LAHORE SCHOOL OF ECONOMICS

Kinetic Advertisements

Small Medium Enterprise Location

Section C

Ali IjlalKiran MaheenLuqman ArshadMuhammah Usamah BakhshiWaleed Baig

Presented to:Sir Haroon Ahmad

ContentsExecutive Summary.....................................................................................................3

Objectives:................................................................................................................3Mission......................................................................................................................3Keys to Success........................................................................................................4

Company Summary.....................................................................................................5Start-up Costs...........................................................................................................5Company Ownership.................................................................................................6Company Locations..................................................................................................6

Services.......................................................................................................................7Product Description..................................................................................................7Future Products........................................................................................................7

Market Analysis Summary............................................................................................8Product.....................................................................................................................8Customers................................................................................................................8Competition..............................................................................................................8Pricing.....................................................................................................................10Proposed Location..................................................................................................11

Strategy and Implementation Summary....................................................................12Strategic Influences................................................................................................12

Consumers...........................................................................................................12Competition.............................................................................................................13Environment............................................................................................................13

Competitive strategy..............................................................................................15Competitive Edge................................................................................................15

Marketing Strategy.................................................................................................15Marketing objectives............................................................................................15Marketing methods..............................................................................................16

Time line:................................................................................................................17Sales Strategy.........................................................................................................18

Management Summary..............................................................................................19Job analysis:............................................................................................................19

Job description:....................................................................................................19Training..................................................................................................................22

Financial Plan.............................................................................................................23Start-up Funding.....................................................................................................23Projected Balance Sheet )1st year)..........................................................................23

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Projected Balance Sheet (2nd year)........................................................................24Projected Balance Sheet (3nd year)........................................................................25Projected Profit and Loss (first 3 years).................................................................27Projected Cash flows (first 3 year)..........................................................................28RATIOS....................................................................................................................30APPENDIX................................................................................................................31Appendix A: Questionnaire:....................................................................................31Appendix B: Ratio’s working...................................................................................34Appendix C:............................................................................................................36

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Executive Summary Kinetic Advertisement, Inc. (KA) is a Pakistani company that rents holographic equipment. We rent out holographic equipment in different sizes. We have obtained the authorizations to be a distributor for Holocube, also we will be the only authorized distributor.KA is a small enterprise fueled by a dynamic management team with unique administrative skills, who are focused on creating, building and maintaining long term relationships with its clients. Its team includes, Mr. M. Usamah Bakhshi, Miss. Kiran Maheen, Mr. M. Luqman Arshad, Mr. Waleed Baig and, Mr. Ali Ijlal. Having lived in Lahore, Pakistan throughout their lives, the management team has compiled an extensive list of customers/ potential customers.

Objectives:To create a service-based company whose primary goal is provides unique and innovative advertising technology.To increase our number of clients served by 20% per year through superior performance and servicesTo develop start-up advertising firm that can survive off its own cash flow.To increase sales to more than 13 million by the third year.

MissionKA’s mission is to become the exclusive hologram equipment rental, and software service company in Lahore with the ability to service the surrounding areas of Lahore as well. Therefore the company's strategy is to create a limited geographical niche for itself where there are no potential competitors.

We will constantly strive to supply what the consumer is asking for, continually review what is available in the marketplace, and what isn't. Improving on what is available and providing new products and services to the areas of need will help ensure our success in the market.

Success will ultimately be measured by our customers choosing us because of their belief in our ability to meet or exceed their expectations of price, service, and selection.

KA’s vision is to continue to expand its service to other areas. The company's coverage area is constantly increasing, as the areas are becoming aware of the company's presence.

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Keys to SuccessKinetic Advertisement has identified three key factors that will be instrumental to its sustainability:

1. Ensure 100% customer satisfaction: Repeat customers and customer recommendations are valuable.

2. Design and rent out meaningful and valuable hologram products.3. Design and implement strict financial controls. This is very important because KA is a

small business thus a stand-alone entity financially.

The company is seeking a loan/credit line in the amount of $300,000 for the purpose of starting the business.Projected revenues for Year 1 to Year 3 are $210,000, $420,000, and $840,000, respectively

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Company Summary Kinetic Advertising provides unique and patented technology. It is a fully integrated 3D projection platform that provides you with the most advanced modern projection technologies. We distinguish ourselves though the unique specs of our products. Our products will offer our consumers the extra attention that will make them stand out from the rest. We plan to commence our business by 1st August2014

The name of our business will be Kinetic Advertising Inc. the company is owned by a partnership of 5 people. Its team includes, Mr. M. Usamah Bakhshi (Director Sales), Miss. Kiran Maheen and Mr. M. Luqman Arshad( Director Marketing and Sales), Mr. Waleed Baig (Director Operations) and Mr. Ali Ijlal (Director Logistics and operations)

