COLLEGE OF POLYTECHNICS JIHLAVA
Obor finance a řízení
Department of Economics
Business Plan for the Fast Transportation Agency
Bakalářská práce
Author: Ahmad Tamim Rashed
Vedoucí práce: Ing. Petr Tyráček, Ph.D., MBA
Jihlava 2017
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Abstract
The purpose of this bachelor thesis on the topic Business plan for the startup of Fast Transportation agency provider is a business plan that covers the financial analysis and recommendations.
The thesis divided into two main parts.
The first part of this business plan built on theoretical research from many resources such as books, journals, and interview, Internet. Internet data was one of the supportive resources during the analysis; also, the interview research was well-organized date used in this thesis it found via friends of author who had massive experience in related field, in which we can find out some necessary information for successfully managing business activities, and you can find information about what is a business activity, what forms of the business organization we now, what is a business plan and what part it contains.
In the second part, The business plan’s financial analysis according to the data research. The conclusion is then the evaluation and recommendation based on the results of the financial study.
Keywords:
Business activity, forms of business organization, industry analysis, business plan, market analysis, marketing plan, financial analysis
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Acknowledgements:
Foremost, I would like to express my sincere gratitude to my advisor/supervisor of this bachelor thesis
Ing. Petr Tyráček, Ph.D., MBA.
For his patience, motivation, enthusiasm, and immense knowledge while writing the thesis. His guidance helped me in all the time of research and writing of this thesis. I could not have imagined having a better advisor and mentor for my Bachelor study.
Last but not least, I would like to thank my family, my friends, my colleague for supporting me for having required information about my business plan.
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Prohlášení
Prohlašuji, že předložená bakalářská práce je původní a zpracoval/a jsem ji samostatně.
Prohlašuji, že citace použitých pramenů je úplná, že jsem v práci neporušil/a autorská práva
(ve smyslu zákona č. 121/2000 Sb., o právu autorském, o právech souvisejících s právem autorským a o změně některých zákonů, v platném znění, dále též „AZ“).
Souhlasím s umístěním bakalářské práce v knihovně VŠPJ a s jejím užitím k výuce nebo k vlastní vnitřní potřebě VŠPJ.
Byl/a jsem seznámen/a s tím, že na mou bakalářskou práci se plně vztahuje AZ, zejména §
60 (školní dílo).
Beru na vědomí, že VŠPJ má právo na uzavření licenční smlouvy o užití mé bakalářské práce a prohlašuji, že souhlasím s případným užitím mé bakalářské práce (prodej, zapůjčení apod.).
Jsem si vědom/a toho, že užití své bakalářské práce či poskytnutí licence k jejímu využití mohu jen se souhlasem VŠPJ, která má právo ode mne požadovat přiměřený příspěvek na
úhradu nákladů, vynaložených vysokou školou na vytvoření díla (až do jejich skutečné výše), z výdělku dosaženého v souvislosti s užitím díla či poskytnutím licence.
V Jihlavě dne / / /
......
Podpis
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Contents
1 Introduction ...... 1
2 Literature Research ...... 3
2.1 business activities ...... 3
2.1.1 Business definition ...... 3
2.1.2 General conditions ...... 3
2.2 Types of Business organization ...... 3
2.3 How to register the company in Afghanistan? ...... 4
2.4 Industry analysis ...... 5
2.4.1 Industry overview ...... 5
2.4.2 Industry Size & Players in The Industry ...... 5
2.4.3 Growth Rate and Growth Potential ...... 6
2.5 Business plan ...... 6
2.5.1 The uses and importance of a business plan ...... 6
2.6 Parts of a business plan: ...... 6
2.6.1 Executive summary ...... 7
2.6.2 Company Overview /Description ...... 7
2.6.3 Market analysis ...... 7
2.6.4 Marketing plan ...... 15
2.6.5 Operational plan ...... 16
2.6.6 Financial Plan...... 16
2.6.7 Risk evaluation...... 21
2.6.8 Appendixes ...... 21
3 Business plan for the establishment of Fast Transportation Agency ...... 22
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3.1 Executive summary ...... 22
3.1.1 Company overview ...... 23
3.1.2 Objective ...... 23
3.1.3 Goals ...... 24
3.2 Market analysis ...... 25
3.2.1 Market Segmentation ...... 25
3.2.2 Target market ...... 26
3.2.3 Strategic Market Positioning...... 27
3.2.4 Competitor analysis ...... 27
3.2.5 Competitive Advantage ...... 28
3.2.6 PEST Analysis ...... 29
3.2.7 SWOT analysis ...... 30
3.3 Marketing Mix ...... 31
3.3.1 Product and services ...... 31
3.3.2 Value Proposition...... 33
3.3.3 Product/services strategy ...... 34
3.3.4 Place ...... 35
3.3.5 Partnership ...... 36
3.4 Marketing Communication Plan Strategy: ...... 36
3.5 Source of income : ...... 39
3.6 Marketing survey + Results of survey ...... 39
3.7 Operational Plan ...... 44
3.7.1 Operating routes ...... 44
3.7.2 Management structure ...... 46
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3.7.3 Risk Management ...... 49
3.8 Financial plan ...... 51
3.8.1 Investment plan ...... 51
3.8.2 Source of financing ...... 52
3.8.3 Balance sheet ...... 52
3.8.4 Sensitivity Analysis ...... 53
3.9 Conclusion ...... 63
3.10 References ...... 65
4 List of Charts, tables, pictures ...... 67
4.1 Charts ...... 67
4.2 Tables ...... 67
4.3 Pictures ...... 68
5 Appendixes ...... 69
5.1 Balance sheet format in Afghanistan ...... 69
5.2 Example of Income statement in Afghanistan ...... 72
5.3 Example of Cash flow in Afghanistan ...... 73
5.4 Questionnaires ...... 74
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1 Introduction
Fast Transportation agency Co-Owner
Wazir Akbar Khan Abdul Salam Rashed
15 street Tamim Rashed
Kabul Afghanistan Emal Bakhshi
The subject of my thesis is a business plan for the creation of FAST (TEEZ) transportation agency. After I had studied finance and management course, I comprehend how to make the logical decision not just for my benefits also for the whole society, how to make the plan and how enables me to allocate my financial resources efficiently and set realistic performance targets. Even by studying of finance and management, I understood how to increase the competitive advantage of business it enables my business plan to respond appropriately to changes in target markets and stay ahead of its competitors.
Currently the poor performance of private transport system and public transport system especially in bus transport and taxi services becoming uninteresting and unacceptable for the people around Afghanistan , unfortunately, the massive number of people have been complaining since extended period because of poor level of services, Which have been affecting the people’s punctuality for being late for their work or school, and Government transport buses are not running to every route.
According to my research there are many transportation agencies which are operating in Afghanistan, but they have weak quality transportation systems or even we can say there is no transportation system, old buses without consideration about the needs of customers, they don't have any standard transportation system, Which means if you look around to transportation of Afghanistan even just one company don’t have their simple timetable that the buses will come on the time to take the people to their destinations. This is the main reason which I had decided to not just to write a business plan also to implement this business plan to the Afghanistan, By the establishment of the business plan in real.
The Idea of Business plan of Fast Transportation agency is something really different from current transportation or organizations which are currently operating in Afghanistan, After fall of the
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Taliban regime in 2001 to assess the extent to which Afghanistan’s transition has been achieving durable achievements, 16 years has been provided opportunities to determine the progress towards highways, developed streets with good condition, which connecting each province together. According to United Nations estimate, the current population of Afghanistan is 34,190,069 million people there is a very high-level of consumption in transportation. That is the reason that currently there is a significant market for the travel industry which is day by day increasing the number of travelers around the country, according to my research there are vast number of population using buses and taxi to go from one destination to another, because of universities, jobs, sightseen and etc, I am sure because of lack of competitors, and uniqueness of the Bussiness in Afghanistan there is a high demand.
According to Forrester research the travel agency is one of the fastest-growing parts of the economy, which will count for 32 percent of all business to consumer in 2003, the online sales of travel agency rushed around 200 percent in the last year alone, which getting bigger or increasing from $3.1 billion to $8 billion in 2001. So Fast transportation agency believes that now is the right time to be entering in the transportation agency.
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2 Literature Research
2.1 business activities
2.1.1 Business definition
“Business is an organization that provides goods or services to earn a profit." With this definition, business activity over the delivery of goods and services aim to make a profit. An organization is producing a profit when "total revenues" in a period is higher than the "total cost." Profit is the main aspect of business activity so that the advantage can be enlarged or goes to long term. [1] 2.1.2 General conditions
According to ACBR, Ministry of Commerce & Industry conditions for entry into the business in Afghanistan: [2]
The person must be +18 years old The individual must be mentally healthy and able to manage or direct the company in his/her capacity. The individual mustn’t have criminal record 2.2 Types of Business organization
In your business plan, you'll need to provide details about the legal ownership of your business. Any potential lender, investor, grant provider or anyone who might offer other kinds of help will want to know what you have the legal right to be negotiating with them and that your business is or will be created by work or act legal procedures.
Under the new commercial laws of Afghanistan (2007) individuals and businesses who would like to become legal entities in Afghanistan need to register with Afghanistan Central Business Registry with the Ministry of Commerce and Industry ( MoCI). [2]
There are four kinds of legal entities for individuals and business in Afghanistan:
Sole Proprietorship: someone who owns the company independent by themselves.
In another word, we can say If you're in business by your self and didn't create a recognized or proper business structure, so you're already a sole proprietor.
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Partnership: in this company must be two or more persons join to create sustain a business while contributing some form of money, property, and skill while being directly impacted by the profit or loss of the business
Corporation: this business structure enables prospective shareholders to exchange cash and property in exchange for capital stock
Limited liability company (LLC): this is a state-authorized business structure that falls under state-specific regulations that are composed of members who are the owners. 2.3 How to register the company in Afghanistan?
Afghanistan Central business Register ( ACBR) is the place where companies or businesses able to register in couple hours. It combines all of the functions previously done by the commercial court, Ministry of Justice (MoJ)and Ministry of Finance (MoF).
