Construction Business Plan: Blendlee Case Study

The assignment delves into developing a comprehensive business plan for a construction startup named Blendlee. It draws upon project management principles and examines successful cases like Blendlee's to guide the plan's creation. The analysis considers Malaysia's construction industry growth, GDP contributions from construction, and performance trends. Additionally, it touches upon crucial aspects such as organizational structure, sales activities, legal considerations (copyright), and potential risks faced by the construction industry.

Entrepreneurial and Growth
Management

EXECUTIVE SUMMARY
Business starts its operations in order to attain desired objectives in a timely manner. In
present report, Exotic Housing Construction Ltd which is new business venture will be engaged
in construction sector mainly of housing in Malaysia's city Selangor. Customers would get
attracted to it because it will implement market penetration strategy so as to receive more
attention from them in order to build its market share. For accomplishing this, Mission statement
of company is as follows- “Exotic Housing Construction Ltd pledge to offer quality construction
to clients in a customised manner so that they could choose upon their best preferable option for
gaining satisfaction for their dream houses.” The highest level of services will be imparted to
clients by which market share can be accomplished. Moreover, number of employees will be
around 100 and will increase manpower for sustaining in market. Company will have good
profitability in coming years and will be successful as financial statements clarifies that earnings
will be maximised. Moreover, Malaysian construction industry of residential buildings is around
27.70 % which can be advantageous to business as it could lure clients for attaining profits. This
shows that company will effectively establish it’s firm-standing in Malaysia and will maximise
profits.

TABLE OF CONTENTS
MARKET ANALYSIS....................................................................................................................1
Industry Description and Outlook..........................................................................................1
Target Market.........................................................................................................................3
Marketing Mix........................................................................................................................3
Competitive analysis..............................................................................................................4
Regulatory restrictions............................................................................................................5
BUSINESS DESCRIPTION............................................................................................................6
ORGANISATION AND MANAGEMENT....................................................................................7
MARKETING AND SALES STRATEGIES................................................................................10
SERVICES OR PRODUCT LINE................................................................................................12
FUNDING REQUEST...................................................................................................................13
FINANCIALS................................................................................................................................16
CRITICAL RISKS.........................................................................................................................21
MILESTONES...............................................................................................................................22
REFERENCES..............................................................................................................................23

MARKET ANALYSIS
Industry Description and Outlook
Construction industry of Malaysia is considered as one of the fastest growing sectors in
this present scenario of year 2016 – 2020. This specific industry has been expected for the
expansion of 7% close to this year. The main reason for this expected expansion is directly
supported with plan of government for improving transport network of country. Housing
shortage in country has led for growth of industry in the coming years. The review period of
2011 – 2015, the valuation of industry of construction was major supported with 10th Malaysian
plan 2011 – 2015. In this specific scenario, there was huge investment from government in
context of infrastructure, residential buildings and industrial parks. There was presence of
various policies through government for public private partnerships with specific objective for
developing infrastructure of country. Simultaneously, there was increment from 52% in total
private investment in context of projects of infrastructure through spending in year 2010 till 64%
in 2014 (Malaysia construction industry, 2017).
Residential construction has captured the largest market in construction industry of
Malaysia which had accounted 31% of total value of industry in year 2015. The CAGR of 19.7%
had been recorded by market for review period which has been raised from year 2011 to 2015.
This particular growth was supported with government plan for building houses which are
affordable. The GDP in Malaysia from construction has been raised to 14093 MYR million in
2018's first quarter from 13352 MYR. It had directly averaged to 10269.76 MYR million from
year 2010 till 2018 as it had reached at peak of 14093 MYR million and had stated low record of
6464 MYR million in the 2010's first quarter.
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Illustration 1: Malaysia GDP from construction
(Source: Malaysia GDP, 2018)
In each sub sector, it had driven growth in positive aspect which is illustrated as below:
Sub sector Share
Civil Engineering 38.90%
Special Trades 4.60%
Non-residential buildings 28.80%
Residential buildings 27.70%
Total 100.00%
Its performance has been recorded with the growth of 7.7%. The value of expansion had
driven positive growth in various sub sectors which are stated with its share. With the
contribution, sub sector of Civil Engineering had dominated performance with valuation of
construction which is performed with 38.8% and so on. The private sector had also dominated
63.3% by comparing it from public sector of 36.7% (Performance of construction sector, 2018).
