1.

0 Business Reporting Objectives

In this report, our company will do reporting on all part of our business. It includes
the vision and mission of our business, marketing plan, financial aspect, and our
business operation. The objectives of this report are to have an overview on our
business performance and find out the good and weak points of our business. After
that, our company can get the ways to improve it. This is a good way in order to make
our company to have the space to improve and make it good in all the ways.

2.0 Background

2.1 Vision

Our vision is to kindle a passion for clay art and provide a community for that passion
to flourish. Such passion prepares the community for the creation, practice, study,
criticism and teaching of this art.Our company seeks to deepen the understanding of
clay arts, to expand audiences, and to enrich the quality of life in our community.

2.2 Mission

The mission of Clay It Yourself is to accomplish its vision by providingaconducive

environment to create interest in UPM students towards clay art, so as to help them in
establishing their own business with their basic knowledge of clay art.Our missions
include:

a) To make, distribute and sell the finest quality clay products that satisfy our
customers and highly competitive among the other competitors.
b) To support the creative diversity of UPM students and share in the development of
their artistic potential by offering a stimulating space for practiceand educational
opportunities with personal freedom to explore and experiment.
c) To make clay as an art form accessible, convenient and fun where UPM students
can gain another alternative way of relaxation from the stressful university life.

2.3 Marketing Objective

To develop interest in UPM students towards clay art by giving basic clay art lessons
for at least 20 students and selling 65 ready-made productswithin 2 weeks. The sales
of at least 15 clay art packages are also meant to ensure the continuous interest of

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students towards clay art. The basic knowledge and materials sold will help in
providing them a basis in establishing their own business based on clay art in future.

2.4Company Logo

This is our company’s logo. It was designed by of our members.

Meaning of the logo

a) Colours of logo
The colours red, yellow and green are the basic colours of soft clay to make soft
clay art. With these colours, we are able to make colourful and creative crafts. The
same goes to our company that we always bear in mind our vision of starting this
business and continue to develop our business successfully.

b) Words
Our company’s name is Clay It Yourself. We use this name is because all the
crafts are handmade which brings a meaning of DIY (Do It Yourself). Instead, we
change the “Do” to “Clay” since the main material we use is soft clay.

c) Symbols
Handprints and heart-shape are used for our logo. Handprints symbolize that the
crafts are all handmade and learners picking our lessons need to make soft clay
crafts with their own hands. The logo also brings up our vision that we wish to
shape the passion of customers towards clay art. The heart shape symbolizes the
passion of heart.

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3.0 Business Formation and Capital Structure

Company Name : Clay It Yourself Sdn. Bhd

Company Address : Foyer Library, UPM

Contact Number : Mr. Chang Man Keat (016-2433973)

Ms. Grace Ang (017-3323281)

Form of Business : Partnership

Type of Business : Merchandising, Manufacturing and Services Business

Date of Business : 6th to 9th November and 20th to 22th November 2012

Capital : RM300.00

Website : https://www.facebook.com/ClayItYourself

Shareholder : Grace AngHui En

Cheong WaiWai

Chang Man Keat

Ong Chai Waa

Kek Ying Fen

Tan Yih Bing

Lai Wan Xin

Lim Hui Yee

Loo Ai Lee

Ng Mei Yi

Note: Each of the shareholders contributes RM30 for the business.

Capital = RM30 X 10 shareholders = RM300

100% syer divide will be equally (10 shareholders) = each shareholder will have
10% syer

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4.0Aspects of Business Administration and Management

4.1 Establishment of Organization

Organization structure is particularly important for establish an organization. It is

made of the different elements that create a flow of communication and ideas
throughout an organization. The communication structure of an organization helps
ideas and information to flow from one department to the next. Each of these forms of
organizational structure serves a function that allows the company to move forward
and continue to grow.

Organization structure comes in one of three types which are classical,

functional, and divisional or matrix. In our organization, we use functional structure
as our structure of organization. With functional structure, our organization has
divides employees into different department based on their job function. It has the
advantage of clear lines of authority, and allows each employee to concentrate on
their particular mission. All employees are united and communicate with one another
in order to accomplish a certain task within the require periods, with quality and with
quantities.

Our organization has three departments which they are finance department,
marketing & sales department, and production department. These three departments
are guiding by President and Deputy President, and it is also helped by secretary. In
finance department, we have financial manager and accountant. In marketing & sales
department, we have marketing manager, market analyst and sales manager. In
production department, we have production manager and art production artist. These
three departments will work together and achieve the goal of our organization.

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 4.2 Clay It Yourself SdnBhd Organization Chart

President
Chang Man Keat

Deputy President
Tan Yih Bing
Secretary
Grace AngHui En

Finance Marketing& Sales Production

Department Department Department

Production Manager
Financial Manager Marketing Manager
Loo Ai Lee Ng Mei Yi
Kek Ying Fen

Accountant Marketing Analyst Art Production Artist

Lim Hui Yee Ong Chai Waa Lai Wan Xin

Sales Manager
Cheong WaiWai
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4.2.1 President

Name: Chang Man Keat

Highest Education: STPM

Phone Number: 016-2433973

E-mail Address: skydestiny_@hotmail.com

Responsibility:

· Creating, communicating, and implementing the business’s vision, mission,

and overall direction.
· Leading, guiding, directing, and evaluating the work of other executive leaders
including vice president, managers, and directors.
· Formulating and implementing the strategic plan that guides the direction of
business.
· Forming, staffing, guiding, leading, and managing business sufficient to
accomplish the president’s responsibilities and the strategic plan of business.
· Evaluating the success of business.
· Maintaining awareness of the external and internal competitive landscape,
customers, markets, and standards.

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4.2.2 Deputy President

Name: Tan Yih Bing

Highest Education: STPM

Phone Number: 016-2939228

E-mail Address:yihbing_tan@hotmail.com

Responsibilities:

· Take up the role of president and implement all the responsibilities of

president when president is absent.
· Creating, communicating, and implementing the business’s vision, mission,
and overall direction.
· Leading, guiding, directing, and evaluating the work of other executive leaders
including vice president, managers, and directors.
· Formulating and implementing the strategic plan that guides the direction of
business.
· Forming, staffing, guiding, leading, and managing business sufficient to
accomplish the president’s responsibilities and the strategic plan of business.
· Evaluating the success of business.
· Maintaining awareness of the external and internal competitive landscape,
customers, markets, and standards.

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4.2.3 Secretary

Name: Grace AngHui En

Highest Education: STPM

Phone Number: 017-3323281

E-mail Address: grace_ang_311@hotmail.com

Responsibilities:

· Maintain paper and electronic filing systems for records and messages.
· Route and distribute incoming email.
· Answer routine email.
· Reply and attach files to incoming messages.
· Correct spelling and grammar to ensure accuracy.
· Use computers for spread sheet, word processing, database management, and
other applications.
· Complete forms in accordance with company procedures.

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4.2.4 Finance Department

4.2.4.1 Financial Manager

Name: Loo Ai Lee

Highest Education: STPM

Phone Number: 017-7976830

E-mail Address: ailee_loo@hotmail.com

Responsibilities:

· Prepare financial statements, business activity reports, and forecasts.

· Monitor financial details to ensure that legal requirements are met.
· Supervise employees who do financial reporting and budgeting
· Review company financial reports and seek ways to reduce costs.
· Analyse market trends to find opportunities for expansion.
· Help management make financial decisions.

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4.2.4.2 Accountant

Name: Lim Hui Yee

Highest Education: STPM

Phone Number: 016-6319904

E-mail Address: yee.hy@live.com

Responsibilities:

· Examine financial statements to be sure that they are accurate and comply
with laws and regulations
· Inspect account books and accounting systems for efficiency and use of
accepted accounting procedures.
· Organize and maintain financial records.
· Assess financial operations and make best-practices recommendations to
management.
· Suggest ways to reduce costs, enhance revenues, and improve profits.

