3.1. MARKET ANALYSIS SUMMARY

Net-Zone is faced with the exciting opportunity of being the first-mover in the Mohammadpur

cyber-cafe market. The consistent popularity of free FTP in the Internet has been proven to be a

winning concept in other markets and will produce the same results in Mohammadpur.

3.2. TARGET MARKET SEGMENT STRATEGY

Net-Zone intends to capture to people who want a high speed connection around the Internet and

to serve users by providing various services such as FTP and also membership services.

Furthermore, Net-Zone will be an important source of best internet for local people who desire to

work or check their email messages and also desire for new movie collection in a friendly

atmosphere. These residents will either use Net-Zones's PCs, or plug their notebooks into

Internet connections. Net-Zone's target market covers a wide range of ages: from members of

young generation who are growing up surrounded by computers, to professionals who have come

to the realization that people today cannot afford to ignore computers.

3.3. MARKET NEEDS

Factors such as current trends of free FTP service ensure that the high demand for low cost

internet service will remain constant over the next five years. The rapid growth of the Internet

and online services are increasing day by day. The potential growth of the Internet is vast, to the

point where one day, people cannot think any source of getting information without using

Internet. Being the second cyber-cafe in Mohammadpur, Net-Zone will establish itself as the

first-mover advantages of best service in the regional area.

3.4. MARKET SEGMENTATION

Net-Zone's customers can be divided into two groups. The first group is familiar with the

Internet. The second group is not familiar with the Internet, yet, and is just waiting for the right

opportunity to enter the online community. Net-Zone's target market falls anywhere between the

ages of 18 to 50. In addition to these two broad categories, Net-Zone's target market can be

divided into more specific market segments. The majority of these individuals are students and

business people. See the Market Analysis chart and table below for more specifics.

3.5. SERVICE BUSINESS ANALYSIS

The popularity of the Internet is growing exponentially. Those who are familiar with the Internet

are well aware of how fun and addictive surfing the Net can be. Those who have not yet

experienced the Internet need a convenient, relaxed atmosphere where they can feel comfortable

learning about and utilizing the current technologies. Net-Zone seeks to provide its customers

with affordable Internet access in an innovative and supportive environment.

The founder of Net-Zone realizes the need for differentiation and strongly believes that

combining a cafe with complete Internet service is the key to success. The fact that no cyber-

cafes are established in Mohammadpur with the service of ISP and also memebership, presents

Net-Zone with a chance to enter the window of opportunity and enter into a profitable niche in

the market.

3.6. COMPETITION AND BUYING PATTERNS

The main competitor in the internet service provider is Rupali Business Centre. These businesses

are located in or near the Noorzahan Road, and target a similar segment to Net-Zone's.

Competition from online service providers comes from locally-owned. There are approximately

eight, local, online service providers in Mohammadpur. This number is expected to grow with

the increasing demand for Internet access. Due to the nature of the Internet, there are no

geographical boundaries restricting competition.

3.7. STRATEGY AND IMPLEMENTATION SUMMARY

Net-Zone has 2 main strategies. The first strategy focuses on attracting novice Internet users. By

providing a novice friendly environment, Net-Zone hopes to educate and train a loyal customer

base.

The second, and most important, strategy focuses on pulling in power Internet users. Power

Internet users are extremely familiar with the Internet and its offerings. This group of customers

serves an important function at Net-Zone. Power users have knowledge and web-browsing

experience that novice Internet users find attractive and exciting.

3.8. STRATEGY PYRAMID

The following subtopics provide an overview of Net-Zone's 2 key strategies. Strategy pyramid

graphics are presented in the appendix of this plan.

3.8.1. ATTRACT POWER INTERNET USERS

Net-Zone's second strategy will be focused on attracting power Internet users. Power Internet

users provide an important function at Net-Zone. Net-Zone plans on attracting this type of

customer by:

Providing the latest in computing technology.

Providing scanning and printing services.

Providing access to powerful software applications.

3.8.2. ATTRACT NOVICE INTERNET USERS

Net-Zone's first strategy focuses on attracting novice Internet users. Net-Zone plans on attracting

these customers by:

Providing a novice friendly environment. Net-Zone will be staffed by knowledgeable

employees focused on serving the customer's needs.

A customer service desk will always be staffed. If a customer has any type of question or

concern, a Net-Zone will always be available to assist.

Net-Zone will offer introductory classes on the Internet and email. These classes will be

designed to help novice users familiarize themselves with these key tools and the Net-

Zone computer systems.

