Business Development Proposal For Aqua Park Tourism Essay

Published Date: 23 Mar 2015

The aim of this paper is to present research analysis for what appears to be an excellent investment opportunity - Aqua Park in Banja Vrujci. Banja Vrujci is situated in the north-western Serbia in the basin of the Kolubara River, in Valjevska podgorina region. It lies amidst picturesque hills near the village Gornja Toplica, near the road Mionica - Ljig, in the valley of the Toplica river (the right tributary of the Kolubara), which means "warm water". Its altitude of 179 to 252 meters makes it geographically the lowest spa resort in Serbia. The climate is mild, moderate and continental. Due to weather circumstances, the outdoor pools of Banja Vrujci can be sometimes used from April till the beginning of October. The distance from Belgrade is 92 km while from Ibarska magistrala (the crossroad Ljig) - 15 km only. The healing properties of Banja Vrujci The thermal water and the mud contain sulfur and is mildly radioactive. There are five main springs and several secondary ones. The temperature of the water is ranging from 26 - 28 -32 C and it contains potassium, magnesium and selenium. This healing water emerges out of the mud and loses sediment on the area, approximately 200meters long and 50 m wide. The capacity of the spring is 300 liters per sec.

Scenario chosen

This is a start-up company and the scenario contains the following important aspects of the business plan:

Marketing plan - it includes a knowledge of the potential customers and competitors and a competitive pricing strategy.

Mission - it gives an indication as to the core values of the project and describes the services or products, identifies the key members, associates and principals in our business.

Financial Statements - the balance sheet, income statement and statement of cash flows, which are basically projections of what we think we will earn or spend.

Projections - Projections are based on long-range assumptions. Factors that can influence our projections include the competitors, the growth of the industry and development of new products.

Aims and objectives of the work

The object I am proposing is a pool complex, organized in the form of an open Aqua Park. The open Aqua Park is to be built on construction land comprising the space of 3 hectares, or 30.000 m2. It is meant for water games and should consist of 5 theme units (a pool with waves, a larger pool with toboggans, a smaller pool with toboggans, a swimming pool and a children's pool) as well as necessary additional objects and resting places, such as open showers, sanitary objects, catering facilities and paved and sand areas for sunbathing and relaxation. There should be also a parking lot of roughly 600 vehicles capacity, spreading over the area of 12 000 m2, defined by the regulation plan and located near the entrance of the complex. The most modern equipment for this form of fun should be installed, together with the new pool technology and water game devices. Attractive architecture solutions must applied, as well as a modern design of space, construction elements and equipment, high level of final processing and a sophisticated management system.

The Banja Vrujci Aqua Park should have the following content in order to enable it to create a sustained concurrence advantage in a longer period of time:

The open Aqua Park should be a fun place during the entire summer season. In addition to the described pools, there should be a vast choice of pastime, pleasure and relaxation types manifested through the presence of all auxiliary facilities that such a representative object implies. Also, the auxiliary objects (restaurants, hotels, cafes) must be built so that the guests coming from nearby towns and countries can be accommodated.

The open Aqua Park should contain all the objects necessary for providing services of that type, which will have a synergetic effect on completing the unique offer from the aspect of total concurrence advantage.

The aim is to transfer the epicenter of events connected with recreation, relaxation and fun onto the location of our Aqua Park, not only from the towns of the gravitational area, but wider area as well. The open Aqua Park with all its content, will supply the customers with all sorts of services like those in world famous Open Aqua Parks, e.g. Costa Caribe, Marineland, Tropical Islands in Berlin etc.

Time required time to complete the realization of the object:

Obtaining the urban-technical conditions and approval - 1 month

Technical documentation development- 2 months

Obtaining the consents and approvals for technical documentation-1 month

Performing rough construction works - 3 months

Performing finishing works -2 months

Technical acceptance and approval for use -1 month

In total 10 months

Structure of the work

After the Introduction containing the business idea rationale and the aims of the project with the scenario on how these goals will be realized, the second part of the work will analyze the business concept in detail. The third part of the paper will present the qualitative and quantitative market research, organizational and financial feasibility issues, products and services. The fourth part will address strategic analysis of the new business idea, which is identification of sources of competitive advantage and sustainability, selection of strategies for success and, finally, development of appropriate Business Model. Business plan, as the fifth part of the work, will contain step by step business schedule, setting out key events and resource requirements for successful operation of the Business Model. Also, it will analyze critical success/failure factors.

The basis for the economical-financial analysis and the efficiency of investing is the content of the Aqua Park, the scope and structure of investments, elements for income forming and the expenses of the object. The applied methodology of the economical-financial analysis and efficiency of investment estimation was based on common procedures of surveying the investment efficiency (a methodology recommended and accepted by banks, investment funds, state development funds etc.). In the investment analysis we started from the total investment into the basic and working capital, and when it comes to sources and financing conditions, we started from personal resources and financing based on credit. The basic indicators of business have been quantified (total income, expenses, gain, money flow, economy flow with and without financing expenses) based on which the relevant indicators of investment efficiency (current net value of the object, intern profitability rate, cost threshold, investment return limit etc.). The analysis comprised an examination of the object's sensitivity to changes of relevant starting measurements - total investments, total income and expenses.

