The document summarizes a business plan for a proposed indoor soccer club called "El tapete" in Bogota, Colombia. It will have 5 indoor soccer fields located within 10 minutes of residential neighborhoods totaling 7,000 residents and a nearby university. The capital needed is $290,000 USD to construct the fields, facilities, and parking lot. Monthly income is projected at $30,000 USD from field rentals with additional income from food/drink and events. The objectives are to develop a youth soccer academy and host tournaments to occupy the fields 90% of rush hours. The mission is to provide locals a year-round soccer facility.

1. Business English
Done by:
David Cardeñosa

2. TASK 1: Exchange rates
How Exchange rates affect our economy?
The exchange rate shows the relationship between two currencies. For Colombia, the
exchange rate expresses how many pesos have to be paid for a unit of another currency. The
most used currency for foreign transactions in Colombia is the US dollar. The exchange rate
rises or falls according to the offer and demand of the currency. Therefore, as more dollars
can be found the exchange rate falls. On the other hand, when few dollars are found the
exchange rate rises.
Exchange rates fluctuations are due to different shocks. These shocks may either have a
persistent effect on the rate, or a one-time effect that can’t be predicted. In order to
understand how exchange rates affect the economy, it is necessary to identify the type of
shocks that are relevant in this exercise.
Exchange rates have different impacts on the economy of a country. On one hand increases
in world export prices can be seen, which adjusts the transfer of resources between the trade
sectors. Also the trade flows and economic welfare are affected by the exchange rate. Finally,
the exchange rates have different effects according to the economic sector being studied. For
instance, the agricultural sector seems insensitive, while the manufacturing and service
sector are more vulnerable.

3. How good was gold convertibility? Was this system fair enough with all the countries?
Gold convertibility was based on having a fixed price of per ounce of gold. The US government
was committed to backing every dollar overseas with gold, by this time the US dollar was the
only currency directly backed by gold. Other currencies were valued against the US dollar, and
could be exchanged through the US government for a fixed amount of gold.
Gold convertibility was good as long as the US had enough gold reserves to back up the
domestic and international money supply. However, as this supply expanded and the US
expenses rose, the US dollar got overvalued, and therefore devaluation of other currencies
was necessary.
This is the reason why the system wasn’t fair with the countries holding US dollars. For
instance, because Western Germany wasn’t willing to devaluate its currency in order to
uphold the US dollar, it redeemed their US dollars for gold. This move was followed
afterwards by other nations such as France and Switzerland.

4. If US Dollar increases, this affects or helps our economy? Explain why.
If US Dollar increases we have to study 2 types of persons. On one hand, people who
trade with foreign companies (exporters) will benefit from this increase. As they
collect the same amount of dollars, as they exchange them at a “high” rate, they will
have more pesos to spend. At the same time they will have the ability to be more
competitive in the international market, and be able to lower their price in dollars.
This will allow them to acquire new customers and afterward adjust the price and sell
at higher prices.
As a consequence, new exporters will appear. Industries will appear, and investments
in assets and manpower will appear. However the other sectors will shrink, and their
costs will be higher, therefore the demand of the product or service will fall.
On the other hand, people that aren’t involved in international transactions are
affected negatively. These people are having the same incomes, but a lower
acquisitive power. Products being bought from the US will have and increase in their
prices.

5. TASK 2: Financing international trade
What is the role of exportations and importations in our economy?
Exports and imports are the forces of economic growth. Ports employ thousands of
workers to load and unload cargo. At the same time, jobs for logistical professionals
that transport the cargo are created.
The products that Colombia exports are mainly natural resources and agrarian
products. Those products are needed as inputs in other countries in order to develop
manufactured goods. Exports allow to acquire foreign currencies, and also to achieve a
balanced development. If exports grow, jobs to develop export products are created.
Imports allow to acquire products that aren’t produced in the country, so they allow
the access to products that otherwise wouldn’t be available. In some cases imports
also allow the access to low-cost and high-quality products. In Colombia, technologies
and equipment are imported, in order to develop processed products. Therefore,
imports have helped to improve the competitiveness of our manufactured goods.
Finally, imports have promoted foreign investment, which has contributed to the
development of free zones and jobs in the region.

