A New Multi Sport Complex in Tweed Heads - Example

Name of the Company A Business Plan to a Venture Capitalist: A New Multi sport Complex in Tweed Heads Name Grade Course: Tutor’s Name: 30th, September, 2009 This Business Plan has been submitted on confidential Basis solely for the benefit of venture capitalists and is not for use by any other persons. It should not be reproduced copied or stored in any other form. By accepting delivery of this of this plan, the recipient agrees to return this copy to the addressee (student) if the recipient does not undertake to subscribe to the offering. Do not copy, reproduce, fax or distribute without permission. Table of Contents 1.0 Executive Summary………………………………………………3 2.0 Introduction……………………………………………………….5 3.0 Venture Description………………………………………………6 4.0 Management………………………………………………………8 5.0 Marketing…………………………………………………………9 6.0 Competitor analysis……………………………………………….9 7.0 Financial Analysis………………………………………………….10 8.0 Risks and Challenges……………………………………………….11 9.0 Reference List…………………………………………...................12 1.0 Appendices…………………………………………….……………13 1.0 Executive Summary Health Excellence is a facility that will have a variety of sporting and leisure activities. It not only attracts the locals around it but also tourists with the accommodation facilities that it will have. The first opportunity and potential of this venture is that it is a multi sport complex facility. It is strategically placed attracting people from an area that has not been exploited. It has no competitors making it the only complex that will hold the region’s market. Almost all sporting activities are within the complex attracting different customers. This is based on the fact that people have different tastes and preferences and the idea has captured all of them. Another issue is that the complex has other facilities that can help get profit. It is not just built for sports alone but has shops, cafes and several others where people can get what they need while they are in the sporting facility. This idea attracts more people since it makes it easier for them to make decisions on what place to visit. That is, a place with all that they need in one site. Different age groups have also been considered with child care facilities made available so that families with young children are welcome. With a wide range of customers and a variety of activities and products, the Health Excellence multi sport complex has very high potential of making high profits and even expanding. The important ideas mentioned cannot be mismanaged and therefore competent and qualified managers and employees have been employed. All areas of the business have to be managed properly with the aim of maximizing profits. A target will be set higher, and any motivation to achieving this target implemented to marketing strategies, competent workforce and the business itself, return on any investment will be very high. Generally, this complex is bound to make a lot of profits. The strategic position chosen is close to the Gold Coast's major attractions, including Dream World, Movie World, Sea World and Surfers Paradise which are tourist attractions. This contributes to revenue from tourists. It also considers the handicapped. It has two wheelchair accessible lodges giving those families with handicapped people an opportunity to visit it. Generally, this complex provides for everybody, that is the young and the old, tourists and local, the handicapped and the normal, singles and families, sport lovers and non sport lovers name it. (DeThomas & Derammelaere, 2008; Timmons & Spinelli, 2003). 2.0 Introduction A good business idea has been developed in Bryron bay that requires the attention of investors. Health Excellence is a multi sport complex designed to capture both local people and tourists. It is the only business of its kind around the area giving it the opportunity to exploit the market. The availability of tourist attraction activities and sites around it adds to its potential to get a lot of revenue from the tourists. The complex has accommodation lodges next to Gold Coast's major attractions, including Dream World, Movie World, Sea World and Surfers Paradise. It has facilities that consider almost all types of consumers. There are facilities for children, (the child care facilities), the middle aged, the old and the handicapped. This gives everybody (those with children, handicapped and families) the chance to visit the place. It also has different sporting facilities including Olympic swimming pools, squash courts (which will also be used for indoor volley ball), two full size basket ball courts (which can be used for other sporting activities) and courts and floors for gymnastics, indoor football, indoor hockey, badminton, aerobics, dance and many more. It has accommodation facilities that can be used by visiting tourists and it also has other services that go along with the activities