Start-up CostsKinetic Advertising will incur the following start-up expenses:

1. Separators for the different departments, 2. 6 tables and 12chairs, with 1 couch3. 1 lockable cabinet.4. DSL router and DSL connections5. 5 laptops, including 1 printer6. Two telephones

START UP EXPENSEStart-up Requirements

Start-up Expenses Number of items

Price (Rs) Total Price (Rs)

Equipment:

HC 15 HC 40 HC 70System Equipment Laptops RouterCommunication Telephone Internet connection Internet fee per

321

51

21

12

236,250607,5002,362,500

40,0001500

100020002000

1500

708,7501,215,0002,362,500

200,0001500

200020002000

18,000

5

monthOffice Chairs Tables Sofa Separators

6-112

2000 (8000* long table)90003000

20,00090006000

4,546,750

Premises:

Rent

Advance

Utilities

2 month rent as advance

76000

50,000

76,000

152,000

50,000

Total Start-up Expenses 4,824750

Company OwnershipKinetic Adverting is a privately held partnership of 5 people. The capital structure is such that the profits/losses will be shared equally by all the partners.

Company Locations We have one location--a 1010 square feet office on the third floor in a suburban center located in Dha phase 6. It provides us with easy access to cantt, Gulbreg and surrounding areas of DHA, where there are offices of companies like Nestle, Coca-cola and etc.

Services At kinetic advertisement we work on innovative and attractive way of advertising a product. We are introducing the holographic image projection technology for the first time in Pakistan. We are using HOLOCUBE holograph equipment. This includes the modern holograph technology in a cube shaped display box.

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Product DescriptionThe Hologram box ranges in sizes from 15 inch to a life size display of 72 inch. The modern 3D holograph technology is used in the production of holocube. It is manufactured in Belgium, Europe.All three of the holocube have a high resolution of 1024x768 ensuring the life like picture quality along with a contrast ratio of 700:1 to make sure the sharpness of the image is not deteriorated. The equipment can be used independently placed on floor, a stand or table as well as can be fit into a two sided wall and can be viewed perfectly from either side. All three holocube products come with an auto 3D digital convertor that can convert simple 2D videos and pictures into digital 3D. internal storage of 4gb and externally extendable storage options gives a great room of using it for longer video advertisements. Holocube is very energy efficient and works on conventional voltage using only 60 Hz current.Holocube is being produced in Belgium and is directly imported to Pakistan with all the reselling rights reserved with us. We will not only be providing the equipment but also we will be providing our services of making 3D ads for the holocube. However this service will be outsourced to Red Tape Media.

Future ProductsFor the first year of operations kinetic advertisements will only be using holocube whereas later we plan to import the next generation holographic display known as ‘telepresence’. Telepresence is next generation holographic image projection technique in which it is not enclosed in a box but actually present just like a human being. We also plan to start out own software development center to make the advertisements for our customers.

Market Analysis Summary Product

Most of our responders, 71%, said that they will be more interested in renting the holocube, thus for the first year we plan to only import holocube and rent that. The pricing for the technology is given ahead.

CustomersKinetic advertisements will be targeting the corporate sector in particular. Since it will be a new introduction to the Pakistani market; Lahore initially, we will be charging a premium on the services that we will be providing. This is the reason our customer base will include companies who have major interest in marketing; which can be seen by their

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marketing budget. Our customers will include beverage companies, automobile companies, telecommunication, banking etc We have a diverse range of customers that we are focusing. Our customers can be anybody from fmcg’s to retail and garment companies. Following is the graph of the industries that were used for the survey

29%

29%

14%

14%

14%

Industry type

FMCGTelecommunicationfood and bevragesRetailConstruction

Almost all of the responders took part in heavy advertising with 86% saying that they rely heavily on advertising. 57% of the companies had a marketing budget bigger than 15crore. Coke said that they do not have any specific marketing budget; they will use whatever is required for marketing. 100% that is all of our responders said that they will use hologram for advertising and 71% said that they are even ready to extend their marketing budget for this technology.

CompetitionThe advertising industry has grown at a very high pace in past few years. The companies now focus quite a lot on their advertising which is why the advertising budget is one of the highest allotted budgets by all major companies nowadays. As the demand has increased, it has created many opportunities which is why there are many advertising companies working and entering the market. There is a large indirect as well as direct competition that we will be facing. It includes the top advertising companies of Pakistan which have major customers which are large companies operating in Pakistan.From our survey we found out that TVC’s is the highest used medium followed by billboards.