3.9. SWOT ANALYSIS

The SWOT analysis provides us with an opportunity to examine the internal strengths and

weaknesses Net-Zone must address. It also allows us to examine the opportunities presented to

Net-Zone as well as potential threats.

Net-Zone has a valuable inventory of strengths that will help it succeed. These strengths include:

a knowledgeable and friendly staff, state-of-the-art computer hardware, and a clear vision of the

market need. Strengths are valuable, but it is also important to realize the weaknesses Net-Zone

must address. These weaknesses include: a dependence on quickly changing technology, and the

cost factor associated with keeping state-of-the art computer hardware.

Net-Zone's strengths will help it capitalize on emerging opportunities. These opportunities

include, but are not limited to, a growing population of daily Internet users, and the growing

social bonds fostered by the new Internet communities. Threats that Net-Zone should be aware

of include, the rapidly falling cost of Internet access, and emerging local competitors.

3.9.1. WEAKNESSES

1. A dependence on quickly changing technology. Net-Zone is a place for people to

experience the technology of the Internet. The technology that is the Internet changes

rapidly. Net-Zone needs to keep up with the technology because a lot of the Net-Zone

experience is technology.

2. Cost factor associated with keeping state-of-the-art hardware. Keeping up with the

technology of the Internet is an expensive undertaking. Net-Zone needs to balance

technology needs with the other needs of the business.

3.9.2. OPPORTUNITIES

1. Growing population of daily Internet users. The importance of the Internet almost equals

that of the telephone. As the population of daily Internet users increases, so will the need

for the services Net-Zone offers.

2. Social bonds fostered by the new Internet communities. The Internet is bringing people

from across the world together unlike any other communication medium. Net-Zone will

capitalize on this social trend by providing a place for smaller and local Internet

communities to meet in person. Net-Zone will grow some of these communities on its

own by establishing chat areas and community programs. These programs will be

designed to build customer loyalty.

3.9.3. THREATS

1. Emerging local competitors. Currently, Net-Zone is enjoying a first-mover advantage in

the local cyber-cafe market. Many of our programs will be designed to build customer

loyalty, and it is our hope that our quality service.

3.9.4. STRENGTHS

1. Knowledgeable and friendly staff.

2. State-of-the art equipment. Part of the Net-Zone experience includes access to state-of-

the-art computer equipment.

3. Clear vision of the market need. Net-Zone knows what it takes to build an upscale cyber

cafe. We know the customers, we know the technology, and we know how to build the

service that will bring the two together.

3.10. MARKETING STRATEGY

Net-Zone will position itself as an Internet service provider. It will serve high-quality speed of

internet service at a competitive price. Due to the number of internet service providers in

Mohammadpur, Noorzahan Road, it is important that Net-Zone sets fair prices for its service.

Net-Zone will use advertising as its main source of promotion. Ads placed in the wall of

Noorzahan Road and it will help build more customers.

3.11. PRICING STRATEGY

Determining a fair market, hourly price, for online use is more difficult because there is no direct

competition from another cyber-cafe in Mohammadpur. Therefore, Net-Zone considered three

sources to determine the hourly charge rate. First, we considered the cost to use other Internet

servers, whether it is a local networking firm or a provider. Internet access providers use

different pricing schemes. Charges are in monthly fee. In addition, some providers use this

strategy for pricing schemes. Thus, it can quickly become a high monthly cost for the individual.

Second, Net-Zone looked at how cyber-cafes in other markets went about pricing Internet access.

3.12. SALES STRATEGY

Net-Zone employs people to handle sales transactions. Computer literacy is a requirement for

Net-Zone employees. If an employee does not possess basic computer skills when they are hired,

they are trained by our full-time technician. Our full-time technician is also available for

customers in need of assistance. Net-Zone's commitment to friendly, helpful service is one of the

key factors that distinguish Net-Zone from other Internet cafes.

SALES FORECAST

Month 1Month

2Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9

Month 10

Month 11Month

12Year 1

UNIT SALES

Monthly Membership

s100 120 144 173 207 249 299 358 430 516 619 743 3958

Monthly Internet service

130 156 187 225 270 323 388 466 559 671 805 966 5145

Total Unit Sales

230 276 331 397 477 572 687 824 989 1187 1424 1709 9104

UNIT PRICES

Monthly Membership

sTk.200 Tk.200 Tk.200 Tk.200 Tk.200 Tk.200 Tk.200 Tk.200 Tk.200 Tk.200 Tk.200 Tk.200

Monthly Internet Fees

Tk.700 Tk.700 Tk.700 Tk.700 Tk.700 Tk.700 Tk.700 Tk.700 Tk.700 Tk.700 Tk.700 Tk.700

