Course Work
Content
LLC „Elit Ship“ yacht rental service
Business plan Course work
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CONTENT
1. 2. 3. 4. 5. 6. 7. Introduction..............................................................................................................................3 What is a business plan............................................................................................................ 4 Project descriptio and main idea.............................................................................................. 5 Current situation.......................................................................................................................7 Market and marketing complex..............................................................................................12 Human resources and administrative......................................................................................15 Services and possible alternatives..........................................................................................18 Recommendations and proposed solutions........................................................................... 21
8. Literature............................................................................................................................... 26
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Introduction
The project idea - yacht rental business in Trakai. Estimated start-up for the company is 2011, April. Company „Elite Ship“ seek a range of financial, customer and business processes and staff-oriented goals, but the main goal - quality services, ensuring the proper company„s profit. The investment environment is not very favorable: the economic situation remains difficult, there are legal loopholes, and speacially this is more seasonal business. This causes problems that affect the core business problem - a small number of customers and business income. Trakai, leisure and entertainment services offers 19% of working companies in Trakai, of which 3% offers yacht rental services. Estimating the prices of competitors by focusing more on each other, but their main strength is the Galve Lake. Competitors are main support measures brochures and the Internet. About 27% of visitors to Trakai likes to do or just to try water entertainment. Deviding market in the equal parts of water entertainment business to all the organizing entertainment companies gets approximately 5,500 clients. LLC „ELIT Ship“ will seek to stand self-positioning competitors as well as quality of service. Prices will be set according to the influence of seasonality. Place of business - Galve Lake. Support tools - brochures, the Internet, souvenirs. Joint venture "Elite Ship" planned direct marketing expenses for the year is Lt 11,550. The company employs 7 employees: the Director, Accountant (half time), 5 yacht captains. Only people who has high qualification can work in this company. In addition, there will be employed workers for to promote materials for the company. The total amount of wages paid per month for all employees will be 11 900 LT. For a yachts and communications equipment will be given 206,000Lt, using a bank loan or lease. The investment will be made only in 2011 There are considered yacht rental business alternatives: yacht sailing courses, water bike rentals, pleasure boat rentals. The evaluation of alternatives pros and cons there was made a decision not to do that. Yacht rental service performance indicators: IRR = 12%, NPV = Lt 17,508.40, MIRR = 9%, investment payback period - 5.66 years.
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Implementation of the project is feasible, but the long-term return on investment and low profitability of the project are refused
What is a business plan?
A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals. Business plans may also target changes in perception and branding by the customer, client, taxpayer, or larger community. When the existing business is to assume a major change or when planning a new venture - a 3 to 5 year business plan is required since investors will look for their annual return in the 3 to 5 year time
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2. PROJECT DESCRIPTION AND MAIN IDEA
2.1. Project origin and general investment objective
The business idea is to create a company whose activities include the yacht rental service in Trakai. The main idea is to offer our customers exceptional service, comfort and unique sensations. Customers will be offered tours in four different yachts, according to their needs (active or passive tourism). During the trip, according to customers' requests, yacht captain (a total of five) will present the Trakai region - will present the landscape, history and so on. Customers, according to the wishes will be able to choose the language in which they will communicate with the captain of the yacht during the trip ( in Lithuanian, Russian, English, German). This project is inspired by the desire to create a city of Trakai more interesting, profitable business, a number of working places and to meet consumer needs, not just during the summer season, but spring and autumn months (April, May, June, July, August, September, October). This project provides for approximately 210 000. Source of finances – bank loan.
2.2. INVESTMENT ENVIRONMENT
Economic environment.
The global economic crisis is shrinking and you can barely see a slight growth of economics (Lithuania are expected 3% growth in 2011). But still there are high unemployment in Lithuania, the relatively high interest rates, a small majority (three quarters) of personal income, slow, middleclass formation, lack of state support for small and medium-sized business is not conducive to the development of internal tourism growth, while at the same yacht and rental business in Trakai. However, inTrakai most of the guests a high proportion of foreign tourists. So it should be taken to foreign countries' economic environment. According to the European Economic Review suggests that the majority of European countries have seen much higher growth than in Lithuania. As well as lower unemployment rate, higher incomes for local residents. Legal - the political environment.
Incomplete formation of the tourism business-friendly legal system in developing tourism
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infrastructure, simplifying tourist visa and other entry into Lithuania procedures governing public institutions, non-governmental organizations, business interaction rule base. These legal gaps complicates business investment in tourism infrastructure and other services
The physical environment. Comparatively small District of the environment (air, water, soil) pollution. Strongest pollution source is the Lithuanian Power Plant (currently Elektrenai municipality) in the area of pollution due to the small distance (approximately 25 km) fall and Trakai. The main local sources of air pollution of the Trakai district municipality has a boiler, grass and trash burning, periodically repeated peat fires, automobile transport. State Department of Tourism data Trakai district in 2008 in the District water released 8.8 million. m3 of sewage. Of these, 23.5% of under-treated. This is after city of Vilnius the largest contaminated of wastewater of Vilnius County. Lithuania has a transitional climate - cold winters and warm summers. It is influenced by the seasonality of the business
2.3. Results and consequences of the company action
Initiating the project aims to: To develop tourism of water and to strengthen Trakai as a tourist city in the world; To supplement the existing local tourism infrastructure, development of the infrastructure, tourism products and services in complexity; Facilitate the delivery of Lithuanian cultural heritage of Europe; Facilitate the economic, social and cultural development, better elements of cultural identity, traditions and lifestyles of contacts at national, regional and local levels; For financial gain. These results may affect the company's activities - the variety of services to increase local and foreign tourist flows, which in turn is influenced by higher incomes and company profits. Also improve the region's image and increase the competitiveness of the region.
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3. CURRENT SITUATION
3.1. DETAILS OF ECONOMIC OPERATOR AND KEY DATA
Company name: LLC "Elite Ship” Company code: 312134543 VAT number: LT100004547210 Address: Kestucio 4, LT-21104 Trakai Telephone: (8528) 53941 E-mail. E-mail: [email protected] Bank: AB “Swedbank” Current account: LT267300010112723094 LLC “Elit Ship” Yacht rental office in Trakai, scheduled to open in 2011, in April. It is then that starts sailing yachts in Trakai season and lasts until November. The company will seek to meet the various expectations of our customers, and Trakai residents and visitors will be offered:
Sightseeing, entertainment yacht trip; Regatta (boat race); Romantic sailing yacht; Customer's request, to an individual program;
“Elit Ship” legal status - a limited liability company. The company is guided in its activities of the Civil Code of Lithuania, the Lithuanian Company Law and other laws provided for in legislation.
3.2. COMPANY MISSION, VISION, STRATEGIC OBJECTIVES
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MISSION:
Constantly bring joy to each of our client, surprise gifts and entertain them in high-quality, full of excitement and unforgettable pleasure.
VISION:
Become recognized as the most loved and valued and constantly evolving leisure activities of firms. THE COMPANY’S GOAL:
Become a reliable and long-term partner, the maximum satisfaction of customer needs, giving people who work in the company's livelihood.
Given the company's mission and vision and the main objective can be formulate strategic goals. These objectives are divided into four groups which is called perspectives (financial, customer, business processes, personnel). Prospects of joining the common strategy of the company.
FINANCE:
To occupy 20% market share. Net profit margin - more than 15%. Debt indicator value is less than 0.6. Dividends payable - about 50% of net profit. However, the annual dividend rate will depend on the company's financial situation and needs substantial investment.
CLIENTS: Constantly focus on customer needs.
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Be flexible and be able to take into account individual situations. Shedding of service quality, the highest level in a show of customer requirements are met.
