____ Business Plan____

Ababeel Private Company

Zil e Rehman
Zeeshan Aslam
Muhammad Usman Abbas
Mechanical 37 Syndicate
25 May 2019
B
 Ababeel Private Company

Table of Contents
1. Executive Summary.............................................................................................................................3
2. Company Description..........................................................................................................................3
2.1. Mission Statement.......................................................................................................................3
2.2. Company Philosophy and Vision..................................................................................................4
2.3. Company Goals............................................................................................................................4
2.4. Target Market..............................................................................................................................4
2.5. Industry........................................................................................................................................4
3. Product and Services...........................................................................................................................5
4. Market Analysis Plan...........................................................................................................................7
4.1. Barriers to Entry:..........................................................................................................................8
4.2. Threats and Opportunities:..........................................................................................................9
4.3. Competitor Analysis:....................................................................................................................9
5. Operations Plan...................................................................................................................................9
5.1. Production.................................................................................................................................10
5.2. Quality Control...........................................................................................................................10
5.3. Location.....................................................................................................................................10
5.4. Legal Environment.....................................................................................................................10
5.5. Personal.....................................................................................................................................10
5.6. Suppliers....................................................................................................................................11
6. Management Summary.....................................................................................................................11
7. Financial Plan.....................................................................................................................................12
7.1. Important Assumptions.............................................................................................................14
7.2. Break-even Analysis...................................................................................................................14
7.3. Projected Profit and Loss...........................................................................................................15
7.4. Projected Cash Flow..................................................................................................................17
7.5. Projected Balance Sheet............................................................................................................19
1. Executive Summary
Ababeel Private Limited is a company that specializes in Vertical
Takeoff and Landing capable remote controlled aircrafts for
surveillance, tracking and mapping, delivery services etc. These UAVs
are highly modifiable and can be custom made.

Military and agriculture industry has shown great interest in our

products and we would like to present them with a variety of models
of highest quality and great customer service. In total we expect to
control at least 25% of the whole UAV market by FY3. Our goal is to
achieve a self sustainable business by the end of first year and grow
exponentially in the first three years.

The Vertical Takeoff and Landing is a feature that gives us a

competitive edge over other unmanned aerial vehicles. The
automated control would make the aircraft user friendly and more
practical.

The startup cost would be funded by founding members, sponsor

deals and commercial loan in the early stage.

2. Company Description
2.1. Mission Statement
Ababeel Pvt. Ltd is a UAV Manufacturer Company that specializes in
VTOL capable fixed wing remote controlled aircrafts. We provide
 easily accessible and versatile multipurpose UAVs that can help
people belonging to different fields of life.

2.2. Company Philosophy and Vision

Ababeel focuses on innovation and creativity as well as quality of
highest standards. We want to provide a fixed wing which is highly
modifiable with our customers being our top priority. Our aim is to
create a brand that has international customers that are fully
satisfied with our products and services.

2.3. Company Goals

Our aim is to create a steady sale of our product by creating new
clients and to achieve a smooth process of importing the necessary
electronics in the short term. In the long run we would like our
products to be totally indigenous with new and better features.
Further we would like to expand our business not only domestically
but internationally.

2.4. Target Market

Our target market would include students, hobbyists, security
services, rescue services, delivery services etc. It’s a very wide market
as the product itself is exceptionally practical. We would create
different versions of our product that would target the respective
market. For example our fixed wing would most likely be used for
surveillance by security services thus that particular model of UAV
would be equipped with high end cameras and sensors. Similarly our
most basic model would be intended for students and hobbyists as it
would be more user friendly as well as low cost.

2.5. Industry
The remote controlled drone industry is growing exponentially year
by year. If we talk about Pakistan then there are two types of
companies. They are as following:
  Local Importers or Retail Stores: These companies are usually
toy stores that import RC planes mostly from china and sell it at a
higher rate. These stores mostly provide toy planes that are not
really made to be used for any other purpose than a little
entertainment. Some stores do actually provide high end drones
that can be used for recording and cinematography but those
drones are retail products.
 Local Manufacturers: The primary research shows that there
aren’t many local manufacturers in the twin cities. These
manufacturers prepare model aircrafts on order. Although as the
demand for UAVs is high, these type of companies are no short of
business. Moreover these companies can charge customers as
they desire.

