Table of Contents
INDUSTRY ANALYSIS....................................................................................................................................5
Part B.........................................................................................................................................................10
OBVAI Future Plan.....................................................................................................................................10
Ownership and equity...............................................................................................................................11
Managerial role for the short term and long term business......................................................................13
PROFORMA INCOME STATEMENT And PROFORMA BALANCE SHEET.......................................................13
Capital Financing For OBHAI......................................................................................................................16
Convincing the Investors...........................................................................................................................16
Three Question’s Answer:.........................................................................................................................17
Conclusion.................................................................................................................................................19
References.................................................................................................................................................20
INDUSTRY ANALYSIS
Ride sharing is a time and facility oriented updated service with the help of proliferations of
internet and affordable smart phone have created avenues for internet based innovative ride
sharing service in Bangladesh. Ridesharing is simply where two groups of people as driver and
passenger exits. This service mostly involves efficient use of vehicles with a different mode of
transportation, usually car and bike. In the era of digital sharing economy ride sharing systems
extends with the availability of lot (Internet of things) and new technology smartphone give us
an opportunity for easy and flexible communication system both riders and users. Because of its
benefits sides it is very popular and demanded service of new generation like it reduced travel
time, travel cost, traffic congestion. Academic researchers, entrepreneur, businesspersons,
innovators and policy makers are showing greater interest of this ride sharing service. Ride
sharing service create more opportunities in terms of market share and social benefits. Moreover,
ride sharing companies are also benefited by new dimension of service use and new area of
earning profit. Using this service both (Service company & users) are benefited with the wave of
other countries. Some of the ride sharing companies started their operations in Bangladesh like
UBER, PATHAO, AMARBIKE, TAXIWALA, GARIVARA, CHALO, SOHOJ Ride, OBHAI,
OBON and others. Using this service people can easily go anywhere in less time, order foods
anytime his or her affordable restaurant, this apps give safety of consumers, also package service
etc. people are using the service frequently which is further attracting newer companies to enter
the market and making the competition intense. Day by day ride sharing service create new
software to give us new services. The future ride sharing service would be more efficient with
the help of GPS tracking system. With the help of pie chart, graphs I am showing current market
situation of ride sharing in Bangladesh.
In this pie charts shows Experience of ride sharing services. On my survey 80 % people use the
ride sharing and 20 % people are never used the ride sharing service. So I can easily say that
people nowadays more dependent of ride sharing.
Figure 1: Experience of ride sharing services
In this graph shows that around 37% of responds prefer a car only while 33% of responds prefer
motorbike only. There are also 27%of responds who are indifferent between these two modes
based on their situation and convenience.
Figure 2: Preferred transportation mode
In this graph shows why 20% or above people not using ridesharing? because of their security
purposes. Users must give their real information on this app through GPS tracking and all
detailed information recorded in real time. People feel insecure for various reasons at nighttime.
Figure 3: Reasons behind ignorance of ride-sharing services
Based on survey data 2019, it shows that ride sharing service company give users minimum cost
of service.[ CITATION Sai191 \l 1033 ]
Figure 4: Range of avg payments per trip
The future prospects and challenges of ride sharing service
Figure 5: Reasons of choosing ride-sharing services in future
This graph shows the problem people may face using ride sharing service like abuse personal
information, charging higher price, threat of privacy, unregistered bikes or car, harassment by the
drivers, risk of accidents.
Figure 6: Problems faced in ride sharing services
As we say firstly ride sharing is very popular now in our country. Many ride sharing company
started their business in Bangladesh like UBER, PATHAO, OBHAI, OBON, TAXIWALA,
GARIVARA, CHALO, SOHOJ ride. It is one of the brand labels of MGH groups in Bangladesh.
OBHAI brand targeting people is all class in the city who value safety, security and time
efficiency. OBHAI starting their ride sharing this concept like what if one wants to go to a place
with a large number of family members? The app offer customers cars, motorcycle, CNG auto
rickshaws and even seats on a 10 seated air-conditioned microbus. OBHAI reduces waiting time
for pickup and travel durations as it offers multiple options of choosing between cars, microbus,
motorcycles and CNG – auto rickshaws. Ongoing of some research, we found out that rather
than another ride sharing company OBHAI users are so low. In this graph shows that uber users
are around 40%, PATHAO users 37% and OBHAI users are so low around 3% consumer prefer
mostly UBER and PATHAO.
