SAMPLE BUSINESS PLAN

of

An AMUSEMENT PARK

EXECUTIVE SUMMARY

I. Project On: Amusement Park

II. Covered Area: 100

Acres

III. Land & Equipment : 270 Lakhs

IV. Power Requirement : 50 KW

V. Employment Potential: 70

VI. Break-Even Point : 42%

VII. Location : Bhubaneswar/ Odisha

VIII. Expected Turnover(1st Year):

72 Lakhs

IX. PBIT(1st Year) : 42 Lakhs

X. Technology : Indegenious
XI. Total Capital Requirement: 305 Lakhs

Basis and Presumptions

1. The project profile has been prepared on the basis of the 25 working days in a
month.

2. It is presumed that during the first year the capacity utilization will be 75%
followed by 85% during the next year and 100% in subsequent years.

3. Depreciation on machinery and equipments has been taken @10%.

4. The rates given for salaries and wages for the skilled workers and others are
on the basis of the minimum rate prevailing in the state.

5. The rates given for machinery, equipments, and raw materials are those
prevailing at the time of the preparation of the project profile and are likely to
vary from place to place and supplier to supplier.

6. It is expected that the project will become operational in 6-7 months time.

Vision Statement

To passionately promote peace,love and oneness through educational and

inspirational activities,thrilling rides and entertaining games.

To foster positive mental and physical Development and the renewing of mind in a
relaxed environment.

Mission Statement

To Create a Peaceful, friendly, quality environment to foster love, family, unity and
friendships through recreation, leisure and entertainment for the well-being of
individuals and families.

Goals: To Create a Benchmark in Customer Service.

Objectives: To make the project fully operational and profitable in next two years
time.
Industry Analysis:

Looking from the Competition point of view the rivalry is not very high among the
Competitors as it is a Concept and hence product differentiation exists as no two
Competitors services are same.

Substitute products are available hence Buyers bargaining power is there.

Since the input materials are available in plenty hence the bargaining power of
Supplier is very low

As it is a Capital intensive Project and it is a Concept hence the threat of new

entrants is low.

Competitor Analysis:

At present locally there are no Competitors. But globally the Competition is high.
Hence at first we will try to take advantage of the local monopoly and will gradually
cater to the increased global market.

Market Promotion

⚫ Online Advertising
⚫ Newspapers
⚫ Hoardings
⚫ Social Media
⚫ Sponsoring various events
 SWOT Analysis

Strength

The strength the project lies in the fact that Amusement parks are very much in
demand in today’s generation. Exposure to television and internet has made people
aware about such type of theme parks elsewhere in the world.

The project does not require too much inventories because of the fact that it is
basically a service organization.

As it has a fast cash cycle hence the working capital will not be tied up for a very
long period.

Weakness

The project suffers from the following limitation.

1. Peoples spending habits are not clearly known.

2. The cash flow during the rainy months will be low.
Opportunities

1. As there are few Competitors in the Market place, hence the market potential of
the Project is very high.

2. The Project has the capacity to attract foreign exchange.

Threat

Since the project does not require too much technical expertise, hence Competitors
may step in to take advantage of it.
ABOUT THE PROJECT

Amusement parks and theme parks are terms for a collection of rides and other
entertainment attractions assembled for the purpose of entertaining a large group of
people. An amusement park is more elaborate than a simple city park or playground,
usually providing attractions meant to cater to children, teenagers, and adults.

The twin city of Bhubaneswar and Cuttack is growing at a very fast pace both in
terms of the population as well as the area. Compared to a decade ago, people’s
standard of living has increased much because of the expansion of the economic
activity. Consequently peoples’ spending pattern has also increased. They prefer to
spend more amounts on leisure and amusement. People are also more increasingly
looking for leisure and amusement activities .In this context the Amusement Park
has increased importance.

The twin city of Bhubaneswar and Cuttack and its surrounding places lack such
type of specialized amusement parks. Thus there is more need of such type of
projects in the Twin City.

In order to understand the need and profitability of such type of projects a

questionnaire is prepared and a survey is made amongst the park goers of the Twin
City.

Proposal

The proposed Amusement Park is a unique project of its kind. Of late peoples
spending habit has been changed. Due to increasing middle class income and
increase in the communication network such type of projects is gaining importance.
People prefer to spend some of their disposable income in quality entertainments.
The increase in the number of malls in metro cities, increase in luxury resorts and
luxury satellite towns are examples of this.

