Business_Plan_Drive_in

Twilight Drive-In Also dba. Weekend Market Place Business Plan [pic] John Mahany MGT 140.CI Golden Gate University Fall 2008 Twilight Drive-In TABLE OF CONTENTS Section Page Executive Summary……………………………………………………………………….3 Business Description………………………………………………………………………3 Market Analyis…………………………………………………………………………….4 Our Mission……………………………………………………………………………….4 Our Vision,Motto,Goals…………………………………………...………………………5 Services Provided……………………………………………………………………….5-7 Our Customers……………………………………………………………………………7 Area Statistics………………………………………………………………………..…7-8 Owner Information…………………………………...……………………………………8 Funding……………………………………………………………………………………9 Business Objectives……………….………………………………………………………9 Other Objectives…………..…………………………………………………………..…10 Business Operations……………………………………………………………………...10 Marketing……………………………………………………………………..………11-13 Operating Costs, Projections…………………………………………………………13-14 Competitors………………………………………………………………………………14 Management and Personnel…………………………………………………………..14-15 Risks & Security…………..…………………………………………………….……15-16 Conclusion & Summary…...…………………………………………………………16-17 EXECUTIVE SUMMARY Do you remember the day when you were younger and you and your family would all pack into the station wagon and head down to the local Drive-in to catch a show' What about the Friday nights in high school when you and your buddies would head out to the Drive-In to hang out' Or the time you took that special someone to the Drive-In on your first date' On the American landscape the Drive-In is a dying breed of what once was a vital part of our American life. However, there still remains a high demand for this form of entertainment in certain areas of California. Twilight Drive-In is dedicated to bringing back this time honored experience while updating it with some modern twists. Twilight Drive-In plans to offer an entertaining experience to people young and old while creating a venue that can host such events as marketplaces, concerts and shows. This is a chance to bring back the closeness of the American family and to build community. Let’s hang on to a piece of American History that we hold so dear. BUSINESS DESCRIPTON A large flat outdoor cinema with over 400 spots to park an automobile and enjoy a movie with your family in friends within the privacy of that automobile. The Drive-In is a multi-use space that contains a concession stand, stage, playground and public restrooms that can be rented out. The lot will be located just out of Joshua Tree, California a remote area consisting of lower to middle income families and will serve the entire Morongo Basin Area. MARKET ANALYSIS The Drive-In movie theater business has been in a rapid decline in the last 10 years in the United States. Drive-Ins have given in to their large competitors of Multi-plexes with super surround sound and ideal seating; however their still is a demand from Drive-In enthusiasts and low income families for the need of a Drive-In. According to the website, http://www.driveinmovie.com/CA.htm, explains that “California's first drive-in movie theatre opened in June of 1938 (there were less than 15 "auto theatres" in all of America at that point). Within just ten years, another 43 drive-ins had opened up and California was on its way to becoming one of the top drive-in states.” Since 1993 the demand for a Drive-In located in Joshua Tree, CA has grown since the closing of Sky Drive-In located 10 miles away in Yucca Valley. The nearest competition, Smith’s Ranch is located 20 miles away in Twenty-Nine Palms, CA. Due to the fact that Smith’s Ranch is located next to a US Marine Base and has the reputation to get rowdy many families tend to avoid it. This is where Twilight Drive-In will differ in serving the Morongo Basin area. OUR MISSION To construct a modern day Drive-In theater and marketplace in order to operate a thriving business by creating an experience that is unique from other entertainment opportunities our there. To hold on to a piece of America’s past while updating to succeed in modern times. OUR VISION To create a tranquil oasis from the chaos of modern day life while entertaining family and friends in a relaxed laid back setting. To offer up a marketplace in which local vendors can come and interact and help grow theirs businesses and community. Finally to establish a venue in which special events have the chance to grow and flourish. OUR MOTTO Leave all the work to us while you take a nostalgic trip with family and friends in order to reconnect and enjoy the company of the ones you are with. OUR GOALS To operate a successful and profitable business that will sustain long term business growth and development. To provide quality service that develops loyal life long customers. To work to strength the economy and value of the town in which we do business. To become a partner to the community to ensure it a better place for the children of tomorrow. SERVICES PROVIDED Our main service that we will provide will be seasonal night time double features. These double features with consist of new and classic movies shown throughout the spring and summer months. During