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p. +880 31
717437
f. +880 31
718186
info@flashnet.co
m
www.flashnet.co
m
FlashNet Online
Ltd.
Executive Summary
FlashNet Online Ltd. Online Ltd. provides broadband Internet connections to several Chittagong
neighborhoods. Utilizing WDM technology and proprietary antennas and repeaters, FlashNet
Online Ltd. Online Ltd. will be able to serve a large area with broadband Internet connections.
The market for broadband Internet connections is wide open. Demand for traditional broadband
connections is surpassing conservative forecasts. The market is even more exciting due to the
significantly lower costs needed in terms of delivery infrastructure. As FlashNet Online Ltd.
Online Ltd.' customer base grows, costs decrease through scales of economy, creating an even
more compelling argument for FlashNet Online Ltd. Online Ltd.' existence.
FlashNet Online Ltd. Online Ltd. has targeted three distinct groups. The first is Home, a market
segment that uses the Internet the most and also have high expectations regarding the speed of
the connection. The second group is Office, people with disposable income, not a lot of
excessive time on their hands, and a group that uses the Internet a fair amount, both personally as
well as professionally. The last group that will be targeted is techies. This group is the early
adopters of any type of technology and spend incredible amounts of time immersed in Internet
technology.
FlashNet Online Ltd. Online Ltd. is a compelling business concept that leverages advances in
technology and proprietary tools to offer a market need at below market prices. In addition to
earning great margins with low infrastructure costs, margins increase as the customer base
increases. This exciting business plan has a high likelihood of success. The business will
earn modest profits in year two, increasing exponentially in year three. Net profit is forecasted to
be commensurate in years two and three.
Highlights
BDT 2,500,000.00
BDT 2,000,000.00
BDT 1,500,000.00
BDT 1,000,000.00
BDT 500,000.00
BDT 0.00
Year 1
Year 2
Year 3
(BDT 500,000.00)
(BDT 1,000,000.00)
Sales
Expense
Net Profit
Mission
Committed to provide quality internet services by implementing next generation
technologies with the strongest network coverage & innovative team for ultimate
customer satisfaction.
Vision
The internet is one of the most liberating, exciting features of life in the 21st century. Whatever
youre into music, news, views, video, information, chat, and contact, research, for business,
pleasure or education we think you should be able to enjoy uninterrupted access to it, wherever
you are, whenever you want.
Objectives
Provide, fast, reliable, wireless Internet access.
Treat customers with the upmost respect.
Become profitable within two years
Keys to Success
Practice disciplined growth.
Reach profitability by year two.
Ensure that the customer's needs are met and maintain a 90% customer retention ratio.
Industry Analysis
The annual earnings from broadband internet penetration in Bangladesh is expected to reach Tk.
128 billion by 2020 if the country ensures a rule-based policy regime.
Bangladesh's internet penetration rate may grow to 32 percent at household level and 66 percent
at business level by 2020 from the existing average of four percent, according to the study
conducted by Boston Consulting Group USA.
GSM (Global System of Mobile Communication) Association safeguards the interest of the
mobile communications industry globally. The association unites around 800 mobile operators
from 219 countries.
Bangladesh has a bigger chance than any other countries to use its 3G (third generation)
spectrum for broadband rollout.
Spectrum cost should be nominal to ensure the affordability of broadband services.
1.3 billion fixed phones now cover 19.4 percent of the world's total population, while 4.3 billion
mobile lines link 64 percent. GSM operators cover 80 percent of the total mobile subscribers.
A 10 percentage-point increase in internet penetration leads to 1-1.25 percent leap in GDP (gross
domestic product), 3-10 percent jump in production, one percent in new business, 2 percent in
FDI (foreign direct investment) and 8-9 percent increase in government revenues.
In Bangladesh, 48 percent urban people are aware of internet services, while 29 percent of the
rural population have heard about the service..
Bangladesh will have around 20 million internet subscribers by 2020 if proper policy support is
provided, and 90 percent of the users will be added through wireless connections.
The study was part of an in-depth research into the adoption rate of internet and its impact in the
emerging economies with special focus on Bangladesh, Thailand and Serbia.
