MBA - DIPLOMA STAGE
TITLE PAGE: Business Title
:
Night Club
Report To
:
Dr Harry Matlay & Dr Rod Shelton
Report From
:
Yogesh Bhujbal
Student ID
:
S10497122
Date
:
1 April 2011
Business Name
:
LA-VIDA
1
Table of Contents
Page no. 1. Business Summary ……………………………………………………………
3
2. Business Model …………………………………………………………………
3
2.1
Mission ………………………………………………………………………
3
2.2
Name and Design of the Nightclub ………………………….
3
2.3
Objectives ………………………………………………………………….
4
2.4
Key to Success ………………………………………………………….
4
3. SWOT Analysis ………………………………………………………………….
4
4. Start-up and Investment Plan ……………………………………….
5
5. Market Analysis ………………………………………………………………..
6
5.1
Market Segmentation ……………………………………………….
6
6. The 4 P’s …………………………………………………………………………….
7
7. The Management Team Summary ……………………………….
7
7.1
Products and Services we are going to offer…………..
2
8
7.2
Personal Development …………………………………………….
8
7.3
Personnel in the Business ……………………………………….
9
8. Strategy and Implementation Summary …………….......
9
8.1
Competitive Edge ……………………………………………………..
9
8.2
Sales Strategy ………………………………………………………….
9
8.3
Financial Forecast ……………………………………………………..
10
8.4
Break-even Analysis ………………………………………………….
11
9. References ………………………………………………………………………..
1.
12
BUSINESS SUMARRY The location of LA-VIDA night club will focus on attracting the students of Navi Mumbai area which has 28 large collages Higher Education in India (2011) growing by 15% each year. The nightclub site will be on the main area of Vashi local railway station that connected to all major railway station across the city. The area does not have nightclub though there are some bars which are in business form past 10 years. The site is on the most important street most often used by students. We will provide a simple, yet unique, themed list of options and surrounding which will create a sense of 'belonging' for locals and tourists alike. Once opened, the LA-VIDA will have the excellent management team to direct its success. The three owners, Swapnil Kale, Alex Rodrigeous and Yogesh Bhujbal have over 5 years of nightclub management experience. Among them, Alex Rodrigeous has been the manager of the Indulges nightclub. It is most popular Club in the Navi Mumbai area, for the past five years. Funding for LA-VIDA nightclub will come from a bank loan and also from the business partners own funding and savings.
3
2.
BUSINESS MODEL
2.1
Mission: “Expect stress free life at LA-VIDA” LA-VIDA is a French word that means The Life. The above French line “La vida es Sueno” which means, The Life is a Dream, inspires it. This nightclub understands mainstay customers perfectly. The mission of the LA-VIDA is to create an atmosphere that please the varying tastes and prospect of our mainstay customers. For example, college students and youth people of the town.
2.2
Name and Design of the Nightclub: Your business name is usually the first way people get to hear about your venture and it needs to convey the essence of the business quickly and clearly. The main consideration in choosing a business name is its commercial usefulness. Barrow C., Barrow P. and Brown R. The Business Plan Workbook (2008). This is the reason I choose “LA-VIDA” as my nightclub’s name. It sounds attractive and very appealing name for nightclub. This nightclub will feature high top limit and a contemporary look with energetic glamorous interior decoration and furnishings, and colour schemes. The location of LA-VIDA club will combine this space into a 5,000 square foot nightclub. The central area of the club will consist of a large dance floor with cocktail seating along the perimeter and a large bar located nearby. The focus of the club's design will be to create a highly social atmosphere. This will be achieving through the placement of couches, booth seating, and a quieter lounge area located away from the dancing and music.
2.3 Objectives: •
Make the most of on excellent location prospect. Launch the location with a vastly made known grand opening event in the month of November in year one. • Keep up flat control of costs, processes, and cash flow through systematic management and automatic computer control. • Maintain food costs below 33% of food revenue. • Maintain total beverage costs below 25% of beverage revenue.
2.4
Keys to Success: Strict control on all costs without exclusion. Provide exceptional service that leaves an impression with our mainstay customers. • Constant amusement atmosphere and service quality. • Managing our in-house funds and cash flow to facilitate upward capital growth. •
4
3.
