Post on 15-Oct-2014
MGM3180 Basic Entrepreneurship
Blossom Craft Sdn Bhd
Business ReportGroup members:
Lecturer: Dr Husniyah Bt Abd Rahim
Date of Submit: 22 December 2011
Name Matrix numberWong Chiok Ling 148679
Lim Liting 148616Koh Li Juan 148730
Loo See Guan 149129Anis Fatina Mat Salleh 146731
Auji Nabilah Abdul Razak 150623Nur Hazirah ‘Aqilah Ramli 148744Nur Munirah binti Shafie 148208
1.0 EXECUTIVE SUMMARY
Blossom Craft Sdn Bhd is incorperated in Taman Sri Serdang, Selangor on 1 September
2011. This company consisted of 8 shareholders. Each of us has to invest RM30.00 in order
to operate the business. Our company has three department which is financial department,
markrting department, and operation & production department. Our managing director is
Wong Chiok Ling who is the head of the team member that lead us to plan, organize, and
control the business.
The company is dealing with brooches and shawls that have been shaped as rose flowers as
gifts for graduation students. We decided to sell shawls and brooches due to the high market
demand that based on our market survey. Due to season of the convocation festival, it bring
up the opportunity for us to do this business by selling unique rose flower shape of shawl,
we named it “Happy Rose” and set of brooches we named it “Blossom Brooch” . All of the
products are handmade; therefore it is unique, attractive and multifunctional.
The strength of creative and innovative of our team, we had made the high profit and
become best seller through our great market planning. Therefore Blossom Craft Sdn Bhd
gets the total revenue of RM612.70 by sold 30 happy rose and 44 brooches. This result of
business was under our expectation by getting the revenue of more than RM500.00 which
state at the proposal report. There are two ideally location for our product sold which is in
front of lobby faculty of Environmental Studies and the parking area of Kolej Tun Perak.
Besides that, we also use media to promote our product such Posters, Internet especially by
Facebook, interesting advertisement and so on.
We have also set the price of the product at the reasonable price and it is affordable. Thus
we decided set the price of our products for only RM16.90 per Happy Flower RM3.00 per 1
set of Blossom Brooches and RM5.00 for 2 set of Blossom Brooches. For Combo Set (1
Happy Flower + 1 set of Blossom Brooches), we set the price for only RM18.00. For the
strategies planning, we use SWOT analysis which is strengthen, weakness, opportunity,
threat. Through this SWOT analyses that help us plan well in order to achieve our goal and
target. Besides that, the implementation timetable also has been made as guidance for us to
implement the entire task with effectively and efficiency.
2.0 BUSINESS AND COMPANY BACKGROUND
Blossom Craft Sdn Bhd is incorporated in Taman Sri Serdang, Selangor on 1 September
2011. The company’s name was Blossom Craft Sdn Bhd because most of products in this
company based on the flowers shape. In addition, we made products in blossom concepts
because we want to bring the beautiful and nice elements of blossom to people life. Our
company slogan was “blossoming your day”. It means that when people buy our products,
their life will be cheerful. The company is dealing in decoration shawls or pashmina form
rose flowers for gifts graduation students. Actually, our main products are the pashmina or
shawls folded and made in rose shape (bouquet) and it also called Happy Rose. We called
this product as Happy Rose because the shape of the products in a flowers shape and then
happy refers to the something like the fresh flowers. Besides, we also sell flora (blossom)
shape brooches made from buttons. In addition, we provided the wishes card for graduation
students if people buy the Happy Rose. There are variety colors of Happy Rose such as red,
pink, yellow, purple, and others. It is two in one products and it is very unique products. It
is means that when people buy Happy Rose, they can give to the person that they want as a
gift such as graduation gift and the that person can open the Happy Rose and use it as
shawls for the women. Besides that, we have eight employees in this company. Each
employee has their own specific tasks in handling in this business.
