YNM Project Management Company’s Business Plan

Executive summary

The business is idea technically and economically viable because it is in response to the existing demand for project management consultancy services that are increasing in the Kingdom of Saudi Arabia. The clear market size of 11 million project management roles in 11 countries with a GDP of $6.61 trillion, which consists of 80 megaprojects justify the need to exploit the business opportunity. Upon realizing the existence of the business opportunity, Musaad Alabdulkarim (CEO) started the company along with Ahmad Salah Senior served as the functional manager and Mohammed Al-Gahtani serving as the planning engineer. The business was founded solely to generate profit by optimizing the existing business opportunity.

The nature of the business entailed providing consultancy services, which aims to expand into the construction of modular warehouse models that could be assembled anywhere in the country and exported outside of Saudi Arabia. Increasing demand, better utilization of resources, completion of projects at the least cost and on time were some of the benefits that encouraged stakeholders to invest in the business opportunity.

Business opportunity

An economically and technologically viable idea that entails the exchange of products and services for monetary gain in a legally recognized environment under license to practice the idea is referred to as a business opportunity. The goal of the proposed project management consultancy service is to exploit the profit-generating business opportunities that are characterized by the compelling nature of the commercial idea that is potentially convertible in the form of either a consultancy service or a product that can be used to fulfill customer needs and expectations (Richards 2014).

The business opportunity

As argued by Chen and Zhang (2014), the three areas of engagement that the YNM PROJECT MANAGEMENT Company will concentrate on including the construction of warehouses and in the provision of professional services that specifically cover the following areas.

  • Project management best practices.
  • Program management.
  • Portfolio management.

The project management team consists of Musaad Alabdulkarim, the CEO who has trained as an industrial engineer, Ahmad Salah the senor functional manager who has trained as an infrastructure and communication engineer, and Mohammed Al-Gahtani who has standardization and planning training. The business was a novel idea that was developed and proposed by the CEO, Mr. Musaad Alabdulkarim. Besides financing the company, the CEO engaged the other two members into the leadership positions.

Milestones

The company has grown the management team which consists of people with specialized skills employees from one person who stared the idea to 3 members in the management hierarchy and it is still growing. Higher profits, an increase in market size, increasing demand for the product and consultancy services, and better financial outlooks were some of the milestones achieved.

Background

In specific terms, the idea is to provide professional project management services besides embarking on the modular construction of warehouses because of the demand for the products in the market that justify the implementation of the project. The results are based on empirical evidence derived from market conditions that show an outlook of a viable business idea (Richards 2014). There is evidence of real demand for consultancy services from the case study that has been presented where the prospective entrepreneur incurred delays and cost overruns in the completion of the project while the next warehouse project proved successful after the integration of the project management professional leadership and consultancy services into the business processes. This is evident in the 35% cost reductions on the project because of better engineering and material selection solutions, effective portfolio management strategies, and diagnostic provision of industry-based best project management practices.

Position

The IP position, in theory, and practice are based on demand which was factored into the business opportunity as the key driver and component of a successful consultancy firm. Demand is the idea that connects the business to customer behavior. The factors that pushed demand for the consultancy services, the relative size of the market, the increasing and decreasing nature of demand and market size, and the possibility of expanding the scope of the market to other products and services positively contributed to the success of the business opportunity.

Feasibility study

This is the feasibility study of the business opportunity for the company known as YNM PROJECT MANAGEMENT, which aims to provide consultancy services in project management for the construction of warehouses in the local market of Saudi Arabia. The goal is to develop a project management consultancy service that enables project managers to optimize available resources and opportunities in the market by integrating the best business practices into project management processes to fill the gaps that happen in the execution of projects cost-effectively and professionally.

The project management business is an economically and technically viable business opportunity that could be integrated into the cost-effective development of warehouses in Saudi Arabia. YNM PROJECT MANAGEMENT is the name of the proposed company, which was started by Musaad Alabdulkarim, the CEO with suitable and excellent background qualifications as an engineer. Besides, other company executives include Ahmad Salah the infrastructure and communications engineer, and Mohammed Al-Gahtani, the planning engineer with background knowledge and skills in material standardization and planning.

