Entrepreneurship

Project
On
(Business Plan on
Opening of
Resort/Hotel)

Submitted To-: Submitted By-:

Professor Anil Kamboj Srishti Singh

F2
227
 Overview

The Vintage Avenue outlines how it will provide quality hospitality

services, cost-effectively, in a popular city of India, Delhi (Manesar).
This plan successfully raised capital for property acquisition,
renovation, and company start-up related costs.

 EXECUTIVE SUMMARY
 BUSINESS MODEL
 HOTEL & LOUNGE OVERVIEW (INNOVATION)
 MARKET ANALYSIS (FIVE FORCES)
 COMPETITIVE ENVIRONMENT
 GROWTH STRATEGY & IMPLEMENTATION
 PROMOTION STRATEGY
 FINANCIAL PLAN/PROJECT FUNDING
 FINANCIAL ASSUMPTIONS
 PLANS FOR EXIT
EXECUTIVE SUMMARY
We seek funds for the acquisition and renovation of The Vintage Avenue, an adult-
marketed, 17-room "boutique style" hotel specializing in weekend getaway, Nature lovers,
Honeymooners, Families to provide relaxation and recreation. A popular tourism spot
located near Manesar in the region of Delhi NCR. Moderately priced between the high-line
hotel properties and the older motel strips.

Combined with an on-site lounge, Multi cuisine dining options, 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, The
Vintage Avenue 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
business plan.

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 in order to review the market potential,
and competitive situation.

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.
The Vintage Avenue 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.

As our short-term goal is to increase sales that will allow us to compete with our
competitors and further provides economies of scale, make short term profits, increase
market share and consequently continue to innovate our business.
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 determining a company's opportunities and risks.

Ideal Property Location

The vintage avenue is located on the outskirts of Delhi NCR near Manesar (A popular tourist
destination for holidays, outing, get together) which is 32.5 km from IGI Airport.

The preferred location is a 10-acre parcel with 8 acres of woods. Of the 18 rooms, 3 are
executive suites. Each room has individual climate control, direct-dial phones, and
televisions. The facility has a large main lobby area, indoor pool, 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.

This facility consists of one building, built in two phases with 14,787 square feet area. The
18-unit motel 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 sauna room, an indoor swimming pool, and mechanical room. The motel 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.

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
a blacktop driveway and parking lot with 23 parking spaces, a lighted tennis court, and
beautiful landscaping with a variety of trees and shrubs.
Mission Statement
The Vintage Avenue Inc.'s mission is to provide quality hospitality services to our guests in a
comprehensive and cost competitive manner, providing the finest accommodations in Delhi
NCR, Manesar.

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 international investors

 Focus ideas and establish goals
 Identify and quantify long-term expansion
 Track and direct growth
 Create benchmarks for measuring success

The Vintage Avenue shall fill a niche not presently available, namely a moderately priced
(under 10,000 per night, summer rate) . 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
motel. With the construction of an outdoor pool adjacent to the present indoor pool
complex and our other refurbishment and new amenities, The Vintage Avenue will form the
basis of a highly profitable venture set in a Prairie Style environment.

MARKET ANALYSIS
Vintage Avenue, 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. Also Increase in no. of jobs in nearby hub
location such as Gurgaon leading more people to be able and willing to spend money and to
get away for some time.

Geographical/Competitive Environment
As Manesar is the most popular destination to go for an outing to. As surroundings of
Manesar is filled with different picnic spots, Temple, Resorts, Riverside Lake etc.

Manesar is just the perfect place to come up with a unique styled resort due to corporate
hub and presence of already available various resorts, picnic spots as most of the Delhiites
and various other people planned to go for a short trip to Manesar and the nearby places.
Presence of readily available resorts provide competitive advantage to us.

Legal/Political Environment
The Vintage Avenue management will not move the project forward until it has obtained an
option to acquire 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
experts. The facility will obtain all the necessary building permits prior to construction.
Present facility zoning allows for this proposed use, including a bar, grill, and dance floor
space.

