Executive summary
This business plan provides details for investors on all the operational and start-up features of “The Entertainment village”. It specifically outlines the infrastructural issues, business growth, procedures and many other strategies that will be essential to the success of this business.
It has been estimated that a total start-up cost of $10, 063, 535 will be needed and operational costs of $1,142,284.5 for the first year will have to be added thus making the total costs to be $11,205,820.
Risks for investments will be reduced through the following: Project commencement will occur only after adequate capital has been obtained so that investors do not lose their funds.
A thoroughly trained workforce will be available in order to provide the best customer service. Investments in the latest technologies will ensure that the services on offer are a cut above the rest. A perfect location for the business has been selected; it will ensure a consistent flow of clients. Lastly, the products involved do not require excessive inventory so the project will not have many operational costs.
Objectives
Entertainment village will be located at the heart of Riyadh. The intention is to provide a recreational centre with eight main attractions: indoor and outdoor shooting ranges, four golf simulators, four paintball fields, seven bowling lanes, a play station 3 zone, restaurants and coffee shops, an arcade center and two projectors for matches.
The project will cost a total of $11, 205, 820 to start up. The funds will be borrowed from financial institutions at a rate of 10% per annum for a period of ten years. It is likely that Entertainment village will be opened in one year’s time although the first year profit will not exceed investments in the assets. However, in the second year, gross revenues indicate a return and they are expected to grow in the subsequent years as well.
Mission and vision
The aim of creating The Entertainment Village is to offer residents of Riyadh excellent entertainment in an enjoyable and pleasing environment. Quality services will be provided through the most technologically advanced facilities in the recreational industry. This center will be globally competitive because it will borrow trends from different parts of the world. In short, the mission is to provide excellence through the latest technologies and global competitiveness.
The vision of the business is to be the first of its kind in entertainment and recreation; to become the best in the industry and to become the biggest recreational service provider in the country.
Competitive comparison
The success of The Entertainment Village will be dependent upon the social abilities and the expertise of the management team that will run the facility. This leisure hub will be the most technologically advanced entertainment venue in Riyadh. The contractors that will be used in its creation will be internationally recognized and will build the most reputable entertainment venue in the country (Schilit 104).
The Entertainment Village will be marketed aggressively to potential clients so that they can come and use the facility when it has been completed. Lastly, the center will be located at a prime area with lots of customers who have disposable incomes.
Company summary
The site for The Entertainment Village will be at a prime business location called Jeddah. This area is five minutes away from the airport and the city centre is about 15 minutes. It is in North Riyadh and is richly endowed with many private residential areas. This is a very busy area but is also known for its recreational services.
A lot of customers usually come to that side of town in order to enjoy themselves. They will find that there is a lot of room for parking. Besides, the architectural requirements for establishing such as complex recreational centre will have been met if the business will be located in that part of town.
The market for a recreational centre is quite high in Riyadh. It has been reported that there is an increase in the number of people aged between sixteen and twenty five. These would be the ideal market segment for the business. The target area has very few similar activities, so this facility will enjoy first-mover advantage.
Demand has been going up for the product so chances are that people will respond well to the initiative (Kiyosaki 25). It will also be possible to expand the activities quite rapidly in this chosen area. As people continue to learn about the centre, more and more of them will continue to participate.
The main priorities will be the arcade center, golf simulator and play station 3 zone. These areas will all possess the latest game versions and play technologies. All areas will be well spaced and beautifully designed. Ample lighting will be provided depending on the nature of the activity under consideration. The Play station 3 zone may not require too much bright light. Consequently, the lights will be strong enough to allow visibility but will not be too overwhelming.
In the arcade center, facilities will be arranged in a straight row so that everyone can witness what the other is doing and thus have more fun in the process. The use of high quality equipment will also make the services quite satisfactory to the patrons. Since The Entertainment Village will have four golf simulator screens as well as four paintball fields, then customers will not have to wait in line in order to use them.
The bowling area will also be highly computerized. Staff members will be ever present at each lane so that clients can be assisted. Scores will be shown through an automated system that will be recorded for every single game. Customers will be informed about prices of each game through a visible board. Promotional and marketing campaigns will also quote those prices so that buyers can be aware of what to expect in the recreational centre.
