Description of the Project Data

Project Promoter or initiator

One-time requirements must be supplied in the headquarter location and continuous requirements must be supplied in both headquarter and locations on tourney routings. It is required at this point to explain why housing of animals is not specified as need. Since it is not an easy work to prepare place for animals in every city visited, it is planned to use the lorries for animal keeping. The lorries will have a special design for keeping the animals while travelling and during a visit to a city. This subject will be explained in details in the following sections of the study.

b) Technical project requirements: There exist two options for the circus facility. One of them is to use a tent and the other one is to use an existing sports facility. The required properties for each are:

c) Market type: The market of a circus is entertainment market and the target market is families with children of 05-19 ages and primary & secondary schools (it is learned from BELYA that schools are so eager to contribute). The educational and economical level of the society are preferred to be at medium level.

d) Organizational requirements and management structure: The required organization structure is explained in detail in Organization and Management section of the study. However, in this part, it will be stated that the location of the headquarter must enable the organization to find skilled personnel to employ. The headquarter location must also be selected such that the communication can easily be supplied with government offices. This is needed to get permissions and follow the regulations of government to perform the circus entertainment.

e) Transportation: Another requirement for a circus to be placed on a location is the transportation facilities of that location or site. An entertainment place must be easily reached to be attractive. Therefore vehicles such as metro and busses must be available for the audiences. Also for the headquarter location, it is important to be close to the cities on tourney routing.

6. Environment: Environment concept can be considered in two ways:

- environmental features needed: If the tent will be used for the show, then heating can be problem since it will be too costly to heat the tent.. Therefore in order to eliminate this problem the climatic conditions can be defined as requirements and warm weather will be required for the tent shows. The environment of the site is preferred to be away from the public locations. This is mainly because of animal keeping, to place them near to public areas may not be secure and desired by people due to smell. Also the noise and sounds that occurs during the show may be disturbing for the environment. Since the organization does not use anything directly from the environment, no other requirement is specified.

- environmental effects of project: Since there exist a number of animals, their wastes must be disposed not to pollute the environment. Therefore a waste disposal unit must serve at the selected location. The circus does not produce any other thing that is harmful to the environment, so no other precautions are required to be taken.

As it was stated before, two kinds of locations will be selected. One for headquarter and training saloon and the other for the stops of tourney routing.

· ANKARA: It is easy to communicate with government offices and follow the regulations. It is in the middle of Turkiye, so transportation to other cities will be easier. The communication with the municipalities who give order for the circus will be easly provided. Transportation facilities within the city is sufficiently effective (Metro, Ankaray, busses, minibusses etc.).

· ISTANBUL: Onetime requirements can easily be supplied. Skilled technical personnel can be hired.

Ankara and Istanbul are the two alternatives for the central location of the organization. When the key requirements in section B are considered, Istanbul had to be eliminated. The first reason is that it isn’t close to government offices. Another reason was that Istanbul is a small city in size, so to find and hire or purchase a land to construct a facility may be too expensive. Also since the living standards are higher than other cities, more wages may be required to pay for the employees.

As a result Ankara is selected for headquarter location. The matching properties with the key requirements are listed below:

1. Close to government offices, so communications for permissions to perform the shows, to bring trainers & animals from different countries can easily be taken.
2. Many empty site alternatives exist just outside the city which are suitable for the circus project. If they are purchased from the treasury of government, the prices may decreases in significant amounts.
3. Since it is at the middle of Turkiye, transportation to tourney routings can be less costly and quicker in time.
4. Skilled personnel can be found, esp. new graduates from ODTU and Bilkent University can be employed.
5. The market type, that is , the socio-economical level in Ankara is also suitable for circus entertainment.
6. By the highway between Ankara and Istanbul, the inputs (esp. onetime requirements) can be supplied from Istanbul by road transportation.
7. The fuel & power (electricity) costs are cheaper in Ankara than in Istanbul. Also water supplies are more sufficient in Ankara.

At the beginning of this section, it was stated that the circus organization will be traveling in order to reach more audiences. In the early periods of circus project, introductory tourneys are planned. For these tourneys, routings will be determined for 6 months. During these tourneys, the circus will be introduced to the public and advertisements will be made. To decide the cities on the route, some criteria (requirements) are determined:

• cities having a sports facility with required dimensions. If it doesn’t have such a facility, tent will be used; then availability of water, electricity and waste disposal services will be the key requirements. The first tourney route will be selected such that each city has sports facility sufficient for the shows.
• Total population of the city and percentage of 05-19 year age children to total population. Since the circus entertainment’s target market is this aged children and their parent, the cities with high percentages with high populations are selected. The information about the statistics are gathered from Government Statistics Institute. They tabulated below:

• Culture of citizens. The cities in which contribution to a circus entertainment is expected to be high are preferred. Due to some cultural or religional rules, it may not be welcomed (eg. Konya is not as an alternative).
• To optimize the tourney routing, the route stops are arranged in circular order not to allow back tracking.
• Cities must not be neighbor to each other since people can attend the circus after travelling for a few hours from one city to another. This is made to increase the number of audiences in one location.

Using the above requirements, an optimal tourney routing is planned. While determining the cities to be visited, the cities in which circus entertainment was hold before. The information about this is gathered from the MOSCOVA CIRCUS personnel. According to the plan, after Ankara, the first visit will be made to Istanbul. Since the circus can be reflected to media more in Istanbul, public in other cities will hear and get information about it and become more eager to watch the show. That is to begin with big cities will be an advertisement for the other cities. The rest of the route is planned as follows:

1. ANKARA
2. ISTANBUL
3. BURSA
4. IZMIR
5. ANTALYA
6. ADANA
7. DIYARBAKIR
8. TRABZON
9. SAMSUM

The periods that the circus show will be on action in each city are defined by forecasting the demand for the show and arranging a period which the demand will not fall below a quantity which won’t overcome the costs of the shows. The periods for each city are given in the table below:

While the cities were selected, attention was given to visit each section of Turkiye (like Ege, Marmara, etc.). This tourney will begin in April 2000 after 14 months from the foundation of the company and continue for 6 months.

As the circus may become known by people, orders are expected to be given. These orders may come especially from municipalities and private sectors. When the orders begin to arrive, location would be automatically determined. Site selection will also be made by the customer (organization inviting the circus) according to the requirements that are defined by the circus management. To accept an order, contracts must be signed. These contracts include the agreements on the requirements of the circus. The requirements which will be supplied by the customer or by the circus will be determined. These can be grouped as:

• facility properties that the circus show will take place
• availability of feed
• housing requirements for the artists
• transportation costs

If it is decided to supply the feed for animals or housing by the circus organization, a traveling personnel will be employed to make necessary research and agreements with the suppliers. If they are decided to be supplied by the customer than the traveling personnel will be employed if the requirements are met.

The shows may be displayed in sports facility or in a tent. According to this choice requirements may change. Tent will be used only in warm climatic conditions since heating system will cost a lot (no heating system will be used for tent at least for a few years). The requirements for tent will be water and electricity supplies and waste disposal services. These requirements are already supplied in sports facilities.

After the selection of location, next step is to determine the site.

a) The first site to be determined is the site for training saloon. The site requirements are listed below (these are the requirements related to sites, pulled out from the ones listed in section III.B):

• availability of feed for animals
• availability of water supply
• electricity availability
• fuel for heating
• waste disposal
• being away from public centers
• reliable cost of land
• topographic properties for construction of the saloon
• human resources availability both for employees and construction workers

Alternatives to be evaluated are:

• sites provided in parks
• the empty sites on Eskisehir highway
• the empty sites on Istanbul highway

After the requirements are examined again, it is seen that the last alternative will be eliminated. One of the requirements were about the cost of land. The cost in such parks will be very high and also no permission may be given for circus entertainment since it needs wide area.

The remaining two alternatives will have higher cost since water, electricity, fuel supplies and waste disposal regulations must be initialized. When the costs are considered for the remaining two alternatives, the costs for maintaining these will be less for the sites on Istanbul highway close to the new hippodrome. This is since the water, fuel, power transports have reached to a certain point and less costs will be added for these expenses. Another advantage may be due to Animal Exchange Company. This will ease to meet two requirements. One is feed for animal provision. Since, transportation cost is already given to deliver feed from factory to here, cost of feed supply will be less than any other place. There exist Animal feed factory (Ankara Yem Fabrikası) on the way to Eryaman, this will also decrease the transportation costs. The second requirement is the municipality services. The municipality activities reached close to the site alternative considered because of the hippodrome and animal exchange company, so this will also decrease the costs that will be given to municipality for the services. Both of the alternatives also meets the requirements to be away from public center locations not to disturb the public (by noise pollution, security risks due to animals etc.). The cost of land is more expensive on Istanbul highway than on Eskisehir highway, but since only training activities will take place in the saloon, its transportation is not very important. Therefore the site needn’t be close to the road. This flexibility will allow to find cheaper land. Both of the alternatives are suitable for construction requirements such as delivery of materials and workers. As a result of above discussions, the site on Istanbul highway, close to the new hippodrome is selected for the training saloon.

