A BUSINESS DEVELOPMENT PLAN

OF

Submitted to:

Bal Ram ChapagainFaculty, Entrepreneurship and Innovations

Uniglobe CollegeBaneshwar, Kathmandu

Submitted by:

Bibek KhadgiMaushmi Vaidhya

Rajesh SubediSangeeta Shrestha

Subin ShresthaDeepesh Banepali

MBA, TERM IV13 November, 2011

Executive Summary

The trend of going out with friends’ for entertainment, hanging out with

them and nightlife culture is increasing in Nepal. They go to the places

like Shopping Malls, Cinema Theatre, Night Clubs, Discotheques, Sports

Bar, Restaurant and Coffee House etc… to spend jolly time with their

friends. The change that has taken place in lifestyle and socio culture of

Nepalese people has led us to open up this business as there is growing

need for such a hub where youngsters and others can have fun of all

Sports bar, discotheques, gaming zones and coffee house at the same

time under one roof.

The strategy we are going to follow is differentiation strategy. Amusement

Lounge is going to provide something different than the existing

competitor. In Hangout lounge people will be able to enjoy blend of

various entertainment. There will be four areas. In one area people can

enjoy live sports and enjoy drinks along with their friends. In another area

they can simply enjoy games in play stations. In third area, peoples can

enjoy dancing with their friends. And lastly, they can also enjoy peaceful

area where they will be able to enjoy coffees and bakery items with free

WiFi service and stay connected with their friends as well.

Amusement Lounge is a combined zone for entertainment which will be

located in prime location of New Baneshwor. This lounge will provide

varieties of services to its customer like Sports bar, discotheque, gaming

zone and a café. We think this is an innovative idea because there are not

many places especially with in Kathmandu where people can hang out

and enjoy all above mentioned means of entertainment under one roof.

We are aiming to get 5% of market share and our target customers are

local resident, student and working people. We are going to provide

i

differentiation strategy as people will be able to enjoy different means of

entertainment at one place.

There are various internal and external risk associated with the business

like delay in opening of the lounge, political risk, change in policies and so

on which has to be considered as well.

From the operation plan, marketing analysis and financial analysis we can

see that Hangout Lounge has a good chance of success in the business.

But there is tough competition in the market and we also have to think

about alternative plans. In this condition we can give it as lease to other

or we might as well sell the overall lounge to others. The amount received

from the sale will help little to minimize the loss.

