Business Plan for Photography

In this day and age, capturing a photo is easier with the advancement of technology. New technologies have been developed and many people are able to take photograph digitally and print it by themselves. However, only a small amount of people know how to capture their memorable moments properly. People will do whatever they can to preserve the memorable moments so that they will be able to cherish them in the later life. Fine Line Images Professional Photography plans to take advantage of that by offering high-quality service of professional photographers. We are dedicated to capturing a moment you can remember forever and will preserve your memories in a beautiful piece of photographic art.

Fine Line Images Professional Photography® is owned by Prestige Galleries™. The founders of the company have various experiences and differ from each other. But they have one thing in common, a passion in photography. That is why they decided to invest their money and they have faith that this company will succeed.

For the first 2 years, Fine Line Images Professional Photography® consists of 8 management staffs, a professional full time and two part time photographers. The business will be located in the heart of Kuala Lumpur, which is a shop lot at Avenue K Mall, Jalan Ampang, Kuala Lumpur. It is situated strategically opposite to KLCC and condominiums. Therefore, the availability of our services towards customers, locals and tourists is an advantage. Basically, our company will offer a variety of services such as photographing for events, photographing for magazines, sell artistic photographs, aside from studio photographing for individual purposes.

Currently, when we ask ourselves to name a professional photographer company that stands out among the rest, we believe that most people could not answer that. This proves that there are not many companies that offer professional photographer out there or their marketing strategies are not effective. Therefore, there are fewer well known competitors in this industry. Although there are many competitors from small shops that specialize in studio photographing, these are not exactly the same type of businesses as we are.
Fine Line Images Professional Photography® will use aggressive marketing strategies. The company will promote its name through the pictures taken by our professional photographers. After all, a picture tells a thousand words. From the display of our photographs, potential customers will know the quality and the strength of our services. The company also has a website which is www.prestigegalleries.com/finelineimages. Through this website, the company will promote our services, business activities and captured photographs. The company also owns a gallery which will be used to display an array of our captured photographs. Fine Line Images Professional Photography® will also try to collaborate with magazines published in the country to strengthen the company’s image and brand name.

All photographs taken by Fine Line Images Professional Photography® will carry proper copyright notice. This notice of copyright will offer protection against a claim of "innocent infringement" on the part of a client. Some clients of Fine Line Images Professional Photography® will require copyright release forms; this will primarily involve any person who will need to use the photographs for publication.

The strategic location and effective marketing strategies will prove beneficial to us even though the cost of start up is quite high. Slowly, the sales and profits generated from the business will recover back the costs and eventually, after we have created a strong brand name in the industry in the next few years, we will have a high earning of income. For the financial plan, each of the management staffs who are also the founders will contribute RM 10,000 to the companies. We are planning to increase our capital structure. Therefore, as a result, we are requesting another RM 30,000 from potential investors and we are also planning to apply for loan from bank amounting to RM 50,000 for this purpose. With the availability of the funds, the company can become more competitive and is able to provide high-quality services in order to achieve the company’s objectives, vision and mission.


Today’s environment present that most of people are concern about their sweet moments and they will make them memorable by keeping them whether by buried as photos or been recorded. Fine Line Images Professional Photographer® is a company which will provide professional photography services and pictures. We will accept any order from our interested customers who are willing to use our services by hiring our professionals. Our services are more toward capturing pictures and we will provide professional photographers to ensure high-quality results are committed to provide every customer with value and satisfaction. In additional, our company has a gallery that being used to promote our services. Pictures taken by our professionals are available at the gallery and those who are interested to buy the pictures are allowed to do so. This gallery is one of the marketing strategies of the company where we try to promote our professional by publishing their work collections.

Since there are a lot of competitors from small organizations, our company will focus in big occasions such as wedding ceremonies and important celebrations. More over, there are few big companies that directly involved in photography, we can say that our company has few competitors and this will give us more advantages to expand our business in the market because we are offering professional photographing services. Beside that, we are willing to share our professional knowledge such as tips to take pictures, camera and its function, portfolio photographer and how to do picture editor through magazines. Those people that interested in photographing can gain knowledge and tips through the magazines. Furthermore, it will help us to promote and to make Fine Line Images Professional Photographer® as a well-known company.