It is very simple easy and fast with low fee the business registration process which involves obtaining a tax identification number (TIN). Submitting business information in the official Gazette and getting referral letter to any licensing agency for a low flat fee in short period, This certainly helps and encourage the businesses to enter the formal economy.[2]
Offices:
ACBR-HQ: Ministry of Commerce & Industry, Dar-ul-Aman road, Kabul. ACBR-Jalalabad Office: Mostofiat Building, Mostafiat Chowk, Jalal Abad. ACBR-Mazar-e-Sharif: Bagh Huzoor, Welayat Avenue, Balkh Chamber of Commerce &Industry building, 2nd floor, Mazar-e-Sharif. ACBR Heart: Mostofiat Square, Mostofiat New Building, 1st floor, Herat. ACBR Kandahar: Mostofiat Building, Kandahar.
Contacts:
Tel: +93(0)752041772
Cell: +93(0)707165490
Email: [email protected]
Website: www.acbr.gov.af
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2.4 Industry analysis
2.4.1 Industry overview
The public transportation industry is the part of industry of Afghanistan, in the past years the public transportation was mainly arranged by the government of Afghanistan, around 10 – 15 million people were using public transit in daily basis, which was a significant demand in public transportation, services like electric buses, Mili buses, but due to civil wars many regimes like Taliban and Mujahidin got destroyed it.
After 2001 Afghanistan has been developing, currently buses, Mili buses, taxi have become the primary part of public transportation like before for people without cars and motors in Afghanistan, recently demand for public transportation has been increasing in the community as most of them which cannot arrange or afford their private cars and motors, so they prefer luxury and comfortable buses and taxi which is unfortunately not available currently in Afghanistan. 2.4.2 Industry Size & Players in The Industry
According to the ministry of public works which predicted over 731,607 vehicles registered in Afghanistan which serve 29 million people.
Below mentioned shows table the vehicles usage and demand management in Afghanistan. Table 1: Vehicles & demand management
Items Percentages Cars 49% Trucks 20% Motorcycles 15.50% Buses 10% Foreign vehicles 3% Rickshaws 1.50% Bicycles 25%
(Source: Author)
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2.4.3 Growth Rate and Growth Potential
While there are a small number of challenges facing the transportation industry in Afghanistan, there is enormous potential growth over six years. 2.5 Business plan
A business plan is a written document prepared by an entrepreneur as a basic plan of the business. In the process, we learn about the company, target customer group, position on the market, financial performance and return on investments.
The plan describes an essential meaning of company; it's long-term and short-term goals and path to achieve them. It represents all factors connected with running the new business on the market.
Entrepreneur writes a plan to see the effectiveness, variability, competitiveness and profitability of the proposed project. At the end of a project, he/she should decide if a project is acceptable or not. [1] 2.5.1 The uses and importance of a business plan
Internal uses
Used for own business purposes. An entrepreneur takes it as a corporate strategic plan. The usage of a method is before running company to see if it will be successful or not. He/she can also compare reality with the plan since starting operation.
External uses
In case the company wants to use funding from foreign sources. The task is to persuade banking institutions or investors about plan effectiveness, especially about a return on investments. It can have provided to banks, investment companies, private investors or government institutions. 2.6 Parts of a business plan:
If you want to get your business where you want it to go, you need a map to follow, which is what your business plan is all about. You'll follow to achieve success here are the step which is very important for business. [1]
Executive summary
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Business description Market analysis Marketing plan Operational plan Financial plan Risk evaluation Appendixes 2.6.1 Executive summary
This section is a summary of the critical points in your business plan. You should incorporate it if your project runs more than ten pages and you want to convey necessary information upfront. Because many readers dig no more in-depth than your executive summary, you want to keep it clear, captivating, and brief. [1] 2.6.2 Company Overview /Description
This section provides details about the company and nature of the business its product. It includes a description of products and services which a businessperson will offer to the customers. To define, why there are unique and tenderable. To find a suitable location according to requirements for a specific business field and to have some future and visions. [3]
Field of business Product and service identification Location description Prosperity and future vision 2.6.3 Market analysis
Market analysis is exploring the market share of a specific area of business. Description of the market situation. This study should define the target customers – who they are, where they located, what they buy and why they buy. To analyze the competition.[1] It is necessary to come up with lists of possible competitors and find their impact on our company.
Market definition
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PESTE analysis Market segmentation Analysis of competition SWOT analysis
PESTLE analysis
All companies need to recognize external factors within their environment that could have a good impact on their operations. Many of these will be things that till agency has no control over, but the implication which needs to be understood.
A favorite tool for of find out these external factors is the PEST analysis, which can be used to help you study the Political, Economic, social, technological issue.
Essentially a PEST analysis assists you in determining how these elements are going to affect the production and activities of our business in the term of long-term, also PEST analysis can be used as an instrument by an organization to understand the environment they’re operating in, or arrangement to:
Launching a new product or services Entering into the new region or country Considering a new way route to the market
There are many questions that one needs to ask while managing this analysis, which can give them a thought or strategy of what essential things keep in mind, Like:
How is the political situation in the country and how should affect the business? What are the widespread economic elements? Are there any regulations that control the business? Which kind of innovations are going to pop up and affect the market structure Which will be necessary to for the next more five years
All these elements of the technique are essential for any business might be in, more than just understanding the market, this structure characterizes one of the basis to support company's objective, and the strategies strung them [4]
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PEST factors
Before we use and start using this analysis, we should understand what each of these elements describes.
Political
Political may result in changes in government significances, which in turn can lead to new creativities were introduced as well as changes to trade regulations or taxation.
These can include changes in:
• Employment laws • Consumers protection laws • Environmental regulation • Taxation regulations • Trade restrictions on reforms • Health and safety requirements
Economic
For having an operational ability, it is essential to consider such parts as unemployment, skills levels, accessibility of expertise, wage, working practices and labor cost trends. When trying to regulate the economic viability of a market, you would also look at such issues as the current cost of living for your target market as well as the availability of credit or finance.
In economic factors, these issues include: assessing potential changes in an economy's inflation rate taxes Interest rates exchanges rates trading regulation and excise duties
Social
Social factors that need to was considered are those that have an impact on your market.
These include:
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Age distribution Population growth rate Employment levels Income statistics Education and career trends Religious beliefs Cultural and social conventions
Technological
Changes in technology can have a rapid and dramatic impact on an economy. Issues to consider include:
Level of expenditure on research and development by competitors. This will indicate whether any changes in technology-driven production processes or new products should anticipate. New markets. Does the introduction of new technology create a new market for a technology-based product or service? Production methods. How might technology be utilized to improve production methods within the business, and how might competitors use technology to gain a competitive advantage? The rate of adoption of new technology. It is often a considerable time before modern technology gains mass-market appeal. [4]
The reason which I have mentioned about PEST is that for Fast transportation agency is very important to examine its marketing environment includes the macro and micro marketing. Afghanistan is a country which couldn’t improve due to civil wars. But since 2001, the state is moving towards development and new transportation system, So this is the most significant opportunity for the company to build a strategy or understand the customer needs before a competitor. This gives excellent opportunity to convert these users into customers before anyone else.
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Market Segmentation
The meaning of market segmentation is the process of dividing a market of potential customers into segments or group. To create a product or offer service and a unique way of marketing to the primary target group, it is very important to understand who they are, where they are living, how they behave to new the product or services.
The market segmentation can segment by the following characteristics of the final consumer: [5]
Geographic Demographic Psychical Behavior
Geographic segmentation
This segmentation mainly divides people based on geography they are located. The mentioned segmentation has its variables such as:
Provinces, by country, continent, and state Size of population by country or city Climate: according to atmospheric condition, tropical, subtropical Density: tropical, suburban, rural
Demographic segmentation:
Segmentation usually divides populations based on variables. This demographic segmentation to has its variables such as:
Age Gender Family size Income, occupation Education Race, nationality, religion
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Psychological segmentation:
This segmentation defines the lifestyle of people, their daily activities, interests, and opinion. Some variables consist of:
Activities Interests Opinion Attitudes Values
Behavioral segmentation:
This segmentation mostly focusses on customer’s behavior toward the products. It studies their motivation to come and select the protect and what be the reason for being satisfied with the brand.
Variables include:
Purchase occasion Benefits sought, like quality service. User status Loyalty Attitude towards product
SWOT analysis
SWOT analysis which stands for Strength, Weakness, Opportunities and threats Is the important matching instrument or technique that helps managers of an organization to develop and identify the strengths and weaknesses of the organization, opportunities, and threats strategies for each of its product, services to the market in which operates. [4]
Internal factors: The internal factors take a close look inside of the organization, placing our essential capabilities and areas in which a business has a competitive advantage, it also looks at parts in which a company has lack of specific strengths.
External factors: The external factors study the market in which a business works and helps to recognize new areas in which the industry can develop and niche markets that can follow, all which
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will eventually lead to better profits for the company, it also looks at changes and tendencies in the marketplace that might affect a company's business operations.
We can conduct a SWOT analysis by answer the following question in each section:
Advantages of SWOT
One of the main benefits of SWOT analysis can be used by the companies to plans the future, it is the best step towards improving the business without additional expanse of an external consultant, or SWOT can be used gain inside about market, give you a better understanding of your competitor. [6]
Some other advantages which taking care of most important aspects that affecting a business:
It helps to understand the company Invest in the opportunities Develop the business objective and goals to achieve them. Competitive advantages in the marketplace Bring innovation Provides graphic overview
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Checklist for SWOT analysis
We can use a SWOT analysis that helps you to decide if and how your decision should be [4] Table 2 SWOT analysis
+ _
Core competencies Low market share Economies of scale Lack of fund Low-cost position High-cost base
Leadership and management skills Weak balance sheet and cash flow Financial resources Weak positioning
Internal Manufacturing skills and technology Quality problems Research and development Lack of distribution Differentiated product Skills gap
S W
O T
Technology innovation New market entrants New demand Competitive price pressure Market growth Changing customer needs
Demographic and social change Threat of substitutes
Cheap funds Demographic changes Economic upswing Regulation and legislation
External Positive political support Risk of imports Acquisition and partnerships Decrease in company profit economic crisis
Enlarge of competitors
(Sources: [4])
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2.6.4 Marketing plan
In this section of the business plan the business person to decides about developing the marketing plan, this The study should define how the target group will get access to the product. How they will be inspired to come, how to make sales and develop a loyal customer This study also studies a marketing strategy benefits regarding cost and efficiency. [1]
Marketing mix Marketing strategy
Marketing Mix
Marketing mix (4Ps) represents all steps that company uses for raising demand for the product. There are four of these steps:
Product Price Place Promotion
Product identification can include a range of products, design, package, brand, quality, and Variation. The primary factor will be how it will satisfy target customers. Price includes a policy according to customers ‘expectations about the price and company’s objectives. We can add discounts, credit options and conditions of payment.
