Part 1 EXECUTIVE SUMMARY

Company’s Name: Naturally U Fitness Center Pvt. Ltd.

Address : New Plaza
Putalisadak
Kathmandu, Nepal
Phone Number : 01-2004343

Names and Addresses of Key People:

1. Bishal Dhakal 2. Ramesh Baral

Sales and Marketing, Head Health and Training, Head

Bishal Nagar Sankhamul
Kathmandu Nepal Kathmandu, Nepal
Phone: 01-4431381 Phone: 01-4782085

3. Manoj Saria 4. Sanjeev Bartaula

Managing Director & Customer care, Head Finance and Administration, Head
New Plaza Old Baneshwor
Kathmandu, Nepal Kathmandu,
Phone: 01-4497556 Phone: 01-4473581

Naturally U Fitness Center is a service oriented center which especially provides people
with the basic health improvements work. It will be established for the promotion of
physical and mental health intended to provide assistance for people who want to live a
healthy life in a luxurious manner.

The center features Gym, Swimming pool, Dry and Steam Sauna , Jacuzzi, Aerobics and
Restaurant in reasonable price to all target customers, since there are only high class
expensive centers till date which cannot be afforded by middle class people.

There are around 17 fitness clubs in the valley with the same facilities that we provide.
All these centers have been in profit over the last two years as the market is growing
rapidly. Therefore, to sustain and attract customers we have capitalized on the cost
reduction strategy and plan to provide the same services minimum of cost in an
affordable manner to people having monthly salary of around NRs.25000.
Introducing facilities like indoor swimming pool, hot water swimming pool, water slides,
electronic modern gym equipment, celebrity endorsement, herbal massage facilities,
international dieticians etc will surely boost the service sales in near future.

Fitness center will be established under the partnership act with four partners. All four are
Science graduates of Kathmandu University. A description of each partner is given
below:

• Ramesh Baral stays in Sankhamul and has been actively engaged in various
fitness centers as a customer. He therefore has well knowledge on the effective
working of fitness center and what a customer desires for in a health center.

• Manoj Saria stays in Putalisadak and has well known contacts and knowledge on
the working of a firm at that particular location

• Sanjeev Bartaula stays in Old Baneshwor, wants to do some innovative and

challenging work and has strong background in management. On his family
background, his father who dwells in United States can provide us various
important information on the latest innovations adopted by fitness centers out
there.

• Bishal Dhakal is hardworking and interested in having his own organization

rather than working on others. He stays in Bishal Nagar and through his family
contacts various government formalities can be sorted out easily. He has basic
marketing capabilities.

We have estimated about NRs.31, 00,000 as a capital to run this project and around 48%
of this money will be gathered as a loan from the bank. This document will surely aid the
bank to grant us a loan. This total capital will be used for purchasing, installation of
equipments and also as a working capital.
Financial forecast is shown below:

Financial Investment and Financing Plan

Particular Owners' equity Loan Total
A. Fixed capital
Swimming pool,Steam and
sauna 800000 500000 1300000
Building 180000 0 180000
Machineries & equipment 0 908000 908000
Office equipment 181000 0 181000
Electronics 90000 0 90000
Furniture 228500 228500
B. Pre operating expenses 23500 0 23500
C. Working capital 97000 92000 189000
Total 1600000 1500000 3100000

2
Percentage 52% 48% 100%

Summary Table

Name of the Company, Naturally U Fitness Center Pvt. Ltd

Location House No.66, New Plaza, Putalisadak
Registered As Per This company is registered under Nepal government's
Company Act 1964

Type of Company Private Limited Company

Owners Four ; Bishal Dhakal, Ramesh Baral, Manoj Saria and
Sanjeev Bartaula
Objective Providing physical fitness facility and also acting as a
recreational center.
Mission Ensuring Good Health for Better community
Target Market All middle class people having salary around NRs 25000/
month
Total Investment Rs.31,00,000
Cash in Hand Rs.16,00,000
Loan from Bank Rs.15,00,000 at 9% interest
Total Capacity 500 (Upon full acceleration of business)
Number of Staffs 14
Distribution of Department Four; Sales and Marketing, Finance and Administration,
Health and Training, Customer Care

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Part 2 MARKETING PLAN
2.1 Product and Pricing

2.1.1 Description of the service

The business of fitness center in Nepal is gradually becoming competitive and

professional. The basic philosophy of this new health center is to achieve a greater sense
of health and yet maintain equilibrium between various classes (middle, high) dilemma
by creating an appropriate environment suited to the life style of different groups. The
services that we offer are not just for health, but are symbols of quality lifestyle and
luxury for those who aspire for it.

The future prospect of this market has lured many of the new investors. In this context
our service- Naturally U Fitness Center Pvt. Ltd.(NU) is also going to be launched in the
market very soon. With various range of facilities to meet the modern life, the product
satisfies all the needs that a customer desires for. Naturally U Fitness Center offers
services responding to the customer's needs in an affordable manner and has a beautifully
carved environment to suit the need of budget luxurious lifestyle ,equipped with items of
modern comfort.

The service will be available in the market after detailed survey and research among
various fitness experts, architects and designers. The fitness project has been effectively
blended with the graceful elements of Japanese, American lifestyle enhancing Nepalese
living standard. High quality with affordable prices will be the core special offers of the
company to the consumers.

We have the following services:

• Secure, sound and comfortable environment with complete facilities.

• Rich ambience with excellent infrastructure.
• Fully equipped gymnasium and aerobic classes with licensed trainers.
• Strong emphasis on peaceful ambience, health and hygiene.
• Garden and parking spaces.
• Stunning, comfortable and affordable modern services.
• Sauna, Jacuzzi, Steam bath facilities.
• Wide swimming pool.
• 3 shifts a day (morning, evening and afternoon)
• Unsurpassed quality.
• Various membership parameters according to customer budget.
• Lasting commitment to the customers.
• Easily accessible location.

4
2.1.2 Location

Location plays a vital role in the success of any business and this will be a prime factor in
our business as well. People prefer secured area with serene, comfortable, accessible,
and eco-friendly environment with proper transportation facility.

Putalisadak House No.66 is our selected Location for the center which is 2 minutes walk
from Singhadurbar, 10 minutes from New Road, 3 minutes from Anamnagar, and 5
minutes from Dillibazar. The surrounding area is a well established residential area with
more than a 1000 families staying around 100 metres from our site. Another important
aspect of this location is that it lies in the heart of Kathmandu Valley with proper
transportation facility from any corner of city. Though the estimated price of a flat at
Putalisadak is Rs.20,000 only, we have planned to lease 5 flats (initially) from the local
individual for 5 years at Rs.70,000 including the spare land. This will help minimize our
investment in the business and thus minimize our business risk as well. The swimming
pool will be constructed in an area of 1 ropani behind the building.

2.1.3 Product Attributes

The aim of the center is to provide customers with best facilities for guaranteed
maximum satisfaction. For this very reason, facilities such as gym, sauna, steam,
swimming pool, and also service like Jacuzzi have been introduced which definitely will
satisfy our valued customers. A brief description of each is given below:

Gymnasium

The center provides wide range of cardio vascular and strength training exercise
equipments such as branded motorized tread mills. steppers, rowing machines, stationary
bicycles, cross cable equipments, wide range free weights and other cardio equipments.

