A BUSINESS DEVELOPMENT PLAN OF

Submitted to: Bal Ram Chapagain Faculty, Entrepreneurship and Innovations Uniglobe College Baneshwar, Kathmandu Submitted by: Bibek Khadgi Maushmi Vaidhya Rajesh Subedi Sangeeta Shrestha Subin Shrestha Deepesh Banepali

MBA, TERM IV 13 November, 2011

Executive Summary
The trend of going out with friends for entertainment, hanging out with them and nightlife culture is increasing in Nepal. They go to the places like Shopping Malls, Cinema Theatre, Night Clubs, Discotheques, Sports Bar, Restaurant and Coffee House etc to spend jolly time with their friends. The change that has taken place in lifestyle and socio culture of Nepalese people has led us to open up this business as there is growing need for such a hub where youngsters and others can have fun of all Sports bar, discotheques, gaming zones and coffee house at the same time under one roof. The strategy we are going to follow is differentiation strategy. Amusement Lounge is going to provide something different than the existing competitor. In Hangout lounge people will be able to enjoy blend of various entertainment. There will be four areas. In one area people can enjoy live sports and enjoy drinks along with their friends. In another area they can simply enjoy games in play stations. In third area, peoples can enjoy dancing with their friends. And lastly, they can also enjoy peaceful area where they will be able to enjoy coffees and bakery items with free WiFi service and stay connected with their friends as well.

Amusement Lounge is a combined zone for entertainment which will be located in prime location of New Baneshwor. This lounge will provide varieties of services to its customer like Sports bar, discotheque, gaming zone and a caf. We think this is an innovative idea because there are not many places especially with in Kathmandu where people can hang out and enjoy all above mentioned means of entertainment under one roof. We are aiming to get 5% of market share and our target customers are local resident, student and working people. We are going to provide differentiation

strategy as people will be able to enjoy different means of entertainment at one place. There are various internal and external risk associated with the business like delay in opening of the lounge, political risk, change in policies and so on which has to be considered as well. From the operation plan, marketing analysis and financial analysis we can see that Hangout Lounge has a good chance of success in the business. But there is tough competition in the market and we also have to think about alternative plans. In this condition we can give it as lease to other or we might as well sell the overall lounge to others. The amount received from the sale will help little to minimize the loss.

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TABLES OF CONTENTS
Executive Summary i Tables of Content.ii List of Tables.vi List of Figuresvi CHAPTER 1: INTRODUCTION ................................................................... 1 1.1 Background............................................................................................... 1 1.1.1 Mission Statement ............................................................................ 1 1.1.2 Vision ............................................................................................... 1 1.1.3 Objectives ......................................................................................... 1 1.1.4 Keys to Success ................................................................................ 2 1.2 Product and Services ................................................................................. 2 1.2.1 Products Feature .............................................................................. 2 1.2.2 Service Features ............................................................................... 2 1.3 Location .................................................................................................... 4 1.4. Market Segmentation ............................................................................... 4 1.4.1 1.4.2 Demographic Segmentation ............................................................ 4 Behavioral segmentation: ............................................................... 5

1.5 Targeting to the Customers........................................................................ 5 1.5.1 1.5.2 1.5.3 Local residents : ............................................................................. 5 College students: ............................................................................ 5 Working people: ............................................................................. 5

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CHAPTER 2: ASSESSMENT OF BUSINESS ENVIRONMENT ........................ 6 2.1. SWOT Analysis: ........................................................................................ 6 2.1.1. Strength: ......................................................................................... 6 2.1.2. Weakness: ....................................................................................... 6 2.1.3. Opportunities: ................................................................................. 6 2.1.4. Threat:............................................................................................. 6 2.2. Environmental Analysis: ........................................................................... 7 2.2.1. Political Environment: ...................................................................... 7 2.2.2. Economical Environment : ............................................................... 7 2.2.3. Social-cultural Environment: ........................................................... 7 2.2.4. Technological Environment: ............................................................. 7 2.2.5. Legal Environment : ......................................................................... 8 2.3 Market Analysis......................................................................................... 8 2.4 Competitor Analysis .................................................................................. 9 2.4.1 Intensity Of Rivalry ........................................................................... 9 2.4.2 Threat Of New Entrants .................................................................. 10 2.4.3 Threat Of Substitute Products ........................................................ 10 2.4.4 Bargaining Power Of Customer ....................................................... 10 2.4.5 Bargaining Power Of Supplier ......................................................... 10