This is further accentuated by the liberalization policy adopted by Govt. and the vast
increase in communication networks. The no. of flights to Bhubaneswar over the
year has increased. Further over the years the no. of workplace and offices of
various Software, FMCG and other Corporate have increased in Bhubaneswar . This
means again increase in the disposable income and more number of affluent people
including the company personnel. Again the increase in the telecommunication
network, the availability of World Wide Web means that there is easy access to the
internet. Thus the company can promote itself in telecom networks as well as on the
internet.

The proposed project will be situated near Phulanakhra/Puri which will be an ideal
place for number of reasons. First of all it is situated near N.H.-5. It is nearer to the
City of Bhubaneswar which is well connected both by rail and air. Since it is well
connected, hence it is an ideal spot for setting up an amusement park.

Techno-Economic Viability Study Report of Fun City Ltd.

1. BACKGROUND
Fun City Limited is planning to set up a project for Amusement Park in the outskirts
of the City of Bhubaneswar.
The cost of project estimated at Rs.305 lakhs.
The Company proposes to go for external financial assistance by way of fresh Term
Loan of Rs. 100.00 lakhs and Working Capital borrowing of Rs. 35 lakhs
The balance will be contributed by promoters.

2. BACKGROUND OF THE PROMOTERS

There are three promoters involved in the project. The main Promoter is an NRI
having experience in Hospitality Industry. The other promoters are local
Businessmen and mainly investors and will not have any active involvement in
Business.

The Company will be registered in the name of Fun City Ltd.

2.PROJECT DETAILS

I. About the Amusement Park

Fun City Ltd proposes to start amusement park in the Twin-City of Bhubaneswar
and Cuttack to provide recreation and amusement activities to the people. The Park
will cater to the requirements of all the age group including Children, youngsters as
well as adults. The Park also includes Water Sports in the Water Park. The
equipments installed in the Park includes Climbers, Water Playing Slide, Joy Rides,
Multi Lanes, Float Rides, Tornado, Rope Way etc.

It is expected that the Park will attract more than 5, 00,000 visitors per annum..

II. Land & Premises.

The company has procured around 100 Acres of land for this purpose and is also in
the process of acquiring more lands in the adjacent areas to the Amusement Park.
The infrastructure of the project is on the verge of completion and the park is slated
to open by the end of the financial year.

III. Rides & Attractions Equipment

The following items of plant and machinery has been proposed to be

installed section-wise:

:
List of Equipment Estimated Cost

(Rs.)

Children’s Climbers 0.50 Lakhs

Water Playing Slide 9.00 Lakhs

Joy Rides 8.50 Lakhs

Multi Lanes 12.00 Lakhs

Float Rides 10.00 Lakhs

Tornado 30.00 Lakhs

Rope Way 50.00 Lakhs

The cost of plant and machinery has been estimated at Rs. 120 lakhs.

The promoter is yet to submit quotation / other documents of individual items in

support of the cost of plant and machinery provided in the cost of project. Since cost
of the individual items of the above are not backed by supporting documents like
quotations etc., the same has to be submitted before disbursement of term loan in
the event that the proposal for term loan is considered for sanction.

V. Electrical Installations, Furniture & Fixture and Misc. Equipments.

The documents for installations like transformers, generators will be submitted

before disbursement of term loan.

VII. Maintenance Dept.

Power

The power requirement is to the extent of 50 KW. The company has deposited
security money to the concerned authorities for obtaining the requisite power load.

Water

Water is mainly used for cooling the water circulation system. Make up water will be
needed to cover the evaporation of water in the cooling tower. The requirement of
water has been estimated at around 400 Liters per day. Water shall be available
from Tanks as well as Tube-Wells to be sunk in the unit.
VIII. Manpower

The following manpower has been proposed for the unit:

DESIGNATION NO SALARY TOTAL

Park Manager 1 10,000.00 10,000.00

Electrician 2 5,000.00 10,000.00
Supervisor 3 5000.00 15,000.00
Machine Operator 3 5000.00 15,000.00
Skilled Worker 10 4,000.00 40,000.00
Unskilled Worker 20 3,000.00 60,000.00
Accounts Clerk 2 5,000.00 10,000.00
Peon/Guard 4 2,500.00 10,000.00
Total Salary Per 170,000.00
Month
Salary Per Annum 20,40,000.00