these double features we will provide auto parking, stereo sound via speakers or FM frequency. Located at the front side of the screen we will also have a playground for smaller children to go and burn off extra energy and to also give their parents some alone time. Next to the playground we will also include benches and a picnic area. As an added perk we will also provide wireless internet service so that movie patrons can connect to the internet to our interactive website that will show facts about the movies showing along with upcoming titles. Intended to be our major source of income will be the concession stand centered in the middle of the outdoor cinema area. Through this concession stand we will offer a variety of traditional concessions that are associated with the Classic Drive-In Theater along with many modern offerings. We are looking at building relationships with vendors such as Starbucks Coffee, Coca-Cola Co. and Orville Redenbacher popcorn to become exclusive dealers. During the weekend marketplace the concession stand would provide breakfast, lunch and traditional snacks. We will also seek to secure a liquor license in order to serve alcohol during special events only. In order to increase our revenue and offer other services we will design the outdoor cinema to contain a stage area in order to host special events and corporate parties. We will have a sound system and lights and eventually would hire a special events coordinator to assist in this area of the business. Another source of revenue for the Twilight Drive in will be holding a weekend marketplace during the day timee. Here we will offer to rent out lots to local retailers, grocers, and venders in order for them to sell their goods to the public. We will also rent spaces to private citizens who would like to use the space for selling personal items from garage sales and estate sales. We will also donate space to non-profit organizations as needed. Advertising opportunities will be the last area of service provided by the Twilight Drive In. We plan to issue quarterly pamphlet that will detail upcoming events, movie facts and trivia, upcoming showings. Throughout this pamphlet advertising space will be available. Advertising space will also be able throughout the entire outdoor cinema area. OUR CUSTOMERS Twilight Drive-in customers will represent all walks of life. Our movie patrons will consist of people of all ages. Our customer base will consist of families and younger adults that is living on a budget and need an inexpensive way to enjoy a fun, relaxing and enjoyable night away from the life’s stress. Our marketplace customers will also be these same people, however add in the local, independent farmers, grocers and retailers. We will also attract special events promoters who would utilize or space for special parties for either corporate functions or for individual promoter profit. Our customers will also be the sponsors for the various mediums of advertisement set up around the theater and its publications. AREA STATISTICS “According to the County of San Bernardino Economic Development Strategy 2007 Report prepared by John Husing, the Basin’s jobs gain during the first five years of the millennium ranked fifth in the county’s six economic zones. Only the Outlying Desert zone, which is very sparsely populated and includes the small towns of Trona and Needles, ranked lower. Breaking the Basin’s overall employment landscape down by sector and using California Employment Development Department statistics, Husing’s report names government, and principally the Marine Corps Air-Ground Combat Center, as the Basin’s employment leader, accounting for 64.8 percent of jobs in 2005. It’s important to recognize that the wages provided by these local market businesses are typically ranked at the low end of the wage scale. Husing’s report puts retail, which includes restaurant work, and employment agencies, which supply many of the home health care workers in the area, at the very bottom of the list. In the year 2005, these two employment sources paid annual average wages of $21,392 and $17, 852 respectively. Government paid considerably better with an average annual wage of $86,743 in 2005.” OWNER The Twilight Drive will be operated under a sole proprietorship with John Mahany in the role of Owner. This will be his first venture into a new start up but he has shown exceptional levels of success in the overall operations and management of several successful small business ventures. OWNER’S FINANCIAL STATEMENTS Available upon request. FUNDING John Mahany will be investing $100,000 of his personal funds in order to cover start up costs. This $100,000 will remain with the business and he intends to draw as illustrated under Business Objectives. In order to purchase land loans we will be utilizing e-construction loans.com and will participate in their Single close construction loan-1. This loan consists of: |5.750% on 1 Year ARM | |1 pt total includes .5 construc. fee | |6.329% APR (annual percentage rate) | |[pic] | | | |The lender charges a construction management fee of .5%. | |This single close