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4.2.5 Marketing & Sales Department

4.2.5.1 Marketing Manager

Name: Ng Mei Yi

Highest Education: STPM

Phone Number: 016-9228572

E-mail Address: mandying_1211@hotmail.com

Responsibilities:

· Discuss topics such as contracts, selection of advertising media, or products to

be advertised.
· Gather and organize information to plan advertising campaigns.
· Plan the advertising, including which media to advertise in, such as print and
online.
· Inspect layouts, which are sketches and plans for an advertisement.
· Initiate market research studies and analyse findings.
· Develop pricing strategies for products to be marketed, balancing the goals of
business with customer satisfaction.

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4.2.5.2 Marketing Analyst

Name: Ong Chai Waa

Highest Education: STPM

Phone Number: 017-3628653

E-mail Address: nicole_aries@hotmail.com

Responsibilities:

· Monitor and forecast marketing and sales trends.

· Measure the effectiveness of marketing programs and strategies
· Devise and evaluate methods for collecting data, such as questionnaires.
· Gather data about consumers and market conditions.
· Convert complex data and findings into understandable graphs.
· Prepare reports and present to management.

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4.2.5.3 Sales Manager

Name: Cheong WaiWai

Highest Education: STPM

Phone Number: 014-3402638

E-mail Address: mickiemoe@hotmail.com

Responsibilities:

· Resolve customer complaints regarding sales and service.

· Prepare budgets and approve budget expenditures.
· Monitor customer preferences to determine the focus of sales efforts.
· Project sales and determine the profitability of products and services.
· Determine discount rates and special pricing plans.

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4.2.6 Production Department

4.2.6.1 Production Manager

Name: Kek Ying Fen

Highest Education: STPM

Phone Number: 017-6069967

E-mail Address: kekyingfen@gmail.com

Responsibilities:

· Ensure that production stays on schedule and within budget.

· Monitor the production to ensure it meet performance and safety requirements.
· Create ways to make the production process more efficient.
· Determine whether new machines are needed.
· Fix any production problems that may arise.

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4.2.6.2 Art Production Artist

Name: Lai Wan Xin

Highest Education: STPM

Phone Number: 012-5033660

E-mail Address: yuki.laiwanxin@gmail.com

Responsibilities:

· Develop creative ideas or new methods for making art.

· Create sketches and templates for making art.
· Select which materials to use on the basis of colour, texture, strength, and
other qualities.
· Process materials by shaping and joining.
· Use visual elements, such as composition, colour, space, and perspective, to
produce desired artistic effects.

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5.0 Aspects of Business Operational

From the business operational aspect, our company, Clay It Yourself, has decided to
venture into three types of business, which are merchandising, manufacturing and
services business respectively.

5.1 Purchasing Process for Merchandising Business

For our merchandising business, we are planning to merchandise 15 units of clay art
packages, which consist of an ice-cream stick and 3 different coloured clays. At first,
the purchase of 3 packets of clay of different colours from our supplier, ART
FRIEND, will cost us RM39.00. The next purchase is 15 units of ice-cream sticks
from our supplier, PenjilidBukuAlatulisFotocopy Jaya, which cost us RM1.17. In
addition, we purchase 45 units of zipper plastic from Syarikat Perniagaan Wei Yoong
with the cost of RM1.75. Lastly, we will buy an officer receipt book which costs
RM1.30. Hence, the total cost for the purchase of all materials is expected to come to
a sum of RM43.22. With the expectation of merchandising 15 units of clay art
packages, the cost per unit would be RM2.79. The complete process of merchandising
begins with the purchase of raw materials, proceeding on to the packaging of 3
different coloured clays and an ice-cream stick into separated zipper plastic. The
zipper plastic with its contents will then be sold as our merchandised product.

Ù Clay (Raw material)

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5.2 Production Process for Manufacturing Business

For our manufacturing business, our company plans to produce a total of 65 units of
ready-made product as our clay art products. Our raw materials needed to produce
ready-made product are clay, ice-cream sticks, ribbon, marker pen, silver pen, UHU
glue and glitter glue. The raw materials, which include ice-cream sticks, ribbon, glitter
glue, marker pen, silver pen and UHU gum, will be purchased in various local
stationery shops, such as PenjilidBukuAlatulisFotocopy Jaya, Summer Flora and
Kraf, and others depending on the price offered. As for the clay, we will purchase 4
different packets of different colours from our supplier, ART FRIEND at a price of
RM13 for each pack. The total expected expense for the raw materials are RM77.07.
Other expenses which include receipt book, publicity fees (flyer and poster),
transportation fees and wages are expected to be RM48.10. Hence, the calculation
comes to a total of RM125.67 for expenses and the production of 65 units of ready-
made product will cost RM1.93 for each unit.

ÙReady-made Product(Finished product)

The basic steps involved in the production of ready-made product are as follow:

i. Preparation of raw materials needed, which are clay, ice-cream sticks, ribbon,
marker pen, silver pen, UHU glue and glitter glue.
ii. Creating the base for ready-made product by decorating the ice-cream sticks
with silver ribbon.

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 iii. Molding clay into specific shapes and sizes to form the main decoration for
the ready-made product.
iv. Glue the clay art onto the base to complete the ready-made productas a
finished clay art product.
v. (optional) Short messages can be written on the ready-made productfor
personalization purposes.

An example of steps in creating a ready-made productwith an orange rose as the main

clay art decoration is:

1. Firstly, prepare all the materials needed for the

production of ready-made product, such as clay, ice-
cream sticks, ribbon, UHU glue and glitter glue.

2. Create the base for ready-made productby decorating

the ice-cream sticks with silver ribbon. The silver
ribbon is taped onto both ends of the ice-cream stick
with UHU glue.

3. With that, the base part for the ready-made productis

completed.

4. The next step is to create the rose from a small clump

of orange coloured clay. First, take a small pinch from
the orange clay prepared.

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5. Then, knead the small clump of clay into a long tube
form and flatten it with your fingers.

6. After that, roll up the flattened clay inwards to form the

layers of petals for the rose.

7. Now, the main decoration of the ready-made productis

halfway done with the clay rose completed.

8. Proceed on to the creation of leaves to complement the

rose as the main decoration. Take a small pinch from
the green clay prepared.

9. Roll the green clay to form a small tube and divide

them evenly into two parts.

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10. Knead both parts of clay to form the three-dimensional
shape of leaves.

11. Use a flat edge object (preferably plastic knife) to

imprint the veins of the leaves onto the clay.

12. After imprinting the clay, the leaves for the roses is
then done.

13. With that, the different parts of the main decoration (a

rose plant) are completed.

14. The following step is to attach the leaves to the base of

the rose before the clay dries up. The attachment at this
point does not require adhesive glue as the clay are still
capable of sticking together before they are dried up.

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15. With that, the main decoration (rose plant) is almost
completed.

16. Glitter glue is added to the rose petal to enhance the

beauty of the main decoration.

17. The final step in the ready-made productproduction is

to attach the main decoration (rose plant) to one end of
the base (decorated ice-cream stick) using UHU glue.

18. Lastly, allow the ready-made productto be left in open

for the clay and glue to dry up and harden. The ready-
made productis then completed.

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5.3 Teaching Process for Service Business

Besides merchandising and manufacturing business, our company wishes to take up

the challenge of venturing into service business by providing art & craft class for
students of UPM who are interested in learning the techniques in clay art. The classes
will be held on Tuesdays (7pm to 8pm) in Faculty of Economy and Management
(FEP) and also on Wednesdays (5pm to 6pm) in Fifth College, in line with the
demand of customers based on the customer analysis done. During each class, the
participant will be given the materials (clay, transparent cover, ice-cream stick and
glitter glue) needed for production of ready-made productand taught the basic
techniques in producing a ready-made product. For the art & craft class, raw materials
involved are clay, transparent covers, ice-cream sticks and glitter glue which will be
expected to cost RM21.56, besides a sum of RM40.00 for wages of tutors and
RM1.30 for officer receipt book. Hence, calculating the total cost of RM62.86 and the
expectation of 20 participants, it is seen that the cost per participant will be RM3.14.

5.4 Project Location

In this project, we had 4 kinds of business, which included the art & craft class
(process how to made ready-made product), sell the ready-made product, materials
(Clay art package) and customized product. The following information are included
where was our businesses conducted during the past few weeks and the process of
borrowing the places and how we conduct our businesses.

