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Transcript of Hotel b Plan
BUSINESS PLAN
PORSALANO RESORT
The Porsalano outlines how it will provide quality hospitality services,
cost-effectively, in a popular northern INDIA resort environment. This
plan successfully raised capital for property acquisition, renovation, and
company start-up related costs.
Contents
Five Objectives of Porsalano, Inc..............................................................6
Ideal Property Location..............................................................................6
Mission Statement.......................................................................................7
Management & Organizational Summary................................................9
Competitive Advantage.............................................................................11
Industry Keys to Success..........................................................................11
Economic Environment......................................................................12
Geographical/Competitive Environment...........................................12
Legal/Political Environment..............................................................12
Marketing Strategies.........................................................................17
Target Markets - Consumer...............................................................17
Distribution Strategy.........................................................................18
Pricing Strategy.................................................................................18
Service and Support Philosophy........................................................20
Evaluation & Control Strategies........................................................23
Projected Balance Sheet.......................................................................28
Table: Balance Sheet.........................................................................28
Questionnaire……………………………………………………………………..…...……….29
2
EXECUTIVE SUMMARY
We seek funds for the acquisition and renovation of Porsalano, an adult-
marketed, 17-room "boutique style" hotel specializing in a couples'
"getaway" to provide relaxation and recreation in Manali, a popular
tourism spot. Moderately priced between the high-line hotel properties
and the older motel strips, Porsalano shall fill an affordability niche not
presently available in Manali.
Combined with an on-site lounge, grill, poolside beverage service, and
morning continental breakfast bar, we are seeking investment funds to
renovate the hotel building, build-out a piano bar/lounge area with dance
floor, and construct an outdoor pool adjacent to the indoor pool. With this
refurbishment and other new amenities, Porsalano will form the basis of
a highly profitable hotel venture. We are seeking funds to develop and
expand the business in a phased approach, as highlighted within this
document.
The foundation for the plan is a combination of primary and secondary
research, upon which the marketing strategies are built. Discussions and
interviews were held with a variety of individuals involved with other
similar businesses to develop the proforma data, review the market
potential, and competitive situation.
Renovation in the Prairie Style period, our hotel's design elements and
furniture will reflect this "organic" approach and provide an overall
comfortable experience. Porsalano shall specialize in meeting an
individual or couple's needs. As growth warrants, the 10-acre site would
allow for future expansion of the lodging portion of the resort.
3
Business Plan Purpose
Introduction
In today's highly competitive environment, formal business planning is an
essential element in achieving business success. A well-written business
plan is primarily a communication tool used to obtain financing. In
certain instances, particularly with our early stage company, this
business plan also serves as a strategic plan.
Considering that lenders are inundated by numerous investment
opportunities from which they choose only a few, this business plan
describes our story and how we intend to grow. Porsalano, Inc.
management team has made an in-depth analysis of its opportunities and
weaknesses and it has concluded that the company has an excellent
chance to succeed.
Methodology for Business Planning
Sophisticated business planning helps management answer questions,
such as:
What will be our record of achievement?
How have we fared compared to our competitors?
Are we setting realistic and attainable goals and objectives?
Constructive and useful business planning requires a broad-based
understanding of changes taking place in the marketplace in which the
company competes, or plans to compete, and the ever-changing financial
markets. In-depth technical skills in a variety of disciplines such as
financial analysis, sales and marketing, latest technology, and managing
growth are critical components in assessing a company's opportunities
and risks.
Developing the Business Plan
4
The management of Porsalano, Inc. has developed this disciplined
planning methodology to help the company anticipate its start-up costs
and other critical information to arrive at this realistic plan.
5
Guidance from Outside Professionals
We will seek legal assistance and advisors to develop the Porsalano
concept. The management of Porsalano, Inc. will maintain an active
management involvement in every aspect of daily resort operations. This
plan reflects his vision.
Five Objectives of Porsalano, Inc.
1. Attract Rs. 10 Cr mortgage/investment capital;
2. Focus ideas and establish goals;
3. Identify and quantify objectives;
4. Track and direct growth;
5. Create benchmarks for measuring success.
Management is soliciting commercial finance partners who share its
vision and desire to participate in this exciting business opportunity in
the resort community of Manali, India. The integration of these
disciplines results in extensive and innovative services set in a unique
Prairie Style surrounding for our prospective guests.
Ideal Property Location
The preferred location is a 10-acre parcel with 8 acres of woods. Of the
18 rooms, 3 are executive suites, with Jacuzzi tubs, and one of them will
be converted to an onsite manager's apartment. Each room has
individual climate control, direct-dial phones, and televisions. The facility
has a large main lobby area, indoor pool/Jacuzzi/sauna, lighted tennis
court, 2-car garage, storage shed, ample parking, and all equipment
necessary for operation of the motel. The separate onsite manager
residence and meeting room complex will serve as a future lounge/grill
space. The grounds are beautifully landscaped.