construction loan program is also the permanent financing. It is a 1 Year Adjustable Rate Mortgage. | |After a fixed rate for an initial period of 1 Year, this loan will adjust once per year with a 2% annual cap, a 6% life | |cap, and a 2.75% margin over the 1-Year Treasury Weekly Average. The construction period is 12 months, during which time | |the loan is interest only on the amount drawn, at the above interest rate. After the initial fixed period, the loan will | |adjust annually in accordance with the above specified caps and margin. | | | Retrieved from the web, December 6, 2008 from: http://www.e-constructionloans.com/construction_loans.htm Once construction has been complete Twilight Drive-In will utilize a revolving line of credit known as the The Gold Card from American Express Open to cover expenses until revenue will support them. Until revenues begin to support the business. BUSINESS OBJECTIVES Twilight Drive-In will have these business objectives during the first two years of operation: 1. Owner draws of $46,000 by the end of Year 1. 2. Cash break-even by the end of Year 1. 3. Owners draw of $55,000 by the end of Year 2. OTHER OBJECTIVES The key objective in the operation of Twilight Drive-In will be to create a niche in which the big Multiplexes of the present can no longer achieve. We will not try to compete with these Multiplexes, instead we will offer the chance for families and friends to get together in the confines of their autos where they can interact and enjoy the movie while not disturbing others. Our hope is to re-ignite the passion that was once the American family. Through our Weekend Market Place and Special Events departments we hope to build a relationship with the town and help stimulate its economy and spirit. We hope to offer our fellow business owners with an outlet in which to network and achieve their desired business goals. We hope to give back to the community which supports us by aiding in volunteer and charity works. BUSINESS OPERATIONS The operations of Twilight Drive-In will be described using the main functions of the business: marketing, competitive analysis, legal structure, management expertise, support personnel, and financial information. One of the things that will make Twilight Drive-In a success will be excellent customer service and clean accommodations. MARKETING Products Seasonal Nighttime Double Features will sell themselves. Concessions sold to patrons of all events. Advertisement space viewable at all events. Vendor Booth Rental at Weekend Marketplace. Special Events forum as needed. Concession Related Products Twilight Drive-In will sell the following: burritos, tacos, popcorn, hot dogs, corn dogs, fries, chips, candy, cotton candy, seasonal treats and beverages. During Weekend Marketplace everything listed above as well as: breakfast and lunch sandwiches, gyros and corn on the cob. John Mahany will purchase all items from a variety of distributors following further research. All foods and beverage suppliers will be subject to change due to poor quality or poor customer service. Price The majority of the sales will come from concession sales. Representative prices are as follows: $5.00 for items: hot dogs, corndogs, sandwiches, $2.50 for various boxed candy, and all other items are based on volume. A comprehensive survey was made of local restaurants offering beer and soda on the menu. The general price range for imported Mexican beer was $2.50 to $4.25. Domestic beer ranged from $2.00 to $4.00 Other revenue will come from Advertising sales and Weekend Marketplace booth rental. Advertising packages ranging from $100 to $5,000 per campaign. Booth rental will be offered daily, weekly, monthly, yearly and price will be based off of square footage. Price will be approximately $4.00 dollars per square foot. Place The mbconsevation.org indicates that the Morongo Basin area is considered a remote area. We are looking for a location that is away from the bright lights of the downtown areas but still accessible by a means of paved road. Some areas we have of interest are the area outside of Sunfair Dry Lake bed which is located next to Copper Mountain College. The area is sparsely populated and is isolated from light and sound pollution. Average cost per 2.5 acres is approx. $12,000. Looking to purchase up to 100 acres. Customers will enjoy visiting the area due to its extreme beauty and favorable climate along with the access from Highway 62. Bright stars and clear nights make spending time outdoors here a pleasant experience. All of these factors contribute to the decision to locate in this area. |Yucca Valley , California - Monthly Climate Normals | |  |  Average °F | 64 |51 |52 |55 |63 |67 |77 |86 |83 |79 |73 |57 |48 | | Rain | 3.34 | .95 |.43 | .11 | .00 |.00 |.00 |.01 |.00 |.00 |.23 |.65 |.96 | |Retrieved from the web on December 8, 2008 from http://www.desertusa.com/Cities/ca/yuccavalley.html Print and Radio Daily news ad indicating coming attractions, current show times, special events and ticket prices Weekly Radio spots featuring sound bytes of current and coming attractions to air on local radio stations Z107.7 and KDGL 106.9FM. Online Interactive webpage with proposed website www.twilightnights.com OPERATING COSTS All costs are on a monthly estimated basis for large expenditures: Movie Attainment Fees 50% of ticket sales Repairs and Maintenance $500.00 Supplies $6,000.00 Wire Less Internet $125.00 Payroll $8,000.00 PROJECTIONS One and three-year sales forecasts are presented below together with anticipated promotional costs based on an average nightly attendance of 300 during the spring and summer months, year round booth rental for Weekend Market Place and advertising sales. Special events have not been projected due to their unpredictability. 