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Afa Berhas Business Plan

Essay by   •  August 30, 2011  •  Case Study  •  3,544 Words (15 Pages)  •  1,602 Views

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Executive Summary

This business name is AFA Berhad. We establish a car rent business. There is a possibility for an exciting and profitable new business in Segamat. us will to rent cars to University of Segamt students, a secondary student, as well as anyone who would have a need for efficient, around-town transportation. There is currently no business like this, in Segamat, which caters to this market.

For slightly more than the cost of a monthly cellular phone bill, it is possible for a student to have their own mode of transportation during the school year. AFA Berhad have many positive advantages over cars such as lower operating costs, fuel efficiency, and are less costly to maintain.

The target market for this business would be the approximately 15,000 full-time students. There are also thousands of students who are commuting daily from the Segamat-Town area. Parking on campus is hard to find, and the bus offers few options. This is where the economical AFA Berhad services comes into play.

Many students do not have the disposable income that it takes to purchase a car, but they are in a position to pay RM70 per day to rent one. AFA Berhad would purchase used cars for RM700-RM1000 and rent them out. The average car would be paid off in under one year.

In year one, AFA Berhad would attempt to get 1% of all full-time students. This would equate to 150 cars rented. We expect the five year growth rate to be at least 15%.

1.1 Objectives

1. Rent 150 units in year one.

2. AFA Berhad will be fully self-sufficient and profitable by year three.

3. get 15% annual growth rate.

1.2 Mission

AFA Berhad will service the student first. At AFA Berhad, clients will be able to rent a quality means of transportation at a fair price. AFA Berhad will also be a profitable business which will treat employees fairly and provide financially for its owners.

1.3 Keys to Success

1. Good customer service and value.

2. Affordable rental prices.

3. Reaching the target market.

4. Integrity in serving our customers, resulting in repeat purchases.

5. always make customer satisfied

Company Summary

AFA Berhad will rent cars to University of Segamat students, as well as others who would have a need. There is currently no business like this, in Segamat, which caters to this market. For slightly more than the cost of a monthly cellular phone bill, it is possible for a student to have their own mode of transportation that is fairly inexpensive. The target market for this business would be the approximately 15,000 full-time university students.

There are thousands of students who are commuting daily from the Autzen Field area. Parking on campus is hard to find, and the bus offers few options. This is where the economical moped comes into play. Many students do not have the disposable income that it takes to purchase a moped, but they are in a position to pay $50 per month to rent. Assuming an average purchase price of $550, and a ten month rental at $50 per month, it is possible for University Mopeds to be profitable in year two.

2.1 Start-up Summary

This company will be funded by Matthew Cavanaugh. The majority of the funding will come from private savings and local investors, plus loans backed by starting assets. The cost of the start-up, including inventory, legal expenses, and advertising, will total $100,000. We anticipate that this company will start generating immediate cash flow.

Start-up Requirements

Start-up Expenses

Legal $500

Stationery etc. $150

Brochures $0

Consultants $0

Insurance $500

Rent $1,000

Research and development $750

Expensed equipment $1,500

Other $0

Total Start-up Expenses $4,400

Start-up Assets

Cash Required $33,100

Start-up Inventory $82,500

Other Current Assets $50,000

Long-term Assets $300,000

Total Assets $465,600

Total Requirements $470,000

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Start-up Funding

Start-up Expenses to Fund $4,400

Start-up Assets to Fund $465,600

Total Funding Required $470,000

Assets

Non-cash Assets from Start-up $432,500

Cash Requirements from Start-up $33,100

Additional Cash Raised $0

Cash Balance on Starting Date $33,100

Total Assets $465,600

Liabilities and Capital

Liabilities

Current Borrowing $40,000

Long-term Liabilities $300,000

Accounts Payable (Outstanding Bills) $0

Other Current Liabilities (interest-free) $0

Total Liabilities $340,000

Capital

Planned Investment

Investor 1 $100,000

Investor 2 $10,000

Other $20,000

Additional Investment Requirement $0

Total Planned Investment $130,000

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