For those who are interested to render our services, they can contact us or send us an email. We will have a short discussion regarding the pricing because the price is depend on type of services that they want.

2.1 Objective
Fine Line Images Professional Photographer® is a company that aimed at bringing a smile to every person that love to take pictures of their sweet moments. Our goal is to ensure satisfaction from customers and members by providing them with the best services and high-quality of pictures.

2.2 Mission
Most of the people are concern about the quality of a product and they want to maximize their satisfaction when using a product they bought. As a professional photographer company, we will give the best services and high-quality pictures to our customers. By using our professional experiences, we will provide high-quality pictures that hard to produce by non-professional photographer. These will ensure that our customers will satisfied with our products and will ask for our products for the next time.

2.3 Key of Success
Our company will ensure that we will give good commitment to our customers and we will give the best in order to satisfy them. We will build a good relation with our customers and we will fulfill their demands.













3.1 Products and Services
Fine Line Images Professional Photography® offers a variety of products and services to meet our client's needs. We offer specific information on each of our products to the prospective client. This information is designed to help the client select a setting for any type of photographic session. The discussion of the different settings helps the client select a studio session, personal session, or outdoor location for the photographs. We also provide instructions for each setting. For example, for formal portrait sessions, we provide detailed instructions to the clients for a better result and customer satisfaction. The following sections are examples of the services we provide and the resulting product.
3.2 Product and Service Description
3.2.1 Right’s Managed & Royalty Free Imagery
3.2.1.1 Rights managed Definition:
Rights-managed images are licensed on a use-by-use basis. The fee for using the product is calculated from several factors including size, placement, duration of use and geographic distribution. At the time you order a rights-managed image you will be asked to submit information that will specify the usage rights to be granted. A rights-managed image can be protected at different levels. This means that, depending on the level of protection you choose, you can insure that your image will not be used within a specific industry and/or for a specific use by a competitor during the time you specify. Rights Managed images are designated by a (RM) next to the identification number. .
3.2.1.2 Royalty Free Definition:
Royalty-free pricing is based solely on the size of the product you need, not the specific use. You don't have to pay any additional royalties on a use-by-use basis. Once you purchase a royalty-free product, you may use it multiple times for multiple projects without paying additional fees. (Pornographic, defamatory, libelous or otherwise unlawful use of any image is, of course, prohibited.)
3.3 Technology
Digital imaging technology has brought new and exciting tools to photography. Today the client can see the images recorded in the studio moments after they are taken. High-resolution printers make a print of the image readily available--no processing of film is required. The software to control and manipulate the digital images can remove unwanted objects and shadows, and enhance other qualities. Many sources believe that in the years to come we will replace traditional film with digital images. While this may be true of the amateur photographer and the commercial or technical photographer, we at Fine Line Images Professional Photography® believe that the time-honored artistry of photography, exhibited by Ansel Adams, Yuseff Karsh, Annie Leibowitz, and other famous photographers, will continue to be recorded on film.
With a single piece of equipment--the camera--different film emulsions can be used to control grain, contrast, tone, and texture of an image. This image, and the lighting of the subject, are composed in the artistic eye of the photographer and capture a moment in time. While we certainly believe that digital imagery is an enhancement to the portrait photographer, and its application in portrait photography will increase, we do not believe that it is a replacement for artistic talent.
3.4 Equipments
We have many types of equipment, varying from the purposes that we use it for. Here are the backbones equipments of our company which really let our photographers get to working and also we mainly update these ones whenever we have to.


180 Pcs. Canon EOS 400D / Digital Rebel XTi
Image

Format SLR
Price (street) US$800
Also known as Canon EOS Digital Rebel Xti
Camera body
Release Status
Max resolution
3888 x 2592
Low resolution
2816 x 1880, 1936 x 1288
Image ratio w:h
3:2
Effective pixels
10.1 million
Sensor photo detectors
10.5 million
Sensor size
22.2 x 14.8 mm
Sensor type
CMOS
Colour filter array
RGB
Sensor manufacturer
Canon
ISO rating
100, 200, 400, 800, 1600
Zoom wide (W)
n/a
Zoom tele (T)
n/a
Digital zoom
No
Image stabilization
No
Auto Focus
Yes
Manual Focus
Yes
Auto focus type
Multi-BASIS TTL, 9 focus points (EOS 30D AF)
Normal focus range