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38.90%
4.60% 28.80%
27.70%
Civil Engineering
Special Trades
Non residential buildings
Residential buildings
Target Market
Market segmentation: In this specific scenario, residential buildings have gained
Malaysian market share of 28% which is rising because of shortage which is supported by
government. This is considered as the fastest growing segment as compared to special trades,
civil engineering and buildings which are non-residential.
Target: The average margin had been gained by housing segment as it is an initial start-
up so, it would lay special emphasis on marketing and appropriate services to its customers.
There is huge requirement of land, cost and scope. So, it tends to be very sensitive in its time of
completion. It would be targeting the consumers from area Selangor in Malaysia.
Positioning: It would build high end addition and houses on custom basis along with
modest home renovations. It would provide meticulous historic work along with the luxury
designs.
Marketing Mix
Market test
Product: Building products such as roofing, cabinets, windows, piping, fixtures/fittings,
electrical products, paint, windows and wall board.
Place: It would be operating in Selangor in Malaysia.
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Promotion: It would be promoting through different social media websites, Trade shows, blogs,
direct mail marketing, brochures and flyers and especially listing itself in directory.
Price: It would be using cost effective strategy as it would work on volume with affordable cost
as there was shortage in review period of housing. In simple words, it could be elaborated as
offering in low prices.
Competitive analysis
SWOT Analysis
Strength: It would be gaining expertise in building and designing in context of addition
of major house with specific alterations. It would be offering one stop solution for building new
house along with design, administration and construction till dream house of client. It would
provide services which are excellent and reliable on time. It would also justify green designs on
alternative aspect and incorporate practices which are sustainable for the basis of construction for
creating better environment.
Weakness: There is Lack of expertise especially for cement manufacturer for producing
raw material as compared its competitors which are existing. As it is a start-up company, it
would be facing different challenges, only cement is the major concern. There is lack of land
available for the purpose of residential. There is presence of environmentally critical areas.
Opportunities: There was shortage of housing so government had also supported for
residential purposes it would indirectly create housing boom which is expected. It could be
simplified through strategic alliance with projects of public sector. There is the raise of need of
growth in housing.
Threat: The rate of urbanization with rapid rate along with increment is concentration of
migration with few urban areas. There is presence of inequalities for socio economic. There is
also adverse impact on alterations in climate.
It can be summarized from above SWOT and PESTLE analysis, firm would deploy well-
structured strategies so as to meet good amount of profits with reference to Malaysian market.
Moreover, it may be able to establish its brand name in housing construction market by
satisfying customers. It will have to comply with political and legal factors as documentation is
required for permitting firm while entering business. In this manner, laws and regulations have to
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comply with organization which would carry out activities in productive and uninterrupted
manner. Hence, it would achieve goals and objectives quite effectually in the market.
Regulatory restrictions
PESTLE Analysis
Political: There are various factors which impact construction industry in Malaysia with context to
permits with documentation which are gained with different stages of construction. It also
considers various factors for accounting degree of government for alterations to influence
specific industry. In simple words, it gives legal framework as Government can adopt
stance and conducts economic policy.
Legal: It considers each legal aspect such as exports, resources, employment, quotas, etc. It
consists of both internal and external factors as well. There are various laws which might
alter external environment of particular company. There is presence of various policies
with these aspects and then it would extract strategies for considering legislations into
account.
Economic: It would include different functions of economy and its effect on operations of
organization. If there is raise in inflation of economy which might impact method of
setting price of its products. It would also be considered as alteration in model of demand
and supply as it also considers inflation rate, foreign exchange patterns, economic
growth, etc.
Technological: It is directly related to changes and innovations in technology which might give outcome
for operations of industry are favourable to market or not. It is directly linked with
awareness of technology which has been possessed by the organization. It might become
obsolete in shorter duration after launch and so, it is very important for the consideration.
Social: It helps in scrutinizing events which might impact market and community in social
aspect. The people who are residing in this specific place where is project had been set
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considers merits and demerits as well. It also consists of various dynamics of population,
career altitudes, cultural expectations and global warming, etc. All these factors help in
consideration for social environment which are prevalent in specific market for
identifying the determinants like population analytics, cultural trends, etc.
Environment:
 It consists of influences which are identified by surroundings of environment. Generally,
it considers environment in context of business that how it has been carried out. It
includes climate, global alterations, weather and environmental offsets but it is not
restricted.
