Business Feasibility and Financial Analysis Report ( see attached)
Please Pm Price and to discuss topic.
BUS357
Starting and Managing a Business
Group-based Assignment
January 2020 Presentation
BUS357 Group-based Assignment
SINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS) Page 2 of 7
GROUP-BASED ASSIGNMENT
This assignment is worth 38% of the final mark for BUS357 Starting and Managing a Business.
The cut-off date for this assignment is 23 February 2020, 2355hrs.
This is a group-based assignment. You should form a group of 4 members from your seminar
group. Each group is required to upload a single report via your respective seminar group site
in Canvas. Please elect a group leader. The responsibility of the group leader is to upload the
report on behalf of the group.
It is important for each group member to contribute substantially to the final submitted work.
All group members are equally responsible for the entire submitted assignment. If you feel that
the work distribution is inequitable to either yourself or your group mates, please highlight this
to your instructor as soon as possible. Your instructor will then investigate and decide on any
action that needs to be taken. It is not necessary for all group members to be awarded the same
mark.
Note to Students:
You are to include the following particulars in your submission: Course Code, Title of the
GBA, SUSS PI No., Your Name, and Submission Date.
BUS357 Group-based Assignment
SINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS) Page 3 of 7
Important Note: Grading of TMA/GBA/ECA Submissions
Marks awarded to your assignment are based on the following guidelines:
1. 80% of the marks are allocated to the content of your answers:
The marks awarded to what your answers cover depend on the extent to which they
cover the key points that correctly and comprehensively address each question.
The key points should be supported by evidence drawn from course materials and,
wherever relevant, from other credible sources.
2. 20% of the marks are allocated to the presentation of your answers:
Wherever applicable, the marks awarded to how your answers are presented depend
on the extent to which your answers:
form a sound reasoning by developing those key points in a clear, logical and succinct
manner;
provide proper and adequate in-text citations and referencing to content drawn from
course materials and other credible sources;
strictly follow APA formatting and style guidelines1, in particular for:
in-text citations and end-of-report references;
the identification of figures and tables;
use, wherever relevant, the specialised vocabulary and terminology commonly used in
discussions about the topic(s) covered by each question;
provide a reference or bibliography at the end of the main report;
include the less relevant details in an Appendix;
use sentence constructions that are grammatically and syntactically correct;
are free from spelling mistakes; present the workings, numerical formulations and
results in a logical manner that follows the APA formatting and style guidelines;
design and present graphs, diagrams and plots that follow the APA formatting and style
guidelines;
are highly original;
have proper formatting, which may:
include a properly formatted cover page;
respect the answer length/word count set out in the assignment guidelines, if
any is prescribed;
present answers in paragraphs with proper spacing and page margins;
include page numbers and appendices, if necessary.
1 You can find a short tutorial on the APA formatting and style guidelines here: https://is.gd/mgEOnC .
Additional details (pertaining to tables and figures) can be found here: https://is.gd/O4vDdT .
https://is.gd/mgEOnC
https://is.gd/O4vDdT
BUS357 Group-based Assignment
SINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS) Page 4 of 7
Background
With the proliferation of food-delivery options and e-commerce sites offering competitive
pricing, diverse offerings and convenient doorstep deliveries, shoppers are finding little
incentives to visit a shopping mall. Shopping malls are under siege to address the problems of
declining footfalls through their malls and shorter time spent by shoppers, resulting in tenant
retailers becoming increasingly discontented with the lack of sales.
Faced with a lacklustre retail scene, retail malls are reporting rising vacancies and falling rental
rate. Conventionally, retail and food & beverages tenants were preferred as they tend to pay
higher rental, often resulting in cookie-cutter malls which are similar in offerings and targeting
the same group of customers.
To bring shoppers back to the malls, landlords are strategizing to incorporate activity-based
spaces and business concepts, such as culinary classes, craft workshops and fitness activities,
for like-minded consumers to gather and interact in common shared experiences. These tenants
help to drive and maintain regular traffic whilst keeping them longer in the malls.
For example, Timezone arcade, outfitted with a bumper car ring and mini-bowling lanes to
attract the young and old, opened its 12,000 square feet flagship outlet at Vivocity in January
2018. Even traditional retailers are rejuvenating their offerings. ToTT (Tools of The Trade), a
kitchenware retailer under the Sia Huat group (founded in 1959), established a 7,000 square
feet store at Century Square in 2018 that conducts cooking classes for the public, renting out
of studio, hosting of private parties and corporate team bonding activities.
