Business Plan for a Recreational Business

EXECUTIVE SUMMARY Away with the old and in with the new ‘X-Treme Gravity’ recreational park. The business is viewed as exhilarating, enjoyable and flexible. It accommodates almost all ages and different packages are designed to suit the customers’ capacity and beyond that to boost one’s confidence by motivating them to overcome their fears. The first task accomplished was the brainstorming and mind-mapping session. This was done in order to develop an exhilarating and fresh idea for recreational businesses. The factors considered for the business were divided in to two.
There were the external factors that were considered such as economic factors, political factors, the socio-cultural factors and the competitors in the industry. Then, there were the internal factors considered which include: the start-up costs, the returns on investment, the assets and other resources required and the overall financial budget. The business’s main center is located in Karen within Nairobi. These premises offer several extreme and outdoor sports such as paintballing, go karting, dirt bike racing, and zorbing, among others.
The business also extends their services by offering extreme sports packages for certain extreme sports that cannot be done on the premises. Therefore, the packages comprise of mountain climbing, trekking, scuba diving, snorkeling, white water rafting and sky diving to different areas within Kenya. The vision of this business is; to provide excellent customer services, build long-term relationships with the clients, create awareness & increase stipulation for the extreme sports.

Various sources for the research were used, such as: The Internet, newspapers, magazines, journals, public banners, the general public, individual businessmen and successful companies. The task of SWOT analysis was much of a group contribution, whereby the group members contributed information based on their own knowledge and understanding of the business. The financial projections of the business were based on estimated values. The business interviewed companies with similar products such as, ‘Out of bounds’ and ‘Kitengela adventures, to acquire reasonable figures for costs and revenues.
They were mainly interviewed via email and telephone. Our business also did surveys and face-to-face interviews. A market research was carried out to determine market growth, trends and needs. Survey objectives were determined and the questions were prepared based on these objectives. The promotional campaign was addressed and researched through a market survey. Overall, the business was seen as viable and acceptable. MISSION STATEMENT: AIM AND OBJECTIVES OF THE BUSINESS -Short Term goals: From 1 to 12 month of operating: a)Establish the target market and inform the target market of the products existence by 10% in the first year. )Creating a promotional and marketing plan that will fasten the awareness process by 15% in a year. c)Using discount and seasonal pricing to increase the demand of the products and services in the market by 10% in the first year. d) To develop a relationship with our customers in order to create a friendly environment and to keep them loyal to our business. This will maintain and steadily increase revenue by 5% each year. -Middle term goals: From 13 to 60months: a)Design a marketing plan that will keep our customers loyal to the business. Profits will steadily increase by 10% in a year. )Design a plan to increase our customer’s margin; revenue will increase by 9% in a year. c)Increase the profit monthly through the above plans. Profits should increase by 15 in a year. d)Receive higher returns on the investment of 12% in a year. e)Grow in the market and expand the business’s market share by 6%. f)Increase revenue and sales margins after the first year, by 10% each year thereafter. – Long-term goals: a)To expand the business by locating it in different areas to facilitate the access of our products to potential customers in those areas; revenue will increase by 15% in a year. )To design a plan that will expand the business in terms of the target market; profits will rise by 18% in a year. c)Maintain long-term relationships with the clients and receive customer feedback. Market share will expand by 7%. d)Introduce new activities and extreme sports packages. Profits will increase by 19% in a year. e)Maximize profit margins and revenue margins by 22% in a year. f)Continue expanding in the market to eliminate any other competition. Increase market share by 10%. KEYS TO SUCCESS The essential keys to success of this business include: Create an environment for people to feel good about themselves, both physically and mentally. •To keep our customers comfortable by creating a relationship with them •Provide special activities for various holidays. •To insist on excellent customer assistance at all times •To recruit professionals in the different domains to insure customers’ satisfaction Always a follow up on the customers’ experiences in our premises and in outdoor facilities arranged by us. IDEA GENERATION When selecting an appropriate business, the group identified various factors and their implications on the business. EXTERNAL FACTORS CONSIDERED:
Economic factors: These included factors such as inflation, unemployment, economic growth and income inequality. Each factor was considered and evaluated in order to determine the most detrimental one to the business in the market. Initial surveys and experiments show that Income inequality will affect this business the most in this market. Political factors: These include the political upheaval in the market. Another major detrimental factor to businesses in Nairobi is the political factors. Therefore, it is important to study the current political situation and the impact it will have on our business.
Socio-cultural factors: These include factors such as population structure, lifestyles and behavior of the market. This was vital to consider since the nature of the business is one that has rarely been explored before and therefore, its success depends entirely on the customer behavior and lifestyles. Competition: The fewer the competitors, the easier the success of the business. Therefore, the business was selected based on the number of competitors in the market. X-Treme Gravity faces its main competition from “Out of Bounds” and “Kitengela adventures”. (Sourced from surveys)
The pie chart shows which one of these factors is seen as the most detrimental in the market, especially for our business. INTERNAL FACTORS CONSIDERED: Assets and resources: The assets and resources for the business are limited, since most of the sports being done on the premises are outdoor and require, one-off payments for the main equipment. Similarly, since the business is outsourcing for the extreme sports packages, then the assets and resources required are controlled. Financial budget: The business was also selected because the preparation of the projected financial budget was not impractical.
Initial start-up costs: The initial start-up costs for the business are relatively high for the new business. This is because the business is being located in Karen and the cost of acquiring lad is quite expensive. However, it is a one-off cost. Return on Investment: The return on investment is attractive. This encourages more investors to ‘pitch in’ and the success of this business highly depends on the attractiveness of the investment. Profitability: The nature of this business is very dynamic which constantly eliminates any new type of competition to this business.
The business may experience high initial start up costs but these costs are likely to be recovered fully within the course of the business. BUSINESS DESCRIPTION / COMPANY SUMMARY COMPANY DESCRIPTION AND OWNERSHIP: 1. 1Company description The business is mainly accentuated around extreme sports. We provide our customers with different thrilling activities. These include: A set of activities that can be enjoyed in either the ‘X-Treme Gravity’ recreational park or outside the premises. Our premises are situated in Karen, Nairobi.
This is our main center, and it will be an extreme sports recreational park. Then we extend our services by offering other extreme sports packages so that certain extreme sports such as scuba diving, skydiving, mountain climbing and white water rafting, among others, can be done in style. The extreme sports packages have been designed in such a way that it stretches out to different, unique places within Kenya that are best suited for that particular extreme sport. The main objective of this business is to provide a new way of enjoying and relaxing during leisure time to our Nairobi residents.
