Business plan on the national sports complex business plan

The National Sports Complex: Business plan

I. Executive summary
The National Sports Complex is going to be a full serviced sporting center with world facilities for various indoor games and sports located in Cape Town, South Africa. Currently there are no such kinds of sporting facilities within this African region. This business plan will therefore outline the feasibility study for the National Sports Complex in addition to providing the means or marketing plan for the facility. The business plan shall also form the basis upon which the goals and objectives of the National Sports Complex shall continuously be evaluated.
The National Sports Complex can only be successful if we market it effectively. Already the complex has world class equipments and facilities for different sporting. However, there is also need for a staff team that is experienced and highly skillful to run and to facilitate the programs that will be conducted within the complex. The sporting industry within the African region is a booming business with sports being used as a tool for empowering people including women and children. The market value of the sporting industry has been on the rise ever since the development of sports. It is also projected that this growing of the industry will continue for decades to come.
The objectives of the National Sports Complex is to sell at least 500 membership within the first year of its inception, organize various sporting events within the first year and engage in vigorous marketing so as generate revenue from the events, sponsor community events for branding purposes, and have at least a 10 percent return to stakeholders just within the first year. The facilities will be used for various sporting and fitness activities by both local and international lovers of sports and fitness.
II. Table of content

Executive summary

Introduction and background information
Feasibility study
Market research
Environmental analysis
Competitive analysis
Consumer analysis
Geographical analysis
Legal and regulatory analysis
Financial analysis
The projected cash flow is expected to come from areas sales of cash receivables, and cash sales, where as the main expenditure is expected to come from cash spending and payment of bills. Conclusion

Marketing the facility


III. Introduction and background information
The National Sports Complex is a Chinese government initiative within the African region. It intends to develop sports within the region by building sporting facilities that can host world class events for indoor sports such as basketball, racket games, swimming, and fitness activities. However, this is in collaboration with the local South African government. In addition to providing sporting and fitness services, the National Sports Complex will also seek to generate revenue through provision of leisure services. This means that people can actually go to have fun and pay for their wonderful experience within the facilities.
So, my group has been contracted by the government to develop a feasibility study for this facility and market it in such a way that it would yield the intended returns. Our aim is to ensure that the objectives will be met especially within the first of operation. We also focus on ensuring the facility is established as a brand within the city, the entire country, and the region as well. Considering the size and nature of the facility, it is possible for the National Sports Complex to hold international events as well.
Startup for the sporting and fitness complex is going to come up to $50 million. This figure includes the cost of purchasing a land within a strategic point in the city of Cape Town. It also includes development cost, equipment cost, and the operating capital for at least the first year. Funding for building the facility primarily comes from the Chinese government. The funds are part of what the Chinese government sets aside for development in Africa and other developing countries. However, the Chinese government will not entirely fund the full project. It will only fund 80 percent of the project with 20 percent coming from the South African government.
The services that will be provided within the complex are a variety considering the fact that National Sports Complex will be a multi sports complex. There will be weight and fitness services. The facility will have a state of the art gym equipments and lifestyle center to also attract consumers in the high end market. This means that high net worth individuals, both locally and internationally, will be able to use the fitness services offered within the complex. The weight and fitness services will be run by skilled and qualified individuals who will be trained to meet the specific needs of the clients.
In addition to the fitness and weight services, there will be indoor courts for various indoor sports and games. There will be five full sized basketball courts, four tennis courts located on open grounds, a full court for gymnastics and ice skating, four full size and state of the art swimming pools, and an extra sporting floor that will accommodate racket games such as badminton and squash. In order to focus on quality, the courts will be installed by reputable contractors who have help installed other similar facilities worldwide.
The third essential service that will be offered within the complex is food service. This is important for any facility that intends to play host to large events. As a way to further build the brand image of the National Sports Complex, there will be franchise set ups for food retail chains such as KFC, McDonalds, and Starbucks, including other local food retail chains. There will also be a clinic that offers massage therapy. This is a service that is still yet to pick up within this African region. Therefore, by offering the service, it will be some form of market development where people will be accustomed to appreciating the value of massage therapy. In addition to these services, there will a gaming section where teenagers and young people can enjoy themselves; there will also be a section for children to play, and a section where the administration offices will be located.
IV. Feasibility study
Market research
The National Sports Complex will be a unique multi sporting complex within the entire city of Cape Town. Some of the services offered within the complex are not offered at any other place within the city. Therefore the set up will be strategic since Cape Town is a gateway city that opens door to the entire Southern and central African region. The target market audience will vary. There are people who would want to use the facility for leisure and for recreation, while there are others who will be dedicated members who are obsessed with health and fitness. There is also the market segment that includes institutions and organization that form teams to participate in the various sporting events to be hosted within the complex. There is a growing trend for health and fitness consciousness even in developing countries. The trend is very much high in developed countries but slightly lower in developing countries. Membership at health clubs has been increasing as more people begin to appreciate the value of being fit. As African nations are projected to grow into middle income earning nations, the number of people registering into health and fitness clubs will also increase. At the same time there are specific services that most people use in a health and fitness club. These services are will be offered within the National Sports Complex. For instance, gym and swimming are the most commonly used fitness services.
Therefore, National Sports Complex will aim to target tourists, business travelers, senior citizens, families, dedicated fitness gurus, and gym rats for the fitness and health services. However, for the sporting services, the target market will be organizations teams and institutional teams. There will be leagues running and using the courts within the complex. There will also be events that will be hosted within the complex.
Environmental analysis
Politically, the government uses sports and games as one of the means to empower its citizens. This therefore means that there are little obstacles in terms of government laws and regulations to prevent smooth operation of the complex. Economically, the region is moving towards a middle income society. There are a lot of growing potentials and opportunities for development in the region. This makes possible for people to be able to afford the services offered. Socially, people are beginning to be conscious about their health amidst the concerns for preventable illnesses. Currently, there are preventable health conditions that claim the lives of so many people. If only people would change their lifestyles and begin taking care of their health, then prevalence rate of these ailments will begin to decline.
Competitive analysis
The fitness and health industry in the region is not entirely competitive. Considering the fact that the National Sports Complex is one of a kind in the region, it is expected that the complex would dominate for a long time until the industry becomes competitive. At the same time, looking at the services that will be offered within the National Sports Complex there are specific services that will only be offered within the complex in the entire region of Southern and central Africa. For instance, ice skating, which seeks to target leisure skaters, is one of a kind sporting activity in the region. Therefore the threat of new entrants is very low. However, there would be a significant threat of existing competition if the fees charged to use the complex are high compared to other sporting facilities in the region. Nonetheless, since the National Sports Complex will offer state of the earth and world class equipments, marketing the facility will focus on a market niche.
Consumer analysis
The health and fitness industry in South Africa comprises mainly of independent facilities located within the urban centers. However, there these facilities only get to provide services to only 2 percent of the entire country’s population. Most of the people attracted to these facilities are young people within the age range of 18 to 40. Male consumers are the dominant. This means that the market in the region is quite young and shows a lot of potentials for growth.
Geographical analysis
Geographical analysis is important in segmenting the market. A bulk of the revenue is expected to be generated from the urban center where the complex will be located. Most of the clients for the fitness and health services will therefore be from Cape Town and neighboring urban centers. At the same time, it is expected that the local institutions and organization use the facilities to run their leagues, for instance basketball league.
Legal and regulatory analysis
There are legal and regulatory issues involved in sports and recreation organization that might impact the operation of the complex. The first legal issue involved is member protection. The National Sports Complex seeks to register up to 500 members within the first year of its inception. These members have to be protected in addition to protecting the staff members. Protection will also involve keeping sensitive information confidential. The National Sports Complex will also be sensitive to protect its members and associates from any form of discrimination and harassment.
Financial analysis

