XTREME BATTLEGROUNDSPAINTBALL BUSINESS PLAN

Executive Summary

Xtreme Battlegrounds will officially open its doors April 1. Located in the City of Harare, it is a great location serving over 100,000 people in the greater city. Internationally, paintball is growing as a recreational activity and sport. The popularity has lead to many international competitions with cash prizes to the winners. Xtreme Battlegrounds will have both indoor and outdoor playing facilities, as well as a concession stand and an entertainment center.

Elisha Mpofu, founder of Mead Entertainment and Lifestyle a wholly owned division of Mead and Co Group, has been connected with the sport for over five years whilst in South Africa. For the past five years, Elisha has played the popular activity in South Africa and has participated in a few entertaining competitions.

There is a great need for recreational activities and entertainment in the country. This will improve the social relations of people in the country hence developing the country. On the other hand Paintball can be one of the most entertaining activities for families, young people, children and parents. Hence bringing the park to the country will be one of the major achievements in our ambitions of building a great Zimbabwe.

The dynamic management team responsible for the design, building, development of the facility, and hands-on management of the daily operations of the appointed management from the company. In addition, a team-oriented and customer-focused staff will support the management team under the Mead Entertainment and Lifestyle division.

Objectives

Xtreme Battlegrounds will build a paintball game facility in Harare include an indoor/outdoor playing facilities, snack bar, rental shop, clean-up/repair area. The commercial funding will be raised from private investors. Xtreme Battlegrounds anticipates opening on April 1, with top gun first year gross revenues.

Mission

The purpose of Xtreme Battlegrounds is to provide the residents of Harare the best paintball facility in the region. It will provide excellent service, quality rental equipment, and a clean-up facility, which will cater to the entire family. The snack bar will be a large comfortable area where players and guests can socialize.

The indoor facility is a 10,000 square foot converted factory floor that will be set-up in a tropical motif. The outdoor facility will be on a 10 acre parcel of land and will include an imaginary town setting called SunCity.

On all playing fields, Xtreme Batlegrounds will create a competitive environment that will promote playing safe, playing hard, and playing fair. Our customers will be satisfied and will return again and again.

Keys to Success

Xtreme Battlegrounds has three keys to success.

Location. Other services and stores in the surrounding area will ensure passing traffic. Low overhead cost. The management will keep overhead cost at a minimum.

Wide range of game options. Xtreme Battlegrounds will aim to provide diverse and changing games.

Company Summary

The facility site is a ten-acre tract of flat land located in what are quickly becoming the most desirable business cities in the country. The market for a paintball facility in Harare is superior to most, due to the tremendous population growth during the past five years, the overwhelming majority of which is within ten miles of the facility and the ambition to provide engaging entertainment that is family orientated. In addition, the city has a wide population of young people especially students who will come to wind up their time.

Paintball is a growing participation sport in Africa and in other international markets like the USA paintball facilities grossed over $100 million in sales last year. By far, the most significant factor to affect the paintball business in the forthcoming decade is the dramatic growth of the 16-25 year old segment of the population, which will increase by 54%. This age group represents the prime segment of the population that joins paintball leagues, and that means bottom-line profit for the facility will increase. The facility will be the most modern in the country.

Company Ownership

Xtreme Battlegrounds is owned by Mead Entertainment and Lifestyle, a division of Mead&Co Group, a holdings company wholly owned by Elisha Mpofu and Tinomudaishe Hove.

Start-up Summary

During the start-up phase of this project, the following major events will occur, some of them simultaneously:

Obtain $50,000 investment. Obtain $150,000

Obtain all required permits.

Lease the facility site.

Order paintball equipment (short-term assets).

Start building center/leasehold improvements (this on two-month timeline).

Facility furniture and equipment (long-term assets).

Hire key personnel.

Finalize operating procedures.

Intensify marketing campaign.

Hire remaining staff.

Train staff.

Order inventory.

Open for business.

Products and Services

The paintball business is a growing entertainment. This is a sport that all ages can participate in and enjoy as individuals or in groups. The core revenue producer is the rental of the gmaespots, which is all encompassing.

Market Analysis Summary

The prime market of a paintball facility is a ten-mile radius. However, if the facility has easy access to the Interstate highway system, that radius can be extended to twenty miles.

The demographics of Xtreme Battlegrounds are:

Total population in the ten-mile radius is in excess of 100,000 people. 21.5% are men 26 to 46 years old.

18% are young men 16 to 25 years old.

The average income for the area is $1,000.

Market Segmentation

The paintball market is targeted at two main groups:

Young Men: ages 16-25. Older Men: ages 26-46.

Strategy and Implementation Summary

Customer service is paramount in the paintball business. The starting point to accomplish this is to have a trained and motivated staff that enjoys working directly with the public. It is always easier to please your customers when the facility is exceptional and all of the equipment is in proper working order.