Besides that, our vision is to become a global well-known company of creative and
innovative gift-based products. We always put more effort in decorate a creative and
innovative products because we want our product can get market in the globalization, one
day. Then, our mission is to share the exquisite element of blossom to others through our
lovely and creative products, and spread the spirit “life is all about wonderful”. It means
that when people buy our products, they might be thinking that our products company is so
creative and will make them life will be wonderful. That’s why we put our slogan as a
“blossom-ing your day”. Then, we have a few objectives such as we want to implement the
original business ideas in order to make high profit from our creative and innovative gift-
based products. We also want to fulfill the customer demand and desire on creative and
innovative gift products. Lastly, we want to enhance company competitive advantage by
continuously innovative various unique and creative products. We hope that our company
can get achieve all the goal setting that we have set together, one day.
3.0 OPERATION
3.1 Operational Plan
Task Execution Period
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6
Planning ∕
Production ∕
Marketing ∕
Sales ∕ ∕
Fig 1: A table showing an execution period on tasks that we did.
3.2 Organizational Structure & Staffing
Blossom Craft Sdn Bhd started with a total of 8 people overall including the Director.
(Please refer to our organization chart)
3.3 Professional Advisor
Dr. Husniyah Abd. Rahim @ Abd Wahab who also lecturer for group 26 course MGM3180
Basic Entrepreneurship.
3.3 Business premises
Blossom Craft had done the production activity in one of our members place. This is due to
the place is free as we don’t need to pay for a rent. The production activity is taken place at
Taman Sri Serdang which is so close to the business place, Universiti Putra Malaysia
(UPM).
Blossom Craft Sdn Bhd has started it business in two places:
1. The booth in front of Faculty of Environmental Studies. (Morning session)
2. The booth at Kolej Tun Perak. (Residential college for night session)
3.4 Facilities and Equipment
As we are doing all the items by handmade, so we don’t really need a facilities. We just
need a few equipments such as:
1) Shawl
2) Needle
3) Wrapping material
4) Glue gun
5) Buttons
6) Paper
7) Pin
All these items are needed to produce our product which is Happy Rose and Blossom
Brooch.
3.5 Production and processes
In order to produce happy rose, we need to do it by hand made. So no mass production
because it is a craft product thus it is time consuming. So we really need a person who can
creatively design the shawl until it becomes a rose. A special skill is requires and only
certain people can do it. In our team, Ms Koh Li Juan guided other members to learn and do
it at the same time. Finally, we had produced 30 unit of Happy Rose with different colors
for each.
In another situation, to make a Blossom Brooch, it is really consume time as we have to sit
down and create a brooch by arranging the buttons and then stick it together nicely using
glue. It may take time but this one doesn’t really need a skill to do it so we can use a lot of
man power which is all the members in the team to produce it. There are 3 different sizes
for each set that we are going to make which is small, medium and large. All those three
have a similar design and color. After that we had to pack it up in small transparent plastics
so that it will be protected and easier to take a look at. We successfully produce 44 sets. All
the product took about 4-5 days of production and all of our teams have to have a good
collaboration to make this project a success.
3.6 Contingency plan
As this is only a small project, so we have developed a small contingency plan. We had
discussed among teams on what we have to do if there is an emergency happen and so on.
This has to be incorporate from procurement, production, sales, and security.
For example, at the first stage of our production we try to minimize our production which is
we produced about 20 Happy Rose first because we want to test out the market. This is also
to avoid over producing.
We also experienced slow stocks sale rate for Blossom Brooch so we decided to go door to
door sale services at Kolej Tun Perak which is a residential college in Universiti Putra
Malaysia. By using this method, customers have more time to get to see properly on our
products and try them on. In the end, we manage to increase the sales rate.
4.0 MARKETING
4.1 Market research
Before we started doing our business, we had done some research on what kind of thing that
suitable to be sold among the UPM student especially during the graduation days. Finally,
we agreed to sell shawls and brooches because of great interest to women especially the
UPM students.
Shawl is a square or oblong piece of cloth worn as a cover for the hair, neck, and shoulders.
However, shawl is not only being used by Muslimah to cover their hair. Those Indian and
Chinese or any other races can use the shawl as well where they can use it to warmth
themselves or for their style. Therefore, we choose to sell the shawl and brooches at UPM
Convocation Festival since there are many visitors whereby they could buy the shawl
(which already designed like a bouquet of rose – Happy Flower) and give it to their friends
or relatives who graduate on that day. To make the shawl (Happy Rose) become more
unique and perfect, we included 1 set of brooches (Blossom Brooch) for each Happy Rose
and sell them (Happy Rose & Blossom Brooch) as a package where will be more
economical.