For the ready-made product, clay art package businesses and customized
product, we had set up our booth at foyer library UPM, on Tuesday, Wednesday, and
Thursday within two weeks, (6-9 November and 20-22 November) which is before
the semester break and after the semester break. Meanwhile, our business hour at the
foyer library UPM is from 12pm to 3pm. Before we set our booth at the foyer library
UPM, we had prepared a letter to library of Sultan Abdul Samad, University Putra
Malaysia, inside the letter we did request to the person in charge and mention that we
would like to borrow the foyer library for two weeks long to set up our booth and sell
our ready-made productunder course MGM3180.On the same day (31 October), we
hand in our letter to the person in charge, the person also approve our application for
borrowing the foyer library.

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The process of how we conducted our business at foyer library

During the two week’s business hours, we reached library approximately

11.30am, on the first day, we are guided by the librarian to get all the equipment’s
(desk and chair) from the store room (the following days we took the equipment by
our self). After we have the equipment, we started to decorate our stall and placing
some ready-made product on top of the desk. Sharp 12pm, we have already done the
decoration for our stall and started to promote our products. Along these two weeks,
we had been separated into 2 groups, one is promote and another is in charge of
decorating and receipt book. For example, 6 of our group mates are on duty in charge
of promoting our products and services, while another 4 group mates are in charge of
the receipt book, packing and the free writing services (on top of the ready-made
product). When we were promoting our product and services, we had used the flyers
that we had printed out to do an explanation to each of our customer. During the
explanation we had mention about our art & craft classes (where is the place and
time), clay art package and our ready-made product. For example, on the first day, we
had successful promoted to our first customer (Miss Teng), she loves our ready-made
product very much and we manage to sold 7 ready-made products to her (Miss Teng).
On the following week, Miss Teng come back to us and purchases 2 more ready-made
products from us. She was very satisfies with our product and our services.

On another hand, we have four art & craft class (teach how to make ready-
made product), we held our art & craft classat two different places and two different
time. We held our first and the third art & craft class on Tuesday (6 and 20 November)
at the faculty of economic and management, BT 11 from 7pm to 8pm. While the
second and the fourth art & craft class on (8 and 21 November) at fifth college,
BilikBacaan 2 from 5pm-6pm. In the process borrowing the BT 11 at faculty of
economic and management, we when to the main office of the faculty, deal with the
staff and mention we student are under course MGM 3180 would like to borrow the
BT 11 for our art & craft class (one of our group business),at the end after we do our
explanation, the staff of the faculty allow us to borrow the class. While the process
borrow the BilikBacaan 2 at fifth college is, we when to the main office of fifth
college, the college staff request us to fill in the form, before we get approval from the
college staff, he did ask us some question like what are we going to do during the one
hour, we are from which society or course and told us to clean up after using the room.

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The process of how we conducted our business for our art & craft class

Firstly, when our customer reach to the specific place (faculty of economic
and management, BT 11 or fifth college, BilikBacaan 2), we welcome them to our art
& craft class and do a briefly introduce who are the person who will be conduct the
class on the specific day (purpose to break the ice). Second, the topic (what is going to
make) for each of our art & craft class was chosen by our customer. After chosen
what they wanted to make, we started our clay art lesson and teach them the step how
to make the specific thing (making the ready-made product, it takes 30-35 minutes).
When they have done their own ready-made product, we did promote the clay art
package to them (in case they wanted to make their own by themselves). Lastly,
before we end the art & craft class we also did some feedback from our customers, do
they satisfies with our services. All of the customers who attend the art & craft class,
they are very satisfies with our services.

To conclude, we had borrowed three places to our conduct our business. The
first is foyer library, UPM as our main business center, because at the place we did
our promoting to our customers, and we also selling our product at the place too.
Another, two places we had borrowed was for our art & craft class, the place which
included at faculty of economic and management BT 11 and BilikBacaan 2 at fifth
college.

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6.0 Aspects of Marketing

In the aspect of marketing, we include 4aspects of which are market analysis, market
trend, market size, competitor, and seasonality.

6.1 Market Analysis

Before our group started doing our business plan, we have created an online survey
form using Google doc, for our market analysis purpose. The survey form consists of
7 questions which are very important to be answered by our respondent and as a
guideline for us to starting our business (Refer appendixes).

Question 1:
How interested are you with clay art?

5%
11%
12%
Not interested at all
Not very interested

34% Moderate
Interested
38%
Very interested

The first question of the questionnaire is “How interested are you with clay art?”
There are 5 options that can be choose which option 1 is stand for not interested at all
towards clay art while the option 5 represent very interested toward clay art. We have
transcribed all the answers into a pie chart. According to the pie chart above, it shows
that 38% of respondents are having a moderate interest with clay art. Besides, there
have 34%and 11% of respondents are interested and very interested with clay art
respectively compared to 5% and 12% of respondents are not interested at all and not
very interested with clay art respectively.

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 Question 2:
How interested are you in buying a ready-made clay
art product?
2%

7%
Not interested at all
28% 19% Not very interested
Moderate
Interested
44% Very interested

The second question is “How interested are you in buying a ready-made clay art
product?” There are also 5 options that can be chosen in which option 1 stands for not
interested at all towards clay art while the option 5 represent very interested toward
clay art. According to the pie chart, it shows that 44% of respondent are having a
moderate interested in buying a ready-made clay art. Other than that, it also shows
that there have 28% and 2% of respondents are interested and very interested in
buying a ready-made clay art respectively compared to 19% and 7% of respondent are
not very interested and not interested at all in buying a ready-made clay art.

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 Question 3:
How much are you willing to pay for a ready-made
clay art product?

6%

RM5
22%
More than RM5
63%
Less Than RM5
9% Others

The third question is “How much are you willing to pay for a ready-made clay
product?”For this question, we have prepared 2 options for our respondent to answer
which are RM5 and “others”. For the options of “others”, respondent can write down
any price that they prefer to buy the ready-made clay art. This question is important to
let us know the selling price that we will set for our business. According to the pie
chart above, it shows that there have 63% of respondents are willing to pay for a
ready-made clay product with RM5. Besides, there have 22% of respondents are
willing to pay for a ready-made clay product with the price which is less than RM5
compared to 9% of respondents are willing to pay for a ready-made clay product with
the price which is more than RM5. For the 6% of respondents that are answering for
the “Others”, majority of them said the price they are willing to pay depends on the
quality of the product.

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 Question 4:
How interested are you in joining a quick class (1
hour) for clay art production?

7%
15% Not interested at all
22% Not very interested
Moderate
31%
Interested
25% Very interested

The fourth question is “How interested are you in joining a quick class (1 hour) for
clay art production?” This question is important to let us know whether our
respondents have interest to join the quick class for clay art production or not. For this
question, we have prepared 5 options for our respondent which option 1 is stand for
not interested at all toward joining a quick class for clay art production while option
5represent deep interest towards joining a quick class for clay art production.
According to the pie chart above, it shows that there have 25% of respondents are
having a moderate interested in joining a quick class (1 hour) for clay art production.
Besides, there have 31% and 15% of respondents are interested and very interested in
joining the class respectively compared to 22% and 7% of respondent are not very
interested and not interested at all in joining the class.

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 Question 5:
How much are you willing to pay for a quick class (1
hour) for clay art production?

11%
RM8
More than RM8
29% 55%
Less than RM8
Others

5%

The fifth question is “How much are you willing to pay for a quick class (1 hour) for
clay art production?” This question is important to let us know the price that to be set
for our quick class for clay art production when we start our business. In this question,
we have given two options to our respondents which there have RM8 and “Others”. In
the option of “Others”, respondents can write down how much of the price that they
willing to pay for the quick class for clay art production. According to the pie chart
above, it shows that there have 55% of respondents are willing to pay for a quick class
(1 hour) for clay art production with RM8. Besides, there have 5% of respondent are
willing to pay for it with the price which is more than RM8 compared to 29% of
respondents are willing to pay for it with the price which is less than RM8, and
majority of them are prefer with the price RM5 for the quick class. For the option of
“Others”, majority of our respondents replied that the price they are willing to pay are
dependent on what will be taught in the class and some of them are requested it as
free of charge.