The place is a factor where the products will be sold. And studies should define specific requirements for the location. It can also include distribution channels and sales range. Promotion is the medium that helps consumers to learn about the product. Internal development can be used (direct communication with a customer inside the place of the company) and external (public relations, advertising, and sales promotion). [5]
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Pricing policy
Four aspects regulate a pricing policy:
Costs Competition Customers Business options
The key goal is to make a profit. The business should ensure that price of the product will be higher than total average cost. In a short-term period, this study can determine the amount which will at least exceed purchase price. Monopolistic business can choose any price because they are alone in the market.
In perfect competition, a company should accept the market price because they have no market power. Certainty is usually somewhere in between.
Objectives of the company:
Cover all expenses Exploit profit Be competitive Obtain a high rate of return on the total investment 2.6.5 Operational plan
Personnel requirements Project schedule
Contains a description of how a business person will run a business. To recommend a team and management. To specify an exact timeline of how he/she will proceed with the Implementation of the plan. It can also include distribution channels and sales range. [8] 2.6.6 Financial Plan
A financial plan is the most significant part of the business plan where stockholders will be considering. Also Defines the original investments and profitability of the business. The important point is when
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The investment will pay back. It usually proposed for five years of operation. [9]
Which is include:
Initial investment Capital resources Operating costs Expected revenues Financial statements Capital budgeting
Balance sheet statement
The balance sheet is a report which represents or takes a snapshot of a company’s financial position at the single moment in time. [10]
Company’s balance sheet has three major components
Assets – shows what company owns (cash, inventory, buildings, land, equipment) Liabilities – shows what company owes (bank loans, funds and more) Owner’s equity – what the firm owns outright, or start-up (capital, shares and more)
Income statements
A financial statement which specifies a way how incomes are converting into a net profit. Net income expresses the increase (or decrease) in net worth of a company. The aim is to represent or calculate how much the company has profit or loss. [11]
Cash flow statement
Cash flow statements are a financial report which shows all changes in the balance sheet according to business activities with cash inflows and outflows or how the money spent over a specified period. And Cash Flow Statement can be prepared weekly, monthly, and annually. [12]
Cash flow statement structure
A cash flow statement separated into parts by these three useful areas within a business:
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Operating activities – activity represented from day to day business operation such as Sale of goods and services, a collection of receivable, production, payment from the current account. Investing activities – represent incomes and costs from purchasing and selling long-term assets Or the cash which used for the for the funding of assets such as equipment’s, or other long-term assets Dividend payout from shares represents financing activities – here revenues, and costs represented by payment of bank loans such as the sale of stock, issuance of debt or repurchase of company stock.
Capital budgeting analysis:
Also known as investment appraisal is the process by which a company a decides to invest in research and development or opening a new branch or to replace something which has value.
Initial investment
The initial investment is the amount of required in which a business owner needs to start up his/her project.
Expenses
Is the amount of money which a company owner spend for the need of his/her business. [13]
Here we have two types of costs:
Fixed cost: Costs that do not change with the quantity of output produced, such as salaries, rent, insurance Variable cost: expenses that vary with the level of production – they are increasing with a more significant volume of production. Such as Materials, power for production, commissions,
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Net cash flow
Net cash flow is the amount of cash generated or loss during a specific time. And the main difference from cash flow statement is in depreciation which adds to earnings after tax. [13]
Payback period (PB)
• It shows the time repayment of initial investments. Or It is the period during which the cost of investments pays back from revenues (better from monetary income) of investment operation. [14]
Formula
퐶표푠푡 표푓 푡ℎ푒 𝑖푛푣푒푠푡푚푒푛푡 Payback Period = 퐴푛푛푢푎푙 푛푒푡 푐푎푠ℎ 푓푙표푤
Net present value (NPV)
Net present value defined as an investment measure which shows for an investor that the investment is achieving its target profit at a given initial investment. [15]
If the NPV is positive, we can take the project. Means that the project has profited so we can invest our money in it,
Net Present Value Formula
NPV =PVNCF – NINV Picture 1: NPV
(Sources: https://en.wikipedia.org/wiki/Net_present_value)
Where
n=project life t= year k = cost of capital in % NCFt = net cash flow during the period
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NINV= Initial investment cost
Which gives three results:
NPV > 0 the project is profitable, we can invest in it
NPV < 0 the project is for the loss of company, and we shouldn't invest in it
NPV = 0 so we are paying exactly what the is the value of assets.
Break-even analysis
Break-even analysis expresses a point, where total revenues equivalent total costs. To see if it is
Profitable to sell the suggested product. The company exploited this analysis as an instrument, which helps to decide a selling price of a product and lowest volume of the sales they
need. [17]
Formula
퐹퐶 푄퐵 = 푃 − 푉
Where:
QB = is the amount of product sold to reach all costs
FC = Fixed costs
P = Price per unit
V = Variable cost
Break-even analysis Picture 2: Break even analysis
(Sources: https://www.tutor2u.net/business/images/break_even.gif)
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2.6.7 Risk evaluation
This part should cover the evolution of the project, identifying all aspect of risks and how to eliminate and act to reduce them, supports to collect qualitative and quantitative information so that managers can take appropriate decision and their solution can be a positive sign for potential investors. [16]
2.6.8 Appendixes
Here are all some additional materials, documents such as charts, Graphs, and tables which reference to concrete parts of the business plan.
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3 Business plan for the establishment of Fast Transportation Agency
Picture 3: Company’s logo
(Source: Author)
3.1 Executive summary
Table 3: Executive summary
Business name: Fast Transportation agency
Industry: Domestic Transportation
Establishment date: 2019 Kabul, Afghanistan
Legal form: Partnership
Owners: Abdul Salam Rashed, Emal Bakhshi, Tamim Rashed
Business stage of life cycle Startup
Business location Wazir Akbar Khan 15/street, Kabul, Afghanistan
Phone number: +92 700 27 27 27
E-mail: [email protected]
(Source: Author)
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3.1.1 Company overview
Fast Transportation agency is a partnership company specialize in sector of private buses and services, Which will be established probably in 2019 will be located in most areas with economic viability like in Wazir Akbar Khan, and Froshgha Kabul the capital of Afghanistan, The company’s aim to provide public affordable, reliable and safe transportation service for the customers from one region to another located in Afghanistan, other services will be included in this business plan are Taxi services, International and domestic airline tickets, and Reservation of hotels at special rates.
The Fast Transportation agency will provide access to Afghanistan Major cities town:
• Kabul – Paghman: daily routes between 5/Taimany, Froshgha, Kabul University street, Company road, Qargha, Paghman. • Kabul – Mazar: weekly routes between 5/Taimany/ Sarai Shamali, Bagram, Parwan, Charikar, Pul Khomri, Aybak, Mazar Sharif.
This business plan will focus on the creation of Local transportation of people with high quality of services to satisfy the customer needs. 3.1.2 Objective
The Fast Transportation agency aim is not just to focus on becoming a profitable provider of transportation to the Afghanistan and on the highest quality of services or to exploit by using this advantage of travel planning opportunities growth and moderate competition in the travel portion of the industry, with a committed and experienced staff, excellent networking, and powerful management and marketing in the Afghanistan, We will ensure that our transportation agency support greater Afghanistan economy to improve the opportunities, which connect the people with their job, schools, universities, however, the customer’s satisfaction is the priority and profit maximation is the goal of our business, as well as it increases the level of services without any increase in pollution, and takes ahead Afghanistan transportation system through they standardization of transportation system, and Fast Transportation agency will help the people to be at the time to their destination without facing any issue in their personal life, and it increases level of environmental services, which means that our company will have reasonable government support,
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Our service will place exceptionally carefully, it will be very high quality, comfortable, instructive and customized to the customers’ needs and want such us the will help the individuals to have considerable appreciation
Finally, the resolution of generating this business plan is based on the public demands and want, Which I can write it has a significant market capacity in Afghanistan and its provinces, Due to the distinctiveness of this assignment.
Summaries of the Objectives
To become the most profitable agency of transportation in Afghanistan To provide high-quality services in transportation industry to meet the needs of customers To employ the most experienced employee from the beginning of business to obtain a minimum of regular customers from the beginning to have a reasonable net profit by the end of the second year of operation 3.1.3 Goals
The primary goal of our company is to increase profit margin and capture a more significant market share in Afghanistan by improving employee training and better services which will be accessible, reliable, comfortable, well-organized to the customers.
Our Vision
The vision of the business is to become the most construct a unique travel agency for the best service and quality and to become the first choice for the individual clients and corporate in whole Afghanistan, and connect the transportation system of Afghanistan with other Asian countries.
Our mission
Our mission is to innovate and provide, professional, safe, convenient transportation and present the business world class into Afghanistan, and provide job opportunities for the new generation including women. In order to maintain customer’s interests and satisfaction with our transport service, we will continually monitor and review our service delivery on a regular basis.
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3.2 Market analysis
3.2.1 Market Segmentation
Fast Transportation agency believes the market for public transportation services is wide-ranging and diverse. It, therefore, it is very important to divide the market into different segments to understand better each segment needs.
Fast Transportation agency identified the following market segments:
Students
The primary and university students are aged between 12 and 26 years they have always been requiring fast and on time transportation services to travel from the home to school/college. And the needs of students are always would be safety, quality, affordability, and timelines.
Business travelers
Afghanistan since 2001 is synonymous for traders, the business people are regularly travelling from one destination to another, and most of the businessman/businesswoman needs or us luxury buses with time conscious, efficient and effective and also business travelers mostly move with some extra luggage space That Fast Transportation agency offer extra luggage space for their passengers.
General public
The General public is considered a wider community that is using the most public transportation, these members of people do not have their private cars in Afghanistan, which are depending on the public transportation to travel or move from one part to another. These people are tired of bad quality services so now most of them give priority to the quality services more than price to be relaxed and have comfortable travel.
- Price
Price is one of the most important elements which determining market segmentation and influences customer' travel choice. Customers always have come to demand what they pay for. If a customer would like to have expensive travel, then he/she will expect better service.
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However, it is important to keep in our mind that majority of People in Afghanistan looks for the better value, which is the key component of the Fast Transportation agency.
Pricing strategy
It is usual in this industry that Transportation agency can make their money also via commission by offering traveling related services such as booking for flight tickets, booking for shuttle buses hotel booking between many other services
Payment options
Fast Transportation agency will have payment policy which is inclusive in Afghanistan by being quite aware that different kind of people will need different payment options the way they want. The below mentioned are payment options that will be available to our customers.