5
Steam/Sauna

The center provides both steam and dry sauna. It is one of the life’s most physically and
mentally refreshing experiences. This will help reduce the damaging effects of stress,
fatigue and exposure to environmental toxins

Jacuzzi

Also known as Japanese hot water bath where water is effectively bubbled to refresh and
rejuvenate the human body. It is a most reliable way to have perfect refreshment and only
way that can satisfy your entire body with perfect safety.

6
Aerobics

It helps to use oxygen more effectively by conditioning the heart and lungs. Aerobic
exercises have a wide range of benefits such as it increases muscular and cardiovascular
fitness thus enhancing flexibility.

Swimming Pool

A crystal clear swimming pool with the sunlight reflecting its rays over the clear
sparkling water. Enjoy a refreshing cool water and search the aquatic world.

7
Restaurant

It has a clean and fresh look catering hygenic and healthy food. It offers different high
quality cuisine ranging from typical Nepali food to continental dishes with a genuinely
friendly service.

8
2.1.4 Product Life cycle

This concept though not new in Nepalese market is still one of the happening business
expanding as every year passes i.e. is presently in a rapid growth phase. This product life
cycle depicts NU fitness centers development plan over a period of 5 years
hypothetically.

Error: Reference source not found

TIME(Years)

During maturation phase (which arises due to increasing competition) introducing

facilities like indoor swimming pool, hot water swimming pool, water slides, electronic
modern gym equipment, celebrity endorsement, herbal massage facilities, international
dieticians etc will surely boost the service sales as in the figure.

2.1.5 Costing

Cost of Product Development

Particulars Charge(NRs.)
Registration 5,000
Legal 4,000
Product
Transportation Growth phase(2 Growth phase(2
1,500
development
Communication years) years)
1,000
(6 months)
Interior designing consultation fee 12,000

Total 23,500

Cost of goods

For Gymnasium

Particulars Quantity Cost/item Total(NRs.)

Bench press 2 25,000 50,000
Inclined Press 2 30,000 60,000
Decline Press 2 30,000 60,000

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Weight Stand 2 4,500 9,000
Tread Mill 2 36,000 72,000
Home Gym 2 95,000 190,000
Weights 22,000 22,000
Barbell 20 600 12,000
Multi gym 1 250,000 250,000
Stationary Cycle 3 17,000 51,000
Steppers 2 6,000 12,000
Cross Cable Equipment 1 15,000 15,000
Rowing Machines 3 16,000 48,000
Ab king Pro 2 8,000 16,000
Push Up rest 6 500 3,000

Total 870,000

Others

Particulars Quantity Cost/item Total(NRs.)

Sofa 2 25,000 50,000
Table 8 4,000 32,000
Chairs 20 1,200 24,000
Mirrors 15 1,500 22,500
Cupboard 5 8,000 40,000
Resting Bench 10 2,000 20,000
Lockers 2 40,000 80,000
Computers 2 35,000 70,000
Printer 1 8,000 8,000
Music System 2 24,000 48,000
Television 1 42,000 42,000
Carpet 40,000 40,000
Electric Motor 2 11,000 22,000
Euro Guard 2 8,000 16,000
Steam/Sauna 1 450,000 450,000
Installation
Telephone Set 10 800 8,000
EPABX system 1 15,000 15,000
Jacuzzi 1 70,000 70,000

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Swimming Pool 1 700,000 700,000
system
Water plant 1 80,000 80,000
Renovation 180,000

Total 2,017,500

The price of the above accessories have been obtained from the following sources:

• Gymnasium Equipments

The Fitness Store, Bijulibazar

Fitness Choice, Kalikasthan
The Bluebird Mall

• Computers from Computer Info System Pvt. Ltd.

• Music System from LG Shoppe, Gorkha Complex, Minbhawan

• Other electronics from Macto trading Concern, Tripureshwor

• Cost of Swimming pool, Steam/Sauna installation, Jacuzzi from the owners of

existing health clubs viz. Mahendra Police Club and Hotel Shahanshah
International Sports Center

Operating expenses

Particulars Cost(NRs.)/month
Salary
(Receptionist-1, Accountant-1, Trainer-2, 112,000
Life guard-2, Cleaner-2, Security Guards-2,
Management Team-4)
Rent 45,000
Advertisement 7,000
Electricity 8,000
Maintenance 3,000
Telephone 2,000
Stationary 1,000
Transportation 500
Miscellaneous 2,000

Total 180,500/ month

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2.1.6 Pricing

Our focus is on the middle class society and thus the pricing scheme we offer is
reasonable and affordable. We offer different price schemes to encourage more
customers. Discount offers for couples, students, family, corporates and those in numbers
as stated below are certain to draw more customers.

Membership Type Duration of Membership

1 yr 6 months 3 months 1 month
Single 13,000 7,000 4,500 1,800
Couple 20,000 12,000 8,700 3,300
Family(3-5 persons) 33,500 17,000 12,000 7,000

Special Packages

1. Prepaid membership

25 visits valid for 3 months- Rs.2,500

2. For swimming

Single Student- Rs.100/student/visit

5 or more at a time- Rs.85/student/visit

3. Membership for swimming

One year- NRs.9,000

Half year- NRs.5,000
Quaterly- NRs. 3,000
Monthly- NRs. 1,200

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2.2 Market Characteristics

2.2.1 Market Characteristics

Through our public questionnaire we realized that many people nowadays living in the
valley are health conscious. Many middle class people go for regular morning walks to
uplift their fitness level and are willing to join a fitness center. But almost all health clubs
in today's market are expensive which cannot be afforded by the middle class groups.
Thus, realizing the scope and need of a fitness center which provides excellent service in
a reasonable price and implementing it for the welfare of the general public is necessary
and profitable as well.

We were able to sample out around 40 people. Among them 60 % of people belonging to
the age group of 20-30 yrs were extremely health conscious. Almost equal percentage of
male and female showed interest on an affordable fitness center.

2.2.2 Market Size and Total Demand

Our survey of the presently established health clubs reflected that around 15 Health Clubs
are working in Kathmandu at the moment. Most of these clubs are focused on high
society .Thus, the majority of the people in Kathmandu who lie in the middle class are
deprived of these facilities .Clubs like Mahendra Police Club (MPC), Hotel Shahanshah
International Sports Center, Banus's fitness , City Health club, Kundalini Suite Hotel and

13
Health Resort, The Nature Club have an average member of 200. This statistic is certain
to rise drastically provided the pricing scheme focuses on the middle class citizens

The fusion club located at Sinamangal has received overwhelming response with 50
members in just 2 months with only a Gymnasium .The key factor behind the success has
been the reasonable pricing and pinpoint marketing strategy. Total market demand for a
fitness club is very high provided the business strategy is realistic and sincere with
effective marketing strategy . We hope to achieve all these.

2.2.3 Market Share

Existing health clubs have 100-200 members on average. However, the total market is
very large compared to what’s been reflected through survey. The majority of the
population reluctant to go to clubs due to various reasons is our main focus. 15 clubs
have engaged around 2500 members at the present. And the total of around 1500 more
are looking forward joining a club. With two competitors around, we expect to attract
around 300 customers within a year. The business is going through growth phase at the
present and our effort in capitalizing this opportunity with features like reasonable price
and extra services gives us competitive edge over the competitors. With this we hope to
cover 20% of the market.
2.2.4 Market Survey

Objective

The basic objective of this survey is to conduct an analysis for establishment of a

Health Clubs in Nepal .

