Business Plan

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
Optical Sensor Detector
Gantry
5
Competitive Advantages
Critical Success Factors

• Clearly defined target market

• Customized carpark management system
  catered to needs of specific customers

• 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 - S1 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 1 Year 2 Year 3
Year 4 Year 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

• (c) Ratio Analysis

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
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

• (d) Financial Returns

Year 3 Year 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)
Investors Share of dividends -
48,000 86,400 84,000 Add
Contribution from founders - 54,000
42,000 60,000 Dividends from
investment - 102,000 128,400
144,000 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
100,000 200,000 200,000
200,000 100,000 200,000
275,000 300,000
17
Financial Matters

• (d) Financial Returns

Year 3 Year 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

• 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...