Therefore, ‘X-Treme Gravity’ is not only an extreme sports park but also a fun park, specifically founded to add enjoyment in the lives of our customers. EXTREME SPORTS AGENTS: We extend our services as extreme sports agents and the procedure that tour business followed is: 1. 2Company Ownership After a careful analysis of all the different possible ownerships available, this company will operate as a limited company for the following advantages: a)The ordinary shareholders are the owners of our company. b)The ordinary shareholders at the AGM elect the Board of Directors. )The members of the company can vary from two till infinity (depending on the no. Of shares) d)The shares are traded on the stock exchange. e)There is a separate ‘legal entity’ from the shareholders f)There is a limited liability to shareholders. g)Funds and finance are raised through the issue of shares and redemption of debentures. (MBA Publishing Ltd, 2005) COMPANY LOCATION AND FACILTIES: This company will be located in Karen considering the atmosphere we would like to create for our customers as well as the issue of land.
Extreme sports which need to be done outdoors will then have its appropriate locations where customers will either be transported there using the company’s facilities or use their private transport. Those w need to hire out our company vehicles to pick and drop them to our premises need to give a weeks advance notice, including the numbers needed to be picked. (Sourced from Kitengela Glass) The facilities included are: A cafeteria: The cafeteria is designed in a modern art style. It extends outdoors so that our customers can enjoy the outdoor breeze on a sunny day under the table umbrellas.
People may also sit in the well-designed, creative loft. Changing rooms: These have been included on the premises so that the people doing the outdoor sports can change there and lock their belongings in the secure lockers in the changing rooms. Picnic site: There is a picnic site on location, which has bee well designed to fit the description of “peaceful, relaxing and scenic”. This has been specially introduced for the schools, companies and families. An area filled with nature and comfort perfectly designed specifically for the satisfaction of our customers.
Go-kart and dirt bike tracks: The premises also include two separate tracks for go karting and dirt bike racing. Attention has been given to developing these tracks so that various competitions can be held on location under the categories of ‘junior karting’ and ‘team building’. Artificial rough rock wall: This has been installed on location as well for the purpose of training for rock climbing. There is one separate wall for juniors and one separate one for adults and professionals. Within this area, individuals are also trained for abseiling/ rappelling.
Rope crossing/ Tarzaning/ aerial rope structures: Once again, a separate area within the premises will be dedicated to all the rope games (heights), where ropes are tied to various tall structures very high off the ground. PRODUCTS AND SERVICES PRODUCT AND SERVICE DESCRIPTION: X-TREME GRAVITY will be offering the following activities within the premises: 1. Paintball: P aintball is a sport in which players eliminate opponents by hitting them with pellets containing paint (referred to as a “paintball”), usually shot from powered paintball gun (or marker). Wikipedia, 2007) The area for paintballing has been designed in such a way that it offers flexibility in the types of paintball games that can be played on location. These variations in the paintball games have been done intentionally, to offer a wider variety for customers ranging from the age group of 10 onwards. Among the paintball games that can be played on our premises are: Capture the flag- players need to steal the enemy flag and defend the friendly flag Elimination- shoot the enemy team; may replay if hit King of the hill- one team defends a raised flag while the other team attempts to lower the flag.
Zombie- a few players are considered enemy (only die with goggle shots) which will turn others into their team by hitting them Speedball- players start from 2 far sides of a round field trying to capture a flag placed in the middle and returning it to friendly base. (Wikipedia, 2007) 2. Go-karting: T He business chose to introduce go-karting on the premises because it is a very fun-filled, enlivening and stimulating game. The game requires a person to hire out a go-kart and complete several rounds, competing with other fast drivers on the same tracks with them.
The idea is to reach the finish point before the opponents and the thrill lies in the speed at which they drive the go-kart. The game has been designed and split in to two categories: The ‘junior karting’ for all the children under the age of 12 and ‘team building’ for adults and companies who come to the premises for ‘team building’ activities. We can also provide photography, video recording and product displays if required. (Envermeyer, 2009) ‘TEAM-BUILDING’ GO KARTING: What better way to get your workforce motivated than a Grand Prix-style event?
Once your staff is confronted by a track full of adrenaline-fuelled workmates and a burning desire to win you will soon see who responds best under testing conditions; there really is no better way of bringing people together than on the race track. (Envermeyer, 2009) “JUNIOR KARTING”: All likelihood the next Formula 1 Champion will have started his career in a go-kart. Youngsters from 8 years upwards are competing on a regular basis and whether you are trying the sport to see if the child has potential or simply looking for a different type of birthday treat the karting could be something to consider. Envermeyer, 2009) 3. Dirt bike riding: This game has several similarities with go-karting. To start with, it is a game that spells out ‘wild and crazy’ fun, just as go-karting. Separate dirt-bike tracks have been designed in such a way that the tracks are dusty, uneven, uphill, downhill, through bushes, testing various levels of difficulty. The tracks are quite long and the game requires a well protected and geared up individual to ride a motor cross bike through the different levels along the track, competing with his/her opponents along that track. The deal is to reach the finish point before your opponents.
The game is only applicable for children above the age of 15 and requires a certain level of skill or enthusiasm. (Dirtrider. net, 2005) 4. Aerial ropes / Rope crossing and Tarzaning: This activity emphasizes on height and balance. There are several activities involving ropes within the premises that have especially been designed for ‘team-building’ activities, ‘junior’ activities and ‘professional training’. One rope is tied from one tall structure to another and a person is to balance him/herself on the one end to the other wearing the harness and other necessary protective gear, for our client’s protection.
However, this is just one of the many activities with the ropes. There are bridges made of ropes only, suspended high off the ground, there are ‘Tarzaning’ activities as the name suggests and many more. (South Stafford shire council, 2009). The ropes are suspended very high of the ground and they have been positioned in an area within the premises that has outdoor, adventurous, bushy excursion scenery. This helps overcoming the fear of heights. Some of the trails we offer are: MINI AERIAL ROPES TRAIL: 8 years of age & up:
This trail is to be created especially for small adventurers. The trail is similar to the regular trail, but is adapted to the younger clientele. This trail permits children to have fun going from one tree to the next all the while at their own rhythm and abilities. Although, the trail has different levels of difficulties for the juniors as well. Participation Requirements: (South Stafford shire council, 2009). Must measure a minimum 1m40 arms extended, from fingertips to toes. Adult supervision is obligatory. Be in good health.
THE ‘CAP JASEUX’ TRAIL: Aerial ropes course in Cap Jaseux consists of 73 suspended bridges, which cross over 4 distinct areas. These bridges wind through a majestic trees, bushes and woods, from platform to platform within’ the trees. Each section is composed of a complete route with each its own challenges and surprises, but always respecting the capacities of each hiker. (South Stafford shire council, 2009). Participation Requirements: You must be over 8 years of age and measure a minimum of 1m80, arms extended, from fingertips to toes.
