Chapter I Introductory Page

CHAPTER I

INTRODUCTORY PAGE

1.1 . Name and Address of Business

Name of Business: Sabang Merauke Trip Organizer (Sake Trip Organizer)

Address of Business: Jalan Peta Komp. Kopo Plaza Blok B no 1, Bandung

1.2 . Name and Address of Principal

Name of Principal: Velysia

Address of Principal: Jalan Perum. Holis Indah Blok C2 no. 92, Bandung

1.3 . Nature of Business Nowadays, with better life and growing economy in Indonesia, moreover cheaper flights due to the airlines competition and globalization, people especially employees that work everyday seek for entertainment and holiday. Sake Trip Organizer provides the best travel and holiday partner. In addition, Indonesia no doubt has the potential in terms of nature, culture, also marine life which are the best assets for tourism business. Indonesia has well-preserved rainforest system that occupied over 57% of Indonesia’s land. Indonesia also consists of more than 16,000 islands, perfect place for diving. Lays between coral triangle zone, Indonesia offers many incredible diving spots. Around 3,000 different species of fishes and 600 coral species can be found in Indonesia (Wikipedia.com, 2013). 1.4 . Statement of Financing Needed The financial source comes from the owner. The owner invested Rp 100,000,000 for the establishment of the new company. The sources of funds and use of funds statement are explained in chapter 9.

1.5 . Statement of Confidentiality Report The undersigned reader acknowledges that the information provided by Sabang Merauke Trip Organizer in this business plan is confidential; therefore, reader agrees not to disclose it without the express written permission of Sabang Merauke Trip Organizer. It is acknowledged by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that and disclosure or use of same by reader, may cause serious harm or damage to Sabang Merauke Trip Organizer. Upon request, this document is to be immediately returned to Sabang Merauke Trip Organizer.

CHAPTER II

EXECUTIVE SUMMARY

Introduction

The tourism industry has grown rapidly in last several decades. This mainly happened due to the advent of “borderless” world and the easiness of obtaining information about the unbelievable scenery around the world. Indonesia has such an amazing nature and marine life. It consists of thousands of archipelago positioned in the middle of world coral triangle, best spot for snorkeling and diving. Unfortunately, the local Indonesian itself doesn’t realize the advantages. They prefer going abroad rather than seeing their own country. Sake Trip Organizer is here to re-introduce that our motherland is way much prettier.

Company Description

Sake Trip Organizer is a company which specializes in archipelagos trip. The main products are exotic islands in Indonesia; Raja Ampat, Derawan, Wakatobi, Ora Beach, Belitung, Togean, Weh Island, Takabonerate, and Komodo Island. The founders and the employee are experienced traveler and professionals who are capable and passionate about tourism. Differentiating the company from travel agent, we create our own package, not only selling the package. Sake Trip Organizer cooperates with local provider to run the tour to particular area. Not only profit oriented, but involving in society is the company’s goal. also. Some of the profit will be donated to our foundation in order to help and develop the local society, thus empowering the local community.

Industry Analysis

According to HVS Global Hospitality Service Research, in 2012, number of tourists which traveled in Indonesia reached 250 million people. From the total number, 245 million are domestic tourists.

The promotional activity done by Ministry of Tourism has increased tourism volumes in Indonesia in 2008-2012. In addition, the increasing of domestic and international airline and capacity routes has expanded inbound tourist volumes at a CAGR of 3.20% and are expected to record marginal growth at CAGR 1.29% in 2013-2017.

Market Analysis

To begin, the segmentation includes three big cities in Indonesia; Jakarta, Surabaya, Makassar, targeting the age of 22-40. There are three main competitors who run in the same business style; Wisata Bahari Indonesia, Kakaban Trip, Valadoo.

Marketing Plan

Promotion and advertisement will be conducted as effectively and efficiently as possible through internet, as the powerful media to promote. In the end, Sake Trip Organizer does not just intend to market and sell our services, but to market and sell travel solution and a total quality environment. This will ensure the establishment of a reputable corporate image.

Management Team and Company Structure

The management team consists of five members led by the founder Velysia, age 21. Velysia has involved in this industry since 2011. Traveling around Indonesia makes Velysia has the advantage of the tourism industry knowledge, links, also an expert in consulting. Therefore, to support Velysia and the company, other four employees will be added. Two persons in Marketing division, one person in finance division,

4 and one person as the reservation. These four people shall report to Velysia as the owner and director of Sake Trip Organizer.

Operations and Development Plan

Sake Trip Organizer operates on: Monday-Friday from 8 a.m. to 5 p.m. The company mainly sells the product through websites. There will be no display or tangible place to meet the customers. In other words, the staffs work in our office where all communications and transactions are virtual.

Financial Projections

The business plan includes all financial projections such as pro forma income statements, balance sheets, and cash flow (three years projections.) The funding source comes from the owner with the amount of Rp 100,000,000. The company expected sales in the first year reach Rp 761,000,000 with the profit margin of 30%. Net profit is projected to be Rp 29,525,000 in the first year, Rp 149,760,000 in the second year and Rp 347,643,000 in the third year.

CHAPTER III

INDUSTRY ANALYSIS

3.1. Future Outlook and Trends

Likely food, as the basic need of human, travel and pleasure are also cannot be separated from human’s need. Since the presence of low cost airlines which creates competition among airlines companies, furthermore has changed the mobility of global population, now everyone can easily purchase flight as it becomes cheaper. Furthermore, the growth of tourism has increased, as according to HVS Global Hospitality Service Research, in 2012, number of tourists which traveled in Indonesia reached 250 million people. From the total number, 245 million are domestic tourists. As for international tourists, the number increased 5% from 2011. In 2013, 8.6 million of international tourists are targeted to visit Indonesia (Kompas, 2013).

Minister of Indonesia, Maria Elka Pangestu stated that Indonesia is the third developing country in South East Asia in terms of infrastructure development and hotel investment. The investment mostly is implanted in Nusa Tenggara Barat and Nusa Tenggara Timur region. According to HVS China and South East Asia, numbers of travel trips in Indonesia may reach 400 million in 2023 (Kompas, 2013).

According to Mathieson and Wall (1982); Seward et al. (1982), Duffield (1982) (all in Gržinic, 2006: 10) reasons for the economy to seek to develop tourism as an export industry are the following: 1. Creation of new industries and activities; 2. Impact on employment; 3. The increase in urbanization; 4. Increased income of the country in balance of payments and accelerating the development of national economy.

5. The redistribution of power through redistribution of capital in developed and developing countries. 6. Tourism multiplier effect Figure 3.1. Tourism Performance, Indonesia Compared to Global

7. 8. 9. 10. 11. 12. 13. 14. 15. 16. cts.

Source: Statistic Indonesia, MTCE, UNWTO, 2012

3.2. Analysis of Competitors

Sabang Merauke Trip Organizer concerns about its competitor. As a new company, seeking information about the competitors determines the new plan to face the competition. A survey is done by joining the trip provided by the competitors in order to find out the strength and weakness.

