Business Plan for a Health Spa

8/8/2019 Business Plan for a Health Spa

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Business Plan for a Health Spa

VINCENT PRIVATE LIMITED COMPANY

Prepared for:

Syed Alamgir Jafar

Associate Professor

Prepared by

Asif Uddin Ahmed, Roll-12

Asif M Touhid, Roll-16

Faisal Saeed, Roll-24

Syed M Alam Khan, Roll-49

January 17,1999

INSTITUTEOF BUSINESS ADMINISTRATION

University of Dhaka


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17.1.99

Syed Alamgir JafarAssociate Professor

Institute of Business Administration

University of Dhaka

Dear Sir,

Here is the Business Plan that you have assigned us as the partial requirement for

the Small Business Management Course. This Business Plan helped us a lot to get

a practical exposure of the field of small business and real life business plan.

It was a great pleasure for us and we would be glad to furnish you with any details

if required.

Thank you,

Asif Uddin Ahmed, Roll-12

Asif M Touhid, Roll-16

Faisal Saeed, Roll-24

Syed M Alam Khan, Roll-49


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Table of Contents

ERROR: REFERENCE SOURCE NOT FOUND

I. EXECUTIVE SUMMARY I

II. DESCRIPTION OF VENTURE 1

III. INDUSTRY ANALYSIS 14

IV. MARKETING PLAN 22

V. ORGANIZATION PLAN 36

VI. TECHNICAL PLAN 61

VII. FINANCIAL PLAN 83

ANNEX


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1.0 KEY DATA SUMMARY

1.1 The Organization at a Glance

Club Vincent will be incorporated on 31st March 1999 as a private limited

company. It is a service industry designed to give complete health facilities

with additional other facilities. The firm will start its operation from 1st May

1999.

Health Spa has become extremely popular in South Asian countries as well

as Bangladesh. Because of recent trends, free flow of information, satellite

television and sports craze, the demand for a complete health spa with allthe modern facilities has become extremely prominent. Moreover recent

trends in urbanization and lack of leisure sport has brighten its future.

People from all sector has become very health conscious and Club Vincent

will be dedicated to support their needs.

1.2 Demand Characteristic

If we look at the recent trends in health and the fitness sector of South Asia

as well as Bangladesh, we will see a big change in the mind setup of the

people. People from the lower income group are concerned with their basic

health rights and people from the middle and upper income groups are

devoting their time for overall fitness. The demand for a complete health

spa in a city like Dhaka is increasing in a rapid pace. Moreover recent craze

in sports especially in cricket has created a great demand for a fitness

center with all kind of facilities. It has been also found that there is no

proper fitness and treatment center for the sportsmen and women of our

country. There is also a huge vacuum in the leisure spots for the growing

executive class and young generation.

1.3 Activities of the Firm

Club Vincent will provide a complete health spa with facilities like well

equipped gym, sauna, physiotherapy, electronic massage, yoga, diet guide

and primary medical guide, physical training, a health store and side

facilities like grooming center, a restaurant with health foods, pool and


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billiard facility, and other related services.

1.4 Management and Technical Expertise

The Board of Directors of the company consists of persons with long

experience in running different businesses including hotel management,

world renowned restaurant management and gym management in foreign

countries. Additional professionals needed for such a health spa will be

hired from local experts as well as experts from Thailand, India and China.

Halvetia, a renowned fast food store, as a part of them, will manage the

restaurant and person will head the management with 16 years experience

in hotel management in Switzerland.

1.5 Cost of the Project

The estimated cost of the project is calculated Taka 76,00,000. Among

these Taka 2,000,000 for set up, Taka 8,96,000 for equipment, Taka

1,000,000 for marketing expenses for the first 18 months and Taka

2,000,000 for operating expenses for the first 18 months.

1.6 Specialty of the Project

The project has competitive advantages in every aspect compared to the

competitors in the industry because of professional management and

approach, financial plan, modern facilities, location and additional facilities.

The projected operated income of the plan is presented graphically below.


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2.0 MAJOR INFORMATION OF THE PLAN

2.1 Particulars of the Key Personnel and The Company Related With The firm

Firms Location- House No-3, Road No-27, Dhanmondi, Dhaka-1207

Managing Director- Mr. Rashiduddin

Board of Directors- Mr. Asif M Touhid

Mr. Faisal Saeed

Mr. S M Alam Khan

Mr. Asif Uddin Ahmed

Mr. Ahsanul Haque Titu

Bankers- 1.Pubali Bank Limited, 26, Dilkusha Commercial area, Dhaka

2.ANZ Grindlayz Bank, Dhanmondi, Dhaka

Corporate Advisor- Mr. C.R. Mazumdar, FCA

2.2 Project Characteristic

Club Vincent will be primarily concerned with the health and fitness oriented

service like gym, sauna, physiotherapy etc. Moreover it will also try to

develop a image of leisure spot for a particular segment. For diversification

of service and more source of profitability it will incorporate facilities like

grooming center, a fast-food shop, pool and billiard facility and sales center

for health food which will be directly imported from United States. It will also

give dietary advice and primary medical facility for their members.

