tiểu luận quản trị tài chính investment project HADIGO STORE

What we sell are eco friendly products, and at our first stage, we focus on launching and improving our first product line: Tomato Lady.. After 1 year of operating, we plan to extend the

I A DESCRIPTION OF THE PROJECT

1 Preface

Pollution problem has been no longer strange to any of us We all know that hundreds of “garbage patch” has been created all over the world, especially along the coast, on the floor of the ocean and underneath the surface We also know that it takes at least 400 years to disintegrate a plastic item, like packaging and straw which is often used for very short period before being discarded It is a fact that within 100 years since the Second Industrial Revolution happened, about 8.3 billion tons of plastic garbage has been discharged to the planet – an amount equals to 25,000 Empire State Buildings

in New York, or a billion elephants

We definitely do not want to live on a Planet Plastic so it is high time we start replacing plastic by other type of material, using products which are made from environmentally friendly ingredients This is the idea driving us to establish “HadiGo” – a green store where you can make some simple changes with eco friendly products that can have big impacts on your environmental footprint What we sell are eco friendly products, and at our first stage, we focus on launching and improving our first product line: Tomato Lady After 1 year of operating, we plan to extend the diversity of our products

by providing more non-plastic and eco-friendly products to customers, from plates, bowls, take away containers and cups made from bamboo and sugarcane, which can be easily disintegrated; glass and metal straws which can be reused for a long time, to designed tote bags which can be convenient, fashionable and environmental - friendly

Ultimately, our aim is not only to sell eco-friendly products, but also to create a

‘green’ lifestyle, to give a green solution to our beloved customers We hope that the waste water from sinks, toilets, drains of each small family will become cleaner, reduce environmental pressure for polluted rivers and streams, and increase balance regenerated ability We would like to accompany and cooperate with individuals, social organizations, state agencies to join hands in restoring our harmony with nature

We believe that labor must be associated with the joy of life and the joy of creativity We aim towards product’s true quality Each and every product makes love and knowledge blossom form within our growers, researchers, producers, distributors, and consumers

2 Mission Statement

From the origin of idea, we have devoted our energy and our competencies solely to one business: environment This business is worth in meaning, as it enables all individuals to realise how important of the planet to themselves, and turn this awareness into action by saving the planet in every single activity

in their daily life HadiGo has set itself the mission of offering all women and men in Vietnam sustainable products which are totally made of eco-friendly materials in terms of quality, efficacy and safety by meeting the infinite diversity of daily needs and desires all over the country We not only hope to gain profits for our stakeholders through efforts of running this business, but more than that, we also strive for giving our customers creative, discarding plastic items, and a great experience in changing into a green lifestyle

3 Description of “Tomato Lady” Products

Tomato is a micronutrient-rich product that is extremely available in Vietnam After making fermented, Tomato is left with residue and be ready to mix with microorganisms to create fertilizer that 100% in harmony with the environment

1 Fragrance: A product that uses natural essential oils for a gentle, delicate scent

2 Cleaning by microbiological fermentation instead of surface abrasion

3 Support deodorizing, sterilizing, especially adding anti-fungal ingredients

Because it is made from fermented microbiological herbs, the waste water from the washbasin, the washing machine or toilet will go out harmlessly If it

is used by many households, the microorganisms will clean public sewers, wastewater will be cleaner, eliminate odors

The product does not only clean during usage but only continue to clean clothes, floors and appliances after use because of the ongoing fermentation mechanism

TOMATO LADY consists of 6 products:

● Ms Tomato hand washer

● Ms Tomato dish washer

● Ms Tomato floor cleanser

● Ms Tomato cloth washing (soak 30-60 minutes before washing)

● Ms Tomato Super Clean (clean multi-purpose appliances)

● Ms Tomato Toilet Brush

II SWOT ANALYSIS

Table 1: SWOT

● High-quality and well-designed

eco-friendly products

● Having a wide variety of product line

that can satisfy the needs of different

customer segments

● We have ourselves a sales team and

customer care They are loyal

customers, they believe in us, believe

in the services we provide That is the

foundation, the system makes a

difference

● Being in the initial introduction phase; taking time and effort to educate target customers to change their consumption habits

● Haven't received strong brand recognition and reputation yet

● Have limited budget, service lines, management experiences and human resources

● Consumers, especially young people,

are taking into account environmental

protection seriously and are aware of

how their own actions affect the

environment

● As income and consumer

consciousness improve, green

consumption trends are becoming

more common in developing

countries, particularly in Vietnam

potential in the current time

Only few businesses jump into

eco-friendly products sector → a

promisingly opportunity of doing

● Large businesses like Unilever can launch similar products or launch products that are less harmful to human health and the environment They can also enter green manufacturing Or giants may find ways to destroy small businesses

● Once green products have become popular in supermarkets and stores all over the country, it is difficult for our businesses to sell such products

