Chapter 1 Introduction

1.1 Background
Nepal is the famous tourist destination for adventure sports and adventure tours in Asia. The topography of Himalayan Kingdom makes it the first choice for adventure tours. Being at the top of the world, Nepal offers a wide range of adventure tourism to those who takes their life as a challenge. The varied landscape has some of the best sites for these activities, raging rivers to run, mountains to scale, clear blue skies, challenging treks, fine lakes and rivers to boat, fish and raft down, and a wild terrain to ride. So there is a greater prospect of growth and profit in this field of business as a result opening an adventure travel agency is seen to be a lucrative business. Although lot more contribution from the government side is awaited in terms of development of infrastructure and ensuring a conducive business environment, private sector has been instrumental in the growth of tourism industry in the country.

1.2 Potentiality of Business

Zipper Adventure ( ZA) wi l l be gi n operations next year and provide adventure and sport/travel packages to peoples. An opportunity for ZA is poised to take advantage of the growth of domestic tourism and lack of direct competition with an experienced staff, excellent location, and effective management and marketing. ZA will provide services related to adventure sports like Bungee Jumping, Rafting, Mountain Biking, Paragliding, Rock climbing and trekking. The business aims to promote internal tourism as well which is still considered underdeveloped and untapped. Currently there are 2,669 tour guide and 1,765 travel agencies registered in the country. Most of these agencies cater to foreign tourists only. However, Zipper Adventure will be one of the few agencies providing adventure services to internal tourist also. In Nepalese market there are only few companies catering exclusively to domestic market Zipper Adventure will have only few direct competitors for the local market. Side by side ZA will focus on external customers also.

1.3 Company: Zipper Adventure

Registration The business will be registered under the company act as a Partnership company under the name of Zipper Adventure with its office located at Nag Pokhari. Once the

company is registered the next steps is to take PAN number that is Permanent Account Number from In land revenue Department.

1.4 Description of the Firm

Zipper Adventure (ZA) is a travel agency that specializes in adventure tourism and travel. It will provide consulting and custom travel arrangements and packages. ZA will position itself as a specialist in the field of adventure travel and will generate the majority of its income from this segment. ZA's employees and owner are outdoor adventure and travel enthusiasts. ZA seeks to connect adventure travel newcomers and veterans with service providers, adventure activities, and accommodations that fit the client's desires, budget, and skill level.

ZA is a full service travel agency that specializes in adventure travel and provides recreational and business travelers with professional service and consultation. ZA will position itself as a specialist in the field of adventure travel and will generate the majority of its income from this segment.
Table 1: Funds from Partners

Name of the owners Madhu Sudan Koirala Sudarshan Paudel Sanjit K.C. Shanku Ghimire

Amount (Rs.) 8,00,000 8,00,000 8,00,000 8,00,000

1.5 Vision
Our vision is to be the leading travel company of choice in Nepal through providing premier services and innovative options to all types of customers. During the first 10 years the Zipper Adventure concentrates on the Nepal. Later, in the future, the agency will spread its services to other countries in the world. Zipper Adventure is going to make Nepalese companies and their employees aware of the nature and the human impact of it. And to make them clear that the world they live in will never be the same if human beings dont take care of it. Zipper Adventure even go for NGO for saving natural resource. It also brings various awareness programs in schools and in local level, in community level about the importance of resources and ways to generate revenues.

1.6 Mission
Zipper Adventure mission is to provide customers with the highest quality outdoor adventure, to provide warm, professional, and knowledgeable service to all clients, as well as to potential clientele. To provide a life time adventure expertise and learning to its customers through its exclusive packages designed for the participants and at the same time promote internal tourism.

1.7 Goals and Objectives

The idea behind the guided tours is to present different characteristics of the nature like three of the four elements of the world; water, earth and air. ZA will focus on these characteristics. Customers will entertain as well as helps to conserve these resources. They will participate in tours where they go through new and unique nature experiences. Some of the objectives of ZA are: To establish as the leading adventure travel company in the country by 2015. To create a service-based company with mission t o exceed customers expectations.

To deliver the positive profit line from the first year of operation thereby giving the required financial base to move ahead in the competition and establish a strong brand.

Develop a repeat-business base of loyal customers in order to create sufficient sales. To establish an eco friendly adventure service providing company by ensuring that activities carried out by ZA will have minimum impact in the natural environment.

1.8 Values
What is important for the agency is that they keep a friendly work-climate, and that the people stay behind their idea namely to make the world more environment friendly. The agency wants to share their business vision with their clients. The agency promises their clients that the guided tours wont destroy the nature. And the food the hotels will serve is free of any preserving substances and poison substances. The agency wants to bring people and nature closer to each other. The agencys philosophy and slogan is: Live Fullest Responsibly!

1.9 Critical Success Factor

The keys to ZA success will undoubtedly be effective market segmentation through identification of several niche markets and implementation strategies. Along these lines the company intends to implement advertising, personal selling and direct marketing strategies to the target markets. Our personal selling marketing strategies will rotate around keeping in touch with hotels and travel agencies for major customers, and advertising for more individual customers. Hence our key success factors will include the following: 1. Excellence in fulfilling the promise: We intend to offer completely enjoyable, comfortable and informative travel excursions that will ensure that travelers are thoroughly satisfied and appreciative at the end of their trip.

2. Timely response to customers' requests: We cannot afford to delay our clients for whatever reason, as this will have a negative bearing on our image and reputation, including future business. Hence we need to be continually communicating with the client, including hotels and lodges so as to ensure that we are constantly available to the client meeting their expectations.

3. Solid and fruitful strategic alliances: Considering the nature of our services and our relative infancy on the market, we realize the importance of establishing and maintaining fruitful strategic alliances with various stakeholders, including hotels, lodges, and travel agencies, amongst others, so as be assured of a constant flow of customers, fulfilling their needs at every opportunity.

4. Marketing know-how: As a relatively new company on the market there will be a need to aggressively market our business and the services we provide so as to be continuously at the top of our prospective clients minds. This will also act as a temporary deterrent for companies contemplating entering our market. Advertising shall be undertaken on a regular basis.

Chapter 2 Assessment of Business Environment

We have done SWOT analysis of Zipper Adventure along with its Environmental analysis. This will help to see what the competitive edges are; the firm has in respect to 0the environment.

2.1 SWOT Analysis

SWOT analysis will scan the strategic environment and provide information that will h e l p the company in matching its resources and capabilities to the environment in which it operates.

Strengths: A differentiated offering with the management experience, capital, and commitment to make it work. Targeting market at niche level both nationally and internationally. Effective promotional and advertising strategy through internet, use of computerized reservation system. Only company to come up with product offer exclusively for the domestic market. Operations and activities conducted by experienced instructors and expert guides with enough local knowledge. Team work and Employees motivation: to be able to guarantee an environmental protection, in form to guarantee an environment management orientated. Affordable prices.

Weaknesses: Lack of visibility due to the newness of the operations. Inability to forecast perfectly the demand of services. Lack of experience in operating this kind of business. New name in the market so building trust will take time.

Opportunities: The growing trend of youngsters to seek out adventure sports. Increasing monthly disposable income of middle and higher class Nepalese. Lack of good and thrilling entertainment facilities in the country thereby people opts for adventure holidays. Growing trend of corporate houses and colleges in Nepal to organize offsite team building activities for their employees. New business which incorporate work, wellness and nature all in one. Higher interest about sustainable development by people.

Threats: Competition from already established agencies that improve their service offerings to be more competitive. Political instability and strikes affecting the operation. Change in climatic condition. A lot of indirect competitors, the agency have to convince companies to organize congresses with them and not with their competitors. Lack of safety, rules and regulation, skilled guide, facilities and transportation.

2.2 PESTLE Analysis

Business environment are normally beyond the organizations control. These factors bring and create huge opportunities and positive approach. They also present threat to the organizations success. They measure the growth and decline of business organizations in terms of market behavior, business potential and suitability of access. These factors always tend to produce an impact on the way the business organizations exist. There are different environmental factors which do affect the business. Like: Political Environment: Nepal had historically been a small peaceful country. The royal family massacre in 2001 and the Maoist movement from 1996 to 2006 were two events that destabilized the country and pushed it towards a spiral of political instability. In 2006, a peace treaty was signed legalizing the Maoist. In 2008, the monarchy was abolished and Maoist won the election of 2008. According to the Enterprise survey 25, over 60% of the businesses in Nepal identifies political instability as the biggest constraint to doing business in Nepal. The FDI in Nepal, which was at low levels to begin with, slumped during the Civil war years falling to 0.007% of GDP in 2008. Nepal also ranks very low on political stability, corruption as well as rule of law. The weak rule of law has led to a large number of strikes in Nepal. The lack of strong judicial system to protect investors only adds to this perception of risk.

