... an emerging Asian Tiger
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e |1
TABLE OF CONTENTS
INTRODUCTION ........................................................................................................................................................... 18
COMPANY OVERVIEW.................................................................................................................................................. 26
Problem worth Solving............................................................................................................................................ 26
STRATEGIC OBJECTIVES ............................................................................................................................................... 27
COMPETITIVE ADVANTAGE (VALUE PROPOSITION)..................................................................................................... 28
SWOT ANALYSIS ........................................................................................................................................................... 28
INDUSTRY AND MARKET .............................................................................................................................................. 30
TARGET MARKET.......................................................................................................................................................... 30
COMPETITORS ............................................................................................................................................................. 31
Competitive Analysis............................................................................................................................................... 32
CRITICAL SUCCESS FACTORS ........................................................................................................................................ 32
FINANCIAL OVERVIEW | ASSUMPTIONS ...................................................................................................................... 34
General ................................................................................................................................................................... 34
Sales Projections ..................................................................................................................................................... 34
Operational Expenses ............................................................................................................................................. 34
PERSONNEL REQUIREMENTS ....................................................................................................................................... 35
Personnel Burden .................................................................................................................................................... 35
Payroll Expenses | Annual | Year 1-5...................................................................................................................... 35
SALES ........................................................................................................................................................................... 36
Sales Projections | Annual | Year 1-5 ..................................................................................................................... 36
BALANCE SHEET ........................................................................................................................................................... 37
Balance Sheet | Annual | Year 1-5.......................................................................................................................... 37
INCOME STATEMENT................................................................................................................................................... 38
Income Statement | Summary................................................................................................................................ 38
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e |2
Income Statement | Annual | Year 1-5................................................................................................................... 39
CASH FLOW STATEMENT ............................................................................................................................................. 41
Cash Flow | Annual | Year 1-5 ................................................................................................................................ 41
BREAK-EVEN ANALYSIS ................................................................................................................................................ 41
SENSITIVITY ANALYSIS (WHAT-IF SCENARIO STUDY).................................................................................................... 42
Effect on the Projected Income Statement ............................................................................................................. 42
Effect on the Projected Cash Flow Statement......................................................................................................... 43
Effect on the Projected Balance Sheet .................................................................................................................... 43
MARKETING OBJECTIVES ............................................................................................................................................. 44
MARKETING STRATEGY................................................................................................................................................ 44
Marketing Activities................................................................................................................................................ 45
SALES STRATEGY .......................................................................................................................................................... 47
DIGITAL (ONLINE) MARKETING STRATEGY................................................................................................................... 47
COMMUNICATION STRATEGY...................................................................................................................................... 49
THE THAI LOGISTICS INDUSTRY.................................................................................................................................... 51
Thailand Operational Risks ..................................................................................................................................... 51
Global Shipping Outlook ......................................................................................................................................... 51
Opportunities in Thailand’s Logistics Market.......................................................................................................... 52
Thailand Economy................................................................................................................................................... 58
THE GLOBAL ECONOMY ............................................................................................................................................... 60
Major Disruptive Global Trends (That Will Impact All Industries)........................................................................... 60
TRENDS AND BEST PRACTICES IN MARKETING............................................................................................................. 62
Global Trends in Internet Advertising ..................................................................................................................... 62
Word-of-Mouth Marketing ..................................................................................................................................... 63
Global Trends in Marketing .................................................................................................................................... 64
Key Marketing and Brand Development Programmes ........................................................................................... 65
Customer Loyalty Strategy...................................................................................................................................... 67
STATEMENT OF CONFIDENTIALITY .............................................................................................................................. 68
FINANCIAL STATEMENTS ............................................................................................................................................. 69
Sales Projections | Monthly | Year 1-2 ................................................................................................................... 69
Income Statement | Monthly | Year 1-2................................................................................................................. 71
Cash Flow | Monthly | Year 1-2.............................................................................................................................. 74
DISCLAIMER ................................................................................................................................................................. 78
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e |3
WHO WE ARE (WHY US ?)
Thailand sits in the center of mainland Southeast Asia, bordering Myanmar, Lao PDR, Cambodia, and Malaysia. It is
this central location that makes Thailand well suited to take on the role as ASEAN’s Logistics Hub. Besides bordering
most of the mainland Southeast Asian nations, Thailand has access to the Mekong River as well as plenty of
coastline along the Gulf of Thailand and Andaman Sea, thus offering logistic opportunities that few, if any, other
ASEAN countries can compete with.
Thailand’s share of regional logistics is bound to grow, especially with its linkage to Cambodia, Lao PDR, and
Myanmar, states whose growing economies are catching the eyes of investors worldwide. Thailand is one of
Southeast Asia’s top performers in the logistics field. Currently, Thailand ranked 35th out of 160 countries in the
World Bank’s Logistics Performance Index (LPI) and ranked 3rd among ASEAN countries listed in the index. This is
clear evidence that Thailand is competitive at a global level.
The Worldwide Logistics Group, China (WWL) in partnership with the Netlog Logistics Group, Turkey (NL) plans to
enter the Thailand market to set up a Freight and Logistics Company jointly in Bangkok. This would therefore,
require the need to explore Thailand’s Freight and Logistics market to ascertain the potential and other business
opportunities centred around all aspects of Global Transportation to complement and support the proposed entry
by these two Companies into Thailand. Both Groups (further referred to as Netlog Global Forwarding – NLGF) are
highly diversified throughout the world, in the fields of Freight, Logistics, Warehousing, Bulk, Chemical, Project, Cold
Chain and DG etc., and collectively employ in excess of 8,500 staff worldwide. With a collective network of their
own offices spreading throughout China and Europe; the prospect of introducing such operations in Thailand and
the South East Asian region as an extension of their worldwide coverage is seen as prudent. Note: Both Companies
in collective partnership, own some offices in China, Hong Kong and Vietnam, and have plans to expand their Asian
presence in other countries such as Malaysia, Myanmar and Indonesia, in addition to Thailand.
The new Company (which would be named ‘Netlog Global Forwarding Co., Ltd’) (referred to as ‘NETLOG GLOBAL
FORWARDING’ hereafter) would need to be registered in Thailand as an International Freight and Logistics provider
for Import and Export cargo moving by Air, Sea, Road and Rail. The business would operate from premises centrally
located within the Bangkok metropolitan area, (preferably with warehousing) and would initially function with
minimal staffing where the Customs Clearance, warehousing and trucking operations could be outsourced until
such time that the Company is ready to graduate to a fully-fledged Freight and Logistics operation.
The Company will engage immediately in a world-wide awareness and communication campaign to establish its
identity amongst prospective Agents and Customers in a bid to commence its operations in the shortest possible
time. Once the business has gained momentum and has an established flow of shipments, it is planned that the
Company will expand its operations to include end-to-end Logistics, warehousing, trucking and other value added
services.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e |4
MARKET RESEARCH
Detailed Market Research has been conducted on the Primary Industry in which the company operates, i.e.
Transportation, Logistics, Freight and Shipping. The findings of the research are included under the Industry Analysis
section of this Business Plan. All further/supporting Market Research that has been conducted (Secondary- and Tertiary
Industries) is included under the Annexures section of this Business Plan. The Secondary- and Tertiary Industries referred
to are those markets/industries that have either a direct/indirect impact on NETLOG GLOBAL FORWARDING.
Primary Industry Secondary- and Tertiary Industries
Transportation, Logistics, Freight, Shipping Thailand Economy
FUNDING (INVESTMENT) REQUIREMENTS
It has been assumed that Non-Equity Funding (Business Loan/Debt Financing) will be applied for by the NETLOG GLOBAL
FORWARDING. For the purposes of this Business Plan and Financial Projections Model, the company has prepared its
projected financial performance over a five (5) year, sixty (60) month period. NETLOG GLOBAL FORWARDING requires
Start-Up/Expansion Capital Funding to establish/expand its operations and initiate various business
development/marketing programmes, acquire various fixed assets, and fund its start-up costs/related expenses. An
amount has been allocated towards Working Capital so as to sustain the company during the first year of the projected
Financial Model. NETLOG GLOBAL FORWARDING’s funding requirement from External Sources amount to $480,050.00. It
is the shareholders’ intention to contribute up to 100.0% of their own funds to the start-up funding requirements of the
Thai-based Company. For the purposes of the Business Plan, the funding/invested has been treated as a Shareholders’
Loan, with capital and interest repayments deferred to a future date. The aforementioned parameters have been taken
into account in preparing the Financial Projections Model. The currency used throughout the Financial Projections Model
is United Stated Dollar (USD).
FINANCIAL PROJECTIONS
Funding (Investment) Requirement
Deferred/Shareholders' Loan Existing or New Principal amount Start date Interest %
Company Loan, Internal Investment New 50,500 Jan 2017
Start-Up Assets and Expenses New 200,000 Jan 2017
Company Loan, Internal Investment New 124,550 Jan 2017
Working Capital for Outlays on Shipments New 105,000 Jan 2017
Company Loan, Internal Investment
Registration and Set-Up of Two Thai Companies
Company Loan, Internal Investment
Working Capital Operational Expenses
Funding Allocation (Use of Funds)
Expendable Amount
Office Rental (Advance)
Interior Design Consultant 7,000
Stationery and Printing 3,000
Unexpected, Contingency 2,000
Working Capital for Outlays on Shipments 6,000
Total start-up expenses (= Beginning Cash Balance) 200,000
218,000
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e |5
New fixed assets Start date Useful life (years) Book value
Buildings Jan 2017 40 7,000
Structural Renovations and Signage
Electronic equipment Jan 2017 3 6,000
Computers Jan 2017 3 4,500
Switchboard and Telephones Jan 2017 3 3,000
Electronics
Furniture and Fixtures Jan 2017 5 8,000
Office Furniture
Vehicles Jan 2017 8 4,000
Vehicle for General Manager (Deposit, Installment Sale)
Non-depreciable assets Jan 2017 60,000
Company Formation (Thai Company A) Jan 2017 1,200
Other Related Costs Jan 2017
Company Formation (Thai Company B) Jan 2017 60,000
Other Costs Jan 2017 1,200
Set-up Company Structures Jan 2017 650
Work Permit Applications Jan 2017 750
Non-B Visa Application Jan 2017 650
Bank Account 100
Depreciation Schedule: Existing 2017 2018 2019 2020 2021
Year 7,000 7,000 7,000 7,000 7,000
Buildings 175 350 525 700 875
Book value
Accumulated depreciation 6,825 6,650 6,475 6,300 6,125
Actual value
Electronic equipment 13,500 13,500 13,500 13,500 13,500
Book value 4,500 9,000 13,500 13,500 13,500
Accumulated depreciation 9,000 4,500
Actual value 8,000 8,000 8,000
Furniture and Fixtures 8,000 8,000 4,800 6,400 8,000
Book value 1,600 3,200 3,200 1,600
Accumulated depreciation 6,400 4,800 4,000
Actual value 4,000 4,000 2,500
Vehicles 4,000 4,000 1,500 2,000 1,500
Book value 500 1,000 2,500 2,000
Accumulated depreciation 3,000 124,550
Actual value 3,500 124,550 124,550
Non-depreciable assets 124,550
Book value 124,550
Overall total 157,050 157,050 157,050 157,050 157,050
Book value 6,775 13,550 20,325 22,600 24,875
Accumulated depreciation
Actual value 150,275 143,500 136,725 134,450 132,175
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e |6
Financial Summary
Operating results 2017 2018 2019 2020 2021
Total Sales
Gross Profit 292,450 500,707 862,961 1,006,907 1,175,102
Operating Expenses 292,450 500,707 862,961 1,006,907 1,175,102
EBITDA 512,496 308,506 374,256
Depreciation and amortization -220,046 192,201 488,705 390,359 442,796
Net profit / loss 616,548 732,306
Company tax 6,775 6,775 6,775
Net earnings -226,821 185,426 481,930 2,275 2,275
Financial position 614,273 730,031
Current assets -226,821 185,426 88,106 122,855 146,006
Current liabilities 393,824 491,418 584,025
Working capital 102,954 295,155
Fixed assets (net) 783,860 1,312,302 1,921,753
Total assets 102,954 295,155 88,106 122,855 146,006
Shareholders' equity 150,275 143,500
Capital expenditures 253,229 438,655 695,754 1,189,447 1,775,747
Financial ratios -226,821 -41,395 136,725 134,450 132,175
Break-even point ($) 157,050 920,585
Return on revenues 308,506 352,429 1,446,752 2,053,928
Return on assets 512,496 37.03% 843,847 1,427,872
Return on equity -77.56% 73.22% 374,256
Current ratio 45.64% 390,359 442,796
89.78% 48.80% 49.70%
Sales Projections 53.38% 40.37%
8.90 139.44% 69.21%
Total Net Sales
10.68 13.16
Total Cost of Goods
2017 2018 2019 2020 Sales
Total Gross Profit 292,450 500,707 862,961 1,006,907
2021
292,450 500,707 862,961 1,006,907 1,175,102
1,175,102
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e |7
Profit and Loss
Profit and Loss 2017 Change 2018 Change 2019 Change 2020 Change 2021
Total Sales 292,450 71.2% 500,707 72.3% 862,961 16.7% 1,006,907 16.7% 1,175,102
Gross Profit 292,450 71.2% 500,707 72.3% 862,961 16.7% 1,006,907 16.7% 1,175,102
Gross Profit Margin % 100.0% 100.0% 100.0%
Operating Expenses1 519,271 -39.3% 315,281 20.9% 381,031 3.0% 100.0% 13.4% 100.0%
% of Total Sales 177.6% 63.0% 44.2% 392,634 445,071
Net Business Result2 -226,821 181.7% 185,426 112.4% 393,824 24.8% 18.8%
% of Total Sales -77.6% 37.0% 45.6% 39.0% 37.9%
491,418 584,025
48.8% 49.7%
1 The Expenses required for establishment and/or expansion of the company is included in the first month’s operational expenses of the Financial Projections Model. P a g e |8
2 Net Business Result refers to the Profit / (Loss) after the deduction of Company Tax.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e |9
Cash Flow
Cash Flow 2017 Change 2018 Change 2019 Change 2020 Change 2021
Beginning Cash Balance -218,000 128.1% 61,291 282.5% 234,414 192.5% 685,592 74.7% 1,197,643
Total Cash In 708,851 -32.1% 481,629 71.4% 825,434 20.0% 990,515 16.7% 1,155,949
Total Cash Out 429,559 -28.2% 308,506 21.3% 374,256 27.8% 478,465 18.2%
Ending Cash Balance 282.5% 234,414 192.5% 685,592 74.7% 49.3% 565,651
Change in Cash 61,291 173,123 451,178 1,197,643 1,787,941
279,291 512,051
590,298
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 10
Balance Sheet
Balance Sheet Beginning 2017 2018 2019 2020 2021
Total Current Assets 102,954 295,155 783,860 1,312,302 1,921,753
Total Fixed Assets 150,275 143,500 136,725
Total Assets 253,229 438,655 920,585 134,450 132,175
Total Current Liabilities 88,106 1,446,752 2,053,928
Total Long Term Liabilities 480,050 480,050 480,050
Total Shareholders’ Equity -226,821 -41,395 352,429 122,855 146,006
480,050 480,050
843,847 1,427,872
Personnel
Personnel Plan 2017 2018 2019 2020 2021
9 9 14 14 17
Headcount
201,747 209,817 268,069 278,792 323,858
Net Payroll (Net Salary) 10,087 10,491 13,403 13,940 16,193
Payroll Burden3 211,834 220,308 281,473 292,732 340,051
Total Personnel Cost
(Gross Salary)
3 Payroll Burden refers to expense items over and above the net (cash) salary component, including Employers Pension Fund Contributions, Social
Security, Payroll Tax, Bonuses, etc. In other words, Net Payroll (Net Salary) plus the Payroll Burden results in the Total Personnel Cost to the company
(Cost to Company).
