Project management on Sports Club

Project Report

Being Young- The Sports Club

(11th September, 2010) In partial fulfillment of the requirement of the course “Project Management”

MBA Full Time (2009-2011)

Submitted to: Prof. H.K.Shrivastava

Submitted by: Dipesh Jain 091312

Index 1. Introduction....................................................................................................... ........................ 1.1. Industry Analysis-Porter’s Five Forces Model............................................................. 1.2. Company Analysis- Swot Analysis................................................................................. 1.3. Services Offered............................................................................................................ 1.4. Project Scope............................................................................................................... 2. Project layout and Resource Requirement................................................................................. 2.1. Project Layout.............................................................................................................. 2.2. Resources Required.................................................................................................... 3. Initial Investment......................................................................................................... ............. 4. Sources of Revenue and Expenses for regular years................................................................ 4.1. Membership Packages................................................................................................

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5. Financial Data................................................................................................................... .......... 5.1. Membership revenue.................................................................................................. 5.2. Salary Expense estimates............................................................................................ 5.3. Calculation of Loan Instalments.................................................................................. 5.4. Estimated Cash Flow................................................................................................... 6. Project Control............................................................................................................... ........... 7. Bibligraphy........................................................................................................ ........................

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1. Introduction: This project is about opening a new sports club in Surat city at Udhna Magdalla Road. The idea of this project came to the mind because there is lack of availability of a sports club at that region which can provide citizens with different games like squash, lawn tennis and basketball. There has been a change in the citizen of Surat in respect of the games they play. They have started playing games which were uncommon earlier like basketball, lawn tennis and squash. Thus the main intention of this sports club is to provide citizens with different games and increase talent in those games, which a nation like India lacks. The name selected of the club i.e. Being Young is because here even the elder people can come, play and feel young. Thus the name shows the importance of being young as when you are young you are energized and wound up. 1.1.

Porter’s five forces Model for Sports Club Industry:

Below are the five forces that act in favour or against of the industry: i) Competitive Rivalry within Industry: There are many sports club in

India who provides services like this but in whole Surat there are just two players. These players have well established customer base but are unable to attract customers staying at far areas. Thus there is a good chance of getting new customers by opening sports club at an area where these clubs are not able to spread their reach. Fixed costs in this industry are high but variable costs are low. Buyers switching costs is high in this industry. Exit barriers are high as initial investment is high.

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ii) Threat of new entrants: As entry barriers are high in this due to high

capital expenditure entry barrier is there and hence threat of new entrants is less. This industry is growing at constant pace and hence there is chance of attracting new entrants which can increase threats.

iii) Bargaining power of supplier: There are many suppliers who can

provide equipments needed at different costs and hence this factor reduces supplier’s bargaining power towards the sports club. There is threat that supplier may forward integrate as he has equipments to start and thus this increases its bargaining power as there are less chances of buyer integrating backward. Suppliers main selling is this industry and thus it is an important industry for them and they can’t easily let go this industry and thus here suppliers bargaining power decreases.

iv) Bargaining power of customers: In this industry customers are

more than service providers and hence bargaining power of customers is less as they have limited choice where as service providers have many choices. Differentiation in terms of sports provided is not much though there are some variations and hence there can be increase in bargaining power of service providers if they will differentiate their offerings than others else customer bargaining power will be high. Switching costs and importance of service is high to the buyer and thus this reduces its bargaining power.

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v) Threat of substitute product: There is a high threat of substitute

product which in this case will be the establishing services in the societies itself so that the member of the societies doesn’t need to go out to play sports. This has been done by many new builders providing services such as indoor sports, swimming pool and gymnasium in their societies. Thus there is considerable threat from substitute product.

Hence above are the five forces that determine the competitive intensity and therefore attractiveness of a market.

1.2. Company Analysis: SWOT Below is SWOT analysis of Being Young- the sports club: i) Strengths: Providing customers with different types of sports is

strength as that will attract customers towards this sports club. Another important strength is the location as there is huge potential customer base that will be ready to pay premium prices for the services and will be willing to join.

ii) Weakness: As it is new, brand name is not strong and thus it creates a

weakness. Skilled workers will be hard to find in the starting phase.

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iii) Opportunities: There is opportunity to convert untapped market into

customers by providing services to those people who are interested in uncommon sports activity. There is also an opportunity to increase market share.

iv) Threats: Emergence of substitute’s product such as providing facilities

in the societies is a bug threat to Being Young sports club.