Economic Environment: Economic conditions play a major role in the success of any business. Improvement in the economic condition of a country will lead to rise in industrial activities, create jobs, increase tourist inflow and creation of major infrastructure in the country. The country where economy mostly depends on remittance does have influential effect in tourism sector too. Due to increase in income level of middle class, now people wants to entertain and do adventurous activity. If the inflation rate goes on increasing trend, cost of operation and marketing expenses also gets rise. Due to change in exchange rate i.e. US $, purchasing power of international tourist has increases but at the same time the inflation on services has also driven up.

Societal Environment: Social factors include the demographic and cultural aspects of the external macro environment. These factors affect customer needs and the size of potential markets. The life styles of people are changing. The younger generation especially students and young professionals prefer to take break from their busy schedule and look out for different holiday breaks of which one of them is adventurous sport. Further this generations spending has changed over time and they tend to spend more given the increase in their disposable income. Seeking adventure is widely prevalent amongst the foreign tourist which is being copied in the Nepalese younger generation as well.

Technological Environment: Technological environment consists of the invention, techniques and the vast store of organized knowledge of ways of doing things. Although ZA will deal with adventure and nature where technology appears to play little role; however advancement in technological factors does impact the business. The advancement in Computer Reservation System, E-commerce and massive use of internet through smart phones both possess opportunities and threats. ZA focuses on these innovation e.g. use of durable and high quality equipments like lighter mountain bikes made of aluminum, strong and high quality rafts, and tents.

Legal Environment: Nepal had committed to open up foreign investment in travel agency and tour operator service after the WTO membership, but limited to 51 per cent. But up to 80 per cent foreign investment has already been accepted in hotel, lodging services and graded restaurants with governments permission. Tourism industry will have the largest monetary turnover in the world by the year 2020, according to the global survey. Thus, trade liberalization constraints in tourism must be acknowledged and differences between the SAARC nations must be rectified in order to reap the highest benefit of this growing industry. E.g. Government can lower VAT rate for the hotel sector or redeem 3% of the VAT paid by hoteliers taking into consideration the sectors contribution in foreign exchange earnings and employment generation. The Government has already

initiated the effort of legal and procedural arrangements necessary for the implementation of the polices for permitting of up to 25 percent foreign investment on tourism (aviation companies and big hotels), water resources (Power and drinking water), mines and mineral related industries and goods production and processing sources through stock market. This is in line with the government policy of opening foreign investment through the secondary market. The limitation of 25 percent foreign investment and its scope could be further extended in future based on the experiences.

Ecological Environment: The quality of the environment, both natural and man-made, is essential to tourism. However, tourism's relationship with the environment is complex. It involves many activities that can have adverse environmental effects. Many of these impacts are linked with the construction of general infrastructure such as roads and airports, and of tourism facilities, including resorts, hotels, restaurants, shops, and golf courses. Being the member of WWF there are clause that Nepal should follow. Include aspects of ecotourism in national tourism policy. Modify legislation pertaining to tourism laws to include environmental protection clauses for natural areas. Monitor the quality of nature-based tourism services and facilities. Work with private sector and international funding agencies to develop adequate tourism infrastructure at each site.

2.3 Competitive Analysis

There are and there would be competitors in the business. It is essential for every business organization to identify its existing and potential competitors, their skills, strength as well as weakness. For this kind of business there might be potential competitors who might come up with similar travel agencies.

Competition and Buying Patterns Strengths and weaknesses of the competitors: The competitors in this market are of two primary types.

First, there is the adventure provider who specializes in a single type of hard-adventure activity such as white-water rafting, trekking, cannoning, rock climbing, etc. Their strength is their expertise in a given sport. Their weakness is that they provide an undifferentiated product in a competitive market. In addition, they do not have the resources, ability or desire to target and/or accommodate a customer demanding more accommodation and a more luxury/adventure-oriented service. Companies that offer higher-priced, more luxurious packages generally provide a "soft" adventure. The activities are more along the lines of sightseeing and low-risk alternatives. The advantages these companies have include established reputations, extensive knowledge of the industry, and key personnel and management. Some have been in operation for more than ten years. They are familiar with local service providers and have established strategic relationships. The intense competitors can be Yala Adventure, Last Resort, Borderlands Eco Adventure Resort, Adventure Nepal Ltd. as they provide a similar nature of adventure services in this region. But like Zipper Adventure they do not concentrates solely on adventure packages which brings an added advantage over these competitors. Other adventure and trekking agencies also provide adventure events in general but we provide specific adventure related services. Apart from these intense competitors other well known and established companies in the country will provide indirect competition to ZA. There are about 1,765 travel, trekking and adventure service providers in the country operating. But the target market of most of these are foreign tourist visiting Nepal and though they provide services to domestic customers but they do not have core focus upon the domestic market which are of great potential and growing day to day. Competitive Edge Zipper Adventure competitive edge is its focus, passion, and experience. ZA seeks to promote and provide access to adventure sports and travel. It provides a differentiated offering with the management experience, capital, and commitment to make it work.

Chapter 3 Defining Products/ Services

Zipper Adventure is a full service agency and sells standard travel agency goods and services. The value added of ZAs offering is its knowledge and expertise, competitive rates, and specialty focus on adventure travel, which translates into increased satisfaction for the customer. Zipper Adventure will provide a specific range of service i.e. packages with variation as per the customer need and demand. The various blends of services are in the form of services which includes: 1. Mountain Biking 2. Bungee Jumping 3. White Water Rafting 4. Paragliding 5. Trekking 6. Rock Climbing Adventure travel is divided into two categories, Hard and Soft adventure. Both hard and soft adventure involves active and athletic activities. I. Hard Adventure:

Hard adventure activities, as the name suggests, generally consist of activities that involve risk and athletic competence. This category of service will be targeted to young and energetic individuals who are ready to take the challenge of extreme adventure. The total package under this category will include Mountain Biking, Bungee Jumping, White Water Rafting, Rock Climbing and Paragliding.

II.

Soft Adventure

Soft adventure activities are less physically demanding and more passive than their hard adventure counterparts. This will be a medium adventure package and will be targeted to individual and group of both young and old age category. The package under this activity will consist of Trekking and normal Boating.

The brief description of our product highlights are as follows: Mountain Biking This event will take place on the Arniko Highway from Barabise to The Last Resort and is designed for the bikers that appreciate a few of life's comforts along the trail. Once they have left the Kathmandu Valley (they can put their bike on the roof of the bus and have themselves dropped at the edge of the valley) the road is quiet and it is a pleasure to cycle through the magical land so close to Tibet. The ride takes about 6 hours with stops on the way. Our partner organization has good quality imported branded mountain bikes. They also provide an experienced guide and cycle helmets. Beside this we can take them to the ride to other option like cycling from Kathmandu to Pokhara or Chitwan. Bungee Jumping: This event will be done in The Last Resort, the only bungee jumping spot in Nepal. This remarkable 500ft (160m) drop into the Bhote Koshi River gorge on the Nepal/Tibet border is the longest Free-fall in the world. The site of bungee jump in Nepal is considered among the best in the world. White Water Rafting: At the foot of the Himalayan Mountains, Nepal is blessed with an amazing diversity of rivers. From convenient day excursions to full on 12 day river expeditions, the possibilities are endless! In fact, with so many river options like Bhote Koshi, Trisuli, Marsyangdi, Tamur, Karnali, etc one can achieve life time experience.

Paragliding: Paragliding in Nepal can be a truly wonderful and fulfilling experience for the adventure seeker. A trip will take you over some of the best scenery on earth, as you share airspace with Himalayan griffin vultures, eagles, kites and float over villages, monasteries, temples, lakes and jungle, with a fantastic view of the majestic Himalaya. The world famous place after Switzerland and fifth best location (Pokhara) for paragliding situated here in Nepal. Hence, paragliding can be a perfect alternative Adventure sport.