Payment by Cash Online payment Payment through bank transfers
Purpose of Travel
Our company is in Kabul, Afghanistan, the location which is chosen for its environment and possibilities to arrange a trip from Froshghahi Kabul until the last destination to Paghman which is sightseeing, beautiful nature and other attraction for the people of Afghanistan they are spending time with their family.
We have chosen this destination due to exitance of big companies, universities, and school in the route of Qargha, that our buses, easily can access to the street of universities such us Kabul University, Bakhtar university. So, we immediately have a big group of potential customers in the area, and it helps people to pay less for their daily trip plus enjoying our comfortable buses. 3.2.2 Target market
The primary target of Fast Transportation agency is demographic and psychographic which mean the company will serve small to medium sized people from different classes lower to upper middle classes citizens as well as foreigners who think the time is more valuable than money and sufferings of using conventional traveling, and time conscious. We are coming to transportation
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industry with a professional transportation system that will enable us to work with each citizen of Afghanistan. 3.2.3 Strategic Market Positioning
Fast Transportation agency will position as a preferred company by providing comfortable traveling around Afghanistan with an excellent supportive and friendly staff, also here are some elements which give a good position for Fast Transportation agency:
• Focuses on the needs of customers • Proper advertising • Trying to have better services than competitors • Focuses on the Punctuality • Enjoyable • Taxi services in Kabul city 3.2.4 Competitor analysis
Direct:
In Afghanistan are some low-quality transportation services, these transportations are not served on local route, and they didn’t establish brand or and reputation in the country, that include: Khatirat Dostan Limited is providing mainly logistic services + transportation services, Maihan Transport, Waziri Transport, Nasseri Transport Company,
The above-mentioned companies are operating in different provinces of Afghanistan such as Mazar e Sharif, and Faizabad, these companies are typically working from Sunday to Wednesday, also these companies even don’t have their websites and any type strategy to satisfy the needs of people, which is a pretty excellent opportunity for the Fast Transportation company to be ahead of its direct competitors through its approach which will use.
Indirect:
Air transport:
There are some domestic airlines often make use high-cost Airlines providing domestic flights. These can be an indirect competition for the Fast Transportation agency; Main local Airlines include Safi Airways, Kam Air, and Aryana.
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Regularly the customers are going to Mazar e Sharif from Kabul by Airlines and then from there Mazar to other cities, which is an enormous cost for each customer.
For being ahead of the indirect competitor’s Fast transportation also cover that urban city which is on the route of Mazar -e- Sharef which I have already mentioned in my Operational plan. 3.2.5 Competitive Advantage
The level competitions in transportation agency depend mainly on the location of the business if you can create a unique brand identity for your transportation agency. You likely face less competition experience.
The fast Transportation agency is a new participant in the transportation industry in the Afghanistan, which differentiates itself from the competitors by below-mentioned elements.
One of the most important competitive advantages which Fast Transportation agency has its team and management, which will be professionals licensed, high graduated employees, mean that they will help as to build the company, being focused on the mission and help to deliver our set goal to achieve all our objectives.
Fast Transportation agency believes customer responsive is the key of achievement which is very hard, as the target market of Fast Transportation agency demands a high level of services and quality and gives value for their money they spend, in order be ahead from its competitor and full this gap. The company will have its 24-customer services agent to answer the questions of the clients and solve and type issue will be regarding our services.
One of potential competitive of Fast Transportation agency will be prepared with entertainment features such as TVs and game system, these features will attract more the customers and the, even more, they can enjoy their trip, including all this Fast Transportation agency, will offer blankets, Pillows, and water for free which will increase the comfort of passengers
Another factor to make the company unique is the specific segmentation of the market which will be focused. Fortunately, many transportation agencies in Afghanistan don’t have their particular segments
The other ability of the company is online service which the company will provide its services on the internet such as offer prices, booking options, cancellation of the tickets, choice booking cheap hotels, and purchasing of International and domestic airline tickets, the management of 28
Fast Transportation agency believes these are elements gives us a sense of achievement and operate profitably in the Afghanistan. 3.2.6 PEST Analysis
In the transportation industry, the PEST analysis (Political, Economic. Social and Technological) part is very important which helps to evaluate how the company’s strategy fits into the environment and support strategic thinking about my business plan in Afghanistan.
PEST analysis of Afghanistan Table 4: PEST analysis
Political Economical
• Wars and conflicts • The economy has improved • Legislation and regulation significantly since the fall of the Taliban regime.
• Service sector growth • Low inflation • Improving domestic production • the government has been increasingly focusing on private sector-led growth.
Social Technological
• Buses are primary means of • Unprecedented development in transportation in Afghanistan Information and Communication • Demands for high standard of living Technology(ICT) • High demand services • Massive increase in Social media • Increasing urbanization • Online shopping
• Online booking • Increasing connectivity
(Source: Author)
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3.2.7 SWOT analysis
The Fast Transportation agency has undertaken the SWOT analysis to identify its internal strengths and weaknesses also the external threats and opportunities, by identifying these elements on our company is an advantage to be able to build our strengths, opportunities and come up with ways to control our weakness and threat.
The below-mentioned SWOT analysis shows the strength, weakness, opportunities, and threats of a Fast Transportation agency
Highly experienced management Unique service Extensive employee Training program Extent of market Strengths High-quality services New technology Fast market growth few and weak competitors
Lack of experience in transportation industry Weaknesses Lack of funds, The business may have to depend on external funders in order to expand or diversify
Growing internet market across the globe More buses, routes and a greater variety of transport network Innovative marketing New roads/highways Opportunities Online market Customer dissatisfied with other bus companies Additional services • Improving the state of transit Entrance of new competitors the noncompetitive behavior of entrepreneurs Shifting of customers towards airlines Threats The potential increase in petrol prices thus implying a higher level of operating costs and lower profits The usage of other means of transportation such as rail and air
(Source: Author)
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3.3 Marketing Mix
3.3.1 Product and services
Fast Transportation agency is a bus service company/transportation company which offers convenient and reasonable solution to Afghanistan’s transportation issues, which people of Afghanistan are facing in their daily life, and the services which we provide it is not just for the financial benefits of the company but develop the level of transportation system in whole Afghanistan.
Service which Fast Transportation agency will offer are listed below:
• Bus Services / Transportation services • Taxi Services • Booking International and domestic airline tickets • Hotels reservation at special rates
Bus Services / Transportation
Fast Transportation agency will be the first environmental and technological revolution in the transporting sector within Afghanistan; the buses will be introduced with more advanced feature which makes the company differentiate from its competitors
Fast Transportation agency will provide the below-mentioned services inside of the bus for its passengers
• Toilet in bus, free WIFI • We will offer 100% customer satisfaction • We will offer luxury buses with less noise, comfortable seating arrangement, massive space for luggage with cabin bag.
Taxi Services
In Afghanistan taxi services are an essential part of transportation system and an efficient key to travel around the cities, Afghanistan's public transportation which is under developing is not enough care huge number population, and Afghanistan's taxi services are among the lowest in the world, the quickly increasing of middle class prefers to use taxi services instead of other
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transportation services mainly in Kabul the capital city of Afghanistan. This has proved an increasing demand for the taxi services.
We proud to announce that Fast Transportation agency’s local taxi services, with our local taxi services world-class taxi services which brings Afghanistan's taxi system at high level of standards, New days it is the big issue in Afghanistan many people had been complaining about giving massive amount of money for taxi from Airport to other destination, Overcharging/not using meter, not being on the time and etc.
Fast Transportation agency's target will not be people of Kabul city but Foreigners who are natural target groups by arriving/departing from airports for business or personal issues, which makes more comfortable for them after a long flight that they order our taxi by booking or by calling to customer service of the company. Most of Afghan and foreigners have faced problems with private taxi drivers by taking the quickest route, not using the meter but charge how much they want, and communication between them, so still we can see we have a more significant chance to provide the best services and enjoy the reputation by delivering better services.
Our services which are included in local taxi services are:
• 24 /seven facilities • Using meter and GPS • No additional cost, you will pay just for the destination you will go • Online booking reservation
Hotels
Fast Transportation agency will be the first company in Afghanistan which will have in his website Hotel booking option, that means our customers will be able to search hotels which are excited in Kabul and make their travel even more comfortable, Fast Transportation agency can be the first choice of your travel plans with accommodation which will be suitable for business travel and low cost travels with luxury and cheap hotels and we will ensure that our customer will find the best hotel for a fabulous staying with their families. The hotels which will be on our website are:
Business class
• Kabul Serena hotel
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• Safi Land Mark • Moon Hotel
Economic class
• Spozhmai hotel • Gulf Hotel
It will be effortless to book the hotels mentioned above, log on to fasttrevelagency.com/hotels and check the best offers, and compare all our suggestions according to your budget. 3.3.2 Value Proposition
Currently situation in Afghanistan there are significant issue related to transportation system, unfortunately, the massive number of people have been complaining since long period of time because of low level of services, high level of urban pollution by using old buses and low quality of fuels, Which have been affecting the people’s punctuality for being late for their work or school, According to my research there are many transportation agencies which are operating in Afghanistan, but they have poor quality transportation systems, old buses and without consideration customer’s or they don’t have any standard transportation system.
We are thinking largest customer going to work with us because it will be the first Bus company which will provide a standard transportation system based on customer needs and want, because of the cost saving, takes ahead Afghanistan transportation system through they standardization of transportation system, innovation in transportation system, will help the people to be at the time to their destination without facing any issue in their personal life and it increases level of environmental services, which means that our company will have reasonable government support,
Our bus company will be the first company which will provide online booking services of bus tickets in Afghanistan, which is playing a very important role in the life of a human such us:
• Our customer can Take full advantage of reservation
Most of the people who book their reservation are more likely to show up, making no-shows a thing of the past. If a customer needs to cancel his/her reservation, the patch will automatically open online, so it gives another customer a chance to reserve their tickets, by the maximizing the reservation, you will not leave unused activity spots.
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• It’s cheaper without additional cost and saving your time
There are many ways to save your money by using our online purchase, like our customer can save their transportation costs, or they will have incurred travel to one of our retailers, plus you save service fee like always higher for the physical purchase. As we all know if we buy the tickets online we don't have to spend your expensive time by going to our retailer or our agency.
• Changes and cancellation of the tickets
By the help of our online purchase a ticket cancellation and modification of tickets are becoming very easy for our customer, all you have to do it, just go to our website (www.fasttransportationagenc.com) and login to your booking information than you will be able to change your ticket simply, cancel your reservation.
