Culture Entertainment Clubs
Culture Entertainment Clubs 2017
1 Executive summary
This report is a feasibility study on culture entertainment clubs in Bhutan. The proposed business will be mainly dealing with providing the entertainment services to people. The services are performing traditional dance, songs and music and even mask dances as well. The services will mainly be availed during the times of special events and occasions such as wedding ceremonies, inauguration ceremonies, and cultural shows, etc.
With the modernization taking place, it is a crucial to preserve culture and traditions which has been passed down from our ancestors.
(i) Justification of the Project: With the increased number in celebrations and occasions held in the country, and fewer number of culture entertainment providers, the proposed business found the urge to setup the business.
(ii) Market Analysis: There is presently lesser number of culture entertainment clubs in Bhutan. Most of the people now are celebrating their birthdays, anniversary, promotion party and its now trending.
(iii) Resources required: The equipment needed for this business are musical instruments such as, fiddle, flute, Dulcimer and Dramyen. It will be easily procured from the local seller who is very much expert in making those musical instruments. The other instruments like guitar, Drum sets, mic and mic stand will be procured from the Indian suppliers mention in detail below.
(iv) Location of the Business: The location of the business should be in the main city, Thimphu, whereby most of the big events are held. The business will have one unit of apartment as a club at which the performances will be done.
(v) Cultural Aspects: The entertainment service provided by the proposed business will fulfill one the pillars of “GNH” which is preservation and promotion of culture. It will not only promote the culture and tradition but will also show the unique identity of Bhutan.
(vi) Implementation of the Project: The implementation of the project will take 12 months including pre-project activities.
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Culture Entertainment Clubs 2017
(vii) Cost Presentation and Financial Analysis:
Fixed Cost Nu. 321,500
Working capital Nu. 138,493
Total Investment Nu. 459,993
Break Even Point (BEP) 413 units
Return On Investment (ROI) 173%
Payback Period 3 year and 1 month
The business achieves more than 173% ROI from its first year of production alone. The business will achieve its breakeven point at 413 units in 3 years and 1 month. It’s payback period will be 1 year and 8 months.
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Culture Entertainment Clubs 2017
Contents 1 Executive summary ...... 1 2 Justification of the project ...... 4 3 Market Analysis...... 5 3.3 Competitiveness of the project ...... 6 Culture oriented ...... 6 Location of the business ...... 6 4 Resource...... 6 4.1 Sources of raw material ...... 6 4.2 Suppliers Details for Modern Musical Instruments ...... 7 5 Man power requirement and organization chart ...... 9 5.1 Specification of services provided by the business ...... 10 6 Project Implementation Schedule ...... 12 7 Financial Analysis ...... 13 7.1 Total Project capital Costs ...... 13 7.2 Working Capital Costs...... 14 7.3 Cost of Production per unit ...... 14 7.4 Human Resource cost ...... 15 7.5 Marketing Cost ...... 15 7.6 Project profit and Loss Statement ...... 16 7.7 Projected Cash flow statement ...... 17 7.8 Projected Balance sheet statement...... 18 8 Financial Ratio analysis ...... 19 8.1 Interest on loan ...... 19 8.2 Break Even Point ...... 19 8.3 Return on Investment ...... 20 8.4 Net Present Value and Internal Rate of Return...... 20 9 Conclusion- Is project feasible ...... 21 10 Reference ...... 21
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Culture Entertainment Clubs 2017
2 Justification of the project The need of the project
One of the pillars of “Gross National Happiness” is a preservation and promotion of culture and tradition. The proposed business will focus on promoting this pillar and showcase the unique tradition and culture.
Happiness is believed to be contributed by the preserving the culture. Developing cultural resilience, which can be understood as the culture’s capacity to maintain and develop cultural identity, knowledge and practices, and able to overcome challenges and difficulties from other norms and ideals. Cultural expression in Bhutan is as unique and sacred as the holy kingdom.
Since there is growth in the number of organizing the events mainly wedding ceremonies, anniversaries, birthday parties, promotion, and other celebrations and occasion. There are only few performing art clubs like, Khuju Luyang, Lhayi Lugar, and Royal Academy for Performing Arts (RAPA), etc. Most of these venues do promote culture and tradition by performing folk dances and mask dances.
The proposed business is unique as it provides band performance as well. It will be the collaboration of traditional folk songs with modern and contemporary musical instruments, which indeed will do a complete value addition.