Trekking: This short trekking trial and long trekking trail both will be provided. Annapurna Base Camp, Rara Lake, Rolwaling, Dolpo trekking, The Great Himalaya Trial, etc are the bestseller trek among all other trekking tours. The breathtaking mountain scenery and the beautiful ethnic villages justify the popularity of these trekking. The trek service includes both hard and soft. While talking about soft it is easy; it has enough walking along streams and forests for those who are looking for few days close to nature. But hard trekking involves l o n g r o u t e and involves high climbing. Rock Climbing: There are some terrific, dizzying places for those who get their kicks from crawling up vertical cliffs. ZA provides rock climbing experience those who wants to learn climbing and planning for climbing high cliffs. Of late, rock climbing has found increasing popularity among the tourists coming into Nepal as well as for local enthusiasts. Nagarjun Forest, Shivapuri water shed, Kakani are some places near Kathmandu where ZA takes its customer for climbing. Beyond that ZA will also provide counseling and learning lessons for new comers. There might be variation in services. The packages might be: One day rafting package (especially for Local tourist) consist of transportation, lunch, breakfast, rafting fee and raft guide fee. Two day rafting package (especially for International tourist) consist of transportation, lunch, rafting fee, guide fee, tent fee, dinner and BBQ charge. 6 night and 7 days package (both for International and Local tourist) consist of paragliding at Pokhara, jungle safari at Chitwan, Lumbini visit and many more. 15 days trekking (both for International and Local tourist) ABC trekking, Rolwaling, Mustang, etc. 3 days gold package (both for International and National tourist) consist of Bungee/Swing, Khasa visit, Rafting at Sukute Beach, Helambu trekking and Chisapani mountain biking.

Chapter 4 Marketing Research and Analysis

Marketing plays an integral role in the start-up and daily operations of any business, and Zipper Adventure is no exception. Like any other business, Zipper Adventure has a product/service that consumers want and are willing to purchase. Therefore, marketing plan can help to achieve this goal. Travel industry is an upward growth industry. Adventure travel is a growing segment of the travel industry. One theory of the recent increase in extreme sports has to do with the strong competitive nature of younger Nepalese generation highly influenced by western trend of enjoying extreme adventure activities.

4.1 Market Description

Previously there used to be only international tourist going for adventurous sports, now more and more Nepalese people are opting and showing interest for such adventure sports. As Nepal has natural beauty with diversity in cultural, Languages, Life style, Natural resources. ZA can not only develop international tourism but also focuses on internal tourism In Nepal, There are a number of destinations that are mainly visited by domestic tourists, not foreigners. Nowadays there is growth in domestic tourism. Major destinations for domestic tourists are Kathmandu, Pokhara, Chitwan, Lumbini, Palpa, Makwanpur, Nagarkot, Gorkha , Dhulikhel., Muktinath, Tatopani Border and all the pilgrims & historical sites, On an average, about 50,000 to 60,000 domestic tourists travel annually to Pokhara and Chitwan. Thats why ZA should focus on promotion of domestic tourism too with affordable domestic tour packages. With this Domestic tourism we can boost up the living standard of local community, this also help for sustainable development of Nepal.

As the arrival of international tourist in the country is increasing year by year so most of the competitors will be busy focusing their marketing and products offering to the foreign customers as a result the vast domestic market potential will remain fully unutilized and uncovered. So this will be an opportunity for ZA to focus, segment the market, target and cater to the needs of this market exclusively.

4.2 Market Segmentation

Zipper Adventure has a focus on meeting the adventure need for the people around the world. According to the difference in need, purchasing power and buying behavior of the customers, demands are also different. Based on this difference, the market has been segmented into geographic and demographic segmentations.
4.2.1 Geographic Segmentation

The target consumers for ZA will be travelers across the globe.

4.2.2 Demographic Segmentation

While segmenting the market for adventure seekers the demographic variables used are age, gender, and income. Age: People between ages 20 to 45 years will be targeted as the potential customers for the adventure packages. Given the types of services offered, the target customers group will be young to middle aged. Gender: Both male and female falls under the market segment as both have shown interest in such adventure sports and extreme activities. Income: The packages fee structure is set by keeping mind the income level of the people. The affordable fee structure is provided so that from the middle income and high income people can get our service with quality i.e. people having monthly income of above Rs.40, 000.

4.3 Market Needs

Many potential customers are unsure of the location they wish to reach. Part of the value associated with travel agencies is the knowledge they possess about destinations. Customers look to the agency to provide them with sound advice for a competitive price. ZA is confident in its ability to do so. Time is a precious commodity. ZA can save the customer time and money, and help to ensure that they are satisfied with their vacation.

4.4 Target Market

Zipper Adventure will be catering to the needs of both domestic and foreign customers. Its target segments will be professionals and employees of corporate organizations, students of college and universities. There are two types of packages the hard adventure package which will be targeted to energetic people who want to explore and enjoy the entire thrill in their life and another soft adventure packages which will focuses to those people who are risk averse and of old age. While talking about how ZA will target market is based upon Competitors customer flow. We take Yala Adventure as major competitor. The Number of customer deal by Yala Adventure (Yearly) is as follows:
Table 2: Total customer inflow of Yala Adventure and ZAs target

Month January February March April May June July August September October November December Total

Yalas Customer Inflow (Average) 35 45 70 75 80 105 160 220 350 320 245 208 1,913

Zipperss Target Customer Inflow 10 15 23 27 32 38 45 62 70 65 56 32 475

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4.5 Market Growth

Not only is the growth of foreign tourist the growth of domestic tourist also increasing which provides huge potential. The improving condition of the political situation of the country and the tourism policy of the government will also help to find more customers.

According to the NTB, arrivals from the South Asian countries were up 13.9 percent in May, 2012. India, which constitutes the major market for Nepal, recorded a robust growth of 16.1 percent to 20,138 visitors. Similarly, arrivals from China, one of the fastest growing tourist markets for Nepal, rose 10.2 percent. However, there has been a decline in arrivals from other Asian countries, mainly Thailand, South Korea and Singapore. An overall growth of 8.3 percent has been observed from the European market with arrivals from the UK, Germany, Spain, the Netherlands, Sweden, Poland, Russia and Czech Republic remaining positive.

Table 3: Arrival Growth

(Source: The Kathmandu post, 3 June 2012)

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Chapter 5 Marketing Plan and Strategies

To be successful, company should consider marketing which will help in building profitable relationship with its customers. Marketing will help in: Attracting new customers by ensuring quality services. To keep and grow current customers by delivering satisfaction to them.

Talking in a very broad way, for building a well developed marketing plan, we as a marketer are going to rest upon following core concept: demands, product, value, costs and satisfaction, exchange and transactions, relationships and networks. A marketing plan solidifies the marketing strategy by defining customers, sales forecasts, and marketing objectives. It synthesizes market research and the entrepreneurs strategy into a blueprint for action.

5.1 Market Positioning

For any individual who wish to participate in adventure travel, ZA is the premier adventure travel agency in the Kathmandu. ZA's experience with and enthusiasm for adventure travel is displayed in the exceptional service, value, and advice it provides for the customer. Zipper Adventure with its service focused solely on adventurous activities will position itself as a provider of life time adventure experience. ZA would like to be positioned as a company that meets the needs of both domestic market and foreigners with an affordable rate and service with topmost quality. The service will be delivered through expert and professional guides who have the expertise, experiences and deep local knowledge.

5.2 Market/ Growth Strategy

ZA adheres to the theory that the goal of business is to create and keep customers. Its marketing strategy will reflect this goal as it builds its reputation in the tourism market. Though ZA operates in the travel and adventure industry, it provides much more than travel. ZA provides adventure and freedom. ZA offers the ability to get away and remember how much they love the challenge and excitement of an athletic endeavor. ZA will promote the benefits of adventure travel which include better health, excitement, and a whole lot of fun.

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5.2.1 Market Penetration

In N epal , Travel and Adventure industry is already an overcrowded industry. There are numbers of other agencies involved directly or indirectly in this line of business. Thus, Zipper Adventure will take up an aggressive market penetrating strategy initially by lowering its pricing to capture the market share. Along with low cost, it will adapt differentiation strategy as there are no other agencies providing the adventure packages as provided by ZA. This differentiation will help us to attract more adventure seeking people. Our main market is concentrated for both domestic and foreign market. Once our brand will be known and positioned in the mind of people and overall market, pricing will be gradually raised to command a premium. Here most of the travel agencies provide only individual services like trekking, cycling, paragliding, rock climbing activities, etc separately so our adventure packages will be indistinct. ZA will repackage its product offer through combination of different adventure sports into a package form. This will enable us to offer a production differentiation in the market.
5.2.2 Distribution Strategy

ZA's distribution strategy will focus on the target market all over Nepal. ZA seeks to establish distribution capability on the World Wide Web. Doing so will improve ZA's ability to establish a national reputation. The CRS (Computerized Reservation System) will enable the customers to make their direct booking for the packages of their choice. ZA will also build relationship with other third party agencies for business referrals on commission basis.
5.2.3 Communication Strategy

Customers will be reached through traditional marketing communication methods along with latest web based technology. Information has been located detailing profiles of both hard and soft adventure travelers, where they live, work, what they do, etc. Research suggests that many of our target customers, and travelers in general, are Internet savvy and many adventure travelers purchase over the Internet. As such, the Internet will serve as an appropriate and effective medium of communication.

