Nauman Rasheed

Feasibility Report Prepared by: Team DIHE, Semester 3, 2010 Contents Executive Summary ............................................................................... 2 Vision, Mission & Core Values ................................................................ 2 Vision.................................................................................................. 2 Mission ................................................................................................ 2 Core Values ......................................................................................... 2 Industry Analysis .................................................................................. 3 Outlook for the future stages of Growth ................................................ 4 Company Goals and Objectives .............................................................. 5 Goals .................................................................................................. 5 Objectives ........................................................................................... 5 Business Strategy .................................................................................. 6 Competition and Buying Patterns ............................................................ 6 Main Competitors.................................................................................. 6 Business Participants ............................................................................. 6 Marketing Strategy ............................................................................... 6 Desired Image and Position in the market ............................................. 7 Pricing Strategy .................................................................................... 7 Promotion Strategy ............................................................................... 7 Company Ownership ............................................................................. 7 Competitive Strategy ............................................................................. 8 Services .............................................................................................. 8 Competitive Comparison ........................................................................ 8 Situational Analysis ............................................................................. 10 SWOT Analysis ....................................................................................10 Marketing Program Strategy and Tactics ............................................. 11 Product Line ........................................................................................11 Promotion ...........................................................................................11 Place ..................................................................................................11 Pricing................................................................................................11 ii Company Products and Services .......................................................... 12 Services .............................................................................................12 Fulfillment ..........................................................................................12 Technology .........................................................................................12 Future service offerings ....................................................................... 13 Marketing Strategy .............................................................................. 14 Target Market ...................................................................................... 15 Positioning ..........................................................................................15 Market Size & Trends ........................................................................... 16 Market Segmentation ...........................................................................16 Advertising & Promotion...................................................................... 17 Advertising Schedule ............................................................................17 Promotion Strategy ..............................................................................17 Pricing ................................................................................................. 18 Terms & Conditions ..............................................................................18 Price Comparison .................................................................................18 Company Location and Layout ............................................................. 19 Company Layout..................................................................................19 Snap Shot of Office ..............................................................................19 Few snapshots of office are as under: ................................................. 19 Description of Management Team........................................................ 20 Management Summary.........................................................................20 Quality Control ....................................................................................21 Evaluation Analysis ..............................................................................21 Financial Forecasts .............................................................................. 