Macro focus range
n/a
White balance override
6 positions & manual preset
Aperture range
n/a
Min shutter
30 sec + Bulb
Max shutter
1/4000 sec
Built-in Flash Yes, pop-up
Flash guide no. 12 m (39.3 ft) @ ISO 100
External flash Yes, hot-shoe, E-TTL II
Flash modes Auto, On, Red-eye reduction, Off
Exposure compensation
-2 EV to +2 EV in 1/3 EV or 1/2 EV steps
Metering
35 area eval, center weighted, partial
Aperture priority
Yes
Shutter priority
Yes
Focal length multiplier
1.6
Lens thread Canon EOS EF, EF-S mount
Continuous Drive
Yes, 3.0 fps, 27 JPEG or 10 RAW frames
Movie Clips No
Remote control E3 connector, InfraRed
Tripod mount Yes
Self-timer 10 sec (2 sec with mirror lock-up)
Timelapse recording
Yes, by USB cable and PC
Orientation sensor Yes
Storage types
Compact Flash (Type I or II)
Storage included
None
Uncompressed format
RAW
Compressed format
JPEG (EXIF 2.21)
Quality Levels
Fine, Normal
Viewfinder
TTL
LCD
2.5 "
LCD Pixels
230,000
Video out
Yes
USB
Yes, 2.0
Firewire (IEEE 1394)
No
Battery / Charger
Yes
Battery
Canon 720mAh Li-Ion & Charger
Weight (inc. batteries) 556 g (19.6 oz)
Dimensions 127 x 94 x 65 mm (5 x 3.7 x 2.6 in)
Notes
Resolution Chart
Colour Patches

65 Pcs. Nikon D80
Image

Format SLR
Price (street) US$999
Also known as
Camera body
Release Status
Max resolution
3872 x 2592
Low resolution
2896 x 1944, 1936 x 1296
Image ratio w:h
3:2
Effective pixels
10.0 million
Sensor photo detectors
10.8 million
Sensor size
23.6 x 15.8 mm
Sensor type
CCD
Colour filter array
RGB
Sensor manufacturer
Sony
ISO rating
Auto, 100 - 1600 (up to 3200 with boost)
Zoom wide (W)
n/a
Zoom tele (T)
n/a
Digital zoom
No
Image stabilization
No
Auto Focus
Yes
Manual Focus
Yes
Auto focus type
Nikon Multi-CAM1000
Normal focus range
n/a
Macro focus range
n/a
White balance override
6 positions, plus manual preset
Aperture range
n/a
Min shutter
30 sec + Bulb
Max shutter
1/4000 sec
Built-in Flash Yes, pop-up
Flash guide no. 13 m (42.6 ft) m
External flash Yes, hot-shoe
Flash modes Front curtain, Rear curtain, Red-Eye, Slow, Red-Eye Slow
Exposure compensation
-5 EV to +5 EV in 1/2 or 1/3 EV steps
Metering
3D Matrix metering II, Center weighted, Spot
Aperture priority
Yes
Shutter priority
Yes
Focal length multiplier
1.5
Lens thread Nikkor AF / F-mount, D-Type
Continuous Drive
Yes, 3 fps, up to 23 JPEG, 6 NEF images
Movie Clips No
Remote control Optional (ML-L3 or MC-DC1)
Tripod mount Yes
Self-timer 2, 5, 10 or 20 sec
Timelapse recording
No
Orientation sensor Yes
Storage types
SD/SDHC card
Storage included
None
Uncompressed format
RAW
Compressed format
JPEG (EXIF 2.2)
Quality Levels
Fine, Normal, Basic
Viewfinder
TTL
LCD
2.5 "
LCD Pixels
230,000
Video out
Yes
USB
Yes, 2.0
Firewire (IEEE 1394)
No
Battery / Charger
Yes
Battery
Nikon EN-EL3e Lithium-Ion battery
Weight (inc. batteries) 668 g (23.6 oz)
Dimensions 132 x 103 x 77 mm (5.2 x 4.1 x 3 in)
Notes
Resolution Chart
Colour Patches



4.0 MARKET DESCRIPTION
In photography industry, our target market will be everyone in the community. In other words, everybody is a potential customer for our business. As we do not specifically targeting a specific market group, we accept customers from different age and income group, gender, culture etc. However, our business is more focusing on customers from and inside Klang Valley, including areas such as Kajang, Klang, Puchong and Shah Alam. We are trying to provide quality photographing services with affordable range of prices.