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ZA will likely use trade or special interest magazines, mailing lists and direct mail, and personal selling. Sales will be extended into the national and global markets. We hope to promote out of season services through frequent customer contact. Apart from providing information through brochures and fliers, ZA will carry out on the site presentation and briefings where required. Using personal relationship, the company will also tie-up with selective colleges, universities and corporate houses to sell the adventure packages. Information about the company will be providing through its own website where company details like profile, vision, mission, objectives, products and services, address, contact numbers and reservation form will be posted.

5.3 Marketing Mix

Service Marketing Mix

The service marketing mix consists of 7 Ps as compared to the 4 Ps of a product marketing mix. The need for the extension is due to the high degree of direct contact between the adventure service providers and the customers, the highly visible nature of the service process and the simultaneity of the production and consumption.
5.3.1 Product/Services

The Zipper Adventure (ZA) will be providing two different adventure packages to its customers namely, Hard Adventure Package and Soft Adventure Package. Clients will be pleasantly surprised at how attentive and careful ZA is in regards to their needs. The business operates on the assumption that it will do whatever is reasonably necessary to keep the customer happy. This reflects the notion that if the customer is kept happy, long term relationship and long term profits is ensured.
Table 4: List of Product/Service

Hard Adventure Package 1 2 3 4 5 6 Mountain Biking Bungee Jumping/Swing Rafting Trekking Rock Climbing Paragliding
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Soft Adventure Package Sight-seeing Boating Soft Trekking Bird Watching & Jungle Safari Elephant ride Pilgrim Visit

5.3.2 Pricing

Our company will focus on low cost strategy at its initial stage to establish and strengthen its customer base.

As for our service, we will be in the introduction phase of the product life cycle of the product where we will mainly focus on brand awareness and invest in different promotional tools from the introduction. ZA will focus on low cost strategy at its initial stage to establish its customer base. The pricing will be structured slightly lower that what market offers as a market penetration strategy, for which ZA will go with the cost base pricing. Only few of the activities will be outsourced, other than that most of the activities will be carried out by itself. This will provide the advantage over cost due to which ZA will pass on the benefits to its customers initially to arrive at lower pricing. This will also address the price sensitive psyche of Nepalese market. However, the business will steadily increase its pricing once it establishes at a later stage considering the effect of inflation in the economy. The total package offered will be new to the domestic market giving additional value to the customer. Further with the emphasis on service quality and safety, customers will not mind paying a premium plus price.
Table 5: Comparative Price Analysis

Package Hard Adventure Soft Adventure

Price of Yala Adventure (Rs.) 30,000 20,000

Price of Zipper Adventure (Rs.) 21,000 15,500

5.3.3 Place

The office of Zipper Adventure will be located in Nagpokhari, Kathmandu from where the overall business will be managed. Tribhuwan International Airport (TIA) is also located nearly which is the major route of tourist inflow.

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5.3.4 Promotion

Zipper Adventure will be establishing tie-ups with corporate houses, school, colleges and universities to promote and sell its adventure services. During ZAs first year of operation it will hold a grand opening. We will provide various travel packages and other items as prizes as well in that small event. During the grand opening and other events, ZA will provide literature with information about the trips and activities.

Other media like print media (Magazines and National dailies), brochures and fliers, etc will also be used to advertise about the service offerings. Companys own website will be created to provide full information and facilitate application. Besides this, creating a page in the Facebook will also help in letting people know and build interest about ZA.

5.3.5 People

There will be two types of qualified people working for the company. One type of staff will manage their daily office tasks/administration roles like sales and marketing, finance, accounts, etc and will be full time employees. Another type of staff who will be the expert professionals and guides will manage the ground operations of the two adventure services. These staff will comprise of both part time and full time employees.

5.3.6 Physical Evidence

We will provide the message that ZA is there to provide and meet the thrilling fun and adventure to its customers. The atmosphere of the office, the website, brochures and advertisements will be designed to reflect that ZA is a quality adventure provider. The office premises will contain clipping, pictures and photos of adventure activities to excite the customer/visitors. The ground operators, expert guides and professional instructors will be trained and educated to provide maximum fun and adventure to the participants.

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5.3.7 Process

ZA will be focusing on making the overall process hassle free, fun and a life time of experience for the customers. Prospective customers can directly book the package of their choice through office visit, phone calls. Booking can be made on-line through the companys website. ZA will rely on Computerized Reservation System (CRS) for client reservations. The CRS enable travel agencies to identify what the customers is looking for and make that information quickly available. It also increases the speed and efficiency with which ZA can communicate with suppliers.

5.4 Competitive Edge

ZA's competitive edge is its focus, passion, and experience. ZA seeks to promote and provide access to adventure sports and travel. ZA provides a differentiated offering with the management experience, capital, and commitment to make it work. In order to reach its goal of becoming the Nations premier adventure travel agency, ZA will adopt the following strategy: 1. Establish ZA's reputation as a differentiated, specialty provider of adventure travel. This will be accomplished through a diverse marketing communications program at ZA's target market, utilizing various media. 2. Provide unparalleled service to the people in order to gain repeat business and build trust. This will include providing superior service in all phases of the transaction, including timely follow-through. 3. Aggressively promote adventure sports as healthy and exciting activities and those who participate in them as pioneers, heroes, and true Nepalese citizens.

5.5 Marketing Budget

ZA will provide advertisement shots in college magazines and national dailies. Promotional campaigns like presentation and briefing at customer location will also be used. Brochures and fliers will be created for distribution during promotional activities and placement at office and strategic locations. As a souvenir two badges with ZA logo and adventure pictures will be provided to the customers. To meet the marketing cost ZA
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will allocate first annual budget of Rs. 5,00,000 and thereafter Rs. 2,00,000 annually for its marketing activities. As on the later years ZAs image and brand will be positioned itself the budget on marketing will be reduced as a result advertisement in the national daily will be discontinued. A detailed breakdown plan of the marketing budget incorporating type, frequency, amount etc is given in Annexure 3 (Table No 12).

5.6 Sales Forecasting

The sales forecast is made taking into account per person pricing charged for a package. The pricing is derived after calculation of total direct cost per person plus the margin. The pricing has been slightly lower than the market to make it attractive and as a penetrating strategy. In the first year total person to be received is projected to be 250 in the Hard Adventure Package and 225 in the Soft Adventure Package which arrives at sale of Rs. 52,50,000 from Hard Adventure package and Rs. 34,87,500 from Soft Adventure package.

The number of customer received is projected based on the study of competitors yearly turnover and the projected impact of the advertisement and promotional campaign which ZA will run to increase the awareness and attract the potential customers. Though there is no any record about the flow of domestic tourism in the country, here, the number of clients is assumed to grow by 10% in the year 2013 because annually people are showing more and more interest in such adventurous sports. Similarly, annually more organizations, colleges and universities are being established the flow of potential customers will rise. The growth rate of clients will remain constant after the year 3rd i.e. from 2015 due to the increased competition the growth rate is expected to stabilize.
Table 6: Annual Sales Forecast

Year Hard Adventure Package Soft Adventure Package Total Service Revenue Revenue Growth % No. Of Customers Growth % Customers

2013 2014 2015 52,50,000 60,63,750 67,60,530 34,87,500 40,36,200 44,77,580 87,37,500 1,00,99,950 1,12,38,110 16% 11% 475 523 554 10% 6%
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2016 75,36,139 49,70,765 1,25,06,904 11% 587 6%

2017 83,72,407 55,38,960 1,39,11,367 11% 622 6%

Chapter 6 Operational Plan

Zipper Adventure is a service oriented business providing adventure sports service to the clients. We deal primarily in providing services and assisting customers and in experiencing the life time adventures.

6.1 Office Location

The main office will be operated from Nagpokhari, Kathmandu. People will find it easier to come to this location as it is centrally located and is easily accessible. The office will be operated on a rented area. Initial rental agreement will be for a period of 5 years and renewal thereafter on mutual agreement basis.

6.2 Layout Design

The office will be the main physical contact point. All administrative and operational functions will be controlled from here. The office will contain important business units like finance, marketing, operation, and reception lobby. For this a moderate office plan is required. The office area will cover maximum area of 1,000 sq.ft.