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 Question 6:
Which of these are a suitable day and time for you to
join a quick class (1 hour) for clay art production?

8% Tue, 2pm - 3pm

22% 9% Tue, 3pm - 4pm
Tue, 7pm - 8pm
15% Tue, 8pm - 9pm
19% Wed, 4pm - 5pm
13% Wed, 5pm - 6pm
14% Others

The sixth question is “Which of these are a suitable day and time for you to join a
quick class (1 hour) for clay art production?”This question is important for us to set
the time of quick class for clay art production that we will open for our business. For
this question, we have given 7 options for our respondent which there have Tuesday
(2pm-3pm), Tuesday (3pm-4pm), Tuesday (7pm-8pm), Tuesday (8pm-9pm),
Wednesday (4pm-5pm), Wednesday (5pm-6pm), and “Others”. According to the pie
chart above, on Tuesday, the majority of respondents prefer the class on 7pm-8pm.
On Wednesday, the majority of respondents prefer the class on 5pm-6pm.

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 Question 7:
Which of these places do you prefer to join a quick
class (1 hour) for clay art production?

Faculty of Economics and

7%
Management (FEP)
18% Kompleks Akademik
18% Mahasiswa (KAA)
Fifth College (K5)

33% Canselor College (KC) / Sixth

24%
College (K6)
Others

The seventh question is “Which of these places do you prefer to join a quick class (1
hour) for clay art production?” This question is important to let us know where the
place is suitable for our respondent to join the quick class for clay art production. This
also can help us to decide where the place that we will open our quick class in our
business. According to the pie chart above, in college area, majority of respondents
prefer to have a quick class at Fifth College (K5) which is 24%. In academic area,
majority of respondents are preferred to have a quick class at Complex Academic
(KAA) which is 33%.

31 | P a g e
6.1.1 Summary on Market Analysis

Our company decides to carry out our business in both production and service form.
In production, our company will sell ready-made productand clay while for service,
our company will organize art & craft classin making clay art. From the analysis
above, our company found that our business is welcomed by UPM students and
outsiders. They are willing to pay for our products and service too. Therefore, our
company business has the potential to be carried out in UPM. In this business, our
company set UPM students, lecturers and outsiders as our target markets. They
seldom get clay art ready-made productand art & craft classfor clay art production.
This is because there is only a few of company providing clay art ready-made
productand there is no art & craft classfor the production of clay art in Serdang area.
Besides that, our company will set Faculty of Economics and Management (FEP) and
Fifth College (K5) as our distribution centre according to our target markets
requirements.

6.1.2 Competitor

Competitor in business is referred to a company in the same industry or a similar

industry which offers a similar product or service.There are a few competitors in our
business environment. One of the competitors in UPM is a group of students carrying
out their business in line with the subject MGM3180, whereby their business products
(ready-made product) are same with us but in different forms. This group of students
are selling ready-made productmade from cloth material. The difference between our
business and their business are that our company provide art & craft classand clay as
well. Besides that, there is no competitor in art & craft classbusiness as there is no
such business in Serdang area. However, the nearest competitor is nearby Jalan Air
Jerneh Air Panas at Setapak, Kuala Lumpur. On the other hands, for clay, our
competitor is located at The Garden Mall, Mid Valley. Overall, our competitors are
far away from our company. Thus, our company have to focus on the competition
strategies for outsiders as outsiders may decide to buy the products from our
competitors.

32 | P a g e
6.1.3 Seasonality

Seasonality is referred to fluctuations in out put and sales related to the seasonal of the
year.For our company products and service, it does not affected by the season in our
country. In contrast, it could be sold throughout the year and target markets may buy
at anytime which depends on their preferences. Therefore, it would not affect our
profit along our business and our company net profit is depends on our promotion
strategy.

6.1.4 Potential Strategies Alliance

Our company carry out strategies to promote and attract more target markets by using
marketing mix which are product/service strategy, pricing strategy, placing strategy,
and promotion strategy. For product elements, it is the way how our company make
our product attractive by using packing, labelling or branding while service elements
is that how we provide services by using good attitude to attract our customers
psychologically. Next for pricing strategy, it is the way that our company set our
products or services price at optimum level which can increase our profit and attract
customers even compete with others company. Furthermore, for placing strategy, it is
used to help us to get more customers. Our company choose the place that have more
passer-by and the place will also bring convenience to our customers. Last but not
least is the promotion strategy. Our company use different promotion strategy to
provide information, persuade and influence customers’ psychology. It includes
personal selling, advertising, sales promotion and publicity. By using the marketing
mix strategy, it is believed that our company will attract more target markets and can
be successful in the UPM environments.

6.1.5 SWOT Analysis

SWOT analysis is a strategic planning method used to evaluate the strengths,

weaknesses, opportunities, and threats involved in a project or in a business venture. It
involves specifying the objective of the business venture or project and identifying the
internal and external factors that were favourable and unfavourable to achieve that
objective.

33 | P a g e
 STRENGTHS WEAKNESSES

· Efficiency in completing tasks in the given · Lack of reputation

time
· Able to generate ideas to run business
successfully
· Cooperative among members.
· Good communication skill within company
members and outsiders.
· Low input costs
· Variety of ready-made productbase on
creativity
· Our shareholder have good skill in making
clay art
· Have several promotion strategies to
promote sales

OPPORTUNITIES THREATS

· A lot of potential customers · Many competitors outside of UPM (further

· UPM provides the free rental for distribution
centre.
· Fewer competitors in UPM and outside
market
· Reading environment in UPM is good
than Serdang area)
· The price of the ready-made productof
competitors maybe lowers than our
company
· Variety of ready-made productof

· No art & craft classhave been organized in competitor maybe more attractive than our

Serdang area company

· Competitor can use technology to produce
large amount of products by lower input
costs in a short periods
· Lack of transportation service in UPM

34 | P a g e
6.1.5.1 Strengths

A good and stable company must have strength in order to carry out their business. Its
strength could be evaluated from four aspects which are marketing, finance,
manufacturing and organization. In marketing aspect, we have introduced various
types of ready-made productto vary customers’ choices and we also use several
strategies to promote selling in order to increase our profits. Because of our company
products are handmade; its inputs costs are relatively low which could help us to
make profits for our company. It is one of the financial benefits for our company.
Besides that, for both art & craft classand products, our shareholders have good skill
in making clay art. It can help our production process to become smoother and our
products are good in quality. For art & craft class, our customers will understand the
making process easily as our tutors have good skills and will teach them step by step
by an easy way. As a result, it could help our company to build up our reputation. In
addition, our company has good organization and each of our shareholders hold
different position in our company. It helps our business to be carried out efficiently.
Our shareholders are cooperative and have good communication skill with outsiders.
This result in our company carrying out our business effectively and can complete the
task in the given time. In addition, good communication skill is needed when
communicating with customers in order to provide information and persuade them to
buy our products.

6.1.5.2 Weaknesses

There is weakness that appears in our company although we have strengths. Our
company is in lack of reputation. This is because our company business is new and no
one recognizes our company. It is hard to sell our products to customers as they do
not know our company. Therefore, our company has to use different type of strategies
to promote our company products and service.

6.1.5.3 Opportunities

Opportunities are the external chances that improve performance in the environment.
For our company, we have a lot of potential customers as in UPM there are a large
number of students and lecturers. Our company needs not to find customers at outside

35 | P a g e
but we could sell our product directly to the target markets easily. This will help us to
save time as we do not have time to sell our products outside of our campus. Besides
that, our company gets the distribution opportunity as UPM provide free rental places
as our distribution centre and art & craft class. This can reduce our production cost as
we need not to pay for rental. Consequently, we can get more profit from our
business. Besides that, there are fewer competitors in UPM. This will also reduce our
production cost as our company needs not to pay much for promotion costs such as
advertising costs. Then, the target market of our company will be larger as there is not
competitor to compete with us. Next, the reading environment in UPM is good. This
indirectly will influence our target markets to buy our products. Therefore, it can
increase our selling quantity. Moreover, as there is no clay art courses have been held
in Serdang area, therefore our company is providing a new service in this area. This
can give our target markets a chance to explore themselves in this field. As a result,
the service business of our company may be welcomed by the target markets.

