Project Report

Being Young- The Sports Club

(11th September, 2010)

In partial fulfillment of the requirement of the course

“Project Management”

MBA Full Time (2009-2011)

Submitted to:

Prof. H.K.Shrivastava

Submitted by:

Dipesh Jain

091312
 Index

1. Introduction...............................................................................................................................

1.1. Industry Analysis-Porter’s Five Forces Model.............................................................

1.2. Company Analysis- Swot Analysis.................................................................................

1.3. Services Offered............................................................................................................

1.4. Project Scope...............................................................................................................

2. Project layout and Resource Requirement.................................................................................

2.1. Project Layout..............................................................................................................

2.2. Resources Required....................................................................................................

3. Initial Investment......................................................................................................................

4. Sources of Revenue and Expenses for regular years................................................................

4.1. Membership Packages................................................................................................

5. Financial Data.............................................................................................................................

5.1. Membership revenue..................................................................................................

5.2. Salary Expense estimates............................................................................................

5.3. Calculation of Loan Instalments..................................................................................

5.4. Estimated Cash Flow...................................................................................................

6. Project Control..........................................................................................................................

7. Bibligraphy................................................................................................................................

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1. Introduction:

This project is about opening a new sports club in Surat city at Udhna Magdalla Road. The idea
of this project came to the mind because there is lack of availability of a sports club at that
region which can provide citizens with different games like squash, lawn tennis and basketball.
There has been a change in the citizen of Surat in respect of the games they play. They have
started playing games which were uncommon earlier like basketball, lawn tennis and squash.
Thus the main intention of this sports club is to provide citizens with different games and
increase talent in those games, which a nation like India lacks.

The name selected of the club i.e. Being Young is because here even the elder people can come,
play and feel young. Thus the name shows the importance of being young as when you are
young you are energized and wound up.

1.1. Porter’s five forces Model for Sports Club Industry:

Below are the five forces that act in favour or against of the industry:

i) Competitive Rivalry within Industry: There are many sports club in India who
provides services like this but in whole Surat there are just two players. These players
have well established customer base but are unable to attract customers staying at
far areas. Thus there is a good chance of getting new customers by opening sports
club at an area where these clubs are not able to spread their reach. Fixed costs in
this industry are high but variable costs are low. Buyers switching costs is high in this
industry. Exit barriers are high as initial investment is high.

ii) Threat of new entrants: As entry barriers are high in this due to high capital
expenditure entry barrier is there and hence threat of new entrants is less. This
industry is growing at constant pace and hence there is chance of attracting new
entrants which can increase threats.

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 iii) Bargaining power of supplier: There are many suppliers who can provide
equipments needed at different costs and hence this factor reduces supplier’s
bargaining power towards the sports club. There is threat that supplier may forward
integrate as he has equipments to start and thus this increases its bargaining power
as there are less chances of buyer integrating backward. Suppliers main selling is this
industry and thus it is an important industry for them and they can’t easily let go this
industry and thus here suppliers bargaining power decreases.

iv) Bargaining power of customers: In this industry customers are more than service
providers and hence bargaining power of customers is less as they have limited
choice where as service providers have many choices. Differentiation in terms of
sports provided is not much though there are some variations and hence there can
be increase in bargaining power of service providers if they will differentiate their
offerings than others else customer bargaining power will be high. Switching costs
and importance of service is high to the buyer and thus this reduces its bargaining
power.

v) Threat of substitute product: There is a high threat of substitute product which in

this case will be the establishing services in the societies itself so that the member of
the societies doesn’t need to go out to play sports. This has been done by many new
builders providing services such as indoor sports, swimming pool and gymnasium in
their societies. Thus there is considerable threat from substitute product.

Hence above are the five forces that determine the competitive intensity and therefore
attractiveness of a market.

1.2. Company Analysis: SWOT

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Below is SWOT analysis of Being Young- the sports club:

i) Strengths: Providing customers with different types of sports is strength as that will
attract customers towards this sports club. Another important strength is the
location as there is huge potential customer base that will be ready to pay premium
prices for the services and will be willing to join.

ii) Weakness: As it is new, brand name is not strong and thus it creates a weakness.
Skilled workers will be hard to find in the starting phase.

iii) Opportunities: There is opportunity to convert untapped market into customers by

providing services to those people who are interested in uncommon sports activity.
There is also an opportunity to increase market share.

iv) Threats: Emergence of substitute’s product such as providing facilities in the

societies is a bug threat to Being Young sports club.