22 Initial Expenses ...................................................................................22 Operating Expenses .............................................................................22 Gross Profit per Unit Sold ......................................................................22 Sales Forecast ..................................................................................... 23 Personnel Plan.....................................................................................23 Profit Sharing ......................................................................................24 iii Executive Summary Learn about an outstanding Pakistani company. Providing specialist consulting and training services in the area of on-road safety, we are a company with tremendous strength and high caliber. Be it consulting or training, we are tuned and geared for extreme results. We seek projects with a promise of innovation and hard work. We continue to break ground in services unheard of in a developing country like Pakistan. Drive-Alive mainly focuses in the area of road transport, safety and consultancy to minimize the accidents rates and all other valuable losses occurred in case of an accident. The main idea of the business is to educate the license holder’s professional and non-professional drivers and make them deemed fit for handling all types of transport vehicles. Our training will make trainees eligible for job position in national or multinational companies. Formal driving training programs exist very less in the developing country like Pakistan. The programs of driver training are generally accepted as an efficient and effective means for learning to drive and, perhaps more importantly, for learning to drive safely by changing the mindset of the low-literacy individuals and professional drivers. The company also creates tailored programs for different types of vehicle categories to polish the skills of driving and operations for professionals, nonprofessional and individuals. The safety benefits of such programs have been the subject of much debate and the focus of considerable research, most of which has not been particularly favorable. Despite the lack of evidence showing the safety benefits of driver education/training programs, they continue to attract support and clients. It is likely that a major reason for the continued appeal of driver education/ training is that it makes sense. Driving in today's demanding roadway environment requires considerable knowledge and skill that take many years to develop. Driver education/training provides a structured approach to the learning process that can presumably facilitate and accelerate the acquisition of the needed skills. Simply put, driver education/training is seen as a sensible alternative to "trial and error" learning, especially given that errors can have such profoundly negative consequences. The financial investment of 50% will be arranged by the directors of the business and 50% finance for operating the business must be financed through a financial institution on the basis of 5 years easy installment plan. 70% of investment of the leased finance will be on fixed assets, and the other 30% on business operations. Our motive is to keep humanity safe and secure in all the adverse conditions! Page 2 of 24 Our Team Contact details of the business are as under: Business Name: Address: Telephone: Fax: Email: Drive-Alive (Pvt.) Limited 18/C, Block 6, P.E.C.H.S, P. O. Box # 12538, Karachi - (DRIVEA) +9221-xxxxxxxx- Contact details of managerial & non-managerial staff are as under: Mr. Nauman-ur-Rasheed Mrs. Beenish Saiyed President/Director Marketing & IT Business Operations Manager Email:- Email:- Mr. Muhammad Aslam Syed Aminuddin Farooqui Chief Consultant/Director Finance Assistant Manager, Business Operations Email:- Email:- Mr. Abdul Hai Khan Syed Akram Shah Senior Consultant/Director Logistics Administration Officer Email:- Email:- Mr. Joseph Babulal Senior Trainer Email:-Mr. Mansoor Hassan Lead Trainer Email:-Mr. Muhammad Ismail Junior Trainer Email:-Page 3 of 24 Vision, Mission & Core Values Vision Our vision is to become an internationally accredited industry leader in the specialized area of road transport consultancy and training services with the assistance of our customers. Mission Why we exist as a company? Our mission is: The mission of Drive-Alive (Pvt.) Limited is to provide high quality, reliable and professional driving consultancy and training services at a reasonable cost with prime focus on safety. It is the goal of Drive-Alive (Pvt.) Limited to provide prompt and transparent services aligned with client goals. Meeting and preferably exceeding customer expectations and while doing all this, enjoying our work, constantly learning and helping others learn the worth of life. Core Values How we work and deliver our services? We believe we can satisfy our mission if we adhere to these core values:  Customer Care  Integrity  Hardworking, Honesty and Transparency  Best Possible Efforts and,  Respect for all Individuals Page 2 of 24 Industry Analysis Drive-Alive (Pvt.) Limited stands is at a great moment in its history. Having achieved an enviable record of