BUSINESS PROCESSES:
To achieve synergy. Develop the organization's availability with (flexible working hours, exclusive of individual orders, etc.). Minimize downtime. Accountable work environment.
STAFF:
Create a supportive work atmosphere and a unique organizational culture. To ensure equal opportunities for the company staff (gender, race, religion and so on. Terms). Maintain constant staffing company. High-qualified staff.
3.3. YACHT RENT ANALYSIS IN TRAKAI
Trakai, according to the number of tourists, far behind from Vilnius or Kaunas. However, compared with Druskininkai can be seen that Trakai their attendance significantly leads. Trakai is receiving in a year about 200,000 visitors. In 2009 tourist flow was slightly reduced. However, the tourist flow in Lithuania decreased in all areas. This can be expressed as a consequence of the difficult economic situation, impact on the purchasing power of population decline.
City
2007
2008
2009 9
Vilnius Kaunas Druskininkai Trakai
761,7 406,9 95,5 189,8
1 010,8 382,5 114,4 213,7
888,4 290,0 70,2 164,8
1 Table "The most visiting cities in Lithuania (tūkst.)“
For water activities there are four suitable lakes next to the Trakai and one the upper trailing Verkne route (Vilkoksnis lake, Verknė lake, Sienio lake, Navos lake and below).
3.4. ANALYSIS OF THE PROBLEM
Yacht rental business in Trakai, in particular, faced with imperfect Lithuanian legislation at the local high-income tourists and staff lack of qualification shortages. This in turn affects other things, a material which causes the yacht rental business in Trakai, the problem - a small number of customers and business income. This problem is particularly relevant not only for business. There is a causal - investigating links between the original problem and the results of the business and the business performance and economic and social situation of the country. It can be argued that these problems can influence a whole can be identified as one of the low economic growth in the Trakai district grounds. This problem also affects the number of jobs created and revenue to the state budget level.
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Problem Tree
Not a lot of jobs
Poor economic growth in the Trakai distric
Small revenue to the state budget
Untapped potential of the yacht rental business
A small number of customers and business income
Difficult situation of competition Yacht rental service and business development stop Contradictions between different laws Low purchasing power of customers
Dissatisfied customer expectations
The language barrier
Yacht rental business restriction or prohibition
Lack of financial resources for business development
Lack of knowledge and skills
Lithuanian legal base
Not high cost of living
Poor workers' skills
1 Schema “Jachtų nuomos Trakuose problemų medis”
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4. MARKET AND MARKETING COMPLEX
4.1. MARKETING RESEARCH
Leisure and recreation service offers about 19% of the Trakai tourism. Of these, only 3% of the yacht offers a rental service. Yacht rental service companies in Trakai are monopolistic competition in the market. There are relatively many companies supplying the market of similar, but different specific types of services are needed. Therefore, each company has a small market share, and it has a limited ability to control market prices. Most of the firms in determining the prices of services focused on the competition. Often fails to demand operating season and try to maintain a constant price level. The main competitors are concentrated in the Lake Galve, there is an island and in the island there is a castle. This is a good strategic location, since the main attraction is just Trakai Castle. The biggest tourist flows allows companies to maximize their potential and gain maximum income. However, the strength of competitors in one place encourages firms to increase their competitiveness and take appropriate measures to maintain or gain competitive advantage. The Public Department of Tourism conducted questionnaire research, which showed that in Trakai, leisure and recreation services company offering the most used marketing tools in the following (in order of most frequently used tools): Brochures and Other Printed Material; Web sites, information on the Internet; Lithuanian press; Participation in Trade Fairs; Outdoor Advertising.
Leisure and Recreation Service Providers as a Cost-Effective Measures Identified on-line (five-point system 4.75 points), email (4.6 points) and Specialized Exhibitions (4.3 points).Relatively ineffective as a marketing tool for radio advertising, advertising in the Press reports. After the yacht rental websites review in Trakai, has been noted that the information is presented in very general terms, is reporting on major activities and contacts. Lack of visual information, a house the photos or short films, corporate services delivery.
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4.2. DEMAND AND SUPPLY
Water activities in Trakai offers four companies and four individuals. 5 of them offer similar services, yacht rental company as well as the „Elite ship“ . According to the Trakai Information Center water activities are very popular among the guests. Even 27% of which came to Trakai test various proposed water activities. After the calculations, it can be noted that these companies offer entertainment during the year, attracts about 44,496 customers. For subsequent calculations (where all the players get in on the market) can be assumed that each market participant per year is about 5,500 customers.
4.3. MARKETING STRATEGY
The company LLC "Elite Ship's target market - who are interested in yacht rental services in the town of Trakai residents and guests. The target market can be segmented.Company "Elite Ship distinguishes these yachts rental market segmentation techniques in Trakai:
The geographical (local, regional, national, international); demographics (age, marital status, income, occupation (profession)); psychographic (values and way of implementation, social class); Conduct (business, tourists, families / friends and visitors day / weekend tourists,holidaymakers and traditional),
The important thing is the positioning of competitors. Company Name (LLC „EliteShip“) will be aimed at a potential consumer's mind to create a unique serviceassociation. English language use in the business name and potecialių to local customersand foreign tourists in the mind to form a company offering yacht rental services elit image.With a loud name of the company we are trying to lead the customer in mind to LLC „Elite Ship“ "brand to the top shelf.". The company's products – yacht rental service is intangible in the physical sense, immeasurable individual units, but also to all other tangible and has its own essence
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andquality. According to customers' needs will be offered yacht rental services to meet differentconsumer wants. Much attention will be paid to the quality of services - high demands boats(comfortable, spacious, good equipment and so on.) Service staff (sailing skills, foreignlanguage, the history of Lithuania knowledge, communication skills, presentable appearance). Yacht rental service is characterized by the consumption of its properties will be expressed in terms of functional properties. Unlike other areas of services trade, renting a yacht in the positive emotions create a client will be provided at one particular service, but several interrelated services, by using components such as natural resources, culture, architecture andhistorical sights, the measures necessary for the operation of the service, etc.. Service price will be determined by focusing on demand. Yacht rental business is highlyseasonal, so tourists at peak lactation ration (summer months), when demand is higher, will be determined and above Yacht rental price. Decline in demand, the cost of services will also be reduced. Company "Elite Ship“ yacht rental services to customers and not through intermediaries but directly. Deployment of the company yacht marina location will be near Trakai Castle, where touristsare most intense. This location offer their services and most water activities in Trakai,providing competitors. Therefore, to distinguish themselves from competitors in the company will need the active support of the program. According to the National Department of Tourism conducted questionnaire-based studies, suggests that advertising in the press or radio advertising is ineffective in the development of yacht rental business. Company "Elite Ship“ will attempt to reach potential customers via the Internet (detailed description of the company's website, active in the social websiteFacebook). Also will focus on outdoor advertising and print advertising (flyers, brochures)for distribution in Trakai.
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4.4. POTENTIAL FIRST MARKETING COSTS
Direct marketing costs (per year): 1. Cost of sales: 2. discounts to customers (about 1500Lt);
Promotion costs: Web page (about 2000Lt); Information stand (about 1000 Lt); Print ad (layout 50, brochures (one year) of Lt 6000); Souvenirs to customers (1000 Lt);
General of LLC "Elite Ship" planned direct marketing expenses for the year is 11,550 Lt. The company also incurred costs and indirect marketing, such as marketing, responsiblefor personnel costs, communication costs, and so on. However, these costs would bemore appropriate to assign a company's costs.