After deciding the site, next step is to define how to purchase that site. The exact placement will be determined after the availability of the sites are researched. The available land may belong either to private organization or to the government. It is preferred to purchase from the treasury since it will be cheaper. Also some incitement credits can be taken from the government. The site needed for the facility planed to be constructed will be 2500 m². The prices of m² of land on the selected site are investigated from real estate agents and it is learned that it changes from 1,000,000 TL to 1,500,000 TL. With the public work expenses this value reaches to 2,000,000 TL. so the total cost of purchasing the land is estimated to be about 5,000,000,000 TL. The costs of construction were explained before in section III.A.

b) The next site selection is for the management office. The requirements of management office are:

• being close to government offices & work centers to perform the job
• easy transportation (not to put services to arrive the office)
• reliable rent
• place which the attraction of public can be provided

To meet these requirements, a floor (about 200m² ) of a business center building is required. Such a place may be in Kızılay, Ulus, Tunalı, Bahçelievler, or Tandoğan. The most important criteria in the evaluation of the alternatives is the availability of such a place. With the assumption that a place can be found at each sites given above, three more criteria will be evaluated. These can be summarized as closeness to centers, cost of renting a place and attraction of public i.e. a place which can get attention by public. In order to evaluate the alternatives, Lµ method from Decision Analysis methods is used. The calculations are given below:

* first alternative to be selected

** second alternative to be selected

*** third alternative to be selected

**** last alternative to be selected

According to the results of the analysis, BAHCELIEVLER is selected to rent an office. Since there isn’t business centers in Bahceli, one or two floors of an apartment are planned to be rented.

A division of the company into organizational units in line with marketing, supply, service and administrative functions are very important to allow the assessment and projection of overhead costs. This section deals with indirect or overhead costs. These costs may have a significant impact on the profitability of the project.

1. Organization & Management:

Organization is the means by which the operational functions and activities of the enterprise are structured and assigned to organizational units, represented by managerial staff, supervisors and workforce, with the objective of coordinating and controlling the performance of the enterprise and the achievement of its business targets.

The organizational structure of an enterprise indicates the delegation of responsibilities to the various functional units.

Organizational functions are the building blocks of the company. These functional units are represented on the organization chart below:

The organizational structure of the proposed circus takes the shape of a typical pyramid with three organizational levels:

Top Management: Responsible with long-term strategic planning, budgeting, coordination and control.

Middle Management: Responsible with the planning and control of the organizational functions such as tournee routings, purchases, advertisement, finance and transportation.

Supervisory Management: Responsible with planning and controlling the day-to-day operations and activities within the organizational units.

2. Organizational Design

The mission of the Circus is providing the best entertainment that can be attained with the money and time people spend for.

The vision of the proposed service is becoming the top leader in entertainment sector in Turkey.

• Improving entertainment sector in Turkey
• Becoming a world-wide Circus by improving its capacity and number of shows that can simultaneously be continued.
• Improving the motivation of Turkish people by giving some fun.
• Being a company aiming continuous improvement, competing by itself.

The functions that are necessary to achieve these goals and objectives are shown on the organization chart. However some fundamental aspects of the optimal organizations are also in consideration. As the number of organization levels increase, it is more difficult to manage the organization. Thus, the organizational level is tried to be held as minimum required. Every aspect is thought to be as simple and small as possible, while considering the work capacity of the employees, i.e., no less or no more than required number of employees are considered. A subdivision of activities by the functions are also considered in building the organization chart. These functions and job descriptions of employees working under these functions are described in following sections.

General Manager is the heart of the company, establishing the co-ordination and co-operation between the departments and manage the organization as a whole. The general manager is also responsible for all the entrepreneurial functions. He should be clever and ambiguous, motivating the employees.

An administrative unit is planned to provide both the management with the subjects related to human resources and financial and accounting information.

Finance & Accounting:

Financial and economic information is required for the efficient and economic operation of the enterprise. Turkish laws and fiscal regulations also require that the financial situation of the organization should be reported regularly. For this department, specialized staff is required for cost accounting, bookkeeping, calculation of wages and budgeting. Three specialized employees will be sufficient for this department. Two of them staying at the center and one of them traveling with the Circus. The responsibilities of this traveling accounter is given in Circus Management section.

Human Resources:

This department is responsible with recruitment and training of the employees. It is also responsible for searching trainers and new personnel for circus environment and the activities of hiring, laying-off of the personnel are held within this department.

The artists working at the Circus have different shows each with different levels of danger. Dangerous jobs should be paid more. Thus, job evaluation study becomes a must. This will also be held by this department. These activities can be held by two specialized employees experienced in human resources.

This department is required for new plays on the show. The show gym will be free in the time when the Circus is on tournee which does not mean that the gym will not be used. The aim of constructing such a building is mainly for the training of new personnel as well as developing the show. This department will search for famous trainers, and contact with them. Since the firm will be continuously improving, additional artists may be added and not all the artist may play on the same show, i.e., if the number of artists grow two simultaneous shows may be held in different cities, and resulting in improvement of the firm. This department will also be responsible of looking for more economical ways to run the Circus and develop new skills or design equipment required for Circus. Two employees in center building will perform the prescribed jobs.

Marketing

This functional unit has three sub-divisions.

Advertising: Advertising is very important for especially for Circus organization. It is a service industry and giving entertainment, not a vital need such as bread or water. With this aim an Advertising Unit is necessary. This department will produce new advertisements for each city depending on the socio-economic and cultural environment. For example, adds on public transportation vehicles will work in big cities, whereas a huge add on the largest building or municipality announcements on small cities will work in small cities. The pictures on adds will also be determined by what the public wish to see depending on its culture. For example, in front of a school, a big picture of a clown will attract the students. The Circus will approximately use 500 posters and 5000 leaflets (much more or less depending on the population of the city) Per week and press of these adds will be in responsibility of this department. One employee will be sufficient for these activities. He/She will work in co-ordination with traveling employee.

Forecasting & Route Planning: This unit is responsible of forecasting the future demand on Circus for different cities. For this aim, every year a market research will be held through the municipalities (Since they are the major co-operation that can order an entertainment program). Depending on the demand a tournee routing will be determined for six months period. Two employees will hold these functions.

Contract: Contract unit is responsible for the contracts of future demand. As mentioned in tournee routing section, in the future of the organization, new routes may be added to the tournee routing according to the demand of the municipality or private organizations. These organizations can hire the Circus and give a total amount of money which reduces the ticket sales or advertising costs. One employee will hold these activities.

S & A

This functional unit is composed of four departments related with the basic operations to hold a circus show.

Supplies & Storage Department: The supply system includes the provision of inputs of materials such as food staff of the animals, costumes, inventory of lights, make-ups and other equipment used in a show. This department purchases all kinds of materials and equipment required for the organization and the traveling circus. When the Circus is on a tournee, some of the required inputs such as food of the animals are not purchased by this department but may be maintained in the city of the show. However, other equipment such as make-up equipment or costumes, lights etc. are purchased and stored until a tournee starts. When the circus is ready for a tournee, the equipment required for the shows are loaded on trucks. During the tournee, new demand may come from other cities. In such situations, this new city can be added to the end of the routing according to the distance. This is also considered by the Supplies Department. When this happens, According to the level of the inventory held within the traveling Circus, Supplies Department sends additional inventory that may be required at new city. There are three responsibles of this unit. Two of these employees search for the best possible prices, while avoiding the storage of larger quantities of input materials to be stored and after each tournee, determine the new requirements. Selection and evaluation of suppliers, requesting bids, ordering, warehousing and invoice control and payment of suppliers are made by this department. Enabling the maintenance of the equipment such as the tent, electrical equipment etc. is also in responsibility of this unit. This will be done by co-operation with the technicians in the Circus site. One of these employees will establish all kinds of connections with the suppliers having place in center building, and the other will be responsible by the materials and maintenance having place at the show gym where the materials are stored. The third employee is the traveling one so-called Director of whom responsibilities are given in Circus Management section.

