(+63)

Joy St.,
912-345-6789
Macabacle, San
Cruz
XM & Gravito
Equipment
BUSINESS
Fernando, Pampanga
xmrental@gmail.com
Rental

PLAN OUTLINE

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Business Goals

B
efore this all became a possibility, we, as partners collaborated on a
project for our Civil Engineering undergraduate class as a potential
rental business for the school, Colegio de Sebastian—Pampanga, Inc. As
time progressed, the idea did not seem to deter because of the infinite
opportunities and possibilities that, not only the school, but the province offered
is difficult to pass up on. Pampanga, on a socio-economic standpoint, has
become a new destination for building an urbanized haven; with business
owners expanding more, construction equipment is much heavily used as so.

The salient points in our consideration were as follows:

 To have a business that is in a growth industry with greater opportunities for the
entire area
 To maintain a well-established relationship between the company and its
clientele
 To procure a long-term financial opportunity and to provide an adequate
standard of living
 To always be objective and transparent to our shareholders in every transaction

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Business Strategies

I
n behest of securing funding from various venture capitalists (VCs) and
banks, a stable foundation of vocation should have been established. With
this, the company has decided to do sub contractual work for field projects,
seeking out prospects and doing liaison work on equipment bidding and middle-
man transactions. Each of these individual business dealings will invoice us a
respectable amount of commission which is relayed to the company’s expansion
projects.

After building up a total sales of about P5,000,000 in middle-man rental

transactions, the company should have inadvertently embraced a wide customer
base here in Pampanga, and for some along Region III. With a sizing clientele
comes a need for expansion, in which, the company should capitally have its
own equipment to rent.

Furthermore, the company should at least procure/rent to act as a docking bay

for the larger vehicular equipment and a storage for the smaller ones.

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Table of Contents
Business Goals 1
Business Strategies 2
Table of Contents 3
Section 1: Business Specifics 4
Description 5
Location 5
Product List 6
Market 7
Competition 8
Management & Personnel 8
Section 2: Financial Data 9
Sources and Application of Funding 10
Capital Equipment List 11
Balance Sheet 11
Break-even Analysis 12
Income Projections
Cash Flow Projections
Section 3: Supporting Documents

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BUSINESS SPECIFICS
XM Equipment Rental

XM EQUIPMENT RENTAL
San Fernando, Pampanga
S

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XM EQUIPMENT RENTAL is an equipment rental

business providing a wide variety of tools and machinery for construction
purposes. This venture seeks to provide a competitive service to its customers
and secure a long-term financial opportunity and livelihood in which both
partners can be sustainable.

The company is a home-based business that mostly acts as a middle-man

renting facility in which we locate the equipment built for your needs. We supply
heavy machinery to field projects that move massive loads by the ton. We also
deliver* these heavy vehicular machines right to your area of work.

The company also offers a standard equipment rental/repair for home uses such
as tillers, augers, and the like. We also offer consulting in equipment logistics
and estimates. All equipment aforementioned are outsourced from a third-party
to which they license for distribution on contractual jobs.

*Only applies to customers residing in REGION III; A customary fee will be

charged for those outside of the region.

LOCATION
The company is currently home-based, located at Joy St., Macabacle,
Pampanga, since it is financially easier and more practical for the line of
business but, given the chance, the company would also like to obtain a small
piece of land in Magalang, Pampanga as attached with its accompanying
details.

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Product List
Price per unit
Equipment Per Hour Per Day
Backhoes
CAT 420D 1,200.00
CAT 430F2 IT 1,000.00
CAT 440 1,000.00
KOMATSU WA380-3 1,100.00
KOMATSU PC30 900.00
Bulldozers
CAT D7F 2,250.00
LIEBHERR PR7E4-4 2,500.00
ZOOMLION ZD160-3 2,000.00
Excavators
CAT 320 GC 1,300.00
CAT 300.9D 800.00
KOMATSU PC120 1,500.00
KATO HD-400 1,300.00
Trenchers
CAT T6B 1,300.00
CAT T9B 1,350.00
Compactors
VOLVO SD110 1,000.00
VOLVO DD110C 1,000.00
Tillers
CAT LT13B 700.00
CAT RM-350B 1,000.00
MANTIS ELECTRIC 3550 1,000.00
KUBOTA KRX193 1,000.00
HONDA FJ500 IN 1,000.00
Chainsaws
STIHL 5200 950.00
DEWALT DW5200 950.00
LINGGONG MS5200 900.00
Augers
CAT A14B 1,500.00
HOYOMA DZ64 1,000.00

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Market

S
ince Pampanga is the upcoming metropolitan area here in the
Philippines*, the possibilities for the construction and development
department are endless. This includes restructuring landmarks and
realigning highways to make Pampanga a modernized hub for residents and
newcomers alike.

Projects such as Megaworld’s Capital Town, wherein the Pampanga Sugar

Development Company (PASUDECO) used to operate, and the urbanization of
the New Clark City (NCC)*, by the Clark Development Corporation (CDC), are
the reason why this venture—in such a strategic location—was noteworthy in our
formulaic method to consider this line of business.

Aside from grand projects mentioned above, the DPWH is constantly in need of
contractors that rent equipment for their road widening agenda and such. Also,
housing companies such as Camella Homes, Communities Philippines, and,
Vista Land are rapidly growing which creates a direct influx in our growth as
well.

*Palafox Jr., F. (2018). “Pampanga Metropolis: Strongest Counter-Magnet to

Metro Manila”. PALAFOX . Retrieved from
http://palafoxassociates.com/news/201802/pampanga-megalopolis-
strongest-counter-magnet-metro-manila

*Katigbak, M.P. (2019). “Urbanization: A Challenging future”. Business

World Online . Retrieved from https://www.bworldonline.com/urbanization-
a-challenging-future/

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Competition

I
n a brief analysis of licensed equipment rentals here in Pampanga, there
seemed to be a few of which situated here in San Fernando. These sorts of
business types lie more on areas such as Mabalacat, Apalit, and along the
stretch of Friendship Hwy. Although, we hardly treat these businesses as
competitions but, rather, as a partnership.