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 11
Liquidity Ratios Safe Range Between: 2017 2018 2019 2020 Liquidity
Current Ratio 1.50 2.00 8.90 10.68
Quick Ratio 1.00 1.70 8.90 10.68 2021
Cash Ratio 0.40 1.00 7.78 9.75 13.16
Interest Coverage 1.00 - 13.16
Colour Legend Keys: 12.25
Ratio
Current Ratio Red Grey Green
Quick Ratio The ratio is too low. The company The ratio may be too high. The The ratio is optimal. The cash on
may have problems meeting its company may not be efficiently hand and disposable assets are
Cash Ratio short-term obligations. using its current assets or its short- enough to pay off short term
term financing facilities. liabilities.
Interest Coverage The ratio is too low. The company The ratio may be too high. The The ratio is optimal. The cash on
cannot currently pay back its current company may not be efficiently hand and disposable assets are
liabilities. using its current assets or its short- enough to pay off short term
term financing facilities. liabilities.
The ratio is too low. The company The ratio may be too high. The The ratio is optimal. The cash on
cannot currently pay back its current company may not be efficiently hand and disposable assets are
liabilities. using its current assets or its short- enough to pay off short term
term financing facilities. liabilities.
The ratio is too low. The ratio - The ratio is optimal. The company is
indicates the company is having generating the cash to pay its
difficulties generating the cash interest (on loans) obligations.
necessary to pay its interest (on
loans) obligations. If the value is too high, this may
suggest the company is ‘too safe’
and is neglecting opportunities to
magnify earnings through leverage.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 12
Solvency
Solvency Ratios Minimum Maximum 2017 2018 2019 2020 2021
Total Assets/Total Liabilities 0.53 0.91 1.62 2.40 3.28
Total Liabilities/Total Assets X 100% 1.50 - 61.72 41.67 30.48
Shareholders’ Capital/Foreign Capital 189.57 109.44 0.62 1.40 2.28
Shareholders’ Capital/Total Assets X 100% - 67.00 -0.47 -0.09 38.28 58.33 69.52
Debt to Worth Ratio -9.44 1.61 0.71 0.44
Colour Legend Keys: 0.50 - -89.57
Ratio -2.12 -11.60
Total Assets/Total Liabilities 33.00 -
Total Liabilities/Total Assets X 100% - 2.00
Shareholders’ Capital/Foreign Capital Red Grey Green
The ratio may be too high. The
Shareholders’ Capital/Total Assets X 100% The ratio is too low. The company company may not be efficiently The ratio is optimal. The cash on
may have problems meeting its using its current assets or its short- hand and disposable assets are
Debt to Worth Ratio short-term obligations. term financing facilities. enough to pay off short term
- liabilities.
The ratio is too high. This is The ratio is optimal. The company
indicating that the company owes - does not have too much debt. The
far more than it owns. company is healthy.
The ratio is too high. This is - The ratio is optimal. The company
indicating that the company owes does not have too much debt. The
far more than it owns. - company is healthy.
The ratio is too high. This is The ratio is optimal. The company
indicating that the company owes does not have too much debt. The
far more than it owns. company is healthy.
The ratio is too high. The high ratio The ratio is optimal. The ratio
indicates the company is not indicates that the company is
offering enough protection to its offering enough protection to its
creditors. creditors. The company is healthy.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 13
Bankruptcy Analysis
Z-Score Ratio Minimum Maximum 2017 2018 2019 2020 2021
Z-Score 1.23 2.90 -2.30 2.82 3.69 3.69 3.84
Colour Legend Keys:
Ratio Red Grey Green
Z < 1.23 is the ‘Distress’ Zone. 1.23 >= Z < 2.9 is the ‘Grey’ Zone.
Z-Score Z = 2.9 is the ‘Safe’ Zone. A Z-Score
above 2.89 indicates the firm is
‘safe’ from bankruptcy whereby the
higher the score, the safer the
company.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 14
Key Ratios
Profitability ratios and Break even 2017 2018 2019 2020 2021
100.0%
Gross profit margin % 512,496 100.0% 100.0% 100.0% 100.0%
Return on assets 42,708 73.2% 89.8% 53.4% 40.4%
Break-even point ($) 2017 308,506 374,256 390,359 442,796
Break-even sales monthly average ($) 25,709 31,188 32,530 36,900
2017
Liquidity ratios 0.53 2018 2019 2020 2021
Current ratio 189.57 2018 8.90 10.68 13.16
Quick ratio -0.47 8.90 10.68 13.16
Cash ratio 0.91 7.78 9.75 12.25
-89.57 109.44
Interest coverage -2.12 2019 2020 2021
-0.09
Solvency ratios -226,821 -9.44 1.62 2.40 3.28
2017 -11.60 61.72 41.67 30.48
Total assets / Total liabilities -41,395 0.62 1.40 2.28
Total liabilities / Total assets x 100% 102,954 38.28 58.33 69.52
Shareholders' capital / Foreign capital 2018 1.61 0.71 0.44
Shareholders' capital / Total assets x 100% 2017 352,429 843,847 1,427,872
-226,821 295,155
Debt to worth ratio 2019 2020 2021
Net worth ($) 6,775 2018
-45,364 695,754 1,189,447 1,775,747
Working capital -174,682 185,426
157,050 2019 2020 2021
Net working capital ($) 102,954 6,775
-434,686 481,930 614,273 730,031
Operating cash flow and Free cash flow 37,085
155,116 6,775 2,275 2,275
EBIT
+ 0 96,386 122,855 146,006
192,201 392,319 493,693 586,300
Depreciation & Amortization -37,085
- 0 0 0
400,599 493,693 586,300
Income tax
Operating cash flow (OCF) -8,280 0 0
-
Capital expenditure (Capex)
Change in working capital
Free cash flow (FCF)
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 15
Internal Rate of Return (IRR)
Annual Interest Rate (Discount Rate4) 15.000%
Investment/Funding (Investments from Shareholders and/or External Sources) 480,050
Year Net Cash Flow
2017 279,291
2018 173,123
2019 451,178
2020 512,051
2021 590,298
Net Present Value (NPV5) 776,624
Internal Rate of Return (IRR6) 60.880%
4 Discount Rate refers to the interest rate used to discount future cash flows to the present value, which is a key variable in the process of determining
the NPV. A company’s weighted average cost of capital (after tax) is often used, but many people believe that it is appropriate to use higher discount
rates to adjust for risk, opportunity cost, or other factors. Another approach to choosing the discount rate factor is to decide the rate which the capital
needed for the project/business could return if invested in an alternative venture. If, for example, the capital required for Business A can earn 15.00%
elsewhere, use this discount rate in the NPV calculation to allow a direct comparison to be made between Business A and the alternative. For some
professional investors, their investment funds are committed to target a specified rate of return. In such cases, that rate of return should be selected
as the discount rate for the NPV calculation. In this way, a direct comparison can be made between the profitability of the project/business and the
desired rate of return. The higher the potential risk of the Project/Business, the higher the discount rate to be used.
5 Net Present Value (NPV) refers to the different between the present value cash inflows and the present value of cash outflows. NPV is used in
capital budgeting to analyse the profitability of an investment or project. In finance, the net present value (NPV) or net present worth (NPW)
is defined as the sum of the present values (PVs) of incoming and outgoing cash flows over a period of time.
6 The discount rate often used in capital budgeting that makes the net present value of all cash flows from a particular project equal to zero. Generally
speaking, the higher a project's internal rate of return, the more desirable it is to undertake the project. As such, Internal Rate of Return (IRR) can be
used to rank several prospective businesses/projects to invest in. Assuming all other factors are equal among the various projects/businesses, the
project/business with the highest IRR would probably be considered the best and undertaken first. IRR is sometimes referred to as ‘economic rate of
return (ERR)’. One can think of IRR as the rate of growth a project/business is expected to generate. While the actual rate of return that a given
project/business ends up generating will often differ from its estimated IRR rate, a project/business with a substantially higher IRR value than other
available investment options would still provide a much better chance of strong growth. IRR’s can also be compared against prevailing rates of return
in the securities market, e.g. the FTSE ASEAN All-Share Index or the Thailand Share Market. If an investor can't find any projects/businesses with IRR’s
greater than the returns that can be generated in the financial markets, it may simply choose to invest its investment funds into the market.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 16
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 17
INTRODUCTION
With its strategic geopolitical position and significance as the second largest economy in the Association of Southeast Asian
Nations (ASEAN), Thailand plays a major role in promoting regional cooperation and integration. Having attained upper
middle-income status, the country aspires to reach higher-income status within the next 2 decades. Since joining ADB as a
founding member in 1966, Thailand has received $6.5 billion for 273 loans, grants, and technical assistance projects, with the
greatest share of funding going to the energy sector (36%), followed by transport and communications (20%); finance (16%);
and water supply, sanitation, and waste management (9%). Out of the total, ADB has provided 3 grant projects worth $7.0
million and 183 technical assistance projects worth $71.0 million.