ii

TABLES OF CONTENTS

Executive Summary……………………………………………………………………

i

Tables of Content……………………………………………………………………….ii

List of Tables…………………………………………………………………………….vi

List of Figures……………………………………………………………………………vi

CHAPTER 1: INTRODUCTION.........................................................10

1.1 Background..............................................................................................10

1.1.1 Mission Statement..........................................................................10

1.1.2 Vision..............................................................................................10

1.1.3 Objectives.......................................................................................10

1.1.4 Keys to Success..............................................................................11

1.2 Product and Services...............................................................................11

1.2.1 Products Feature.............................................................................11

1.2.2 Service Features.............................................................................11

1.3 Location...................................................................................................13

1.4. Market Segmentation.............................................................................13

1.4.1 Demographic Segmentation.........................................................13

1.4.2 Behavioral segmentation:............................................................13

1.5 Targeting to the Customers.....................................................................14

1.5.1 Local residents :...........................................................................14

1.5.2 College students:..........................................................................14

1.5.3 Working people:...........................................................................14

iii

CHAPTER 2: ASSESSMENT OF BUSINESS ENVIRONMENT.................14

2.1. SWOT Analysis:.......................................................................................15

2.1.1. Strength:........................................................................................15

2.1.2. Weakness:......................................................................................15

2.1.3. Opportunities:................................................................................15

2.1.4. Threat:...........................................................................................15

2.2. Environmental Analysis:.........................................................................15

2.2.1. Political Environment:....................................................................16

2.2.2. Economical Environment :.............................................................16

2.2.3. Social-cultural Environment:..........................................................16

2.2.4. Technological Environment:...........................................................16

2.2.5. Legal Environment :.......................................................................16

2.3 Market Analysis........................................................................................17

2.4 Competitor Analysis.................................................................................18

2.4.1 Intensity Of Rivalry.........................................................................18

2.4.2 Threat Of New Entrants..................................................................18

2.4.3 Threat Of Substitute Products.........................................................18

2.4.4 Bargaining Power Of Customer.......................................................18

2.4.5 Bargaining Power Of Supplier.........................................................19

CHAPTER 3: THE BUSINESS PLAN..................................................19

3.1 Operational Plan......................................................................................19

3.1.1 Procurement...................................................................................19

iv

3.1.2 Layout And Area Requirement........................................................20

3.1.3 Daily Operation...............................................................................21

3.2 Financial Plan...........................................................................................21

3.2.1 Capital Requirement.......................................................................22

3.2.2 Capital Structure.............................................................................23

3.2.3 Monthly Operational Expenditure...................................................23

3.2.4 Revenue Forecast...........................................................................24

3.2.5 Income Statement..........................................................................26

3.2.6 Analysis Of Financials.....................................................................26

3.3 Marketing Plan.........................................................................................27

3.3.1 Marketing Mix:................................................................................27

3.3.2 Positioning......................................................................................28

3.4 Human Resource Planning.......................................................................28

3.4.1 Job Description:...............................................................................28

3.4.2 Human Resource Requirement.......................................................30

3.4.3 Organizational Structure.................................................................31

3.5 Company Strategy...................................................................................31

CHAPTER 4: CRITICAL RISK AND CONTINGENCIES..........................34

4.1 Internal Risks:..........................................................................................34

4.2 External Risks:.........................................................................................34

4.3 Future Plan..............................................................................................34

4.4 Exit Strategy............................................................................................35

APPENDICES................................................................................35

v

List of Tables

Table 1: Total area requirement plan...................................................11

Table 2: Capital requirement plan........................................................14

Table: 3 Capital structure.....................................................................14

Table 4: Monthly operational expenditure............................................15

Table 5: Primary revenue forecast.......................................................15

Table 6: Secondary revenue forecast...................................................16

Table 7: Income statement..................................................................17

Table 8: Human resource requirement................................................21

List of figures

Figure 1: Layout of the Lounge............................................................12

Figure 2: Organization structure..........................................................22

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CHAPTER 1: INTRODUCTION

1.1 Background

The Planned business belongs to entertainment industry with blend of

varieties of entertainment options. The trend of going out with friends’ for

entertainment, hanging out with them and nightlife culture is increasing

in Nepal. They go to the places like Shopping Malls, Cinema Theatre,

Night Clubs, Discotheques, Sports Bar, Restaurant and Coffee House etc…

to spend jolly time with their friends. The change that has taken place in

lifestyle and socio culture of Nepalese people has led us to open up this

business as there is growing need for such a hub where youngsters and

others can have fun of all Sports bar, discotheques, gaming zones and

coffee house at the same time. Entertainment Lounge is a combined zone

for amusement which will be located in prime location of New Baneshwor.

This lounge will provide varieties of services to its customer like Sports

bar, discotheque, gaming zone and a café. We think this is an innovative

idea because there are not many places especially with in Kathmandu

where people can hang out and enjoy all above mentioned means of

entertainment under one roof.

1.1.1 Mission Statement:

We deliver our products and entertainment service to our valued

customer in way that helps to enjoy their life in a jolly way with our ever

motivated and skilled employees in socially responsible manner to grow in

days to come.

1.1.2 Vision:

“To become customer’s first preferred entertainment lounge in market by

offering quality services and comfortable environment”

1.1.3 Objectives:

1

To gain profit and have 15% market share.

Creating friendly and amusing atmosphere where customers can

enjoy with their friends.

Providing place where people can access to all entertainment

means.

To gain larger market share within five years.

To provide quality service.

1.1.4 Key to Success:

Superior means of entertainment

Only one business of its kind in Kathmandu

Friendly customer environment

A relaxing interior design

Prime location where there is heavy traffic of people

Aggressive marketing

Trained and friendly staff

1.2 Product and Services:

We entirely tend to provide various means of entertainment which is our

product and we will provide quality service in same field. Our product and

service features are as follows:

1.2.1 Products Features

Hangout lounge will provide blend of varieties entertainment services like

sports bar where customer can enjoy their favorite football teams and

cricket teams playing their matches, discotheques where customers can

hangout with their friends in musical tunes of all kind, gaming zones

where customers can explore various virtual gaming funs and finally a

coffee house where customers can enjoy coffee beverages.