In considering the current state of tourism and in establishing directions for quicker development of this project, a SWOT analysis is necessary and important. A threat is defined as any improper event or force in the external environment that causes harm to the organization's strategy. [1] It represents the internal power that an organization possesses to compete against its rivals. [2] It also represents organizational capabilities and internal positive attitudes that enable organizations possess strategic power to achieve organizational goals. While others view organizational strengths as skills and abilities that enable organizations set out and implement their strategies so as to outperform their rivals. [3] Opportunities are defined as a set of conditions suitable for achieving goals at the right time. Weaknesses represent organizational aspects that negatively impact product and/or service value with regards to customers or competitive environment. [4] Weakness also represents shortages in internal capabilities that make organizations unable to achieve their goals or lose their competitive advantage.

The following key factors were taken into consideration for the SWOT analysis:

1. General infrastructure and transport

2. Tourist Products (values, attractions and tourist infrastructure)

3. Human Resources and the Labor Market

4. Relations with other public and private sectors; and

5. Organization, management and promotion of tourist development

The business concept

As for the general supply of Aqua Parks, the existing Aqua Parks are mainly complexes of swimming pools with accompanying content - food facilities, restaurants and cafes, sports fields etc. of small capacity, open type, which work only during summer time and whose visitors are mainly locals. On our gravitational area (80 km) there is no open type Aqua Park. Also, on wider gravitational area (160 km+) there is no open type Aqua Park supply with the content presented in the Banja Vrujci Aqua Park. There are no companies that can compete with their offer and content with the services that will be provided for the consumers in our complex which will consist of an open Aqua Park. Thus, the stressed distinctive competence, as well as the thermal waters exploitation, which provides us with green and cheap energy is our biggest and unreachable competitive advantage. The construction land on which the Aqua Park is to be built is equipped with complete infrastructure, which will influence the activities of current and future competition which would have to spare significant financial resources for the purpose of purchasing land on which to build the complex of similar design, purpose and dimensions, so that we can freely say that the entrance barriers for competitions are substantial. If we take into consideration the concessions for exploiting geothermal waters which will be used for heating the pools and which have sources near our Open Aqua Park, the realization of our project is clearly economically justified.

The object we have built is a pool complex, organized in the form of an open aqua park. The open aqua park is built on construction land comprising the space of 3 hectares, or 30.000 m2. It is meant for water games and it consists of 5 theme units (a pool with waves, a larger pool with toboggans, a smaller pool with toboggans, a swimming pool and a children's pool) as well as necessary additional objects and resting places, such as open showers, sanitary objects, catering facilities and paved and sand areas for sunbathing and relaxation. There is a parking lot of roughly 600 vehicles capacity, spreading over the area of 12 000 m2, defined by the regulation plan and located near the entrance of the complex. The most modern equipment for this form of fun has been installed, together with the new pool technology and water game devices. Attractive architecture solutions have been applied, as well as a modern design of space, construction elements and equipment, high level of final processing and a sophisticated management system.

The starting point of the object is the entrance building (ground floor and first floor) of about 600m2. The content of this object are the park management, the ticket office, souvenir stores, sports equipment shops and the lifeguard and first aid services. The following content is placed within the aqua park:

A pool with waves

A larger pool with toboggans

A smaller pool with toboggans

A swimming pool

A children's pool

Catering services

Open showers

Sanitary objects

Dressing rooms

Paved and sandy areas for relaxation and sunbathing

All the areas are connected by paths, next to which parterre accessories have been placed, as well as catering points and trimmed green spaces. The capacity of the open aqua park is 3000 visitors.

Feasibility

Primary and secondary market research

For the most adequate explanation of aqua parks, we present two definitions: Medlik [5] defines it as 'a recreation area providing water sports, other water-based activities and such visual attractions as waterfalls, usually for the general public and on payment of an admission charge.' According to Beaver [6] the use of this term 'may be a large water-sport complex, or a tourist attraction, such as a water-based theme park, or a combination of the two'. Even though such parks are considered a type of a theme park, there can be determined some different features between theme parks and water parks. In order to compare them we will use the features pointed out by Davidson. [7] Both parks have diverse visitors. Water parks directly gather the tourists already visiting the regions, on holiday. Day-trippers, as opposed to tourists, undoubtedly comprise the vast majority of most European theme parks' clientele. Most of the parks are developing a theme around which all the attractions are designed and situated in 'themed areas'. These provide variety by giving visitors the impression that they pass through different lands, or worlds, or time periods. The main difference between both parks, in this case, is the theme that is chosen. In the water parks always the main theme is the water, i.e. most of the attractions are water-based. In the water parks the range of the attractions varies depending on the market segment they cater for and not on different themes. Water parks which are situated mostly near sun and sea destinations offer not only the man-built attractions but also the enjoying of the nice weather and sunbathing. That is the reason why in the admission fee they include the usage of a sun-chair and sun-shade. Hence, in some cases water parks offer more value for money than theme parks. Parking is usually free 'as research has shown that visitors do not like to pay out twice before entering the park'. [8] Analyzing the differences between theme and water parks, the first are much bigger in most terms. Theme parks elsewhere in Europe generally occupy 150-200 hectares (the size of a small town), water parks are smaller - mostly not more than 60 hectares which means that they also require less people for serving smaller territory. As far as the investments are concerned, the amount cannot be generalized.