5. Human resources and administrative
5.1. Company's organizational structure
LLC "ELIT Ship" management structure is not complicated, because all managementfunctions are performed by one person - a director. Initially, the company providesmanagement control to a patriarchal structure, where the head of the company under the authority of all personnel.
Director
Accountant
yacht captains(5)
Figure 2: "Company's organizational structure
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Director of the company will be responsible for the planning, organization and control. He also engage activities in marketing (market analysis, will coordinate the marketing mix elements and so on.). In addition, the responsibility will be to ensure the effectivemanagement of personnel (in conflict situations, staff motivation, training, etc.) Accountant will work on bookkeeping, payroll, inventory and various documents, etc.. Yacht Masters will be the company's employees who are directly interacting with customers. Their responsibility will be to provide customer service chosen by all the servicerequirements.
5.2. ADMINISTRATION OF THE COMPANY
The company's administration will work only two people – a director and accountant. Company director qualifications must be high enough, since the decision depends on the company's performance. The Director must be able to perform not only his but also thesales manager, marketing manager, the staff of the Company. The company is not large, it is not carried out in extremely difficult financial transactions, particularly because of high demand for qualified accountants do not. The most commonaccountant faced with such tasks as billing, bank transfer, payroll, check register, and so on.These works is enough Accountant, working half-time. Administrative staff have been identified and will be paid a monthly salary: Director of the company – 2000Lt; Accountant - 500 Lt.
5.3. SERVICE STAFF
LLC "ELIT ship" will have five yacht captains. 3 out of the sail yacht tourists from preregistered, and two captains will be responsible for the yacht rental service in advancerezervavusiems yacht clients. If the pre-reservation to yachts need more than two boats, and then, depending on how much extra should yacht captains serving a reduced pre registered by the number of tourists are satisfied and pre-registered customer demand. Yacht captains are responsible for the yacht rental service in advance who had a reservation for the yacht customers do not have a specific timetable. They are directly dependent on the number of advance orders.
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Captains, sail yacht tourists, non-registered in advance is always working on weekends, as they are receiving all major tourist flows. Captains work schedule: 1 Captin Opening hours: Wednesday, Thursday, Friday, Saturday, Sunday; 2 Captin Open: Saturday, Sunday, Monday, Tuesday, Wednesday; 3 Captin Opening hours: Tuesday, Thursday, Friday, Saturday, Sunday. Tourists are served from 10 am. up to 19 hours. except when there is a reservation. Captains skills are very high. All of them are more than 10 years of sailing experience, participatedin world sailing competitions and regattas. Qualification shows captainssailing yachts a vailable for crew members of a diploma. Yacht captains are responsible for the yacht rental service in advance who had reservation for the yacht customers are charged 30Lt per hour wages (in exceptional cases where the ordersafter 22 hours. 40Lt is paid hourly wages). Remaining masters who work in the schedule, amonthly remuneration of 1800Lt. Captins works under seasonal labor contract since April till the end of November. becauseonly at that time, according to climatic conditions, potential yacht rental services in Lithuania. For months, when conditions are unfavorable Lithuania boating, yacht captainsusually spend a swim in warmer waters. This is the kind of training are. It should be noted that the company will also hired additional staff, distribution of promotional material. Provided the employee's annual salary budget – 8000Lt.
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6. SERVICES AND POSSIBLE ALTERNATIVES
6.1. Service provision scheme
Reservation by telephone, e-mail, office
Order date and time alignment with the boat captain
Confirmation to the client
Preparation of the yacht (under special customer requirements or standard) Meeting a client which did not had an advance booking
Customers pick and Yacht Delivery
Selected travel beginning
Introduction to the landscape, history and so on.
End of the journey. A Souvenir for a customer
Farewell to the customer 18
Figure 3: "Yacht rental service scheme"
6.2. WORKING ARRANGEMENTS
The main and essential working tool is the yacht. LLC "ELIT Ship demand is 4 yachts,which are planned to purchase from private persons or entities. Will be purchased secondhand yachts. But will be thoroughly checked for technical compliance with state andcompany requirements for quality and comfort levels. Company share of the budgetallocated to the long-term asset purchase is 200 000 Lt. Yachts, wind speeds are powered by gasoline or diesel engines. There is a need for fuelto rental services for yachts. As the yacht is not powerful (up to 24 hp), fuel costs are about 2 l / hr. Calculating the monetary value would be about 6 Lt / hour. Fuel supplier company JSC "Lukoil Baltija. Expected that the fuel costs per year should not exceed 20 000 Lt. To ensure the smooth functioning of the company and customer communication, you need to put the means of communication. E-mail communications and to facilitate the daily activities of the company will need two computers. (The total amount of 4000 Lt). Also, the company must maintain a constant connection to their home and with clients. To this end, the company will acquire seven mobile phones, which generally will be the amount of 2000 Lt.. The company is acquiring a communications plan to work with Tele2.
6.3. BUSINESS LOCATION AND ENVIRONMENT
Deployment of the company yacht will be in marina and this location will be near Trakai Castle. The company's headquarters will be registered under the owner's residence, because there is no need to rent the premises - the administration has only two employees - a director and accountant. The analysis of the environment is the appropriate to identify weaknesses and strengths ofthe business environment. District Strength: Trakai district geographical location and the Vilnius neighborhood is conducive toattracting foreign visitors who visited the capital city;
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Real and intangible cultural heritage and history associated with statehood; favorable natural conditions and other professional and amateur water sports; A small area of urban development, landscape; Developed area and the edge of the trunk road network, railway; Trakai district is rich in recreation and tourism appropriate resources and beautifulscenery.
Weaknesses of the district: Visitors come for a short period of time; Large seasonal nature of tourism; Cultural organization of tradition and experience only partially meet the modern needs, cultural requirements of users and a representative at district level; Lack of highly skilled staff; Thousands of tourism service, they are unevenly located in the area;
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7. RECOMMENDATIONS AND PROPOSED SOLUTIONS
7.1. YACHT RENTAL BUSINESS ALTERNATIVES ANALYSIS SUMMAR
Given an alternative to yacht rental business has its own advantages and disadvantages. Depending on what the goals are and evaluate business opportunities and the advantagesand disadvantages to consider about the yacht rental business alternatives. Requiring a minimum investment business is a water-wheel bike. A new water wheel cost is about 3000 Lt. If, planning to provide the water bicycle rental services are purchased 10 water cycle, the total investment in the basic working tools required is 30 000 Lt. Also, this business is attractive due to lower wage costs, since you need only one man who rent waterbikes. The employee does not have some specific skills that are necessary for the provision of yacht rental services, and being paid for work way less. However, engaging inthe business need to assess the popularity of the service is not very large income from the business also has a relatively small and therefore the profitability of the business may not meet expectations. Yacht sailing courses for business are sufficiently risky choice. Demand is volatile, it is difficult to predict its revenue, and the more profit. The possibility exists that such a situationthe company incurred marketing costs will be inadequate in generating profits. Of course, the staff need to is the less than the yacht rental business, but the qualification will also behigh. Yacht sailing courses to develop business-friendly than separately, and do it as one of the services offered by its elements. For example, LLC "Elit ship" offers all of this feasibility study, the services and additionally engaged in yacht sailing courses. Pleasure boat rental business would be the best alternative for the yacht hire business. Organizing sightseeing tours simultaneously enjoys more customers, because the ship can accommodate more people, for whom the price is the relatively lower due to highernumbers. It would also generate additional income from on-board operating a bar and cafe.The average price of pleasure craft is the about 200 000 Lt. To meet the demand of a single ship, so that investment is the same as the projected LLC "ELIT Ship" yacht rental business. However, it should looked from another point of view like service stickiness - the ship fliesestimated hours provided for the route. And also, when a small group wants to rent a boatfor a particular holiday, the service price is quite high. This is part of the potential customers to encourage to find other alternatives. In addition, the company would facegreater legal regulation of ship operating in cafes and bars.
