Moacsa touristic complex
BUSINESS PLAN
- Draft version November 2007-
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This is a business plan. It does not imply an offering of securities. Table of Contents
1. 1. Executive Summary...... 33 1.1. Objectives ...... 33 1.2. Mission...... 44 1.3. Keys to Success...... 44 2. 2. Company Summary ...... 44 2.1. Company Ownership ...... 44 2.2. Start-up Summary ...... 55 2.3. Project Location...... 66 2.3.1. Romania ...... 66 2.3.2. Covasna county...... 1010 2.3.3. Moacsa township ...... 1111 2.3.4. Our plot of land...... 1515 2.4. The Project...... 1515 3. 3. Services...... 1818 3.1. Service Description...... 1818 3.2. Competitive Comparison ...... 1919 3.3. Sales Literature ...... 2020 3.4. Future Services...... 2020 4. 4. Market Analysis Summary ...... 2020 4.1. Market Segmentation...... 2121 4.2. Target Market Segment Strategy ...... 2222 4.2.1. Market Needs...... 2222 4.2.2. Market Trends...... 2323 4.2.3. Market Growth...... 2323 4.3. Service Business Analysis ...... 2424 4.3.1. Business Participants ...... 2424 4.3.2. Competition and Buying Patterns ...... 2424 4.3.3. Main Competitors ...... 2525 4.4. Statistics ...... 2626 5. 5. Strategy and Implementation Summary...... 2626 5.1. SWOT Analysis ...... 2626 5.1.1. Strengths ...... 2626 5.1.2. Weaknesses ...... 2626 5.1.3. Opportunities...... 2727 5.1.4. Threats...... 2727 5.2. Competitive Edge...... 2727 5.3. Marketing Strategy...... 2727 5.3.1. Positioning Statement ...... 2828 5.3.2. Pricing Strategy...... 2828 5.3.3. Promotion Strategy ...... 2828 5.4. Sales Strategy...... 2929 5.4.1. Sales Forecast...... 2929 6. 6. Web Plan Summary ...... 3131 6.1. Website Marketing Strategy ...... 3131 6.2. Development Requirements...... 3232 7. 7. Management Summary ...... 3333 Table of Contents
7.1. Management Team...... 33 7.2. Personnel Plan...... 34 8. Financial Plan...... 35 8.1. Start-up Funding ...... 35 8.2. Important Assumptions...... 36 8.3. Break-even Analysis ...... 37 8.4. Projected Profit and Loss...... 38 8.5. Projected Cash Flow ...... 41 8.6. Projected Balance Sheet...... 42 8.7. Use of Funds ...... 43 9. Annex...... 44 Moacsa touristic complex
ABOUT CARBON CONSULT SC Carbon Consult SRL offers management consultancy services since 2004. Our offer is aimed especially to the smaller companies, start-ups and entrepreneurs. Our company has significant experience in developing business plans, this area being a strong point in our business offer. We have developed business plans in different industries and in various formats, simple or more complex. The services Carbon Consult offers are: - Development of business plans; - Identification of financing sources; - Monitoring financing sources; - Supplying relevant information about project financing; - Filling in of financing documentation; - Making economic analysis; - Making market studies; - Assisting in developing company strategy; - Writing reports and developing presentations.
For more details you can view our company’s web page at www.carbon- consult.ro or you can contact our staff by email at [email protected].
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DESPRE CARBON CONSULT
SC Carbon Consult SRL oferă servicii de consultanţă în afaceri şi management din anul 2004. Serviciile firmei se adresează în special întreprinderilor mici şi antreprenorilor aflaţi la început de drum. Firma are o bogată experienţă în realizarea de planuri de afaceri, acest domeniu reprezentând un punct forte în relaţia cu clienţii. În cadrul firmei au fost realizate planuri de afaceri din domenii diverse, în formate variate, mai simple sau complexe. Serviciile oferite de Carbon Consult constau în: - Realizarea planurilor de afaceri;
- Identificarea surselor de finanţare;
- Monitorizarea surselor de finanţare;
- Furnizarea de informaţii relevante referitoare la finanţarea proiectelor;
- Completarea documentaţiilor pentru finanţări; - Realizarea de analize economice;
- Realizarea de studii de piaţă;
- Asistenţă în elaborarea strategiilor firmei;
- Realizarea de rapoarte şi prezentări.