SALES

Monthly Membership

s

Tk.20,000

Tk.24,000

Tk.28,800

Tk.34,560

Tk.41,472

Tk.49,766

Tk.59,720

Tk.71,664

Tk.85,996

Tk.103,196

Tk.123,835

Tk.148,602

Tk.791,610

Monthly Internet Fees

Tk.91,000

Tk.109,200

Tk.131,040

Tk.157,248

Tk.188,698

Tk.226,437

Tk.271,725

Tk.326,069

Tk.391,283

Tk.469,540

Tk.563,448

Tk.676,138

Tk.3,601,826

Total SalesTk.111,

000Tk.133,2

00Tk.159,

840Tk.191,8

08Tk.230,1

70Tk.276,2

04Tk.331,4

44Tk.397,7

33Tk.477,2

80Tk.572,7

36Tk.687,2

83Tk.824,

739Tk.4,393,

436

CHAPTER 5

FINANCIAL PART

5.1. FINANCIAL PLAN

The following sections lay out the details of our financial plan for the next three years.

5.2. START-UP FUNDING

This business plan is prepared to obtain financing in the amount of $542,000. The supplemental

financing is required to begin work on site preparation and modifications, equipment purchases,

and to cover expenses in the first year of operations.

Start-up FundingStart-up Expenses to Fund Tk.542,000Start-up Assets to Fund Tk.544,500Total Funding Required Tk.1,086,500

AssetsNon-cash Assets from Start-up Tk.979,500Cash Requirements from Start-up Tk.200,000Total Assets Tk.1,179,500

CapitalPlanned Investment

Bishawjit Roy Tk.600,000Abdullah al Mamun Tk.350,000Iqram Tk.350,000Total Planned Investment Tk.1,300,000Loss at Start-up (Start-up Expenses) Tk.542,000Total Capital Tk.758,000Total Capital and Liabilities Tk.758,000Total Funding Tk.1,086,500

5.3. BREAK-EVEN ANALYSIS

Break-even data is presented in the chart below. Therefore we have to provide 1640 units in

combination of membership and internet service both. And we can complete it within 12 months

of our business operation.

5.4. PROJECTED PROFIT AND LOSS

Pro Forma Profit and Loss

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9Month

10Month

11Month

12 Year 1

SalesTk.111,

000Tk.133,

200Tk.159,

840Tk.191,

808Tk.230,

170Tk.276,

204Tk.331,

444Tk.397,

733Tk.477,

280Tk.572,

736Tk.687,

283Tk.824,

739Tk.4,393,43

6

Other Costs of Sales Tk.0.00 Tk.0.00 Tk.0.00 Tk.0.00 Tk.0.00 Tk.0.00 Tk.0.00 Tk.0.00 Tk.0.00 Tk.0.00 Tk.0.00 Tk.0.00 Tk.0.00

Total Cost of Sales

Tk.111,000

Tk.133,200

Tk.159,840

Tk.191,808

Tk.230,170

Tk.276,204

Tk.331,444

Tk.397,733

Tk.477,280

Tk.572,736

Tk.687,283

Tk.824,739

Tk.4,393,436

Expenses

PayrollTk.22,0

00Tk.22,0

00Tk.22,0

00Tk.22,0

00Tk.22,0

00Tk.22,0

00Tk.22,0

00Tk.22,0

00Tk.22,0

00Tk.22,0

00Tk.22,0

00Tk.22,0

00Tk.264,000.

