internet cafe business plan
DESCRIPTION
A business Concept for starting based business like ISP in Bangladesh. This Business plan was prepared for The department of Business Studies of ULAB.TRANSCRIPT
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
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.