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30%

10%

20%

40%

Medium used

billboardsRadioprint mediaTVC's

Our competitors were also found from the survey. Our major competitor is symmetry digital, red tape media and pakmedia advertisement, which both hold 25% of the market each, followed by mindshare, synergy advertisement at 13 and 12%

25%

25%

13%

13%

25%

Competitors

Symmetry DigitalPak Media adver-tisementMindshareSynergy AdvertisementsRed Tape

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PricingSince 71% of our responders said that they will be more interested in renting the technology thus we plan to rent our technology. 63% of the responders wanted to rent this technology (HC40) from 13000-15000, thus we used that figure to develop our pricing models.

13%

13%

63%

13%

prices

7 to 1010 to 1313 to 1515 to 1818 above

Also since we will have a sole dealership with our respective companies who we get the technology, we plan to make use of that factor and charge a premium price on our products for the first few months. 86% of the responders said that they will rent the technology on need basis, thus our prices are priced on per day estimates. For those that want to rent it for 15 days or above, we will give them a 10% discount.

HTC-15 Rent Charge= Rs.11000/day Estimated No. of days rented/month= 15 days

HTC-40 Rent Charge =Rs.15000/day Estimated No. of days rented/month=10 days

HTC-70 Rent Charge=Rs.40000/day Estimated No. of days rented/month=10 days

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Proposed LocationWe will need an office in DHA phase 6 area in Lahore because of the easy access to cantt, Gulbreg and surrounding areas of DHA, where there are offices of companies like Nestle, Coca-cola and etc.In this phase the commercial area consist of 4 marlas plazas mostly and the rental cost of each floor are as below:

1st floor – 2.15 lakhs/month 2nd floor – 1 lakh/month 3rd floor – 76 thousand/month 4th floor – 60 thousand/month

Different sections could be made in it and can be used for storage and cubicle offices.This facility has a good parking area and this phase has an easy access to new airport Lahore. In addition to that the locality has a good infrastructure with all facilities being provided such as: Electricity, Sui gas and water. We plan to rent the 3rd floor costing us 76thousand per month (the office layout is given in appendix B)

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Strategy and Implementation Summary

Strategic Influences

ConsumersKinetic advertisements will be targeting the corporate sector in particular. Since it will be a new introduction to the Pakistani market; Lahore initially, we will be charging a premium on the services that we will be providing. This is the reason our customer base will include companies who have major interest in marketing; which can be seen by their marketing budget. Our customers will include beverage companies, automobile companies, telecommunication, banking etc . Mobile companies in Pakistan have gained tremendous importance as far as marketing is concerned; therefore this industry will be another prominent focus of ours. Another product which is continuously and intensely advertised is the textile industry; Lawns in particular for the ongoing season. We will be dealing with different and diverse customer segments, where we will sell or rent out product. As before our focus is on companies with huge marketing budgets that advertise their product regularly, according to the events, seasons etc. These companies mostly have focused adverts that are according to the events in the country, example Eid, Ramzan. Thus their marketing is mostly focused on specific times and rarely done randomlyThe biggest amount of advertisement is done by Q-mobile, Ufone, Coco cola, and Pepsi. To find out the percentages we will have to do a primary research since a lot of data is not available in Pakistan.Individual customers will include the following who will also be our biggest clients:

Beverage Companies

CokePepsi Automobile Companies

MercedesPorscheBMW Mobile Companies

Q MobileSamsungVoice

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Nokia

Competition

The advertising industry has grown at a very high pace in past few years. The companies now focus quite a lot on their advertising which is why the advertising budget is one of the highest allotted budgets by all major companies nowadays. As the demand has increased, it has created many opportunities which is why there are many advertising companies working and entering the market. There is a large indirect as well as direct competition that we will be facing. It includes the top advertising companies of Pakistan which have major customers which are large companies operating in Pakistan. Some of these top advertising companies and their respective major customers are:

Pak media company- Ufone Maxim advertisements- Unilever Red Tube Media- Sooper Midas- Samsung JWT artistics- LG Pakistan Mindshare- Nokia Synergy advertisement- Mobilink

All these advertising companies are quite big and have been working for long time now. The advertising market is very volatile currently because it has just been a few years since the companies have started highly focusing on advertisement. Also every company from every industry is trying to come up with some new and innovative ways to market their products. This actually has created an opportunity for new ideas and innovative ways of marketing a product and that is why many new competitors are entering the market. To further find out the sales turnover and the percentage of the market our indirect customers hold we will have to do secondary and primary research.