providing the lowest cost drivers training & consultancy services with comparable quality for the greater Karachi area, the company is ready to expand into the Central and region. The firm plans to open two more facilities, one in Islamabad, OR and the other in Lahore. The directors of the company realized that there was a great untapped opportunity in this industry. No company was providing what the customers truly demanded, high quality driver education at the lowest possible cost. Large companies were charging too much for their services and the local companies were not providing enough programs and services or they were poor quality. The opportunity rested in creating synergy with other organizations that were either buyers or suppliers. By doing so a company could reduce costs, shut out competition, and gain market share. Future planning of the company plan is to open the branches in major cities and the keys to success over the next three years for such an endeavor are as follows:      Lower costs so that the company's gross margin increases to 50%. Appoint a cost control officer for each of the new facilities who is responsible to the board of directors. Institute a comprehensive cost reduction program throughout the company. Strengthen and pursue partnerships and strategic alliances with suppliers so as to further reduce costs. Aggressively pursue contracts with organizations that need our services such as police departments, high schools and large fleet operation companies. Page 3 of 24 Outlook for the future stages of Growth Drive-Alive (Pvt.) Limited will be started by four individuals who saw an untapped potential in the driver education industry. This potential was in creating a new low cost position while still being able to compete with the larger companies on quality. This strategy would be created through strategic alliances and partnerships of local suppliers and buyers. The company has forecasted steady growth in a mature market which is a sign of the firm's viable business strategy. The company has four investors, the majority of whom are employees of the firm. Drive-Alive (Pvt.) Limited is establish in Karachi city. The company will be expecting to achieve revenues of approximately Rs. 7,200,000 and a gross profit of 32%. In addition, the company has to achieve a customer satisfaction rate of 100%. The company was founded when Nauman-ur-Rasheed, a longtime manager of a training firm and Muhammad Aslam, a cost control manager, sought to go into business them-selves. At the time, there was no low-cost leader in the industry that was providing comprehensive high-quality education with the most modern teaching techniques (including classroom, computer simulations and testing equipment). The national chains were ignoring the fact that the customers could not recognize the difference in value that the various competitors provided, and therefore sought only the cheapest provider. On the other hand the vast number of smaller companies was not keeping up with the newest teaching techniques such as computer simulators. Finally, the Karachi City District Government had recently begun to outsource many of its services such as driver training to private firms. This presented a great opportunity to a company willing to take a few risks. Soon after starting Mr. Nauman and Aslam brought in Abdul Hai Khan a professional on-road training provider. Mr. Joseph Babulal, an expert in the writing of training manuals, procedures and senior trainer of heavy vehicles and equipment operations. Business is being run by the partnership of these four personnel. The industry usually has high capital cost due to well-equipped in-house training facility, equipment, and highly trained professionals. The key to low-cost leadership in this field is through special relationships with suppliers and buyers. Page 4 of 24 Company Goals and Objectives Goals Drive-Alive (Pvt.) Limited offers a wide range of services as outlined in the detailed sections below. It is ultimately the goal of the company to offer a one-stop facility for all driver training needs. In this way the company could offer greater perceived value for the customer that he or she could use for their entire driving career. The industry is highly competitive with suppliers having a great deal of power in setting and negotiating the prices of their products and services to driving schools. In addition, because the customers see the service as undifferentiated and a "commodity" with little value separation between competitors, buyer power is also very high, Finally, the barriers to entry are moderately low, and the large number of competitors in this field, including substitutes (such as in house training at institutions like driving schools), mean that the pricing for such services are very competitive. The only way to have an advantage in this industry is a low-cost leadership principal applied aggressively to all aspects of the business. Long-term goals of the company are to get a certification from international accreditation body for on-road consultancy and training services. Objectives The objectives over the next three years for Drive-Alive (Pvt.) Limited are the following:  Achieve revenues from services of approximately Rs. 5.1 million by the next three years  Expand by starting up two more training facilities (one in Islamabad