4.1 Types of Customers
We have divided our customers into several smaller groups:

4.1.1 Business and Corporation
Firms, companies and organizations fall under this category. For this type of group, we provide professional photography services for their annual dinner, family day or events such as product launching and annual general meeting.

4.1.2 Special events/occasions
Special events like wedding, birthday party and wedding anniversary are under this category. We have several interesting packages that could satisfy our customers need and demand for this category.

4.1.3 School, Colleges and Universities
This type of categories may as well guarantee an annual income for the company. In detail, we have reached agreements with several school and colleges whom we shall provide photographing services for them. Some of the services will be college’s year book, graduation pictures and events that being organized by the universities or colleges. University of Kuala Lumpur, Inpens College and Help Institute are among the universities and colleges that involve in the agreements. Indirectly, this is a way of promoting the company to public.

4.1.4 Personal
This group includes individuals who come alone, with his/her partner or with families. For this category, we provide services like family photograph package, studio portrait and passport photograph.

4.2 Market Size and Trend
In this industry, the market size is very big as it is common for everyone to have their pictures taken. Nowadays, more people want their memorable moments to be kept in images; either in still or moving images. Although at the moment, there are many new models of digital cameras and videos available in the market, many people would still prefer to obtain services from professional photographers for their events and functions. This is mainly due to the equipment and the skills that they have with them. Apart from having quality products, the customer could focus on other things as the photograph is handled by professionals. Our company is entering an existing but a big market. It is an opportunity for our company to exploit and gain profits from.

4.3 Competitors
We have identified a type of competitors that we have to face to get our own market share in the photography market. These competitors are:

Other Professional Photography Companies:
Although there will be some similarities in term of our services, we will try to give services at the lowest price. Furthermore, we would give free advice and consultation related to photograph. One of our main competitors will be Foto Prime, who is in the market since 1983. Therefore, we have to build our own reputation and brand equity in order for us to challenge the ‘big boys’.




5.0 Market analysis Summary
Many of today's white collar professionals, between the ages of 26 and 60 want to take photographs for different occasions. It is most important for remembrance in the future. People spend approximately $26 billion annually for photography, (Hunter, 1999). Fine line Images Professional Photography will reach this particular audience by targeting clients of these existing markets. We will fill the prevalent need for clients by specializing in all types of photography. Through advertisements in print media, brochures, and establishing working relationships with all organizations and specialty businesses frequented by our potential client base, we will highlight our quality products and services.
5.1 Market Segmentation
The breakdown for the market for photography is somewhat diverse, as are the products designed to meet those needs. Individuals, as well as organizations, require the services that we provide. In order to deliver the greatest depth, the market segments have been broken down into private organizations and individuals stratified by age groups.
5.1.1 Private Organizations and Businesses:
Our target market is business organizations as well as private organizations. The potential business customers will be newspapers, magazines and wedding planners as well as other events connectors. We believe that 75% of all Malaysians want their pictures saved for the future. The potential business customers are expected to pay us thousands of ringgits per year for photography contracts. We can also concentrate on organizations such as schools, universities, and parks that organize occasional special events.
5.1.2 Individual clients:
The market in this category can be further divided into product lines designed to meet the needs of individual customers.
o Studio and Location Portraits: This category will generate the second-highest level of income for the business; the market segment will be white collar professionals 26-60 years old. Individuals that fall into this age group are one of the potential markets. The studio portraits will capture a lasting memory, and the location portraits will highlight the relationship with the family at home.
o Seasonal Promotions: This category represents the highest level of sales. The product in this category will appeal to the all age groups, but focuses on candid photography to capture in themed settings such as Chinese New Year, Deepavali celebration or Christmas.
5.2 Market Analysis
Market Analysis
Potential Customers Growth 2000 2001 2002 2003 2004 CAGR
Private Organizations/Businesses 20% 850 1,020 1,224 1,469 1,763 20.01%
Individuals 15% 2,865 3,295 3,789 4,357 5,011 15.00%
Stock Photography Market 10% 250 275 303 333 366 10.00%
Total 15.84% 3,965 4,590 5,316 6,159 7,140 15.84%