CHAPTER 3: THE BUSINESS PLAN ......................................................... 11 3.1 Operational Plan...................................................................................... 11 3.1.1 Procurement ................................................................................... 11 3.1.2 Layout And Area Requirement ........................................................ 11
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3.1.3 Daily Operation .............................................................................. 12 3.2 Financial Plan ......................................................................................... 13 3.2.1 Capital Requirement ....................................................................... 13 3.2.2 Capital Structure ............................................................................ 14 3.2.3 Monthly Operational Expenditure ................................................... 14 3.2.4 Revenue Forecast ............................................................................ 15 3.2.5 Income Statement ........................................................................... 16 3.2.6 Analysis Of Financials .................................................................... 17 3.3 Marketing Plan ........................................................................................ 17 3.3.1 Marketing Mix: ............................................................................... 17 3.3.2 Positioning ...................................................................................... 18 3.4 Human Resource Planning ...................................................................... 19 3.4.1 Job Description: ............................................................................. 19 3.4.2 Human Resource Requirement........................................................ 20 3.4.3 Organizational Structure ................................................................ 21 3.5 Company Strategy ................................................................................... 22

CHAPTER 4: CRITICAL RISK AND CONTINGENCIESError! Bookmark not defined. 4.1 Internal Risks: ......................................................................................... 23 4.2 External Risks: ........................................................................................ 23 4.3 Future Plan ............................................................................................. 23 4.4 Exit Strategy ........................................................................................... 24 APPENDICES ......................................................................................... 25

List of Tables Table 1: Total area requirement plan ....... Error! Bookmark not defined. Table 2: Capital requirement plan........................................................ 14 Table: 3 Capital structure .................................................................... 14 Table 4: Monthly operational expenditure ............................................ 15 Table 5: Primary revenue forecast ........................................................ 15 Table 6: Secondary revenue forecast .................................................... 16 Table 7: Income statement....................... Error! Bookmark not defined. Table 8: Human resource requirement ..... Error! Bookmark not defined.

List of figures Figure 1: Layout of the Lounge .............. Error! Bookmark not defined.2 Figure 2: Organization structure.............. Error! Bookmark not defined.

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CHAPTER 1: INTRODUCTION

1.1 Background The Planned business belongs to entertainment industry with blend of varieties of entertainment options. The trend of going out with friends for entertainment, hanging out with them and nightlife culture is increasing in Nepal. They go to the places like Shopping Malls, Cinema Theatre, Night Clubs, Discotheques, Sports Bar, Restaurant and Coffee House etc to spend jolly time with their friends. The change that has taken place in lifestyle and socio culture of Nepalese people has led us to open up this business as there is growing need for such a hub where youngsters and others can have fun of all Sports bar, discotheques, gaming zones and coffee house at the same time. Entertainment Lounge is a combined zone for amusement which will be located in prime location of New Baneshwor. This lounge will provide varieties of services to its customer like Sports bar, discotheque, gaming zone and a caf. We think this is an innovative idea because there are not many places especially with in Kathmandu where people can hang out and enjoy all above mentioned means of entertainment under one roof. 1.1.1 Mission Statement: We deliver our products and entertainment service to our valued customer in way that helps to enjoy their life in a jolly way with our ever motivated and skilled employees in socially responsible manner to grow in days to come. 1.1.2 Vision: To become customers first preferred entertainment lounge in market by offering quality services and comfortable environment 1.1.3 Objectives: To gain profit and have 15% market share. 1