Our business would be a hybrid of these two types in its early stages.
The local industry is in dire need of a manufacturer who can readily
deliver remote controlled fixed wing UAVs at commercial rates.

3. Product and Services

Ababeel would provide multiple kinds of remote controlled UAVs
that would include VTOL capable Fixed Wing and Tilt Rotor aircrafts
as well as quad copters. Our company would also provide custom
made airplanes on order. Moreover a separate department would be
created to manage the repair and maintenance of unmanned aerial
vehicles. Following is the list of our most basic models:

Model Type Specialty Uses

Ababeel FW 1 Fixed Wing
FW1 is capable of  Surveillance
VTOL as well as  Mapping
 quick transition to  Medical and
horizontal flight Rescue services
from vertical  Delivery Service
hovering. It is the  Military service
fastest moving  Tracking
product we
provide.

TR1 design is  Entertainment

based on USA  Mapping
military helicopter  Delivery services
Ababeel TR1 Tilt Rotor
V-22 Osprey.  Fire Control
Servomechanism  Tracking
is used to  Agriculture
transition the
flight.

QC1 is a more  Videography

commercially and  Entertainment
industrially well  Surveillance
known product  Data Router
because of its  Agriculture
Ababeel QC1 Quadcopter quality and
versatility which
gives it a
competitive edge
over other
makers.

These are our three basic models that are readily available. We
would provide further services other than the predefined upgrades
as to make each and every product unique and custom. These
models would be capable of working with different modules that can
 be attached as desired. These modules would include cameras,
sensors and mechanical grippers, battery etc. This type of flexibility is
the identity of our company. For example we can provide different
kind of cameras that could capture imagery in slow motion, night,
able to track and capture fast moving targets. These cameras can
further be programmed with different kind of sensors like to study
and map distances, to ascertain the terrain and learn about the
natural habitats. Other modules like the carrying pod would able our
vertical takeoff and landing aircraft to deliver different products with
a safe and quick delivery. This is especially useful for providing relief
services to people trapped in tight spaced areas where nobody else
can go. Our fire control module kit would sense fire before hand and
transmit a signal to a command centre. The specialized camera
would be able to see through the smoke and would be highly useful
in carrying out the rescue services. If properly used, our products can
be life saving. The students would be able to order and customize our
model as they please as it would help them understand the
aerodynamics of aerial vehicles. That would be beneficial in their
careers. Hobbyists are likely to have the most fun with our products
as they would not find a more user friendly and versatile VTOL
aircrafts then Ababeel models.

4. Market Analysis Plan

Ababeel would focus on the Military services, Rescue services, Delivery
services, RC enthusiasts, Construction and Mapping Companies, Agriculture
industry, Students etc.

In 2017, the drone industry was made up of around 4.6$ billion, while in
2018 it jumped to 50$ billion. This trend is more than likely to continue and
we expect the industry to grow to a 100$ billion dollar figure by the next
year i.e. 2020. These numbers indicate how much potential this industry
 has in a global market. Pakistan isn’t the frontrunner in the drone market
but considering the demand, we are sure to find extremely profitable and
sustainable businesses domestically as well as in the foreign market.

Market Analysis

Armed Services
Agriculture
Delivery Services
Medical and Rescue
Hobbyists and Students
Construction and Mapping

4.1. Barriers to Entry:

When we talk about an opportunity with such potential, we are more than
likely to face some issues in the face up. Some of the barriers that are
expected to occur are as following:

 High startup costs

 High production costs

 High marketing costs

  Brand recognition challenges

 Finding qualified employees

 Need for specialized technology or patents

 Tariffs and quotas

4.2. Threats and Opportunities:

 Changes in government regulations

 Changes in technology

 Changes in the economy

4.3. Competitor Analysis:

Our direct competitor includes Artech Hobbies located in Saddar,

Rawalpindi. While they are an expensive store but being an old company,
they have a larger market currently. It is clear that we can sway the
customers to our side by making a product that is cheaper yet better in
quality. Even though Artech hobbies is a competitor, the demand for our
products is so high we would not be affected much.