2.3 Capacity and Technology

Table 7: Rated Capacity

CAPACITY AREA

Gym- Total capacity 30 people at a time on various 2000 sq.ft


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equipmentSauna- Total capacity 10 people at a time 1300 sq.ftRestaurant- Sitting capacity of 16-20 people at a time. 1000 sq.ftGrooming center- 6 people at a time. 1000 sq.ftPool- Three pool tables will be installed 1000 sq.ft

2.3.2 Technology

The equipment for the gymnasium will be modern equipment from USA,

Korea and Taiwan. The sauna facility will be the best in town. The electric

massage equipments will be bought from Singapore. A firm from Delhi,

India will install pool tables. The trainer and physiotherapists will be brought

from Thailand, China and India.

2.7 Major Financial Ratios

-Table 7: Major financial ratios are given below

RATIOS YEAR1 YEAR2Profit Margin -.2347 .2237Return on Assets -.1217 .141Return on Equity -.2177 .206Fixed asset turnover .697 .8714Total Asset Turnover .5187 .6305Debt to Asset .4409 .3215

2.8 Risk Factors

The following are the major risk factors that may affect company

performance-

Change in the habits of customers unfavorably.

Entrance of the new local competitors.

Change in the domestic socio-political environment.

Negative trends in the economic condition.

2.9 Management Perception about Risk Factors

Among the risks outlined above, the management is concerned about the

negative trends in economic condition. though the targeted customer

segment of the firm is from a steady income level group it is important that


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they have enough disposable income in their hand. It is very unlikely that

the consumer habit will go in a opposite trend because of the influence of

satellite television and free flow of information. The firm plans to get a

competitive advantage through international standard service and huge

marketing campaign before any new firm enters the market.

2.10 Project Performance Plan

Table 7: The project performance plan is given below-

Serial No. Particulars Performance Time1. Interior decoration and renovation of building. One month2. Building the sauna facility. Fifteen days3. Buying and setting up the gym equipment. Five Days

4. Setting up the pool tables. Two Days5. Primary marketing One Month6. Incorporate the experts. Fifteen Days7. Arrival of the health products from USA One Month8. Trial operation Three Days9. Commercial operation After two months


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3.0 SERVICES

Club Vincent will be primarily concerned with the health and fitness oriented

service like gym, sauna, physiotherapy etc. Moreover it will also try to

develop a image of leisure spot for a particular segment. For diversification

of service and more source of profitability it will incorporate facilities like

grooming center, a fast-food shop, pool and billiard facility and sales center

for health food which will be directly imported from United States. It will also

give dietary advice and primary medical facility for their members. A detail

description of the facilities and services are given below.

3.1 The Gymnasium

The primary business of Club Vincent is health and fitness. The firm plans

to provide the best possible facilities available for the executives, the young

generation, the sportsman and the health conscious people. The

gymnasium will be equipped with best available equipment. The

gymnasium can give facilities to thirty people at a time. There will be one

and half hour sessions and also special provision. There will be two mullet

station gym for eleven people, best quality warm up and slimming machine

with digital readings and all other necessary equipment essential for sports

man and health conscious people. The gym will be designed with the help

of Chinese athletic coach, national coach of Bangladesh cricket team and

other manuals from USA. The main purpose of this gym is to give health

facilities as well as prepare the next generation for the sports world.

3.2 The Sauna

Sauna and steam bath has become inevitable part of the health and fitness

program and Club Vincent does not want to deprive its customers from the

facilities. The same engineer that developed the sauna facility in Hotel

Sonargaon will develop the sauna facility and it will accommodate 10

people at a time.

3.3 The Physiotherapy and Electric Massage Facility

It was stated before that Club Vincent count sports people of this country as


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one of their major client and will be ready to provide any kind of facility to

them at any cost. It has been seen in the recent survey that there is no

facility of international standard for the sports people of this country. The

facilities that are badly needed by the are physiotherapy and massage. For

physiotherapy one person from Thailand will be always kept with us.

Chinese experts for assistance in physiotherapy will train two student of

Physical Training College for three months. In time we will take help from

the Indian experts and there will be special arrangements with Australian

and German physiotherapist for the national hockey and cricket team of the

country. There will be electric massage equipment from Singapore to help

these facilities run smoothly.