3.2.1. Direct Competitors

Since most travel agents are not focusing on travel packages in eastern archipelagos of Indonesia, they are not considered as our main direct competitors. There are three main competitors who run in the same type of business which are:

1. Wisata Bahari Indonesia

Wisata Bahari Indonesia is a company located in Lampung, owned by a registered guide named Ricky. His products are almost the same or even more with cheaper price. But WBI did not deliver good service to customers. From the experience during joining their trips, many customers unsatisfied with the unprofessional services by Ricki.

2. Kakaban Trip

A well established company, starting their first product which is Derawan Trip. This company’s target is high class people, also delivers good services and high facilities to them. Kakaban Trip often shows up in travel fair. They have strong marketing and loyal customers. The weakness is only high price which not all people can afford.

3. Valadoo.com

Valadoo.com is an online based travel provider. Established in 2010, Valadoo.com started to run by giving daily deals. In 2011, Valadoo.com focused only on travel packages. The strength of Valadoo.com is the practicality in transactions. They cover up all different types of destinations and activities in 27 provinces in Indonesia. The website has more than 60,000 members.

3.2.2. Future Competitors

Tourism industry will continue to grow, as indicated in the industry analysis earlier. Individuals can easily create the same business. This will be the team challenge to survive in the future competitors.

Table 3.1. Competitive Analysis Grid

Name Sake Trip Wisata Bahari Kakaban Trip Valadoo.com Organizer Indonesia Staff Advantage Disadvantage Even Even Tour Even Even Even Even packages offered Service Advantage Disadvantage Even Even Quality Price Advantage Even Disadvantage Disadvantage Source: Velysia, Founder of Sake Trip Organizer, 2014 Summary The Grid shows that Sake Trip Organizer has some winning points comparing to its main competition. Although Sake Trip Organizer has the same tour packages offered, but considering the price, the quality, and the staff, Sake Trip Organizer has the advantage to take over the industry

3.3. Market Segmentation, Targeting, and Positioning

3.3.1. Marketing Segmentation

The definition of market segmentation is the process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics. The objective is to design marketing mix and plan that meet the expectations of customers in the targeted segment. Four basic factors that affect market segmentation are (Businessdictionary, 2013):

1. Clear identification of the segment. 2. Measurability of its effective size. 3. Accessibility through promotional effort. 4. Appropriateness to the policies and resources of the company.

Figure 3.2. Population by Age Group and Sex of Java Island, 2010

The table above shows the potential market for the business is the age group of:

1. 20-24 years old with total numbers 11,068,020 2. 25-29 years old with total numbers 12,145,377 3. 30-34 years old with total numbers 11,403,728

Figure 3.3. Number of Population by Province, Sex, Sex Ratio, and Growth Rate of Population (thousand), 2010

Source: Based on 2010 population census, BPS-Statistic Indonesia

From the table shown above, the population in West Java has the highest number of population (21,907mill.), followed by East Java (18,503mill.). We decided to focus our market in Bandung and Surabaya as the capital city of both provinces

3.3.2. Targeting

Sake Trip Organizer will target the customers who live in Jakarta, Bandung, and Surabaya where most population of people stay in those three cities. Our main target is the people with age of 25-29 years old, the productive age. This age is also considered as the golden age to travel while they still have their personal income and unmarried yet. The classes of people targeted are company, employees, divers, and honeymooners.

3.3.3. Positioning

Sake Trip Organizer positioned itself as a trip organizer which focuses on archipelagos around Indonesia. With adventurous activities including snorkeling and diving trip, the company aims to change Indonesian’s mind on how beautiful and how rich we are having such an amazing country. Not only for pleasure, nature preservation as well as local society development is company’s main concern.

3.4. Industry and Market Forecast

In the report “Travel and Tourism in Indonesia to 2017” by Timetric, here are important points concluded about industry and market forecast in Indonesia tourism (Beforeitsnews, 2013):

The promotional activity done by Ministry of Tourism has increased tourism volumes in Indonesia in 2008-2012. In addition, the increasing of domestic and international airline and capacity routes has expanded inbound tourist volumes at a Compound Annual Growth Rate (CAGR) of 3.20% and are expected to record marginal growth at CAGR 1.29% in 2013-2017.

The rising middle-class population in Indonesia plays important role in domestic tourism growth. Based on National Statistic Bureau, in first quarter of 2013 Indonesians made 3.41% more trips, 5.7 million, compared to 53.86 million during

12 the same period in 2012. Those with highest propensity to travel are residents from East Java, Central Java, West Java, Jakarta, North Sumatera, and Bali.

The growth potential in Indonesia is expected to increase travel and tourism revenues. The steady flow of foreign investors will add more travelers for business purpose. Moreover, government efforts in building and promoting tourism infrastructure lead to growth in both domestic and international tourism.

Government has identified 16 priority destinations to be developed in up-coming years to attract international tourists in the country. The destinations are:

1. Pangandaran 2. Lake Toba 3. Borobudur and Prambanan Temples 4. Bromo-Tengger-Semeru, 5. Lombok and Rinjani Volcano 6. Yogya-Sleman 7. Toraja 8. Flores 9. Wakatobi 10. Derawan Islands 11. Weh Island 12. Togean Islands 13. Thousand Islands 14. Old Batavia 15. Bali’s southern and northern coasts 16. Mount Batur

In 2011, the government has terminated the fiscal tax imposed to Indonesians who are about to leave the countries. Before, the tax was impose to all Indonesians except

13 of those who able to produce Tax Identification Number. From January 2011, all Indonesians are allowed to travel abroad without having to pay the tax.

The trend of low cost airlines has changed the mobility of people in this era. As result, travelers can now easily purchase cheap promotional tickets offered by the airlines. Three low cost airlines operating in Indonesia are Air Asia, Cebu Pacific, and Tiger Airways. More Indonesians can travel more often thanks to the low cost airlines.

Indonesia’s local airlines such as Garuda Indonesia, Lion Air, Merpati Airlines, and Sriwijaya Airlines have improved their services by adding the routes especially on eastern part of Indonesia. Merpati Airlines has daily flight to Labuan Bajo, Sriwijaya Airlines started daily routes to Timika and Manokwari. In May 2013, Garuda Indonesia announced daily flights to Bandung from Bali.

Investment in hotel and resorts develop luxurious accommodation in Indonesia. Both domestic and international hotel chains are targeting Indonesia, the most visible one is in Bali and Lombok. Some recorded hotel chains in Indonesia scheduled to be commence by 2014 are:

a. 20 midscale Aston properties and 24 FavHotel properties by Aston International. b. 23 Harris properties and 23 Pop! Properties by Tauzia Hotel Management. c. 13 Best Western properties by Best Western International. d. 7 Zest properties by Swill Bel-hotel. e. 10 Tune hotels.

Car rental business continues to grow in 2012, increased by 10% from 2011 and reach 177 in 2012. The small operators impact in improving car rental business in Indonesia. The share of total car rental values sales by medium-sized operators increased during the year. Three leading car rental operators are PT. CSM

Corporatama, Serasi Autoraya, and PT Adi Sarana Armada, which together accounted for 65% of the total car rental business in Indonesia.

Demand for products and services offered by travel agents is likely to decrease in Indonesia over the forecast period due to a shift from using travel intermediaries to booking flights and accommodation online directly from airlines and hotel websites.