6.1.5.4 Threats

There are also threats that maybe influence our company. Threat is the external
factors that would cause trouble to the business. In our business industry, there are
many competitors outside UPM. The competitors could set their products price lower
than our company because they could produce the products in large quantity. Besides
that, they could produce ready-made productthat are more attractive and make the
customers have more choices. This will attract the customers to but their products as
they can produce different types of ready-made productsuch as in 3D form. In
addition, competitors can use technology to produce products in large quantity. This
can fit the request of demand when customers want to buy ready-made productin
large quantity. Because they use technology to produce ready-made product, they can
reduce their cost and get high profit. Then they can use their profit to expand their
business. Thus, it causes threat to our business as we are unable to compete with
them. In addition, the insufficient of transportation service is also one of the threats
for our business as students may face problem on transportation to attend the art &
craft class. Consequently, they will choose not to participate in our art & craft class.

36 | P a g e
6.1.6 Market Trends

For our business company Clay It Yourself, we are take part in both production and
servicing business. For production business, our company will use clay, ice-cream
stick and ribbon to make it into a ready-made productand we will also sell clay in
package in our art & craft class, which is our servicing business. In art & craft class,
we will teach our customers to make clay art from basic and step by step. By doing
both of these businesses, we could increase our selling quantity, as our customers can
buy and learn how to make the products by their own in the form that they wish to do.
Any problem that they face in making clay art, they can ask during the art & craft
class, our tutors will teach them patiently.

6.1.7 Market Segmentation

Market segmentation is a marketing strategy that divides a broad target market into
subsets of consumers who have common needs or desires as well as common
applications for the relevant goods and services.These subsets maybe segmented by
five aspects which are geographic, demographic, psychographic, behavioural, and
benefits. However, for our company business, the markets are segmented from the
aspects of behavioural and benefit. This is because our company expect our target
markets will buy products and service according to their preferences and the benefits
that they will get from our products and service. Since our products and service do
not have seasonality neither branded, they will buy only if they are interestedin it or
when it brings them benefits, as in needing it to help them to manage their reading
materials. On the other hands, by doing market segmentation, our company can use
different of strategies to promote sales and service. This could increase our company
selling quantity and bring profit to us.

6.1.8Target Markets

In our business, our target markets are UPM students, lecturers and outsiders
especially kindergarten and primary school students. Usually, UPM students and
lecturers will use ready-made product(bookmark) as their managing tool in their
reading materials. Since there are no ready-made product(bookmark) retailer and art
& craft classsuppliers around UPM, they may buy our products or service as it is
cheap and convenient for them. Besides that, since UPM students have to cover their

37 | P a g e
daily expenses, our products and service is suitable for them as the price is low and
they can afford to purchase it. Then, for outsiders, especially for kindergarten and
primary school students, our company expect that they will buy our products as they
are interested in the products. Children are cute and innocent; they usually like the
cute and creative products. It’s normal to see children requesting their parent buy
things or products for them. Therefore, if our company sells our products to them, it
will be much welcomed and popular.

6.2Marketing Strategies

6.2.1 Product/ Service

A product is seen as anything that could be offered to a market that might satisfies the
wants or needs of the consumers. Our company is selling both products and service in
our business. Our products include various types of ready-made productthat could be
used by the readers to keep the reader’s place in a book and enable the reader to return
to it with ease. There are two types of products, which are ready-made product and
customized product. Besides that, we also sell customize clay art product and clay art
package which the customers can make the products by themselves. On the other
hands, our company service business is to organize art & craft classto teach our target
markets to make clay art.

First of all, the products of our company are named as “ready-made product”.
Our company use ice-cream sticks which are different in colors, hand make clay art
product and ribbon to make it into a bookmark. These bookmarks can be produced in
different ways which depends on our own creativity. Besides that, for the customize
products, our company make the products according to the customer enquiries. It
increases the choices for the customers as they can buy different types of bookmarks
base on their preferences as well as the bookmarks are unique as it is different from
outside market. For this business, our company set UPM students, lecturers and
outsiders as our target market. In general, students, lecturers or outsiders will read on
different type of books in order to get information for homework and work, or they
will read on their favorite materials in leisure time. Therefore, bookmarks will be the
aid to help them to manage their reading materials. For instance, if they are searching

38 | P a g e
information from different books, they can use the bookmarks to mark on the page
that they wish to refer and they can refer to it easily. This can save their time because
they need not to refer to the contents of the books again.

Besides acting as a managing tool, our products are also act as the tools for
messages delivery. Our company helps our customers to write their message on the
ready-made productif they want to give their friends as a gift. Besides that, it can also
be written some quote on the ready-made productto encourage themselves in their
life. This business is potential in UPM because there is not such business had been
open in UPM yet.

In addition, for our company service business; art & craft class, we teach our
target markets to make ready-made product. Our company’s tutors teach ours target
markets from basics in order to let our target markets understand and expert in making
clay art. In the class, our company prepares the materials for our target markets to
make clay art. First, the classes’ tutors will teach them how to make different colors
of clay since the clay needs to be mixed to form different colors. Then, they also teach
them how to make clay into different shape and patterns step by step and finally make
it into a product. Despite of this, the tutors also teach them to make the clay art that
they wish to do. The tutors always try to satisfy their needs and make them feel that
our company will concern on their needs. To make our customers convenience, our
company sells clay in our art & craft classto them. We provide the clay in package
with an ice-cream sticks and each package is cost RM4.00. This is to let them to
make their clay art product at their house as some of them do not know the place that
sells clay. As our company is providing service to our target markets, the tutors of
our company are friendly and patiently to the participants in the art & craft class. This
make the participants feel comfortable and can learn something from the class in an
easy way. Indirectly, this builds up their confidence to our company and also can
attract more participants in our company as our company provides the good and
believable service to them.

6.2.2Price

Price is the quantity of payment or compensation given by one party to the other in
order to get return for goods or services. It is very important as it determines our
company's profit and hence, survival. There are two factors that affect our pricing
39 | P a g e
strategy which are internal factor and external factor. In our company, the internal
factor that affects our pricing strategy is marketing management cost while the
external factor is the competence environment. In our marketing management cost, it
includes the variable costs which are input costs and wages. In order to cover our cost
and get some profit from our business, our company decides to set our selling price at
RM3.50 for ready-made product, customized products at RM4.50. For the art & craft
class, our company set the fees at RM6.00 per class. From both of the prices, we get a
moderate profit calculated by using the formula (Total Revenue- Total Cost = Profit).
According to law of demand, it stated that consumers buy more of a good when its
price is low and its price is higher. This show that when our selling price is low, it
would attract more customer as the rate of price affects the psychology of customers.
We have compared our price with other competitor at outside market; they usually set
their products price at RM8.00 to RM10 .00. On the other hands, the price for art &
craft class at outside market is usually set at RM30.00 to RM90.00 per lesson. It is
one of the pricing strategies that we use to compete with others because our selling
price is lower than the outside market, so we could compete with them as our products
and service are unique and cheaper.

6.2.3 Promotion

Promotion is the way of communication that used by the marketer to provide

information to different parties about the products. It is a process of communication
that involving information, persuasion, and influence to the customer. There are four
elements of promotion which are advertising, personal selling, publicity and sales
promotion. For this business, our company uses personal selling, publicity and sale
promotion as our promotion strategies.

First of all, we create flyer as advertising and distribute to the target markets.
Our company distributes it to the customers when we try to introduce our products
and service to them. This is an effective way to introduce our products to our
customers as the customers will help us to introduce our products to their friends
although they do not buy our products. On the other hands, for personal selling, it is
the way that our company used to persuade the existing and prospective buyer to buy
our products in person. Our company use friendly attitude to persuade our customer to
buy more products from us. Besides that, our company also persuades the prospective

40 | P a g e
buyer to introduce our products to their friends or family about our product. As a
result, our selling quantity increases gradually. For the art & craft class, our company
provides our customers best service then persuades them to invite their friend to
participate in our classes.