Pentru mai multe detalii poate fi consultat ă pagina de internet a firmei www.carbon-consult.ro sau pot fi contacta ţ i reprezenta ţ ii firmei la adresa de email [email protected].
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1. Executive Summary
The company SC Moacsa Touristic Complex SRL is planning to develop a touristic complex in Moacsa village, 20 km from Brasov. Total costs of the project will amount to around 835.000 euro and it will take 18 months to develop. We will offer our customers good quality services, on three different areas: accommodation, dining and entertainment. We will work hard to make our service offer reach excellence, with average prices but outstanding benefits to our customers. Our location in a beautiful but still underdeveloped area from a touristic point of view is one of our keys to success. We will be able to benefit from the beauty of the area, present the rich traditions of the locals and capitalize on the proximity of important cities. We have cautiously forecasted our first year sales to close to 300.000 euro, with a significant increase in subsequent years, reaching over 750.000 euro in the fifth year, with a net profit of over 200.000 euro in that year and a net profit/sales ratio of over 25% in that year.
Highlights
€800,000
€700,000
€600,000
€500,000
€400,000 Sales Gross Margin €300,000 Net Profit €200,000
€100,000
€0
(€100,000) Year1 Year2 Year3 Year4 Year5
1.1. Objectives 1. Open the Moacsa Touristic Complex as a "turn key operation" within 18 months from project approval;
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2. Demonstrate a minimum of 50% occupancy averaged throughout the first year; 3. Increase exposure and gain market share using Internet technology and direct advertising on Romanian and Hungarian markets; 5. Increase off-season use by divesting into various uses for property; 6. Supporting the development of the local economy.
1.2. Mission The Moacsa Touristic Complex's purpose is to establish a profitable and well managed company while at the same time creating an atmosphere of fun and excitement for our guests. We also intend to become a key element in the development of the local community, helping to preserve local traditions and to improve the quality of life of the local population.
1.3. Keys to Success In order to succeed, the new management will strive to achieve the following goals: • Position Moacsa Touristic Complex as the best facility of it's kind in Covasna county; • Build a strong market position among the local patrons and people that can participate in our offering of services; • Maintain sound financial management of the venture.
2. Company Summary
The company that will develop this project is SC Moacsa Touristic Complex SRL. The company was founded in 2007 and is currently located in Bucharest. The company is registered at the National Trade Register Office with the number ______and has the unique registry code ______.
2.1. Company Ownership
Moacsa Touristic Complex SRL has 2 associates:
• Popescu Ioan - 25% of company capital
• Petre Adrian - 75% of company capital
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Future economic perspectives:
•• a field suitable for investments is the fish farming. The waters are rich in trout. There may be arranged trout farms;
•• arrangement of an equitation center;
•• the local administration is willing to cooperate with the potential investors with a view to set up a spa at the spring in Pãdureni called Budos Kut. The climate is temperate -continental, with average temperatures and rainfalls.
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2.3.4. Our plot of land We own a surface of around 12 hectares in the Moacsa village. Around 1 hectare of this surface contains trees (forest), the rest being grass land. At local land prices the total property is currently valued at around 300.000 euro.
2.4. The Project We estimate that it will take around to 18 months to complete the construction, since the project is approved and financed. The total investment will be of around 834.700. euro. This sum is comprised of company start-up costs (4.700 euro), the start-up inventory, short-term assets and some cash (32.500 euro in total) and the long term assets (797.500 euro) that are detailed below. We will build 5 distinct houses of around 200 square meters each. 4 of these houses will be used for accommodating tourists and 1 of them will contain the restaurant, bar and all such spaces. This building will also have a cellar that will be used for storage. Each of the 4 buildings used for accommodation will have 8 double rooms and 1 apartment, with a total capacity of 20 places.
Construction costs:
•• price/square meter - 350 euro
•• total surface - 1000 sq.m.