Serbia has 60 convective hydro geothermal systems - 25 in the Dinarides, 20 in the Carpatho-Balkanides, 5 in the Serbian-Macedonian Massif, and 5 in the Pannonia Basin. Conductive hydro geothermal systems are developed in basins filled with Paleogene and Neogene sedimentary rocks, and are primarily located in the Pannonian Basin in Vojvodina in northern Serbia. [9] A spa area is defined in respective regulations as an area of one or more natural healing factors that has standard establishment and facilities for their utilization. Natural healing factors are considered to be: thermal and mineral water, air, gas, and mineral mud of confirmed medicinal effect. [10] Serbia has no specific geothermal legislation. Some financing is available for geothermal projects as conditional loans, grants, and project financing. All water resources are regulated by the Law on Waters. [11] 

Speaking about the broader context of this project, below are the results of the SWOT analysis of the external factors which can affect the development of the presented project:

SWOT Analysis of the general infrastructure and transport

Strengths

Weaknesses

Located in an area which is linked to other tourist regions;

An existing and mostly modernized transport network;

Continued energy provided (electricity, water);

System of protecting the environment;

Developed base and mobile telecommunication net-works and internet.

Lack of European road corridors;

Marginalized existing railroad transport;

Technologically outdated electrical distribution network;

Lack of tourist signage;

Lack of parking space; and,

Non-implementation of laws and penal measures (protection of the environment).

Opportunities

Threats

Projects for regional corridors;

Interest in investing in the infrastructure;

Fall in prices of telecommunication and informatics infrastructure;

Developed standards for infrastructure and transport;

Fall in prices of infrastructural equipment for balneal-therapeutic, wellness and spa treatments.

Lack of local sources of financing infrastructure and transport, especially in spas;

Lack of foreign guests because of weak foreign marketing as well as poor previous experiences;

Loss of market because of lack of quality accommodation capacities.

SWOT analysis of tourist products

Strengths

Weaknesses

Citizens of the area (hospitable, open, simple);

growing number of additional activities;

wealth of mineral springs and traditions of spas;

exceptional cultural and historical heritage of the

greater area;

gastronomy;

a centuries long tradition of services and restoration.

Lack of protection and maintenance of resources;

Lack of spatial and urban plans;

Lack of initial infrastructure for building new edifices for accommodation

Unresolved urbanistic and illegal construction problems;

Lack of new tourist attractions.

Opportunities

Threats

Application of innovations in tourist management;

Positive opinion about Serbia as a whole on the foreign market;

Availability of spa tourism products for a wide range of clients;

Expected positive reaction to a new, unknown foreign destination;

Conditions for the development of health tourism.

Quick development of competition from spa destinations;

Lack of professionally formed products for foreign tourists.

SWOT Analysis based on the organization, management and stimulation of development of tourism

Strengths

Weaknesses

Existence of the basic institutionalized base (Law on Tourism),

Existence of tourist services;

Existing awareness of problems in spa tourism;

Growing rating of the tourism of Serbia in the rehabilitation of tourism.

Lack of understanding of the importance of support for potential investments;

Unregulated property and legal relations;

Lack of coordination between sectors in securing support for loans in the private sector,

Long process in obtaining permits;

General regulations in the tourist sector.

Opportunities

Threats

Interest and support from the Republic for the development of tourism in the interior;

Easily accessible models and experiences in the organization and management of tourist resources;

Regionalization and accession to the European Union.

Difficulties in agreeing on priorities and the development of tourism;

Poor beginning and experiences with privatization in tourism.

SWOT Analysis of Human Resources and Labor Market

Strengths

Weaknesses

Positive attitude of citizens towards tourism;

Traditionally positive mentality and tendency towards quality of tourist services;

Existence of several middle, college and higher level educational facilities (private and state) in Serbia.

Lack of possibilities for the economically positive sides of tourism;

Lack of managers in tourism;

Lack of cadres for new occupations (animators, guides).

Opportunities

Threats

Application of European regulations of work and employment policy;

Availability of internet.

Level of service inadequate, and partial dissatisfaction of users;

Lack of growth in productivity;

Loss of once established positions in tourism.

Conclusions about the sales options, i.e. profitability of the process of service providing and sale of the additional products in the open aqua park, were derived from a previously conducted detailed market analysis, i.e. analysis of the basic determinants of demand, analysis of competition prices, as well analysis of sales and success of the competition in the previous period and today which is described in detail in the previous chapters. After analyzing the supply and competition and subsequently projecting the demand development in the following period, we created the plan and sales options. The described competition advantages we possess helped us define the plan and possibilities of sale. Considering all the analyzed and above mentioned parameters, we came to an assessment of the placement opportunities and the degree of capacity utilization per exploitation year.

Feasibility

In the following period, it can be expected that the demand for fun, recreation, relaxation and pastime services will rise. The customers are experiencing an escalation of the life standard, as well as a change in the consumer habits and preferences. Ever growing part of income is put aside for various services - fun, recreation, relaxation, etc. Also, the tendency of the service sector to grow is reflected in the growth of the demand for these services. With the growth of various forms of vacation, fun and recreation, there will be an increase of demand for additional services - tourist services, accommodation services, food services etc., which will have positive implications on an increased employment rate in nearby towns, as well as an increased employment rate in Serbia in general. (Our estimation was that around 1100 employees would be indirectly employed.) Furthermore, considering that the services of the aqua park are meant for the citizens of Serbia as well as nearby countries, we expect that the tourist inflow will have positive implications on the inflow of foreign currency as well.