and the other in Lahore)  Become the low cost provider of comprehensive driving training and consultancy services in Pakistan. Page 5 of 24 Business Strategy This section is covered in the business competitive comparison section of the plan. Competition and Buying Patterns This industry is highly seasonal. Most of our students attend classes during the fall or spring, with winter being the slowest months. The summer sees a good number of students seeking our services, but not as many as in spring or fall. Most customers of driver education services discover their provider through some form of referral, such as another education institution, the state DOT, or something else. For this reason, DRIVE-ALIVE and other providers seek to make as many contacts in the community as possible. Main Competitors As stated elsewhere, Drive-Alive major national competitors are Consult & Train (Pvt.) Limited and National Highway Authority. These companies together hold about 45% market share, while the rest is taken up by the "mom and pop" outfits. Business Participants As stated earlier, the driver education industry is fragmented into two different types of businesses. The largest group consists of the "mom and pop" type of company that is very local, with low capitalization, and ranges in quality of education from poor to excellent. The other group consists of a very few regional or national companies such as Consult & Train (Pvt.) Limited and National Highway Authority. These competitors are well funded, have excellent facilities and services and high quality. The two companies listed above are Drive-Alive major competitors in the Karachi area. These companies often try to buy out smaller competitors and therefore consolidate the market. Marketing Strategy At the moment, the company is focusing on its core market segment, the beginner students. This means creating closer ties with school districts and pursuing those contracts. In addition, the company is focusing on Web, magazine, e-marketing and email broadcasters, all with a driver focus. Starting next year, Drive-Alive hopes to have some form of advertisements or booths within shopping malls frequented by our target market. With the company's expansion, we have focused on creating a detailed report on the lifestyles of our target market to further hone our marketing efforts. With this report we will be able to go forward with the best possible client organizations and partnerships to promote sales and to fill our classes to capacity. Page 6 of 24 Desired Image and Position in the market Pricing Strategy Drive-Alive prices its services based on the accumulated total cost to provide such services and then add on a flat profit margin to arrive at a final net profit/sales ratio of 10%. Promotion Strategy Currently about half of Drive-Alive sales promotions are through informationrelated media such as the Web, Email Broadcasters, Newsletters, etc. The other half is done through creating a network of referrals and other relations to provide information to prospective clients. It is with this latter method that the company uses its own printed literature. Often our strategic partners are passing out our literature of our services. The company collects testimonials from as many students as possible to use in its campaign. Every three to six months, depending on the type of media used, or relationship sought, the company reviews the effectiveness of the promotion tool and determines its viability. Company Ownership The company has four investors, the majority of whom are employees of the firm. Together they own 100% or 2,000 privately owned shares of the company. Drive-Alive (Pvt.) Limited is incorporated in the Karachi city and obliged to perform under that government's rules. By the rules of the company's charter, no investor can trade, sell or dispose of any shares after discussing with the board of directors. Drive-Alive (Pvt.) Limited is presently seeking to find new investors to help offset the expenses of its planned expansion. The strategy entails a further issuance of 2,000 shares to these new shareholders. Page 7 of 24 Competitive Strategy Drive-Alive possesses two competitive edges in relation to its rivals. The first one is its excellent ability to create strategic alliances that reduce costs and allow it to become the low-cost provider and create its vision of the one-stop driver caching and training center. In addition the company has a very aggressive management of business operations in the person of Mrs. Beenish Saiyed, whose goal is to proactively discover how best to provide our services, when to provide them, and where to provide them. Mrs. Beenish work has spawned new service ideas such as Driver's Assessment & Screening, a program that is now being evaluated where a driver educator could provide hands on teaching in-house to assess driver’s eligibility for a job position in organizations. Other ideas such as this are also in the works to improve service as much as possible. Services Drive-Alive (Pvt.) Limited hires trained and certified instructors who provide all the teaching services. In addition, the company has five computer simulators that are used to train clients. Each of these pieces of equipment is maintained regularly and will be replaced every few years to keep up with technology and to provide a high quality