The Hotel is situated on 9.43 beautifully landscaped, wooded acres.
Approximately 7 of the 9.43 acres are wooded and undeveloped, which
6
creates an opportunity for significant expansion or potential for an
entirely new enterprise.
This facility consists of one building, built in two phases: a 22- and 15-
year-old two- and one- story wood frame 18-unit Hotel and
manager's/owner's apartment, which when combined, total
approximately 14,787 square feet of living area. The 18-unit hotel
includes a lobby with a fireplace, reception area, storage area, laundry
room, bathroom, meeting rooms, a balcony, 18 room units, a men's and
women's bathroom, kitchen, a whirlpool/sauna room, an indoor
swimming pool, and mechanical room. The hotel has a partial basement
and includes a laundry room with two washers and two dryers.
The manager's apartment (future piano bar and basement bar/meeting
room area) offers a living room, kitchen, dining area, family room, half
bath, and gift shop on the first floor with 3 bedrooms and 2 baths on the
second floor. The home has a concrete block basement that is partially
finished with a recreation room and a 3/4 bathroom.
The exterior is cedar and the roof is pitch and pebble. The building is
seated on a poured concrete and a concrete block foundation. Interior
walls are concrete block and drywall. The flooring is carpet and ceramic
tile. There are casement windows and wood storms and screens. There is
a basement area under the living quarters and a portion of the hotel.
Other improvements include a 2-car garage with 2 electric door openers.
A detached storage shed is located to the rear of the manager's
apartment. Land improvements include parking lot with 23 parking
spaces, concrete sidewalks, a lighted tennis court, street signage, and
beautiful landscaping with a mature variety of trees and shrubs.
Mechanical systems include five gas hydropic, two gas forced air
furnaces, electric baseboard heat, individual heat, and central air for
each unit; 120-gallon hot water heater, 600-amp electrical service,
intercom system, two central vacs, water softener, sump pump, 4-camera
security system, cable television, smoke alarms, and telephone system.
7
Mission Statement
Porsalano, Inc.'s mission is to provide quality hospitality services to our
guests in a comprehensive and cost competitive manner, providing the
finest accommodations in Manali, India.
8
Company Business Plan Objective
This business plan serves to detail the direction, vision, and planning to
achieve our goal for providing superior and comprehensive hotel and
lounge services. Our plan objectives are:
Attract Rs. 3 Cr bridge loan to secure Rs. 10 Cr property mortgage
Focus ideas and establish goals
Identify and quantify long-term expansion
Track and direct growth
Create benchmarks for measuring success
Porsalano shall fill a niche not presently available, namely a moderately
priced (under Rs. 10,000per night, summer rate) resort. Combined with
an on-site lounge, a grilled food service, an indoor and outdoor pool bar,
and a morning continental breakfast offering, we shall differentiate
ourselves by becoming a "boutique style" resort versus simply another
hotel. With the construction of an outdoor pool adjacent to the present
indoor pool/whirlpool/sauna complex and our other refurbishment and
new amenities, Porsalano will form the basis of a highly profitable
venture set in a Prairie Style environment.
9
COMPANY SUMMARY
Key Advisors to the Company
Porsalano, Inc. has additional key staff members and advisors to assist
during the development, planning, and initial planning phases. They
include an architect trained at the CEPT University, Ahmedabad, CPAs,
and former managers of bar and Bed and Breakfast style properties.
Management & Organizational Summary
The Medusa Group will manage all aspects of the business and service
development to ensure effective customer responsiveness. Qualified
resort associate professionals will provide additional support services.
Support staff will be added as guest and/or patron load factors mandate.
10
Corporate Development Plan
For purposes of this Business Plan document, Porsalano, Inc.—Phase I
and Phase II for developmental growth are defined below:
Phase I
This phase involves preparation and development of Porsalano. Until the
ideal property is acquired, Porsalano, Inc. offices will be housed at
Mumbai, India. The property will establish its own Prairie Style identity,
management directives, and capital. Incorporating a total quality
management approach and a guest appreciation program, Porsalano will
develop key repeat guests and lounge patrons. Through word of mouth
and advertising, our reputation as an affordable "boutique style" resort
shall grow.
Property renovation will include the makeover of 18 to 17 rooms (with 3
suites) and the conversion of the present onsite property manager's
house to lounge gathering space. New construction includes a bar room
addition, extra parking lot build-out, and an outdoor pool. [Phase I capital
(start-up) funds are documented later on in this business plan.] It is
anticipated that the funding and transfer of this property will happen in
early 2013.
Phase II
Continue implementation of sales, advertising, and marketing strategies
developed in Phase I. Identify and pursue additional guest markets, i.e.