Time schedules or waiting times will be communicated to the clients before using the centers so as to manage inflow and outflow traffic. It is likely that this sufficient information will translate into a great service experience that will cause most clients to keep spending their money. The structured sources of income will come from the golf simulators, the paintball fields, arcade centers, play station 3 zone, and the shooting range.
These will all have a fixed price that will be paid per hour. However, the cafes, restaurants as well as the projectors for matches will be dependent upon how much the clients choose to spend on food and drinks. Some of the customers from the gaming centers will be the same ones who will frequent these eateries. Given the fact that there will be virtually no competition, this business is likely to elicit very positive responses.
Company ownership and legal entity
The organization will be privately owned and a portion of the stock will be made available to investors. This means that it will be a joint stock firm.
Establishment
At the start up of the event, a number of things will occur concurrently. First, the entrepreneurs will obtain investment for the business. As stated earlier, the intention is to do this through a commercial loan (Kiyosaki 29). The business plan will be sent to a variety of funding sources in Riyadh in order to carry out the project. At the same time, it will be necessary to obtain a permit for carrying out the business. This will be collected from the government revenue collection authority.
All other legal requirements will be considered in the process as well. This will be followed by the purchase of the land where The Entertainment Village will be located. As soon as the latter step is completed, architectural drawings for the facility will commence. Since some of the items needed to complete the recreational centre have long lead times, then their orders will be placed immediately; they include steel and other metals.
It will be essential to start looking at the equipments for the arcade centers, bowling, golf simulators and many more. Orders will be made for the equipments at that time. After completion of the orders, it is likely that the architectural drawings will have been completed. It is at this point that the architects will be given the final approval. Shortly after, site clearance and preparation will be done.
The building will then be started and will possess a timeline of about six months. After the six months, employees will be hired to work in the various segments of The Entertainment Village. A number of in-house training initiatives will be developed and implemented immediately after the completion of the building. Finalization of operation procedures will be made such as: streamlining the play station games, pretesting the shooting range and golf simulator equipment and ascertaining that the bowling alley is working well.
Now the company will be ready to start advertising. An intense marketing campaign will be launched in order to let the public know about the services that will be available in this recreational centre. Additional staff will be needed to carry out other functions, so a second hiring phase will be necessary. They will still require some training before then can start working.
After all the structural components have been put in place, the firm will need investors. The restaurants and cafes will require food supplies as well as other kinds of supplies that will be essential in service provision. There will also be a need for gloves, head gear, knee caps, paintball suits, bowling bowls and other supplies that will be necessary in the running of the centre. After all inventories have arrived, then the organization will be ready to open for business.
Shown below is a summary of the establishment requirements
Company location and facilities
This entertainment center will be strategically located. It will be adjacent to a number of supermarkets, shopping complexes, banks and smaller businesses that are different from this one. As a result, a multipurpose recreational centre will be ideal in such an area.
Recreational experts and analysts often assert that most centers should be between one to file miles away from a market place. The Entertainment Village will fit this requirement flawlessly; demographics of the location will be perfect. Since the facilities will be made from scratch, then it will be possible to custom-design the place.
Customers will be given plenty of parking space. The facility will mostly consist of masonry work with some components of glass. Many clients in one section of The Entertainment Village may be interested in viewing what users in other sections are doing. Therefore, most of the centers will be compartmentalized using glass. Clients will not be unnecessarily inconvenienced when accessing the company premises because most of them will actually be coming to that side of the City for a variety of reasons (Schilit 378).
Products and services
This will be an entertainment centre for people of almost all age groups. The leisure activities found in this area will posses characteristics that are suitable to different groups or individuals. Computer technology will assist in monitoring the games, keeping scores as well as providing software for some of the competitions such as the golf simulator and the play-station zone.
The main revenue generator for this facility will be the paint ball as it will cost customers two hundred and fifty dollars in order to use it for one hour. The shooting range and arcade will be the next revenue generating items and these will bring in 150 and 100 dollars per person per hour into the company. The main idea in paint ball and the golf simulator is to get people to compete with one another.
Scores will be noted and conveyed to the participants as they proceed with the games. In the arcade center and the play station zone, customers will be competing with themselves in order to see how far they can go. The most aggressive arena will be bowling because minor competitions will be held for participants. Basically, these are all the entertainment services that will be available.