look to the company. The company is preparing plans to launch a new commercial driver’s training program that will provide greater margins that the ordinary operators or driver improvement programs. Competitive Comparison The driver education industry is not highly competitive in the third world countries like, India, Bangladesh and Pakistan. Each company within this field has average capital costs, balance margins, and a medium intensity of competition. Suppliers have a great deal of power in setting and negotiating the prices of their products and services to driving training companies. This is due to the fact that the suppliers who absorb the greatest amounts of cash from driving institutions are large petroleum and auto manufacturer companies. These companies are more consolidated that the driving training industry, have deeper pockets, an almost limitless number of substitute customers, and finally they are the single most important supplier to Drive-Alive industry. In addition, because the customers see the service as undifferentiated and a "commodity" with little value separation between competitors, buyer power is also very high. Market research conducted between January and August 2010 has shown that although the quality and services of driver education companies can vary quite a bit, the customer does not perceive this as a serious issue when seeking driver education services. In fact there is still a significant portion of the population that learns from informal sources such as relatives. Additionally, the costs of our services are not cheap, and buyers are willing to search for the most favorable Page 8 of 24 combination of price and acceptable service. The barriers to entry and exit are moderately low in this industry. Switching costs are virtually non-existent and the costs to entry and exist the market are low. However, the advantages of producing at high volume and reaping the benefits of economies of scale are quite attractive. Once Drive-Alive becomes a regional player, these economies of scale will work toward the company's advantage. The few number of competitors in this field, including substitutes such as in house training at institutions like driving schools, means that the pricing for such services are very competitive. The only way to have an advantage in this industry is a low-cost leadership principal applied aggressively to all aspects of the business. Page 9 of 24 Situational Analysis SWOT Analysis Strength:      Acknowledging worth of lift to humanity Reputation for honesty that won the trust and respect of the suppliers and customer. Highly motivated professional staff In-house classroom training facility Prompt delivery of training reports Weaknesses:    Marketing efforts must be enhanced Software to develop for maintaining training records Succession planning Opportunity:     A developing market such as the e-marketing Mergers, joint ventures or strategic alliances Moving into new market segments that offers training workshops for high school students/university graduates To establish a network of training professionals in new areas of health, safety and environment Threat:      No interest shown by government sector to ensure safety measures in road transport sector Lack of rules and regulation implementation by traffic control authorities Lack of awareness of road safety in public and government sectors Most common attitude relating training as an extra expense by local management Higher utilities tariffs Page 10 of 24 Marketing Program Strategy and Tactics Product Line Drive-Alive has designed a product line that will create positive impressions in the leading market today. Services need to be readily available to consumers and distinguishable from competitor’s services. This plays a positive role in marketing Drive-Alive services, as the trainings are unique and helpful to draw the curiosity. The unique product qualities include their focus on Traffic environmental conservation. Promotion The promotional plan to be adopted by Drive-Alive, has two key objectives. That is, gaining new product acceptance and increasing sales for the company. Promotion of the Defensive Driving Course will mainly involve above-the-line promotion techniques including advertising in specialized industry journals and magazines, internet promotion. Drive-Alive will be adopting a product development strategy, in relation to the promotion of the Defensive Driving Course. This will involve targeting an existing market of Drive-Alive clients, with a new and more advanced version of the Defensive Driving Course. Place Drive-Alive at present is providing its service nationally as well as internationally. Example: Training conducted at OMV (Yemen S2) field and office location at SAANA’s Republic of Yemen in the month of December 2008 Pricing By employing a lower cost pricing strategy, the organization will be earning fixed gross profit. This will also enable a better control of costs. Almost 70% of the feedback from the survey by Drive-Alive indicated that the quality of the product was of higher importance than the price or value of the good. This suggests that the demand for the services is relatively inelastic. For this reason, we have no hesitation in suggesting that the price of our good reflects the willingness of consumers in our target market to buy. Page 11 