Chess Education

Blitz Chess Caf

3rd Floor, PUSO MALL Sto. Nio, Hagonoy, Bulacan BlitzChessCafe@yahoo.com Blitz Chess Caf will provide chess education services to the youth especially the students in the municipality of Hagonoy, Bulacan. These services include tutorial, coaching, training, selling chess equipments plus food and drinks to be served.

1.0 EXECUTIVE SUMMARY

The purpose of this business is to raise P150,000.00 for the development of a chess education business while showcasing the expected financials and operations over the next three years. Blitz Chess Caf is a first in its class that will provide chess education services to the youth of Hagonoy. It was founded by Mr. Cielito H. Sanchez.

1.1 The Services

The business will provide chess tutorials, coaching, training, selling of chess equipments like chess sets, chess clocks, chess books, and other chess items plus serving healthy and nutritious food and drinks. Blitz Chess Caf will also frequently work with public and private schools, municipal agencies, and private companies in promoting the benefits of playing chess. The third section of the business plan will further describe the services offered by Blitz Chess Caf.

1.2 Financing
Mr. Sanchez is seeking to raise P150,000 from a bank loan. The interest rate and loan agreement to be further discussed during negotiation. This business plan assumes that the business will receive a three year loan with 8% per annum interest rate. The financing will be used for the following: Development of the business center. Financing for the first six months of operation. Capital to purchase chess sets, chess clocks, chess books, other chess equipments and materials.

Mr. Sanchez will contribute P115,000 to the venture.

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1.3 Mission Statement

Blitz Chess Cafs mission is to provide chess education to the youth of Hagonoy and using chess as a tool to develop their intellectual capacity making them more equipped in real life.

1.4 Management Team

Blitz Chess Caf was founded by Cielito Sanchez. Mr. Sanchez has more than 10 years of experience in the field of Chess. Through his expertise, he will be able to bring the operations of the business to profitability within its third year of operation.

1.5 Sales Forecast

Mr. Sanchez expects a strong rate of growth at the start of the operations. Below are the expected financials over the next three years. Year 1 2 3 ______________________________________________________________________ Sales Operating costs Earnings before Interest, dep. Interest, and depreciation Net profit 344,000 264,000 38,720 57,996 (19,276) 447,200 287,400 70,360 57,996 12,364 581,360 305,730 159,358 57,996 101,362

2.0 VENTURE AND FINANCING SUMMARY

2.1 Registered Name
The business is registered as a solo proprietorship under Department of Trade and Industry (DTI) under the business name of Blitz Ches Caf.

2.2 Required Funds

At this time, Blitz Chess Caf requires P150,000 of debt funds. Below is a breakdown of how these funds will be used:

Projected startup costs Working Capital Furniture, Fixture and Equipment Improvements Inventories Marketing Budget Supplies Business Licenses and Permits 2|Page Php 15,500 138,000 20,000 57,500 5,000 3,000 3,000

Rental Deposit(2 months) Telephone Installation Contingency Fund Total startup costs

10,000 3,000 10,000 Php 265,000

Use of funds

2.3 Investor Equity

Mr. Sanchez is not seeking an investment from a third party at this time.

2.4 Management Equity

Mr. Sanchez owns 100% of Blitz Chess Caf.

2.5 Exit Strategy

Mr. Sanchez is not inclined to sell the business especially if it is very successful. He will continue to manage the affairs of the business and will even expand its reach, targeting even nearby towns.