Thailand | Economic Forecasts | 2016-2020 Outlook:
Overview Actual Q2/16 Q3/16 Q4/16 Q1/17 2020 Measure
GDP Growth Rate 0.8 0.3 0.7 0.9 0.7 0.9 percent
Unemployment Rate 0.9 1 percent
Inflation Rate 0.87 0.87 0.85 0.4 0.83 2.5 percent
Interest Rate -0.46 0 0.2 1.5 0.4 percent
Balance of Trade 1.5 560 1.5 1.68
Government Debt to GDP 1.5 1.5 49 560 811 USD Million
4990 1097 1847 54.99 percent
45.7 49.2 49.2 49.2
Markets Actual Q2/16 Q3/16 Q4/16 Q1/17 2020 Measure
Currency 35.08 35.55 35.9 36.24 36.59 20.91
Stock Market 886 859 832 814 1130 points
Government Bond 10Y 913.03 1.76 1.82 1.9 1.99 2.6 percent
GDP Growth Rate 1.7 0.3 0.7 0.93 0.7 0.9 percent
GDP Annual Growth Rate 0.8 2.9 3 2.8 3.5 3.33 percent
GDP 2.8 425 425 425 391 448 USD Billion
GDP Constant Prices THB Million
Gross National Product 404.82 2416436 2422564 2429686 2437482 2474619 THB Billion
Gross Fixed Capital 2395644 4835 4842 4850 4874 5483 THB Million
Formation 4839.07
GDP per capita 579857 572055 624838 626188 620212 USD
GDP per capita PPP 611684 USD
GDP From Agriculture 3499 3492 3485 3494 3629 THB Million
GDP From Construction 3451.33 14164 14137 14111 14139 14487 THB Million
13986.5 120382 120842 121626 120626 126603
121834 71634 72483 67036 67036 74232
71272
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 18
Markets Actual Q2/16 Q3/16 Q4/16 Q1/17 2020 Measure
GDP From Manufacturing 668900 669047 667561 688836 690846 720772 THB Million
GDP From Mining 62363 58476 59469 61083 59012 63032 THB Million
GDP From Public
Administration 125313 130724 132725 135850 129850 146237 THB Million
GDP From Transport
GDP From Utilities 243065 249918 254196 260056 246785 331511 THB Million
LABOUR 79911 77811 80257 81906 87854 111228 THB Million
Unemployment Rate Actual Q2/16 Q3/16 Q4/16 Q1/17
Employed Persons 2020 percent
Unemployed Persons 0.87 0.87 0.85 0.85 0.83 1 Thousand
Job Vacancies 37870.59 37097 38200 38400 38400 Thousand
Wages 38247
Wages in Manufacturing 335.4 323 325 324 323 323 THB/Month
Minimum Wages 43019 35015 40851 30508 30508 THB/Month
Population 13774.29 14014 14298 14333 14479 40920
Youth Unemployment Rate 12638.9 12634 12855 12866 12939 16447 THB/Day
Inflation Rate 13780 Million
Inflation Rate Mom 300 306 360 360 360 percent
Consumer Price Index CPI 67.22 67.31 67.35 67.39 67.43 500 percent
Core Consumer Prices 3.99 4.26 67.52 percent
Core Inflation Rate 2.5 4.2 4.3 4.19
GDP Deflator -0.46 0 0.2 0.4 0.4 Index Points
Producer Prices 0.21 0.02 0.02 0.02 2.5 Index Points
Export Prices 105.84 0.01 108 107 107 0.1
Import Prices 106.38 107 107 107 107 114 percent
Food Inflation 0.75 107 0.75 0.74 109 Index Points
CPI Transportation 142.18 0.8 146 144 1 1.1 Index Points
Interest Rate 100.4 144 101 100 143 144 Index Points
Money Supply M0 108.13 101 108 108 100 101 Index Points
Money Supply M1 91.55 112 98.38 99.28 108 102
Money Supply M3 0.97 97.53 1.6 99.28 101 percent
Banks Balance Sheet 93.58 1.5 94.79 1.8 1.8 2.85 Index Points
Foreign Exchange Reserves 94.74 1.5 94.56 94.51 94.55
Loans to Private Sector 1.5 1.5 1239187 1.5 1.68 percent
Deposit Interest Rate 1237055 1221406 1804 1.5 1256145 1381870 THB Million
Central Bank Balance Sheet 1782 17704 1256145 1848 2180 THB Billion
Interbank Rate 1750 17507 18006675 17887 21701 THB Billion
Balance of Trade 17748.25 17114484 189232 1826 18463993 22307577 THB Million
Exports 17492815 185062 3841367 17887 193155 199228 USD Million
Imports 175073.3 3809324 1.93 18233600 3890049 3990679 THB Million
Current Account 3752628 1.98 7014677 191440 1.68 1.97
Current Account to GDP 6888626 1.59 3867979 7153854 7848744 percent
1.96 1.59 1847 1.59 1.59 THB Million
6840659 1097 16816 1.67 560 811
16162 15425 7121196 16439 19327 percent
1.6 15878 1623 15896 19402 USD Million
4990 1960 1.67 1.59 1319 5098 USD Million
18990 1.11 560 1.98 2.71 USD Million
14010 16439 USD Million
7400 15896
2440 percent
3.8 2.24
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 19
Markets Actual Q2/16 Q3/16 Q4/16 Q1/17 2020 Measure
External Debt 129397.5 135513 137291 124215 124607 138936 USD Million
Terms of Trade 116 112 119 119 Index Points
Tourist Arrivals 118.12 119
Gold Reserves 3088880 2284299 2712142 2712252 2712186 3008019 Tonnes
Terrorism Index 152 152 152 152
Foreign Direct Investment 152.4 7.24 7.27 7.29 7.28 152 THB Million
Crude Oil Production 7.28 7.31 BBL/D/1K
Government Debt to GDP 46729.49 15938 18810 -5478 21680 24026 percent
Government Budget 245 255 247 255 255 252
Government Budget Value 45.7 49.2 49.2 49.2 49.2 54.99 percent of GDP
Government Spending -2.5 -2.4 -2.4 -2.4 -2.4 -2.49 THB Million
Government Revenues -13481 -26248 THB Million
Fiscal Expenditure 388243 -23992 -32282 -29906 -28136 382857 THB Million
Business Confidence 146742 390779 393052 394074 396817 250789 THB Million
Industrial Production 130911 350508 150508 187784 189015 205616
Industrial Production Mom 51.5 197778 192348 187392 188207 percent
Capacity Utilization -1.62 52 percent
Changes in Inventories 1.39 50.1 48.7 52.1 50.8 1.38 Index Points
Car Registrations 64.65 -3.4 -1.2 1.7 1.3 0.47 THB Million
Leading Economic Index 21423 0.35 -0.32 68.64
Competitiveness Index 37127 65.38 64.39 0.91 0.48 29415 Cars
Competitiveness Rank 155.8 -28305 -63432 64.47 64.48 32509 Index Points
Ease of Doing Business 4.64 36271 35631 60216 -22823 156
Corruption Index 152 152 35852 35831 Points
Corruption Rank 32 4.7 4.7 5
Consumer Confidence 49 29.78 29.78 153 153 27 Points
Retail Sales YoY 38 4.7 4.64 32
Consumer Spending 76 42 43 29.78 31.88 43 percent
Disposable Personal Income 73.5 40 40 43 77 THB Million
Personal Savings 1.04 82 82 40 42 85.5 THB Million
Bank Lending Rate 1211330 76.1 76.2 82 40 0.5
Personal Spending 7434419 1.2 2.5 80.5 82 1403695 percent
Consumer Credit 8.3 1228430 1256459 0.5 80.5 9025173 percent
Households Debt To Gdp 7.1 7596116 7653731 126714 0.5 8.77 percent
Gasoline Prices 0.3 7.8 7.8 7711346 1275714 6.5 THB Million
HOUSING 3711406 7.1 7.1 8.99 7779370 0.25 percent of GDP
Housing Index 70.8 3.09 -0.09 7.1 8.89 4556214 USD/Liter
Housing Starts 0.85 3786056 3830357 0.09 7.1 74.68
Corporate Tax Rate Actual 72.13 72.25 3907462 0.09 1.1 Index points
Personal Income Tax Rate 128.8 0.9 72.71 3964485 2020
Sales Tax Rate 9410 Q2/16 1 72.77 127 percent
Social Security Rate 20 129 Q3/16 1 10178 percent
35 9484 Q4/16 1 20 percent
20 122 Q1/17 35 percent
7 35 7180 122
10 8056 122 7
7 20 8056 10
10 35 20
35 20
7 35
8.5 7
10 7
10
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 20
Markets Actual Q2/16 Q3/16 Q4/16 Q1/17 2020 Measure
5 5 4.25 4 4 4 percent
Social Security Rate For 5 5 5 5 5 5 percent
Companies
Social Security Rate For
Employees
Thailand | ASEAN’s Logistics Hub:
Thailand sits in the center of mainland Southeast Asia, bordering Myanmar, Lao PDR,
Cambodia, and Malaysia. It is this central location that makes Thailand well suited to take on
the role as ASEAN’s Logistics Hub. Besides bordering most of the mainland Southeast Asian
nations, Thailand has access to the Mekong River as well as plenty of coastline along the Gulf
of Thailand and Andaman Sea, thus offering logistic opportunities that few, if any, other
ASEAN countries can compete with.
Thailand’s share of regional logistics is bound to grow, especially with its linkage to
Cambodia, Lao PDR, and Myanmar, states whose growing economies are catching the eyes
of investors worldwide. Thailand is one of Southeast Asia’s top performers in the logistics
field. Currently, Thailand ranked 35th out of 160 countries in the World Bank’s Logistics
Performance Index (LPI) and ranked 3rd among ASEAN countries listed in the index. This is
clear evidence that Thailand is competitive at a global level.
Government Policies and Initiatives:
Thailand has been actively executing new policies that will transform all aspects of Thailand’s
transportation infrastructure into globally competitive, first tier systems.
The new administration recently passed a new Infrastructure Development Plan (2015-2022) worth US$ 75 billion (THB 2.4
trillion) to revamp Thailand’s infrastructure. The targets of this new Infrastructure Development Plan are illustrated below.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 21
The massive scope of this plan is designed to maximize capacity and efficiency of every element of Thailand’s national
transportation systems. This infrastructure development plan will greatly benefit logistics providers. Upgraded railways will
expand the capacity of Thailand’s railroads while minimizing transit durations.
Expanded four way highways between Thailand’s arteries of commerce will minimise transit times. Expanded seaports will
welcome even greater volumes of cargo as Thailand cements its position as ASEAN’s logistics hub. Expanded and enhanced
airports across Thailand will increase capacity while upgraded air traffic systems will improve efficiency. Thailand will not only
maintain its superior position in the logistics industry, but will also guarantee that Thailand will become the premier center
for logistics in Southeast Asia. The chart below depicts Thailand’s Logistics Development Strategy for achieving the goals listed
by 2017. It shows in greater detail how the 3 missions and 7 strategies will work in harmony to accomplish the above listed
goals of improving competiveness, co-prosperity, and sustainability, as well as improving overall quality of life in the region.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 22
Furthermore, below is a chart explaining the Manufacturing Logistics Development Master Plan (2015-2017). The plan aims
to enhance Thailand’s logistic and supply chain management in order to increase the overall competitiveness of the
manufacturing logistics sector. This plan targets maximizing efficiencies in the logistics sector, nurturing skilled human capital,
and utilizing technology to make Thailand’s logistics sector more competitive. The ultimate goal of the plan is for Thailand to
increase its competiveness in the aspects of cost, time, and quality by the year 2017, making it a key driving force in Southeast
Asia logistics.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 23
Excellent Infrastructure:
World Class Airport Thailand’s world class international airports see heavy amounts of traffic due to Thailand’s central location
in ASEAN. With Don Mueang Airport reopened as an international airport in 2011, along with the world-renowned
Suvarnabhumi International Airport, Bangkok has seen a significant increase in both passenger movement and aircraft
movement volume. These volume increases still do not account for future expansion plans for both airports that will
undoubtedly allow for even greater volume growth. According to the Ministry of Transport (MOT), Suvarnabhumi Airport’s
expansion goal is to accommodate 120 million passengers and 6.5 million tons of cargo per year in the future. Furthermore,
to facilitate the movement of arrival, departure, and transfer freight with less customs regulation, a Free Zone complex has
been established in the northwest area of the airport that will allow for duty exemption, zero rate value added tax (VAT)
calculation, excise duty exemption, and no time limit for storage in the zone’s warehouse.
For Don Mueang International Airport, Airports of Thailand Public Company Limited (AOT) under the MOT, expects to expand
the airport further to better serve the rapidly growing volume of passengers and cargo. The current project consists of the
following: the modification of Terminal 2 for domestic passengers, the modification of South Corridor and Pier 5, the
modification of the car park, the modification and expansion of the existing domestic terminal, the modification of Pier 6, the
expansion of Terminal 1 for international passengers, and the modification of the airport in order to accept an increase of
cargo intake. Thailand’s airport infrastructure will see massive upgrades as a result of the Infrastructure Development Plan.
The following five airports were selected in the plan for development: 1) Suvarnabhumi Airport 2) Don Mueang Airport 3)
Phuket Airport 4) Betong Airport 5) Mae Sot Airport Besides enhancing airport facilities, the plan is investing in enhancing
Thailand’s airport traffic systems and establishing aviation industrial estates for the purpose of becoming the regional center
for air transportation. Regarding total passenger movement volume, all of Thailand’s airports have positive growth trends. A
combination of factors have led to these positive growth trends including Thailand’s title as one of the most visited nations in
the world and its role as the hub of commerce for Southeast Asia. Aircraft movement volume as well has seen positive growth
trends across Thailand’s airports.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 24
Excellent Seaports and Coastal Ports:
Thailand has access to the Gulf of Thailand and possesses two major deep sea ports, Laem Chabang and Map Ta Phut Industrial
Port. The Port of Laem Chabang is Thailand’s largest port, located about 25 kilometers north of Pattaya and south of the city
Chon Buri, the port occupies about 2,572 acres. The port consists of several separate ports with a total capacity of 11 million
TEUs (20 foot equivalent units) and has a berthing capacity that can accommodate ships weighing up to 50,000 DWT
(deadweight tonnage). The Infrastructure Investment Plan includes a Phase 3 development project for Laem Chabang. The
project would expand TEU capacity to 18 million and accommodate ships weighing over 100,000 DWT. Besides expanding
container capacity and accommodating a new generation of super-sized container ships, a major roadway is planned that will
connect Laem Chabang Port to Map Ta Phut Industrial Estate.