Environment

One of the major limitations that our target customers can face is related to the technology itself. The setting up process can take up to 3months, with high cost. If we take the example of Musion, an industry leader in Hologram technology, they charge up to $65000 rent, which is around 65lakh Pakistani rupee. If the company wants to buy the product, then yet again taking the example of Musion, they sell the technology for $220,000 which 2.5crore. Thus the whole system becomes very costly; however we can make use of the Holo Cube here, which is cheaper than the eyeliner technology. A believe a major limitation would be the internet connection problem. Live telepresence needs a fast, direct connection of 10-20 megabytes per second (Mbps), as the recordings are of higher quality.In today’s challenging environment, companies are finding new ways to advertise. The legacy of communication has unfolded over the past few decades leaving unconventional

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prints in the history of advertising. With the high involvement of technology and advanced media, several new communication channels have exploded over time. Innovation is at its peak in even Pakistan, where recently we saw the arrival of 3d advertisements in billboards, example the Cadbury, dairy milk advert and sting advert. Marketing has become one of the core competencies for a lot of companies residing in Pakistan, example the current biggest selling mobile brand in Pakistan: Q-mobile which has made marketing their unique selling point. Another good example could be safe guard and how it marketed itself successfully through its advertisement which makes use of animated character called commando safeguard. Thus we can see that companies tend to spend increasing amounts of marketing and advertising strategies, led by multinationals, the advertisement industry has become enormously complex but successful.Trying to market a new product is difficult in hard economic times. Pakistan has overall been through an economic turmoil. However looking how the Pak rupee appreciated against the dollar last week, it shows that Pakistan is moving towards positive economic growth. Another important factor is the power crises; it has hit every industry very hard and made it difficult for them to flourish given the increase in the oil prices as well (costly to operate generators). There are low foreign reserves and less investments coming into the country, which makes it more difficult to establish new business. Since we are starting off from Lahore, which is one of the most flourishing provinces of Pakistan. A lot of multinations are based here, and loads of money goes into marketing products, an example Coca Cola beverage has a marketing budget of 22 corers. Pakistan has a very unstable political system; however, in the current period the situation has improved. The current government is more supportive of new businesses and more open to giving loans. Recent government policy of reducing import tariffs and duties would also work in our favor when we import our equipment.There has been a shift in marketing from tradition to technology, in terms of approach and tools, this is actively underway in Pakistani media thanks to emerging digital means of communication. Today the advertisement industry is equipped with all those technologies that one would find globally, our production houses and agencies make use of latest techniques and modern technologies for the creation of any advertising product, This has really raised the standard of advertising products in Pakistan. A good example would be of the projector screen located ‘Ghora chowk’ round about, which shows that the trend towards video ad broadcasting is also being introduced into Pakistan. Thus we can make use of these trends to launch our product.The companies that we are targeting need to be well established, with high marketing budgets. Another factor would be to target companies that advertise regularly. Initially we are focusing on companies in Lahore, one reason being that the companies here don’t hesitate in introducing new innovation advertisements. We will be focusing on all the three industry sectors; primary, secondary, tertiary.

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There are a several external influences on our target market. For example consumers perception, maco-economic changes, technological changes, political environment and legal regulations.For the given factors we will have to make use of both secondary and primary research methods

Competitive strategyKinetic Advertisement has a strategy that allows them to leverage their competitive edge and quickly gain market penetration. KA’s competitive edge is its state of the art technology, that is being imported from one of the top distributors from Belgium

Competitive EdgeHolographic image projection is a completely new concept for Pakistani market and this technology has not been used by anyone in Pakistan yet. This introduction of a very innovative and unique medium of advertisement is what sets kinetic advertisements apart from all other firms in the industry. The introduction of holographic image projection equipment to Pakistani market is our competitive edge. But this competitive edge might get compromised after few months so we plan to keep on extending our line of innovative marketing techniques to keep kinetic advertisements unique and different from all other competitors in the market. However one advantage that we have is that we are the authorized sole distributor of Holocube in Pakistan, thus our competitive edge might not get compromised for a long while.

Marketing StrategyThe marketing strategy will concentrate on the ability to offer supreme, state of the art hologram technology equipment that is not available in the Pakistani market elsewhere. This campaign

The marketing strategy will concentrate on the ability to offer supreme, inexpensive protection for an entire family's stable of electric and electronic appliances. This campaign will be communicated through various methods and will focus on the product offerings coming from the safe, established TCIC, an icon of Cleveland for over 50 years. Please review the following sections for a more detailed analysis.