Problem

Project management consultancy business opportunity could be an appropriate solution to the problem that has been experienced by different project managers and companies investing in supply chain business operations. The problem is how to offer additional product portfolio and program management best advises ensuring that the company achieves the strategic objectives in the provision of high-quality services that satisfy customer needs and expectations in return for profits.

Technical feasibility

A feasibility study was conducted to determine the viability of the project and its consistency with the market needs. That includes the consultancy methods of providing professional advice on the type of warehouse to construct and how to optimize the logistics of warehousing and space use, the quality of input materials to use in the construction of the warehouse.

Technical feasibility

A typical example of a warehouse that is bonded in shown in figure 1 consists of a situation where items have been warehoused (Persson & Virum 2001). The project manager intends to use the different quality metrics in the provision of the consultancy reports, which include the location of the warehouse, quality requirements, type of design and contract, market conditions, and extent of the site works.

Business Model

An appropriate business model should provide the elements and a framework that enables the project manager to create value, be innovative and be able to transform a business idea into a solution that returns money (Tah & Carr 2001). The proposed project management business opportunity has solutions modeled on the project management processes. The first phase consists of establishing the project management infrastructure (where roles, governance structure, and resources are defined and identified), the second phase consists of project definition (definition and confirmation of objectives, benefits, risks, and scope) followed by the third phase of, project planning (detailed work plan consisting of resources, costs, and schedules).

Management and control are the fourth phases of the project charter were risks, budget, status reports, quality management, people management, data tracking and review, deliverables, and reporting are done (Fitzsimmons & Fitzsimmons 2013). The fourth and last phase is the project closure where a detailed work plan for the closure of the project is developed with the complete implementation and a discussion of lessons learned is done.

Product/Service

The company deals in the provision of professional advice on the construction of warehouses besides offering professional consultancy services for clients in Saudi Arabia. The business is built on the foundation of integrity, accuracy, expertise, professionalism, knowledge, and commitment to the client’s needs.

Warehouses are buildings that are used for the storage of goods that are in transit to retail stores and other distribution points in the supply chain system. The following examples include the layout designs that could be used provided to customers with efficient space utilization.

Product/Service

Figure 3 shows a warehouse that can be used in a manufacturing environment. It provides optimal resource utilization, cheaper and facilitates supply chain activities in the storage and distribution of raw materials and finished products.

Warehouse that can be used in a manufacturing environment.
Figure 3: Warehouse that can be used in a manufacturing environment.

Using the above design provides additional benefits such as 10% to 20% inventory reductions, proper inventory, and support for different inventories which include raw materials, work in progress, finished products, and warehousing for finished products ready for entry into the market.

Limitations

However, the limitations include the inability to generally apply the same product design in different situations. The solution is to develop a template for making a different design that can be customized to meet different customer needs and expectations (McFarlane & Sheffi 2003). Some of the special features include space optimization besides input and output inventory optimization. Also, the facility designs are indicated and provided as in the figures. However, requirements or compliance include:

  • The 55.220 standards for storing food in warehouses.
  • Food distribution standards of various countries.
  • The National Fire Protection Association (NFPA) 230 Standard for fire protection and storage standards.

Market/Competition

A clear indication of the market trend and market analysis shows that the company will face competition from international companies that have long term industry experience in providing professional services that cut across project costs, risks, and delivery options. Such companies deliver value to the clients and enable them to make clear and well-informed decisions. However, the company can use the right market intelligence reports to compete with international companies in the same business. Examples of companies in the category of international consultants are Faithful+Gould, PM Solutions, Mott MacDonald, and ARUP.

In broad terms, the business environment consists of different products offered by competing companies, which include financial loans, professional business advice, and other professional services.

