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CHPAPTER FIVE
BUSINESS CONTROL AND FORECAST
We plan to use a computer base financial management system. With this system, we can review our sales and marketing activities on a regular base. This will allow us keep tract of financial movements resulting from the services offered, which will enable us compensate our staff according to performance or output.
We will develop outline scripts to help the sales staff manage inquiries. This will ensure that all incoming and outgoing mails including phone calls are dealt with the same way and that they meet required standards.
We hope to encourage people inquiring about our services to give us feedbacks on:
- our ability to handle their enquiry;
- the length of time spent from the client’s first enquiry to the date of actual travel;
- the client’s reactions to the vacation in terms of whether it meets their expectations.
The financial objectives of Fako Atlantic Tours (FAT) are to be operating at or close to break-even cash flow by the end of the first year, with a steady growth over the next five years. We aim to be profitable from year one onwards; our goal is to earn at least 9 037 503 CFAF post-tax profit in year 1 and nearly 21 778 557 CFAF in year 2.
FAT’s strategies for archiving its goals consist of five major points:
- Establish an extensive public relations campaign
- Recruit well-trained enthusiastic staff
- Deliver superior product knowledge
- Provide high-quality customer service
- Offer competitive pricing on vacation packages and participation of events
- If we are able to attain these goals, then we will be able to maximize our profits.
We see some risks associated with our expected growth, including the following:
- Losing touch with customers
- Loss of clientele to other providers
- Quality of services diminished
- New businesses
The risks facing the expansion of FAT can be summed up in one word, competition.
Tables 1- 4 below show the tables of investment and depreciation, operating costs/running expenses, Product and the Income statement: five years summary.
From these tables some operations of the company are illustrated and we can tell whether the project is a good one or not, consequently one can deduce if it is worth investing or abstaining.
According to the income statement, the entire project is estimated to cost about 37 905 000 CFAF. This amount is expected to be raised through the sale of equity and a loan from one of the existing banks. However, the initial amount of about five million will be raised by the project initiator.
|
TABLE 1: TABLE OF INVESTMENT AND AMORTIZATION |
|
|
Account
No. |
Description |
Qty |
Unit price |
Value |
Life span |
Year 1 |
Year 2 |
Year3 |
Year 4 |
Year 5 |
|
|
|
24513 |
Vehicle (rolling stock) |
1 |
20 000 000 |
20 000 000 |
5 years |
4 000 000 |
4 000 000 |
4 000 000 |
4 000 000 |
4 000 000 |
|
|
24411 |
Office equipment |
3 |
75 000 |
225 000 |
10 years |
22 500 |
22 500 |
22 500 |
22 500 |
22 500 |
|
|
24422 |
Computers |
3 |
5 00 000 |
1 500 000 |
3 years |
500 000 |
500 000 |
500 000 |
500 000 |
500 000 |
|
|
23513 |
Internal design and set-up |
|
Lump sum |
500 000 |
10 years |
50 000 |
50 000 |
50 000 |
50 000 |
50 000 |
|
|
|
Total |
|
|
22 225 000 |
|
4 572 500 |
4 572 500 |
4 572 500 |
4 572 500 |
4 572 500 |
|
|
SALARIES OF PERSONNEL |
|
|
|
Month |
Value |
Annual |
From third year |
|
1 |
Director |
12 |
250 000 |
3 000 000 |
6 000 000 |
|
2 |
Deputy Director |
12 |
200 000 |
2 400 000 |
4 800 000 |
|
3 |
Public Relations Officer |
12 |
150 000 |
1 800 000 |
3 600 000 |
|
4 |
Secretary |
12 |
50 000 |
600 000 |
1 200 000 |
|
|
Total |
|
650 000 |
7 800 000 |
15 600 000 |
TABLE 3: TABLE OF PRODUCT AND REVENUE/TURNOVER |
|
Account No. |
Description |
Qty |
Unit price |
Value |
Year 1 |
year 2 |
year 3 |
year 4 |
year 5 |
|
70112 |
Renting of stands |
100 |
150 000 |
15 000 000 |
15 000 000 |
30 000 000 |
30 000 000 |
45 000 000 |
45 000 000 |
|
70113 |
Gate fee |
200/pax*7days |
1000/pax |
1 400 000 |
1 400 000 |
2 800 000 |
2 800 000 |
8 400 000 |
8 400 000 |
|
77211 |
Participation fee |
50 |
5000 |
250 000 |
250 000 |
500 000 |
500 000 |
750 000 |
750 000 |
|
71822 |
Sponsoring |
|
|
20 000 000 |
20 000 000 |
40 000 000 |
40 000 000 |
60 000 000 |
60 000 000 |
|
71811 |
MINTOUR's subvention |
|
|
1 000 000 |
1 000 000 |
2 000 000 |
2 000 000 |
3 000 000 |
3 000 000 |
|
70212 |
Tourist packages |
30/year |
75000 |
2 250 000 |
2 250 000 |
2 250 000 |
2 250 000 |
2 250 000 |
2 250 000 |
|
|
Total |
|
|
39 900 000 |
39 900 000 |
77 550 000 |
77 550 000 |
119 400 000 |
119 400 000 |
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