BUSINESS DESCRIPTION
Business runs to attain profits by garnering customer's base. This is essentially required
as organisation aims to accomplish desired revenue by satisfying customers in the best possible
manner. In present scenario, Exotic Housing Construction Ltd will be starting its business
operations in the market particularly focusing on housing construction. This will provide good
quantum of revenue as Malaysian construction sector has generated nearly 19.7 % of growth in
GDP (Gross Domestic Product) alone in the country which marks that Malaysian construction
sector is highly suitable for the company in attaining the profits and business would flourish in
the coming years up to a high extent. This clarifies why construction sector has been chosen by
company as good quantum of income will be generated and organisation will be able to attain
market share quite effectually. In this manner, residential construction is being chosen for
attaining profits and start business venture (Clough and et.al., 2015).
Exotic Housing Construction Ltd will focus on residential homes as it will be able to earn
profits in that manner by which company would be able to accomplish gain in market. The
services that will be offered by organisation consist of design work, customised home,
remodelling and alterations or renovation. These activities will be provided by business and in
that way, goals would be achieved in a better way. Contracts regarding residential will be
attained by which it may be able to position its products and services in the market quite
effectually. Furthermore, primary aim of proposed venture is to establish itself in market by
which more of customers would get attracted to company leading to have enough of profits. In
this manner, Selangor area will be targeted by company in order to lure customers for
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customising their homes in a better way. Hence, firm would garner profits by taking into
considerations which will be fruitful for it and try to establish in Malaysian market quite
effectually. Moreover, business would offer services and products at affordable prices which will
be helpful in achieving desired profits with ease.
Moreover, it would be helpful for company in attaining goals as Malaysian construction
industry has been performing well signifying that Exotic Housing Construction Ltd will also
attain desired profits in its start-up phase and definitely will establish its position in the market in
effective manner. Business will employ efficient manpower which is main requirement in
construction of houses as with their efforts, company will attain desired production in quick
manner. This is vital as with productive machineries and equipment, labour force is required
which will enhance its profits in the best possible manner. Moreover, it would grant company
with sufficient income and timely completion of construction project will be accomplished quite
effectually. The target area of Exotic Housing Construction Ltd is Selangor and customers will
be satisfied with affordable prices to build their houses in comparison to competitors.
Competitive advantage can be gained at this specific location and firm will be benefited up to a
high extent because highly affordable prices would be established leading to maximisation of
profits and minimisation of costs (Rosati and Conti, 2016). Outstanding personnel is prerequisite
as with better management, company will attain good profitability position.
ORGANISATION AND MANAGEMENT
Management is key concern of company so as to handle internal issues in the best
possible manner and that too in a manner beneficial for entire organisation. Since, shareholders
are in more number, Board of Directors are usually appointed which takes into account all
considerations of company and as a result, firm is able to earn profits as output is produced in a
better way. Management must perform tasks in that way by which each and every department
performs in effective manner. This leads to evolution of organisation chart which is required as
organisation divides and allocates the work to different departments leading to productive work
and thus, duplication of work is avoided in a better way. This will help company in achieving
work in that manner by which contracts would be completed by deploying duties and
responsibilities to individual departments which will have clarity of doing work in the best
possible manner (Clinton and Whisnant, 2019).
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Organisation chart is necessary which would be helpful in making clarity about the work
in the best possible way. It is essentially required that Exotic Housing Construction Ltd will have
effective managerial personnel’s which will handle various tasks in effective way and then
produce desired results with ease. In relation to this, who will be doing which work in company,
organisation chart is prepared below outlining activities to be performed by units as governed by
Board of Directors of organisation. It is produced as under-
Illustration 2: Organisational chart
It can be identified from the above organisation chart that firm will have management
units in a way which would deploy the activities in effective manner. There will be six
departments handled by each of personnel’s such as Purchasing Manager, Engineer Director, HR
Director, Financial Director and Marketing Director. In this manner, roles and responsibilities of
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various departments are discussed below which will be helpful for business venture in attaining
clarity.
Purchasing department
This department is under charge to purchase raw materials such as stone, sand, cement
and many others materials. Supplies are also used in projects and meeting daily requirements of
organisation. Purchasing unit is entitled not only to buy necessary materials but also to compare
different suppliers and exploring out qualities of materials with relevant prices whether they are
affordable or not and hence, correct price is paid for every purchase (Eastman, 2018).