Currently around five million people in Bangladesh enjoy internet services offered by both
mobile and fixed internet service providers.
Description of Business
FlashNet Online Ltd. Online Ltd. will be formed in 2015 to offer an inexpensive broadband
Internet connection to compete with DSL or cable offerings. Using WDM technology, it is
inexpensive to set up a neighborhood network. The company was founded by S.M. Rasel along
with Shahinur Rashid, Shafiqur Rahman and Shakila Akter Shipu. We will rely on outside
investors for the necessary start-up costs.
Location
The corporate office of FlashNet Online Ltd. Online Ltd. located at IIUC Tower, 13th Floor,
1700/A, Sk. Mujib Road, Agrabad, Chittagong, Bangladesh. Our primary objective to cover
Agrabad area.
Interior
FlashNet Online Ltd. Online Ltd. will provide fiber optic networks using latest WDM
technology in Chittagong. We will have 25 POP stations in Chittagong Metropolitan Area that
enable to connect user easily with low cost investment, Where Core fiber Network is fully
Redundant. We will also have wireless backup backbone in case of physical connection of both
trunk has been disconnected. It will connection oriented routing protocol and connectionless
oriented routing protocol. To more security in user LAN we would provide different subnet and
VLAN facilities each and every users LAN.
Hours of Operation
Our Corporate office will start from 8 am and will be close at 9 pm every day except Sunday.
Primary connectivity through BTCL bandwidth with backup bandwidth from Mango Tele
Services
Massive fiber redundancy each and every POP if both are fails the Wireless back up will
active
Stand by vehicle with generator to recover the backup power failure at COL POP
Management
S. M. Rasel, founder and president will be the anchor of the management team. S. M. Rasel
received his undergraduate degree in BBA from Bangladesh University of Business and
Technology (BUBT). While he enjoyed the course work he recognized that it was not something
that he was interested in pursuing as a career. He decided that it would be in his best interest to
study for an MBA, however, he was not immediately ready to do this.
He began the MBA program at Chittagong University. His course of study concentrated on
entrepreneurial ventures, recognizing at some point his desire to start his own business. Near the
end of his second year, He began to hear about WDM technology. He became interested in what
he saw was a strong market need for inexpensive broadband Internet connections transmitted
wirelessly, thereby significantly decreasing delivery costs. Rasel formed FlashNet Online Ltd.
Online Ltd. to fulfill this market need.
The management team consists of other three key people. See the table
Operations Strategy
Dimension
Capacity
Strategy
Growth as needed through additional place - but capacity added
carefully
Facilities
Distributed facilities, each facility being very similar to the next, all
focused around the same package - although the uniformity is
beginning to change
Process
Technology
processes
A leader in the technology of ISP.
Vertical
Integration
quality improvement
Workforce
Financial Management
START-UP FUNDING
Start-up Expenses to Fund
Tk. 95,000
Tk. 10,05,000
TK. 11,00,000
Assets
Non-cash Assets from Start-up
FLASHNET ONLINE LTD. -
Tk. 50,000
Tk. 9,94,500
Tk. 55,500
TOTAL ASSETS
TK. 11,00,000
Tk. 0
Long-term Liabilities
Tk. 0
Tk. 0
TOTAL LIABILITIES
TK. 0
Capital
Planned Investment
Investor 1
Tk. 5,50,000
Investor 2
Tk. 5,50,000
TK. 11,00,000
(Tk. 95,000)
TOTAL CAPITAL
TK. 10,05,000
TK. 11,00,000
Total Funding
Tk. 11,00,000
Start-up Expenses
Legal
Tk. 10,00,000
Stationery etc.