of 24 Company Products and Services Services Drive-Alive provides a wide range of state-certified courses and services. These include:  Defensive driving training for management staff. (In-house/Client premises)  Defensive driving training for non-managerial staff. (In-house/Client premises)  Vans/minibus/ambulance driving course for professional/non-professional drivers  Heavy Vehicles driver training for professional/non-professional drivers  Crane/Forklift operator training for professional/non-professional operators Each course requires that the trainees will possess a valid driving license for the category of vehicle operated. Course duration is of 8 to 16 hours. Instructors are required to have certain hours of the week made available for trainee’s questions and issues. Fulfillment Drive-Alive (Pvt.) Limited hires trained and certified instructors who provide all the teaching services. It is planned that each facility will have the same number and type of equipment. Each of these pieces of equipment is maintained regularly and are replaced every few years to keep up with technology and to provide a high-quality look to the company. Technology The technological revolution in computers has enhanced our abilities to teach. Drive-Alive has remained on the cutting edge by instituting the use of computer simulators and remote Web-accessed study material. The company will continue to seek new ways to provide a better and more convenient teaching environment through technology. The virtual class room is a thing of the near future, and we are positioning ourselves to be among the first who will provide such services. Page 12 of 24 Future service offerings The company is in the process of launching a new division for the Lahore and Islamabad that will encompass training classes for commercial drivers and motorcycle. These services will include comprehensive indoor training classes, job placement assistance for truck and bus drivers, and rented vehicles to practice with, and use for license testing. This program will be launched in 3rd quarter 2012. Drive-alive needs to extend its services by offering training on the following areas:  Accident Investigation  Basic Fire Fighting Course  Basic Health, Safety, Security & Environment  Computer Skills  Driver Management  Emergency Response  Fatigue Management  Fleet Management  Journey Management & Driver Trip Logs  Managing Haulier-Base  Preventive Maintenance  Principles of Supervision / Management  Road Transport Finance  Road Transport Laws  Road Transport Operations, Procedures & Rules  Safe Loading & Securing  Social & Ethical Aspects of Road Transport  Spot Checks, Inspections & Audits  Standard First Aid Course  Vehicle Inspections  Vehicle Scheduling  Work Permits & Gas Freeing  Workshop Management Page 13 of 24 Marketing Strategy Just about every individual in this country needs driving education at one point or another in their lives. Therefore the potential market for Drive-Alive consists of every person age 21 and above in our geographical area of Karachi, Pakistan. We segment this market into a series of groups based on their individual needs and different demographics. These segments are:  Adult drivers  Managerial staff  Non-managerial staff  Commercial drivers. Each of these groups are mentioned in more detail in the market segmentation section. Although Drive-Alive does not offer services for high school drivers just yet, since this will be part of our business in the future, it is included here. Each group has different needs based on lifestyle and past driving experience. Many of our adult drivers are people with tight work schedules who can only devote time for driver education at normal working hours. They often need refresher courses or defensive driver courses. For these individuals Drive-Alive has compressed courses designed to get the driver back onto the street quickly but safely. Finally, our future commercial drivers segment will require courses that are more technical in nature, most detailed and last the longest. Furthermore, many of the participants will be able to take the classes during normal working hours. For these participants, a more detailed syllabus with the best instructors is necessary. Page 14 of 24 Target Market  The target market for Drive-Alive is the corporate safety conscious, logistics, transport and the multinational companies maintaining different fleet of vehicles.  The geographical location of the market will initially be all the individuals of Pakistan with basic needs of knowledge and professional driving skills on the road. Population of Pakistan is over 16 billion.  The demographic of the market is approximately 90% male 10% female, primarily between the ages of 25 and 55.  The psychographic qualities of the market are middle or upper class citizens who hold quality in higher esteem than price.  