAFIRO 0.00LORRY 8,000.00GELEN 0.00
CURRENT ASSETBANK 201,114.41DEBTOR 0.00STOCK 19,657.5WORKING CAPITAL 122,342.50NET ASSETS 351,114.41
LONG TERM LIABILITYhousing loan 0SHORT TERM LIABILITY : 0CREDITOR 150000SHORT TERM LOAN 0.00CAPITAL 100,000P&L 101114.41TOTAL LIABILITIES 351,114.41
29 | P a g e
5.6 Profit and Loss Forecast
PROFITS AND LOSS AS AT 31 DECEMBER 2014 simulationRM
SALES 556,601.08PURCHASE 290,724.85RETURN INWARD 0.00NET STOCK 19,657.50GROSS PROFITS 246,218.73
EXPENSES
SALARY 44,156.34UTILITIES 21,377.93RENTAL(factories and other machines and homestay) 13,830.00EDUCATION 586.60ELECTRICITY 1,807.83Expenses (promotion) 43,165.82WATER 2,830.86OTHER EXPENSES CAR 0.00INSTALLMENT CAR 0.00transfer 0.00TELEPHONE 17,348.94house payment 0.00
NET PROFITS 101,114.41
30 | P a g e
5.7 Expected Cash Flow
cash flow as at 2014 simulationRM RM
balance b/d 100000
money in
sales 556,601
money out
PURCHASE 290,725
SALARY 44,156
UTILITIES 21,378
RENTAL(factories and other machines) 13,830
EDUCATION 587
ELECTRICITY 1,808
expenses 43,166
WATER 2,831
OTHER EXPENSES CAR -
INSTALLMENT CAR -
transfer -
TELEPHONE 17,349
NET STOCK 19,658
455,486.67
cash gain at the end of 2014 101,114.41
balance c/d 201,114.41
31 | P a g e
The usage of financial tools such as breakeven point, budgeting, financial ratios, costing
analysis will determine the successful of companies as most of new entrepreneurs
(especially the SMEs) are come from a nonfinancial background and lack accounting
knowledge. This helps them delve more into their financial strength in order to provide a
better understanding of their financial position. They also need help to market their products
both locally and globally. Other areas include promotion of the unique features of their
products in order to create public awareness regarding them. In addition, SMEs also need
expertise in market intelligence where they are able to obtain information on the current and
future demands, potential threats and opportunities that will help the growth of the company.
The “early-growth stage” companies need guidance in pricing as they need to ensure that the
price they set is competitive. Choosing the right manufacturing processes is crucial as it
implication for the cost of operation, quality and productivity.
8.0 CONCLUSIONS
The OJAH line of products will be extended from time to time as the company gradually
moving into a mature stage. OJAH’s products ranged from the extrusion snack to baulu,
kerepek and potato chips. Our product groups will be continuously expended and
diversified in order to meet customer’s demand and to maintain sustainable growth in our
business development.
Striving to produce products with safety and quality, we have been focusing on research and
development in order to compete in the fiercely competitive snacks food market and for the
survival and long-term growth of our company. Continuous product innovations from time
to time will help to keep us in line with the market trend and consumer need. With our
strength in quality control, product development and continuous market expansion, we will
have a promising future ahead of us.
32 | P a g e
Our partnership with the government agencies and private sector such as SME Bank,
Malaysia External Trade Development Corporation (MATRADE), Standard and Industrial
Research Institute of Malaysia (SIRIM), SME Corp, Malaysian Technology Development
(MTDC), Ministry of Science, Technology and Innovation (MOSTI), Federation of
Malaysian Manufacturers (FMM) and Dewan Perniagaan Melayu Malaysia (DPMM) could
play a bigger role in assisting us to overcome the obstacles that we might face.
33 | P a g e