“Brick-and-mortar businesses must go beyond passively selling products and
services to generating quality retail experiences and emotional connections.”
– Lee Chee Koon, CapitaLand Chief Executive Officer (September 2018)
With an estimated 803,000 square feet of retail space to be added over the next two to three
years, it is imperative that retail malls need to innovate, transform and engage the shoppers to
halt rental and occupancy rates from further decline by offering experience-based activities as
they reposition to survive. [Sources: Adapted from Lim (2018), Mahrotri (2018), Timezone
Singapore (2018) and ToTT Store (2018)].
References
Lim, J. (2018, July 31). The Big Read: Malls change tack to draw crowds, never mind if they
aren’t there to shop. Channel NewsAsia. Retrieved from https://www.channelnewsasia.com/n
ews/singapore/e-commerce-malls-gaming-arcades-fitness-studios-retail-singapore-10574068
Mahrotri, P. T. (2018, November 24). Singapore malls try big gambit before online shopping
catches on. Bloomberg.com. Retrieved from https://www.bloomberg.com/news/articles/2018-
11-25/singapore-malls-try-big-gambit-to-stay-ahead-of-e-commerce
Timezone Singapore (2018). Timezone Singapore. [online] Available at:
https://www.timezone.com
[Accessed 2 August 2018].
ToTT Store (2018). ToTT Store Singapore. [online] Available at https://tottstore.com
[Accessed 2 August 2018].
https://www.channelnewsasia.com/news/singapore/e-commerce-malls-gaming-arcades-fitness-studios-retail-singapore-10574068
https://www.channelnewsasia.com/news/singapore/e-commerce-malls-gaming-arcades-fitness-studios-retail-singapore-10574068
https://www.bloomberg.com/news/articles/2018-11-25/singapore-malls-try-big-gambit-to-stay-ahead-of-e-commerce
https://www.bloomberg.com/news/articles/2018-11-25/singapore-malls-try-big-gambit-to-stay-ahead-of-e-commerce
https://www.timezone.com/
BUS357 Group-based Assignment
SINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS) Page 5 of 7
Question 1
The Kitchen, a food court operated by the Koufu Group, located at The Star Vista, has recently
ceased operations (2018). The management of The Star Vista has decided to sub-divide and
lease out the vacated space to interested parties who can create an activity-based experiential
business concept for their shoppers.
Your group is to prepare a comprehensive feasibility analysis plan to propose and evaluate an
activity-based business concept that is to be situated at the former food court. The report should
a) examine the technical feasibility
b) appraise the market and financial feasibility, and
c) apply break-even and expected financial returns analysis
The report should also design the organisational feasibility, and discuss briefly any regulatory
issues on starting and operating the business. A complete report format is shown below.
(100 marks)
Guidelines and Assumptions
1. GBA groups are free to conduct desk research, field research, interviews, etc. to identify
possible business ideas. The team should obtain/collect data from the relevant library
databases and other reliable sources to assess the demographics, market potential and
financial attractiveness of the opportunity.
2. The proposed business idea should satisfy The Star Vista management’s desire to offer
an ‘activity-based experiential business concept’ to their shoppers that is currently not
available at the mall. This should be clearly articulated as part of “The Value
Proposition of the Product(s)/Service(s)” (Section 2.1), on how your business concept
aligns with their objectives in attracting and retaining shoppers for a longer duration.
If the proposed activity-based business concept has a complementary F&B and/or retail
components, these must not exceed 30% of the total revenue and must be shown as a
separate line item in the Income Statement (Section 6.1.1).
Franchise business concepts, wholesaler and distributorship, import-export, and
education related businesses, such as tuition and enrichment services, are not
permissible for this assignment.
3. Unfurnished available rental space starts from a minimum of 1,500 square feet up to a
maximum of 4,000 square feet, in increments of 500 square feet. You decide on the
appropriate space your business requires and the landlord will allocate accordingly.
Monthly rental rate is at $20.00 per square foot and remains fixed for the entire duration
of the tenancy.
The minimum lease is 3 years, with the tenancy renewable for another 3 years at the
same rate. Rental deposit is equivalent to 2 months’ rental, payable on the
commencement of the lease. Sub-letting is not permissible by management.