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3.0 PRODUCTS AND SERVICES

3.1 As stated in the Executive Summary,

Blitz Chess Caf intends to provide chess tutorials for the youth, ages ranging from 6 years old and above. The topics will be laderized starting with the beginners to intermediate to advance level of chess knowledge. As the skills and level of expertise rises, students will be exposed to topics about chess psychology, physiology, computer chess, How the Brain Works, and Mathematics in Chess among others. . There are many scientific studies showing the enormous benefits that can be acquired from chess.If you are to delve into the details of the game, you will see that chess is a game of strategy. The fact that every piece on the board has a unique form of movement and is a part of the whole, makes the game complex. Introducing a child to chess allows the child to recognise complexity. There are numerous ways in which the pieces can be moved, and analysing each move enhances the childs mathematical as well as analytical capabilities. In fact, children who play chess are able to solve mathematical problems mentally instead of using a calculator to do so. The same goes with the influence of chess on the understanding of science. Going forward, when faced with complex exams like the NSAT a child will be in a better position. Chess is one game that teaches a child patience and willpower. It improves a childs ability to interact with his opponent albeit in a silent way. This enhances confidence as well as self esteem and makes one a good listener. Listening can go a long way in improving interpersonal skills and help in business negotiations. An important feature one will learn in chess is the ability to judge body language. Being able to read expressions when a game is in progress is what will help one plan in advance. This, while applicable to the moves on the chess board are equally important in ones life. Being able to anticipate issues will allow you to plan in advance and this will hold you in good stead no matter what situation you are faced with. Planning ahead has some great rewards, while lack of planning can result in a check mate or lose.

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Chess involves several numerical combinations. Unlike any other game, chess is one where there are numerous ways to reach the end result. Each game is different and there are several numerical possibilities to a strategy. Having to deal with this will develop a scientific way of thinking which is very essential when faced with multiple solutions to a problem. Being able to quickly analyse the effects of each move is what will enhance a childs mental ability. Chess has also proven its ability to calm aggressive children. The need to sit still in one place and concentrate on the board has brought a calming effect on a number of children. This has allowed them to grow into calmer individuals with a stable head on their shoulders. Looking at things from the health perspective, chess also helps students who may have sustained certain physical disabilities from birth or by accident. Because of the movement of pieces in the left, right, forward, backward and diagonal ways, fine motor skills are developed. Chess is also a game of experience. If you want to win successive games, you will have to learn from your earlier mistakes. This means remembering all the moves you made. Memory is another thing that chess helps improve. Chess has also proven capabilities of calming frayed nerves and therefore is also used extensively as recreational therapy. Ones attention span as well as observation powers are highly sensitised with the game. In order to understand how your opponent is going to play, you need to watch and remember his or her moves, try and find a pattern in it.

This is where cognitive skills are enhanced and improved on. Chess has a number of benefits that may not be as easily perceived as the physical advantages of football and cricket. Its effects are subjective and one that can be observed over a period of time. Introducing children to the game at a young age will allow them to grasp and understand the nuances of the game much earlier on. You will be doing them a favour in the long run. Trainings will also be provided for students for those who wants to fasten their mastery of the game. These are most beneficial to varsity players or for those who wants to be varsity chess player in the future. Coaching on various aspects of the game will also be offered like: Opening Phase Middle Game Phase End Game Phase Tactic Strategy Positional Play Sacrifices Planning

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Chess equipments like chess sets, chess clocks, chess books, chess shirts and chess souveneir items will be available for sale to help promote the game. The intension is to increase the youths awareness on chess and its benefits to the intellectual, physical, psychological, and behavioral aspect of a person. As Grandmaster Alexander Alekhine, 4th World Chess Champion of the World, once said, Through chess, I molded my character. Healthy and nutritious food and drinks will be served for the customers. It will offer customized food for the chess playerss active chess mind. The names of the food will be customized, for example, a Kings bread, Queens Pasta, Pawns snack and the likes. The foods and drinks are guaranteed nutritious and affordable since most of our customers are students. One more idea is to get the attention of non-playing chess people, the presumption is this, If they will visit Blitz Chess Caf for the sole reason of its innovative foods, then it will be highly probable that they will be interested in the game of Chess since they can always see people enjoying the Game of Kings.