5. Operations Plan
5.1. Production
The company is based in Islamabad with the factory in the Industrial Area.
We would acquire hardware material from the Expanded Polyvinyl Chloride
(PVC) retailers and electronics from the importers in the short term.
Assembly line would be created to automate the system.

5.2. Quality Control

A quality control department would be setup to make sure that each and
every unit meets the high standards of the company. In addition this
department would collect the feedback from the customers and help
implement the necessary upgrades.

5.3. Location
Industrial Area, Islamabad is best suited for our production factory as it is
easier to get the hardware and the tools needed to make company
products with fewer restrictions. The utility bills in this area would also be
less. The Area of the factory would be around 50000 sq ft at the beginning
with an expansion in future plans.

5.4. Legal Environment

The company lawyer will deal with the licenses and permits and make sure
that no hurdles that could hinder the business occur. Also patents and copy
right claims will be filed under this category as well as insurance and shares
of the company.

5.5. Personal
A total of around 15 people would be needed to set the business up and
running. With the passage of time more space will be filled as the company
grows and expand.
 5.6. Suppliers
A couple of different suppliers would be needed to make our final products.
We would like to create a partnership with our suppliers, so that we can
have a better understanding between us which would not only help us
financially but greatly reduce the time spent on procurement. Following is
the list of suppliers:

 Nova Engineering
 Angel Toy store
 Full Throttle

6. Management Summary
 Mr. Zil e Rehman

He is the President of the company with 4 years of experience in marketing

and logistics. A mechanical engineer with sound technical knowledge, he is
also skilled with managing organizations with unparalleled passion and
grinding hard work. Furthermore he has the know how to handle PR with
great expedience and provide services to the concerned entities.

 Mr. Zeeshan Aslam

As a Vice President and CTO, he is an indispensible part of the company. He

is expert in Fluid Mechanics with more than four years worth of experience.
Specializing in mechanical engineering he is the brains behind the company.
With prior experience as internee in top engineering firm of the country,
there’s no one else better suited for designing the products of the company
  Mr. Muhammad Usman Abbas

Head of Research and Development and one of the founding members of

the project, he is also mechanical engineer adept in aerodynamics and
avionics. His prior experience in the industry shows that he knows how to
lead and get things done.

 Mr. John Doe

He is the Chief Financial Officer (CFO) of the company. An accomplished

chartered accountant with 5 years experience finance ministry, he’s more
than capable of handling the finances of Ababeel.

 Ms Jane Doe

A lawyer by profession, she is a member of Islamabad Bar Council. She is

experienced in working out patents and copyright claims.

7. Financial Plan
The firm expects to be profitable in the first year of operations, with profits
increasing over the next four years, as we establish and increase our customer
base. Our main concern will be to have sufficient cash on hand to meet our
payment obligations and be prepared for unexpected needs of cash. Our
conservative projections indicate that our business is able to generate positive
cash flows and sufficient cash reserves
The financial plan of the Ababeel Pvt Ltd is outlined in the following sections.
 Asset Type Amount
Salaries (includes payroll taxes) $ 250,000

Equipment/Spare Parts $ 40,000

Repairs & maintenance $ 25,000

Marketing $ 4,140
Accounting and legal $ 4,000
Production/Assembly $ 20,000
Taxes $ 2,550
Local advertising $ 1000

Miscellaneous $ 45,000
Domain Name $ 200

Asset Type

Salaries
Equipment
R&M
Marketing
Accounting
Production
Taxes
Local Advertising
Miscellaneous
Firm Name

7.1. Important Assumptions

Long-term solvency and cash flow adequacy ratios are in fact the primary factors
influencing our financial plan as shown below.
 GENERAL ASSUMPTIONS

YEAR 1 YEAR 2 YEAR 3

Plan Month 1 2 3

Current Interest Rate 11.00% 11.00% 11.00%

Long-term Interest Rate 12.00% 12.00% 12.00%

Tax Rate 18% 17.5% 17.4%

Other 0 0 0

7.2. Break-even Analysis

At the start the initial expenditures would be high but gradually the costs would
be stabilized thus taking the business towards profit and benefit. This table
shows we need to sell a single unit of fixed wing UAV (Profit $ 35,000) or 2 units
of tilt rotor (profit $ 17,000) to achieve the breakeven point.
 7.3. Projected Profit and Loss

Here is a complete projection of our yearly profit and losses.