1.3.

Services offered

Sports club will have services as below: i) Lawn tennis court ii) Basketball court iii) Table tennis and board games such as carom and chess iv) Squash v) Badminton vi) Juice and snack bar vii)

Tournament twice in a year which will include every sport provided by sports club.

viii)

Trained coaches for games will be provided.

Hence above activities will be provided by the sports club. With the above activities members of sports club will get chance to spread the social 7

network by interacting with one another. There will be special member services and different packages will be allowed to customers based on their need of playing games. This will give customers variety in selection.

1.4. Project Scope Below is the scope checklist for the project: i) Project objective: Main objective of the project is to start a sports

club in Surat city which will provide customers with uncommon as well as some of the common indoor sports such as basketball, squash and lawn tennis within 1.5 year at a cost not exceeding Rs. 10 million.

ii) Deliverables: Here major deliverables will be defined which are as

follows:  Project layout o

Deliverable Priorities: 

Constrain: Here the fix parameter will be that project layout must be in the scope and should not go beyond it.



Enhance: Here costs should be optimized so as to keep the project within available budget.



Accept: Time delay of few days will be accepted but project layout should be precise. Though delay in time will increase cost and will be hard to enhance cost care will be taken to allocate costs properly. 8

 Permissions and Approval from Local Authority o Deliverable Priorities: 

Constrain: Here the fix parameter will be time as getting approval and permissions on time is important in order to complete full project on time.



Enhance: Here too costs will be tried to enhance which means optimum costs will be tried to incur in order to get approvals and permissions.



Scope: It will be accepted if approval and permissions will be bit of scope i.e. if less square feet will be approved to start than it can be managed by building multi-storey building.

 Selection of Location o

Deliverable Priorities: 

Constrain: Here cost parameter will be fixed i.e. the location must meet the budget.



Enhance: Here time will be tried to optimize so that project doesn’t get delay and even cost remains in control as it is generally accepted that increase in time increases the cost.



Accept: here it will be accepted if location goes a bit out of scope that is getting a lesser space than planned as that can be compensated with building multi-storey building

 Construction of Sports Building 9

o

Deliverable Priorities: 

Constrain: Building should be completed within the time specified as it is important to provide services within the time given.



Enhance: Costs will be tried to optimize so that project can be completed within budget.



Accept: A little here and there in scope will be accepted though scope is an important consideration.

 Procurement of Equipment o Deliverable Priorities: 

Constrain: Procurement should be done on time.



Enhance: Cost will be tried to optimize by getting into most beneficial contract



Accept: Scope will be accepted as in getting a bit higher or lower quality equipment will serve the purpose.

 Designing of Membership Packages o

Deliverable Priorities: 

Constrain: Here the packages should meet the scope.



Enhance: Time will be tried to optimize in order to market the services early



Accept: Variance in cost will be accepted as it won’t be much in designing. 10

iii) Limits and exclusions: In this project limit in scope will be related to

services that will be offered and membership packages that will be available. Members will have to bring their own equipments such as racquets, accessories, etc. Club will provide them with balls and all other facilities. Eating or drinking at juice bar will cost them and it won’t be included in Membership fee. Maintenance of Club’s equipment will be done every month in order to ensure proper working of equipments. iv) Reviews with customer: In this section reviews with customer will be

done. Here customer means both internal (employees) and external (members). Reviews will be done in order to know what their expectations from the club are and are they getting what they desire. Are the time, cost and scope in project layout achievable? Thus clear communication in all these matters will be done as they are important to avoid claims and misunderstandings.

2. Project Layout and Resources Required

2.1. Project layout Project layout i.e. physical layout of the club is as follows:

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The project layout above comprises of space for all the sports activities club is providing. Hence total square feet space that project will need for the above layout is approximate 25000 square feet which will be taken on lease. In this layout there is also a juice and snack bar which will be helpful for refreshments during playing and will also help club as a source of revenue. 12

Layout has been designed so as to use the space optimally. This building will be constructed within 1.5 years with all keeping in mind necessities for different sports such as their flooring, height, etc. Approximate cost of constructing the building is Rs.3 million.

