Business Proposal for the Al-Yamamah College and JavaNet

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Executive Summary

This is a proposal which is mainly framed for Java Net to open a new branch inside Al-yamamah College. It is a typical forum that provides an exceptional forum for entertainment and communication via the internet. The proposal deals about all the major concerns that are directly associated with the establishment of the new branch in the predetermined location. The proposal is designed to identify the various factors and that influences the decision to start a new branch. The needs and opportunities are identified and based on that additional requirements are designed. An important objective of the company is to create a demand in the college campus by providing an educational and entertaining atmosphere for worldwide communication. The total budget required for the company to lay its foundation on the college campus is SR 88,290. The other additional finance requirements are generated from the King Fahed Economic Development Fund, from personal savings from the owner Omar Al-Aqeel, from three investors, and from the short-term loans. In addition to the capital, the company has also secured finance from its shareholders and funds from the Oregon Economic Development. The goal of the project of starting the Java net Internet café is its objective to satisfy the increasing demand for internet for the people and also providing internet to people at a reasonable cost. A well-integrated action plan has been designed to carry out the project work in an efficient and effective way. A strong customer base will be generated within few months of operation and this will lead to the company’s success in the market. The chart shown below depicts the yearly growth of the concern.

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Company Background

Java Net offers the community easy and affordable access to the Internet and it is located in downtown Riyadh on Prince Sultan Street. It has a long time experience in this field of operation. The company endow with jam-packed access to email, WWW, FTP, Usenet and erstwhile Internet applications such as Telnet and Gopher. It also offer exclusive and pioneering environment for enjoying grand coffee, specialty beverages, and bakery stuff to the customers specifically the college students.

Identification of Needs and opportunity

The needs of the customers are identified by providing a novice-friendly environment. The needs of the students are identified by conducting small survey and the data are collected by the questionnaire stating the facilities that the students are expecting from the concern. This supply of questionnaire enabled to understand and identify the need of the customer.

Starting a new branch inside the Al-yamamah College campus is a very opportunity for the concern because the student category uses the internet facility more and thus can explore the demand that is currently prevailing in the market. The other opportunity is that the college students will not go outside for using internet when such facility is presented in the college itself.

(Receiving Company’s Name) Needs

The company will have its name in a good position if it able to meet the expectations of the customer and when it meet its corporate social responsibility. After the needs are identified appropriate measure are taken for further implementation process to make the operation to start a new branch a successful one.

Additional Requirements

The additional requirements for the firm that are required for starting a new branch are:

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  • Well established furniture
  • Required number of staffs
  • Modern machines and equipments
  • Sources from where funds can be generated.
  • Cafeteria and other snack facilities in the concern.


This project proposal is done for an existing company and as it is a proposal the figures ad the data derived are just estimations. The informations are collected from the published materials and the data derived from the questionnaires that are used for need identification.

Project Scope

The scope of the project is to establish a new branch of Java net in the Al-Yamamah College and how the decision created can be a success. This project work is not only confined to the students but also includes all the members in the college including the teaching staffs. The various ways that are used to attract both teaching and student category is taken into consideration.

Statement of Need

Proposed strategy

Today, all the businesses are in great competition; for existence, this company implemented some new policies for the safety in future. One of the proposed strategies is to add more communication system for the progress of its business. It included new services and policies in order to get new customers and to retain the existing permanent customers. It also implements latest technologies like fast processing computers for the quick availability of internet connection for the users.


The main objectives of this proposal are:

  • To establish a new branch within the Al-Yamamah College.
  • To understand the various issues that is faced by the concern in starting a new business in to organization.
  • Accessing the information of online services at reasonable price.


The main strategies of java net are:

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  • Attention on attracting new customers.
  • Providing a unique and sociable atmosphere to the customers.
  • Pull strategy of power internet customers.


Java net internet café provides complete accessing of the internet functions at reasonable price to the users. The internet café also offers Xerox facility. The services are delivered at relatively lower price than that of the services offered by the outside service providers. It provides coffee and bakery items for their customers to create a pleasant and friendly atmosphere for the internet users

Needs vs. Opportunities

Javanet internet cafe offers entertainment and communication via internet. The main requirement of Javanet internet café is to get necessary equipments for communication so that internet facility is available to the customers. Other needs include the equipments for entertainment, capital etc. The opportunities in this field are increasing because the number of internet users is increasing day by day. Internet has strengthened the social bonds between people of different regions. This created more demand for the internet service providers.