Animals Unit: The organization of animals department deals with all subjects related to animals. New animal acquisition, the health of the animals, the reports of each animal that has every detailed information about the animals are the responsibilities of this department. Two veterinarians will work within the organization of this department. One of them will be on the Circus Site during the tournee and the other will be at the show gym in Ankara.

Gym Manager is responsible of the activities held in the gym. Scheduling of the training programs, utilization of the gym (renting in free days), controlling maintenance and cleaning of the gym are all in the responsibilities of this manager. 2 technicians, 2 cleaners and 3 security personnel works under gym manager.

Circus Management includes the activities during the tournee. Circus Manager is responsible of the show, organization of the activities being on time and correctly, coordination of employees and solving problems related with artists. Under the Circus Manager there are four units. This part of the organization is a matrix type where the Accounter, Director Transportation and Health unit give report to both the Circus Manager and their related departments. The accounter is responsible for keeping records of every transaction and gives records to Administration Manager. Director is responsible for running the show, the arrangement of lights, costumes, the scheduling of the shows of the artists, the arrangement of the show area, building up and pushing down the tent (where tent is used), maintaining electricity and water and supplies and gives report to S&A Manager, works in coordination with Supplies & Storage. The technicians will work for building up and pulling down the tent and during the show, they will use the lights with the directives of the Director and arrange the show area for next artist on the show. They also sell clown accessories, balloons etc. before the show. While selling they wear costumes of Mickey Mouse or Tweety etc. These may not necessarily be technicians but trained workers, but they will be referred as technicians in this context working under Director. Five technicians will be sufficient for the organization. Transportation unit deals with all kinds of transportation problems. These are the transportation of animals, artists and other Circus site personnel on their routings. A special kind of lorry is used for the transportation of animals. This lorry is designed with a heating system and inside separated with rooms for the animals. Two of them is sufficient for being home to all of the animals. The sides can be open or closed. Thus, on a tournee, there is no requirement of looking for a place for animals. This is considered since every animal can only stay at a place that has the unique dimensions. No more or less than the animal’s usual area is allowed. This is something with the psychology of the animals. If more or less area is given to an animal, it can react inversely and even may not play on the show (Moscow Circus). Other than animals, transportation of the artists and Circus site personnel are also within the responsibilities of this unit. For this aim, two buses are provided and all the requirements of transportation are satisfied with five drivers at this unit in co-ordination with Circus Manager. He will follow the inventory levels of Circus on tournee and anytime necessary in co-ordination with Supplies & Storage Unit will organize an additional shipment. Health unit is composed of a veterinarian and a doctor that is responsible from the health of employees and the animals. The doctor also keeps records of every artist, a record of any injury will affect the wage of that artist in a positive direction.

Finally a traveling employee is in the organization of the Circus Management, who works in co-operation with almost every department. Thus, he is an independent staff. The responsibilities of this employee is going to the city on the next route and before the Circus arrives, arranging almost everything. He is responsible for all the formalities with the municipality, distribute the advertisements, and controlling the advertising activities within the city. Arranging the hotels where the Circus employees will stay during the tournee, supplying the required inputs for the show such as the food of the animals, making connections to supply electricity and water (if the tent show is going on instead of a show in the gym).

On the organization chart, every functional unit has a manager giving report to the General Manager. And every functional unit has one secretary. As mentioned previously, the organization is tried to be kept as simple and small as possible. Thus, in the whole organization, a general manager, four managers and two secretaries in center building, one for General Manager and the other for the entrance of the company also connecting external telephone calls to the related officers, a gym manager with 2 technicians, 2 security and 2 cleaners, a circus manager, 28 employees including technicians, doctors and officers, and approximately 50 employees including the show group and animal keepers and 9 security personnel (24 hours on guard) and a traveling employee.

3. Overhead Costs

Overhead costs are taken as a whole in this feasibility study. These overheads are;

Circus, Saloon and business center utilities such as water, electricity, natural gas, effluent disposal, rents of the gym or an area (for tent Circus) during a show, rents of the Business center are estimated in the title; Rents+Utilities. . Insurances and social security contributions are also considered under this title. Transportation and Hotel costs of the Circus team is also considered as overhead costs since they do not directly involve in the service given. Marketing overheads are included in these overheads and an assumption is made for marketing overheads. These costs comprise the 5% of the total overheads. A discrimination should be made since marketing overhead is variable, however others are fixed.

Depreciation: Straight line depreciation method is used for estimating the depreciation costs.

In this section, the human resource requirements at various levels and during different stages of the project are defined as well as their availability and costs. On the basis of the qualitative and quantitative human resource requirements of the project, the availability of the personnel and training needs, the cost estimates for wages, salaries, other personnel related expenses and training are prepared for the financial analysis of the project.

1. Categories and functions

The determination of human resources required, as well as the assessment of the resources available for the project are an important part of this study, because managerial staff and skilled labor and artists are critical factors for the success of the project.

The definition of personnel requirements by categories and functions is necessary for the preparation of a detailed manning table, including the calculation of the total costs of the management, staff and labor and for a comparison of the needed personnel with the resources available in Turkey.

Managerial Staff:

The provision of qualified and experienced managers is a basic prerequisite for successful project implementation. Although in Turkey, there is not a Circus organization, this kind of staff is available. There are service organizations such as arranging a birthday party, or a trip etc. and experienced managerial staff on entertainment sector will be available. However, an experienced staff on Circus Management is not that much easy to be available. Since a tent Circus is being planned, every aspect of it should be taken care of and the best manager to manage a Circus will be an experienced manager that can come from other Circuses in the world. All the managerial staff should have the capabilities of setting-up of corporate objectives, strategies and the motivation and supervision of other staff and workers.

The staff working under these managers should also have some specific capabilities according to the units they work. The administration staff will consist of two accounters and two human resources specialist in center building, Research and Development staff requires creativity and easy communication with foreigners. This staff may not necessarily have a university degree. SAT staff, requires two industrial engineers for Supplies & Storage Unit, for Animals Unit, 2 veterinarians work one of whom has no obstacle to travel. Marketing Department staff should consist of all engineers, preferably Industrial Engineers.

Since Circus is a special kind of service, very specialized labor should be used in Circus area. Technicians should be very careful in the sense that it is very important to build up the tent, arrange the ropes and other Circus equipment. The life security of the artists depends on the care of technicians. Thus, these technicians should be trained. As well as these technicians, the artists should also be trained regularly, since every year the same show will not attract the same attention as the previous years.

2. Socio-economic and Cultural Environment

Legislation and labor terms: Labor terms are regulated by legislation. The prevailing rules have impact on the number of effective working hours and days Per year and affect the human resource requirements.

Labor norms: Differences in skills, experience and productivity affects the feasibility study. While estimating the required labor, this aspect is also considered. This is particularly important in the initial stages of the operation phase of the Circus. For this aim, to increase motivation, the wages will be proportional to the effort the employees spend for. In the implementation phase, this judgement is made by the General Manager.

Occupational Safety: Occupational safety is very important in Circus environment. Some of the shows are very dangerous and extra insurance payment has to be provided for these shows.

3. Project-related Requirements

Staff and labor requirements are planned for the implementation phase as well as for the start-up and operating phases. In the implementation phase, special professional skills are required. External organizations will be hired in construction and design of the gym with predetermined specifications. The project implementation team will consist of the managers in the organization chart. This team is a combination of experienced and committed personnel. The leave of any employee will affect the project in reverse direction and may cause the failure of the project. Thus, the managers will be chosen very carefully. The project schedule will be mentioned in Implementation Scheduling section. This plan is prepared so that timing of recruitment, marketing, training etc. will be done on time, causing no delays or failures during the operation phase of the organization i.e., when the Circus goes on a tournee. The details related with this topic is also mentioned in stages of Project Implementation section. A contest will be made across Turkey, to provide artists. Although, there is not a circus in Turkey, many people have interesting capabilities that are shown on TVs and attract the attention of people.

Pre-tournee Phase: The labor requirements for the pre-tournee i.e., the requirements before the Circus starts the operational phase. That is why, the managerial staff forms the project team. Some specialized labor in construction of the building and equipment are also necessary. Since the technicians will continue installing and uninstalling equipment on operating phase, the technicians should also take place in installation of equipment in pre-tournee phase. The installation of the equipment will be shown by the experts provided by the suppliers of the equipment. It is not very clear that all Circus equipment staff (tent, balls, make-up etc.) can easily be found in Turkey. Thus, foreign expertise will be necessary.