The potential maker size is estimated to be more than 80 megaprojects each worth over $1bn that has been earmarked to be completed by 2030 or in the next 14 years in Saudi Arabia. The estimates show Saudi Arabia to be the largest investor in the megaprojects market in the Middle East. Also, the government plans to invest a significant amount of money in housing projects that have already been allocated $130bn

A feasibility study of the market and the demand factor as a function of a viable business opportunity has revealed that there is a market size that is projected to grow by 11 million project management roles by 2020 in Saudi Arabia and around the world and the potential to make profits of more than 1 billion dollars (Richards 2014). There is a positive trend of increasing demand for the services happening in 22 countries and the business is expected to generate the GDP of the host countries from estimated capital intensive projects worth $6.61 trillion. The sheer amount of money and the size of the project investments in the countries have propped up the justification to invest in the business.

Direct completion is minima because no companies have been constituted in the local market to offer project management consultancy services (Richards 2014). External competition can happen due to international companies wanting to invest in the business. The competitive positioning of the business is shown in the SWOT analysis matrix. However, the competitive advantages (strengths) of the company are shown in table 1.

Marketing Plan

The customers include those that have invested in supply chain businesses that want to expand their businesses throughout Saudi Arabia and beyond.

Table 1: Potential customers.

Name Business type Geographic area
Grand Co. ltd Cement and steel transportation Jeddah, Riyadh mecca
Mohammed Ret. Ltd Consumer goods Medina, Jeddah, Dammam
Electro. Densities ltd. Electronic goods, radios, computers, TVs, Printers, etc Jeddah, Dammam, Medina, Ad Diriyah, Riyadh, and Al muzahimiya
Al Haydih ltd. Consumer goods e.g. milk. Al-Hakim

Pricing strategy

Low and competitive pricing that generates enough profits to sustain the company. The prices range between 4000 $ to 10, 0000 $ for the professional advice and advice coupled with the construction process.

The potential customers who are shown in table 1 provide a strong demand for warehouses services with the goals to optimize their supply chain activities and reach the market in the least time and at the least cost. However, this company’s core business activities include the provision of professional advice on the cost-effective and least-cost methods of constructing warehouses at the least cost in the shorted time possible. However, when orders begin to increase, the company could create a supply chain system for the delivery of ready to install warehouses that are made from different components that can be assembled at any time in any place. However, it is in the plans of the company to invest in the future in the construction of ready to assemble warehouses.

Environmental analysis

The Company provides professional services in project management in the construction of warehouses in the Kingdom of Saudi Arabia. Since its inceptions, the company has steadily grown and is still growing because of the increase in demand for services in the local market. The aspects that have an impact on the commercialization of the idea include:

The market environment

According to Gielnik, Krämer, Kappel, and Frese (2014), the idea could be commercialized to overcome the competitive forces due to the international competitors that have entered the market.

Economic forces

Despite the grim economic environment because of the low revenue generated from the sale of oil by Saudi Arabia, the demand for professional advice in project management has attracted much small and large scale business organizations to buy into the idea. That is because of the benefits that the companies save by using the professional advice offered by the company. Here, the political environments do not inhibit the entrepreneurial business drive.

Legal environment

The company is obliged to comply with the legal and regulatory requirements that outline the tax and other business regulations and other laws in compliance with Saudi Arabia’s laws and regulations. It is possible to comply with laws as the Zakat base of 2.5%, the income tax of 20% that is adjusted on the net profits and other laws that constitute the corporate income tax.

Technology

A significant number of companies in the competition landscape have requisite and modern technologies which make the competition more difficult. However, the YNM PROJECT MANAGEMENT Company has well educated and experienced engineers and the technologies are available for the business. Examples include real-time and secure communication on the internet, mobile phone communication, and web site hosting.

Table 2: SWOT analysis.

Strengths Educated engineers
Local company
Opportunities The wide market for professional project management services and products
Differentiated strategy The better and growing market
The real-time solution to expensive construction solutions Acceptable business idea
Weaknesses A new entry into the market Threats New and financially stable companies making entry into the market
Less experienced teams compared with competitors The high demand that cannot be met
Low capital base Infrastructure
Trying with new technologies
Inability to address rising demand

Business organization

The key resources include those at the top management who include the CEO (Musaad Alabdulkarim), Ahmad Salah the infrastructure and communication engineer, and Mohammed Al-Gahtani, the material standardization and planning engineer. Others include the marketing manager, financial controller, human resource manager, and operations personnel for the construction of warehouses.

