OFFER ELECTICAL TESTING SERVICE

International SEPT Program, University of Leipzig

Business Plan:
OFFER ELECTICAL TESTING SERVICE

Name of Student: Dang Ngoc Vung
Email of Student:
SEPT ID Number:
Matriculation Number: 11212119

Module Number: 102 Entrepreneurship Management
Supervisor: Dr. Utz Dornberger
Date of submission: 31.07.2012
____________________________________________________________ 1


Table of contents
1. Executive Summary__________________________________________4
2. Company’s Overview ________________________________________5
2.1 Mission ______________________________________________5
2.2 Vision _______________________________________________6
3. Services Description _________________________________________6
3.1 Offered Services _______________________________________6
3.2 Future Growth _________________________________________8
4. Sector, Market and Customer Base Analysis _____________________8
4.1 Sector________________________________________________8
4.2 Target Market ________________________________________10
4.3 Market Size__________________________________________10
4.4 Competition Analysis __________________________________10
5. Marketing Strategy _________________________________________11
5.1 Marketing Mix _______________________________________11

5.2 Market Entry Strategy__________________________________13
5.3 Brand _______________________________________________14
6. Management and Organization _______________________________14
6.1 Location of the Company _______________________________15
6.2 Legal Status __________________________________________16
6.3 Organizational Structure ________________________________16
6.4 Facilities and Operative Resources ________________________18
7. Financial Planning __________________________________________20
7.1 Monthly Salaries ______________________________________20
7.2 Investment Requirements _______________________________20
7.3 Cash Flow Monthly Base _______________________________21
7.4 Cash Flow Yearly Base _________________________________23
7.5 Profit and Loss & Sales Forecast _________________________25
____________________________________________________________ 2


7.6 Cash Flow Graph ______________________________________27
7.7 Profit and Loss Graph___________________________________28
8. Appendix ___________________________________________29

____________________________________________________________ 3


Executive Summary
Hung Yen is known as a local in the northern key economic sectors
with a series of arteries run through like the National Highway 5A, Highway
39; abundant human resources.
In order to a manufacturing company works efficiently and growing,
besides factors such as: people, raw materials for production, production
grounds, the legal environment of local, infrastructure. .. the problem that

make sure continuous stable in power supply and power systems and
production lines to operate reliably is a vital element of the manufacturing
companies. Because, if the electrical system is damaged or incident, the plant
will stop all production activities cause major damage to businesses. This is
precisely the detected necessity by the founder of the Truong Giang Trade
Service Technical Co,. Ltd (TGTSTC), a new‐creation company which
focuses to provide three main services, include: Supply the testing service of
electrical systems; Troubleshooting electrical systems; Repair the electrical
system after testing to all manufacturing companies in Hung Yen province
and other nearly Hung Yen province.
Thanks to the years of experience gathered by the founder of the
TGTSTC in the field of testing electrical systems related three main services
that company will be offered aimed:
- To comply strictly with procedures and regulations prescribed by the state
- To reduce production costs to both national and foreign manufacturing
companies;
- To know clearly operational status of the electrical system so it is actively
planning the company's production plan.
- To detecte and replace in time the electrical equipment that do not standard
in the power system and the production lines.

____________________________________________________________ 4


- To deal promptly with problems in power supply also contribute to reducing
production costs caused by power outages.
- To improve the life of electrical equipment in particular and in general the
production lines contribute to reduce investment for production.
One of the main reasons of success for the TGTSTC is the low
competition in the field as well as the extraordinary attractiveness of Hung

Yen city for manufacturing and services companies, considered as one of the
most growing areas in Vietnam; all these factors create the most adequate
conditions to attract new investors in the zone. In addition, the TGTSTC will
be composed of eight professional executives with a background on technical,
economic, administrative and legal areas, as well as useful practical
experience, remarkable factors that contribute to the success of the Company.
In terms of Finance, during the first three years of projected operations, the
Cash Flow analysis shows always positive numbers, ending in Year 3 with
more than 2,9 billion Vietnam dong, with an investment of

2,4 billion

Vietnam dong only in the first year for the whole project; the Profit & Loss
analysis always positive numbers during the first three years of projected
operations.
In summary, the birth of the Truong Giang Trade Service Technical
Co,. Ltd promises a successful professional future for the participating
personnel, an elevated profit for the capitalist investors and professional and
high quality services for the customers.
2. Company’s Overview
The Truong Giang Trade service Technical Co,. Ltd, will be created in
Hung Yen city, Vietnam. The Company will be entirely composed of private
capital, primordially from three Shareholders who will work in the Company
as well.
2.1 Mission
____________________________________________________________ 5


