Académique Documents
Professionnel Documents
Culture Documents
Managing Director & Customer care, Head Finance and Administration, Head
New Plaza Old Baneshwor
Kathmandu, Nepal Kathmandu,
Phone: 01-4497556 Phone: 01-4473581
Naturally U Fitness Center is a service oriented center which especially provides people
with the basic health improvements work. It will be established for the promotion of
physical and mental health intended to provide assistance for people who want to live a
healthy life in a luxurious manner.
The center features Gym, Swimming pool, Dry and Steam Sauna , Jacuzzi, Aerobics and
Restaurant in reasonable price to all target customers, since there are only high class
expensive centers till date which cannot be afforded by middle class people.
There are around 17 fitness clubs in the valley with the same facilities that we provide.
All these centers have been in profit over the last two years as the market is growing
rapidly. Therefore, to sustain and attract customers we have capitalized on the cost
reduction strategy and plan to provide the same services minimum of cost in an
affordable manner to people having monthly salary of around NRs.25000.
Introducing facilities like indoor swimming pool, hot water swimming pool, water slides,
electronic modern gym equipment, celebrity endorsement, herbal massage facilities,
international dieticians etc will surely boost the service sales in near future.
Fitness center will be established under the partnership act with four partners. All four are
Science graduates of Kathmandu University. A description of each partner is given
below:
• Ramesh Baral stays in Sankhamul and has been actively engaged in various
fitness centers as a customer. He therefore has well knowledge on the effective
working of fitness center and what a customer desires for in a health center.
• Manoj Saria stays in Putalisadak and has well known contacts and knowledge on
the working of a firm at that particular location
We have estimated about NRs.31, 00,000 as a capital to run this project and around 48%
of this money will be gathered as a loan from the bank. This document will surely aid the
bank to grant us a loan. This total capital will be used for purchasing, installation of
equipments and also as a working capital.
Financial forecast is shown below:
2
Percentage 52% 48% 100%
Summary Table
3
Part 2 MARKETING PLAN
2.1 Product and Pricing
The future prospect of this market has lured many of the new investors. In this context
our service- Naturally U Fitness Center Pvt. Ltd.(NU) is also going to be launched in the
market very soon. With various range of facilities to meet the modern life, the product
satisfies all the needs that a customer desires for. Naturally U Fitness Center offers
services responding to the customer's needs in an affordable manner and has a beautifully
carved environment to suit the need of budget luxurious lifestyle ,equipped with items of
modern comfort.
The service will be available in the market after detailed survey and research among
various fitness experts, architects and designers. The fitness project has been effectively
blended with the graceful elements of Japanese, American lifestyle enhancing Nepalese
living standard. High quality with affordable prices will be the core special offers of the
company to the consumers.
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2.1.2 Location
Location plays a vital role in the success of any business and this will be a prime factor in
our business as well. People prefer secured area with serene, comfortable, accessible,
and eco-friendly environment with proper transportation facility.
Putalisadak House No.66 is our selected Location for the center which is 2 minutes walk
from Singhadurbar, 10 minutes from New Road, 3 minutes from Anamnagar, and 5
minutes from Dillibazar. The surrounding area is a well established residential area with
more than a 1000 families staying around 100 metres from our site. Another important
aspect of this location is that it lies in the heart of Kathmandu Valley with proper
transportation facility from any corner of city. Though the estimated price of a flat at
Putalisadak is Rs.20,000 only, we have planned to lease 5 flats (initially) from the local
individual for 5 years at Rs.70,000 including the spare land. This will help minimize our
investment in the business and thus minimize our business risk as well. The swimming
pool will be constructed in an area of 1 ropani behind the building.
The aim of the center is to provide customers with best facilities for guaranteed
maximum satisfaction. For this very reason, facilities such as gym, sauna, steam,
swimming pool, and also service like Jacuzzi have been introduced which definitely will
satisfy our valued customers. A brief description of each is given below:
Gymnasium
The center provides wide range of cardio vascular and strength training exercise
equipments such as branded motorized tread mills. steppers, rowing machines, stationary
bicycles, cross cable equipments, wide range free weights and other cardio equipments.
5
Steam/Sauna
The center provides both steam and dry sauna. It is one of the life’s most physically and
mentally refreshing experiences. This will help reduce the damaging effects of stress,
fatigue and exposure to environmental toxins
Jacuzzi
Also known as Japanese hot water bath where water is effectively bubbled to refresh and
rejuvenate the human body. It is a most reliable way to have perfect refreshment and only
way that can satisfy your entire body with perfect safety.
6
Aerobics
It helps to use oxygen more effectively by conditioning the heart and lungs. Aerobic
exercises have a wide range of benefits such as it increases muscular and cardiovascular
fitness thus enhancing flexibility.
Swimming Pool
A crystal clear swimming pool with the sunlight reflecting its rays over the clear
sparkling water. Enjoy a refreshing cool water and search the aquatic world.
7
Restaurant
It has a clean and fresh look catering hygenic and healthy food. It offers different high
quality cuisine ranging from typical Nepali food to continental dishes with a genuinely
friendly service.