The Board of directors includes the CEO, one stakeholder chosen by stakeholders, and one representative from among the employees. Each board member will be expected to provide details about the market, research on market information, and a strategy of how to grow the business. The premises include office space and a yard for the construction and assembly of modular warehouses. To start with, the company has sufficient office space and office equipment.

However, the company lacks qualified technicians to develop the modules for the warehouses. For the construction work, experienced and skilled technicians will be recruited through an advertisement on different media to attract the best personnel. The company lacks construction material and equipment which will be bought through stakeholder contributions. The legal form of the business is defined by the construction or provision of professional services in project management. The board of directors will work with the human resource manager to determine the compensation and reward systems for the employees.

Implementation milestones

The company will roll out the implementation plan as per policy. The policy stipulates an incremental approach of investment in project management and warehouse construction.

Milestone Achievements to date Plans Breakeven When to run out of cash
The initial investment in professional advice The company has provided professional advice to 3 supply chain companies. To hire more highly skilled staff, increase capacity, finances. When the company hits a $3 million turnover capacity When other companies have crowded out the company
Later investment in construction work (creation of modules) None Start building modules When the company’ liquid assets reach a 2 million dollars mark When the profits at too low to sustain its operations

Business barriers/Risks

The barriers include stringent compliance with taxation laws that could eat into the profits of the company, logistics and supply chain problems such as the provision of services to a wide market, lack of initial investment capital, and competition from international professional project management service providers.

The most important risk is the barrier to a business that leads to loss of customers. Preparations could provide the solutions. Risks could be planned for through risk identification, analysis, and prevention strategies that could be consistent with the company’s risk appetite.

Financials

The following financial statement reflects the value of the business when it started.

31st December
2015
Assets
Non-current assets
The property, and equipment 5 29 964
Company property 1 130
Subsidiary assets 38 693
Stakeholder investments 41 670
Tangible and intangible assets 6 123
Long-term assets 1 245
Long-term financing 81 152
Accounts receivables 14 195
560 372
Current assets
Inventories 243
Short-term accounts 35 476
financial assets 5 494
payments made in advance
Loans 114 062
Trade receivables 4 460
Cash equivalents 89 653
261 216
Total assets 726 581

References

Chen, C P & Zhang, C Y 2014, Data-intensive applications, challenges, techniques, and technologies: A survey on Big Data. Information Sciences, vol. 1, no. 275, pp. 314-347. Web.

Fitzsimmons, J & Fitzsimmons, M 2013, Service management: Operations, strategy, information technology, McGraw-Hill Higher Education. New York. Web.

Gielnik, M M, Krämer, A-C, Kappel, B & Frese, M 2014, Antecedents of business opportunity identification and innovation: Investigating the interplay of information processing and information acquisition. Applied Psychology, vol. 2, no. 63, pp. 344-381. Web.

McFarlane, D & Sheffi, Y 2003, The impact of automatic identification on supply chain operations. The international journal of logistics management, vol. 1, no. 14, pp. 1-17. Web.

Persson, G & Virum, H 2001, Growth strategies for logistics service providers: a case study. The International Journal of Logistics Management, vol. 1, no. 12, pp. 53-64. Web.

Richards, G 2014, Warehouse Management: A complete guide to improving efficiency and minimizing costs in the modern warehouse, Kogan Page Publishers, New York. Web.

Tah, J H M & Carr, V 2001, Knowledge-based approach to construction project risk management. Journal of computing in civil engineering, vol. 3, no. 15, pp. 170-177. Web.