BUS357 Group-based Assignment
SINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS) Page 6 of 7
In deciding the appropriate and reasonable space required, you should carefully
consider the needs of your proposed business, including when operating at full capacity.
4. The initial two months of operation is the gestation period of the new business, e.g.,
staff recruitment, renovation, staff training and etc. The first revenue can only be
received by the new business from the third month onwards in the team’s financial
forecast.
5. The depreciation for any capital investment is a straight line over three (3) years.
6. The Cost of Capital (Weighted Average Cost of Capital, WACC) formula is:
WACC =
E
x Re +
D
x Rd x (1 – Tc)
V V
Re = Cost of Equity
Rd = Cost of Debt
E = Funding from Equity
D = Funding from Debt / Loans
V = E + D (i.e. total funding)
E/V = Percentage of Financing that is Equity
D/V = Percentage of Financing that is Debt
Tc = Corporate Tax Rate*
*Specific Tax Exemptions, Credits & Reliefs (e.g. Tax Exemption Scheme for New
Start-Up Companies), Concessions, Rebates, Loss-Carrying Forward and similar
Schemes are to be ignored in computations
This is the full equation of the WACC formula and it must be used in this GBA. If any
other simplified WACC formula is used in this GBA, 5 marks will be deducted.
7. The Comprehensive Feasibility Plan must be written in the form of a report using the
format show below.
8. Assumptions made must be supported by appropriate references shown in “Appendix
A: References for Assumptions Made” in the report. Reliable sources from the Internet
may be quoted. All sources must be properly cited in the text, and included in the
reference list.
9. The report length should not be more than 18 pages (excluding appendices). Executive
Summary must be only maximum two (2) pages long.
All the three financial statements (Income Statement, Cash Flow Statement and Balance
Sheet) must be included in the main report. These three financial statements should
be inserted and properly resized as an embedded object clearly displayed in MS Word
(use “INSERT > OBJECT” function) and NOT as a picture, image, hyperlink or
attachment.
Approximately 10 marks may be deducted for every additional page that exceeds
the maximum length of 18 pages. The quality of the content is more important than
the length of the report.
BUS357 Group-based Assignment
SINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS) Page 7 of 7
GBA REPORT FORMAT
Table of Contents
1 Executive Summary (maximum 2 pages) 12 marks
Summary of the Feasibility Study and Conclusion on the Viability/Non-Viability of the
Business Idea
2 Technical Feasibility (1 page) 10 marks
2.1 Description of the Business’s Product(s)/Service(s) to be offered
2.2 Value Proposition of the Product(s)/Service(s)
3 Market Feasibility (2 pages) 18 marks
3.1 Market Segmentation, Target Market and their Characteristics
3.2 Total Market Potential based on Research Data
3.3 Potential Sales Price, Projected Market Share and Sales Volume
3.4 Promotional Activities
4 Industry Analysis (2 pages) 18 marks
4.1 Industry Assessment using Porter’s 5 Forces
4.2 Conclusion of the Industry Environment
5 Organisational Feasibility (2 pages) 14 marks
5.1 Brief write-up on each of the Founding Member (GBA Team) and their respective Roles
and Responsibilities
5.2 Perceived Gaps and Personnel Requirements to run the Business
5.3 Legal and Regulatory Requirements for the Business
5.4 Justification for Rental Space Requirements
6 Financial Feasibility (9 pages) * Challenge Question 28 marks
6.1 Assessment of Financial Statements
6.1.1 Income Statement (1st year – Monthly Basis; 2nd to 3rd year – Quarterly Basis)
6.1.2 Cash Flow Statement (Quarterly Basis)
6.1.3 Balance Sheet (Yearly Basis)
6.2 Break-even Analysis using the Graphical Method
6.3 Initial Investment required to Start-up Operations; and
Sources of Capital: Justification for proportion of Debt and/or Equity Funding
6.4 Expected Financial Returns: NPV and IRR
(Assume: Cost of Debt = 5%; Cost of Equity = 12%; Corporate Tax Rate = 17%)
Appendices: References for Assumptions Made
Reference list
Number of pages indicated above for each section are indicative (except for the Executive
Summary – maximum 2 pages). Total pages must not exceed 18 pages (excluding Appendices
and Reference list).
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