Business / Dive Shop Business Plan
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Autor: maswov 12 November 2011
Words: 1840 | Pages: 8
1 Executive Summary
Frogman Dive Shop will serve tourists to the Pattaya area in addition to local population. Our intention is to certify new divers and subsequently sell them equipment and offer ongoing dive excursions. Advanced and professional level instruction will also be available.
Frogman Dive Shop expects to make a minimal profit in the 1st year of operation however, after completion of the first year we expect to have a solid customer base. As student numbers increase, instructors will be added as necessary. Future instructors and divemasters will be recruited from our students to maintain our standard of training and expectations.
Owners Quincy Berman and Paul Huesman together have extensive experience in recreational diving, nautical skills, marketing and education. We understand the needs and wants of current and future divers, realize that flexibility is necessary in instruction and new adventures in dives can be had while maintaining safety.
With all of the current dive shops in operation, we believe there is still a demand for more competition. We intend to provide superior service to our customers in addition to top-notch instruction; this will ensure a long term customer base which is essential success. Industry experience, marketing background, well trained loyal employees set in Pattaya, an ideal dive destination, is a well balanced mix for a successful dive shop.
2 Situation Analysis
Pattaya has many dive shops; most are small operators doing little business. The main competition here is Mermaid's Dive Center; this is the largest in the area doing the most business. They have a large following of customers and this should continue into the foreseeable future. They have been in business in Pattaya since 1990 and are the first shop in the area to be rated as a PADI Career Development Center (CDC). Mermaid's tends to push the students through and not offer the personal attention some students require. This lack of attention also shows with their retail customers and pax on the dive trips. Diver's are typically loyal to their dive shop and this lack of attention potentially will drive away some of their customers.
Aquanauts is another major competitor in the area. This shop has been in business since 1996 and is also rated as a PADI CDC providing instruction from beginner to instructor level. Aquanauts has sponsored the Pattaya Dive Festival which involved Over 500 divers from Bangkok/Pattaya area promoting the dive scene and focusing on environment awareness of coral reefs. This is the most expensive dive shop for all products, instruction, equipment purchase and dive trips.
Seaduction currently is a top competitor however their future is bleak. In addition to dive trips they offer deep-sea fishing and spear fishing excursions. The management team of Seaduction has fallen apart with one partner losing interest and the remaining partner lacks concern for the business success. Whether Seaduction remains to be future competition is dependent upon who buys the business and their plan for the future.
Adventure Divers is a small but solid business operating in Pattaya for 12 years. They have the nicest and most well equipped dive boat in the area attracting customers to dive with them. The family atmosphere and "friend for life" attitude keeps the customer's loyal and returning year after year. Continued future success is expected.
3 SWOT Analysis
• Management has solid background in dive industry, the diversity of experience will bring new ideas to an existing market.
• Management experienced in marketing.
• The use of contracted instructors and independent boat operators will minimize overhead increasing net profit.
• Family atmosphere builds a solid long term customer base which is essential for referral customers.
• As a startup business, Frogman Dive shop will have to build a name amongst the local completion which has a strong foothold.
• Initial debt from loan for startup capital mitigates positive cash flow.
• Contracted instructors may create less stability in the atmosphere of the shop.
• Initial staff will require training to become familiar with the products offered.
• Technicians limited on certifications decrease the equipment brands able to be serviced.
• Location is in a popular tourist area, much of the tourist population is from destinations where scuba diving is common.
• With much of the world focused on preserving nature, scuba diving offers a chance to. observe the sea in its natural state and lend a hand to beach and underwater cleanup activities.
• Although most dive spots have been located there is still the possibility of discovering new locations. Additionally ships may be strategically sunk to create artificial reefs.
• Locations outside Pattaya offer good dive spots. Expansion to these areas are possible with limited instruction and equipment sales however dive trips to these areas could be arranged.
• Tourism is seasonal based on local weather conditions and weather conditions of the homes of the tourist population.
• The current situation with strengthening baht and weakening world currencies result in less tourism.
• Current political unrest deters many tourists from choosing Thailand as a holiday destination.
• Agreements with dive boat operators could change to circumstances beyond our control.
4.1 Financial Resources
For the dive shop to begin operations, it is estimated that 2,800,000 ฿ will be required. This figure includes start-up costs of 2,250,000 ฿. The start-up costs include starting inventory of scuba equipment and related gear, air compressor for filling tanks and commercial space remodeling. Capital will also be required to cover work permits and other government fees for establishing the business. Since the primary operations will be taking customers scuba diving insurance is also required. Additionally, 6 months operating expenses and a petty cash fund on hand totaling 450,000 ฿ will be required.