To provide our customers with three main services aimed to reduce
their production costs:

1. Supply the testing service of electrical systems;
2. Troubleshooting electrical systems;
3. Repair the electrical system after testing.
2.2 Vision
To be the best option for electrical system testing of consulting services
support, start‐ups advisory and private‐partner Consultancy Company,
offering its services under the highest quality standards to plants, factories,
companies, production in Hung Yen Province and the northern provinces of
Vietnam.
3. Services Description
3.1 Offered Services
The consulting company plans to offer three main services, as a
separately for plants, factories, companies:
1. Supply the testing service of electrical systems;
2. Troubleshooting electrical systems;
3. Repair the electrical system after testing.
In addition, before contracting our services, the customer receives
automatically the following services in free:
1. Consultants use power-saving, efficiency in production
2. Consultants use of electrical equipment, production line power
saving
3. Advisory cycle testing, production line maintenance, electrical
equipment
3.1.1 Supply the testing service of electrical systems:

____________________________________________________________ 6


Each factory or company have power supply systems and production
lines of certain products. Power to provide for all activities of production of

the plant and company. Entire production plan of a factory or company
depends greatly on the situation of power supply operation of the plant as well
as the operation of production lines of the machine. For the situation of power
systems and production lines of the factory or company, how the plant or
company need to hire a consulting firm to do the electrical testing to
determine system and conclude power systems as well as production lines or
plants of the power company is now like.
3.1.2 Troubleshooting electrical systems:
During production of the plant, the plant occasionally to stop work due
to accident or incident power system production line. At such plant or
company to hire consulting firm to handle such incidents.
3.1.3 Repair the electrical system after testing:
After testing electrical systems and production lines for factories or
companies will discover the elements of the electrical system not to operate
standard. Meanwhile the companies will hire consultants to carry out repair of
non-standard equipment.
3.1.4 Consultants use power-saving, efficiency in production:
In Vietnam and other countries in the world, saving electricity in the
production of the company are important issues. therefore our firm advises
clients that use the power and efficiency savings.
3.1.5 Consultants use of electrical equipment, production line power
saving:
Today, many manufacturing lines using outdated energy-consuming,
thereby reducing competition in the market as well as provide low efficiency
in production. Our company is responsible for advising clients select lines and
electrical equipment consumes less power.
____________________________________________________________ 7


3.1.6 Advisory cycle testing, production line maintenance, electrical

equipment:
The power supply system as well as the production lines of the plant,
not done simultaneously test all electrical equipment that each line of
electrical equipment in a test cycle is different. So our company to advise
customers of each test cycle power equipment, in order to reduce costs for the
plant.
3.2 Future Growth
At the first stage of the company, only three services plus the additional
services will be offered (Supply the testing service of electrical systems;
Troubleshooting electrical systems; Repair the electrical system after testing);
however, eventually new services could be developed and added, depending
on the requirements of the customers and on the market opportunities, but
that’s something to be developed once the company is fully operative and able
to detect the market opportunities related to its core business.
As a result, the immediate growth of the company may be measured not
in terms of the number of different services, but in the range of the offered
services; this means that the Company want to increase its level of
participation among different provinces in Vietnam. During the first stage, the
company will be only focused on Hung Yen province. which is one of the
most dynamic province in Vietnam in terms of attracting national and foreign
direct investment.
In the second stage, the Company contemplates to expand its operations
to the the northern provinces of Vietnam, but always considering the market
demand.
4. Sector, Market and Customer Base Analysis
4.1 Sector

____________________________________________________________ 8

The company will belong to the sub‐sector of Consulting Companies of
the Services to the Industry Sector, because the main target‐market of their
services are the manufacturing companies. This classification was given by
the Department of Planning and Investment of the provinces. The following
chart provides a general overview of the sector:
Services to Industry Sector, Sub‐sector Consulting Companies General Overview

Characteristic

Situation
Medium number of companies, mainly multinational and

Size

local firms well positioned from many different
consultancy areas (i.e. fiscal, real estate, accountability,
legal, relocation, etc.)
Low growing sector, due to the high level of

Growth

specialization of knowledge of the companies as well as
to the recent financial crisis.
Medium to high level. There are not high expenses on
assets or infrastructure; the entry company must prove
that is an expert on its field by providing excellent

Entry Barriers

services and deep knowledge on the area, aiming to

generate a positive reputation which can lead it to a high
position in the market; it is also difficult to find
customers at the beginning phase due that there is no
previous professional experience with other companies.
Low, due that the operation of the company doesn’t
require too much investment in assets or infrastructure;

Exit Barriers

the main problem is to provide a bad service, because it
causes a bad reputation through the mouth to mouth
publicity, both for the personnel as well as for the
company itself.