Tk. 10,000
Consultants
Tk. 5,000
Insurance
Tk. 30,000
Rent
Tk. 24,000
Tk. 5,000
Expensed Equipment
Tk. 5,000
TK. 10,79,000
Start-up Assets
Cash Required
Tk. 9,00,000
Long-term Assets
Tk. 2,00,000
TOTAL ASSETS
TK. 11,00,000
Total Requirements
Tk. 11,00,000
10
Start-Up Summary
Start-up s ummery
BDT 1,100,000.00
BDT 1,100,000.00
BDT 1,100,000.00
BDT 1,095,000.00
BDT 1,090,000.00
BDT 1,085,000.00
BDT 1,080,000.00
BDT 1,079,000.00
BDT 1,075,000.00
BDT 1,070,000.00
BDT 1,065,000.00
A sset
In ve s t m e n t
Loan
Ex p e n s e
YEAR 2
YEAR 3
Sales
Tk. 5,65,840
Tk. 15,26,650
Tk. 23,14,430
Tk. 18,290
Tk. 66,330
Tk. 1,05,720
Tk. 0
Tk. 0
Tk. 0
TK. 18,290
TK. 66,330
TK. 105,720
Gross Margin
Tk. 5,47,550
Tk. 14,60,320
Tk. 22,08,710
Gross Margin %
95.00%
95.00%
95.00%
Tk. 7,88,000
Tk. 9,56,000
Tk. 10,76,000
Expenses
Payroll
FLASHNET ONLINE LTD. -
11
Sales
and
Marketing
and
Tk. 56,000
Tk. 1,20,000
Expenses
Depreciation
Tk. 9,960
Tk. 10,020
Tk. 10,020
Rent
Tk. 24,000
Tk. 24,000
Tk. 24,000
Utilities
Tk. 96,000
Tk. 1,30,000
Tk. 1,50,000
Insurance
Tk. 30,000
Tk. 30,000
Tk. 30,000
Payroll Taxes
Tk. 88,200
Tk. 1,13,400
Tk. 1,31,400
Other
Tk. 60,000
Tk. 60,000
Tk. 60,000
Tk. 9,20,160
Tk. 11,79,420
Tk. 14,01,420
(Tk. 5,72,610)
Tk. 80,900
Tk. 6,07,290
EBDIT
(Tk. 5,62,650)
Tk. 90,920
Tk. 6,17,310
Interest Expense
Tk. 0
Tk. 0
Tk. 0
Taxes Incurred
Tk. 0
Tk. 24,270
Tk. 1,82,190
Net Profit
(Tk. 5,72,610)
Tk. 56,630
Tk. 4,25,100
Net Profit/Sales
-156.52%
4.27%
20.10%
12
Balance Sheet
PROJECTED BALANCE SHEET
YEAR 1
YEAR 2
YEAR 3
Cash
Tk. 2,21,720
Tk. 3,00,420
Tk. 7,60,140
Tk. 0
Tk. 0
Tk. 0
TK. 2,21,720
TK. 3,00,420
TK. 7,60,140
Long-term Assets
Tk. 50,000
Tk. 50,000
Tk. 50,000
Accumulated Depreciation
Tk. 9,960
Tk. 19,980
Tk. 30,000
TK. 1,40,040
TK. 1,30,020
TK. 1,20,000
TOTAL ASSETS
TK. 3,61,760
TK. 4,30,440
TK. 8,80,140
Year 1
Year 2
Year 3
Accounts Payable
Tk. 1,29,380
Tk. 1,41,420
Tk. 1,66,030
Current Borrowing
Tk. 1,00,000
Tk. 1,00,000
Tk. 1,00,000
Tk. 0
Tk. 0
Tk. 0
TK. 29,380
TK. 41,420
TK. 66,030
Long-term Liabilities
Tk. 1,00,000
Tk. 1,00,000
Tk. 1,00,000
TOTAL LIABILITIES
TK. 3,29,380
TK. 3,41,420
TK. 3,66,030
Paid-in Capital
Tk. 7,00,000
Tk. 7,00,000
Tk. 7,00,000
Retained Earnings
(Tk. 95,000)
(Tk. 6,67,610)
(Tk. 6,10,980)
Earnings
(Tk. 5,72,610)
Tk. 56,630
Tk. 4,25,100
TOTAL CAPITAL
TK. 32,390
TK. 89,020
TK. 5,14,120
TK. 3,61,760
TK. 4,30,440
TK. 7,80,140
Assets
Current Assets
Long-term Assets
Current Liabilities
13
Break-Even Analysis
Average per-unit revenue: based on the Tk. 700 monthly access fee.