Frogman Dive Shop will be established as a private company. Total start-up expenses will be funded by Mr. Berman and Mr. Huesman, Mr. Berman will invest 900,000 ฿ and Mr. Huesman will invest 400,000 ฿ from personal investment funding. In addition, Mr. Huesman will secure home equity loan of 1,500,000 ฿ on his property in the United States to meet the minimum expected start up costs.
Operating expenses for the 1st year is expected to be 1,000,000 increasing 10% each year for the following 2 years. Net profit from retail sales, rentals and instruction is expected to be 420,000 ฿ the 1st year and also increasing by 20% the 2nd year and 10% the 3rd year. Plans for future expansion of a live aboard dive boat will funded through the issue of new shares.
4.2 Human Resources
In the first year of operation Frogman Dive Shop will require a fulltime retail staff of 4 and 2 equipment technicians during the peak tourist season and reduced to 2 retail staff while maintaining 2 equipment technicians in the off season. Frogman Dive Shop will provide recreational scuba instruction at all levels however instructors will be contracted to teach with the exception of one PADI Course Director which will be part of the fulltime staff. Divemasters for the classes are hired by the instructors therefore do not impact our human resource needs. In the first 3 years of operation 3 dive boats will be required. Joint ventures with independent boat operators will be established to satisfy the boating needs. Future expansion consists of a live aboard dive boat owned and operated by Frogman Dive Shop, human resource needs will be assessed at that time.
Providing student numbers increase as expected, retail staff will be increased by 2 in the 2nd year of operation and 1 in the 3rd year of operation. Equipment technicians will need to be increased by 1 in both 2nd and 3rd year of operation. Instructor contracts will also need to be increased by 2 the 2nd year and 1 the 3rd year.
Retail staff, while not required, should be certified scuba divers since they will be expected to provide sound advice and tips to customers regarding equipment. The retail staff will also handle the rental counter. Manufacturer training of equipment will be provided when available. Technicians will be required to be certified by manufacturer as a repair technician, subsequent training will be provided as required. Technicians will perform equipment check-ups and repair, fill tanks, and inspect returned rental equipment.
4.3 Experience and Expertise
Quincy Berman has more than 15 years of recreational diving experience, 3 years experience diving for a tour submarine and 20 years service in the US Navy. This well rounded nautical experience provides a solid foundation of technical expertise in the dive industry.
Paul Huesman has a solid background in marketing in various industries as a consultant. Mr. Huesman also has experience in teaching. This experience was not dive related however the fundamentals of organizing lessons and providing suitable learning environments are universal. He is also a recreational diver with 7 years experience.
• Provide scuba training at all levels for students from Open Water to Instructor
• Offer scuba equipment for sale from major equipment manufacturers (authorized retailer)
• Offer chartered boat dives to dive sites in the Pattaya and Sattahip surrounding waters for all levels of divers and specialties
• Exceed 60% of class capacity by the end of the 1st year of operation
• Increase student numbers by 20% for the following 3 years
• Provide equipment routine service and repair by manufacturer trained technicians
• Provide continued training, benefits and incentives for employees to encourage loyalty to the company
• Promote a family atmosphere for staff and customers to eliminate the rushed feeling
5.2 Marketing and Sales Plan
Mr. Huesman intends on using a number of marketing strategies that will allow Frogman Dive Shop to easily target men and women within the target market. These strategies include traditional print advertisements and ads placed on search engines on the Internet. Print advertising will include The Pattaya Guide and Mobile Advertising which places billboards on baht buses in the Pattaya area. The internet based strategy is very important as many people seek local retailers, such as scuba supply stores, using the internet to conduct their preliminary searches. Internet based advertising also reaches tourists prior to their arrival in Thailand. Mr. Huesman will register Frogman Dive Shop with online portals so that potential customers can easily reach the business. The company will also develop its own online website, which may feature e-commerce functionality in the future. In addition to internet based advertising, the international market will be reached through tour agencies in select markets offering dive holiday packages. Finally, Mr. Huesman will develop ongoing referral relationships with local hotels and motels within the target market.
Marketing studies for 2010 indicate baby boomers, ages 50-67 as the most active scuba customers. Generation Y, ages 10 to 30, is the fastest growing group of new divers. Generation X, ages 31 to 49, participate in scuba diving however balance it with family responsibilities and financial restrictions. Scuba divers tend to be very loyal to their dive shop therefore Generation Y will be the primary target for Open Water, Advanced Open Water and Rescue Diver classes to establish long term repeat customers. Baby Boomers will be targeted with specialty courses and some of the more adventurous dive trips. Diving as a family activity will be marketed to Generation X. The male/female ratio of divers is 60/40. That is not a significant difference therefore not a concern for the marketing strategy.
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