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1.2 Financing
Mr. Sanchez is seeking to raise P150,000 from a bank loan. The interest rate and loan agreement to be further discussed during negotiation. This business plan assumes that the business will receive a three year loan with 8% per annum interest rate. The financing will be used for the following: Development of the business center. Financing for the first six months of operation. Capital to purchase chess sets, chess clocks, chess books, other chess equipments and materials.
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Projected startup costs Working Capital Furniture, Fixture and Equipment Improvements Inventories Marketing Budget Supplies Business Licenses and Permits 2|Page Php 15,500 138,000 20,000 57,500 5,000 3,000 3,000
Rental Deposit(2 months) Telephone Installation Contingency Fund Total startup costs
Use of funds
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Blitz Chess Caf intends to provide chess tutorials for the youth, ages ranging from 6 years old and above. The topics will be laderized starting with the beginners to intermediate to advance level of chess knowledge. As the skills and level of expertise rises, students will be exposed to topics about chess psychology, physiology, computer chess, How the Brain Works, and Mathematics in Chess among others. . There are many scientific studies showing the enormous benefits that can be acquired from chess.If you are to delve into the details of the game, you will see that chess is a game of strategy. The fact that every piece on the board has a unique form of movement and is a part of the whole, makes the game complex. Introducing a child to chess allows the child to recognise complexity. There are numerous ways in which the pieces can be moved, and analysing each move enhances the childs mathematical as well as analytical capabilities. In fact, children who play chess are able to solve mathematical problems mentally instead of using a calculator to do so. The same goes with the influence of chess on the understanding of science. Going forward, when faced with complex exams like the NSAT a child will be in a better position. Chess is one game that teaches a child patience and willpower. It improves a childs ability to interact with his opponent albeit in a silent way. This enhances confidence as well as self esteem and makes one a good listener. Listening can go a long way in improving interpersonal skills and help in business negotiations. An important feature one will learn in chess is the ability to judge body language. Being able to read expressions when a game is in progress is what will help one plan in advance. This, while applicable to the moves on the chess board are equally important in ones life. Being able to anticipate issues will allow you to plan in advance and this will hold you in good stead no matter what situation you are faced with. Planning ahead has some great rewards, while lack of planning can result in a check mate or lose.
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Chess involves several numerical combinations. Unlike any other game, chess is one where there are numerous ways to reach the end result. Each game is different and there are several numerical possibilities to a strategy. Having to deal with this will develop a scientific way of thinking which is very essential when faced with multiple solutions to a problem. Being able to quickly analyse the effects of each move is what will enhance a childs mental ability. Chess has also proven its ability to calm aggressive children. The need to sit still in one place and concentrate on the board has brought a calming effect on a number of children. This has allowed them to grow into calmer individuals with a stable head on their shoulders. Looking at things from the health perspective, chess also helps students who may have sustained certain physical disabilities from birth or by accident. Because of the movement of pieces in the left, right, forward, backward and diagonal ways, fine motor skills are developed. Chess is also a game of experience. If you want to win successive games, you will have to learn from your earlier mistakes. This means remembering all the moves you made. Memory is another thing that chess helps improve. Chess has also proven capabilities of calming frayed nerves and therefore is also used extensively as recreational therapy. Ones attention span as well as observation powers are highly sensitised with the game. In order to understand how your opponent is going to play, you need to watch and remember his or her moves, try and find a pattern in it.