In the investment analysis we started from the total investment into the basic and working capital, and when it comes to sources and financing conditions, we started from personal resources and financing based on credit. The basic indicators of business have been quantified (total income, expenses, gain, money flow, economy flow with and without financing expenses) based on which the relevant indicators of investment efficiency (current net value of the object, intern profitability rate, cost threshold, investment return limit etc.). The analysis comprised an examination of the object's sensitivity to changes of relevant starting measurements - total investments, total income and expenses.

For the realization of the project of building an open aqua park in Banja Vrujci, constant investment was planned adding up to 5 300 000€, in the following amounts:

The scope and structure of investment in fixed assets

Description

Total investment

Land 2.4 million €

Buildings 400 000 €

Infrastructure 950 000€

Equipment 1 400 000€

Other 150 000 €

FIXED ASSETS 5 300 000 €

Projection of business expenses

Direct material expenses are projected based on empirical parameters, with the participation of 15% of total income.

-Production services include maintenance costs and publicity cost and are projected based on empirical data - maintenance 10% and 5% of total revenue.

Amortization is projected in fixed amount of 167 750€ in the following way:

Amortization calculations

Description

Amount in euro's

Value of buildings with accompanying documentation

550 000

amortization rate %

2.5%

Amortization of buildings

13 750

Equipment value

1 400 000

amortization rate %

11%

Amortization equipment

154 000

Total amortization

167 750

Gross profit for 75 employees is projected for the first year of operation in the annual amount of 507 287€ in the following way:

Gross profit

Number of workers

Net monthly income

Net annual income

Net annual income, taxes and contributions

Total annual gross in euro's

I shift

II shift

Total

Aqua park working force

21

21

42

297

149 688

79 445

229 133

Specialized personnel

5

5

10

380

45 600

24 168

69 768

Administrative personnel

10

10

20

430

103 200

54 696

157 896

Managers

2

2

750

18 000

9540

27 540

Top manager

1

1

1250

15000

7950

22950

Total

39

36

75

331 560

175 727

507 287

In the following years, concluding with the 8th year, an increase of the gross revenue increased by 2%.

The remaining expenses of business that comprise several different categories of nonmaterial expenses and other expenses are projected based on empirical parameters with participation of 15% in total revenue.

Investment in working capital

The calculation of all required working capital for the first year of operation and business liabilities are made based on their effect and the coefficient of trade. The effect is quantified based on the position of the projected success balance, and the coefficient of trade is determined based on empirical data with respect to specific business activities. Calculations of the required working capital, business liabilities and net working capital as a difference between them for the first year of operation are presented below.

Calculation of working capital

Description

Annual traffic in euro's

Coefficient of trade

Required working capital in euro's

Basic and auxiliary material (1)

513 000

12

42 750

Customers (2)

3 420 000

51

66 500

Cash (3)

3 420 000

180

19 000

Total (1+2+3)

128 250

Liabilities for nonmaterial and other expenses (4)

513 000

24

21 375

Revenue(5)

507 287

12

42 274

Suppliers (6)

1 026 000

24

42 750

Deductions (4+5+6)

106 399

Required working capital (1+2+3)-(4+5+6)

21 851

Required changes of the working capital that come from the changes of business activity are accounted from the current business.

Total investments for financing this project are 5 321 851 €, specifically:

Total investments

Description

Total investments in euro's

Structure

fixed assets

5 300 000

99.6%

working capital

21 851

0.4%

total investment

5 321 851

100%

Building and equipping the open aqua park worth 2 500 000€ is financed from loans, whereas the personal stake of the investor in total amount of 2 821 851€ goes for financing fixed assets and working capital.

Financing resources

Description

Total investment

Structure

Loans

2 500 000

47%

Personal assets

2 821 851

53%

Total

5 321 851

100%

The loans have the following conditions:

interest rate of 8%

repayment term of 12 years from the start of construction

compound interest paid in the first and second year of operation

The calculation of compound interest, loan liabilities and repay plan of the credit are presented below:

Calculations of compound interest:

Loan amount in euro's

2 500 000

Number of years

2

Interest rate

8%

Total compound interest rate in euro's

416 000

Compound interest in accordance with the loan amount and the interest rate is calculated to be the total of 416 000€. Compound interest is played in the first and second year of operation.

Calculations for loan liabilities

Total loan amount in euro's

2 500 000

Interest rate per year

8%

Number of repayment years

12

Grace period

2 years from the start of construction

Annual annuity in euro's

361 891

Loan repayment plan

Period (year. quarter )