CHAPTER IV

DESCRIPTION OF VENTURE

4.1. Product(s)

Sake Trip Organizer focuses on tour package to archipelagos around Indonesia. The tour packages are:

a. Raja Ampat. Raja Ampat which means Four Kings is an archipelago located in West Papua. No more doubts, it is the best diving spot in Indonesia, even on earth. Raja Ampat has the most marine diversity. The position among two oceans, Indians and Pacific Oceans, with the suitable temperature accelerated corals growth. No wonder it's considered as last paradise on earth. The beauty and the diversity, added with the warm local people, is a must place to visit. Figure 4.1. Pianemo, Raja Ampat

Source: littlenomadid.blogspot (owner’s personal blog), 2013 b. Derawan Archipelago. Located in East Borneo, Derawan Archipelago offers so many unique things. There are four main islands in Derawan Archipelago; Derawan, Kakaban, Maratua, Sangalaki. One of the uniqueness is an ancient lake in Kakaban where stingless jellyfish can be found here. The jellyfish is no longer sting because the lake which used to be salty turned to freshwater. The species is very rare and can be found in Palau as well beside Kakaban Lake. Maratua has a very nice resort underwater. The water is truly sparkling, best place for honeymooners. Figure 4.2. Maratua Island, Derawan

Source: littlenomadid.blogspot (owner’s personal blog), 2012 c. Wakatobi Archipelago. Wakatobi consists of four big islands named Wangi- Wangi, Kaledupa, Tomia, and Binongko. A marine national park in Southeast Sulawesi, very rich in coral diversity and marine life. Wakatobi marine park has more than 750 coral species and around 942 species of fishes. More than in Carriebean Sea (50 species) and Red Sea (300) species. Furthermore,

Wakatobi has the second biggest barrier reef after Australia, and the longest atol (48 km) in the world. Part of Operation Wallacea, an organization that do research and conserve wildlife in remote locations around the world. Figure 4.3. Underwater Wakatobi Island

Source: littlenomadid.blogspot (owner’s personal blog), 2013 d. Takabonerate National Park. Takabonerate Archipelago lays in the southern peninsula of Sulawesi Island, Indonesia. In 2002, Takabonerate was entitled as a national park. What makes it so special is the size of atoll reefs in Takabonerate with the area of 220,000 ha which makes it become the third largest atoll in the word after Kwajifein atoll in Marshall Islands, and Maldives atoll in Suvadiva. In total, there are 21 islands in Takabonerate National Park. Some islands are inhabitant, some are still virgin islands. Takabonerate is administratively a part of Selayar Regency in South Sulawesi Province. Surely, the level of marine biodiversity is high, a paradise for divers. Species such as turtles, jackfish, humphead wrasse can be found here. Tinabo,

as the island to manage everything especially in controlling all activities in national park. Figure 4.4. Tinabo Island, Takabonerate

Source: littlenomadid.blogspot (owner’s personal blog), 2013 e. Komodo National Park. Komodo national park before was a candidate for seven wonders. It is only the place where Komodo dragon can be found. Komodo dragon is a rare species and almost extinct. Therefore, it is acknowledged as a World Heritage site and Biosphere Reserve. The gate to reach this wonderful Komodo National Park is from Labuan Bajo, Nusa Tenggara Timur. Here are three main islands: Rinca Island (Loh Buaya), Komodo Island (Loh Liang), and Padar Island. About 2000++ Komodo Dragon live in these islands.

Figure 4.5. Pink Beach, Komodo National Park

Source: littlenomadid.blogspot (owner’s personal blog), 2012 f. Ora Beach. Ora Beach, a hidden paradise located in North of Seram Island. A secluded beach with only private eco-resort and surrounded by giant limestone hills, truly an excellent place to find serenity. Moreover, the house reef in front of the resort is still maintained very well. Healthy bunch of corals, even when the tide is low, the corals are visible. This place is very suitable for honeymooners.

Figure 4.6. Ora Beach

Source: littlenomadid.blogspot (owner’s personal blog), 2013 g. Weh Island. Sabang or known as Weh Island is the most outer island in western part of Indonesia. People might think that the best marine or the best island in Indonesia lays in the eastern part of Indonesia. Completely wrong! The beauty of Weh Island equals to other islands in the east. Its special characteristic is the amazing gradation of green and blue colour.

Figure 4.7. Rubiah Island, Sabang

Source: littlenomadid.blogspot (owner’s personal blog), 2013 h. Belitung Island. Belitung is very popular since the movie, "Laskar Pelangi", took set on a white sandy beach with stones in this island. Since then, there were increasing numbers of tourists to Belitung. Some tourist spots in Belitung Island are Kaolin Lake, Lengkuas Island, Tanjung Kepayang, Tanjung Tinggi.

Figure 4.8. Lengkuas Island, Belitung

Source: littlenomadid.blogspot (owner’s personal blog), 2012 i. Togean Archipelago. Located in the middle of Tomini Gulf in Central Sulawesi, Togean Island is a favorite place for international travelers and tourists when they travel in Sulawesi. Kadidri Island as the main island in Togean archipelago has numbers of homestays. The reason why Togean Archipelago becomes tourists’ favorite is because they are able to blend with locals.

Figure 4.9. Togean Island

Source: Indtravel.com

Sake Trip Organizer also able to conduct trip base on customer’s request to both domestic and international destinations

4.2. Service(s)

Sake Trip Organizer realizes that service is the core of this business. Satisfaction of customers lead to returning customers, this is what a business need to strengthen the company. Highlighting travel and tourism business, service must be delivered to customers. Sake Trip Organizer gives free consultation by the expertise in travel industry. The consultant adjusts to what customers want and give the warmest hospitality. Free documentation is provided, also insurance in case something happened. Sake Trip Organizer is the one-stop solution for your holiday.

In 2012 and 2013, Sake Trip Organizer has successfully conducted trip to the follow destinations:

1. Krakatau, Lampung with 27 participants June 16th-17th,2012 2. Derawan, East Borneo with 15 participants August 21st-23rd, 2012 3. Dieng, Wonosbo with 30 participants September 21st-23rd, 2012 4. Baduy Dalam with 10 participants October 6th-7th, 2012 5. Harapan Island with 17 participants November 3rd-4th, 2012 6. Cangke Island with 22 participants May 25th-26th, 2013 7. Weh Island with 12 participants September 6th-8th, 2013 8. Pari Island with 30 participants September 15th-16th, 2013 9. Raja Ampat with 19 participants October 12th-16th, 2013 10. Derawan with 12 participants November 2nd-5th, 2013 11. Tanjung Bira with 6 participants November 22th-24th, 2013 12. Peucang Island with 19th participants December 6th-8th, 2013

4.3. Size of Business

According to UU no. 20, 2008 about micro, small, and medium enterprise, the criteria of small enterprise is:

1. Net Profit: Rp 50,000,000-Rp 500,000,000 (exclude land and building) 2. Sales: Rp 300,000,000-Rp 2,500,000,000

Sake Trip Organizer estimates the sales of the company in the first year until third year is less than Rp 2,500,000,000. The net profit estimated is between Rp 50,000,000-Rp 100,000,000 so the company is considered as small enterprise.