● Competition with many businesses provides similar services but they have more resources

business in green products

stores

III MARKETING MIX

1 Product

What we bring to the customer is not products, we bring green solution to the customers in which its nature is services However, green solutions do not meet the customers’ need, so our products must have good quality and meet the customer’s needs and satisfaction

We innovate everyday, we change, we create to develop our products and services to be more perfect And diversification of them is essential to satisfy the customers from low level to the high level

2 Price

We set the price as listed on the market by manufacturers However, we would have discount campaigns and incentive policies to attract customers

3 Place

Products are sold on the ecommerce platform, stores and direct sales system Customers can enjoy shopping with just a smartphone and access the store's address on e-commerce sites Customers can shop directly at the store And especially, we have a sales team specializing in distributing, selling products and serving customers to each household

4 Promote

Table 2: Promotion Plan

Objectives Build trust and win customers'

trust Make our market construction and reach potential customers Building a sales system and creating a loyal customer database.

Develop businesses and

market.

Expand business scale, establish facilities across provinces and cities nationwide and lead the market in the distribution industry, provide green products, green solutions.

2022

From 2023 to 2030

presences.

communicating content.

● Establish and promote sales teams.

● Build and improve customer services.

● Diversify products and services portfolio

● Develop 3 business units in Hanoi

● Develop the sale teams both in quantity and quality.

● Promote marketing, direct and indirect communication through direct sale team, advertising on e-commerce

interfaces.

● Launch 10, 20, 50 and

100 branches throughout the country.

● Clone sales teams.

● Promote communication and marketing networks.

IV FINANCIAL ANALYSIS

1 Assumption

The financial plan depends on important assumptions, most of which are shown in the following table as annual figures The key underlying assumptions are:

Table 3: General Assumption

● Based on the average index of Vietnamese retail industry provided by Viet Capital Securities (VCSC) in 12/2019 (31,18%), we assume that cost

of equity of our project would be 50%, which is marked up 18.82% in order to cover our risk

● A slow growth economy, without great recession

● Growth and cash flows will be moderate

● Future cash investments will use NPV projections to achieve maximum return with limited risk

● There is no inflation or any changes in interest rates, or inflation is fully anticipated This is a reasonable initial assumption, and it can be modified

● There is an increasing interest of customers when we launch new project

● Our sales team can work effectively with a specified sales growth rate

● Our company will remain in business for the foreseeable future

● We assume our fiscal year starts from January 1st 2020

● All the money figures are in Thousands VND (1,000 VND)

● Our financial forecasting would be carried out in the monthly basic for the first year, and then annually for the next two years

For others specific assumptions, we will show them in each related part below

2 Initial Investment

At a very first stage, we have already made use of our personal venue as a warehouse, therefore minimizing the storage cost We have to invest in tools for management, in this case we will purchase a laptop for the CEO, which would be the long term asset of our company This asset would be depreciated each year using straight line method, without salvage value

We would contract an outsourcing service in constructing our brand foundation This package will consist of logo design, webshop, sales management software, etc

Table 4: Initial Investment

Assets Value Lifetime Depreciation per year

Brand Foundation

Package

3 Fund Raising

financial analysis assume that we use 100% equity to finance this project This

is a long-term project, which is reevaluated after every three years

4 Incremental Earnings Forecast

a Revenue

Our project has only one source of revenue, which comes from selling products (we act as a wholesaler)

According to our actual business results in the first month, our revenue is mainly from performance of the sales team In the first launched month this team has 5 people, each salesman has an average of 30 products in sales

We assume that there would be 2 new salesman hired each month, and the sales growth rate would be stable as describing in the table:

Table 5: Direct sales (Product)

No of product through

direct sales

In addition to build our sales team, we would participate in about 2 events (start up exhibition, competition, fair, etc) each month, which mostly free to register, in order to promote our brand image to the customers Sales from those kind of events would increase the number of products sold by 20 units each month

Table 6: Cumulative product growth

No of product through

event

No of product through

direct sales

We assume that the number of products sold would be counted in the whole number at the end of the month The average price per product in the first month is nearly 70,000 VND Because we plan to keep the same product portfolio in the first six months, and then broaden our product range in the next 2-year period So, the average price per product would be 70,000 VND and 150,000 VND in the two periods, respectively

Also, we assume that revenue rowth rate in 2nd year nearly equal to the average growth rate of the VN retail industry in 2018 - 11% The revenue growth rate of the 3rd year will be 11% plus 30% due to expansion Thus, the estimated revenues would be as the following table:

b Cost of Good Sold

Due to the nature of the wholesaler in general and our project in particular,

cost of goods sold for this project is the cost of purchasing inventory

Table 8: Supplier’s Credit Term

Liter 100 - 300 300 - 500 500 - 1000 > 1000

We apply our current credit term of Co Ca Chua products to assume COGS

rate of the first six months After we broaden our product portfolio, the credit

term could be higher, up to 55% for the next six months, and would go down

to 50% in the 2nd and 3rd year due to our economies of scale

The COGS would be added 1% of delivery cost Thus, the COGS for the

three-year period would be as the table below:

No of product 170 300 452 654 919 1,264 1,571 1,927 2,338 2,813 3,360 3,987 Average price per product 70 70 70 70 70 70 150 150 150 150 150 150

Revenue 11,900 21,000 31,640 45,780 64,330 88,480 235,650 289,050 350,700 421,950 504,000 598,050

No of product 4,426 4,426 4,426 4,426 4,426 4,426 4,426 4,426 4,426 4,426 4,426 4,426 Average price per product 150 150 150 150 150 150 150 150 150 150 150 150

Revenue 663,836 663,836 663,836 663,836 663,836 663,836 663,836 663,836 663,836 663,836 663,836 663,836

No of product 6,240 6,240 6,240 6,240 6,240 6,240 6,240 6,240 6,240 6,240 6,240 6,240 Average price per product 150 150 150 150 150 150 150 150 150 150 150 150

Revenue 936,008 936,008 936,008 936,008 936,008 936,008 936,008 936,008 936,008 936,008 936,008 936,008

Year 1

Year 2

Year 3

Table 7: Estimated Revenues

c Expenses

We plan to do business mainly online and through our sales team in the first

year After that, we intend to invest in a physical store in the 2nd year and

scale up the business model the year after Therefore, our expenses for the

next 3-year period would be shown in the following parts:

● Salaries and Wages

Salaries of sales team still extract from the revenue and the commision rate is

20% for every product, the fixed wage is 1.000.000 VND per salesman We do

not have to pay shopkeeper wages until we open physical store in the 2nd

year

We assume that our co-founder team (3 people) would be in charge of

marketing (coordinator, content writer, designer), operation, finance and

management and receive salaries for those tasks

No of product 170 300 452 654 919 1,264 1,571 1,927 2,338 2,813 3,360 3,987 Revenue 11,900 21,000 31,640 45,780 64,330 88,480 235,650 289,050 350,700 421,950 504,000 598,050 COGS rate 66% 61% 61% 56% 56% 46% 56% 56% 54% 54% 54% 54%

COGS 7,854 12,810 19,300 25,637 36,025 40,701 131,964 161,868 189,378 227,853 272,160 322,947

No of product 4,426 4,426 4,426 4,426 4,426 4,426 4,426 4,426 4,426 4,426 4,426 4,426 Revenue 663,836 663,836 663,836 663,836 663,836 663,836 663,836 663,836 663,836 663,836 663,836 663,836 COGS rate 51% 51% 51% 51% 51% 51% 51% 51% 51% 51% 51% 51%

COGS 338,556 338,556 338,556 338,556 338,556 338,556 338,556 338,556 338,556 338,556 338,556 338,556

No of product 4,912 4,912 4,912 4,912 4,912 4,912 4,912 4,912 4,912 4,912 4,912 4,912 Revenue 936,008 936,008 936,008 936,008 936,008 936,008 936,008 936,008 936,008 936,008 936,008 936,008 COGS rate 51% 51% 51% 51% 51% 51% 51% 51% 51% 51% 51% 51%

COGS 477,364 477,364 477,364 477,364 477,364 477,364 477,364 477,364 477,364 477,364 477,364 477,364

Year 3 Year 2 Year 1

Commision rate 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% Salesmen salaries 7,380 11,200 15,328 20,156 25,866 32,696 64,130 76,810 91,140 107,390 125,800 146,610 Founder salaries 4,500 4,500 4,500 4,500 4,500 4,500 9,000 9,000 9,000 9,000 9,000 9,000

-Total 11,880 15,700 19,828 24,656 30,366 37,196 73,130 85,810 100,140 116,390 134,800 155,610

Commision rate 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% Salesmen salaries 162,737 162,737 162,737 162,737 162,737 162,737 162,737 162,737 162,737 162,737 162,737 162,737 Founder salaries 9,990 9,990 9,990 9,990 9,990 9,990 9,990 9,990 9,990 9,990 9,990 9,990 Shopkeeper 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000

Total 180,727 180,727 180,727 180,727 180,727 180,727 180,727 180,727 180,727 180,727 180,727 180,727

Commision rate 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% Salesmen salaries 229,459 229,459 229,459 229,459 229,459 229,459 229,459 229,459 229,459 229,459 229,459 229,459 Founder salaries 14,086 14,086 14,086 14,086 14,086 14,086 14,086 14,086 14,086 14,086 14,086 14,086

Year 1

Year 2

Year 3

Table 9: Cost of Goods Sold

Table 10: Salaries and Wages