00

Marketing/Promotion

Tk.10,000 Tk.0 Tk.0 Tk.0 Tk.0 Tk.0 Tk.0 Tk.0 Tk.0 Tk.0 Tk.0 Tk.0

Tk.10,000.00

Utilities

Electricity BillTk.5,00

0Tk.5,00

0Tk.5,00

0Tk.5,00

0Tk.5,00

0Tk.5,00

0Tk.5,00

0Tk.5,00

0Tk.5,00

0Tk.5,00

0Tk.5,00

0Tk.5,00

0Tk.60,000.0

0

Telephone BillTk.2,00

0Tk.2,00

0Tk.2,00

0Tk.2,00

0Tk.2,00

0Tk.2,00

0Tk.2,00

0Tk.2,00

0Tk.2,00

0Tk.2,00

0Tk.2,00

0Tk.2,00

0Tk.24,000.0

0

OtherTk.1,00

0Tk.1,00

0Tk.1,00

0Tk.1,00

0Tk.1,00

0Tk.1,00

0Tk.1,00

0Tk.1,00

0Tk.1,00

0Tk.1,00

0Tk.1,00

0Tk.1,00

0Tk.12,000.0

0

Total Operating Expenses

Tk.40,000

Tk.30,000

Tk.30,000

Tk.30,000

Tk.30,000

Tk.30,000

Tk.30,000

Tk.30,000

Tk.30,000

Tk.30,000

Tk.30,000

Tk.30,000

Tk.370,000.00

Profit Before Interest and Taxes

Tk.71,000

Tk.103,200

Tk.129,840

Tk.161,808

Tk.200,170

Tk.246,204

Tk.301,444

Tk.367,733

Tk.447,280

Tk.542,736

Tk.657,283

Tk.794,739

Tk.4,023,435.75

Tax 10%Tk.7,10

0Tk.10,3

20Tk.12,9

84Tk.16,1

81Tk.20,0

17Tk.24,6

20Tk.30,1

44Tk.36,7

73Tk.44,7

28Tk.54,2

74Tk.65,7

28Tk.79,4

74 Tk.402,344

TotalTk.63,9

00Tk.92,8

80Tk.116,

856Tk.145,

627Tk.180,

153Tk.221,

583Tk.271,

300Tk.330,

960Tk.402,

552Tk.488,

462Tk.591,

554Tk.715,

265Tk.3,621,09

2

Net ProfitTk.63,9

00Tk.92,8

80Tk.116,

856Tk.145,

627Tk.180,

153Tk.221,

583Tk.271,

300Tk.330,

960Tk.402,

552Tk.488,

462Tk.591,

554Tk.715,

265Tk.4,023,43

5.75

5.5. PROJECTED CASH FLOW

PRO FORMA CASH FLOW

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Year 1

CASH RECEIVED

CASH FROM OPERATIONS

Cash Sales

Tk.111,000

Tk.133,200

Tk.159,840

Tk.191,808

Tk.230,170

Tk.276,204

Tk.331,444

Tk.397,733

Tk.477,280

Tk.572,736

Tk.687,283

Tk.824,739

Tk.4,393,436

EXPENDITURES

EXPENDITURES FROM OPERATIONS

Cash Spending

Tk.22,000

Tk.22,000

Tk.22,000

Tk.22,000

Tk.22,000

Tk.22,000

Tk.22,000

Tk.22,000

Tk.22,000

Tk.22,000

Tk.22,000

Tk.22,000

Tk.264,000.00

Electricity Bill

Tk.5,000

Tk.5,000

Tk.5,000

Tk.5,000

Tk.5,000

Tk.5,000

Tk.5,000 Tk.5,000 Tk.5,000 Tk.5,000 Tk.5,000 Tk.5,000Tk.60,000.00

Telephone Bill

Tk.2,000

Tk.2,000

Tk.2,000

Tk.2,000

Tk.2,000

Tk.2,000

Tk.2,000 Tk.2,000 Tk.2,000 Tk.2,000 Tk.2,000 Tk.2,000Tk.24,000.00

TotalTk.29,000

Tk.29,000

Tk.29,000

Tk.29,000

Tk.29,000

Tk.29,000

Tk.29,000

Tk.29,000

Tk.29,000

Tk.29,000

Tk.29,000

Tk.29,000

Tk.348,000.00

ADDITIONAL CASH SPENT

OtherTk.1,000

Tk.1,000

Tk.1,000

Tk.1,000

Tk.1,000

Tk.1,000

Tk.1,000 Tk.1,000 Tk.1,000 Tk.1,000 Tk.1,000 Tk.1,000Tk.12,000.00

TotalTk.1,000

Tk.1,000

Tk.1,000

Tk.1,000

Tk.1,000

Tk.1,000

Tk.1,000 Tk.1,000 Tk.1,000 Tk.1,000 Tk.1,000 Tk.1,000Tk.12,000.00

Net Cash Flow

Tk.81,000

Tk.103,200

Tk.129,840

Tk.161,808

Tk.200,170

Tk.246,204

Tk.301,444

Tk.367,733

Tk.447,280

Tk.542,736

Tk.657,283

Tk.794,739

Tk.794,739.29

Cash Balance

Tk.119,000

Tk.222,200

Tk.352,040

Tk.513,848

Tk.714,018

Tk.960,221

Tk.1,261,665

Tk.1,629,398

Tk.2,076,678

Tk.2,619,414

Tk.3,276,696

Tk.4,071,436

Tk.4,071,435.75

5.6. PROJECTED BALANCE SHEET

Our projected balance sheet is presented in the table below.

