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Mount Major Rental Shop

Business Plan

BUS 650 2012 Authored by: Pamela Paquette

Mount Major Rental Shop


Business Plan 1.0 Executive Summary

Mount Major Rental Shop is located in central New Hampshire. Mount Major Rental Shop will provide equipment to the resort clientele. By providing state of the art equipment and processing system, clients will be able to try the newest skiing and snowboarding equipment with speed and accuracy. Mount Major will have an efficient equipment inventory method and a spacious area for regular equipment renters to pick up and return their equipment. The decrease in time and increase in efficiency will allow for more customers to participate in the rental program. Consumers of the resort services are season pass holders from an average of a 75 mile radius, school season pass holders which operates within a 60 mile radius, day trippers, international visitors and extended vacationers. The rental shop will offer skis, snowboards, ski boots, snowboard boots, poles and helmets. The rental shop is going to include passive RFIDs or barcoding on all rental equipment to ensure accurate inventory controls. The shop will also deploy a new kiosk system to help speed up the rental process by enabling customers to reserve their rental equipment online and check-in upon arrival. The new kiosks will allow for faster access to rental agreements and waivers. A new web page will be designed to allow for online purchasing of lift tickets, rental equipment, lessons and more. The new web page will also be enhanced for mobile commerce. 1.1 Objectives The objective of Mount Major Rental Shop in the first year includes: Exceeding customer expectations for speed of service Have rental equipment for all guests during peak periods Provide a better work flow for purchasing of various tickets / passes for the mountain

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Provide a more efficient process for checking out and checking in equipment Provide for a more efficient method for regular renters to obtain and return their equipment

1.2 Mission The mission of Mount Major Rental Shop is to become the most efficient and the number one choice with visitors to the central New Hampshire area.

2.0 Company Summary

Mount Major is located in central New Hampshire. This is a family owned business started in the 1950s. The resort has 2 high speed quad lifts, 1 triple chair lift and a t-bar lift for the terrain park.

There are several parking lots. Skiers and riders buy lift tickets at the ticket counter, can sign up for lessons, can rent equipment, and may purchase food and drinks in the caf. The season typically runs from Thanksgiving to the beginning of April. On most weekends, they sell 1000 day lift passes and are visited by 500 season pass holders. The busiest (peak) times are the week between Christmas and New Years Day, the winter vacation weeks for Massachusetts, New Hampshire, and Rhode Island, and Martin Luther King weekend in January. During these times, they sell on average 2000 day lift passes and are visited by 1000 season pass holders per day.

3.0 Products & Equipment

Mount Major Rental Shop provides products for the skier and snowboarder. The available rental equipment includes: Ski Boots Snowboarding Boots Skis Snowboards Poles Helmets

3.1 Process Improvement Products In order for Mount Major Rental Shop to expedite rental equipment the purchase of RFID devices and device readers will be necessary. The Rental Shop will also require the purchase of several kiosks to enable online processing of the Rental Agreements and Waivers. An Inventory Control System will be purchased from IntelliTrack. The software package that we will be working with is their Check-In-Check-Out software program. All equipment will need to have a passive RFIDs or barcodes attached to it and an RFID and barcode reader will have to be installed for expedited return of equipment. 3.2 E-Commerce Improvement Products In order for Mount Major Rental Shop to improve accuracy of sales, we will be building an e-commerce web page that will be optimized for mobile web devices as well. The web page will include a shopping cart, a way to increase our customer loyalty using web page stickiness items, for personalization. 3.3 New Equipment Retrieval Room
A new room will be constructed to deal with the multitude of renters from the schools that rent the same equipment every week. This will have a direct impact on the speed of retrieval and return of the equipment for the school groups.

4.0 Market Analysis Summary

Mount Major Rental Shop will compete in the recreational services industry. In a Gallup Poll survey on the use of recreation and leisure time, respondents in the high income bracket listed seeking adventure and being with nature as primary motivations for their vacation choices. The adventure travel segment along accounts for over $10 billion in annual revenue and is the fastest growing segment

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in the travel industry. The ski industry is responding to this trend with significant investments in stry. services that appeal to the adventure skiers and snowboards. Not only are consumers demanding better ski conditions, they are spending more money on their ski vacations. Resort development and operation in the central New Hampshire area has been successful and ort profitable in the previous years. Last year in particular the very large amount of snow that New Hampshire received helped to build up the local economy. Time hare / resort hotel development and Time-share investments into ski resorts nationwide are currently going strong. This increase in lodging has an impact on the Mount Major Rental Shop. 4.1 Market Segmentation ation Our customers can be broadly divided into 4 groups: rs Season Pass Holders: customers come from an average of 75 mile radius School Season Pass Holders: the school program that operates within a 60 mile radius the Day Trippers - customers come from up to 120 miles away Extended Vacationers - customers that stay for an extended time

Visitors
Season Pass Holders School Pass Holders Day Trippers 21% 12% Extended Vacationers

35%

32%

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4.2 Marketing Communications Mount Major Rental Shop has budgeted $50,000 for marketing expenses for the upcoming year The year. companys initial marketing resources will be devoted to capturing the established local and national devoted markets. 4.2.1 Direct Mail Mount Major Rental Shop will develop a high quality color brochure designed to convey the personalization and exceptional quality of the companys rental services. All of Mount Maj Majors marketing materials, including its brochures, will be designed with a common look and will feature the