3.4 Diet and Medical Facilities

There will be resident MBBS doctor for this firm. He will regularly keep

basic health records of the members of the club. This will give our members

a feeling of security as well as importance. We also plan to arrange regular

meeting with qualified dietitian for the help our customers. It will also be

helpful for the sportsmen affiliated with the club.

3.5 Health Foods

It has been seen recently that food especially health foods play a vital role

for the professionals as well as the amateurs in case of their fitness. In USA

health foods companies make a big business by the food sold in the GNC

store and gyms of their country. These foods are very necessary for a

complete health and fitness program. Unfortunately no serious steps has

been taken to import these foods to our country and Club Vincent wants to

be pioneer in this. The main two sources of the foods will be imported from

American GNC stores.

3.6 Pool and Billiard Facility

Fitness is mot only health oriented but also mind oriented as a health and

fitness center we firmly believe in it. In western world pool and billiard is

highly recommended for mental relaxation and fitness. It may be mentioned


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here that few months back our national cricket coach also recommended

this for his team. We like to incorporate this service for four reasons. The

mental fitness, recreation for the waiting period, added attraction and a

small but important source or revenue generator. The pool tables will be

installed by Delhi based company.

3.7 Males Grooming Center

Success of a small business largely depends on the diversification of their

service and product. As a grooming center is not totally a out of track

product and very much associated with the look and physical neatness of a

man, so we also try to incorporate this with our business and in the market

survey it came out that this will pay off well. For now the facility will only for

four people at a time.

3.8 Other Facilities

The other facilities that will be given in this center are an exclusive fast food

center run by Halvetia, a small store for health magazine and customized

T-shirts and a small VCD club.


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4.0 MARKETING ANALYSIS

A great care has to be taken in designing marketing strategy for service

industry like Club Vincent. Marketing for a service industry is quite different

from production oriented industry and here the main emphasis will be give

on building the image. Here to design our strategy we went through steps

like industry analysis with competitors analysis, market segmentation and

targeting, pricing of the service and the main focus of this chapter

promotion of the service with a promotional plan for 18 months.

4.1 Industry Analysis

If we look at the recent trends in health and the fitness sector of South Asia

as well as Bangladesh, we will see a big change in the mind setup of the

people. People from the lower income group are concerned with their basic

health rights and people from the middle and upper income groups are

devoting their time for overall fitness. The demand for a complete health

spa in a city like Dhaka is increasing in a rapid pace. Moreover recent craze

in sports especially in cricket has created a great demand for a fitness

center with all kind of facilities. It has been also found that there is no

proper fitness and treatment center for the sportsmen and women of our

country. There is also a huge vacuum in the leisure spots for the growing

executive class and young generation.

At one point of time only Hotel Sonargaon and Hotel Sheraton used to

provide the complete gym facility. It went for a long time with only one

another private sector gym Health and fitness. But in the last two years

three new gym was opened in Gulshan-Baridhara area and only one smallin the Dhanmondi area it is to be mentioned here the Health and Fitness

used to and still operate in the Dhanmondi area. As we did the market

survey we found out that there are another three in the construction phase

in the area like Mirpur, Uttara and Gulshan. If we also look at the slimming

centers that went into operation for the last two years, we will be surprised

at the numbers. All it depicts is a growing need for complete health spa but

unfortunately none of the firms except for Hotel Sonargaon could provide

the health care facility properly.


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4.2 Competitors Analysis

-Table 7: A detailed competitors analysis is given below

ORGANIZATION ADVANTAGES DISADVANTAGES

Hotel Sonargaon Image, Swimming pool, Trainer,Equipment, Other attraction liketennis and massage, Car parking.

Less promotion, high servicecharge, priorities to hotel residents,no innovation.

Hotel Sheraton Image, Swimming pool Less or no promotional activities,small capacity, high charge, nofacility to sports men and women.

Health and Fitness Only club with sauna inDhanmodi

No promotional activity, noswimming pool, poor management.No added attraction.

Life enrichment Modern technology, location,facilities for the sports people.Medical Facilities Available.

Again no kind of promotionalactivities, no added attraction, highcharges, far from some area.

Dhaka Billiard Center Added attraction of billiard,

wonderful location.

This is not at all a full-scale gym. 5

equipments

If we analyze the chart we will see that most of the firms have no

promotional activities and they badly suffer for bad management, lack of

innovation. Moreover there is no full-scale health spa in the area of

Dhanmondi that is the center for growing executive class and sports

people. There are at least three full-fledged cricket grounds in this area.

