Start up plan for autronics company : an outsourcing company offering electrical, electronics and automation services. | |
| Author | Chanda, Nikhil |
| Subject(s) | Contracting out Service industries--Automation |
| Note | The degree of Masters of Business Administration (Executive) in Management of Technology and International Business, School of Management |
| Publisher | Asian Institute of Technology |
| Abstract | India has acted as a thriving hub of Business Process Outsourcing services for more than a decade. According to “The BPO market outlook” India is the largest provider of offshore Business Process Outsourcing services. Although a lot of software and electronic manufacturing outsourcing is done in Indian subcontinent, offering services in the field of Electronics, Automation and Electrical maintenance is still a novel concept in India. Autronics Company will be formed as an outsourcing firm specializing in Electrical, Electronics and Automation services. The home office of the firm will be in Mumbai, India. The firm will strive for a fast entry to the market. The founder of the firm is a professional engineer with five years of progressive experience in various positions of responsibility. Autronics Company has a mission of providing an exhaustive gamut of Electrical, Electronic and Automation services and solutions to its clients at competitive rates. Some of the objectives that Autronics Company has in vision are: 1. Revenues of INR 4.7 Million for the 1st year, approaching INR 6.6 Million per year at the end of third year 2. Increasing gross margin to 85% by the third year of operations 3. Increasing Return on Invested capital from 0.97 in the first year to 2 in the second year Some of the services in which Autronics Company specializes are outsourced maintenance, new projects, modification of existing hardware and software platforms and assistance from installation to start up phase of a new project. Some value added services will incorporate writing automation software, consultancy etc. All these services will be offered to both Indian and foreign customers. Initial start up costs amount to INR 1,500,000 per year. Out of this INR 670,000 are startup expenses, INR 100,000 is allocated for a contingency fund and the rest is for working capital. The break even for this business will come within a year. The entire project will require a capital investment of about INR 1,500,000. Assuming a modest level of business in the first year and the following years, the development of the firm is predicted to be as follows: Performance parameter 2008 2009 2010 Sales(000s) 4800 5500 6600 Net Operating Profit After Tax (000) 900 1300 2000 Profit Margin 18% 24% 31% The debt from banks will be repaid in the form of 5 year annuity. The cash flows for the project are highly positive and working capital grows handsomely during the project. For the first financial year, Autronics Company will provide an attractive rate of return on investments of 18% and even in the worst case scenario, all of the capital of investors will be returned through take over by a competitor. |
| Year | 2007 |
| Type | Thesis |
| School | School of Management (SOM) |
| Department | Other Field of Studies (No Department) |
| Academic Program/FoS | Master of Business Administration (Executive) in International Business - Management of Technology (VN/BKK)) |
| Chairperson(s) | Kauranen, Ilkka; |
| Examination Committee(s) | Islam, Nazul;Johri, Lalit M.; |