4. PROJECT COST AND MEANS OF FINANCE OF A PROPOSED AMUSEMENT

PARK(FUN CITY LTD.)
RS. IN LAKHS
PROJECT COST:

I. LAND & PREMISES 150 Lakhs

:

II. EQUIPMENT

1. Children Climbers 0.50 Lakhs

2. Water Playing Slide 9.00 Lakhs

3. Joy Rides 8.50 Lakhs

4. Multi Lanes 12.00 Lakhs

5. Float Rides 10.00 Lakhs

6. Tornado 30.00 Lakhs

7. Rope Way 50.00 Lakhs

:

Total 120 Lakhs

:

III. WORKING CAPITAL REQUIREMENTS : 35.00 Lakhs

TOTALPROJECT COST : 305.00 Lakhs

MEANS OF FINANCING

EQUITY
:

- PROMOTERS : 70 Lakhs

- INDIAN PUBLIC ( 10 lakhs shares @ of Rs. 10/share)S : 100 Lakhs

WORKING CAPITAL LOAN : 35 Lakhs

TERM LOAN FROM BANK : 100 Lakhs

TOTAL : 305 Lakhs

5. PROJECT IMPLEMENTATION SCHEDULE:

The implementation of the project includes various jobs such as procurement of

technical know-how, transfer of technology, market Surveys, preparation of the
project report, selection of site, financing of the project, procurement of equipment,
recruitment of staff, erection of equipments, trial production and commercial
production etc. Project implementation will take a period of 7-8 months from the date
of approval of the scheme.

Break-up of activities, with relative time for each activity is shown below:

ACTIVITY PERIOD
1. Scheme Preparation 1 Month

2. Sanction of Loan 2-5 Month

3. Clearance from State Pollution Control Board 3-4 Month

4. Placement of Order for Equipment 4-5 Month

5. Installation of Equipment 5-6 Months

6. Power Connection 3-5 Month

7. Trial Run 6-7 Month

8. Commercial Run 7-8 Month

 PROJECTED BALANCE SHEET OF FUN CITY LTD.

RS. IN LAKHS

Year 1 Year 2 Year 3 Year 4 Year 5

A. SOURCES OF FUNDS

EQUITY SHARE CAPITAL

170 Lakhs 170 Lakhs 170 Lakhs 170 Lakhs 170 Lakhs

RESERVES & SURPLUS

- PROFIT & LOSS

15 Lakhs 35 Lakhs 40 Lakhs 50 Lakhs 60 Lakhs

TOTAL SHAREHOLDERS FUNDS

OTHERS (SPECIFY ITEM WISE) 185 Lakhs 205 Lakhs 210 Lakhs 220 Lakhs 230 Lakhs

1.Working Capital Loan

35 Lakhs 30 Lakhs 25 Lakhs 20 Lakhs 15 Lakhs

2.Term Loan From Banks

100 Lakhs 90 Lakhs 80 Lakhs 70 Lakhs 60 Lakhs

TOTAL
320 Lakhs 315 Lakhs 310 Lakhs 305 Lakhs
325 Lakhs
B. APPLICATION OF FUNDS:

GROSS FIXED ASSETS

270 Lakhs 270 Lakhs 240 Lakhs 210 Lakhs

300 Lakhs
LESS: DEPRECIATION(10%SLM)

NET FIXED ASSETS (a) 27 Lakhs 30 Lakhs 30 Lakhs 30 Lakhs

30 Lakhs

OTHERS (SPECIFY ITEM WISE) 243 Lakhs 240 Lakhs 210 Lakhs 180 Lakhs
270 Lakhs

DIVIDEND PAID (b)

REPAYMENT OF LOAN (c) 5 Lakhs 5 Lakhs 5 Lakhs 5 Lakhs

CASH & BANK BALANCES 15 Lakhs 15 Lakhs 15 Lakhs 15 Lakhs

OTHER CURRENT ASSETS 57 Lakhs 82 Lakhs 112 Lakhs 167 Lakhs 232 Lakhs

TOTAL CURRENT ASSETS 30 Lakhs 5 Lakhs 5 Lakhs 10 Lakhs 5 Lakhs

TOTAL CURRENT LIBILITIES 87 Lakhs 87 Lakhs 117 Lakhs 177 Lakhs 237 Lakhs

NET CURRENT ASSETS (CA-CL) (d) 40 Lakhs 72 Lakhs 87 Lakhs 132 Lakhs 177 Lakhs

TOTAL (a+b+c+d) 47 Lakhs 15 Lakhs 30 Lakhs 45 Lakhs 60 Lakhs

320 Lakhs 325 Lakhs 315 Lakhs 310 Lakhs 305 Lakhs

Interpretation –
 The net worth of the company has increased from Rs. 185 lakhs in the
financial year 1 to 230 lakhs in the year 5 (∆ in % is about 25 %), which shows
an increase in the book value per share.
 At the same time the debt burden of the company has also decreased
consistently.
 The dividend paid to the shareholders has been maintained at a constant
rate, which shows the confidence of the promoters in the project.
 PROJECTED PROFIT & LOSS STATEMENT