4.2 Market analysis
a) Industry trend
As we can see, there are so many shops and vendors out there who sell shawls. Almost
every shopping complex has at least 5 small shops which sell shawl as their main business.
However, they only sell the exact condition of the shawl without any modification.
b) Seasonal variations
Nowadays, shawl seems being a high interest to women either they in career or not. As we
can see out there, 1 out of 5 women wear shawl either to cover her hair or as her style. To
conclude, almost each woman has shawl in her closet. Shawl spread rapidly since 2010.
Shawl before reproduction Shawl after reproduction
Button before modification Button after modification
Besides that, this product will become more popular during Hari Raya among the Malay
women. There are various types of shawl such as, shawl jojet, shawl satin, silver bread
(manik) shawl, cotton shawl, plain plead shawl and others. In addition, it sold at an
affordable price (RM8 above).
c) Competitors
Since we choose to sell the product during the convocation festival, of course there will be
many vendors who sell shawls as well. In fact, shawl that being sold by them had more
choices and colors rather than our products.
d) Potential strategic allies
We have not decided to collaborate and corporate with any other company or party to
expand our business since we prefer to expand our business on our own.
e) SWOT analysis
i. Strength – our strength is we designed our shawls to be rose alike and sell them in
combo/package together with the Blossom Brooch. Therefore, it will be easy for the
customer where they do not need to buy brooches from other vendor in order to
match with their shawl since the brooches (Blossom Brooch) that we sell for
combo/package is already match with the shawl. In fact. The brooches are very
unique, creative and limited in the market since they were made from the t-shirt’s
buttons. Not only for the Blossom Brooch, the Happy Rose that we sell is also
creative, unique, beautiful and attractive since we are the only company who sell
this Do It Yourself (DIY) product (gift) which made from a shawl. This Happy Rose
is a multipurpose product whereby we can use it as souvenir, gift or even can use it
directly as a shawl to cover hair or as a warmer. Besides that, with an expert person
in making the shawl to be rose alike in our organization, we can make the product
easily and perfectly which can also considered as one of our strength. Because of the
high demand and good marketing strategies that we have done to promote our
product, we only took less than 2 weeks to sell all Happy Rose and the 80% of the
Blossom Brooches.
ii. Weakness – We need to convince our customer that our products are very suitable
to be used as a convocation gift. In addition, our customer target is not really
balance since this product is more suitable for women rather than men. We also have
only one expert in making the Happy Rose where could affect the productivity of
this product. Besides that, these products (Happy rose and Blossom Brooch) are time
consuming since we need to do them slowly and give full concentration in order to
make the product perfectly. Moreover, the short period and the limitation of time for
running this business activity have made we cannot produce more product and do
some more marketing strategies which can boost our business more.
iii. Opportunity – Since we are the creator and innovator of this product (Happy Rose)
and there is no other party who had done the same thing, we could expand our
market more to the outsider, not only among the UPM students. In addition, we were
very lucky because we can run our business during the convocation day where this
product’s demand is higher than during the usual time. There were lots of visitors
which gives meaning that we can have a lot of customers as well. Moreover, our
products are easy to carry, so we can just walk around and sell them to the customer.
In fact, the delivery process also as easy as ABC whereby we can use ‘free delivery
services’ as one of our marketing strategies. In fact, this product can fulfill
preferences of customer’s searching for innovative product. The advance technology
such as Facebook, Blogs had give opportunity for us to promote or product without
any cost. By having these kind of advertisement, we can let public know our
products more and those who have interest with our product can make reservation
before they self-take or we deliver the product to them.
iv. Threat – Product design might be imitated by other party because there is no Happy
Rose been made and sold before. We are the first creator and inventor of this
product. In addition, we have to compete with the florists who sell many real flowers
and other kind of gifts for convocation. In fact, the florists sell many bouquets of
flowers with different design and they usually give many discounts for their product
especially at the end of the convocation festival.
4.3 Marketing plan
a) Products/services and target market
Our target market is women among students, housewives, career person and also teenagers.
