Investment costs in opening a billiard club amount to 2,164,000 rubles. Payback period – 12 months.
The goal of the project is to create a billiard club “Round Ball” in a rented premises in Rostov-on-Don. Positioning as a family holiday establishment with a bar, as well as a sports club for beginners (a qualified instructor is on staff); price segment – medium. The expediency of the project implementation is due to the decrease in the interest of Russians in expensive vacations, in particular in tourist trips, recreation in entertainment centers, spa clubs, etc. Such a decrease in interest is caused by the difficult economic situation in the country, currency fluctuations, etc. In such a situation, consumers tend to switch their attention to more affordable types of recreation. One of the popular ways of entertainment is playing billiards.
Investment costs in the project amount to 2,164,000 rubles. Payback period – 12 months. Project performance indicators are given in Table. one.
Table 1. Integral project payback indicators
|Discount rate (r), %||eight%|
|Discount rate (r-month), %||0.643%|
|Payback period (PP), months||12|
|Discounted payback period (DPP), months||12|
|Net present value (NPV), rub.||12 927 740|
|Return on investment ratio (ARR), %||14.36%|
|Internal rate of return (IRR), %||8.96%|
|Yield Index (PI)||5.97|
1. DESCRIPTION OF THE INDUSTRY AND COMPANY
The branch of the project can be attributed, first of all, to the entertainment industry. According to statistics, entertainment becomes one of the first objects that Russians spend on during a crisis. However, it is necessary to take into account the fact that entertainment remains a vital activity for any person. Thus, it becomes natural to reduce the cost of expensive entertainment – vacations abroad, expensive shopping, vacations in water parks, etc. in favor of more affordable ones – cinema, cafes and, for example, billiards.
Billiards can be regarded both as a way of family recreation or recreation in a company, and as a sport. By combining these two areas, you can significantly increase the target audience of the project.
Club “Round Ball” is located in the Northern residential area of Rostov-on-Don, which is a residential area with a high population density, but the infrastructure is still relatively underdeveloped. The population of the massif is approximately equal to 250 thousand people. or about ¼ of the total population of the city. At the same time, on its territory there are only about five more or less large shopping centers, one cinema with several halls and 6 billiard clubs.
Table 2. Target audience of the project
|No.||Group||Visit purpose||Estimated share in the total volume of CA|
|one||Men, 16-50 years old||Single or joint rest in the evening and on weekends||70%|
|2||Men, 16-30 years old||Learning the basics of the game, individual lessons with an instructor||20%|
|3||Married couples, 27-37 years old, with children||Family holiday||ten%|
The basis for the positioning of the company is the coverage of two segments at once – recreation and sports. For a comfortable stay, it is assumed that there will be a bar with drinks and light snacks, as well as the organization of a comfortable seating area near each table. To teach the basics of the game, there is an experienced instructor on staff who conducts individual lessons.
The room is located on the ground floor of a multi-storey residential building in the center of mass residential development. The entrance is located on the main highway of the microdistrict with high traffic. The entrance group is decorated brightly in order to passively attract the attention of potential visitors.
The club premises consist of the main hall, which houses the gaming tables, recreation areas and a bar, staff quarters, toilets and a kitchen. The kitchen is minimally equipped – for making sandwiches and heating semi-finished products. Recreation areas are a set of upholstered furniture (a sofa, two armchairs and a table with local lighting). Orders are taken by the waiter.
It is supposed to have 5 tables for Russian billiards and one for pool. Tables are used exclusively professional with a basis from a natural stone. This will ensure the high quality of the game, durability, and will also positively affect the image of the institution. The average cost of such a table from the supplier in question is 156 thousand rubles per table for the Russian pyramid and 86 thousand for the American pool; is the market average. A set of equipment for one table (cues, cars, balls, bowls, shelves for balls, etc.) costs 38,000 rubles.
The decoration of the premises is carried out by a professional designer in the style of a European country house with stone and wood trim. The price category of drinks and snacks in the bar is medium and premium. Drinks: hot (tea, coffee), soft drinks, beer. A license to operate a bar is not required, because. there is no hard alcohol for sale.
The club’s work schedule is 7 days a week, 12.00-24.00. The instructor has his own schedule, being in the club every day, except Sunday and Monday, from 16.00 to 22.00. Thus, he has the opportunity to work part-time, which reduces the cost of remuneration for his labor. In addition to the main schedule, the instructor can conduct individual lessons by agreement with the client at any other time.