1.2.2 Service Features

2

All the customers and visitors of our Hangout Lounge can enjoy following

services with complete attention to their preferences and safety.

a) Sports Bar:

Capacity of 50 people

Two, 74 inches plasma screens

Surround sound system

Comfortable sofas to watch games

Soft and hard drinks with snacks available.

Flags and jerseys of favorite teams will be available.

b) Discotheque:

Dancing floor for 150 peoples.

15000 watt surround sound system

Illuminating lighting effects.

DJ sessions in request of customers.

Comfortable sitting arrangements for rest.

Soft and hard drinks with snacks available.

Dancing masks available.

c) Gaming Zones:

Capacity of 20 peoples at a time.

Virtual play stations

Games like footballs, crickets, wrestling, bike and car racing

will be available in play stations.

Snookers and Pools

One soft drinks free for 1 ticket

Individual headphones will be provided for individual players.

d) Coffee Centre:

Capacity of 30 peoples at a time.

3

Clean and hygienic ambience

Varieties of Coffee beverages will be available.

Tea, soft drinks, juices, milkshakes, chocolates and ice

creams.

Pastries, Sandwich, burgers and other bakery items.

Continuous soft music will be played and free WiFi services.

1.3 Location

This lounge will be located in New Baneshwor. I have selected New

Baneshwor because it is developing very rapidly with all those schools

and colleges around like Ace Institute of Management, K & K College,

Prime College, White House, Don Bosco, Nobel, etc. Apart from this there

are also several banks open in New Baneshwor so they can also come to

this lounge and enjoy while doing their work as they can log in with the

help of Wi.Fi any time. In addition, our location is becoming a commercial

hub day by day so our lounge can attract customers from all around the

Kathmandu valley.

1.4 Market Segmentation

We have segmented the market on the basis of geographic area,

demography and behavioral. Following will be the basis of segmentation

of the market.

1.4.1Demographic Segmentation

We are planning to segment on the following demographic basis:

a) Income:

We will focus mainly on high and middle class people. We will

try our best effort to make the market penetration as far as

possible.

b) Age:

4

Our target group will be above 18 years of age. As from the

data taken from the Bureau of statistic we can see that the

population of Kathmandu is estimated to increase by 15.27%

from 2006 to2011. Similarly the population of Bhaktapur is

estimated to increase by 11.09% and Patan is estimated to

increase by 11.25%. So, Kathmandu valley has high potential

for such business.

1.4.2Behavioral Segmentation

As there is increasing trend in the market for visiting discotheques, cafes

and sports bar this will help to achieve gain as achieve larger market

share and brand recognition. The trend of lifestyle and culture in

youngsters and mid aged peoples is changing; such population can be

long term customers for the business.

1.5 Targeting to the Customers

Nowadays, in Nepal mall culture is in rise and most of the people prefer to

visit malls, restaurants, watch movie, go to discos etc... So our target

customer will be from middle income people to higher middle level

income people. Similarly, most of the people going to the restaurants are

teenagers. So the target population is from age of 18 to 45. The Hangout

Lounge’s target customers are

1.5.1Local Residents

These people are the local residence of New Baneshwor. These people will

be from the age group of 18 to 45.

1.5.2College Students

These are the college student around the Kathmandu valley especially

around Baneshwor as they can come to the lounge in their break time or

5

after college. Similarly in weekends other students from different location

can also come.

1.5.3Working People

They are the employees of the corporate houses. As there are many

banks and offices around Baneshwor they are potential customer for the

lounge.

CHAPTER 2: ASSESSMENT OF BUSINESS

ENVIRONMENT

We have done SWOT analysis of Hangout Lounge along with

Environmental analysis of “Hangout Lounge”. In addition, we have also

assessed market through internets and also assumed what could be the

potential competition to us. This will help to see what are the competitive

edges, Hangout Lounge have in respect to the environment.

2.1 SWOT Analysis

2.1.1 Strength:

Different varieties of entertainment means in one place.