Fig in Lakhs
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Revenue
30 50 55 55
Income from sale of tickets 70
20 30 30 35
Income from sale of food items 40
22 30 30 40
Income from sale of merchandise 40
Total (a)
72 110 115 130
150
Operational Expenditure

Maintenance expenses
3 4 5 4
Salaries 4
10 12 12 14
Electricity 15
2 3 3 4
Administrative expenses 4
1 1.5 1 1.5
Advertisement & promotional 2
12 15 16 19
Miscellaneous 22
2 4.5 3 2.5
Total (b) 3
30 40 40 45
50
Op. Profit (a - b)
42 70 75 85
Less: 100

Depreciation

Profit 27 30 30 30
30
Dividend 15 40 45 55
65
Transfer to reserves Nil 5 5 5 5
15 35 40 50 60
The profit and loss statement shows that the total revenue of the company has been
increasing consistently over the years. Over a period of 5 years the total revenue is
doubled from Rs. 72 lakhs in the year 1 to 150 lakhs in the year 5. Consequently the
operating profit has also increased from 42 lakhs in the year 1 to Rs. 100 lakhs in the
year 5.
The company is maintaining a constant dividend policy and transferring the balance
of the P/L A/C to reserve and surplus A/C. The reserve is expected to increase from
15 lakhs in the year 2011-12 to 60 lakhs in the year 2015-16. As a future prospect
the company can always fall back on the internal source of finance for further
expansion of the business.

IMPORTANT RATIOS RS. IN LAKHS

1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
CURRENT RATIO 2.175 1.42 2 3.25 2

CASH RATIO 0.75 0.57 0.83 1.75 0.75

DEBT/EQUITY 0.79 0.70 0.61 0.52 0.44

OP. PROFIT/INCOME 58% 63% 65% 65% 66%

RETURN ON TOTAL 4.6% 12.3% 14.2% 17.7% 21.3%

ASSETS

8.1% 19.5% 21.4% 25% 28.2%

RONW/ROI

EPS (RS.)
0.88 2.35 2.64 3.23 3.82

BREAK EVEN ANALYSIS RS. IN LAKHS

1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
GROSS REVENUE 72 Lakhs 110 Lakhs 115 Lakhs 130 Lakhs 150 Lakhs

VARIABLE EXPENSES 20 Lakhs 30 Lakhs 30 Lakhs 35 Lakhs 40 Lakhs

(SPECIFY ITEMWISE)

CONTRIBUTIONS
52 Lakhs 80 Lakhs 85 Lakhs 95 Lakhs 110 Lakhs
P/V RATIO
72.22% 72.22% 73.91% 75.38% 73.33%
FIXED EXPENSES

(SPECIFY ITEMWISE)
10 Lakhs 15 Lakhs 20 Lakhs 20 Lakhs 20 Lakhs
PROFIT
42 Lakhs 65 Lakhs 65 Lakhs 75 Lakhs 90 Lakhs
BREAK-EVEN POINT
30 Lakhs 45 Lakhs 45 Lakhs 45 Lakhs 60 Lakhs
 Cash Flow Statement

A. Cash Flow from Operating Activities Year1 Year 2 Year 3 Year 4 Year 5

Net Profit before Taxation 15 40 45 85 100

Add:Adjustment for Depreciation 27 30 30 30 30

Operating Profit 42 70 75 115 130

Adjustment for Direct Taxes Paid 05 10 10 25 30

Operating profit before

W.C Changes 37 60 65 95 100

Working Capital Changes ---- 42 (15 ) (15) (15)

Total of A 37 102 50 75 85

B. Cash Flow from Investing

Activities

Purchase of Fixed Assets (270) (57) - - -

Total of B (270) (57) - - -

C. Cash Flow from Financing

Activities
 Repayment of Loan (15) (15) (15) (15) (15)