Project Team

The project team consists consist of the persons who are responsible for carrying out the project proposal. The proposal is to start a new branch with in the Al-Yamamah College. The project team consist of ten members and they were divided to five equal groups. Each group handled the various functions such as marketing, market research, preparing questionnaire, financial planning and budgeting.

Market Trend

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The popularity of internet is increasing in the market at a fast rate. Most of the people use internet often for various purposes like communicating with others, browsing etc. Payment is collected on an hourly basis.

Market of your service/product

The service has good market because of the wide popularity and use of internet. Since Javanet provides an atmosphere of entertainment and comfort, all types of people are attracted towards it. The target customers was the teachers and the students in the campus.

Service/Product providers in your market

There are number of service providers in the market. Some of the most important service providers include America Online, CompuServe, and Prodigy. STC computers provide computer support and internet access to Java net.

Project Description

The goal of the project of starting the Javanet Internet café in Al-Yamamah College is its objective to satisfy the increasing demand of internet for the people and also providing internet to people at reasonable cost. The project also focuses on how to create attention from the target customers.

Company Name

The company name is JavaNet Internet Café. The owner of this company is Omar Al-aqeel and the three present outside investors are Mohammed Al-Ali, Saleh Al-sheikh, and Khalid Al-mula.

Business Concept

JavaNet’s aim is to offer to the society learning and interesting environment for universal contact available to all people at reasonable costs. The business concept of this company is to increase the interest towards learning via proper utilization of the internet services.

Geographic Location

The Geographic Location of JavaNet is in downtown Riyadh on Prince Sultan Street and presently it is planning to locate one of its branches in Al-Yamamah College campus to meet the ever increasing demands of the students and faculties. The decision to start its new branch in the college campus reflects the responsibility of the concern towards the society.

Project Implementation Process/phases

The company has set up its objectives for the first three financial years during which it hopes to provide its customers with modern internet and develop a customer base. First the needs

of the target customers are identified, based on those needs strategies are designed, various facilities are arranged and finally the prices are fixed at a reasonable rate to meet the customers’ expectations.

Project Evaluation process

Feedbacks are collected from the customers and if any quality gap arise those gaps are filled by implementing appropriate strategies.

Technical Requirements

Javanet plans to invest in the latest, high speed computers along with fast and reliable internet connection. All the latest technologies which are not easily available in home or office like Pentium PC will be made easily available.


The Javanet internet café provides coffee as well as internet, both of which can be used simultaneously in a very enjoyable atmosphere. So, Javanet can face competition from both the groups i.e. from coffee sellers and also from internet service providers. The café can face competition in coffee but since there are less internet service providers, the competitiveness in the internet sector will be less.

Key Differentiator

The key point of difference that Javanet has with other service sector companies is that Javanet focuses both on business as well as refreshment.


The key point of difference that Javanet has with such other service sector companies is that Javanet focuses both on business as well as refreshment.

Revenue Model

Javanet projected all its future expenses and also its revenue by making proper arrangements for rent, marketing, personnel pay etc. It is trying to find more investors from the market. For the start-up expenses, funds are being mobilized even though additional financing has already been secured from development funds and contributions by the owner along with the 3investors and from short term loans.

Investment to start the businesses

The investment that is needed for starting the business is related to the building’s renovation as a café cum internet service provider, the fixing of modernized coffee vending machines, high technology computer communication machines. The price of internet will be decided on an hourly basis. The total amount of investment that is required for the firm to start a new branch is SR 88,290.


The challenges faced by Javanet are that whether people will associate with Javanet as a social hub. There is also a risk factor, that the services that Javanet intends to offer should have demand. The low internet costs of accessing from home is also a challenge for the Javanet


Due to the increasing public demands and wants, the competition in this field is emerging. Competition is mainly between different producers and companies producing similar products; this benefits the end users and consumers, because in this situation all companies try to provide better products to satisfy the consumers.


  • Emerging local competitors in this field will lead to competition among the producers.
  • Emerging communities like open enterprises provide lot of information that can be easily accessible by all the internet users
  • Most of the people use Personal computers now; hence, there is no need to go to café for getting knowledge.

