Golden City

Primary issue to the partners is determine whether there is enough demand for launching new miniature golf facility.

First of all partners needs to assess size of potential market for the services they want to deliver. Golden City has 260 000 inhabitants and 70 635 families, split shows that there are around 50 000 preteens and teens and based on the research done on the pool of 300 showed that 204 (68%) would play miniature golf if it was located in Metropolitan Mall in addition to that 39 (13%) answered that maybe they would have played. Assuming that 50% out of 13% decides to go and play mini-golf then we arrive to the figure that 75,5% of teens and preteens are potential customers what gives 37 750 potential customers. As another research shows also adults are quite interested in mini-golf although we do not have so precise information we can estimate that additionally 20-30% of them would use the golf facility if it is located in Metropolitan Mall. Calculating number of potential customers the total population 260 000 reduced by 50 000 (preteens and teens) is taken this shows 52-78 000 of potential customers. If the two groups are added then the research shows that potentially there 89 750 Ð'- 115 750 customers. Assuming that only 60-70% of them would play only once during the season the market value ranges from $ 215 000 to 364 000.

The two existing in Golden City miniature golf courses are relatively old offers facility or poor quality, additionally one of them has not very convenient location and challenge offered is very little. Both of them virtually have no any marketing activities apart from little advertising. Strengths of Gataway Plaza course is that it offers fair challenge and looks good.

Strengths of new investment is perfect location, high quality of materials and degree of challenge. Also well planned marketing campaign will work in advantage of the investment of Mia and Connor.

Brake even and profit calculation shows the table presented below:

Annual cost estimates for Minature Golf Course $4 233,20

Cost of an employee for the season $9 043,84

Other extra costs assumption $2 000,00

Interest expenses

Advertisement costs $34 094,00

Total fixed costs $49 371,04

No. Of tickets to be sold in a season (av price 3,75) to break even 10 532,49

No. Of tickets to be sold in a season (av price 3,5) to break even 11 284,81

No. Of tickets to be sold on average daily for 104 days to brake even 22