More over the other gyms suffer for the lack of added attraction. There is no

physiotherapy facility in any of the gym.

4.3 Target Market

We have segmented and selected our market with great care. The

segmentation was done on the basis of income, profession, interest in

sports and fitness, psychological upbringing etc. After detail analysis we

have selected four groups as our target market-

The health conscious people of the area of Dhanmondi and Lalmatia.

Especially people from the growing apartments in this area will be major

customers.

The growing executive class of the Dhaka city.

The young generation that spent their leisure time in various area of

Dhanmondi.

The sports people. This is a area where we will put great emphasis. The


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20 teams of the premier division cricket league will be our major interest.

And all kind of necessary steps will be taken to ensure their membership.

Also other cricket player and those who are affiliated with various other

sports will be our major target.

Models. The trend and craze of modeling and show biz is very high and

health spa is an unavoidable part of a successful model.


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5.0 MARKETING STRATEGIES

5.1 Basic Marketing Strategies

Until recently and still now service firm service firms specially health spa

lagged behind the manufacturing firms in our country. Furthermore service

businesses are more difficult to manage using a traditional marketing

approach. As the marketing survey among the current user of health clubs

has shown there is problems with the marketing of the firms. According to

the survey Vincent has determined its basic marketing strategies keeping in

mind the intangibility, inseparability and the variability of their service. First

of all we would like to clear the gaps of the health service providers and

their customers. These gaps are-

Gap between consumer expectation and management perception-

Management does not always perceive what customers want which Club

Vincent wants to be free from.

Gap between management perception and service quality

specification- Management might correctly perceive the customers want

but not set a specified performance standard.

Gap between service quality specifications and service delivery- The

personnel might be poorly trained or over worked and incapable or

unwilling to meet the standard. Or they may be held to conflicting standards

such as taking time to listen to customers and serving them fast.

Gap between service delivery and external communication- Consumer

expectations are effected by statements made by company representatives

and ads.

More over in the market survey the target market identified five major

categories of quality that they want from this firm and which our firm is

determined to fulfill and market. These are-

Reliability-The ability to perform the promised service accurately and

dependably.


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Responsiveness- The willingness to help customers and to provide

prompt services.

Assurance-The knowledge and courtesy of employ and their ability toconvey trust and confidence.

Empathy-The provision for caring individualized attention to customers.

Tangibles-The appearance of physical facilities, equipment, personnel and

communication materials.

Beside these the firm on its own will try to follow the following trends of

successful service industry-

A strategic concept of customer obsession.

Top managements commitment to quality.

The setting of high standards.

Systems for monitoring service performance.

Systems for satisfying complaining customers.

Satisfying the employees as well as customers.

5.2 Pricing

The main strategy of the pricing of the firm is to provide high quality with

medium price thus maximizing sales. Though their will be various options

for payment for services in this firm the main method that will beemphasized is yearly membership. The strategy is depicted below-


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The various payment methods is given below-

Yearly membership-Taka 15,000

Half yearly membership- Taka 9,000

Use and pay- Taka 50 for half an hour of gym and Taka 50 for half an hour

sauna. Use and pay user will have to pay for pool and billiard facility and

they wont get discount for grooming and other facility.

Players option- For any division league player the yearly membership will

be taka 7,000 for one year and taka 5,000 for half year.

Others-The usage fee for pool and billiard table will be taka 50 per game

for the nonmembers and taka 25 for the members. For the grooming center

the standard price list of centers like Hairobics and Cherokee will be used.

Halvetia will run the first food center and they will charge their usual price.

For the health foods and other commodities that will be sold in the center

will be priced with 20% markup with their total cost. It has been seen even

after that the rate will be lower than the market price by 10%.

5.3 Promotion and Advertising

The Board of Directors have detected promotion as the main competitive

tool and wants to emphasize on it a lot. For that reason there will be a huge

budget allocated in this sector and this investment is very much justified. In

promotion of a service industry, the main effective tools are personal selling

and promoting people with image. These are the two sectors along with

other where the promotional activities will concentrate.

5.3.1 Personal selling

The responsibility of personal selling will be directly on the directors and

few very well selected people. But initially the directors will carry the

responsibility. There are two customer segments that we want to reach

through the personal selling. Firstly the executives of MNCs, local

companys and other high paid professional. First we want to use our

personal contact and later use these contacts to reach others. The directors


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will personally visit the clients, communicate the services and facilities that

will be provided and give them a gift coupon of taka 200 that they can

exercise in Club Vincent. This coupon will cover one day free use of gym,

sauna, pool and taka 50 worth of any other facilities. After that we will try to

sell the yearly membership to these people. In the mean time we will

contact the coaches and captains of the club of the division cricket leagues,

We will also contact the director of the clubs. We will communicate our idea

and give the coaches membership of the club with a nominal token fee in

exchange of his commitment to communicate our massage to his player

and motivate them to join the club. After initial contact we will arrange one-

day free tour for the players of each club serial in the club and demonstrate

our facilities to this potential client. The points like Thai physiotherapist and

time to time foreign renowned consultants will be the main point of

emphasis.