Operational Phase: Requirements during the operation phase may vary over time. As the operational phase is implemented, as mentioned previously, the capacity may improve and two or more simultaneous circus show can take place at different cities. While estimating the wages, number of effective working days, social security, fringe benefits, funds, cost of training are also considered.

Effective Working days Per year:

These values are estimated by considering Turkish Business laws, Rule Numbers:47, 38,52 and 65.

The departmental manning tables that define the labor and staff requirements by functions and categories are given on figure.........The number of efficient working days a year is considered while preparing these tables. An assumption made is; these labor requirements refer to the first year of operation. In the following years, according to the demand this can improve. These tables will also be used to analyze availability and recruitment of human resources as well as estimate operating costs related to these resources.

The artists and guards of animals compose the show team that will count to an amount of around 50 employees. Their wages will change according to their capabilities. But in average, the wages will be 200 million TL and 5% of the profit from the shows will be distributed to the Circus team.

4. Availability and Recruitment

Assessment of supply and demand: The assessment of human resources is very important in the sense that Circus is not known in Turkey and relevant human resource categories are limited. Although the unemployment rate is high, Circus show requires different capabilities that are accomplished after a training period. In Turkey, the talent contests attract the attention of many people, and the demand to attend such contests is very high. Most of this demand comes from the unemployed personalities, who try to be famous with easy tricks. In the implementation phase of the project, such a contest will be held with an award of high salary. This does not necessarily mean that their shows have high quality, but if a person has a natural talent, this will be easily seen in this contest and with a training that personality can become the number one of the Circus show. However, it is also very important that the audience wants famous artists in the show and none of these Turkish artists chosen by the contest will be sufficient to satisfy the demand of the audience. Thus, import of artists from foreign countries will attract much more attention than Turkish. This situation affects the costs of the project such that as the number of imported employees increase, their cost will also increase.

Recruitment planning: The competitiveness in recruitment depends on salaries offered and on social security and fringe benefits. Since there is not competition in the sector, the wages paid will not be that much high, but for those imported from other Circus a recruitment planning is required such that the offered wages, social security and fringe benefits should be higher than those of other Circuses. It is also important that this personnel is recruited for a long period so no leaves will occur after training. The recruitment of key personnel (managers and skilled labor) is a combination of foreign expertise and experienced Turkish managers.

Foreign Experts: The lack of experience of Turkish managerial talent is compensated through the employment of foreign expertise. The Circus manager will be imported, for building up and pulling down the tent for the first time will also be by foreign expertise.

The lack of experience can constitute a significant bottleneck for project implementation and operation. One of the assumptions made during the implementation phase is that the project team builds up the skeleton of the organization and each of them is experienced in its profession. However, a training plan is made in the operation phase. The show gym is constructed for this aim. During the tournee, training of new artists will take place in the gym. For this aim, foreign trainers determined by Research & Development department will be hired and new artists for new shows will be trained. Other artists will also have a training plan. After each tournee, they will work for different kinds of shows.

The training of the animals is also an important factor that should be considered. Different kinds of animals have different properties to be trained. One of them is valid for almost all kinds of animals that, the animal will born in hands of its trainer. However, these animals have different ages to start training. For example, horses can not be trained before age 3.

Also during the tournee, the artist will work themselves for new shows and try to improve their capabilities. The timing of training programs is of crucial importance, since people should be sufficiently trained to be able to perform their positions when required. Thus, even the Turkish artists are awarded in the contest, they will require a training so that they can easily perform their show in front of the audience.

Formal training may also be required related to the management and supervisory personnel.

The manning tables prepared for each department are used to estimate labor costs. The labor wages are estimated as fixed costs and for each show since they earn 1/3 % of the profits of the show, a variable cost is accrued for the Circus personnel.

This phase of the project represents the period from the decision to invest to the start of the business. It is important to plan and analyse this phase since deviations from the objectives and original plans can easily effect the entire project.

The implementation of a project is to carry out all the on and off site works to bring a project from the feasibility study stage to its operational stage. The project implementation planning is considered in order to draw the attention of the project planner to the financial implications of project scheduling and to the possibilities of the early detection of potential delays and their causes.

Implementation planning and budgeting includes the following tasks:

• Determination of the type of work tasks , on and off site that are necessary to implement the project
• Determination of the logical sequence of events in the work task.
• Preparation of a time-phased implementation schedule, positioning all the work tasks correctly in time and allowing for adequate time to complete each task
• Determination of the resources needed to complete the individual tasks and the extraction of costs
• Preparation of an implementation budget
• Documentation of the implementation data

The stages established for this project are explained under the headings below. However this analysis don’t require that each step is leading to the other. A great deal of overlapping and simultaneous planning of overlapping of various activities is inevitable.

Appointment of the Implementation Team

The realization of a project usually starts with forming a project implementation team. Since there isn’t a company in process of circus business , the project implementation team is thought to be formed during the establishment of a new company and this team would be the nucleus of the organizational structure of this new company.

The objective of the appointment of a project team is to ensure that the execution of all works go in parallel with the implementation plan and budget ,and the required counter actions can be carried while any deviation of actual implementation work and costs from the plan occurs.

This project team is thought to be formed by the candidates of the financial manager ,the managers of marketing, SA and administration managers of the company and the circus manager. A firm is planned to be hired for the construction activities of the show gym. This firm would provide the construction team which consists of civil engineers ,architects and contractors. Also an advocate would be necessary for this implementation team during approvals from related authorities so an advocate also would be hired who would work in coordination with the administration and finance units of the team.

Company formation stages are planned to be as:

• Signing of a letter of intent between business partners to establish the company.
• Agreement between the business partners on the financial agreements and the drafting of the documents required by the authorities.
• Formal application to the authorities These applications are summarized below.

Application to Industry and Trade Ministry to get investment certificate and getting approval from Environment Ministry for the formation of company and the show saloon. The next step is to provide credit from Government Planning Organization, the credit opportunities published by this organization would be followed by the advocate and finance manager of the team.

In order to get permission for a construction it would be required to apply to Municipality of Ankara .Also it may be required to ask for a permission from Agriculture and Tourism Ministry in order to show that the construction of show saloon would not damage agricultural historical and touristic areas.

Insurance Procedures:

It would also be a requirement that the necessary investigations and applications are completed to insurance firms in order to guarantee the prevention of any risk.

Social Insurance Corporation Procedures:

It is an obligation that the employed labor are announced to SIC at the right time .

Governmental approvals would be required while importing animals and their trainers. It is important for the animals that the health controls and vaccinations are done before clearing them through the customs. At this stage of the implementation the person responsible from the animals would check the previous controls and health reports of the of the animals that would be imported. At the customs the controls would be revised in order to get the approval of Culture Ministry. Since , before ,the encouragement credit would have been gathered from Government Planning Organization for this business there wouldn’t be any tax requirement at the customs. Also the approval of Culture Ministry would ease the procedures during the clearance of the animals. The approval procedure for the trainers should be carried between Ministry of Foreign Affairs of Türkiye and Russia. Also some approvals would be required about the working permission for this trainers which would be gathered from Working Ministry.

At this stage , the analysis for the financial requirements of project implementation would be carried. With this aim the following implementation cost list is prepared. This phase would provide the accuring financial costs and initial investment costs.

Cost of project implementation management

Wages of managerial staff

Rent and operation of offices

Travel and communication expenses

Fees and cost of controls abroad (e.g. at customs)

Printing and photocopying

Taxes during the implementation period

Costs of legal assistance

Costs and expenses directly related to company formation , such as financial costs, duties, taxes, and costs of legal assistance

Wages of managerial and administrative staff

Recruitment costs

Wages of recruited staff and labor from

Travel and communication expenses

Fees for foreign staff

Wages of planning staff

Rent and operation of offices

Travel, transport and communication

Fees for various types of consultants on detailed engineering costs

Site tests

Printing documents ,drawings and specifications

Stamps and duties

Legal assistance

Wages of site staff

Rents

Erection, operation and camp maintenance

Raw and auxiliary materials, performance testing

Cost of maintenance

Insurance paid during project implementation

Wages for supplies staff

Travel and other expenses

Communications

Wages for sales and marketing staff

Advertising

Training of traveling person

Travel expenses

Communications

Printing expenses for public relations ,materials etc.