SWOT Analysis

SWOT analysis helps examine the internal strengths and weaknesses and external opportunities and threats of Java Net. Java Net has a significant range of strengths that will help achieve its goal.


  1. well-informed and pleasant employees
  2. Fashionable environment. It uses high tech technology. The various culture activities and all are adopted giving the social environment. To Good knowledge about the market need. They are unto date and follow according to the changes in the market environment.


  1. Activities and services are monitored in quarterly basis.
  2. Java Net needs to keep up with the technology.
  3. maintenance up with the know-how is an costly task


  1. Demand of the customers is increasing.
  2. It provides various opportunities all over the world.


  1. Quickly diminishing charge of Internet availability.
  2. Rising neighbouring competition. It will adversely affect the java net.
  3. Increasing opportunities to access the information in home itself.

The marketing and sales plan

In short, they can be termed as a blueprint for communication process and generating the value of the product and the business.

Sales and promotion strategies

They spend a huge amount advertisement for the start up year for its operations for building a good brand image and customer awareness. Promotion is concentrated in the local market and the marketing promotion includes the local TV, print media, radio events and the public relations conducted by the java net events.

Sales and promotion budget

The sales and the promotion budget play an important role in the promotion, when a product is to be introduced in the market. A clear estimation should be made on the budget. The total budget required for the sales and promotion activity is SR 2200.

Service pricing

As far as different kinds of services are concerned, present day has much access to the internet, the pricing of the materials are to be made on hourly price for the online use, because there is no direct competition in the cyber café. The java net considers the price in different way as they consider the three factors for the use – they are the cost to use the internet, secondly the pricing of the java Net in the market and how the competitor firm has made the pricing and thirdly a market survey is conducted in identifying the different downfall in the operations.

Management and Operations

Core Team

The proprietor of JavaNet is Mr. Cale Brucker. As it is a small organization, the entire management of the business activities is carried out by the proprietor himself. All the decisions and planning of this organization are made by him. There are intelligent and sociable part time staffs for giving guidance and assistance to the customers; moreover; there is one technician.

External Consultants

There are three private investors in JavaNet internet café. Even though they are the investors of this company, they do have the power to take any managerial decisions.

Staff Requirement

Inorder to start a new branch sufficient number of staffs are required to perform all the activities. It is better to employ part time staffs. The part time staffs are required to work thirty hours in a week with a salary of $5.50 per hour. The full time technician needs to work for forty hours a week and will get a salary $10.00 per hour. The technician needs to be technically oriented, because he will have to deal with the terminal repairs.

Organizational Structure

The structure of the organization is a simple one due to its small size. This structure helps in easy communication and high flexibility. All the management decisions are taken by the proprietor. He controls the business activities of the organization. The staffs include part time employees, full time technicians and private investors.

Operation and Infrastructure Details

This company forms a distinctive, modern and attractive atmosphere for the purpose of communication through the internet. The total funds required to start up this internet café is $88,290.


The total budget required for this particular project proposal is SR 88,290.

Start-up Expenses

The total start up expenses required for the concern to start one of its branch ion the college campus is SR 62,290. The bar chart shown below indicates the start-up expenses


  • Staff Expenses: The total expenses that are required to meet the staff expenses for the three years is $129,254.
  • Management Expenses: The total expenses that are required to meet the management expenses for the three years is $ 26,400
  • Recurring Expenses: The recurring expense is calculated based on all the other expenses and the earnings generated.
  • One Time Expenses: There are six part-time employees working for 30 hrs and technicians working forty hours a day. For the sift workers it is $ 5.50 per hour and for one full-time technician it is $10.00 per hour.
  • Sales and Marketing: The promotional expenses allocated for the plan is $ 33,750. In the budget allocated for the market 20% is almost equal to sales.

A Few Specific Marketing Efforts:

  • Local TV spots
  • Print Materials
  • Local Newspapers
  • Local Radio Spots
  • JavaNet Events

Investment required for 3 months: The total investment required for the concern for three month is $ 7,290.

Funds Available: The funds to be obtained in the initial period are SR 24,000 from Oregon Economic development fund. SR 19000 will be raised from the personal savings of the owner. SR 36000 from the investors and the rest of the SR 9,290 will be raised by loan.