4.4. Office Equipment and Personnel

4.4.1. Office Equipment

Below is some office equipments needed to support the company’s working activity:

Table 4.1. Office Equipment

Office Equipment No Item Price Description 1. 2 Personal Computers Rp 5,400,000 Intel Pentium Dual Core, CPU&Monitor, mouse, keyboard 2. Printer Rp 325,000 Printer HP Deskjet 1000 3. Router Rp 180,000 TP-Link TI-mr3020 4. Telephone Rp 40,000 5. Fax Machine Rp 500,000 6. Air Conditioner Rp 2,000,000 Sanken ½ PK 7. Furniture Rp 5,850,000 5 chairs @350,000 5 tables @600,000 2 cabinets @550,000 8. Stationary Rp 2,000,000 Total Rp 16,295,000 Source: Velysia, Founder of Sake Trip Organizer, 2014

4.4.2. Personnel

As a start-up company, Sake Trip Organizer needs personnel to work with. In the beginning, the company will hire four people. The numbers may change as the company’s grow. Sake Trip is based on online and internet so we still don’t need many employees.

Table 4.2. Personnel

Personnel Position Number of Employee Director 1 Marketing 1 Online Marketing 1 Accountant 1 Reservation 1

4.5 Background of Entrepreneur

Velysia is a President University student majoring in Business Administration concentrating in Entrepreneurship. From the beginning, she has chosen her path to be an entrepreneur. When she started to travel, she was enchanted by the beauty of Indonesia and determined to do a business which suit to her hobby and passion. Furthermore, she committed to involve in empowering local society and also conserving coral reefs. Velysia has started doing this business since 2012 by online. She arranged trip, being a consultant, and jump to the location doing survey. She worked for a travel company to get more insight about travel business. As an optimistic and a hard worker, she believes that she can make her dreams come true.

CHAPTER V

PRODUCTION AND OPERATIONAL PLAN

5.1. Production Development Plan

According to Stanley Rich and David Gumpert, the author of Business Plans That Win, a company is categorized into four points in terms how ready the products or services are being sold (Preparing Effective Business Plan, 2009):

a. Level 4.: Going Concern. A company where the products or services have not only developed, but it is being produced and sold to customers who are satisfied. b. Level 3. Ready to Go. The stage of the company where the products or services are ready to be sold. The company is ready to introduce the product to market and ready for aggressive marketing and sales effort. c. Level 2. Almost There. Companies have built a prototype but still needs evaluation and additional input from prospective customers to verify user benefits. d. Level 1. Good Idea, But…Companies have the idea but still in that stage. No prototype exists yet.

The stage of Sake Trip Organizer services is the fourth level. In 2012-2013, Sake Trip Organizer has conducted trip based on our packages. The company offers full service travel package with semi-backpacking standard. For the car rental at least we use air-conditioned car. While most of the travel packages are the archipelagos in not too developed area, only cottages and guesthouses are available. For the boat itself, we use local boat and it is different depends on the destination. In the future, Sake Trip Organizer plans to open trip to Alor (NTT), Teluk Cendrawasih (Manokwari), Misool (Raja Ampat), but of course research is needed.

5.2. Physical Plan

Sake Trip Organizer’s office is located in Jl. Peta Komp. Kopo Plaza, Bandung. Jalan Peta is the main road in Southern Bandung. In figure 5.1. Below, the A mark points the exact location where the office is. It is a three floor building with the measurement 12 meters long and 6 meters wide. Sake Trip Organizer has the opportunity to use the second floor by paying Rp 20,000,000 each year. First floor is a cellular phone store. Even though there are two different company in the same building, the entrance door is different. To reach second floor, the door on the left side of building can be used. Please refer to figure 5.2 to see the office plan.

Figure 5.1. Maps of Sake Trip Organizer’s Office

Source: Google Map, 2014

Figure 5.2. Office Plan

Source: Velysia, Founder of Sake Trip Organizer, 2014

5.3. Description of Company’s Operation

The operation procedure and model will be explained in this section. Sake Trip Organizer operates on: Monday-Friday from 8 a.m. to 5 p.m. The company mainly

30 sells the product through websites. There will be no display or tangible place to meet the customers. In other words, the staffs work in our office where all communications and transactions are virtual. The reason why the company chooses to operate through website is because of:

1. Large-scale internet user: Internet covers all over the world which means that it is easier to attract customers no matter the location are. The scale is bigger rather than selling just in one place. The users from Sumatera, Sulawesi, Borneo, and Papua can also see our products through internet (see figure 5.3.). 2. Low-Cost: Many providers such as speedy offers cheap monthly internet quota. 3. Effective: Displaying the products through websites is more effective and efficient. Question and asking can be done through messenger and email.

Figure 5.3. Indonesia Internet Users since 1998-2012

Source: APJII, 2013

The operations are broken into three following steps:

1. Creating Website In order to sell via internet, Sake Trip Organizer needs a website to sell and promote the travel packages. The steps of creating the website include: a. Reserve Domain Name. The domain name is trip-sake.com. b. Select Web Hosting Company. Web host is the company providing space to create web pages. Most of web host companies offer the same service. There will be annual fee as big as $9 c. Web Design. The website is designed using wordpress in terms of the easiness and complete plugins. The template is simple with attractive pictures and information about the destinations to attract the customers. d. Web maintenance. The website shall be maintained and updated weekly to enhance the performance. Nevertheless, the web is susceptive to bugs and spam so it is highly recommended to clean the websites.

Figure 5.4. Design of Sake Trip Organizer website

Source: trip-sake.blogspot.com, 2013

2. Company Contract Besides selling through internet, we aim to sell group packages for company’s activities. Our marketing division will go to the company and negotiate for agreement. In South Bandung, nearby our office, numbers of textile factories might be advantageous in terms using our services. The list of the factories will be added in appendix. 3. Open Trip Sake Trip Organizer will set the trip schedule. This method is applied to reduce the price, in other words share cost method. If more people join, the price will be lower. The positive point of open trip is one person can also join because she or he will be combined with other participants. They can also get new friends with this method. The destination and schedule is made normally in the beginning of month and the end of month. Public holiday is also counted.

5.4. Flow of Orders for Services

The figure below shows how the flow of the order. Guests or members who access our website can have a look to the package. Once they have decided which package they want to join, they can order through text message/email. There will be application form to collect the data of the customers. The reservation staff will respond by sending the company bank account. Participants have to pay downpayment 50% to book the seat. The downpayment is used for booking the accommodation as well. Two weeks before departure, reservation staff will decide whether the tour keeps go on or canceled depend on the numbers of participants. Each tour package has the minimum participants. If the registered participants are less than the minimum set, the company has the right to adjust the price based on the number of participants. If the participants signing up less than half of minimum required, the company has the right to cancel the trip and refund the customers’ money. After the minimum numbers of participants are reached, the reservation will

33 contact the participants back to pay the rest of money 2 weeks before departure. The meeting point will be in the particular airport and our staff/local guide will pick up the participants in the airport, and tour start. The guide will handle and take responsibility since the tour starts and ends. After the tour ends, guide will send all the participants back to the airport.