 Creating friendly and amusing atmosphere where customers can enjoy with their friends. Providing place where people can access to all entertainment means. To gain larger market share within five years. To provide quality service. 1.1.4 Key to Success: Superior means of entertainment Only one business of its kind in Kathmandu Friendly customer environment A relaxing interior design Prime location where there is heavy traffic of people Aggressive marketing Trained and friendly staff

1.2 Product and Services: We entirely tend to provide various means of entertainment which is our product and we will provide quality service in same field. Our product and service features are as follows: 1.2.1 Products Features Hangout lounge will provide blend of varieties entertainment services like sports bar where customer can enjoy their favorite football teams and cricket teams playing their matches, discotheques where customers can hangout with their friends in musical tunes of all kind, gaming zones where customers can explore various virtual gaming funs and finally a coffee house where customers can enjoy coffee beverages. 1.2.2 Service Features All the customers and visitors of our Hangout Lounge can enjoy following services with complete attention to their preferences and safety. 2

a) Sports Bar: Capacity of 50 people Two, 74 inches plasma screens Surround sound system Comfortable sofas to watch games Soft and hard drinks with snacks available. Flags and jerseys of favorite teams will be available. b) Discotheque: Dancing floor for 150 peoples. 15000 watt surround sound system Illuminating lighting effects. DJ sessions in request of customers. Comfortable sitting arrangements for rest. Soft and hard drinks with snacks available. Dancing masks available. c) Gaming Zones: Capacity of 20 peoples at a time. Virtual play stations Games like footballs, crickets, wrestling, bike and car racing will be available in play stations. Snookers and Pools One soft drinks free for 1 ticket Individual headphones will be provided for individual players. d) Coffee Centre: Capacity of 30 peoples at a time. Clean and hygienic ambience Varieties of Coffee beverages will be available. Tea, soft drinks, juices, milkshakes, chocolates and ice creams. 3

 Pastries, Sandwich, burgers and other bakery items. Continuous soft music will be played and free WiFi services. 1.3 Location This lounge will be located in New Baneshwor. I have selected New Baneshwor because it is developing very rapidly with all those schools and colleges around like Ace Institute of Management, K & K College, Prime College, White House, Don Bosco, Nobel, etc. Apart from this there are also several banks open in New Baneshwor so they can also come to this lounge and enjoy while doing their work as they can log in with the help of Wi.Fi any time. In addition, our location is becoming a commercial hub day by day so our lounge can attract customers from all around the Kathmandu valley. 1.4 Market Segmentation We have segmented the market on the basis of geographic area, demography and behavioral. Following will be the basis of segmentation of the market. 1.4.1 Demographic Segmentation We are planning to segment on the following demographic basis: a) Income: We will focus mainly on high and middle class people. We will try our best effort to make the market penetration as far as possible. b) Age: Our target group will be above 18 years of age. As from the data taken from the Bureau of statistic we can see that the population of Kathmandu is estimated to increase by 15.27% from 2006 to2011. Similarly the population of Bhaktapur is estimated to increase by 11.09% and Patan is estimated to

increase by 11.25%. So, Kathmandu valley has high potential for such business.

1.4.2 Behavioral Segmentation As there is increasing trend in the market for visiting discotheques, cafes and sports bar this will help to achieve gain as achieve larger market share and brand recognition. The trend of lifestyle and culture in youngsters and mid aged peoples is changing; such population can be long term customers for the business. 1.5 Targeting to the Customers Nowadays, in Nepal mall culture is in rise and most of the people prefer to visit malls, restaurants, watch movie, go to discos etc... So our target customer will be from middle income people to higher middle level income people. Similarly, most of the people going to the restaurants are teenagers. So the target population is from age of 18 to 45. The Hangout Lounges target customers are 1.5.1 Local Residents These people are the local residence of New Baneshwor. These people will be from the age group of 18 to 45. 1.5.2 College Students These are the college student around the Kathmandu valley especially around Baneshwor as they can come to the lounge in their break time or after college. Similarly in weekends other students from different location can also come. 1.5.3 Working People They are the employees of the corporate houses. As there are many banks and offices around Baneshwor they are potential customer for the lounge.

