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Small manufacturing and retail business wanting to grow

Member: MandM-Indoz
Located in: Indonesia

Business Details

Business Stage:
  • Established (ready for expansion)
Amount Required:
  • $200000.00
Investment Types:
  • Debt/loan financing
  • Equity/shares
Reasons:
  • Sales & marketing
  • General expansion of business
  • Equipment/inventory purchase
  • Working capital
Industries:
  • Building & Construction
  • Retail Trade & Shops
  • Wholesale Trade

Short Description

PROJECT 2014
M & M INDOZ
Michael Sequenza (CEO) (Australian / British)
Masudah (Manager) (Indonesian)

Web Site: http://squeezy8.wix.com/mandm-indoz

After 2 years of initial investment of over 100,000 USD building house and warnet, also buying and preparing land for the buildings which house the building material shop and batako making area, I feel confident that now is the time to push the business further forward by another investment in stock and machinery. In particular the batako and cement products manufacturing side, where the profit is much larger (60%)
A full 3 year business plan is available through the web site, or contact direct

Executive Summary

M & M Indoz
Introduction

The company M & M Indoz is a registered company in Indonesia situated between the 2 cities of Surabaya and Malang. Having been in operation for 2 years servicing mainly the large local community as a building materials retail outlet. The first year of operation was a slow progress to establish the business within an area which has a growing demand for all types of building materials. Due to the demographics of the area the profit margins are lower than normal and in reality it just pays its way. So with further market research and knowledge we decided to go into the manufacturing of cement products as well, which are used within the building industry. These types of products have a net profit of 80 to 100% as the raw materials are inexpensive and labour costs are low.

The Market
Indonesia is one of the progressive Asian countries experiencing a building boom as more and more of the population are employed due to large factories opening up in the area. This gives the financial opportunity for people to either build a new residence or upgrade their present one. Now is the time to expand or start a business as the labour and raw material costs are low. The main problem for most people, in particular a foreign investor, is the documentation and administration that is required. In particular the time it takes to have it processed through government channels. Being a foreigner married to a well connected Indonesian family does assist one in these areas
.
The Services
We are now well established as a business that gives quality service with quality products and free local delivery. With many local builders now sourcing most of their requirements from M & M Indoz. This also goes for those individuals who are either building new or upgrading present homes.
The manufacturing side is expanding quicker than we can make, as at present all or most of the work is done manually. The quality of our Batako (concrete building blocks) is of A1 class, but we can still be price competitive as that is a driving factor in this area.
The Management
Myself being a mature adult and CEO of M & M Indoz having spent most of my working life in the UK and going to Australia in 2001, have extensive experience of business and in particular marketing. After working in the retail field and also having my own retail businesses, have gained a lot of knowledge and experience of this type of operation. (Still learning)
Masudah who is my wife and manager is a local Indonesian and belongs to one of the largest families around. Although her knowledge in running a business was almost nil 2 years ago she has listened and learnt very quickly. The one advantage is the contacts she has which greatly helps with net working and of course the ever frustrating officialdom.
Present staff, which are all locals, stands at 3 permanent and 3 casual.

Financials
Since the start of manufacturing Batako the turnover and net profit has risen. Whilst the business before was paying its way, but leaving very little for investment, it now has started to produce a small net profit which is the reason for applying for further investment to push the business to higher profit levels. At present I take no income from the business as I have a UK pension and also run a Warnet (Internet Café) from the lower floor of the new house.

My initial investment here which included the buying of land, and building the new house and business premises, was 150,000 USD.

The total investment required is 200,000 USD but to achieve the immediate aim an investment of 80,000 USD with the rest at a later stage of the expansion project. The investment can either be as a loan to be paid back with agreed interest, from the cash flow of the business within five years, or as a 25% partnership. A combination of this is possible and can be subject to negotiation.

Capital required ------------------------------------- 800,000,000 rph
Consolidation of Vehicle Loan ---------------------- 97,000,000 rph
Stock and materials --------------------------------- 170,000,000 rph
Machinery and building extension ---------------- 200,000,000 rph
Running costs for the next 6 to 12 months ------ 130,000,000 rph
Backup Funds ---------------------------------------- 150,000,000 rph
Administration costs -------------------------------- 23,000,000 rph
Total 770,000,000 rph
USD 80,000

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