8
2.1.4 Product Life cycle
This concept though not new in Nepalese market is still one of the happening business
expanding as every year passes i.e. is presently in a rapid growth phase. This product life
cycle depicts NU fitness centers development plan over a period of 5 years
hypothetically.
TIME(Years)
2.1.5 Costing
Particulars Charge(NRs.)
Registration 5,000
Legal 4,000
Product
Transportation Growth phase(2 Growth phase(2
1,500
development
Communication years) years)
1,000
(6 months)
Interior designing consultation fee 12,000
Total 23,500
Cost of goods
For Gymnasium
9
Weight Stand 2 4,500 9,000
Tread Mill 2 36,000 72,000
Home Gym 2 95,000 190,000
Weights 22,000 22,000
Barbell 20 600 12,000
Multi gym 1 250,000 250,000
Stationary Cycle 3 17,000 51,000
Steppers 2 6,000 12,000
Cross Cable Equipment 1 15,000 15,000
Rowing Machines 3 16,000 48,000
Ab king Pro 2 8,000 16,000
Push Up rest 6 500 3,000
Total 870,000
Others
10
Swimming Pool 1 700,000 700,000
system
Water plant 1 80,000 80,000
Renovation 180,000
Total 2,017,500
The price of the above accessories have been obtained from the following sources:
• Gymnasium Equipments
Operating expenses
Particulars Cost(NRs.)/month
Salary
(Receptionist-1, Accountant-1, Trainer-2, 112,000
Life guard-2, Cleaner-2, Security Guards-2,
Management Team-4)
Rent 45,000
Advertisement 7,000
Electricity 8,000
Maintenance 3,000
Telephone 2,000
Stationary 1,000
Transportation 500
Miscellaneous 2,000
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2.1.6 Pricing
Our focus is on the middle class society and thus the pricing scheme we offer is
reasonable and affordable. We offer different price schemes to encourage more
customers. Discount offers for couples, students, family, corporates and those in numbers
as stated below are certain to draw more customers.
Special Packages
1. Prepaid membership
2. For swimming
12
2.2 Market Characteristics
Through our public questionnaire we realized that many people nowadays living in the
valley are health conscious. Many middle class people go for regular morning walks to
uplift their fitness level and are willing to join a fitness center. But almost all health clubs
in today's market are expensive which cannot be afforded by the middle class groups.
Thus, realizing the scope and need of a fitness center which provides excellent service in
a reasonable price and implementing it for the welfare of the general public is necessary
and profitable as well.
We were able to sample out around 40 people. Among them 60 % of people belonging to
the age group of 20-30 yrs were extremely health conscious. Almost equal percentage of
male and female showed interest on an affordable fitness center.
Our survey of the presently established health clubs reflected that around 15 Health Clubs
are working in Kathmandu at the moment. Most of these clubs are focused on high
society .Thus, the majority of the people in Kathmandu who lie in the middle class are
deprived of these facilities .Clubs like Mahendra Police Club (MPC), Hotel Shahanshah
International Sports Center, Banus's fitness , City Health club, Kundalini Suite Hotel and
13
Health Resort, The Nature Club have an average member of 200. This statistic is certain
to rise drastically provided the pricing scheme focuses on the middle class citizens
The fusion club located at Sinamangal has received overwhelming response with 50
members in just 2 months with only a Gymnasium .The key factor behind the success has
been the reasonable pricing and pinpoint marketing strategy. Total market demand for a
fitness club is very high provided the business strategy is realistic and sincere with
effective marketing strategy . We hope to achieve all these.
Existing health clubs have 100-200 members on average. However, the total market is
very large compared to what’s been reflected through survey. The majority of the
population reluctant to go to clubs due to various reasons is our main focus. 15 clubs
have engaged around 2500 members at the present. And the total of around 1500 more
are looking forward joining a club. With two competitors around, we expect to attract
around 300 customers within a year. The business is going through growth phase at the
present and our effort in capitalizing this opportunity with features like reasonable price
and extra services gives us competitive edge over the competitors. With this we hope to
cover 20% of the market.
2.2.4 Market Survey
Objective
Methodology
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At: Putalisadak, New Baneshwor, New Road and United World Trade Center,
Tripureshwor
On:12 May 2008
How: First Set of questionnaire was provided to the public and they were asked to fill it
up.
At: Mahendra Police Club, City Health Club, Kundalini Suite Hotel and Health Resort
Pvt. Ltd., Hotel Shahanshah International Sports Center , The Nature Club
On: 13 and 14 May
How: The second set of questionnaire was provided to the existing health club owner's
and was filled up by them. Personal informal interview was also carried out with them.
This questionnaire survey was conducted on the customers basically for knowing their
interest, wants and needs.
This questionnaire survey was conducted on the existing health club owners. This set was
focused on the owners, their challenges, strengths and their clients. This set also includes
the services they offer, the facilities they have and the status they stand on.
Major Findings
Club Owners
Following facts about the club was revealed during our market survey:
Mostly young individuals of age group 20-30 are the mostly interested.