Participants under 16 years of age must be accompanied by a responsible adult (an adult can accompany a maximum of 3 young participants). Participants cannot be under the influence of alcohol or drugs. Participants must be healthy. 5. Zorbing: The activity of sphering, zorbing or globe riding is the recreational practice of humans rolling downhill in a bouncing sphere, generally made of transparent plastic. Sphereing is generally performed on a gentle slope, but can also be done on a level surface, as well as on water, permitting more rider control.
The zorbing zone has been designed with several exciting and challenging barriers. While rolling downhill in the plastic ball, the sphere is rolled down n a certain direction and from there it meets several ‘cushioned’ barriers that make the sphere ‘bounce-off’ the cushioned barrier. We offer two types of spheres, the single holder and the double holder. Zorbing is a very flexible game as it can be done in various ways. It could be rolled down, it could be in water, it could be bounced off various barriers. Extras: We also include a low level of water in the zorbs. Extreme dreams, 2009) . 6. Wall/rock climbing and abseiling/rappelling: For those who are interested in high-adrenaline adventures and the terror of height, wall/rock climbing was not forgotten in the mixture of the creation of X-TREME GRAVITY. In this sport, the climber wears a harness and other protective equipment before the activity begins in order to protect them from accidents of any sorts. The built-in wall/rock wall has an uneven, rough texture just as in a real adventure. Individuals are required to climb it using different levels of support. The wall stretches very high.
On reaching the top, then the individual is required to climb down using the appropriate equipment from the other side of the wall. This helps in overcoming fear of heights and it can be used especially for training of using the appropriate equipment and climbing and descending aptly, for a real rock climbing expedition. (Wikipedia, 2007) EXTREME SPORTS PACKAGES: The business is keen to provide exciting, thrilling and adventurous extreme sports packages and therefore, X-treme Gravity has designed several exhilarating packages for the introductory stage of the business.
The business looks forward to expanding and introducing more new and unique extreme sports packages over time. The packages that X-treme Gravity introduces, includes: Mountain Climbing White-Water Rafting and Kayaking Scuba Diving Sky diving Mountain Climbing If you enjoy climbing/hiking, Kenya has a lot to offer, the most favorable areas being, the Aberdare Mountains, the Chyulu Hills, Hell’s Gate, Mt. Susua, Mt. Longonot, the Menengai Crater in the Rift Valley, Ngong Hills, located south-west of Nairobi, Cherangani Hill, Mt. Elgon and Mt Kenya. (East Africa Shuttles & safaris Ltd, 2008)
Mt Kenya offers a rewarding hike as well as challenging climbs. There are eight routes up the mountain, three of them being the most popular and accessible to anyone of reasonable fitness. Naro Moru, lying to the west, is the easiest ascent with Sirimon to the north and Chogoria to the east being equally popular but you still need to be fit and properly equipped. Batian at 5,199meters is the summit and should only be attempted by experienced climbers. You need to be accompanied by a porter or go with organized tour. Be careful of altitude sickness and hypothermia.
The best time of the year for climbing is from mid-January to late February and from late August through September but it is accessible most year round. (East Africa Shuttles & safaris Ltd, 2008) You will need warm, wind proof clothing, strong comfortable walking boots, gloves, a tent and a good sleeping bag as well as a stove and high-energy food and drinks. Several places hire equipment (East Africa Shuttles & safaris Ltd, 2008) Mount Kenya Routes and Rates (East Africa Shuttles & safaris Ltd, 2008) Sirimon Route – The least used of the three principal routes.
Because Sirimon is on the dry side of the mountain it offers some of the finest forest walking to be had on any tropical mountain. In the lower sections, above the Park Gate. Higher up, Hugh specimens of St John’s Work interspersed with small thickets of Bamboo. Near the top of the track, beautiful alpine flowers and the start of the tussock grass. Animal life abounds and parties often come across buffalo, elephant and sometimes-even lions. Naro Moro Route – Although the least scenic of the three principal routes, it remains the most popular.
Firstly it is the fastest route to Lenana and back if you enter from the main road. Secondly both the Naro Moro River Lodge and Mountain Rock Hotel offer excellent facilities for climbers, including equipment hire porters and comfortable accommodation. Chogoria Route – Having reached the road head, Chogoria is the fastest and, arguably, the most beautiful and spectacular route up the mountain. Itinerary: (Packages designed by X-Treme Gravity) Option 1: -2 night 3 days. Sirimon Route $537 pp (Kshs. 42950) Day 1: Transfer from Nairobi and beginning of ascent.
The first night is spent at Old Moses Day 2: Trek from Old Moses up to Shiptons Hut, in preparation for the final ascent. Day 3: Starting very early in the morning, ascend up to Lenana Point for Sunrise. The descent begins shortly afterwards, back past Old Moses in order to meet the vehicle, for the transfer back to Nairobi. Option 2: 2 nights 3 days. Naro Moru – route. From US$537 pp (Kshs. 42950) Day 1: Transfer from Nairobi and beginning of ascent. The first night is spent at the Met Station. Day 2: Trek from the Met Station up to Mackinders Hut, in preparation for the final ascent.
Day 3: Starting very early in the morning, ascend up to Lenana Point for Sunrise. The descent begins shortly afterwards, back past the Met Station in order to meet the vehicle, for the transfer back to Nairobi. Option 3: 3 nights 4 days Sirimon Route from US$600 pp (Kshs. 48,020) Day 1: Transfer from Nairobi up to Old Moses. Day 2: Trek from Old Moses to Shiptons Hut. Day 3: Starting very early in the morning, ascend up to Lenana Point for Sunrise. The descent begins shortly afterwards, back to Old Moses for the night. Day 4: Final descent and transfer back to Nairobi.
All Prices include: All prices exclude: Park FeesTipping PortersClimbing Gear & Sleeping Bags GuidesBeverages & Mineral Water Accommodation in huts 3 simple meals per day Cooks White-Water Rafting and Kayaking Kenya has three rivers; the Tana, the Athi and the Ewaso, suitable for rafting at all levels of competence up to exhilarating Class V white water. The experience is more rustic and less crowded than the Zambezi version. (East Africa Shuttles & safaris Ltd, 2008) Below are details of the rivers we run and the rates for established trips. Rivers and Rates: The Tana River – one day rafting trip:
Our premiere one-day trip ideal for people with a day or two to spare when visiting Nairobi, or those basing themselves in the capital (only 100kms along the Nyeri Rd). This will be an exciting day of thrills (and often spills) with a great mix of high action white-water (up to grade V) interspersed with scenic calm water where bird life abounds. Not enough? Why not leap feet first into a big surfing hole, jump a 30ft waterfall or swim The Devils Toilet Bowl (water level dependant). (East Africa Shuttles & safaris Ltd, 2008) A typical day trip starts with you being picked up from either The Norfolk hotel, or Sarit Centre in Nairobi by 8am.