This section seeks to establish the viability, stability and profitability of the venture. The startup amount required is $50 million, which have already been made available by the respective sources. The underlying assumptions when making a plan for this money include: strong national and regional economy that are not affected by recession and increasing growth of the sports and fitness industry. The table below shows assumptions of the interest rates and tax rates for the first three years.

1st year
2nd year
3rd year
Interest rates

Tax rates

Projected profit and gross margins for the first three years (in US dollars)

Projected financial performance for the first three years (in $)

Year 1
Year 2
Year 3

Sales and Marketing, advertising Expenses

Leased Equipment

Repairs and Maintenance

Landscape Maintenance

Accounting Fees

Legal Fees

Payroll Taxes

Total Operating Expenses

Profit Before Interest and Taxes

Net Profit

The projected cash flow is expected to come from areas sales of cash receivables, and cash sales, where as the main expenditure is expected to come from cash spending and payment of bills.
Based on the above analyses, there is little doubt that the venture will be successful. The industry is still young within the region implying that it has potential of growing and of rapid expansion.
V. Marketing the facility
The National Sports Complex will operate within a very large market owing to its size and potential. In order to offer a competitive edge over its existing competitors, it will focus on differentiation strategy where specialized services will be offered to its clients. For instance, the kind of equipments installed in the complex, will be in a class of their own giving the clients an experience that they can only get at the National Sports Complex. The sales strategy to be employed will seek to develop loyalty from the clients. This is why membership registration will be emphasized. The strategy will seek to get both institutional and individual membership depending on the nature of service and amenities being offered. For instance, the tennis and basketball courts will draw interest from institutions where as the gym and other recreational facilities will draw interest from individuals.

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