1.3. Services offered

Sports club will have services as below:

i) Lawn tennis court

ii) Basketball court
iii) Table tennis and board games such as carom and chess
iv) Squash
v) Badminton
vi) Juice and snack bar
vii) Tournament twice in a year which will include every sport provided by sports club.
viii) Trained coaches for games will be provided.

Hence above activities will be provided by the sports club. With the above activities members of
sports club will get chance to spread the social network by interacting with one another. There
will be special member services and different packages will be allowed to customers based on
their need of playing games. This will give customers variety in selection.

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1.4. Project Scope

Below is the scope checklist for the project:

i) Project objective: Main objective of the project is to start a sports club in Surat city
which will provide customers with uncommon as well as some of the common
indoor sports such as basketball, squash and lawn tennis within 1.5 year at a cost not
exceeding Rs. 10 million.

ii) Deliverables: Here major deliverables will be defined which are as follows:
 Project layout
o Deliverable Priorities:
 Constrain: Here the fix parameter will be that project layout must
be in the scope and should not go beyond it.
 Enhance: Here costs should be optimized so as to keep the project
within available budget.
 Accept: Time delay of few days will be accepted but project layout
should be precise. Though delay in time will increase cost and will
be hard to enhance cost care will be taken to allocate costs
properly.
 Permissions and Approval from Local Authority
o Deliverable Priorities:
 Constrain: Here the fix parameter will be time as getting approval
and permissions on time is important in order to complete full
project on time.
 Enhance: Here too costs will be tried to enhance which means
optimum costs will be tried to incur in order to get approvals and
permissions.
 Scope: It will be accepted if approval and permissions will be bit of
scope i.e. if less square feet will be approved to start than it can
be managed by building multi-storey building.
 Selection of Location
o Deliverable Priorities:
 Constrain: Here cost parameter will be fixed i.e. the location must
meet the budget.

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  Enhance: Here time will be tried to optimize so that project
doesn’t get delay and even cost remains in control as it is
generally accepted that increase in time increases the cost.
 Accept: here it will be accepted if location goes a bit out of scope
that is getting a lesser space than planned as that can be
compensated with building multi-storey building
 Construction of Sports Building
o Deliverable Priorities:
 Constrain: Building should be completed within the time specified
as it is important to provide services within the time given.
 Enhance: Costs will be tried to optimize so that project can be
completed within budget.
 Accept: A little here and there in scope will be accepted though
scope is an important consideration.
 Procurement of Equipment
o Deliverable Priorities:
 Constrain: Procurement should be done on time.
 Enhance: Cost will be tried to optimize by getting into most
beneficial contract
 Accept: Scope will be accepted as in getting a bit higher or lower
quality equipment will serve the purpose.
 Designing of Membership Packages
o Deliverable Priorities:
 Constrain: Here the packages should meet the scope.
 Enhance: Time will be tried to optimize in order to market the
services early
 Accept: Variance in cost will be accepted as it won’t be much in
designing.
iii) Limits and exclusions: In this project limit in scope will be related to services that will
be offered and membership packages that will be available. Members will have to
bring their own equipments such as racquets, accessories, etc. Club will provide
them with balls and all other facilities. Eating or drinking at juice bar will cost them
and it won’t be included in Membership fee. Maintenance of Club’s equipment will
be done every month in order to ensure proper working of equipments.

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 iv) Reviews with customer: In this section reviews with customer will be done. Here
customer means both internal (employees) and external (members). Reviews will be
done in order to know what their expectations from the club are and are they getting
what they desire. Are the time, cost and scope in project layout achievable? Thus
clear communication in all these matters will be done as they are important to avoid
claims and misunderstandings.

2. Project Layout and Resources Required

2.1. Project layout

Project layout i.e. physical layout of the club is as follows:

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The project layout above comprises of space for all the sports activities club is providing. Hence
total square feet space that project will need for the above layout is approximate 25000 square
feet which will be taken on lease. In this layout there is also a juice and snack bar which will be
helpful for refreshments during playing and will also help club as a source of revenue. Layout
has been designed so as to use the space optimally. This building will be constructed within 1.5
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years with all keeping in mind necessities for different sports such as their flooring, height, etc.
Approximate cost of constructing the building is Rs.3 million.

2.2. Resources Required

Below are the descriptions about the resources that will be required in order to start the sports
club. Resources are divided according to equipments needed for different sports and man-
power needed for different activities.