The main objectives of this study are stated as follows:

1) To make a strong marketing strategy .

2) To know the status of the existing health clubs in Kathmandu .
3) To understand the wants and needs of the customer.
4) To know the pros and cons of health Clubs in the valley.
5) To attract the customer by fulfilling their needs.
6) To analyze the pricing strategy.

Methodology

We basically focused on questionnaire as a method for conducting survey . We applied

two sets of questionnaire: One set questionnaire for the customers and another set was
used for the health club owners.

The survey was carried:

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At: Putalisadak, New Baneshwor, New Road and United World Trade Center,
Tripureshwor
On:12 May 2008

How: First Set of questionnaire was provided to the public and they were asked to fill it
up.

At: Mahendra Police Club, City Health Club, Kundalini Suite Hotel and Health Resort
Pvt. Ltd., Hotel Shahanshah International Sports Center , The Nature Club
On: 13 and 14 May

How: The second set of questionnaire was provided to the existing health club owner's
and was filled up by them. Personal informal interview was also carried out with them.

1st set questionnaire

This questionnaire survey was conducted on the customers basically for knowing their
interest, wants and needs.

2nd set questionnaire

This questionnaire survey was conducted on the existing health club owners. This set was
focused on the owners, their challenges, strengths and their clients. This set also includes
the services they offer, the facilities they have and the status they stand on.

Major Findings

Club Owners

Following facts about the club was revealed during our market survey:

 Mostly young individuals of age group 20-30 are the mostly interested.
 No difference between the services provided to male or female.
 There are only 28 licensed trainers in Nepal at the present. So finding one is the
difficult task. Most of the good trainers are already involved in their own gym
businesses.

15
  Customers mostly have the interest in Gym and swimming pool. So these sections
need to be properly taken care of.
 Most of the owners are not satisfied with their business and do not seem to have a
good profit. This may be the result of improper marketing plans.
 It is difficult to retain customers than to attract them. They seem to have new and
more attractive offers every new week. And maybe also because the customers
are not satisfied with what the present club owners offer.
 Payment from the customers is easy in the beginning however they get reluctant
as the history with the club increases. Thus most health clubs are running on
credit policy.
 Maximum health club owners do not advertise.
 Health clubs are not usually affected by political turbulence.
 In average, a customer pays about NRs.2,000 / month.
 Most of the trainers do not do their job properly as they know that they are among
few of the trainers available in Nepal.
 A professional dietician could add to the effectiveness of the gym and customer
satisfaction.
 Localities may sometimes interfere in the club's normal pricing schemes as they
expect heavy discounts.
 Equipments must be bought as per the targeted customer groups.
 High society individuals prefer high-tech electronic gadgets as middle class
people prefer mechanical machines at affordable price.

Potential Members:

 The general conception about fitness clubs is that, they are just the sign of
luxurious life and are affordable for high society only. The majority of the people
interested in doing so are discouraged by the pricing scheme.
 People prefer a fitness club in about a kilometer's range from the residential area.
 Females prefer separate gym for male and female.
 The fitness club should not be crowded so that customers can get effective
guidance and achieve better results easily.
 Health drinks should be included in the package.
 There should be a respectable environment in the gym with the classy co-
operative members.
 Most people prefer morning timings rather than afternoon and evening.

2.2.5 Clients

Our market potential is quite huge, despite we are just setting up our business and our
market not being saturated. During our initial phases, we will be focusing mainly on the
middle class Professionals having monthly salary below NRs 25,000. After few years
when our business will be in the growth phase (as will be indicated by customers order

16
and sales figure), we would focus more on customers having salary more than NRs
25,000. With growing urbanization the club is supposed to have more potential customers
after few years. In addition, the product targets students and teenagers of valley having
desire of health and fun.

Customers Description
Working couples Working couples prefer exercise for health as they are very
busy in their office work. They do not have much physical
work to satisfy their health needs.
Students and teenagers Joining health club seems like a fashion statement among
youths who desire for health while having fun and
effectively pass their spare time
High society business- Especially, those who belong to this high society need
Men luxury and comfort and more over a place where they can
socialize.
Foreigners We aim to stand out among Nepalese Clubs so as to attract
health conscious foreigners during their tour in Nepal.

Working couple

Students and teenagers

High society
businessmen
Foreigners

2.2.6 Competition

SWOT ANALYSIS

All business ventures and its product have some strength, weakness, opportunities and
threats. Strength and weakness are internal to the business and seem to be controllable
but threats and opportunities are external to the organization so they are uncontrollable in
nature. So, for the betterment of the service the company should be able to exploit its
opportunities and avoid threats.

17
SWOT analysis is done to understand the internal as well external environment of
product. The various forces in the internal environment provide strength and weakness
and the forces in the external environment provide opportunities and threats. Through
SWOT analysis, product's internal strength can be matched with external opportunities to
gain strategic advantage. SWOT analysis can be used to invest in weakness of the
product to make competitive and avoid threats operating in the external environment.
Similarly, this analysis is also the essence of strategy formulation.

The SWOT analyses of "Naturally U Fitness Center Pvt. Ltd.” are as follows:

Strengths Weakness

• Good infrastructure. • New in the competitive market.

• Located in the heart of the valley. • Inexperienced management.
Thus easily accessible. • Small parking area.
• Reasonable Price. • Payment may not be prompt.
• Licensed Trainers.
• Professional dieticians.
• New Modern Equipments.
• Various facilities.
• Highly secured area.

Opportunities Threats

• Growing demand for fitness. • Many successful competitors

• Site for possible extension.
• Apt as a party place.
• Addition of facilities hot water
pool, electronic gaming zone,
kiddies club
• Ownership of restaurant
• Consumer's loyalty towards
previous business house.
• Competitors may imitate
innovative ideas.
• Customer safety problem

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Similarly, SWOT analysis of some of the major competitors is as follows:

1 MAHENDRA POLICE CLUB (MPC)

Strength:

• Established long ago

• Numerous facilities
• Happening location
• Wide parking area

Weakness:

• Inexperienced management (new management established few days ago)

• Old equipments
• Small gym room
• Customers unsatisfaction
• Payment problem by customers
• Expensive

Opportunities:

• Site for possible extension

• Conduction of sport events.
• Establishment of indoor sports practice stadium.

Threats:

• Customer safety problem

• Market competition

2 HOTEL SHAHANSHAH INTERNATIONAL SPORTS CENTER

Strength:

• Established long ago

• Numerous facilities
• Wide parking area
• Experienced management
• Children amusement park established
• Tennis/squash/bowling facilities
• Excellent infrastructure

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Weakness:

• Old equipments
• Small gym room
• Very expensive
• High payment problem by customers
• Located in outskirts of valley

Opportunities:

• Site for possible extension

• Conduction of international sport events.

Threats:

• Customer safety problem

• Market competition

2.2.7 Market Strategy

Service Strategy

We are launching our service targeting small groups within small demographic area.
Although it is located in the heart of the city, our target area is its surrounding areas such
as Maitidevi, Dillibazar, Putalisadak, Anamnagar, Thapathali and New Baneshwor. The
sole aim of our center is to attract middle class people and above stated areas are mostly
covered by middle class people.