5.3 Target market segment strategy
Our target markets are middle- to upper-middle class families, couples, individuals, or private organizations and businesses. We chose these groups because they are most likely to have outings and visit events, have the need to take photographs for magazines.
In today's current environment, photographs occupy a prominent place in the family, or as the central focus of attention in a single household. Sales trends for these photographs have shown substantial annual increases since 2000. Fine Line Images Professional Photography® fills a need for capturing a moment in time, or preserving a special relationship and providing loved ones with a high quality portrait of them and their best friend. Considering the rise in income and population, coupled with the increased spending for decoration items and services, the demand for individual photography services can only increase.
5.4 Market Needs
Photographs have always been an important part of the Malaysian family. However, as the Malaysian culture has changed in the last two decades, an even more prominent role for the highly paid weddings and events has emerged. In today's mobile society, people often lose touch with their community, friends, and family, exchange of photographs and cards are more common in the communities. As more people put off having children until later in life, money in their hand is increasingly lapping up the luxuries that had once been reserved for human housemates. Research had shown that photographs help people with mental and emotional weakness by helping them to think of there future and more over, it relax their mind.
The importance of the family photographs is evident, and it calculates into big business. People want to show how much they care. Thus, it only makes sense that all the member of the family should be included in the family portrait, or even have a separate photo shoot of their selves. Indeed, with increasing frequency, we now see pictures of families on employee's desks. A photography studio that openly welcomes everyone appears to be a viable business unto itself.
5.5 Market Trend
As Malaysians have enjoyed increased standards of living, they expect to pass this on to their luxuries. They spend thousands of Ringgits on the events such as wedding or Birthday party and from which quite large budget is reserved for the photographs. They tend to hire professionals for this job.
5.6 Service Business Analysis
Fine Line Images Professional Photography® is in a unique position of competition. We compete against two other exclusive large scale photographers in the KL area, and a host of amateur photographers. The benefits and drawbacks of each of our competitors as compared with the services we offer are hardly a match in quality and price.
5.6.1 Standard Portrait Studios:
• Strengths: Established studio locations and support staff, often with repeat clients. Reputation as reliable and stable business.
• Weaknesses: Often very expensive, with little or no experience in certain environment. Can be inflexible with scheduling and out-of-studio work.
5.6.2 Other Exclusive Photographers:
• Strengths: Have been in the market longer; have established client base and reputation.
• Weaknesses: Array of services is limited, inflexible with schedules, and limited studio capability. Quality of final portrait.
5.6.3 Local Amateur Photographers:
• Strengths: Pricing.
• Weaknesses: Quality of final product, lack of professional photographic equipment and skills.
5.6.4 Business Participants
The portrait photography business is composed of thousands of small, individually-owned studios, and several large franchise operations. Portrait photography is a new, but very successful, niche market which is experiencing rapid growth. While this segment of the industry is largely based on individually owned studios or "on location" photographers who operate without a studio, we can still compete with these small scale operations and capture their market.

5.7 PROMOTION STRATEGY
Fine Line Images Professional Photography® will use specialty events to broaden our client base through direct marketing to individual attending the events. Through an arrangement with the specialty show organizers, we will have a link to our website. On this link we will feature information about our services, pricing, location, and showcase examples of previous work. We will advertise our services by placing brochures and finished photographic works of art in pet specialty stores, grooming salons, and veterinary clinics. Through the Showcase School of Photography, we will offer classes for teaching amateur photographers how to take successful candid photographs. Finally, we will place ads in any monthly magazine. These advertisements target customers’ enthusiasts, and highlight Fine Line Images Professional Photography® quality portrait packages and reasonable prices.