Internet room guarantee services. Porsalano shall evaluate its room
occupancy position to determine if a facility expansion is warranted.
Porsalano anticipates additional support staff would be needed at the
proper time (Phase II). This Plan does not contain funding needs for this
Phase.
11
HOTEL & LOUNGE OVERVIEW
Establishing a hotel and lounge business clientele will take some time, as
the research revealed word-of-mouth /recommendations /referrals and
value as the primary way in which hotel and lounge services are selected
by new guests. People who are completely new to the area, or who have
few established connections, may look to the Yellow Pages or other
advertising and Social networking websites to establish available
services, then call for information or pricing.
Competitive Advantage
Currently, a mid-size "boutique" resort niche is vacant in the Manali
market, with present lodging on the high end, averaging Rs. 10,000 per
night (and up) down to older Hotel properties of Rs. 3,500 per night.
Several B&B establishments may fall into the middle, however,
Porsalano, as a resort-style property, will serve its niche by itself and
cater to a customer oriented market.
Industry Keys to Success
1. A property designed for the guest and/or lounge patron
2. Frequent Guest Award Program
3. Controlled overhead and operational costs
4. Regular and ongoing guest feedback
5. Latest technology/software capacity
6. Weekend lounge (piano bar, dance floor) entertainment
7. Unique, timeless and comfortable environment
8. Dedicated management and associate support staff
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MARKET ANALYSIS
Porsalano, Inc. like all businesses is affected by forces and trends in the
market environment. These include economic, geographical, competitive,
legal/political, and technical.
Economic Environment
Positive forces include the generally prosperous economy that is
currently in place, full employment, rising wages, and low inflation,
leading more people to be able and willing to spend money and to get
away for some time. The close locality of Shimla market is an affordable
alternative to a flyaway destination.
Geographical/Competitive Environment
The area would have several golf courses, two ski hills, water recreation
activities, numerous dining establishments, various retail and specialty
shops, art galleries, theatre entertainment venues, and the beauty and
serenity of Manali, India.
Porsalano shall fill a niche not presently available, namely a moderately
priced (under Rs. 10,000 per night), resort-type establishment. Combined
with an on-site lounge, a grilled food service, an indoor and outdoor pool
bar, and a morning continental breakfast offering, we shall differentiate
ourselves by becoming a "boutique style" resort versus simply another
hotel.
Our Prairie Style surroundings will attract and retain guests who
appreciate such refined environments.
Legal/Political Environment
The MEDUSA Group management will not move the project forward until
it has obtained an option to acquire one of the Manali liquor licenses. As
faced by all businesses, the proper insurance needs shall be met and all
operations and policy manuals shall be reviewed by appropriate legal
13
experts. The facility will obtain all the necessary building permits prior to
construction. Present facility zoning allows for this proposed use,
including a bar, cabaret, grill, and dance floor space.
14
Technology Environment
Computer programs greatly simplify the financial recordkeeping for
today's businesses. As a small business, Porsalano will need to watch its
expenses closely. By utilizing the existing software packages available in
the hotel industry, including: room and facility management database,
controlled bar and inventory measuring systems, and room key cards that
allow patrons to charge directly to their room account, this technology
shall assist management in controlling costs, reducing cash management,
and maximizing revenue. The MEDUSA Group shall attract the resources
necessary to train and operate the system in order to generate the
reports and manage the inventory.
15
COMPETITIVE ENVIRONMENT
A listing of the hotel properties in Manali, India is as follows
- Holiday Inn (Rs 21,000 and above)
- Snow Valley Resort (9000 and above)
- Manali INN (16,000 and above)
- Manali Heights (13,000 and above)
- Manali Resorts (15,000 and above)
Bed & Breakfast (B&B)
Dahlia House
The Mixer House
Precious Times Inn
Hotel properties in adjacent communities are not listed, however, they do
advertise in the Yellow Pages and any other social media.
Porsalano hotel and lounge is attempting to carve out a fourth segment
in the lodging market; that of a "boutique" style, high-line property at
mid-line pricing geared towards adult couples and not marketed to
families.
A review of competitors' marketing strategies reveals no one targeting
this market segment. Hotel and lounge is a referral-driven business—new
business can be obtained by encouraging and rewarding present guests
to refer future guests. Networking within business and civic groups is
important; even if the business results are not immediately felt, it is an
excellent public relations opportunity. Live piano, or jazz style trio, on
the weekends will add excitement to the resort and draw community
residents and guests from other properties.
16
Market Research
A hypothetical behavior sequence model for a new customer (future
guest) contemplating using a hotel and lounge service for the first time
might look something like the following (based on discussions and
interviews with potential guests):
Individual or couple decided to getaway for a few days. This may happen
as a result of a need for a change of pace, vacation, or a celebration
purpose. The need can arise anytime year round. Even in the late fall and
winter months people are thinking "getaway" to break the weather
doldrums.