The satisfaction of the league players is the best marketing vehicle we have in building a loyal customer base.

5.1 Competitive Edge

Xtreme Battlegrounds's competitive advantage over its potential competitors is the following:

Location.

Low overhead cost. Xtreme Battlegrounds's management will keep overhead cost at a minimum. Mead Entertainment and Lifestyle will be operating paintball facilities will contribute to his ability to streamline operations while minimizing unnecessary expenses.

Wide range of game options. Xtreme Battlegrounds will provide our customers with multiple playing fields (indoor and outdoor) and changing game scenarios that will be tailored to group skill. This diversity will bring in more customers and assure their satisfaction with the experience.

5.2 Marketing Strategy

The marketing strategy will be to attract customers from both target groups by using a distinct pricing and promotion strategy for each group.

5.2.1 Pricing Strategy

Pricing strategy for young adults:

Admission for children and young adults (ages 16-26) will be $5. Admission for a group of five or more children and young adults is $4 for each.

Gun rentals and paint balls are discounted by 15% on Monday - Thursday (except summer months).

Students-focused two for the price of one admission on Monday - Thursday .

Pricing strategy for older adults:

Admission will be $10. Admission for a group of five older adults is $8 for each.

Gun rentals and paint balls are discounted by 15% on Monday - Thursday (except summer months).

5.2.2 Promotion Strategy

Promotion strategy for young adults:

Sponsor weekly youth and student competition. Advertise close to schools

Advertise in other gaming arcades

Promotion strategy for older adults:

Sponsor a competition Advertise employee-event package deal to local businesses.

5.3 Sales Strategy

Xtreme Battlegrounds provides a venue for the paintball player to enjoy his leisure time participating in a competitive sport that requires strength and athletic ability.

5.3.1 Sales Forecast

The charts and table below show Xtreme Battlegrounds projected Sales Forecast for three years.

Sales Forecast

Year 1 Year 2 Year 3

Unit Sales

Admission 12,500 16,500 19,000

Rentals 10,125 11,138 11,694

Paint Balls 24,500 25,725 27,011

Food 6,480 6,804 7,144

Other 0 0 0

Total Unit Sales 53,605 60,167 64,850

Unit Prices Year 1 Year 2 Year 3

Admission $12.00 $12.00 $13.00

Rentals $15.00 $15.00 $16.00

Paint Balls $25.00 $25.00 $25.00

Food $5.00 $5.00 $5.00

Other $0.00 $0.00 $0.00

Sales

Admission $150,000 $198,000 $247,000

Rentals $151,875 $167,063 $187,110

Paint Balls $612,500 $643,125 $675,281

Food $32,400 $34,020 $35,721

Other $0 $0 $0

Total Sales $946,775 $1,042,208 $1,145,112

Direct Unit Costs Year 1 Year 2 Year 3

Admission $0.00 $0.00 $0.00

Rentals $1.00 $1.00 $1.00

Paint Balls $3.00 $3.00 $3.00

Food $1.00 $1.00 $1.00

Other $0.00 $0.00 $0.00

Direct Cost of Sales

Admission $0 $0 $0

Rentals $10,125 $11,138 $11,694

Paint Balls $73,500 $77,175 $81,034

Food $6,480 $6,804 $7,144

Other $0 $0 $0

Subtotal Direct Cost of Sales $90,105 $95,117 $99,872

5.4 Milestones

The following table shows important milestones for Xtreme Battlegrounds.

Milestones

Milestone Start Date End Date Budget Manager Department

Lease Land 1/1/2002 1/1/2002 $0 ABC Marketing

Rehab Outdoor Surface 2/1/2001 3/1/2001 $0 ABC Marketing

Rehab Indoor Surface 1/15/2001 2/28/2001 $0 ABC Web

Hiring Staff 2/2/2002 3/15/2002 $0 ABC Web

Equipment Set-Up 2/1/2002 3/12/2002 $0 ABC Web

Advertising 3/1/2002 3/30/2002 $0 ABC Department

Opening 4/1/2002 4/1/2002 $0 ABC Department

Totals $0

Management Summary

Our management philosophy is based on mutual respect for all contributions made by our employees without regard to the position they hold in the company. People who work at Xtreme Battlegrounds want to work here because the work environment enables them to work smarter--not harder, and they know their suggestions are appreciated. The ability of Xtreme Battlegrounds to accomplish its goals and lead the Paintball industry is significantly related to the expertise, abilities, and can-do spirit of the management team. The high standards set by Xtreme Battlegrounds team will make it difficult for competitors to enter and survive in the market area.

6.1 Management Team

The management team will be assigned to their positions under Mead Entertainment and Lifestyle.

6.2 Personnel Plan

The Xtreme Battlegrounds will have the following personnel:

One counter person. One concession person.

Two safety inspectors.