Figure 5.5. Flow of Orders for services

Full Decisio paymen Order Downp Pick up n t through Filling aymen from Tour end, making maximu Executi participants text applic t 50% airport are , tour m 2 on of messag by and dropped ation goes weeks tour back in the e/email custom tour form on or before airport /bbm er starts not departu re

Source: Velysia, Founder of Sake Trip Organizer, 2014

5.5. Technology Utilization

As mentioned in the first point, Sake Trip Organizer will operate through website. In order to create a good and selling website, some skills and techniques are needed to boost the performance of the websites. A good website shall be in the first page of search engine such as google or bing. A common technique used is called SEO (Search Engine Optimization). SEO is a process of getting traffic from the “free”,

“organic”, “editorial” or “natural” listings on search engine (Search Engine Land, 2013). According to Ianne, Travis Derouin, and Seattle SEO Firm, posting on Wikihow.com, here are some tips for driving search engine traffic:

1. Good content. Good content will naturally shared by the readers which generates additional backlinks and extra traffic. Sake Trip Organizer will focus on the right content, also update some information about the destinations. There will be articles to persuade readers so that they want to go. Rewriting the old content, updating image attributes, and changing keyword density will accelerate the search engine performance. 2. Multi channel optimization. Multi channel platforms can be helpful, as result it is very important to implement on site to get more readers. The channel platforms including; Facebook, Twitter, Email, etc (see figure 5.6.). Figure 5.6. Multi Channel Platform

Source: Search Engine Watch, 2013

3. Meta Tags. . These are pieces of code behind the scene. The code should look something like this: It should be placed directly under the title tag code Your site title

CHAPTER VI

MARKETING PLAN

6.1. Pricing

Sake Trip Organizer will be competitively priced in relation to dominate the market. While most of the expenses to archipelago come from the boat, a system which is called “Open Trip” is made. The departure date is set then all people can freely join even if they come alone. This system also has positive side which is meeting new people, get more friends. The boat price can be shared so the selling price will be not too high and still affordable.

The company makes good relationship with local guesthouse, boat owner, and local restaurant in order to have mutualism relationship for both sides beneficial. Estimations margin is 30 percent.

Table 6.1. Comparative Price between Sake Trip Organizer and Direct Competitors

Sake Trip Organizer vs. Direct Competitors Sake Trip Wisata Bahari Kakaban Trip Valadoo.com Organizer Indonesia Raja Ampat Rp 5,350,000 Rp 4,900,000 Rp 12,000,000 Rp 8,077,980 Derawan Rp 2,000,000 Rp 1,850,000 Rp 2,900,000 Rp 2,373,500 Wakatobi Rp 3,500,000 Rp 3,500,000 Rp 5,500,000 Rp 4,322,900 Takabonerate Rp 2,500,000 Rp 2,750,000 Komodo Rp 1,750,000 Rp 1,750,000 Rp 2,500,000 Rp 2,000,000 Ora Beach Rp 2,500,000 Rp 3,500,000 Rp 5,500,000 Rp 3,030,000 Weh Island Rp 1,200,000 - - Rp 2,300,000 Belitung Rp 850,000 Rp 900,000 - - Togean Rp 3,100,000 - - -

6.2. Distribution

Distribution encompasses all the activities that move a firm’s product from its place of origin to the consumer. In service business, distribution is not a major issue. Sake Trip Organizer has two channels for the distribution; travel agent and direct to end- customers. Travel agents will receive 10% discount from the selling price while direct to end-customers will get no discount unless they are loyal customers (see section 6.3.5.).

6.3. Promotion

6.3.1. Advertising

This shall be undertaken under public media such as magazines. For the magazines, an article section containing the information about the destinations is published, while also promoting our travel agent. The magazines that come to our mind are MyTrip and JalanJalan. Both magazines are specialized in traveling, also they accept contribution of articles for free. They will be our first try out before choosing more popular magazines such as GoGirl. Meantime, Sake Trip Organizer will be advertised through brochures, pamphlets which allow the company is professionally known by public. This type of advertisement will be targeted at potential clients.

Table 6.2. List of advertising tools

Types Number Price/page Total Brochure 5000 Rp 289 Rp 1,445,000 Q4(21x27.8 cm) Poster A4 (21x29.7 1000 Rp 900 Rp 900,000 cm) Map Folder (23x24 500 Rp 3,300 Rp 1,650,000 cm) Source: Cetakmurah.com, 2014

6.3.3. Events

Sake Trip Organizer aims to promote itself through attending events such as travel fair, exhibition, or expo. The purpose is to increase the awareness of our brand, also enable us to interact with potential clients. Trade shows that come to mind include:

1. Garuda Indonesia Travel Fair One of the biggest travel exhibitions in Indonesia showcasing many attractive tour packages with surprising price. This event is held by Garuda Indonesia followed by more than 70 travel agents and retailers, hotels and resorts. In 2013, Garuda Indonesia Travel Fair was held in Jakarta Convention Centre. The participant fee and facilities are shown in the table below (GATF, 2013). Table 6.3. Participant fee Area A (Cendrawasih Room) Rp 1,650,000/sqm Area B (Cendrawasih Room) Rp 1,375,000/sqm Area C (Cendrawasih Room) Rp 1,100,000/sqm Area D (Lobby Plenary Hall) Rp 1,650,000/sqm Area P (Plenary Hall) Rp 1,375,000/sqm Area P (Plenary Hall) Rp 1,100,000/sqm Source: GATF, 2013 Table 6.4. Facilities by Garuda Travel Fair

Fascia Blue background with Exhibitor's name in English (max 30 letters) in white vinyl lettering. Paneling Three-side panel partitions in white finish. In case of corner booths, it will be two side walls and two fascia boards. Carpet Grey carpet covering inside Shell Scheme Area; Blue carpet covering the gang way and the remaining floor area. Furniture Information counter with one reception desk, Two folding chairs, One wastepaper basket, two units of fluorescent lamps at fascia Lighting One power single phase socket with electricity 2 amp (not to be Power used to connect spot lights & fluorescent lights). Source: GATF, 2013

Sake Trip Organizer intends to open one small booth in Area P (Rp 1,375,000/sqm). Total area for the booth is 4 meters square so the cost is Rp 5,500,000. 2. Indonesia Travel Fair An annual travel organized by RajaMice.com. Indonesia Travel Fair has been held for 11 times since 2009. The travel fair in 2014 located in Jakarta Convention Center targets 60,000 visitors, credit card transaction Rp 20 billion, and total transaction Rp 40 billion. The floor plan booth price can be seen in the figure below (Indonesiatravelfair, 2014).

Figure 6.1. ITHF Floor Plan and Booth Price

Source: Indonesiatravelfair,2014

The company plans to join the exhibition starting 2015. Estimated booth cost is not too significant from the year in 2014, so Sake Trip Organizer will take standard shell with total area 4 meters square which cost Rp 5,000,000 (50% super early bird).

6.3.4. Internet Marketing

The power of internet marketing which has changed the industry by the practicality in accessing information provides a huge opportunity for the business. As the company aims for not only specific area but also potential clients all over Indonesia, internet is the main weapon to grab customers who seek for the best deal possible. Also, people nowadays seek out information over the internet due to its relatively low cost and ease of use. A website is created with all products in it, design the templates as simple and as easy to be accessed. Sake Trip Organizer ensures all information about our company and products are served completely inside the web. The use of social media is maximized to build the audience, such as facebook, twitter, and instagram. Sake Trip Organizer will promote the website through facebook ad, twitter promotion account, and also google adwords.