12 month and 3-year Sales Forecasts and Related Promotional Costs Years Sales Revenue Promotion One 320,000 5,550 Two 360,000 4,000 Three 420,000 7,000 **all information is estimation COMPETITORS The following is a list of competing venues that also show movies in a 20 mile radius o of proposed location area: Smith Ranch Drive In Theater, 4584 Adobe Road, Twenty-nine Palms, CA 92277 The following are within a 50 mile radius of the proposed location: Camelot Theatre, 2300 East Bristo Road, Palms Springs, CA 92262 Regal Cinemas Palm Springs Stadium 9, 789 E. Tahquitz Way, Palm Springs, CA 92262 Cinemark 10, Date Palm Drive, Cathedral City, CA 92234 Mary Pickford, 36-850 Pickfair Street, Cathedral City, CA 92234 MANAGEMENT EXPERTISE The owner has held many supervisor positions in small businesses. The owner holds an undergraduate business degree from the School of Biology, California State Sonoma; John Mahany’s extensive business activities have used several reputable basin professionals who provide services to the business. These include John Mahany Plumbing, State Farm Insurance, and SunBelt Construction. The owner has had a long term banking relationship with Pomona First Federal. SUPPORT PERSONNEL The Theater will operate using family and high school students as its principal employees to reflect a youthful, family oriented image consistent with its motto and ideas. Business Financial Statements Since this is a new venture this information is not available at this time. Risks and Problems As with any venture there are some apparent risks that could occur. Since this business primary location is outside the weather could greatly effect operations. The area of the theater is an ideal spot due to weather conditions; however in the summer months flash flooding and extreme thunderstorms can occur and could cut operations at anytime. Since we are dealing with middle to lower income class families drastic changes in the economy as we are experiencing now can greatly affect attendance at movies and Weekend Market Place. Lastly this area is located in highly seismic region. In 1992 the area experienced a 7.3 earthquake that resulted in the death of 1 person and numerous buildings being destroyed. While everything will be built to CA Seismic standards there always stands a chance of damages or property loss. SECURITY Security is an important issue that will not be taken lightly. The building and property will by monitored by ADT security systems when not in operations. While in operation Twilight Drive-In will employ the services of Pinkerton Security. According to Pinkerton’s website they are “proud to be a guarding company that can offer our partners solutions without detracting from our core business. This advantage, combined with PGS’ nationwide support structure and contract-proven processes for expediting recruiting and clearance approval, qualifies us as the low risk, best value choice to meet the demanding schedule requirements of any organization.” We will hire them on a contract basis. Benefits of this are reliable, professional security while keeping insurance costs down due to the fact they carry the liability coverage of their guards. CONCLUSION Even though Drive-Ins are being replaced by new modern Movie Houses there still remains a niche for this nostalgic memory of the past. Today there are more than 35 clubs alone in the State of California that spends their weekends traveling from Drive-In to Drive-In to experience this piece of the past before it is long gone. Therefore I believe even though it may not be the easiest venture to get off the ground, once established would become a treasure to the community and a viable source of income for its owner. SUMMARY Twilight Drive-In and Marketplace plan on conducting business in the town of Joshua Tree. It plans on offering Double Feature movies during the summer months and a Weekend Market Place on the Saturdays and Sundays. The main sources of revenue will come from admission fees, concession sales, booth rental and advertising sales. The principal owner will be John Mahany and the majority of funding will come from lines of credit and loans. REFERENCES http://www.pukarindia.com/Joshua-Tree-California-Land,i150311424598,c15841.html http://www.pinkertons.com/ http://www.mbconservation.org/pdf/growth.pdf http://www.driveinmovie.com/CA.htm http://www.driveinmovie.com/ http://en.wikipedia.org/wiki/Drive-in_theater http://www.mbconservation.org/pdf/growth.pdf