Competition Analysis
The table mentioned below shows the competitors for this proposed business especially in Thimphu region and Paro.
PERFORMING TROUPE
Sl No. Name of the troupes Location
1 Lha-yee Lugar Performing Arts YDF, Simply Bhutan, Thimphu town
2 Khuju Luyang Changzamtog, Thimphu town
3 Yangchen Lugar Kichu, Paro
4 Tshangyang Dechen Pelter Paro
5 Minjung Luyang Thimphu town
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Culture Entertainment Clubs 2017
6 Phuntsho Luyang Paro
7 Luma Doegar Thimphu town
8 Karma Phunsum Luyang Paro
3 Market Analysis 3.1 Demand vs. supply
There are more than 17 drayangs alone in Thimphu and many other clubs such as Lhayi- lugar, Khuju Luyang, Kala Pingka. Even then it isn’t sufficient for the people residing over here in Thimphu. Thus the proposed business finds the greater demand for this business.
3.2 Pricing and Marketing Strategies
Prices per Unit
Year Performing traditional dances Performing Mask Dances Band Performance
1 5000 8000 10000
2 5000 8000 10000
3 5250 8400 10500
4 5513 8820 11025
5 5788 9261 11576
Note: The service charge has been increased by 5% starting from the third year. The service charge for the each service has been considered upon the market price of the competitors and existing clubs.
Kuju Luyang, one of the competitors is basically the troupe of 12 performing a popular hour- long selection of religious, regional and folk songs and dances, including cham masked dances and songs from Laya and Sakteng, accompanied by live music on the zither, flute, fiddle and dranyen (lute). It charges Nu.5000 per the group performance.
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Culture Entertainment Clubs 2017
Segmentation: The Culture entertainment club’s market would be mainly segmented to the people living in the urban areas mainly because many of the events and ceremonies being organized in urban areas.
Services: By ensuring good dancers and performers and strict adherence to norms and guide- lines regarding culture and tradition, the company can ensure that their services are better than prevalent services in the market.
3.3 Competitiveness of the project
Culture oriented
The business is mainly aimed with promoting the culture and tradition in the country through performing arts and traditional dances which has been passed down from the ancestors of decades.
Location of the business
The business would be located in Changzamtok, Thimphu where majority of the population are settled and also a place where it is the hotspot for tourist to visit, which further increases the scope of the business since it can gain more customers.
4 Resource The resources required for the proposed business are as follows:
Musical Instruments: Piwang (Fiddle), Flute, Dulcimer (yang-chen), Dranmryen are required for this proposed business and these instruments will be purchased from the local dealer who makes such musical instruments.
Costumes/ Dresses: Costumes for Girls includes; kira,wonju, tego, tsholham, jewellery, and Rachu. On the other hand, costumes for boys includes such as gho, tego, tsholham and dhar.
4.1 Sources of raw material The required musical instruments will be purchased from Mr Sangay Wangchuk, a local dealer who makes instruments located at Motithang in Thimphu.
Costumes and accessories for both male and female will be purchased from Balaji shop at Bahu bazaar located in phuentsholing. The cost in this shop is comparatively low and reasonable than usual Bhutanese textile shops.
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4.2 Suppliers Details for Modern Musical Instruments Acoustic Guitar
Supplier: Sattva Musical Instruments Shop
Model: Dxb, Cost: Rs. 15,850
Classifications:AcousticGuitar Size: 41” Inches
Body:Dreadnaught Type: Cut Anymore.
Electric Guitar
Supplier: RK Enterprise, Jeedimetla, Hyderabad
Price: Rs. 21,500
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D Drums - D120B BR Box 1 & 2
Supplier: RK Enterprise, Jeedimetla, Hyderabad
Price: 40,000
Studio Microphone
Supplier: Pankaj Electronics, Loni Ghaziabad Price: Rs.900 / piece
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Mic Stand
Supplier: Electronic De Machine , Delhi Price: Rs.450/piece
5 Man power requirement and organization chart
MANPOWER REQUIREMENT
Monthly Particulars Year 1 Year 2 Year 3 Year 4 Year 5 Salary Manager Cum 1 1 1 1 Musician 8,500 1 Contemporary Musician 5,500 3 3 3 3 3 Traditional Musician 5,000 2 3 3 3 3
Singers 6,000 2 2 2 2 2
Dancers 5,000 6 6 6 6 6
Total 14 15 15 15
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5.1 Specification of services provided by the business The proposed business will deal with the performing arts and its services are as follows.