inside. Health excellence’s strategic position and unexploited market provide an opportunity for its growth and development. With its establishment, the consumers, the owners and investors will benefit. This facility however has not been established and requires some amount of funds for its establishment and growth. Health Excellence multi sport complex requires a seed funding amounting to $ 5, 000, 000 only, for the establishment of two basketball courts, to see that the rich market of locals around Tweed Heads, provided by the children, sport funs, families and many others and that provided by the tourists is exploited. Exploitation of this business idea is expected to produce a profit of $ 40,000,000. Based on this fact, the ROI will be very high considering the seed fund required. This business plan is a formal explanation to what Health Excellence is and its potential, in order to secure the seed fund mentioned above. Any Venture capitalist who shows interest is highly welcome. 3.0 Venture Description This is a multi sport complex meant to offer both the local people and tourists a variety of sport and leisure activities. It is the only complex of its kind and was done after a thorough market research. A multi sport complex has so many sporting and leisure activities that can boost business and even support the establishment of other businesses. The multi sport component means it caters for different sports capturing different people who love different types of sports. Strategic Location: The selected location was arrived at after thorough market research. According to the analysis of the current ABS statistics (2009), Tweed Heads had a 2.6 % increase in population between 2007 and 2008. The availability of consumers to the complex’s services is important and this is the reason why Tweed Heads has been selected as an appropriate location for the Health Excellence. The statistics also predicts increased population growth in the future. Tweed Heads is also strategically placed around tourist attraction sites such as Coolangatta, Kingscliff and Murwillumbah and the Gold Coast. It is also close to the airport. This supports the idea of putting up various sporting and leisure activities that tourists can engage in and accommodation facilities that the tourists can use when visiting the region. Additionally, there are no fitness centers around Tweed Heads that offer all the services that Health Excellence will offer within one site. It will have the following facilities: An Olympic swimming pool that can be used for international swimming events, a tartan track which can and will also be used for international athletic events, two water slides, sauna, spa and hydr0therapy pool. It will also have two full-size basketball courts: These two courts can be used for netball as well and will provide the floor for aerobics, gymnastics, badminton, indoor hockey, indoor soccer and dance. Squash courts which will also be used for indoor volley ball. There will also be a massage therapy clinic, a food and beverage/lounge area; a child care centre, a conference room, massage therapy clinic, offices and other amenities, full-service locker rooms and Group exercise classes. The facilities will also be handicap accessible. It offers the following services: Weights and Fitness services which will be done at the complex’s gymnasium, Food Services, child care services, massage therapy services and so many others that come along side the facilities available. Health Excellence will also be registered with Australia fitness therefore offering rehabilitation services. This complex belongs to so many industries because of the activities and businesses that it will be involved in. It will belong to the tourist industry, the events industry and the sporting and recreation industry among others. All these industries are major contributors to government revenues. Malaysia for example, receives most of its revenue from tourism. London a large City, receives some good amount of its revenue from the events industry and sport and recreation is obviously a large contributor to different nation’s revenues. All these reveal the potential of the complex to expand with time (Timmons & Spinelli, 2003; Frederick et al, 2006). Since Health Excellence will be involved in offering health services at the fitness centre, it will be registered with Australia fitness in order to receive certification to perform such services. 