Besides that, men can be our customer as well where they can buy the Happy Rose for their
girlfriends. These products can also being used as a gift for convocation day. In addition, we
have our own delivery service to make our customers feel more satisfied and comfortable.
b) Placement
Booth A – In front of lobby faculty of Environmental Studies
Figure: Placement of Booth A
Booth B – Parking Area, Kolej Tun Perak
Figure: Placement of Booth B
4.4 Marketing Strategies
a) Poster
b) Promotion via internet application (Facebook)
c) Video advertisement
d) Pricing Policy
We decided set the price of our products for only RM16.90 per Happy Rose and RM3.00
per set of Blossom Brooches. For Combo Set A (1 Happy Flower + 1 set of Blossom
Brooches), we set the price for only RM18.00 while RM5.00 for Combo Set B (2 sets of
Blossom Brooches)
4.4 Evaluation of marketing
The reason why we choose electronic media such as Facebook is because public can access
to Facebook easily. Therefore, publics can know our product better and two way
communications can be done easily if the customers have some inquiries of the products.
In addition, Facebook nowadays is a mandatory asset to all UPM students and almost every
day they will check their Facebook to see if there is any latest information. In fact,
Facebook is a fast, easy and cheap medium to promote our products and easy to get
customers by using this electronic media. There are also no costs if we use Facebook to do
promotion. We can chat and talk with each other without any boundary and also an
application with no have limitation in time, so that people will feel more comfortable.
Other method that we used in promoting our product was by using poster. Poster is quite
good as well where we can easily it at the faculties and colleges so that the students can
easily look and consider as whether to but it or not. However, poster have less information
of our products and the two way communications is very bad whereby the customer need to
call us first in order to know more about the product. This will sometimes affect of our
marketing strategies because the probabilities of those who have interest to buy the product
at first can change their mind to not buy the product since they get less information of that
product. They sometimes will refuse to give a call to ask about the product as this will cause
them pay the cost of calling us. Moreover, poster advertisement also needs cost in term of
the printing process. In order to produce more attractive poster, we need to make the poster
more cheerful with many colors so that it will attract the customer easily. However, the
color printing of the poster is very costly. We already had our own budget for the marketing
process. Therefore, we only use poster as our second alternative in promoting our product.
We also add up the advertisement in marketing strategy to make people know what
‘HAPPY ROSE’ is. The advertisement shown a boy gives the HAPPY ROSE to his
girlfriend and make her happy with that gift. That means it is one of the way to apply the
HAPPY ROSE by giving to another people especially someone that close with us. Our
customers need only 5 minutes to watch our short video advertisement. In order to improve
our weakness in promoting and marketing our products, we try to convince our customer
that our product is totally suitable to be used as a convocation gift. We did mention to them
that our product (Happy Rose) is long-lasting as compared to the real bouquet of roses sold
by the florist.
The marketing strategies that we done have successfully attract customers among the UPM
student. We only took less than 2 weeks to sell all Happy Rose and the Blossom Brooches.
The strategy that we will do if the demand of our product decreasing is we will try to
promote this product to the outsider (not only among the UPM students) as our contingency
plan. Besides, we will try to sell the product through vend them from door to door at all
UPM colleges. Through this strategy, the customer will get clear information of the product
and soon can make the product become more famous and well-known.
5.0 FINANCIAL
5.1 EXPENSES RECORD
5.1.1 Production Expenses
Item Quantity (Unit) Price (RM)
Production Expenses
Transportation fee - 8.00
Electricity - 1.50
Miscellaneous - 2.40
11.90
Marketing Expenses
Photocopy (Advertisement) - 3.00
3.00
Direct Material (Happy Rose)
Needle 2 3.00
Ribbon 3 9.00
Wrapping Material 2 12.00
Paper 2 1.50
Shawl 30 135.00
160.50
Direct Material (Brooch)
Button 4 packets 18.00
Pin 2 packets 9.50
Glue 3 2.40
29.90
Total Expenses: 205.30
5.2 SALES RECORD
5.2.1 Sales on 6 October 2011
Item Price per unit Quantity Sales Total Amount (RM)
Happy Rose 16.90 6 101.40
Happy Rose (Combo) 18.00 2 36.00
Brooch (set 1) 3.00 2 6.00
Brooch (set 2) 5.00 3 15.00
Total: 158.40
Blossom Craft Sdn Bhd sold the happy rose at the price RM16.90 per unit while combo is
RM18.00. There were 6 units of happy rose sold and 2 units of happy rose combo sold in
discount price which is RM18.00 each. The brooch is sold at RM3.00 for set 1 and discount
price is set 2 which is RM5.00. There were 2 units sold for set 1 and 3 units for set 2. The
total revenue is RM158.40.