Marketing objectivesFor our business plan we conducted a research in which we held interviews with different firms, mainly large MNCs and other business firms.Kinetic advertisement is a B2B business and being a B2B business the marketing techniques to be used are different from a normal B2C business. The marketing method to be used by us would be different from other marketing or advertising firms. Since our

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USP is our equipment and the holographic image projection technology hence the marketing mediums to be used would be slightly different. The equipment needs to be displayed and the specifications or capabilities of that equipment need to be explained to the potential customers.We aim to provide a better and a whole new way to market a product using latest technology that has not been used in Pakistan yet.

Marketing methods

Innovation:Our services are completely new and different from all other marketing and advertising firm present in the market. The holographic image projection is completely a new medium for advertisement in Pakistan.

Incentives:We will be giving free demos of their own products to the companies so that they could actually see and evaluate the equipment as how could it benefit them. Furthermore we will be giving big discounts in the beginning just to give our target customers an idea and taste of what we have to offer them.

PromotionFor promotion we won’t be allocating a high budget to our promotional activities as we are being cost effective. So we will be focusing more on low cost mediums for our marketing.Our first step would be to inform the target market as to create awareness and for this we will start by:

Visiting different companies and giving presentations and free demos of our equipment and services.

In the initial months we will offer high discounts upto 100% for a very short period of time so that the potential customer would actually use it to see how it could work for them in future.

To create awareness about the product we will also set up stalls on all business related exhibitions and expos.

We will also advertise through social media, i.e Facebook, Twitter, where a complete detail of our services along with pictures, videos etc will be provided. We will also have a complete website with online ordering facility.

We will be giving brief presentations to the managers of the targeted firms and in those presentations the hologram equipment will be shown in working condition with sample of their respective products.

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Furthermore, we will setup small seminars and exhibitions of our own where our holographic image projection equipment will be displayed in fully working condition.

Building and using contacts or PR is the key in the advertising industry so we will be highly focusing on reaching out to our potential customers personally.

We also plan to launch our own website, which would be built interactively to offer customers the distinct experience that they are looking for.

To target and reach out to our potential customers (Large business firms) we will also be advertising our company in various leading magazines of Pakistan including Pakistan Business Jounal, Media blinks, Herald, Economic Affair, Vmag etc. we will also advertise of the websites of these magazines

We will be focusing the most on creating product awareness among our potential customers and on creating brand awareness, we will be designing various giveaways like paper weights, calendars, ball points, desk clocks, wall clocks, stationary holder and other such items with our brand name on it that will be gifted to the top level management of our potential customers so that our brand is recognized by them.

We will also use email marketing where a brief email including pictures and video links of our product will be sent out to managers from various firms.

We would not be using high cost mediums such as billboards and tvc’s since our target market is not individual consumers but large businesses.

We also plan to partially or completely sponsor any event where multiple businesses are involved like marketing expos.

Time line:

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ResearchImport

and setup

Promotion Launch

March- June

3 Month

July- AugPromotion

SeptemberDec-March 3 Months

Sales Strategy

KA’s sales campaign will emphasize the fact that KA is using state of the art products, imported straight from Holocube. This will be effective because Holocube is a well-known established company known for its latest, innovative hologram equipment’s.

Management Summary ‘Kinetic advertisements’ is a small company with a small workforce. The 5 business partners will make up the majority of the workforce. Furthermore we will be hiring a few more personnel. We be needing a helper/assistant, a technician and two sales assistants.

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Job analysis:The hiring preferably will be done from within Lahore since, the personnel need not be highly specialized and the job requirement is fairly basic. Ads will be given in ‘jung’ newspaper due to its large reader base and ‘rozee.pk’.

Job description:Director finance: He/she will be in charge of:

Monitoring business performance Managing and monitoring cash flow Preparing and overseeing budgets Managing and preparing accounts Competitor analysis

Skills and qualification:Must be a university graduate with a degree in finance and a passion for accounting and numbers. Good oral and written communication skills, self-motivation, excellent analytical and numeric abilities

Director Marketing: He/ She will be in charge of: Analyzing and evaluating marketing environment Monitoring opportunities and threats and performing actions to ensure

sales and brand development Analyzing all marketing activities of the business (sales-product mix,

customer profile, demographics etc) Developing, managing and implementing marketing plans and advertising

campaigns. Public relations and ensuring that the company’s image is maintained at

high standards.

Skills and qualifications: Must be a university graduate with a degree in the field of marketing. Exceptional public dealing skills. Must have a creative approach. Must have the confidence to “sell” ideas.

Director Operations: He/ She will be in charge of: Day to day operations of the business Ensuring that the operational targets are met Controlling costs and debt management Maintaining customer satisfaction

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Skills and Qualifications:Must have a university degree, excellent leadership skills, effective communication skills, high ability to synthesize. Very high problem solving abilities.