Individual or couple investigates hotel services. In most cases, this means
they will consider first any recommendations that they are
knowledgeable of through prior association (relative, friend, or social
group). If the individual or couple is new to the area or otherwise has not
made any close connections with people, he/she would look in the Yellow
Pages for a listing, website or perhaps look in a newspaper for
advertising and in any social media.
Acting on the advice of friends (or own knowledge), the individual or
couple will call the recommended property to obtain information that will
help him/her decide if this place is the best for them. Criteria for
selection include: (1) amenities (pool, on-site food service, non smoking
rooms, bar lounge area, etc.); (2) reputation (what kind of persons
usually stay here?); (3) Physical plant (how recent the renovation,
upkeep, etc?); (4) courtesy (professional and attentive staff?); and (5)
pricing (is the place affordable?).
Based on the information received, the individual or couple makes a
decision and either schedules an appointment to view the property or
makes a reservation.
The individual's satisfaction with his/her decision and with the service
itself is largely a function of their interaction with the staff during their
stay. Everyone associated with Porsalano will do everything possible to
17
ensure a satisfactory experience for the guest, so that future business
(and a future referral) is not at risk.
Marketing strategies will build on this model, taking advantage of
precipitating events, fostering word-of-mouth recommendations, and
creating satisfaction through interacting with the future or present
guests.
Summary of Opportunities and Threats in the Environment
Overall, the environment appears very positive for Porsalano, Inc. The
forces driving market demand, mainly economic and geographical, are
strong, with more people staying closer to home for shorter getaway
trips and their comfort level of visiting Manali, one of the North prime
travel destinations. On the negative side, there is competition, and it will
take a while for Porsalano to get "established" in its market niche.
18
STRATEGY & IMPLEMENTATION
The business is driven by referrals and repeat business, so for the first
few years Porsalano will need to be aggressive in attracting new guests.
The marketing strategy is subject to change upon guest feedback and
surveys.
Marketing Strategies
Target Markets—Geographical: The major cities within a three-hour drive
of the property.
Target Markets - Consumer:
New visitors travelling to the area
Middle- and upper-income bracket
Returning visitors to the area
Businesses needing to hold small overnight planning and strategy
sessions
Area wedding parties
Couples
19
Positioning and Product Strategy
For its guests, Porsalano will be positioned as a new, beautifully
landscaped, nature-filled, unique atmosphere hotel with a bar lounge
service that fits an adult "getaway" market niche. A full range of referral
services (i.e. restaurant recommendations, shopping, taxis, area
attractions) will be made available and tailored to the needs of the
particular guest.
Business services range from room phones that are Internet jack ready
and telephone answering message service for each room to on-site fax
services and meeting room space (lounge sitting area and cabaret room).
Porsalano will aim to attract business guests and their partners needing
to hold planning or strategy sessions away from the office in new and
comfortable surroundings, in order to even out revenues throughout the
week.
Distribution Strategy
Unlike products that are produced, then distributed, and sold, hotel and
lounge services are produced and consumed simultaneously in a real-
time environment. Thus, distribution issues center on making the
services available in a convenient manner to the greatest number of
potential guests. Porsalano will maintain a front office staff member
throughout the night so guests are able to get answers to any question or
service when they need it. This flexibility is especially attractive to the
business traveller. Clients will be able to contact Porsalano by telephone,
fax, and e-mail.
Pricing Strategy
Rooms per night fees have been developed. The fee schedule takes into
account seasonal rates that are common in the area. For businesses and
other large group functions, pricing can be discounted depending upon
the number of rooms reserved.
20
Example lounge pricing and grill food offerings are also noted.
Example fees:
Room Fees
Winter Rates (November through April):
Regular Rooms Rs10200
Suites Rs18000
Summer Rates (May through October):
Regular Rooms Rs12000
Suites Rs24000
(Includes Continental Breakfast, use of indoor and outdoor pools, and
exercise equipment room.)
Telephone Rates (set at going company rate)
Hotel Safe Storage Fee (per day) Rs600
Liquor and Drink Fees(Sandwiches include fries, onion rings or chips.)
"Top Shelf" Brands Rs2400-6000
Specialty Drinks Rs1800-4800
Import Beers & Wine rs700(beer)- 2400(wine)
Domestic Beers Rs495
Draft Beer Rs360
Juices, Bottled Water, and Soft Drinks Rs240
Grill Menu
Rib-Eye Steak Sandwich Rs499
Cheese Vegetable Grill Sandwich Rs299
Burger (1/4 pound) Rs149
Fried Cod Fish Sandwich Rs399
Salads Rs249-549
21
Chicken Tenders Rs449-949
Cheese Sticks (with sauce) Rs249
Service and Support Philosophy
By giving careful consideration to customer responsiveness, Porsalano's
goal will be to meet and exceed every service expectation of its hotel and
lounge services. Our guests can expect quality service and a total quality
management (TQM) philosophy throughout all levels of the staff.