Financial Projections

The financial projections for the firm are shown in a chart as appendix.

The Standard Industrial Classification (SIC) Code for the Internet Service Provider industry is “Remote data base information retrieval” 7375.9903. We used the report for “Information retrieval services” 7375 to generate the industry profile. The combined nature of JavaNet Cafe makes our ratios a blend of the two industries – Shown in the appendices as appendix-1.

Income statement for the year ended December 31st, 2009: Complete profit and loss statement with appropriate graphs and charts are presented as appendix 4.

Projected income statement for next year: The income statement for the next three years are shown in appendix 5:

Yearly Cash Flow: Cash flow data is presented in the chart and table below. The calculation of the cash flow is SR 313,610.

Future plans and exit strategy

The future plans of javanet are to explore more branches in various parts of the countries and to retain a good position in the market. The plans are also to increase the additional units to be accounted for the shop floor.

The exit strategy of the business is the arising situation where the performance in the business tends to be weak and the organization is in the process of quitting of the operation, i.e. the escapism from the business.

Beyond the second phase

The java net has incurred the basic mile stones to keep the business plan priorities in place, each of the business responsibility is on the owner of the business and the forecast of the operation shows a good improvement in the operations. The forecast is done for three years; as far as the second year is concerned, they have a good growth compared to the previous year of the operations with the unit price the same. As the company has good operational methods and monitoring of the company operations, they are less prone to make losses in the operations. The detecting of the price also gives the idea on the hourly rate of access.

Exit strategy

Exit strategy is the escapism from the business and the shutdown of the operation, the exit from the business is as important as the entry into the business and the aim of the company is to make revenue and the value for the company with the least time. The steps involved in the exit strategies are to reach the agreement and obtain the authorization, organizing the team, engage the professionals, prepare the list of the professionals and perform the valuation of the business. The schedule should be developed and the notice has to be announced followed by the closing operations.


This proposal depicts a clear cut picture about how to set up a new branch inside the Al-Yamamah College campus. The cash flow, financial projections for three years are calculated and from all the financial projections it is very clear that the firm will be able to meet its customers’ demand and will have the capacity to succeed in future.


Appendix – 1

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 21.97% 3.32% 0.90%
Percent of Total Assets
Inventory 19.50% 16.66% 14.08% 2.17%
Other Current Assets 0.00% 0.00% 0.00% 84.78%
Total Current Assets 100.00% 100.00% 100.00% 86.95%
Long-term Assets 0.00% 0.00% 0.00% 13.05%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 44.62% 36.41% 30.20% 28.33%
Long-term Liabilities 40.23% 18.39% 7.36% 16.21%
Total Liabilities 84.84% 54.81% 37.56% 44.54%
Net Worth 15.16% 45.19% 62.44% 55.46%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 75.00% 75.00% 75.00% 100.00%
Selling, General & Administrative Expenses 69.89% 69.18% 69.93% 79.00%
Advertising Expenses 0.00% 0.00% 0.00% 1.01%
Profit Before Interest and Taxes 8.23% 8.80% 7.60% 1.62%
Main Ratios
Current 2.24 2.75 3.31 0.00
Quick 1.80 2.29 2.85 0.00
Total Debt to Total Assets 84.84% 54.81% 37.56% 0.00%
Pre-tax Return on Net Worth 334.80% 109.30% 58.28% 0.00%
Pre-tax Return on Assets 50.74% 49.40% 36.39% 0.00%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 5.11% 5.82% 5.07% n.a
Return on Equity 234.36% 76.51% 40.79% n.a
Activity Ratios
Inventory Turnover 12.00 9.80 9.06 n.a
Accounts Payable Turnover 10.58 12.17 12.17 n.a
Payment Days 27 30 30 n.a
Total Asset Turnover 6.95 5.94 5.02 n.a
Debt Ratios
Debt to Net Worth 5.60 1.21 0.60 n.a
Current Liab. to Liab. 0.53 0.66 0.80 n.a
Liquidity Ratios
Net Working Capital SR 19,826 SR 32,496 SR 43,610 n.a
Interest Coverage 8.81 18.17 21.67 n.a
Additional Ratios
Assets to Sales 0.14 0.17 0.20 n.a
Current Debt/Total Assets 45% 36% 30% n.a
Acid Test 1.80 2.29 2.85 n.a
Sales/Net Worth 45.87 13.14 8.04 n.a
Dividend Payout 0.00 0.00 0.00 n.a