5.3.2 Promotion

The main points that will be emphasized are discussed previously. And we

like to incorporate the best available people within our budget to convey our

massage. In the three years marketing plan the sports people will get the

highest emphasis and the executives and models will be treated as another

different group. Both the programs will cover the general members and the

young people though the firms definitely have separate plan for them.

For the sports people the firm plan to keep a close tie with the national

team coaches, specially cricket,, It is to be mentioned here in case of

service designing, the national coach will be cosulted and best efforts will

be given to follow his advice in the selection of physio and trainers. If not

all. the major national heros will be the spoksepersons for this firm, It is to

be mentioned here the national team player will get a free membership of

the club. In the first year we will try to bring two world reknowned figure to

speak for the necessity of fitness and the facilities of this club.They will both

come for a two days visit to the country. The club recently have one indian

national cricketer and famous coach Boby Simpson in mind as he is

currently residing in India. After three months we plan to bring Danis Lily for

a three day fast bowling training program for the young and under 19


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national team where he will speak for physical fitness and for the club. One

of our director Mr.Khaled Hassan Tito will arrange these visits. In

subsequent years we also plan to make similar arrangements for other

teams. Another marketing plan we like to take that sponsor a foreign physio

during the World Cup Tour of our National Team.

For the models and the general consumers, the firm plan to bring the

famous Indian model Milind Soman for one day visit, where he will talk to

the club members about the physical fitness and appearance. This will be

the only such program in the first year though the firm plan to take more in

the subsequent years.

5.4 Advirtising

The firm will mainly rely on ads in newspaper and magazines, billboards in

the sports grounds and few selected areas. The other facilities specially the

grooming falility will be advirtised heavily in the newspaper. Television ads

will be very nominal as it has been found that there is little impact of

television ads for this industry. But the firm will look for publicity for the

various promotional plans.


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6.0 FINANCIAL PLAN

6 .1 SOURCES OF CAPITAL

Equity Capital: Tk 42,00,000 has been collected from the equity source

(each owner has contributed Tk 7,00,000)

Debt Capital: Tk 34,00,000 has been borrowed as long term loan from

Pubali Bank. This long-term loan has been collected from Pubali bank at

the interest rate of 15.5%.

The reason of taking long term bank loan:

Inability to issue debentures, Absence of specialized financial

intermediaries to finance small ventures, Convenience, Speed,

Confidentiality, Flexibility, Access to funding.

In the preparation of the financial statements the following assumptions

have been made:

It is assumed that present stable political and economic environment will

continue.

Financial projections are made under the historical cost convention based

on generally accepted accounting principle.

For projecting financial transactions relevent international accounting

standards together with the relevent laws and rules of the country are

followed.

Depreciation on fixec asset is calculated on the straight line method at the

rate of five years.

Growth in sales is calculated on the basis of reasonable forcast.

The long term loan of Tk 32,00,000 has been borrowed to be paid back

within ten years time at twenty installments.


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Table 7: Weighted-Average Cost of Capital

Cost (after tax @ 6%) Weights Weighted CostDebt 9.5% 44.74% 4.25%Equity 14%1 55.26% 7.74%

Weighted average cost of capital 11.99%

Financial leverage impact of debt capital on the profit is shown on the

following table. This table also incorporates the consequence of forecasted

sales fluctuation on profits.

Table 7: Financial Leverage

100% Capital 44.74% Debt + 55.26% Equity Capital

Optimistic+20%

Expected Pessimistic-20%

Optimistic+20%

Expected Pessimistic-20%

Fluctuation of RevenuesSalesrevenues

4800000 4000000 3200000 4800000 4000000 3200000

Total cost 2458000 2458000 2458000 2458000 2458000 2458000Earning beforeinterest andtax

2342000 1542000 742000 2342000 1542000 742000

Less interest 1662000 862000 62000Less tax 140520 92520 44520 99720 51720 3720Net profit aftertaxes