Expense for placing facebook ad: $2.5/daily targeting the audience who lives in Indonesia, age 21-45, interested in travel and tourism. Estimated like 26-105 likes per day. The ad will be stopped after reaching USD 450, approximately after 6 months

Expense for placing twitter advertisement: Rp 86,000/month for two times post per day in 11 different twitter accounts with more than 50,000 followers.

Expense for placing GoogleAdword: Rp $0.5/click. Estimated 20-50 click per day. Budget for GoogleAdword is USD 450, approximately run for 18 days.

6.3.5. Customer loyalty program

Sake Trip Organizer will give reward to the loyal customers including:

1. 10% discount every purchase after the 5th purchase, 2. Free return flights for the 10th purchase, 3. 5% discount for each friend they brought to join tour 4. Free merchandise from Sake Trip Organizer 5. Weekly news sent to email to keep customers updated.

6.3.6. Corporate Social Responsibility

Sake Trip Organizer recognizes the fact that environment and society are very important, we intend to give some of our profit to conservation as well as society empowerment. Realizing that some travel agents only seek for profit while abandoning the people around, damaging environment with mass tourism, Sake Trip Organizer wants to make a move to encouraging people on implementing eco- tourism. Customers are encouraged to do simple thing such as no throwing allowed, snorkeling without damaging coral, and learn about the locals. In the second year, Sake Trip Organizer intends to donate to NGOs such as WWF and Greenpeace Rp 50,000,000. In the third year, Sake Trip Organizer will donate to more NGOs including humanity area such as UNICEF. Estimated donation given is Rp 100,000,000

As the company grows, Sake Trip Organizer intends to establish a foundation with short term and long term projects in order to build sustainable environment, involving in campaign such as save corals, save turtles, and save sharks. Not only that, local community is also our main concern. There will be some programs related to social environment in terms of education, entrepreneurship, and culture preservation.

6.3.7. Total Expense for Marketing

From all of the marketing tools, the table below shows the expenses needed for marketing tools. Sake Trip Organizer assumes 10% increment of the expense in the next years.

Table 6.5. Total Marketing Expense in First Year

6.3.1 Advertising Brochure Rp 1,445,000 Rp 3,995,000 Poster Rp 900,000 Map Folder Rp 1,650,000 6.3.2 Events Garuda Fair Rp 5,500,000 Rp 10,500,000 Indonesia Fair Rp 5,000,000 6.3.3 Internet FacebookAd Rp 5,000,000 Rp 11,032,000 Marketing Twitter Rp 1,032,000 GoogleAd Rp 5,000,000 Total Rp 25,527,000 Source: Velysia, Founder of Sake Trip Organizer,2014

6.4. Sales Forecasts

Assume two departure time in the first month to Derawan Archipelago with minimum participant 12 people each trip. The price per person for Derawan tour is Rp 2,000,000. There are 24 people in a month which means the sales in the first month is Rp 48,000,000. Same with the next months with another customize tour in addition. It will reach the peak in month 12 where the trip to Raja Ampat which costs Rp 5,350,000/person is held. Sales monthly for the first year can be shown in the figure below. Sake Trip Organizer forecasts the growth for second year is 39% after the acknowledgment of people surrounding and expecting growth to 38% from the second year in the third year after the company get contracts with the factories around (see table 6.

Figure 6.2. Sales Forecast, First Year Chart

Sales Monthly (in thousands Rupiah)

120000

100000

80000

60000 Sales Monthly (in thousands 40000 Rupiah)

20000

Month9 Month1 Month2 Month3 Month4 Month5 Month6 Month7 Month8

Month11 Month12 Month10

Source: Velysia, Founder or Sake Trip Organizer, 2014

Table 6.6. Sales Forecast in Three Years

Sales Forecast Year 1 Year 2 Year 3 Sales All tourist services Rp 761,000 Rp 1,257,000 Rp 2,016,000 Other Rp 0 Rp 0 Rp 0 Total Sales Rp 761,000 Rp 1,257,000 Rp 2,016,000 Direct Cost of Sales Year 1 Year 2 Year 3 All tourist services Rp 532,700 Rp 879,900 Rp 1,411,200 Other Rp 0 Rp 0 Rp 0 Subtotal Direct Cost of Sales Rp 532,700 Rp 879,900 Rp 1,411,200 Source; Velysia, Founder of Sake Trip Organizer, 2014

6.5. Controls

With the rapid increment of local tourism in Indonesia and government plan to promote Indonesia tourism to worldwide, tour provider has a good business prospect. Sake Trip Organizer will begin to lift up our reputation. By the time, the customers will choose us in terms of travel excursions. To maintain a good projection to our company, we intend to undertake regular evaluations to our marketing programs. In conclusion, here are the following controls applied:

1. Market segment focus: The company ensures that the market segmentation is on track by monitoring the growth in specific targeted segment. 2. Customer feedback: Customers’ feedbacks are very important to overview our product and service. Therefore, Sake Trip Organizer can learn from mistakes and fix it in order to reach costumer’s satisfaction as well as expectation. 3. Advertising tools evaluation: Through several methods of advertising tools the company used, Sake Trip Organizer will evaluate which tools give more impact to the customer’s growth. In the application form, a question about where the customers know about Sake Trip Organizer will be asked. Therefore, the company can evaluate and spend more on the most effective tools.

CHAPTER VII

ORGANIZATIONAL PLAN

7.1 Management Structure

The human resources element are undeniable important for the company, especially as a start up business, employees determine the growth and development of the business. Involving in service sector, the quality of human resources is the major component. Sake Trip Organizer ensures that the employees are trained well as experts in travel and tourism field. By having enthusiast, hardworking, professional, also good communication skills, Sake Trip Organizer has the competitive advantage to compete with the well established tour organizer.

Figure 7.1. Organization Structure

Director

Marketing Financial Operational Manager Manager Manager

Online Accountant Reservation Marketing

Marketing Cashier Staff

Source: Velysia, Founder of Sake Trip Organizer, 2014

7.2 Personnel Plan

As a start-up company, Sake Trip Organizer ideally has three main divisions. All divisions shall give daily report to the director. The number of personnel might change due to the condition.

a. Marketing Division From the beginning, the company intends to boost our sales by enhancing strategy in marketing and promotion, especially online marketing. Marketing division plays vital role in terms of advertisement, web-content, and targeted strategy. There will be two staffs in marketing division; marketing staff and online marketing. b. Finance Division The division is responsible for all related financing activities, mainly responsible for cash in and out, banking, assets purchasing, budgeting, etc. In the beginning, only one accountant will be hired to do financing job. c. Operation Division Basically, there will be one personnel in operation division. Director will involve directly in the operational management as well. Reservation staff will in charge on hotel bookings, tour, also as a bridge from local tour provider with Sake Trip Organizer.