We, as the middle-men, outsource to these businesses with clients of our own,
and partner up with them. We scrape of the top of their prices with ensured
renters and invoice them to us as a commission for seeking prospective
clientele. This, in turn, will both be a gain for us, financially speaking, while
retaining our customers if they ever need us in the future.

Management & Personnel

A
s much as the business goes, we handle it by ourselves. We do it based
on the leniency of our schedule but when we do, we make sure that the
work is done. The company has a payload driver for delivering the
equipment to the customers. Everything including operations, financials, and
executive decisions is done based on both our mutual interests. This also
diminishes the company’s expenses especially so.

For future arrangements in obtaining an office location, a sales team would be of

need since this brings us even more value customer-wise. Instructional
operators and drivers would also benefit us in the future.

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FINANCIAL DATA
XM Equipment Rental

XM EQUIPMENT RENTAL
San Fernando, Pampanga
S

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Sources and Application of Funding

The company is self-sustaining, at best, but to rapidly increase our growth, we
need the help of investors to obtain a wider market and a piece of land.

The company is seeking a loan/credit line in the amount of 45 million for the
purpose of expanding the business. Expansion plans include the purchase of
additional land and construction of a larger shop/service area, increase rental
inventory, and hiring of additional personnel including a mechanic and delivery
driver.

Loan Breakdown
3%1%
11%

84%

Lot & Construction Equipment Purchases

Research & Development Misc. (Insurance, etc.)

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Equipment Capital List

So far, the current equipment that we have right now are the small non-vehicular
equipment and the low loader trailer truck lent to us (my grandfather) that we
use for transporting heavy machinery. Prices of acquisition are as follows:

Equipment Price of Acquisition (in Php)

Tillers
MANTIS ELECTRIC 3550 15,450.00
KUBOTA KRX193 33,745.00
HONDA FJ500 IN 44,999.00
Chainsaws
STIHL 5200 6,500.00
DEWALT DW5200 13,000.00
LINGGONG MS5200 12,375.00
Augers
HOYOMA DZ64 13,000.00
GVWR 49450 kg Low Loader Trailer 6,500,000.00
TOTAL 6,639,069.00

Balance Sheet (for the year 2019)

Current Assets
Cash 75,360.00
Accounts Receivable 18,200.00
Non-Current Assets
Equipment 6,639,069.00
TOTAL ASSETS 6,732,629.00

Liabilities
Accounts Payable 15,000.00
Non-current Liabilities 0
TOTAL LIABILITES 15,000.00

Capital
Investments 49,195.00
Retained Earnings 6,676,434.00
Less: Drawing (8,000.00)
TOTAL CAPITAL 6,717,629.00

TOTAL LIABILITIES & OWNER’s EQUITY 6,732,629.00

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Breakeven Analysis
Given the numerous selections we offer, we decided to show you a breakeven
analysis of a standard backhoe rental, which is the most popular amongst our
customers for an average of 10 hours.

Sales
Sales Price per Unit 15,000.00
Total Sales 15,000.00

Variable Costs
Shipping per Unit 500.00
Labor per Unit 500.00
Actual rental fee per Unit 10,000.00
Total Variable Costs 11,000.00

Net Profit 4,000.00

Income Projections (5-year Summary)

This is a summarized list of our gross sales for the past five years.

2015 2016 2017 2018 2019

Net Sales 72,000.00 118,000.00 138,000.00 215,300.00 242,058.00
Less: Cost of Goods Sold 64,000.00 109,000.00 72,000.00 182,700.00 89,029.00

Net Operating Income 8,000.00 9,000.00 66,000.00 32,600.00 153,029.00

Operating Expenses 2,000.00 2,000.00 5,000.00 8,000.00 17,000.00

Net Income 4,000.00 7,000.00 61,000.00 24,600.00 136029.00

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Cash Flow Projection

The projection stated below is the summarized cash flow projection of the
company from 2019.

Cash flows from operating activities

Net income 76,995.00
Net cash provided by operating activities 76,995.00

Cash flows from investing activities

Additions to property, plant, and equipment (33,745.00)
Additional invests and advances (1,200.00)
Net cash used in investing activities (34,945.00)

Cash flows from financing activities

Reductions in short-term debts (6570.00)
Acquired Interest Receivables 810.00
Net cash used in financing activities (5,460.00)

Increase/Decrease in cash 36550.00

Cash at beginning of period 38810.00
Cash at end of period 75360.00

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SUPPORTING DATA
XM Equipment Rental

XM EQUIPMENT RENTAL
San Fernando, Pampanga
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₱ 35,000,000
Floor Area: 1,000SQM
Lot Area: 646.5 SQM

Commercial Building along Rizal Street Poblacion Magalang

Property Overview Magalang Elementary Carreon's Sweets & Pastries

Listing Number School 1.16km
115886186 1.22km Transport and Public
Type of Property Food and Entertainment Services
Commercial Jollibee Magalang Post Office
List Date 0.89km 0.95km
24 February 2020 Mr Frosty DFFS
Lot Area 0.94km 5.20km
646.5 SQM Health Other
Floor Area Apung Tony Church of the Risen Christ
1000 SQM 7.47km 5.82km
Education Shopping Iglesia ni Cristo
Golden Vine Superdrug 6.09km
1.09km 1.13km

*https://www.property24.com.ph/commercial-for-sale-in-magalang-115886186

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