Registration fees

Public relations expenses

Legal fees

Insurance

The proposed organizational structure for the company is told in detail in section 5.The project implementation team is thought to be the nucleus of the organization and the manager of the team would also be the manager of the company. This team would have been formed by the investor firm of this company by advertisements on newspapers. As a result the team would be consist of willing people for the circus business. After the nucleus have been formed, also the organizational construction would be completed by newspaper announcements.

Some hiring activities would be required for the animal trainers coming abroad. They would not only participate in shows but also teach the animal training so after a wile the company’s own trainers could make the shows.

This phase of the implementation consists of site preparation and civil works during the construction of the show saloon. The required drawings, descriptions, bills of quantity and equipment specifications would require the coordinated work of engineers, architects and contractors in the implementation team. The basic engineering procedures would be:

• Engineering Line Diagram or Piping and Instrumentation Diagram
• The flow diagram of the facility
• List of the major equipment
• Electric Line Diagram
• The plan of pre-establishment
• The specifications of pipe connections
• Standart specifications

The center of the company is planned to be located at Bahçelievler at a hired place as told in detail in location selection section. Also the analysis for the selection of the show saloon is provided in that section. If the selected land belongs to the government, the required approvals would be gathered from Treasury and Foreign Trade Undersecretariat . If the land belongs to a person there would be a negotiation and after the decision a sales document should be signed at notary. The procedures about title deed would be carried among Trade Register Office and Tittle Deed Register Office. After these it would be required to apply Real State Tax Office.

This phase can begin when the final layout of the show saloon has been prepared ,land has been acquired and the necessary approvals have been obtained from authorities mentioned above. The layout preparation activities would consists of the necessary tests and technical investigations required for the civil works.

The basic supplies for the circus business at the starting point is thought to be the materials that should be imported and feed of the animals. There isn’t any circus tent manufacturer in Türkiye , some of the decor and the special show equipment would have to be provided from abroad. Such supplies that would be required once or rarely are planned to be provided by the firm CIRCUSTAFF which is a famous and reliable firm. It is noticed during the Internet search for this project and provides the opportunity of easy trade through Netscape.

The materials such as costumes and make-up tools would be provided from Istanbul and some of this costumes would have been sewed in Ankara at a sewing firm. New agreements would be available with this firm while new costumes are required again.

The supply of feed for animals can be provided from Ankara Feed Factory and wholesale market of fruit and vegetable for the starting stage and while the circus is at Ankara. During the route of the circus the feed supply is planned to be provided from the city where the circus is located.

This stage consists of the activities carried for the preparation of the market. These preparation activities are advertising and training of traveling employee. Since the starting point of the route is Ankara the first advertising activities are planned to be carried by the advertising unit of the company. Also the training activities would be carried simultaneously since in other cities he will be responsible from this stage .

Since this phase would be the first introduction of our business to the public it should take the proposed attention. Not only the circus but also the new company would be introduced . This would be carried by advertisements on newspapers and a cocktail is planned as an introductory activity.

There would be a contest before hiring the animal-trainers from abroad. This contest is planned in order to provide an opportunity to the persons who have different and interesting talents or shows with animals. By this way it is aimed to select the ones that could be employed in the circus. As a result the requirement of foreign trainers and actors would be reduced and a job opportunity ,that such talented people or trainers can not refuse would be provided. In order to introduce this competition to the whole country , television and newspaper advertisements are proposed. Because of its central position ,Ankara is thought as the competition place, hiring a gymnasium would be appropriate for such a contest for example. The contest would be open to public ,by the way the behavior of the animal in front of audience would be tested and the ones that are accustomed to the crowd could be selected.

In this phase the performance tests for the saloon and show trials would be carried. It should be checked whether the saloon would provide the requirements for training and practice activities or would be appropriate for living conditions of the animals. Since they very sensitive about such conditions , careful attention is essential at this phase. In addition supply of materials and labor are the activities that should have been completed at this stage. After the contest ,told before, the trainers and actors that would be hired can be determined and imported together with their animals to Ankara. It can be said that at the end of this phase the saloon would be ready for training and circus staff would be ready for the shows.

The project scheduling aims to balance the timing of the delivery of input requirements and to provide coordinated implementation activities for the project. For this project Gantt chart below is proposed showing the division of implementation activities and their duration.

The objective of the implementation budgeting is to determine the cost of resources required to implement an investment project. The cost estimates based on the implementation activities are provided at section 8 at the schedule number 2.

In this part, objectives and principles for our project with a view to determining the allocation of resources over planning horizon, which is 10 years, will be examined in detail.

The main project strategy is specializing in the entertainment industry. In putting the project in application, geographical area, which include the determination of the traveling route, are chosen by considering demand in the centers on this route, and also the availability of inputs.

According to the proposed marketing strategy, 5-19 year-old-children and their family are considered as the target customer group. To win their favor, clowns, acrobats and illusionists will carry out unusual entertainment activities. Also animal- and trapeze- shows will take place. Additionally, as a competition policy, differentiation strategy is chosen to pursue throughout all activities to defeat the competitors.

The marketing mix includes 4 components: Product, Price, Promotion and Place. The product is the entertainment service. From the point of the product, more importance is given to increase the service quality. For this purpose, training activities to the staff are provided. Moreover, in order to develop new shows, R & D studies are carried out. The other marketing mix is price. The ticket price is grouped basically in two groups: ticket price for special places(1,250,000 TL) and ticket price for normal place (1,000,000 TL). For children ( <12 year-old), 20 % discount is applied. Setting different price levels aims to increase demand of people having moderate or low income. Third component of the marketing mix is promotion. Several promotion activities are used to simulate the buyer. The type of advertisement is decided according to the place where the circus show is being held. In large cities, television adds and posters on busses are preferred, while in small cities municipality announcement is more suitable. Also sales promotion are used to improve the effectiveness of the other promotion-mix ingredients. At the end of each show, photographs with clowns, animals are provided to audience with the payment of 500,000 TL. As a promotion activity, 10 people chosen randomly are rewarded with the photographs with no payment. The last component of the marketing mix is place, which requires to decide the type of channels of distribution. A person, traveling employee, is responsible for the distribution, which is mentioned in detail in Organizational Design.

2. Marketing Research

For the development of project strategy and the marketing concept, the analysis of supply and demand is made. Since the target market is composed of 5-19 year-old children and their family, in analysing the demand, the dispersion of the target group through the cities are examined. In the analysis of the supply, the circuses around the world are considered to supply the animals, the trainers and the artists. Moscow and France circuses are found to be more appropriate as a supplier. Then, a choice is made between these two, and Moscow circus is chosen due to ease of transportation.

Before starting with the marketing research and the subsequent design of a marketing concept, it is necessary to have an understanding of the functions of marketing, the marketing tools, and who and what determines the characteristics of the market. The circus can not act independently and autonomously in a market and within an economy or socio-economic system. It can be seen clearly in the figure below:

Socio-Economic and Natural Environment

Currently, there exist no competitor circus. However, the competitors of a circus is not only restricted to other circus. Theater, TV-shows, cinema, opera & ballet and all kind of entertainment activities, which share the same customer group, are also the competitors of the circus. The reason for this is that people generally had to make choices between the entertainment activities because of financial restrictions. Since the competitors group varies widely, the policy the competitors pursue change widely.

The analysis of the demand and market made the market-project relations transparent, while outlining the strategic options for the project. The work is organized in along with the following lines:

• Assessment of the target market structure
• Customer analysis and market segmentation
• Analysis of the channels of distribution
• Analysis of the competition
• Corporate or internal analysis
• Projections of marketing data
• Conclusions, prospects and risks

The quantitative estimate of the target market is based on the statistics made by Government Statistics Institute. A qualitative research is made by making an interview with the organizer of the Moscow circus, which is currently making shows in Ankara. Market size and characteristics are based on these research.

Specifically, the intensity of the target group in several cities are examined and Ankara, Istanbul, Bursa, Izmir, Antalya, Adana, Diyarbakir, Trabzon and Samsun are found to be the most suitable cities.

After the assessment of the market structure, the customers and their needs & behavior were identified by making interview with the people, who went to watch Moscow circus in Ankara. According to the result obtained from these interviews, most attractive parts of a circus are found to be clowns and animal shows by children, and acrobat and trapeze shows by adults. Therefore, the main purchasing motive is found to be danger in the show for adults, and to be interesting things, animals for children.