A 1. 5hr drives sees you arriving at our Camp at Sagana. Here you can relax with tea/coffee and biscuits before receiving a comprehensive safety briefing. After signing a compulsory release and assumption of risk form, we drive up to the put-in where you will receive some final practical training before heading down river. The trip is either 16km (high water season) or 8km (low water season) and lasts approximately 4hrs. This varies greatly due to the water levels and we often find ourselves rafting 8km one day, then 11km the next due to rain upstream.
The trip takes out at Savage Camp, where you can enjoy a solar heated shower or relax in the pool before enjoying a three-course BBQ lunch. Trips depart Savage Camp no later than 5pm for Nairobi to ensure you arrive back at your pick up point before dark. Other options available on the Tana include scenic float trips from the camp downstream on completely flat water for those not wishing to experience any white-water. This trip lasts 4hrs and takes in the abundant bird life inhabiting the lush riverine forests along the river. To date our guides have recorded over 120 species of birds on this section.
A Kenya Professional Safari Guide usually takes trips. (East Africa Shuttles & safaris Ltd, 2008). New to our repertoire of Tana trips is the full moon run. This takes in the white-water section only and lasts about 3hrs. (Packages designed by the X-treme Gravity) Prices All prices are in US dollars: One day trip — 99. 00 (Kshs. 7,910) One day/one night —137. 00 (Kshs. 10,920) Scenic float trip — 82. 00 (Kshs. 6,540) Full moon trip — 124. 00 (Kshs. 9,950) The Athi River – 3 day rafting expedition: Itinerary (East Africa Shuttles & safaris Ltd, 2008) If you like multi-day expedition style trips then the Athi is for you!
Flowing through Tsavo National Park, we raft up to 80km`s of Kenya’s second longest river with three days and three nights on the river. The river gives an awesome mixture of relaxing calm water with game viewing (Lion, Elephant, Buffalo, crocodile and hippo have all been seen from our boats) and abundant birdlife interspersed with some great white-water (up to grade IV). The trip usually goes out fully self supported with our guides providing breakfast (full cooked or cereals/fruit/toast), lunch (a selection of cold meats and cheeses with bread/salad and fruit) and dinner (three courses).
If a more luxury trip is your style then vehicle support (at an extra cost) is available to bring those added necessities. (East Africa Shuttles & safaris Ltd, 2008)Day one: gets you to Athi at Kibwezi, a short drive from the Mombassa road. After our comprehensive safety briefing, you will set out in the afternoon to raft the short distance to our first camp, Bushwhackers. Set on a secluded sandbar mid river. The first night is spent round the campfire listening to the sounds of Africa and swapping stories with the guides about the days ahead.
Day two: after breakfast and an early start you will soon reach our first major rapid followed by a few calm sections interspersed with smaller rapids down to our lunch spot. More rapids and flat open plains where hopefully you will see some of the animal’s native to this area follow this. Late afternoon we arrive at our second camp `scorpion` on the relatively unpopulated left bank of the river. Day three has some of the best rapids with the legendary `Vietnam` taking you through dense undergrowth and crocodile burn providing an awesome hit.
After another fun packed day you will arrive at our final camp, `Hippo`, where you will spend a final night by the fire relaxing and re living the previous day’s action. Day four: we return to Nairobi by around lunchtime. Price (US Dollars) – $623. 00 (Kshs. 49,800) All prices exclude: Tipping Beverages & Mineral Water Scuba Diving and balloon safaris Kenya has nearly 600 kms of coastline, nearly all bordered by spectacular coral reef. The Indian Ocean provides warm, hospitable waters, with coral reefs teeming with marine life, ideal for scuba diving.
Often on our way to dive sites the boat will slow down to play with a school of friendly dolphins or stop to dive with the gentlest of giants, the whale shark. (Africastay, 2004) In Kenya we work with Diving the Crab and Diani Marine – Kenya’s top dive schools. Both are based at Diani Beach on the South Coast of Kenya and are accredited to run PADI and SSI dive courses. Diani Marine was established in 1978, Diving the Crab in 1983 so both schools have nearly many years experience of scuba diving in Kenya and operate very well run dive bases, equipped with the latest equipment, dive boats and high qualified instructors and dive masters. Africastay, 2004) The package: 7 night’s accommodation at beach side hotel on the spectacular Diani Beach + flying safari to the Masai Mara for 2 nights 3 day in Luxury tented camp. on full board with 3 game drives per day in 4×4 vehicle Optional extras such as diving with Whale Sharks, scuba dives and courses, dolphin watching, kite surfing + windsurfing; Flights from Europe not included, airport transfers included and park fees included Location, Mombassa Region, Diani, South Coast Price, from US $ 1,198 (Kshs. 5,800) All prices include:All prices exclude: Flights, Included Tipping Availability: All yearBeverages & Mineral Water Skydiving Divers are usually based at a single beach resort and make their way to a local airstrip before falling out the sky at enormous heights. At Diani, skydivers take a short trip to Ukunda airstrip, and ascend in a Kenya Twin Otter, completing the spectacular and exhilarating drive by landing on the doorstep of their chosen accommodation to enjoy a well-earned drink. Mowngera Kioga, 2005) This means that at Diani, skydivers stay at the Safari Beach Hotel – take a short 10 minute drive to Ukunda airstrip, take off in a waiting Air plane [Twin Otter], and then dive directly over the beach- landing on the sands right at the doorstep of the resort. For the skydiving addict, this is a perfect arrangement. For most skydivers, it’s all about the fall- the pure freedom of flight that lasts from the time a jumper leaves the plane until the parachute is pulled at around 2000 feet.
The average diver falls at the incredible speed of 120 miles per hour- but those who have never tried it may be surprised to know that this experience does not feel like falling- the continued momentum of the plane sends the diver earthward on a sustained arc- which means that there is none of the stomach lifting “plunge” sensation that you may expect. (Mowngera Kioga, 2005) This is the nearest experience possible to flying free as a bird n freedom at its most pure and simple. Packages 2 night, 3 days, Diani beach. US $ 1,074, (Kshs. 85,900) Day 1: Transfer from Nairobi to Mombasa Diani
Day 2: sky diving day. Day 3: Starting very early in the morning, for the transfer back to Nairobi. Location, Mombasa, Diani Region, Kenya, Africa All prices include:All prices exclude: Flights, IncludedTipping Availability, January, February, March, November, December,Beverages & Mineral Water CURRENT SITUATION AND SWOT ANALYSIS INDUSTRY PATTERNS: Whilst millions of shillings are being pumped into the sports industry especially the extreme sports industry, by companies in the form of sponsorship, most extreme sports remain at amateur levels, bedeviled by problems.