In addition, for sales promotion, our company uses pricing promotion

strategies to help us to promote sales of our products. Our company use price discount
to attract more customers. For those who buy our normal clay art products, they have
to pay RM3.50 for each, but if they buy three units of our products, they only have to
pay RM10.00. Meanwhile, for those who buy our customized product, they have to
pay RM4.50 for each, but if they buy three units of our products, they only have to
pay RM13.00. On the other hand, we use internet as our publicity. Our company use
Facebook as our media to sell products. In Facebook page, our company states our
product name, code and price. If customers are interested to buy our products, they
can order via online. Then, for those who are interested to participate in our art &
craft class, they can also register on our Facebook page and they can live their
message in the webpage if they have any inquiries. This is one of the effective ways
to promote our product and service because nowadays people always browse
Facebook webpage when they are free and we can save our time as we need not to
promote our company product and service at outside by our own.

6.2.4 Place

The place is the location where customers receive the product or service. For business
place, our company uses the place outside library as our distribution centre for our
products while for the art & craft class, we use DKEP 11 and Fifth College as our
service centre.

In our business, our company use direct distribution to distribute our products
to the customers. Distribution is referred to the ways that an organization distributes
the product to the end user. Our company set up our booth before business is operated,
and we use some interesting and attractive decoration to attract more customers to
come to us. This makes a good impression to our customers and also builds up their
confident towards our company. After all of the things are set up, then our company
can sell our products direct to our customers. Besides of this place, our company will
also sell our products around each faculty by face to face selling. This increase our
41 | P a g e
ways of distribution as if there is only one distribution place, our company may not
get customers efficiently. By face to face selling, we could tell customers our
distribution centre location, and if they have interest to buy our products again, they
may visit to our distribution centre. This is a very effective ways as many customers
come back to our distribution centre to buy more products.

In addition, for our company art & craft class, DKEP 11 and Fifth College are
the suitable place. In DKEP11, the room is large and it has the good utilities in the
room that can let our customers feel comfortable when they are learning in the class.
In this condition, our customers feel satisfy and enjoy when they are attending the
class. This increases our reputation and attracts more participant as we provide good
services and environment for our customers. Besides that, it is suitable for our target
markets who want to attend the art & craft classbecause the place is easy to be
searched for the outsiders while for UPM students, DKEP 11 is next to library. On the
other hands, for Fifth College, it also brings convenience to our target markets
especially for UPM students. As Fifth College is near by Putra food court, our target
markets can take their meal before or after the art & craft class. This is a convenience
way for them as sometimes they have to works or taking class before come to our art
& craft class.

42 | P a g e
7.0 Aspects of Finances

7.1 Cost of Products

7.1.1Ready-made Product, Customized Product&Model

Items Quantity Unit Price (RM) Cost (RM)

Clay 4 packs 13.00 52.00

Ice-cream Sticks 150 sticks 0.078 11.70

Ribbon 2 rolls 3.00 6.00

Glitter Glue 1 unit 4.90 4.90

Marker Pen 1 unit 3.00 3.00

Silver Pen 1 unit 2.50 2.50

UHU Gum 1 unit 5.50 5.50

Zipper Bag 1 pack 3.50 3.50

Officer Receipt Book 2 units 1.30 2.60

Total 91.70

Other expenses:

Wages : [79 units (ready- made) X RM 0.50] + [71 units (customized product) X RM 0.80]+
[5 unit (last day promotion product) X RM0.50] + [1 unit (Sponge-bob) X RM 4.00]
+ [1 unit (Garfield) X RM 1.50]

= RM 39.50 + RM 56.80 + RM 2.50 + RM4.00 + RM 1.50

= RM 104.30

\Total : RM 91.70+ RM 4.50+ RM 104.30

= RM 200.50

Cost per unit : RM 200.50 /150

= RM 1.34

*Sponge-bob and garfield are our customized product

43 | P a g e
7.1.2 Art and Craft Class

Items Quantity Unit Price (RM) Cost (RM)

Clay 1 pack 13.00 13.00

Transparent Cover 20 sheets 0.25 5.00

Officer Receipt Book 1 unit 1.30 1.30

Ice-cream Sticks 9 sticks 0.078 0.70

Total 20.00

Other expenses:

Wages : RM 3.00 X 9 participants

= RM 27.00

\ Total : RM 20.00 + RM27 + RM4.50

= RM 51.50

Cost per participant : RM 51.50 / 9

= RM 5.72

7.1.3 Clay Art Package

Items Quantity Unit Price (RM) Cost (RM)

Clay 3 packs 13.00 39.00

Zipper Bag 1 pack 3.50 3.50

Officer Receipt Book 1 unit 1.30 1.30

Ice-cream Sticks 15 sticks 0.078 1.17

Total 44.97

\ Total : RM 44.97 + RM 4.50

=RM 49.47

Cost per unit : RM 49.47 / 15

= RM 3.30

44 | P a g e
7.1.4 Marketing Expenses

Promotion : Flyer RM 1.30

Logo RM 1.00

Price Tag RM 1.00

Drawing paper RM 0.20

Fuel allowance:RM 10.00

\Marketing expenses per three services:

= (RM 1.30 + RM 1.00 + RM 1.00 +RM 0.20 + RM 10.00)/ 3

= RM 4.50

45 | P a g e
7.2 Cost

7.2.1 Fixed Cost

Items Quantity Unit Price (RM) Cost(RM)

Clay 8 packs 13 104.00

Glitter Glue 1 unit 4.90 4.90

UHU Gum 1 unit 5.50 5.50

Silver Pen 1 unit 2.50 2.50

Transparent Cover 20 sheets 0.25 5.00

Ice-cream Sticks 100 sticks 0.078 7.80

Ribbon 2 rolls 3.00 6.00

Zipper Bag 1 pack 3.50 3.50

Receipt Book 4 units 1.30 5.20

Marker Pen 1 unit 3.00 3.00

Logo 2 unit 0.50 1.00

Price Tag 2 unit 0.50 1.00

Flyer 1 unit 1.30 1.30

Drawing Paper 1 unit 0.20 0.20

Transport Fees 1 10.00 10.00

Wages (Art and Craft Class) 9 3 27.00

Wages (Ready-made Product) 150 0.50 75.00

Total 262.90

46 | P a g e
7.2.2 Variable Cost

Unit Price Cost

Type of product Quantity
(RM) (RM)

Ice-cream Sticks 100 sticks 0.078 7.80

Zipper Bag 1 pack 3.50 3.50

Wages(Last Day Promotion Product) 5 0.50 2.50

Wages (Customized Model, Sponge-bob) 1 4.00 4.00

Wages (Customized Model, Garfield) 1 1.50 1.50

Wages (Customized Product) 71 0.30 21.30

Total 40.60

7.3Selling Price and Cash Sales

Selling Unit Cash Sales

Type of products/service Quantity
Price (RM) (RM)

Ready-made Product 3.50 22 sticks 77.00

Customized Product 4.50 62 sticks 279.00

Customized Model(Sponge-bob) 10.00 1 unit 10.00

Customized Model(Garfield) 7.00 1 unit 7.00

Promotion Package (Ready-made) 10.00 19 packages 190.00

Promotion Package (Customized) 13.00 3 packages 39.00

*4 Ready-made Product for RM 12 12.00 1 12.00

*1 Ready-made Product for RM 1 1.00 1 1.00

*3 Ice-cream Sticks for RM0.50 0.50 1 0.50

Art and Craft Class 6.00 9 participants 54.00

Clay Art Package 4.00 15 packages 60.00

Total 729.50

*Last Day Special Promotion

47 | P a g e
7.4Balance Sheet

CLAY IT YOURSELF

BALANCE SHEETON 6 TH NOVEMBER 2012

RM RM

ASSETS
Cash 300
Stock -
300

LIABILITY -

OWNER’S EQUITY
Initial Modal -
Net Profit -

300

CLAY IT YOURSELF

BALANCE SHEET ON 27TH NOVEMBER 2012

RM RM

ASSETS
Cash -
Stock 0.70
0.70

LIABILITY -

OWNER’S EQUITY
Net Profit 427.10
427.10

427.80

48 | P a g e
7.5 Income Statement

CLAY IT YOURSELF

INCOME STATEMENT FOR DATE ENDED 27TH NOVEMBER 2012

RM RM

RENEVUE :