The demand for the circus varies throughout the time interval. The demand is high in weekends and holidays. The purchasing quantity and frequency changes according to the personal income in the city where the circus carries out the shows.

Market segmentation is made in order to use the marketing tools efficiently. In making the market segmentation, potential buyers (5-19 year-old-children and their family) according to the geographic areas are identified and categorized. This is not made for serving a narrow segment of customers. This is made for determining the traveling routine for the first year of the circus. Because the circus will follow a route in its first year for the introduction and advertisement purposes, and later it will make shows according to the request.

The possibility of extending the market to the other countries can be considered at least after 15 years, after required capacity is reached. Since our planning horizon is 10 years, this part is not considered in this study. After 10 years, when all revenues are determined, extending the market to the other countries can be analyzed.

The possible channels of distribution are through wholesalers to retailers; through retailers only; directly to consumers. After considering the applicability of all these possibilities, directly to customers is found to be most appropriate as a distribution channel in the circus. Primary advantage of this is its effectiveness in cost. One person, Traveling Employee, is responsible for the distribution.

As mentioned before, the competitors of the circus is not only the potential other circuses, but also all the entertainment activities that people can prefer to a circus. Tv-shows, theater, cinema etc. are all in the competitors of a circus. Because the important thing for the firm is not only why our circus is not preferred to other circuses. One of the major aim of the firm is to increase the share of the circus in the entertainment activities.

As the competitor range increases, the target groups they work on and their marketing tools they use show great variability. Most of the competitors such as theater, opera & ballet consider the adults as a target group, while circus proposed focuses on 5-19 year-old-children and their family. Moreover, the usage of the marketing tools among the competitors exhibit great variability. Tv-shows give more importance to promotion, while theater focuses on products service & quality.

The strengths of the competitors come from their history in Turkey. Since this circus will be the first in Turkey, it has currently no audience. For this reason, more advertisement will be made in order create the possible customer groups. The other strength of the competitors is advertisement cost. Advertisement of the Tv-shows, cinema etc. can be made cheaper and more people can be reached. The other strength of the competitors is its availability on hand. No extra effort is needed to watch an entertainment activity in Tv.

In order to be successful in the competition, different strategies are applied for each individual phase of the life cycle. The intensity of competition can be basically expressed by the height of the entry and exit barriers, the phase in the sub-sector life cycle, the pressure through substitute products, and the negotiating power of the buyers and suppliers.

Height of entry and exit barriers: Entry barriers prevent new competitors from entering the sub-sector. Since the demand for a circus in Turkey can be met by only one circus, entrance of new competitors to the market is a very weak risk. Therefore, no patent studies are carried out to prevent entrance. The experience and the size of the existing circus, and high investment activities (ie, R & D activities made) will automatically prevent new competitors from entering the market. Besides, since a part of employee are brought from other countries, it is difficult to layoff them. The difficulty to lay off employees set the high exit barriers for the existing circus.

Phase in the life cycle: Circus is a new entertainment area in Turkey. For this reason, all the potential circuses will try to get more share from the pie. Therefore, the intensity of competition among the competitors will be at the highest level when many of them compete for slowly growing sales.

Negotiating power of the buyers and suppliers: The negotiating power of the buyers and the suppliers mainly depends on the importance of a circus for buyers. The pressure on margins will be high because of limited choice of buyers and suppliers.

The internal analysis usually applies only for investment projects of existing enterprises, as in the case of expansion, rehabilitation or modernization projects. Since the circus is not existing currently, it is impossible to make internal analysis at this stage. But after about 2-3 years, it is proposed to make such an analysis to specify the position of the firm and to make improvements.

The projection of future developments is the most significant and certainly the most complex element of the marketing research.

What the traveling route should be followed for the first time, and consumer reactions and the other possible entertainment activities are the determining factors for the projecting of marketing data. From the statistics made by Government Statistics Institute, average demand for entertainment activities such as opera, theater and cinema are examined.

These statistics are gathered to forecasts about the potential demand for a circus. When making forecast, the number of cinema, theater are proportioned to the number of circus, which is the first one. Since the circus is traveling throughout Turkey, some fluctuations can be observed from city to city. The expected demand per show is about 2000-2500. This number includes various assumptions and probabilities. Unpredictable events, such as an enormous change in the level of the income, can alter the effective demand. Some of the uncertainties are as follows: changes in the structure of family budgets; the emergence of a substitute; technological developments inside or outside the entertainment industry; constant inflation (70% is assumed for Turkey); the emergence of a dominant competitor.

After having summarized all results obtained so far in the market research, the market opportunities that can make the project feasible, as well as the market risks endangering it are summed up.

The major opportunity of the project is that this circus is primary in Turkey. Therefore, the interest from the people is expected to be high. However, this is also a risk factor. Because the reaction of the people can not be expected. They may not find the circus interesting enough, and the demand may drop abruptly. The potential opportunities and risks provided the bases for the development of the project strategy and marketing concept, as well as for any decision concerning the choice of the scope of the project, human and material resources, location, engineering and technology, management, organization, and the financial evaluation and appraisal of the project. These are explained separately detailed in the relevant sections.

3. Outline of the Project Strategy

Outline of the project strategy requires assessing the project situation and analysing the initial position, and then making conclusions and proposing strategic possibilities.

Assessment of the situation and analysing the initial position are the first step required for the determination of the project strategy. This includes, but is not limited to, demand and market analysis. These are examined in detail in the previous sections.

Specializing in the entertainment industry is determined as the project strategy. In developing this strategy, special emphasis are given to the targeted geographical area, the market share, product-market relations and competition and market development.

It is not planned to be international in the first 10 years. Therefore, only the target customer group is taken into consideration in determining the traveling route. Analysis of the population according to the ages in several cities are made to determine the geographical area. In the section Location, these are explained in more detail.

Another element of the project strategy is the target position to be achieved in the market. Currently, no other circus exist. The major competitors are the Tv-shows, theater, cinema etc. By providing new and interesting shows, flexible traveling routine, promotional activities and price adjustments, market share is aimed to be maximized. The Research & Development department supply people only for developing new shows. Also training is provided to the staff, which will increase the quality. Moreover, price adjustments are applied to increase the market share : ticket price for special places(1,250,000 TL) and ticket price for normal place (1,000,000 TL). For children ( <12 year-old), 20 % discount is applied. Setting different price levels aims to increase demand of people having moderate or low income. At the end of each show, photographs with clowns, animals are provided to audience. As a promotion activity, 10 people chosen randomly are rewarded with the photographs with no payment to simulate demand. Moreover, the transportation opportunities are provided to primary schools to increase the lumped demand.

The wide range of alternatives such as Tv-shows, cinema, theater will cause the market share of the circus to be small. However, a small market share may be highly profitable as a result of focusing on the target customers, comparatively simple market concept or low overheads.

While quality of service can not be ignored, low cost relative to competition is the second core of the strategies. The activities carried out to minimize the cost includes the tight cost and overhead control. Moreover, research and development costs are tried to be minimized as long as it does not prevent the minimum required development rate.

Differentiation provides insulation against competitive rivalry because of less concern about price. Price is set at a logical level by providing more interesting shows and activities. Also achieving differentiation preclude gaining a high market share due to the perception of exclusivity. For differentiation purposes, more importance is given to the Research & Development studies. New shows are developed in time to keep the demand at the same level or more. Additionally, some part of the circus staff can be hired by people for their special days according to the requests. The circus will get one-third of the revenue obtained from these activities, and the two-third will be given to the staffs, who are hired. The Circus Manager will be responsible for the organization of all these activities, and the clowns are not allowed to accept such offers without informing the Circus Manager.

Focusing on a strictly confined aim is more efficient than operating in a broad field of competition. In the proposed project, in the first year of the circus a route, which is mentioned in location, will be followed. This is made for introducing the circus throughout Turkey. Afterwards, the circus will go to the cities according to the special requests. While the niche strategy is accomplished, it is avoided from offering high prices. For this purpose, additional income items are created. For example, photograph service after show, sale of circus equipment and hiring the circus staff to the customer for their special days create considerable additional income. This supports the niche strategy while avoiding from offering high prices.

The selected product-market relation determines the strategic dimensions of the marketing concept, and a product-market orientation is also fundamental to the determination of the project strategy. Four basically different types of marketing strategy is Market Penetration, Product Development, Market Development and Diversification. The circus as an entertainment activity is a new enterprise in Turkey. Therefore, diversification is thought to be the most appropriate marketing strategy. According to this strategy, the circus will succeed on new markets with this new entertainment activity.