Figure 7: Preferred service provider
In Bangladesh, Obhai Solutions Limited is one of the growing ride-sharing companies with the
slogan "Ride in a minute". The COO of the company is Quazi Omar Ferdous. It gives customers
the option to choose from various ride options for the planned trips. Outside of Dhaka,
Chittagong, and Sylhet, Obhai is the first ride - sharing company in Rajshahi, Jessore, Cox's
Bazar, and Khulna towns. Since joining in 2018, the organization has more than 500,000
customers and 150,000 appointed riders.[CITATION OBH19 \l 1033 ].
Part B
[Link] do you want the business to look like in 1, 5, 10 years? (Is your motto “go big or go
home or built to last”?)
OBVAI Future Plan
OBVAI mainly focus on ridesharing service. As we explain firstly OBVAI services. Instead of
ridesharing service we are planning to include more services like Courier service, female
ridesharing service, food delivery service as in our 1-5 years plan. UBER, PATHAO and another
ride sharing services popular because they have more vehicles and multiple types of service like
courier, food delivery etc. As we know this is a competitive market and it’s growing day by day.
To sustain in this market, we are planning to add more services (Courier service, female
ridesharing service, food delivery service) in single app OBVAI instead of having ride sharing.
Our motto to provide a user friendly app to the customers with multiple facilities. To get more
customer we firstly focus on app as follows
1. Female ride sharing service (using bike or scouter in low cost). Most of female passengers are
not comfortable with unknown male rider. We got so many complains that the most of female
passengers are not getting good experience with the unknown male riders because of reckless
driving, not feeling safe etc.
2. Safety and security is also a main issue now a days. We will able to provide more safety and
security than others because we owned the vehicles and drivers are our employee and also using
vehicle tracking tools. Whereas the PATHAO, UBER and others are failing to ensure the proper
security because their drivers are not their employee. They are working as a media to connect
with rider and passenger. So In our service we can ensure more security than others.
3. Food and groceries delivery service, as we know it is very popular nowadays. In our country
many people want part time jobs. So we can hire students or others as a part time job for food
delivery service and we give them bicycles which will cost less.
4. Courier Service or door to door parcel using bicycles (to nearby locations) or motor bike. We
can deliver the handy parcels to passenger nearby destinations.
This is our starting services if we make business and popularity to the market then we make
another wing as dedicatedly open courier service intercountry.
5. In 5 to 10 year we will plan to add new service in our OBVAI app named as telemedicine
service or online pharmacy. In our country almost 60% to 70% people suffer many disease like
diabetes, high blood pressure, kidney disease, oral problem, cancer, gyn logistic problem,
depression problem etc. We will find at least one person in each family having regular medicine
for Diabetes, high blood pressure, kidney problems or many more disease is almost common in
our country. Aged people are mostly suffering these diseases and they are not taking proper
medicine time to time, sometime the doctor prescription are not understandable for general,
sometime they are not able to go outside for medicine and mostly these people are forgot to take
medicine time to time. So we plan to create a new service which we named telemedicine or
online pharmacy in our app. Uploading the prescription’s photos by app, We will provide them
medicine by packing with time and days as prescribed by doctors. So the patients don’t need to
know which medicine have to take, they just unpack and take the medicine. It will relief the
patient and save time. This app will give our users reminder to take medicine. So aged people
doesn’t forgot to take medicine.
[Link] do you want as partners, beyond your co-founders? These are the people who will
be owning and controlling the business with you. (Who controls the big decisions, the co-
founders or the investors?)
Ownership and equity
Co-founders carries more labor to the organization. All in all, the more hands you have
accessible the more work your organization can do in the equivalent, or even less, measure of
time. But we don’t want partners, beyond our co-founders. We definitely have some investors,
and they will get 10% to 15% share in our business but they won’t get any decision making
rights in business. They will get profit for investing and get shares up to 10% to 15% but they
can’t control the big decisions. Because they have the decision making rights. With equity
money from investors, the owner is relieved of the pressure to meet the ... Equity partners want
to have a voice in making the decisions of the business, ... to finance the operations and growth
of a business can be the right decision ... The owner does not have to give up control of his
business.[ CITATION Mar17 \l 1033 ]
Disadvantage of having more partners in business:
1. Liabilities. Notwithstanding sharing benefits and resources, an organization additionally
involves sharing any business misfortunes, just as duty regarding any obligations, regardless
of whether they are brought about by the other accomplice.
2. Loss of Autonomy: the test of shared dynamic cycles; the requirement for building
agreement with accomplices before move can be made and the ramifications of more
extensive responsibility
3. Emotional Issues: Accomplishment in any business relies upon our comprehension of
feelings. The explanation: whoever purchases what you are selling is doing as such for
enthusiastic reasons.