2.2. Resources Required Below are the descriptions about the resources that will be required in order to start the sports club. Resources are divided according to equipments needed for different sports and man-power needed for different activities. Equipments: i) Lawn Tennis: Resources required for lawn tennis are:

a. Tennis net b. Balls- approximately 150 per year

c. Tennis Posts d. Umpires chair e. Tennis posts ground sockets f. Court flooring will be hard court whose requirement will be dealt during construction and its cost will be included in construction costs. g. 2 long benches to sit for players during break ii) Basketball: Resources required for basketball are: a. 5 balls per year

b. Basketball board

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c. Basketball net d. Basket ring e. Court will be cemented and its construction cost will be included in construction of building costs. f. 4 long benches to sit for teams during rest period iii) Badminton: Resources required for badminton are:

a. Shuttlecocks- approximately 400 pieces per year for 1 court so total 800 pieces b. 2 Badminton set (includes net and posts) c. Flouring will be Anchored Cushioned which will be taken care by

construction team and its costs will be included in construction costs. iv) Table tennis: Resources required for table tennis are:

a. 2 Table-tennis table which will be Stag Centre Fold Table-Tennis Table b. Balls-300 balls c. 2 Net of Decathlon company d. Flooring will be of concrete surface that is covered with a

professional Taraflex mat and its cost will be included in construction costs v) Carrom: Resources required for Carrom are:

a. 4 Carrom Board of Synco Kidmaster b. 16 piece of Striker of Synco Signature

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c. 16 chairs and 4 tables to play on 4 boards at a time vi) Chess: Resources required for Chess are:

a. 4 Full set (Board and Pieces) of Staunton b. 8 chairs and 4 tables to sit and play on 4 boards at a time vii) Squash: Resources required for squash are:

a. 10 Balls of decathlon having 2 years warranty b. 2 small benches to sit for players during rest period Resources other than sports i.e. Personnel: i) 1 instructor each for basketball and lawn tennis and 2 common instructor for all other indoor sports. ii) 1 person to work for juice and snack bar

iii) 1 accountant and 1 clerk iv) 1 manager and 1 maintenance person v) 5 workers for cleanliness

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3. Initial Investment

Particulars

Units Required

Building

Cost per Unit

Total cost

1

3000000

3000000

Net

1

6000

6000

Posts

1

15600

15600

Umpires Chair

1

39600

39600

Posts Ground Sockets

1

3520

3520

Board

1

19800

19800

Net

1

117

117

Ring

1

1900

1900

2

2500

5000

Centre fold Table-Tennis Table

2

14500

29000

Net

2

800

1600

4

1530

6120

16

250

4000

4

1000

4000

8

2000

16000

32

300

9600

Small Benches

2

800

1600

Long Benches

6

1500

9000

Sports Equipments: Tennis:

Basketball:

Badminton: badminton set Table tennis:

Carrom: Board Striker Chess: Full set Other Resources: Tables-for chess and table Chairs

Total

3172457

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Above written are the capital expenditures that are incurred in the initial year. As there is no income in initial year there hasn’t been any mention above. The above expenses will be funded in 1:1 ratio of debt and equity. That is half the money will be funded by myself and rest will be taken from market.

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4. Sources of Revenue and Expenses for regular years

Below are the sources of revenue for the Being Young sports club: i) Membership fee ii) Revenue from juice and snack bar iii) Income from participation fee for the tournament that will be held twice in a year Below are the sources of expense for the Being Young Sports club: i) Salary of Personnel ii) Electricity iii) Maintenance iv) Lease for leasehold land v) Advertisement expenses vi) Materials vii)

Office expenses

viii)

Loan instalment and interest on loan

Hence above are the sources from which revenue will be earned and expense will be done every year. There might be some unseen expenses and revenue in the business later which will be needed to added in the cash flow statements. 4.1. Membership packages Below are the membership packages that will be offered to the customers:

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i) Diamond Package a. Activities include- All sports facilities and free participation in all the events done by Being Young Sports club. b. Membership fee- Rs. 1,00,000.

c. Benefits- No time constrain i.e. can come anytime they want. Special offers will be granted to them from time to time. Membership card can be used by family members too limiting to 5 members whose name must be registered in advance. Thus 5 people can take benefit of a single membership, in short this is a kind of family membership ii) Gold package a. Activities include- Selection of any 3 sports they would like to play and free participation for that sports in the events organized by Being Young Sports Club. b. Membership fee- Rs. 12000 yearly c. Benefits- This is a good package for those who want themselves

to limit to just some games they like and also it’s very cost effective. They too have time freedom but only an individual can use it and not family. This package can be converted into quarterly and half yearly package with Rs. 4000 and Rs. 7000 respectively for the package. iii)Silver Package a. Activities include- Can play only one game and will have time restriction. Extra fee will be taken for participating in games other you have opted for. b. Membership fee- Rs. 6000 yearly 19

c. Benefits- A very cost effective package for those who have

financial problems and likes to play only one game. This package can be converted into quarterly and half yearly package with Rs. 2000 and Rs. 3500 respectively for the package. Assumptions regarding yearly revenue from Membership fee: Total Members in first year from starting will be: i) Diamond Package-50 members ii) Golden Package-120 members a. 70-yearly

b. 30-half yearly c. 20-quarterly package iii) Silver Package-50 members a. 25-yearly b. 10-half yearly c. 15-quarterly package Assumptions regarding revenue from Events: i)