Sales
Ø Ready-made Product 77.00
Ø Customized Product 279.00
Ø Art and Craft Class 54.00
Ø Clay Art Package 60.00
Ø Customized Model 17.00
Ø Promotion Package(RM) 190.00
Ø Promotion Package(CM) 39.00
Ø Last Day Special Promotion 13.50

(-) Returns -

Net Sales 729.50

COST OF SALES :

Material
Ø Ready-made & Customized
Product 91.70
Ø Art and Craft Class 20.00
Ø Clay Art Package 44.97
Ø Others 0.23

(156.90)

GROSS PROFIT
572.60

49 | P a g e
(-) EXPENSES :

Administrative Expenses 96.30

Wages 27.00
Ø Ready-made, Customized 10.00
Product& Customized Model
Ø Art & Craft Class
Ø Fuel Allowance (141.30)

Marketing Expenses
Flyer 104.30
Logo Printing 27.00
Price Tag 10.00
Drawing Paper (3.50)

1.30
Direct Expenses 1.00
(0.70)
Damaged Item 1.00
0.20

NET PROFIT

0.70

427.10

50 | P a g e
7.6 Cash Flow Statement

CLAY IT YOURSELF

CASH FLOW STATEMENT FOR DATE ENDED 27TH NOVEMBER 2012

RM RM

CASH INFLOWS :

Capital 300

Cash Sales
Ø Ready-Made Product 77.00
Ø Customized Product 279.00
Ø Art and Craft Class 54.00
Ø Clay Art Package 60.00
Ø Customized Model 17.00
Ø Promotion Package(RM) 190.00
Ø Promotion Package(CM) 39.00
Ø Last Day Special Promotion 13.50

1029.50

TOTAL CASH INFLOWS

CASH OUTFLOWS :

Material 156.90
Administrative Expenses 141.30
Marketing Expenses 3.50
Direct Expenses 0.70
(302.40)

CASH BALANCE 727.10

51 | P a g e
7.7 Profit and Loss

Profit = Total Revenue - Total Cost of Sales - Total Expenses

= RM 729.50 – RM 156.90 – RM145.50

= RM 427.10

7.8 Financial Analysis

7.8.1 Net Profit Margin

Net Profit Margin = Net Profit X 100%

Total Revenue

= RM427.10 X 100%

RM729.50

= 58.55 %

ð For every Ringgit Malaysia of selling generated profit of 58.55 %.

7.8.2 Return of Investment (ROI)

Return of Investment = Operating Profit X 100 %

Total Investment

= RM 427.10 X 100 %

RM300

= 142.37%

ð Business gets 142.37 % of returns of every Ringgit Malaysia of capital invested

for the business.

52 | P a g e
7.9 Break Even Analysis

7.9.1Ready-made Product

Break Even Point in Unit = Total Fixed Cost

Unit Sales Price – Variable Cost per unit

= RM 85.35
RM 3.50– RM 0.05

=RM 85.35
RM 3.45

= 25 units

7.9.2 Customized Product

Break Even Point in Unit = RM 81.35

RM 4.50 – RM 0.35

= RM 81.35
RM 4.15

= 20 units

7.9.3Art and Craft Class

Break Even Point in Participant = RM18.70

RM 6.00 – RM 0.42

= RM 18.70
RM 5.58

= 3 participants

7.9.4 Clay Art Package

Break Even Point in Unit = RM 41.92

RM 4.00 – RM 0.25

= RM 41.92
RM 3.75

= 11 units

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8.0 Review

8.1 Challenges

First and foremost, pricing of products was our main challenge. We found that our
pricing of products was higher than we expected from the feedback of questionnaire.
Thus, we adjusted them into RM3.50 for ready-made product, RM6.00 for art & craft
class and RM4.00 for clay art package. Moreover, we came out with promotion
package which customers could buy three ready-made products for only RM10.
Throughout the business, we concluded that this promotion was a very effective way
in attracting customers to purchase more ready-made products.

After our types of products had been identified, clay designations for ready-
made products were the following challenge. After a discussion, we decided to design
bear, rose, bee, flying heart, lollipop, lady bird and simple designations for the starting
of business. Later, we would increase the quantity based on customers’ demands. In
the other hands, some customers requested special clay designations on their favor
such as Domo, Gemini, Angry bird, Hello Kitty, Toro, Doraemon and so on. The
requests brought another challenge as skillful was needed in making process. In a
solution, we could only transform the clay into faces instead of full bodies of the
characters above. These have been satisfied by our customers too. Through this
experience, we upgraded our ready-made products into customized product to boost
the interest of other customers and our sales too.

In our opinion, there would be a crowd of UPM students going to library so

we chose library’s foyer to set up our booth. Conversely, the passers-by were less than
expectation and most of them were rushing for classes. This appeared as a challenge
in conducting our business too. Thus, we used our Facebook page wisely in
promoting and giving further information such as our current location. Moreover, we
gave flyers to passers-by after a brief introduction. We hoped that they might come
over to our booth, visit our page or call us for details.

For art & craft class, venue was the first challenge encountered. As we
referred to the feedback form, Complex Academic A had been chosen the most.
However, we had been rejected because our target was less than 80 participants. Then,
we changed the venue and applied successfully in Faculty of Economic and

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Management. Although we were given DKEP 20 in conducting our art & craft class,
but it was used by lecturer in the same time and insisted to change anyway. This
became the following challenge. As a result, we changed the venue to Tutorial
Classroom 12 for both art & craft class. In the other hands, ways to attract more
participants were the main challenge for this art & craft class. Other than preparing all
the materials needed, participants could choose clay designation for learning. Through
their feedback, they were satisfied on our services and claimed that it was a great
experience in claying.

Next, we faced challenge in selling clay art package too. We found that clay
art package did not lure customers’ attention in our booth. Thus, we also promoted it
to participants in the end of art & craft classas they could practice the skills they
learned. This was a very effective way to increase the quantity of clay art package
sold.

Last but not least, we faced losses in conducting the business because the
damages of materials and products. We considered irregular shape and non-uniform
color of ice cream sticks as damages of materials. Moreover, we wrote message
wrongly and out of shape of products were considered as damages of products. In the
other hands, there were some unsold products and being considered as losses in
business too.

8.2 Lessons Learned

We have learned the importance of preparing a business plan before starting up any
business. A business plan is important, for it enables us to take a realistic and
objective look at our business as a whole to identify our business strengths, capability,
competitive advantage, business potential and opportunities. It can also serves as a
guide for our business operation and avoid making unnecessary mistakes. Running or
starting a business without a business plan is similar to walking through the dark
without a torch light. Operating our business in such manner will expose us to the risk
of business failure. Therefore, our group has prepared a business plan for our clay art
business to help identify our company’s vision, goals and objectives, determine if our
product and service will be profitable and has a sufficient market to support it,
defining our target market and marketing strategies to reach our target customers, and
also establishing or reevaluating our competitive position within the market by

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conducting a thorough analysis of the competition (finding out the weaknesses of our
competitors and how we can take advantage of them). By preparing a business plan
before starting our clay art business in UPM, it allows us to identify potential
problems, threats, weaknesses, strength and opportunities of our company. Our group
had also included marketing budgets in our business plan to help us to manage cash
flow, which is critical in keeping our business running. Besides, our group has done
marketing analysis to understand our customers’ behavior, wants and needs, and also
came up with 4P marketing strategies (price, product and service, place and
promotion) to ensure our company’s success. Learning all these before launching our
business gave us time to make any necessary adjustments to improve our business and
provide benchmarks for success.