Director Logistics and distributions: He/ She will be responsible Looking over the import and purchases of equipment Organizing the storage and distribution of equipment Ensuring the delivery of right products to the right location in right time Coordinating effectively with the suppliers and the consumers

Skills and Qualifications:Must have a university degree, good understanding of supply chain management, good collaboration skills, innovative ideas to optimize logistics.

Installation and service technician: He will be responsible for: Setting up the hologram equipment in working condition Repairing any damages caused to the equipment Ensuring the safe and continuous electric supply to the equipment Keeping the equipment working by following the operating instructions

and trouble shooting.

Skills and qualification:Electronics troubleshooting, equipment maintenance experience of at least 5 years.

Office assistant: He will be responsible for:Maintaining office supplies, receiving and forwarding information, making office schedules, holding reception desk.

Skills and Qualification:Must be a college graduate with fairly good communication and typing, printing and photocopying.

Personnel Plan

Year 1 Year2 Year 3

Activity

Staff Finance Manager Delivery person 2-IT Graphics

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(driver) Designer

Operations Manager Assistant Accounts and Imports

Logistics and Distribution Manager

Operations Supervisor

Marketing and sales Managers

Assistants for every department

Office Assistant

Insurance Agent

Installation and service technician

Table: Personnel Plan

The above table gives a summary of the personnel’s that we will require for the first 3 years. Below we show the payroll plan for these personnel’s

Payroll PlanNo. Pay (years)

Staff 1 2 3Finance Manager 1

Equal share in profit

Operations Manager 1Logistics and Distribution Manager

1

Marketing and sales Managers

2

Office Assistant 1Technician 1

OutsourceGraphic Designing 25,000/hologram

10,000/imageIncrease with change in market rates

Table: Personnel Payroll Plan

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Training

strategy is important for every business small or large. The basic human resource requirement of kinetic advertisement is quite basic and conventional in nature. Most of the human capital will consist of the partners themselves.The basic recruitment and hiring would work in following manner:

The training programs will be different for both the kind of employees. The business partners will be given management training from a professional training institute Decisions pvt. Ltd. And the courses that will be attended by the managers will be:

Cohesiveness through motivation (3 sessions) Managing leadership (3 sessions)

The other employees will be trained from different training programs from another professional training institute (cyber design pvt. Ltd.) :

Basic employee training program (2 sessions) Graphic designing and IT training and forward thinking development (1 month)

Financial Plan Start-up Funding

Project Financing Structure Inputs

Basis of Assumption PKR

Equity 60% 3000000

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New Employees

Business Partners

TRAINING AND DEVELOPMENT

Trained employees

Managers

Debt 40% 2000000100% 5000000

Projected Balance Sheet )1st year)B/S for the first year

AssetsEquipmentHC-15 708750HC-40 1215000HC-70 2362500

System EquipmentLaptops 200000Projector 85000

Office EquipmentChairs 18000Tables 20000Sofa 9000Separator 6000

Total Fixed Assets 4624250

Current AssetsBank Balance 5384400DebtorsHC 15 330000HC 40 210000HC 70 200000Total CA 6124400Total Assets 10748650CLRent 760000Utilities 50000Telephone 1000Transport 15000Internet 2000Total CL 828000

Long Term LiabilityBank Loan (12.18%) 2000000

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Total Liability 2828000

Assets-Liabilities 7920650

Owner's EquityM. Usamah Bakhshi 600000M. Luqman Arshad 600000Waleed Baig 600000Ali Ijlal 600000Kiran Maheen 600000

Total Capital 3000000Net Profit 5388650Total Capital 8388650Transfer to Contingency Reserve 468000New Capital 7920650

Projected Balance Sheet (2nd year)AssetsEquipmentHC-15 945000HC-40 1822500HC-70 4725000

System EquipmentLaptops 200000Projector 85000

Office EquipmentChairs 18000Tables 20000Sofa 9000Separator 6000

Total Fixed Assets 7830500

Current AssetsBank Balance 1165915

0Debtors

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HC 15 440000HC 40 315000HC 70 400000Total CA 1281415

0Total Assets 2064465

0CLCreditorsRent 760000Utilities 50000Telephone 1000Transport 15000Internet 2000Total CL 828000

Long Term LiabilityBank Loan (12.18%) 2000000

Total Liability 2828000

Assets-Liabilities 17816650

Owners EquityCapitalNet ProfitNew Capital

Projected Balance Sheet (3nd year)AssetsEquipmentHC-15 945000HC-40 1822500HC-70 4725000Telepresence 10000000System EquipmentLaptops 200000Projector 85000

Office EquipmentChairs 18000Tables 20000

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Sofa 9000Separator 6000Shehzore 3000000Total Fixed Assets 20830500

Current AssetsBank Balance 9765150

Total Assets 30595650

Owner's EquityCapital 23751650Net Profit 6844000New Capital 30595650

Projected Profit and Loss (first 3 years)Year 1 Year 2 Year 3Rs. Rs.

