Overview of Business Plan
Supreme Sporting Business Plan is a business entity that focuses on promoting and sponsoring different countries. We focus on establishing a football team that will go on to be one of the best teams in the top-flight European league. We chose to develop the team because our location is a friendly state for playing soccer.
This organization was founded and registered in 2015 by Kenneth A., who has become the manager of the organization. The organization has active management with one manager, three directors, and two financial officers. Supreme Sports Ltd is expected to be the leader in sponsoring teams, and we believe that the organization will do much to ensure that most of the best teams are under it for business development and success. The organization will buy players and their sporting kits and all the training equipment for the team (Bradley et al., 2016). We focus on taking football management to the next level.
Marketing Promotion
To ensure that the organization is fully known, we shall use marketing tools such as advertisements, technology, and even online promotions. Different products produced by the team are very significant when it comes to generating revenue. One option is that the club might decide to sell playing kits such as jerseys to the team’s fans. This will be done through advertising the available jerseys. Gym services can also be advertised so that anyone who is willing to do trials can pay and enjoy the facilities. This will be additional revenue. Advertising will also make the organization well-known (Carling et al., 2015). Online promotion tools such as website development will also be added to revenue-generation efforts. The team will also appoint someone to work on some of its social media websites, where client inquiries about any service can be addressed.
Tax and Legal Issues
One of the taxation issues that have arisen for most club owners is the issue of corporate tax and image-right taxation. Most managers of football sporting teams will have to deal with matters concerning the payment of corporate fees arising from trading activities. Corporate taxes usually consider everything part of just the payments for having the membership (Cavico et al., 2014). If the company or organization can register a turnover of more than 100,000 euros, it should register for the payment of Value Added Tax. However, there are exemptions from this tax, which are usually based on the nature of physical education. Clubs are also faced with legal issues, which include the contracts given to players and training compensation. Legal matters also arise when a buy-out clause in a player’s settlement can trigger his transfer and in agreements involving young footballers who are in demand. There are also solidarity payment and training compensation issues for the training offered to the various players (Dimitropoulos et al., 2016).
Financial Risks
Some risks related to running a football club are usually associated with the company. One of the dangers is the risk of bankruptcy. In most cases, factors such as constant losses can lead to the club’s bankruptcy. This means it will even lack the finances to conduct most of the club’s activities, such as transporting the players to a pitch for any scheduled competitive game. The other risk is player injury. During any game, players might sustain serious injuries that may prove expensive for the organization to cover fully and efficiently. Injuries will affect the team’s performance and thus negatively affect the group’s financial position (Edelman, 2009). The other risk is that of overspending. Sometimes, the football team might spend more money than it makes, especially when buying new and high-profile players.
| Income statement | |||||||
| Supreme Sports Ltd | |||||||
| from 2012-2017 | |||||||
| Revenue | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | |
| Gross sales | $ 300.00 | $ 320.00 | $ 310.00 | $ 200.00 | $ 250.00 | $ 150.00 | |
| (Less sales return) | 210 | 220 | 240 | 160 | 260 | 100 | |
| Net sales | $ 90.00 | $ 100.00 | $ 70.00 | $ 40.00 | $ (10.00) | $ 50.00 | |
| Cost of sales | |||||||
| Opening stock | $ 200.00 | $ 250.00 | $ 300.00 | $ 310.00 | $ 200.00 | $ 100.00 | |
| plus the cost of goods available for sale | 50 | 100 | 100 | 120 | 150 | 50 | |
| Total Goods sold | $ 250.00 | $ 350.00 | $ 200.00 | $ 190.00 | $ 200.00 | $ 50.00 | |
| Less closing stock | 100 | 120 | 100 | 140 | 170 | 40 | |
| Cost of goods sold | $ 150.00 | $ 230.00 | $ 100.00 | $ 50.00 | $ 30.00 | $ 10.00 | |
| Gross profit/loss | $ 60.00 | $ 130.00 | $ 30.00 | $ 10.00 | $ 40.00 | $ (40.00) | |
| Expenses | |||||||
| Advertising | $ 5.00 | $ 10.00 | $ 4.00 | $ 3.00 | $ 6.00 | $ 8.00 | |
| Administration cost | 1 | 3 | 6 | 9 | 2 | 4 | |
| Total expenses | $ 6.00 | $ 13.00 | $ 10.00 | $ 12.00 | $ 8.00 | $ 12.00 | |
| NET INCOME | $ 54.00 | $ 117.00 | $ 20.00 | $ (2.00) | $ 32.00 | $ (52.00) | |
Balance Sheet of Supreme Sports Ltd
As of December 2017 (All figures in $)
| Cash | 800 | |
| Accounts receivable | 100 | |
| Inventory | 100 | |
| Assets | 90 | |
| Total Assets | 1090 | |
| Accounts payable | 500 | |
| Equipment loan | 290 | |
| Debts | 100 | |
| Stock | 200 | |
| Total Liabilities | 1090 | |
| Statement of flow from the years 2016 and 2017 | |||
| 2016 | 2017 | ||
| Accounts receivable | 500 | 500 | |
| Rent prepaid | 100 | 100 | |
| Insurance cover | 10 | 12 | |
| Sales | 600 | 700 | |
| Accounts payable | 450 | 480 | |
| Salaries | 50 | 80 | |
| Income | 140 | 190 | |
| Interest | 198 | 189 | |
| End of year 2016 | |||
| Net sales | 800 | ||
| Salary expense | 700 | ||
| Insurance expense | 389 | ||
| Rent expense | 289 | ||
| Interest expense | 135 | ||
Financial assumptions from the income statement
- The income and expenses are factual figures attained from the company’s operations.