No difference between the services provided to male or female.
There are only 28 licensed trainers in Nepal at the present. So finding one is the
difficult task. Most of the good trainers are already involved in their own gym
businesses.
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Customers mostly have the interest in Gym and swimming pool. So these sections
need to be properly taken care of.
Most of the owners are not satisfied with their business and do not seem to have a
good profit. This may be the result of improper marketing plans.
It is difficult to retain customers than to attract them. They seem to have new and
more attractive offers every new week. And maybe also because the customers
are not satisfied with what the present club owners offer.
Payment from the customers is easy in the beginning however they get reluctant
as the history with the club increases. Thus most health clubs are running on
credit policy.
Maximum health club owners do not advertise.
Health clubs are not usually affected by political turbulence.
In average, a customer pays about NRs.2,000 / month.
Most of the trainers do not do their job properly as they know that they are among
few of the trainers available in Nepal.
A professional dietician could add to the effectiveness of the gym and customer
satisfaction.
Localities may sometimes interfere in the club's normal pricing schemes as they
expect heavy discounts.
Equipments must be bought as per the targeted customer groups.
High society individuals prefer high-tech electronic gadgets as middle class
people prefer mechanical machines at affordable price.
Potential Members:
The general conception about fitness clubs is that, they are just the sign of
luxurious life and are affordable for high society only. The majority of the people
interested in doing so are discouraged by the pricing scheme.
People prefer a fitness club in about a kilometer's range from the residential area.
Females prefer separate gym for male and female.
The fitness club should not be crowded so that customers can get effective
guidance and achieve better results easily.
Health drinks should be included in the package.
There should be a respectable environment in the gym with the classy co-
operative members.
Most people prefer morning timings rather than afternoon and evening.
2.2.5 Clients
Our market potential is quite huge, despite we are just setting up our business and our
market not being saturated. During our initial phases, we will be focusing mainly on the
middle class Professionals having monthly salary below NRs 25,000. After few years
when our business will be in the growth phase (as will be indicated by customers order
16
and sales figure), we would focus more on customers having salary more than NRs
25,000. With growing urbanization the club is supposed to have more potential customers
after few years. In addition, the product targets students and teenagers of valley having
desire of health and fun.
Customers Description
Working couples Working couples prefer exercise for health as they are very
busy in their office work. They do not have much physical
work to satisfy their health needs.
Students and teenagers Joining health club seems like a fashion statement among
youths who desire for health while having fun and
effectively pass their spare time
High society business- Especially, those who belong to this high society need
Men luxury and comfort and more over a place where they can
socialize.
Foreigners We aim to stand out among Nepalese Clubs so as to attract
health conscious foreigners during their tour in Nepal.
Working couple
High society
businessmen
Foreigners
2.2.6 Competition
SWOT ANALYSIS
All business ventures and its product have some strength, weakness, opportunities and
threats. Strength and weakness are internal to the business and seem to be controllable
but threats and opportunities are external to the organization so they are uncontrollable in
nature. So, for the betterment of the service the company should be able to exploit its
opportunities and avoid threats.
17
SWOT analysis is done to understand the internal as well external environment of
product. The various forces in the internal environment provide strength and weakness
and the forces in the external environment provide opportunities and threats. Through
SWOT analysis, product's internal strength can be matched with external opportunities to
gain strategic advantage. SWOT analysis can be used to invest in weakness of the
product to make competitive and avoid threats operating in the external environment.
Similarly, this analysis is also the essence of strategy formulation.
The SWOT analyses of "Naturally U Fitness Center Pvt. Ltd.” are as follows:
Strengths Weakness
Opportunities Threats
18
Similarly, SWOT analysis of some of the major competitors is as follows:
Strength:
Weakness:
Opportunities:
Threats:
Strength:
19
Weakness:
• Old equipments
• Small gym room
• Very expensive
• High payment problem by customers
• Located in outskirts of valley
Opportunities:
Threats:
Service Strategy
We are launching our service targeting small groups within small demographic area.
Although it is located in the heart of the city, our target area is its surrounding areas such
as Maitidevi, Dillibazar, Putalisadak, Anamnagar, Thapathali and New Baneshwor. The
sole aim of our center is to attract middle class people and above stated areas are mostly
covered by middle class people.
Pricing Strategy
We will be applying "Market Penetration" strategy for pricing. According to our survey
price is the key factor that affects the customer. Comparative study with existing health
clubs, our club possesses the least price. We hope this will surely attract more customers.
Pricing Strategies
20
Internal Factors
Marketing objectives
Marketing mix
Costs
External factors
There are basically three methods of determining the selling prices of product .In general
and especially when starting a business, it is safer to use the "Cost +Method". It is also a
good business strategy to anticipate our competitor's reaction to our pricing strategy.
Selling price is the crucial factor for any business as it decides the profit for the company.
While determining the selling price of our product, we have decided to concentrate on
both the "cost + method" and the "competitive method".