7.3 Job Description and Skills Needed

7.3.1. Marketing Manager

Job Description

a. Manage marketing teams and departments b. Develop documents, manuals, marketing documentation c. Attend conferences, meetings, exhibitions, client events, and trade shows d. Conduct presentations or product information sessions

e. Implement marketing campaigns, advertisements f. Investigate and evaluate market developments and inclinations g. Supervise and assess staff members h. Report on product performance i. Prepare and report on budgets and other financial areas

Skills

a. Be an effective leader and team player b. Be multilingual c. Be able to meet deadlines d. Be innovative and strategic e. Be client and detail oriented f. Have a strong knowledge of the business market and economy g. Be confident and self motivated h. Have excellent communication skills i. Be good at implementing sales and marketing strategies j. Be able to network and negotiate k. Be professional and dependable l. Be able to perform at a high standard at all times m. Have great project and time management skills

Background

Marketing managers must have experience in both sales and marketing position. Three years experience is the minimum requirement to obtain the position. Not only that, marketing manager should also contribute in the previous company in recording a successful accomplishment. Sake Trip Organizer is more interested in experience but educational background is undeniable important to pursue the career. Minimum

48 first basic degree in business or marketing area is required. Training will be held in order to maximize the personal skills of the manager. Marketing manager must be equipped with current situation and trend of industry, also able to present the knowledge of commercial and business development.

7.3.2. Online Marketing

Job Description

a. Creating and sending email campaigns. b. Optimizing web content for SEO strategies. c. Updating social media profiles. d. Advising about new trends. e. Managing the development and launch of display advertisements.

Skills

a. Having good written and spoken communication abilities. b. Being self motivated and flexible. c. Having critical thinking. d. Being independent e. Being able to work on several projects at the same time. f. Having high attention to details g. Having teamwork skills. h. Having networking abilities. i. Being able to understand social media. j. Having problem solving skills.

Background

Sake Trip Organizer seeks for a high quality online marketing. As the company mainly runs in the internet and website, an online marketing must do and solve all

49 problems related to the website. Applicants must know how to operate search engine optimization and able to suggest the perfect item used to advertise in website. A degree related to advertising, marketing communication, or IT is approved. A postgraduate qualification in economics, math, statistics, marketing or business increases chances to get a job in online marketing.

7.3.3. Marketing Staff

Job Description

a. Checking inventory. b. Assembling reports with presentations, graphs and information. c. Assisting contract reviews. d. Organizing client analysis. e. Collecting market trends.

Skills

a. Having high consumer and product awareness. b. Being self motivated and proactive. c. Being able to work with a team. d. Having math skills. e. Having competent communication abilities. f. Having high attention to details. g. Being able to work on different projects at the same time. h. Having good planning skills. i. Having IT skills. j. Being able to create reports.

Background It is not compulsory for marketing staff to have higher education degree. Diploma is acceptable for the position. A higher education related to business, marketing, and

50 economics are very useful in this area. Experience in relevant area might give positive mark for the applicants. Marketing staff will be trained after accepted by the company. 7.3.4. Financial Manager Job Description

a. Implementing financial plans b. Revising strategic decisions c. Preparing monthly and annual reports d. Assessing risks e. Performing risk management f. Advising business executives g. Resolving accounting problems h. Reconciling balances i. Reporting to senior managers j. Attending meetings k. Supervising staff l. Leading teams m. Managing projects n. Working with financial systems o. Utilizing fiscal applications p. Upgrading general ledgers

Skills

a. Written and oral communication b. Technical, numeric and analytical skills c. Logic and quick thinking d. Time management e. Team management f. Producing expert advice

g. Motivating others h. Resolving issues i. Research j. Being discrete k. Handling performance management processes l. Risk assessment m. Commercial awareness n. Managing relationships o. Negotiating

Background

Being a Finance Manager is a top-level job and therefore requires an advanced degree. Finance Managers may hold a Master's or Doctoral Degree in their area of specialization. They need to have extensive financial knowledge but they may have specialized in Statistics, Finance, Economics, Mathematics, Accounting, or Business Administration. 7.3.5. Accountant Job Description

a. Managing bank accounts b. Consolidating annual accounting statements c. Forecasting cash flow d. Developing policy for company treasury e. Preparing tax returns f. Managing finance teams g. Assisting auditors h. Reconciling balance sheets i. Preparing reports j. Managing supplier rebates

Skills

a. Systematic thinking b. Accounting and numeracy c. Resolving financial issues d. Management and supervision e. Being motivational f. Interpersonal relations g. Time management h. Technical knowledge in global accounting principles i. Being organized j. Working with teams k. Being detail oriented l. Risk management m. IT skills n. Flexibility Communication Background Bachelors in accounting, finance and management are the assets for those who want to apply in Sake Trip Organizer. Minimum three years experience in related field. 7.3.6. Cashier Job Description a. Processing refunds. b. Balancing the cash. c. Accepting payments. d. Greeting customers. e. Answering questions of customers about products. Skills a. Having manual dexterity. b. Being able to work alone. c. Having high attention to details.

d. Being accurate. e. Having math skills. f. Being trustworthy. g. Having good communication skills. h. Being able to process information through register systems. i. Having good customer service skills. j. Being self-motivated and proactive. Background Candidates for Cashier jobs are required to have a High School Diploma as a minimum requirement. They also need to have good customer service skills, basic knowledge of computers, and math skills. Most persons working on this field learn their work by observing other cashiers in the same job. Some employers train candidates for few weeks, including equipment operation, an overview and policies of this business, security, and procedures. Then trainees are assigned to a register under the supervision of an experienced cashier. There are vocational schools that offer cashier courses for those persons who want to have better job opportunities in this area.

8.3.6. Operational Manager Job Description a. Conduct office management tasks b. Ensure safety regulations are adhered to c. Implement measure to provide motivation for employees d. Oversee customer service departments and assess that they are meeting customer satisfaction goals e. Prepare, revise and submit reports, budgets and other documentation f. Dialogue with clientele about customer service issues or queries g. Communicate information to the departments filtered for management h. Perform training sessions

i. Implement quality management and regulatory compliance strategies j. Review customer reviews and customer related statistics Skills a. Strong organizational skills b. Be able to multitask c. Be able to use computer applications effectively d. Have prior experience in operational management e. Efficiently communicate both verbally and in written form f. Have comprehensive knowledge of quality assurance principles, methods, design, testing and implementation g. Have leadership and supervisory skills h. Have interpersonal skills i. Be able to work with teams j. Be able to coordinate with other departments k. Excellent project, planning, change and time management capabilities l. Be cordial and professional m. Be innovative n. Have good judgement and decision making skills

Background

Operational managers must have both a qualifying degree and a successful working experience in operational management. The bachelors or masters degree should be in operational management or other business related area. 7.3.7. Reservation Staff Job Description

a. Arranges reservations of hotel and tour packages b. Requests contract rates from hotels c. Arranges reservations of tour package

d. Communicate with local tour guide and provider e. Advises customers in terms of travel destination f. Sells tour packages and hotels vouchers

Skills a. Teamwork b. Initiative and Commitment to Achieve c. Attention to Details d. Organized and presentable e. Adaptability and innovation. f. Interpersonal Ability g. Good communication skills Background Candidates for Reservation Staff jobs are required to have a High School Diploma as a minimum requirement. They also need to have good customer service skills, basic knowledge of computers, and math skills.