•• TOTAL construction costs - 350.000 euro
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Furniture and equipment
•• cost/room - 3500 euro; 40 rooms - total cost - 140.000 euro
•• restaurant - 25.000 euro
•• bar - 10.000 euro
•• kitchen - 30.000 euro
•• laundry - 5.000
•• other - 15.000 euro
•• TOTAL furniture&equipment - 225.000 euro
The construction containing the restaurant and bar will have billiards and table tennis equipment. In this location there will also be a conference room.
•• billiards and table tennis equipment - 4.000 euro
•• conference room furniture and equipment - 20.000 euro
•• TOTAL - 24.000 euro
Other necessary long-term assets::
•• a 100-150 sqm construction that will be used as a barn and stable
oo TOTAL Barn cost - 12.000 euro
•• 5 horses and 3 ponies
oo 1500 euro/horse or pony, on average
oo 500 euro/each set of equipment
oo TOTAL - 16.000 euro
•• 5 ATV's
oo 1500 euro/ATV
oo TOTAL - 7.500 euro
•• 3 vehicles - 1 mini-van for transporting goods and 2 vans for transporting employees and tourists
oo mini-van - 15.000 euro
oo van - 10.000 euro
oo SUV - 15.000 euro
oo TOTAL - 40.000 euro
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• sports courts: 1 tennis court, 1 basketball and volleyball court and 1 football court
o tennis court - 20.000 euro each
o basketball and volleyball court - 8.000 euro each
o football court - 25.000 euro
o additional equipment - 3.000 euro
o TOTAL - 56.000 euro
• TOTAL other necessary investment - 131.500 euro
Utilities:
• electricity - current facilities at about 300 meters from our plot of land
o TOTAL cost - 35.000 euro
• sewerage - we will develop our own facilities (septic tank)
o TOTAL cost - 7.000 euro
• water - we will make our own well for fresh water
o TOTAL cost - 5.000 euro
• heat - central heating system working with wood (wooden pellets)
o TOTAL cost - 20.000 euro
• TOTAL utilities - 67.000 euro
TOTAL long term assets: 797.500 euro
According to the Romanian legislation, the rural tourist boarding houses are classified according to a number of flowers (daisies). The number of daisies corresponds to the number of stars of hotels. We aim to develop a 3 daisies location. Minimum legal requirements for this include:
• minimum room surface of 10 sq.m. for rooms with 1 bed and of 123 sq.m. for rooms with 2 beds
• own bathroom for all rooms
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• TV and radio
• fridge
Supplementary to the minimum legal requirements, tourist establishment must achieve a number of points resulted from the evaluation of supplementary criteria. In the case of the 3 stars (daisies) establishment the minimum number of points is 80. There is a list of these criteria and the points that can be awarded for complying with the criteria.
3. Services
We will provide 3 main types of services to our guests:
1. Accommodation
• a total of 32 double rooms and 4 apartments, with total capacity of 80 guests;
• the rooms will be placed in 4 buildings that will have 8 double rooms and 1 apartment each;
2. Dining
• delicious meals can be served in our restaurant, that has a 60 people capacity (15 tables);
• the restaurant will offer a rich menu with local and international dishes;
• next to the restaurant there is a picturesque bar, with local and international drinks;
3. Entertainment
• organizing various activities and offering our clients numerous possibilities to spend their time in a pleasurable manner;
3.1. Service Description 1. Accommodation
• rustic style accommodation in our 32 double rooms and 4 apartments
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o the rooms will be decorated with different themes, with local meaning;
2. Dining
• Romanian and international cuisine (emphasis on Hungarian cuisine)
o we will put emphasis on the fact that many of our recipes are traditional;
o we will use organic products;
o the waiting staff will wear traditional clothing;
3. Entertainment
• horse riding - we will have several horses and ponies, with quality equipment and professional supervision;
• sports - tennis, football, basketball, volleyball - we will build sports courts, of good quality and with good equipment;
• fishing - we will provide all necessary tackle and some basic supervision if necessary;
• ATV & quad driving - we will buy some ATV's and quads that can be used by our guests;
• minigolf;
• paintball;
• billiards, table tennis;
• visiting local sights and cultural interest points;
• video cameras for recording parties and daily activities of our guests who will receive edited DVD's with their stay in our resort.