4. Future Selling Complications: As conditions change later on, you or your accomplice may
wish to sell the business. This could introduce challenges on the off chance that one of the
accomplices isn't keen on selling. You can manage such an outcome by remembering a leave
system for the organization arrangement.
5. Lack of Stability: On the off chance that one accomplice decides to resign, quit, or leave, at
that point the business consequently breaks down. This can likewise occur on the off chance
that one accomplice kicks the bucket unexpectedly or needs to petition for financial
protection. ... With an organization between two individuals or gatherings, there is an
absence of security associated with the fate of the business.
6. Conflicts of interest: where a choice or activity that is ideal for the interests of the association
yet might be at chances with the individual association's inclinations.
7. Drain on resources: responsibility (regularly altogether more noteworthy than foreseen) of
time and energy of key staff in association building and venture improvement
notwithstanding any extra monetary or other asset commitments.
8. Implementation challenges: the everyday requests of conveying an association program as a
community oriented endeavor, with all the extra administration, following, detailing and
assessment prerequisites that involves.
9. Negative reputation impact: at the point when organizations turn out badly making harm the
standing or history of individual accomplices by affiliation.
3. What do you want your role to be? (Will co-founders run the business for the long haul,
or will “professional” management be brought in before long?)
Managerial role for the short term and long term business.
We have taken some decisions to run our business for 10 years. We divided our 10 years long
plan into 2 segments. We will use our co-founders and the professional executives sequentially.
Basically, we have two options in our hand. Either we need to run our business with the co-
founders or we need to run it with the professional executives. As we are new in this industry
and may not have that amount of capital to hire executives so we want to run our business with
the co-founders for 5 years. This will help us to reduce cost that will be required to hire the
professionals. We can invest those money to expand our business or keep those as reserve. And
we are very much hopeful about making profit during this period. And if we can make profit than
that would be a great achievement for us. Then we can hire professional executives to keep this
growth of profit in the long run. Hiring professionals are very much important to keep the
business alive in the long run and to sustain in this competitive market. This will create a positive
impacts in the market and also among the investors. The investors will feel reliable to invest in
our company. Moreover, these plans can help us to be the market leader in the industry. So,
that’s our plan to run the business with the decisions of the co-founders for the first 5 years. Then
we will hire the professional executives in the long run.
4. How much capital do you need to take advantage of the opportunity in front of you?
PROFORMA INCOME STATEMENT And PROFORMA BALANCE SHEET
PROFORMA INCOME STATEMENT
DETAILS ৳ 2020 (CURRENT YEAR) ৳ 2021 ৳ 2026 ৳ 2030
Revenue 30000000 32100000 34800000 46500000
Less Expenses 10000000 12100000 14762000 18895360
EBIT 20000000 20000000 20038000 27604640
Less Interest (10%) 2000000 2000000 1943800 2760464
Taxable Income 18000000 18000000 18094200 24844176
Less Tax 41% 7380000 7380000 7418622 10186112.16
NET PROFIT 10620000 10620000 10675578 14658064
PROFORMA BALANCE SHEET ৳ 2020 ৳ 2021 ৳ 2026 ৳ 2030
ASSETS
Current asset 54000000 59400000 64800000 83700000
Fixed Asset 126000000 118800000 129600000 167400000
Total Asset 180000000 198000000 216000000 279000000
LIB & OE
Current Liabilities 51769800 28368825 28368825 28368825
Non-current liabilities 120796200 66193925 66193925 66193925
Total Liabilities 172566000 94562750 94562750 94562750
Equity: Retained Earnings 7434000 7434000 7472904.6 10260644.69
Total LIB & OE 180000000 196559500 196598404.6 199386144.7
EXTERNAL FUND NEEDED 0 14405000 19401595.4 79613855.31
ADJUSTMENTS 2021 2026 2030
Revenue Proportional to Change 7% 16% 55%
Asset Increased By 10% 20% 55%
Expenses Increased To 21% 22% 28%
Dividend Paid 30% 30% 30%
PROFORMA INCOME STATEMENT
50000000
45000000
40000000
35000000
30000000
25000000
20000000
15000000
10000000
5000000
0
0 1 2 3 4 5 6 7 8
৳ 2020 (CURRENT YEAR) ৳ 2021
৳ 2026 ৳ 2030
PROFORMA BALANCE SHEET
90%
60%
30%
0%
TS et et et OE es es es gs OE D
SE a ss A ss A ss & i liti l iti i liti nin & E DE
S b i r E
A nt xe
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LIB ia b ia
b
Ea IB N
rre To tL lia lL lL
C u Fi n n t ta n e d
o t a ND
rr e rre T o ti T F U
Cu cu ea AL
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No ui
t
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Eq EX
৳ 2020 ৳ 2021 ৳ 2026 ৳ 2030
Our initial investment required for business in around 14.5 Million on 2021. When we increased
our sells by 16% in 2026, we will need 19.5 Million extra fund. As we expected to increase our
sells by 55% in 2030, we will need extra 76.6 Million extra fund to operate our business.