Wash Room E Director Room MD Room

Operation & Marketing Department

Customer Service Department

Account

Entrance

Sofa
Figure 1: Office Layout

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6.3 Process of Service Delivery

Zipper Adventure will be selling two adventure packages namely, Hard Adventure Package and Soft Adventure Package.
Customer

Hard Adventure

Choose

Soft Adventure

Choose from: Mountain Biking Bungee Jumping Rafting Paragliding Trekking Rock Climbing

Choose from: Boating Site Seeing Jungle Safari Bird Watching Mountain View Pilgrim place visit

Departure to destination

Departure to destination

Actual Activity

Actual Activity

Return to KTM

Return to KTM

Figure 2: Flow Chart of Service

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Hard Adventure Package: The total package under this category will include Mountain Biking, Bungee Jumping, White Water Rafting, Rock Climbing and Paragliding. These events will occur continuously and will occur for 5 days. The event will be initiated with cycling then Bungee Jumping followed by white water rafting. Rafting will be followed by Paragliding and finally rock climbing. But there might be adjustment with packages if any of customers required in their way. This event will take place in different places of the country as per the demand of our customers like (Pokhara, Kathmandu, Nagarkot, Lumbini, Chitwan, Illam, etc.) to see the scenic beauty a n d g a i n a d v e n t u r o u s e x p e r i e n c e .

Soft Adventure Package: Soft adventure activities are less physically demanding and more passive than their hard adventure counterparts. This will be a medium adventure package and will be targeted to individual and group of both young and old age category. The package under this activity will consist of Trekking. The peak season for ZA will be from October till May i.e. for 8 months as the rest of the months will be rainy season. So the rest of the months will be spent on marketing, promotion and soliciting of business. This period will be utilized for other internal works. Operation Time: The office will operate 6 days a week from Sunday to Friday from 10:00 am to 6 pm with lunch breaks from 1:30 pm to 2:30 pm. The office will be off on Saturdays. Inventory and Equipment Requirement ZA will maintain its own inventory of most of the necessary equipments. The inventory of equipments will be handled by Operation Manager. The equipment will consists of tents, boats, life jackets, trekking equipments, rock climbing equipments, crockery, cooking materials etc. Other additional needed equipments will be outsourced from a reliable and reputed store available in the market under special contract.
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6.4 Resource Management

Zipper Adventure will maintain team of experts to guide, assist and support the participants in the journey. There will be trekking guides, rafting guides, rock climbing trainers, cook, porters and helpers. The company will also recruit a first-aid expert who will move along with the group to provide first aid treatment in case of need.

6.5 Capacity Planning

Zipper Adventure will ensure a proper capacity planning. Our service will be offered in terms of two different adventure packages i.e. hard and soft adventure packages. The capacity of the company to handle maximum group will be different for the two packages. In the case of Hard package, it will be capacitated to handle maximum of 3 groups in a month however in the case of Soft package the company will not handle more than 4 groups. Each group or package will consist of 12 to 15 numbers of clients. In beginning years due to lack of experience, capital and network the number of service are limited but with the passes of time the number will increase.

6.6 Quality Management

The company will be focusing all its resources and expertise to provide quality life time of adventure service to the clients so as to ensure that they come back to us for repeat service and also refer us to other prospective customers, as there is no any better advertisement than the word of mouth advertisement from a satisfied customer. To boost repeat business we will be taking care of customers changing and new requirements and taking into consideration their need we will be also adding new product lines of adventure sports in our packages in coming year.

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Zipper Adventure will ensure quality management on the following areas: i. Prompt Service: The company will ensure that right service will be provided to the customers promptly without making them to wait for n o t more than 1 5 m i n u t e s i n any of its touch points within its control. At that spare time they can enjoy hot and cold beverage, watching TV in our customer waiting lounge. ii. Proper Agreement: ZA will be in place with any outsourced or external stakeholder so that the service and products received from them is well within the standard and the expectation of the company. iii. Training and Facilitation: Staffs of ZA will be provided with the necessary and regular training on enhancement of customers service. iv. Maintenance: The materials and equipments used will be kept in order, well maintained and not out dated so that there is no unwanted risk from the use. v. Environment: The office periphery will be kept neat, tidy and attractive so that the clients feel comfortable to visit in and get to know about our service profile. The office will have a full time cleaner for daily regular cleaning and maintenance of the office. vi. Database Management: Zipper Adventure will keep a computerize database of all its customers for future reference and network relationship building. vii. Response: We will also provide services as per the customers request. We will also look at the customers feedback and improve it.

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viii. Courtesy: The staff members will be polite to the customers and will also be trained to handle complaints and handle clients with love and care. ix. Security and Reliability: We will assure our service to be off utmost quality taking into consideration the security essentials of our clients. Our trekking guides, rafting guides will be well experienced in guarantying for the secure trip and adventures. In addition we will be employing first aid health care taker in case of any mishaps while in the adventure trip. Every group members will be insured for every package to ensure their risk of loss in case of any.

6.7 Organizational and Management Plan

6.7.1 Organization Structure

Out of four, two promoters will be the major decision makers in the overall management of the company. One will be responsible for the overview of the overall technical and ground operation side of the company, while the other will be responsible for all the policy planning related matters, marketing, administration, finance and daily operation. Rest two will be more silent. Two managers will be hired who will assist both the directors in managing the overall business of the company. The managers will be delegated with appropriate authority to take vital decisions on finance and operational aspects. Both the directors consent will be required to take major decisions of the company. In total 11 permanent staffs in the organization. The detailed organizational structure of the company is given as follows:

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Executive Director

Managing Director

Operation Manager

Finance Manager

Marketing Officer

Trekking Guide Rafting Guide Cleaner

Accountant

Receptionist

Driver

Figure 3: Organization Structure

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6.7.2 Recruitment and Selection

There will be two types of staffs working for the company, permanent and the part time. Permanents staffs will be hired for post like operation managers, finance managers, accountants, marketing officers, receptionist, etc. Field guides (Trekking guide & Rafting guide) may be of both types depending upon the business flow and seasonal situations. All other types of resources (additional guides, trainers, porters, cook and helpers) will be hired on part time basis. Advertisement in the daily post and websites will be given for job vacancy and recruitment of resources. Selection will be done on the basis of review of qualification (Minimum Criteria is Master Degree for manager position), reference letters, experience, communication skills and completion of face-to-face interview.
6.7.3 Remuneration and Compensation System

Permanent staffs will be paid on the monthly salary basis and the part time staffs will be paid on daily wages basis depending upon the services rendered. Permanent field guides will be paid extra field allowances in addition to monthly salary. The payment of annual salary has been shown in detail in Table No 13 (Annexure 3).

6.7.4 Training and Retention Plan

Adequate training will be given at least once a year to all the staffs involved in ground operation to equip them with capabilities to provide better customer service. Education and coaching on customer service will also be provided to front end sales and operational staffs on periodic basis to handle and serve customers. Remuneration package will be reviewed on annual basis and compensation will be provided to those who perform well in annual performance review to ensure talents and enthusiast are motivated and retained.

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Chapter 7 Financial Plan

This section details the calculations, assumptions and methodology used as a basis for the projections of the expected financial performance of Zipper Adventure.

7.1 Capital Requirement

Table 7: Capital Requirement

Fixed Assets Units Vehicle (Maruti Van) Tents (Dome Tent) 10 Toilet Tents Rafts (Boat & Paddling ore) Music System & Other Equip. Life Jackets 35 Computers Printer Television DVD Player Furniture (Sofa Set) Table (Director) Table (Manager) Reception Desk Tea Table Revolving Chair Simple Chair Filling Cabinets Telephone Set Fax Machine Photo Copy Machine Gas Stove Gas Cylinder Utensils Tea/Coffee Vending Machine Vacuum Cleaner Working Capital Total

Per Unit Cost (Rs.) 1 12,29,440 14,000 2 4,700 4 2,10,000 2,500 30,000 25,000 30,000 5,500 50,000 20,000 16,500 20,000 12,000 8,000 5,000 12,500 2,500 25,000 85,000 2,500 1,330

4 1 1 1 1 2 2 1 1 2 5 5 4 1 1 2 2

1 20,000 1 7,000

Total Cost (Rs.) 12,29,440 1,40,000 9,400 8,40,000 90,000 87,500 1,20,000 25,000 30,000 5,500 50,000 40,000 33,000 20,000 12,000 16,000 25,000 62,500 10,000 25,000 85,000 5,000 2,660 10,000 20,000 7,000 2,00,000 32,00,000

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The business will be established with a paid up capital of Rs. 32,00,000 form equal proportion of four partners.
Table 8: Capital Structure

Capital Structure Madhu Sudan Koirala Sudarshan Paudel Sanjit K.C. Shanku Ghimire Total

Percentage 25% 25% 25% 25% 100%

Amount (Rs.) 8,00,000 8,00,000 8,00,000 8,00,000 32,00,000

7.2 Assumptions
Cost per person and price per person has been raised by 5% keeping in consideration the inflation factor. The sales will increase by 10% p.a. The depreciation will be charged 20% on trekking equipment and 15% on office equipment under Diminishing Balance method. The investment will be made on 10%. Tax rate is 25%.