In the first year there will be 400 entries at each event that will pay participation fee.

ii)

Participation fee is Rs.500 per person.

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5. Financial data: 5.1.

Membership Revenue is as follows Details for 1st 5 years: Year 1

Package

Memb

Packag

Incom

Diamond Package

ers 50

e fee 100000

e 50000

Golden Package-

70

12000

00 84000

yearly Golden Package-

30

7000

0 21000

Half yearly Golden Package-

20

4000

0 80000

Quarterly Silver Package-

25

6000

15000

Yearly Silver Package-half

10

3500

0 35000

Yearly Silver Package-

15

2000

30000

Quarterly Total

220

63450 00

Year 2 Package

Memb Packag Incom

Diamond Package

rs 50

Golden Packageyearly Golden Package-

100 50

e fee 100000

e 50000

12000

00 12000

7000

00 35000

Half yearly

0 21

Golden Package-

20

4000

80000

Quarterly Silver Package-

50

6000

30000

Yearly Silver Package-half

10

3500

0 35000

Yearly Silver Package-

30

2000

60000

Quarterly Total

310

70250 00

Year 3 Package

Memb Packag Incom

Diamond Package

rs 50

Golden Packageyearly Golden Package-

90 60

e fee 100000

e 50000

12000

00 10800

7000

00 42000

Half yearly Golden Package-

30

4000

0 12000

Quarterly Silver Package-

40

6000

0 24000

Yearly Silver Package-half

20

3500

0 70000

Yearly Silver Package-

30

2000

60000

Quarterly Total

320

69900 00

year 4 Package

Memb Packag Incom 22

rs

e fee

e

Diamond Package

50

100000

50000

Golden Package-

95

12000

00 11400

yearly Golden Package-

30

7000

00 21000

4000

0 16000

6000

0 24000

Half yearly Golden PackageQuarterly Silver Package-

40 40

Yearly Silver Package-half

20

3500

0 70000

Yearly Silver Package-

35

2000

70000

Quarterly Total

310

68900 00

year 5 Package

Memb Packag Incom

Diamond Package

rs 45

e fee 100000

e 45000

Golden Package-

100

12000

00 12000

yearly Golden Package-

40

7000

00 28000

Half yearly Golden Package-

50

4000

0 20000

Quarterly Silver Package-

40

6000

0 24000

Yearly Silver Package-half

20

3500

0 70000

Yearly Silver Package-

30

2000

60000

23

Quarterly Total

325

65500 00

5.2.