There are many other reasons why the targeted market should select Fast Transportation agency, Toilet in bus, free WIFI
• We will offer 100% customer satisfaction • We will provide luxury buses with less noise, comfortable seating arrangement, huge space for luggage with cabin bag,
Our bus company employees will be with at least a bachelor’s degree, Employees would also like necessary to have an outstanding experience with the travel agency companies, and we will have much training abroad for the employees in order to understand what customers want and needs. 3.3.3 Product/services strategy
In the first year of operation, Fast Transportation agency will provide two buses on Friday and Sunday to Mazar Sharif destinations on its route are coming to some other provinces also which our bus will cover and take the customers to different destinations, includes Charkar, Pol-e- Khomri, Parwan.
Our timetable/schedule of pick-up/drop-off times will better match with needs of our customers, most of the buses in our country are picks-up the passengers at 8:00 o’clock am and 8:30 according to the surveys which we had most of our target market approximately 45% wish to go earlier. Therefore Fast Transportation agency will be departing at 5:00 am, and this is itself that Fast Transportation agency differentiates himself from other companies.
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Fast Transportation agency will have some feature that differentiates it from competitors, Fast Transportation agency will be prepared with entertainment features such as TVs and game system, these features will attract more the customers and the, even more, they can enjoy their trip, including all this Fast Transportation agency, will offer blankets, Pillows, and water for free which will increase the comfort of passengers. Fortunately, we proud to say that Fast Transportation agency will be the first Transportation agency which provides all these features for the passengers in Afghanistan.
Fast Transportation agency will also provide two buses from Kabul to Paghman Valley, which will operate daily, from 6:30 till 10:00,
With this destination, we will focus on ordinary people, which every day or on the weekend would like to spend their time on the most beautiful places like (Bagh-e- Bala, Qargha Vally, Paghman valley) students, such as (High school colleges, universities) and employees of the companies. 3.3.4 Place
Fast Transportation agency will take a rented place through an estate agent at Wazir Akbar Khan which is a suitable and urban place for its headquarter, Contract will be signed in which the company will start its operation. The Commission will be given for the agent equal to one month of the rent, and for the future, the company makes sure that services will be available not just in Kabul and Mazar but at all suitable cities of Afghanistan.
There are many reasons why we have chosen this location of the agency:
Commercial space Power lines Near to public transport stops Easy availability for the customers Parking space
Here are the opening hours for the customer •Saturday – Thursday 8 p. m. –5:00 a. m. •Friday 9 p. m. – 2:00 a. m.
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3.3.5 Partnership
Fast Transportation agency will cooperate with a lot of companies that is also reliant on them, these partners will help the company to reduce the cost of internet, petrol and water instead our company will advertise their partner’s business inside of the buses that each of Fast Transportation agency’s passenger will pay attention to the TVs, due to this partnership first 6 month our company will have free internet from NEDA ISP ( internet service provider) which is a really fantastic step for the reduction of cost , and with Azizi group + Azizi Bank which is petrol supplier for our buses and taxi will offer 10% - 15% of discount for one year in replacement the company will advertise their product and our buses will stop for 15 minutes to their petrol stations.
Our two more partners will be Sofi airways and Kam Airs which help us mainly for the promotion of our taxi from the airport to other destinations. 3.4 Marketing Communication Plan Strategy:
The goal of Fast Transportation agency is to become one of top transportation agency in Afghanistan, which is why we have made out a strategy that will support us take advantage of the current market and grow to become a most important force not just in Kabul and Mazar cities also to other cities in Afghanistan.
Fast Transportation agency will set the following marketing strategies to attract the customers
Sending starting letters with our brochure to organizations, universities in Kabul and other cities Advertise the company with website, newspapers, TV stations and social media Encourage word – of – mouth marketing from reliable and satisfied customers Control on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al. to promote our brand Having billboards in urban locations all our workers will wear our own branded shirts, and all our vehicles are well branded with our company’s logo.
Website
If we look around the world everywhere is just technology and multimedia generation, People spending more time on the internet than going outdoor, In order to deliver the company's image to
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our potential customers, we will create a company official website which the very important issue and necessary to develop first, the website of Fast Transportation agency will not be just a site with company's description or a link for the customers to view and have more information about the company, or to buy tickets for our business, it will also be a system for the company to post their recruiting requests, information about the management of the company, and also purchase of tickets from different Airline companies, such as Afghan Jet international, Ariana Afghan Airlines, Kam Air, and Safi Airways, which are the most famous airlines around of Afghanistan
Facebook Advertising
Even our president Mr., Ashraf Ghani or Obama has their Facebook fan page for their election campaign, and many other International companies have their own Facebook pages, With amount of 1,978,243,530 of active users all around the world, we Cannot refuse the usefulness of Facebook effect on our daily information delivery channel, within a second, our services and information about our company can spread over Afghanistan and around the world a like a virus, Our business will not ignore these advantages like it is free without cost, very fast, efficiency and time saving.
With Facebook and other social services which I have mentioned above we can market on our own, It is taking less than 10 minutes to create a page, and everyone around Afghanistan can have the right to access it, With the help of our Marketing department we will update every day the page, upload picture of our business activities, answer and reply the questions of our clients and also to be connected with the customers. Picture 4: Facebook Advertising
(Source: Author)
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Newspaper Advertising
The Newspapers advertising is a useful marketing tool that has been described ideal weapon for a marketing strategy, and Fast Transportation agency doesn't want to lose the chance of attracting the customers through newspaper industries which are playing an important role in Afghanistan.
A very popular newspaper amount Afghanistan Media channel are Afghanistan times daily and Kabul times, Which thousands of people in Afghanistan are reading them and the reason which will have these 2 advertising companies is that are advertising in 2 official languages of Afghanistan, Pashto which 35 percent people of Afghanistan talking Dari Language, which 50 percent of people talking, There are many more other newspapers that we can use a bridge for our advertisements such as Bakhtar new, Khaama press and Daily outlook Afghanistan but considering the limited amount of fund and high cost for the business, We suggest posting only with two advertising company Which I mentioned above, instead spreading on much other newspaper agency, We would like to invest in specified organizations which have effective newspapers and massive amount of readers in Afghanistan every morning, and the advertising can be 4 days for the 1 month just for the beginning a business
Billboard
The other advertising system which Fast Transportation agency will you is Billboard advertising in the two main places with a huge number of population in Kabul city such as:
• Froshgah Kabul, every day more thousands of people are visiting Shops, Super Markets, Big companies, schools, and universities. • Wazir Akbar Khan: which is an urban area for all international companies, supermarket, and the street which almost which link the center with other roads. Picture 5: Billboard
(Source: Author)
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Souvenir products
FT agency for will use souvenir item such as calendar, pen, cap, etc. Which will represent our company by adding our logo and contact on, We will use the calendars, pen, cap as welcoming gifts for our clients, including for the companies which are working in Afghanistan, by this souvenir we will use the power of each person we know in our network to spread the agency reputation and image for us, by keeping our calendars in their office, drinking from the cap and using our pens, with this approach we believe that will influence to the image of company and moreover. In Afghanistan is very easy to find a souvenir shop including painting the way we want, for a small shop, they will be pleased and willing to prepare for us even the will be very happy to sign a contract with a big company, and fortunately, it doesn’t cost much. 3.5 Source of income :
Fast Transportation will be established with the purpose of maximizing profits in transportation industry, and we will go through all possible ways to ensure that will have a good income for the company
• Bus services for individuals and corporates customers • Taxi services • Booking of flight tickets • Booking for other shuttles buses • Hotel booking • Advertising of companies
3.6 Marketing survey + Results of survey
The survey was an online questionnaire and presentation selected for the marketing survey the internet conducted the questionnaire via Facebook and personal presentation at schools, universities, and companies at the period of 15/03/2016 to 30/09/2016, and the survey which we had was not restricted by sex, age, nationality.
The sample of the questionnaire is enclosed in the appendix.
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The questionnaire included of nine obligatory questions which primarily shows what are the needs and preferences of the customers and what are their demands, at the last the questionnaire is was three segmentation questions about the region, age, gender and where are the customers living. Respondents From 540 respondents 198 women and 342 were answered
Chart 1: Respondents
37% Men Women 63%
(Source: Author)
Gender response As we can see on pie chart shows that most of them were under age 25 Chart 2: Gender response
2%
6% 6%
to 26 years 20% 27 - 36 years 37 - 46 years 66% 47 - 55 years 56 + years
(Source: Author)
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Ages response
Most people who were given response where from Kabul, Mazar, Parwan, Jalalabad. The reason for a high percentage of Kabul and Mazar is that we were given in these urban cities also a presentation at universities, schools, and companies. Chart 3: Ages response
1.00% 3% 1.00% 3% 3% Kabul 8% Mazar Parwan Jelalbad 11% 50% Herat Punjshir Kandahar 19% Helmand others
(Source: Author) How would you prefer to purchase the tickets? The reason which we had asked this question is to know how the people would like to buy the tickets, which will cut the cost of additional for alternative agencies, which most of the students answer for purchasing the tickets at the station from the conductor of the bus and online payment, and most people which were working at the companies preferred to pay by online purchase through web page of the company Chart 4: Purchase of tickets
15% 35%
50%
Web pages of the company At the station Other location
(Source: Author)
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How often do you use bus services?
As we can see at the pie chart, shows that most of students + employees of the companies are using daily bus services in their daily life, which is positive sign for the company that matched with companies target group Chart 5: Use of bus services
10%
12% 45%
33%
Daily Weekly Monthly Rarely
(Source: Author)
Have you satisfied with other bus and taxi company services?
We have chosen this question to understand needs of our future customers or making better strategy for covering that gaps which our competitors don't have it, As we can see below, that a considerable percentage of people wasn’t satisfied with the services of our competitor’s services, which shows for the company is a better opportunity to cover the gap and meet the needs of people. Chart 6: satisfied with other bus and taxi company services
5%
9%
15%
69%
Very satisfied Satisfied less dissatisfied dissatisfied
(Source: Author)
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Where do you prefer to know about services of a company?
As we can see below, as technology is playing an essential role in daily life of an individual, most people are looking at internet for knowing about services of the companies, and the other key for increasing awareness of business among people are almost in the same percentage, Chart 7: Where do you prefer to know about services of a company
60 52% 50 40 30
20 15% 15% 13% 10 5% 0 Category 1
Internet Mass media Billboards Press Email
(Source: Author)
Which factors influence you during your purchasing of tickets?