7.3 Fixed Assets

The company will invest Rs. 30,00,000 in fixed assets. Most of the important fixed assets will be acquired in the beginning of the year in order to support the business operation smoothly. The table showing the fixed assets used in the company have been included in the Table No 14 (Annexure 4). Similarly the depreciation on fixed assets has been shown in Table No 15 (Annexure 5). Here diminishing balance method is used for calculating depreciation.

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7.4 Income Statement

The company is projected to make total sales revenue of Rs. 87,37,500 and gross profit of Rs.33,07,875 in first year. Gross profit margin is 37.86% which is supposed to be satisfactory in Travel business. Though net profit after tax is negative in the first year of operation i.e. loss of Rs. 6,37,942, the projected income statement shows that our Net Income is increasing every year. We can see in the income statement for the five years that there is increase in the service revenue; the expenses have also increased due to the inflation. Increase in the clients and charging of premium has contributed to growth in profit.
Table 9: Projected Income Statement

Particulars 2013 Service Revenue Less: Cost of Sales Gross Contribution Margin Less: Operating Expenses Personnel Cost Rent Expenses Utility Expenses Equipment Maintenance Cost Other Operating Expenses Depreciation Total Operating Expenses Earnings Before Interest & Tax(EBIT) (6,37,942) Add: Interest on Investment (10%) Earnings Before Tax (EAT) Less: Tax @ 25% Net Income After Tax (6,37,942) 0 (6,37,942) 2,46,916 2,46,916 61,729 1,85,187 6,24,517 60,000 6,84,517 1,71,129 5,13,388 10,25,994 80,000 11,05,994 2,76,498 8,29,495 14,56,603 1,10,000 15,66,603 3,91,651 11,74,953 19,18,100 4,20,000 2,23,800 36,000 7,63,500 5,84,417 39,45,817 20,14,005 4,41,000 2,34,990 37,800 3,79,025 469,871 35,76,691 21,14,705 4,63,050 2,46,740 39,690 3,87,976 377,884 36,30,045 22,20,441 4,86,203 2,59,076 41,675 3,97,375 303,996 37,08,766 23,31,463 5,10,513 2,72,030 43,758 4,07,244 244,632 38,09,640 87,37,500 54,29,625 33,07,875 2014 1,00,99,950 62,76,343 38,23,607 2015 1,12,38,110 69,83,548 42,54,562 2016 1,25,06,904 77,72,145 47,34,759 2017 1,39,11,367 86,45,124 52,66,243

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7.5 Statement of Retained earnings:

Table 10: Statement of Retained Earnings

YEAR 1 Beginning Balance Add: Net profit Ending balance 0 (6,37,942) (6,37,942)

YEAR 2 (6,37,942) 1,85,187 (4,52,755)

YEAR 3 (4,52,755) 5,13,388 60,633

YEAR 4 60,633 8,29,495 8,90,128

YEAR 5 8,90,128 11,74,953 20,65,080

7.6 Cash Budget

As per the projected cash budget, the company is expected to have satisfactory cash position. Excess cash is projected to be invested in short term securities to generate additional revenue for the company. The detail of cash budget is provided in the following table:
Table 11: Projected Cash Flow Statement

Particulars Receipt Beginning Balance Equity Sales Revenue Interest on Investment Total Receipt (A) Disbursement Fixed Assets Cost of Sales Personnel Cost Rent Expenses Utility Expenses Equipment Maintenance Cost Other Operating Expenses Tax Payment Total Disbursement Cash Surplus(Deficit) Investment in short term Securities Ending Balance 0 0

2013

2014 1,46,475 1,00,99,950 1,02,46,425 62,76,343 20,14,005 4,41,000 2,34,990 37,800 3,79,025 61,729 94,44,892 8,01,533 6,00,000 2,01,533

2015 2,01,533 1,12,38,110 60,000 1,14,99,643 69,83,548 21,14,705 4,63,050 2,46,740 39,690 3,87,976 1,71,129 1,04,06,838 10,92,805 8,00,000 2,92,805

2016 2,92,805 1,25,06,904 80,000 1,28,79,709 77,72,145 22,20,441 4,86,203 2,59,076 41,675 3,97,375 2,76,498 1,14,53,413 14,26,296 11,00,000 3,26,296

2017 3,26,296 1,39,11,367 1,10,000 1,43,47,663 86,45,124 23,31,463 5,10,513 2,72,030 43,758 4,07,244 3,91,651 1,26,01,782 17,45,880 13,00,000 4,45,880

32,00,000 87,37,500 1,19,37,500 30,00,000 54,29,625 19,18,100 4,20,000 2,23,800 36,000 7,63,500 11,791,025 1,46,475 1,46,475

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7.7 Projected Balance Sheet

Table 12: Projected Balance Sheet

Balance Sheet of Zipper Adventure 2013 2014 Assets Current Assets Cash Investment in Short Term Securities Total Current Assets Fixed Asset Less: Accumulated Depreciation Net Fixed Assets Total Assets Liabilities & Owner's Equity Capital Stock Retained Earnings Total Liabilities & Owner's Equity

2015

2016

2017

1,46,475 2,01,533 2,92,805 3,26,296 4,45,880 6,00,000 14,00,000 25,00,000 38,00,000 1,46,475 8,01,533 16,92,805 28,26,296 42,45,880 30,00,000 30,00,000 30,00,000 30,00,000 30,00,000
5,84,417 10,54,288 14,32,172 17,36,169 19,80,801

24,15,583 25,62,058

19,45,712 27,47,245

15,67,828 32,60,633

12,63,831 40,90,127

10,19,199 52,65,079

32,00,000 32,00,000 32,00,000 (6,37,942) (4,52,755) 60,633 25,62,058 27,47,245 32,60,633

32,00,000 32,00,000 8,90,128 20,65,080 40,90,128 52,65,080

From the above stated five years projected balance sheet, it helps to show the real financial position of the company over the periods. Here, it can be seen that that the cash balance has been boost up throughout the periods.

7.8 Projected Key Financial Ratios

Table 13: Key Financial Ratios

Ratios Net Profit Margin Return on Equity Return on Assets

2013 -7.30% -19.94% -24.90%

2014 1.83% 5.79% 6.74%

2015 4.57% 16.04% 15.75%

2016 6.63% 25.92% 20.28%

2017 8.45% 36.72% 22.32%

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7.9 Project Analysis

Payback Period
Table 14: Payback Period

Years 0 1 2 3 4 5

Cash Flow (53525) 655058 891272 1133491 1419585

Cumulative Cash Flow (53525) 601533 1492805 2626296 4045881

Payback Period = 4.39 years

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Chapter 8: Critical Risk and Contingencies

There are various risk associated with the business. The risk can be both internal as well as external. The risks are as follows:

8.1 Internal Risk

A. Project Delay There is the risk of the project being delayed due to the following reasons: Delay in registration process of the firm with the government bodies. Unavailability of the adequate skilled staff resources in the market. Inadequacy of the required capital. Inability to locate suitable office premises.

B. Unwanted incidents during ground operation As our company is concerned with adventure services, there could be incidents of lapses and accidents during the process of delivery of services which could lead to injury or fatality. To mitigate this, all ground operation will be carried out with highest safety measures. Equipments and materials will be used of high quality and reliability. There will be system of periodic tests of all equipments being used. Both crew and clients shall be covered by accidental insurance. C. Staff dissatisfaction and misunderstanding between partners The company could face challenges from its employees in areas like salary & retirement benefits, training issue, work life balance, etc. Similarly just being normal humans no matter how much we try to understand others in times due to unwanted circumstance there might arise some misunderstanding between partners which might hamper the operation of the organization.
40

8.2 External Risk

Possibility of frequent Bandhs/Strikes from political & ethnic groups could impact the smooth operation of service delivery at the sites and office operation as well. Problems might arise during the course of business with third party and suppliers due to which normal business could be impacted. Business could face slackness in the domestic market due to reasons beyond its control. Change in government laws and regulations regarding tourism business.

41

Chapter 9: Future Plan and Exit Strategy

9.1 Future Plan
One of the main objectives of Zipper Adventure is to achieve higher growth and lead the market. ZA may in the future open agencies at foreign land. In addition, as the adventure travel market reaches maturity, ZA may participate in additional segments of the target market. ZA shall be reaching the market to identify potential opportunities for future sales. ZAs long term goal is to establish itself as an international recognized provider of the top of the line adventure sports. This goal does not prohibit ZA from participating in additional segments. It does however; provide a corporate focus and a differentiated offering. In addition to that keeping in mind the changing requirement of our potential and current customers we will be adding more of the new adventure sports and new packages which can provide as much of fun and thrill to our clients. Additional Adventure Sports in Near Future: Canyoning Hot Air ballooning Scuba Diving Kayaking Sky Diving Ice Skating

Similarly we will also be adding team building activities in our packages and will explore new trekking trials. We are even looking forward to develop a new package which includes both hard core adventure sports along with team building activity.