Promotion Strategy
In the introduction stage of the product, promotion plays very important role to make
people aware of the product. Promotion is one of the most important aspects of marketing
the product. Promotion is generally divided into advertising, personal selling, sales
promotion and publicity. These measures are:
These activities cost money to our business, so one has to be sure that for every
promotional measure adopted: there is a foreseeable increase in sale. Without a justifiable
increase in sale, cost will escalate: hence increase the unit cost of the product. We have
planned to spend NRs.84,000 for our promotional in the first year and plan to rely on
mouth to mouth endorsement in the successive years from satisfied customers.
21
• Our target is small area, so by promoting our product in Local media such as
Subisu Cable Network and Cable Television Network would be most effective
and cheapest means of promotion.
• We will also sponsor local programs so that locals will be familiar and aware
about health and finally about our center.
• We will also conduct talk programs related to health and fitness including doctors
and dieticians.
• By publishing Newsletters, highlighting the benefits of the health clubs and need
of fitness in today's world to get rid of the stress and disease
Marketing is one of the measures for enhancing the product in the market .We have
separated certain sum for promoting the product. The major promotion areas are stated
below:
Scrolling in local channel network(Cable Television Network and Subisu Cable Network)
(scrolling 2hrs per day) for first 4 months - Rs.44,000 (11,000 per month )
So, in total we will be spending about NRs 84000.00 annually as marketing budget.
The result of our survey reflected the fact that the existing health clubs have been able to
attract about 50-60 members in a small window of interval without any sort of
advertisements. If we capitalize on this fact seriously, we surely may be able to gather
about 100 members within the first few months, and if well advertised it may lead to
about 300 members in the first year.
22
The number of irregular members will certainly rise as per different seasons, thus the sale
is expected to rise as the business matures with some seasonal fluctuation in the sales.
The forecast for the next 4 years have been shown in the table below.
The individuals interested in joining our fitness center will have to fill a simple
membership form and pay the necessary registration fee. After obtaining the necessary
information, thereby registered members will be allowed to enter the premises and use
the facilities inside the center. Full time proper guidance will be provided to all the
members.
3.1.2 Operation Process for the occasional swimmers (For the visitors)
23
Any swimmer interested to use the facility i.e. swimming pool for a day without the
membership will have to register the name in the reception on his way in. After using the
pool, the individual will then have to pay the charge in the reception on his way out.
Start
Fill in the
membership form
at the reception
Yes
Use the
facilities? Sign in and
exercise
No
24
Sign out
End
Start
25
Pay the charges
Sign out
End
Particulars Amount
1. Building + Infrastructure 1,480,000
2. Machineries and equipment 908,000
3. Electronic 90,000
4. Furniture 228,500
5. Office equipment 181,000
Total 2,887,500
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2 Machineries and equipment 10% 908,000 90,800
3 Electronics 10% 90,000 9,000
4 Furniture 20% 2,28,500 45,700
5 Office equipment 10% 1,81,000 18,100
Total depreciation 237,600
Per month 19,800
The normal life of machineries & electronics, buildings, and furniture are 10 years, 20
years and 5 years respectively.
As the time progresses, the fixed assets that we have (furniture, machineries, buildings
etc.) are sure to face quality degradation and thus they need timely maintenance and
repair. We have allocated certain amount of money for this purpose.The maintenance will
performed by hired professionals.
The source for the maintenance and repair expense will be obtained from the general
income of the fitness center. However, the major expenses regarding this will be funded
from the bank savings of the center.
The gymnasium equipments required for the gym will be brought from:
The computer system and the software will be provided by the “Computer Info System”,
New Road which has already been agreed upon by both the parties.
The water supply system maintenance and the required machineries during daily
operation will be provided by Macto Trading Concern,Tripureswor
The entertainment systems such as Television and Music Systems are supplied by LG
Shoppe, Gorkha Complex, Minbhawan.
The fitness center can accomodate customers depending on various facilities as follows:
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S.No. Facilities Capacity at a time
1 Swimming pool 50
2 Dry Sauna 10
3 Steam Sauna 10
4 Jacuzzi 6
5 Gymnasium(Cardio+Weight) 70
6. Aerobics 32
Total 178
In total our fitness center when fully packed has capacity of 178 customers at a time.
The space has been fully utilized available in the leased building.
In future the fitness center may be expanded as per needed. According to the customer
need, want, demand and the market change, the fitness center may be expanded by
leasing the land or building nearby the fitness center.
Following are the terms and conditions between the fitness center with the equipment
seller:
50% of the total amount should be paid cash down and the remaining amount
should be paid within the 21 days of the delivery.
Or 25% of the total amount should be paid cash down and the remaining amount
can be paid in installment within 18 months with interest of 7%.
The seller will be responsible for all kind of damage to the equipments during
delivery.
Parts replacement of all the machinery equipments is valid till 1 year of the
delivery. Electronics systems( TV and Music system) is provided with a warranty
period of 4 yrs.
Free repair and maintenance of the machinery equipments is valid for 1 year.
The cost of delivery should be paid by the seller.