It is among only few places where we can enjoy all sports,

music and dances, gaming and coffee.

Location as it will be located in fastest growing commercial

area.

Separate area so customers can enjoy without being

disturbed.

2.1.2Weakness:

Not suitable for those above 50 years and above.

Lack of experience in this field.

Shortage of technical human resource.

6

2.1.3Opportunities:

Growing population of teenagers and students.

Change in the life style.

Increase in market share for such means of entertainment

and services.

2.1.4Threat:

Presence of substitute sports bar and lounge.

Economy of the people as they may change their spending

pattern.

Change in taste of the customer.

Obstacles since the business operates mostly during nights.

2.2 Environmental Analysis

We have assessed on following environmental factors that may affect our

business.

2.2.1 Political Environment

Due to political instability it may hamper the business to certain aspect

because of bandhs and strikes. So people may not be able to come to the

lounge due to which the business may be hampered.

2.2.2Economical Environment

This business can put the hand to some extend the economic position of

the country as it will generate some revenue. The economy of the people

may change due to which the business may be affected as well as the

taste of the people may be affected.

2.2.3Social-cultural Environment

7

There will be social- cultural impact on the society. There has been

change in the cultural aspect of the people and more and more people

have tendency to hang out with friends and family. So due which it will be

profitable for this kind of business but at the same time night life can be

regarded as unsuitable for Nepalese society by some social groups.

2.2.4Technological Environment

Due to advance technology we can import our requirements like plasma

screen, music system, software and other equipments from outside as

well. These technologies will help to gain competitive edge in this

competitive world.

2.2.5Legal Environment

There will be no restriction from the government while opening this

lounge. We can register it easily. We can register this lounge under

company act. The registration fee for the lounge is Rs 10000.

In order to register this company under the name of “Hangout Lounge ”

we need to do some of the legal formalities which are as follows:

An application form is submitted along with the Rs 5 stamp at

the office of the registrar which is situated at Tripureshwor.

Besides this citizenship certificate of the Partners and the

company register stamp is provided to the office of the

registrar.

Once the company is registered the next steps is to take PAN

number from inland revenue Department which is situated at

Lazimpat. For this necessary documents are: Application

form, Copy of the citizenship certificate of the Partners, Copy

of the company/firm registration certificate, two passport size

photo of the Partners, hand drawn sketch of the business

8

location. 

2.3 Market Analysis

Hangout Lounge is an entertainment hub which provides variety services

in entertainment sector. Entertainment business has been gaining

popularity in this modern world. With change in economy and people’s

disposable income the trend of entertainment culture is increasing. If we

can bring something different then we can gain profit in this business. For

example, Thamel restro bar, Sports lounge, Club platinum and other disco

theques, coffee shops are doing well in the market. But the proposed

lounge is first of its kind in Nepal which has got new features of 4 different

products of amusement.

We are aiming to achieve 5% of total market share from the remaining

market. It is found out from the capacity of our lounge and population of

Kathmandu. As the population of Kathmandu has been growing by more

than 5% we can achieve our target.

New Baneshwor has become the major commercial centre of business

with establishments of various banks, offices, colleges etc… We have

selected New Baneshwor because it is developing very rapidly with all

those sectors that is constantly increasing the market.

It is an easy access area as well, as there are easy transportation facilities

to most of the areas around Kathmandu. This creates attractive market

potential. As we can see that there is only one disco theque in Baneshwar

and no sports bar and lounge so, all that we need to do is add something

of value to the customer and we think this lounge is just the thing that

people wants and will be very successful if it is operated properly.

2.4 Competitor Analysis

9

The main competitor is outside Baneshwar but that can pose intense

competition to the business. Different sports bar, discotheques, gaming

zones and cafes of Thamel and Durbarmarg may be the competitors.

Under the competitive analysis we can see the five competitive forces:

2.4.1 Intensity of Rivalry

There is intense rivalry in these industries as there is various other

businesses providing same service but separately but Hangout lounge

stands out from the competition on the context of the unique service it is

going to provide. There is only one place where customers can enjoy all

the features of sports, gaming, café and disco.

But no matter what we can distinguish ourselves from other as we will

provide something distinguish from others.