This is where cognitive skills are enhanced and improved on. Chess has a number of benefits that may not be as easily perceived as the physical advantages of football and cricket. Its effects are subjective and one that can be observed over a period of time. Introducing children to the game at a young age will allow them to grasp and understand the nuances of the game much earlier on. You will be doing them a favour in the long run. Trainings will also be provided for students for those who wants to fasten their mastery of the game. These are most beneficial to varsity players or for those who wants to be varsity chess player in the future. Coaching on various aspects of the game will also be offered like: Opening Phase Middle Game Phase End Game Phase Tactic Strategy Positional Play Sacrifices Planning
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Chess equipments like chess sets, chess clocks, chess books, chess shirts and chess souveneir items will be available for sale to help promote the game. The intension is to increase the youths awareness on chess and its benefits to the intellectual, physical, psychological, and behavioral aspect of a person. As Grandmaster Alexander Alekhine, 4th World Chess Champion of the World, once said, Through chess, I molded my character. Healthy and nutritious food and drinks will be served for the customers. It will offer customized food for the chess playerss active chess mind. The names of the food will be customized, for example, a Kings bread, Queens Pasta, Pawns snack and the likes. The foods and drinks are guaranteed nutritious and affordable since most of our customers are students. One more idea is to get the attention of non-playing chess people, the presumption is this, If they will visit Blitz Chess Caf for the sole reason of its innovative foods, then it will be highly probable that they will be interested in the game of Chess since they can always see people enjoying the Game of Kings.
all over the country being established to promote chess. In Hagonoy, there is yet to have a chess center wherein players can go to a common place where they can play with each other. Blitz Chess Caf will meet this demand by the chess players. There is a potential for a chess boom in the town. It will be first in the field.
The prospect customers will be coming from 16,000 students from 29 elementary schools, 10,800 students coming from 7 high schools and around 300 out of school youths living in Hagonoy. There is an enormous potential chess players to be in Hagonoy. It must be introduced to them intelligently to catch their attentions.
3.4 Competition
There is no direct competition as of the moment since this is a fresh idea. No one has yet to establish a chess center. Indirect competition includes computer shops that cater computer gaming for the students. The management intends to showcase that playing chess will bring out the best in an individual rather than playing traditional computer games and online games on the internet. It is imperative that Blitz Chess Caf will showcase its premium quality by promoting student welfare.
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4.2 Marketing Strategies Foremost, the management will aggressively develop relationships with school principals, directors, and teachers in order to penetrate the schools and have an opportunity to meet the students. The management is intending to hold on a regular basis a Campus Tour, sponsoring events like Graduation Day, Foundation Day and Recognition Day. During these events, Blitz Chess Caf logo will be highly visible, to the point that it will awaken the curiosity of students, parents, and school heads. Chess items will be sold during these events. Customized chess shirts will be provided as token for the school heads. Word of Mouth Strategy will be employed as a strategy to have more people aware of Blitz Chess Caf. Successful referrals will entitle them to 20% discount on chess tutorials. Newsletter will be released on a quarterly basis featuring the scientific findings about chess on its relevance as a tool to promote intellectual capability. It will also showcase the reports on chess tournaments regularly held in Hagonoy and updates on the world of chess.
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5.0 OPERATIONS
5.1 Hours
Blitz Chess Caf is open from 10am to 8pm from Monday-Saturday.
5.2 Rates
Rental of Chess Clock and Chess Set - P20.00 per hour Tutorials : 2hours per session Beginners P1,500 for 5 sessions per month Intermediate P2,000 for 5 sessions per month Advance P2,500 for 7 sessions per month Chess in School P30 per student, minimum of 10 students Training/Coaching for Varsity Chess Players P3,000 for 10 sessions for every 4 players P1,500 for 8 sessions for 1 player Chess Research and Reading P10 per hour Chess Clock P2,000 P2,000 per piece Chess Set P550 per piece Chess Shirts P200 P300 per piece Chess Breads P15 P30 per piece
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5.3 Payment
Blitz Chess Caf will require 50% downpayment for Tutorials, Training, Coaching prior to the start of the chess sessions. Customers renting the chess equipments, chess researching and chess items for sale will be required to pay in cash.
MANAGER
CHESS INSTRUCTOR
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6.2 Organizational Budget Personnel plan yearly Year 1 2 3 ______________________________________________________________________ Owner / Manager Chess Instructor Total P 72,000 P 48,000 P120,000 P 79,200 P 52,800 P132,000 P 87,120 P 58,080 P145,200
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8.2 Source of Funds Financing Equity contributions Owner Investment Total equity financing Bank Total debt financing Total financing
7.2 General Assumptions Operating expenses namely salaries, advertising, travel cost, utility cost, repairs and maintenance will increase annually by 10%, while rental will increase by 5% annually.