HR department
HR department will have responsibilities to hire productive staff and training them for
increased productivity. Keeping records of employees, insurance, relationship with them,
compensation and inculcating habit of persuading teamwork.
Engineering department
This unit is purely responsible for proper planning of construction projects undertaken by
Exotic Housing Construction Ltd in a better way. Conducting surveys, making research,
assessment of results, planning project and also supporting technical problems during project.
Project department
As the name suggests, project department will be able to attain completion of project in
accordance to scheduling activities for each of project. Project Manager is in-charge in this
scenario in forming out budget, assigning work to employees and allocating respective
responsibilities for timely project completion. He seeks also for occupational health and safety at
workplace.
Financial department
The purchasing unit will be engaged in developing strategies to maintain cash inflows
and initiating control over cash outflows so that cash balance may be maintained quite
effectually. This will have flow of funds in a proper way as business will be able to purchase raw
materials needed for construction and related machineries. Moreover, cash position will be
strengthened so as to make daily payments by having sufficient funds (Ross and Byrd, 2015).
Marketing department-
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Marketing unit has main duty to conduct market research, formulate market strategies,
advertising and promotion. Furthermore, tactics to increase sales, pricing, product development
and related activities so that promotional tools may be beneficial for the firm. Hence, all these
departments will be deployed with activities and tasks and Exotic Housing Construction Ltd will
have efficiency in its construction business.
MARKETING AND SALES STRATEGIES
Marketing strategies are important so that firm may be able to perform well by effectively
attaining promotion so that profits can be achieved in the start-up phase. This is required as
business should promote its services by which customer's may come to know and thus, contracts
can be attained from them so as to build luxurious houses. The marketing strategies are listed
below-
Market penetration strategy
Organisation is new in Malaysian market and so that it needs to establish its firm-
standing in it by which sales may be accomplished in starting phase only and may flourish in
long run (Gandy, 2015). To attain this, market penetration strategy is must, company will use
this strategy by providing affordable prices to customer's by which they can build houses with
ease. Prices would be cut down instantly in order to capture the market as people will be lured to
give housing construction contract to organisation because of low prices in comparison to
competitors. Thus, firm will get low profits which it can recover in later period once, it gains
market share thereafter would charge competitive and high prices.
Growing business strategy
In order to grow business in remarkable manner, it is required that internal strategy
should be implemented. New venture will be going to make milestone in construction sector
particularly and in this business, manpower is basic need. In simple words, after business grows,
internal strategy will be implemented so as to hire human resources which may increase
productivity and contribute organisation to reach towards prospective heights. Increasing labour
force would be fruitful internal strategy for company by which it can accomplish higher profits
(Kiznyte, Welker and Dechange, 2016).
Distribution channel strategy
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Construction business is based on the principle that distribution channel should be
strengthened so that all activities may be streamlined in a better way. This is essentially required
in this sector, cranes and bulldozers are required and for this Original Equipment Manufacturers
(OEM) will be hired so that they may manufacture such construction equipments which will be
used in by Exotic Housing Construction Ltd in attaining housing construction in the best possible
manner.
Communication strategy
The communication is a vital aspect as ultimate services are sold to customers and if they
are not well-communicated, then firm's position may completely vanish within shorter period
(Brinckmann, Dew, Read, Mayer-Haug and Grichnik, 2018). In relation to this, advertising,
promotion and public relations are pillars for enhancing better communication to prospective
customers by which they may avail services quite effectually. Brochures and catalogues will be
circulated in Malaysian market mainly in Selangor by which customers may be properly
communicated as after marketing only, sales strategies could be implemented and revenue can be
received actually.
On the other hand, sales strategies are crucial for Exotic Housing Construction Ltd so that
net revenue can be maximised in the best possible manner. Sales are needed to be enhanced by
which company may easily establish its stake in Malaysian market and attain good market share
by overcoming strategies of rival construction firms (Smith, 2017).
Sales force strategy
Human resources are the integral part of company and is required that more and more of
manpower should be engaged in meeting out constructions as per contracts in effective manner.
In relation to this, adequate sales force is required and thus, independent representatives will be
appointed and around 20 salespeople will be recruited. Elasticity and transparency recruitment
strategy will be implemented. To impart training, sessions would be made and average of around
2040 Malaysian Ringgit will be given to them.
Sales activities
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Illustration 3: Sales activities
It is required that sales activities should be broke down in a manner so that company may
be able to get into good sales volume and as such, firm may be able to attain desired profits.