Average per-unit variable cost: costs based on infrastructure, and administrative costs.
Estimated monthly fixed costs: Internet connections costs.
Break-Even Analysis
7000
6000
5000
4000
3000
2000
1000
0
-1000
-2000
-3000
-4000
-5000
-6000
-7000
BREAK-EVEN ANALYSIS
Monthly Revenue Break-even
FLASHNET ONLINE LTD. -
14
Tk. 80,720
Assumptions:
Average Percent Variable Cost
5%
Tk. 76,680
Ratio Analysis
RATIO ANALYSIS
YEAR 1
YEAR 2
YEAR 3
INDUSTRY
PROFILE
Sales Growth
0.00%
262.63%
59.38%
15.97%
0.00%
0.00%
0.00%
56.35%
35.17%
76.99%
96.55%
87.48%
Long-term Assets
64.83%
23.01%
3.45%
12.52%
TOTAL ASSETS
100.00%
100.00%
100.00%
100.00%
Current Liabilities
47.56%
31.76%
11.38%
30.66%
Long-term Liabilities
0.00%
0.00%
0.00%
23.07%
Total Liabilities
47.56%
31.76%
11.38%
53.73%
NET WORTH
52.44%
68.24%
88.62%
46.27%
Sales
100.00%
100.00%
100.00%
100.00%
Gross Margin
95.00%
95.00%
95.00%
100.00%
90.73%
74.90%
73.80%
Percent of Sales
0.00%
0.00%
0.00%
1.37%
-156.52%
6.10%
28.72%
1.03%
Current
0.74
2.42
8.48
1.97
Quick
0.74
2.42
8.48
1.50
47.56%
31.76%
11.38%
59.78%
-1767.98%
90.88%
118.12%
2.93%
-927.10%
62.02%
104.68%
7.28%
Additional Ratios
Year 1
Year 2
Year 3
Main Ratios
15
-156.52%
4.27%
20.10%
N/A
Return on Equity
-1767.98%
63.62%
82.69%
N/A
11.59
12.17
12.17
N/A
Payment Days
27
26
24
N/A
5.92
10.17
3.64
N/A
0.91
0.47
0.13
N/A
(Tk. 765)
Tk. 5,900
Tk. 49,412
N/A
Interest Coverage
0.00
0.00
0.00
N/A
Assets to Sales
0.17
0.10
0.27
N/A
48%
32%
11%
N/A
Acid Test
0.74
2.42
8.48
N/A
Sales/Net Worth
11.30
14.90
4.11
N/A
Dividend Payout
0.00
0.00
0.00
N/A
Activity Ratios
Debt Ratios
Debt to Net Worth
Liquidity Ratios
Additional Ratios
Marketing
FlashNet Online Ltd. Online Ltd. will take various marketing plan to establish in market. In this
market Chittagong is not so competitive. We will set an attractive price also take various
promotional strategy.
16
Market Analysis
Within the last three years there has been a proliferation of broadband Internet connections. With
so many people enjoying fast connections at work, they are no longer willing to deal slow
connection. With the advent of WDM technology, customers can now enjoy a fast connection
with inexpensive way. The targeted market segments are: Home, Office and Techies.
Year 1
Year 2
Year 3
Home
5,400
6,000
7,500
Office
3,400
3,600
4,200
Techies
1,000
1,100
1,300
Total
9,800
10,700
13,000
Customers will grow slowly in first two years but after the complete of second year customers
will increase very fast. So revenue will increase in third year.
15%
10%
5%
0%
Year 1
Year 2
Techies
Office
Home
Year 3
Home
17
Office
Techies
Market Segmentation
FlashNet Online Ltd. Online Ltd. has chosen the three aforementioned target markets due to their
adoption of broadband Internet technology. It is these three groups that are most likely to use a
fast connection and the most willing to pay a premium for the connection.
Market Segments
Techies; 10%
Home
Office
Office; 35%
Techies
Home; 55%
Competition
As mentioned in the previous section, DSL, cable, and satellite access are the competitors in the
broadband market. Consumer buying patterns are based on two factors:
Convenience: this is often based on where the outlet cords are based in the house,
whether the computer will be located closer to the cable TV or nearer to a phone jack.