Debt remaining

Interest rate

Repayment

Trimester annuity

1.1

2 500 000

48 566.5

41 906.5

90 473

1.2

2 455 095

42 256

42 221

90 473

1.3

2 410 350

41 256

44 152

90 473

1.4

2 325 426

40 100

45 251

90 473

2.1

2 280 155

39 425

46 335

90 473

2.2

2 268 155

38 566

47 665

90 473

2.3

2 175 550

38 100

48 125

90 473

2.4

2 141 054

37 250

48 999

90 473

3.1

2 097 115

36 895

49 485

90 473

3.2

1 991 540

35 147

50 124

90 473

3.3

1 910 245

35 001

52 478

90 473

3.4

1 880 458

34 112

53 682

90 473

4.1

1 810 105

33 048

54 792

90 473

4.2

1 721 260

32 895

55 842

90 473

4.3

1 700 058

31 458

57 162

90 473

4.4

1 690 548

30 565

58 485

90 473

5.1

1 650 785

30 000

59 487

90 473

5.2

1 620 352

29 142

61 748

90 473

5.3

1 603 154

28 985

63 487

90 473

5.4

1 540 248

28 001

64 125

90 473

6.1

1 485 595

26 995

66 452

90 473

6.2

1 426 004

26 110

67 359

90 473

6.3

1 360 234

25 712

67 999

90 473

6.4

1 280 245

24 715

68 751

90 473

7.1

1 234 011

23 685

69 235

90 473

7.2

1 177 011

23 045

70 158

90 473

7.3

1 086 110

21 778

71 485

90 473

7.4

1 030 100

20 658

72 653

90 473

8.1

960 158

19 582

73 495

90 473

8.2

940 285

19 001

74 125

90 473

8.3

820 143

18 211

75 888

90 473

8.4

760 437

17 363

76 999

90 473

9.1

680 375

17 002

78 125

90 473

9.2

601 721

16 245

79 542

90 473

9.3

512 236

15 236

80 148

90 473

9.4

422 157

14 986

81 652

90 473

10.1

345 486

14 103

83 111

90 473

10.2

278 205

11 102

84 152

90 473

10.3

179 306

8 632

85 632

90 473

10.4

88 297

2 224

86 145

90 473

Income statement

The income statement was based on standard accounting principles with respect to the objective aim of the project, the nature of the activity and the relative importance of certain categories of revenue and expenses. From the income statement presented below, it is evident that in all the years of economic life of the project a positive result is recorded, with the net profit on average presents 28.14% of the total revenue.

Description/projection year

0

1

2

3

4

5

TOTAL REVENUE

0

3 420 000

3 420 000

3 420 000

3 420 000

3 420 000

TOTAL EXPENSES

0

2 414 047

2 582 965

2 410 056

2 411 152

2 400 514

Business expenses

0

2 221 452

2 111 052

2 410 056

2411 154

2 256 401

Direct material expenses

0

580 685

562 482

562 378

578 625

548 215

Production services

0

580 685

562 482

625 748

562 248

523 514

Amortization

0

152 250

152 250

152 250

152 250

152 250

Other expenses

0

568 125

568 125

568 125

568 125

568 125

Gross revenue

0

514 689

248 356

258 465

245 145

268 956

Financing expenses

0

200 000

400 000

180 562

175 689

189 568

Regular interest

0

0

185 365

145 011

145 101

144 575

compound interest

0

200 000

212 521

0

0

0

GROSS PROFIT

0

1 500 986

989 568

1 011 236

100 425

152 689

Income tax

0

102 485

98 452

110 485

100 125

100 896

NET PROFIT

0

986 485

785 652

956 145

899 658

965 689

Financial flow

The financial flow is a combination of an approach to investments and financing of investments, as well as its results. It gives an overview of all financial transactions, and thus an insight into the financial potential of the business, and the basis for the liquidity assessment.

The financial course of the project consists out of inflow, outflow and net inflow. Inflow in the financial flow consists out of total income, financing resources, business expenses (without amortization), annuities and separation from the results. Net inflow is the difference between inflow and outflow, and as such is a good indicator of the project's regularity, in a dynamic way, for each year. The financial flow is shown below, from which it can be seen that the project is regular in all projection years.

The rest of the project value in the financial course is the inflow in the last projection year, and the amount is calculated starting from total investments reduced by amortization according to the required rates throughout the whole projection period.

Description/ Projection year

0

1

2

3

4

5

INFLOW

5 326 458

3 452 968

3 452 968

3 452 968

3 452 968

3 452 968

Total revenue

0

3 452 968

3 452 968

3 452 968

3 452 968

3 452 968

Financing resources

5 326 458

0

0

0

0

0

Loan

2 585 695

0

0

0

0

0

Personal resources

2 965 859

0

0

0

0

0

The rest of the proj.value

0

0

0

0

0

0

OUTFLOW

5 323 485

2 658 965

3 245 578

3 015 236

3 011 589

2 100 895

Investments

5 323 485

0

-895

-758

-720

-168

Land

3 359 000

0

0

0

0

0

Buildings

596 589

0

0

0

0

0

Equipment

1 400 000

0

0

0

0

0

Working capital

25 689

0

-895

-814

-985

-945

Expenses

0

1 986 452

1 986 452

1 986 452

1 986 452

1 986 452

Direct material expens.

0

986 575

986 575

986 575

986 575

986 575

Production Services

0

986 575

986 575

986 575

986 575

986 575

Other expenses

0

986 575

986 575

986 575

986 575

986 575

Gross income

0

685 478

685 954

642 785

625 986

625 142

Annuity

0

10 785

14 845

45 785

12 859

12 455

Compound interest

0

101 225

95 865

101 562

101 252

104 256

Income tax

0

152 145

458 659

154 859

485 685

485 965

NET INFLOW

0

9865 458

758 425

845 854

956 245

925 685

Balance sheet

The balance sheet is an overview of the state of assets and resources, and for its development certain information from the income statement and financial flow are used. The balance sheet is shown below.

Balance sheet

ASSETS

0

1

2

3

4

5

1. Fixed assets and nonmaterial invest.

156 256

785 596

485 586

458 152

125 362

125 859

cost of fixed assets

11 233

125 636

144 525

178 256

148 256

195 652

-cumulative amort.