Appendix

CVs of team members

CV for Musaad Alabdulkarim

  • Summary experience
    • Worked as an industrial engineer for five years.
    • Logistics and Supply Chain Management.
    • Inventory Management.
    • Scheduling projects.
    • Worked as an assistant in the Department of Industrial Engineering and Logistics Management for 3 years.
  • Education
    • M.Sc. Graduated with Operations Research, Yale University, 2010.
    • Management Science, National Chiao-Tung University, 2013.
    • BSc: Industrial engineering 2008.
    • Worked for Tianching China Company in the construction of warehouses.
    • Worked for Dong Company in research and development.

CV for Ahmad Salah

  • Summary experience.
    • Worked as a Senior Functional Manager for ten years.
    • Worked with various companies at different levels of management.
    • Key knowledge and skills in infrastructure and communication engineering.
    • Wide experience in practical the construction of warehouse modules.
  • Areas of expertise.
    • Have skills and knowledge in drafting customer equipment designs for customers.
    • Analyzed machinery performance.
    • Experience in the preparation of accurate specifications for purchase of equipment and materials.
    • Far thinking Industrial Engineer.
  • Academic qualifications.
    • Bachelor of Science – Industrial Engineering 2002.

CV for Mohammed Al-Gahtani

  • Summary and experience
    • Simplify highly technical manuals and standardize training materials; provide product knowledge training to all new recruits, including all account executives to keep them inform of new product development, product launches, technical requirements and specifications
    • Collaborate in team sales presentations of high level technical complexities with strong emphasis on helping the sales team to win new contracts and/or increasing business with existing accounts
    • Train new installation crews on proper flooring application, techniques and processes
    • Maintain a high degree of morale and efficiency by providing ongoing support and motivation to crew members and the sales force
  • Selected Accomplishments
    • Successfully managed large industrial and commercial installation projects with contract value between $3 million and $5 million
    • Increased market share by successfully launching 12 new products in the Canadian market
    • Generated additional revenue of $280,000 by researching, testing and developing a new product
    • Played a key role in team sales presentations which led to acquiring large contracts with major corporations such as Cara Foods, Ellis Don, Magna and Canada Bread
    • Reduced warranty claims/repairs by 27% through detailed quality control inspection of projects upon completion and analysis of failure reports
    • Recognized by senior management as Top Engineer in Canada for three consecutive years
    • Contributed to company overall success and revenue growth in the Canadian market – from $27 million in 1999 to $62 million in 2003
  • Education qualifications
    • Bsc in standardized training materials
    • Practiced with the international companies in construction management

Employee contracts, stock option plans, retirement plans

The company has chosen you as an employee for the organization. The terms and conditions of the contract are binding. Please check the contract and sign against your name to bind yourself. Retirement plan: Retirees will be paid 15% of their contributions for each month for the period one has worked for as gratuity followed by monthly salary of 20% of the net salary.

The stock options plan consists of the retirement framework that fits into the employee retirement goals.

Personal financial for Musaad Alabdulkarim.

Value of Assets
Current assets: 2015 2016
Cash equivalents and cash $ 10,510 $ 9,110
Investment in the Short-term 41,126 43,162
Cash at hand, their equivalents, and investments in the short-term
fixed assets
52,736 53,772
Accounts receivable
accounts of $421 and $532
15,643 15,987
Existing inventories 1,451 1,472
Income that is differed from taxes 2,179 2,477
Contingencies 3,714 3,420
current assets on total 72,613 74,818
net of accumulated depreciation in property
of $10,542 and $9,827
9,010 9,162
Investment in equity 7,650 11,865
Accruing goodwill 19,770 21,581
Net intangible assets 3,581 944
Other long-term assets 1,919 1,434
Total assets $ 112,243 $ 108,704
Liabilities and stockholders’ equity
Personal financial for Mohammed Al-Gahtani

Current liabilities:

Accounts payable $ 3,884 $ 4,197
Accrued compensation 2,677 3,575
Income taxes 921 580
Short-term unearned revenue 13,985 15,722
Securities lending payable 849 1,208
Other 3,057 3,492
Personal Financial statement for CV for Ahmad Salah