3.0 STRATEGIC AND MARKET ANALYSIS

3.1 Economic Outlook
This section of the analysis will detail the economic climate, the chess education industry, the customer profile, and the competition that the business will face as it progresses through its business operations. Presently, the economic market in Hagonoy, Bulacan is moderate. After the typhoon Pedring and Quiel hit the province, highly affected was the municipality of Hagonoy. Today, business is back in its course. More and more big companys like the banking institutions including Maybank, Metrobank, Planters Bank, and BDO; food business like Mang Inasal, Jollibee, Enlins Bakery; gasoline business like Petron, Shell, Caltex, Flying A, Red Oil; and big companies like Mercury Drugs, and PureGold is planning to put up a business in the town. An indication of their confidence in the local economy.

3.2 Industry Analysis

Chess is becoming a popular game nowadays in the Philippines. There are many factors contributing to the growth of the game, one is the phenomenon of Grandmaster Wesley So, who at his tender age of 20 became the youngest Grandmaster in the Philippines. The title of GrandMaster is the highest title you can get in chess starting from being National Master to International Master then to Grandmasterdom. Many youngsters are plunging into the game. Most notable is the yearly chess festival sponsored and organized by Pilipinas Shell Corporation wherein yearly, they set up a strong chess tournament all over the Philippnes in search for the next Grandmasters. Chess Schools like the Metro Manila Chess Club operated by its founder Woman National Master Mila Emperado, Chess Clubs 6|Page

all over the country being established to promote chess. In Hagonoy, there is yet to have a chess center wherein players can go to a common place where they can play with each other. Blitz Chess Caf will meet this demand by the chess players. There is a potential for a chess boom in the town. It will be first in the field.

3.3 Customer Profile

As the business offers beneficial effects on the students intellectual, emotional, physical and psychological aspects, parents will be interested to expose their children in chess. The management is expecting its customers to be coming from elementary schools and high schools and even out of school youth. Common traits of the customers are: Ages 6-20 Lives near the heart of Hagonoy. Belongs to an average income family. Will spend around P10 - P2,000 per visit to Blitz Chess Caf.

The prospect customers will be coming from 16,000 students from 29 elementary schools, 10,800 students coming from 7 high schools and around 300 out of school youths living in Hagonoy. There is an enormous potential chess players to be in Hagonoy. It must be introduced to them intelligently to catch their attentions.

3.4 Competition
There is no direct competition as of the moment since this is a fresh idea. No one has yet to establish a chess center. Indirect competition includes computer shops that cater computer gaming for the students. The management intends to showcase that playing chess will bring out the best in an individual rather than playing traditional computer games and online games on the internet. It is imperative that Blitz Chess Caf will showcase its premium quality by promoting student welfare.

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4.0 MARKETING PLAN

The management intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted customers. Below is an overview of the marketing strategies and objectives of Blitz Chess Caf.

4.1 Marketing Objectives

Develop online presence by developing a Fan Page in Facebook since a great number of youth are subscribers of the Social Network. Implement a local campaign with the managements targeted market via the use of flyers, tarpaulins, newsletter, local newspaper advertisements (Hagonoy Balita), local cable company (Star Cable), and word of mouth advertising. Develop relationships with educational institutions and municipal agencies that promote youth welfare.

4.2 Marketing Strategies Foremost, the management will aggressively develop relationships with school principals, directors, and teachers in order to penetrate the schools and have an opportunity to meet the students. The management is intending to hold on a regular basis a Campus Tour, sponsoring events like Graduation Day, Foundation Day and Recognition Day. During these events, Blitz Chess Caf logo will be highly visible, to the point that it will awaken the curiosity of students, parents, and school heads. Chess items will be sold during these events. Customized chess shirts will be provided as token for the school heads. Word of Mouth Strategy will be employed as a strategy to have more people aware of Blitz Chess Caf. Successful referrals will entitle them to 20% discount on chess tutorials. Newsletter will be released on a quarterly basis featuring the scientific findings about chess on its relevance as a tool to promote intellectual capability. It will also showcase the reports on chess tournaments regularly held in Hagonoy and updates on the world of chess.