PROMOTION STRATEGY
Promotion strategies will vary depending on the target market segments.
Given the importance of word-of-mouth referrals among all market
segments when choosing a "getaway" hotel or small business meeting
location, our efforts are designed to create awareness and build referrals.
A cost-effective campaign—focused on direct marketing, publicity, our
frequent guest reward program, and advertising—is being proposed.
22
Marketing Plan
New Business Segment
A direct marketing (direct mail) package consisting of a tri-fold brochure,
letter of introduction, and reply card will be sent to a list of potential
guests. This list can be obtained from Yellow pages and just Dial. The
above will be compiled from tax records (by upper-income geographical
areas, Secretary of State Incorporation registrations, business license
applications, and announcements from newspaper clippings).
The brochure and letter introduces Porsalano, stresses the importance of
having a good time in comfortable surroundings, provides information on
our resort services, and describes what sets us apart from other area
hotel and lounge properties. The initial mailing may contain a
promotional offer: the opportunity to receive a 10% discount on the first
night's room rate.
Approximately two months after the mailing, an additional letter shall be
sent. The potential guest would be asked to address any questions and
the follow-up would remind them to drop in for a property tour on their
next trip to Manali. Additionally, new businesses will be targeted and
sent information.
The cycle would repeat itself with new target communities and select
businesses and would continue through the first year. After that,
additional mailings would be conducted, as needed, based upon
occupancy goals.
Porsalano, Inc. will also consider developing a one-page newsletter to be
mailed quarterly to past guests and prospects in the database. The
newsletter can be used to update clients on hotel and lounge and area-
related developments, but also serves as a reminder of what sets
Porsalano apart. The newsletter can be produced in-house and for the
cost of paper and a stamp creates a lot of goodwill among guests and
business prospects.
23
Publicity and Public Relations
A news release will be sent to area newspapers and magazines
announcing the launch of Porsalano, Inc. and lounge. Area talent
searches will be conducted to secure weekend cabaret room
entertainment.
The MEDUSA Group will join the Manali Chamber of Commerce as a
means of networking in the community. They will make themselves
available for speaking engagements at other community or civic
organizations as a low-cost way of increasing awareness and building
goodwill in the community.
Guest Reward Programs
For present guests: "Stay 6 nights and get the seventh night for free"
promotion and as a means of building business by word-of-mouth,
present customers should be encouraged and rewarded for referring
future guests. This can be accomplished by offering a small "rebate" (5%
or 10% rebate on first night stay) to current customers who successfully
refer a new guest.
Advertising
Advertising is utilized primarily to attract new guests and serves to build
awareness and name recognition of the resort in general, which is
important for word-of-mouth referrals ("Oh yes, I've seen that resort's
ads before.")
Periodic advertising in target market area newspapers will afford
Porsalano, Inc. name recognition benefits. From quarter page ads
announcing its entertainment line-up to business card-sized logo
ads.
Yellow Pages—Manali Telephone Directory. Research indicated
that new visitors or people who don't have many personal
acquaintances to ask about hotel and lounge services will look to
the Yellow Pages to establish a list of potential hotel and lounge
24
services to call. Even a small 2" × 2" boxed ad can create
awareness and attract the desired target client, above and beyond
the ability of a simple listing. Yellow Pages cover the relevant
market area, delivering over 30,000 copies to residents and
business.
Telephone Book Cover. A business card-like ad on the plastic cover
which is placed over any telephone book enables the business
name/logo to be seen virtually 24 hours a day, 365 days a year.
Covers are distributed bi-annually free of charge to residents and
businesses.
Restaurant Placemats—Opportunities exist for a business card-like
ad to be placed on the paper placemats used in area restaurants
(shelf-life of the ad is about six months), or for special (holiday)
events taking place at a restaurant (1-off opportunities).
Additional places to post flyers/business cards or for a business
card ad include bulletin boards in public buildings (grocery stores,
senior centers), and playbills for local theatre groups.
Along with the above, all the other social media.
Web Plan Summary:
The company is still in search for a Domain name and would like to
have a website name www.porsalona.in
The Website will be tracing all the visitor’s and would even be
customer friendly to use
It would also include Pre- Booking and all the ongoing offers during
seasons.