4.0 Management Health Excellence will have the overall manager of the complex that sees to the overall management and running of the complex. All other departmental managers report to him/her. The departmental managers will depend on the size of the department as well as the events/activities in the department. This complex will require a lot of human resource including a marketing manager, a chief accountant, event managers, IT manager to oversee efficient communication within the organization and so many others (Timmons & Spinelli, 2003). Apart from the mentioned managers, Health Excellence will ensure availability of knowledgeable and qualified staff in different areas to satisfy the customers’ needs. The management of the courts for example will need a manager with knowledge and experience on how to organize sporting events that take place in such courts. The manager will also be responsible for every day management of this specific section of the complex. Other important skills that will be hired include: a certified instructor for the gymnasium, a certified strength and conditioning specialist and an experienced person with knowledge about food and beverage lounge management (Timmons & Spinelli, 2003; Frederick et al, 2006). Business performance will however be evaluated on a yearly basis to determine its progress and to propose new ideas on how to improve (Gladstone, 2002). Business success is all about good management. Good management requires skills and knowledge on how to manage under different situations and organizational culture. With experienced and competent managers, Health Excellence hopes to be succesful. Performance of an organization for example, depends on human resources efforts, business opportunities, market competition, good management strategies and availability of other resources among other factors. Health Excellence has the opportunity to exploit the market and expand, it has no competitors yet, it will have other resources on its establishment. Good human resource management will therefore contribute to its success (Timmons & Spinelli, 2003; Frederick et al, 2006). 5.0 Marketing Plan Marketing will be done through advertisements and reputation building. Since it is a new venture and is one of its kind in this area, awareness will mostly be done through advertisements. Long term reputation of good and quality services from the business will in time be used to retain and attract more customers. Advertising about the complex and its services will be done through local TV stations, radios and newspapers. Reaching to the tourists from different parts of the world will be done through the internet, which will require the development of the organization’s own website. Special and large events such as international Olympics swimming competitions will however be advertised on international TV and Radio stations (Gladstone, 2002; Frederick et al, 2006). Online advertisement will reach both the locals and the international audiences. Information about the services offered in the complex, and activities that people can involve in will all be placed on the organizations website. Since it is not easy for people to just search and find the services the complex offers, the initial step of making more people aware will be through advertising on the most frequently visited sites on the internet. The marketing manager will have to develop an appropriate plan that will fit the allocated budget (Gladstone, 2002; Frederick et al, 2006). 6.0 Competitor Analysis Health Excellence has no competitors when considering the overall type of business it is. It is a large complex with a variety of sporting and leisure activities within it including the basketball courts that can be used for other sporting activities. It also offers some weight and fitness services meant to help people with obesity which has been found to be prevalent in Australia. There is no weight and fitness center that has been previously established in Tweed Heads that has all the services within one site as Health Excellence has. There is also no single facility with all sporting and leisure activities in one spot described above that has been developed in Tweed Heads or around the North Coast. Even though Health Excellence has no competitors considering the type of business, the types of goods and services it offers may receive competition from other small sport and leisure activities. Competition will also come from the tourism industry which was existent even before its establishment. Accommodation facilities may be available for tourists in other places, but the strategic position of Health Excellence and the fact that it offers other services in one place will make it a first choice for most tourists (Dollinger, 1999). Competition however will exist between those organizations that offer accommodation facilities. 