PRO FORMA BALANCE SHEET

Month 1

Month 2

Month 3

Month 4Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

ASSETS

CURRENT ASSETS

CashTk.119,000

Tk.222,200

Tk.352,040

Tk.513,848

Tk.714,018

Tk.960,221

Tk.1,261,665

Tk.1,629,398

Tk.2,076,678

Tk.2,619,414

Tk.3,276,696

Tk.4,071,436

A/C Receivable

Tk.265,500

Tk.199,500

Tk.89,300.00

Other Current Assets

Tk.7,000

Tk.2,000

Tk.9,000

Tk.1,000

Tk.2,000

Tk.3,000

Tk.5,000

Tk.6,000

Tk.7,000

Tk.5,000

Tk.1,000

Tk.2,000

Total Current Assets

Tk.391,500

Tk.423,700

Tk.450,340

Tk.514,848

Tk.716,018

Tk.963,221

Tk.1,266,665

Tk.1,635,398

Tk.2,083,678

Tk.2,624,414

Tk.3,277,696

Tk.4,073,436

LONG-TERM ASSETS

Long-term Assets

Tk.979,500

Tk.979,500

Tk.979,500

Tk.979,500

Tk.979,500

Tk.979,500

Tk.979,500

Tk.979,500

Tk.979,500

Tk.979,500

Tk.979,500

Tk.979,500

Total Long-term Assets

Tk.979,500

Tk.979,500

Tk.979,500

Tk.979,500

Tk.979,500

Tk.979,500

Tk.979,500

Tk.979,500

Tk.979,500

Tk.979,500

Tk.979,500

Tk.979,500

Total Assets

Tk.1,371,000

Tk.1,403,200

Tk.1,429,840

Tk.1,494,348

Tk.1,695,518

Tk.1,942,721

Tk.2,246,165

Tk.2,614,898

Tk.3,063,178

Tk.3,603,914

Tk.4,257,196

Tk.5,052,936

LIABILITIES AND CAPITAL

A/C Payable

Tk.32,540

Tk.195,348

Tk.396,518

Tk.644,721

Tk.947,165

Tk.1,315,898

Tk.1,761,178

Tk.2,299,914

Tk.2,958,196

Total Capital

Tk.1,300,000

Tk.1,300,000

Tk.1,300,000

Tk.1,300,000

Tk.1,300,000

Tk.1,300,000

Tk.1,300,000

Tk.1,300,000

Tk.1,300,000

Tk.1,300,000

Tk.1,300,000

Tk.1,300,000

Net Profit

Tk.63,900

Tk.92,880

Tk.116,856

Tk.145,627

Tk.180,153

Tk.221,583

Tk.271,300

Tk.330,960

Tk.402,552

Tk.488,462

Tk.591,554

Tk.715,265

Total Liabilities and Capital

Tk.1,363,900

Tk.1,392,880

Tk.1,416,856

Tk.1,478,167

Tk.1,675,501

Tk.1,918,101

Tk.2,216,021

Tk.2,578,125

Tk.3,018,450

Tk.3,549,640

Tk.4,191,468

Tk.4,973,462

Net-Zone will provide full access to FTP. The establishment of Net-Zone as entertainment

source by free FTP service. The risks involved with starting Net-Zone are: Net-Zone is a

partnership business held by 3 owners. Internet service provider charges higher price. Net-Zone

will provide FTP service. Net-Zone will be the second Internet cafe in Mohammadpur. Net-Zone

will provide its customers with full access to the Internet. Only one Internet services are

available to Net-Zone customers are listed below: Customers can sign up for a Net-Zone email

account. Net-Zone will also provide its customers with access to introductory Internet and email

classes. Net-Zone's customers can be divided into two groups. Net-Zone has 2 main strategies.

Net-Zone's second strategy will be focused on attracting power Internet users. Power Internet

users provide an important function at Net-Zone. Net-Zone plans on attracting this type of

customer by: Net-Zone's first strategy focuses on attracting novice Internet users. Net-Zone plans

on attracting these customers by: Net-Zone will offer introductory classes on the Internet and

email. Net-Zone is a place for people to experience the technology of the Internet. Net-Zone will

position itself as an Internet service provider. Second, Net-Zone looked at how cyber-cafes in

other markets went about pricing Internet access. Net-Zone employs people to handle sales

transactions. Computer literacy is a requirement for Net-Zone employees. Net-Zone's

commitment to friendly, helpful service is one of the key factors that distinguish Net-Zone from

other Internet cafes.