The behavioural qualities of the market are that they participate in the training on an annual basis and do value a recognized company name. Positioning Defensive Driving Course will be positioned as a service that offers uncompromising protection for road users, as well as grooming there driving skills. This method of positioning would involve communicating the importance of the traffic environmental conservation in line with the present Pakistan government road policies. Page 15 of 24 Market Size & Trends Market Segmentation Each group has different needs based on lifestyle and past driving experience. Many of our adult drivers are people with tight work schedules who can only devote time for driver education at normal working hours. We have designed classes that meet such needs. In addition, unlike our young participants, many of the adults are pre-existing drivers who either need refresher courses, defensive driver courses or are required to take a course due to traffic violations. For these individuals Drive-Alive has compressed courses designed to get the driver back onto the street quickly but safely. These courses concentrate more on the rules of the road than on driving skills. For our beginner drivers, the majority of whom are teenagers, we offer courses both in the summertime, after school and AT their school. These courses are usually longer, and devote more time to the mechanics of driving than the adult classes. The high school segment falls under this larger category. It is separated out from the others since they are "corporate" customers who often bid for and negotiate contracts. Finally, our future commercial drivers segment will require courses that are more technical in nature, most detailed and last the longest. Furthermore, many of the students will be able to take the classes during normal working hours. For these students, a more detailed syllabus with the best instructors is necessary. Market Analysis For the year- market analysis is as under: Market Analysis Growth 2011 2012 2013 2014 2015 Cumulative Average Growth Rate Adult drivers 1% 80,000 80,640 81,285 81,935 82,590 0.80% Managerial staff 1% 68,000 68,510 69,024 69,542 70,064 0.75% Non-Managerial staff 2% 80,000 80,940 90,450 91,250 91,750 1.25% Commercial drivers 3% 40,000 41,280 42,601 43,964 45,371 3.20% Total 7% 270,011 273,382 285,373 288,705 291,790 Potential Customers Page 16 of 24 Advertising & Promotion Advertising Schedule The implementation of Drive-Alive promotional schedule is a critical aspect of the success of the service. Advertising, direct marketing and magazines are to be initiated, such crucial promotion will be introduced after every 2 months. Advertising media used for services promotion are as under:  Website  Bulk Mailing  Safety posters hanged on client premises Promotion Strategy The company’s promotion will include the following:  Email marketing to all major courier, pharmaceutical, logistics, oil & gas and transportation industry to help spread our company name  Paid magazine articles and advertisements to generate sales and service awareness  Participating in transport industry related exhibitions  Creating affiliations with road transport authorities such as National Highway Authority, Chartered Institute of Logistics and Transport and Association of Road Users of Pakistan to capture the industry related service market. Page 17 of 24 Pricing Pricing of the services are as under: S. # Course Name Trainee s Per Per Unit Additio Price n 1. Defensive Driving (LVs) 10 35,000 4,000 2. Defensive Driving Refresher (LVs) 10 35,000 4,000 3. Heavy Vehicle Driver Training 08 40,000 5,500 4. Heavy Vehicle Driver Training Refresher 08 40,000 5,500 5. Forklift Operator Training Course 08 40,000 5,500 6. Crane Operator Training Course 08 40,000 5,500 7. Off-Road Driver Training 08 40,000 5,500 8. Accident Investigation 04 150,000 - 9. Driver Assessor - Train the Trainer 04 150,000 - 10. Driver Screening & Coaching 01 5,000 - Terms & Conditions Prices include training material cost only. Travel and accommodation charges must be bared by the client in case of outstation training. Client with provide transportation for trainer, if the training venue is inside Karachi city. Training room, white board, markers, multimedia and assessment vehicle must be client’s responsibility. Payment will be made within 28 days after receiving of invoice. Price Comparison Price of Drive-Alive is moderate as compared to its competitors. Few competitors are charging above Drive-Alive prices. Others were charging lower prices. A price offered by Drive-alive is based on excellent quality services from the initial start till the completion of training. Page 18 of 24 Company Location and Layout Company Layout The company has a rented office in Karachi at P.E.C.H.S. This is in the city center and consists of 400 Square yard office space on rental basis. 12 person classroom, 06 person classroom, 01 CEO room with attached bath, 01 computer room with attached bath and 01 mini restaurant. Parking facilities are inside and outside the office. The facility is very modern and comfortable, making it a relaxing atmosphere for trainees. Snap Shot of Office Few snapshots of office are as under: Page 19 of 24 Description of Management Team Organogram of Drive-Alive is as under: Organogram of Drive-Alive xxx Managerial Staff xxx Non-Managerial Staff Chief Executive Officer Senior Consultant Chief Consultant Senior Trainer Manager Business Operations Assistant Manager, Business Operations Operations & Logistics Coordinator Administration Officer Office Assistant Management Summary Drive-Alive has a great management staff that provides comprehensive direction for the company's day-to-day operations and for its future planning. This included Mr. Nauman, the president and director marketing & IT, the