2.4.2Threat of New Entrants

Despite low economies of scale and the fact that customers face low

switching costs in the entertainment industry, the threat of new entrants

is not that high because of cost disadvantages, capital requirements and

low level of differentiation possible.

2.4.3Threat of Substitute Products

The threat of the substitute products is not that high because people who

want to have fun of all four things will prefer our lounge. However, when

the economic situation stays bad, people want to spend less on average.

In this last case, the threat of the substitutes can become higher.

2.4.4Bargaining Power of Customer

The bargaining power of customer is medium as there are many sports

bar, discos gaming zones and cafe business and the switching cost is low.

2.4.5Bargaining Power of Supplier

10

Since there are many suppliers who supply our required procurements,

the bargaining power of suppliers is low.

CHAPTER 3: THE BUSINESS PLAN

3.1 Operational Plan

The business will be operated in following way:

3.1.1 Procurement

The soft and hard drinks will be procured from renowned distributors.

Likewise snacks combo, pastries and other bakery items will be procured

from Nepal dairy in daily basis. Similarly raw materials required for

making tea and coffees will be purchased from suitable stores. This will be

checked on daily basis and make available as soon as the stock starts to

decrease. The key supplier will be distributor and wholesaler of New

Baneshwor. We will try to negotiate with such distributors and wholesalers

in order to procure all required materials in wholesale price.

3.1.2 Layout and Area Requirement

We will be much more focused on layout and interiors of our lounge. The

designs will be as per latest trend friendly and comfortable environment.

In addition, there will be different restrooms in each section and changing

rooms in sports bar and discotheque. We have also provisioned for

storage room, mini kitchen and guard rooms. We have allocated space for

our different sections on the basis of which we will search for suitable

commercial building to rent for our business.

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Sections Area required

Sports bar 2300 sq. ft

Discotheque 3000 sq. ft

Gaming zone 1900 sq. ft

Café 2400 sq. ft

Parking 1500 sq. ft

Total Area Required 11100 sq. ft

Table 1: Total area requirement plan

Figure 1: Layouts of our four sections.

3.1.3 Daily Operation

From market analysis, on an average 200 people visit the places

like sports bar and discotheques. Since we have two more sections

we will get that number to an average of 300 peoples every day.

We will charge Rs. 50 for entrance which will be our primary source

of revenue.

We will charge Rs. 100 who wants to enter to the sports bar and Rs.

150 to those who want to enjoy discos.

12

Likewise we assume customers will spend Rs. 150 on an average in

our gaming zones.

We will deduct Rs. 50 from the bills of customers only visiting the

café because it’s not reasonable to charge Rs. 50 to those who only

enter our café.

3.2 Financial Plan

Finance is the heart of business. Every business requires financial backup

in order to get started. We have also proposed a financial plan for our

business and for the sake of simplicity we have done it in a simple way.

3.2.1 Capital Requirement

Particulars Unit cost/unit Amount (Rs)

Furniture:      

Tables and chairs 20 10000 200000

Couches and Sofas 15 20000 300000

Cup boards and shelfs 2 27000 54000

Counters 5 45000 225000

Glass Show cases 2 65000 130000

Electronic Gadgets:      

74 inches plasma screen 2 250000 500000

Surround sound system 3 70000 210000

Play stations 5 85000 425000

Sound mixer 1 130000 130000

Lighting effects equipments 1 182000 182000

Computers 4 35000 140000

Kitchen Equipment:      

Refrigerators 5 50000 250000

Freezer 2 63000 126000

13

Coffee Vending Machine 2 55000 110000

Microwave oven 2 15000 30000

other kitchen items 1 50000 50000

Others:      

Snookers and pools 2 90000 180000

Computer Software 1 25000 25000

Telephone sets 4 4000 16000

Cash box 4 2200 8800

Generator 1 130000 130000

Fire extinguishers 4 20000 80000

1 700000 700000

Rent in advance for 3 months @

Rs.72/sq. ft     2397600

Working capital requied     100000

Total estimated Cost     6699400

Table 2: Capital requirement planning

Debt:Equity 40:60

Debt Rs.2679760

Equity Rs.4019640

Total capital required Rs.6699400

3.2.2 Capital Structure

Table 3: Capital structure

3.2.3 Monthly Operational Expenditure

 Human Resource  Base Salary  Total

Managing Director Rs.70000/Month for 1 70000

Senior operational Manger Rs. 40000/Month for 2 80000

Assistant Manger Rs.25000/Month for 4 100000

Marketing officer Rs. 18000/Month for 1 18000

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Technical officer Rs. 18000/Month for 1 18000