The below pie chart had shown for us that due to the unfortunate experience of the value or quality of buses in Afghanistan now most of them would prefer the quality of the bus and taxi services, that our company mainly focus on providing the best quality and excellence for the customer is possible. Chart 8: Influencing during purchase of tickets
Sales
Qulaity Price
(Source: Author)
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Would you feel safer with a male or a female taxi driver?
In Afghanistan that most of the women are not feeling uncomfortable with a man driver, in this survey we wanted to know recognize the choice of customer, and how to make differentiate the company from others , which give as pretty reasonable result, which most of the people would like to prefer travel with the same gender drivers, that the company will offer just on its taxi services also women driver in order the company’s passengers would feel safer, but for the bus drivers would be only a man driver but the conductor would be a woman. Chart 10: Would you feel safer with a male or a female taxi driver?
35% 40%
25%
Male Female Indifferent
(Source: Author) 3.7 Operational Plan
3.7.1 Operating routes
The Fast Transportation agency will provide the following directions; the company will provide daily departure and arrivals routes and weekly departure and arrivals routes. Table 5: Operating routes
Daily routes
Kabul – Paghman Daily routes will be between 5/Taimany. Froshgha, Kabul University road, Company street, Qargha, Paghman.
Weekly routes
Kabul - Mazar Weekly routes will be between Sarai shamale, Bagram, Parwan, Charikar, Pul – Khomri, Aybak, Kholm, Mazar -e- Sharif
(Source: Author)
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Kabul Paghman routes Picture 6: Kabul Paghman routes
(Source: Author) Kabul – Mazar routes
Picture 7: Kabul – Mazar routes
(Source: Author)
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3.7.2 Management structure
Fast Transportation agency, will put up a strong business structure that can hold up the growth of our business. We will make sure that we employ experienced, skilled hands to help us build the dream of our business. The fact that we want to become the first choice for travelers and taxi agency in Afghanistan.
Fast Transportation agency will build the Below mentioned business structure;
Chief executive officer Admin/HR manager Marketing and sales administrative Finance Customer Care/Front Desk Officers
Chart 9: Organization structure
Managing Director
Marketing Finance Operation/ HR
Customer care
Front desk Offcers Sale admnistrative Accountant Drivers
Bus attendantds
(Source: Author)
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Managing Director/CEO
The Managing Directors will be responsible for implementation of all rules and other functions like planning, leading, organizing and controlling. He/She will play an important role in understanding the consumers, competitor’s activity, building better relationships with the customers and they will keep updated the changes of external and internal environment.
The below also mentioned some duties of Managing Directors:
• Maintaining the operation of the business • Support the financial budgeting and control it • Ensuring that buses are managed well and serviced regularly • Ensuring policy and roles of the company are executed in the market and the business
Finance
The finance department with the accountant will be responsible for the following
• Developing bus operations budget and controlling the expenses • Preparing cash book, general ledger and other accounting transactions • Handling debtors and creditors • Preparation of annual financial statement • Checking that all transactions recorded well • Make sure everyone paid
Operation/HR
Operation department + HR will be responsible for all key staff required to provide buses services, which includes customer care, front desk officer, drivers and bus attendant.
• Interviewing, selecting, coaching, training, managing, and appraising the performance of fixed route personnel. • Transportation of client from area to another • Ensuring to provide the best quality service and support towards the satisfaction of customers • Developing the market for new customers • Creating and controlling timetables for the company
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• Investigating to resolve customers complaints • Performing other duties as required by the Operation department
Marketing
Marketing Department will be responsible for the following
• Promoting the awareness of the company and services • Developing a strong relationship with the passengers of company • Ensuring to sell our all seat for each trip
Workers of the Fast Transportation agency
Table 6: Workers of the company
Departments Positions Number of employees
CEO Chief executive officer 1
Marketing Marketing officers 2
Finance Finance manager 1
Accountant 1
Operation / HR Customer care 3
Front disk 2
Drivers 9
Bus attendants 3
Total 22
(Source: Author)
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Table 7: Salaries per month (USD)
Management Salaries $ per month Positions No/ Employees Salaries Total Managing Director 1 2,000.00 2,000.00 Marketing Manager 1 800.00 800.00 Marketing officer 1 250.00 250.00 Finance manager 1 800.00 800.00 accountant 1 400.00 400.00 Operation/HR manager 1 800.00 800.00 CSR (Customer services representative 2 250.00 500.00 Front disk officers 2 250.00 500.00 drivers 9 300.00 2,700.00 Bus attendants 3 200.00 600.00 Total 22 9,350.00
(Source: Author)
3.7.3 Risk Management
• The entire business plan is a develop a strategy to eliminate all risks, the concept of business is something new in Afghanistan market, so it means all customers will shows their interest and try trip with us, that it is essential to monitor customers’ needs and expectation, it can be done by passenger’s book ( on the website, and through calling to our customer care, or even through the complains boxes which we will be around the city) where passengers can write their wishes and complaints about services of the company. • Business risk is mostly on the competitors, as Afghanistan becoming developed country day by days so there will be always a new entrant in the market, to be ahead of these new entrant competitors the Fast Transportation agency will always try to use some new technologies, train the employees to abroad by using company’s financial reserves into the project, which identify new skills, represent a standard quality, helps to the worth of current and future employees and certify that they are in line with principles of business.
49
• As Transportation system is new market in Afghanistan and I assuming there will chance of new entrant in the market, Fast Transportation agency will improve its competitiveness to have a better understanding of the customers and competitors and match service with the customer expectation, we will conduct market survey and analysis of market three times per year, • As the company will be operating in Afghanistan which is very high risk of security around the country, to reduce the risk of security, Fast Transportation agency will just serve to those cities of Afghanistan such as (Kabul, Mazar Sharef, and routes from Kabul to Paghman) which already has a good security confirming by the Ministry of defense, and ministry of internal affair. • Employees are a key asset to the company, these are the assets which make balancing trust between customers and organization, they also can represent one of the most significant sources of risk, due to lack experience of the company it can be a considerable risk for the Fast Transportation agency, in order to avoid this risk Fast Transportation company will always provide training programs for a month or week for the employees to be able to give the best quality of services to the customers. • High inflation on fuel can be a high risk for the company which increase the expenses, to manage the fuel price, the company will have the contract with the Azizi groups which provide us 10% - 15% discount in fuel instead the company will advertise their product and our buses will stop for 15 minutes to their petrol stations.
50
3.8 Financial plan
A financial plan is a Significant part which determining how the organization will pay for to achieve its objective and goal. Establishing of Transportation agency can have its own costs and expenses, Fast Transportation agency characterized each of its activities, equipment, materials, expenditures, and cash that will be needed for the establishment of the company in this part. Likewise, we have described what will be the profit of investment including Balance sheet, Cash Flow, Income statement which will show the predict of 5 years for the Fast Transportation. 3.8.1 Investment plan
The highest part of investment for Fast Transportation company is purchasing of 4 buses and four taxis, in this section of investment plan also includes all important item which will be needed during establishing of the mentioned agency.
The below mentioned table shows financial projection and costs for starting of the Fast Transportation company. Table 8: Investment plan
Item of Investment Y 1 Y2 Y 3 Y 4 Y 5 Buses 300000 60000 Taxis 11200 5600 Equipment 5000 2000 Total investment 316200 0 0 67600 0 383800 (Source: Author) As we can the above-mentioned table, that I assumed to buy 5 buses in the first year and 1 more bus in the fourth year in total will be 6 buses, also I expected to buy 4 taxies in the first year and on more taxi in the fourth year in total will be 6 taxies.
Key assumption Table 9: Key assumption
Item Assumption
Business days per week 7 days
Working days per month 30 days
Capacity of buses 5 x 1 VOLVO – 9700 – 59 seats
51
Capacity of Taxis 4 x 1 Suzuki – Swift – 4 seats
Average number of passengers per trip (Tickets sold) Kabul – Paghman 50 tickets per trip Kabul – Mazar 40 Tickets
Number of trips per day (Kabul – Paghman) Kabul – Paghman 6 trip
Number of trips per week (Kabul Mazar) Kabul – Mazar 2 trips
Number of trips per year Kabul – Paghman 2190 trips
Kabul – Mazar 95 trips
Bus per person per trip Kabul – Paghman 4 USD
Kabul – Mazar 40 USD
Average number of passengers per day(Taxi) 10 Passengers
Price per order (Taxi) $1.54
Number of passengers per month 300 passengers
Number of passengers per year 109500 Passengers
Average taxi order per day (sold) $ 65
(Source: Author) 3.8.2 Source of financing
Cash needs to commence operation, so the initial capital mainly will be arranged by the owners/founders $400,000 by their own to invest for the Fast Transportation Agency, we will try to don’t get a loan from banks to avoid monthly down payment and interest. 3.8.3 Balance sheet
The below-mentioned table will show the first entry of Fast Transportation agency accounts Table 10: Balance sheet
Asset Liability
Cash $400,000 Equity $400,000
(Source: Author)
52
3.8.4 Sensitivity Analysis
3.8.4.1 Optimistic variant
Sales Projection
One thing is sure that there will always be individuals, and corporate companies that would need to use buses, and taxi on their daily basis within Kabul and other urban cities. We will be well positioned to cover the available market in the Afghanistan, and we are sure that we will meet our set target of making enough income/profits by offer competitive prices, valuable services according to customer’s expectations from the first year of operations and grow the company and expand the company to other major cities of Afghanistan and our sales will be increasing during the next five years. The below mentioned table shows sales and cost company during 5 years:
Table 11: Cost of sales
Cost of sales (in USD) Y 1 Y2 Y 3 Y 4 Y 5 Fuel (petrol, oil…) 137608 156543.2 155084.56 176542.28 160717.6 Overhad cost 5000 5000 10000 10000 10000 Rent 600 600 800 800 800 Furniture 2000 0 0 500 0 Promotion 10000 7000 7000 5000 5000 Personal cost 98400 108000 117600 127200 132000 TOTAL 253608 277143.2 290484.56 320042.28 308517.6
(Source: Author)
Table 12: Sales
Sales Y 1 Y2 Y 3 Y 4 Y 5 Transportation sales 671087.04 747338.8 831438.4 915538 945600 Other sales 15000 15000 20000 20000 20000 Total sales 686087.04 762338.8 851438.4 935538 965600 (Source: Author)
53
Chart 10: Sales projection
Sales projection Sales Cost of sales 1500000
1000000
500000
0 year1 Year2 Year3 Year4 Year5
(Source: Author) Balance sheet
Table 13Balance sheet:
Year 1 Year 2 Year 3 Year 4 Year 5
Assets 769239 1191195 1688908 2227644 2807967
Cash 516279 1001475 1562428 2110324 2767407
Property 316200 316200 316200 383800 383800
Accumulated Depreciation 63240 126480 189720 266480 343240
Total Long-term Assets 252960 189720 126480 117320 40560
Liability 769239 1191195 1688908 2227644 2807967
Equity 400000 400000 400000 400000 400000
Bank loan 0 0 0 0 0
Payment (Loan r8) 0 0 0 0 0
Retained Earnings 369239 791195 1288908 1827644 2407967
(Source: Author)
54
Profit and loss statement
Table 14: Profit & loss
P+L statement Year 1 Year 2 Year 3 Year 4 Year 5
Sales 686087 762339 851438 935538 965600
Direct Cost of Sales 253608 277143 290485 320042 308518
Depreciation 63240 63240 63240 76760 76760
Interest 0 0 0 0 0
Total Cost of Sales 316848 340383 353725 396802 385278
EBIT 369239 421956 497714 538736 580322
Profit 369239 421956 497714 538736 580322
(Source: Author)
Cash flow projection
Table 15: Cash flow projection
Year 1 Year 2 Year 3 Year 4 Year 5
Cash 400000 516279 1001475 1562428 2110324
Expenditure Inv. 316200 0 0 67600 0
Payment (Loan r8) 0 0 0 0 0
Profit 369239 421956 497714 538736 580322
Depreciation 63240 63240 63240 76760 76760
Cash ending 516279 1001475 1562428 2110324 2767407
(Source: Author)
55
Break Even Point The company will get it is profit in from the first year of its operation, because of investments we will do on our company’s promotion of the services, thanks to that our services will be we known and recommended.