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3.9 Factory location and layout
3.9.1 Location:
New Plaza, Putalisadak House No.66 is the selected Location for the center which is 2
minutes walk from Singhadurbar, 10 minutes from New Road, 3 minutes from
Anamnagar, and 5 minutes from Dillibazar. The surrounding area is a well established
residential area with more than a 1000 families staying around 100 metres from our site.
Another important aspect of this location is that it lies in the heart of Kathmandu Valley
with proper transportation facility from any corner of city.
Kamalpokhari
Rich
Kumari Bank Interiors
NUFC
Anam Nagar
Singha Durbar
Bhadrakali
3.9.2 Layout
29
The site has enough free areas at affordable prices for our center. Though the estimated
price of the flat at Putalisadak is only Rs.20,000, we have planned to lease 4 flats
(initially) from the local individual for 5 years at 70,000 including the spare land with
some discount. This will help minimize our investment in the business and thus minimize
our business risk as well. The swimming pool will be constructed in an area of 1 ropani
behind the building.
As per the layouts, we have allocated a flat for each of our services. This will help us to
increase the security to our members.(for example we can stop limited members from
entering off limit areas or restrict him/her from entering the services s/he has not paid for
and stop them from crowding the areas).
The swimming pool will be constructed on the spare land straight to the main gate.
The design has kept the restaurant up in the top floor so it can also provide service to the
non member guests. Even the passer-by can drop in and grab some healthy meal.
Our facility also gives a free parking to the members and customers of the center which is
just 20 seconds walk from the main building.
Layout Features
30
Restaurant
BALCONY 2
BALCONY 1
MAIN Guard
GATE Room
TOP VIEW
31
Swimming pool
Ground Premises
Rooftop Restaurant
32
TOP VIEW (GROUND FLOOR)
STORE
ROOM
RECEPTION
TOILET
PASSAGE TO
SWIMMING
Stairs to first POOL
floor
33
TOP VIEW( FIRST FLOOR)
REST ROOM
DRY SAUNA
LADIES TOILET
C
H
A R
N O
G O STEAM SAUNA
JACUZZI ROOM
I M
N
G
34
TOP VIEW (SECOND FLOOR)
REST ROOM
GYM ROOM
(CARDIAC)
GENTS TOILET
C
H
A R
N O
G O GYM ROOM
AEROBICS (WEIGHT)
I M
N
G
3.10 Staff
35
The fitness centre that we intend to operate is a medium scale private business with 14
permanent staffs. These staffs will be appointed in a contract system for a certain period
of time and the renewal of these staffs will be based on their performance. We do not
have any plans of having temporary staffs.
We have different appointed responsibilities for each of the owners in their specialized
field which are Finance and Marketing Division, Health & Training Program Division,
Sales and Marketing Division and Customer Care Division.
All the staffs will work under the supervision and direction of the managing director.
Sales and marketing officer, Financial and Administrative officer, Health and Training
Officer will fulfill their respective duties whereas MD himself will look upon the
Customer Care Division. Other staffs will be selected based on their qualifications from
among the applicants. The receptionist, the cleaner and the accountant will be under the
influence of the Finance and Administrative Division.
Health and Training Department will be responsible for the overall management process
inside the center. Gymnasium & Aerobics Instructor, Pool Life Guards, Maintenance
personals will all be monitored by the same department. Finally, the MD himself will be
governing the actions of Nutrition Advisor who will be in the Customer Care Division.
The job of the receptionist will be to communicate with customers and potential
customers and to maintain the business link with the external market and the competitors.
The balance sheets and all the other financial documents will be managed by the
accountant who will be briefed abut his responsibilities and the vision of the center before
his appointment.
Security guards will be provided with a small room within the premises to ensure their
service twenty four seven.
To inspire the staffs for better and more motivated performances, annual staff meetings
will be held where excellent performances will be rewarded. The staffs will be notified of
the importance that a customer holds to our center. Staffs will be encouraged to learn
common foreign languages (apart from English Language) to facilitate the
communication with the foreigners interested in visiting our center.
We will have 14 staffs in total. Their salary will range from 5,000 to 12000 depending
upon their position and qualifications. The expenses in providing salary to the staffs
constitute a considerable part of the total income of the fitness center. The salary level of
each of the staffs in the center is described in the table below:
36
Level No. of Person Salary per month(Rs)
Apart from the professionals like Trainers and dieticians, staffs like receptionist,
accountant and life guards are easily available. However, very few licensed trainers are
present in Kathmandu and it is even harder to convince them for their service. There are
only 28 licensed trainers in Nepal at the present. So finding one is the difficult task. Most
of the good trainers are already involved in their own gym businesses. Nutrition Advisor
are comparatively easier to approach as some of the medical students can also act as
dieticians.
Staffs like receptionist, cleaners and accountant can be selected from the list of applicants
based on their qualifications and their interest towards this profession once the
advertisement has been posted in a newspaper.
In the Fitness Center, monthly rent, maintenance and repair cost, Depreciation of
furniture's and buildings, electricity are our major overhead expenses. The major
overhead expenses of our Fitness Center are as follows:
37
4.1 Vision
Our vision will be visible in our way of operating this business standing as a perfect
fitness club providing prime quality recreation facility for health and happiness.