Evaluation & Control Strategies
25
Objectives have been established for Porsalano so that actual
performance can be measured. Thus, at the end of its first year,
Porsalano should have:
Rs. 3 Cr in total revenue
Anticipate 60% occupancy rating
Each subsequent year new objectives will be set for these benchmarks
and actual performance will be measured against them. If actual
performance falls short of objectives, investigation will be made into the
cause, and plans will be adjusted accordingly.
In addition, it is recommended that Porsalano keep track of the source of
all new guests ("Where did you hear of us?") in order to measure the
effectiveness of each type of promotion. Each subsequent year's budget
should adjust spending toward the types of promotion that reach the
most new clients.
Customer satisfaction is most directly reflected in the year-to-year
customer retention percentage. All lost customers should be investigated
to find out why they left. A customer satisfaction survey may be
considered after three to four years in the business.
26
FINANCIAL PLAN
Start-up FundingStart-up Expenses to Fund Rs92,70,000 Start-up Assets to Fund Rs1,82,30,000 Total Funding Required Rs2,75,00,000
Assets Non-cash Assets from Start-up Rs1,75,00,000 Cash Requirements from Start-up Rs7,30,000Additional Cash Raised - Cash Balance on Starting Date Rs7,30,000 Total Assets Rs1,82,30,000
Liabilities and Capital
LiabilitiesCurrent Borrowing - Long-term Liabilities Rs1,75,00,000 Accounts Payable (Outstanding Bills) - Other Current Liabilities (interest-free) - Total Liabilities Rs1,75,00,000
Capital
Planned InvestmentMarty Snyderman Rs50,00,000 Luke Roth Rs50,00,000 Additional Investment Requirement - Total Planned Investment Rs1,00,00,000
Loss at Start-up (Start-up Expenses) Rs92,70,000Total Capital Rs7,30,000
Total Capital and Liabilities Rs1,82,30,000
Total Funding Rs2,75,00,000
Start-up
Requirements
Start-up ExpensesLegal Rs2,50,000 Stationery etc. Rs20,000 Brochures Rs3,00,000 Rental Shop Setup Rs25,00,000 Property Down payment Rs25,00,000 Lodge Setup Rs10,00,000 Store Setup Rs25,00,000Insurance Rs2,00,000 Total Start-up Expenses Rs92,70,000
Start-up AssetsCash Required Rs7,30,000Other Current Assets - Long-term Assets Rs1,75,00,000 Total Assets Rs1,82,30,000
Total Requirements Rs2,75,00,000
27
Sales Forecast Year 1 Year 2 Year 3
SalesRooms Rs2,15,00,000 Rs2,80,00,000 Rs3,00,00,000 Food Rs60,50,000 Rs70,00,000 Rs90,00,000Ski Rentals Rs66,00,000 Rs72,50,000 Rs80,00,000 Clothing Rs29,00,000 Rs35,00,000 Rs41,00,000 Total Sales Rs3,70,50,000 Rs4,57,50,000 Rs5,11,00,000
Direct Cost of Sales Year 1 Year 2 Year 3Rooms - - - Food Rs29,75,000 Rs35,50,000 Rs45,00,000 Ski Rentals - - - Clothing Rs11,85,000 Rs15,00,000 Rs19,00,000 Subtotal Direct Cost of Sales $83,200 $101,000 Rs64,00,000
Personnel Plan Year 1 Year 2 Year 3
Manager Rs18,00,000 Rs19,50,000 Rs21,00,000 Assistant Manager Rs21,00,000 Rs22,50,000 Rs24,00,000 Lodge Staff Rs55,00,000 Rs60,00,000 Rs63,00,000 Food Store Staff Rs19,50,000 Rs21,50,000 Rs23,00,000 Clothing Store Staff Rs17,50,000 Rs19,50,000 Rs21,00,000 Maintenance Staff Rs24,00,000 Rs26,00,000 Rs27,50,000 Cleaning Staff Rs36,00,000 Rs3800000 Rs39,50,000 Total People 9 22 22
Total Payroll Rs1,91,00,000 Rs2,07,00,000 Rs2,19,00,000
Pro Forma Profit and Loss Year 1 Year 2 Year 3
Sales Rs3,70,50,000 Rs4,57,50,000 Rs5,11,00,000Direct Cost of Sales Rs41,60,000 Rs50,50,000 Rs64,00,000Other Production Expenses - - - Total Cost of Sales Rs41,60,000 Rs50,50,000 Rs64,00,000
Gross Margin Rs3,28,90,000 Rs4,07,00,000 Rs64,00,000 Gross Margin % 88.77% 88.96% 87.48%
ExpensesPayroll Rs1,91,00,000 Rs2,07,00,000 Rs2,19,00,000 Sales and Marketing and Other Expenses
Rs30,00,000 Rs40,00,000 Rs50,00,000
Depreciation Rs7,14,000 Rs7,14,000 Rs7,14,000 Leased Equipment - - - Utilities Rs13,00,000 Rs13,00,000 Rs13,00,000 Insurance Rs12,00,000 Rs12,00,000 Rs12,00,000 Lease - - - Payroll Taxes Rs28,65,000 Rs31,05,000 Rs32,85,000 Other - $0 -
Total Operating Expenses Rs2,81,79,000 Rs3,10,19,000 Rs3,33,99,000
Profit Before Interest and Taxes Rs47,11,000 Rs96,81,000 Rs1,13,01,000EBITDA Rs54,25,000 Rs1,03,95,000 Rs1,20,15,000 Interest Expense Rs16,68,750 Rs15,25,000 Rs13,75,000 Taxes Incurred Rs9,12,700 Rs24,19,800 Rs29,77,800
Net Profit Rs21,29,600 Rs57,09,200 Rs69,48,200
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Net Profit/Sales 5.75% 12.48% 13.60%
Projected Balance SheetThe following is the projected balance sheet for three years.
