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Business Plan

Business Plan. Intelligent Automated Parking - An Intelligent Carpark Management Initiative. Objectives. Target sales of $10 million in ten years’ time and 30-40% in gross margins. Industry Specialist. Local market share in first 5 years. Regional and global markets beyond 5 years.

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Business Plan

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  1. Business Plan Intelligent Automated Parking - An Intelligent Carpark Management Initiative

  2. Objectives • Target sales of $10 million in ten years’ time and 30-40% in gross margins • Industry Specialist • Local market share in first 5 years • Regional and global markets beyond 5 years

  3. The Product: Intelligent Automated Parking • Sophisticated Carpark Management Systems  more convenient payment mechanism  novel traffic layout • Advanced Electronic Road Pricing (ERP) Technology  Dedicated Short Range Communications (DSRC) System • Patent proprietary expertise and model

  4. The IAP Process Central Management Station Entrance Vehicle Centralised Station Mounted Camera Barrier Gantry Proximity Reader Exit Vehicle Vehicle Gantry Optical Sensor Detector

  5. Competitive Advantages Critical Success Factors: • Customized carpark management system catered to needs of specific customers • Clearly defined target market • Value for money proposition: - assurance of quality of IAP technology - excellence in provision of after-sales service

  6. Competitive Advantages • Highly probable positive feedback of IAP system from motorists due to: - convenience & time-saving - widely accepted existing technology of ERP gantry system • added incentive to carpark owners to implement system

  7. Industry Analysis • Commercial carparks - 150,000 lots - $150 million potential revenue • View to expand into public carparks - over 600,000 lots - $400 million potential revenue • Industry Participants: - Carpark operators, government bodies, engineering companies and IT solutions providers

  8. Main Competitors • Stratech Systems - SmartPark • ST Electronics – Autoparc ST 8300 • Sanyo Trading Company • Siemens Advanced Engineering • CET Technologies

  9. Market Analysis • Market Growth - Increase in car ownership - Current implementation of cashless parking • Market Segmentation - size and ownership - more justified in large-scale carparks

  10. Marketing Strategy • Positioning Statement - market niche player • Pricing Strategy - cost-plus pricing strategy based on: (a) variable costs of IAP equipment (b) salaries of engineers (c) subcontracting costs - gross margin of 30%

  11. Marketing Strategy • Promotion Strategy - minimal advertising expenditure - personalised selling of product • Marketing Program - printing of catalogues & brochures on IAP process - internet website, yellow pages - prototype modelling for demonstrations

  12. Financial Matters (a) Required funding - S$1 million • Subscribe for 400,000 shares of $2.50 each or 40% stake • Uses of funds: - Develop IAP prototype - Purchase of fixed assets - Payment of engineers’ salaries - Payment of subcontracting costs - Purchase of IAP equipment supplies for contracts

  13. Financial Matters (b) Breakeven Analysis • Expect to be in the black by end of 2nd year Year 1Year 2Year 3Year 4Year 5 Revenue 352,000 1,055,000 1,427,000 1,666,000 2,150,000 Less: COGS 246,000 738,000 998,400 1,138,400 1,488,000 Operating expenses 229,000 132,000 150,000 169,200 171,600 Profits/(Losses) before tax(121,000) 195,000 305,600 410,400 580,400 Profits/(Losses) after tax (121,000) 146,250 229,200 307,800 435,300 Retained profits/(Losses) b/f - (121,000) 25,250 134,450 202,250 (121,000) 25,250 254,450 442,250 637,550 Less: Dividends - - (120,000) (240,000) (300,000) Retained profits/(Losses) c/f (121,000) 25,250 134,450 202,250 337,550

  14. Financial Matters Sales & Profit Trends

  15. Financial Matters Year 1 Year 2 Year 3 Year 4 Year 5 Liquidity ratios Current ratio N/A 20.43 6.51 4.43 4.01 Quick ratio N/A 15.77 5.04 3.71 3.40 (c) Ratio Analysis Operating ratios Average collection period (days) 59.8 73.0 73.1 72.9 73.0 Net sales to total assets ratio 0.40 0.99 1.09 1.11 1.26 Net sales to working capital ratio 0.46 1.12 1.34 1.46 1.67 Profitability ratios Net profit margin (0.34) 0.18 0.21 0.24 0.26 Return on equity (0.14) 0.14 0.20 0.26 0.33 Return on total assets (0.14) 0.14 0.17 0.20 0.24

  16. Financial Matters Year 3Year 4 Year 5 Year 6 Founders Share of dividends - 72,000 153,600 216,000 Less: Cashout option - - (75,000) (100,000) Contribution to investors - (54,000) (42,000) (60,000) (d) Financial Returns Investors Share of dividends - 48,000 86,400 84,000 Add: Contribution from founders - 54,000 42,000 60,000 Dividends from investment - 102,000128,400144,000 Investment base 1,000,000 900,000 700,000 Return (%) 10.2 14.3 20.6 Cashout option: Founders’ share of dividends - - 75,000 100,000 Cash 100,000200,000200,000200,000100,000200,000275,000300,000

  17. Financial Matters Year 3Year 4 Year 5 Year 6 Share buyback (no. of shares) 40,000 80,000 110,000 120,000 Share capital composition: Founders 640,000 720,000 830,000 950,000 Investors 360,000 280,000 170,000 50,000 (d) Financial Returns • By end of year 6, founders would have returned 87.5% (or $875,000) of investors’ monies equivalent to 350,000 shares.

  18. Thank You For Your Attention...

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