Mission
The firm will be registered as a partnership firm under the Company act 1964 A.D. Mr.
Bishal Dhakal, Mr. Manoj Saria, Mr. Ramesh Baral and Mr. Sanjeev Bartaula will
jointly own the company with equal investment thus sharing equal profit and loss. NRs
1600000 have to be invested initially which will be divided among four(i.e Each member
will invest NRs. 400000). The Board of four members play equal role in all the decisions
made for the welfare of the company. Three members must agree for any decision to be
implemented.
The center will open its head office in Putalisadak, Kathmandu in the initial phase. The
branches may be expanded as per the Board decision and requirement.
Our fitness center comprises of four Board of Directors. The Board of the Directors will
consist of the top line managers .One of them will lead the company as a Managing
Director and will govern four departments: Finance & Administration Division, Sales &
Marketing Division, Customer Care Division and Health & Training Program Division.
As the company expands, more divisions will be created as per the demand. Below the
Top-level managers, we have a First-line manager (Center Manager) who will be the in-
charge of the center and take the responsibility of all other non-managerial employees of
the center.The center manager will also work as a Accountant.
Board Of Directors
(Bishal, Ramesh, Manoj
38
and Sanjeev)
Managing Director
(Manoj)
Customer Care
Center
Manger
(Accountant)
Aerobics Gym Pool
Instructor Instructor Lifeguard
Receptionist
Security
Guard
Cleaner
39
The owners of the company are fresh science graduates from Kathmandu University.
These graduates possess basic knowledge of fitness, marketing and financial control.
Manoj Saria will hold the designation of Managing Director of the company. He will also
Head Customer Care Division He possess sound knowledge of leadership and is capable
of controlling various department. He has completed his Bachelor’s Degree B.Tech in
Biotechnology from Kathmandu University. He has well known contacts and knowledge
on the working of a firm at that particular location.
Mr.Sanjeev Bartaula will Head Finance & Administrative Division .He has basic
knowledge about Finance and accountancy. He has completed his Bachelor’s Degree
B.Tech in Biotechnology from Kathmandu University. He posseses sound knowledge of
managerial skills.
Mr. Bishal Dhakal will Head Sales & Marketing Division. He is quite hardworking and
interested in having his own organization rather than working on others. He has
completed his Bachelor’s Degree B.Tech in Biotechnology from Kathmandu University.
He has knowledge about marketing strategies.
Mr.Ramesh Baral will be the Head of the Health & Training Program Division. He
possess basic knowledge of fitness training as he is actively engaged in various fitness
centers as a customer. He has completed his Bachelor’s Degree B.Tech in Biotechnology
from Kathmandu University. He has well knowledge on the effective working of fitness
center and what a customer desires for in a health center.
Each owner has been allocated various divisions viz. Finance and Administration
Division, Sales and Marketing Division, Health & Training Program Division, Customer
Care Divison.
Mr.Manoj Saria
Mr. Manoj Saria will be the Managing Director of the company and play the crucial role
in the organization. He will Head Customer Care division. He will be responsible for
providing leadership, direction and control for all aspects of the center’s activities in
order to realize the maximum profits compatible with the best long- and short term
interests of employees, customers and public. He will establish operating policies and
guide the organization’s interactions with its environment. He is also responsible for
handling the customers, their problems and get suggestions and feedback from them.
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Mr. Sanjeev Bartaula will Head the Finance & Administration Division of the company.
He is responsible for guiding and directing financial control activities of the company in a
manner designed to protect assets, meet reporting requirements and effectively plan for
auditing the financial needs of the Center.
Mr. Ramesh Baral will Head the Health & Training Program Division. He governs the
instructor of Aerobics & Gymnasium and maintenance. He will also monitor lifeguards
and looks at all the services, where it is lagging behind, the things to be repaired and
reconstructed.
Mr. Bishal Dhakal will Head the Sales and Marketing Division of the center. He is
responsible for designing marketing strategies of the company. His main job is to create
and deliver the desired services and suggestions to customers for winning and retaining
loyal customers. He will assume the overall management of the health promotion
programs, entertainment programs, including organizing and conducting health education
programs He is responsible for promoting the center.
The main responsibility is to look at all the cash in flow, cash outflow, salary payments,
loan ,tax payments and all other financial activities.
The main responsibility of this department is to provide perfect training for customer
satisfaction and aware customers about their fitness and take responsibility to maintain
customers fitness. This department also looks on the maintenance of the center, what is
lagging behind and what needs to be repaired or renovated.
The main job of this department is to control the overall management of the health
promotion programs, entertainment programs, including organizing and conducting
health education programs. He is responsible for promoting the center.
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4.6.4 Customer Care Division
The main job of this department is to create and deliver desired services and suggestions
to customers. It is responsible to understand what the customers’ need, demand, and want
before the competitors hence offering services that will satisfy customers.
The overall performance of staffs will be evaluated by certain criteria as given below.
2.
3.
4.
