Mercy Lodge Business Plan

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TABLE OF CONTENTS

1.0EXECUTIVE SUMMARY1

2.0BUSINESS PROFILE3

2.1General Introduction3
2.2Objectives of the Business Plan3
2.3Year of Establishment and Owners3
2.4Objectives of the Business4
2.5Location of office4

3.0BUSINESS CONCEPT – Mission, Vision and Values5

3.1Mission5
3.2Vision5
3.3Values5
3.4Strategic Goals and Objectives6

4.0HUMAN RESOURCES – Management and Key Personnel6

5.0DESCRIPTION OF BUSINESS SERVICES8

5.1Structure and Trends in the Hotel Industry8
5.2Tourism Investment9
5.3National and Economic Trends9
5.4Investment Climate10
5.5Government Initiatives10

6.0MARKETING ANALYSIS11

6.1Marketing Plan11
6.2Competition and Target Market12
6.3Demand Trend, Current and Future15
6.4Product Development18

7.0RISK ASSESSMENT21

7.1Critical External Factors21
7.2Scenario analysis of critical internal factors21

8.0FINANCIAL ANALYSIS23

8.1Financial Plan23
8.2Financial Assumptions and Methodology23
8.3Analysis of Income Statement and Cash Flow25
8.4Break-Even and Sensitivity Analyses26

9.0CONCLUSION AND RECOMMENDATION27

10.0APPENDIX A: TABLES FOR FINANCIAL PROJECTIONS28

11.0 APPENDIX B: BUSINESS REGISTRATION CERTIFICATES.28

1.0EXECUTIVE SUMMARY

Mercy Lodge Limited acquired 3.0 acres of land in the Adukrom area for development of its first hotel property. The board of directors having invested US$5.991 million on the project and engaged Mercsol Ventures Limited to determine the financial viability and the product category to provide based on the location and market trends and demand.

Mercsol Ventures is certain that there is considerable potential in operating in the 4-star deluxe category. This particular segment of the hotel market is currently enjoying the highest occupancy rate. Thus, most hotels falling within this category with prudent management are currently very profitable.

Mercy Lodge plans to operate a 4-star deluxe property concentrating on the Leisure and the prestige conference market segment while delivering significantly superior service to anything currently on the market especially within that region and out of Accra.

Published research show that tourism is a fast-growing business sector and with government incentives and planned events for 2007 and 2008 we expect an increase in demand through relatively new and small markets.

A team has currently been selected for the development and when completed an operational team will be put in place to commence actual operation.

Mercy Lodge expects to make a profit after tax of $1.296 million in year one, $1.391 million in year 2, and $1.505 million in year 5. To achieve these results the company plans to invest in equipments, fixtures and fittings and in constant maintenance of the facility. In all a total of $319,470.06 and €161,987.80 will be needed for the purchase of equipment and accessories to complete the project. In addition a working capital of $254,276 will be required.

Evaluation of Company and Market Industry

Market and Marketing Plan
The market for Hospitality in Ghana is huge and still growing. The marketing objective of Mercy Lodge Limited is to achieve an average sales growth rate of 20 per annum over the five-year period under review. It will also generate adequate funds from the hospitality services to enable the company achieve its profitability and cash flow targets.

Financial Viability
The financial objective of Management will be to focus on the business and adhere to stringent cost containment and forward contract pricing as important components to ensure the profitability and sustainability of the business.

Management will also make monitoring and evaluation a corporate culture of the company. Thus, effective and efficient monitoring...
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