CHAPTER VIII

ASSESMENT OF RISK

8.1. Evaluate Weakness of Business

Every type of business has its own strength and weakness. The weakness that Sake Trip Organizer face as a start up business are:

1. Difficulty in pricing competitively as a new comer. 2. Some destinations are seasonal due to the monsoon, mostly our tour destination is archipelago so not every month is suitable for visiting. Table 8.1. Seasons of destinations Destination Worst Time to Travel Raja Ampat May-September Derawan January-March Wakatobi June-August Takabonerate November-February Komodo January-March Ora Beach July-August Belitung November-February Weh Island August-January Togean July-August Source: Velysia, Founder of Sake Trip Organizer, 2014 3. Weather is hard to predict, it will be a challenge for us. 4. Traveling requires high mobility with different types of transport so it is considered high risk activity.

8.2. Contingency Plan

In order to overcome the risk, Sake Trip Organizer has contingency plan to answer and overcome, at least reducing the risk.

1. To be as competitive as we can, Sake Trip Organizer will build good relationships with the local tour provider, hotels, car rental, in order to get lower price. Next, we ensure that customers get the best service from us and build customer’s loyalty. 2. Sake Trip Organizer realizes that during rainy seasons, it is not comfortable to travel as our main destinations mostly are beaches and islands. To overcome this problem, we will not open any trip during this season, but we will work on the marketing strategy and get double amount of customers on next trip. We also will create secondary trips to city or abroad. 3. Travel safety is a must. Therefore, choosing partners especially for transportation shall be done wisely. The partners must be licensed and professional. We have extra service which is insurance for our customers.

CHAPTER IX

FINANCIAL PLAN

9.1. Pro Forma Income Statement (in thousands)

Table 9.1. Pro Forma Income Statement

Year 1 Year 2 Year 3 Amount Percent Amount Percent Amount Percent Sales Rp 761,000 100% Rp 1,257,000 100% Rp 100% 2,016,000 Cost of Good Sold Rp 532,700 70% Rp 879,900 70% Rp 70% 1,411,200 Other Gross Margin Rp 228,300 30% Rp 378,000 30% Rp 604,800 30%

Operating Expense Salaries and Rp 136,380 63.7 Rp 143,640 59.5 Rp 150,657 57.2 Wages Marketing and Rp 25,527 11.2 Rp 28,100 11.6 Rp 30,910 11.7 Advertising Rent Rp 20,000 9.3 Rp 20,000 8.3 Rp 20,000 7.6 Legal and Rp 10,000 4.7 Rp 10,000 4.1 Rp 10,000 3.8 Accounting Furniture and Rp 16,295 7.6 Rp 0 Rp 0 Equipment Purchase Utilities Rp 0 0 Rp 0 Rp 0 Office Supplies Rp 2,000 0.9 Rp 2,500 1.0 Rp 3,500 1.3 Water & Rp 1,000 0.5 Rp 1,000 0.4 Rp 1,000 0.4 Electricity

Table 9.1. Continued Communication Rp 1,500 0.7 Rp 1,500 0.6 Rp 2,500 0.9 Maintenance Rp 5,000 2.1 Rp 5,000 1.9 Insurance Rp 18,000 7.5 Rp 18,000 6.8 Travel Rp 10,000 4.1 Rp 20,000 7.6 Depreciation and Rp 1,600 0.7 Rp 1,600 0.7 Rp 1,600 0.6 Amortization Total Operating Rp 214,312 100% Rp 241,340 100% Rp 263,167 100% Expenses

Profit Before Interest and Taxes Interest Expense Short-Term Interest Expense Long-Term Taxes Incurred Net Profit Rp 13,988 6% Rp 136,660 36% Rp 347,543 43% Net Profit %

9.2. Cash Flow Projections

Table 9.2. Cash Flow Projections

Year 1 Year 2 Year 3 Cash Balance at Beginning 100,000 113,978 199,738 of Year Sales Rp 761,000 Rp 1,257,000 Rp 2,016,000

Uses of Cash COGS Rp 532,700 Rp 879,900 Rp 1,411,200 Overhead Rp 193,507 Rp 236,340 Rp 256,167 Interest

Table 9.2. Continued Taxes Equipment Purchase Rp 16,295 Debt, Principal Payments Miscellaneous (Office Rp 4,500 Rp 5,000 Rp 7,000 Supply) Charity Rp 50,000 Rp 100,000 Total Cash Out Rp 747,022 Rp 1,171,240 Rp 1,774,367

Ending Cash on Hand Rp 113,978 Rp 199,738 Rp 441,371

9.3. Pro Forma Balance Sheet

Table 9.3. Pro Forma Balance Sheet

End of Year 1 End of Year 2 End Year 3 ASSETS Short Term/Current Assets Cash and Cash Equivalents Rp 113,978 Rp 199,738 Rp 441,371 Accounts Receivable Inventory Other Current Assets Total Current Assets Notes Receivable Prepaid Insurance Rp 18,000 Rp 18,000 Total Short-term Assets Rp 113,978 Rp 217,738 Rp 459,371

Long-Term Assets/Fixed Assets Furniture & Equipments Rp 16,295 Table 9.3. Continued Less Accum. Depreciation Rp 1,600 Rp 1,600 Rp 1,600 Total Long-Term Assets Rp 14,695 Rp 13,095 Rp 11,495 TOTAL ASSETS Rp 128,673 Rp 230,833 Rp 470,866

Table 9.3. Continued LIABILITIES Short-Term Liabilities Accounts Payable Interest Payable Taxes Payable Other Current Liabilities Rp 28,673 Rp 130,833 Rp 370,866 Total Short-Term Liabilities Rp 28,673 Rp 130,833 Rp 370,866

Long Term-Liabilities Debt-Note Payable Other Long-Term Liabilities Total Long-Term Liabilities

TOTAL LIABILITIES Rp 28,673 Rp 130,833 Rp 370,866

Contributed Capital Rp 100,000 Rp 100,000 Rp 100,000 Total Owner’s Equity Rp 100,000 Rp 100,000 Rp 100,000 LIABILITIES AND Rp 128,673 Rp 230,833 Rp 470,866 SHAREHOLDER’S EQUITY

9.4. Break-even Analysis

Below, Sake Trip Organizer analyzes the break-even point for every tour package by the following method:

Break-even point= Total fixed cost/(price-average variable costs)

Total Fixed Cost=Overhead Costs

Variable Costs=30% from the price.

Table 9.4. Break Even Analysis

Destination Total Fixed Cost Price Average Variable Cost Break Even Point Raja Ampat 193507000 5350000 3745000 120.565109 Derawan 193507000 2000000 1400000 322.5116667 Wakatobi 193507000 3500000 2450000 184.292381 Komodo 193507000 1750000 1225000 368.5847619 Takabonerate 193507000 2500000 1750000 258.0093333 Ora Beach 193507000 2500000 1750000 258.0093333 Weh Island 193507000 1200000 840000 537.5194444 Belitung 193507000 850000 595000 758.8509804 Togean 193507000 3100000 2170000 208.072043

9.5. Sources and Applications of Funds

The source of fund comes directly from owner investment. The applications of fund for the first year is shown in the table below.

Table 9.5. Source of Funds Source of Funds Owner Investment Rp 100,000,000

Use of Funds Cost Building Rp 20,000,000

Office and Computer Rp 10,445,000 Equipment Furniture Rp 5,850,000 Sales and Marketing Rp 25,575,000 Other Rp 20,000,000 Total Required Funds Rp 91,870,000

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