The goal of the project is to open a mini-karting track in the open air with a track length of 300 meters in a city with a population of 500,000 people. The karting track will be opened on an empty paved area of one of the city parks and will operate during the warm season, focusing on customers of attractions located in the neighborhood.
Investments in the opening will amount to 1,701,000 rubles. Investment costs for the opening of the karting track are calculated based on the minimum required budget. The payback period of investments, given the start of sales at the beginning of the warm season, will occur in the second season of operation.
|KEY FINANCIAL INDICATORS OF THE PROJECT||MEANING|
|Discount rate, %||17|
|Net present value (NPV), rub.||558 999|
|Net profit of the project*, rub.||128 678|
|Return on sales, %||7.54|
|Payback period (PP), months||eighteen|
|Discounted payback period (DPP), months||25|
*with an average attendance of the karting track 20 people per day and an average bill of 400 rubles.
2.Description of the company
The goal of the project is to open a mini-karting track in the open air in one of the parks of the city with a population of 500,000 people. The karting track will be opened on an empty paved area left from the placement of other attractions. The karting track will operate during the warm season (from early April to late October). The clients of the karting track will be the park’s vacationers and visitors to the attractions located in the neighborhood. Due to the small area at its disposal (about 2 thousand square meters), the karting track does not pretend to be large and hold sports competitions: the length of the track will be only 300 meters, which is a small distance by the standards of karting tracks. The main service of the karting track will be the rental of karts for running races among park visitors.
The karting track will be managed by an individual entrepreneur who will be directly involved in the daily work of the karting track: organize sales, instruct customers, issue equipment. Also, track staff will be involved in the work, who monitors safety during races and a mechanic who repairs and maintains karts. The simplified taxation system (USN 6%) will be chosen as a form of taxation.
3.Description of services
The main services of the karting track will be the rental of karts for races lasting 10-30 minutes. The price for rental services will depend on the age of customers and the day of visiting the karting track. As additional services, the possibility of renting a track for corporate races will be available. More details about services and prices – in Table. one.
Table 1. List of services
|NO.||NAME||SERVICE DESCRIPTION||COST, RUB.|
|one||10 minutes, child ticket. Weekdays||Rent a map, check-in 10 minutes. Mon-Fri. Children under 12||300|
|2||10 minutes, child ticket. Weekend||Rent a map, check-in 10 minutes. Sat-Sun, holidays. Children under 12||450|
|3||10 minutes, adult ticket. Weekdays||Rent a map, check-in 10 minutes. Mon-Fri. adults||350|
|4||10 minutes, adult ticket. Weekend||Rent a map, check-in 10 minutes. Sat-Sun, holidays. adults||450|
|5||30 minutes, child ticket. Weekdays||Rent a map, check-in 30 minutes. Mon.-Fri. Children under 12||700|
|6||30 minutes, child ticket. Weekend||Rent a map, check-in 30 minutes. Sat-Sun, holidays. Children under 12||1000|
|7||30 minutes, adult ticket. Weekdays||Rent a map, check-in 30 minutes. Mon-Fri. adults||850|
|eight||30 minutes, adult ticket. Weekend||Rent a map, check-in 30 minutes. Sat-Sun, holidays. adults||1100|
|nine||Check-in for the birthday boy||Check-in on the birthday, one day before the birthday, on the next day day after birthday (upon presentation of a supporting document)||30% discount|
|ten||Organization of corporate events and celebrations||Holding corporate events, renting a track for races||negotiable|
4.Sales and marketing
Due to the fact that the karting track will be located near attractions intended for both children and adults, it will be appropriate to use different types of karts. Adult customers will be offered karts with a 6.5 hp motor, children – children’s karts with a power of 3-5.5 hp. Based on the experience of other small karting tracks in the country, the so-called tandem karts, that is, double karts, will also be used. Thus, when selecting a fleet, all age groups of pilots will be taken into account. At its core, the karting track will be a family format institution.
To attract customers, the karting center will use outdoor advertising methods (signboards, signs in the park, posters, etc.). Also, information about the karting track will be posted on the park’s website and in the created group on the social network, where news, photo essays, posts about karting, prices, work schedule, and more will be posted. Working with clients in social networks does not require financial investments, which is especially important due to the seasonal nature of the business, and may be the responsibility of karting track employees. Demand will be stimulated by holding contests of reposts in social networks with a drawing of season tickets for free admission, quizzes, time trials during the holidays / at the opening of the season, etc.
