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 as one of the best team in the top flight European league. We choose to develop the team because our location is a friendly state when it comes to playing soccer. This organization was first founded and registered in 2015 by Kenneth A. who has turned to be the manager of the organization. The organization has active management with one manager, three directors, and two financial officers. The Supreme Sports Ltd is expected to be the leader in sponsoring of 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 deal with buying players, their sporting kits and buying 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 has been fully known, we shall carry out marketing through promotion tools such as the use of advertisements, use of technology and even online promotions. Different products that are produced by the team are very significant when it comes to the generation of revenue. One of the things is the club might decide to sell the playing kits such as the jerseys to the fans of the team. 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 be able to pay and enjoy the facilities too. This will be additional revenue. Advertising will also make the organization to be well known (Carling et al., 2015). Online promotion tools such as the making of a website will also be added to the revenue generation efforts. The team will also appoint someone to work on some of their social media websites where inquiries from clients about any service can be addressed.
Tax and legal issues
One of the taxation issues that have arisen for most of the club owners is the issue of corporate tax and image right taxation. Most of the management of football sporting teams will have to incur matters to do with the payment of corporate fees which arises from trading activities. The 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, they should express themselves for the payment of Value Added Tax. However, there are exemptions from this tax which is usually based on the nature of physical education. Clubs are also faced with legal issues which include the contracts given to players; the training compensations and legal matters are circulating when a buy-out clause in settlement of a player can trigger his transfer and others relating to the agreement of those footballers who are young but 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
There are some risks related to running a football club is usually associated with the company. One of the dangers is the risk of growing bankruptcy. In most cases, some factors such as constant loses can lead to the club being bankrupt. This means that they will even lack the finance to conduct most of the clubs’ activities such as transporting the players to a given pitch for any scheduled competitive game. The other risk is a player injury. During any game, the player might get serious injuries that may prove to be expensive for the organization to cater for in full quantity and an efficient manner. Injuries will affect the performance of the team and thus impact the financial position of the group to be low (Edelman, 2009). The other risk is that of overspending. Sometimes, the football team might spend more money than the one they make especially when it comes to the buying of new and high profiled players.
| Income statement | |||||||
| Supreme Sports Ltd | |||||||
| from 2012-2017 | |||||||
| Revenue | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | |
| Gros 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 at December 2017 (All figures in $)
| Cash | 800 | |
| Account 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 year 2016 and 2017 | |||
| 2016 | 2017 | ||
| Receivable account | 500 | 500 | |
| Rent prepaid | 100 | 100 | |
| Insurance cover | 10 | 12 | |
| sales | 600 | 700 | |
| Payable account | 450 | 480 | |
| salaries | 50 | 80 | |
| income | 140 | 190 | |
| Interests | 198 | 189 | |
| End year of 2016 | |||
| Net sales | 800 | ||
| expense of salary | 700 | ||
| expense on insurance | 389 | ||
| expense on rent | 289 | ||
| Expense of interest | 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 which can be easily be verified.
Financial analysis
- Liquidity ratios- these would be used in measuring debts which a company has incurred as well as give a broader perspective of financial health of an organization
- Efficiency ratios-The rations would be employed to provide extra insight in regions like of collections, operational results, and cash flows.
- Profitability ratios-The ratios would assess the viability of a firm financially.
Mitigating the risks
To ensure that this problem of bankruptcy is not witnessed, the sporting team management must ensure that they can insure themselves with a renowned insurance company. This company will help them to cater for specific activities. They should also enter into a partnership with some 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 loses by a health insurance company. During the time 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 they come up with a budget beyond which they 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 the supreme Sporting limited can generate many funds from investors, some good returns will be a sign of appreciating their investments. One of the returns that the Supreme will offer is ensuring that each share of the investors are assigned to them at 40% of the total turnover on every investment that they make. They will also be given 50% of the profit that the organization will come up with at the end of any trading periods (Parlow, 2009). The Supreme Sports Limited can also decide to offer royalty fees to some of their investors in an attempt to generate more funds. They will, therefore, have the ability to use the copyright of the club when conducting most of their business promotions. This fee will enable the company to gain much trust from most of the investors. They should also ensure that they can offer high interest on savings. This will make most of the investors to save their funds in the accounts of Supreme Sport limited.
Exit strategy
To ensure that the Supreme Sports Company exits the business more efficiently, the company will embark on the use of a stop-loss strategy which is in most cases known as stops (Nolan, 2013). This is where you will be pushed out of a business when any of the security of Supreme violates the main reason why the company adopted a team or why it entered the trade. Some of the technical features that the company will break include the trendlines, moving averages, etc. this helps them to establish the stop loss price more naturally. At this point, the company will be allowed to 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.