This is in sheer contrast to the thriving environment businesses are currently enjoying. Among the most attractive extreme sport is mountain climbing and trekking which is mainly practiced in on Mt. Kenya, Mt. Elgon, the Aberdare Mountains, the Chyulu Hills, Hell’s Gate, Mt. Susua, Mt. Longonot, the Menengai Crater in the Rift Valley, Ngong Hills, located south-west of Nairobi, Cherangani Hill, as just a few to mention among others. Extreme sports are a combination of both professional and corporate social sports at the same time.
The second most popular extreme sport is Skydiving, which is usually based at a single beach resort and make their way to a local airstrip before falling out the sky at enormous heights. At Diani, skydivers take a short trip to Ukunda airstrip, and ascend in a Kenya Twin Otter, completing the spectacular and exhilarating drive by landing on the doorstep of their chosen accommodation to enjoy a well-earned drink. Throughout the 2002 event, over 120 divers made continual skydives over 2 weeks.
Kenya has a weak reputation for extreme sports compared to the other sports, the coastal regions are mainly the scene for these sports mainly because of the huge water bodies (sea), and on the other hand, motor sports tend to recover the reputation through big sporting events like the Kenya Safari Rally, which takes place around Easter. The rally, which starts and finishes in Nairobi, follows a route that covers 4,000 kilometers (2,486 miles). Large crowds follow the event in the rural areas and the cities.
During the rally, daily results dominate radio, print, and television news coverage as Kenyans cheer for the local heroes competing against top international drivers. In the sports industry, the rules of play change constantly. Sports organizations must deal with an ever-evolving array of challenges such as risks that can threaten organizations’ ability to compete in this dynamic and high-profile marketplace, finding professionals experienced in identifying and solving the unique risk management challenges facing companies and organizations within the sports industry.
Some of the major challenges are Designing and negotiating cost- effective, custom-made insurance programs tailored to the needs of your company or organization, Establishing a loss-control program by assessing the risks facing your company or organization and preventing losses before it is too late and designing a claims management program that will help reduce your total cost of risk. The Government says that it will support establishment of extreme sports lottery that will among other issues help fund the welfare of extreme sports people and promote sporting activities in the country.
President Kibaki said a committee will soon be formed to manage the lottery to improve extreme sports in the country. “We want to have institutionalized mechanisms in Kenya that will promote various fields of Extreme sports and improve the welfare of extreme sports people in the country,” the President said. In recognition of the importance of sports, President Kibaki said the Government has initiated measures to strengthen the sports industry in Kenya.
He disclosed that the Government has allocated resources in the budget to support sports development programmes. Said President Kibaki: “My Government has also established the sports stadia management board and set aside funds for maintenance of sports facilities countrywide. ” The President said, in addition to these measures, programmes will be intensified for the promotion of extreme sports through identification and training of talented young people from the districts and provinces up to the national level.
He observed these sporting activities are essential not only for nurturing good health but also in creating opportunities for individuals and communities to socialize among people “Thus sport contributes to building a cohesive society that is an essential base for a strong and prosperous nation,” the Head of State said. The President pointed out that sports have become a source of dependable employment for many young people and urged extreme sports people to aspire to excel in their chosen fields in order to benefit from these sports. In terms of market needs, there is legitimate great need for extreme sports entertainment.
A growing economy means more people have more money to spend and leisure activities are gaining a premium. The local entertainment industry mostly consists and is almost limited to media. People are willing to spend a lot just to enjoy the pleasures of extreme sports and explore these sports to rise in the sports industry for economic purposes. Some of these sports are professionally practiced around the world and cost quite a lot compared to the local sports but this in turn brings a benefit to the country as a whole, not only financially but economically and socially as well.
In terms of promotion and engagement, our emerging culture has a tremendous tie to sports. People will develop a personal identity with a sport; being in such a group fulfills a strong social need. This is a social need that is currently only served by mainstream sports. Club sports tend to disappoint but there is a legitimate social need not being met here. This is because club sports are usually amateur played and do not engage in team building so as to play among people and get to know the sport very well, such an example is golf, which is played individually, so it is up to the player to play it right.
COMPETITION AND BUYING PATTERNS Competition is mainly among touring companies, lodges and resorts that associate with different packaging styles and enhance these extreme sports. They help in the practice of these sports such as to get the appropriate locations for the sports. These touring companies have professionals who help in the process of undertaking these sports, where they guide the actual practitioners all through the way. Some of these companies include Africa scope safari and tours located in Nairobi, Extreme Safaris located in Mombasa, Kenya eco lodges, Kenya diving resorts, Mt.
Kenya treks, Burguret Chogoria, Wildlife safaris, the ultimate expedition and various others. This leads to a monopolistic competition among the market therefore competition is intense due to many choices and a wide range of variety for customers to make decision upon. These touring companies create a ‘smart’ marketing strategy in order to attract their customers. This is done through affordable and attractive packages and offers that customers look forward to all the time.
This is mainly generated during the peak seasons although most recover their costs through high pricing but in an attractive way or package therefore making the competition intense. This allows very little room for new entrants in the market therefore creating barriers to entry. The buying patterns are mostly the youth who are excited to explore these sports in many ways. This is because most of them are fearless of the risks and are energetic therefore allowing them the opportunity to participate in these sports.
Even though money is an issue, as most of them are not employed, they still do these sports as they borrow money from other sources. Following the youth are the middle-aged adults who have fear of safety but still some of them dare to challenge themselves. These people are mostly employed but still have concerns about prices due to economic downturn plus some get limited salary just enough to survive. This in turn causes a high pricing pressure on the companies allowing them to target their market.
Therefore in summary, the main market here is the market with high income and flexible lifestyle who can afford to enjoy these sports at any time although those with an average income tend to save but this eventually takes a long time before they practice these sports. OTHER PRODUCTS THAT AFFECT OUR BUSINESS PRODUCTS: Other competitor’s products: The extreme sports industry is dormant in the industry currently. Perhaps the biggest reason for that are the backward trends of the society and the cultural backgrounds. Therefore, the idea is to make extreme sports a new and latest fashion in Nairobi in order for the business to succeed.