2201480 1449480 697480 1562280 810280 58280

Fluctuation ofprofits

51.88067 -51.8807 92.80742 -92.8074

Table 7: Startup Fund requirement

Total fundEquity

Debt [@15.5%]Tk 42,00,000Tk 34,00,000

Cash 119700Equipment 2590300Marketing 1000000Salary 1140000

Interior decoration 2000000Rent, utilities 480000Miscellaneous supplies 10000Inventory 50000Office supplies 10000Insurance 200000Total = 7600000

Income Statement

Health Spa

1 Cost of equity has been held at 14% that is the interest of government bond with 8 years maturity period.


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Consolidated Income Statement

For the year ended December 31

Net sales

1999

32,00,000

2000

40,00,000

2001

45,00,000Operating expenses

Advertising expensesSales salaries expensesDepreciation expensesRentUtilitiesMiscellaneous expensesTotal operating expenses

General and administrative expensesOffice salaries expensesOffice supplies expenses

Insurance expensesDepreciation expenses, Office equip.Total general and admin. Expenses

10000001020000

22506024000024000010000

2735060

12000010000

200000293000623000

2,50,00010,20,000

2,25,0602,40,0002,40,000

10,00019,85,060

1,20,00010,000

50,0002,93,0004,73,000

2,50,00010,20,000

2,25,0602,40,0002,40,000

10,00019,85,060

1,20,00020,000

50,0002,93,0004,83,000

Operating IncomeNon operating Income

Less Loan repayment

(158060)87,000

(6,80,000)

15,41,94090,000

(6,80,000)

20,41,940106,600

(6,80,000)Income before taxes

Income taxes(7,51,060)

09,51,940(57,116)

14,68,540(88,087)

Net income (7,51,060) 8,94,824 13,80,453


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Balance Sheet

AssetsCurrent assets

CashInventoryPrepaid RentMiscellaneous suppliesOffice suppliesPrepaid Insurance expenseMarketable securities and depositsTotal current asset

Plant and equipmentLess accumulated depreciation

Total asset

LiabilitiesLong term liabilitiesBank Loan

Total liabilitiesOwners Equity

Rashid Uddin, CapitalAsif U. Ahmed, CapitalAsif M. Touhid, CapitalFaisal Syeed, CapitalS. M. Alam Khan, CapitalAhsanul Haque Titu, CapitalRetained earnings (deficit)

Total owners equity

Total Liability and owners equity

Jan 01, 1999

10,09,70050,00060,00010,00010,000

2,00,00016,70,00030,09,70045,90,300

076,00,000

34,00,00034,00,000

7,00,0007,00,0007,00,0007,00,0007,00,0007,00,000

042,00,000

76,00,000

Dec 31, 1999

2,41,00025,00020,0005,0005,000

50,00016,87,00020,33,00045,90,300

4,54,36061,68,940

27,20,00027,20,000

7,00,0007,00,0007,00,0007,00,0007,00,0007,00,000

(7,51,060)34,48,940

61,68,940

Dec 31, 2000

5,47,18430,00020,0007,5007,500

50,00020,00,00026,62,18445,90,300

9,08,72063,43,764

20,40,00020,40,000

7,00,0007,00,0007,00,0007,00,0007,00,0007,00,000

1,43,76443,43,764

63,43,764


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Cash Flow Statement

Cash flows from operating activities:

Net incomeAdjustments to determine cash flow fromoperating activities:Add depreciation

Decrease in inventoryDecrease in prepaid rentDecrease in Misc. SuppliesDecrease in office suppliesDecrease in prepaid insurance expenseIncrease in marketable securities and

deposits

Net cash flow from operating activities

Adjustment to determine cash flow frominvesting activities:

Decrease in long term liabilitiesNet cash flow from investing activities

Net (decrease) in cash flows

(7,51,060)

4,54,360

25,00040,0005,0005,000

150,000

(17,000)

(88,700)

(6,80,000)(6,80,000)

(7,68,700)

Table 8: Major financial ratios are given below

RATIOS YEAR1 YEAR2Profit Margin -23.47% 22.37%Return on Assets -12.17% 14.1%Return on Equity -21.77% 20.6%Fixed asset turnover 69.7% 87.14%Total Asset Turnover 51.87% 63.05%Debt to Asset 44.09% 32.15%


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7.0 HUMAN RESOURCES PLAN

7.1 ORGANIZING

An organization structure is effective if it facilitates the contribution of

individuals in the attainment of enterprise objective. The application of the

principle of unity implies of course the existence of formulated and

understood enterprise objective. As the companys objective is to make

profit over a period of time, the organization pattern that will help to

accomplish this conforms to the principle of unity of objective.

In looking organizing as a process several fundamental inputs must beconsidered. In the first place the structure must reflect objectives and plans

because enterprise objectives derive from these. In the second place the

structure must reflect the authority available to enterprise managers. In the

third place organization structure like any plan must reflects its

environment. Fourthly the organization must be staffed with people.