Accountant Rs. 20000/Month for 2 40000

Technical Staffs Rs. 10000/Month for 2 20000

Bouncers Rs. 25000/Month for 6 150000

Disco Jockey Rs. 25000/Month for 1 25000

Counter attendant Rs. 12000/Month for 8 96000

Security Guards Rs. 10000/Month for 3 30000

 Hygiene staffs  Rs. 6000/Month for 8  48000

Maintenance cost Rs.20000/Month 20000

Electricity charges

2000 units/Month @

Rs.8/unit 16000

Water Rs.20000/Month 20000

Telephone and internet

charges Rs.30000/Month 30000

Total Monthly Expenses   781000

15

Table 4: Monthly operational expenditure

3.2.4 Revenue Forecast

Table 5: Primary monthly revenue forecast

Table 6: Secondary monthly revenue forecast

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Revenue Forecast (Primary

Revenue)

No.*Charge*Day

s Amount (Rs.)

Revenue From Daily Entrance

  Sports Bar 20*150*30 90000

  Discotheque 50*250*30 375000

  Gaming zones 30*100*30 90000

  Total/Month   555000

Revenue from drinks and snacks (Secondary revenue)

Section

Items Sold on

Average

Units

Sold on

average

Mark up

(Rs.) Profit/day

Sports Bar

 

 

 

       

Soft drinks 60 15 900

Hard drinks 30 35 1050

Snacks combo 70 60 4200

Discotheques

 

 

      0

Soft drinks 80 15 1200

Hard drinks 50 35 1750

Gaming Zones

 

 

      0

Soft drinks 80 15 1200

Snacks combo 90 60 4200

Café

 

 

 

      0

Coffee

beverages 100 35

3500-

(50*50)=

1000

Soft drinks 100 15 1500

Pastries and

bakeries 150 20 3000

 Total/day 20000

 Total/Month 600000

3.2.5 Income Statement

Particulars Amount in Rs.

Primary revenue 555000

Secondary revenue 600000

Total revenue 1155000

Less: Monthly operating expenditure 781000

Earnings before interest and tax 374000

Less: Interest on loan with principal @14% 65050

Earnings before tax 308950

Less: Tax (25%) 77238

Net profit per month 231713

Table 7: Monthly income statement

3.2.6 Analysis of Financials

We have calculated our initial capital requirement by allocating

requirement of fixed assets, Set up cost, maintenance cost, utilities

expenses and our working capital requirement. Likewise our capital

structure will be 40% debt and 60% equity. For, debts we will approach

commercial bank for equal installments loans for five years. Similarly, we

have two sources of revenue i.e. primary revenue from entry ticket and

secondary from sales of food and beverages inside four different sections.

From our assumption we will be able to make monthly profit of Rs.

231713 which seems quite inspiring for our business. In this way will be

able to recover our equity investment in about 1 year or less.

3.3 Marketing Plan

Since marketing plays vital role in modern business we have stressed on

marketing of our business. Our marketing strategy will be as follows:

3.3.1 Marketing mix:

a) Product:

17

The product that “Hangout Lounge” is going to provide is various

type of entertainment options. The food and drinks provided in our

lounge will be of high quality and will be very hygienic in nature.

Apart from these products, the customer will also be able to use

free Wi-Fi services in café.

b) Price:

We have keep price according to the cost plus pricing technique in

which markup amount of profit is determined. We have kept our

entry prices nominal compared to our competitors which will be an

advantage to our business. Likewise, our margin of profit in foods

and beverages are low compared to others.

c) Place:

This lounge will be located in New Baneshwor. I have selected New

Baneshwor because it is developing very rapidly with all those

schools and colleges around like Ace Institute of Management, K & K

College, Prime College, White House, Don Bosco, Nobel, etc. Apart

from this there are also several banks open in New Baneshwor so

they can also come to this lounge and enjoy while doing their work

as they can log in with the help of Wi.Fi any time.

d) Promotion:

The promotion strategy we are going to take for the café is through

flyers in colleges, advertisements in face book, and we will also

launch website of lounge. We will also be promoting through face

book as face book has become a number one place for people to

connect with their love ones. And with the help of this face book we

will be able to connect with large number of people. This will also

help to provide word of mouth advertisement which is a very

powerful way to advertise the product. And for the promotional

advertisement we will also approach to visual and print media.