Any increase in the market share can arise either from a gain at the expense of competitors, if the total market volume is stable or decreasing, or from an expanding market.

Competition Strategy, winning market share from competitors, is not applicable for the current situation of the circus. Since there is no other circus, the competitors are Tv-shows, cinema, theater, opera & ballet etc., which have an old history and which spread throughout all cities. So, it is difficult to obtain market share from competitors.

Market Expansion Strategy, creation of a new market or enlargement of the existing marketing volume, is found to be more appropriate. Since circus is a new type of entertainment in Turkey, a new market will be created, so market expansion strategy is will be followed.

Ankara is chosen as the administrative and training center of the circus. An optimal traveling routine is determined by considering the target customer group, which consists of mainly 5-19 year-old-children and their families. The basic strategy is the differentiation. The market niche and cost minimization strategies are also followed to support the differentiation policy.

Since currently there is no other circus, all market on circus will belong to the proposed circus. When all entertainment market is considered, the expected market share will be 5 % of the total market at the end of the 10 years. Diversification is taken as the basis for marketing concept. It provides insulation against competitive rivalry because of less concern about price. Besides, circus is a new activity as an entertainment. Therefore, market expansion strategy is preferred to the competition strategy.

The projection of marketing costs comprises all cost components resulting from the marketing activities described so far. In the project implementation phase, a contest will be held (see Implementation Planning and Budgeting). The advertisement of this contest is expected to cost about 80x10⁹ TL in the first year. Afterwards, each year 300x 10⁹ TL is separated for marketing expense. This includes the all advertisement activities, promotions and other expenses related with the marketing. The salaries of the marketing personnel is included in the labor and labor overhead costs for simplicity. Besides, there will be activities for finding sponsors for shows. The revenue that comes from sponsors are included in the marketing revenue. All the expected marketing costs and revenues can be seen in the financial analysis.

In this section, after an introduction to the scope & objectives of the analysis, the principal aspects of the analysis and investment appraisal are explained. Important aspects of financial analysis, such as basic criteria for investment decisions, pricing of project inputs and outputs, the planning horizon and project life as well as risk and uncertainty, will be discussed and then detailed consideration will be given to cost analysis, basic accounting principles, method of investment appraisal, financing, financial efficiency and ratios, and financial analysis and project evaluation in conditions of uncertainty.

From the financial and economic point of view, investment is the long term commitment of the economic resources made with the objective of obtaining net gains exceeding the total initial investment in the future.

The scope and objectives of the financial analysis are determined to a great extent by this definition. The main aspect of this commitment is the transformation of liquidity- the investor’s funds into assets represented by fixed investment and net working capital, as well as the generation of liquidity again during the use of these assets. Thus, financial analysis and investment appraisal includes the assessment analysis and evaluation of the required project inputs, the service produced and future net benefits in terms of financial factors. In this aspect, determining, analyzing and interpreting all the financial consequences of the investment relevant to and important for the investment and financing decisions are required. Additionally, financial analysis and evaluation ensures that the most attractive possible project alternatives is determined under the prevailing conditions of uncertainty and the flow of financial resources during the investment, start-up and operational phases is determined.

Reliable costs are basic to the appraisal of an investment project. These estimates covers the corresponding costs of initial investment, circus show marketing, saloon, equipment replacement and working capital requirements. 10 years after the construction of the saloon is considered in this feasibility study.

Initial Investment Costs: Initial investment costs are defined as the sum of fixed assets (fixed investment cost plus pre-production expenditures) and net working capital, with fixed assets constituting the resources required for constructing and equipping an investment project, and net working capital corresponding to resources to operate the project totally or partially.

Investment required during plant operation: In order to keep the plant in operation, the equipment should be replaced at the appropriate time. For this purpose, each year 10*10⁹ TL is showed as plant, machinery & equipment cost in schedule 1.

Pre-production Expenditures: These are expenditures related with the acquisition of assets. These expenditures include:

Company Formation & Org. Build-up : legal fees for preparation of memorandum and articles of association and similar documents

Engineering & Contracting : engineering and contracting cost for building a training saloon

Pre-service Supplies & Marketing : advertisement, public announcements for contest

Trial Circus Shows: fees payable for supervision of start-up operations, wages, fringe benefits, utilities and other incidental start-up costs

Fixed assets includes the fixed investment cost and pre-production expenditures. Fixed investment cost includes the land purchase, building, plant, machinery and equipment. Total annual fixed investment costs are projected for each year of the construction period until the planned production level is reached.

Networking capital is the difference between the current assets and the current liabilities. It forms an essential part of the initial capital outlays required for an investment project, because it is required to finance the operation of the circus. Any net increase of working capital corresponds to a cash outflow to be financed. Networking capital includes total inventory ( circus supplies in stock plus work-in progress), cash-in-hand, accounts receivable, current assets, accounts payable, and total net working capital requirements.

Accounts Receivable: Accounts receivable are trade credits extended to customers. The traveling employee start the sale of tickets in the city a month before the circus goes to that city. Therefore, 12% of the gross revenue is taken as account receivable.

Inventories: Working capital requirements are considerably affected by the amount of capital immobilized in the form of inventories. It involves the operation materials, and spare parts.

Cash-in-Hand: At the end of the each year, the surplus of receipts over payments is generally positive.

Accounts Payable: Account payable depends on credit terms provided by suppliers. Since the costumes, tents etc. are usually purchased on credit with a certain period elapsing before payment is effected, their cost are included in the account payable.

Calculation of Networking Capital Requirements: When calculating the working capital requirements, the minimum coverage of days for current assets and liabilities are determined. Annual operating costs, and costs of shows are computed. Next, the coefficient of turnover for the components of current assets and liabilities by dividing 360 days by the number of days minimum coverage(schedule X-4). Subsequently, the cost data in schedule X-3 for each item of the current assets and liabilities are divided by the respective coefficients of turnover and put in schedule X-4. Finally, networking capital requirements are obtained by deducting the current liabilities from the sum of current assets. The required cash-in-hand is calculated separately(schedule X-5).

The calculation of working capital requirements at the stage of the feasibility study is of particular importance since it forces the project promoter, ,investors and financing institutions to think about the funds needed to finance the operation of the project as compared with invested funds, such as pre-production expenditures ad fixed investment costs.

Arealistic forecast of service costs for a project is essential since it may lead unexpected losses due to underages or low capacity utilization. This study of service costs deal with overall service costs which broken down into main cost items such as circus supplies, personnel overheads and depriciation.

In oreder to assemble all of the cost items which enter the service costs, schedule X-3 is prepared.Those costs are defined in three categories that are : Circus costs, administrative overhead costs and depriciation.

Circus Costs: It includes the following items:

• Variable costs such as circus supplies , maintanence
• Labor costs
• Overhead costs (in general fixed costs)

Depriciation:This cost is due to changes made in the annual net income statement for the productive use of fixed asssets which are show saloon, the decor, circus tents , trucks and busses.

Figure belowshows the cost elements of this project and interactions among them.

Circus supplies Wages Communications Show saloon Current assets less

Repair,maintenance Show equipment liabilities

Insurance and taxes Tools & costumes

Office equipment

Supplies + Labor + Overheads = Operating Costs

Operating Cost + Depriciation = Service Costs

Service Costs + Marketing Costs = Total costs of service

Sales revenues - Total costs = Gross earnings

Gross earnings - Income tax = Net earnings

Net working capital + Pre-operation expendiures = Total investment costs

Marketing cost comprise the costs for all marketing activities in marketing section. This include the advertisement costs, promotion expenditures and all other cost related to the marketing. The salaries of the marketing personnel in marketing is not included in the marketing costs for simplicity purposes.

Although the cash flow analysis is the principal method for investment appraisal, basic accounting principles and statements are necessary for the analysis of the structure of project financing and for the computation of the capital cost of the circus. Net income statement or profit and loss account which is linked to the balance sheet; and the cash flow table for financial planning are the basic statements.

The net income statement (schedule X-8) is used to compute the net income (net earnings) or deficit of the project arising each year. The projections are required for the entire duration of the planning period.

The net income statement is linked with the projected balance sheet in so far as the annual profit (or loss) in the net income statement increases(or reduces) the wealth of the circus in the balance sheet. Annual profits, if retained, increase the reserves (schedule X-9), while losses are accumulated under the assets. As dividends are usually not paid in the same year, the annual balance contains also a line for dividends. For break even analysis, the variable costs, fixed costs (including overhead costs and labor overhead) are shown in the income statement.