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The analysis of several alternative business under the same criteria (potential customers,the need for investment, personnel needs and qualifications, expected income) can bedescribed as the most attractive business opportunities in this study, the yacht rental business and as an alternative to the pleasure boat rental business. Both businesses arefaced with the same investment needs, and a similar number of potential customers. Staffqualifications are similar, but in order to provide yacht rental services is greater need forstaff. However, services are more flexible, responsive to individual customer requirements(creating a certain exclusivity), the pursuit of yacht rental business can be expected to behigher income and higher business entity's financial position.
7.2. YACHT RENTAL BUSINESS FINANCIAL FUTURE
In order to provide the financial prospects of yacht rental business has been carried outanalysis of the planned activities. Future earnings power, and thus gain the most influenced by the number of customers. The table below sets out the number of potential clients 2011 2014 in and service fees.
Disposed of service levels (units / m) Sightseeing, entertainment travel Regatta Romantic travel Individual program Disposed prices, LT / units. Sightseeing, entertainment travel Regatta Romantic travel Individual program
2011 m. 1.200 70 400 200 2011 m. 105,00 120,00 100,00 100,00
2012 m. 1.250 80 450 250 2012 m. 105,00 120,00 100,00 100,00
2013 m. 1.300 80 450 250 2013 m. 105,00 120,00 100,00 100,00
2014 m. 1.300 80 500 300 2014 m. 105,00 120,00 100,00 100,00
Table 5 'Yacht rental potential customers and service fees"
Financial perspective to find out the corresponding figures were calculated:
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Indicators of economic viability 1. 2. 3. 4. 5. net profit margin Debt ratio Loan recovery rate Liquidity ratio Debt-equity ratio
2011 m. 2,0% 0,93 1,516925 12,7146794
2012 m. 6,3% 0,84 0,945 2,83037778 5,06460181
2013 m. 8,0% 0,73 1,183 4,93187978 2,63879953
2014 m. 11,2% 0,59 1,557 8,43639934 1,46842069
Table 6. Variables dinamics of 2011 to 2014
One of the LLC "Elite Ship" financial goals is the profitability ratio of net value - more than 15%. Predicted that the result until 2014 not be reached. During the first year of netprofitability ratio value (2.0%) is less than a good indicator of the minimum value (5.0%).However, the 2012 2014 index value is greater than 5.0% and the trend is coming to the expected 15% of the category. The debt ratio over the analysis period to exchange large range. In 2011 this ratio veryclose to 1. This is due to the company's own lack of capital and the acquisition of assetswith borrowed funds (taken by a bank loan). 2012 - 2014 in index value is 2014, and company reaches the maximum desired value, which is still 0.9% higher than the wellregarded value. Loan recovery rate in 2012 is the less than 1, which means that LLC "Elite Ship" annualcash flow is less than a year, payable to the bank. 2013 - 2014 in index value exceeds 1, but still below the recommended target value. Company "Elit ship" is able to cover its current liabilities from current assets its liquidityvalue index 2011 - 2014 more than 1.2. However, the 2012 - 2014 value of the indicator is growing rapidly and preferably stored beyond the range (1.2 - 2). This is a signal that the company operating assets freeze of funds, ie assets are managed poorly. Analysis of the company's operations, high debt-equity ratio can testify about the increasedrisk, as it can be difficult to cover their interest payments and repayment of debt and obtainsufficient resources for further funding. Economic viability are important indicators of financial analysis of business prospects, butkeep in mind the company's evaluation and performance indicators. They are presented in Table 7.
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Corporate perfomence indicators IRR NPV The discount rate MIRR Reinvestment rate Investment payback period 12% 17.508,40 Lt 7% 9% 4,50% 5,66 m.
Table 7. „Elit ship“ perfomence indicators
In order to assess the break-even take into account the internal rate of return (IRR) and net present value (NPV). In this case, the investment is safe because the IRR is achieved >7% and NPV>0. Then should be noted that the payback period is the 5.66 years, NPV =17,508.40 LT. In order to accurately determine the project's profitability is calculated by a modified internalrate of return (MIIR). Calculation of this indicator is the an assumption that the project cashflows are reinvested in accordance with the capital costs, while the IRR method assumesthat project cash flows are reinvested in accordance with the IRR of the project.Reinvestment in terms of capital costs is the correctness, the MIRR is a better indicator ofthe true profitability of the project. LLC "Elit Ship" MIRR value is equal to 9% the projectis the acceptable.
7.3. YACHT RENTAL PROJECT OPPORTUNITIES AND PROSPECT
Company "Elit Ship" launching yacht rental business in particular, faced with the need forfinancial resources. Company services are needed for four boats and means of communication, a total of 206,000 Lt. The share capital - 10 000 Lt. That funds can be obtained by recourse to Swedbank for granting loans or yacht purchase and communications leasing. Yacht rental business is regulated by different laws. Permits, licenses and other conditions for the time and costs, but the major difficulty is not the cause. LLC "ELIT Ship" to potential employees meet the requirements of the feasibility study, a list. With regard to the prospects of the project, should take into account the financial perspectives of the project. Calculations show that the project is acceptable. However, asalready mentioned, the net current value of the project is 17,508.40 Lt. And
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the investment payback period is the 5.66 years. That means in 5.66-year will be earned only 17 508.40 Lt. In addition, both the internal rate of return and modified internal rate of return value is low. Economic viability of the indicator values are also informed by the low profitability and high risks. Implementation of the project is feasible, but the same business profitability is not high. Investment payback period is the inadequate who earns money. Debt and debtequityindicators inform the high values of the significant risk for the development of a businessusing borrowed capital. Implementation of the project are all possibilities, but the outlook is not good design. Recommendation - refuse yacht rental business project.