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3.3.2 Positioning

The positioning we want to create in the mind of the customer is the place

where we can get hygienic food and drinks while they watch sports,

dance, and play games with their friends.

As there is increasing trend in the market for visiting sports bar and

discotheque we can easily capture the market. From the information of

market and survey with friends and teenagers we found out that people

prefer to enjoy along with their friends while enjoying hygienic food. And

Hangout Lounge is just the place where they can enjoy both the things.

So, this lounge is sure to get success in the market.

3.4 Human Resource Planning

3.4.1 Job Description:

a) Managing director:

The Managing Director would be managing the overall business.

M.D. will be responsible for overall strategic plans of business. Two

senior operational managers will report to the Managing Director.

b) Senior operational manager:

The senior operational manager would be responsible for looking

after two sectors of their responsibility and take feedback and

instruct assistant manager of their respective sector for smooth

operation of daily business.

c) Accountant:

The account will be need to process and check bills, invoices,

receivable management, maintain account and so on. The

accountant will also be responsible for receiving payments.

d) Assistant manager:

Assistant managers will be responsible in smooth operation of

business and ensure that the service provided to the customer is up

19

to mark. Likewise they need to make regular coordination with

bouncers and counter attendants for quality service and safeguard

of the customers. They need to report to the senior managers.

e) Bouncers:

They are responsible for security inside the lounge and make sure

that any wrong happenings or possible fights inside the lounge. In

such situation they need to settle such circumstances.

f) Counter attendants:

They will be responsible for timely execution of customers order and

request and also responsible for daily works of hygiene staffs.

g) Technical officer:

Technical officer will be responsible for meeting the technical

problems that might occur in sports bar, discotheques and gaming

zones and other technical issues of the lounge.

h) Technical staffs:

They need to work directly under technical officer.

i) Marketing officer:

Marketing officer will be responsible for marketing the business

wherever is feasible. S/he will work directly under assistant

manager of café however, as per requirement s/he is also required

to coordinate with other assistant managers.

j) Disco jockey:

S/he will be responsible for music inside the discotheque.

k) Hygiene staffs:

They will be responsible for sanitation of overall lounge and they will

work directly under counter attendants of each section.

l) Security guards:

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They will be responsible for security during off and on hours of

business and will directly work under supervision of bouncers.

3.4.2 Human Resource Requirement

We will require following number of human resources:

Human resource Number

Managing director 1

Senior operational manager 2

Assistant operational manager 4

Accountant 2

Technical officer 1

Marketing officer 1

Technical staffs 2

Bouncers 6

Counter attendants 8

Disco jockey 1

Security guards 3

Hygiene staffs 8

Total 38

Table 8: Human resource requirement

3.4.3 Organizational Structure

We have proposed our organizational structure will be hierarchical in

which roles and responsibility of everyone is specifically determined.

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Figure 2: Organizational structure

3.5 Company Strategy

The strategy we are going to follow is differentiation strategy. Hangout

Lounge is going to provide something different than the existing

competitor. In Hangout lounge people will be able to enjoy blend of

various amusement. There will be four areas. In one area people can

enjoy live sports and enjoy drinks along with their friends. In another area

they can simply enjoy games in play stations. In third area, peoples can

enjoy dancing with their friends. And lastly, they can also enjoy peaceful

area where they will be able to enjoy coffees and bakery items with free

WiFi service and stay connected with their friends as well.

In the future the company is going to extend its business by opening its

other lounges in and around prime location of ring road and in location

such as in Lazimpat, Durbar marg, New road, and Jawalakhel.