Pricing Strategy

We will be applying "Market Penetration" strategy for pricing. According to our survey
price is the key factor that affects the customer. Comparative study with existing health
clubs, our club possesses the least price. We hope this will surely attract more customers.

Pricing Strategies

 Different Charges for Different Product Services.

 Price is fixed as per the going market rate.
 Cost-plus pricing strategy.

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Internal Factors

Marketing objectives
Marketing mix
Costs

External factors

Nature of customers and demand

Competition

There are basically three methods of determining the selling prices of product .In general
and especially when starting a business, it is safer to use the "Cost +Method". It is also a
good business strategy to anticipate our competitor's reaction to our pricing strategy.
Selling price is the crucial factor for any business as it decides the profit for the company.

We know that the

SP = Full Cost + Markup %

While determining the selling price of our product, we have decided to concentrate on
both the "cost + method" and the "competitive method".

Promotion Strategy

In the introduction stage of the product, promotion plays very important role to make
people aware of the product. Promotion is one of the most important aspects of marketing
the product. Promotion is generally divided into advertising, personal selling, sales
promotion and publicity. These measures are:

• Advertisement on FM radio, newspaper, magazines and trade journals.

• Volume discount (reduce prices in lump sum sale )
• Billboards
• Personal selling.
• Prompt, regular, courteous and efficient services to our client.

These activities cost money to our business, so one has to be sure that for every
promotional measure adopted: there is a foreseeable increase in sale. Without a justifiable
increase in sale, cost will escalate: hence increase the unit cost of the product. We have
planned to spend NRs.84,000 for our promotional in the first year and plan to rely on
mouth to mouth endorsement in the successive years from satisfied customers.

21
 • Our target is small area, so by promoting our product in Local media such as
Subisu Cable Network and Cable Television Network would be most effective
and cheapest means of promotion.

• We will also sponsor local programs so that locals will be familiar and aware
about health and finally about our center.

• We will also conduct talk programs related to health and fitness including doctors
and dieticians.

• By publishing Newsletters, highlighting the benefits of the health clubs and need
of fitness in today's world to get rid of the stress and disease

• In future, we will involve the celebrities in cheap to attract the customers.

2.2.8 Marketing Budget

Marketing is one of the measures for enhancing the product in the market .We have
separated certain sum for promoting the product. The major promotion areas are stated
below:

Scrolling in local channel network(Cable Television Network and Subisu Cable Network)
(scrolling 2hrs per day) for first 4 months - Rs.44,000 (11,000 per month )

Sponsoring the local programs conducted in the local area- Rs 40,000

E.g: Sponsoring in local sports program such as football, cricket, volleyball competitions
Organizing free health test campaign locally

So, in total we will be spending about NRs 84000.00 annually as marketing budget.

2.2.9 Projected Sales:

The result of our survey reflected the fact that the existing health clubs have been able to
attract about 50-60 members in a small window of interval without any sort of
advertisements. If we capitalize on this fact seriously, we surely may be able to gather
about 100 members within the first few months, and if well advertised it may lead to
about 300 members in the first year.

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 The number of irregular members will certainly rise as per different seasons, thus the sale
is expected to rise as the business matures with some seasonal fluctuation in the sales.

The forecast for the next 4 years have been shown in the table below.

Pre-operating 1st year 2nd year 3rd year 4th year

45% 65% 80% 92%
Sales forcasting in units 0 225 325 400 460
Sales 0 3873798 5595486 6886752 7919765

Part 3 SERVICE AND OPERATION PLAN

3.1 Operation of Fitness Center

Our fitness center will mainly be dealing with following operations:

 Conduction of well equipped gym and swimming pool.

 Occasional organizing of free pool side parties for members.
 Provide individuals with basic gymnasium exercise guidelines and swimming
skills.
 Provide total refreshment of mind and body with unique soothing experience of
Jacuzzi and sauna.
 Delicious food

3.1.1 Operation Process for member Registration

The individuals interested in joining our fitness center will have to fill a simple
membership form and pay the necessary registration fee. After obtaining the necessary
information, thereby registered members will be allowed to enter the premises and use
the facilities inside the center. Full time proper guidance will be provided to all the
members.

3.1.2 Operation Process for the occasional swimmers (For the visitors)

23
Any swimmer interested to use the facility i.e. swimming pool for a day without the
membership will have to register the name in the reception on his way in. After using the
pool, the individual will then have to pay the charge in the reception on his way out.

Start

Fill in the
membership form
at the reception

Pay the necessary

registration fee

Yes
Use the
facilities? Sign in and
exercise

No

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 Sign out

End

Fig: Operation process for membership

Start

Register the name

and put your
belongings in the
locker

Use the swimming

pool

25
 Pay the charges

Sign out

End

Fig: Operation process for Swimming Visitors

3.2 Fixed Capital

Particulars Amount
1. Building + Infrastructure 1,480,000
2. Machineries and equipment 908,000
3. Electronic 90,000
4. Furniture 228,500
5. Office equipment 181,000

Total 2,887,500

3.3 Life of Fixed Capital

The value of our fixed assets is certain to be subjected to depreciation in years to

come. The depreciation amounts relative to our assets are included in the table below:

S.N. Description Rate Total Depreciation

1 Building + Infrastructure 5% 1,480,000 74,000

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 2 Machineries and equipment 10% 908,000 90,800
3 Electronics 10% 90,000 9,000
4 Furniture 20% 2,28,500 45,700
5 Office equipment 10% 1,81,000 18,100
Total depreciation 237,600
Per month 19,800

The normal life of machineries & electronics, buildings, and furniture are 10 years, 20
years and 5 years respectively.

3.4 Maintenance and repair

As the time progresses, the fixed assets that we have (furniture, machineries, buildings
etc.) are sure to face quality degradation and thus they need timely maintenance and
repair. We have allocated certain amount of money for this purpose.The maintenance will
performed by hired professionals.

The source for the maintenance and repair expense will be obtained from the general
income of the fitness center. However, the major expenses regarding this will be funded
from the bank savings of the center.

3.5 Sources of Equipment

The gymnasium equipments required for the gym will be brought from:

 The Bluebird Mall

 The Fitness Store, Bijulibazar
 Fitness Choice, Kalikasthan

The computer system and the software will be provided by the “Computer Info System”,
New Road which has already been agreed upon by both the parties.

The water supply system maintenance and the required machineries during daily
operation will be provided by Macto Trading Concern,Tripureswor

The entertainment systems such as Television and Music Systems are supplied by LG
Shoppe, Gorkha Complex, Minbhawan.

3.6 Planned Capacity and capacity Utilization

The fitness center can accomodate customers depending on various facilities as follows:

27
 S.No. Facilities Capacity at a time
1 Swimming pool 50
2 Dry Sauna 10
3 Steam Sauna 10
4 Jacuzzi 6
5 Gymnasium(Cardio+Weight) 70
6. Aerobics 32
Total 178

In total our fitness center when fully packed has capacity of 178 customers at a time.

The space has been fully utilized available in the leased building.

3.7 Future Capacity

In future the fitness center may be expanded as per needed. According to the customer
need, want, demand and the market change, the fitness center may be expanded by
leasing the land or building nearby the fitness center.