CHAPTER 2: ASSESSMENT OF BUSINESS ENVIRONMENT

We have done SWOT analysis of Hangout Lounge along with Environmental analysis of Hangout Lounge. In addition, we have also assessed market through internets and also assumed what could be the potential competition to us. This will help to see what are the competitive edges, Hangout Lounge have in respect to the environment. 2.1 SWOT Analysis 2.1.1 Strength: Different varieties of entertainment means in one place. It is among only few places where we can enjoy all sports, music and dances, gaming and coffee. Location as it will be located in fastest growing commercial area. Separate area so customers can enjoy without being disturbed. 2.1.2 Weakness: Not suitable for those above 50 years and above. Lack of experience in this field. Shortage of technical human resource. 2.1.3 Opportunities: Growing population of teenagers and students. Change in the life style. Increase in market share for such means of entertainment and services. 2.1.4 Threat: Presence of substitute sports bar and lounge. 6

 Economy of the people as they may change their spending pattern. Change in taste of the customer. Obstacles since the business operates mostly during nights. 2.2 Environmental Analysis We have assessed on following environmental factors that may affect our business. 2.2.1 Political Environment Due to political instability it may hamper the business to certain aspect because of bandhs and strikes. So people may not be able to come to the lounge due to which the business may be hampered.

2.2.2 Economical Environment This business can put the hand to some extend the economic position of the country as it will generate some revenue. The economy of the people may change due to which the business may be affected as well as the taste of the people may be affected.

2.2.3 Social-cultural Environment There will be social- cultural impact on the society. There has been change in the cultural aspect of the people and more and more people have tendency to hang out with friends and family. So due which it will be profitable for this kind of business but at the same time night life can be regarded as unsuitable for Nepalese society by some social groups.

2.2.4 Technological Environment Due to advance technology we can import our requirements like plasma screen, music system, software and other equipments from outside as well. 7

These technologies will help to gain competitive edge in this competitive world.

2.2.5 Legal Environment There will be no restriction from the government while opening this lounge. We can register it easily. We can register this lounge under company act. The registration fee for the lounge is Rs 10000. In order to register this company under the name of Hangout Lounge we need to do some of the legal formalities which are as follows: An application form is submitted along with the Rs 5 stamp at the office of the registrar which is situated at Tripureshwor. Besides this citizenship certificate of the Partners and the company register stamp is provided to the office of the registrar. Once the company is registered the next steps is to take PAN number from inland revenue Department which is situated at Lazimpat. For this necessary documents are: Application form, Copy of the citizenship certificate of the Partners, Copy of the company/firm registration certificate, two passport size photo of the Partners, hand drawn sketch of the business location.

2.3 Market Analysis Hangout Lounge is an entertainment hub which provides variety services in entertainment sector. Entertainment business has been gaining popularity in this modern world. With change in economy and peoples disposable income the trend of entertainment culture is increasing. If we can bring something different then we can gain profit in this business. For example, Thamel restro bar, Sports lounge, Club platinum and other disco theques, coffee shops are doing well in the market. But the proposed lounge is first of 8

its kind in Nepal which has got new features of 4 different products of amusement. We are aiming to achieve 5% of total market share from the remaining market. It is found out from the capacity of our lounge and population of Kathmandu. As the population of Kathmandu has been growing by more than 5% we can achieve our target. New Baneshwor has become the major commercial centre of business with establishments of various banks, offices, colleges etc We have selected New Baneshwor because it is developing very rapidly with all those sectors that is constantly increasing the market.

It is an easy access area as well, as there are easy transportation facilities to most of the areas around Kathmandu. This creates attractive market potential. As we can see that there is only one disco theque in Baneshwar and no sports bar and lounge so, all that we need to do is add something of value to the customer and we think this lounge is just the thing that people wants and will be very successful if it is operated properly.