Salary Expense estimates are as below for 1st 3 years: Year 1 perso Montly

Total

ns

Salary /prsn

Yrly

Instructors Juice &

4 1

10000 3000

salry 480000 36000

Snack bar Accountant Clerk manager maintenanc

1 1 1 1

15000 8000 25000 15000

180000 96000 300000 180000

5

2000

120000 1392000

Job

e Cleanliness Total

Year 2 perso Montly

Total

ns

Salary /prsn

Yrly

Instructors Juice &

5 2

12000 3500

salry 720000 84000

Snack bar Accountant Clerk manager maintenanc

1 1 1 2

16000 8500 28000 15000

192000 102000 336000 360000

7

2000

168000 1962000

Job

e Cleanliness Total

24

Year 3 perso Montly

Total

ns

Salary /prsn

Yrly

Instructors Juice &

5 2

13000 4000

salry 780000 96000

Snack bar Accountant Clerk manager maintenanc

1 1 1 2

17000 9000 30000 17000

204000 108000 360000 408000

8

2500

240000 2196000

Job

e Cleanliness Total

Job

Year 4 perso Montly

Total Yearly

Instructors Juice &

ns 5 2

Salary/person 14000 4500

salary 840000 108000

Snack bar Accountant Clerk manager maintenanc

1 2 2 2

18000 9500 32000 18000

216000 228000 768000 432000

8

3000

288000 2880000

e Cleanliness Total

Job

year 5 perso Montly

Total Yearly

Instructors Juice &

ns 5 2

Salary/person 15000 5000

salary 900000 120000

Snack bar Accountant Clerk

1 2

19000 10000

228000 240000 25

manager maintenanc

2 2

33000 19000

792000 456000

e Cleanliness Total

8

3500

336000 3072000

5.3. Calculation of Loan instalments is as below: Year

Amoun Princip

Int

total

1

t 15000

al 15000

1500

3000

2

00 13500

0 15000

00 1350

00 2850

3

00 12000

0 15000

00 1200

00 2700

4

00 10500

0 15000

00 1050

00 2550

5

00 90000

0 15000

00 9000

00 2400

6

0 75000

0 15000

0 7500

00 2250

7

0 60000

0 15000

0 6000

00 2100

8

0 45000

0 15000

0 4500

00 1950

9

0 30000

0 15000

0 3000

00 1800

10

0 15000

0 15000

0 1500

00 1650

0

0

0

00

Assumptions taken in cash flow: i) Office expense increases by 10,000 every year. ii) Materials expense increases by 20,000 every year. 26

iii) Advertisement expense increases by 50,000 every year. iv) Juice and snack bar revenue increases by 50,000 every year. v) Expense of 0 year has been counted and shown earlier and hence not shown again in cash flow statement. Just the total expense is written directly. vi) Loan is estimated to be taken of 15, 00,000 for 10 years at 10% interest annually.

5.4.

Estimated Cash Flow for 5 years is below:

Particulars balance B/f

Years 0

1 -

2 -

3 18885

4 547254

5 831754

31724

20694

43

3

3

57

57

Revenue: membership fee

63450

70250

69900

689000

655000

Juice and Snack

00 35000

00 40000

00 45000

0 500000

0 525000

bar Events

0 40000

0 50000

0 45000

550000

600000

0

0

0

Total

0

39225 58555 97785 13412

15992

43

43

43

543

543

Expenses: salary

13920

19620

21960

288000

307200

electricity

00 12000

00 15000

00 18000

0 210000

240000

lease of

0 12000

0 12000

0 12000

120000

120000

leasehold land Loan installment

00 30000

00 28500

00 27000

0 255000

0 240000

27

00 70000

materials

0 90000

0 11000

130000

150000

90000 250000

100000 300000

80000

90000

Office expense Advertisement

60000 10000

70000 15000

0 80000 20000

Miscellaneous

0 50000

0 60000

0 70000

Total

Balance C/f

31724 59920 39670 43060 50950

26272

57

00

00

00

-

-

18885 54725 83175

31724 20694 43 57

00

43

00

43

13365 343

57

Hence the above estimated cash flow shows that there will be positive inflow of cash from the second year. 6. Project Control:

Project control is very important for any project because if there will be no control even the well planned project may go haywire. Control is the process of comparing actual performance against plan to identify deviations, evaluate possible alternative courses of actions, and take appropriate corrective action. Control Process will keep check on the following issues: i) Customer satisfaction on the issues such as facilities provided, staff behaviour, instructor’s job, etc. Even the employees will be asked their satisfaction level and whether they have any issues with management or any suggestion they want to give. ii) There will be check on financial issues such as cost and revenue. Whether they are in control or going out of the planned budget. If

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they will be going out than proper measures will be taken in order to keep them in control. iii) Best Quality service at reasonable price: Market research will be

conducted every year or 6monthly to check what technology our competitors are using and at what price they are providing these services. iv) Proper control will be kept that there is proper co-ordination between different staff members and that whole organization works for one objective- providing quality service to the customers.

7. Bibliography Below are the references of the sources from the data has been collected: i) Project Management- The Managerial Process (Clifford F. Gray and Erik W Larson) ii) http://www.playgroundonline.com/ iii) http://shop.ebay.in/i.html?

_nkw=chess&_sacat=0&_odkw=chess+table&_osacat=0&bkBtn=&_ trksid=p3286.m270.l1313 iv) http://en.wikipedia.org/wiki/Table_tennis 29

v) http://www.squashgame.info/squashlibrary/14/37 vi) http://www.sportsknowhow.com/badminton/dimensions/badminton-

court-dimensions.html vii) http://en.wikipedia.org/wiki/Basketball_court viii)

http://en.wikipedia.org/wiki/Tennis

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