5.2.2 Sales on 12 October 2011
Item Price per unit Quantity Sales Total Amount (RM)
Happy Rose 16.90 4 67.60
Happy Rose (Combo) 18.00 2 36.00
Brooch (set 1) 3.00 2 6.00
Brooch (set 2) 5.00 3 15.00
Total: 124.60
Blossom Craft Sdn Bhd sold the happy rose at the price RM16.90 per unit while combo is
RM18.00. There were 4 units of happy rose sold and 2 units of happy rose combo sold in
discount price which is RM18.00 each. The brooch is sold at RM3.00 for set 1 and discount
price is set 2 which is RM5.00. There were 2 units sold for set 1 and 3 units for set 2. The
total revenue is RM124.60.
5.2.3 Sales on 13 October 2011
Item Price per unit Quantity Sales Total Amount (RM)
Happy Rose 16.90 4 67.60
Happy Rose (Combo) 18.00 1 18.00
Brooch (set 1) 3.00 1 3.00
Brooch (set 2) 5.00 0 0.00
Total: 88.60
Blossom Craft Sdn Bhd sold the happy rose at the price RM16.90 per unit while combo is
RM18.00. There were 4 units of happy rose sold and 1 units of happy rose combo sold in
discount price which is RM18.00 each. The brooch is sold at RM3.00 for set 1 and discount
price is set 2 which is RM5.00. There were 1 unit sold for set 1 and none for set 2. The total
revenue is RM88.60.
5.2.4 Sales on 14 October 2011
Item Price per unit Quantity Sales Total Amount (RM)
Happy Rose 16.90 3 50.70
Happy Rose (Combo) 18.00 1 18.00
Brooch (set 1) 3.00 2 6.00
Brooch (set 2) 5.00 2 10.00
Total: 84.70
Blossom Craft Sdn Bhd sold the happy rose at the price RM16.90 per unit while combo is
RM18.00. There were 3 units of happy rose sold and 1 units of happy rose combo sold in
discount price which is RM18.00 each. The brooch is sold at RM3.00 for set 1 and discount
price is set 2 which is RM5.00. There were 2 units sold for set 1 and 2 units for set 2. The
total revenue is RM84.70.
5.2.5 Sales on 15 October 2011
Item Price per unit Quantity Sales Total Amount (RM)
Happy Rose 16.90 4 67.60
Happy Rose (Combo) 18.00 - -
Brooch (set 1) 3.00 3 9.00
Brooch (set 2) 5.00 2 10.00
Total: 86.60
Blossom Craft Sdn Bhd sold the happy rose at the price RM16.90 per unit while combo is
RM18.00. There were 4 units of happy rose sold and none of the happy rose combo is being
sold in discount price which is RM18.00 each. The brooch is sold at RM3.00 for set 1 and
discount price is set 2 which is RM5.00. There were 3 units sold for set 1 and 2 units for set
2. The total revenue is RM86.60.
5.2.6 Sales on 16 October 2011
Item Price per unit Quantity Sales Total Amount (RM)
Happy Rose 16.90 2 33.80
Happy Rose (Combo) 18.00 1 18.00
Brooch (set 1) 3.00 1 3.00
Brooch (set 2) 5.00 2 10.00
Total: 64.80
Blossom Craft Sdn Bhd sold the happy rose at the price RM16.90 per unit while combo is
RM18.00. There were 2 units of happy rose sold and 1 unit of happy rose combo sold in
discount price which is RM18.00 each. The brooch is sold at RM3.00 for set 1 and discount
price is set 2 which is RM5.00. There was 1 unit sold for set 1 and 2 units for set 2. The
total revenue is RM64.80.