Q5. What are you willing to give up for that capital?
Capital Financing For OBHAI
In the initial stage we are looking to fund the business from cofounder’s capital. In the latter
stage we will try to bring investors and take bank loan to expand the business capital. But both of
the initiatives have risk incorporated in them.
While a bank loan can offer several advantages, but both us and the lender are at risk. The lender
carries the risk that the money loaned to us may not entirely be repaid. And we can suffer
financially or even our assets such as (house, shops, etc.) as far as our own personal financial
wellbeing is concerned. This is why, to mitigate the risk for all parties, lenders use careful
underwriting criteria. A bank loan can become a burden depending on the business, we might
have to pay a substantial amount of money per month to the bank. There may come a scenario
where we might not be able to pay the monthly interest money then it may affect the credit score.
As we know lower credit score can make the bank lose trust in your ability to pay back money.
They might not be willing to lend us money in the future. If we obtain loan by showing an asset
we get in trouble if we are unable to pay the interest amount. Unable to pay the interest in longer
period of time may force the bank to sell the assets.
Investors can help us to raise capital but in return we have to give something from our business.
We have decided to take capital from them and offer them 25% business ownership. They will
not have any say in decision making process. We will give them quarterly updates on the
business and would like to hear their advice on the important matters.
6. Can you convince investors your company will have enough value for the investor meet
their?
Convincing the Investors
Desired OBVAI mainly focus on ridesharing service. As we explain firstly OBVAI services.
Instead of ridesharing service we are planning to include more services like Courier service,
female ridesharing service, food delivery service as in our 1-5 years plan. Return. In 5 to 10 year
we will plan to add new service in our OBVAI app named as telemedicine service or online
pharmacy. In our country almost 60% to 70% people suffer many disease like diabetes, high
blood pressure, kidney disease, oral problem, cancer, gyn logistic problem, depression problem
etc. We will find at least one person in each family having regular medicine for Diabetes, high
blood pressure, kidney problems or many more disease is almost common in our country. For
expanding our business we need investors. Our main investors would be the Bank. Because we
don’t want to sell share. Because selling share we will have to share equity. We don’t want to
share our equity with anyone. So we have to convince our investor by giving them our plan
model of our business how to expand and what will be our new features? Our new features is
Telemedicine. Where people will be benefited by this app. Where people can upload their
prescription and make a reminder when they have to take their medicine. And also we add their
medicine order system we will provide them the medicine if they order. By this telemedicine
apps so many people will be benefited. Now everyone has smart phone. In Bangladesh so many
patient most of are diabetics patient. They have to take insulin in time by using this app they will
get as a reminder. Then they will take the insulin at time. We have all features that one patient
will be needed. Actually this is our main features of telemedicine apps. So our main investor is
bank we will share our profit of 15% with them. Our telemedicine apps will be more useful we
will make more profit than before. Obhai is now rising their profit day by day using their new
facilities. We bring this telemedicine we will be expanded and profit will be increase more than
before. That’s the thing we need to tell our investor how much profitable our new features. I
hope our new features will be liked by our investors. After all we are giving them the 15% of our
profit. They will be more profitable. This is how we will be convince our investors. I hope
investor will be convinced. If they want more profit we will give them 20% that will be our last
offer to them. If they bargain about the profit how much they want. 15% is huge amount of profit
because we will make more profit we expect. Because our new features will be more effective to
the people. And they will be more comfortable by using our this telemedicine apps.
Three Question’s Answer:
Question A. Financing opportunities available in Bangladesh
Apart from financing from our own money there is very few options available in Bangladesh.
Especially for ride-sharing companies as there is only a handful of ride-sharing companies
present.
Friends & family- Though not everyone is lucky enough to get funding for any business from
family. Some individuals do get their first funding from their close friends and family. While the
amount may not be large, but it helps to start the business and get it running initially.