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8. Literature:
1. Turizmo sektoriaus konkurencingumo stiprinimas Vilniaus apskrityje (sektorinė studija), 2010 (priega per internetą): http://www.apskritis.lt/stotisFiles/uploadedAttachments/Sektorine%20studija_Turizmo %20sektoriaus%20konkurencingumo%20stiprinimas%20Vilniaus%20apskrityje.pdf 2. Lietuvos turizmo ir komunikacijos ir rinkodaros strategija 2009-2013 m. (priega per internetą): http://www.tourism.lt/informacija/Turizmo%20rinkodaros%20strategija-081224.doc 3. Turizmo plėtotės strategija (priega per internetą): http://www.ukmin.lt/lt/strategija/doc/13.%20turizmo%20pletotes%20strategija.doc 4. Trakų rajono turizmo plėtros programa (priega per internetą): http://webcache.googleusercontent.com/search?q=cache:36SzPlqBHoJ:www.tourism.lt/ dom/docs/31_traku_progr.doc+trakai+rinkodaros&cd=12&hl=lt&ct=clnk&gl=lt 5. Statistikos departamentas (priega per internetą): http://db1.stat.gov.lt/statbank/SelectVarVal/saveselections.asp 6. Trakų rajono savivaldybė (priega per internetą): http://www.trakai.lt/index.php?2234172880 7. A.V. Rutkauskas, R. Tamošiūnienė “Verslo projektavimas”, Vilnius „Technika“ 2002. 8. Sky Advisory (priega per internetą): http://www.skyadvisory.netii.net/index.php?p=1_6 9. EVPA (priega per internetą): http://www.evpa.lt/lt/paslaugos/galimybiu_studijos_investiciniu_projektu_rengimas
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Business plan Course work
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CONTENT
1. 2. 3. 4. 5. 6. 7. Introduction..............................................................................................................................3 What is a business plan............................................................................................................ 4 Project descriptio and main idea.............................................................................................. 5 Current situation.......................................................................................................................7 Market and marketing complex..............................................................................................12 Human resources and administrative......................................................................................15 Services and possible alternatives..........................................................................................18 Recommendations and proposed solutions........................................................................... 21
8. Literature............................................................................................................................... 26
2
Introduction
The project idea - yacht rental business in Trakai. Estimated start-up for the company is 2011, April. Company „Elite Ship“ seek a range of financial, customer and business processes and staff-oriented goals, but the main goal - quality services, ensuring the proper company„s profit. The investment environment is not very favorable: the economic situation remains difficult, there are legal loopholes, and speacially this is more seasonal business. This causes problems that affect the core business problem - a small number of customers and business income. Trakai, leisure and entertainment services offers 19% of working companies in Trakai, of which 3% offers yacht rental services. Estimating the prices of competitors by focusing more on each other, but their main strength is the Galve Lake. Competitors are main support measures brochures and the Internet. About 27% of visitors to Trakai likes to do or just to try water entertainment. Deviding market in the equal parts of water entertainment business to all the organizing entertainment companies gets approximately 5,500 clients. LLC „ELIT Ship“ will seek to stand self-positioning competitors as well as quality of service. Prices will be set according to the influence of seasonality. Place of business - Galve Lake. Support tools - brochures, the Internet, souvenirs. Joint venture "Elite Ship" planned direct marketing expenses for the year is Lt 11,550. The company employs 7 employees: the Director, Accountant (half time), 5 yacht captains. Only people who has high qualification can work in this company. In addition, there will be employed workers for to promote materials for the company. The total amount of wages paid per month for all employees will be 11 900 LT. For a yachts and communications equipment will be given 206,000Lt, using a bank loan or lease. The investment will be made only in 2011 There are considered yacht rental business alternatives: yacht sailing courses, water bike rentals, pleasure boat rentals. The evaluation of alternatives pros and cons there was made a decision not to do that. Yacht rental service performance indicators: IRR = 12%, NPV = Lt 17,508.40, MIRR = 9%, investment payback period - 5.66 years.
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Implementation of the project is feasible, but the long-term return on investment and low profitability of the project are refused
What is a business plan?
A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals. Business plans may also target changes in perception and branding by the customer, client, taxpayer, or larger community. When the existing business is to assume a major change or when planning a new venture - a 3 to 5 year business plan is required since investors will look for their annual return in the 3 to 5 year time
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2. PROJECT DESCRIPTION AND MAIN IDEA
2.1. Project origin and general investment objective
The business idea is to create a company whose activities include the yacht rental service in Trakai. The main idea is to offer our customers exceptional service, comfort and unique sensations. Customers will be offered tours in four different yachts, according to their needs (active or passive tourism). During the trip, according to customers' requests, yacht captain (a total of five) will present the Trakai region - will present the landscape, history and so on. Customers, according to the wishes will be able to choose the language in which they will communicate with the captain of the yacht during the trip ( in Lithuanian, Russian, English, German). This project is inspired by the desire to create a city of Trakai more interesting, profitable business, a number of working places and to meet consumer needs, not just during the summer season, but spring and autumn months (April, May, June, July, August, September, October). This project provides for approximately 210 000. Source of finances – bank loan.
2.2. INVESTMENT ENVIRONMENT
Economic environment.
The global economic crisis is shrinking and you can barely see a slight growth of economics (Lithuania are expected 3% growth in 2011). But still there are high unemployment in Lithuania, the relatively high interest rates, a small majority (three quarters) of personal income, slow, middleclass formation, lack of state support for small and medium-sized business is not conducive to the development of internal tourism growth, while at the same yacht and rental business in Trakai. However, inTrakai most of the guests a high proportion of foreign tourists. So it should be taken to foreign countries' economic environment. According to the European Economic Review suggests that the majority of European countries have seen much higher growth than in Lithuania. As well as lower unemployment rate, higher incomes for local residents. Legal - the political environment.
Incomplete formation of the tourism business-friendly legal system in developing tourism
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infrastructure, simplifying tourist visa and other entry into Lithuania procedures governing public institutions, non-governmental organizations, business interaction rule base. These legal gaps complicates business investment in tourism infrastructure and other services
The physical environment. Comparatively small District of the environment (air, water, soil) pollution. Strongest pollution source is the Lithuanian Power Plant (currently Elektrenai municipality) in the area of pollution due to the small distance (approximately 25 km) fall and Trakai. The main local sources of air pollution of the Trakai district municipality has a boiler, grass and trash burning, periodically repeated peat fires, automobile transport. State Department of Tourism data Trakai district in 2008 in the District water released 8.8 million. m3 of sewage. Of these, 23.5% of under-treated. This is after city of Vilnius the largest contaminated of wastewater of Vilnius County. Lithuania has a transitional climate - cold winters and warm summers. It is influenced by the seasonality of the business
2.3. Results and consequences of the company action
Initiating the project aims to: To develop tourism of water and to strengthen Trakai as a tourist city in the world; To supplement the existing local tourism infrastructure, development of the infrastructure, tourism products and services in complexity; Facilitate the delivery of Lithuanian cultural heritage of Europe; Facilitate the economic, social and cultural development, better elements of cultural identity, traditions and lifestyles of contacts at national, regional and local levels; For financial gain. These results may affect the company's activities - the variety of services to increase local and foreign tourist flows, which in turn is influenced by higher incomes and company profits. Also improve the region's image and increase the competitiveness of the region.
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3. CURRENT SITUATION
3.1. DETAILS OF ECONOMIC OPERATOR AND KEY DATA
Company name: LLC "Elite Ship” Company code: 312134543 VAT number: LT100004547210 Address: Kestucio 4, LT-21104 Trakai Telephone: (8528) 53941 E-mail. E-mail: [email protected] Bank: AB “Swedbank” Current account: LT267300010112723094 LLC “Elit Ship” Yacht rental office in Trakai, scheduled to open in 2011, in April. It is then that starts sailing yachts in Trakai season and lasts until November. The company will seek to meet the various expectations of our customers, and Trakai residents and visitors will be offered:
Sightseeing, entertainment yacht trip; Regatta (boat race); Romantic sailing yacht; Customer's request, to an individual program;
“Elit Ship” legal status - a limited liability company. The company is guided in its activities of the Civil Code of Lithuania, the Lithuanian Company Law and other laws provided for in legislation.
3.2. COMPANY MISSION, VISION, STRATEGIC OBJECTIVES
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MISSION:
Constantly bring joy to each of our client, surprise gifts and entertain them in high-quality, full of excitement and unforgettable pleasure.
VISION:
Become recognized as the most loved and valued and constantly evolving leisure activities of firms. THE COMPANY’S GOAL:
Become a reliable and long-term partner, the maximum satisfaction of customer needs, giving people who work in the company's livelihood.
Given the company's mission and vision and the main objective can be formulate strategic goals. These objectives are divided into four groups which is called perspectives (financial, customer, business processes, personnel). Prospects of joining the common strategy of the company.
FINANCE:
To occupy 20% market share. Net profit margin - more than 15%. Debt indicator value is less than 0.6. Dividends payable - about 50% of net profit. However, the annual dividend rate will depend on the company's financial situation and needs substantial investment.
CLIENTS: Constantly focus on customer needs.
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Be flexible and be able to take into account individual situations. Shedding of service quality, the highest level in a show of customer requirements are met.