2.4 Competitor Analysis The main competitor is outside Baneshwar but that can pose intense competition to the business. Different sports bar, discotheques, gaming zones and cafes of Thamel and Durbarmarg may be the competitors. Under the competitive analysis we can see the five competitive forces: 2.4.1 Intensity of Rivalry There is intense rivalry in these industries as there is various other businesses providing same service but separately but Hangout lounge stands out from the competition on the context of the unique service it is

going to provide. There is only one place where customers can enjoy all the features of sports, gaming, caf and disco. But no matter what we can distinguish ourselves from other as we will provide something distinguish from others. 2.4.2 Threat of New Entrants Despite low economies of scale and the fact that customers face low switching costs in the entertainment industry, the threat of new entrants is not that high because of cost disadvantages, capital requirements and low level of differentiation possible. 2.4.3 Threat of Substitute Products The threat of the substitute products is not that high because people who want to have fun of all four things will prefer our lounge. However, when the economic situation stays bad, people want to spend less on average. In this last case, the threat of the substitutes can become higher. 2.4.4 Bargaining Power of Customer The bargaining power of customer is medium as there are many sports bar, discos gaming zones and cafe business and the switching cost is low. 2.4.5 Bargaining Power of Supplier Since there are many suppliers who supply our required procurements, the bargaining power of suppliers is low.

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CHAPTER 3: THE BUSINESS PLAN

3.1 Operational Plan The business will be operated in following way: 3.1.1 Procurement The soft and hard drinks will be procured from renowned distributors. Likewise snacks combo, pastries and other bakery items will be procured from Nepal dairy in daily basis. Similarly raw materials required for making tea and coffees will be purchased from suitable stores. This will be checked on daily basis and make available as soon as the stock starts to decrease. The key supplier will be distributor and wholesaler of New Baneshwor. We will try to negotiate with such distributors and wholesalers in order to procure all required materials in wholesale price. 3.1.2 Layout and Area Requirement We will be much more focused on layout and interiors of our lounge. The designs will be as per latest trend friendly and comfortable environment. In addition, there will be different restrooms in each section and changing rooms in sports bar and discotheque. We have also provisioned for storage room, mini kitchen and guard rooms. We have allocated space for our different sections on the basis of which we will search for suitable commercial building to rent for our business. Sections Sports bar Discotheque Gaming zone Caf Parking Total Area Required 11 Area required 2300 sq. ft 3000 sq. ft 1900 sq. ft 2400 sq. ft 1500 sq. ft 11100 sq. ft

Table 1: Total area requirement plan

Figure 1: Layouts of our four sections. 3.1.3 Daily Operation From market analysis, on an average 200 people visit the places like sports bar and discotheques. Since we have two more sections we will get that number to an average of 300 peoples every day. We will charge Rs. 50 for entrance which will be our primary source of revenue. We will charge Rs. 100 who wants to enter to the sports bar and Rs. 150 to those who want to enjoy discos. Likewise we assume customers will spend Rs. 150 on an average in our gaming zones. We will deduct Rs. 50 from the bills of customers only visiting the caf because its not reasonable to charge Rs. 50 to those who only enter our caf.

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3.2 Financial Plan Finance is the heart of business. Every business requires financial backup in order to get started. We have also proposed a financial plan for our business and for the sake of simplicity we have done it in a simple way. 3.2.1 Capital Requirement Particulars Furniture: Tables and chairs Couches and Sofas Cup boards and shelfs Counters Glass Show cases Electronic Gadgets: 74 inches plasma screen Surround sound system Play stations Sound mixer Lighting effects equipments Computers Kitchen Equipment: Refrigerators Freezer Coffee Vending Machine Microwave oven other kitchen items Others: Snookers and pools Computer Software Telephone sets 2 1 4 90000 25000 4000 180000 25000 16000 5 2 2 2 1 50000 63000 55000 15000 50000 250000 126000 110000 30000 50000 2 3 5 1 1 4 250000 70000 85000 130000 182000 35000 500000 210000 425000 130000 182000 140000 20 15 2 5 2 10000 20000 27000 45000 65000 200000 300000 54000 225000 130000 Unit cost/unit Amount (Rs)

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Cash box Generator Fire extinguishers Rent in advance for 3 months @