6. Are Free Trade Agreements affecting our economy? Give examples to explain this
situation.
Free trade agreements imply a bi-lateral commercial relationship between Colombia
and other countries. Exporters have the opportunity to establish long term ventures
that can develop jobs and increase incomes. FTA allows exporters to be in contact with
potential customers. However, now they have to compete directly with more
companies similar to them.
Free trade agreements require investment and hard work in order to both countries to
feel the benefits. If this is not done, a free trade agreement reproduces a model of
raw materials export in which the only benefitted is the developed country.
Transnational corporations are usually the ones that get the benefits, and the inclusive
development is not achieved.
For instance the agrarian sector, which is very vulnerable to FTA’s, has suffered a lot.
The last weeks the agrarian strike was caused because of the poor performance of the
sector. The local farmers, who felt the impacts caused by the disadvantage when
competing against US companies (because of quality and government benefits that US
farmers received) went on a strike to display their concerns. Local farmers, had been
working harder, but still having fewer profits.

7. TASK 3: Business plans
“El tapete” Soccer Club.
Indoor soccer fields are becoming very common in the landscape of Bogotá. However,
most of the fields are located in commercial districts, far away from residential
neighborhoods. The soccer facilities of “El tapete” will be located at a walking distance
(approximately 10 minutes) from the neighborhood “Bella Suiza”, “Contador”, and
“Belmira” (approximately 7000 habitants).
The location of the fields is selected strategically. On one hand, the walking distance
from the residential neighborhoods facilitates kids to walk to the soccer academy, in
order to fill the schedule from 2 p.m. to 6 p.m. Also at a walking distance “El Bosque”
university can be found, which has around 9,000 students, this market is going to be
approached by special offers for them to fill the fields through de day.

8. According to the market study, the rush hours for the fields is between 6 p.m. and
10 p.m. In order to fill the other hours, the soccer academy (whose target market
is kids that are 7 to 16 years old), is developed. The university students, receiving
special offers, will use the fields through the morning until 6 p.m. For the
weekend mornings, tournaments are going to be organized. And the purpose is to
have memberships assigned to teams and players.

9. The built area required for the 5 fields (4 for fut-5, and 1 for fut-8) is of 5,700m2, plus the
required facilities such as bathrooms, store, etc. of around 600m2. Finally, a parking lot
will be constructed, with an area of 1,000m2.
The capital required for each field of soccer-5 is of 40,000USD, while of 50,000USD for
the soccer-8. The other facilities require a capital of 40,000USD. So, for the start-up a net
amount of 290,000USD is required.
Incomes for the field’s rental are of 60USD in rush hours (4 daily hours estimated) and
of 40USD in non-rush hours (1 daily hour estimated). Therefore the incomes projected
for a month are show in the next table:
Field # Day Month
1 USD 280,00 USD 5.600,00
2 USD 280,00 USD 5.600,00
3 USD 280,00 USD 5.600,00
4 USD 280,00 USD 5.600,00
5 USD 380,00 USD 7.600,00
USD 30.000,00Total

10. On the other hand, the monthly expenses are estimated in 9,000 USD. Other incomes
that are related to food and drink sales, as well as tournaments and the youth
academy are estimated to be in 12,000 USD per month.
Objectives
Consolidate a youth soccer academy that involves 80 students and the most qualified
instructors.
Register 30 adult teams, and 20 youth teams by the end of the first year of operation.
Develop a market that rents the fields for special events.
Host 20 tournaments by the end of the first year of operation.
Have an occupation of 90% during the rush hours.
Mission
The mission of “El tapete” soccer club is to provide Bogota’s residents with a soccer
facility that will enable both youth and adults to enjoy the sport of soccer year
round.