3.2. Competitive Comparison There are many touristic complexes and rural accommodation offers in Romania and even in Covasna county. They all operate in the same basic market, some of them on specific market niches.
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Market Analysis (Pie)
Local clients Romanian and foreign tourists Special events
4.2. Target Market Segment Strategy Each market segment has specific needs that have to be addressed distinctively. In order to do this in a successful manner we try to understand as much as possible the characteristics of every segment and group.
4.2.1. Market Needs
1. Weekend getaway customers These are local customers (from the Covasna county, mostly from neighboring towns). They need a place to relax in a weekend, or sometimes just for a day, close to their home. They are most likely to become repeat customers if they will like our resort. They need personalized service, great attention and are stimulated by discounts.
2. Regular foreign and Romanian tourists These tourists will form the majority of our customers. They come from all over the country and from other countries also (especially Hungary and Germany). They come to us looking for the traditional experience, for the good, natural and healthy meals. They want to spend quality time with their family and friends, to visit interesting places, to learn about local traditions and generally to interact with a different culture.
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3. Special events Many companies, most of them from the county but also from the rest of the country frequently require a location where they can send their employees for teambuilding activities, training courses and other special events. Also many individuals need a good location for private celebrations (anniversaries, weddings and other special events). They all need a place that can accommodate a large number of people, that has good cooking facilities, beautiful scenery and can provide various quality services.
4.2.2. Market Trends
1. Weekend getaway customers Increasing purchasing power of the population translates in a greater request for relaxation related services. Because of the increasingly stressful professional activities more and more people feel the need to take a day off, to relax with friends and family.
2. Regular foreign and Romanian tourists The increasing purchasing power of the Romanians also means that they travel more, both abroad and in Romania. Foreigners also come to Romania in greater numbers, and this trend is likely to accentuate after Romania's accession to the EU.
3. Special events It is becoming almost a norm for certain companies and certain segments of the population to have their special events in location other than the company headquarters or the peoples' homes. This trend means that the demand for locations such as ours is constantly increasing. We can assume that this tendency will continue in future years. This trend is also associated with a growing demand for new and personalized services.
4.2.3. Market Growth
1. Weekend getaway customers We have assumed that this market segment will remain constant in the next 5 years. While the number of potential customers will remain constant we believe that their preferences will shift towards better quality resorts, in resonance with the increasing purchasing power of the customers.
2. Regular foreign and Romanian tourists
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The total number of tourist, both from Romania and from abroad, is likely to increase significantly in future years. Using available market statistics we have forecasted a 5% yearly increase in this market segment.
3. Special events This market segment is also likely to grow in the next years. It will actually have the most dynamic development. For our forecast we have included a 10% yearly increase of the customers for special events.
4.3. Service Business Analysis The accommodation and tourism services industry is formed of numerous small and medium companies and several large ones. Our industry niche, represented by rural tourist boarding houses has many participants, offering services at different quality standards.
4.3.1. Business Participants There is a rather large number of small companies or individual families offering their services in rural tourist boarding houses. This type of establishment is closest to our type of project. These boarding houses are commonly owned by one person or one family and are situated in places with some interesting characteristics (scenery, balneary, mountain resorts etc).
4.3.2. Competition and Buying Patterns One of the most important factors in this industry is location. Competition analysis is based on location. Therefore, the number of business participants in the industry is relevant only in conjunction with their location. Customers choose one service provider over another based on their desired holiday destination. First they decide where they want to go and then they search for accommodation. Therefore, generally the only relevant competition is the one from the close vicinity, with whom one has to share potential customers. Price is important for customers when choosing their holiday destination, but services are equally important. Usually customers decide on the number of stars they want their hotels or resort to have and then choose between the offers from that range of price/quality. As a result, the most important competitors are those that are in the same area and have the same number of stars (or daisies in the case of rural boarding houses).
