STARTING THE COMMERCIAL RECREATION ENTERPRISE

STARTING THE COMMERCIAL RECREATION ENTERPRISE CHAPTER 4

Four Foundation Points for a Successful Recreation Business • THE PRODUCT: Rewards & Risks • MANAGEMENT: Concept & Competition • LOCATION: Demographics & Site • FINANCE: Feasibility

THE PRODUCT • Rewards of starting a commercial recreation and tourism enterprise: *Personal satisfaction *Independence *Profits *Power and Influence *Use of accumulated capital *Security *Applying skills and background *Getting out of a rut

Cont. • Risks in starting a commercial recreation and tourism enterprise. *Financial losses *Loss of friends/family *Anguish over uncertainty *Time and effort *Straining of values *Demands above expertise *Growth dilemmas

MANAGEMENT • The most common reason for business failure is lack of management expertise. • The second most common reason is lack of management experience or unbalanced management.

The Business Concept • One key to promoting business success is to have a sound business concept. • Established vs New Market: decide if your business will serve an established or a new market! • Life cycle of the industry: introduce your business in the “take-off” stage, it will have a better chance to gain loyalty and build a base of satisfied, repeat customers.

The Competition • The new business must find a way to differentiate its product/service from that of its competitors. • It is important that any difference upon which the business hopes to establish market appeal is perceived and valued by the customers. • Consider the following conditions that will influence the customer:

considerations: • Price-lower, higher, kids rates, etc. • Quality • Consistency • Features-more, new, different, etc. • Clientele-youth, adults, seniors, etc. • Location-access, convenience • Time-hours of operation • Credit-credit cards, lay-a-way, etc. • Service-personal, attentiveness • Packaging/Atmosphere

LOCATION • Important consideration in the establishment of a new business • Select a general area • Then a specific site w/in the general area

Base the general area selection on the following criteria: • Overall Demographics: population, growth, income, age, education, occupations, culture. • Community Environment: employee availability, competition, transportation insurance rates, climate, local ordinances. • Business Environment: tax rates, real estate, business trends

Site Selection Check List • Traffic flow Visibility • Accessibility Signage design • Proximity Community Attractions • Compatibility Parking • Safety Attractiveness • Utility Costs Storage • Fire/Police Zoning • Labor Risks • Views Delivery access • Handicap accessibility

THE FEASIBILITY STUDY • This study is used to get results in a document that provides a comprehensive analysis to determine if a specific project has potential for reaching its financial goals. The project may be a new product/service at an existing location, a move to a new location, or the creation of a new business.

Reasons to conduct a study: • To Establish Feasibility-deciding whether or not a business will realize a return on the investment. • To Formulate the Optimum Concept-finding the best facilities, location, scale & market. • To Assist in Establishing Management and Marketing Guidelines • To Assist in Obtaining Funding

Contents of a Feasibility Study • Description of the Business (detail) • Risk Factors • Location Analysis (detail) • Management Analysis (org. chart) • Target Market Analysis • Financial Analysis • Recommendations

Choose from the following: • Public Golf Course • Public Campground • Amusement/Water Park • Playground Equipment Sales Co. • Sporting Goods Store • Outdoor Movie Theater • Jazz Festival/4 days • Athletic/Fitness Gym

STARTING THE COMMERCIAL RECREATION ENTERPRISE