Technology Environment
Computer programs and its related software greatly simplify the financial recordkeeping for
today's businesses. As a small business, The Vintage Avenue 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. For this purpose, it needs to hire finance professionals. The Vintage
Avenue shall attract the resources necessary to train and operate the system in order to
generate the reports and manage the inventory.
COMPETITIVE ENVIRONMENT
A listing of the hotel and motel properties in Delhi NCR, Manesar (Note: Other properties in
Manesar, but outside the city limits, are not included):

High Line (7,000-10,000 per night onwards depending upon season)

Golden Turtle Farm
Heritage Village Resort
Western Resort Country Club

Motel (3,000-6,000 per night, depending upon season)

Surjivan resort
Paradise Inn
Lemon Tree Hotel
The Aravali

Market Research
A hypothetical behaviour 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 the 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, or perhaps look in a newspaper for advertising.

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) Goodwill (what kind of persons usually stay here?)

(3) Physical plant (how recent the renovation, upkeep, etc?)

(4) Courtesy (professional and attentive staff?)

(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 The
Vintage Avenue will do everything possible to 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.

STRATEGY & IMPLEMENTATION

The business is driven by referrals and repeat business, so for the first few years The Vintage
Avenue 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 traveling to the area
 Middle- and upper-income bracket
 Returning visitors to the area
 Businesses partners for discussion and meeting
 Area wedding parties
  Couples
 Foreign Tourist

Positioning and Product Strategy

For its guests, The Vintage Avenue 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). The Vintage Avenue will aim to attract business
guests and their partners needing to hold planning or strategy sessions away from the office
in a new and comfortable surrounding, 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 centre on making the services available in a convenient manner to the greatest
number of potential guests. The Vintage Avenue 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 The Vintage Avenue 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.
 Room Fees

Winter Rates (November through April):

Regular Rooms Rs. 8061.53

Suites Rs. 11,019.89

Summer Rates (May through October):

Regular Rooms Rs. 9540.71

Suites Rs. 13,238.66

(Includes Continental Breakfast, use of indoor and outdoor pools, and exercise equipment
room.)

Fax Service (per page, outgoing) Rs. 55.47

Telephone Rates (set at going company rate)

Hotel Safe Storage Fee (per day) Rs 184.90

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,
High-end experience, publicity, our frequent guest reward program, and advertising—is
being proposed.

Marketing Plan
New Business Segment (Direct Marketing)
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 different partners and sources and is 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 introduce The Vintage Avenue, 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 Manesar. 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.

The Vintage Avenue 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 Vintage avenue 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.

Publicity and Public Relations

A news release will be sent to area newspapers and magazines announcing the launch of
The Vintage Avenue, Inc. and lounge.

Guest Reward Programs (Customer Loyalty Program)

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.")

For promoting the new resort, overseas advertising budget will be used to support travel
agents brochures and provide flyers for unique packages.

Local advertisement can be use to support the travel agents

Yellow pages-: Telephone directory (This form of advertisement has been used to target
new guests or those who do not have many personal experiences to ask about the hotel
services will look to the yellow pages to chose the list of potential resorts/Hotel/Lounge
services to call.

The Social Media Plan

The hosting of our resort in the social media sites will be proposed.

Example Promotion Budget

Resort brochure (2-color, 1,000 quantity, high quality

Rs. 55,469.25
paper)

Reply card (2-color, 500 quantity, card stock) Rs. 18,489.75

Lists (new businesses, home-based businesses) Rs. 55,469.25

Postage (mailing 450 pieces) Rs. 36,979.50

Restaurant placemats (5 restaurants/10 events) Rs. 36,979.50

Newspaper advertising Rs. 3,69,795.00

Yellow Pages Rs. 1,47,918.00

Advertising specialties (give-away) Rs. 18,489.75

Evaluation & Control Strategies

Objectives have been established for The Vintage Avenue so that actual performance can be
measured. Thus, at the end of its first year, Vintage Avenue should have:

 Rs. 50-55 lakh (approx.) in total revenue

 Anticipate 57% 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 standards,
investigation will be made into the cause, and plans will be adjusted accordingly.

In addition, it is recommended that The Vintage Avenue keep track of the source of all new
guests through short survey ("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 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.