3.8 Terms and condition of purchase of Equipments

Following are the terms and conditions between the fitness center with the equipment
seller:

 50% of the total amount should be paid cash down and the remaining amount
should be paid within the 21 days of the delivery.
 Or 25% of the total amount should be paid cash down and the remaining amount
can be paid in installment within 18 months with interest of 7%.
 The seller will be responsible for all kind of damage to the equipments during
delivery.
 Parts replacement of all the machinery equipments is valid till 1 year of the
delivery. Electronics systems( TV and Music system) is provided with a warranty
period of 4 yrs.
 Free repair and maintenance of the machinery equipments is valid for 1 year.
 The cost of delivery should be paid by the seller.

28
 3.9 Factory location and layout

3.9.1 Location:

New Plaza, Putalisadak House No.66 is the selected Location for the center which is 2
minutes walk from Singhadurbar, 10 minutes from New Road, 3 minutes from
Anamnagar, and 5 minutes from Dillibazar. The surrounding area is a well established
residential area with more than a 1000 families staying around 100 metres from our site.
Another important aspect of this location is that it lies in the heart of Kathmandu Valley
with proper transportation facility from any corner of city.

Kamalpokhari

Rich
Kumari Bank Interiors

NUFC

Anam Nagar
Singha Durbar

Bhadrakali

3.9.2 Layout

29
The site has enough free areas at affordable prices for our center. Though the estimated
price of the flat at Putalisadak is only Rs.20,000, we have planned to lease 4 flats
(initially) from the local individual for 5 years at 70,000 including the spare land with
some discount. This will help minimize our investment in the business and thus minimize
our business risk as well. The swimming pool will be constructed in an area of 1 ropani
behind the building.

As per the layouts, we have allocated a flat for each of our services. This will help us to
increase the security to our members.(for example we can stop limited members from
entering off limit areas or restrict him/her from entering the services s/he has not paid for
and stop them from crowding the areas).

The swimming pool will be constructed on the spare land straight to the main gate.

The design has kept the restaurant up in the top floor so it can also provide service to the
non member guests. Even the passer-by can drop in and grab some healthy meal.

Our facility also gives a free parking to the members and customers of the center which is
just 20 seconds walk from the main building.

Layout Features

 Sense of separateness yet connectivity

 Security and privacy
 Each service area has its own changing rooms with locker facilities
 Spacious and comfortable rooms
 Each service area has got what it needs in terms of equipment
 Wide swimming pool.
 Marble flooring
 Balcony for fresh air
 Comfortable Rest rooms for socializing.

FRONT VIEW (ENTIRE HOUSE)

30
 Restaurant

BALCONY 2

BALCONY 1

MAIN Guard
GATE Room

TOP VIEW

31
 Swimming pool

Ground Premises

Rooftop Restaurant

32
 TOP VIEW (GROUND FLOOR)

STORE
ROOM

RECEPTION

TOILET

PASSAGE TO
SWIMMING
Stairs to first POOL

floor

MANAGEMENT CHANGING ROOM

ROOM WITH LOCKERS
FOR SWIMMING
POOL
GUARD
ROOM

33
 TOP VIEW( FIRST FLOOR)

REST ROOM

DRY SAUNA

LADIES TOILET

C
H
A R
N O
G O STEAM SAUNA
JACUZZI ROOM
I M
N
G

34
 TOP VIEW (SECOND FLOOR)

REST ROOM

GYM ROOM
(CARDIAC)
GENTS TOILET

C
H
A R
N O
G O GYM ROOM
AEROBICS (WEIGHT)
I M
N
G

3.10 Staff

35
The fitness centre that we intend to operate is a medium scale private business with 14
permanent staffs. These staffs will be appointed in a contract system for a certain period
of time and the renewal of these staffs will be based on their performance. We do not
have any plans of having temporary staffs.

We have different appointed responsibilities for each of the owners in their specialized
field which are Finance and Marketing Division, Health & Training Program Division,
Sales and Marketing Division and Customer Care Division.

All the staffs will work under the supervision and direction of the managing director.
Sales and marketing officer, Financial and Administrative officer, Health and Training
Officer will fulfill their respective duties whereas MD himself will look upon the
Customer Care Division. Other staffs will be selected based on their qualifications from
among the applicants. The receptionist, the cleaner and the accountant will be under the
influence of the Finance and Administrative Division.

Health and Training Department will be responsible for the overall management process
inside the center. Gymnasium & Aerobics Instructor, Pool Life Guards, Maintenance
personals will all be monitored by the same department. Finally, the MD himself will be
governing the actions of Nutrition Advisor who will be in the Customer Care Division.

The job of the receptionist will be to communicate with customers and potential
customers and to maintain the business link with the external market and the competitors.

The balance sheets and all the other financial documents will be managed by the
accountant who will be briefed abut his responsibilities and the vision of the center before
his appointment.

Security guards will be provided with a small room within the premises to ensure their
service twenty four seven.

To inspire the staffs for better and more motivated performances, annual staff meetings
will be held where excellent performances will be rewarded. The staffs will be notified of
the importance that a customer holds to our center. Staffs will be encouraged to learn
common foreign languages (apart from English Language) to facilitate the
communication with the foreigners interested in visiting our center.

3.11 Cost of Staff

We will have 14 staffs in total. Their salary will range from 5,000 to 12000 depending
upon their position and qualifications. The expenses in providing salary to the staffs
constitute a considerable part of the total income of the fitness center. The salary level of
each of the staffs in the center is described in the table below:

36
 Level No. of Person Salary per month(Rs)

Division Officers 4 12,000

Receptionist 1 8,000
Accountant 1 10,000
Trainers 2 8,000
Life Guards 2 5,000
Security Guards 2 5,000
Cleaners 2 5,000
Total 112,000

3.12 Staff Availability

Apart from the professionals like Trainers and dieticians, staffs like receptionist,
accountant and life guards are easily available. However, very few licensed trainers are
present in Kathmandu and it is even harder to convince them for their service. There are
only 28 licensed trainers in Nepal at the present. So finding one is the difficult task. Most
of the good trainers are already involved in their own gym businesses. Nutrition Advisor
are comparatively easier to approach as some of the medical students can also act as
dieticians.

Staffs like receptionist, cleaners and accountant can be selected from the list of applicants
based on their qualifications and their interest towards this profession once the
advertisement has been posted in a newspaper.

3.13 Overhead Expenses

In the Fitness Center, monthly rent, maintenance and repair cost, Depreciation of
furniture's and buildings, electricity are our major overhead expenses. The major
overhead expenses of our Fitness Center are as follows:

S.No. Particulars Amount(NRs.)/year

1 Rent 540,000
2 Maintenance and repair cost 36,000
3 Depreciation 237,600
4 Stationary 12,000
5 Telephone 24,000
6 Electricity 96,000
7 Salary 1,344,000
8 Marketing 84,000
9 Transportation 6,000
10 Others 24,000
Total 2,403,600
Part 4 ORGANIZATION AND MANAGEMENT PLAN

37
4.1 Vision

Our vision will be visible in our way of operating this business standing as a perfect
fitness club providing prime quality recreation facility for health and happiness.