Table 16: Break Even point
Year 1 Year 2 Year 3 Year 4 Year 5 Sales 686087 1448426 2299864 3235402 4201002
Total Cost of Sales 711848 1046731 1394956 1788258 2170036 Equity 400000 400000 400000 400000 400000 (Source: Author)
Chart 11: Break Even point
4500000 4000000 3500000 3000000 2500000 Sales 2000000 Total Cost of Sales 1500000 Equity 1000000 500000 0 Year 1 Year 2 Year 3 Year 4 Year 5
(Source: Author)
56
3.8.4.2 Most expected variant
Sales Projection Table 17: Cost of Sales
Cost of sales (in USD) Y 1 Y2 Y 3 Y 4 Y 5 Fuel (petrol, oil…) 180,625.00 180625 180625 185102 185102 Overhad cost 6200 6400 11400 11400 11400 Rent 900 900 900 1100 1100 Furniture ` 0 0 0 0 Promotion 5000 4000 3000 5000 6000 Personal cost 112200 119700 128100 138900 144900 TOTAL 304,925.00 311,625.00 324,025.00 341,502.00 348,502.00 (Source: Author) Table 18: Sales
Sales Y 1 Y 2 Y 3 Y 4 Y 5 Transportation sales 300000 380000 700000 800000 850000 Other sales 50000 70000 80000 100000 120000 Total sales 350000 450000 780000 900000 970000 (Source: Author)
Chart 12:Sales projection
Sales projection
Sales Cost of sales 1200000
1000000
800000
600000
400000
200000
0 year1 Year2 Year3 Year4 Year5
(Source: Author)
57
Balance Sheet Table 19: Balance Sheet
Year 1 Year 2 Year 3 Year 4 Year 5 Assets 381835 456970 849705 1331443 1876181 Cash 128875 267250 723225 1214123 1835621 Property 316200 316200 316200 383800 383800 Accumulated 63240 126480 189720 266480 343240 Depreciation Total Long-term 252960 189720 126480 117320 40560 Assets Liability 381835 456970 849705 1331443 1876181 Equity 400000 400000 400000 400000 400000 Bank loan 0 0 0 0 0 Payment (Loan r8) 0 0 0 0 0 Retained Earnings -18165 56970 449705 931443 1476181 (Source: Author) Profit and loss statement
Table 20: Profit & loss
P+L statement Year 1 Year 2 Year 3 Year 4 Year 5 Sales 350000 450000 780000 900000 970000
Direct Cost of Sales 304925 311625 324025 341502 348502
Depreciation 63240 63240 63240 76760 76760 Interest 0 0 0 0 0 Total Cost of Sales 368165 374865 387265 418262 425262 EBIT -18165 75135 392735 481738 544738 Profit -18165 75135 392735 481738 544738
(Source: Author) Cash Flow Table 21: Cash flow
Year 1 Year 2 Year 3 Year 4 Year 5 Cash 400000 128875 267250 723225 1214123 Expenditure Inv. 316200 0 0 67600 0 Payment (Loan r8) 0 0 0 0 0 Profit -18165 75135 392735 481738 544738 Depreciation 63240 63240 63240 76760 76760 Cash ending 128875 267250 723225 1214123 1835621
58
(Source: Author)
Break Even Point
As we can the below-mentioned graph which shows that company will get it is profit in from the third year of its operation, it might be due to low investments we will do on our company’s promotion of the services, which will decrease the customer’s awareness from the company and might will have the average customers which will purchase the tickets. Table 22: Break Even point
Year 1 Year 2 Year 3 Year 4 Year 5 Sales 350000 800000 1580000 2480000 3450000
Total Cost of Sales 768165 1143030 1530295 1948557 2373819
Equity 400000 400000 400000 400000 400000
(Source: Author) Chart 13: Break Even point
4000000
3500000
3000000
2500000 Sales 2000000 Total Cost of Sales 1500000 Equity 1000000
500000
0 Year 1 Year 2 Year 3 Year 4 Year 5
(Source: Author)
59
3.8.4.3 Pessimistic variant
Sales projection Table 23: Sales projection
Cost of sales (in USD) Y 1 Y2 Y 3 Y 4 Y 5 Fuel (petrol, oil…) 204706.8 206936.1 208165.4 199009.9 190625 Overhad cost 5000 5000 5000 6000 6000 Rent 1000 1000 1000 1400 1400 Furniture 2200 0 0 500 0 Promotion 5000 7000 7000 6000 2000 Personal cost 123000 143700 154800 174900 192000 TOTAL 340906.8 363636.1 375965.4 387809.9 392025
(Source: Author) Table 24: Sales
Sales Y 1 Y2 Y 3 Y 4 Y 5 Transportation sales 381775.68 454103.5 509555.3 534875.1 537504 Other sales 2000 2000 2000 3000 3000 Total sales 383775.68 456103.5 511555.3 537875.1 540504 (Source: Author) Chart 14: Sales projection
Sales projection
Sales Cost of sales 600000
500000
400000
300000
200000
100000
0 year1 Year2 Year3 Year4 Year5
(Source: Author)
60
Balance Sheet Table 25: Balance Sheet
Year 1 Year 2 Year 3 Year 4 Year 5 Assets 379629 408856 481206 554511 626230 Cash 126669 219136 354726 437191 585670
Property 316200 316200 316200 383800 383800 Accumulated 63240 126480 189720 266480 343240 Depreciation Total Long-term 252960 189720 126480 117320 40560 Assets Liability 379629 408856 481206 554511 626230 Equity 400000 400000 400000 400000 400000 Bank loan 0 0 0 0 0 Payment (Loan r8) 0 0 0 0 0 Retained Earnings -20371 8856 81206 154511 226230
(Source: Author)
Profit and lost Statement Table 26: Profit & loss
Year 1 Year 2 Year 3 Year 4 Year 5 Sales 383776 456104 511555 537875 540504 Direct Cost of Sales 340907 363636 375965 387810 392025 Depreciation 63240 63240 63240 76760 76760 Interest 0 0 0 0 0 Total Cost of Sales 404147 426876 439205 464570 468785 EBIT -20371 29227 72350 73305 71719 Profit -20371 29227 72350 73305 71719 (Source: Author)
Cashflow Table 27; Cashflow
Year 1 Year 2 Year 3 Year 4 Year 5 Cash 400000 126669 219136 354726 437191 Expenditure inv. 316200 0 0 67600 0 Payment (Loan r8) 0 0 0 0 0 Profit -20371 29227 72350 73305 71719 Depreciation 63240 63240 63240 76760 76760 Cash ending 126669 219136 354726 437191 585670 (Source: Author)
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Break Even Point
As we can the below-mentioned graph which shows that company will not get profit within years it might be due to low investments we will do on our company’s promotion of the services, which will decrease the customer’s awareness from the company and might will have the average customers which will purchase the tickets, and also it can be due to high inflation rate of fuel or other reason also can be the lack of providing low services by the employee. Table 28: Break Even point
Year 1 Year 2 Year 3 Year 4 Year 5 Sales 383776 839879 1351434 1889310 2429814 Total Cost of Sales 804147 1231023 1670228 2134798 2603583 Equity 400000 400000 400000 400000 400000
(Source: Author)
Chart 15: Break Even point
3000000
2500000
2000000
Sales 1500000 Total Cost of Sales Equity 1000000
500000
0 Year 1 Year 2 Year 3 Year 4 Year 5
(Source: Author)
62
3.9 Conclusion
The subject of my thesis is about establishing of Fast Transportation agency in Afghanistan, which will provide the high-quality bus services and taxi services for the people of Afghanistan, the objective of company is not just about making profit but also satisfy the needs of people which have been facing problems in their daily life because of bad quality services of transportation in Afghanistan, as we analyzed the market needs of people in Afghanistan in this business plan include taxi services in Kabul city.
The management of Fast Transportation agency is assuming that the business plan which is given for the establishing of Transportation agency will have a huge success according to the observation we had in transportation industry of Afghanistan.
The first part of the business plan is information about theoretical part including the form of organization, industry analysis, market analysis, operational strategy, and financial analysis which was very supportive for the creating of this business plan.
According all analysis of Industry, Market, and financial accounting technique such as understanding of the needs of people, study of market requirement and the methods for the promoting the company among people and quality of services, net present value, and payback period, each of them have proved that the business will be profitable and worthy to be operated in the country, even more can cover the gap of market and gives a standard transportation for the nation.