Traditional dances: A group of people will perform traditional as well as contemporary dances. The dances will include zhungdra, Boedra, and Boedra- Rigsar.
Figure. 1: Girls performing Traditional Dance
Mask Dances: The same group of boys will perform popular mask dances like, Pacham (Dance of Heroes), Durdag cham and Dramitse Ngacham. This popular dance will not only attract the enthusiastic tourist but also the people within the country. Especially for the tourism sector and the mask dance lovers.
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Band Performance: There will be band performance as well, especially for the youngster who loves the modern contemporary music’s. The band will consist of one lead guitarist, acoustic guitarist, drummer and a singer.
Collaboration of Traditional songs and Modern Music: This is the very unique and new service going to be provided which will emphasize on the performance of Traditional songs with new version of music with modern musical instruments.
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6 Project Implementation Schedule PROJECT TIMELINE
2017 Activities 1st Month 2nd Month 3rd Month 4th Month 5th Month
Feasibility study and development of the project proposal
If the project is going to be funded:
Purchase of Machineries and Installation
Purchase of Inventories and Start of Production
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7 Financial Analysis
7.1 Total Project capital Costs COMPONENTS OF PROJECT COST Amount in Nu. Forex. PARTICULARS Domestic Component Total Cost Remarks Component Rent 30,000 Total Cost 30,000 30,000 Plant & Machinery Total
Miscellaneous Fixed Assets: Office Furniture 13,500 Sound Mixer 47,000 Speaker (pair) 17,000 Dancers uniform 64,350 Musical Instruments 122,650 Stationary 6,000 Computer 30,000 Telephone (Fixed line) 3,000 Electrical Fittings 5,000 Total Cost 308,500 308,500 Preliminary Expenses 20,000 20,000
Total Project Startup Cost 358,500
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7.2 Working Capital Costs
Particulars Monthly Yearly Advertising 2,000 24,000
Office Expenses 1,000 12,000
Payroll 55,000 660,000
Rent or Lease 10,000 180,000
Taxes and Licenses 31,393 376,718
Utilities & Telephone 500 6,000
Others: 48,500 582,000
Total 148,393 1,840,718
7.3 Cost of Production per unit
Year 1 Year 2 Year 3 Year 4 Year 5
Total Units 276 304 334 367 404
Cost of Production 1,919,433 2,055,266 2,242,045 2,450,886 2,684,839
Unit Cost of Production 6,954.47 6,769.65 6,713.51 6,671.69 6,644.13
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7.4 Human Resource cost MANPOWER COST
Particulars Monthly Year 1 Year 2 Year 3 Year 4 Year 5
Direct Labor 46,500 558,000 585,900 615,195 645,955 678,252
Salary & Allowances 8,500 102,000 107,100 112,455 118,078 123,982
Total 55,000 660,000 693,000 727,650 764,033 802,234
7.5 Marketing Cost The monthly marketing cost incurred would be Nu.2000 through various media channels such as Television, websites and radios.