Liabilities that are current

25,473 29,774
Debt 11,832 11,821
Unearned revenue in the Long-term 1,342 2,391
Income tax deferred 1,182 1,656
Other long-term liabilities 8,386 8,072
Total liabilities 48,122 51,621
Stockholders’ equity:
34,0010; outstanding 7,382 and 7,376 63,912 63,615
Retained earnings (deficit), including accumulated other
comprehensive income of $726 and $1,963
211 (6,432)
Total stockholders’ equity 65,121 67,083
Total liabilities and stockholders’ equity $ 212,243 $ 222,704

Product specs or photos

Inside the warehouse.
Inside the warehouse.
Refrigeration section.
Refrigeration section.

The other propping factors of the business opportunity include the gains that could be made due to the integration of intellectual property rights, project scalability issues, the ability to optimise the highly skilled and experienced teams, and the ability to secure a wide market share due to the positive demand and trend in the market for the services. It is a competitive idea that could yield returns on investment on the initial investment. Besides, it is an idea that is technologically proven to work, viable, and that is consistent with the technology trends in the market today.

Product specs

Patents, copyright and related rights

The patents and copyright laws that were developed and agreements entered into are defined in the laws of Saudi Arabia. In addition, the best practices and legally binding roles were defined in the paper to ensure that each party to the agreement was satisfied before making the binding agreement. In this regard, the purpose of the copy right laws were clearly defined in the document that was issued by the requisite office so as to avoid and warn in advance anyone with the intention to infringe on the rules and regulations that underpin the agreement. As spelt here, the specific creators of the project management consultancy firm and its detailed operations have the sole rights of ownership of the idea as detailed in the copyright document.

In this case, the protection provided on this document is sufficient to encourage other groups or individuals with the same interest in developing innovative ideas to reap the full benefits of their innovations and works.

The goal of this patent rights document is to prevent what the free ride people have on the inventions of other besides protecting the original source of the idea. The rationale is that in case of people who offer services in project management, it is difficult to prevent an idea from getting copied because of the existence of the internet and applications that enable the sharing of information on the internet platform. The most important aspect of the laws is to protect the invention of an idea or an innovation that looks unique to the original idea. In each case, originality should be protected. In that case, the government provides protection for ideas and innovations in a legally binding engagement.

Technical analysis

Steel Structure Workshop Technical Parameter.

1. Main Structure: Steel Welded H Section
2. Purlin: C Section Steel or Z Section Steel
3. Roof Cladding: Sandwich Panel or Corrugated Steel Sheet with Fiber Glass Wool Coil
4. Wall Cladding: Sandwich Panel or Corrugated Steel Sheet
5. Tie Rod: Circular Steel Tube
6. Brace: Round Bar
7. Column & Transverse Brace: Angle Steel or H Section Steel or Steel Pipe
8. Knee Brace: Angle Steel
9. Wrapping Cover:Color Steel Sheet
10. Wall and Roof insulation: Single colour sheet, Colour sheet with Glass-wool, EPS Sandwich panel
11. Roof Gutter: Color Steel Sheet
12. Rainspout: PVC Pipe
13. Door: Sliding Door, use 50mm EPS Sandwich panel
14. Windows: PVC/Plastic Steel/Aluminum Alloy Window
15. Connecting: High Strength Bolts
Product detail:
Standard ASTM, BS, DIN, GB, JIS
Material Grade Q235&Q345(S235JR&S355JR)
Dimensions Yours requirements
Place Of Origin Shandong China (Mainland)
FOB Price US $ 700 – 1200/ Square Meter
Port QingDao
Minimum Order Quantity 300SQM
Supply Ability 1000 Ton/Tons per Month
Payment Terms L/C,T/T
Quality Control The third party ,SGS,ASIA INSPECTION all accept
Delivery Term Within 30 days after signing contract
Packaging According yours requirement, usually bundle with steel strip
Delivery Container 20’GP,40’GP,40’HQ,40’OT
Our Experience Successfully provided professional advice to four local companies
More detailed financial projections.
More detailed financial projections.