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5.0 OPERATIONS
5.1 Hours
Blitz Chess Caf is open from 10am to 8pm from Monday-Saturday.

5.2 Rates
Rental of Chess Clock and Chess Set - P20.00 per hour Tutorials : 2hours per session Beginners P1,500 for 5 sessions per month Intermediate P2,000 for 5 sessions per month Advance P2,500 for 7 sessions per month Chess in School P30 per student, minimum of 10 students Training/Coaching for Varsity Chess Players P3,000 for 10 sessions for every 4 players P1,500 for 8 sessions for 1 player Chess Research and Reading P10 per hour Chess Clock P2,000 P2,000 per piece Chess Set P550 per piece Chess Shirts P200 P300 per piece Chess Breads P15 P30 per piece

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Chess Drinks P10 P15 per bottle

Chess Souvenier Items P50 P150 per piece

5.3 Payment
Blitz Chess Caf will require 50% downpayment for Tutorials, Training, Coaching prior to the start of the chess sessions. Customers renting the chess equipments, chess researching and chess items for sale will be required to pay in cash.

5.4 Facility and Location

Blitz Chess Caf will be located in the heart of the town, at the PUSO Mall, Sto. Nio, Hagonoy. It will be strategically located because it can be easily found by chess players. Facilities include modern equipments like digital chess clocks, desktop computers, 5 feet magnetic demonstration chessboard, and Eureka chess sets.

6.0 ORGANIZATIONAL PLAN AND PERSONNEL SUMMARY

MANAGER

CHESS INSTRUCTOR

6.1 Responsibilities and Roles

The manager will be the owner, Mr. Sanchez. He is responsible for the overall operation of the business which include but not limited to the marketing, chess tutorials/trainings/coaching, and planning while maintaining the status symbol of the business. Mr. Aldrin Caraig will be the Chess Instructor, current varsity chess player of Bulacan State University (BulSu). With their experience and expertise, they can provide quality chess education to students. On the firstnfew months of operation, he will be on-call basis. But after maybe 6 months when there is a steady number of customers, he will be fully hired as a regular employee.

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6.2 Organizational Budget Personnel plan yearly Year 1 2 3 ______________________________________________________________________ Owner / Manager Chess Instructor Total P 72,000 P 48,000 P120,000 P 79,200 P 52,800 P132,000 P 87,120 P 58,080 P145,200

Numbers of Personnel Year 1 2 3 ______________________________________________________________________ Owner / Manager Chess Instructor Total 1 1 2 1 1 2 1 1 2

Personnel expense breakdown

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7.0 FINANCIAL PLAN

7.1 Underlying Assumptions Blitz Chess Caf has based its proforma financial statements on the following: Blitz Chess Caf will have an annual revenue growth of 30% per year. The Owner/Manager will acquire P150,000 of debt funds to develop the business. The loan will have a 3 year term with an 8% interest rate.

8.2 Source of Funds Financing Equity contributions Owner Investment Total equity financing Bank Total debt financing Total financing

P115,000.00 P115,000.00 P150,000.00 P150,000.00 P265,000.00

7.2 General Assumptions Operating expenses namely salaries, advertising, travel cost, utility cost, repairs and maintenance will increase annually by 10%, while rental will increase by 5% annually.

Inventories will increase by an average of 30% yearly.

Accounts receivable will be at 10% of the sales revenue per annum.