Map Ta Phut Industrial Port is located on the east coast of the Gulf of Thailand, about 220 kilometers from Bangkok, and is an
industrial harbor owned by the Industrial Estate Authority of Thailand (IEAT). Map Tap Phut port is a multi-purpose port that
has dedicated facilities for storing gaseous and liquid chemicals including natural gas and petrochemicals. The port can
accommodate several sizes of ships including ships weighing up to 120,000 DWT. Map Ta Phut Port is composed of two types
of berths: 1) Public Berths that are opened to provide services to customers who consist of Thai Prosperity Terminal Co., Ltd.
and Thai Tank Terminal Ltd. 2) Specific Berths, which are only used by investor groups and their customers, consisting of
National Fertilizer Co., Ltd., Rayong Bulk Terminal Co., Ltd., Star Petroleum Refining Public Co., Ltd., PTT Global Chemical Public
Co., Ltd., Maptaphut Tank Terminal Co., Ltd., GLOW SPP3 Co., Ltd., BLCP Power Co., Ltd., PTT LNG Co. Ltd., PTT TANK Co., Ltd,
and Rayong Terminal Co., Ltd.
Other than the main deep sea ports, Thailand has a number of coastal ports that could be assets for logistics applications.
The Port of Bangkok is located on the Chao Phraya River in the Khlong Toei District of Thailand’s capital city.
The Port of Chiang Saen is located on the Mekong River in Chiang Rai Province near the border of Lao PDR in the very
north of Thailand. It is mainly used for trading between Lao PDR, China, and Myanmar.
The Chiang Kong Port is also located on the bank of the Mekong River in Chiang Rai, but is much smaller than Chiang Saen.
It contains one berth port with a width of 24 meters and a length of 180 meters.
The Port of Ranong is located on the Kra Buri River, near the Myanmar border, and is the port located nearest to the
Indian Ocean. Originally approved by the Port Authority Thailand in 2003, its purpose is to act as a cargo hub for the West
Indian Ocean and Andaman Sea areas. Recognizing the importance of seaports in Thailand’s role as ASEAN’s logistic hub,
the Infrastructure Development Plan has targeted significant enhancement to Thailand’s seaport capabilities. Thailand
will improve its port capabilities in both the Gulf of Thailand and the Andaman Sea. The plan also calls for building
container centers to maximize container capacity at Thailand’s ports.
Information from the Port Authority of Thailand (PAT) shows that shipping freight volume has seen a significant increase over
the past 4 years. From 2010 to 2013 Thailand’s Sea Cargo Traffic had an annual compounded growth rate of 7%. Thailand’s
top tier port facilities and vital role in the global supply chain have made Thailand a top destination for cargo.
Land Linkages Road Network:
Compared to other mainland Southeast Asian nations, Thailand is more strategically located for logistics purposes. Thailand is
virtually ASEAN’s crossroad; it shares over 5,500 kilometers of borders with its four neighboring countries with 30 provinces
physically connected to neighboring states. Myanmar shares the longest land linkage with Thailand, with a total length of
about 2,096 kilometers and borders 10 of Thailand’s provinces in the northern, central, and southern regions of Thailand.
These provinces include: Chiang Rai, Chiang Mai, Mae Hong Son, and Tak in the North, Kanchanaburi, Ratchaburi, Phetchaburi,
and Prachuap Khiri Khan in the West, and lastly Chumphon and Ranong in the South.
Lao PDR ranks second in shared land linkage with Thailand, with a total length of roughly 1,835 kilometers and borders 12
provinces in the Northern and Northeastern regions. These regions include: Chiang Rai, Phayao, Nan, Uttaradit, and
Phitsanulok in the Northern region, and Loei, Nong Khai, Nakhon Phanom, Bueng Kan, Mukdahan, Amnat Charoen, and Ubon
Ratchathani in the Northeastern region. The third longest connection is Cambodia, which shares a length of roughly 803
kilometers with Thailand and borders 7 provinces in the Northeastern and Eastern regions. Lastly, Malaysia shares about 506
kilometers with Thailand and borders 4 provinces of the southern region of Thailand, namely Satun, Songkhla, Narathiwat,
and Yala.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 25
Thailand is utilizing its central location in Southeast Asia to conduct various land transport development projects with its
neighbors to maximize cross border road freight opportunities. According to the Thailand Development Research Institute
(TDRI), Thailand currently has 23 cross-border land infrastructure projects in various stages of completion. Thailand is not only
upgrading cross boarder land infrastructure, the Infrastructure Development Plan calls for massive upgrades to Thailand’s
highway system. In order to minimize transit time between Bangkok and other major cities expanded four - lane highways will
be built. Thailand’s Main Corridor, the major artery of road based commerce, will see 235 projects on 12 major routes spanning
2,162 km.
According to the Ministry of Transport, the road conditions for routes between Thailand to Myanmar and Thailand to Viet
Nam via Cambodia will be significantly improved in the future to accommodate the continuing growth of inland truck cargo
throughout the region. The map above depicts the Greater Mekong Sub-Region road networks. By observing Thailand’s central
location in every route of the network, one clearly sees that Thailand has the potential to be the hub for the region’s inland
freight transport.
Rail Network:
Railroad infrastructure development is a key aspect of Thailand’s Infrastructure Development Plan. Thailand’s provincial
railroad network will see upgrades to its infrastructure and six main rails covering 887 km will become dual track rail lines. The
dual rail infrastructure will enhance the capacity of local trains and make rail transport a more attractive option for logistics
purposes. The six double-track projects in the Infrastructure Development Plan are: 1) Nakhon Ratchasima – Khon Kaen (185
km) 2) Prachuap Khiri Khan – Chumporn (167 km) 3) Nakhon Pathom – Hua Hin (165 km) 4) Map Ka Bao – Nakhon Ratchasima
(132 km) 5) Lop Buri – Nakhon Sawan (148 km) 6) Hua Hin – Prachuap Khiri Khan (90 km)
COMPANY OVERVIEW
The Worldwide Logistics Group, China (WWL) in partnership with the Netlog Logistics Group, Turkey (NL) plans to enter the
Thailand market to set up a Freight and Logistics Company jointly in Bangkok. This would therefore, require the need to explore
Thailand’s Freight and Logistics market to ascertain the potential and other business opportunities centred around all aspects
of Global Transportation to complement and support the proposed entry by these two Companies into Thailand. Both Groups
(further referred to as Netlog Global Forwarding – NLGF) are highly diversified throughout the world, in the fields of Freight,
Logistics, Warehousing, Bulk, Chemical, Project, Cold Chain and DG etc., and collectively employ in excess of 8,500 staff
worldwide. With a collective network of their own offices spreading throughout China and Europe; the prospect of introducing
such operations in Thailand and the South East Asian region as an extension of their worldwide coverage is seen as prudent.
Note: Both Companies in collective partnership, own some offices in China, Hong Kong and Vietnam, and have plans to expand
their Asian presence in other countries such as Malaysia, Myanmar and Indonesia, in addition to Thailand.
Problem worth Solving
The new Company (which would be named ‘Netlog Global Forwarding Co., Ltd’) (referred to as ‘NETLOG GLOBAL
FORWARDING’ hereafter) would need to be registered in Thailand as an International Freight and Logistics provider for Import
and Export cargo moving by Air, Sea, Road and Rail. The business would operate from premises centrally located within the
Bangkok metropolitan area, (preferably with warehousing) and would initially function with minimal staffing where the
Customs Clearance, warehousing and trucking operations could be outsourced until such time that the Company is ready to
graduate to a fully-fledged Freight and Logistics operation.
The Company will engage immediately in a world-wide awareness and communication campaign to establish its identity
amongst prospective Agents and Customers in a bid to commence its operations in the shortest possible time.
Once the business has gained momentum and has an established flow of shipments, it is planned that the Company will expand
its operations to include end-to-end Logistics, warehousing, trucking and other value added services.
In time, it could be further planned to grow the business to include other areas of portfolio expansion such as Maritime
Agencies, NVOCC Operations, Air Cargo Consolidation, Air Charters, 3rd Party Logistics/Distribution and ICD/CFS operations in
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 26
addition to the possibility of having Airline GSA Agencies. Foreign investors setting up a Company in Thailand are restricted to
a maximum shareholding of 49% ownership. The balance 51% by Thai law requires that it must be held by a Thai entity.
However, there is possibility for a Foreign Investor or Company to have full ownership if it is done as follows:
In the above structure, the foreign investor (NL + WWL) will need to register two (2) Companies that each own 51% of the
other. NL + WWL will own 49% of each Company in keeping with Thai Legal requirements. This structure eliminates the need
for a Thai shareholder, nominee or Joint Venture partner. However, the additional costs of registering two separate companies
need to be taken into consideration. The holding company should be registered at a different address than the operating
company i.e. serviced office such as Regus could be an option which would probably cost less than USD100 per month to
register and maintain. The Holding Company could also become operational if/when there is a requirement to further expand
i.e. Safetrans for ISO Tank business.
STRATEGIC OBJECTIVES
NETLOG GLOBAL FORWARDING will concentrate on its strengths in achieving its medium- to long-term strategic objectives:
1. Creating regional brand awareness via regional marketing campaigns.
2. Provide a supportive and competent management structure.
3. Creating an interactive social media structure with newsletters, blogs, and Facebook pages to advertise and promote the
brand.
4. Provide ongoing training to staff in order to excel and keep up with industry trends.
5. Ensure that every aspect of the company focuses on branding and marketing; from the company website with proper
utilisation of search engine optimisation (SEO) to well-structured marketing programmes with adequate coverage for all
divisions.
6. Employ quality and skilled employees that will uphold the owner’s vision of an emphasis on quality, originality and
dependability on service.
7. Obtain approval for the required funding, which will primarily be used to establish NETLOG GLOBAL FORWARDING’s
operations and implement the required business strategy. Formalise funding arrangements with the targeted funders,
including agreement on their operational and strategic involvement in the business, amount of funding required,
shareholding and exit strategy.
8. Explore and establish alliances with various stakeholders within the Logistics and Shipping Industry with the primary aim
of providing the identified target market customers with a turnkey solution.
9. The company’s operations will be managed by:
Periodically Monitoring the Company’s Cash Flow Statement;
Conducting Financial Analysis and Business Ratio Comparisons;
Performing on-going Competitor Analysis;
Analysing Return on Marketing Spend;
Gauging Staff Morale; and
Monitoring Profitability.
10. Penetrate and later expand the company’s identified target markets by firstly developing and implementing a formal
marketing strategy and secondly, providing a broader scope of products and services to customers.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 27
11. Design and implement the appropriate internal management control systems and risk mitigation strategies for the various
elements of the business. Implement and improve the appropriate management control systems for the various elements
of the business.
12. Establish and build on a good working relationship with the company’s customers by meeting with their decision makers,
truly understanding their needs and plotting a mutual plan for success. Obtain commitments for continued support and
use of the company’s products and services.
13. Conduct adequate research into the Target Market and Industry in order to not only have a comprehensive understanding
of the company’s customer profiles and industry composition but also current statistics and future trends.
COMPETITIVE ADVANTAGE (VALUE PROPOSITION)
Given the above circumstances, it is suggested that the new Company should aim to establish itself in the shortest possible
time frame through the use of the following measures:
1. Effective Communication;
2. Bring on-board as much of the existing business that currently moves to/from Thailand and also obtain the support of the
NL and WWL Group offices;
3. Offer value-added services in the shortest possible time (Warehousing/Logistics/Transportation) and graduate to 3PL and
even 4PL services; and
4. Create a ‘Niche-Business Lane’ i.e. movements of cargo between Thailand and selected destination where the NL and
WWL Group’s strength currently prevails.
SWOT ANALYSIS
Evaluation Methodology:
The relevance of the SWOT Analysis for this Business Plan is to identify and draw conclusions about the Strengths that will assist in
executing the company’s strategy; the Weaknesses that is fatal to the survival of the company; the Opportunities that are attractive
to pursue and the Threats that is making the company more vulnerable and poses a risk to it operating in a sustainable and profitable
manner. The evaluation result will assist the company to assess the implications for its future business strategy.
Strengths Weaknesses
The NL-WWL Partnership, providing reputation, Start-Up Company in Thailand and unknown entity in
stability and financial backing. This could be used as the Thai market. This would need to be countered by
positive communication with prospective clients and an aggressive awareness campaign worldwide, starting
Agents worldwide. with known Agents and Clients and also through
Membership with at least two Freight Network Groups
The Group’s diversity across the region in Freight and i.e. WCA and another to be decided upon.
Logistics, Warehousing, Bulk, Chemical, Project Cold
Chain etc. This would facilitate the easy transfer of Inability to provide a full-service operation. The lack
knowledge, skills and expertise for similar operations of value added facilities such as Warehousing,
in Thailand as well as develop business within the Transport, Customs Brokerage etc., would be a
Group’s Companies with the new Thai Freight and negative factor in the initial months of operation.
Logistics Company.