The performance will be judged by the board members annually according to the above
stated criteria.
Its policy is to maintain efficient, determined and hard working employees, who could
benefit the service with regards to their increment in the salaries, bonus and other
additional facilities. This would drive the employees towards perfection and stability in
lieu of rewards. The records of number of current markets, along with their competitors
are kept. The management of human resource is done according to their designed post.
The attitude of employees towards customer’s service and their response towards
customer’s behavior plays a key role in implementing strategies.
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For this purpose we have planned special features for our staffs once they have proved
themselves as a valuable asset for the center. Raising their salary by 20-30% depending
on their work and contribution to the center and further increase with experience in our
fitness center will be one our strategy.
Trainers who have contributed with high performance would be sent for further training
to various parts of the world so that they deliver even higher performance in the forth
coming years.
Particulars Duration(week)
Registering the company 1
Looking at the site for company 1
Applying for loan and approval 2
Construction of Swimming pools and 6
redesigning of building
Purchase of Equipments 3
Staff hiring 3
Particulars Charge(NRs.)
Registration 5,000
Legal 4,000
Transportation 1,500
Communication 1,000
Interior designing consultation fee 12,000
Total 23,500
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All the required office equipments will be purchased from the initial investment at the
time of establishment of the Fitness Center. Total fixed capital investment of the office
equipments is predicted to be NRs. 181,000. However, the depreciation amount for these
equipments is NRs. 18,100 in a year time.
The administrative expenses including the salary and other administrative expenses are as
follows:
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Part 5 FINANCIAL PLAN
5.1 Project Cost
Particular Total
A. Fixed capital
Swimming pool,Steam and sauna 1300000
Building 180000
Machineries & equipment 908000
Office equipment 181000
Electronics 90000
Furniture 228500
B. Pre operating expenses 23500
C. Working capital 189000
Total 3100000
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5.3 Security for the Loan
The Loan could be acquired with the collateral as a security for the loan. The details of
the collateral is given below:
With the market value of such high worth, we expect the bank to easily grant us a loan of
only NRs. 1,500,000
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Family Rate Annual Income Monthly Income
Monthly 10 1200 144000 12000
3 Months 8 3000 96000 8000
6 Months 5 5000 50000 4166.66
Yearly 2 9000 18000 1500
Total 308000 25666.66
Table : Only Swimming Membership Schemes
Pre-
Particulars operating 1st year 2nd year 3rd year 4th year 5th year
45% 65% 80% 92% 100%
Sales forcasting in units 225 325 400 460 500
Sales 3873798 5595486 6886752 7919765 8608440
Pre Operating Cost
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Projected cash flow statement
Particular Preoperating 1st year 2nd year 3rd year 4th year 5th year
Cash inflow
Equity 1600000
Loan 1500000
Sales 3873798 5595486 6886752 7919765 8608440
Total cash from sales(exclude AR) 3873798 5595486 6886752 7919765 8608440
Total cash inflows 3100000 3873798 5595486 6886752 7919765 8608440
Cash outflow
Pre-operating expenses 23500
Purchase of fixed assets 2887500
Direct costs less depreciation 1374000 1374000 1374000 1374000 1374000
Administrative expenses 792000 792000 792000 792000 792000
Selling and distribution costs 0 0 0 0 0
Increase in inventories 0 0 0 0 0
Interest expenses 135000 108000 81000 54000 27000
Loan amortisation 300000 300000 300000 300000 300000
Total cash outflows 2911000 2601000 2574000 2547000 2520000 2493000
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Projected Balance Sheet
Preoperating 1st year 2nd year 3rd year 4th year 5th year
Assets
Total gross fixed assets 2887500 2887500 2887500 2887500 2887500 2887500
Less accumulated depreciation 237600 475200 712800 950400 1188000
Net fixed assets 2887500 2649900 2412300 2174700 1937100 1699500
Liabilities
Owners equity
Equity capital in the beginning 1600000 1600000 1600000 1600000 1600000 1600000
Accumulated profit 1335198 4419084 8821236 14283401 20461241
Total owners' equity 1600000 2935198 6019084 10421236 15883401 22061241
Total liabilities and equity 3100000 4135198 6919084 11021236 16183401 22061241
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Projected break even point in percent
Pre-operating 1st year 2nd year 3rd year 4th year 5th year
Sales amount 3873798 5595486 6886752 7919765 8608440
Fixed costs 2538600 2511600 2484600 2457600 2430600
Provided the sales are in accordance to the above financial tables, we can confidently
state that our company will remain in profit with sufficient equity for normal operation
and expansion. The bank loan can be repayed easily within the 5 yrs time and even before
if desired. The center can be expanded easily interms of finance.
5.12 Time Table for implementing plan and launching the business
ANNEX
Bibliography
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Zimmerer T.W and Scarborough N.M, “Essentials of Entrepreneurship and
Small business Management” (Fourth Edition).Pearson Education International,
New Jersey U.S.A
Madhav R. Koirala, "An Introduction to Accountancy and Auditing"(Second
Edition). Buddha Academic Publishers and Distributors, Kathmandu,Nepal
Private Company Act and Partnership Act, Nepal Government
www.moics.gov.np
www.unctd.org
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Glossary
Assets: Accounting term for everything a company owns and which has a monetary
value listed in the balance sheet (cash, credit balances, inventory, equipment, real estate,
etc.).