The projectors for watching matches will also be giving customers a service as they will get to enjoy their preferred matches in a great atmosphere. Most of them will purchase drinks as they watch the competitions. Additionally, the coffee shops and restaurants will be offering food and drinks to clients. Revenues will be generated from the purchase of those items directly. Late night customers or early morning reverends will have something that they can get from The Entertainment Village at all times.
Competitive analysis
The business under analysis will be a success because of the following reasons: The entrepreneurs and managers running this business will have done a thorough research about the industry, trends and many other things that customers look for when they come to an entertainment center such as the one under consideration.
It will probably receive a lot of publicity from the media because of the professionalism accorded in the business. Secondly, the company will strive to provide high quality customer service that would make users comfortable in the environment.
That part of employee training will be thoroughly explained to them prior to the hiring process and during operation of the project. Third, aggressive marketing will take place prior to the commencement of business. All clients will be duly informed about the great things they can do and enjoy at the Entertainment Village through posters, the internet (especially social networking websites), television and radio ads, newspapers and personal selling.
Through these various channels, it is likely that several people will have heard of the entity and will be willing to try it out when it opens. Fourth, the location of the business is excellent. The Entertainment village will be a few miles away from the target consumers. The neighborhoods found around the chosen location are upper and middle class, so most of them will welcome this centre enthusiastically.
Fifth, the affordability of the facility will also contribute towards its success. Since the pricing will be quite reasonable, clients are likely to respond well to the provisions made. Additionally, the safety that will be provided to users will also increase their rate of satisfaction and may cause them to enhance their level of patronage to the facilities (Pinson & Jinnet 99).
Supplies
Most supplies that are used in the leisure industry are usually shipped overnight. In this business, products are not perishable so the orders can be made in advance. This will prevent the last-minute rush that may sometimes compromise on customer service (Abrams 211).
Only the restaurants and the cafes will require immediate daily responses for supplies. In such cases, only the best local vendors will be chosen for this task. Reputable restaurants all around the country will be analyzed so that selection of the most efficient suppliers can be done.
Technology
The Entertainment Village will strive to serve the needs of entertainment consumers, business clients and sports oriented clients through the use of technology. Most of the scoring systems will be recorded and encoded through the use of technology so that managers can concentrate on other tasks.
All gamers have their own experience levels and the software used will be designed to provide each person with challenges that fit their abilities. Most of the games will be handled by a Pentium processor which will then display information on high-resolution screens for all to see. In case new improvements have been made to the current and existing software, then it will be relatively easy to upgrade because most software firms usually leave room to upgrade to better versions without too much stress.
Future products and services
In the fourth year of operation, The Entertainment Village will expand to include even more revenue generating activities. There will be a batting cage as well as a dodge ball court. All these will increase the client base and thus supplement current services and products on offer.
Minor additions in various facilities will include: provision of snack bars in a range of segments like the paintball field area as well as the outdoor shooting range; the introduction of vending machines in enclosed settings like the play station 3 zone and the arcade center. Customers will be allowed to rent lockers through monthly payments and there will also be a nursery where parents can leave their children and attend to the other activities that may be difficult to do in their presence.
Market analysis
It is likely that nearby residents will be coming to the entertainment centre; in addition, the vast and efficient transportation system available will cause customers from different parts of the country to still get a chance to come to the recreational centre.
The demographics of the people who will be interested in the services found at the entertainment village are: middle income earners; predominantly male buyers especially for the golf and shooting range, persons younger than thirty for the gaming services or the play station 3 services. It is likely that most of these people drive their own cars and are people with a reasonable disposable income in their hands (McKeever 48).
Market plan for the target market
In this organization, a designated person will be in charge of public relations as a full time job. She or he will always be responsible for informing the public about upcoming matches, events and competitions. It will be that person’s main responsibility to create new offers. The public relations manager will also be responsible for ensuring that customer service is top notch at the center. Publicity for events will be created through the use of television advertisements.
Catchy models, actors and actresses will be used for these campaigns. Additionally, several radio ads will be used for the same. The internet will be another avenue. Here, email invitations will be sent to individuals; advertisements on specific websites will be placed and a buzz will be created through social networking websites like facebook and twitter. Promotional coupons will be offered from time to time in order to encourage repeat sales from former clients.
There will also be membership provisions in the various types of competitions so that users can have a sense of association to the concerned game. Business to business contacts will also be utilized as these will provide sponsorship opportunities for some of the games.