Investment in the project is carried out at the expense of the entrepreneur’s own funds, the deficit of own funds is covered by a bank loan. The main direction of expenditure is the purchase of tables and equipment; in addition, significant funds are allocated for the design of the premises and finishing work.
Table 3. Investment costs of the project
|NAME||AMOUNT, rub .|
|one||Decoration and decoration of the premises||500 000|
|2||Gaming tables and inventory||1,094,000|
|4||Beverage Equipment||70 000|
|5||Entrance design and signage||100,000|
|6||Development of room design||200 000|
|Total:||2 164 000 ₽|
|Own funds:||RUB 1,000,000.00|
|Required borrowings:||1 164 000 ₽|
2. DESCRIPTION OF SERVICES
Club “Round Ball” offers services for leisure activities, playing billiards, teaching the basics of the game, as well as bar services. There are 6 gaming tables in total, of which 5 are for playing the Russian pyramid (10 feet), 1 is for playing the American pool (8 feet). Each game table has a seating area for 6 people. The instructor conducts individual training in the basics of the game. The cost of the service is 1000 rubles per hour, of which he receives 50%.
The bar offers soft drinks and beer. Assortment of drinks: tea, coffee, drinking water with and without gas, bottled carbonated soft drinks, bottled (3 grades) and draft (3 grades) beer. The price segment of drinks and snacks is medium and premium. In addition, sandwiches of own production are offered (prepared by the bartender), as well as snacks from semi-finished products and snacks.
3. SALES AND MARKETING
Since the project is primarily focused on the target audience living in the microdistrict, promotion activities are focused specifically on this local market. The main recognition is provided by the spectacularly designed entrance group. In addition, it is planned to send out flyers to mailboxes throughout the Northern residential area. Then – the monthly placement of an advertisement in elevators.
Direct competitors include five billiard clubs located on the territory of SZhM. However, the nearest one is at least 15 minutes walk from the Round Ball. 3 of them can be attributed to the budget price segment – tables made of chipboard, worn inventory. In 2 of them there is a bar with drinks, the price segment is “budget”. 2 clubs belong to the “standard” and “standard+” segments. None of them offers conditions for a comfortable stay (according to the principle of “Round Ball” recreation areas), which, accordingly, means that there are no conditions for family vacations. In addition, none of the competitors offers the services of an instructor. Thus, we can say that the “Round Ball” has a significant number of competitive advantages, allowing it to cover a much larger audience than competitors can. Considering that,
Competitors’ prices fluctuate between 250-400 rubles per hour of play. At the same time, 2 clubs diversify the price depending on the day of the week and time of day. This is an effective practice aimed at attracting customers during the daytime and weekdays, ensuring a more even loading of the gaming room. The same is planned to be applied in the “Round Ball”. The average cost of an hour of play in this case will be 350 rubles. at the table.
The total monthly working time fund of the club is: 6 tables * 12 hours a day * 30 days = 2160 hours. At the same time, the planned occupancy on average per month was taken at the level of 70% of the total fund – 1512 hours per month. This figure is the basis for depreciation and calculation of variable costs for billiards services.
The seasonally adjusted sales volume is detailed in Appendix 1.
4. PRODUCTION PLAN
The enterprise does not belong to production and does not produce goods. Therefore, the main product of the project should be its services. Even in the absence of a production cycle in the classical sense, services are still formed as a result of certain business processes. These processes, in the context of this project, include the development of design and decoration of the premises, the selection and installation of equipment, the hiring of qualified personnel, etc.
Special requirements are imposed on the quality of gaming tables and equipment. As mentioned in the previous paragraphs, natural stone at the base of the table, as well as natural wood for the supporting structure, will ensure high quality of the game and an attractive design. The selection of a supplier is based on the range offered, the reputation of the company and the services offered. The selected supplier provides services for the delivery and installation of tables and related furniture and accessories. In the future, he provides services for routine maintenance, reupholstering tables, etc.
The hall is divided into play areas – 20 m 2 for each table with a seating area. The room is planned in such a way that the players at adjacent tables do not interfere with each other. Thus, the required area of the hall is 120 m 2 . Another 50 m 2 is allotted for auxiliary premises – kitchen, toilets, wardrobe, etc. The total area of the club is 170 m 2 .
The demand for the club’s services does not differ in pronounced seasonality. However, during the summer months, during the holidays, demand slightly decreases. In addition, many potential customers prefer outdoor recreation. Seasonal fluctuations in demand are taken into account when making financial calculations.
The first step in calculating the cost of services is the calculation of the production cost, which includes only variable costs. In particular, the variable cost of renting a billiard table for self-play includes depreciation of its original cost. For this project, this option is more efficient than assigning it to fixed costs – due to its faster repayment, because. the basis for accrual is the project occupancy, which is 70% of the total working time fund.