"Ensuring vigor of healthy life"

Mission

Naturally U Fitness Center is a service oriented organization with a mission of

"Ensuring Good Health for Better community"

4.2 Form of business ownership

The firm will be registered as a partnership firm under the Company act 1964 A.D. Mr.
Bishal Dhakal, Mr. Manoj Saria, Mr. Ramesh Baral and Mr. Sanjeev Bartaula will
jointly own the company with equal investment thus sharing equal profit and loss. NRs
1600000 have to be invested initially which will be divided among four(i.e Each member
will invest NRs. 400000). The Board of four members play equal role in all the decisions
made for the welfare of the company. Three members must agree for any decision to be
implemented.

The center will open its head office in Putalisadak, Kathmandu in the initial phase. The
branches may be expanded as per the Board decision and requirement.

4.3 Organizational structure

Our fitness center comprises of four Board of Directors. The Board of the Directors will
consist of the top line managers .One of them will lead the company as a Managing
Director and will govern four departments: Finance & Administration Division, Sales &
Marketing Division, Customer Care Division and Health & Training Program Division.
As the company expands, more divisions will be created as per the demand. Below the
Top-level managers, we have a First-line manager (Center Manager) who will be the in-
charge of the center and take the responsibility of all other non-managerial employees of
the center.The center manager will also work as a Accountant.

Board Of Directors
(Bishal, Ramesh, Manoj
38
and Sanjeev)
 Managing Director
(Manoj)
Customer Care

Marketing & Health & Finance &

Sales Training Administration
(Bishal) (Ramesh) (Sanjeev)

Center
Manger
(Accountant)
Aerobics Gym Pool
Instructor Instructor Lifeguard
Receptionist

Security
Guard

Cleaner

4.4 Business experiences and qualification of Entrepreneurs

39
The owners of the company are fresh science graduates from Kathmandu University.
These graduates possess basic knowledge of fitness, marketing and financial control.

Manoj Saria will hold the designation of Managing Director of the company. He will also
Head Customer Care Division He possess sound knowledge of leadership and is capable
of controlling various department. He has completed his Bachelor’s Degree B.Tech in
Biotechnology from Kathmandu University. He has well known contacts and knowledge
on the working of a firm at that particular location.

Mr.Sanjeev Bartaula will Head Finance & Administrative Division .He has basic
knowledge about Finance and accountancy. He has completed his Bachelor’s Degree
B.Tech in Biotechnology from Kathmandu University. He posseses sound knowledge of
managerial skills.

Mr. Bishal Dhakal will Head Sales & Marketing Division. He is quite hardworking and
interested in having his own organization rather than working on others. He has
completed his Bachelor’s Degree B.Tech in Biotechnology from Kathmandu University.
He has knowledge about marketing strategies.

Mr.Ramesh Baral will be the Head of the Health & Training Program Division. He
possess basic knowledge of fitness training as he is actively engaged in various fitness
centers as a customer. He has completed his Bachelor’s Degree B.Tech in Biotechnology
from Kathmandu University. He has well knowledge on the effective working of fitness
center and what a customer desires for in a health center.

4.5 Responsibilities of Owners

Each owner has been allocated various divisions viz. Finance and Administration
Division, Sales and Marketing Division, Health & Training Program Division, Customer
Care Divison.

Mr.Manoj Saria

Mr. Manoj Saria will be the Managing Director of the company and play the crucial role
in the organization. He will Head Customer Care division. He will be responsible for
providing leadership, direction and control for all aspects of the center’s activities in
order to realize the maximum profits compatible with the best long- and short term
interests of employees, customers and public. He will establish operating policies and
guide the organization’s interactions with its environment. He is also responsible for
handling the customers, their problems and get suggestions and feedback from them.

Mr. Sanjeev Bartaula

40
Mr. Sanjeev Bartaula will Head the Finance & Administration Division of the company.
He is responsible for guiding and directing financial control activities of the company in a
manner designed to protect assets, meet reporting requirements and effectively plan for
auditing the financial needs of the Center.

Mr. Ramesh Baral

Mr. Ramesh Baral will Head the Health & Training Program Division. He governs the
instructor of Aerobics & Gymnasium and maintenance. He will also monitor lifeguards
and looks at all the services, where it is lagging behind, the things to be repaired and
reconstructed.

Mr. Bishal Dhakal

Mr. Bishal Dhakal will Head the Sales and Marketing Division of the center. He is
responsible for designing marketing strategies of the company. His main job is to create
and deliver the desired services and suggestions to customers for winning and retaining
loyal customers. He will assume the overall management of the health promotion
programs, entertainment programs, including organizing and conducting health education
programs He is responsible for promoting the center.

4.6 Responsibilities of various departments

4.6.1 Finance & Administration Division

The main responsibility is to look at all the cash in flow, cash outflow, salary payments,
loan ,tax payments and all other financial activities.

4.6.2 Health & Training Program Division

The main responsibility of this department is to provide perfect training for customer
satisfaction and aware customers about their fitness and take responsibility to maintain
customers fitness. This department also looks on the maintenance of the center, what is
lagging behind and what needs to be repaired or renovated.

4.6.3 Sales & Marketing Division

The main job of this department is to control the overall management of the health
promotion programs, entertainment programs, including organizing and conducting
health education programs. He is responsible for promoting the center.

41
4.6.4 Customer Care Division

The main job of this department is to create and deliver desired services and suggestions
to customers. It is responsible to understand what the customers’ need, demand, and want
before the competitors hence offering services that will satisfy customers.

4.7 Performance evaluation

The overall performance of staffs will be evaluated by certain criteria as given below.

S.No. Attendance Punctuality Discipline Creativity Work Remarks

(10) (10) (10) (20) Performance
(50)
1.

2.

3.

4.

The performance will be judged by the board members annually according to the above
stated criteria.

4.8 Human Resource Policy and Strategy

To maintain sufficient employees as the service demands comes under management of

human resource. Without enough manpower no service aims towards success. Recruiting
employees based on their qualification, work experience, attitude towards work,
personality will be dealt by the administrative department.

Its policy is to maintain efficient, determined and hard working employees, who could
benefit the service with regards to their increment in the salaries, bonus and other
additional facilities. This would drive the employees towards perfection and stability in
lieu of rewards. The records of number of current markets, along with their competitors
are kept. The management of human resource is done according to their designed post.
The attitude of employees towards customer’s service and their response towards
customer’s behavior plays a key role in implementing strategies.

42
For this purpose we have planned special features for our staffs once they have proved
themselves as a valuable asset for the center. Raising their salary by 20-30% depending
on their work and contribution to the center and further increase with experience in our
fitness center will be one our strategy.

Trainers who have contributed with high performance would be sent for further training
to various parts of the world so that they deliver even higher performance in the forth
coming years.

4.9 Pre-operating activities

The pre operating activities are listed below

Particulars Duration(week)
Registering the company 1
Looking at the site for company 1
Applying for loan and approval 2
Construction of Swimming pools and 6
redesigning of building
Purchase of Equipments 3
Staff hiring 3

4.10 Pre operating Expenses

Particulars Charge(NRs.)
Registration 5,000
Legal 4,000
Transportation 1,500
Communication 1,000
Interior designing consultation fee 12,000

Total 23,500

4.11 Office equipments

43
All the required office equipments will be purchased from the initial investment at the
time of establishment of the Fitness Center. Total fixed capital investment of the office
equipments is predicted to be NRs. 181,000. However, the depreciation amount for these
equipments is NRs. 18,100 in a year time.