Table: Balance Sheet
Pro Forma Balance Sheet(Rs) Year 1 Year 2 Year 3
Assets
Current AssetsCash 1,571,850 59,27,750 82,79,200 Other Current Assets 7,00,000 16,00,000 26,50,000Total Current Assets 22,71,850 75,27,750 1,09,29,200
Long-term AssetsLong-term Assets 1,75,00,000 1,85,00,000 215,00,000 Accumulated Depreciation 7,14,000 14,28,000 21,42,000 Total Long-term Assets 1,67,86,000 1,70,72,000 1,93,58,000 Total Assets 1,90,57,850 245,99,750 3,02,87,200
Liabilities and Capital Year 1 Year 2 Year 3
Current LiabilitiesAccounts Payable 1,98,250 15,30,950 17,70,250 Current Borrowing - - - Other Current Liabilities - - - Subtotal Current Liabilities 1,98,250 15,30,950 17,70,250
Long-term Liabilities 1,60,00,000 1,45,00,000 13,00,000 Total Liabilities 1,61,98,250 1,60,30,950 147,70,250
Paid-in Capital 1,00,00,000 1,00,00,000 1,00,00,000 Retained Earnings (92,70,000) (71,40,450) (14,31,250)Earnings 21,29,600 57,09,200 69,48,200Total Capital 28,59,600 85,68,800 1,55,17,000 Total Liabilities and Capital 1,90,57,850 24,599,750 3,02,87,200
Net Worth 28,59,600 8,568,800 1,55,17,000
Projected Cash Flow
Pro Forma Cash Flow(Rs) Year 1 Year 2 Year 3
Cash Received
Cash from OperationsCash Sales 3,70,50,000 4,57,50,000 5,11,00,000Subtotal Cash from Operations 3,70,50,000 4,57,50,000 5,11,00,000
Additional Cash ReceivedSales Tax, VAT, HST/GST Received - - -
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New Current Borrowing - - - New Other Liabilities (interest-free) - - - New Long-term Liabilities - - - Sales of Other Current Assets - - - Sales of Long-term Assets - - - New Investment Received - - - Subtotal Cash Received 3,70,50,000 4,57,50,000 5,11,00,000
Expenditures Year 1 Year 2 Year 3
Expenditures from OperationsCash Spending 1,91,00,000 2,07,00,000 2,19,00,000 Bill Payments 1,49,08,150 1,72,94,100 2,12,98,550 Subtotal Spent on Operations 3,40,08,150 3,79,94,100 4,31,98,550
Additional Cash SpentSales Tax, VAT, HST/GST Paid Out - - - Principal Repayment of Current Borrowing
- - -
Other Liabilities Principal Repayment - - - Long-term Liabilities Principal Repayment
15,00,000 15,00,000 15,00,000
Purchase Other Current Assets 7,00,000 9,00,000 10,50,000 Purchase Long-term Assets - 10,00,000 30,00,000 Dividends - - - Subtotal Cash Spent 3,62,08,150 4,13,94,100 4,87,48,550
Net Cash Flow 84,11,850 43,55,900 23,51,450 Cash Balance 15,71,850 59,27,750 82,79,200
Net Cash Flow
Cash Balance
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
($20,000)
Mon
th 1 M
onth
2 Mon
th 3 M
onth
4 Mon
th 5 M
onth
6 Mon
th 7 M
onth
8 Mon
th 9
Mon
th 1
0 M
onth
11
Mon
th 1
2
Cash
30
Financial Plan Assumptions
The following assumptions will be incorporated into Porsalano, Inc.
proforma statements.
All operating costs are based on Porsalano, Inc. management
research of similar operating companies.
Automated informational and bar control systems will reduce
Porsalano, Inc. staff requirements.
Developmental start-up costs are amortized over a five-year period.
Room Occupancy Rate at 60%.