Equipments:

i) Lawn Tennis: Resources required for lawn tennis are:

a. Tennis net
b. Balls- approximately 150 per year
c. Tennis Posts
d. Umpires chair
e. Tennis posts ground sockets
f. Court flooring will be hard court whose requirement will be dealt during
construction and its cost will be included in construction costs.
g. 2 long benches to sit for players during break
ii) Basketball: Resources required for basketball are:
a. 5 balls per year
b. Basketball board
c. Basketball net
d. Basket ring
e. Court will be cemented and its construction cost will be included in construction
of building costs.
f. 4 long benches to sit for teams during rest period
iii) Badminton: Resources required for badminton are:
a. Shuttlecocks- approximately 400 pieces per year for 1 court so total 800 pieces
b. 2 Badminton set (includes net and posts)
c. Flouring will be Anchored Cushioned which will be taken care by construction
team and its costs will be included in construction costs.
iv) Table tennis: Resources required for table tennis are:
a. 2 Table-tennis table which will be Stag Centre Fold Table-Tennis Table
b. Balls-300 balls
c. 2 Net of Decathlon company

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 d. Flooring will be of concrete surface that is covered with a professional Taraflex
mat and its cost will be included in construction costs
v) Carrom: Resources required for Carrom are:
a. 4 Carrom Board of Synco Kidmaster
b. 16 piece of Striker of Synco Signature
c. 16 chairs and 4 tables to play on 4 boards at a time
vi) Chess: Resources required for Chess are:
a. 4 Full set (Board and Pieces) of Staunton
b. 8 chairs and 4 tables to sit and play on 4 boards at a time
vii) Squash: Resources required for squash are:
a. 10 Balls of decathlon having 2 years warranty
b. 2 small benches to sit for players during rest period

Resources other than sports i.e. Personnel:

i) 1 instructor each for basketball and lawn tennis and 2 common instructor for all
other indoor sports.
ii) 1 person to work for juice and snack bar
iii) 1 accountant and 1 clerk
iv) 1 manager and 1 maintenance person
v) 5 workers for cleanliness

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3. Initial Investment

Particulars Units Required Cost per Unit Total cost

Building 1 3000000 3000000
Sports Equipments:
Tennis:
Net 1 6000 6000
Posts 1 15600 15600
Umpires Chair 1 39600 39600
Posts Ground Sockets 1 3520 3520
Basketball:
Board 1 19800 19800
Net 1 117 117
Ring 1 1900 1900
Badminton:
badminton set 2 2500 5000
Table tennis:
Centre fold Table-Tennis Table 2 14500 29000
Net 2 800 1600
Carrom:
Board 4 1530 6120
Striker 16 250 4000
Chess:
Full set 4 1000 4000
Other Resources:
Tables-for chess and table 8 2000 16000
Chairs 32 300 9600
Small Benches 2 800 1600
Long Benches 6 1500 9000
Total 3172457

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Above written are the capital expenditures that are incurred in the initial year. As there is no
income in initial year there hasn’t been any mention above. The above expenses will be funded
in 1:1 ratio of debt and equity. That is half the money will be funded by myself and rest will be
taken from market.

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4. Sources of Revenue and Expenses for regular years

Below are the sources of revenue for the Being Young sports club:

i) Membership fee
ii) Revenue from juice and snack bar
iii) Income from participation fee for the tournament that will be held twice in a year

Below are the sources of expense for the Being Young Sports club:

i) Salary of Personnel
ii) Electricity
iii) Maintenance
iv) Lease for leasehold land
v) Advertisement expenses
vi) Materials
vii) Office expenses
viii) Loan instalment and interest on loan

Hence above are the sources from which revenue will be earned and expense will be done
every year. There might be some unseen expenses and revenue in the business later which will
be needed to added in the cash flow statements.