4 1 4 1

2200 130000 20000 700000

8800 130000 80000 700000 2397600 100000 6699400

Rs.72/sq. ft Working capital requied Total estimated Cost Table 2: Capital requirement planning

3.2.2 Capital Structure Debt:Equity Debt Equity Total capital required Rs.2679760 Rs.4019640 Rs.6699400 Table 3: Capital structure 3.2.3 Monthly Operational Expenditure Human Resource Managing Director Senior operational Manger Assistant Manger Marketing officer Technical officer Accountant Technical Staffs Bouncers Disco Jockey Counter attendant Base Salary Rs.70000/Month for 1 Rs. 40000/Month for 2 Rs.25000/Month for 4 Rs. 18000/Month for 1 Rs. 18000/Month for 1 Rs. 20000/Month for 2 Rs. 10000/Month for 2 Rs. 25000/Month for 6 Rs. 25000/Month for 1 Rs. 12000/Month for 8 Total 70000 80000 100000 18000 18000 40000 20000 150000 25000 96000 40:60

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Security Guards Hygiene staffs Maintenance cost

Rs. 10000/Month for 3 Rs. 6000/Month for 8 Rs.20000/Month 2000 units/Month @

30000 48000 20000

Electricity charges Water Telephone charges Total Monthly Expenses and internet

Rs.8/unit Rs.20000/Month Rs.30000/Month

16000 20000 30000 781000

Table 4: Monthly operational expenditure 3.2.4 Revenue Forecast Revenue Revenue) Revenue From Daily Entrance Sports Bar Discotheque Gaming zones Total/Month 20*150*30 50*250*30 30*100*30 90000 375000 90000 555000 Forecast (Primary No.*Charge*Days Amount (Rs.)

Table 5: Primary monthly revenue forecast

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Revenue from drinks and snacks (Secondary revenue) Units Items Section Sports Bar Soft drinks Hard drinks Snacks combo Discotheques Soft drinks Hard drinks Gaming Zones Soft drinks Snacks combo 80 90 15 60 80 50 15 35 60 30 70 15 35 60 900 1050 4200 0 1200 1750 0 1200 4200 0 3500(50*50)= Caf Coffee beverages Soft drinks Pastries bakeries Total/day Total/Month Table 6: Secondary monthly revenue forecast 3.2.5 Income Statement Particulars Primary revenue Secondary revenue Total revenue Less: Monthly operating expenditure Earnings before interest and tax 16 Amount in Rs. 555000 600000 1155000 781000 374000 and 150 20 3000 20000 600000 100 100 35 15 1000 1500 Average Sold on Sold on Mark (Rs.) up Profit/day average

Less: Interest on loan with principal @14% Earnings before tax Less: Tax (25%) Net profit per month

65050 308950 77238 231713

Table 7: Monthly income statement 3.2.6 Analysis of Financials We have calculated our initial capital requirement by allocating requirement of fixed assets, Set up cost, maintenance cost, utilities expenses and our working capital requirement. Likewise our capital structure will be 40% debt and 60% equity. For, debts we will approach commercial bank for equal installments loans for five years. Similarly, we have two sources of revenue i.e. primary revenue from entry ticket and secondary from sales of food and beverages inside four different sections. From our assumption we will be able to make monthly profit of Rs. 231713 which seems quite inspiring for our business. In this way will be able to recover our equity investment in about 1 year or less. 3.3 Marketing Plan Since marketing plays vital role in modern business we have stressed on marketing of our business. Our marketing strategy will be as follows: 3.3.1 Marketing mix: a) Product: The product that Hangout Lounge is going to provide is various type of entertainment options. The food and drinks provided in our lounge will be of high quality and will be very hygienic in nature. Apart from these products, the customer will also be able to use free Wi-Fi services in caf.