There are two main competitors in this area- Chittagong Online Limited (COL), Chittagong
Telecom Services Ltd (CTSL).
18
Pricing
As mention earlier we will provide inexpensive broadband connection compare to our
competitors. Our main target is to provide internet service with least cost and capture market
with lower price.
Our Price
Competitors Price
COL
Package
CTSL
Price
396 kbps
Tk. 500
N/A
N/A
512 kbps
Tk. 800
Tk. 1,000
Tk. 1,000
1 mbps
Tk. 1,400
Tk. 1,750
Tk. 1,800
1.5 mbps
Tk. 2,000
N/A
N/A
2 mbps
Tk. 2,500
Tk. 3,000
Tk. 3,200
4 mbps
Tk. 3,500
N/A
N/A
5 mbps
Tk. 4,000
N/A
N/A
*Youtube speed- 10 mbps and FTP Server speed- 20 mbps for all users.
Advertising/postings with local retailers and commercial businesses. This will provide
FlashNet Online Ltd. with great visibility in the exact community that it operates in.
Mailings. FlashNet Online Ltd. will adopt a targeted mailing campaign to local residents.
Website. FlashNet Online Ltd. will leverage its website as a comprehensive and efficient
source of marketing/sales information.
Sales Strategy
19
The sales strategy that FlashNet Online Ltd. will adopt is based on developing an awareness of
FlashNet Online Ltd.' service as a viable alternative to Cable and DSL within the community.
The message used will be that you can receive broadband speed connections to your computer,
wherever it may be, even your laptop on your front lawn, at a price that is a fraction of the
current competitors'. This will be done with targeted advertising with local retail/commercial
establishments in the area. Additionally, FlashNet Online Ltd. will rely on mailings to get the
word out. Lastly, FlashNet Online Ltd. will have a website for marketing, sales, and
administrative purposes.
Sales Forecast
FlashNet Online Ltd. has developed a conservative sales forecast. Adoption rates of
customers are fairly steady from one month to the next. A conservative approach has been
adopted to minimize any external variables that may affect future operations.
FlashNet Online Ltd. believes that it will experience extensive growth for several years
for several reasons. The first is the general adoption of broadband connections which has
been encouraging for the last several years. Another reason FlashNet Online Ltd. believes
their forecast to be accurate is it offers a viable, less expensive alternative to current
broadband connections.
20
monthly s ales
60000
50000
40000
30000
20000
10000
0
Sales by years
BDT 2,500,000.00
BDT 2,314,430.00
BDT 2,000,000.00
BDT 1,526,650.00
BDT 1,500,000.00
BDT 1,000,000.00
BDT 565,840.00
BDT 500,000.00
BDT 0.00
Ye a r 1
Ye a r 2
Ye a r 3
21
SALES FORECAST
YEAR 1
YEAR 2
YEAR 3
Tk. 5,65,840
Tk. 15,26,650
Tk. 23,14,430
Other
Tk. 0
Tk. 0
Tk. 0
TOTAL SALES
TK. 5,65,840
TK. 15,26,650
TK. 23,14430
Sales
Launch Strategy
FlashNet Online Ltd. will open its doors for business on April 1, 1996. S.M. Rasel is already
devoting full time to this venture. Shahinur Rashid, Shafiqur Rahman and ShakilaAkterShipu are
contributing many hours to the planning and launch phase of this business. They will transition
to salaried contributors as the business evolves.
Equipment will be ordered on March 1, 2016. The long lead item which was ordered on February
1, 2016. The install date promised is March 15, 2016. This allows two weeks for debugging and
testing of the system.
Growth Strategy
Growth is expected to be very fast. After the third month it is expected that 100 new users will be
added each month. Our current staffing will be able to accommodate this until the sixth month
when two additional part-time technical people will be hired to handle the phones. We will hire
Computer Science majors from University. The key concern is to be prepared for growth that is
twice as fast as this. We must have sufficient resources (funding) to meet the demand in this
burgeoning market.
22
Several key changes will be investigated when the subscriber base reaches 1,000. The first major
change will be to upgrade our bandwidth to 10Mbps.
23