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

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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

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16

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6.0 MARKETING PLAN

6.1 Price

6.2 Place

6.3 Promotion

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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

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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

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27

29

30

8.0 CONCLUSIONS 31

9.0 APPENDIX 32

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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.

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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

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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

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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

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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

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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.

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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

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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

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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.

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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

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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.

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5.1 Operational Process

5.2 Operational Expenses

Operational expenses will be related to Material cost, Labor, Building rent, Utility,

Electricity, and Water.

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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.

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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

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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

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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

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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.

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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.

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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.

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3. Marketing expenses will not need to increase significantly in order to maintain sales.

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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

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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

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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

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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

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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

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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

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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.

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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.

 

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