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9.2 Exit Plan

The competition of the market does not let the firm to ensure the continuous success. Whenever new market achieves the market share, loads of competitors enter in the market with similar schemes. So it is not possible to ensure stable performance. In worst condition, if Zipper Adventure doesnt work as per the planning then we will have alternative strategy i.e. we will exit from the business. To minimize the loss we will try: To sell off the assets to other travel and adventure companies Liquidate the company

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Annexure 1
Table 15: Sales Forecast for Hard Adventure Package

Yearly sales forecasting for Hard Adventure Package No. of Groups No. of Clients Pricing Per Person** Gross Revenue Cost Per Person* Total Cost Gross Profit(Rs.)

2013 17 250 21,000 52,50,000 13,155 32,88,750 19,61,250

2014 19 275 22,050 60,63,750 13,813 37,98,575 22,65,175

2015 21 292 23,153 67,60,530 14,504 42,35,168 25,25,362

2016 22 310 24,310 75,36,139 15,229 47,20,990 28,15,149

2017 24 328 25,526 83,72,407 15,990 52,44,720 31,27,687

Table 16: Sales Forecast for Soft Adventure Package

Yearly Sales Forecasting for Soft Adventure Package No. of Groups No. of Clients Pricing Per Person** Gross Revenue Cost Per Person* Total Cost Gross Profit(Rs)

2013 15 225 15,500 34,87,500 9,515 21,40,875 13,46,625

2014 17 248 16,275 40,36,200 9,991 24,77,768 15,58,432

2015 19 262 17,090 44,77,580 10,490 27,48,380 17,29,200

2016 20 277 17,945 49,70,765 11,015 30,51,155 19,19,610

2017 21 294 18,840 55,38,960 11,566 34,00,404 21,38,556

(* Cost per person and price per person has been raised by 5% keeping in consideration the inflation factor)

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Annexure 2
Table 17: Pricing per person for Hard Adventure Package

1 2 3 4 5 6 7 8 9 10 11 12 13

Hard Adventure Package Mountain Biking Guide (Rs. 1000/day) Mountain Bike Hire Cost(Rs 700/bike for 8hrs) Packet Breakfast on the way (Rs. 150/head) Transportation cost (Rs. 22,000 round trip by minibus) Bungee Jumping/Rock Climbing/Swing Rafting Guide Cost for 2 Days (Rs. 1,500/day *2*2) One cook cost (Rs. 2000/day*2) Three helpers for cooking and tent fixing (Rs. 500/day*5) One first aid health worker (Rs. 500/day*5) Food cost during rafting for 2 days (lunch-dinner-breakfast-lunch) 3 Star Lodge cost (bed-breakfast) per person Pack lunch (Rs. 180 per head) Paragliding cost (Rs 4500 per head) Total Cost Markup price per head

(12-15 Person) 75 700 150 1,630 2,000 445 295 295 185 1,200 1,500 180 4,500 13,155 8,000 Rs.21,155/21,000

Table 18: Pricing per person for Soft Adventure Package

Soft Adventure Package

(12-15 person)

1 Transportation cost (Rs. 30,000 round trip by Micro Bus) 2,222 2 Packet breakfast on the way (Rs. 150/head) 150 3 Lunch Trek (Rs. 200/head) 200 4 Site Seeing, Bird Watching, etc guide cost (Rs. 1500/day * 4) 444 5 Extra activity i.e. Elephant ride, Boating, etc (Rs. 800/day *2*4) 475 6 Four Porter cost(Rs. 700/day*4*4) 474 7 Food Tea /lunch/dinner and lodging night total cost(Rs. 1200/day*3) 3,600 8 Lunch (Rs. 200/head) 200 9 Hotel Cost (Rs.1500/head) 1,500 10 Lunch on the way back to Kathmandu 250 Total Cost 9,515 Mark Up 6,000 Pricing Per head Rs.15,515/15,500

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Annexure 3
Table 19: Details of Marketing Budget

S.No. 1 2 3 4 5 6 7 8 9

Promotion Method Leaflets Signage Ad in college magazines Paper Ad in Himalayan times Paper Ad in Kantipur Paper Ad in Republica Ad in Magazines Presentation and briefing at customer Location Badges with logo of ZA Total

Quantity 1000 pcs. (A4-70gm) (one time) Quarterly 8 x 20cc 8 x 20 cc 8 x 20 cc one insertion All year round 500 units

Rate(Rs.) 10 per pcs 10,000 10,000 160*650 160*1000 160*600

Cost(Rs.) 10,000 10,000 40,000 104,000 160,000 96,000 40,000 10,000 30,000 5,00,000

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Table 20: Salary Expenses of Permanent Staffs

S.N. 1 2 3 4 5 6 7 8 9 10 11

Designation Executive Director Managing Director Operation Manager Financial Manager Marketing Officer Accountant Trekking Guide River Guide Reception Cleaner/Helper Driver Total

No. of Staff 1 1 1 1 1 1 1 1 1 1 1 11

Monthly Salary (Rs.) 22,000 22,000 18,000 18,000 16,000 12,000 8,000 8,000 7,500 6,200 8,000 1,45,700

Annual Salary(Rs.) 2,86,000 2,86,000 2,34,000 2,34,000 2,08,000 1,56,000 1,04,000 1,04,000 97,500 80,600 1,04,000 18,94,100

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Annexure 4
Table 21: Details of Fixed Assets

Fixed Assets Units Vehicle (Maruti Van) 1 Tents (Dome Tent) 10 Toilet Tents 2 Rafts (Boat & Paddling ore) 4 Music System & Other Equip. Life Jackets 35 Computers 4 Printer 1 Television 1 DVD Player 1 Furniture (Sofa Set) 1 Table (Director) 2 Table (Manager) 2 Reception Desk 1 Tea Table 1 Revolving Chair 2 Simple Chair 5 Filling Cabinets 5 Telephone Set 4 Fax Machine 1 Photo Copy Machine 1 Gas Stove 2 Gas Cylinder 2 Utensils Tea/Coffee Vending Machine 1 Vacuum Cleaner 1 Total

Per Unit Cost (Rs.) 12,29,440 14,000 4,700 2,10,000 2,500 30,000 25,000 30,000 5,500 50,000 20,000 16,500 20,000 12,000 8,000 5,000 12,500 2,500 25,000 85,000 2,500 1,330 20,000 7,000

Total Cost (Rs.) 12,29,440 1,40,000 9,400 8,40,000 90,000 87,500 1,20,000 25,000 30,000 5,500 50,000 40,000 33,000 20,000 12,000 16,000 25,000 62,500 10,000 25,000 85,000 5,000 2,660 10,000 20,000 7,000 30,00,000

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Annexure 5
Table 22: Calculation of Annual Depreciation on Fixed Assets

S.N. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Particulars Vehicle (Maruti Van) Tents (Dome Tent) Toilet Tents Rafts (Boat & Paddling ore) Music System & Other Equ Life Jackets Computers Printer Television DVD Player Furniture (Sofa Set) Table (Director) Table (Manager) Reception Desk Tea Table Revolving Chair Simple Chair Filling Cabinets Telephone Set Fax Machine Photo Copy Machine Gas Stove Gas Cylinder Utensils Tea/Coffee Vending Machine Vacuum Cleaner Total Accumulated Depreciation

Total Cost 12,29,440 1,40,000 9,400 8,40,000 90,000 87,500 120,000 25,000 30,000 5,500 50,000 40,000 33,000 20,000 12,000 16,000 25,000 62,500 10,000 25,000 85,000 5,000 2,660 10,000 20,000 7,000

Rate (%) 2013 20 2,45,888 20 28,000 20 1,880 20 1,68,000 20 18,000 20 17,500 20 24,000 20 5,000 15 4,500 15 825 15 7,500 15 6,000 15 4,950 15 3,000 15 1,800 15 2,400 15 3,750 15 9,375 20 2,000 20 5,000 20 17,000 15 750 15 399 15 1,500 20 4,000 20 1,400 5,84,417 5,84,417

2014 1,96,710 22,400 1,504 1,34,400 14,400 14,000 19,200 4,000 3,825 701 6,375 5,100 4,208 2,550 1,530 2,040 3,188 7,969 1,600 4,000 13,600 638 339 1,275 3,200 1,120 4,69,871 10,54,288