BUSINESS PROCESSES:
To achieve synergy. Develop the organization's availability with (flexible working hours, exclusive of individual orders, etc.). Minimize downtime. Accountable work environment.
STAFF:
Create a supportive work atmosphere and a unique organizational culture. To ensure equal opportunities for the company staff (gender, race, religion and so on. Terms). Maintain constant staffing company. High-qualified staff.
3.3. YACHT RENT ANALYSIS IN TRAKAI
Trakai, according to the number of tourists, far behind from Vilnius or Kaunas. However, compared with Druskininkai can be seen that Trakai their attendance significantly leads. Trakai is receiving in a year about 200,000 visitors. In 2009 tourist flow was slightly reduced. However, the tourist flow in Lithuania decreased in all areas. This can be expressed as a consequence of the difficult economic situation, impact on the purchasing power of population decline.
City
2007
2008
2009 9
Vilnius Kaunas Druskininkai Trakai
761,7 406,9 95,5 189,8
1 010,8 382,5 114,4 213,7
888,4 290,0 70,2 164,8
1 Table "The most visiting cities in Lithuania (tūkst.)“
For water activities there are four suitable lakes next to the Trakai and one the upper trailing Verkne route (Vilkoksnis lake, Verknė lake, Sienio lake, Navos lake and below).
3.4. ANALYSIS OF THE PROBLEM
Yacht rental business in Trakai, in particular, faced with imperfect Lithuanian legislation at the local high-income tourists and staff lack of qualification shortages. This in turn affects other things, a material which causes the yacht rental business in Trakai, the problem - a small number of customers and business income. This problem is particularly relevant not only for business. There is a causal - investigating links between the original problem and the results of the business and the business performance and economic and social situation of the country. It can be argued that these problems can influence a whole can be identified as one of the low economic growth in the Trakai district grounds. This problem also affects the number of jobs created and revenue to the state budget level.
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Problem Tree
Not a lot of jobs
Poor economic growth in the Trakai distric
Small revenue to the state budget
Untapped potential of the yacht rental business
A small number of customers and business income
Difficult situation of competition Yacht rental service and business development stop Contradictions between different laws Low purchasing power of customers
Dissatisfied customer expectations
The language barrier
Yacht rental business restriction or prohibition
Lack of financial resources for business development
Lack of knowledge and skills
Lithuanian legal base
Not high cost of living
Poor workers' skills
1 Schema “Jachtų nuomos Trakuose problemų medis”
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4. MARKET AND MARKETING COMPLEX
4.1. MARKETING RESEARCH
Leisure and recreation service offers about 19% of the Trakai tourism. Of these, only 3% of the yacht offers a rental service. Yacht rental service companies in Trakai are monopolistic competition in the market. There are relatively many companies supplying the market of similar, but different specific types of services are needed. Therefore, each company has a small market share, and it has a limited ability to control market prices. Most of the firms in determining the prices of services focused on the competition. Often fails to demand operating season and try to maintain a constant price level. The main competitors are concentrated in the Lake Galve, there is an island and in the island there is a castle. This is a good strategic location, since the main attraction is just Trakai Castle. The biggest tourist flows allows companies to maximize their potential and gain maximum income. However, the strength of competitors in one place encourages firms to increase their competitiveness and take appropriate measures to maintain or gain competitive advantage. The Public Department of Tourism conducted questionnaire research, which showed that in Trakai, leisure and recreation services company offering the most used marketing tools in the following (in order of most frequently used tools): Brochures and Other Printed Material; Web sites, information on the Internet; Lithuanian press; Participation in Trade Fairs; Outdoor Advertising.
Leisure and Recreation Service Providers as a Cost-Effective Measures Identified on-line (five-point system 4.75 points), email (4.6 points) and Specialized Exhibitions (4.3 points).Relatively ineffective as a marketing tool for radio advertising, advertising in the Press reports. After the yacht rental websites review in Trakai, has been noted that the information is presented in very general terms, is reporting on major activities and contacts. Lack of visual information, a house the photos or short films, corporate services delivery.
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4.2. DEMAND AND SUPPLY
Water activities in Trakai offers four companies and four individuals. 5 of them offer similar services, yacht rental company as well as the „Elite ship“ . According to the Trakai Information Center water activities are very popular among the guests. Even 27% of which came to Trakai test various proposed water activities. After the calculations, it can be noted that these companies offer entertainment during the year, attracts about 44,496 customers. For subsequent calculations (where all the players get in on the market) can be assumed that each market participant per year is about 5,500 customers.
4.3. MARKETING STRATEGY
The company LLC "Elite Ship's target market - who are interested in yacht rental services in the town of Trakai residents and guests. The target market can be segmented.Company "Elite Ship distinguishes these yachts rental market segmentation techniques in Trakai:
The geographical (local, regional, national, international); demographics (age, marital status, income, occupation (profession)); psychographic (values and way of implementation, social class); Conduct (business, tourists, families / friends and visitors day / weekend tourists,holidaymakers and traditional),
The important thing is the positioning of competitors. Company Name (LLC „EliteShip“) will be aimed at a potential consumer's mind to create a unique serviceassociation. English language use in the business name and potecialių to local customersand foreign tourists in the mind to form a company offering yacht rental services elit image.With a loud name of the company we are trying to lead the customer in mind to LLC „Elite Ship“ "brand to the top shelf.". The company's products – yacht rental service is intangible in the physical sense, immeasurable individual units, but also to all other tangible and has its own essence
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andquality. According to customers' needs will be offered yacht rental services to meet differentconsumer wants. Much attention will be paid to the quality of services - high demands boats(comfortable, spacious, good equipment and so on.) Service staff (sailing skills, foreignlanguage, the history of Lithuania knowledge, communication skills, presentable appearance). Yacht rental service is characterized by the consumption of its properties will be expressed in terms of functional properties. Unlike other areas of services trade, renting a yacht in the positive emotions create a client will be provided at one particular service, but several interrelated services, by using components such as natural resources, culture, architecture andhistorical sights, the measures necessary for the operation of the service, etc.. Service price will be determined by focusing on demand. Yacht rental business is highlyseasonal, so tourists at peak lactation ration (summer months), when demand is higher, will be determined and above Yacht rental price. Decline in demand, the cost of services will also be reduced. Company "Elite Ship“ yacht rental services to customers and not through intermediaries but directly. Deployment of the company yacht marina location will be near Trakai Castle, where touristsare most intense. This location offer their services and most water activities in Trakai,providing competitors. Therefore, to distinguish themselves from competitors in the company will need the active support of the program. According to the National Department of Tourism conducted questionnaire-based studies, suggests that advertising in the press or radio advertising is ineffective in the development of yacht rental business. Company "Elite Ship“ will attempt to reach potential customers via the Internet (detailed description of the company's website, active in the social websiteFacebook). Also will focus on outdoor advertising and print advertising (flyers, brochures)for distribution in Trakai.
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4.4. POTENTIAL FIRST MARKETING COSTS
Direct marketing costs (per year): 1. Cost of sales: 2. discounts to customers (about 1500Lt);
Promotion costs: Web page (about 2000Lt); Information stand (about 1000 Lt); Print ad (layout 50, brochures (one year) of Lt 6000); Souvenirs to customers (1000 Lt);
General of LLC "Elite Ship" planned direct marketing expenses for the year is 11,550 Lt. The company also incurred costs and indirect marketing, such as marketing, responsiblefor personnel costs, communication costs, and so on. However, these costs would bemore appropriate to assign a company's costs.