The lack of adequate knowledge of the Thai
Existing International contacts and available Language. Constraints in communication are a very
business. This will ensure that the new Freight and real challenge in Thailand. Misunderstandings and
Logistics Company will be operational within a shorter mistakes as a result, are common. It is imperative to
space of time and will have business in hand. learn the language as a matter of urgency.
Well established foundation in Asia and Europe with
existing business and customer base in Thailand. Will
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 28
allow for quick and seamless commencement of
business of the new company.
Basic Knowledge of Thai business practices, language
and work ethic. Will allow for improved efficiencies in
the new company’s Sales and Operational processes.
Thailand is the 2nd largest Economy and major
manufacturing and trading hub in South East Asia.
Great potential for growth and development for the
new Freight and Logistics Company.
Opportunities Threats
ASEAN Economic Community (AEC 2015) will provide Curtailed Economic growth. Thai Industries are losing
for some serious regional integration. This will out to competition from Vietnam and Cambodia.
provide ease of access to 10 other countries in South Political instability and frequent changes in
Government Policy. This could deter potential
East Asia with Thailand sharing borders with 5 of investors and affect trade. Although the Thai economy
them. generally tends to be resilient, it would be prudent to
Access to the network of Airlines represented by the have links in neighbouring countries.
NL and WWL Groups. The new Freight and Logistics
Company could exploit the special rates and belly
space from within the Organization.
Skills Transfer for all aspects of expertise available
within the NL and WWL Groups. Here lies an
opportunity for which the new Thai Company could
leverage off.
The lack of knowledge of both spoken and written
English and general ‘narrow-focused’ thought
processing amongst Thai staff. There is a distinctive
opportunity to rise above the competition and provide
a reliable ‘Sri Lankan/Chinese’ styled work ethic and
service to our Agents worldwide.
Recessionary conditions: This is seen as an
opportunity as the right time to invest in Thailand as
the Military Government approaches their 3rd
anniversary and they have begun to shift their focus to
attracting Investors, who had for the past 2 years been
hesitant to enter the market.
Incentives by the Thai Government to attract Foreign
Investment in the areas of Warehousing, Logistics,
3PL and ICD/CFS Operations. This would be in keeping
with the expansion strategy of the Company to include
such an operation.
Thai Freight Sector is said to post positive growth in
2016. Another positive indicator in support of the
impending new NL + WWL Company.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 29
INDUSTRY AND MARKET
With average throughput levels of cargo hovering almost at around 10 Million TEUs and 2 Million tons for Sea and Airfreight
respectively, the Thai Government is well aware of the importance of supporting the Freight and Logistics industry. They are
also wary of other ‘Asian Tigers’ such as Vietnam, Cambodia and Myanmar etc., who are beginning to compete head-on with
their ‘more-established’ Asian neighbours.
1. Asian Economic Community: The signing of the Asian Economic Community (AEC) 2015 Agreement amongst the 10
member states is scheduled for the end of 2015. This is expected to provide some positive outcomes for Thailand such
as:
Thailand’s blue prints for further infrastructure development in the field of Logistics are already in place.
It is expected that Regional integration through the AEC, will no doubt promote and increase demand for Logistics
services from Thailand.
Raw materials, good and labour will be exchanged more freely, especially for border and transit trade which are
expected to expand substantially.
Thailand’s Logistics Industry will enjoy various benefits in terms of regulations and other aspects i.e. simplified and
harmonized customs procedures, , improved transportation routes and reduced tariffs.
2. Logistics Development Strategy: Thailand has already put in place this 5-Year Strategy that was drawn up in 2013. The
strategy revolves around 3 objectives as follows:
The First Objective is ‘Supply Chain Competitiveness’ which strives not only to increase competitiveness in supply
chain management and potential business, but also to promote business related to trade and services in border town
areas.
The Second Objective concerns trade facilitation enhancement, which aims to develop transport services and
logistics networks, to improve facilitation at gateways, and to promote services improvement and expand LSP
(layered service provider) networks.
The Third Objective deals with capacity building and policy driving factors, which endeavours both to develop human
resource development systems and to create monitoring systems for self-improvement.
TARGET MARKET
Several market groups (segments) have been identified as critical targets for the continued success of NETLOG GLOBAL
FORWARDING. The definition of each market group (segment) is:
Primary Market: This segment consists of NETLOG GLOBAL FORWARDING’s Repeat Customers. The objective will be to find
ways to further develop repeat customers into extremely loyal and long-time customers that purchase repeatedly.
Secondary Market: This segment consists of First-Time Customers. The objective will be to find ways to develop first-time
customers into repeat customers.
Tertiary Market: This segment consists of Every Person that Heard about the Company. The objective will be to identify the
most popular products/services, identify the individuals/institutions in this segment that are most likely to purchase our
products/services, and follow company strategies to attract new customers who make their first purchase.
Given the vulnerability of the new ‘start-up’ Company in a mature and established industry, the use of effective and targeted
Communication measures is considered important. It is therefore suggested that the following means of Communication are
utilized to ensure optimum worldwide coverage and exposure in the shortest possible time.
1. Membership of the following Thai Freight Bodies to be obtained as soon as the Company is registered:
Thai International Freight Forwarders Association (TIFFA)
Thai Air Forwarders Association (TAFA)
Bangkok Ship Owners and Agents Association (BSAA)
Thai Licensed Customs Broker Association (TCLB)
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 30
Obtaining the above memberships will add credibility to the new Company as well as provide accreditation ahead of some
200+ Freight Companies in Thailand who are not accredited.
2. Design and develop an impressive website which will clearly define the Company’s Value Proposition and provide an
image that would be associated with stability, dependability, reliability, transparency and efficiency. This will also include
the design of the Company’s Logo, Tag Line, Business Cards and Stationary, Corporate Folders and Giveaways etc.
3. Join up to 3 International Freight Networks such as:
World Cargo Association (WCA)
Air and Ocean Partners (AOP)
Worldwide Partner Conference (WWPC)
Another smaller Freight Group
Joining these networks will create immediate awareness and activate interaction amongst the respective members
worldwide, which will generate business and provide the Company with the opportunity to showcase its capabilities. It
will also be important to attend the Annual Regional Conferences of the above Freight Networks at which the opportunity
is provided to create awareness of the Company on a face-to-face basis. The need to advertise in some of the International
Freight publications may be useful, but not essential unless a specific need is identified.
4. Register with Inter-Capital (ICAP) and obtain accreditation with Default Insurance Protection (DIP) which will provide the
Company with the necessary authorizations to have direct contracts with the Airlines for cargo bookings and payment
options.
COMPETITORS
As a ‘start-up’ Company the competition from within the industry is bound to be challenging. It is estimated that there are in
excess of 400 Freight Forwarders in Thailand, but only around half of them are registered with Thailand’s International Freight
Forwarders Association (TIFFA). The Competition could be grouped as follows:
1. Thai Forwarding Companies: Many of these smaller Companies are involved in general transportation, mainly by road
and do not involve themselves in Customs brokerage or international movements.
2. Thai Clearing Companies: These companies are mainly involved in Customs Clearance for Import and Export Shipments
but do not get involved in the Forwarding part of the business. They may however be in partnership with local trucking
companies as mentioned in point 1 above.
3. International Clearing, Freight and Logistics Companies with Thai Ownership or JV with an overseas Freight Company:
The main competition for the new NLGF Company would come from this category of companies who are SMEs that are
involved in similar business activities within a similar target market and customer group.
4. Foreign-owned International Freight and Logistics Companies: The likes of Expeditors, Schenker, DHL, Maersk Logistics,
Kuhn & Nagel, Panalpina, Kintetsu etc., are just some of the large players who are well established in Thailand. These
Companies generally work within their own network of offices and control most of the larger international Corporate
Accounts. The competition arises when soliciting for larger corporate accounts that are already using the services of these
established International Freight and Logistics companies.
5. Warehousing Services and Supply Chain Management Companies: These companies may not pose an immediate threat,
but are seen as the future competition with the increase of 3PL and 4PL activities in Thailand. The Thai Government is
seen to be encouraging and providing incentives for 3PL and 4PL service providers to enter the market and definite signs
that large Corporates and Manufacturers in Thailand are migrating towards the use of these services are evident. It would
therefore be prudent for the new Company to consider entry into this area of business, sooner rather than later.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 31
Competitive Analysis
NETLOG GLOBAL FORWARDING will as part of its continuous market research; employ the following strategies to combat
competitive pressures:
1. Detailed Analysis of our Competitors: Who they are, what they are offering and what their unique selling point (USP) is.
This will identify the areas we need to compete in, as well as giving us a platform for differentiating ourselves.
2. Detailed Analysis of our Customers: Our customer expectations, establishing what matters to our customers and revising
our marketing strategy accordingly.
3. Communicating a Tangible Differentiation Strategy: It's essential to give our customers good reasons to use our product
rather than a rival’s product. Our USP (Unique Selling Proposition) will tap into what customers want and it will be clear
and obvious; no-one should have to ask what makes you different.
4. We will Step up our Marketing: We will make every effort to tell people who we are, what we sell and why they should
buy from us.
5. We will Continuously Update our Image: Simple steps such as the design of our business cards, stationery, and our
website and email correspondence will reflect our USP.
6. We will look after our Existing Customers: They will be our competitors’ target market. We will provide better customer
service by being more responsive to their needs and expectations. If feasible, we will consider offering low-cost extras
such as improved credit terms, discounts or loyalty schemes. We understand that it's cheaper and easier to keep
customers than to find new ones.
7. We will Target New Markets: Selling into a greater number of markets can increase our customer base and spread our
risk.
8. We will have a Long-Term Outlook: Businesses that plan for growth are more successful than those that are happy to
follow the status quo. We will keep up with developments in our sector, follow consumer and industry trends, invest in
new technology and - crucially - have a clear idea of where we want to be in one, three and five years' time.
CRITICAL SUCCESS FACTORS
In order for the company to operate in a successful and sustainable manner, a number of specific ingredients are needed. The
following key aspects that will ensure the long-term survival of the company has been identified, which include:
1. Implement clear marketing objectives delivered through unique approaches and programmes; promote the company in
order to penetrate the target market segments rapidly and profitably.
2. The ability to provide Customer Satisfaction in every transaction.
3. International presence setup around the world through agency partnerships or own offices.
4. Depth of local and global relationships with Customers and Transportation providers.
5. Best-of-breed Operations system (TMS) and Sales System (First Freight CRM).
6. Technologies to improve Customer Experience and Retention.
7. It’s imperative to keep the day-sales-outstanding metric optimized. In simple terms, the company should get money from
its customers as quickly as possible.
8. Identify and exploit a Niche in order to establish a ‘base-business’ i.e. E-commerce is bringing in a new wave of business
clients and they are worth chasing.
9. Scale-Up in the shortest possible time.
10. Offer 3PL and 4PL services for differentiation and product enhancement
11. Establish and maintain a positive reputation through enforcing credibility, integrity, and continued dedication to uphold
high levels of customer service.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 32
12. Implement and follow a financial model that is rooted in industry facts, not optimism. Costs have been based on the
company’s knowledge and research of the industry; validation against competitors’ cost averages, and analysis against
local market averages.
13. Develop successful relationships with third-party service providers and strategic alliances to facilitate the exchange of
information and establish a formal supplier and key stakeholder database.
14. Understand the company’s target market segments to ensure that the correct product and service mix is available to
meet their needs.
15. Develop the visibility and brand of NETLOG GLOBAL FORWARDING and growing the company through word-of-mouth
referrals; a formal marketing plan and quality service delivery so as to generate additional leads. An uncompromising
commitment to the quality and reliability of the company’s service delivery is vital.
16. Use marketing programmes that yield the highest ROI – targeting the right customers in the right channels – ensuring
that a prospective customer can find the company quickly and hassle-free.
17. Focus on long-term relationships; establish excellent supplier relations, strategic alliances with key stakeholders, and
long-term relationships with target market customers to build brand awareness and ensure the long-term survival of the
company.
18. Regularly communicate with the customer base through print media, co-branding/co-marketing initiatives with strategic
alliances, direct marketing, and via the company’s Website and social media platforms.
19. Ensure through daily management practices that the values of the company’s mission are followed so that a successful
and growth-oriented business is developed and maintained.
20. Implement a solid risk mitigation plan. The company has evaluated traditional and non-traditional risks associated with
this business venture’s potential to success and accounted for them. Instead of dismissing the risks, the shareholder(s)
has identified valid mitigation strategies for each.
21. Emphasis on employee retention and development programmes will be a primary focus of the business. Through the
implementation of these programmes, the company will be able to draw seasoned and elite professionals and build a
committed work force.
22. Focus on location and brand benefits; developing the visibility of the company and continuous brand exposure to
generate new business.
23. Ensure stakeholder satisfaction; provide, as far as possible, for the satisfaction of all customers and suppliers. Both are
very valuable to NETLOG GLOBAL FORWARDING.