The production cost of the instructor’s services consists of the cost of his services, which is paid to him in the form of wages and equipment depreciation. In total, the cost of one individual hour-long lesson is 1000 rubles, of which the instructor receives 50%. The management of the enterprise reserves the right to reward the employee in order to provide him with a minimum income in case of a decrease in club attendance.
Table 4. Variable costs
|PRODUCT / SERVICE||COSTS PER UNIT, rub.||TRADING MARGIN, %||UNIT COST, rub.|
|one||Table rental for 1 hour||40||775%||350|
|2||Individual lesson with an instructor, 1 hour||540||100%||1080|
|3||Average bill at the bar||200||200%||600|
|Total:||2 030 ₽|
5. ORGANIZATIONAL PLAN
The main management functions are performed by the owner of the club. In his direct subordination are the accountant and the administrator of the club. The bartenders, waiters, instructor and cleaner are subordinate to the administrator. In fact, the administrator is in charge of ensuring the current functioning of the club.
Considering the established work schedule of the club, there are two shifts of bartenders and waiters in the staffing table, working on a 2/2 schedule. The administrator is present at the club daily, from 16:00 to 23:00. Day off – Monday. The instructor works on a schedule – Tuesday-Saturday, from 16:00 to 22:00.
Requirements for the administrator: experience in an entertainment establishment (bar, restaurant, night club, billiard club, etc.) for at least 5 years, knowledge of customer service standards, kitchen maintenance. Requirements for an instructor: an adult sports category in billiards, experience as an instructor for at least 1 year, the ability to work with people. There are no special requirements for waiters.
Table 5. Staffing and payroll
|Position||Salary, rub.||Quantity, pers.||FOT, rub.|
|one||Accountant||25 000||one||25 000|
|2||Administrator||27 000||one||27 000|
|3||Bartender||25 000||one||25 000|
|Social Security contributions:||RUB 42,600.00|
|Total with deductions:||RUB 184,600.00|
6. FINANCIAL PLAN
The financial plan is designed for a five-year period. Incomes and expenses of cash are taken into account, taking into account seasonality. The repayment of a bank loan has been taken into account. The organizational and legal form of the enterprise was chosen as an individual entrepreneur. If there is a bar on the territory of the gaming hall (if its area is not more than 150 m 2 ), the activity of the enterprise falls under the Unified tax on imputed income. In this case, the basic yield is calculated by the area of the hall.
The fixed costs of the enterprise are reflected in Table. 6. A detailed cash flow statement, as well as the calculation of integral performance indicators, is given in Appendix 2.
Table 6. Fixed costs of the enterprise
|NAME||AMOUNT IN MONTH, rub .|
|one||Premises for rent||102 000|
|Total:||149 000 ₽|
7. PERFORMANCE EVALUATION
Evaluation of the effectiveness and investment attractiveness of the project is carried out by calculating the integral performance indicators. The change in the value of money over time is also taken into account by introducing a discount rate. For this project, it is taken at the level of 8%, since this type of service is well known to the consumer, there is a formed target audience, and no complex technologies are expected to be used.
The payback period of investments is 12 months, both with a simple cash flow calculation and with a discounted one. The net present value (NPV) of the project far exceeds the investment costs. The internal rate of return (IRR) exceeds the barrier rate, and the yield index (PI) > 1. All this indicates that the project is effective and highly attractive to the investor. The net profit of the project for 5 years will be 18.5 million rubles. The integral indicators of the project are given in Table. one.
8. WARRANTIES AND RISKS
The collateral for a bank loan is the purchased equipment, which is pledged to the bank until the loan is repaid. The guarantee of achieving the set financial goals is the competent choice of the location of the club, as well as maintaining a high level of customer service quality.
At the same time, it is necessary to take into account the possible risks associated with the implementation of the project.
The emergence of a new competitor in the local market seems unlikely due to the rather narrow niche of this business. The profits of such establishments are on average relatively low, and the decision to open such a business is made in most cases on the basis of the entrepreneur’s personal hobbies.
Missing the planned sales volume. The critical scenario for the project is a decrease in sales by a third (33%), while the club will be self-sustaining even if the loan needs to be repaid. Such a decrease in relation to the planned revenue indicator is extremely unlikely.
Other potential risks seem even less likely. Thus, we can say that the project has a low degree of risk. The competitive advantages outlined in Section 4 of this business plan make an enterprise highly competitive.
Cash flow statement and financial plan