5. Human resources and administrative
5.1. Company's organizational structure
LLC "ELIT Ship" management structure is not complicated, because all managementfunctions are performed by one person - a director. Initially, the company providesmanagement control to a patriarchal structure, where the head of the company under the authority of all personnel.
Director
Accountant
yacht captains(5)
Figure 2: "Company's organizational structure
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Director of the company will be responsible for the planning, organization and control. He also engage activities in marketing (market analysis, will coordinate the marketing mix elements and so on.). In addition, the responsibility will be to ensure the effectivemanagement of personnel (in conflict situations, staff motivation, training, etc.) Accountant will work on bookkeeping, payroll, inventory and various documents, etc.. Yacht Masters will be the company's employees who are directly interacting with customers. Their responsibility will be to provide customer service chosen by all the servicerequirements.
5.2. ADMINISTRATION OF THE COMPANY
The company's administration will work only two people – a director and accountant. Company director qualifications must be high enough, since the decision depends on the company's performance. The Director must be able to perform not only his but also thesales manager, marketing manager, the staff of the Company. The company is not large, it is not carried out in extremely difficult financial transactions, particularly because of high demand for qualified accountants do not. The most commonaccountant faced with such tasks as billing, bank transfer, payroll, check register, and so on.These works is enough Accountant, working half-time. Administrative staff have been identified and will be paid a monthly salary: Director of the company – 2000Lt; Accountant - 500 Lt.
5.3. SERVICE STAFF
LLC "ELIT ship" will have five yacht captains. 3 out of the sail yacht tourists from preregistered, and two captains will be responsible for the yacht rental service in advancerezervavusiems yacht clients. If the pre-reservation to yachts need more than two boats, and then, depending on how much extra should yacht captains serving a reduced pre registered by the number of tourists are satisfied and pre-registered customer demand. Yacht captains are responsible for the yacht rental service in advance who had a reservation for the yacht customers do not have a specific timetable. They are directly dependent on the number of advance orders.
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Captains, sail yacht tourists, non-registered in advance is always working on weekends, as they are receiving all major tourist flows. Captains work schedule: 1 Captin Opening hours: Wednesday, Thursday, Friday, Saturday, Sunday; 2 Captin Open: Saturday, Sunday, Monday, Tuesday, Wednesday; 3 Captin Opening hours: Tuesday, Thursday, Friday, Saturday, Sunday. Tourists are served from 10 am. up to 19 hours. except when there is a reservation. Captains skills are very high. All of them are more than 10 years of sailing experience, participatedin world sailing competitions and regattas. Qualification shows captainssailing yachts a vailable for crew members of a diploma. Yacht captains are responsible for the yacht rental service in advance who had reservation for the yacht customers are charged 30Lt per hour wages (in exceptional cases where the ordersafter 22 hours. 40Lt is paid hourly wages). Remaining masters who work in the schedule, amonthly remuneration of 1800Lt. Captins works under seasonal labor contract since April till the end of November. becauseonly at that time, according to climatic conditions, potential yacht rental services in Lithuania. For months, when conditions are unfavorable Lithuania boating, yacht captainsusually spend a swim in warmer waters. This is the kind of training are. It should be noted that the company will also hired additional staff, distribution of promotional material. Provided the employee's annual salary budget – 8000Lt.
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6. SERVICES AND POSSIBLE ALTERNATIVES
6.1. Service provision scheme
Reservation by telephone, e-mail, office
Order date and time alignment with the boat captain
Confirmation to the client
Preparation of the yacht (under special customer requirements or standard) Meeting a client which did not had an advance booking
Customers pick and Yacht Delivery
Selected travel beginning
Introduction to the landscape, history and so on.
End of the journey. A Souvenir for a customer
Farewell to the customer 18
Figure 3: "Yacht rental service scheme"
6.2. WORKING ARRANGEMENTS
The main and essential working tool is the yacht. LLC "ELIT Ship demand is 4 yachts,which are planned to purchase from private persons or entities. Will be purchased secondhand yachts. But will be thoroughly checked for technical compliance with state andcompany requirements for quality and comfort levels. Company share of the budgetallocated to the long-term asset purchase is 200 000 Lt. Yachts, wind speeds are powered by gasoline or diesel engines. There is a need for fuelto rental services for yachts. As the yacht is not powerful (up to 24 hp), fuel costs are about 2 l / hr. Calculating the monetary value would be about 6 Lt / hour. Fuel supplier company JSC "Lukoil Baltija. Expected that the fuel costs per year should not exceed 20 000 Lt. To ensure the smooth functioning of the company and customer communication, you need to put the means of communication. E-mail communications and to facilitate the daily activities of the company will need two computers. (The total amount of 4000 Lt). Also, the company must maintain a constant connection to their home and with clients. To this end, the company will acquire seven mobile phones, which generally will be the amount of 2000 Lt.. The company is acquiring a communications plan to work with Tele2.
6.3. BUSINESS LOCATION AND ENVIRONMENT
Deployment of the company yacht will be in marina and this location will be near Trakai Castle. The company's headquarters will be registered under the owner's residence, because there is no need to rent the premises - the administration has only two employees - a director and accountant. The analysis of the environment is the appropriate to identify weaknesses and strengths ofthe business environment. District Strength: Trakai district geographical location and the Vilnius neighborhood is conducive toattracting foreign visitors who visited the capital city;
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Real and intangible cultural heritage and history associated with statehood; favorable natural conditions and other professional and amateur water sports; A small area of urban development, landscape; Developed area and the edge of the trunk road network, railway; Trakai district is rich in recreation and tourism appropriate resources and beautifulscenery.
Weaknesses of the district: Visitors come for a short period of time; Large seasonal nature of tourism; Cultural organization of tradition and experience only partially meet the modern needs, cultural requirements of users and a representative at district level; Lack of highly skilled staff; Thousands of tourism service, they are unevenly located in the area;
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7. RECOMMENDATIONS AND PROPOSED SOLUTIONS
7.1. YACHT RENTAL BUSINESS ALTERNATIVES ANALYSIS SUMMAR
Given an alternative to yacht rental business has its own advantages and disadvantages. Depending on what the goals are and evaluate business opportunities and the advantagesand disadvantages to consider about the yacht rental business alternatives. Requiring a minimum investment business is a water-wheel bike. A new water wheel cost is about 3000 Lt. If, planning to provide the water bicycle rental services are purchased 10 water cycle, the total investment in the basic working tools required is 30 000 Lt. Also, this business is attractive due to lower wage costs, since you need only one man who rent waterbikes. The employee does not have some specific skills that are necessary for the provision of yacht rental services, and being paid for work way less. However, engaging inthe business need to assess the popularity of the service is not very large income from the business also has a relatively small and therefore the profitability of the business may not meet expectations. Yacht sailing courses for business are sufficiently risky choice. Demand is volatile, it is difficult to predict its revenue, and the more profit. The possibility exists that such a situationthe company incurred marketing costs will be inadequate in generating profits. Of course, the staff need to is the less than the yacht rental business, but the qualification will also behigh. Yacht sailing courses to develop business-friendly than separately, and do it as one of the services offered by its elements. For example, LLC "Elit ship" offers all of this feasibility study, the services and additionally engaged in yacht sailing courses. Pleasure boat rental business would be the best alternative for the yacht hire business. Organizing sightseeing tours simultaneously enjoys more customers, because the ship can accommodate more people, for whom the price is the relatively lower due to highernumbers. It would also generate additional income from on-board operating a bar and cafe.The average price of pleasure craft is the about 200 000 Lt. To meet the demand of a single ship, so that investment is the same as the projected LLC "ELIT Ship" yacht rental business. However, it should looked from another point of view like service stickiness - the ship fliesestimated hours provided for the route. And also, when a small group wants to rent a boatfor a particular holiday, the service price is quite high. This is part of the potential customers to encourage to find other alternatives. In addition, the company would facegreater legal regulation of ship operating in cafes and bars.