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b) Price: We have keep price according to the cost plus pricing technique in which markup amount of profit is determined. We have kept our entry prices nominal compared to our competitors which will be an advantage to our business. Likewise, our margin of profit in foods and beverages are low compared to others. c) Place: This lounge will be located in New Baneshwor. I have selected New Baneshwor because it is developing very rapidly with all those schools and colleges around like Ace Institute of Management, K & K College, Prime College, White House, Don Bosco, Nobel, etc. Apart from this there are also several banks open in New Baneshwor so they can also come to this lounge and enjoy while doing their work as they can log in with the help of Wi.Fi any time. d) Promotion: The promotion strategy we are going to take for the caf is through flyers in colleges, advertisements in face book, and we will also launch website of lounge. We will also be promoting through face book as face book has become a number one place for people to connect with their love ones. And with the help of this face book we will be able to connect with large number of people. This will also help to provide word of mouth advertisement which is a very powerful way to advertise the product. And for the promotional advertisement we will also approach to visual and print media.

3.3.2 Positioning The positioning we want to create in the mind of the customer is the place where we can get hygienic food and drinks while they watch sports, dance, and play games with their friends.

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As there is increasing trend in the market for visiting sports bar and discotheque we can easily capture the market. From the information of market and survey with friends and teenagers we found out that people prefer to enjoy along with their friends while enjoying hygienic food. And Hangout Lounge is just the place where they can enjoy both the things. So, this lounge is sure to get success in the market. 3.4 Human Resource Planning 3.4.1 Job Description: a) Managing director: The Managing Director would be managing the overall business. M.D. will be responsible for overall strategic plans of business. Two senior operational managers will report to the Managing Director. b) Senior operational manager: The senior operational manager would be responsible for looking after two sectors of their responsibility and take feedback and instruct assistant manager of their respective sector for smooth operation of daily business. c) Accountant: The account will be need to process and check bills, invoices, receivable management, maintain account and so on. The accountant will also be responsible for receiving payments. d) Assistant manager: Assistant managers will be responsible in smooth operation of business and ensure that the service provided to the customer is up to mark. Likewise they need to make regular coordination with bouncers and counter attendants for quality service and safeguard of the customers. They need to report to the senior managers.

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e) Bouncers: They are responsible for security inside the lounge and make sure that any wrong happenings or possible fights inside the lounge. In such situation they need to settle such circumstances. f) Counter attendants: They will be responsible for timely execution of customers order and request and also responsible for daily works of hygiene staffs. g) Technical officer: Technical officer will be responsible for meeting the technical problems that might occur in sports bar, discotheques and gaming zones and other technical issues of the lounge. h) Technical staffs: They need to work directly under technical officer. i) Marketing officer: Marketing officer will be responsible for marketing the business wherever is feasible. S/he will work directly under assistant manager of caf however, as per requirement s/he is also required to coordinate with other assistant managers. j) Disco jockey: S/he will be responsible for music inside the discotheque. k) Hygiene staffs: They will be responsible for sanitation of overall lounge and they will work directly under counter attendants of each section. l) Security guards: They will be responsible for security during off and on hours of business and will directly work under supervision of bouncers. 3.4.2 Human Resource Requirement We will require following number of human resources:

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Human resource Managing director Senior operational manager Assistant operational manager Accountant Technical officer Marketing officer Technical staffs Bouncers Counter attendants Disco jockey Security guards Hygiene staffs Total Table 8: Human resource requirement 3.4.3 Organizational Structure

Number 1 2 4 2 1 1 2 6 8 1 3 8 38

We have proposed our organizational structure will be hierarchical in which roles and responsibility of everyone is specifically determined.

Managing Director

Senior Manager(Sports bar and discotheque)

Senior Manger(Gaming zone and cafe)

Accountants

Assistant Manager(Sports bar)

Assistant Manager (Discotheque)

Assistant Manager (Gaming Zone)

Assistant Manager (Cafe)

Bouncers (2)

Counter attendants

Disco jockey (DJ)

Bouncers (4)

Counter attendants

Technical officer

Counter attendants

Marketing officer

Counter attendants

security guards

Hygeine staffs

Security guards

Hygeine staffa

Technical staffs

Hygeine staffa

Hygeine staffs

Figure 2: Organizational structure 21

3.5 Company Strategy The strategy we are going to follow is differentiation strategy. Hangout Lounge is going to provide something different than the existing competitor. In Hangout lounge people will be able to enjoy blend of various amusement. There will be four areas. In one area people can enjoy live sports and enjoy drinks along with their friends. In another area they can simply enjoy games in play stations. In third area, peoples can enjoy dancing with their friends. And lastly, they can also enjoy peaceful area where they will be able to enjoy coffees and bakery items with free WiFi service and stay connected with their friends as well. In the future the company is going to extend its business by opening its other lounges in and around prime location of ring road and in location such as in Lazimpat, Durbar marg, New road, and Jawalakhel.