4.1. Membership packages

Below are the membership packages that will be offered to the customers:

i) Diamond Package
a. Activities include- All sports facilities and free participation in all the events done
by Being Young Sports club.
b. Membership fee- Rs. 1,00,000.
c. Benefits- No time constrain i.e. can come anytime they want. Special offers will
be granted to them from time to time. Membership card can be used by family
members too limiting to 5 members whose name must be registered in advance.
Thus 5 people can take benefit of a single membership, in short this is a kind of
family membership
ii) Gold package

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 a. Activities include- Selection of any 3 sports they would like to play and free
participation for that sports in the events organized by Being Young Sports Club.
b. Membership fee- Rs. 12000 yearly
c. Benefits- This is a good package for those who want themselves to limit to just
some games they like and also it’s very cost effective. They too have time
freedom but only an individual can use it and not family. This package can be
converted into quarterly and half yearly package with Rs. 4000 and Rs. 7000
respectively for the package.
iii) Silver Package
a. Activities include- Can play only one game and will have time restriction. Extra
fee will be taken for participating in games other you have opted for.
b. Membership fee- Rs. 6000 yearly
c. Benefits- A very cost effective package for those who have financial problems and
likes to play only one game. This package can be converted into quarterly and
half yearly package with Rs. 2000 and Rs. 3500 respectively for the package.

Assumptions regarding yearly revenue from Membership fee:

Total Members in first year from starting will be:

i) Diamond Package-50 members

ii) Golden Package-120 members
a. 70-yearly
b. 30-half yearly
c. 20-quarterly package
iii) Silver Package-50 members
a. 25-yearly
b. 10-half yearly
c. 15-quarterly package

Assumptions regarding revenue from Events:

i) In the first year there will be 400 entries at each event that will pay participation
fee.
ii) Participation fee is Rs.500 per person.

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5. Financial data:
5.1. Membership Revenue is as follows Details for 1st 5 years:

Year 1

Package Members Package Income

fee
Diamond Package 50 100000 5000000
Golden Package-yearly 70 12000 840000
Golden Package-Half 30 7000 210000
yearly
Golden Package- 20 4000 80000
Quarterly
Silver Package-Yearly 25 6000 150000
Silver Package-half 10 3500 35000
Yearly
Silver Package-Quarterly 15 2000 30000
Total 220 6345000

Year 2

Package Membrs Package Income

fee
Diamond Package 50 100000 5000000
Golden Package-yearly 100 12000 1200000
Golden Package-Half 50 7000 350000
yearly
Golden Package- 20 4000 80000
Quarterly
Silver Package-Yearly 50 6000 300000
Silver Package-half Yearly 10 3500 35000
Silver Package-Quarterly 30 2000 60000
Total 310 7025000

Year 3

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Package Membrs Package Income
fee
Diamond Package 50 100000 5000000
Golden Package-yearly 90 12000 1080000
Golden Package-Half 60 7000 420000
yearly
Golden Package- 30 4000 120000
Quarterly
Silver Package-Yearly 40 6000 240000
Silver Package-half Yearly 20 3500 70000
Silver Package-Quarterly 30 2000 60000
Total 320 6990000

year 4

Package Membrs Package Income

fee
Diamond Package 50 100000 5000000
Golden Package-yearly 95 12000 1140000
Golden Package-Half 30 7000 210000
yearly
Golden Package- 40 4000 160000
Quarterly
Silver Package-Yearly 40 6000 240000
Silver Package-half Yearly 20 3500 70000
Silver Package-Quarterly 35 2000 70000
Total 310 6890000

year 5

Package Membrs Package Income

fee
Diamond Package 45 100000 4500000
Golden Package-yearly 100 12000 1200000
Golden Package-Half 40 7000 280000

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yearly
Golden Package- 50 4000 200000
Quarterly
Silver Package-Yearly 40 6000 240000
Silver Package-half Yearly 20 3500 70000
Silver Package-Quarterly 30 2000 60000
Total 325 6550000

5.2. Salary Expense estimates are as below for 1st 3 years:

Year 1
Job persons Montly Salary Total Yrly
/prsn salry
Instructors 4 10000 480000
Juice & Snack 1 3000 36000
bar
Accountant 1 15000 180000
Clerk 1 8000 96000
manager 1 25000 300000
maintenance 1 15000 180000
Cleanliness 5 2000 120000
Total 1392000

Year 2
Job persons Montly Salary Total Yrly
/prsn salry
Instructors 5 12000 720000
Juice & Snack 2 3500 84000
bar
Accountant 1 16000 192000
Clerk 1 8500 102000
manager 1 28000 336000
maintenance 2 15000 360000
Cleanliness 7 2000 168000
Total 1962000

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 Year 3
Job persons Montly Salary Total Yrly
/prsn salry
Instructors 5 13000 780000
Juice & Snack 2 4000 96000
bar
Accountant 1 17000 204000
Clerk 1 9000 108000
manager 1 30000 360000
maintenance 2 17000 408000
Cleanliness 8 2500 240000
Total 2196000