However, the downfall in our competitor’s products allows our business to pick their weaknesses and turn them in to our strengths. SWOT ANALYSIS: STRENGTHS: a)Excellent staffs that are highly trained and are very customer attentive: Customers are drawn to excellent services since it is the only indicator of the quality of services. Since we are employing highly trained staff who will provide efficient and effective services to our customers; keeping the customers in mind at all times; it is expected that the reputation of our business will grow rapidly as a result of our efficient staff. )Well-equipped ground state of art equipment: This is an indicator of quality of the services we provide. Apart from that it offers a competitive edge for our services. c)The business is able to establish a strong reputation for our services because the business is monopoly in the market. The nature our of the business apparently makes us stand-alone and as a result gain customer loyalty. d)The business is a unique idea: We offer our services as a package. This will be convenient to our clients especially those who normally prefer paying at once when booking. )Superior service offering: Extreme sports; sky diving, scuba diving mountaineering, Bungee diving and white water rafting. f)The Internet: Our website www. xtremegravity. com promises to be significant technological solution for our products in the areas of registration, communication and information delivery system. The website has demonstrated the ability to provide more extensive and current information at reduced costs. g)A state-of—the art computer system: utilizing the latest software that continues to enhance our productivity and expand our capacity.
There is real time processing where customers requirements are processed as they are received. WEAKNESS a). The business is struggling to build brand loyalty. The business has not yet developed footing with the customer and is still creating market demand for the product. b). Difficulty in finding well skilled workers: -Extreme sports are very fragile and needs highly skilled workers who unfortunately are very difficult to find. c). Lack of knowledge, awareness and information of the new business being offered. Most of our local customers tend to be ignorant in extreme sports and consider it as a ‘sport for others’.
We therefore in our promotion strategy focus intensively on creating awareness of this new product. d). Seasonal revenues posses as another weakness. Apart from the locals we are also targeting tourist who actually and factually jet according to the season. We therefore need to adjust in promotions during high and off pick season to maximize our profits. OPPORTUNITIES a). Growing awareness due to the rising awareness in health, fitness and extreme sports and interest too. The government and the world health organization in general have organized campaigns stressing on Importance of physical fitness.
This advantage since awareness is being created and indirectly advertising our product. b). Ability of developing long-term customers . Basing on the monopoly nature of our product, there is a great potential of developing long term customers who are very much loyal to our product. c). At the moment very low competition in the market for this product. We have the potential of acquiring the lion’s share of the market. THREATS. a)Seasonal interest in particular sports which is in direct competition with our own sports. Examples of these sports include the marathons e. g. Lewa marathon, the safari rallies e. . KCB and cycling. Most people tend to plan for this programs in their Holiday calendars and this Impacts negatively to our business at these times of the year. b). Lack of knowledge and interest in our product. Extreme sports is not In the mind of most people while others who have information about it tend to behave like they have other better things to handle than go for such sports. c)Many fears and safety concerns associated with our product. Due to the risks associated with this sports, some of our expected customers turn away from it and making them o change their minds may not be that easy. )Legal and liability issues. Extreme sports continues to be exposed to liability issues in many aspects in many aspects of the experience it provides . The potential concerns range from health and safety issues to various forms of verbal or physical abuse in an increasingly litigious society, there is always potential for legal actions. MANAGEMENT SUMMARY ORGANIZATIONAL STRUCTURE: The business will operate using the common organizational structure. The business operates using the concept of ‘departmentalization’ and in particular the ‘vertical functional’ approach.
Since the business is in the preliminary stages, most of the positions besides, the directors are vacant. (Organizational structure, O. E. ) MANAGEMENT TEAM: Since this is a new business being ventured, the management team is constricted to the main departments for this business. As the business expands, we will be able to employ more managers and initiate other secondary departments. Qualifications: A basic Bachelor of Business degree or A bachelor’s degree with any one area of expertise required for that position A professional degree Masters of Bachelor of Administration (MBA)
At least 5 years work experience. The vital departments for this business have been addressed and managers are required for the field of: General manager: The general manager will be in charge of the day to day running of the business and will mainly accentuate around the administrative staff and the sundry staff. Extreme sports / Outdoor manager: The extreme sports manager is required and is perhaps the most vital manager for this business since the business mainly comprises of extreme sports and a leader is required for the extreme sports specialists.
Cafeteria manager: Since the premises will also consist of a cafeteria, it is necessary to have a manager controlling the daily activities for the cafeteria and reporting to the general manager or even to a director. The manager is also required to observe the needs of the staff. Marketing manager: Another very important section of the business. This is essential because the business requires expertise knowledge on marketing and promotion of the business is to be successful and expand. Therefore, a marketing manager is required. Financial and accounting manager:
A financial manager needed to fill the position. Required to maintain the basic book keeping for the business and calculate the daily finances. Work hand in hand with internal auditors. SALARIES AND REMUNERATION FOR MANAGEMENT AND STAFF: Constant for three years: No. Kshs. Directors remuneration p. a22,000,000 Managers salaries5300,000 Staff salaries10250,000 Proffessionals salaries8280,000 2,830,000 FINANCIAL PLAN FINANCIAL OBJECTIVES: The following are the financial goals of the business for a year. ?Achieve revenue growth of 10% per year Increase earnings by 15% annually ?Increase dividends per share by 5% per year ?Increase net profit margins 2% to 4% ?Boost annual returns on invested capital from 15% to 20% ? Stronger bond and credit ratings ?Recognition as a “blue chip” company ?A more diversified revenue base ?Stable earnings during recessionary periods ?Return on investment (ROI) of 15. 5% ?Solvency ratio of about 30%; ?Dividend distribution of at least 30% of the net profit, unless dictated otherwise by long-term investments and/or acquisitions and/or exceptional circumstances. DIVIDEND POLICY:
In recommending the dividend, the directors will consider the following: The availability of distributable profits: Dividends will be given on a basis of the profits that are distributable The availability of liquid funds: In a time of solvency problems, dividend payments will be adjusted accordingly Whether the revenue reserves are adequate or need to be increased by further profits ploughed back into the business A balance between dividend growth and capital growth The liability to advance corporation tax, which arises from the payment of dividend. (Dividend Policy and account, W. M. ) IMPORTANT ASSUMPTIONS:
There are certain factors that are not mentioned and cannot be explored, therefore X-Treme Gravity analyzed, debated and made an assumption based on those factors. These factors are mainly pertaining to the projected financial statement and the start-up plan for the business. The specific assumptions are stated in the calculations for revenue and expenses. For a broad view on the assumption though, these factors were considered: The tax rate of 30% per annum (approximated) The estimated cost of equity The estimated cost of debt i. e. bank loans and debentures The cost of marketing and research
The number of expected customers for each year The number of expected customers for each outdoors sport and the extreme sports packages. The fixed cost remains constant for the first three years The fees per person from: The entrance fees, activities and the picnic site remain constant for the three years. The variable costs will increase by 10% each year. START – UP PLAN FOR THE BUSINESS: (Sourced from Finance lecture notes, WACC, F. A. ) Since the business will operate as a limited company, there are various sources of funds and finance for this business. These include: Bank loans Ordinary shares Preference shares
Corporate bonds: Debentures Bank loans: These are currently being given at an interest rate of 16. 50%. The business cannot highly depend on its shares for raising its initial investment since it carries a high risk. Therefore, a bank loan will also be used, with an annual interest of 11. 55% after tax. Ordinary shares and preference shares: The business is issuing five million ordinary shares and one million preference shares for the first year. The cost of equity is 13. 50% and 12. 50% respectively. Debentures: The business is also issuing corporate bonds for the purpose of long-term security. The cost of its debt is 9. 0% after tax. SourcesAmount (Kshs)Cost of debt/ equity (%)After-tax cost (%)WeightsWACC (%) Ordinary Shares (@ Kshs 5)25,000,00013. 50%-0. 364. 86 Preference shares (@ Kshs 10)10,000,00012. 50%-0. 141. 75 Bank loan17,500,00016. 50%16. 5(1-0. 3) = 11. 550. 252. 89 Debentures17,500,00014%14(1-0. 3) =9. 800. 252. 45 Total70,000,000111. 95% The estimated tax rate is 30% each year and the required rate of return is 11. 95%. INITIAL START-UP COSTS: (Start-up costs sourced from different businesses) CostKshs. Cost of purchasing land in Karen42,000,000 Cost of construction and renovation7,000,000 Cost of business van / bus1,500,000
Cost of furniture for the lobby and cafeteria1,600,000 Cost of office furniture and equipment1,200,000 Cost of marketing research750,000 Cost of acquiring licenses1,000,000 Cost of outdoor tables and chairs320,000 Cost of activity equipment (W3)13,154,000 Total69,424,000 CALCULATION FOR REVENUE AND EXPENSES: PROJECTED INCOME STATEMENT: FINANCIAL ANALYSIS: PROJECTED INCOME STATEMENT: The projected income statement shows that the initial year expenses are very high relative to the revenue. However, the business will still make a profit in the first year. The net profit margin for the first year is 2. 4%, which indicates that for every Kshs. 100 of revenue earned, a profit of 2. 74 is being made on it. The second year projections indicate a sharp increase in the net profits. The net profit margin increases to 17. 23%. This shows that the business will be picking up especially in the second year. In the third year, the net profit margin indicates that, the net profits are increasing at a slow rate but the margin is still very high. MARKET RESEARCH AND SURVEY DESIGN METHODS OF RESEARCH: The business used various methods for research: ?Surveys / questionnaires ?Face-to-face interviews ?Telephone and e-interviews. Market experiments Surveys/ Questionnaires: The business highly depended on the surveys to determine whether the sample market accepted this business. The survey was used to determine several factors that required fieldwork that could not be gathered otherwise. This was the main form of research. Face-to-face interview: These were conducted with the general public as well as several travel agencies such as Twiga tours and Ibis. It was used to determine information such as the form of operation of a travel agent, the costs involved for outsourcing with travel agents and the marketing costs for using travel agents.
Telephone and e-interviews: These were conducted with those companies that were too far to travel to. Our competitors ‘out of bounds’ and ‘Kitengela adventures’ were interviewed via telephone due to distance. Similarly, banks, insurance companies, hotels and lodges were interviewed via email due to the timing constraint for these firms. The market experiment: This was conducted for the purpose of the promotional campaign effectiveness. The general public was asked whether they could recall the advertisement for the business, whether they could summon up the slogan for the business and what other details they could evoke.
OBJECTIVES OF THE SURVEY: Before conducting the survey, the business opted to decide the key objectives or goals that the survey was trying to achieve. After viewing the different aspects that required the attention of the market, the questionnaire was designed strategically to cover all these aspects and objectives. The objectives selected are: ?To determine the potential demand for extreme sports as a recreational activity in the market. ?To establish the potential competition for extreme sports, outdoor sports and extreme sports packages in this market. ?To identify the ability and the chances of the business survival in the market. To establish what the general public of this market is looking for in this business. ?The demand for different types of extreme sports. ?The preference for Karen as a location and the opinions of the general public, concerning the location for the business. ?To determine other locations for the business. ?The audience’ opinion on the pricing of the packages and products offered by X-Treme Gravity. ?To determine the target market for the business’s products and packages. ?Analyzing and identifying the key external and economical factors that are barriers to the success of this business. ?The acceptability / viability of the business.
SAMPLE SURVEY: (Web surveyor, 2009) X-TREME GRAVITY QUESTIONNAIRE This is a recreational business that is mainly accentuating on extreme sports such as skydiving, bungee jumping, white water rafting, scuba diving, snorkeling, surfing, mountain climbing and trekking, among others. The business is a new and unique idea for leisure in Nairobi City, mainly developed for the purpose of diverting people to healthier ways of enjoying their leisure time. We will be carrying out various extreme sports within our premises (which has been conveniently located). We also extend our services as extreme sports agents.