4.12 Administrative expenses

The administrative expenses including the salary and other administrative expenses are as
follows:

S.N. Description Number Amount

1 Salary for manager 4 48000
2 Other administration 2 18000
3 Total Administrative expenses 66000

Per year 792000

44
Part 5 FINANCIAL PLAN
5.1 Project Cost

The entire project cost are estimated as given below:

Particular Total
A. Fixed capital
Swimming pool,Steam and sauna 1300000
Building 180000
Machineries & equipment 908000
Office equipment 181000
Electronics 90000
Furniture 228500
B. Pre operating expenses 23500
C. Working capital 189000
Total 3100000

5.2 Financial Plan and Loan Requirement

Financial Investment and Financing Plan

Particular Owners' equity Loan Total

A. Fixed capital
Swimming pool,Steam and
sauna 800000 500000 1300000
Building 180000 0 180000
Machineries & equipment 0 908000 908000
Office equipment 181000 0 181000
Electronics 90000 0 90000
Furniture 228500 228500
B. Pre operating expenses 23500 0 23500
C. Working capital 97000 92000 189000
Total 1600000 1500000 3100000
Percentage 52% 48% 100%

45
5.3 Security for the Loan

The Loan could be acquired with the collateral as a security for the loan. The details of
the collateral is given below:

Owner: Mr.Dharma Raj Bartaula (Father of Mr.Sanjeev Bartaula)

Plot No: 75
Type of Asset: Land+ Building
Area: 8-3-2 (Anna-Paisa-Dam)
Location: Prayag Marg-9, Old Baneshwor, Kathmandu
House No.:1715/30
Estimated Market Price: NRs. 9,800,000

With the market value of such high worth, we expect the bank to easily grant us a loan of
only NRs. 1,500,000

5.4 Projected Income Statement

Single Rate Income annually Monthly income

Monthly 50 1800 1080000 90000
3 Months 15 4500 405000 33750
6 Months 10 7000 140000 11666.66
Yearly 5 13000 65000 5416.66
Total 1690000 140833.33
Table : Single Membership Fees Schemes

Couple Rate Annual Income Monthly Income

Monthly 12 3300 475200 39600
3 Months 7 8700 243600 20300
6 Months 5 12000 120000 10000
Yearly 2 20000 40000 3333.33
Total 878800 73233.33
Table : Couple Membership Schemes

Family Rate Annual Income Monthly Income

Monthly 7 7000 588000 49000
3 Months 5 12000 240000 20000
6 Months 3 17000 102000 8500
Yearly 2 33500 67000 5583.33
Total 997000 83083.33
Table : Family Membership Schemes

46
 Family Rate Annual Income Monthly Income
Monthly 10 1200 144000 12000
3 Months 8 3000 96000 8000
6 Months 5 5000 50000 4166.66
Yearly 2 9000 18000 1500
Total 308000 25666.66
Table : Only Swimming Membership Schemes

5.5 Profit and Loss Statement

Projected profit and loss statement

Pre-
Particulars operating 1st year 2nd year 3rd year 4th year 5th year
45% 65% 80% 92% 100%
Sales forcasting in units 225 325 400 460 500
Sales 3873798 5595486 6886752 7919765 8608440
Pre Operating Cost

Other direct costs 1611600 1611600 1611600 1611600 1611600

Total direct costs 1611600 1611600 1611600 1611600 1611600
Gross profit 2262198 3983886 5275152 6308165 6996840

Administrative costs 792000 792000 792000 792000 792000

Selling and distribution costs 0 0 0 0 0
Total administrative and marketing 792000 792000 792000 792000 792000
EBIT 1470198 3191886 4483152 5516165 6204840
Interest 135000 108000 81000 54000 27000
EBT 1335198 3083886 4402152 5462165 6177840
Accumulate profit 1335198 4419084 8821236 14283401 20461241

5.6 Cash Flow Statement

47
Projected cash flow statement
Particular Preoperating 1st year 2nd year 3rd year 4th year 5th year
Cash inflow
Equity 1600000
Loan 1500000
Sales 3873798 5595486 6886752 7919765 8608440
Total cash from sales(exclude AR) 3873798 5595486 6886752 7919765 8608440
Total cash inflows 3100000 3873798 5595486 6886752 7919765 8608440

Cash outflow
Pre-operating expenses 23500
Purchase of fixed assets 2887500
Direct costs less depreciation 1374000 1374000 1374000 1374000 1374000
Administrative expenses 792000 792000 792000 792000 792000
Selling and distribution costs 0 0 0 0 0
Increase in inventories 0 0 0 0 0
Interest expenses 135000 108000 81000 54000 27000
Loan amortisation 300000 300000 300000 300000 300000
Total cash outflows 2911000 2601000 2574000 2547000 2520000 2493000

Net cash flows 189000 1272798 3021486 4339752 5399765 6115440

Cash balance in the beginning 189000 1461798 4483284 8823036 14222801

Cash balance at the end 189000 1461798 4483284 8823036 14222801 20338241

5.7 Balance Sheet

48
Projected Balance Sheet
Preoperating 1st year 2nd year 3rd year 4th year 5th year
Assets

Cash 189000 1461798 4483284 8823036 14222801 20338241

Inventories 0 0 0 0 0 0
Accounts receivable 0 0 0 0 0 0
Total current assets 189000 1461798 4483284 8823036 14222801 20338241

Total gross fixed assets 2887500 2887500 2887500 2887500 2887500 2887500
Less accumulated depreciation 237600 475200 712800 950400 1188000
Net fixed assets 2887500 2649900 2412300 2174700 1937100 1699500

Pre operating expenses 23500 23500 23500 23500 23500 23500

Total assets 3100000 4135198 6919084 11021236 16183401 22061241

Liabilities

Long term loan payable 1500000 1200000 900000 600000 300000 0

Owners equity
Equity capital in the beginning 1600000 1600000 1600000 1600000 1600000 1600000
Accumulated profit 1335198 4419084 8821236 14283401 20461241
Total owners' equity 1600000 2935198 6019084 10421236 15883401 22061241

Total liabilities and equity 3100000 4135198 6919084 11021236 16183401 22061241

5.8 Loan Repayment Schedule

Year Loan amount Interest 9% Principle Total payment

1 1500000 135000 300000 435000
2 1200000 108000 300000 408000
3 900000 81000 300000 381000
4 600000 54000 300000 354000
5 300000 27000 300000 327000
Total 405000 1500000 1905000

5.9 Break Even Point

49
Projected break even point in percent
Pre-operating 1st year 2nd year 3rd year 4th year 5th year
Sales amount 3873798 5595486 6886752 7919765 8608440
Fixed costs 2538600 2511600 2484600 2457600 2430600

BEP (FC/S-VC) 66% 45% 36% 31% 28%

5.10 Return on Investment

Projected profitability 1st yr. 2nd yr. 3rd yr 4th yr 5th yr

Return on Investment (ROI) 32% 45% 40% 34% 28%

5.11 Financial Analysis

Provided the sales are in accordance to the above financial tables, we can confidently
state that our company will remain in profit with sufficient equity for normal operation
and expansion. The bank loan can be repayed easily within the 5 yrs time and even before
if desired. The center can be expanded easily interms of finance.