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The analysis of several alternative business under the same criteria (potential customers,the need for investment, personnel needs and qualifications, expected income) can bedescribed as the most attractive business opportunities in this study, the yacht rental business and as an alternative to the pleasure boat rental business. Both businesses arefaced with the same investment needs, and a similar number of potential customers. Staffqualifications are similar, but in order to provide yacht rental services is greater need forstaff. However, services are more flexible, responsive to individual customer requirements(creating a certain exclusivity), the pursuit of yacht rental business can be expected to behigher income and higher business entity's financial position.
7.2. YACHT RENTAL BUSINESS FINANCIAL FUTURE
In order to provide the financial prospects of yacht rental business has been carried outanalysis of the planned activities. Future earnings power, and thus gain the most influenced by the number of customers. The table below sets out the number of potential clients 2011 2014 in and service fees.
Disposed of service levels (units / m) Sightseeing, entertainment travel Regatta Romantic travel Individual program Disposed prices, LT / units. Sightseeing, entertainment travel Regatta Romantic travel Individual program
2011 m. 1.200 70 400 200 2011 m. 105,00 120,00 100,00 100,00
2012 m. 1.250 80 450 250 2012 m. 105,00 120,00 100,00 100,00
2013 m. 1.300 80 450 250 2013 m. 105,00 120,00 100,00 100,00
2014 m. 1.300 80 500 300 2014 m. 105,00 120,00 100,00 100,00
Table 5 'Yacht rental potential customers and service fees"
Financial perspective to find out the corresponding figures were calculated:
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Indicators of economic viability 1. 2. 3. 4. 5. net profit margin Debt ratio Loan recovery rate Liquidity ratio Debt-equity ratio
2011 m. 2,0% 0,93 1,516925 12,7146794
2012 m. 6,3% 0,84 0,945 2,83037778 5,06460181
2013 m. 8,0% 0,73 1,183 4,93187978 2,63879953
2014 m. 11,2% 0,59 1,557 8,43639934 1,46842069
Table 6. Variables dinamics of 2011 to 2014
One of the LLC "Elite Ship" financial goals is the profitability ratio of net value - more than 15%. Predicted that the result until 2014 not be reached. During the first year of netprofitability ratio value (2.0%) is less than a good indicator of the minimum value (5.0%).However, the 2012 2014 index value is greater than 5.0% and the trend is coming to the expected 15% of the category. The debt ratio over the analysis period to exchange large range. In 2011 this ratio veryclose to 1. This is due to the company's own lack of capital and the acquisition of assetswith borrowed funds (taken by a bank loan). 2012 - 2014 in index value is 2014, and company reaches the maximum desired value, which is still 0.9% higher than the wellregarded value. Loan recovery rate in 2012 is the less than 1, which means that LLC "Elite Ship" annualcash flow is less than a year, payable to the bank. 2013 - 2014 in index value exceeds 1, but still below the recommended target value. Company "Elit ship" is able to cover its current liabilities from current assets its liquidityvalue index 2011 - 2014 more than 1.2. However, the 2012 - 2014 value of the indicator is growing rapidly and preferably stored beyond the range (1.2 - 2). This is a signal that the company operating assets freeze of funds, ie assets are managed poorly. Analysis of the company's operations, high debt-equity ratio can testify about the increasedrisk, as it can be difficult to cover their interest payments and repayment of debt and obtainsufficient resources for further funding. Economic viability are important indicators of financial analysis of business prospects, butkeep in mind the company's evaluation and performance indicators. They are presented in Table 7.
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Corporate perfomence indicators IRR NPV The discount rate MIRR Reinvestment rate Investment payback period 12% 17.508,40 Lt 7% 9% 4,50% 5,66 m.
Table 7. „Elit ship“ perfomence indicators
In order to assess the break-even take into account the internal rate of return (IRR) and net present value (NPV). In this case, the investment is safe because the IRR is achieved >7% and NPV>0. Then should be noted that the payback period is the 5.66 years, NPV =17,508.40 LT. In order to accurately determine the project's profitability is calculated by a modified internalrate of return (MIIR). Calculation of this indicator is the an assumption that the project cashflows are reinvested in accordance with the capital costs, while the IRR method assumesthat project cash flows are reinvested in accordance with the IRR of the project.Reinvestment in terms of capital costs is the correctness, the MIRR is a better indicator ofthe true profitability of the project. LLC "Elit Ship" MIRR value is equal to 9% the projectis the acceptable.
7.3. YACHT RENTAL PROJECT OPPORTUNITIES AND PROSPECT
Company "Elit Ship" launching yacht rental business in particular, faced with the need forfinancial resources. Company services are needed for four boats and means of communication, a total of 206,000 Lt. The share capital - 10 000 Lt. That funds can be obtained by recourse to Swedbank for granting loans or yacht purchase and communications leasing. Yacht rental business is regulated by different laws. Permits, licenses and other conditions for the time and costs, but the major difficulty is not the cause. LLC "ELIT Ship" to potential employees meet the requirements of the feasibility study, a list. With regard to the prospects of the project, should take into account the financial perspectives of the project. Calculations show that the project is acceptable. However, asalready mentioned, the net current value of the project is 17,508.40 Lt. And
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the investment payback period is the 5.66 years. That means in 5.66-year will be earned only 17 508.40 Lt. In addition, both the internal rate of return and modified internal rate of return value is low. Economic viability of the indicator values are also informed by the low profitability and high risks. Implementation of the project is feasible, but the same business profitability is not high. Investment payback period is the inadequate who earns money. Debt and debtequityindicators inform the high values of the significant risk for the development of a businessusing borrowed capital. Implementation of the project are all possibilities, but the outlook is not good design. Recommendation - refuse yacht rental business project.
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8. Literature:
1. Turizmo sektoriaus konkurencingumo stiprinimas Vilniaus apskrityje (sektorinė studija), 2010 (priega per internetą): http://www.apskritis.lt/stotisFiles/uploadedAttachments/Sektorine%20studija_Turizmo %20sektoriaus%20konkurencingumo%20stiprinimas%20Vilniaus%20apskrityje.pdf 2. Lietuvos turizmo ir komunikacijos ir rinkodaros strategija 2009-2013 m. (priega per internetą): http://www.tourism.lt/informacija/Turizmo%20rinkodaros%20strategija-081224.doc 3. Turizmo plėtotės strategija (priega per internetą): http://www.ukmin.lt/lt/strategija/doc/13.%20turizmo%20pletotes%20strategija.doc 4. Trakų rajono turizmo plėtros programa (priega per internetą): http://webcache.googleusercontent.com/search?q=cache:36SzPlqBHoJ:www.tourism.lt/ dom/docs/31_traku_progr.doc+trakai+rinkodaros&cd=12&hl=lt&ct=clnk&gl=lt 5. Statistikos departamentas (priega per internetą): http://db1.stat.gov.lt/statbank/SelectVarVal/saveselections.asp 6. Trakų rajono savivaldybė (priega per internetą): http://www.trakai.lt/index.php?2234172880 7. A.V. Rutkauskas, R. Tamošiūnienė “Verslo projektavimas”, Vilnius „Technika“ 2002. 8. Sky Advisory (priega per internetą): http://www.skyadvisory.netii.net/index.php?p=1_6 9. EVPA (priega per internetą): http://www.evpa.lt/lt/paslaugos/galimybiu_studijos_investiciniu_projektu_rengimas
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