1 525

1 985

985

955

845

685

2. Long term placements

11 111

11 525

11 858

10 158

14 156

12 154

3. Working capital

156 256

785 596

485 586

458 152

125 362

125 859

Supplies

11 233

125 636

144 525

178 256

148 256

195 652

Short term claims

1 525

1 985

985

955

845

685

cash

11 111

11 525

11 858

10 158

14 156

12 154

free assets

256 859

485 956

854 585

958 656

854 452

652 123

TOTAL (1+2+3)

1 526 526

1 589 965

1 785 485

2 859 659

2 658 956

2 999 952

LIABILITIES

0

1

2

3

4

5

4. Capital

145 152

485 744

859 155

155 258

356 895

458 585

Initial capital

156 256

785 596

485 586

458 152

125 362

125 859

Capital Increase/Decrease

11 233

125 636

144 525

178 256

148 256

195 652

5. long term liabilit.

1 525

1 985

985

955

845

685

long term loan-basic debt

11 111

11 525

11 858

10 158

14 156

12 154

-cumulative loan repayment

145 152

485 744

859 155

155 258

356 895

458 585

6. long term liabilities

156 256

785 596

485 586

458 152

125 362

125 859

TOTAL LIABILITIES (4+5+6)

11 233

125 636

144 525

178 256

148 256

195 652

Resource requirement evaluation

Construction of the object within the complex is of a skeletal frame type, which provides the best conditions in terms of space management flexibility and maximal transparency for natural light. The basic materials for the formation of the construction system are reinforced concrete and structural steels. As secondary elements, there appear parts of brick products, artificial stone, wood and aluminum. The objects are equipped with complete water and sewage installations, power grids and telecommunication networks, heating installations based on geothermal energy and air-conditioning and ventilation systems.

The water filtering and water dosing systems are autonomous for each pool, but connected with the common command system in order to mage management and control centralized. All the installations are attached to the infrastructure net of Banja Vrujci. All the infrastructure systems are managed in a centralized manner, within the maintenance and security services of the object, where special attention is given to the organization of constant maintenance of tidiness of the object and its green areas.

Personnel and management structure includes number of workers, job titles and necessary qualifications:

Job title Qualification I shift II shift

Management and administration

Director High Degree 1

Commercial Director High Degree 1

Technical director Higher degree 1

Purchase/ sale officer High Degree 10 10

Specialized personnel Higher degree 5 5

Aqua park working force High school Degree 21 21

In total 39 36

Number of employees: 75

Dynamic planning

Obtaining the urban-technical conditions and approval 1 month

Developing technical documentation 2 months

Performing rough construction works 3 months

Performing finishing works 2 months

Technical admission and approval for use 1 month

In total 10 months

Specifications and description of the necessary input:

Construction materials for rough work:

gravel and sand of required quality, grain size and purity

fresh concrete of various strengths and compositions

cement

hydrated lime

clay products

clean technical water

prefabricated concrete components

construction steel

steel sheet

plasterboard and aluminum substructures

timber structures

aluminum roofer

waterproofing materials

insulation materials

Construction materials for sophisticated work:

aluminum windows, doors and facade panels made according to the project

aluminum profiles

glass of different types and processing

tables of polycarbonate products of different processing

tubes and rods of stainless steel

ceramic tiles

granite ceramics

natural granite plates

natural marble plates

building adhesives

oxide colors

semi-dispersive colors

oil paints and varnishes

laminate flooring

wood trim

rubber and plastic lining

textile lining

boards from pressed mineral fibers

small steel, aluminum and plastic fasteners

silicone adhesives, kits and other materials for joint sealing

Materials and equipment for installation works:

steel tubes with zinc lining and fittings

polyethylene pipes and fittings

polyvinyl chloride pipes and fittings

cast iron pipes and fittings

cast iron lids

copper coated pipes and fittings

valves and faucets of various styles

water meters

wall hydrants

underground hydrants

ground hydrants

sanitary equipment made of ceramic materials

sanitary equipment made of plastic-coated steel sheets

sanitary equipment made of stainless steel

protective coverings, waterproofing and thermal insulation materials

cables and copper wires insulated with plastic materials

cables and wires of zinc and its alloys, insulated with plastic materials

optical fiber cables

joints and fasteners

power cabinets from decaped sheet

distribution boards

bulbs, lamps and other lighting objects for different purposes

outdoor lighting with poles and lamps

switches and sockets

control equipment and electrical energy reading equipment

ventilation canals of aluminum sheet

insulation lings of spongy boards and tapes

fans of different power output and capacity

blinds from aluminum plastic-coated sheet

automatic valves

calorimeters

indicators

fan coil devices

Elements of furnishing and equipping the object:

substations for central heating and hot water distribution

fire alarm installation with a central control unit

fire extinguishers

video surveillance installation with a control unit

PA installation (internal news station)

garbage evacuation installation with a central collection unit

anti-lightning installation

ramps for the handicapped

notification and warning boards

video beam

horticulture

Construction mechanization:

machinery for civil engineering works (excavators, loaders, bulldozers, graders, rollers, trucks, pavers)

machines for rough construction works (trucks, concrete mixers, concrete pumps, mortar pumps, construction cranes and hoists)

portable compressor with a gun

Construction equipment:

construction switchboard for temporary electricity connection

temporary water supply port with taps

temporary phone network port

bunker for new concrete

steel baskets for vertical concrete transport

equipment for stretching and cutting of armature

equipment for metal parts processing (hardware)

carpenter facility with equipment for wood cutting and wood processing

metal supports for formwork panels

scaffolding for building

light metal facade scaffolds

various hand tools

container - office

container - workers' luggage room

protective equipment

Energy:

electrical energy

bottled gas

diesel fuel

Working force:

unskilled construction workers

semi-skilled construction workers

skilled construction workers

highly skilled construction workers

machinery operators

craft workers

installation workers

construction foremen

civil engineering technicians

electrical technicians

mechanical technicians

civil engineers

mechanical engineers

electrical engineers

work protection engineers

guards

Analysis of the purchase of necessary input:

All required materials could be purchased in the country

All required equipment could be purchased in the country, by import from nearby countries or through agents from European countries

All electrical equipment could be purchased in the country

All working force could be engaged from the local territory and from nearby countries

The cost of the required works:

the land 2.400.000 €

objects 400.000€

infrastructure 950.000 €

equipment 1.400.000€

other 150.000 €

in total: 5.300.000 €

The cost of required investments:

technical documentation 62.500 €

providing of the necessary conditions, consents and permitions 37.250 €

building and furnishing of the object 2.750 €

surveillance and quality control expenses 37.250 €

other 12.500 €

In total 2.900.000 €

Equipment (specification and distribution)

technical block for pool technology

entertainment machine plants

substations of central heating and hot sanitary water distribution

installation of fire alarms with a central control unit

fire extinguishers

video surveillance installation with a control unit

PA installation (internal info station)

sewage installation with a central unit

anti-lightning installation

telephone booth

fountains, flower pots, benches, garbage cans

Catering points

Health Services equipment

ramps for the handicapped

video beam

horticulture

During the architectural solution development, we made sure that the norms, standards and regulations in which the consumer safety is secured (place, width and the required number of entrances -exits, width and distribution of the stairways, communication visibility, required heights and volumes of space, vertical and horizontal signalization in co) were followed. Within the electrical installations, a system of fire lighting (panic-lamps) as well as the fire alarm system with automatic extinguishing activation. Within the waterworks, a system of hydrating network is built for fire extinguishing by the means of water and the required number of fire extinguishers of different types are set in accordance with the specific places they are placed on. Within the pool technology, a constant control of the water quality is conducted. Within the object management, a life guard service and first aid service have been organized. The video surveillance installation covers the entire complex. All the infrastructure systems are managed in a centralized way, within the service for object security and maintenance.

Business Model

Strategic Analysis of the business idea

Considering that the Banja Vrujci open aqua park's critical success factor is, we take it, the transparent attractiveness of our offer for the consumers/customers, a lot of attention is dedicated to promoting the mentioned objects as a place for pleasant and affordable vacation, fun and recreation. A strategically important issue is the construction of corridor XI which could increase the number of potential customers. Accessibility of territory of the Republic of Serbia and its regional units is one of the key criteria for measuring the success of spatial development and it is one of the most important indicators for determining spatial aspects of transport systems. [12] Multimodal Corridor XI in its gravitation zone, linking the Pan-European Corridors X, IV and VII, would directly improve transport and economic relations between Italy, Montenegro, Serbia and Romania, and indirectly, in addition to these countries, with Russia, Ukraine, Croatia, Hungary and Bulgaria.

There are no companies that can compete with their offer and content with the services that are provided for the consumers in our complex which will consist of an open aqua park. Thus, the stressed distinctive competence, as well as the thermal waters exploitation, which provides us with green and cheap energy is our biggest and unreachable competitive advantage. No city that belongs to our gravitational area has an open-type aqua park. Besides, an open aqua park built in Banja Vrujci is clearly differentiated in comparison with other objects of similar purpose, because it offers something new, something that other objects do not have. In addition, the large parking space, completeness of the supply assortment, relaxation options, fun for children and pleasant pastime for adults represents a significant competition advantage.

The Banja Vrujci aqua park has the following content that enables it to create a sustained concurrence advantage in a longer period of time:

The open aqua park is a fun place during the entire summer season. In addition to the described pools, there is a vast choice of pastime, pleasure and relaxation types manifested through the presence of all auxiliary facilities that such a representative object implies. Also, the auxiliary objects (restaurants, hotels, cafes) are built so that the guests coming from nearby towns and countries can be accommodated.

The open aqua park contains all the objects necessary for providing services of that type, which has a synergetic effect on completing the unique offer from the aspect of total concurrence advantage.

Strategies for success

Over the years of operating, we need to consider something new which could attract tourists who have rich experiences and at the same time attract the local population for repeat visits. Pikkemaat & Schuckert suggest that instead of constant investment in new attractions, it is more 'appropriate to support attraction management strategies which address both, tourists and locals'. [13] Haden adds that developing new rides and facilities 'only has a short-term uplifting effect on attendance and sales'. [14] 

Our goal is to create a continued relationship between the organization team of the park and its customers/ visitors through relationship marketing. The intention is to accomplish such a degree of customer delight with the customers/ visitors so that we can build their loyalty and turn them into regular customers, in that way indirectly affect securing a positive promotional effect in the marketing theory and practice known as Word Of Mouth - a positive oral propaganda, so to speak. Since we defined the quality standards for our services as well as quality customer relationship management team from the very start, the success of our mission was guaranteed. The task of this management team is, among other things, to develop a full database on existing customers/consumers, through which we are able to develop a one-to-one relationship with the customers in an efficient manner.