5.12 Time Table for implementing plan and launching the business

Date of Business Plan Preparation: 27 May 2008

Company Registration: 4 June 2008
Request for Loan:

ANNEX

Bibliography

50
 Zimmerer T.W and Scarborough N.M, “Essentials of Entrepreneurship and
Small business Management” (Fourth Edition).Pearson Education International,
New Jersey U.S.A
 Madhav R. Koirala, "An Introduction to Accountancy and Auditing"(Second
Edition). Buddha Academic Publishers and Distributors, Kathmandu,Nepal
 Private Company Act and Partnership Act, Nepal Government
 www.moics.gov.np
 www.unctd.org

51
Glossary

Assets: Accounting term for everything a company owns and which has a monetary
value listed in the balance sheet (cash, credit balances, inventory, equipment, real estate,
etc.).

Break Even Point: The level of operation at which a company neither earns a profit nor
incurs a loss

Budget: A plan of future income and expenses during a specified period, such as one
year. In an operating budget the planned costs and revenues, expenditures and income are
compared. The name is derived from the leather bag, or “bougette”, in which the funds to
meet expected expenses were originally stored.

Cash: Money in the company’s current accounts in a bank and petty cash available in the
office.

Cash flow: The flow of money payments to or from a firm. Expenditures are sometimes
referred to as “negative” cash flow.

Collateral: Property that borrowers are obliged to turn over to lenders if they are unable
to repay a loan. This can be, for example, buildings, land, and machinery, inventory of
finished or unfinished goods, securities or accounts receivable.

Depreciation: The decrease in value of an asset through wear and tear or other factors
limiting its usefulness. Fixed assets are depreciated in the accounts by regularly reducing
their book value in the balance sheet.

Fixed assets: Land, buildings, machinery, tools and the equipment used by the company
to carry on the business. This account may also be referred to as plant and equipment or
buildings, machinery and equipment.

Interest: A fee charged by a lending institution (bank) for extending a credit to a

business or an individual person. The interest rate is the fee charged per annum.

Liabilities: It is the creditors claims against a company's assets.

Partnership: An association of two or more people who own a business for purpose of
making profit.

Partnership Agreement: A document that states in writing that all the terms of
operating the partnership and protects the interest of partner.

Profit: The income remaining after deduction of all expenses during a specific period.
The gross profit is the total revenues minus the cost of goods sold. The operating profit is

52
the gross profit minus general administrative expenses. The net profit is the operating
profit minus depreciation, interest, extraordinary charges and corporate tax.

Return on investment: An important measure of how much the company earns on the
money the company itself has invested. It is calculated by dividing the company's net
profit (income) by its total assets. This measure is also called "return on assets".

Sales: Money a company receives from the goods and services it has sold. In some cases,
the amount includes receipts from rents and royalties.

53
Market Survey Questionnaire

Public Questionnaire(First Set)

1. Hello, have you heard about the health clubs? Do you know what they are for?

a) Yes b) No

………………………………………………………………….

2. Do you know any health clubs around? How did you come to know about it?

a) Yes (newspaper, Friends, advertisements, something else)

b) No

3. We are going to establish health club which provides different facilities like
Gymnasium, Aerobics, Sauna Bathing, swimming etc. How is the idea?

a) I like it very much b) Not a good idea

c) Have to think it once.

4. How concerned are you about health and physical fitness?

a) Highly b) Not so much

c) I’m sick

5. Do you perform some kind of exercise or do some kind of physical fitness yourself?

a). Regularly b). Once in a blue moon

c). sometimes d). Never

6. Are you currently joined in to any health clubs?

a) Yes b) No

7. If yes what are the facilities provided by your health club?

……………………………………………………………….

If no, would you be interested in joining one?

54
 a) Yes b) No

How, much are you willing to pay?

……………………………………………………….

8. Would you like to join each of the facilities separately or as a whole in a package?
a) Separately b) In a package

9. If you are offered a package with well equipped gym, swimming pool and a fitness
centre in a reasonable price, would you be interested in joining?

a) Yes b) no

12. If yes what would you pay for such a package?

…………………………………………………………..

13. Would your interest in such a centre be same even if its far from your location?

a) Yes b) No

14. We have a membership plan for our fitness centre. Would you like to be
informed regarding our facilities?

a) Yes b) No

15. If we offer a package for a family membership or group membership, would you
be a part of it?

a) Yes b) No

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 For Health club Owners(Second Set)

1) From when have you been in this field ? Is this your first venture ?
………………………….

2) What facilities have you been providing?

a)Fitness b) Swimming pool c)Steam and sauna d) All of the above e) Others

3) How many members do you have ?

……………………………

4) How much investment does a health club require(not including land) ?

……………………………….

5) Is your health club in profit/loss?

a) Profit b) Loss c)Balanced

6) Are you satisfied with the business that you are in? Is it profitable?
…………………………………..

7) In which section do you think most customers are interested in?

a) Fitness b) Swimming pool c)Steam and sauna d) All of the above

8) Which time of the day do most of your members visit?

a) Morning b) Afternoon c)Evening

9) How many of your members are regular ?

…………………………

10) Which gender has majority in your club? Do you have any preference?

a) Male b)Female

11) Which age group are mostly interested?

a) Below 20 b)21-30 c)31-40 d)above 40

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12) Have you had any problem in getting your payment ? How often do you have to face
it ?
………………………….

13) How do you advertise about your health clubs?

a) Newspaper b) electronic media c) Hoarding board d) Sorry, I don’t advertise

14) Can we get trainers easily?

a) Very easily b) Easily c) Hard d)Very hard

15) How much does the political situation affect the club?

a) Very much b) Not so much c)Indifferent

16) How much area does a health club require?

………………………………………………..

17) What do you think are the challenges and threats in this field ?
……………………….

18) How much a customer pays in average per month?

For regulars
a) 500-1000 b)1000-1500 c)1500-2000 d)More than that

For occassionals
a) 500-1000 b)1000-1500 c)1500-2000 d)More than that

19) What do you think is the future in this business?

……………………………

20) Would you like to change anything in your club?If yes,

…………………………………………………

21) Any further suggestion/advices to the new business comers in this filed?
…………………………………………………………………………………………….

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 Rent agreement

It is agreed between Mr. Dhanpat Saria, (the owner of the building; herein called the first
party) and Mr.Sanjeev Bartaula (for Naturally U Fitness Center Pvt. Ltd) (herein called
the second party) that the house situated at New Plaza, Ward No.32, Kathmandu
Metropolitan City will be used by the second party for business purpose. The additional
terms and conditions are as follows:

1. The first party is agreed to vacate the house property to the second party for the
consideration of monthly rent of Rs. 70000 (in words NRs. Seventy thousand
only).

2. The amount of rent will be payable in advance.

3. The second party will not damage any furnitures , fixtures or equipment provided
to him as well as lying within the premises. On any damage of such type, he shall
reimburse the replacement cost of property.

4. Any change to be made on the layout of the building if required necessary for him
can be done only after the consent of the first party. But he shall clear or
reestablish the original layout unless agreed by the first party.

5. The either shall give three months prior notice in case of vacation of the premises.

6. The charge of electricity, water etc. which are directly used/consumed by the
second party shall be borne by himself as per the actual billing of respective
authority as per the sub meter’s reading.

7. This agreement is valid for 5 yrs and can be extended with mutual understanding.

8. The agreement will be effective from 1st July 2008.

First Party Lawyer Second party

Mr. Dhanpat Saria Mr. Rajeshwor Adhikari Mr. Sanjeev Bartaula

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