5.2.7 Sales on 17 October 2011
Item Price per unit Quantity Sales Total Amount (RM)
Happy Rose 16.90 - -
Happy Rose (Combo) 18.00 - -
Brooch (set 1) 3.00 - -
Brooch (set 2) 5.00 1 5.00
Total: 5.00
The happy rose had been sold finish on 16 October 2011 and only leaves 2 set of brooch.
The brooch is sold at RM5.00 for set 2. The total revenue is RM5.00.
5.3 SUMMARY OF TOTAL SALES
Date
Unit of Product Sold
Total Amount
(RM)
Happy Rose
RM16.90
Happy Rose (Combo)
RM18.00
Brooch
(set 1)
RM3.00
Brooch
(set 2)
RM5.00
6 October 2011 6 2 2 3 158.40
12 October 2011 4 2 2 3 124.60
13 October 2011 4 1 1 - 88.60
14 October 2011 3 1 2 2 84.70
15 October 2011 4 - 3 2 86.60
16 October 2011 2 1 1 2 64.80
17 October 2011 - - - 1 5.00
Total Sales: 23 7 11 13 612.70
Blossom Craft Sdn Bhd has sold 30 happy rose and 44 brooches. The total revenue is
RM612.70.
5.4 PROFIT AND LOSS STATEMENT BUSINESS TO FORECAST
BLOSSOM CRAFT SDN. BHD.
Profit and Loss Statement for 31 October 2011
Total Sales RM597.00
less: Cost of Goods Sold (RM185.00)
Gross Profit RM412.00
less: Expenses (RM14.90)
Photocopy RM3.00
Transportation fee RM8.00
Electricity RM1.50
Miscellaneous RM2.40
Net Profit RM397.10
5.5 PROFIT AND LOSS STATEMENT AFTER RUNNING THE BUSINESS
BLOSSOM CRAFT SDN. BHD.
Profit and Loss Statement for 31 October 2011
Total Sales RM612.70
less: Cost of Goods Sold (RM190.40)
Gross Profit RM422.30
less: Expenses (RM14.90)
Photocopy RM3.00
Transportation fee RM8.00
Electricity RM1.50
Miscellaneous RM2.40
Net Profit RM407.40
5.6 BALANCE SHEET BUSINESS TO FORECAST
BLOSSOM CRAFT SDN. BHD.
Balance Sheet for 1 October 2011
Current Asset: Long-term Liability
Cash RM240.00 Loan RM0.00
Owner Equity:
Capital RM240.00
RM240.00 RM240.00
5.7 BALANCE SHEET AFTER RUNNING THE BUSINESS
BLOSSOM CRAFT SDN. BHD.
Balance Sheet for 31 October 2011
Current Asset: Long-term Liability
Cash RM647.40 Loan RM0.00
Owner Equity:
Capital RM240.00
Net Profit RM407.40
RM647.40 RM647.40
5.8 CASH FLOW STATEMENT
Cash inflows :
From sale of goods
Cash outflows :
To supplier of goods
Cash generated from operations
RM
612.70
(190.40)
422.30
5.9 FINANCIAL ANALYSIS
Total Sales RM 612.70 100%
less: Variable expenses RM 190.40 31.08%
Contribution margin RM 422.30 68.92%
less: Fixed expenses RM 14.90
Operating income RM 407.40
Markup percent (Happy Rose) = (selling price – total cost) / total cost
= (RM 16.90 – RM 5.55) / RM 5.55
= 204%
Markup percent (Brooch) = (selling price – total cost) / total cost
= (RM 3 – RM 0.88) / RM 0.88
= 241%
The 2.05 % of the cost price adds on to get the selling price of RM 16.90 for the Happy
Rose not include the selling price of combo and 2.41 % of the cost price adds on to get the
selling price of RM 3 for one set of button brooch not include the selling price of combo set.