Print advertisements will also be vital in creating an interest around the services on offer in this organization. Most of the clients may be readers of lifestyle magazines. Special attention will be given to magazines that were designed for the younger generation or sports and racing magazines designed for the same market segment as the Entertainment Village centers around them. Posters will also be placed around different shops and businesses around the city.
The basic message in all the platforms will be to make customers excited about the offerings at the recreational center. They will also be told about the prices and actual activities that will go on. Location and charges may be mentioned in certain platforms like print advertisements. This information will be displayed in an aesthetically pleasing but creative way.
Market trends
In Riyadh, more and more people are opening up to the reality of global patterns and influences. Many of them have more disposable income so they have something to spare in terms of leisure and entertainment. Young people are well exposed to play stations and arcade centers, but few of them have ever been able to get all these services in one place. Additionally, a lot of people are interested in watching football matches in public places.
Many restaurants and pubs already have such kinds of systems in place. The only difference is that none of the businesses available are actually offering every kind of game. Riyadh has so many international visitors who will be familiar with paintball fields and the like. Those who may not be aware of these new trends will be educated and trained by people who are on the ground and ready to work with them.
Market needs
An analysis of the demographics in Riyadh reveals that the population between 16 and 25 years is increasing so this category of people has a need for new entertainment options. More visitors are coming into the country and they would certainly be open to the idea of an entertainment all-in-one centre. Disposable income is also at an increase and will facilitate payment for entertainment services.
Market growth
Since the services available at the institution are new, it is likely that the market potential will only increase after using the services. Diversification of the entertainment industry is occurring at very rapid rates and this will definitely increase market prospects.
Service Business analysis
The Entertainment Village will be competing with other leisure and recreational providers such as pubs, theme parks, cinemas, sports centers and bowling centers.
Competition and buying patterns
Competition in paintball and bowling in Riyadh is virtually nonexistent so this business will have an edge over many entertainment centers. However, a lot of competition exists in the restaurant and coffee business as well as match watching.
Great customer service, proximity to other new and exciting leisure services, a safe and ambient location are the qualities that will make those services at The Entertainment Village stand out. In the bowling and golf industries, competition is mild at best; this project will stand out in golf because a golf simulator will be used instead of an actual golf arena. In bowling, good customer service and top-notch technological devices will be used.
Main competitors
Al Hokair group runs an amusement park and many more outdoor activities; it is a force to be reckoned with. Al-Thumama entertainment has a lot of shopping. Snow World Riyadh has indoor skating, ice sculptures and artificial snow. Universal bowling centre is another important competitor because it offers one of the main services to be found in The Entertainment Village – bowling.
Market segmentation
Segmentation will be based on age. The Entertainment village targets young people between sixteen and thirty for some of the services. They include: the paintball field, arcade center and play station 3 zone. The bowling centre will attract people from other age groups as well. Those between the age of 30-40 maybe interested in watching matches, using the restaurants and pubs and may also do indoor and outdoor shooting range. Bowling may attract people over forty and the same can be said about the golf simulator.
Strategy and implementation
In order to have sound leadership and accomplish effective service provisions, one must ensure that staff members are well motivated and that customer service is meticulous. These are the things that will be emphasized in the Entertainment Village
Competitive edge
The Entertainment village will be a force to reckon with because of:
- Uniqueness. It will be the first to offer such types of games in one convenient location. The wide selection of activities and recreational services will be sure to attract a diverse range of clients who will be more than happy to spend their expendable income in the facilities.
- Affordability. The charges will vary from $30 to $250 per hour for any of the services in the recreational centre. This means that most of the customers will easily afford these services without having to strain themselves. Given the demand of the products and their uniqueness, then the selected product range will be quite reasonable.
- Safety. Some of the activities in The Entertainment Village may be hazardous to people who do not know how to use them. A lot of precautions will be enforced in order to ensure that everyone is safe. Furthermore, personal properties, cars and many more will be promptly protected by the organization in order to enhance its appeal to the masses.
Value proposition
The Entertainment village is a technologically advanced and modern entertainment facility. It will be designed to meet the recreational needs of members of the whole family. Through a safe, affordable, convenient and friendly place, the customers will be more than happy to come back (Abrams 7).