5.8 Advertising Strategy

1) Business Card
By using business card, we can provide sufficient information related to our business to clients. Furthermore, we could exchange business cards with our potential customers in functions and events. It will be easier for the customer to make a contact with our business.

2) Brochures
Brochures will be given to the public informing the about our business around the Klang Valley before and after opening the business. This is our way in promoting our business to the customers.

3) Networking
Our employees will visit schools, colleges and universities to promote our professional services. By making contacts with them, we could expand our market further. We could be handling their annual school book, graduation day or even events that being organized by them.

4) Flyers
Flayers will be distributed to the people around Klang Valley. We could send it to offices, residential areas and distribute it at shopping malls. This is to inform the public about our business before and after opening the business.










The management of Fine Line Images Professional Photography® will be very simple in the first few years. The founders will manage the business and serve as office assistants. The photographers for the first two years of operation will consist of a full time photographer and part-time individuals. In the third year of operation, this part-time position will be upgraded to a full-time photographer as the assumptions regarding profitability come to pass.
Fine Line Images Professional Photography® growth will be deliberate rather than fast paced. It is possible that the business will need additional staff. Gaps in the personnel structure might well occur in the support staff. It is a reasonable assumption that the demands of the office, and also assisting the photographer, might become too much for a few individuals. Depending on the strengths of the full time photographer, the subsequent staff member will be hired as a complement.
6.1 Management Team
The core management team of Fine Line Images Professional Photography® includes several executives with successful backgrounds in various industries and experience with startup operations:
Nadzrul Haq bin Abdul Razak will be the manager of Fine Line Images Professional Photography®. He has a pleasant personality, competitive, ambitious and has good interpersonal skill. He was a sports bureau in Students Council in Sunway University College and used to represent Multimedia University in football in Cyber League. He used to work as an accountant in different companies. With his experience, he has been elected as the General Manager of the company.

Nor Affandy Bin Jaafar has been chosen to be the company’s Human Resource Management. He has experience working with people around him, and that is why he is holding the position of HR Manager. Mr. Affandy used to work as an assistant audit Manager at Next Telecommunications Sdn. Bhd

Ms. Hasmaliza was nominated as Fine Line Images Professional Photography® Finance Manager. With the help of Mr. Adib, who is our Accounting Manager, they will be in charge in the finance department. Both of them have the experience in the department that has been mentioned.

For our marketing department, the board of directors of Fine Line Images Professional Photography® and owners of Prestige Galleries™ has voted Mr. Ali and Mr. Muhibullah as Marketing Managers. Their job is basically let words about Fine Line Images Professional Photography® spread around and promote Fine Line Images Professional Photography®. They have the professional services of talented Mr. Omar to help their jobs.
The company’s will have one Production Manager and the person that has been elected is Mr. Abdulrahman. He used to be the Senior Digital Photographer of MindImages.com and Head of Photography for GulfNews. With his experience in photography and cameras, he has been chosen as the company’s Production Manager.

As for the company’s Public Relation Manager, Ms. Aireen has been designated for the job mentioned. She was a journalist for The Star newspaper, and used to communicate with many people from different stages. She also has a lot of contacts. Therefore, she was the suitable person for the title.

6.2 Board of Directors
An impressive board of directors has been assembled that represents some top professional from the area. They will be a great asset to the development of the company. The company seeks advice from two professional photographers in Malaysia, who are Mr. Stephen Wong and Mr. Ted Adnan. We also have Mr. Bernand Chandran as our director. We include Bernand because fashion and photography are closely related. So, with Bernand as one of our director, he could use his influences in fashion industry to promote our services to others.
Stephen Wong is a photographer from Kuala Lumpur, Malaysia who has an ability to combine elements in an image that create interest and integrity and also have a strong work ethic. Besides, he likes to play a role in the creative process.
Ted Adnan Asmadi is also a photographer. He is also a producer & film maker, based in Kuala Lumpur. Ted is a self taught photographer; his background in Arts and Accounts is a distinct advantage over others in providing images that a client requires. He is comfortable creating images in both analog and digital format, and easily transcends both location and studio environments.
Currently known as Malaysia's 'Prince of Fashion', Chandran is one of the very few who takes the effort to understand his customers. This makes his work unique, as each creation is incorporated with something that has not been used before. All his creations are a fusion of artistic elegance and modern day practicality.