Internet address and Mount Major logo. Brochures will be sent to prospective and repeat clients accompanied by a personalized letter from the CEO. These names will be identified from the previous years customer lists. 4.2.2 Internet Web Site In order to serve those members of the target market who actively search for information using the Internet, Mount Major Rental shop will design an interactive web site. The new site will include detailed information about the rentals available, the site will enable customers to reserve their equipment, contact the shop via email and reserve their lift tickets and lessons. 4.2.3 Social Media In order to serve those members of the target market who actively participate in social media sources, Mount Major Rental Shop will design pages for social marketing, examples are; Facebook, Twitter, Google+, Cell Phone App, Blogs, Pinterest, YouTube etc. These sites will include detailed information about current activities, upcoming events, deals, other articles that pertain to skiing and snowboarding. 4.2.4 Mobile Web Application In order to serve those members of the target market who use their mobile devices to track their movements, make purchases, create videos and more, Mount Major will employ a software programming team to create mobile computing to blend with our new web site and rental shop.

5.0 Strategy and Implementation Summary

The market strategy is to capitalize on Mount Majors ever-increasing customer base and contacts by offering the latest products and personalized service. The company's goal in the next year is to obtain financing which will allow for expanding the shop/service area with up-to-date servicing equipment, hiring additional employees, and rental and sales inventory for all aspects of the company's customer base. The companys goal in the next year is to also invest in an inventory control system which includes RFID equipment and/or bar coding equipment, kiosks for customers, a new room to provide package of previously reserved rental equipment.
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The company's goal is to hire additional employees, concentrate on customer service, and promote the company and the environment that has allowed for this increase in service by way of discounts and promotional specials that will benefit the company and the customer.

6. 0 Management Summary

The company's management philosophy is based on responsibility and mutual respect. Mount Major Rental Shop maintains an environment and structure that encourages productivity and respect for customers and fellow employees. 6.1 Personnel Plan

Mount Major Rental Shop has a highly experienced and qualified management team. Its key management team includes Andrew and Lauren Kelly. Jointly, they are responsible for processing clients, scheduling equipment repairs, equipment purchases, managing the rental of all equipment, return of all equipment. The remainder of the team in the rental shop include: Kevin, Joe, Meg, Tim and Clark. This team is responsible for fitting the equipment to each renter and ensuring that all waivers and rental agreements have been properly executed. Future plans call for the hiring of 3 to 4 more personnel to work in the shop. ON occasion part-time personnel will be used and job training provided through the area schools for those interested in this area of the job market.

7.0 Financial Plan


7.1 Income Statement
The following chart summarizes the project financial performance of Mount Major Rental Shop over the 3year period ending in April 2014.

Income Statement
For the year ending May 30 (Amounts in Dollars) Revenue Cost of Goods & Services Gross Margin % of Revenue Operating Expenses % of Revenue Interest Expense Net Income (Loss)
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2012 446,075 162,590 283,485 64% 208,617 47% 61,669 13,199

2013 541,666 246,997 294,669 54% 189,986 35% 59,367 45,316

2014 710,937 315,453 395,484 56% 211,381 30% 55,537 128,566

7.2 Balance Sheet

The Balance Sheet provides an overview of the companys use of the proceeds of its first round of financing.

Balance Sheet
(Amounts in Dollars) Cash Accounts Receivable Total Current Assets Intangible Assets Goodwill/Non-compete Organization Costs Accumulated amortization Net Intangible Assets Fixed Assets Accumulated Depreciation Net Fixed Assets 30-May 2012 2013 2014

Current Assets

212,566 16,828 229,394 195,000 13,000 13,961 194,039 395,457 29,137 366,320 783,967 18,642 551,484 102,422 672,548 106,228 13,199 (8,008) 111,419

185,702 33,539 219,241 195,000 13,000 29,561 178,439 428,165 101,722 326,443 724,123 20,921 493,669 17,793 532,383 151,066 45,316 (4,642) 191,740

163,176 26,618 229,394 195,000 13,000 45,161 162,839 582,550 190,816 391,734 783,967 23,484 430,273 88,988 542,745 258,192 128,566 (165,447) 221,311

Total Assets

Total Current Liabilities Bank Loan Liability Capital Lease Liability Total Liabilities Beginning Capital Contributions Net income (loss) Distributions Total Capital

Liabilities

Capital

Total Liability & Capital

783,967

724,123

764,056

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7.3 Statement of Cash Flows

Statement of Cash Flows


2012 13,199 87,682 (16,828) 16,356 100,409 (310,457) (175,000) (485,457) (76,094) 640,000 178,858 13,796 2013 45,316 88,185 (3,453) 2,279 132,326 (32,708) (32,708) (88,444) (18,126) 2014 128,566 104,694 (6,338) 2,563 229,486 (89,385) (89,385) (111,201) (51,426)

For the year ending May 30 (Amounts in Dollars) Cash flows from operating activities: Net income (Loss) Adjustment to reconcile net income (loss) to cash Depreciation and amortization Changes in operating assets and liabilities: (Increase) decrease in accounts receivable Increase (decrease) in accounts payable Net cash provided (used) by operating activities Cash flows from investing activities: Purchase of fixed assets Other investing activities Net cash provided (used) by investing activities: Cash flows from financing activities Principal payments Contributions Distributions

Net cash provided (used) by financing activities:


Net increase (decrease) in cash Cash - beginning of period

563,906 192,654

(106,570) 185,703
(6,952) 192,655

(162,627) 163,176
(22,526) 185,702

Cash - end of period

Appendix
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All numbers included in this mock Business Plan have been fabricated. There was no research into numbers for the financials.