Personnel Plan

Year 1 Year 2 Year 3

Manager $54,000 $58,000 $61,000

Accountant $38,500 $45,000 $48,000

Assistant Manager $35,000 $45,000 $48,000

Facility Maintenance $36,000 $40,000 $43,000

Counter Staff $35,000 $38,000 $40,000

Concession Person $25,000 $26,250 $27,563

Referee/Safety Inspectors $70,000 $80,000 $85,000

Total People 0 0 0

Total Payroll $293,500 $332,250 $352,563

Financial Plan

The following is the Financial Plan for Xtreme Battlegrounds.

7.1 Break-even Analysis

With the average monthly fixed costs and projected profit margin, Xtreme Battlegrounds will need the following monthly sales revenue to break even.

Break-even Analysis

Monthly Units Break-even 4,233

Monthly Revenue Break-even $74,759

Assumptions:

Average Per-Unit Revenue $17.66

Average Per-Unit Variable Cost $1.68

Estimated Monthly Fixed Cost $67,644

7.2 Projected Profit and Loss

The company's projected profit and loss is outlined in the following table.

Pro Forma Profit and Loss

Year 1 Year 2 Year 3

Sales $946,775 $1,042,208 $1,145,112

Direct Cost of Sales $90,105 $95,117 $99,872

Other Production Expenses $0 $0 $0

Total Cost of Sales $90,105 $95,117 $99,872

Gross Margin $856,670 $947,091 $1,045,240

Gross Margin % 90.48% 90.87% 91.28%

Expenses

Payroll $293,500 $332,250 $352,563

Sales and Marketing and Other Expenses $366,000 $410,000 $450,000

Depreciation $6,000 $6,000 $6,000

Leased Equipment $0 $0 $0

Utilities $18,200 $19,500 $19,800

Insurance $12,000 $12,000 $12,000

Rent $72,000 $72,000 $72,000

Payroll Taxes $44,025 $49,838 $52,884

Other $0 $0 $0

Total Operating Expenses $811,725 $901,588 $965,247

Profit Before Interest and Taxes $44,945 $45,504 $79,993

EBITDA $50,945 $51,504 $85,993

Interest Expense $13,984 $12,188 $10,313

Taxes Incurred $9,288 $9,995 $20,904

Net Profit $21,672 $23,321 $48,776

Net Profit/Sales 2.29% 2.24% 4.26%

7.3 Projected Cash Flow

Pro Forma Cash Flow

Year 1 Year 2 Year 3

Cash Received

Cash from Operations

Cash Sales $946,775 $1,042,208 $1,145,112

Subtotal Cash from Operations $946,775 $1,042,208 $1,145,112

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0

New Current Borrowing $0 $0 $0

New Other Liabilities (interest-free) $0 $0 $0

New Long-term Liabilities $0 $0 $0

Sales of Other Current Assets $0 $0 $0

Sales of Long-term Assets $0 $0 $0

New Investment Received $0 $0 $0

Subtotal Cash Received $946,775 $1,042,208 $1,145,112

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $293,500 $332,250 $352,563

Bill Payments $582,905 $666,889 $733,506

Subtotal Spent on Operations $876,405 $999,139 $1,086,068

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0

Principal Repayment of Current Borrowing $0 $0 $0

Other Liabilities Principal Repayment $0 $0 $0

Long-term Liabilities Principal Repayment $18,750 $18,750 $18,750

Purchase Other Current Assets $0 $0 $0

Purchase Long-term Assets $0 $0 $0

Dividends $0 $0 $0

Subtotal Cash Spent $895,155 $1,017,889 $1,104,818

Net Cash Flow $51,620 $24,319 $40,294

Cash Balance $220,420 $244,739 $285,033

7.4 Projected Balance Sheet

The company's projected balance sheet is outlined in the following table.

Pro Forma Balance SheetYear 1 Year 2 Year 3

Assets

Current Assets

Cash $220,420 $244,739 $285,033

Inventory $8,085 $8,535 $8,961

Other Current Assets $15,000 $15,000 $15,000

Total Current Assets $243,505 $268,273 $308,994

Long-term Assets

Long-term Assets $128,000 $128,000 $128,000

Accumulated Depreciation $6,000 $12,000 $18,000

Total Long-term Assets $122,000 $116,000 $110,000

Total Assets $365,505 $384,273 $418,994

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $41,782 $55,980 $60,674

Current Borrowing $0 $0 $0

Other Current Liabilities $0 $0 $0

Subtotal Current Liabilities $41,782 $55,980 $60,674

Long-term Liabilities $131,250 $112,500 $93,750

Total Liabilities $173,032 $168,480 $154,424

Paid-in Capital $250,000 $250,000 $250,000

Retained Earnings ($79,200) ($57,528) ($34,206)

Earnings $21,672 $23,321 $48,776

Total Capital $192,472 $215,794 $264,570

Total Liabilities and Capital $365,505 $384,273 $418,994

Net Worth $192,472 $215,794 $264,570

7.5 Business Ratios

The company's projected business ratios are provided in the table below. The final column, Industry Profile, shows significant ratios for the Amusement and Recreation industry, as determined by the Standard Industry Classification (SIC) Index code 7999.