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7.6 Project profit and Loss Statement INCOME STATETMENT PROJECTION FOR 5 YEARS
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Revenue 2,208,000 2,428,800 2,805,264 3,240,080 3,742,292
Cost of Goods Sold 570,000 598,500 628,425 659,846 692,839
Gross Profit / (Loss) 1,638,000 1,830,300 2,176,839 2,580,234 3,049,454
Expenses 382,275 399,075 416,715 435,237 454,685
Net Operating Income / (Loss) 1,255,725 1,431,225 1,760,124 2,144,997 2,594,769
30% BIT on NOI 376,718 429,368 528,037 643,499 778,431
Net Income / (Loss) after BIT 879,008 1,001,858 1,232,087 1,501,498 1,816,338
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7.7 Projected Cash flow statement Projected Cash Flow Statement Year 1 Year 2 Year 3 Year 4 Year 5 Beginning Cash
Balance - 436,960 810,494 1,373,713 2,162,907 Accts. Rec. Collections 220,800 242,880 280,526 324,008 374,229
Loan Proceeds 506,893
Sales & Receipts 1,987,200 2,185,920 2,524,738 2,916,072 3,368,063 Other: Total Cash Inflows 2,714,893 2,428,800 2,805,264 3,240,080 3,742,292 Available Cash
Balance 2,714,893 2,865,760 3,615,758 4,613,793 5,905,199
Advertising 24,000 25,200 26,460 27,783 29,172
Office 12,000 12,600 13,230 13,892 14,586
Payroll 660,000 693,000 727,650 764,033 802,234
Rent or Lease 180,000 189,000 198,450 208,373 218,791
Taxes & Licenses 376,718 429,368 528,037 643,499 778,431 Utilities & Telephone 6,000 6,300 6,615 6,946 7,293
Other: 582,000 611,100 641,655 673,738 707,425
Subtotal 1,840,718 1,966,568 2,142,097 2,338,262 2,557,932
Capital Purchases 358,500
Loan Principal 78,716 88,699 99,948 112,624 126,907 Owner's Draw Other:
Subtotal 437,216 88,699 99,948 112,624 126,907 Total Cash
Outflows 2,277,933 2,055,266 2,242,045 2,450,886 2,684,839 Ending Cash
Balance 436,960 810,494 1,373,713 2,162,907 3,220,360
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7.8 Projected Balance sheet statement Projected Balance Sheet For 5 Years Year 1 Year 2 Year 3 Year 4 Year 5
Assets
Cash & Bank 436,960 810,494 1,373,713 2,162,907 3,220,360
Accounts Receivable 220,800 242,880 280,526 324,008 374,229 Inventory
Prepaid Expenses 50,000 Other Current Assets
Total Current Assets 707,760 1,053,374 1,654,239 2,486,915 3,594,590
Net Fixed Assets 262,225 229,950 180,675 131,400 82,125 Other Assets
Total Assets 969,985 1,283,324 1,834,914 2,618,315 3,676,715
Liabilities & Capital
Long-Term Notes Payable 428,178 339,479 239,531 126,907 0 Total Long-Term Liabilities 428,178 339,479 239,531 126,907 0
Total Liabilities 90,978 281,466 602,827 1,116,817 1,860,376
Net Profit 879,008 1,001,858 1,232,087 1,501,498 1,816,338
Total Capital 879,008 1,001,858 1,232,087 1,501,498 1,816,338
Total Liabilities & Capital 969,986 1,283,324 1,834,914 2,618,315 3,676,714
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8 Financial Ratio analysis
8.1 Interest on loan
Year 1 Year 2 Year 3 Year 4 Year 5
Interest 56,591 46,608 35,359 22,683 8,399
Loan Principle 78,716 88,699 99,948 112,624 126,907
Loan Balance 428,178 339,479 239,531 126,907 0
EMI 135,307 135,307 135,307 135,307 135,307
8.2 Break Even Point
BREAK EVEN X BREAK EVEN Y LABEL
295 2,360,000 break even unit =295
UNIT COST = TOTAL SALES/TOTAL UNITS
Total sales Total Units
2,208,000 276 8000
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8.3 Return on Investment
RETURN ON INVESTMENT
Product Year 1 Year 2 Year 3 Year 4 Year 5
Performing traditional dances 73% 82% 99% 117% 139%
Performing Mask Dances 44% 49% 59% 70% 83%
Band Performance 219% 247% 296% 352% 416%
Total ROI 336% 379% 453% 539% 638%
8.4 Net Present Value and Internal Rate of Return
Net Present Value (NPV) 1,682,926
Internal Rate of Return (IRR) 79%
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9 Conclusion- Is project feasible
The project is feasible since:
It is financially viable since less startup capital is required for this business, which amounts to Nu. 4,59,993. There is presently lesser number of culture entertainment clubs in Bhutan. Most of the people now are celebrating their birthdays, anniversary, promotion party and its now trending. People are trending with modern music, thus it’s though this business that the old traditional songs will be brought alive with the collaboration of new modern music sung with traditional songs.
Therefore, this business is very much feasible.
10 Reference
Bhutanese Cultural Profile, An initiative of HACC Multicultural Advisory Service(2014), Published 2012 by: Diversicare PO Box 5199 WEST END Q 4101 Ph 07 3846 1099
Performing Troupe license, Bhutan InfoComm and Media Authority, Retrieved from http://www.bicma.gov.bt/bicmanew/?page_id=758
www.alibaba.com
www.indiamart.com
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