We have also learned to be different from the other companies or groups who
are running different businesses under the course MGM 3180. Nobody will pay
attention to a company that is doing the exactly same business as everyone else.
Therefore, we wanted our business to stand out and differentiate ourselves from the
others, so that our business is unique and can attract the attention of people in UPM.
Instead of doing common businesses such as food and drinks businesses, our group
had decided to start up clay art business, which consists of conducting art& craft class,
selling ready-madeand customize clay product, and DIY Clay It Yourself Packages,
for there is no other similar business running in UPM.

Besides, we learned to accept failure with open heart, learned from mistakes
and strive to achieve success in the next business. As the saying goes, no gain without
pain. We are willing to fail, gain useful experience from our previous attempt, and try
to come up with better business in the future. At first, our group wanted to run a
photography business during convocation week in UPM. However, we canceled this
idea after we have observed the convocation day in University Malaya (UM) on the
3rd of October, 2012. We found out that there are many competitors for this business,
who are professional photographers who offered their services at a lower and
affordable price. These professional photographers used good cameras to take
photographs of graduates, able to print out good quality photographs, and also frame
the requested photographs on the spot. We realized that we will not be able to
compete with these professional photographers because we do not have the skills in

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taking good photographs, and we were lack in professional equipment such as
professional cameras and printers to offer our photography services to our potential
customers. As a result, our group gave up on the idea of running a photography
business, gained some experience and ideas from our observation in UM, and we
discussed to run another business which has better market potential in UPM.

Other than that, we learned to take risks, be more creative and innovative in
our business. Before we came up with the idea of running clay art business, we
wanted to run a simpler business, which is having an “Ice-Cream Eating Competition”,
where each participant will have to pay RM5 for the participation fees. The person
who finished eating the ice-creams in a given period of time will emerge as the
winner of the competition and take away attractive prizes. However, there is no
creativity and innovativeness in this business. Hence, after listening to the advice and
opinion from our lecturer, PuanSitiRahayuHussin, we decided to venture into a more
creative and challenging business, which is the clay art business. We have ventured
into 4 types businesses, which are conducting art & craft class, selling ready-made
product, customizing clay crafts according to the requests of our customers, and
selling DIY Clay It Yourself Packages. In art & craft class, we taught our customers
to make creative hand crafts by using soft clay. The ready-made product (bookmark)
that we are selling are also unique and different from other ordinary bookmarks as our
ready-made productare hand-made by using coloured ice-cream sticks and decorated
with ribbons and clay crafts of various figures, such as teddy bear, honey bee, hearts,
flower and roses. We can also write messages according to the requests of our
customers on the ready-made product.

Other than that, our group had learnedentrepreneurial skills such as sales and
marketing skills, communication skills, self-motivation skills and time management
skills. In terms of sale and marketing skills, our company sold the products personally
to our customers by asking around faculties and hostels. We have also publicized our
clay art products and classes through Facebook as we believe that everyone in UPM
frequently check their Facebook webpage. Customers can also order our products and
register for art & craft class via Facebook. We will record the customers’ details and
set a time for us to meet up with the customers to give their ordered goods. We have
also distributed flyers to advertise our products and art & craft class. When customers

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come to visit our stall at the foyer (in front of library), we take this chance to
introduce our customized clay products and also art & craft class. In order to attract
customers to buy more of our ready-made product, our company did promotion on our
ready-made product. For example, customers will have to pay RM3.50 for a piece of
ready-made product. However, they will get a promotional price of RM10.00 if they
buy 3 pieces of ready-made product. This will encourage the customers to buy more
ready-made product. In the process of running our business, we learned to negotiate
and cooperate with each other to achieve the same goal and success for our business.
We also learned to communicate with group members, as well as with our customers.
In addition, our group members were able to inform succinctly, sell products and
services, and persuade a wide range of customers. When we were selling our products
at the foyer, we approached customers of different races and countries in a friendly
manner to introduce our products and service. We mainly used Malay, Mandarin and
English to communicate with local customers, while for foreign customers, we will
introduce our products and service in English. Even though some of the passersby
were not interested in buying our products, we still thanked them for visiting our stall.
Besides, we learned self-motivation skills by not only depending on our leaders for
instructions, instead, we take initiative to think where do we obtain the money to fund
the business, how to develop the products and how to reach the customers. Although
we were busy with our assignments and mid-term exams, we learned to manage our
time to cope with our studies, school works, as well as our clay art business. We made
commitment, focus our energy and work hard towards each and every step that will
enable us to do well in our assignments and exams, and also make our enterprise a
success.

In conclusion, our group members had gained useful skills and experience in
running a small business. We will always be learning as entrepreneurship is a life-
long learning process. We will apply the skills that we have learned to our daily
situation and challenges in life, and keep on improving ourselves from time to time to
become a better entrepreneur, and also a better person in the future.

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9.0 Conclusion

Our company, “Clay It Yourself”, has launched our business from 6th until 9th of
November and 20th until 22nd of November. In this period of time, we managed to sell
a total of 79 pieces of ready-made products, 71 pieces of customized product, 2
customized clay art products (a Sponge-bob and a Garfield figurine), 15 packages of
DIY clay art packages, and we have a total of 9 participants to join our art & craft
class. Hence, our clay art business is considered a success as we were able to make a
net profit of RM427.10 from our total sales of products (ready-made and customize
ready-made product, and customized clay art figurines) and service (art & craft class).

Although our group faced several challenges in running the business, for
example, we were unable to get as many customers as we expected to visit our stall at
the foyer, unsuccessful in applying for a room in Complex Academic A (KAA) to
conduct our art & craft classand not manage to sell as many packets of DIY clay art
packages as we expected, our group member were very supportive and cooperative in
running the business. We have also applied the 4P marketing strategies (price, product
and service, place and promotion strategies) in ensuring the success of our company.
Other than that, we had learned several lessons in the process of running our clay art
business in UPM, such as entrepreneurial skills (sales and marketing skills,
communication skills, self-motivation skills and time management skills), understand
the importance of preparing a business plan before starting up any business, be
different from the other business companies or groups, learned to accept failure with
open heart, learned from mistakes and strive to achieve success in the next business,
learned to take risks, and be creative and innovative in our running our business. All
these skills and experience will make us a better entrepreneur in the future.

In conclusion, we managed to gain useful skills and experience in running a

small business in UPM. We are grateful to PuanSitiRahayuHussin, who has given us
the opportunity to start up our first business in UPM under the course of MGM 3180,
guided and supported us, and also given us useful advice and ideas on how we can
improve our business. We are also thankful for the help that we get from our friends
and family. Last but not least, we are happy to have each other as group members in
running the clay art business. Together, we made a great team and it enables us to
achieve success in our clay art business. Thank you for all the hard work!

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 10.0 Appendixes

*Clay It Yourself @ CIY*

Dear friends, we are currently doing a short survey regarding clay art for the course MGM3180 Basic
Entrepreneurship. Kindly fill this form and hit the "submit" button after you're done with it.

HUGE THANKS FOR YOUR TIME AND COOPERATION! =]

* Required

1. How interested are you with clay art? *

1 2 3 4 5

Not interested at all Very interested

2. How interested are you in buying a ready-made clay art product? *

1 2 3 4 5

Not interested at all Very interested

3. How much are you willing to pay for a ready-made clay art product? *

· RM5

· Other:

4. How interested are you in joining a quick class (1 hour) for clay art production? *

1 2 3 4 5

Not interested at all Very interested

5. How much are you willing to pay for a quick class (1 hour) for clay art production? *

· RM8
· Other:

6. Which of these is a suitable day and time for you to join a quick class (1 hour) for clay art
production? *You may choose more than one option.

· Tuesday (2pm-3pm)

· Tuesday (3pm-4pm)

· Tuesday (7pm-8pm)

· Tuesday (8pm-9pm)

· Wednesday (4pm-5pm)

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 · Wednesday (5pm-6pm)
· Other:

7. Which of these places do you prefer to join a quick class (1 hour) for clay art production?*You
may choose more than one option.

· Faculty of Economics and Management (FEP)

· KompleksAkademikMahasiswa (KAA)

· Fifth College (K5)

· Canselor College (KC) / Sixth College (K6)

· Other:

Submit

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