He honed his fashion design skills in Paris and became the first Malaysian to win the 'Open European Contest for Look of the Year 2000' in 1991. His talents have earned him many faithful clients among Malaysia's elite most notably the Royal families of Brunei and Malaysia.


6.3 Ownership
Fine Line Images Professional Photography® is a subsidiary company owned by 8 members; Mr. Nadzrul Haq, Mr. Nor Affandy, Mr. Adib, Mr. Abdulrahman, Mr. Ali, Mr. Muhibullah, Ms Hasmaliza and Madam Aireen. The stockholders will retain ownership with the possibility of offering stock to key employees if deemed appropriate. However this act only can be done with all 6 member’s agreement.
6.4 Support Services
At the current state, we have hired part-time photographers. The founders of Prestige Galleries™ and Fine Line Images Professional Photography® will be the management staffs, for that we are in shortage of workforce. Mr. Omar a freelance graphic designer is in the position in creating Fine Line Images Professional Photography® logo, create an advertising campaign for the company. He will also be assisting Mr. Ali and Mr. Muhibullah to make sure Fine Line Images Professional Photography® is well advertised. At the present, we’ve retained consult from Mark & Brown Consultant.












Photography businesses usually require an enormous initial investment in equipment and facilities.
7.1 Important Assumptions
Tax rates are included for informational purposes. We carry a small loan burden that will affect this rate minimally.
General Assumptions
FY 2014 FY 2015 FY 2016
Plan Month 1 2 3
Current Interest Rate 8.00% 8.00% 8.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0

7.4 Projected Profit and Loss
Fine Line Images Professional Photography® expects a 15 percent annual growth rate for the first three years due to the owners’ already established reputation and contacts. Overhead is expected to be stable, with the exception of the photographers’ assistant becoming a full-time position in fiscal year 2016. This allows a predicted 20 percent increase in profits before interest and taxes in the second year of business; this figure remains stable even with the increase in personnel expense the third year. It should be noted that the owner's salary will be taken out of this figure.



Profit and Loss
FY 2014 FY 2015 FY 2016
RM RM RM
Sales 88,250 99,340 116,175
Direct Costs of Goods 27,105 31,777 36,087
Other 0 0 0
----------- ---------- -----------
Cost of Goods Sold 27,105 31,777 36,087
Gross Margin 61,145 67,563 80,088
Gross Margin % 69.29% 68.01% 68.94%
Expenses:
Payroll 0 0 0
Sales and Marketing and Other Expenses 9,900 7,500 7,600
Depreciation 2,004 2,004 2,004
Leased Equipment 0 0 0
Utilities 600 630 650
Insurance 1,800 1,800 1,800
Rent 8500 8500 8500
Payroll Taxes 0 0 0
Other 0 0 0
----------- ---------- ----------
Total Operating Expenses 22,804 20,434 20,554
Profit Before Interest and Taxes 46,841 55,629 68,034
Interest Expense 696 512 320
Taxes Incurred 11,482 13,779 17,211
Net Profit 26,163 32,838 42,003
Net Profit/Sales 39.28% 41.61% 43.47%


7.5 Projected Cash Flow
Our cash situation is optimum. The cash flow is negative for only two months of the first year, during the expected off-season months; the business will be prepared for this with cash reserves, and will maintain positive cash balances.
Cash


Cash Flow
FY 2014 FY 2015 FY 2016

Cash Received
Cash from Operations:
Cash Sales 88,250 99,340 116,175
Cash from Receivables 0 0 0
Subtotal Cash from Operations 88,250 99,340 116,175

Additional Cash Received
Sales Tax 0 0 0
New Current Borrowing 0 0 0
New Other Liabilities (interest-free) 0 0 0
New Long-term Liabilities 0 0 0
Sales of Other Current Assets 0 0 0
Sales of Long-term Assets 0 0 0
New Investment Received 1,200 0 0
Subtotal Cash Received 89,450 99,340 116,175

Expenditures FY 2014 FY 2015 FY 2016
Expenditures from Operations:
Cash Spending 4,874 5,323 5,760
Payment of Accounts Payable 44,475 50,717 57,936
Subtotal Spent on Operations 49,350 56,040 63,696