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7.3 Profit and Loss Statements Year 1 2 3 ______________________________________________________________________ Sales Cost of goods sold Gross margin Operating income Expenses Salaries Rental Advertising/Marketing Travel cost Utility cost Repairs and Maintenance Total operating costs EBITDA Interest expense Depreciation expenses Net profit Profit margin 344,000 41,280 88% 302,720 120,000 60,000 36,000 6,000 36,000 6,000 264,000 38,720 12,000 45,996 (19,276) (6%) 447,200 89,440 80% 357,760 132,000 63,000 39,600 6,600 39,600 6,600 287,400 70,360 12,000 45,996 12,364 3% 581,360 116,272 80% 465,088 145,200 66,150 43,560 7,260 43,560 7,260 305,730 159,358 12,000 45,996 101,362 17%
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7.4 Proforma Balance Sheet Current Assets Cash Accounts Receivable Inventories Total Current Assets Non-current Assets Furniture, Fixture and Equipment Depreciation Total Non-Current Assets Total Assets Liabilities Long Term Liability Interest Payable Total Liabilities Equity Total Liabilities and Equity 1 Php 17,200 34,400 57,500 109,100 138,000 (46,000) 92,000 Php 201,100 2 Php 22,360 44,720 76,024 143,104 92,000 (46,000) 46,000 Php 189,104 3 Php 29068 58,136 98,831 186,035 46,000 (46000) 0 Php 186,035
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7.5 Breakeven Analysis Year 1 2 3 _______________________________________________________________________ Monthly Revenue Yearly Revenue 25,000 300,000 29,938 359,250 31,847 382,163
7.6 Business Ratios Business ratios yearly Year 1 2 3 ______________________________________________________________________ Sales Sales growth Gross margin Financials Profit margin Assets to liabilities Equity to liabilities Liquidity Cash to assets 9% 12% 16% (6%) 1.08% 8% 3% 1.55% 53% 17% 3% 200% 0.00% 88% 30% 80% 30% 80%
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Year 1 Months Sales Tutorials Chess Retal Chess Shirts Chess Books Chess Souvenir Items Cost of Goods Sold (12%) Operating Income Expenses Salaries Rental Advertising Travel cost Utility cost Repairs & Maintenance Total operating costs EBID Interest Depreciation Profit (Loss) 1000 3833 -9680 1000 3833 -9680 1000 3833 -4840 1000 3833 -4840 1000 3833 -440 1000 3833 -440 1000 3833 9680 1000 3833 9680 1000 3833 12320 1000 3833 12320 1000 3833 12320 1000 3833 12320 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 120000 60000 36000 6000 36000 6000 264000 38720 12000 45996 -19276 4500 7500 2000 0 0 14000 1680 12320 4500 7500 2000 0 0 14000 1680 12320 7500 7500 3000 1000 500 19500 2340 17160 7500 7500 3000 1000 500 19500 2340 17160 7500 10000 4000 2000 1000 24500 2940 21560 7500 10000 4000 2000 1000 24500 2940 21560 15000 10000 6000 3000 2000 36000 4320 31680 15000 10000 6000 3000 2000 36000 4320 31680 15000 12500 6000 3000 2500 39000 4680 34320 15000 12500 6000 3000 2500 39000 4680 34320 15000 12500 6000 3000 2500 39000 4680 34320 15000 12500 6000 3000 2500 39000 4680 34320 129000 120000 54000 24000 17000 344000 41280 302720 Jan Feb Mar Apr May June July Aug Sept. Oct. Nov. Dec. Total
132000 63000 39600 6600 39600 6600 287400 70360 12000 45996 12364
145200 66150 43560 7260 43560 7260 305730 159358 12000 45996 101362
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