Policies and strategies of price forming can be based on the choice between three structures of price forming:

Forming based on expenses

Forming based on competition

Forming based on market influence (forming of prices based on the perceived value of the service in the eyes of the consumers)

From the very start, the price forming strategy was based on creating a number of consumers as large as possible, and subsequent increasing of the consumer database as well as providing high quality services. This strategy was used in order to maximize the market share and build a leader position in the earliest phases of the open aqua park life cycle. We consider that with this price forming strategy and this way of management, a higher level of long-lasting profitability can be established.

Modification of service prices was employed, i.e. price forming of the bound service products (package sales of chairs, accommodation, meals, tickets…) which was intended to stimulate the demand through which we achieve affordability of expenses. On the other hand, we did that in periods out of summer season, providing notable discounts. Price discount is also offered to special customer groups such as children, students and seniors.

The nature of our final product, from the two options provided (direct sales and sales with a mediator) we have the only option of direct service distribution. In case of economic expansion and extreme success in the operation of the open aqua park, which is definitely an option, we would consider the option of business spreading through franchise. By providing package franchise we would perform a further service distribution. We are aware that the nature of our service and the assortment conditions the establishment of a direct feedback with the customers that should be utilized. This way we are able to find out their current needs, the change of those needs, as well as their perception of the existing competition offers.

Successful service providing was partially practically provided by the fantastic location and area on which the aqua park is built ( the exploitation of geothermal waters, the land owned by the creator of the park, the possibility of building a vast parking space and necessary auxiliary objects etc.)

All the planned methods of market communication that were used were directed to:

Creating a positive climates and surroundings within which our services would prompt the desired effects and useful reactions in customers/ visitors of the park and

Prompting of the sales of our services and/or products by stimulating the demand and therefore the accomplishment of the planned income with respect to the investments.

When creating a promotion strategy, we put a stress on communication. We are aware that we have to pay attention to communication during a service encounter, i.e. communication of personnel with the visitors (the way they look, the way they act, what they say, how they perform the services), service ambience and physical evidence. If we create a positive effect of market communication and if it is favorable, then by that we increase the value in the eyes of the consumers. Main forms of our communication with the market are primarily reflected in the following two instruments of the promotional mix:

personal sales

business propaganda

sales improvement

public relations

Personal sale is used first, for the purpose of personal presentation of the service in conversations with the target groups, and particularly in cases when we can negotiate a mass sale/traffic: excursions for students of primary schools and high schools, students and similar groups. It represents the most significant variable in the development of expectations and that is why our contact personnel has to be capable of understanding all elements necessary for development of realistic expectations of our consumers. This by no means implies that we will neglect the two powerful means of communication which require no additional investments:

Interactive communication and

Direct market communication

Positive effects of communication were derived with respect to consumer perception. We are aware that the degree of their enjoyment depends also on the way our customers perceive the physical aspects during the service, the knowledge level of our personnel, the technology we use, etc. This primarily means that through investment into staff and modern equipment as well as logistics, we create multiple effects. We certainly use the following instruments of the promotion mix in the communication with the market:

Creating economical publicity, cooperating with the local and state media, press conferences and posting news in the media and monitoring the published information in public

Public relations, which comprises taking care of the relations with the social community, the state, administration, media, competition and potential business partners

Advancing sales which is mainly used in later phases of a life cycle when we give certain discounts and rebate to our customers/visitors as well as business partners, in order to prompt the demand

The internet, creating an attractive and interactive web page which serves the realization of the mentioned marketing relationship strategy

Loyalty programs which are linked to sales advancement as an instrument of the promotion mix.

Business Model development

Open pools already exist in this spa, but in comparison with our open Aqua Park, they are of vanishingly small dimensions and have twice in less visitors than the proposed Aqua Park. If our object would comprise the following content:

A pool with waves 1060 m2

A pool with toboggans, smaller 180 m2

A pool with toboggans, larger 270 m2

A swimming pool 1150 m2

A children's pool 980 m2

Catering services

Open showers

Sanitary objects

Paved and sandy areas for relaxation and sunbathing

it can be freely said that the mentioned open pools will not present competition, even as substitutes for our total catering supply, which in addition to the swimming and children's pools, will also include various content exclusively meant for relaxation of different categories of consumers/customers, starting from children of 3 to 12 years of age, through teenagers, to adults and seniors.

Providing a fantastic and unforgettable experience of fun and relaxation for the visitors is a premise on which the entire strategy of the open aqua park is based. As an accessory repertoire there are numerous other products and services that require separate dedication of attention to regulate the process of service providing and service encounters. The Aqua Park will be attractive to families, young adults, businesses, schools and other groups. The Company will market through a variety of methods. These include newspaper advertising, radio, direct mail referral, brochures, gift passes, Internet and web site and more. It will provide a variety of water park activities. We believe that it can attain significant growth over the next few years. Financial projections show that the Company can utilize the requested funding to support its' growth efforts. The Company projects a steady growth with significant net income over the next years as its' business plan is implemented.

The Aqua Park is envisioned as a revenue-generating value-added experience, with the business model built around admission tickets and concessions. It is a seasonal facility. The foundation of the value-added experience provided by the Aqua Park is the ability to enjoy a series of water attractions, lounge, play games on the abundant grassy areas, barbecue, play a game of sand volleyball or even host a group party. The planned renovations, however, may be an opportunity to explore adding activities that are less dependent on sunny, warm weather and potentially expand the season of the Aqua Park.

As an attraction within the recreational showcase and full-day destination experience that is central to the Aqua Park vision, it is essential that visitors are able to flow freely between the waterpark and other attractions. This is currentl