And in the second part which is practical part focused on creating of the business is all about a summary of company, objective and its goal which is focused on providing the services with high quality and value according to need of customers, in the part also have included competitive advantages, analysis of its SWOT analysis and environmental analysis, which shows there are many advantages for the company that focused on the management, customers responsive and the ability of providing online services like purchasing of ticket through internet. As the company has excellent advantages, but also there are threats which come from lack of experiences, lack of fund for the future market, to reduce the treats the company will provide training programs for the employee of a company that makes is able to provide the best quality and understand the needs of the customers.
63
For the understudying market, a research and presentation had been given to obtain more data about needs and satisfaction level of customers from other companies in the market. However, the analysis was made easy for entering the market and helpful for analyzing the market needs and made a good experience for the market.
At the middle of practical part also I have mentioned about the communication/advertising and management structure arrangement for achieving the goals of company, by the help of these keys the company will be able to send his cleared message to significant people and not just to national groups but also to international target groups and it will encourage them to take action for using the service of the company.
Lastly the most important part of the business plan I analyzed the financial part, which explained clearly about investment in the business, and statements for the 5 years, and also shows that in the first year will be a lots of expenditure in promoting of services and on the employees of the company, however for initial investment, the quality of services will surly stand on long reputation for the company over its operating, after calculating all the cost and revenue of the company I have found the result which shows the company will have profits from the first year of its operating.
From all point of fact which mentioned below shows that business plan should be implemented in Afghanistan and should be used for the future.
64
3.10 References
1) TIFFANY, P. – BARROW, C. – PETERSON, S. Business Plan for Dummles. England: John
Wiley & Sons Ltd., 2004. ISBN 0-7645-7026-9.
2) Acbr.gov.af. (2014). Afghanistan Central Business Regstry & IP. [online] Available at:
http://www.acbr.gov.af [Accessed 31 Oct. 2013].
3) CLAPPERTON, G. – ABRAMS, R. Business plan in a day. Chichester, UK:
Capstone Publishing Ltd., 2005. ISBN 978-1-841-12804-7.
4) Friend, G. and Zehle, S. (2009). Guide to business planning. London: The Economist in
association with Profile Books, pp. ISBN-13 978 1 86197 474 7.
5) Stone, M. and Desmond, J. (2007). Fundamentals of marketing. London: Routledge, pp.
ISBN 0-203-03078-8.
6) PESTLE Analysis. (2017). PESTLE Analysis - Business and SWOT Analysis. [online]
Available at: http://pestleanalysis.com [Accessed 1 Jan. 2017]
7) Tutor2u [online]. 2010 [cit. 2010-03-21] Available on the internet:
8) CLAPPERTON, G. – ABRAMS, R. Business plan in a day. Chichester, UK:
Capstone Publishing Ltd., 2005. ISBN 978-1-841-12804-7
9) WILD, J. – BERNSTEIN, L. Financial Statement Analysis. USA: Irwin McGraw-
Hill, 1998. ISBN 0-256-16704-4
10) Subramanyam, K. and Wild, J. (2009). Financial statement analysis. 10th ed. Boston,
Mass.: McGraw-Hill/Irwin, pp.978-0-07-337943-2.
11) Bernstein, L. and Wild, J. (1998). Financial statement analysis. 6th ed. New York:
McGraw-Hill, pp. ISBN 0-256-16704-4.
65
12) Wikipedia [online]. 2010 [cit. 2010-04-01]. Available on the internet: Internet
Sources
13) Schall, L. and Haley, C. (1991). Introduction to financial management. McGraw-Hill:
New York, pp.ISBN 0-07-055117-0.
14) Study.com [2003] [cit. 2017-01-01] available: http://study.com/academy/lesson/how-
to-calculate-payback-period-method-formula.html
15) En.wikipedia.org [online] (2017). [cit. 2017-09-22]. [online] Available at:
https://en.wikipedia.org/wiki/Net_present_value
16) QLD [online]. (2017). [cit. 2016-06-28]. Available
at:https://www.business.qld.gov.au/running-business/protecting-business/risk-
management/preparing-plan
17) Wikipedia [online]. 2010 [cit. 2010-04-16]. Available on the internet:
66
4 List of Charts, tables, pictures
4.1 Charts
CHART 1: VEHICLES & DEMAND MANAGEMENT ...... ERROR! BOOKMARK NOT DEFINED.
CHART 2: RESPONDENTS ...... 40
CHART 3: GENDER RESPONDS ...... 40
CHART 4: AGES RESPONSE ...... 41
CHART 5: PURCHASE OF TICKETS ...... 41
CHART 6: USE OF BUS SERVICES ...... 42
CHART 7: SATISFIED WITH OTHER BUS AND TAXI COMPANY SERVICES ...... 42
CHART 8: ...... 43
CHART 9: INFLUENCING DURING PURCHASE OF TICKETS ...... 43
CHART 10 ...... 44
CHART 11: ORGANIZATION STRUCTURE ...... 46
CHART 12: SALES PROJECTION ...... 54
CHART 13: BREAK EVEN POINT ...... 56
CHART 14: SALES PROJECTION ...... 57
CHART 15: BREAK EVEN POINT ...... 59
CHART 16: SALES PROJECTION ...... 60
CHART 17: BREAK EVEN POINT ...... 62 4.2 Tables
TABLE 1: VEHICLES & DEMAND MANAGEMENT ...... 5
TABLE 2 SWOT ANALYSIS ...... 14
TABLE 3: EXECUTIVE SUMMARY ...... 22
TABLE 4: PEST ANALYSIS ...... 29
TABLE 5: OPERATING ROUTES ...... 44
TABLE 6: WORKERS OF THE COMPANY ...... 48
TABLE 7: SALARIES PER MONTH (USD) ...... 49
TABLE 8: INVESTMENT PLAN ...... 51
TABLE 9: KEY ASSUMPTION...... 51
TABLE 10: BALANCE SHEET ...... 52
TABLE 11: COST OF SALES ...... 53
TABLE 12: SALES ...... 53
TABLE 13BALANCE SHEET:...... 54
67
TABLE 14: PROFIT & LOSS ...... 55
TABLE 15: CASH FLOW PROJECTION ...... 55
TABLE 16: BREAK EVEN POINT ...... 56
TABLE 17: COST OF SALES ...... 57
TABLE 18: SALES ...... 57
TABLE 19: BALANCE SHEET ...... 58
TABLE 20: PROFIT & LOSS ...... 58
TABLE 21: CASH FLOW ...... 58
TABLE 22: BREAK EVEN POINT ...... 59
TABLE 23: SALES PROJECTION ...... 60
TABLE 24: SALES ...... 60
TABLE 25: BALANCE SHEET ...... 61
TABLE 26: PROFIT & LOSS ...... 61
TABLE 27; CASHFLOW ...... 61
TABLE 28: BREAK EVEN POINT ...... 62 4.3 Pictures
PICTURE 1: NPV ...... 19
PICTURE 2: BREAK EVEN ANALYSIS ...... 20
PICTURE 3: COMPANY’S LOGO ...... 22
PICTURE 4: FACEBOOK ADVERTISING ...... 37
PICTURE 5: BILLBOARD ...... 38
PICTURE 6: KABUL PAGHMAN ROUTES ...... 45
PICTURE 7: KABUL – MAZAR ROUTES ...... 45
68
5 Appendixes
5.1 Balance sheet format in Afghanistan
Balance sheet format in Afghanistan ASSETS
A Receivables for subscribed registered capital
B Fixed asset
B. I Intangible fixed assets Research and development Software Intangible fixed assets under construction
B. II Tangible fixed assets Land Buildings Property Livestock Tangible fixed assets under construction
B. III. Long-term investments Investments in group undertakings Investment in associated companies Long-term security Long-term investments
C. Current assets C.I Inventories Raw materials project in progress Finished good Advanced payment livestock
C. II. Long-term receivables Trade receivables Estimated receivables
69
Receivables from shareholders Other receivables
C. III. Short-term receivables Trade receivables Receivables from group Receivables from shareholders Social security health insurance Tax receivables Other advances paid Other receivables
C. IV. Short-term financial assets Cash Bank accounts Short-term securities ownership interests Short-term investments LIABILITIES AND EQUITY A Equity
A. I. Registered capital Registered capital Own shares held
A. II. Capital contributions Share premium Other capital contributions Revaluation of assets and liabilities
A. III. Reserve funds Statutory reserve other reserves
A. IV. Retained earnings Retained profits Accumulated losses
A. V. Profit (loss) for current period
70
B. Liabilities
B. I. Provisions Tax-deductible provisions Provisions for pensions Income tax provisions Non-deductible provisions
B. II. Long-term liabilities Trade payables Liabilities to group Liabilities to shareholders Long-term advances received Debentures and bonds issued exchange payable Other long-term payables
B. III. Short-term liabilities Trade payables Liabilities to group Liabilities to shareholders Payables to employees Payables to social security Tax liabilities Other payables
B. IV. Bank loans and overdrafts Long-term bank loans Short-term bank loans Short-term financial liabilities (Source: Author)
71
5.2 Example of Income statement in Afghanistan
(Sources:http://www.bakhtarbank.com/news)
72
5.3 Example of Cash flow in Afghanistan
(Sources: http://www.bakhtarbank.com/news)
73
5.4 Questionnaires
Dear Sir/Madam
We are pleased to introduce you to our company Fast Travel Agency, which will be providing bus and taxi services within Afghanistan. We believe that we have an excellent service over the country and offer better service than the other bus and taxi services, and quality services are the primary aim of our company. And by answering to below-mentioned question, we will be able to provide better services and understand what exactly you need for being comfortable and being satisfied
Please just answer the below-mentioned questions, and this questionnaire does not have any restriction on ages, gender, nationality.
Thank you for your time,
Ahmad Tamim Rashed
1. Your Age (Select only one.)
to 26
27-36
37-46
47-55
50 +
2. Your Gender (Select only one.)
Female
Male
74
Other
3. Where are you from? (Select all that apply.)
Kabul
Mazar
Parwan
Jalalabad
Herat
others
4. How would you prefer to purchase the tickets (Select all that apply.)
Web page
At the station
other location
5. Which factors influence you during your purchasing of tickets? (Select all that apply.)
Price
Quality
Other
6. How often do you use bus services? (Select only one.)
Daily
Weekly
75
Monthly
Rarely
7. have you satisfied with other bus and taxi company services? (Select only one.) Very satisfied
Satisfied
Less dissatisfied
dissatisfied
8. Where do you prefer to know about services of a company? (Select only one.)
Internet
Mass media
Billboards
Press
Other
9. Would you feel safer with a male or female taxi drivers? (Select only one.)
Male
Female
Indifferent
(Source: Author)
76