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Managing Director

Senior Manager(Sports bar

and discotheque)

Assistant Manager(Sports

bar)

Bouncers (2)

security guards

Counter attendants

Hygeine staffs

Assistant Manager (Discotheque)

Disco jockey (DJ) Bouncers (4)

Security guards

Counter attendants

Hygeine staffa

Senior Manger(Gaming zone and cafe)

Assistant Manager (Gaming Zone)

Technical officer

Technical staffs

Counter attendants

Hygeine staffa

Assistant Manager (Cafe)

Marketing officer Counter attendants

Hygeine staffs

Accountants

CHAPTER 4: CRITICAL RISK AND CONTINGENCIES

There are various risk associated with the business. The risk can be both

internal as well as external. The risks are as follows:

4.1 Internal Risks:

Delay in opening of the lounge will result in unavailability of staff

members in the market and suitable place to rent.

There may be technical problem

There may be operating problems such as crashing of computer,

change in infrastructure, and so on.

4.2 External Risks:

There may be risk from the political instability due to which it will

hamper the business operation.

The night life culture may change.

The economic position of the people may decrease and they may

not come to the lounge

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The law may change and there may be increase in the policies

toward lounges.

The suppliers may not be able to supply inputs in time which may

hamper the business.

4.3 Future Plan

One of the main objectives of lounge is to achieve higher growth and lead

the market. Some of the future plans that the lounge would like to pursue

are as follows:

Expansion of the lounge in other areas like Lazimpat, Durbarmarg,

Newroad and Jawalakhel.

Expansion of the lounge outside Kathmandu like in Pokhara,

Dharan, Biratnagar and Birgunj.

Expansion in product line, include other means of entertainment

and food items.

4.4 Exit Strategy

Since there is tough competition in the market we also need to think

about alternative plans as the lounge may not be able to attract the

customers. In such worst situation we need exit strategy. In this condition

we can give it as lease to others or we might as well sell the overall

lounge to others. The amount received from the sale will help little to

minimize the loss.

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APPENDICES

Quality Management:

We will follow promptness and cleanliness as the major quality aspect in

the lounge. We can measure quality with the help of customers’ feedback

and improve the service accordingly. The major quality parameters for the

lounge are as follows:

1. Response:

We will also provide product as per the customer request. We will

also look at the customer’s feedback and improve it.

2. Timeliness:

Our lounge will provide quick service to customer. We will provide

service to the customer as per the requirement.

3. Courtesy

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The staff members will be polite to the customer and greet them

when they enter in the lounge. They will also be trained to handle

complaints and handle situation with a smile.

4. Cleanliness:

The area will be hygienic and clean. The overall environment of the

lounge will be customer friendly.

5. Aesthetics:

Aesthetics also plays a very valuable role in defining quality in a

lounge. In the overall appearance is not so good than the customer

may not be willing to come to the lounge.

Population from age 15 years to 45 years:

Age 2006 2011 2016

15-19 2869366 2998875 3078982

20-24 2457240 2844469 297674

30-34 1777559 2063877 2403417

25-29 2091314 2430786 2818327

35-39 1513800 1747636 2033678

40-44 1274854 1479455 1712615

Population of Kathmandu valley:

Place 2006 2011 2016

Kathmandu 1276754 1472707 1668936

Bhaktapur 254074 282245 310679

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Patan 381327 424219 467477

Above mentioned data on population of Kathmandu valley is useful in

forecasting the growth of customer in business.

Assumptions:

Setup cost includes all cost that incurs in interior designs and

decorations.

All fixed assets will be depreciated as per straight line basis

Loan will be 5 years loan and we have assumed on an average

interest on loans will be around 14%.

Our business will grow by 10% every year.

Rent will increase by 5% every year.

Every 3 staffs will be hired every year if business grows by 10%.

Equity amount will be on partnerships.

Advertisement cost:

S.

No

Advertisement Charge

1 Flyers (5000 x Rs 3) + ( 2500 x Rs 7) Rs 32500

2 Design of flyer Rs 3000

3 Website launch Rs 7000

4 Advertisement on face book Rs 0

Total Cost Rs 42500

The advertisement cost above is for the first two years and after third

year we will only distribute 2000 Flyers for Rs 3 and 1000 large size flyers

worth Rs 7.

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