____________________________________________________________ 9


Trends Due to the actual
Trends

Due to the actual financial crisis, the demand for
consulting companies may be affected and diminished.

Source: Own Compilation, 2012

4.2 Target Market
The market target is divided into Primary Target Group and
Secondary Target Group; the first one refers to foreign manufacturing
companies interested to invest in Hung Yen, and the second group is those
Vietnam manufacturing companies who want to receives the services during

manufacturing in Vietnam
4.2.1 Primary Target Group
In Hung Yen province there are 218 foreign manufacturing companies
with the investment was USD 1.969 million.
4.2.2 Secondary Target Group
In Hung Yen province there are 757 domestic manufacturing
companies with the investment was 50,000 billion VND
4.3 Market Size
All foreign and national companies interested to invest in Vietnam have
to contact the State Governments of the locations where they want to
investment; as a result, this is the main source of information to determine the
market size.
4.4 Competition Analysis
The company will be determined from 2 to 3 companies in direct
competition (Northern testing electrical company, Hung Yen power
company, Ha Noi power company) but only of the company will take
market share provides great service, because:
- Free consulting company for customers before signing a contract to
provide services. (Consultants use power-saving, efficiency in production;
____________________________________________________________ 10


Consultants use of electrical equipment, production line power saving;
Advisory cycle testing, production line maintenance, electrical equipment;
Consulting the production lines installed power saving).
- Deal directly with the customers for the value of contracts, and may
reduce the price from 10% to 30% of the value of the price contracts that was
made by the price state.
5. Marketing Strategy
5.1 Marketing Mix

5.1.1 Price Structure
Based on the specific requirements of customers and the unit prices of
state, and especially based on the agreement with the client (for example, the
estimation that the company provides period testing services for a client
estimated value is 300 million VND, but only customers with a contracted
value of 250 million VND. This is considered a company's strengths
compared to other competitors).
5.1.2 Place
• Location. The company will be located in a rented office in Hung Yen
City, where clients will be attended and where the rest of the services will be
done by the staff members.
5.1.3 Promotion
The Company will use the following promotion activities / media:
Networking
• The management of industrial parks. The first and more important
strategy of the company is to present its services with the local management
of industrial parks of the province in order to create cooperation between both
sides. It’s important to be considered as an efficient services provider by the
management of industrial parks, due that it’s the institution in charge of
getting the most quantity of target clients through their promotional activities.
____________________________________________________________ 11


It’s necessary to clarify to the management of industrial parks that the
Company won’t be a competition for them, but a complementary ally in the
promotion activities.
• Other Institutions. It’s important also to establish contact with some
other institutions in order to introduce the company and its services, while
creating bridging effects between each other. The main institutions are
Manufacturing and Commerce Consulates, in province of Vietnam, Industrial

Parks, Construction Companies, Legal, Account and HR Advisory Companies
and R&D Institutions, among others.
Publicity
Printed publicity is considered as the most useful publicity media, due
that advertising in TV or radio is not a suitable option for the Company (too
expensive, major customers abroad). The printed publicity will be done in
specialized Vietnam magazines and newspapers related to the industry,
investment and new businesses (e.g. Power magazine, or Automation Today
magazine, Foreign Investment Review,... ), which is focused on the Primary
Target Market. In addition, in order to reach the Primary Target Market
printed publicity will be also done in publications which main market is
outside of Vietnam, being one of the best options the “ProVietnam Industrial
Costs” (yearly publication in charge of the federal investment agency), as well
as in the promotional material of the management of industrial parks. In the
launch and first phase of the Company, printed publicity will appear in those
three main means (local newspaper, industry magazine and foreign
publications); eventually and according to the demand, the periodicity of the
publicity will be adjusted as required. A fair quantity of flyers with the most
important information of the Company will be also printed and distributed to
the organisms already mentioned.
Personal Sales
____________________________________________________________ 12