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CHAPTER 4: CRITICAL RISK AND CONTINGENCIES

There are various risk associated with the business. The risk can be both internal as well as external. The risks are as follows: 4.1 Internal Risks: Delay in opening of the lounge will result in unavailability of staff members in the market and suitable place to rent. There may be technical problem There may be operating problems such as crashing of computer, change in infrastructure, and so on. 4.2 External Risks: There may be risk from the political instability due to which it will hamper the business operation. The night life culture may change. The economic position of the people may decrease and they may not come to the lounge The law may change and there may be increase in the policies toward lounges. The suppliers may not be able to supply inputs in time which may hamper the business. 4.3 Future Plan One of the main objectives of lounge is to achieve higher growth and lead the market. Some of the future plans that the lounge would like to pursue are as follows: Expansion of the lounge in other areas like Lazimpat, Durbarmarg, Newroad and Jawalakhel. 23

 Expansion of the lounge outside Kathmandu like in Pokhara, Dharan, Biratnagar and Birgunj. Expansion in product line, include other means of entertainment and food items. 4.4 Exit Strategy Since there is tough competition in the market we also need to think about alternative plans as the lounge may not be able to attract the customers. In such worst situation we need exit strategy. In this condition we can give it as lease to others or we might as well sell the overall lounge to others. The amount received from the sale will help little to minimize the loss.

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APPENDICES

Quality Management: We will follow promptness and cleanliness as the major quality aspect in the lounge. We can measure quality with the help of customers feedback and improve the service accordingly. The major quality parameters for the lounge are as follows: 1. Response: We will also provide product as per the customer request. We will also look at the customers feedback and improve it. 2. Timeliness: Our lounge will provide quick service to customer. We will provide service to the customer as per the requirement. 3. Courtesy The staff members will be polite to the customer and greet them when they enter in the lounge. They will also be trained to handle complaints and handle situation with a smile. 4. Cleanliness: The area will be hygienic and clean. The overall environment of the lounge will be customer friendly. 5. Aesthetics: Aesthetics also plays a very valuable role in defining quality in a lounge. In the overall appearance is not so good than the customer may not be willing to come to the lounge.

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Population from age 15 years to 45 years: Age 15-19 20-24 30-34 25-29 35-39 40-44 2006 2869366 2457240 1777559 2091314 1513800 1274854 2011 2998875 2844469 2063877 2430786 1747636 1479455 2016 3078982 297674 2403417 2818327 2033678 1712615

Population of Kathmandu valley: Place Kathmandu Bhaktapur Patan 2006 1276754 254074 381327 2011 1472707 282245 424219 2016 1668936 310679 467477

Above mentioned data on population of Kathmandu valley is useful in forecasting the growth of customer in business.

Assumptions: Setup cost includes all cost that incurs in interior designs and decorations. All fixed assets will be depreciated as per straight line basis Loan will be 5 years loan and we have assumed on an average interest on loans will be around 14%. Our business will grow by 10% every year. 26

 Rent will increase by 5% every year. Every 3 staffs will be hired every year if business grows by 10%. Equity amount will be on partnerships.

Advertisement cost: S. No 1 2 3 4 Flyers (5000 x Rs 3) + ( 2500 x Rs 7) Design of flyer Website launch Advertisement on face book Total Cost Rs 32500 Rs 3000 Rs 7000 Rs 0 Rs 42500 Advertisement Charge

The advertisement cost above is for the first two years and after third year we will only distribute 2000 Flyers for Rs 3 and 1000 large size flyers worth Rs 7.

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