24. The company’s strategy will be successfully implemented through leveraging its key stakeholder relationships and
strategic alliances to penetrate the target market. By drawing on its knowledge of the ‘ideal customer/client’ profile, its
local presence and product/service knowledge, the company will be able to build a compelling marketing programme
with the ultimate aim of establishing a trustworthy and customer-oriented brand. NETLOG GLOBAL FORWARDING will
employ the following strategies to gain both market share and a competitive advantage:
Use social media channels (e.g. Facebook, Twitter, Instagram and LinkedIn), conventional advertising channels, Public
Relations initiatives, targeted/periodic marketing programmes, and formal business development/sales prospecting
to create a word-of-mouth ‘buzz’ around the company’s offering.
Advertise in local media, business directories, online directories, industry-specific publications and other printed
media. Ensure that all marketing programmes are strictly monitored to determine the return on (marketing)
investment, average marketing spend, market research and other cost-benefit measures.
Keep abreast of customers’ needs, purchasing habits and general consumer behaviour with the aim of developing
new offerings and value-added services to turn customers into long-term, loyal buyers. Understand the company’s
target market segments to ensure that the correct product and service mix is available to meet their needs.
Maintain existing strategic alliances and establish relationships with suppliers, and industry stakeholders.
Periodically review the company’s pricing strategy with a strong focus on the reduction of variable costs.
Implement a formal Accounting-, Quality Control-, and Customer Relationship Management system.
Conduct regular Customer Surveys to ensure that the ‘true needs’, changing behaviours and criticism/feedback of
customers are understood and adequately addressed.
A philosophy of sustainable customer satisfaction will form the foundation of the company’s business strategy.
The main focus of the company will be on Brand Development, Business Development, Marketing and Sales and
Service Delivery. This will be paramount as NETLOG GLOBAL FORWARDING will need to gain market share by
promoting the quality and range of its products and services thereby gaining buy-in from its target market customers.
The management team possesses excellent project management skills and is at the higher end of the industry
learning curve.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 33
First Year of Operations FINANCIAL OVERVIEW | ASSUMPTIONS
First Month of Accounting
Company Tax % General
Year 2017
% Sales 30 Days January
% Sales 60 Days
% Sales 90 Days 20.0%
Total Sales on Credit
% Sales on Cash Sales Projections
Discounts and Returns %
2017 2018 2019 2020 2021
Year 50.0% 50.0% 50.0% 50.0% 50.0%
Number of Days Payable 25.0% 25.0% 25.0% 25.0% 25.0%
Bad Debts Provision % 0.0% 0.0% 0.0% 0.0% 0.0%
75.0% 75.0% 75.0% 75.0% 75.0%
25.0% 25.0% 25.0% 25.0% 25.0%
0.0% 0.0% 0.0% 0.0% 0.0%
Operational Expenses
2017 2018 2019 2020 2021
30 30 30 30 30
0.0% 0.0% 0.0% 0.0% 0.0%
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 34
PERSONNEL REQUIREMENTS
Personnel Burden
Year 2017 2018 2019 2020 2021
5.0% 5.0% 5.0% 5.0% 5.0%
Social Security, Fringe Benefits and 5.0% 5.0% 5.0% 5.0% 5.0%
Related
Total Payroll Burden
Payroll Expenses | Annual | Year 1-5
2017 2018 2019 2020 2021
Management 1 1 1 1 1
Headcount 120,000 124,800 129,792 134,984 140,383
Payroll
Bonuses 10,000 10,400 10,816 11,249 11,699
Payroll burden 6,500 6,760 7,030 7,312 7,604
Total cost
Administration, General and Operations 136,500 141,960 147,638 153,544 159,686
Headcount
Payroll 8 8 13 13 16
Bonuses 66,228 68,877 117,656 122,363 158,563
Payroll burden
Total cost 5,519 5,740 9,805 10,197 13,214
3,587 3,731 6,373 6,628 8,589
Overall total 75,334 78,348 133,834
Headcount 139,188 180,365
Payroll
Bonuses 9 9 14 14 17
Payroll burden 186,228 193,677 247,448 257,346 298,946
Total personnel cost
15,519 16,140 20,621 21,446 24,912
10,087 10,491 13,403 13,940 16,193
211,834 220,308 281,473 292,732 340,051
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 35
SALES
2017 Sales price
($)
Service categories 0.30
Airfreight Exports 200.00
Yield per Kilogram
Airfreight Imports 60.00
Yield per Shipment 150.00
Seafreight Exports
Yield per TEU Sales price
Seafreight Imports
Yield per Shipment 10.5%
10.5%
Annual increase %
Airfreight Exports 9.5%
Airfreight Imports 9.5%
Seafreight Exports
Seafreight Imports Sales Projections | Annual | Year 1-5
Airfreight Exports 2017 2018 2019 2020 2021
Yield per Kilogram
Net sales 73,350 98,124 206,630 242,098 283,654
Cost of goods 73,350 98,124 206,630 242,098 283,654
Gross profit
Airfreight Imports 73,350 98,124 206,630 242,098 283,654
Yield per Shipment
Net sales 79,000 158,015 282,408 330,685 387,447
Cost of goods 79,000 158,015 282,408 330,685 387,447
Gross profit
Seafreight Exports 79,000 158,015 282,408 330,685 387,447
Yield per TEU
Net sales 93,300 155,052 247,215 286,905 333,083
Cost of goods 93,300 155,052 247,215 286,905 333,083
Gross profit
Seafreight Imports 93,300 155,052 247,215 286,905 333,083
Yield per Shipment
Net sales 46,800 89,516 126,708 147,219 170,918
Cost of goods 46,800 89,516 126,708 147,219 170,918
Gross profit
46,800 89,516 126,708 147,219 170,918
Overall total sales
Total net sales 292,450 500,707 862,961 1,006,907 1,175,102
Total gross profit 292,450 500,707 862,961 1,006,907 1,175,102
Total sales incl. VAT 292,450 500,707 862,961 1,006,907 1,175,102
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 36
BALANCE SHEET
Balance Sheet | Annual | Year 1-5
ASSETS 31-12-17 31-12-18 31-12-19 31-12-20 31-12-21
Current assets
Cash/Bank 61,291 234,414 685,592 1,197,643 1,787,941
Debtors/Accounts receivable 41,663 60,741 98,268 114,659 133,812
Total current assets 102,954
Fixed assets 295,155 783,860 1,312,302 1,921,753
Buildings 7,000
Office equipment 13,500 7,000 7,000 7,000 7,000
Furniture & Fixtures 13,500 13,500 13,500 13,500
Vehicles 8,000
Non-depreciable assets 4,000 8,000 8,000 8,000 8,000
Less: Accumulated depreciation 124,550 4,000 4,000 4,000 4,000
Total fixed assets 6,775 124,550 124,550 124,550 124,550
TOTAL ASSETS 150,275 13,550 20,325 22,600 24,875
LIABILITIES AND EQUITY 253,229 143,500 136,725 134,450 132,175
Current liabilities 438,655 920,585 1,446,752 2,053,928
Income tax payable
Total current liabilities 480,050 88,106 122,855 146,006 88,106
480,050 88,106 122,855 146,006 88,106
Long term liabilities
Long term loans -226,821 480,050 480,050 480,050 480,050
-226,821 480,050 480,050 480,050 480,050
Total long term liabilities 253,229
Shareholders' equity -41,395 352,429 843,847 1,427,872
Retained earnings -41,395 352,429 843,847 1,427,872
438,655 920,585 1,446,752 2,053,928
Total shareholders' equity
TOTAL LIABILITIES AND EQUITY
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 37
INCOME STATEMENT
Income Statement | Summary
2017 % 2018 % 2019 % 2020 % 2021 %
Revenue on Operations 292,450 100.0% 500,707 100.0% 862,961 100.0% 1,006,907 100.0% 1,175,102 100.0%
Total Sales
Cost of Goods Sold 292,450 100.0% 500,707 100.0% 862,961 100.0% 1,006,907 100.0% 1,175,102 100.0%
Gross Profit
Operating Expenses 58,295 19.9% 62,797 11.0% 66,564 11.0% 70,558 11.0% 74,792 10.9%
General & Administrative 211,834 72.4% 220,308 38.7% 281,473 46.5% 292,732 45.5% 340,051 49.7%
Personnel
Promotion 12,667 4.3% 13,174 2.3% 13,437 2.2% 13,706 2.1% 13,980 2.0%
Insurance 1,500 0.5% 1,620 0.3% 1,750 0.3% 1,890 0.3% 2,041 0.3%
Transportation 3.5% 1.9% 1.8% 1.8% 1.7%
Total operating expenses 10,200 175.2% 10,608 41.7% 11,032 43.4% 11,474 38.8% 11,933 37.7%
EBITDA 512,496 -75.2% 308,506 38.4% 374,256 56.6% 390,359 61.2% 442,796 62.3%
Depreciation & Amortization -220,046 2.3% 192,201 0.9% 488,705 0.8% 616,548 0.2% 732,306 0.2%
Net profit / loss -77.6% 37.0% 55.8% 61.0% 62.1%
Company tax 6,775 6,775 6,775 10.2% 2,275 12.2% 2,275 12.4%
Net business result -226,821 -77.6% 185,426 37.0% 481,930 45.6% 614,273 48.8% 730,031 49.7%
122,855 146,006
Break-even sales -226,821 175.2% 185,426 61.6% 88,106 43.4% 491,418 584,025
393,824
512,496 308,506 390,359 38.8% 442,796 37.7%
374,256
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 38
Income Statement | Annual | Year 1-5
2017 % 2018 % 2019 % 2020 % 2021 %
100.0% 500,707 100.0% 862,961
Revenue on Operations 292,450 100.0% 500,707 100.0% 862,961 100.0% 1,006,907 100.0% 1,175,102 100.0%
Total Sales
Cost of Goods Sold 292,450 100.0% 1,006,907 100.0% 1,175,102 100.0%
Gross Profit
Operating Expenses 3,600 1.2% 3,888 0.7% 4,121 0.7% 4,369 0.7% 4,631 0.7%
General & Administrative 180 0.1% 194 206 218 232
Accountant and Auditors Fees 186 0.1% 201 0.3% 213 0.3% 226 0.3% 239 0.3%
Water 0.6%
Cleaning Expenses 1,800 0.1% 1,944 0.2% 2,061 0.2% 2,184 0.2% 2,315 0.2%
Electricity and Water 150 0.3% 0.1% 0.1% 0.1% 0.1%
Immigration, Work Permits, Visas 900 0.3% 972 8.0% 1,030 7.9% 1,092 7.9% 1,158 7.9%
Repairs and Maintenance 780 14.4% 842 1.1% 893 1.1% 947 1.1% 1,003 1.1%
Printing and Stationery 2.1% 45,360 0.1% 0.1% 0.1% 54,024 0.1%
Rental 42,000 0.1% 6,480 0.4% 48,082 0.4% 50,966 0.4% 7,718 0.4%
Unexpected, Sundries, Contingency 6,000 0.7% 432 6,869 7,281
Staff Training and Development 400 2,138 36.9% 458 44.3% 485 43.3% 515 47.4%
Telephone, Cellphone, and Related 1,980 69.0% 107 1.8% 2,267 2.2% 2,403 2.2% 2,547 2.4%
Office Supplies 99 3.4% 130 113 120
Postage and Courier 120 108 0.4% 137 0.4% 146 0.4% 127 0.4%
Stamp Duties 100 0.8% 1.5% 114 1.4% 121 1.3% 154 1.3%
Personnel 2.7% 209,817 0.2% 0.2% 0.2% 129 0.2%
Salaries and Benefits 201,747 0.4% 10,491 0.1% 268,069 0.1% 278,792 0.1% 0.1%
Payroll Burden (PAYE, UIF, etc.) 10,087 0.1% 0.2% 13,403 0.1% 13,940 0.1% 323,858 0.1%
Promotion 0.3% 2,496 16,193
Advertising and Public Relations 2,400 8,320 0.3% 2,546 0.3% 2,597 0.3% 0.3%
Membership and Subscription 8,000 0.5% 1,110 8,486 8,656 2,649
Corporate Gifts 1,067 0.1% 1,132 0.1% 1,155 0.1% 8,829 0.1%
Internet and Website Hosting 0.2% 374 0.3% 0.3% 0.3% 1,178 0.3%
Client Entertainment 360 0.6% 874 1.4% 382 1.4% 390 1.4% 1.3%
Insurance 840 2.7% 41.7% 891 43.4% 909 38.8% 397 37.7%
Business Insurance 175.2% 1,620 38.4% 56.6% 61.2% 927 62.3%
Transportation 1,500 -75.2% 1,750 1,890
Travel (Local) 624 2,041
Motor Vehicle Expenses 600 1,872 649 675
Vehicle Installment Repayment 1,800 8,112 1,947 2,025 702
Total operating expenses 7,800 308,506 8,436 8,774 2,106
EBITDA 512,496 192,201 374,256 390,359 9,125
-220,046 488,705 616,548 442,796
732,306
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 39
Depreciation 6,775 2.3% 6,775 1.2% 6,775 1.1% 2,275 0.4% 2,275 0.3%
Net profit / loss -226,821 -77.6% 185,426 37.0% 481,930 55.8% 614,273 61.0% 730,031 62.1%
Company tax 10.2% 122,855 12.2% 146,006 12.4%
Net business result -226,821 -77.6% 185,426 37.0% 88,106 45.6% 491,418 48.8% 584,025 49.7%
393,824
Break-even sales 512,496 175.2% 308,506 61.6% 43.4% 390,359 38.8% 442,796 37.7%
374,256
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 40
CASH FLOW STATEMENT
Cash Flow | Annual | Year 1-5
2017 2018 2019 2020 2021
61,291
Beginning balance -218,000 234,414 685,592 1,197,643
Credit/Debit 125,177
Cash in 73,113 356,452 215,740 251,727 293,776
Cash sales 177,675 609,694 738,789 862,174
Collections from debtors -21,987 481,629
Sales tax in 480,050 62,797 825,434 990,515 1,155,949
Long term loans 708,851
Subtotal 220,308 66,564 70,558 74,792
Operating expenses 58,295 13,174 281,473 292,732 340,051
General & Administrative 211,834 1,620
Personnel 10,608 13,437 13,706 13,980
Promotion 12,667 1,750 1,890 2,041
Insurance 1,500 308,506
Transportation 234,414 11,032 11,474 11,933
Capital investments 10,200 173,123
Buildings 374,256 88,106 122,855
Office equipment 7,000 685,592 478,465 565,651
Furniture & Fixtures 13,500 451,178 1,197,643 1,787,941
Vehicles 512,051 590,298
Non-depreciable assets 8,000
Other payments 4,000
Income tax payment 124,550
Sales tax payments/refunds
Subtotal -21,987
Ending balance 429,559
Credit/Debit
61,291
Change in cash
279,291
BREAK-EVEN ANALYSIS
2017 Airfreight Exports Airfreight Imports Seafreight Exports Seafreight Imports
($) 0.30 200.00 60.00 150.00
Key assumptions 0.30 200.00 60.00 150.00
Average sales price per unit 100.0% 100.0%
Gross profit (Contribution) margin 100.0% 100.0%
Contribution margin % % % % %
Operating expenses 27.5% 16.5%
Share of operational expenses 22.5% 33.5% 84,562
Projected overheads 115,312 140,936 171,686 564
Break-even volume (per Year, 2017) 384,372 705 84,562
Break-even sales (per Year, 2017) 115,312 2,861
140,936 171,686
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 41
SENSITIVITY ANALYSIS (WHAT-IF SCENARIO STUDY)
Methodology7
2017 Best case Worst case
10.0% -20.0%
Sales
Cost of goods sold -10.0% 20.0%
Variable costs -10.0% 20.0%
Fixed costs
Effect on the Projected Income Statement
Income statement
($) Projected Best case Worst case
Revenue on Operations 292,450 321,695 233,960
Total Sales
Cost of Goods Sold 292,450 321,695 233,960
Cost of goods sold % 100.0% 100.0% 100.0%