Sales activities need to be prioritise and then sales call in a certain period is to be made. From
this, per sale can be accomplished on the basis of dollar size, per vendor etc.
SERVICES OR PRODUCT LINE
There are variety of services which business would offer in order to attain contracts from
clients. Customers has the greatest advantages because affordable prices will be provided in
comparison to rivals in effective way (Griffith, Stephenson and Watson, 2014). This means that
firm has competitive advantage as only 27.70 % of total construction sector has been dominated
by residential buildings which shows that company can easily innovate new tactics in order to
attract clients so that they may give contracts to it. Customer's will be delighted with services as
technical consultation, customises building design, turnkey projects, cement foundations,
sanitary products, exterior renovations will be provided and at low prices. It is at inception stage
in development cycle (Construction Project Life Cycle – Phases in Life Cycle of a Construction
Project).
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The factors that might affect will be occurred when after execution, performance and
monitoring stage will prevail and competition may be fierce. This will affect sales of Exotic
Housing Construction Ltd and it will face declining face. Apart from this, copyright will be
needed so that it may not be misused by rivals in order to boycott company (Hiscox, 2012). The
documents, models, drawings and plans made by contractors have to secure from the competitors
and as such, it will be required. On the other hand, moral rights are another vital element as
riskiness in agreements are needed to be eradicated up to a high extent. Hence, copyrights would
be licensed and thus, organisation would be able to protect its trade secrets from rivals.
Research and Development (R&D) in housing construction which is required to be
implemented in Exotic Housing Construction Ltd is that efficiency in labour, raw materials such
as bricks and cement, high-tech equipment and machineries and construction management so
that firm may be able to achieve great level of efficiency in carrying out work with much ease.
Moreover, through this, company will enhance and plan its tax saving in accomplishing sales.
R&D from industrial perspective is also crucial and as such, it will be taken into account so that
industrial norms may also be followed for successful venture.
FUNDING REQUEST
Funding is required so that company may be able to start business in the best possible
manner. In relation to this, finance is needed as without it, firm cannot survive. Below are listed
some of expenditures required in starting business to its fullest. Current requirement-
Start-up expenses Amount (MYR)
Legal expenditures 3000
Consultants 5100
Insurance 1000
Research and Development (R&D) 1200
Equipment 4500
Total expenses 14800
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Start-up assets
Cash in hand 315000
Other assets(short-term) 4000
Long-term assets 0
Total assets 319000
Total requirements 333800
Future funding requirement-
Start-up
expenses 2019 2020 2021 2022 2023
Legal
expenditures 3150 3308 3473 3647 3829
Consultants 5355 5623 5904 6199 6509
Insurance 1050 1103 1158 1216 1276
Research
and
Developmen
t (R&D) 1260 1323 1389 1459 1532
Equipment 4725 4961 5209 5470 5743
Total
expenses 15540 16317 17133 17989 18889
0 0 0 0 0
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Start-up
assets 0 0 0 0 0
Cash in hand 330750 347288 364652 382884 402029
Other
assets(short-
term) 4200 4410 4631 4862 5105
Long-term
assets 0 0 0 0 0
Total assets 334950 351698 369282 387746 407134
Total
requirements 350490 368015 386415 405736 426023
Equity and debt both are required so that business may flourish quite effectively and has
better capital structure. Optimal mix of both finances are needed by which no riskiness may
prevail. Debt is risky source of finance and will be attained from bank loans. Generally, interest
is paid along with principal amount. While, by issuing equity shares, finance will be generated
which can be used by company. Dividends will be paid to shareholders on the investment made
by them. Cash flow management is long-term financial strategies that will be used by Exotic
Housing Construction Ltd as proper cash inflows and outflows needs perfect inspection over it as
inappropriate management may lead to diminish liquidity position of new venture. Working
capital will be used for meeting funding requirement. Strategic information with regards to going
public with organisation can have impact on working of company and credibility of organisation
is necessary in this aspect.