HC 15 (3*10*12)*11000 3960000 5280000 Rs.HC 40 (2*7*12)*15000 2520000 378000 HC 15 (4*10*12)*15000 5280000HC 70 (1*5*12)*40000 2400000 4800000 HC 40 (3*7*12)*20000 378000

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HC 70 (2*5*12)*50000 4800000Total Revenue 8880000 10458000

Total Revenue 10458000Less ExpensesFreight Cost (280 kilos) 114750 100000 Less ExpensesCustoms (21%) 900000 600000Insurance (0.25%) 10000 13400 Insurance 13400Rent (76000*12) 912000 912000 Rent (76000*12) 912000Utilities (50000*12) 600000 600000 Utilities (50000*12) 600000Salary- Office Assistant (2*10000*12)

240000 288000 Salary- Office Assistant (2*12000*12)

288000

Telephone (1000*12) 12000 12000 Telephone (1000*12) 12000Internet (2000*12+2000) 26000 26000 Internet (2000*12+2000) 26000Miscellaneous 100000 130000 Miscellaneous 130000Transport (15000*12) 180000 300000 IT Specialist Salary 1200000Company Website (1000+10000) 11000 11000 Company Website (1000+10000) 11000Promotions PromotionsFlex (7000*5) 35000 35000 Flex (7000*5) 35000Keychains (20*500) 10000 10000 Keychains (20*500) 10000Paperweight (150*300) 45000 45000 Paperweight (150*300) 45000Printed Ballpoints (10*1000) 10000 10000 Printed Ballpoints (10*1000) 10000Website Ad. 6000 6000 Website Ad. 6000Online Magazine (3000*12) 36000 36000 Online Magazine (3000*12) 36000

Training 36000Interest Expense ( 2000000 * 12.18%)

243600 243600 Interest Expense ( 2000000 * 12.18%)

243600

Total Expenses 3491350 3378000Total Expenses 3614000

Net Profit 5388650 7080000Net Profit 6844000

Projected Cash flows (first 3 year)Operating Cashflow Year 1 Year 2 Operating Cashflow year 3Cash Receipts: Cash Receipts:HC 15 (3*10*11)*11000 3630000 4840000 HC 15

(4*10*11)*150006600000

HC 40 (2*7*11)*15000 2310000 3465000 HC 40 (3*7*11)*20000 4620000HC 70 (1*5*11)*40000 2200000 4400000 HC 70 (2*5*11)*50000 5500000Operating Cash Inflow 8140000 12705000 Operating Cash Inflow 16720000

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Cash outflow Cash outflowExpenses ExpensesFreight Cost (280 kilos) 114750 100000 Insurance 13400Customs (21%) 900000 600000 Rent (76000*12) 912000Insurance(0.25%) 10000 13400 Utilities (50000*12) 600000Rent (76000*11) 836000 836000 Salary- Office Asisstant

(2*12000*12)288000

Utilities (50000*11) 550000 550000 Telephone (1000*12) 12000Salary- Office Asisstant (2*10000*12)

24000 288000 Internet (2000*12+2000)

26000

Telephone (1000*11) 11000 11000 Miscellaneous 130000Internet (2000*11+2000)

24000 24000 IT Specialist Salary 1200000

Miscellaneous 100000 130000 Company Website (1000+10000)

11000

Transport (15000*11) 165000 275000 PromotionsCompany Website (1000+10000)

11000 11000

PromotionsFlex (7000*5) 35000 35000 Flex (7000*5) 35000Keychains (20*500) 10000 10000 Keychains (20*500) 10000Paperweight (150*300) 45000 45000 Paperweight

(150*300)45000

Printed Ballpoints (10*1000)

10000 10000 Printed Ballpoints (10*1000)

10000

Website Ad. 6000 6000 Website Ad. 6000Online Magazine (3000*12)

36000 36000 Online Magazine (3000*12)

36000

Interest Expense ( 2000000 * 12.18%)

243600 243600 Interest Expense ( 2000000 * 12.18%)

243600

Operating Cash outflow 3131350 3224000 Operating Cash outflow

3614000

Operating Cashflow 5008650 9481000 Operating Cashflow 13106000

Cash from Investing Activities

Cash from Investing Activities

EquipmentHC-15 708750 236250 Shehzore 1 Pickup 3000000HC-40 1215000 607500 Telepresence 10000000