Those activities that cannot be done within the city (e. g. the water sports) will be arranged for in different areas within Kenya. These packages are directed towards anyone and everyone, ranging from school children to adults. (Circle your choice) NB: The 5 – point scales used, range from: Bad (1), Average (2), Good (3), Very Good (4), and Excellent (5). 1)How do you prefer extreme sports? 1 2 3 4 5 2)Are you? Male Female 3)What age bracket would you appear under? a)11 – 20 b)21 – 30 c)31 – 40 d)41 – 50 e)50+ 4)Are you currently? )Employed b)Looking for a job c)Studying d)Retired 5)During your leisure time, you enjoy: a)Doing some sports b)Going on a long vacation c)Watching TV at home and lazing around d)Others 6)If a new extreme sports business develops in the markets, would you: a)Be one of the first to try the sports for this new business b)Wait for a while for the business to settle in to the market and then try it. c)No, I prefer doing my own activities at the sports club d)No, it’s not my area of interest. 7)The location of the business would be in Karen. How would you prefer it? 1 2 3 4 5 ) Which district do you live in? ___________________________________ 9)Would you find the location of the business in Karen? a)Convenient b)Out of the way- too far for you to get there c)Appropriate for the type of business (extreme sports) d)Skewed / biased 10) If you had a choice, where would you locate this business? _____________________________________________ 11)Since the business offers extreme sports packages, among the rates included for these packages are: What would you think of these rates? Extreme sports packages: Ranging from Kshs. 30,000 p. p. to Kshs. 90,000 p. p (approximately) 2 3 4 5 12)Approximately how many people do you think will turn up in the first year? a)150 – 300 b)301- 450 c)451 – 550 d)550 + 13)Out of these extreme sports, which would you like the most? a)Sky diving b)Bungee Jumping c)Water sports i. e. Scuba diving, white water rafting, surfing d)Mountain climbing & trekking e)Others 14)The idea of a new extreme sports recreational park would be? a)Exciting b)Unique c)Not realistic d)None of the above 15)According to you, which one of these economic conditions will the biggest factor to affect the market for extreme sports adversely? )Inflation b)Unemployment c)Downturn in economic growth d)Income inequality e)Others 16)From this business, your biggest expectations are: a)Excellent quality of services b)Fun and exciting extreme sports packages c)Reasonable prices for the extreme sports packages d)Other activities besides extreme sports 17)Do you see this business as? a)A new and unique business in the market b)A similar business to a few other competing businesses that already exist c)A small business competing with many small businesses of its own type 18)Out of these factors, which would affect majority of the businesses in Kenya? a)Economic factors i. . recession / downturn in the economy b)Political or legal factors c)Socio – cultural factors d)Competition 19)To what extent does your chosen factor affect the survival of a new extreme sports business? 1 2 3 4 5 20)What other suggestions or advice would you give for this new extreme sports business? ~END OF SURVEY~ Thank you for your cooperation and time. We assure you that your responses in this questionnaire will be kept highly confidential. RESULTS OF SURVEYS AND DATA COLLLECTED: DATA COLLECTED: A total of 36 surveys out of 50, were successfully completed.
INTEREST IN EXTREME SPORTS: Level:No. Of people(%) 1-Bad26% 2-Average38% 3-Good925% 4-Very good1028% 5-Excellent1233% TARGET MARKET Class of people:No. of people(%) Gender: Male2569% Female1131% Age group: 11-201233% 21-301953% 31-4038% 41-5013% 50+13% Occupational status: Employed822% Looking for a job38% Studying2569% Retired00% Lifestyles / Behavior: Innovators1542% Conservatives411% Not interested514% Wait for business to settle1233% LOCATION: Preference for Karen: LevelNo. Of people(%) 1-Bad26% 2-Average925% 3-Good1542% 4-Very good411% 5-Excellent617% The location is: No. Of people(%) Skewed/ biased:411% Convenient:617%
Out of the way:1233% Appropriate for the business:1439% DEMAND (IN TERMS OF CUSTOMERS) FOR THE 1ST YEAR: No. Of customers expected in the first yearNo. Of people(%) 150-3001850% 301-450822% 451-550514% 550+514% INTEREST IN DIFFERENT TYPES OF EXTREME SPORTS: Type of extreme sport:No. Of people(%) Sky diving1028% Bungee jumping822% Water sports822% Mountain climbing1028% ECONOMIC FACTORS AFFECTING THE BUSINESS ADVERSELY: Economic factors:No. of people(%) Inflation38% Unemployment1131% Economic Recession925% Income inequality1336% CHANGES IN UNEMPLOYMENT AND INCOME INEQUALITY OVER TIME: YearsUnemploymentIncome inequality (%)(HDI)
Year 200540%0. 521 Year 200640%0. 532 Year 200740%0. 532 Year 200845%0. 544 Year 200943%0. 541 TYPE OF BUSINESS IN THE MARKET: Type:No. of people(%) Monopoly2569% Oligopoly822% Monopolistic 38% PROJECTED MARKET SHARE FOR THE BUSINESS: Year:No. Of competitorsMarket share Year 2009337% Year 2010526% Year 2011720% Year 2012817% OTHER FACTORS AFFECTING THE BUSINESS ADVERSELY: Factors:No. of people(%) Economic factors1747% Political-legal factors822% Socio-cultural factors719% Competition411% ANALYSIS OF THE DATA: Figure 1. 2 shows that, 86% of the sample market has a great interest in extreme sports while 14% of the sample market does not.
This permitted us to continue further with the business proposal. Figure 1. 3 supplements figure 1. 2. After determining the interest in extreme sports by the sample market, the level of preference was determined. The figure shows that 33% think of extreme sports as ‘excellent’ while 6% think of extreme sports as ‘bad’ due to lack of interest. Figure 1. 4 shows that 42% find the location of the business ‘good’ while 6% find the location of the business ‘bad’. 25% find the location ‘excellent’. The reasons are illustrated below: Figure 1. shows that 39% find the location of the business ‘appropriate for the type of business’ while 33% find the location ‘out of the way’. Hence, this explains why the highest level of preference is ‘3-good’. Figure 1. 6. Indicates that majority of the sample market expect a turn up of ‘150-300’ customers in the first year. Figure 1. 7. Shows that Economic factors will affects the business the most. Competition in the market will least affect the business. Figure 1. 8. Shows that income inequality will be the most detrimental factor for the business, followed by unemployment, economic recession and then inflation.
Figure 1. 9 shows the demand for various extreme sports. Skydiving and mountain climbing have the highest demand. Bungee jumping and water sports have a lower demand. Figure 2. 1. Indicates that unemployment rate has increased at an increasing rate from 2007 onwards. After 2008, the unemployment rate grows at a decreasing rate. This is a major factor affecting our business. Figure 2. 2 shows that income inequality (measured using HDI) has been on an upward trend since 2005. After 2008, the HDI has gradually decreased and this could be a positive signal for the business. Figure 2. 3.
Shows that the projected market share for the business will rise at an increasing rate. This indicates the chances of the business growth and expansion in the market, is high. The expected number of competitors determined the market share over the years, depending on the profits and the return on investment in the business. RE – ASSESSING THE VIABILITY OF THE BUSINESS POSITIVE COMMENTS: ?A new and unique business: Most of our potential clients believed that our business is very interesting, exciting and unique as opposed to other recreational businesses. There is a chance for survival with this business. Location for the on-premises activities: There are several activities that we are offering on location. The location of the business, as mentioned earlier, is in Karen along Karen road. Even though it seems inconvenient to our potential customers, the surveys indicated otherwise. People actually find the location for the business appropriate and acceptable. ?Diversifying: With a business such as extreme sports, that has rarely been explored, the idea is to spread the risk. Therefore, besides offering extreme sports on the premises, we are sports agents, also offering extreme sports packages. Prices for the products are reasonable: Another surprising result of the survey are the prices. Many of the people in the market find the prices reasonable for the nature of the products being offered. NEGATIVE COMMENTS: ?Uncertainty with the location for extreme sports packages: There were a lot of questions that were raised conc