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5.1.3. Opportunities
• The area is used as a meeting point for Hungarians from all over the world. Cultural events take place in these occasions;
• Growth of the Romanian economy allows more and more Romanians to travel and spend their holidays in resorts such as ours;
• Tourism is developing in Romania, more foreign tourist come to our country;
5.1.4. Threats
• The apparition of many local competitors. Because of the beauty and many other advantages of the area, it is possible to have more competition in the future. Our plans are to develop a high quality resort and we believe that we will be able to handle competition in a successful manner.
5.2. Competitive Edge The MTC's two competitive advantages are:
• Attention to personalized service. While anyone going to a touristic resort should reasonably expect good service, there are ways of setting yourself apart. This will be done through the unrelenting pursuit of personal attention. The feeling of personal attention, or more accurately defined as a sense of person concern, really adds a positive dimension to the travel experience.
• Uniqueness and beauty of the facility. One unique aspect of MTC is the setting within the Moacsa region, known for its outstanding beauty.
5.3. Marketing Strategy Our marketing strategy is focused on position our resort and services uniquely while focusing on our target market segments. It is important to make our resort know among travel agents and tourist alike. We will use our website and advertising programs to promote our service offer. Carefully designed advertising and promotions will accurately target the spectrum of customers identified above in topic 4.2 - Target Market Strategy. While fun and excitement are the main
Page 27 Moacsa touristic complex draws that bring customers in the door, the value pricing and excellent location are also important factors.
5.3.1. Positioning Statement For the weekend getaway customers who need a place to relax in a weekend, our resort will offer the possibility to relax in a comfortable manner, close to their homes yet feeling like in a holiday. Unlike other resorts in the area we are able to provide all services they need to detach from their professional problems. For the regular tourists, Romanian or foreign, who want to experience a traditional holiday, we offer natural and healthy food, a true experience of the local village. Unlike most competitors we go to great lengths to ensure that our guests live the true traditional experience. For the clients that come to us for special events, who are looking for an appropriate location, we offer a flexible location, with sufficient capacity for most events. We offer more than competition in terms of space, capacity and facilities.
5.3.2. Pricing Strategy We aim do develop a pricing strategy that will make our location accessible to most tourists. Our business has seasonal influences and prices will vary according to the time of the year. However of price range for our rooms will be 30-25 euro, with an average of 25 euro. For the meals we will have a 50-70% mark-up. The daily meals for one person will cost on average 16 euro. Some of our entertainment services will be offered for free to our guests, for other they will be charged. We estimate that on average, our clients will pay for additional services around 60% of their accommodation price. Our prices are not the lowest but they are not high either. We aim to charge prices close to our competitors but differentiate ourselves with the quality of our services.
5.3.3. Promotion Strategy We will promote our business using a variety of means. Most of them are quite obvious channels of "spreading the word" about us:
• tourism trade fairs;
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• contracts with travel agencies;
• internet website;
• direct advertising in publications;
• public relations;
We will also try to find more subtle means of attracting customers. We will offer discounts for referrals, we will be present in internet forums and blogs presenting MTC's qualities, we will develop a network of contacts at different companies that might be interested in having company events in our location and so on. Our offering will be adjusted to the specific needs of our customers. We will personalize our offer according to such specific needs.
5.4. Sales Strategy Moacsa Touristic Complex will sell its rooms directly to repeat customers, as well as via traditional travel agents and through the Internet. All reservations will be handled by the resort manager. Repeat customers will have the privilege of priority reservations during the high season.