SWOT ANALYSIS Strength: I think one of our big strength is status for well-known Dj’s music for different types of clubbing experience. We will be seen as the first main stream nightclub in the Vashi - Navi Mumbai area. Weakness: Frequent change bar/nightclub business operation laws and government specified operation time in the state of Maharashtra during previous days shows that there might slow down of business for the specific period. There are some politicians, Government official asks for bribe, and if you do not make for it, they can create lot of hindrance in the business operation. Opportunity: If company views it business in long run one can really build a successful business, especially if we take care of our customer needs. Our nightclub management will look after customers need effectively. People want more from a business nowadays. They want superior services and I think one can offer that then there will be enormous opportunity to bring more customers into the business. Threat: One of the threat is we will have to face is with the changing of the licensing laws, many bars will be becoming more like clubs and venues, so that will enlarge number of participant in nightclub business market and apparently, they will want to share profit of our business. 4. START-UP AND INVESTMENT PLAN Swapnil Kale intends to invest 20% in the business from his saving and bonds. Alex Rodrigious will be investing 25% from his saving and income from sale of property and Yogesh Bjujbal is going to invest 15% from his family saving. The other 40% finance will come by business loan from HDFC bank. Below is an estimate of a possible range of start-up cost. The actual cost might be lower or higher than these figures. Type of Expense
Low-End High-End Estimate Estimate Rent (security deposit & first month rent) £1500 £4,000 Leasehold improvements (air conditioning, £15,000 £50,000 electrical, plumbing, painting, carpentry, kitchen upgrade, restroom upgrade, flooring, smoke detectors) Interior Design and Refurbishing (including £7,000 £25,000 tables, chairs) 5
Equipment/Fixtures (audio/lighting lease payment, DJ sound system, bar equipment, lasers, smoke machines, stage sets, mirror objects, other equipment) Kitchen Equipment (draft dispenser, microbrew equipment, commercial kitchen, hand sinks, concession equipment, etc.) Cash Reserves Signs (exterior, exit signs, etc.) Legal Fees, Licenses and Permits Point of Sales systems (including merchant accounts, credit card terminals, etc.) Fire Fighting Enterprises (fire sprinkler systems, fire alarm, fire extinguishers, etc.) Beginning Inventory (bar supplies, food) Opening Salaries Deposits Insurance Grand Opening Marketing Total Other Expenses Total start up expenditures
£17,000
£50,000
£5,000
£20,000
£25,000 £3,000 £18,000 £5,000
£60,000 £7,000 £40,000 £15,000
£7,000
£15,000
£7,000 £7,000 £300 £1,000
£20,000 £25,000 £2000 £12,000
£118,800 Add 10% of total (£11880) £118,800
£345,000 Add 10% of total (£34500) £379,500
From where will be the revenue coming? The three main sources of revenue for a nightclub business: Admission or entry fees Beverage sales Food sales • Sponsorship supported by businesses and products, which are marketing their products to our mainstay customers. • • •
To calculate daily revenue more accurately, we are going to follow above measurements: • • • •
5.
Average Average Average Average
drinks per person. beverage sales per person. food sales per person. alternative of seating space.
MARKET ANALYSIS Navi Mumbai is a satellite twin of the city of Mumbai. It is the largest planned city in the world, with an area of 344 km2. The present population of Navi Mumbai is 0.75 million and is estimated to grow to 2 6
million. Click India (2011) Navi Mumbai. The revival of the Vashi area represents a unique opportunity for a high-energy dance club. The city's central location, demographics, and absence of straight competition are major advantages to this project. The proposed club—uncertainly named "LA-VIDA" will provide a local answer to the lack of dance and live music venues geared toward the 21 to 35 age group in city area and will help keep late night entertainment expenditures within the region. The development of the Navi Mumbai area has been, and will continue to be, a major means in bringing people to the area with current mobilization of over 15000 students. Additional surrounding educational institutions are also coming up. It will contribute to the potential customer base. Other proposals in the area such as the Multiplex Theatre and shopping centre will also greatly affect the city's traffic flow and nightlife. The club will represent primarily from the Navi Mumbai area while attracting visitors from the other surrounding areas of the city. 5.1
Market Segmentation: Our purpose market segmentation is divided between student and other young population of the Navi Mumbai city area.
Prospective Customers
Progress for the first year
Students
15%
Young population 10% of the city
6.
Other
5%
Total
20%
THE 4 P’S 1. Product: A good social club should sell itself, but there are not many bad bar or clubs in today's extremely competitive markets. In addition, all the club brands have extensive customer service programs, which are created to try to cut down complaints and build effective customer relationship. The question on service of every nightclub or brand can be address if they have formed what its directed markets and guests wanted. Providing a distinctive flavour in clubbing service must meet the needs of your customers or they will not return. 2. Price: Price is determined by market share, opposition, working costs, brand or product identity and the customer's perceived value of the product. Pricing may increase or decrease with occurrence and pricing plans must be deliberate and worked every single day. Cash flow is an evident business critical factor and reasonable discounts on a logical basis are often good business practices. A non-technical look at their pricing 7
plans from only a consumer’s opinion will show how they track ultimatum and adjust prices consequently, even in the slack period. Consumers will always remain sensitive for rational prices, discount possibilities and special offers. 3. Place: Place represents the locations where facilities are available. Technology has changed the distribution networks via the internet and third party resellers and the changing role of instant communication has clearly changed the location of uncertainties and guest access. 4. Promotion: Our mainstay customers are university students form a large part of our targeted market. Marketing includes many faces to reach out to the targeted visitors, including advertising, direct sales, sales promotions, public relations, publicity, branding, media, etc. Joint venture of marketing deals with hotels will help a lot in order to generate promotion. We place brochures in their lobbies, or guest rooms. Nightclubs usually use advertising to endorse their business. Hording and internet or website (Ecommerce) advertising has a potential for bringing customers to the nightclubs.