The karting track will operate from the beginning of April to the end of October. The opening date of the season will directly depend on weather conditions. Working hours: daily from 10:00 to 19:00. Opening hours may vary due to weather conditions and park attendance.
A 2,000-square-meter area will be used to open the karting track. meters in the city park. The area will require partial repair of the asphalt pavement. Together with the improvement of the route, the creation of curbs, protective devices (car tires) and a small administration area, the cost of the work will cost 750 thousand rubles. In addition, you will need to purchase 6 good quality used karts, 2 new tandem karts, as well as other equipment.
Table 2 Equipment Costs
|NO.||NAME||PRICE, RUB.||QUANTITY, PCS.||COST, RUB.|
|one||Children’s cards||70 000||3||210 000|
|2||DINO LEISURE Kart outdoor 200||100,000||3||300 000|
|3||Kart double-160||78 000||2||156 000|
|4||Equipment for visitors||6000||20||120 000|
|5||Advertising sign, production of banners||50,000||one||50,000|
The cost of equipment does not include the cost of delivery from other cities of the country – it will be about 25,000 thousand rubles. To ensure the operation of the karting track, you will need to hire two employees of the track and an auto mechanic. The salary budget, taking into account deductions, will be at least 70 thousand rubles. In addition, in the main period, it will be necessary to invest in expenditure items the cost of renting a land plot, the cost of purchasing fuel and lubricants and broken parts for karts, and the cost of dry cleaning clothes.
With an attendance of 20 people per day and an average check of 400 rubles. for the season, the karting track will be able to generate income in the amount of 1,700,000 rubles. Taking into account fixed and variable costs and tax deductions, the profit can reach 128,000 rubles. per month. With such indicators, the karting track will fully pay for itself in the second season of operation.
6. Organizational plan
The opening of the karting track will require the implementation of several stages, including the registration of an individual entrepreneur, the conclusion of a lease agreement for a land plot, the creation of a track and landscaping, the purchase of equipment, and the hiring of personnel. The most favorable time for opening will be the beginning of the warm season, so the procedures preceding the opening should begin as early as January-February. At the initial stage, the responsibility of the administrator of the karting track will be taken over by an individual entrepreneur. In his submission will be track workers and a mechanic.
7. Financial plan
Starting investments in the opening of the karting track will amount to 1.7 million rubles. Cost items are presented in Table. 3. Indicators for planned revenue, profits and costs are given in Appendix 1 of this business plan.
Table 3. Investment costs
|NO.||COST ITEM||AMOUNT, RUB.|
|Investments in real estate|
|one||Asphalt repair, track creation||750 000|
|2||Purchase of equipment||866 000|
|4||Card shipping costs||25 000|
8. Evaluation of the effectiveness of the project
The performance indicators of the project, calculated for a three-year period of operation of the karting track, are presented in Table. 4.
Table 4. Project performance indicators
|one||Discount rate, %||17|
|2||Net present value (NPV), rub.||558 999|
|3||Net profit of the project*, rub.||128 678|
|4||Return on sales, %||7.54|
|5||Payback period (PP), months||eighteen|
|6||Discounted payback period (DPP), ess.||25|
*with an average attendance of the karting track 20 people per day and an average bill of 400 rubles.
9.Risks and warranties
The advantages of the planned karting track include a low level of initial costs, as well as an advantageous location. The disadvantages include the small size of the track, the need to work with supported cards due to a limited budget and the high cost of new models, as well as open-air operation, which allows the track to be operated only a few months a year. And if the first factor practically does not affect the level of revenue, then the main risks of the project are associated with the last two (for more details on the risks, see Table 5).
Table 6. Assessment of project risks and measures to prevent their occurrence or their consequences
|NO.||RISK||PROBABILITY OF OCCURRENCE||THE SEVERITY OF THE CONSEQUENCES||PREVENTION MEASURES|
|one||Demand volatility/low margins||average||average||Attracting customers through social networks, low-cost advertising methods, setting different rental prices on weekdays and weekends, searching for corporate customers to cover downtime|
|2||Breakage, failure of one or more cards||average||average||Buying good quality karts, hiring an experienced mechanic, having cash available as an airbag, having spare karts available|
|3||Accident on the track||low||high||Cooperation with the insurance company, conducting safety briefings, receipts from customers|
|4||Costs due to bad weather||average||average||Floating season depending on the duration of comfortable temperature, search for corporate customers to cover costs|
Production plan and main financial indicators of the project in a three-year perspective