- The sales volumes are realistic statistics that can be easily verified.
Financial Analysis
- Liquidity ratios: These would be used to measure debts that a company has incurred and give a broader perspective of the financial health of an organization.
- Efficiency ratios: These would be employed to provide extra insight into regions like collections, operational results, and cash flows.
- Profitability ratios: The ratios would assess the viability of a firm financially.
Mitigating the Risks
To ensure this bankruptcy problem does not occur, the sporting team management must ensure that the team is insured with a renowned insurance company. This company will help them cater to specific activities. They should also partner with other companies such as those in charge of making the playing kits. In a case where players suffer any injury while offering services to the team, the team head should ensure that each and every player has been insured against injury losses by a health insurance company. In the event of injury, the company will take care of patients’ treatment bills, which may be expensive for the company (Liu et al., 2015). To reduce the risk of overspending, Supreme Sports Limited will ensure that it has a budget beyond which it should not spend. This will reduce the issue of spending much more than the income that is received.
Investor Return on Investment
To ensure that Supreme Sporting Limited can generate substantial funds from investors, it will offer good returns to show appreciation for their investments. One of the returns that Supreme will offer is ensuring that each share of the investors is assigned to them at 40% of the total turnover on every investment they make. At the end of any trading period, they will also be given 50% of the profit the organization earns (Parlow, 2009). Supreme Sports Limited can also decide to offer some of its investors royalty fees to generate more funds. They will, therefore, be able to use the club’s copyright when conducting most of their business promotions. This fee will enable the company to gain the trust of most investors. It should also ensure that it can offer high interest on savings. This will allow most investors to save their funds in Supreme Sport Limited’s accounts.
Exit Strategy
To ensure that the Supreme Sports Company exits the business more efficiently, the company will use a stop-loss strategy, usually known as stops (Nolan, 2013). This is where the company will be pushed out of a business when the security of Supreme violates the main reason why the company adopted a team or entered the trade. Some technical features that the company will consider include trendlines, moving averages, etc. This helps the company establish the stop-loss price more naturally. At this point, the company can get out of the business.
References
Bradley, P. S., Archer, D. T., Hogg, B., Schuth, G., Bush, M., Carling, C., & Barnes, C. (2016). Tier-specific evolution of match performance characteristics in the English Premier League: it’s getting tighter at the top. Journal of sports sciences, 34(10), 980-987.
Carling, C., Le Gall, F., McCall, A., Nédélec, M., & Dupont, G. (2015). Squad management, injury and match performance in a professional soccer team over a championship-winning season. European journal of sports science, 15(7), 573-582.
Cavico, F. J., Orta, M., Muffler, S. C., & Mujtaba, B. G. (2014). Business plans as legally protected trade secrets under the uniform trade secrets act. Journal of Business Studies Quarterly, 6(2), 42.
Dimitropoulos, P., Leventis, S., & Dedoulis, E. (2016). Managing the European football industry: UEFA’s regulatory intervention and the impact on accounting quality. European Sports Management Quarterly, 16(4), 459-486.
Edelman, M. (2009). Does the NBA Still Have Market Power-Exploring the Antitrust Implications of an Increasingly Global Market for Men’s Basketball Player Labor? Rutgers LJ, 41, 549.
Liu, H., Yi, Q., Giménez, J. V., Gómez, M. A., & Lago-Peñas, C. (2015). Performance profiles of football teams in the UEFA Champions League considering situational efficiency. International Journal of Performance Analysis in Sport, 15(1), 371-390.
Nolan, R. (2013). NCAA’s Call to the Bullpen: Bring in Congress to save the College Game with an Antitrust Exemption. Fla. Coastal L. Rev., 15, 447.
Parlow, M. J. (2009). The NBA and the Great Recession: Implications for the Upcoming Collective Bargaining Agreement Renegotiation. DePaul J. Sports L. & Contemp. Probs., 6, 195.
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