Director Finance, Muhammad Aslam and Manager Business Operations, Mrs. Beenish Saiyed, and the two individuals responsible for training preparation and reporting, Abdul Hai Khan and Joseph Babulal. Each of these individuals, with the exception of Ms. Beenish, has been with the company from the beginning and are principal shareholders. The company functions with a hierarchical structure with each manager heading up a department or section and answerable to Mr. Nauman. Mr. Muhammad Aslam is responsible for managing each of the individual trainers. Page 20 of 24 Plan of Operation Drive-Alive pride themselves on high levels of control and evaluation methods. These have been depicted by the company in extensive quality control, risk analysis and evaluation. Quality Control It is an ongoing process for Drive-Alive to ensure Total Quality Management (TQM) is met within the company. Drive-Alive works in accordance with government regulations. Through audits, team leaders and management staff will document progress in order to continually improve quality of all production. Evaluation Analysis Drive-Alive evaluations will be based primarily on meeting expected targets. We will be conducting service analysis every month and adjusting the promotion budget accordingly. Furthermore, key performance indicators (KPI) will be undertaken by all employees in order to maintain a high standard of achievement within the organization. In relation to the company’s promotional schedule, it will be reviewed every 3 months in order for the company to meet deadlines. Page 21 of 24 Financial Forecasts Initial Expenses We estimate that the capital required to bring the business into operation will total Rs. 15,000,000 which includes construction, equipment, fees, services development, graphic design and e-marketing solutions. The costs of each are illustrated below. Rental Expense (Rs. 200,000) – Advance deposit and rent as an initial expense for office furnishing. Equipment (Rs. 1,100,000) – Equipment and fixtures required for in-house. (i.e. laptop, personal computers, multimedia, generators, printers, UPS, air conditioners, mobile phones, microwave, electric kettle, etc. Fees (Rs. 100,000) - The legal fees associated with registration of the company Services Development and Staffing (Rs. 515,000) – We will be hiring a professional consultant team to develop a professional service image, which will extend to our wider range of Drive-Alive services. Operating Expenses The annual operating expenses necessary to run the business will initially total Rs. 2,115,000 including staff, utilities, marketing, and building rent. These expenses will vary each year and will gradually drop; yearly estimates as follows. Expense Office furnishing Staff Rental Expense Marketing Legal Fees Totals Year 1 Year 2 Year 3 900,000 400,000 300,000 515,000 200,000 300,000 100,000 2,115,000 600,000 250,000 300,000 690,000 300,000 300,000 1,550,000 1,590,000 Gross Profit per Unit Sold The gross profit made on each sale is the sale price minus the unit’s development cost, the gross profit per unit sold of the Drive-Alive is Rs. 20,000/-. Page 22 of 24 Sales Forecast The following table and chart illustrate the projected sales forecast for DriveAlive (Pvt.) Limited. Sales Forecast Sales Adult drivers Managerial Staff Non-managerial staff Commercial drivers Total Sales 2011 Rs. 200,000 Rs. 960,000 Rs 1,440,000 Rs. 2,100,000 Rs. 4,700,000 -,000 979,200 1,512,000 2,205,000 4,906,200 -,200 1,008,576 1,572,480 2,315,250 5,110,506 Sales Forecast Year-,500,000 Sales (in rupees) 2,000,000 1,500,000 Data Sum of 2011 Sum of 2012 Sum of 2013 1,000,000 500,000 Adult drivers Commercial drivers Managerial Staff Non-managerial staff Segmentation Category Personnel Plan The company's expansion to include two additional offices will put a great deal of strain on the company's existing management. Each of the company's four principal officers, with the exception of the marketing coordinator and the controller, are expected to become the facilities manager for each of the existing or proposed sites, along with their current duties. At this time management does not feel comfortable with hiring new managers for these positions. Once the profitability of each site becomes apparent, the president will determine the need to add on additional personnel. Page 23 of 24 Personnel 2011 2012 2013 President 125,000 132,500 140,450 Chief Consultant 100,000 106,000 112,360 Senior Consultant 85,000 90,100 95,506 Senior Trainer 70,000 74,200 78,652 Manager, Business Operations Assistant Manager, Business Operations 50,000 53,000 56,180 35,000 37,100 39,326 Operations & Logistics Coordinator 30,000 33,000 36,300 Administration Officer 20,000 22,000 24,200 547,900 582,974 Total Payroll 515,000 Profit Sharing Total gross profit will be divided on quarterly achieved targets between directors and staff of the company. Limited defined stock option is also offered to the staff according to their positions in the company. Personal Plan For the Year-,000 Compensation (in rupees) 600,000 Personnel 500,000 Administration Officer Assistant Manager, Business Operations 400,000 Chief Consultant Manager, Business Operations Operations & Logistics Coordinator 300,000 President Senior Consultant 200,000 Senior Trainer 100,000 Sum of 2011 Sum of 2012 Sum of 2013 Years Data Page 24 of 24