Break Even Point: The level of operation at which a company neither earns a profit nor
incurs a loss
Budget: A plan of future income and expenses during a specified period, such as one
year. In an operating budget the planned costs and revenues, expenditures and income are
compared. The name is derived from the leather bag, or “bougette”, in which the funds to
meet expected expenses were originally stored.
Cash: Money in the company’s current accounts in a bank and petty cash available in the
office.
Cash flow: The flow of money payments to or from a firm. Expenditures are sometimes
referred to as “negative” cash flow.
Collateral: Property that borrowers are obliged to turn over to lenders if they are unable
to repay a loan. This can be, for example, buildings, land, and machinery, inventory of
finished or unfinished goods, securities or accounts receivable.
Depreciation: The decrease in value of an asset through wear and tear or other factors
limiting its usefulness. Fixed assets are depreciated in the accounts by regularly reducing
their book value in the balance sheet.
Fixed assets: Land, buildings, machinery, tools and the equipment used by the company
to carry on the business. This account may also be referred to as plant and equipment or
buildings, machinery and equipment.
Partnership: An association of two or more people who own a business for purpose of
making profit.
Partnership Agreement: A document that states in writing that all the terms of
operating the partnership and protects the interest of partner.
Profit: The income remaining after deduction of all expenses during a specific period.
The gross profit is the total revenues minus the cost of goods sold. The operating profit is
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the gross profit minus general administrative expenses. The net profit is the operating
profit minus depreciation, interest, extraordinary charges and corporate tax.
Return on investment: An important measure of how much the company earns on the
money the company itself has invested. It is calculated by dividing the company's net
profit (income) by its total assets. This measure is also called "return on assets".
Sales: Money a company receives from the goods and services it has sold. In some cases,
the amount includes receipts from rents and royalties.
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Market Survey Questionnaire
1. Hello, have you heard about the health clubs? Do you know what they are for?
a) Yes b) No
………………………………………………………………….
2. Do you know any health clubs around? How did you come to know about it?
3. We are going to establish health club which provides different facilities like
Gymnasium, Aerobics, Sauna Bathing, swimming etc. How is the idea?
5. Do you perform some kind of exercise or do some kind of physical fitness yourself?
a) Yes b) No
……………………………………………………………….
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a) Yes b) No
……………………………………………………….
8. Would you like to join each of the facilities separately or as a whole in a package?
a) Separately b) In a package
9. If you are offered a package with well equipped gym, swimming pool and a fitness
centre in a reasonable price, would you be interested in joining?
a) Yes b) no
13. Would your interest in such a centre be same even if its far from your location?
a) Yes b) No
14. We have a membership plan for our fitness centre. Would you like to be
informed regarding our facilities?
a) Yes b) No
15. If we offer a package for a family membership or group membership, would you
be a part of it?
a) Yes b) No
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For Health club Owners(Second Set)
1) From when have you been in this field ? Is this your first venture ?
………………………….
a)Fitness b) Swimming pool c)Steam and sauna d) All of the above e) Others
6) Are you satisfied with the business that you are in? Is it profitable?
…………………………………..
10) Which gender has majority in your club? Do you have any preference?
a) Male b)Female
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12) Have you had any problem in getting your payment ? How often do you have to face
it ?
………………………….
15) How much does the political situation affect the club?
17) What do you think are the challenges and threats in this field ?
……………………….
For regulars
a) 500-1000 b)1000-1500 c)1500-2000 d)More than that
For occassionals
a) 500-1000 b)1000-1500 c)1500-2000 d)More than that
21) Any further suggestion/advices to the new business comers in this filed?
…………………………………………………………………………………………….
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Rent agreement
It is agreed between Mr. Dhanpat Saria, (the owner of the building; herein called the first
party) and Mr.Sanjeev Bartaula (for Naturally U Fitness Center Pvt. Ltd) (herein called
the second party) that the house situated at New Plaza, Ward No.32, Kathmandu
Metropolitan City will be used by the second party for business purpose. The additional
terms and conditions are as follows:
1. The first party is agreed to vacate the house property to the second party for the
consideration of monthly rent of Rs. 70000 (in words NRs. Seventy thousand
only).
3. The second party will not damage any furnitures , fixtures or equipment provided
to him as well as lying within the premises. On any damage of such type, he shall
reimburse the replacement cost of property.
4. Any change to be made on the layout of the building if required necessary for him
can be done only after the consent of the first party. But he shall clear or
reestablish the original layout unless agreed by the first party.
5. The either shall give three months prior notice in case of vacation of the premises.
6. The charge of electricity, water etc. which are directly used/consumed by the
second party shall be borne by himself as per the actual billing of respective
authority as per the sub meter’s reading.
7. This agreement is valid for 5 yrs and can be extended with mutual understanding.
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