FINANCIAL PLAN
Here is the Project Funding Summary for Vintage Avenue:

Project Funding Summary

Building and Improvements Cost 6,50,00,000

Fixtures, Build-Out and Furniture 2,20,00,000

Developmental Start-Up Expense 80,00,000.00

Five Months Working Capital 50,00,000

Total 10,00,00,000
Phase 1 Funding Amounts Sought
Developmental costs for the start-up of this new hotel and lounge services company are
listed above. These schedules also listed in the Ten Year Proforma.

The following schedule highlights the anticipated developmental costs:

Classification: Cost

Liquor License Rs.52,51,089

Architect Fees Rs.5,54,692.50

Accounting Rs.1,10,938.50

Marketing, PR & Advertising Rs.7,39,590

Engineering & Permitting Rs.3,69,795

Office Expense Rs.1,47,918

Founders Draw (Gen.

Rs.11,83,344
Contractor)

Legal Rs.2,21,877

Total Rs.85,79,244

The development of The Vintage Avenue Inc. will require the full-time talents of people.
Phase II growth amounts will be developed and sought at a later stage, depending upon the
needs generated at that point of time.

Financial Plan Assumptions

The following assumptions will be incorporated into The Vintage Avenue, Inc. proforma
statements.

 All operating costs are based on Vintage Avenue, Inc. management research of
similar operating companies.
 Automated informational and bar control systems will reduce Vintage Avenue, Inc.
staff requirements.
 Developmental start-up costs are amortized over a five-year period.
 Room Occupancy Rate at 57%, G & A overhead and operations costs are calculated
on an annual basis.
 Property manager’s salary is based on a 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.

Plans for Exit

A hotel’s/resort’s exit strategy should be formulated before the deal to purchase is struck.
However, no two strategies will be the same as owners work to get the most value out of
their assets before saying goodbye.

Robert Leven, chief investment officer at Procaccianti Companies and TPG Hotels & Resorts,
said exit strategies aren’t stagnant, but rather they can alter as the world changes around
the asset. But for starters, it’s important to at least have a concept of what is envisioned for
the full roundtrip of the investment.

“You can conceive and plan for an exit strategy and a million different things can happen
between investing and the time you decide to exit and ultimately do exit,” Leven said. “We
always want to have a conceptual plan of how we see the investment from start to finish
before we buy. It gets revaluated every year as to what has happened with the original
concept or what hasn’t happened—and we make adjustments.”

Michael P. Marshall, president and CEO of Marshall Hotels & Resorts, said it’s important not
to fall in love with the real estate.

“It has to be a business decision through and through,” he said. “The problem with real
estate, and hotels in particular, is that people fall in love with the physical structure of the
building and tend to make decisions based on ego rather than basic business tenets.”
Mary Beth Cutshall, senior vice president and chief business development officer
at Hospitality Ventures Management Group, said there are a few things her company
considers when planning for an exit, including: having a well-defined deal objective, process
and activities; targeted hold period and buyer pool; and the expected investment returns
and resources required to accomplish the objective.

There are various ways by which you can plan a exit strategy for a particular business, In my
case I have found different exit plans for my resort’s business which are as follows-:

1) Continuing the Legacy in the Family

As an entrepreneur, would prefer to keep the business in the family long term, and that
means making plans for transitioning the company to a child or another relative at a certain
point. This may seem like an attractive business exit strategy because you can groom
successors over time—just make sure your family relationships can handle the volatility and
stress of business ownership.

Although keeping the business in the family for multiple generations may seem like the best
way to preserve your name in the business, it’s important to be practical about who is really
the best person for the job of running your business. 

2) Merge or Become Acquired by Another Business

With a merger or acquisition business exit strategy, your company is either purchased by or
merges with, a company with similar or aligned goals to your business. Depending on who
you merge with or sell your business to, this method could mean flexibility in terms of your
involvement, or the freedom to walk away.

Perhaps the best thing about this exit strategy is the ability to negotiate the price of the sell,
whereas selling to the public (an IPO) would value your company relative to the industry.
This process can take a long time, however, if it happens at all. Biz buy Sell estimates
that only 20% of businesses listed for sale actually get bought. If it’s your dream to merge or
get acquired, you might want to have a Plan B just in case.