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7.3 Profit and Loss Statements Year 1 2 3 ______________________________________________________________________ Sales Cost of goods sold Gross margin Operating income Expenses Salaries Rental Advertising/Marketing Travel cost Utility cost Repairs and Maintenance Total operating costs EBITDA Interest expense Depreciation expenses Net profit Profit margin 344,000 41,280 88% 302,720 120,000 60,000 36,000 6,000 36,000 6,000 264,000 38,720 12,000 45,996 (19,276) (6%) 447,200 89,440 80% 357,760 132,000 63,000 39,600 6,600 39,600 6,600 287,400 70,360 12,000 45,996 12,364 3% 581,360 116,272 80% 465,088 145,200 66,150 43,560 7,260 43,560 7,260 305,730 159,358 12,000 45,996 101,362 17%

Sales, operating costs, and profit forecast

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7.4 Proforma Balance Sheet Current Assets Cash Accounts Receivable Inventories Total Current Assets Non-current Assets Furniture, Fixture and Equipment Depreciation Total Non-Current Assets Total Assets Liabilities Long Term Liability Interest Payable Total Liabilities Equity Total Liabilities and Equity 1 Php 17,200 34,400 57,500 109,100 138,000 (46,000) 92,000 Php 201,100 2 Php 22,360 44,720 76,024 143,104 92,000 (46,000) 46,000 Php 189,104 3 Php 29068 58,136 98,831 186,035 46,000 (46000) 0 Php 186,035

150,000 36,000 186,000 15,100 Php 201,100

100,000 24,000 124,000 65,104 Php 189,104

50,000 12,000 62,000 124,035 Php 186,035

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7.5 Breakeven Analysis Year 1 2 3 _______________________________________________________________________ Monthly Revenue Yearly Revenue 25,000 300,000 29,938 359,250 31,847 382,163

7.6 Business Ratios Business ratios yearly Year 1 2 3 ______________________________________________________________________ Sales Sales growth Gross margin Financials Profit margin Assets to liabilities Equity to liabilities Liquidity Cash to assets 9% 12% 16% (6%) 1.08% 8% 3% 1.55% 53% 17% 3% 200% 0.00% 88% 30% 80% 30% 80%

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7.7 Three Year Profit and Loss Statement

Year 1 Months Sales Tutorials Chess Retal Chess Shirts Chess Books Chess Souvenir Items Cost of Goods Sold (12%) Operating Income Expenses Salaries Rental Advertising Travel cost Utility cost Repairs & Maintenance Total operating costs EBID Interest Depreciation Profit (Loss) 1000 3833 -9680 1000 3833 -9680 1000 3833 -4840 1000 3833 -4840 1000 3833 -440 1000 3833 -440 1000 3833 9680 1000 3833 9680 1000 3833 12320 1000 3833 12320 1000 3833 12320 1000 3833 12320 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 10000 5000 3000 500 3000 500 22000 120000 60000 36000 6000 36000 6000 264000 38720 12000 45996 -19276 4500 7500 2000 0 0 14000 1680 12320 4500 7500 2000 0 0 14000 1680 12320 7500 7500 3000 1000 500 19500 2340 17160 7500 7500 3000 1000 500 19500 2340 17160 7500 10000 4000 2000 1000 24500 2940 21560 7500 10000 4000 2000 1000 24500 2940 21560 15000 10000 6000 3000 2000 36000 4320 31680 15000 10000 6000 3000 2000 36000 4320 31680 15000 12500 6000 3000 2500 39000 4680 34320 15000 12500 6000 3000 2500 39000 4680 34320 15000 12500 6000 3000 2500 39000 4680 34320 15000 12500 6000 3000 2500 39000 4680 34320 129000 120000 54000 24000 17000 344000 41280 302720 Jan Feb Mar Apr May June July Aug Sept. Oct. Nov. Dec. Total

Year 2 (30% inc.)

Year 3 (30% inc.)

167700 156000 70200 31200 22100 447200 89440 357760

218010 202800 91260 40560 28730 581360 116272 465088

132000 63000 39600 6600 39600 6600 287400 70360 12000 45996 12364

145200 66150 43560 7260 43560 7260 305730 159358 12000 45996 101362

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