Dividend Paid (5) (5) (5) (5)

Proceeds from Issue of Shares 170 -

Unsecured Loans 135 - - - -

Total of C 290 (20) (20) (20) (20)

Net Cash Flow during the Year (A+B+C) 57 25 30 55 65

Cash Balance at the beginning 0 57 82 112 167

Cash Balance at the end 57 82 112 167 232

Current Ratio
 Current Ratio
3.5

2.5

1.5 Current Ratio

0.5

0
Year 1 Year 2 Year 3 Year 4 Year 5

The current ratio position of the company during the 1 st year is satisfactory. as it is
more than the required rate of return i.e. more than 2:1 However in the 2 nd year, it
has declined which implies that the firm has diverted its working capital to purchase
some fixed assets however this position has improved from 3rd year on words.

The average current ratio of the propose firm is 2.169 which indicates that the firm is
able to meet its current obligations as and when it becomes due thus able to meet
the confidence of creditors

Absolute Liquid Ratio

The absolute liquid of the firm is more than satisfactory since it is above the bankers,
rule of thumb i.e. 0.5:1. However during the 4 th year of its operation it is very high
which indicates that the firm could have better utilized its idle funds and could have
got more return from its funds.
 Cash Ratio
2
1.8
1.6
1.4
1.2
1
Cash Ratio
0.8
0.6
0.4
0.2
0
Year 1 Year 2 Year 3 Year 4 Year 5

Debt/Equity Ratio

The debt equity ratio is more than satisfactory because in the short run the firm need
not have to pay interest. This analysis indicates that this firm is following a
conservative funding policy. However the firm could get benefit from the fact that it is
a low leveraged firm. Hence it could get more funds in future for the purpose of
expansion of business.

Debt/Equity Ratio
0.9
0.8
0.7
0.6
0.5
0.4 Debt/Equity Ratio
0.3
0.2
0.1
0
Year 1 Year 2 Year 3 Year 4 Year 5
Operating Profit/Sales Ratio

This ratio indicates that the firm is able to have a higher margin of safety and it could
attain profitability even at a lower level of sales volume. Profitability of the firm is
more than the industry average.

Op Profit/Income
0.68

0.66

0.64

0.62

0.6 Op Profit/Income

0.58

0.56

0.54
Year 1 Year 2 Year 3 Year 4 Year 5

Return of Total Assets.

This ratio is low during the 1st year of the operation compared to the later years. It
indicates that from 3rd year onwards the firm is able to get a fair return on its assets
thus benefiting its share holders.
 ROTA
0.25

0.2

0.15
ROTA
0.1

0.05

0
Year 1 Year 2 Year 3 Year 4 Year 5

RONW

Return on net worth is increasing over the life of the project, which will increase the
confidence of the share holders. It is showing a steady growth rate. This will attract
the potential investors.

RONW/ROI
0.3

0.25

0.2

0.15 RONW/ROI

0.1

0.05

0
Year 1 Year 2 Year 3 Year 4 Year 5

EPS
Earning per share is showing an upward trend. This will increase the market of the
shares. The share’s of the company will be much in demand in the capital market.

EPS(Rs.)
4
3.5
3
2.5
2 EPS(Rs.)
1.5
1
0.5
0
Year 1 Year 2 Year 3 Year 4 Year 5

Cost Volume Profit Analysis

The break-even point analysis of the company indicates that the company is able to
attain profit at a lower level of operation. The average P/V ratio of the company is
more than 72 %.

P/V Ratio
76.00%

75.00%

74.00%

73.00% P/V Ratio

72.00%

71.00%

70.00%
Year 1 Year 2 Year 3 Year 4 Year 5
 Viability Report

 Easy Accessibility of Land

 Increase in purchasing power of the people
 Unsaturated market
 Easy availability of Equipment
 Tourism & Golden Triangle
 Twin city advantage:
• Existence of urban class & relative purchasing power
• Close proximity, access and comfort

 The commercial operation from the project is envisaged from April 2021.
 Based on the assumptions made the profitability has been worked out from
2021-22 to 2025-26.
 The repayment of Term Loan has been proposed to commence from April
2021 and end on March 2030.
 The Company expects to earn a profit of Rs. 42 Lakhs in the first year of its
operation. The break-even point in the first year of operation is 42% of sales.
Trend % of sales and profit shows an increasing trend which makes the offer even
more lucrative.