7.0 Financial Analysis Health Excellence is a new venture and only seeks seed funding for its establishment. Other funds will be obtained from other relevant fund sources. The $ 5, 000, 000 being sort will be added to other funds and used for construction of the facilities and the business start up. The $ 5, 000, 000 will be used specifically for the establishment of two full basket ball courts which as explained above, will also be used for other sporting activities. The total investment cost for this facility is $ 5, 000, 000. The expected profits from the use of this facility will be an average of $ 70,000,000. The expected return on investment therefore is as follows: $ 70,000, 000/5, 000, 000 = 35. This shows that the project of establishing two basket ball courts as part of the Health Excellence will produce good return on investment and therefore should be implemented (Schniederjans & Hamaker, 2004; Smith & Smith, 2004). NB: The given figures are not exact but are for purposes of correct financial analysis required. Financial statements indicating the predicted future financial status of the venture are given in the appendix. 8.0 Risks and Challenges This venture faces several challenges but different ways of dealing with such challenges have been determined. The following are the challenges and risks and the respective ways of handling. There may be delays in approval by the District Attorney through the council. This however can be prevented by submission of the correct files to the council. It may not be easy to find suitable contractors (those who can meet the deadlines and perform according to the required standards). Early advertisement will be made expressing interest on contractors who can work within the required time frame and within specified standards. Another challenge to the business is the global economic recession which is out of control of the business, but the business can find appropriate ways to start and remain in business during the period depending on its effects on the business. It may not be easy to find all the competent skills required to run the business in time. Again this can be dealt with by planning, identifying the required skills and making early advertisements. If the right skills are not found, there should be time for training the available human resource to undertake the duties and responsibilities specified for the position. 9.0 Reference List DeThomas A R, and Derammelaere S. A, 2008, Writing a Convincing Business Plan, 3rd Ed, Boston, US: Barron's Educational Series. Dollinger M, 1999, Entrepreneurship Strategies and Resources, 2nd Ed. New Jersey: Prentice Hall. Frederick H, Kuratko D, & Hodgetts R, 2006, Entrepreneurship: Theory, Process, Practice, Asia Pacific, London, UK: Thomson Learning. Gallagher and Andrew, Financial Management; Principles and Practice, New York, US: Freeload Press, Inc. Gladstone L, 2002, Venture Hapital Handbook: an Entrepreneur's Guide to Raising Venture Capital. Sydney, Australia: FT Press. Regional Population Growth, Australia, 2009, Australian Bureau of Statistics, Available: http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/3218.0Main%20Features42007-08?opendocument&tabname=Summary&prodno=3218.0&issue=2007-08&num=&view=) Last accessed: 2nd August, 2009. Smith, J K & Smith RL, 2004, Entrepreneurial Finance, 2nd Ed, New York, US: Wiley. Timmons J A, 2009, New Venture Creation: Entrepreneurship for the 21st Century, 8th Ed. Boston, MA: McGraw-Hill. Timmons J A & Spinelli S, 2003, New Venture Creation: Entrepreneurship for the 21st Century with PowerWeb and New Business Mentor CD, 6th Ed. McGraw Hill Professional. 10.0 Appendices Appendix 1 Health Excellence Budget (Installation of two basket ball courts) Item Amount ($) Building and Construction 2, 000, 000 Hiring of Resources 198, 800 Transport costs 1,000 Business registration fees 100 Business licensing and permits 100 Starting inventory 1,000, 000 Down payments on property 500, 000 Down payments on equipment 800, 000 Operating expenses Miscellaneous 500, 000 Total Budget 50, 000, 000 Appendix 2 Cash Flow Projections Statement CASH REVENUES Months Jan Feb Mar Apr May June July Revenue from Product Sales $20, 000 $ 20,000 $22,000 $ 21,000 $ 18,000 $ 17000 $ 21,000 Revenue from Service Sales $35, 000 $ 40,000 $40,000 $ 42,000 $ 40,000 $ 45000 $ 46,000 Total cash revenues $55, 000 $ 60,000 $62,000 $ 63,000 $ 58,000 $ 62, 000 $ 67, 000 CASH DISBURSEMENTS Cash Payments to Trade Suppliers $1, 000 $ 1,000 $1500 $ 1400 $ 1000 $ 1000 $ 1500 Management Draws $ 700 $ 5,00 $500 $ 400 $ 700 $500 $ 400 Salaries and Wages $15, 000 $ 15,000 $15,000 $ 14,000 $ 15,000 $ 15, 000 $ 15, 000 Promotion Expense Paid $1500 $ 1500 $1500 $ 1000 $ 1000 $ 1000 $ 1000 Professional Fees Paid $ 500 $ 500 $400 $ 100 $ 500 $ 600 $ 600 Rent Payments $700 $ 700 $700 $ 700 $700 $700 $700 Insurance Paid $200 $ 200 $200 $ 200 $ 200 $200 $200 Telecommunications Payments $ 100 $ 100 $150 $ 150 $ 100 $ 100 $ 100 Utilities Payments $950 $ 800 $900 $ 900 $ 750 $ 800 $ 800 TOTAL CASH DISBURSEMENTS $20650 $20300 $20850 $18850 $19950 $ 19900 $20300 RECONCILIATION OF CASH FLOW Total cash revenues $55, 000 $ 60,000 $62,000 $ 63,000 $ 58,000 $ 62, 000 $ 67, 000 TOTAL CASH DISBURSEMENTS $20, 650 $20, 300 $20, 850 $18, 850 $19, 950 $ 19, 900 $20, 300 OPENING CASH BALANCE/ CLOSING CASH BALANCE $34, 350 $39, 700 $41, 150 $44, 150 $56, 050 $42, 100 $46, 700 Month Aug Sept Oct Nov Dec Revenue from Product Sales $23,000 $ 25, 000 $25, 000 $ 26, 