Gross Profit
Gross profit margin % 21,546 19,391 25,855
272,950 245,655 327,540
Operating Expenses 512,496 483,047 571,396
Variable costs 175.2% 150.2% 244.2%
Fixed costs
Total operating expenses 6,775 6,775 6,775
% of total sales -226,821 -168,127 -344,211
-147.1%
Depreciation -77.6% -52.3% -344,211
Net profit / loss -226,821 -168,127 -147.1%
Net profit margin %
Net business result -77.6% -52.3%
% of total sales
7 A technique used to determine how different values of an independent variable will impact a particular dependent variable under a given set of
assumptions. This technique is used within specific boundaries that will depend on one or more input variables, such as the effect that changes in
interest rates will have on a bond's price. What-if Analysis (also known as Sensitivity Analysis) is a way to predict the outcome of a decision if a
situation turns out to be different compared to the key prediction(s). Sensitivity analysis is very useful when attempting to determine the impact the
actual outcome of a particular variable will have if it differs from what was previously assumed. By creating a given set of scenarios, the analyst can
determine how changes in one variable(s) will impact the target variable. For the purposes of this Business Plan and Financial Projections Model, the
‘Projections Model’ or Expected Case Financial Projections have been used as a point of departure. The Financial Model’s ‘sensitivity’ to changes has
been tested to determine the outcome on the company’s profitability.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 42
Effect on the Projected Cash Flow Statement
Cash flow Projected Best case Worst case
($) -218,000 -218,000 -218,000
Beginning balance 73,113 80,424 58,490
Cash in 177,675 195,443 142,140
Cash sales -21,987 -21,987 -21,987
Collections from debtors 480,050 480,050 480,050
Sales tax in 708,851 733,929 658,693
Loans
Subtotal 294,496 277,574 328,342
Cash paid out 157,050 157,050 157,050
Operating expenses -21,987
Capital investments 429,559 434,624 485,392
Sales tax payments/refunds 81,306 -44,699
Subtotal 61,291
Ending balance 299,306 173,301
279,291
Change in cash
Effect on the Projected Balance Sheet
Balance sheet
($) Projected Best case Worst case
ASSETS 61,291 81,306 -44,699
Current assets 41,663 45,829 33,330
Cash/Bank 102,954 127,134 -11,369
Debtors/Accounts receivable
Total current assets 32,500 32,500 32,500
Fixed assets 124,550 124,550 124,550
Depreciable assets
Non-depreciable assets 6,775 6,775 6,775
Less: Accumulated depreciation 150,275 150,275 150,275
Total fixed assets 253,229 277,409 138,906
TOTAL ASSETS
LIABILITIES AND EQUITY 480,050 480,050 480,050
Current liabilities 480,050 480,050 480,050
Total current liabilities
Long term liabilities -226,821 -202,641 -341,144
Long term loans (Shareholders/Deferred loans) -226,821 -202,641 -341,144
Total long term liabilities 253,229 277,409 138,906
Shareholders' equity
Retained earnings
Total shareholders' equity
TOTAL LIABILITIES AND EQUITY
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 43
MARKETING OBJECTIVES
NETLOG GLOBAL FORWARDING’s long-term marketing objectives will be:
1. Achieve sustainable growth in the identified target market segments.
2. Identify and explore possible alternative market segments to increase market share.
3. Ensure effective marketing programs targeted at luring prospective customers from competitors.
4. Project the company as an innovative, modern, and ready to excel in meeting customers’ expectations at all times.
5. Portray the company’s brand attributes in all stakeholder communication/international as partners, problem solvers, ‘fast
on our feet’, flexible and easy to work with.
6. Gain market recognition as a reliable partner in the industry NETLOG GLOBAL FORWARDING operates in.
7. Build the brand to encourage confidence in the company and its people.
8. Create a concerted and effective awareness of NETLOG GLOBAL FORWARDING, its products and services
9. Use digital-, social- and conventional media channels that appeal directly to the target market.
10. Use advertising mediums and marketing initiatives that will support brand building.
11. Build and maintain an image of excellence and professionalism in the marketplace.
12. Promote the company’s key strengths underpinned by its Value Proposition and Competitive Advantages.
13. Create a positive environment in which the selling process can take place.
14. Reinforce and increase existing customer loyalty to the company and its products/services.
15. Ultimately, through a sustainable marketing effort, establish a strong foothold for the company's products/services and
develop a substantial market share over the next five (5) years.
MARKETING STRATEGY
All “first prospective customer contacts” will be loaded onto NETLOG GLOBAL FORWARDING’s CRM software platform. An
Elevator Pitch Script, professional introduction and/or welcome script will be crafted for all scenarios where new business
contacts may occur. This systematic information gathering will focus on obtaining five (5) key pieces of data – first name, email
address, contact number, enquiry details and outcome. The capturing of such information will state where such contacts
originate from and who they are. All staff will be trained on and provided with these scripts for use at any points of contact to
ensure that the core message being conveyed is homogenous, yet allowing for individual tweaking to match individual
personalities.
Based on such information, an automated sales process will then ensue to lead prospects via a pre-defined series of
communications and data requests that will systematically filter these prospects into qualified leads and then assist in the
determination of which of these are ready to purchase immediately as well as identify those with whom contact must be
retained to facilitate a purchase at a later date. Such regular and personalised communication will allow credibility to be built
over a period of time and new contacts to be continually loaded into the system for filtering. Pre- and Post-Purchase
Communications will be vital in order to identify the level of satisfaction of customers in order to ensure that referrals are
obtained from highly satisfied clients. Crucial to this will be the capturing of pertinent information such as level of satisfaction,
overall customer experience and customer recommendations.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 44
Further strategies to assist in building brand awareness include:
Client testimonial page on the website;
Search Engine Optimisation (SEO) and Web Optimisation to ensure high search engine listings;
Defined Complaint and Resolution Policy as well as on-going staff training to empower them to take corrective measures
at time of incidents as well as to define parameters and code of conduct; and
Contact details and personal undertaking by management detailing processes, procedures and promises for the prompt
and personal resolution of any dissatisfaction/complaints.
Initial market penetration, branding and exposure will require both direct-response and conventional advertising to achieve
rapid market share and develop appropriate barriers to entry. Consistent and methodical tracking of the result of each
advertising campaign (through media statistics and the tracking of lead sources) will ensure that such campaigns and choice
of media are focussed on the sole objective of ROI maximisation from such activities. NETLOG GLOBAL FORWARDING will
research the media industry in the target market area to focus on and endeavor to form relationships with credible and
reputable media partners. Media and Communications Companies are always looking for partnerships and most of these can
be utilised at minimal or low cost. NETLOG GLOBAL FORWARDING will seek co-branding initiatives that spread advertising
costs while increasing brand awareness and expanding the organisational foot-print. There are numerous companies within
the target market area that are willing to pay to co-brand, provided you have the right deal/or marketing opportunity for them
in place. NETLOG GLOBAL FORWARDING will explore new and innovative ways to increase online exposure by advertising on
partner websites, search engines, business directories and online newsletters.
NETLOG GLOBAL FORWARDING will use a number of relationships to promote the company. Through participation in
Chambers of Commerce and relevant Business Associations, the company will make contact with key stakeholders across
various industries. Participating in Regional/Provincial Chambers of Commerce will also help the company to get increased
exposure. In every method of communication, the company will constantly reinforce its competitive advantage as depicted
earlier in this business plan.
NETLOG GLOBAL FORWARDING’s product and service portfolio is positioned very carefully. The key message that the
company wishes to convey to its target market is that as a company, it is focused on understanding its customers’ unique
needs and meeting those needs through setting the correct expectations. To provide such a product/service – and attract
ongoing clientele thereby – training is critical, as are the creation of systems, in that the staff members are orientated to the
systems; the entire process will be managed more effectively and more consistent results will be produced this way.
A sincere approach to service delivery and really understanding the true needs of NETLOG GLOBAL FORWARDING’s target
market – as well as any specific product and service related preferences – is the cornerstone of the company’s marketing plan
and approach. Crucial to NETLOG GLOBAL FORWARDING’s marketing and brand positioning efforts will be the providing – and
on-going communication – of a unique value proposition to potential (and past) clients as well as differentiating its
products/services from what the competition is offering.
Marketing Activities
The company’s marketing- and sales programmes will include, but will not be limited to, the following:
1. As common problems/solutions are encountered and solved, a set of Standardised Response Templates for initial
responses will be developed. This will shorten response time and eliminate confusion in providing quick solutions to
routine issues.
2. References to Staff Accomplishments, media write-ups and other public relations articles in on-line, off-line and any
other communication efforts.
3. Use website and Campaign Analytical Technology to track customer website activity, post-click activity, campaign
expenditures and returns to determine the most lucrative and proven ROI-centric efforts and formats that generate above
industry-average returns.
4. Monitor Customer Review Sites to attract new customers as well as to gain unfiltered insights into customer experiences
and immediately address any service or product dissatisfaction issues.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 45
5. NETLOG GLOBAL FORWARDING will ensure congruence with market trends and direction at all times; start to create in-
roads to the market place by making use of Social Media Channels (Facebook, LinkedIn, YouTube, Twitter, Google+,
Pinterest, Instagram, etc.) and platforms that are free and content driven.
6. Word of mouth referrals and Loyalty Programmes to award loyal customers and referral business.
7. Presentations and mailers geared to provide a detailed synopsis of our products and services.
8. Training material and Employee Handbooks that helps every employee deliver our brand message in a consistent manner.
9. Business Development including targeted ‘potential lead’ canvassing and subsequent accounts management
(relationship maintenance); Account Relationships which will open doors to pre-qualified sales opportunities.
10. Sales teams will have Sales Targets and pipe lines to meet their objectives.
11. A Photographic Library of professionally taken photographs to include Directors and senior management publicity shots;
product pack shots; case study photographs and major/current projects.
12. The Logo and “brand” theme will be developed in-house by the company.
13. All Stationery, quotations, invoices, email signatures, Service Level Agreements and other company documentation will
bear the logo and contact particulars of the company.
14. Brochure and Online Company Profile and other direct marketing material.
15. Print media, newsletters, magazines, newspapers and Online Directories.
16. Online marketing campaigns, including Google AdWords and periodic e-newsletters.
17. A Website will be developed by the company and act as an “electronic brochure” and resource site for existing and
potential customers. Our website, featuring a database of products, videos and blogs, research, testimonials, cost benefit
analysis, frequently asked questions and news and events. The website will be used as a tool for our sales team,
consumers (customers), designers and trade partners. The Website will be developed to ensure that it can be easily viewed
and navigated via Mobile Devices.