PROJECTED PROFIT AND LOSS

YEAR 1 YEAR 2 YEAR 3

Sales $400,000 $800,000 $1,500,000

Direct Cost of Sales $260,000 $550,000 $1,150,000

TOTAL COST OF SALES $260,600 $550,000 $1,150,000

Gross Margin $140,000 $250,000 $350,000

Gross Margin % 35.00% 31.25% 23.33%

Expenses

Payroll $90,000 $140,000 $180,000

Sales and Marketing and Other $35,000 $40,000 $45,000

Expenses

Utilities $3,000 $4,000 $5,000

Insurance $1,500 $1,700 $1,500

Rent $8,400 $9,000 $12,000

 Payroll Taxes $11,700 $23,550 $29,250

Other $0 $0 $0

Total Operating Expenses $149,600 $218,250 $272,750

Profit Before Interest and Taxes ($9,600) $31,750 $77,250

Interest Expense $3,500 $3,336 $1,937

Taxes Incurred $0 $4,832 $17,357

Net Profit ($13,100) $23,582 $57,956

Net Profit/Sales -2.61% 2.74% 5.96%

1600000

1400000

1200000

1000000
Sales
800000
Direct Cost of Sales
600000 Gross Margin

400000

200000

0
YEAR 1 YEAR 2 YEAR 3
 7.4. Projected Cash Flow
The clause that the customer would at least have to pay 25% of the amount in
advance for his order, guarantees that that the payment schedule of firm would
be smooth and viable.

PRO FORMA CASH FLOW

YEAR 1 YEAR 2 YEAR 3

Received Cash
Cash from Operations

Cash Sales $110,000 $250,000 $400,000

Cash from Receivables $290,000 $690,000 $1,000,000

SUBTOTAL CASH RECEIVED $400,000 $940,000 $1,400,000

YEAR 1 YEAR 2 YEAR 3

Expenditures
Expenditures from Operations

Cash Spending $79,000 $160,000 $190,000

Bill Payments $345,00 $770,00 $1,179,00

SUBTOTAL SPENT ON OPERATIONS $424,000 $930,000 $1,369,000

Additional Cash Spent

Long-term Liabilities Principal $0 $14,000 $15,000

Repayment

SUBTOTAL CASH SPENT $424,000 $944,000 $1,384,000

Net Cash Flow ($24,000) ($4,000) $16,000

$53,000 $49,000 $65,000

Cash Balance

1600000

1400000

1200000

1000000
SUBTOTAL CASH RECEIVED
800000
SUBTOTAL CASH SPENT
600000 Cash Balance

400000

200000

0
YEAR 1 YEAR 2 YEAR 3

7.5. Projected Balance Sheet

The balance sheet is evident of the strong financial position the business plan has along
with a steady growth rate.

PRO FORMA BALANCE SHEET

 YEAR 1 YEAR 2 YEAR 3

Assets

Current Assets

Cash $53,000 $49,000 $65,000

Accounts Receivable $49,000 $112,000 $170,000

Other Current Assets $14,000 $14,000 $14,000

TOTAL CURRENT ASSETS $116,000 $175,000 $249,000

Long-term Assets

Long-term Assets $0 $0 $0

Accumulated Depreciation $0 $0 $0

TOTAL LONG-TERM ASSETS $0 $0 $0

TOTAL ASSETS $116,000 $175,000 $249,000

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $25,668 $67,037 $99,908

Current Borrowing $0 $0 $0

Other Current Liabilities $0 $0 $0

SUBTOTAL CURRENT LIABILITIES $25,668 $67,037 $99,908

Long-term Liabilities $40,000 $26,711 $12,030

TOTAL LIABILITIES $65,668 $93,748 $111,938

Paid-in Capital $88,419 $88,419 $88,419

Retained Earnings ($24,642) ($36,162) ($8,780)

Earnings ($11,520) $27,382 $89,456

TOTAL CAPITAL $52,257 $79,639 $169,095

TOTAL LIABILITIES AND CAPITAL $117,925 $173,387 $281,033

Net Worth $52,257 $79,639 $169,095

Net Worth
180000
160000
140000
120000
100000 Net Worth

80000
60000
40000
20000
0
YEAR 1 YEAR 2 YEAR 3