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HC-70 2362500 2362500System EquipmentLaptops 200000Projector 85000

Office EquipmentChairs 18000Tables 20000Sofa 9000Seperator 6000Cash outflow 4624250Owner's CapitalM. Usamah Bakhshi 600000M. Luqman Arshad 600000Waleed Baig 600000Ali Ijlal 600000Kiran Maheen 600000Cash inflow 3000000

Cashflow from Investing Activities

-1624250

Cashflow from Fianncing Activites

Cash from Financing ActivitiesRepay Loan 2000000

Bank Loan (12.18%) 2000000

Change in Cashflow 5384400 6274750 Change in Cashflow -18940005384400 Beginning Bank

Balance11659150

Total Bank Balance 5384400 11659150 New Balance 9765150

RATIOSRatiosYears

1 2 3PERFORMANCE % % %Liquidity RatiosCurrent Ratio 7.39 15.2Net working capital Ratio

0.49 0.58 0.3

PROFITABILITY

29

RATIOSROA 0.5 0.34 0.22Profit Margin 0.6 0.67 0.65ACTIVITY RATIOSAsset turn over 0.82 0.5 0.34CAPITAL STRUCTURE RATIOS

0.94

Debt to equity ratio 0.26 0.94ROE 0.68 0.39 0.22

APPENDIXAppendix A: Questionnaire:

Kinetics AdvertisingWhat is your company name?

Which sector does your company belong to

Does your company rely heavily on marketing and advertising?

a. yes

 b. noWhat is your company’s approximate marketing budget for a year

 less than 1 crore

30

 1-5 crore

 5-10crore

 10-15crore

 15 crore aboveWhat medium do you use for advertising at the moment?

 a. Billboards

 b. TVCs

 c. Print Media i.e newspaper

 b. Radio

other: _____________

Which company do you use to advertise?

Would you be interested in using Hologram technology for marketing?

 a. yes

 b. noWhat sort of technology would you be more interested in?See the links to choose option: http://www.holocube.eu/files/hc32_01.jpg OR b.http://animationews.com/wp-content/uploads/2013/01/musion-toyota-launch.jpg

 a. Holocube (hologram inside a cube)

  b.Telepresence (device that can project holograms)Would you be willing to extend your marketing budget to use this new technology

 a. yes

 b. noWould you be interested in renting this technology?

 Yes

 NoHow often would you need to use this technology?

 Monthly

 Quarterly

31

 Every six months

 Yearly

 On need basis (randomly)On a scale of 1-5, how important is it for the content to be created for you?1 being very important and 5 being not important

1 2 3 4 5

Select a value from a range of 1 to 5.

How much would you be willing to pay for such a technology for a day?(given the size is 40inches or 3.25 feet)

 7000-10000

 10000-13000

 13000-15000

 15000-18000

above 18000

What size of the hologram would you prefer in the holocubeSize in inches

 14

 15

 17

 17 aboveWould you be interested in receiving more information on these products as they evolve? If so please provide your email address.

32

Appendix B: Ratio’s workingYear 1Liquidity ratios:Current ratio: current asset/ current liab 6124400/828000=7.39

Net working capital ratio: (current assets-current liab)/ total asset(6124400-828000)/10748650 =0.49Profitability ratios:ROA: Net income/ total assets 53886540/10748650 =0.5

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Profit margin: Net income/ sales(revenue) 5388650/8880000 =0.6

Activity ratios:Asset turnover ratio: sales/total assets 8880000/10748650 =0.82Capital Structure ratios:Debt to equity ratio: total liab/ total eq 2828000/3,000,000 =0.94

Year 2

Liquidity ratios:Current ratio: current asset/ current liab 12814150/828000=15.2

Net working capital ratio: (current assets-current liab)/ total asset(12814150-828000)/20644650 =0.58Profitability ratios:ROA: Net income/ total assets 7080000/20644650 =0.34

Profit margin: Net income/ sales(revenue) 7080000/10458000 =0.67

Activity ratios:Asset turnover ratio: sales/total assets 10458000/20644650 =0.5Capital Structure ratios:Debt to equity ratio: total liab/ total eq 2828000/10736650 =0.26

Year 3Liquidity ratios:Net working capital ratio: (current assets-current liab)/ total asset9765150/30595650 =0.3Profitability ratios:ROA: Net income/ total assets 6844000/30595650 =0.22

Profit margin:

34

Net income/ sales(revenue) 6844000/10458000 =0.65

Activity ratios:Asset turnover ratio: sales/total assets 10458000/30595650 =0.34

Appendix C:

35Washroom

Elev

Office 3

Office 2Office 1Storage Room

36

Elev

Appendix C: Job descriptions

37