Appendix – 2

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales SR 248,868 SR 303,544 SR 313,610
Direct Cost of Sales SR 62,217 SR 75,886 SR 78,403
Other Costs of Sales SR 0 SR 0 SR 0
Total Cost of Sales SR 62,217 SR 75,886 SR 78,403
Gross Margin SR 186,651 SR 227,658 SR 235,208
Gross Margin % 75.00% 75.00% 75.00%
Payroll SR 93,291 SR 121,824 SR 129,254
Marketing/Promotion SR 33,750 SR 40,000 SR 43,000
Depreciation SR 0 SR 0 SR 0
Rent SR 24,000 SR 24,000 SR 24,000
Utilities SR 9,120 SR 9,120 SR 9,120
Insurance SR 6,000 SR 6,000 SR 6,000
Payroll Taxes SR 0 SR 0 SR 0
Other SR 0 SR 0 SR 0
Total Operating Expenses SR 166,161 SR 200,944 SR 211,374
Profit Before Interest and Taxes SR 20,490 SR 26,714 SR 23,834
EBITDA SR 20,490 SR 26,714 SR 23,834
Interest Expense SR 2,325 SR 1,470 SR 1,100
Taxes Incurred SR 5,450 SR 7,573 SR 6,820
Net Profit SR 12,716 SR 17,671 SR 15,913
Net Profit/Sales 5.11% 5.82% 5.07%

Appendix – 3

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Current Assets
Cash SR 28,817 SR 42,592 SR 53,681
Inventory SR 6,980 SR 8,514 SR 8,796
Other Current Assets SR 0 SR 0 SR 0
Total Current Assets SR 35,797 SR 51,106 SR 62,478
Long-term Assets
Long-term Assets SR 0 SR 0 SR 0
Accumulated Depreciation SR 0 SR 0 SR 0
Total Long-term Assets SR 0 SR 0 SR 0
Total Assets SR 35,797 SR 51,106 SR 62,478
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable SR 13,972 SR 13,610 SR 13,868
Current Borrowing SR 2,000 SR 5,000 SR 5,000
Other Current Liabilities SR 0 SR 0 SR 0
Subtotal Current Liabilities SR 15,972 SR 18,610 SR 18,868
Long-term Liabilities SR 14,400 SR 9,400 SR 4,600
Total Liabilities SR 30,372 SR 28,010 SR 23,468
Paid-in Capital SR 55,000 SR 55,000 SR 55,000

Appendix – 4

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales SR 248,868 SR 303,544 SR 313,610
Subtotal Cash from Operations SR 248,868 SR 303,544 SR 313,610
Additional Cash Received
Sales Tax, VAT, HST/GST Received SR 0 SR 0 SR 0
New Current Borrowing SR 2,000 SR 5,000 SR 0
New Other Liabilities (interest-free) SR 0 SR 0 SR 0
New Long-term Liabilities SR 0 SR 0 SR 0
Sales of Other Current Assets SR 0 SR 0 SR 0
Sales of Long-term Assets SR 0 SR 0 SR 0
New Investment Received SR 0 SR 0 SR 0
Subtotal Cash Received SR 250,868 SR 308,544 SR 313,610
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending SR 93,291 SR 121,824 SR 129,254
Bill Payments SR 133,870 SR 165,945 SR 168,467
Subtotal Spent on Operations SR 227,161 SR 287,769 SR 297,721
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out SR 0 SR 0 SR 0
Principal Repayment of Current Borrowing SR 9,290 SR 2,000 SR 0
Other Liabilities Principal Repayment SR 0 SR 0 SR 0
Long-term Liabilities Principal Repayment SR 9,600 SR 5,000 SR 4,800
Purchase Other Current Assets SR 0 SR 0 SR 0
Purchase Long-term Assets SR 0 SR 0 SR 0
Dividends SR 0 SR 0 SR 0
Subtotal Cash Spent SR 246,051 SR 294,769 SR 302,521
Net Cash Flow SR 4,817 SR 13,775 SR 11,089
Cash Balance SR 28,817 SR 42,592 SR 53,681

Works Cited

Internet Cafe Business Plan. 2010. Web.

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