18. Creating Press Releases about everything linked to the industry and other related issues by posting articles, starting blogs
for various topics that would be of interest and benefit potential customers.
19. Make use of Business Networks, chambers of commerce, social events and functions to build awareness, create
partnerships in the local area (media, business, suppliers, customers, etc.) and form relationships that can be leveraged
in future to assist with branding, positioning and promotion of the company’s products and services.
20. The company will ensure that its brand is visible and easily recognisable in all Electronic Communication, e.g. e-
newsletters, emails, e-marketing, etc. Create a voice for NETLOG GLOBAL FORWARDING in the market-place by
establishing an “opinion” about the status of products and services offered by NETLOG GLOBAL FORWARDING, motivating
the target market to talk, giving them a place to voice anything from complaints to successes.
21. Public Relations efforts in this regard will include:
Contacting and article submissions to newspapers, magazines, trade publications and house publications of large
companies on industry issues to provide them with new and fresh content through the featuring of regional
information, industry information, product/service information, etc. Such published articles may then be included in
the pre-defined communications to provide third party endorsements and boost credibility. Contact information and
Call-to-Action links will then ensure that such enquirers’ contact details are captured for inclusion in the sales
campaigns.
The featuring of a Client Testimonial display page on the website and in our other advertising mediums to showcase
customer experiences and provide third party endorsements for our products and services.
Selective advertisements placed in magazines, industry publications and industry portals will offer incentives
requiring a call to action that will drive traffic either telephonically, to the website or even simply to a contact details
capturing form. This information capturing will then trigger various pre-defined communications that will attempt
to educate prospects about the company’s products and services and the specific benefits they will receive to not
only reduce buying resistance but also involve and engage these potential customers in a meaningful way.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 46
SALES STRATEGY
Customers will be greeted with an enthusiastic and welcoming greeting (whether via phone or in person) and served to meet
the highest standard of satisfaction with the greatest care taken to provide quick and efficient service. NETLOG GLOBAL
FORWARDING will be developing outline scripts to help the sales staff manage inquiries. This will ensure that all incoming
phone calls or visiting customers are dealt with in the same way and meet a high standard. We will encourage people enquiring
about our products/service to give feedback to NETLOG GLOBAL FORWARDING’s on various service level components, which
will include NETLOG GLOBAL FORWARDING’s ability to handle a customer enquiry; the amount of time from the client’s first
enquiry to a successful sale, including repeat purchases; and the client’s reactions to the products/services in terms of whether
it meets their expectations. NETLOG GLOBAL FORWARDING’s strategy for achieving its goals consists of various components,
including but not limited to:
1. Recruit well-trained, enthusiastic sales staff;
2. Portray superior product/service knowledge;
3. Provide high-quality customer service;
4. Create a library of tools/reference materials for clients; and
5. Employees recruited will go through an extensive training program to ensure that they will be able to provide superior
product knowledge in the field of Freight, Logistics and Shipping.
DIGITAL (ONLINE) MARKETING STRATEGY
The cost of generating traffic from Social Media Channels, search engine marketing and Google AdWords is much lower than
traditional media. Search engine marketing has the lowest cost-per-lead and the highest return on investment. Consumers
have begun to use search engines and Internet directories to find local companies. Local search is now bringing together local
consumers with local business. NETLOG GLOBAL FORWARDING will focus on exploiting this opportunity to its full potential.
Through the use of social networking Websites like Facebook and Twitter, the company aims to create powerful networking
tools in order to effectively manage its public relations and communicate to existing and potential clients. Choosing the tools
and ensuring consistency of message is critical when companies utilise social networking channels.
NETLOG GLOBAL FORWARDING will employ the following online marketing channels:
Search Engine Optimisation: Using Google+ and Google AdWords as platforms for potential clients to search for our
products/services. This will create more client enquiries and drive web traffic to our website.
Facebook Advertising: We will use Facebook Paid Advertising to reach potential consumers.
LinkedIn Marketing: We will use both LinkedIn Paid Advertising and LinkedIn Sales Solutions to reach decision makers.
Twitter Marketing: We will use Twitter Paid Advertising as well as post regular, yet relevant ‘tweets’ that will provide
instant connection with prospective customers
Facebook Fan Page: By creating the company’s Fan Page, we will be able to interact with our fans, update information,
create trust and a brand image as well as institute social loyalty programmes and other campaigns.
NETLOG GLOBAL FORWARDING aims to continuously update its interactive Website, which will be linked to the entire main
search engines; prospective clients will be able to access the full scope of NETLOG GLOBAL FORWARDING’s product and service
offering. The marketing message will convey the sense of quality in every picture, every promotion, and every publication.
When one is looking at advertising and marketing methods today, you have to use the latest technology to supplement existing
tried and tested models. For example, make the most of the interactive nature of social media, where their websites are rich,
interactive, have the potential to discover new clients, can be short or long term, and saves the company and their clients
time and money. This does not mean that the current or traditional model does not work and should be discarded.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 47
NETLOG GLOBAL FORWARDING believes that one of the advantages of the new social client acquisition model is the way in
which it flips the communication from a push to a pull system. In the traditional model, advertisers tend to force people to
take notice of their communication message by paying for media space, often reaching a large audience, some of whom have
little or no interest in the content. The pull method, which is evident in the social media model, connects with people to share
the communication message, whilst you could reach a more targeted or niche audience, meaning the message has more
relevance for the receiver.
NETLOG GLOBAL FORWARDING’s Facebook page will be designed and continuously updated to include the company’s
products, services, brand identification, news, etc. The Internet has established itself as the single most important distribution
and marketing channel across most industries. Thus, a focus on ROI-centric marketing formats, like web-based marketing, that
generates above-industry average returns makes intuitive sense to pursue vigorously. Developing a robust and effective
Internet marketing strategy requires not only establishing on-going interactive relationships with our customers, but also
gaining extensive knowledge of our customers and performing more precise customer segmentation.
Key to this will be the engagement of an automated lead generation and relationship-building programme to generate
qualified leads, build and maintain strong relationships, facilitate client updating and database management, sales and referral
tracking, and more personalised communication in an automated and streamlined business process. Such communication will
take the form predominantly of email and SMS text messaging but also facsimile and telephonic communications. Our focus
will be on identifying proven, ROI-centric Internet marketing strategies and formats; launching a comprehensive Internet
Marketing Strategy to reach potential customers and launching a local Internet marketing strategy to reach impulse-buy
customers.
This strategy will look to identify and drive initiatives in the following areas:
1. Employ Strategic Placements among Key Websites: The cost of generating traffic from search engine marketing and
Google AdWords is much lower than traditional media. Search engine marketing has the lowest cost-per-lead and the
highest return on investment. Consumers have begun to use search engines and Internet directories to find local
companies. Local search is now bringing together local consumers with local business. NETLOG GLOBAL FORWARDING
will focus on exploiting this opportunity to its full potential. Through the use of social networking Websites like Facebook
and Twitter, the company aims to create powerful networking tools in order to effectively manage its public relations and
communicate to existing and potential clients. Choosing the tools and ensuring consistency of message is critical when
companies utilise social networking channels.
NETLOG GLOBAL FORWARDING aims to continuously update its interactive Website, which will be linked to the entire
main search engines; prospective clients will be able to access the full scope of NETLOG GLOBAL FORWARDING’s product
and service offering. The marketing message has to convey the sense of quality in every picture, every promotion, and
every publication. The extraordinary popularity of Facebook in South Africa, for example, has created a revolution in
social networking, and its use is quickly expanding to supplement business functions such as brand building, new client
attainment and social loyalty. Research has shown that a number of companies are steering away from traditional print
media advertising because it is more costly and has a slower response time than electronic media, which now expands to
electronic social media. The ability of this new generation networking tool means that users can share quality content
and information more rapidly and effectively than any other medium. When one is looking at advertising and marketing
methods today, you have to use the latest technology to supplement existing tried and tested models. For example,
make the most of the interactive nature of social media, where their websites are rich, interactive, have the potential to
discover new clients, can be short or long term, and saves the company and their clients time and money.
This does not mean that the current or traditional model does not work and should be discarded. NETLOG GLOBAL
FORWARDING believes that one of the advantages of the new social client acquisition model is the way in which it flips
the communication from a push to a pull system. In the traditional model, advertisers tend to force people to take notice
of their communication message by paying for media space, often reaching a large audience, some of whom have little
or no interest in the content. The pull method, which is evident in the social media model, connects with people to share
the communication message, whilst you could reach a more targeted or niche audience, meaning the message has more
relevance for the receiver. NETLOG GLOBAL FORWARDING’s Facebook page will be designed and continuously updated
to include the company’s products, services, brand identification, news, etc.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 48
2. E-mail: Leveraging email databases are a critical component of future marketing strategies. Using viral campaigns with
key messages will provide NETLOG GLOBAL FORWARDING with the ability to gain maximum exposure. E-mails need to
move from the plain and boring to rich and useful.
Subscription lists and email capture strategy.
On-going marketing to own opt-in subscriber list.
Email sponsorships on email newsletters to important customer segments.
Referral incentive promotions, loyalty programme and voucher system.
3. Social Networking: The Company aims to create powerful networking tools in order to effectively manage its public
relations and communicate to existing and potential clients. Choosing the tools and ensuring consistency of the message
is critical when NETLOG GLOBAL FORWARDING will utilise social networking platforms such as Facebook and Twitter.
4. Interactive Website and PPC Campaigns: Linked to all the main search engines; clients will be able to access the full scope
of NETLOG GLOBAL FORWARDING’s product and service offering. The use of Google AdWords and the implementation
of a formal SEO campaign are vital to ensure extreme exposure of the company.
Implement a system for fresh website content creation;
Search engine optimisation and listing;
Different landing pages for various online campaigns;
Organic/natural listings;
Paid inclusion;
Local search marketing;
Mobile search;
Track post-impression and post click activity;
Track clicks, enquiries and revenues from each campaign; and
Adjust marketing spend based on ROI.
5. Advertorials: In all relevant industry publications in the target market, followed by high frequency awareness
“maintenance” advertising (especially during the establishment phase of the business).
6. Publications and Press Office: This will include fortnightly company newsletters; the main purpose being the
establishment and building of brand awareness across the target market.
7. Service Information: Via monthly newsletters to procurement, brand and marketing managers, and other key
stakeholders and decision makers across the target market.
COMMUNICATION STRATEGY
Given a wide range of customer interests and motivations, communication must appeal across audiences. A strong
communication strategy to be implemented by NETLOG GLOBAL FORWARDING conveys the importance of its product and
service offering as well as opportunities for initiative and engagement. Communication that resonates across all target market
audiences is important, but to be compelling and sustaining, communication must also engage the senses and needs of
individual target groups with specific messages, information, and tools.
Tactics:
1. Develop an integrated, professional public relations campaign;
2. Increase overall knowledge of NETLOG GLOBAL FORWARDING‘s product and service portfolio, technology, manufacturing
process and business potential;
3. Engage in advocacy opportunities related to Trade, Freight, Logistics and Shipping; and
4. Build coalitions with policymakers at the local, provincial and national level, whether it is private or governmental.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 49
Based on the overall marketing strategy, NETLOG GLOBAL FORWARDING’s senior management will liaise with a professional
PR Company to compile and implement a formal communication and PR strategy. The process would involve the following:
External Activities:
Industry Analysis.
Competitor Analysis.
Media Audit.
Internal Activities:
Director Interactions.
Business Strategy Analysis.
The objective of the above activities is to ensure that all stakeholders understand the business and the environment in which
NETLOG GLOBAL FORWARDING will operate. In addition, the parties would agree on deliverables, action plans and timing.
This process is vital to the success of the campaign as it will outline the roles and responsibilities, the positioning and messaging
to ensure that the brand profile that is built is in line with the NETLOG GLOBAL FORWARDING’s business strategy.
Goals:
1. Develop an effective communication and public relations strategy;
2. Consolidate messaging in line with the overall campaign;
3. Build effective media relationships that will provide the platform to build the profile; and
4. Manage the reputation and profile of the business and its Directors.
In addition to the strategy development, the PR Company’s aim would be to start the profile building initiatives in preparation
for the official launch of the NETLOG GLOBAL FORWARDING brand. Activities will include:
Media preparation;
Meet the media initiatives;
Identify suitable communication platforms and marketing initiatives;
Media training of Directors on media interviews, interactions, etc.;
Editorial programme;
Develop editorial angles/messaging;
Aim content at driving profiles of the Directors and general business topics;
Strategically focused articles around the NETLOG GLOBAL FORWARDING brand;
Detailed articles around the NETLOG GLOBAL FORWARDING brand, product and service portfolio;
Key opinion pieces/feature articles;
Advertorials in selected major platforms;
Media invites;
Media packs launching the company; and
Sponsorship of strategic business initiatives that will promote customer buy-in.
2016 © All Rights Reserved. BUSINESS PLAN & FINANCIAL MODEL prepared for Netlog Global Forwarding by SHEHAN SENEVIRATNE P a g e | 50
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