Angel Investors- Angels are typically high-net-worth entities who specifically invest in start - up
companies. They not only invest capital, but also provide their expertise and network of
connections and technological and/or managerial skills. According to [ CITATION Hos17 \l 1033 ] in
early-stage projects, angels in Bangladesh have appeared to finance BDT 5,00,000 to BDT
20,00,000. Another fact is the foreign country’s angel investors usually band together and form a
value chain but in Bangladesh, angels prefer to fly solo. In Bangladesh angels usually hold the
right to control the management practices in the organization because of the potential failing
risks associated with startups. They also get a sit in the board of directors and a promise of
accountability
Venture Capital- Venture capital is a form of private equity and a type of funding given by
investors to start-ups and small companies that are assumed to have potential for long-term
growth. Some notable VC firms in Bangladesh are BD Venture, Athena Venture and Equity
Limited, Maslin Capital etc. Venture capitalist investors are typically searching for an very high
Internal Rate of Return (IRR) and are thus individuals with greater than normal growth potential
are more likely to obtain investment from these for businesses. Companies like [Link],
popular pharmaceuticals limited are examples of deals done by venture capital companies.
Bank/ Non-Bank Loans: Here the banks analyze the 5C’s of credit to give loans to an
entrepreneur. Things like character, capacity, capital, collateral and condition are carefully
inspected by the credit risk management department and then the bank decides whether it is a
good idea to provide loan to the individual. We are looking to take loans from banks as some of
the financial institutions like BRAC bank, IDLC Finance provide loan products that can help our
business. In order to get loan, we have to show our cash flows of previous years. Depending on
the cash flows and 5C’s we can get loan amounting between BDT 1 Lac to BDT 25 Lac from the
institutions.
Question B. What’s realistically available to you now? What funding sources will help you
through future stages of company development?
Realistically now available to us is Bank loan and personal loan. To start a new business now a
day everyone using personal loan as their business funding sources. They are go to the bank and
taking the loan. Just they are giving the interest. We have so many funding sources. We can sell
share we can take bank loan we can sell bond and so many ways. We don’t want to sell share
because we don’t want to share our equity to others. And we don’t want to sell bond because
even if we did lose we have to pay then the interest must. So we are going to take bank loan or
personal loan. Because this is the easiest way to funding the capital. Realistically now available
to us is bank loan and personal loan. For the company future development, we will sell share and
bond. We will make our company big. When we need so much capital for the development of
our company we will sell share bond to the public. We will make our company public for
funding the capital. These are the funding sources available to us bank loan and personal loan.
For the future development of company when become at the stage we will make our company to
public and sell share to the public also bond. This funding source are available to us.
Question C. Investigates the challenges you might face to raise the capital?
[Link] loans are too difficult to get and also if we get the loan we have to pay large amount of
interest it’s very risky for our start up business. Because if we don’t have profit in business we
have to pay huge amount of interests.
[Link] capital investors (Angels and venture capital funds) look for high outgrowth and quick
exit, which are not desires for most of the business.
[Link] security provisions place rigid limits on who are invested and able to invest.
Conclusion
Our goal is to stand out with our brand image and satisfied customers among all the other
competitors in this striving Ride sharing business. Not only this, we also in mind and priorities
eco- friendly ways and techniques of running our business along with top Service with
uniqueness. When it comes to investors, not only will it be a top- notch place to bet your money
on but also will give us competitive advantage against other Ride sharing businesses as well. All
being said, it is opening space for expansion in the near future and has more potential of
increasing target market and market size, resulting in an increase in our overall size.
References
Anynomous. (2019, March 25). BDnews24. OBHAI CNG fleet now numbers 12,500, p. p1. Retrieved from
[Link]
Hossain, M. S. (2017, August 22). Funding: Options Bangladeshi Startups/Entrepreneurs Have. Retrieved
from LinkedIn: [Link]
startupsentrepreneurs-hossain-cfa/
Martinuzzi, B. (2017, September 20). What Are the Advantages and Disadvantages of a Partnership?
Retrieved from American Express: [Link]
and-insights/articles/what-are-the-advantages-and-disadvantages-of-a-partnership/?
fbclid=IwAR3qzhQgb_ygH2cm3YMK9w9Bx7BlS1jjM7GaYtBX35u6vTjk0OhWcynATUw
Saiful Islam, E. H. (2019, August 5). Ride-sharing Service in Bangladesh: Contemporary States and
Prospects. International Journal of Business and Management, 14, pp. 1506-1510.
doi:10.5539/ijbm.v14n9p65