FINANCIALS
Forecasted Balance sheet
Particulars 2019 2020 2021 2022 2023
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Current assets
CCE 385000 404250 424463 445686 467970
Contracts
receivable 1540000 1617000 1697850 1782743 1871880
Uncompleted
contracts
earnings 15000 15750 16538 17364 18233
Advance
salaries 4000 4200 4410 4631 4862
Note
receivable 5000 5250 5513 5788 6078
Items prepaid 31000 32550 34178 35886 37681
Total Current
assets 1980000 2079000 2182950 2292098 2406702
PPE 250000 262500 275625 289406 303877
Other assets 57000 59850 62843 65985 69284
Total assets 2287000 2401350 2521418 2647488 2779863
Current
liabilities 0 0 0 0
Trade payable 450000 472500 496125 520931 546978
Bills of
uncompleted
150000 157500 165375 173644 182326
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contracts
Long-term
debt (current
liabilities) 75000 78750 82688 86822 91163
Accrued
liabilities 165000 173250 181913 191008 200559
Deferred
income tax to
be paid 87000 91350 95918 100713 105749
927000 973350 1022018 1073118 1126774
Long-term
debt 225000 236250 248063 260466 273489
Deferred
income tax 25000 26250 27563 28941 30388
Total liabilities 1177000 1235850 1297643 1362525 1430651
Capital 1110000 1165500 1223775 1284964 1349212
Total
liabilities and
shareholders'
equity 2287000 2401350 2521418 2647488 2779863
Forecasted Income statement
Particulars 2019 2020 2021 2022 2023
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Revenue from
contracts 11000000 11550000 12127500 12733875 13370569
Cost of goods
sold 9300000 9765000 10253250 10765913 11304208
Gross Profit 1700000 1785000 1874250 1967963 2066361
administrative
expenditure 1099000 1153950 1211648 1272230 1335841
Operating
profit 601000 631050 662603 695733 730519
Interest
income 20000 21000 22050 23153 24310
Miscellaneous
income 2000 2100 2205 2315 2431
Interest cost 15000 15750 16538 17364 18233
Total other
income 7000 7350 7718 8103 8509
EBIT 608000 638400 670320 703836 739028
Income tax
provision 240000 252000 264600 277830 291722
Net income 368000 386400 405720 426006 447306
Forecasted Cash flow statement
Particulars 2019 2020 2021 2022 2023
Cash flows
from operating
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activities
Cash from
customers
(received) 10300000 10815000 11355750 11923538 12519714
Paid cash to
suppliers 10068000 10571400 11099970 11654969 12237717
Interest
received 20000 21000 22050 23153 24310
Miscellaneous
income 2000 2100 2205 2315 2431
Interest paid 15000 15750 16538 17364 18233
Net cash from
operating
activities 239000 250950 263498 276672 290506
Cash flows
from investing
activities
Capital
expenses 93000 97650 102533 107659 113042
Net cash used
in investing
activities -93000 -97650 -102533 -107659 -113042
Cash flows
from financing
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activities
Payments
made on long-
term debt 80000 84000 88200 92610 97241
Proceeds from
note
receivables 4000 4200 4410 4631 4862
76000 79800 83790 87980 92378
Increase in
CCE 70000 73500 77175 81034 85085
Beginning
balance of cash 315000 330750 347288 364652 382884
Ending
balance of cash 385000 404250 424463 445686 467970
The above financial statements are prepared in order to arrive at estimation that what will
be the future of company in coming years. Exotic Housing Construction Ltd will be able to attain
desired revenue from the house contracts as it will accomplish revenue increased year after year.
This is evident from above income statement that earnings are maximised in the best possible
manner. On the other side, expenditures are also increased but it has been overcome by net
earnings as it has continuously maximised quite effectually. Furthermore, it can be analysed that
balance sheet shows assets and liabilities for the next five years which also provides clarity that
business will have enough of current and long-term assets for meeting liabilities.
Apart from it, cash position is another vital aspect which has to be taken care by
organisation going to start its new venture with much ease. It is essentially needed that cash
balance at the end of year should be positive and should increase year after year showing
company's liquidity position in effective way. Cash outflows must be less so that firm may attain
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more of cash inflows quite effectually. It can be interpreted that statement of cash flows provide
that organisation's cash position is favourable and is increasing quite firmly implying that it will
be able to make most of construction business and will reach to new heights in the Malaysian
market.
CRITICAL RISKS
There are various critical risks that could have impact on company in attaining its desired
goals within stipulated time. Workforce is important part but it can be identified that company
can have shortage of skilled workforce because accidents and incidents are constantly increasing
in the construction sites which is a big worry for the company as scheduled activities could not
be completed in time which hampers productivity. In relation to this, another critical risk is
construction defect is termed as defect seen in design, materials used in the sites for
accomplishing project quite effectually. If it is proved in court that firm is guilty then it has to
pay hefty amount to plaintiff. This is because it may lead to serious injury to humans and could
lead to damage of property in effective manner (Ferguson, 2018).