Property manager are fixed salary expense basis.
All fixed and variable labour costs should rise annually at 2.5% per
year.
All revenues are figured to rise annually at five percent. Fixed
annual, administrative, and office expenses rise at an annual rate of
one half of one percent.
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Questionnaires
A. For families
Name: ________________________________________________ Age:
________ Sex: Male/Female
Occupation: ______________________________
Range of Annual income
Less than 6 Lacs 6 Lacs to 12 Lacs 12 Lacs to 36
Lacs
More than 36 Lacs
How frequently do you travel for vacations?
Rarely Once a year Twice a year A Lot
(Please tick mark whichever is applicable for the following question)
1. What other amenities would you like the resort to provide?
Souvenir Shop Spa Game Parlor
Children Amusement Park
Outdoor Games WiFi Sight-seeing Medical
Practitioner
2. Apart from the already served Indian, Chinese, Continental and Italian
what other cuisines would you like to be served at the restaurants?
32
Thai Mughlai Kids Special Menu
Mediterranean
Mexican African Fast-Food
(Please rate the following question from 1 to 5 with 1 being the least satisfied and 5 being very
satisfied.)
1 2 3 4 5
3. How would rate the location and
landscaping of the resort?
4. How good you think are you with
the amenities provided for family
and kids?
5. How good are you with the room
services and facilities?
6. How secure do you feel with the
resort security system?
7. How would you rate our ‘ease of
payment’ with respect to banking
facilities?
8. Would you like the resort to design a special packages/tours for a
family of 2 Adults and 2 Children?
Yes No
33
9. Would you like the resort to “Plan Your Travel” right from your home-
station and back?
Yes No
B. For college students
Name: ________________________________________________ Age:
________ Sex: Male/Female
Education: ______________________________
How frequently do you travel for vacations?
Rarely Once a year Twice a year A Lot
(Please tick mark whichever is applicable for the following question)
1. What other amenities would you like the resort to provide?
Gym Spa Game Parlor Adventure
Sports
Outdoor Games WiFi Sight-seeing Medical
practitioner
2. Apart from the already served Indian, Chinese, Continental and Italian
what other cuisines would you like to be served at the restaurants?
34
Thai Mughlai Burmese
Mediterranean
Mexican African Mongolian
(Please rate the following question from 1 to 5 with 1 being the least satisfied and 5 being very
satisfied.)
1 2 3 4 5
3. How would rate the location and
landscaping of the resort?
4. How good is the theme and
ambience of the resort?
5. How good is the room services and
facilities?
6. How secure do you feel with the
resort security system?
7. How would you rate our ‘ease of
payment’ with respect to banking
facilities?
8. Would you like the resort to organize events, workshops and festivals?
Yes No
35
9. Would you like the resort to “Plan Your Travel” right from your home-
station and back?
Yes No
C. For professionals
Name: ________________________________________________ Age: ________ Sex: Male/Female
Occupation: ______________________________
Range of Annual income
Less than 6 Lacs 6 Lacs to 12 Lacs 12 Lacs to 36
Lacs
More than 36 Lacs
How frequently do you travel for office related work?
Rarely Frequently Often A Lot
(Please tick mark whichever is applicable for the following question)
1. What other amenities would you like the resort to provide?
Gym Spa Welcome Kit Exclusive
events
Outdoor Games WiFi Sight-seeing Medical
practitioner
36
2. Apart from the already served Indian, Chinese, Continental and Italian
what other cuisines would you like to be served at the restaurants?
Thai Mughlai Burmese
Mediterranean
Mexican African American
(Please rate the following question from 1 to 5 with 1 being the least satisfied and 5 being very
satisfied.)
1 2 3 4 5
3. How would rate the location,
ambience and landscaping of the
resort?
4. How good you feel is the
Conference Hall and the facilities
provided?
5. How good you think is the room
services and facilities?
6. How secure do you feel with the
resort security system?
7. How would you rate our banking
facilities and ForEx Management?
37
8. Would you like the resort to organize professional events and
workshops exclusive for your organization?
Yes No
9. Would you like the resort to “Manage the Conference” by providing an
entire package of logistics support, travel, stay and food?
Yes No
Bibliography
http://www.foodandhospitalityworld.com/sections/ market-section/1338-v-resorts-plans-to-open-10-resorts-by-year-end
http://www.fortunehotels.in/resort/Mussoorie- Fortune_The_Savoy/Guide.aspx
http://india.businessesforsale.com/indian/search/ Hotels-for-sale
http://www.99acres.com/property-in-kulu-manali-ffid
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http://manali.citrushotels.com/
http://www.tripadvisor.in/Hotel_Review-g297618- d736513-Reviews-Citrus_Manali_Resorts-Manali_Himachal_Pradesh.html
39