2015 1,57,368 17,920 1,203 1,07,520 11,520 11,200 15,360 3,200 3,251 596 5,419 4,335 3,576 2,168 1,301 1,734 2,709 6,773 1,280 3,200 10,880 542 288 1,084 2,560 896 3,77,884 14,32,172

2016 1,25,895 14,336 963 86,016 9,216 8,960 12,288 2,560 2,764 507 4,606 3,685 3,040 1,842 1,105 1,474 2,303 5,757 1,024 2,560 8,704 461 245 921 2,048 717 3,03,996 17,36,168

2017 1,00,716 11,469 770 68,813 7,373 7,168 9,830 2,048 2,349 431 3,915 3,132 2,584 1,566 940 1,253 1,958 4,894 819 2,048 6,963 392 208 783 1,638 573 2,44,632 19,80,800

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Annexure 6
Table 23: Operation & Administration Expenses

Particulars Salary & Wages Training Personnel Cost (A) Rent Total Rent (B) Electricity Water Waste Management Telephone Internet Line Gas Utility Expenses ( C) Repair & Maintenance equipments Computer & Printer Maintenance Equipment Maintenance Cost (D)

Monthly 1,45,700 2,000 1,47,700 35,000 35,000 5,000 1,500 150 7,000 1,500 3,500 18,650 2,000 1,000 3,000 One Time One Time One Time 4,000 6,000 4,000

2013 18,94,100 24,000 19,18,100 4,20,000 4,20,000 60,000 18,000 1,800 84,000 18,000 42,000 2,23,800 24000 12000 36,000

Annually 2014 19,88,805 25,200 20,14,005 4,41,000 4,41,000 63,000 18,900 1,890 88,200 18,900 44,100 2,34,990 25,200 12,600 37,800

2015 20,88,245 26,460 21,14,705 4,63,050 4,63,050 66,150 19,845 1,985 92,610 19,845 46,305 2,46,740 26,460 13,230 39,690

2016 21,92,658 27,783 22,20,441 4,86,203 4,86,203 69,458 20,837 2,084 97,241 20,837 48,620 2,59,076 27,783 13,892 41,675

2017 23,02,290 29,172 23,31,463 5,10,513 5,10,513 72,930 21,879 2,188 1,02,103 21,879 51,051 2,72,030 29,172 14,586 43,758

Firm registration Office Decoration & Layout Website Creation Printing & Stationery Advertisement & promotion Subscriptions Traveling Insurance Other Operating Cost (E) Total Operating & Administrative expenses

8,000 55,000 30,000 48,000 5,00,000 2,500 72,000 48,000 7,63,500

50,400 2,00,000 2,625 75,600 50,400 3,79,025

52,920 2,00,000 2,756 79,380 52,920 3,87,976

55,566 2,00,000 2,894 83,349 55,566 3,97,375

58,344 2,00,000 3,039 87,516 58,344 4,07,244

33,61,400

31,06,820

32,52,161

34,04,769

35,65,008

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Table of Contents
Chapter 1 Introduction .................................................................................................................... 1 1.1 Background ............................................................................................................................ 1 1.2 Potentiality of Business .......................................................................................................... 1 1.3 Company: Zipper Adventure............................................................................................... 2 1.4 Description of the Firm .......................................................................................................... 2 1.5 Vision...................................................................................................................................... 3 1.6 Mission ................................................................................................................................... 3 1.7 Goals and Objectives.............................................................................................................. 3 1.8 Values ..................................................................................................................................... 4 1.9 Critical Success Factor ............................................................................................................ 4 Chapter 2 Assessment of Business Environment ............................................................................. 6 2.1 SWOT Analysis ....................................................................................................................... 6 2.2 PESTLE Analysis ...................................................................................................................... 8 2.3 Competitive Analysis ............................................................................................................ 10 Chapter 3 Defining Products/ Services........................................................................................... 12 Chapter 4 Marketing Research and Analysis.................................................................................. 15 4.1 Market Description .............................................................................................................. 15 4.2 Market Segmentation .......................................................................................................... 16 4.2.1 Geographic Segmentation ............................................................................................ 16 4.2.2 Demographic Segmentation ......................................................................................... 16 4.3 Market Needs....................................................................................................................... 16 4.4 Target Market ...................................................................................................................... 17 4.5 Market Growth .................................................................................................................... 18 Chapter 5 Marketing Plan and Strategies ...................................................................................... 19 5.1 Market Positioning ............................................................................................................... 19 5.2 Market/ Growth Strategy..................................................................................................... 19 5.2.1 Market Penetration....................................................................................................... 20 5.2.2 Distribution Strategy ..................................................................................................... 20 5.2.3 Communication Strategy .............................................................................................. 20 5.3 Marketing Mix ...................................................................................................................... 21 5.3.1 Product/Services ........................................................................................................... 21 50

5.3.2 Pricing............................................................................................................................ 22 5.3.3 Place .............................................................................................................................. 22 5.3.4 Promotion ..................................................................................................................... 23 5.3.5 People ........................................................................................................................... 23 5.3.6 Physical Evidence .......................................................................................................... 23 5.3.7 Process .......................................................................................................................... 24 5.5 Marketing Budget ................................................................................................................ 24 5.6 Sales Forecasting .................................................................................................................. 25 Chapter 6 Operational Plan............................................................................................................ 26 6.1 Office Location ..................................................................................................................... 26 6.2 Layout Design ....................................................................................................................... 26 6.3 Process of Service Delivery .................................................................................................. 27 6.4 Resource Management ........................................................................................................ 29 6.5 Capacity Planning ................................................................................................................. 29 6.6 Quality Management ........................................................................................................... 29 6.7 Organizational and Management Plan ................................................................................ 31 6.7.1 Organization Structure .................................................................................................. 31 6.7.2 Recruitment and Selection............................................................................................ 33 6.7.3 Remuneration and Compensation System ................................................................... 33 6.7.4 Training and Retention Plan.......................................................................................... 33 Chapter 7 Financial Plan................................................................................................................. 34 7.1 Capital Requirement ............................................................................................................ 34 7.2 Assumptions......................................................................................................................... 35 7.3 Fixed Assets .......................................................................................................................... 35 7.4 Income Statement................................................................................................................ 36 7.5 Statement of Retained earnings: ......................................................................................... 37 7.6 Cash Budget ......................................................................................................................... 37 7.7 Projected Balance Sheet ...................................................................................................... 38 7.8 Projected Key Financial Ratios ............................................................................................. 38 7.9 Project Analysis .................................................................................................................... 39 Chapter 8: Critical Risk and Contingencies ..................................................................................... 40 8.1 Internal Risk ......................................................................................................................... 40 51

8.2 External Risk ......................................................................................................................... 41 Chapter 9: Future Plan and Exit Strategy ....................................................................................... 42 9.1 Future Plan ........................................................................................................................... 42 9.2 Exit Plan................................................................................................................................ 43

List of Figures
Figure 1: Office Layout ................................................................................................................... 26 Figure 2: Flow Chart of Service ...................................................................................................... 27 Figure 3: Organization Structure.................................................................................................... 32

List of Tables
Table 1: Funds from Partners........................................................................................................... 2 Table 2: Total customer inflow of Yala Adventure and ZAs target ............................................... 17 Table 3: Arrival Growth .................................................................................................................. 18 Table 4: List of Product/Service ..................................................................................................... 21 Table 5: Comparative Price Analysis .............................................................................................. 22 Table 6: Annual Sales Forecast ...................................................................................................... 25 Table 7: Capital Requirement ........................................................................................................ 34 Table 8: Capital Structure .............................................................................................................. 35 Table 9: Projected Income Statement ........................................................................................... 36 Table 10: Statement of Retained Earnings .................................................................................... 37 Table 11: Projected Cash Flow Statement ..................................................................................... 37 Table 12: Projected Balance Sheet ................................................................................................ 38 Table 13: Key Financial Ratios ........................................................................................................ 38 Table 14: Payback Period ............................................................................................................... 39 Table 15: Sales Forecast for Hard Adventure Package .................................................................. 44 Table 16: Sales Forecast for Soft Adventure Package.................................................................... 44 Table 17: Pricing per person for Hard Adventure Package ............................................................ 45 Table 18: Pricing per person for Soft Adventure Package ............................................................. 45 Table 19: Details of Marketing Budget .......................................................................................... 46 Table 20: Salary Expenses of Permanent Staffs ............................................................................. 46 Table 21: Details of Fixed Assets .................................................................................................... 47 Table 22: Calculation of Annual Depreciation on Fixed Assets...................................................... 48 Table 23: Operation & Administration Expenses ........................................................................... 49

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