5.10 GROSS PROFIT MARGIN
The gross margin is not an exact estimate of the company's pricing strategy but it does give
a good indication of financial health. Without an adequate gross margin, a company will be
unable to pay its operating and other expenses and build for the future
Gross Profit Margin
Gross Profit Margin (Sales from 06/10/2011 – 17/10/2011)
The gross profit margin ratio tells us the profit a business makes on its cost of sales, or cost
of goods sold. The gross profit tells an investor the percentage of revenue or sales left after
subtracting the cost of goods sold. Blossom Craft Sdn. Bhd. has a gross profit margin of
68.92% from the 7 days of sales and it would retain RM0.6892 from each ringgit of revenue
generated, to be put towards paying off expenses.
5.11 NET PROFIT MARGIN/ OPERATING MARGIN
Net margin measures how successful a company has been at the business of making a profit
on each ringgit sales. It is one of the most essential financial ratios. It is a measurement of
what proportion of a company's revenue is left over after paying for variable costs of
production such as wages, raw materials, etc. A healthy operating margin is required for a
company to be able to pay for its fixed costs, such as interest on debt. The higher the ratio,
the more effective a company is at cost control. With net profit margin ratio all costs are
included to find the final benefit of the income of a business.
Net Profit Margin
Net Profit Margin (Sales from 06/10/2011 – 17/10/2011)
Blossom Craft Sdn. Bhd. has a net profit margin of 66.49% from the 7 days of sales and this
mean we has RM 0.6649 of net income for every ringgit of sales.
5.12 RETURN ON EQUITY
Return on Equity = Net profit / Owner Equity
= RM 407.40 / RM 647.40
= 63%
5.13 BREAK EVEN POINT
Total variable cost = RM 160.50 + RM 29.90
= RM 190.40
Total unit produce = 30 unit + 44 unit
= 74 unit
The variable cost per unit (Happy Rose) = RM 160.50/ 30 unit
= RM 5.35
The variable cost per set (Brooch) = RM29.90/ 44 set
= RM 0.68
Total fixed cost = RM 11.90 + RM 3.00
= RM 14.90
Total fixed cost per unit = RM 14.90/ 74 units
= RM 0.20 per unit
Break even point (in units) = Fixed cost / Unit contribution margin
= Fixed cost / (Sales – variable cost) per unit
= RM 14.90 / (RM 8.28 – RM 2.57)
= 2.609 ≈ 3 units
Since we produce two different products, which mean we have two product lines. So, we
use Contribution Margin Method to calculate the break even point. The Contribution
Margin Method as above is suitable in situations where a company has multiple products
lines and wishes to compute a single break even point for the company as a whole.
Break even point for Happy Rose (in unit) = Fixed cost / (unit selling price – variable cost)
= RM 14.90 / (RM 15.50 - RM 5.35)
= 1.47 unit ≈ 2 units
Breakeven point for Brooch (in unit) = Fixed cost / (unit selling price – variable cost)
= RM 14.90 / (RM 2.50 - RM 0.68)
= 8.19 unit ≈ 8 units
There are 2 units of Happy Rose need to sell for recovered the costs (fixed cost and variable
cost) associated with producing product of Happy Rose while 8 units of Brooch need to be
sold to recover the costs of producing one set of Brooch. For overall, there 3 units of the
product lines need to be sold to recover all the costs of producing Happy Rose and Brooch.
6.0 IMPLEMENTATION OF BUSINESS ACTIVITIES
The business period is from 6 October 11 to 18 October 11.
There are 8 main stages for the business activities.
The first stage is planning. Everyone in the organization involved in this stage to generate
ideas for business product. Initial product ideas are shawl rose, button brooch, second hand
accessories and recycled paper card or book mark. We found our business opportunity
which can sell our products as convocation gift and there is no competitor which sell similar
product with us. At last, we chose the shawl rose and button brooch as our main products.
Besides, we need modal to start our business. All members agreed to contribute RM30 as
modal. Thus, the total modal for our business is RM240.00. We also planned for our
marketing strategies at this stage. We forecasted our shawl rose product can get popularity
because it is unique, presentable and affordable for university students; and we figured out
to present along with a hand-made, simple but nice card to add the sale attractiveness of our
shawl rose product. In addition, our marketing strategies include poster and promotion via
online. Besides, we also planned to release combo package which is more cheap and
“worth” to attract customer. The combo package includes 1 shawl rose and 1 set of 3 button
brooches in cheaper price. Then, we planned to walk, promote and sell our products during
convocation period.