The company regularly participate in major exhibitions in production.
there are many customers have real needs in the company’s advisory
Sponsorships
It is important to be active and participate in the events organized by
the management of industrial parks and other organisms; in some occasions
and according to the demand, the sponsorship is another important option for

publicity. Some the management of industrial parks request sponsors for their
promotional material.
5.2 Market Entry Strategy
The best ally for the activities of the Company are the management of
industrial parks; as a result, a proper introduction with them, as already was
mentioned, will be crucial for the good performance of the Company.
The Company offers customers the professional advice, clear benefits
in terms of their power when the system is tested periodically, maintenance
and timely repair. By the ways we directly visite to custpmers or through the
company's website, or the journal to offer our advices and understanding the
needs of customers
Before contracting our services, the customer receives automatically
the following services in free:
1.Consultants

use

power-saving,

efficiency

in

production

2. Consultants use of electrical equipment, production line power
saving
3. Advisory cycle testing, production line maintenance, electrical
equipment
4. Consulting the production lines installed power saving.

We hope that, with the understanding of technical depth in the power system,
as well as the test standard of electrical system would be an advantage to
customers trust contract with us.
____________________________________________________________ 13


5.3 Brand
The founder of the Company, Dang Ngoc Vung, has decided to name
the Company “Truong Giang Trade Service Technical Co., Ltd”; the main
attributes of this name are described as follows:
Due that the Company will focus on both the markets of
domestic and abroad manufacturing companies, English
Language

and Vietnam were selected for being the international
language which the largest number of people can
understand; three words were chosen, being easy to
pronounce and to understand its meaning.
The brand itself describes its core business, which is the

Product / Service

consultancy services of electrical testing systems, provided
by a national company.
The logo as well as the type of letters was carefully

Quality

selected, aiming to project peaceful colors, with a very
good definition which means quality.

The mix were carefully selected, based on the following
criteria:

Colors

• Blue. Color of heaven and sea, associated with stability;
Health, understanding, tranquility, Knowledge, integrity,
seriousness and power, Color of Nature, associated with
freshness, growth, Associated with money

Picture
Letter

characteristics of electrical waves, with the desire of the
company is a professional service in the depth of field
An easy type of letter, being able to be read easily

Logotype
6. Management and Organization
____________________________________________________________ 14


6.1 Location of the Company
The company will start operations in Hung Yen city, due that is located
in the most dynamic area of the Country known as economic triangle north of
Vietnam, conformed of 11 provinces (Hung Yen, Ha Noi, Ha Nam, Thai
Binh, Hai Duong, Bac Ninh, Quang Ninh, Nam Dinh, Ninh Binh, Vinh Phuc,
Hai Phong) within a radius of 250 kms, with a population of 19.77 million
inhabitants (22.74% of total population) and with the most developed
manufacturing industry in the Country, exemplified in the following charts:

Province

Populations

Ha Noi

6,561.90

Vinh Phuc

1,008.30

Bac Ninh

1,034.20

Quang Ninh

1,159.50

Hai Duong

1,712.80

Hai Phong

1,857.80

Hung Yen

1,132.30

Thai Binh

1,786.30

Ha Nam

786.30

Nam Đinh

1,830.00

Ninh Binh

900.60

Total

86,927.70

Source: General statistics office
Source: Department of Survey and Mapping Vietnam

____________________________________________________________ 15


Main Industrial Sectors of interest

6.2 Legal Status
The Company will be founded as a company, created by three members
Dang Ngoc Vung and another two Shareholder, who will contribute equally
with financial resources as well as with its knowledge on the area; as a result,
three Shareholders will share responsibilities, financial resources, risks and
tasks in the Company, in a 40% ‐ 40%-20% basis.
There are some potential candidates who are interested to create this
partnership; Dang Ngoc Vung considers that it won’t be difficult to find the
right person.
6.3 Organizational Structure
6.3.1 Team Members and Work Functions
Shareholder 1: Dang Ngoc Vung
• Educational Profile. Electrical Engineering., HaNoi University of
sciens and Technology. Business Administration background with emphasis
in international trade; Languages – English, Vietnam.

____________________________________________________________ 16


• Professional Experience. 10 years working for Electrical VietNam
Corporation.
6.3.2 Team Profile Requirements
Position

Profile
Education:

In-depth

knowledge

of

electrical

specifications

International Trade, Business Administration, Marketing
Shareholder 2

Experience: Electrical Technical, Sales, legal, labor, promotion, etc.