Obviously the activity groupings and authority provisions of an organization

structure must take into account peoples limitations and customs. The

internal management of this company is developed keeping in the above-

mentioned matters into consideration.

7.2 MANAGEMENT

The management team will consist of board of directors, managing director

and the office manager. Among them only the office manager will be

involved with the operation on a day to day basis.

7.2.1 Board of Directors

Board of directors will consist of the six investing members. As this is a

small business the board of director will have additional responsibilities like

marketing plan implementation, image development, fund management and

operation management with their regular duties. They have their weekly

meeting to review, monitor and control the performance of the business.


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7.2.2 Managing Director

One of the board members will be selected as the managing director with

the full consent of other members. He will full in charge of any

contingency and implementation of the decisions of the board of directors

through the office managers. He will also be responsible to see that all the

marketing objectives and the commitments to the customers are properly

fulfilled. Moreover, he will also be responsible to inform the board of

directors all the relevant information about the business performance,

present stand and the need of the business. He will guide the office

mangers time to time in performing his duties and maintaining the

committed quality.

7.2.3 Office Manager

As a paid employee he will be solely responsible of running the daily

operations. His responsibility will include managing the overall operation,

meeting the buyers, controlling all units in case of extra ordinary situation,

deciding on petty cash disbursement. He will be only liable to the

managing director for his operation. And report to him on weekly basis.

Another major responsibility of him is to maintain the accounts of the

organization, as no other person will be appointed for this purpose. He willbe aided with modern computer and software facilities for his operation.

He will consult the managing director in any case of extraordinary

situation.

7.3 Technical staff

There will be 17 employees employed of full-time/part-time basis to operate

the health spa. Job description of these employees follows-

7.3.1 Trainer

Head trainer will be appointed from Thailand for a three-year contract. The

organization will utilize the economic recession of Thailand to take

advantage in salary payment. He will be trained physiotherapist with the

responsibility of designing all the training programs, providing

physiotherapy facilities to the sports people and train two other assistant

in this period. He will also have secondary responsibilities to look after the

equipment so that they are properly used and maintained. He will inform


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the office managers about his operation.

7.3.2 Assistant trainers

His assistants will be two locals who are ex-body builders or graduates

from Physical Training Institute with stout figure. Their responsibilities will

include train, guide and assist the clients on how to exercise for better

health. They will be required to sign a five-year continuos service contract

with the firm. The head trainer will train them and the management has a

plan to train them abroad depending on their performance.

7.3.3 Attendant

Eight attendants will be appointed for miscellaneous need of the clients.

They will look after the games and equipment of the firm. One of them will

be responsible to maintain store. They will be trained primarily on

maintaining the equipment and other facilities. They will work on two shifts

of four on each shift. They will work under the office manager

7.3.4 Doctor

Two fully MBBS graduate will be appointed for regular health care of the

clients. They will also be responsible for keeping the client health record,

giving health advise and also helping physiotherapy. They will be givenproper training on database management and report generation. They will

have to sign a three-year service contract with the firm. They will report to

the office manager.

7.3.5 Barber

Four barbers will be appointed from recognized grooming centers. They

will be responsible for providing the grooming facility. They will report to

the office manager.

7.4 Training and development

The management has a development plan for the employees emphasizing

on the manners and etiquette. Management believes that it will create

motivation for the employees as well as shorten the gap between

expectation and provided service. The whole training facilities will be

designed to meet the marketing need of the organization. Training

facilities will include training by the foreign trainers and well as overseas

training.


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ANNEX 1

Gym Equipment Cost Schedule

Equipment Type Price per unit Quantity required TotalRunner 6300 5 31500Cycle 8800 5 44000Multi station 130000 2 260000Cycle Better 24800 5 124000Multi station small 85000 2 170000Bench Press 27000 2 54000Rowing 6800 2 13600Ski Walker 8800 2 17600Stepper 3800 5 19000

Walker 12800 5 64000Jumper 3000 3 9000Power Ride 6000 2 12000Thigh shaper 1800 2 3600AB crunch 3200 5 16000Massage equipment 60000 1 60000

Total cost = 8,98,300


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Office Equipment Cost Schedule

Equipment Type Price per unit Quantity required Total

Furniture 50000 - 50000Locker 1500 25 37500Decoration material 100000 - 100000Computer 25000 2 50000Security system 100000 1 100000Shower equipment 6500 5 32500Basin equipment 4000 5 20000Toilet equipment 6000 5 35000Gizer 30000 1 30000Television 20000 4 80000Music system 120000 1 120000Generator 150000 1 150000