Year 4
Job persons Montly Total Yearly
Salary/person salary
Instructors 5 14000 840000
Juice & Snack 2 4500 108000
bar
Accountant 1 18000 216000
Clerk 2 9500 228000
manager 2 32000 768000
maintenance 2 18000 432000
Cleanliness 8 3000 288000
Total 2880000

year 5
Job persons Montly Total Yearly
Salary/person salary
Instructors 5 15000 900000
Juice & Snack 2 5000 120000
bar
Accountant 1 19000 228000
Clerk 2 10000 240000
manager 2 33000 792000
maintenance 2 19000 456000
Cleanliness 8 3500 336000

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Total 3072000

5.3. Calculation of Loan instalments is as below:

Year Amount Principal Int total

1 1500000 150000 150000 300000
2 1350000 150000 135000 285000
3 1200000 150000 120000 270000
4 1050000 150000 105000 255000
5 900000 150000 90000 240000
6 750000 150000 75000 225000
7 600000 150000 60000 210000
8 450000 150000 45000 195000
9 300000 150000 30000 180000
10 150000 150000 15000 165000

Assumptions taken in cash flow:

i) Office expense increases by 10,000 every year.

ii) Materials expense increases by 20,000 every year.
iii) Advertisement expense increases by 50,000 every year.
iv) Juice and snack bar revenue increases by 50,000 every year.
v) Expense of 0 year has been counted and shown earlier and hence not shown again in
cash flow statement. Just the total expense is written directly.
vi) Loan is estimated to be taken of 15, 00,000 for 10 years at 10% interest annually.

5.4. Estimated Cash Flow for 5 years is below:

Years
Particulars 0 1 2 3 4 5
balance B/f - - 1888543 5472543 8317543
3172457 2069457
Revenue:
membership fee 6345000 7025000 6990000 6890000 6550000
Juice and Snack bar 350000 400000 450000 500000 525000
Events 400000 500000 450000 550000 600000

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Total 0 3922543 5855543 9778543 13412543 15992543
Expenses:
salary 1392000 1962000 2196000 2880000 307200
electricity 120000 150000 180000 210000 240000
lease of leasehold 1200000 1200000 1200000 1200000 1200000
land
Loan installment 3000000 285000 270000 255000 240000
materials 70000 90000 110000 130000 150000
Office expense 60000 70000 80000 90000 100000
Advertisement 100000 150000 200000 250000 300000
Miscellaneous 50000 60000 70000 80000 90000

Total 3172457 5992000 3967000 4306000 5095000 2627200

Balance C/f - - 1888543 5472543 8317543 13365343

3172457 2069457

Hence the above estimated cash flow shows that there will be positive inflow of cash from the
second year.

6. Project Control:

Project control is very important for any project because if there will be no control even the well
planned project may go haywire. Control is the process of comparing actual performance
against plan to identify deviations, evaluate possible alternative courses of actions, and take
appropriate corrective action.

Control Process will keep check on the following issues:

i) Customer satisfaction on the issues such as facilities provided, staff behaviour,

instructor’s job, etc. Even the employees will be asked their satisfaction level and
whether they have any issues with management or any suggestion they want to give.
ii) There will be check on financial issues such as cost and revenue. Whether they are in
control or going out of the planned budget. If they will be going out than proper
measures will be taken in order to keep them in control.

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 iii) Best Quality service at reasonable price: Market research will be conducted every
year or 6monthly to check what technology our competitors are using and at what
price they are providing these services.
iv) Proper control will be kept that there is proper co-ordination between different staff
members and that whole organization works for one objective- providing quality
service to the customers.

7. Bibliography

Below are the references of the sources from the data has been collected:

i) Project Management- The Managerial Process (Clifford F. Gray and Erik W Larson)
ii) http://www.playgroundonline.com/
iii) http://shop.ebay.in/i.html?
_nkw=chess&_sacat=0&_odkw=chess+table&_osacat=0&bkBtn=&_trksid=p3286.m2
70.l1313
iv) http://en.wikipedia.org/wiki/Table_tennis
v) http://www.squashgame.info/squashlibrary/14/37
vi) http://www.sportsknowhow.com/badminton/dimensions/badminton-court-
dimensions.html
vii) http://en.wikipedia.org/wiki/Basketball_court
viii) http://en.wikipedia.org/wiki/Tennis

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