Sales strategy
The services will be sold as a sporting package that requires minimal athletic ability or even strength. Customers will be informed about improved health that will result from the services. Those who will be engaging in indoor gaming services will also be told about the affordability and delightfulness of the games.
Sales forecast
SWOT analysis
Strengths
This business will be the first in the field, so that will give it a first-mover advantage. There is a need for such a facility in Riyadh as the people in that area are looking for new ways of entertaining themselves. Virtually no competition in this industry exists.
Entertainment Village will provide clients with high quality equipments so that services can be satisfactory. The business will combine a series of services so that poor market responses in one area can be mitigated by successes in another. Entertainment village will be located at a prime location that will ensure success. Its affordability will also ensure that the business does well.
Weaknesses
The business has not yet started operating. A lot of things will have to be learnt after the facility opens its doors to the public. Entertainment village will have a relatively short to time to market and publicize itself after completion of the constructions, so this may slow down results.
Opportunities
The Company will focus on continually improving the level of services offered, and this will increase the client base. It is likely that the demand for the services will increase as more people become aware of The Entertainment Village. This business will expand its services and thus reach into untapped market segments. Statistics indicate that there is a relative increase of people between the ages of sixteen and twenty years. All these individuals will be targeted by the business.
Threats
Other entertainment companies might try and copy the concept at The Entertainment Village. There are already a number of businesses that focus on one or two services offered in this business. Some of them are restaurants and bars; others offer facilities for watching matches while a few offer gaming services. This business will deal with such threats by continually improving delivery.
Management summary
The goal of management will be to set high standards in the leisure and recreational industry. Although none of the members have been selected yet, it will be crucial to ensure that they possess the right qualities to match the needs of the organization (McKeever 48).
Organizational structure
The organization will employ a hierarchical structure of 60 employees with one general manager, and eight associate managers who will be in charge of the eight segments of service provisions.
Personnel plan
In the administrative area, the company will have a general manager, an accountant and a public relations coordinator. In the operational sector, the firm will have a bowling manager, a golf simulator manager, a paintball field manager, a play station 3 manager, a match projections manager, a restaurant manager and a shooting range manger.
Other employees that will be in operations include shift leaders, porters, waiters and waitresses, attendants. For facility maintenance, the organization will have a chief engineer, who will be supported by second class and first class mechanics. The total amount spent on salaries will be 120, 000 dollars per year.
Financial plan
Important assumptions
It has been assumed that the team will be taxed at a rate of 25% for the property costs. The business license will cost 0.05 of all the revenue to be earned in food and drink sales and 0.08 percent of bowling, shooting range and all the other gaming sales. It has also been assumed that only four hours in a day will be used for each service sector.
In paintball, it has been assumed that there will twenty players per game per hour. In bowling, shooting range, play station 3, golf simulator and the arcade center, the following number of players will be available per hour: 15, 10, 14, 8 and 30 respectively. Banking interest rates have been assumed to be 10% per year (Pinson & Jinnet 51)
Key financial indicators
Revenue forecasts
Income statement projections
In the initial year, annual profits will be $4,120,465.5 annually. This will grow to $21, 945,715.5 in the second year. The revenue will be generated from the core business segments offered by the organization. Price per service will not be increased, but it has been estimated that the client base will.
Cash flow projections
After eighteen months, it has been estimated that the company will be operating under a positive cash flow and will be self sustaining. It will strive to have a cash balance of approximately nine months so that it can handle any potential emergencies.
Pro forma cash flow
Break even analysis
All figures are in thousands. The breakeven point occurs in the 2nd year. It was calculated using the following formula: Fixed costs/ (Selling price per unit less variable costs). All fixed costs were estimated on a monthly basis and so were the variable costs.
Business ratios
Shown is table of the business ratios
Works Cited
Abrams, Rhonda. The successful business plan: secrets and strategies. Chicago: Running ‘R’ Media, 2000. Print.
Kiyosaki, Robert. The ABC’s of writing winning business plans. NY: Business plus, 2009. Print.
McKeever, Mike. How to write a business plan. NJ: NOLO, 2005. Print.
Pinson, Linda & Jinnet, Jerry. Anatomy of a business plan: a step by step guide to starting smart, building the business, and securing your company’s future. NY: Dearborn trade publishers, 1999. Print.
Schilit, Keith. Entrepreneur’s guide to preparing a winning business plan and raising venture capital. NY: Prentice hall, 2010. Print.