Our biggest savings of the year
Sammy's Family Entertainment Center
Strategy and Implementation Summary
John and Michelle Putteer enjoy an unusual position in seeking investors. Many businesses in the early stage of their plan are wondering where to get funding. The Putteer’s have both institutional and private investors who have expressed an interest in financing the Sammy’s concept.
As noted elsewhere, this new concept in family entertainment has proven to be a popular and worthwhile business.
5.1 Competitive Edge
Sammy’s has several distinct competitive advantages over possible competitors.
We need to emphasize again, this “new concept” miniature golf course will be the first one in the service area. The big signature waterfall, large course with water features, and additional attractions will truly make Sammy’s a “one of a kind” facility.
We mentioned two direct competitors when considering competition. But Sammy’s has a large advantage over both:
- Competitor’s problem: The miniature golf course on Hwy 20 just outside Niblick City is an updated, remodeled version of the old style miniature golf course. But this facility is not “kid friendly.” The main feature is a Par 3 golf course with a tavern in the club house. There is not even an appropriate rest room for families/children to use.
Sammy’s advantage: Sammy’s will be the first and only facility of its type in the service area. The facility is designed to be “family friendly” throughout. Sammy’s will offer a much better value for an equal price. When the consumer considers the clean, attractive, multi-dimensional, kid friendly facility, there will be little question which provides the better value.
- Competitor’s problem: The video arcade in the local mall is a one dimensional facility that only offers video games. They have no other attractions that would interest a family. They cannot offer birthday parties, or other group gatherings. The typical customer at this facility is the unsupervised child/teenager visiting while his parents are shopping.
Sammy’s advantage: The dimly lit mall arcade is no comparison for Sammy’s clean, supervised multi-dimensional facility. Again, when compared side by side, there will be little question as to the better value.
It is important to address the indirect competitors in our service area. These indirect competitors come into play when people are considering an outing, but are not sure where to go. Sammy’s has a distinct advantage in pricing over the competitors. There is also an attraction to Sammy’s as the newest entertainment type in the area, whereas other indirect competitors no longer have a “novelty” appeal to the consumers.
The combination of price, novelty, and choices of activities from multi-dimensional offerings clearly makes Sammy’s the competitive leader in family entertainment.
5.2 Marketing Strategy
Sammy’s will be positioned as a relaxing, worry-free environment where friends and families enjoy time together. This unique new facility will draw return visitors to the attractive, clean, safe setting.
Carefully designed advertising and promotions will accurately target the spectrum of customers identified above in the Target Market Segmentation topic.
While fun and excitement are the main draws that bring customers in the door, the value pricing and excellent location are also important factors.
Sammy’s pricing is designed to appeal to all levels of the economic spectrum. A game of miniature golf will only be $5 per person. Children under five are free with an adult. This price is lower than a movie and the experience lasts as long. As noted above, family entertainment is a high priority.
The arcade games will operate with tokens. Free tokens can be given to each participant at a birthday party, each golf game, or other marketing promotions. Tokens are also available for sale at the low price of five tokens for one dollar.
5.3 Sales Strategy
Sammy’s is in the enviable position of having customers who come to the facility with the intent to purchase. But we do not take lightly the need to treat our customers in a manner congruent with the fun loving, relaxing image of Sammy’s. Our friendly, energetic, fun-loving staff will be trained to make the experience memorable and enjoyable, leaving the customer with a desire to return.
The staff will be trained to maximize the sale by adding concessions, arcade, and climbing wall to the golfing experience. We will use promotions and staff to inform the customer about the availability of our facility for group events.
Another factor in garnering repeat customers is the challenge to better their score on the next round. For the truly competitive miniature golfer, Sammy’s involvement with the Mulligan-Bogey Cup Championship offers an appealing incentive for those intrigued by the $10,000 grand prize. This national event is held each year at one of the Mulligan-Bogey built miniature golf courses.
5.3.1 Sales Forecast
The forecast presented here is realistic, but conservative. The course will open March 15 each year. Sammy’s is closed each January and February. The reader should note second year revenues will likely be higher than presented because of consumer awareness of the facility after the first year.
Actual usage from existing courses, with similar demographics and seasonal weather patterns, was considered when making these forecasts. Sammy’s reduced the numbers in order to make a conservative forecast. For a list of actual numbers see the Builder’s Estimate topic, below.
Parties have not been included in these numbers because they are so difficult to forecast. But existing course owners report parties as a significant portion of their income. Therefore, Sammy’s will aggressively market their facilities for all types of parties. Once again we see the conservative nature of the forecast. The additional revenue will be realized with almost no increase in sales costs.
The climbing wall will only be available during peak hours because another employee is needed on the wall whenever it is in use. This wall is mobile and can be set up at other locations for both cash flow and marketing purposes.
Outside concessions projects that 20% of golfers will purchase a bottle of water from the outside vending machine.
Inside concessions projections are based on 35% of golfers visiting our snack bar and spending an average of $2.
Forty percent of golfers will stop in the arcade to play skill or action games. While this figure may be slightly high, it does not consider individuals who may not play miniature golf, but come for the arcade only. Arcade revenues are split 50/50 with the machine owners.
The fish feeder is an idea so effective it is humorous to watch. One miniature golf course owner spent money for years to feed his fish. Then he put vending machines out and discovered another profit center earning over $13,000 the first year. The Department of Fish and Wildlife discovered the same thing when they added vending machines at their hatcheries.
Overall growth is low because attendance at FECs levels, or declines slightly, after the first few years of operation due to the fact that the novelty wears off. To offset a decline in revenues, successful FECs change the appearance of the course with new landscaping and decorative layouts.
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||Year 1||Year 2||Year 3|
|Subtotal Direct Cost of Sales||$22,155||$22,325||$22,498|
The major milestones are separated into three categories:
- The planning, or pre-construction phase
- The construction phase
- The operational phase
The business is the creation of John Putteer, who is solely responsible for oversight and coordination of the entire project.
The dollar figures used in the milestones table are approximate numbers, based on current estimates and projections within the business plan.
Funding: Both commercial and private investors have expressed an interest in reading the completed plan. They have also expressed a genuine belief in this proposal and have indicated an early positive interest in financing the project.
Construction: While John Putteer is the project coordinator, other contractors will be utilized during the course of construction. The General Contractor will be Fairway Construction from Firefly. The miniature golf course will be built by Mulligan-Bogey Leisure Builders.
|Milestone||Start Date||End Date||Budget||Manager||Department|
|Complete Business Plan||2/15/2004||5/24/2004||$0||Davis||Owner/Operator|
|Property Under Contract||6/1/2004||8/15/2004||$20,000||Davis||Owner/Operator|
|Secure Funding Commitments||6/15/2004||8/15/2004||$0||Davis||Owner/Operator|
|Interview & Hire Personnel||3/15/2005||3/31/2005||$150||Davis||Owner/Operator|
|Marketing & Promotions||4/1/2005||5/31/2005||$2,400||Davis||Owner/Operator|
|Open for Business||4/15/2005||5/15/2005||$500||Davis||Owner/Operator|