000 $27,700 Revenue from Service Sales $47,000 $ 47, 000 $48, 000 $ 48, 000 $49,700 Total cash revenues $470, 000 $ 72, 000 $73, 000 $ 74, 000 $76,700 CASH DISBURSEMENTS Cash Payments to Trade Suppliers $ 1, 000 $ 1,000 $1500 $ 1400 $ 1000 Management Draws $ 700 $ 500 $500 $ 400 $ 700 Salaries and Wages $15, 000 $ 15,000 $15,000 $ 14,000 $ 15,000 Promotion Expense Paid $1500 $ 1500 $1500 $ 1000 $ 1000 Professional Fees Paid $ 500 $ 500 $400 $ 100 $ 500 Rent Payments $700 $ 700 $700 $ 700 $700 Insurance Paid $200 $ 200 $200 $ 200 $ 200 Telecommunications Payments $ 100 $ 100 $150 $ 150 $ 100 Utilities Payments $950 $ 800 $900 $ 900 $ 750 TOTAL CASH DISBURSEMENTS $20650 $20300 $20850 $18850 $19950 RECONCILIATION OF CASH FLOW Total cash revenues $47, 000 $ 72, 000 $73, 000 $ 74, 000 $76,700 TOTAL CASH DISBURSEMENTS $20, 650 $20, 300 $20850 $18, 850 $19, 950 OPENING CASH BALANCE/ CLOSING CASH BALANCE $26, 350 $51, 700 $52, 150 $55, 150 $56, 750 Appendix 3 Health Excellence Balance Sheet As At 30th September, 2009 ASSETS $ Current Assets…………………………………………………..... 4, 000, 000 Cash in Bank……………………………………………………… 7, 000, 000 Petty Cash………………………………………………………… 5, 000, 000 Net Cash………………………………………………………….. 9, 000, 000 Inventory………………………………………………………….. 5, 000, 000 Accounts Receivable……………………………………………... 3, 200, 000 Prepaid Insurance………………………………………………... 200, 000 Total Current Assets………………………………………………33, 400, 000 Fixed Assets Land……………………………………………………………… 10, 000, 000 Buildings…………………………………………………………..23, 000, 000 Less Depreciation…………………………………………………. 1, 000, 000 Net Land & Buildings……………………………………………...42, 000, 000 Equipment……………………………………………………… 59, 000, 000 Less Depreciation……………………………………………… 3,000, 000 Net Equipment…………………………………………………. 56, 000, 000 TOTAL ASSETS…………………………………………………. 131, 400, 000 LIABILITIES Current Liabilities Accounts Payable……………………………………………… 9, 000, 000 Vacation Payable…………………………………………… 7, 000, 000 Federal Income Tax Payable…………………………………… 400, 000 Total Australian Customs & Revenue………………………….. 300, 000 Total Current Liabilities………………………………………… 16, 700, 000 Long-Term Liabilities Long-Term Loans…………………………………………………100, 700,000 Total Long-Term Liabilities………………………………………. 13, 000, 000 TOTAL LIABILITIES………………………………………… 131, 400, 000 Appendix 4 Health Excellence Income Statement for the year ending 31st December 2010 Month Jan Feb Mar Apr May June July REVENUE Sporting events 52, 000 56, 000 60, 000 60, 000 62, 500 62, 700 64, 200 Leisure activities 35, 000 39, 000 41, 000 41, 000 43, 000 43, 700 45, 000 Sales from other products 22, 000 23, 000 23, 600 25, 000 25, 000 27, 000 29, 000 Revenue from rentals 20, 000 20, 000 20, 000 20, 000 20, 000 20, 000 20, 000 Total Revenue 129, 000 138, 000 144, 000 146, 000 150, 500 154, 400 158, 200 Cost of Sales 52, 000 53, 000 53, 000 54, 000 56, 000 56, 700 56, 000 Gross Profit 77, 000 85, 000 91, 000 92, 000 94, 500 97, 700 102, 200 EXPENSES Salaries 12, 000 12, 000 12, 000 12, 000 12, 000 12, 000 12, 000 Delivery wages 1, 000 1, 000 1, 000 1, 000 1, 000 1, 000 1, 000 Sales Commissions 2, 500 2, 500 2, 500 2, 500 2, 500 2, 500 2, 500 Other wages 3, 000 3, 000 3, 000 3, 000 3, 000 3, 000 3, 000 Benefits 500 500 500 500 500 500 500 Equipment leases 350 350 350 350 350 350 350 Advertisements 1, 500 1, 250 1, 000 1, 500 1, 700 1, 000 1, 500 Delivery expenses 150 150 150 150 150 150 150 General and Office expenses 1, 200 1, 200 1, 200 1, 200 1, 200 1, 200 1, 200 Telephone and Utilities 700 700 700 700 700 700 700 Insurance 400 400 400 400 400 400 400 Depreciation and amortization 600 600 600 600 600 600 600 Interest 100 120 120 125 140 140 150 Total Expenses 24, 000 23, 770 23, 520 24, 025 24, 240 23, 540 24, 050 Net Income before income taxes 105, 000 114, 230 120, 480 121, 975 126, 260 130, 860 134, 150 Month August Sept Oct Nov Dec Sporting events 65, 000 65, 000 65, 000 67, 500 69, 700 Leisure activities 42, 000 42, 700 44, 000 44, 000 47, 700 Sales from other products 27, 000 27, 600 27, 000 28, 000 35, 000 Revenue from rentals 20, 000 20, 000 20, 000 20, 000 20, 000 Total Revenue 154, 000 154, 000 156, 000 159, 500 172, 400 Cost of Sales 56, 200 57, 100 58, 000 58, 000 60, 000 Gross Profit 97, 800 96, 900 98, 000 101, 500 112, 400 EXPENSES Salaries 12, 000 12, 000 12, 000 12, 000 12, 000 Delivery wages 1, 000 1, 000 1, 000 1, 000 1, 000 Sales Commissions 2, 500 2, 500 2, 500 2, 500 2, 500 Other wages 3, 000 3, 000 3, 000 3, 000 3, 000 Benefits 500 500 500 500 500 Equipment leases 350 350 350 350 350 Advertisements 1, 500 1, 250 1, 000 1, 500 1, 700 Delivery expenses 150 150 150 150 150 General and Office expenses 1, 200 1, 200 1, 200 1, 200 1, 200 Telephone and Utilities 700 700 700 700 700 Insurance 400 400 400 400 400 Depreciation and amortization 600 600 600 600 600 Interest 100 120 120 125 140 Total Expenses 24, 000 23, 770 23, 520 24, 025 24, 240 Net Income before income taxes 73, 800 73, 130 74, 480 77, 475 88, 160 Read More