5.4.1. Sales Forecast It is important to emphasis the fact that there is a delay of 18 months between the project start and the moment where sales begin. When the business plan is approved and the project will start we will first have to develop the complex and only then we'll be able to receive our guests. This period of 18 months is not covered in this business plan. In this forecast we consider that the first month of the project is the first month when we receive clients. In the sales forecast below the unit sales have the following meaning:
• accommodation - 1 room / 1 night (for 2 persons)
• meals - the meals for 1 person / 1 day
• other services - renting our equipment, taking guided tours and so on
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7.2. Personnel Plan In total we will have 30 employees in the first and second year. In future years, in line with our business development we will hire more employees. We have forecasted that we will have 32 employees in year 3 and 34 employees in year 5. They employees will work in 2 shifts. Some might have a flexible schedule. We will have:
• 1 general manager - he will be in charge of all business aspects - net monthly salary - 700 euro;
• 1 accountant - net monthly salary - 400 euro;
• 2 cooks - net monthly salary - 500 euro each;
• 4 cook assistants - net monthly salary - 250 euro each;
• 2 bartenders - net monthly salary - 250 euro each;
• 5 waiters - net monthly salary - 250 euro each;
• 3 receptionists - net monthly salary - 250 euro each;
• 4 cleaning personnel - net monthly salary - 200 euro each;
• 2 laundry personnel - net monthly salary - 200 euro each;
• 1 general maintenance supervisor - net monthly salary - 300 euro;
• 2 general maintenance employee - net monthly salary - 200 euro each;
• 1 driver/guide- net monthly salary - 250 euro;
• 2 entertainment responsibles - net monthly salary - 250 euro each;
Below we have included some statistics regarding salary levels in the region. The proximity to large towns such as Sf. Gheorghe (10 km.) and Brasov (30 km) means we have access to a large pool of potential personnel
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Personnel Plan Year 1 Year 2 Year 3 Year 4 Year 5 General manager €8,400 €9,000 €10,000 €12,000 €13,000 Accountant €4,800 €5,400 €6,000 €6,500 €7,000 Cook €12,000 €14,400 €15,500 €16,500 €17,000 Cook assistant €12,000 €14,400 €16,000 €17,000 €17,500 Bartender €6,000 €7,200 €7,800 €8,200 €8,500 Waiter €15,000 €18,000 €21,000 €22,000 €23,000 Receptionist €9,000 €10,800 €12,000 €14,500 €15,500 Cleaning personnel €9,600 €12,000 €14,000 €15,000 €17,000 Laundry personnel €4,800 €6,000 €7,000 €7,500 €8,000 General maintenance supervisor €3,600 €3,960 €4,400 €4,800 €5,200 General maintenance €4,800 €6,000 €7,000 €7,500 €8,000 Driver/guide €3,000 €3,600 €4,000 €4,500 €5,000 Entertainment responsible €6,000 €7,200 €8,000 €9,000 €10,000 Total People 30 30 32 32 34
Total Payroll €99,000 €117,960 €132,700 €145,000 €154,700
8. Financial Plan Our financial plan is based on a series of assumptions. We have forecasted our sales and our costs and expenses cautiously, trying not to be too optimistic. Actually we believe our forecasts are presented in a more pessimistic manner, verifying that our business is viable even in such conditions. We have forecasted a slow start in the first year, but with a constant growth of sales. Therefore, after a marginal loss in the first year our business will produce profits of up to 200.000 euro/year by year 5.
8.1. Start-up Funding The start-up funding table below describes why is the funding necessary (start-up expenses and assets) and how it will be raised.
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Start-up Funding Start-up Expenses to Fund €4,700 Start-up Assets to Fund €830,000 Total Funding Required €834,700
Assets Non-cash Assets from Start-up €825,000 Cash Requirements from Start-up €5,000 Additional Cash Raised €0 Cash Balance on Starting Date €5,000 Total Assets €830,000
Liabilities and Capital
Liabilities Current Borrowing €0 Long-term Liabilities €0 Accounts Payable (Outstanding Bills) €0 Other Current Liabilities (interest-free) €0 Total Liabilities €0
Capital
Planned Investment Owner €208,675 Investor €626,025 Additional Investment Requirement €0 Total Planned Investment €834,700
Loss at Start-up (Start-up Expenses) (€4,700) Total Capital €830,000
Total Capital and Liabilities €830,000
Total Funding €834,700
8.2. Important Assumptions The business plan is based on some assumptions. As the project will continue we will amend our forecasts and perhaps change some of these assumptions. For the time being however, we have to rely on some assumptions such as:
• We have assumed that mo major event will occur in the forecasted period that might radically change our business environment;
• We have assumed that the current salary and profit taxes will remain constant throughout the forecasted period;
• VAT has not been taken into consideration.
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