The second stage is licensing and authorized approval which in charged by our
organization’s secretary. There are 2 official letters we needed to have which are first is the
acknowledgement letter from our MGM3180 Basic Entrepreneurship lecturer, Dr. Husniyah
bt Abd Rahim to prove that we are doing the business for course requirement; and the
second is the approval letter from the sales venue authority. We planned to have 2 booths;
morning session at the front of Faculty of Environment Studies, which is the path for
students who want going to Sri Serdang will pass-by while night session the booth located
at Kolej Tun Perak (KTP), near to Putra food court.
The third stage is procurement of materials which include shawls, ribbons, wrapping paper,
buttons, glue, etc. The materials bought on the date of 1/10/2001. Most materials bought
from Kohinoor Industries (M) Sdn Bhd and Syarikat Bunga Reben Sdn Bhd. Some
equipment such as scissors and glue gun we either borrow from friends or use our personal
stuffs.
Next is the production stage. Since we have 2 products, so we had 2 production line. For the
production of shawl rose, our operation manager, Koh Li Juan guided us the technique and
skills to make the shawl rose. The various color shawls folded into rose shape and packaged
into bouquet. We produced 30 of shawl roses. For the production of button brooch, the
brooches are made from various colors buttons into blossom shape. The brooches can be
used to buckle Muslim women headpiece, as brooch or accessories. We produced 44 sets;
each set contains 3 different size brooches.
After that is the implementation of marketing strategies. We have 2 main promotion
techniques which are poster and online promotion via Facebook. The poster is decorated
with fancy and cheerful colors. Our products pictures are showed in the poster, price stated
and promote with combo package which is cheaper and worth. The date, time and venue of
our booths also stated in the poster. The poster is placed at our booths to attract customer.
The reason we choose online promotion via Facebook is because we found this is the fast,
convenient, cheap and high coverage of target respondent (UPM student) way.
Then is the stage of sales and marketing. As we planned, we had pre-sale before
convocation and sales during convocation. Before convocation, we had 2 fixed booths,
which are in front of Faculty of Environmental Studies and Kolej Tun Perak. During
convocation period, we separated to 2 groups (each group 4 persons) to walk, promote and
sell our products near to the main hall area. All members in the organization took part in
this stage.
The last stage is the follow up of the sales record, accounts and business report. Every sale
has been recorded at the printed table form for traceable. Then, our Finance Manager, Lim
Liting handled the accounts from the beginning to the end of the business.
We successfully sold out all of our products and get net profit as much as RM407.40
7.0 BUSINESS EXPANSION
Besides the product mix of Happy Rose and Blossom Brooch, we have few ideas to expand
our blossom concept business.
First is by using different materials such as satin cloth, tudung, shawls with tone colors
rather than singer color shawl or pashmina, we can produce different style or types of
Happy Rose.
Second, we also think that we can open market for man. Since man rarely use shawl but
they use handkerchief, so we might produce handkerchief blossom gift set for man.
Third, we can release a new combo package named “Happy Rose Trio”. This package
having 3 happy roses which symbolize the meaning “I love you”, with the combo price
RM45.70 instead of original price RM50.70, thus save money for RM5.
Lastly, we have the idea to make small Happy Rose by ribbon and make to rose shape, then
make it into brooches. We are sure that this product is look nice and can get popularity from
female customers.
8.0 CONCLUSION
Through this entrepreneurship subject, we get the real experience to become entrepreneur.
Besides that, it is good opportunity for us to learn how to create our own business and
managing our business as well as making high profit from our business. In the whole
process, we have to cooperate well with each other in order to meet our objective. Hence,
we always have a discussion through the meeting and solving the problems that we faced
together. The four elements that is essential in the whole processes which are planning,
organizing, leading and controlling. Furthermore, we used our creativities and innovative in
producing unique products that resulting high demand and eventually create profit from
business. We show highly appreciation to each other’s contribution to this business. We
would also like to thank our beloved lecturer Dr Husniyah Bt Abd Rahim for leading and
guiding us along the way. Finally, this is really good bitter sweet experience in our
university life.
9.0 APPENDIX
- put our presentation slides
-poster
-receipts copy
-auji ang hezy certificates (if have)