Ratio AnalysisYear 1 Year 2 Year 3 Industry Profile

Sales Growth 0.00% 10.08% 9.87% 15.20%

Percent of Total Assets

Inventory 2.21% 2.22% 2.14% 3.50%

Other Current Assets 4.10% 3.90% 3.58% 34.40%

Total Current Assets 66.62% 69.81% 73.75% 42.90%

Long-term Assets 33.38% 30.19% 26.25% 57.10%

Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 11.43% 14.57% 14.48% 36.40%

Long-term Liabilities 35.91% 29.28% 22.38% 23.30%

Total Liabilities 47.34% 43.84% 36.86% 59.70%

Net Worth 52.66% 56.16% 63.14% 40.30%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 90.48% 90.87% 91.28% 0.00%

Selling, General & Administrative Expenses 88.19% 88.64% 87.02% 76.60%

Advertising Expenses 6.97% 5.76% 6.11% 2.60%

Profit Before Interest and Taxes 4.75% 4.37% 6.99% 2.00%

Main Ratios

Current 5.83 4.79 5.09 1.17

Quick 5.63 4.64 4.94 0.75

Total Debt to Total Assets 47.34% 43.84% 36.86% 59.70%

Pre-tax Return on Net Worth 16.09% 15.44% 26.34% 2.40%

Pre-tax Return on Assets 8.47% 8.67% 16.63% 6.00%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 2.29% 2.24% 4.26% n.a

Return on Equity 11.26% 10.81% 18.44% n.a

Activity Ratios

Inventory Turnover 8.57 11.45 11.42 n.a

Accounts Payable Turnover 14.95 12.17 12.17 n.a

Payment Days 27 26 29 n.a

Total Asset Turnover 2.59 2.71 2.73 n.a

Debt Ratios

Debt to Net Worth 0.90 0.78 0.58 n.a

Current Liab. to Liab. 0.24 0.33 0.39 n.a

Liquidity Ratios

Net Working Capital $201,722 $212,294 $248,320 n.a

Interest Coverage 3.21 3.73 7.76 n.a

Additional Ratios

Assets to Sales 0.39 0.37 0.37 n.a

Current Debt/Total Assets 11% 15% 14% n.a

Acid Test 5.63 4.64 4.94 n.a

Sales/Net Worth 4.92 4.83 4.33 n.a

Dividend Payout 0.00 0.00 0.00 n.

Pricing

Standard Session: (minimum of 12 players or payment received for 12 players)

Cost: $10 per player and includes the following:- Marker (semi-auto)- Full face mask (hygiene friendly rubber)- Unlimited CO2- Army jackets - 200 paintballs- Field marshalls- 30 mins

Additional 100 paintballs = $3

Kids Party/Short Session: (18yrs or younger, no younger than 11yrs. Minimum of 12 players or payment of 12 players)

Cost: $5 per player and includes the following:- Marker (semi-auto)- Full face mask (hygiene friendly rubber)- Unlimited CO2- Army jackets (Browns)- 100 paintballs- Field marshalls- 30 mins

Additional 100 paintballs = $3

Open Day's: (bring yourself or couple of friends

Our Fields

by admin

Speedball / Airball

Field 1 was designed with the speedball player and spectator in mind. Field 1 has a pitch 45m x 49m in size, and makes use of inflatable airball bunkers in it’s layout and function. Using inflatable bunkers allows us to make many different layouts which challenge players to use different approaches and tactics to defeat their opponents.

Nova hosts many competitions (NPL, RPL, Nova Cup) that is up to internatioinal standard with cash prizes and much more, we are graced to have some of the best proffesional speedball in the country compete at our field.

Terra Nova

Field 2 – Milsim/CQC

Field 2 was designed like a stage from a computer game for the hardcore Milsim (Military Simulation) or CQC (Close Quarter Combat) player, this field layout contains:

A mirrored layout with 2 x Ground Level cabins with their own courtyards, creating the perfect tactical positioning to infiltrate and attack players from out of nowhere.

1 x Raised bridge built across the width of the field, creating strategic access to either side of the field but beware of snipers in raised positions!

Multiple sandbag bunkers and obstructions adding to the “Urban/Village” style of this field.

Field 3 (Super Milsim)

Field 3 is a ‘always improving’ urban field, this field can cater up to 40 players at once (for a crazy showdown)

The field is built out of wood, tyres and loose netting to create an intresting random field.

In production on this field: Super Maze, Turrets, Multiple level structures.