A balance sheet is a statement showing the accumulated assets- the wealth- of a company and how this wealth is financed. The sources of finance are treated as the aggregate liabilities of the company and those providing it with funds, namely the investors. By definition both sides of a balance sheet representing assets and liabilities are equal.

The projected balance sheet (schedule X-11) consist of estimates of key items, such as cash and other current assets (in particular, raw materials, account receivable, work-in progress, and finished products), fixed assets, as well as the current liabilities that are required for the smooth performance of the enterprise.

All components of the balance sheet are contained in the schedules already designed, although a number of adjustments still have to be made. Current assets are shown in schedule X-4 and fixed assets may be computed from the data contained in schedule X-5(annual depreciation allowances are required in order to arrive at the book value). Current liabilities are inserted from schedule X-4. Also retained profits are available in the balance sheet. This is used for financing new investments.

The net income statement and the balance sheet, designed to show the wealth of the circus, are not directly suitable for financial planning, that is, the assurance of the liquidity of the circus. The cash flow schedule, therefore, (Schedule 6) is prepared to show the sources and application of the funds, in particular, the overall cash inflows and outflows. From the financial planning part for the operational phase shows that cash inflows, or sales revenues from operations will be adequate to cover all operation expenses and all financial commitments such as taxes and payments of projected dividends. The cash flow tables are closely linked to the projected balance sheet, since the cumulative cash balance obtained in cash flow schedule for financial planning corresponds to the figure in the balance sheet. The cash outflow for the tax payments is obtained from the net income statements, assuming that the tax is paid at the end of the same year.

a) Financial Analysis

A feasibility study would serve little purpose if it was not backed by a reasonable assurance that resources were available for a project if the conclusions of the study proved positive and satisfactory. In the early steps of this section estimates for the financial requirements were made by using the estimates of the costs on one hand and the income on the other hand. Unless there exist sufficient resources are found to meet these requirements, the project won’t be able to implemented, so will have no use. Therefore it is important in a feasibility study to define the sources for the financial requirements. The financial calculations made for circus organization were made upon an assumption that the investor will provide all the requirements without borrowing, so the source of the initial capital investment will be the assets of the investor firm. The dept service is fixed and legally binding for the firm, and has to be paid even the generation of cash is insufficient in certain years. Also the interests rate are so high in Turkiye, so it is decided not get liabilities. However, possible sources of finance will be provided below:

Capital for the financing of the investment may be obtained from private and institutional resources (banks, insurance companies, funds etc.). However, behind these institutions stand again private investors. In all cases private savings are therefore the ultimate source of capital.

The figures appearing in the balance sheet, the net income statement and the cash flow tables convey a considerable amount of information in terms of their absolute values. In financial analysis it is usual to refer to several well-known ratios that facilitate the analysis and specially the comparison of projects and alternatives. Since the industry averages about these ratios are not known a comparison won’t to be made to determine the place of the circus in the market. However the ratios can be compared with following years figures which are estimation at this point. From an investor’s standpoint, predicting the future is what financial statement analysis is all about, while from managemnet’s standpoint, financial statement analysis is useful both as a way to anticipate future conditios and more important, as starting point for planning actions that will influence the future course events.

1.Financial Ratios (Liquidity Ratios):

A liquid asset is one that can be converted to cash quickly at a reasonably well-known price, and a firm’s “liquidity position” deals with this question: will the firm be able to meet its current obligations?

Current Ratio: It indicates the extent to which the claims of short-term creditors re covered by assets expected to be converted to cash in the near future. It is computed as:

Current Ratio = Current assets / Current liabilities

Quick Ratio: It eliminates inventory and prepaid expenses from current assets. It is calculated as:

Quick ratio = (current assets-inventories)/current liabilities

In the view of the danger of possible misinterpretations, the following ranges of satisfactory values can only be offered with great caution:

2.Efficiency ratios:

Inventory Turnover Ratio: is an asset management ratio and is a measure of the marketing capabilities of management. It calculated as :

Inventory Turnover Ratio = sales / inventories

Days sales outstanding: indicates the average length of time the firm must wait after making a sale before receiving money. It is calculated as:

Days sales outstanding = receivables / average sales per day

Fixed Assets Turnover Ratio: measures how effectively the firm uses its plant and equipment. It is the ratio of sales to net fixed assets:

Fixed Assets Turnover Ratio = sales / net fixed assets

3.Profitability Ratios:

Profit Margin on Sales: measures income Per dollar of sales; it is computed by dividing net income by sales:

Profit Margin on Sales = net income / sales

Return on Total Assets: The ratio of net income to total assets measures the return on total assets after interest and taxes:

Return on Total Assets = net income / total assets

4.Market Value:

Price/Earnings Ratio: P/E ratio shows how much investors are willing to pay per dollar of reported profits.

Price/Earnings Ratio = price Per share / earnings Per share

The values of the calculated ratios are given below each table.

Forecasts of the future business environment and of demand, production and sales can be only an approximation, because it is not possible, on the basis of past data, to determine more than a past tren, which may be extrapolated into an uncertain future. Of primary importance in the appraisal of the study is the reliability of the past data assessed and of the project design (marketing concept and sales programs, selection of project inputs and location, engineering design, management, personnel and organization, as well as the implementation of the project). To minimize uncertainty with regard to the reliability of project data and design, it will be guaranteed that the study covers all the aspects relevant to the investment and financing decisions. When the study is reviewed, it can be seen that the main aspects considered were the market research, availability of material and information gathering. These are critical factors for a feasibility study since any mistake in these may affect the overall results, however the others can only affect the costs or time in little amounts. The uncertainty commonly causes from inflation, changes in the market, length of construction, running-in periods. So there are ncertainties in the study performed. For example the demand figures for each country is expected to be about 1500 people, but is only estimated and includes uncertainty in it. Also there are uncertainties with the cost calculations due to inflation esp.. these uncertainties causes risks and nobody wants to invest money risky businesses. Therefore the risks must be decreased. Some strtegies must be defined for risk control. One of them can be not to invest if the expected returns are less than the cost of capital plus the risk margin. Another one can be to decrease the uncertainties by making sufficient researches. The risks will decrease as the uncertainties are eliminated.

With the help of sensitivity analysis it is possible to show how the net cash returns or the profitability of an investment change with different values assigned to different values. The elements of uncertainty can be reduced by finding optimistic and pessimistic alternatives, and thus determining the commercially most realistic combination of project inputs for the business environment.

The cash flows are analyzed for the sensitivity analysis, the variables that have the greatest share of cash flows are chosen as the critic variables and they are subject to variations. Sales Revenue and Operating Costs have the largest share in cash flows. The critic variables for the Sales Revenue are, the number of people coming to watch the show, the price of the ticket and the number of shows Per week. The calculations on the given table is made with the assumption that the ticket price is on average 1000000 TL., the number of people coming to watch the show is on average 2000 and the number of shows is 9 Per week; one Per day in week time (3 days), 3 Per day at weekends. A very pessimistic view would be when the number of tickets sold is 1500, with 7 shows Per week and price 750000. Then, the result would be failure such that, a positive cash flow would be at year 2009 and the net present value of the investment would be -1297299E9. And related ratios would be:

A very optimistic view would be that the tent would be full al the time i.e., with 2500 audience a ticket price of 1000000 with 9 shows Per week would result with a huge NPV which is 3426600E9 which again would be misleading since it can end up with a disappointment due to overestimated demand. The results shown on those tables are found after variation of many variables and found to be the best ones.

Break-even Analysis

The purpose of the break-even analysis is to determine the equilibrium point at which sales revenues equal the cost of products sold. When sales are below this point, the organization makes a loss, and when the revenues equals costs the firm is at the break even point. Some assumptions are made to find the break-even point.

• The Service and marketing costs are a function of the sales volume
• Fixed operating costs are the same for every volume of sales
• The sales price is on average 1000000 TL:
• The price elasticity for demand for inputs and output is zero

With these assumptions break-even selling price of a ticket with 9 shows Per week and 2000 audience, is found as: 936291 TL. If the price is less than this amount, the organization will loose money. However, according to the cities such a chance exists since in small relatively small cities, this price can be thought as expensive. In such a situation, the number of audience can be increased and a new break-even price may be found. The highest capacity of the Circus show is not limited with 2500 audience. As Moscow Circus is on show, the gym had a capacity of 5500 audience with almost all seats full in each show.

APPENDICES