Air Conditioner 300000 2 600000Office Supplies 50000 - 50000Cash registrar 10000 1 10000


Game Room Equipment Cost Schedule

Equipment Type Price per unit Quantity required TotalPool Table 35,000 2 70000Dart Board 1,000 5 5000Video games 35,000 2 70000Table Football 10,000 2 20000



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Mens Grooming Center Equipment Cost Schedule

Equipment Type Price per unit Quantity required Total

Armchair 4000 4 16000Decoration Material 30000 - 30000Barber tool set 1500 4 6000Skin care tool set 5000 2 10000

Total cost = 62,000

Depreciation Schedule2

Item Cost Year 1 Year 2 Year 3 Year 4 Year 5Gym equipment 8,98,300 179660 179660 179660 179660 179660

Game equipment 1,65,000 33000 33000 33000 33000 33000

Grooming equip. 62,000 12400 12400 12400 12400 12400Total depreciation

for operating

11,25,300 225060 225060 225060 225060 225060

Office equipment 14,65,000 293000 293000 293000 293000 293000

Human Resources Salary Schedule

Work type Salary per month Required number Total [12 months]Manager 10,000 1 120000Head trainer 25,000 1 300000

Trainer 6,000 2 144000Barber 5,000 4 240000Doctor 5,000 2 120000Attendant 2,000 6 144000Doorkeeper 1,500 2 36000Janitor 1,500 2 36000


2 Five year straight line depreciation calculation


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ANNEX 2

Business Location


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Perspective plan (Exterior)


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Perspective Plan (Interior)


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ANNEX 3

Questionnaire for Market Survey

Survey Data

1. What is the first word that comes to your mind when you hear the followings?

Model

_____________

Health

_____________

Swimming pool

_____________

Sauna

_____________

Balanced diet _____________

Yoga _____________

Smart _____________

Gifts _____________

Sports _____________

Dhanmondi _____________


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2. What are the elements that make a person look smart?

Manners Dress up Physical beauty Hair cut

Macho image It is god gifted Money Others

[pls. specify..

.]

3. Which advertisement will catch your eye most?

In newspapers In billboards In magazines In neon

signs

4. How do you judge the quality of a service?

Consult friends Use personally Read a review Talk to users

Others [pls. specify.

..]

5. How do you spend your free time?

Indoor games Outdoor games Chat with friends Stay in

home/TV

Exercise Outdoor activities Go to club Others

[pls. specify....

]

6. Why would you like to go to a gym?

Exercise Better health Status Time pass

New craze Build muscles Meet friends Others

[pls. specify...

.]

7. Do you already use any gym? if yes where?

Yes [in ] No

8. When would you prefer to go to a gym?

Early morning Morning Noon Afternoon Night

9. How often do you think one should use the gym?

7 days a week 4-6 days a week 3 days a week 1/2 days week

10. What services would you want from a modern gymnasium?

Equipment Trainer Doctor Shower

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Sauna Yoga Music

Television

Magazine Massage Toilet Locker

Exclusivity Food St. Game room Others

[pls. specify........

.]

11. How much are you willing to spend annually for a gym with all facilities

mentioned in question 10?

up to Tk. 5000 up to Tk. 10000 up to Tk. 15000 up to Tk.

20000

12. Which form of payment system would you like?

Annually Monthly Weekly Use and pay

(daily)

13. How would you feel if both male and female use the gym at the same time?

Hate it! Uncomfortable No difference Comfortable

14. How would you like to use a gym?

Personally With family

15. Please complete the following sentences:

I like the music of

___________________________________________________

My favorite film star is _____________________________________________

I feel more comfortable in _________________________________environment.

I think wrestling and football are

_______________________________________

I prefer to go to ___________________________________________

restaurant.

I buy most of my cloths from ___________________________________ market.

Things that I buy for myself are actually paid by __________________________

Personal Data [optional]

My name is ____________________________________________________

[m/f]

I live in _______________________ area. I often come near Dhanmondi area [Y/N]

36


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Age: 12 to 18 19 to 25 26 to 35 36 to 45 46 +

Occupation: Student Business Service Others

[pls. specify..

...]

Income per month: Below Tk. 5000 Tk. 5000 to 10000

Tk. 10000 to 20000 Tk. 20000 to

30000

Tk. 30000 +

37


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Sampling Schedule

Category Number Foreigners 20

English medium students

Boys

Girls

30

20Bangla Medium

Boys

Girls

20

10University

IBA

NSU

IUB

DU

20

20

20

20Executives

Male

Female

30

20Faculty 10

Business Plan for a Health Spa

Documents