(Vice Director)

Languages: English, Vietnam (mandatory), other desirable.
Age: 27 ‐ 35
Gender: Indistinct
Education: In-depth knowledge of electrical specifications, Business
Administration, Marketing
Experience: Electrical Technical (mandatory), Sales, legal, labor,

Shareholder 3
(Chief of technical

promotion, etc.
Languages: English, Vietnam (mandatory), other desirable.

department)

Age: 25 ‐ 30
Gender: Indistinct
Education: International Trade, Business Administration, Marketing
Experience: Not mandatory but desirable (sales, legal, labor,
Chief of Business promotion)
Languages: English (mandatory), other desirable.

Department

Age: 24 ‐ 30
Gender: Indistinct
Education: International Trade, Business Administration, Marketing
Experience: Not mandatory but desirable (sales, legal, labor,
Chief of Finance
&

Accounting

Department

promotion)
Languages: English (mandatory), other desirable.
Age: 24 ‐ 30
Gender: Indistinct

Staff
Technical

1

of Education: In-depth knowledge of electrical specification,
Experience: Electrical Technical, procedures, regulations, standards,

____________________________________________________________ 17


etc.

Department

Languages: English, Vietnam (mandatory), other desirable.
Age: 24 ‐ 30
Gender: Indistinct
Education: In-depth knowledge of electrical specification,
Experience: Electrical Technical, procedures, regulations, standards,
Staff

2

of

Technical

etc.
Languages: English, Vietnam (mandatory), other desirable.

Department

Age: 24 ‐ 30
Gender: Indistinct

Education: In-depth knowledge of electrical specification,
Experience: Electrical Technical, procedures, regulations, standards,

Staff

3

Technical
Department

of

etc.
Languages: English, Vietnam (mandatory), other desirable.
Age: 24 ‐ 30
Gender: Indistinct

6.3.3 Organizational chart

6.4 Facilities and Operative Resources
The following Operative Resources will be required for the operation of the
Company:
1. Office space for eight to ten persons in well located area;
2. Office Equipments (i.e. Personal Computers, Fax, furniture, scanner,
coffee machine, etc.);

____________________________________________________________ 18


3. Vehicle. During the first phase of the Company, the personal

vehicles of the Shareholders will be used, with future plan to buy vehicles to
fulfill three services.
4. Testing equipments: (i.e. Megommet, Terromet, MOM200, AC/DC
120/130kV, Relay test kits etc.);
The detailed information on investment and equipments is located in
the Financial Plan file; however, in this document is presented some of the
main resources the Company will acquire for its operation:

Office in Hung Yen city

Main office equipment

Specialized Vehicles: transport
testing equipments.
Honda CRV: 5 passengers

Testing equipments

____________________________________________________________ 19


7. Financial Planning
All financial analysis and reports are calculated in the file “Financial
Plan” (i.e. Investment Requirements, Fixed and Variable Costs, Sales, Profit
and Loss analysis, Sales Forecast, Depreciations, Cash Flow and Salaries;
however, the most important information is annexed to this document:

7.1 Monthly Salaries
No. Position

Annual
Increase Year of Incorporation

Brutto Salary Benefits(20%) Net Salary

l Shareholder 1

15,000,000

3,750,000 11,250,000

10%

Month 1/Year 1

2 Shareholder 2

15,000,000

3,750,000 11,250,000

10%

Month 1/Year 1

3 Chief of technical Department

12,000,000

3,000,000

9,000,000

10%

Month 2/Year 1

4 Staff 1 of technical Department

8,000,000

2,000,000

6,000,000

10%

Month 2/Year 1

5 Staff 2 of technical Department

8,000,000

2,000,000

6,000,000

10%

Month 12/Year 1

6 Staff 3 of technical Department

8,000,000

2,000,000

6,000,000

10%

Month 12/Year 1

7 Chief of business Department
Chief of finance & accounting
8 Department
Exchange Rate: $1=20,875.00 VND

12,000,000

3,000,000

9,000,000

10%

Month 12/Year 1

12,000,000

3,000,000

9,000,000

10%

Month 2/Year 1

Personel will be increased according to the increase of the demand, as shown in the Sales Forecast and Profit and Loss
Analysis

7.2 Investment Requirements
Investment
(VND)
Monthly/Year1

Year

Investment (VND)

1

300,000,000

1

2,400,000,000

2

1,800,000,000

2

0

3

0

3
4
5

100,000,000 TOTAL INVESTMENT

2,400,000,000

FOR PROJECT

____________________________________________________________ 20