Additional Cash Spent
Sales Tax 0 0 0
Principal Repayment of Current Borrowing 2,400 2,400 2,400
Other Liabilities Principal Repayment 0 0 0
Long-term Liabilities Principal Repayment 0 0 0
Purchase Other Current Assets 0 0 0
Purchase Long-term Assets 0 0 0
Dividends 0 0 0
Subtotal Cash Spent 51,750 58,440 66,096

Net Cash Flow 37,700 40,900 50,079
Cash Balance 51,200 92,101 142,180

7.6 Projected Balance Sheet
Fine Line Images Professional Photography® is set up for business. According to the numbers, there is steady accumulation of cash and assets. Accounts payable remain stable. No major capital investments are expected throughout the early years, so the liabilities remain limited. Net worth steadily grows.
Balance Sheet

Assets
Current Assets FY 2014 FY 2015 FY 2016
Cash 51,200 92,101 142,180
Inventory 1,355 1,589 1,804
Other Current Assets 10,000 10,000 10,000
Total Current Assets 62,555 103,689 153,984
Long-term Assets
Long-term Assets 0 0 0
Accumulated Depreciation 2,004 4,008 6,012
Total Long-term Assets (2,004) (4,008) (6,012)
Total Assets 60,551 99,681 147,972

Liabilities and Capital
Current Liabilities FY 2014 FY 2015 FY 2016
Accounts Payable 2,088 2,280 2,467
Current Borrowing 7,600 5,200 2,800
Other Current Liabilities 0 0 0
Subtotal Current Liabilities 9,688 7,480 5,267

Long-term Liabilities 0 0 0
Total Liabilities 9,688 7,480 5,267

Paid-in Capital 23,550 23,550 23,550
Retained Earnings (7,350) 27,313 68,651
Earnings 34,663 41,338 50,503
Total Capital 50,863 92,201 142,704
Total Liabilities and Capital 60,551 99,681 147,972
Net Worth 50,863 92,201 142,704
Purchase Other Current Assets 0 0 0
Purchase Long-term Assets 0 0 0
Dividends 0 0 0
Subtotal Cash Spent 51,750 58,440 66,096

Net Cash Flow 37,700 40,900 50,079
Cash Balance 51,200 92,101 142,180
7.7 Ratios
The following table includes Industry Profile statistics for the photographic studios/portraits industry, as determined by the Standard Industry Classifications (SIC) Index code 7221. These statistics show a comparison of industry standards and the key ratios for this plan.
Ratio Analysis
FY 2014 FY 2015 FY 2016
Sales Growth 0.00% 12.57% 16.95%

Percent of Total Assets
Accounts Receivable 0.00% 0.00% 0.00%
Inventory 2.24% 1.59% 1.22%
Other Current Assets 16.51% 10.03% 6.76%
Total Current Assets 103.31% 104.02% 104.06%
Long-term Assets -3.31% -4.02% -4.06%
Total Assets 100.00% 100.00% 100.00%

Current Liabilities 16.00% 7.50% 3.56%
Long-term Liabilities 0.00% 0.00% 0.00%
Total Liabilities 16.00% 7.50% 3.56%
Net Worth 84.00% 92.50% 96.44%

Percent of Sales
Sales 100.00% 100.00% 100.00%
Gross Margin 69.29% 68.01% 68.94%
Selling, General & Administrative Expenses 39.42% 35.46% 40.72%
Advertising Expenses 8.50% 5.03% 4.30%
Profit Before Interest and Taxes 53.08% 56.00% 58.56%

Main Ratios
Current 6.46 13.86 29.23
Quick 6.32 13.65 28.89
Total Debt to Total Assets 16.00% 7.50% 3.56%
Pre-tax Return on Net Worth 90.72% 59.78% 47.45%
Pre-tax Return on Assets 76.21% 55.29% 45.76%

Additional Ratios FY 2014 FY 2015 FY 2016
Net Profit Margin 39.28% 41.61% 43.47%
Return on Equity 68.15% 44.83% 35.39%

Activity Ratios
Accounts Receivable Turnover 0 0 0