HE MANAGEMENT TEAM SUMMARY
The LA-VIDA’s location has three owners, Alex Rodrigeous, Swapnil Kale, and Yogesh Bhujbal. Alex Rodrigeous has a Master’s in business administration. He successfully managed five bars in past few years. He is currently in his eight year as manager of Indulge Club and bar, the most popular bar Navi Mumbai area. Swapnil Kale has Master’s in Marketing from Mumbai University. He has held a marketing position with Siemens and Quickwin before starting the WWF nightclub with Yogesh Bhujbal 3 years before. He has a Bachelor degree in business administration. Before being partner in the WWF nightclub, he also managed three nightclubs. 7.1 Products and Services we are going to offer: Nightclub’s central Location, demographics, and deficient in of direct competition are main return to this project. LA-VIDA nightclub will specialize in high-energy dance music with a quality light show and will offer beer, wine and selection of fluids and mixed drinks permitted by government. In addition, the location will sell non-alcoholic beverages such as juices, soft-drinks and bottled water. The initial hours of operation will be 7:00p.m. to 2:00a.m. five nights a week from Tuesday to Sunday. The establishment will draw primarily from the student population of Navi Mumbai area and also will attract visitors from other parts of the city for 8
example, Nerul, CBD-Belapur, Chembur Ghatkopar, Kurla, Bhandup, Mulund and Thane. 7.2 Personal Development: Swapnil Kale has been working as a project manager for Siemens Ltd. and Operation manager for WWF nightclub in Mumbai, India from the past 6 years. His experience in operation management of live projects in Mumbai region has helped him develop relationship key government official. Swapnil will be working full time with LA VIDA in Mumbai. He would maintain relationship with politician and Government official which will eventually help to run business smoothly and without hindrance as they are considered to be main interruption in the clubbing business. Yogesh Bhujbal has been working with WWF club Mumbai and has good knowledge of Navi Mumbai area as he lives there since his childhood. Additionally, his experience as business development management has developed necessary skills required for this role. Yogesh will be based in India at the Vashi- Navi Mumbai area and will be involves in day to day running of the business along with two staff. Alex Rodrigeous has successfully managed five bars in past few years. He is very trustful person and is a friend with Yogesh Bhujbal and Swapnil kale since last ten years.
7.3 Personnel in the Business: Year: (Alex Rodrigeous Yogesh Bhujbal Swapnil Kale) Total Total Personnel Total Payroll
2012
£20,000
2013
£22,000
3
3
£20,000
£22,000
8.
STRATEGY AND IMPLEMENTATION SUMMARY
8.1
Competitive Edge: 9
2014
£24,000 3 £24,000
There are three fundamentals to the location's reasonable circumference. The location is easily accessible by local railway network and form the whole Navi Mumbai area. The area around the Vashi location is already a regular place for students to mingle in the evening. The nightclub’s location will have the following to attract and retain our core customers: A larger people room area In advance of its conventional uses, it's will be also a place for social meeting and exchange. As a effect, we will add extra square footage to this part of the venue including a couch, music, TV and well enough social liberty. Floor design Careful deliberation will be taking in to consideration on everything from colours, to interior, and materials. Music We will employ DJ’s who have the best contentment tempo with the new generation test of music.
8.2
Sales Strategy: The cover charge we will waive for all student customers. We will then establish a Ladies night and Gay clubbing on every Wednesday and last Saturday of every month subsequently. This will eventually make our nightclub popular in mass. The cover charges will be £4. This will be cheapest than any other nightclub and bar in the city. Our sales strategy is to provide amusement to bring in an early gathering before 10 P.M. Comedians, entertainment games, football and cricket matches on big screen will be reserved into the early evening time slot.
8.3
Financial Forecast: As the following table shows, we intend to deliver sales of £25K in the first year, and double that by the third year of the plan. Sale prediction for a year
10
(Figure: 1) Sale prediction for three years
(Figure:2)
8.4 Break-even Analysis: Break-even Analysis is given in the following chart. Break-even Analysis 11
Monthly Units Break-even
£5,110
Monthly Revenue Break-even
£28,241
Assumptions: Average Per-Unit Revenue
£3.33
Average Per-Unit Variable Cost
£1
Projected Monthly Fixed Cost
£21,215
(Words count: 2170)
12
9.
REFERENCES
1. Higher Education in India (2010) Available at: http://www.highereducationinindia.com/india/navi-mumbaiinstitutes.php Last Accessed on 15 March 2011 2. Barrow C., Barrow P., and Brown R. (2008). The Business Plan Workbook. 6th ed. London: British Library. p.41.
3. Click India. (2011) Navi Mumbai. Available at: http://mumbai.clickindia.com/areas/navimumbai.html. Last Accessed on 20 March 2011.
13