Contractual risk is much critical for the aspect when organisation's employees face
accidents which might have legal complications on business. Contracts are governed under
Workmen's Compensation Act 1952 under Malaysia law. Hence, it is required that workers
safety in the construction site be safeguarded quite effectively. If any incident occurs, then
employees have to be compensated with amount and by sanctioning amount, employers may be
protected from being sued by injured employees (Heisler, 2018).
Overextension is another critical risk facing industry. Reason behind is that in the event
of increasing demand, contractors take more of contracts of which they are not capable of being
handling it nicely. This results into elevation in risks and furthermore, site accidents and defects
may also exacerbate. Hence, these type of critical risks should be managed by organisation so
that it may be able to attain desired goals in new market quite effectually. Furthermore, it will
have maximum profitability as along with workers' safety, customers will also be provided with
the finest quality houses.
MILESTONES
Milestones are vital part of attaining timely projects as per the contracts in the best
possible manner. Project scheduling is highly regulated as when activities are completed in step-
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wise way, scheduling becomes pretty much easy and organisation is able to complete entire
project with much ease. It is termed as a crucial event usually occurring in course of project.
Timing can influence scheduling of tasks or activities. In addition to this, business is able to
target particularly management that project is accurately heading towards schedule implemented
in project plan. Milestones in Exotic Housing Construction Ltd could include securing the
funding, to acquire a suitable site where it can effectively commence its operations, for
appointing consultants, approvals from clients in case of customised designs provided them or
made by designing team entitled in drawing out models. To effectively tender contract, OEM so
as to save time and build houses in a better way and that too in a timely manner ( Slavin, Sinenko
and Yoshin, 2018).
Rectify defects is another important milestone so that firm may provide enhanced
services in effective manner by which it can be able to handle and make improvements if any in
imparting out services. Remedies are also needed in case need arises when stipulated milestone
is completely missed. Hence, proper planning is required in order to overcome problems in the
best possible manner. In this scenario, reallocation of resources may be required so that firm can
effectively attain priorities which are needed to project scheduling. Thus, all milestones will be
achieved by company and will accomplish desired goals.
22

REFERENCES
Books and Journals
Brinckmann, J., Dew, N., Read, S., Mayer-Haug, K. and Grichnik, D., 2018. Of those who plan:
A meta-analysis of the relationship between human capital and business planning. Long
Range Planning.
Clinton, L. and Whisnant, R., 2019. Business Model Innovations for Sustainability. In Managing
Sustainable Business (pp. 467-507). Springer, Dordrecht.
Clough, R. H., and et.al., 2015. Construction contracting: A practical guide to company
management. John Wiley & Sons.
Eastman, C. M., 2018. Building product models: computer environments, supporting design and
construction. CRC press.
Ferguson, C., 2018. Business continuity and disaster management within the public service in
relation to a national development plan. Journal of business continuity & emergency
planning. 11(3). pp.243-255.
Gandy, D.L., 2015. Small business strategies for company profitability and sustainability.
Griffith, A., Stephenson, P. and Watson, P., 2014. Management systems for construction.
Routledge.
Kiznyte, J., Welker, M. and Dechange, A., 2016. Applying project management methods to the
creation of a start-up business plan: the case of Blendlee. PM World Journal.5(5).pp.1-24.
Rosati, U. and Conti, S., 2016. What is a smart city project? An urban model or a corporate
business plan?. Procedia-Social and Behavioral Sciences. 223.pp.968-973.
Ross, L. W. and Byrd, K., 2015. Business Plan Competitions: Start-Up'Idols' and Their Twenty-
First Century Launch Pads.
Slavin, A., Sinenko, S. and Yoshin, N., 2018. The evolutionary development of the methodology
of operational planning of construction production. In IOP Conference Series: Materials
Science and Engineering (Vol. 365, No. 6, p. 062040). IOP Publishing.
Smith, A.J., 2017. Estimating, Tendering and Bidding for Construction Work. Macmillan
International Higher Education.
Online
Malaysia construction industry. 2017. [Online] Available through: <https://www.construction-
ic.com/pressrelease/malaysias-construction-industry-will-among-the-fastest-growing-in-
the-world-in-the-next-five-years-5716420>.
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