KLC Lakeside Rentals ELC 310 Presented By: Karen Pelletier
Company Description KLC Lakeside Rentals, LLC is newly formed rental business which is ideally located along Long Lake. It has been renting and serving the needs of people since 2007 and it is currently expanding. Although it is currently producing enough revenue to cover the cost of purchasing the property and improvements it is expanding in size and also in marketing and advertising techniques.
The company is named after the founder’s children (Karen, Lance, Clint). The reason for naming the company after his children was for the purpose of having this company as a family business for possible years to come. The plan was to start out small and test out the waters to see the potential of the company and the possible number of customers.
Although there is plenty of competition in camp rentals KLC Lakeside Rentals realized there is some opportunity and potential for what they have to offer.
Construction The main house can comfortably accommodate over a dozen people at one time • It is a two story house that measures 3,500 square feet total • It has a large open layout with stainless steel appliances • A second bathroom was added and a porch on the top floor with sliding glass doors was also added • On the outside of the house there was some landscaping and the siding was updated to a dark blue cemplank • Large garage is currently being constructed into second rental unit
Strengths Successful existing business with repeat customers Ideally located on the lake Walking distance to a restaurant, golf course, and bar Located next to four-wheeler/snowmobile trails Great communication/relationships with customers Weaknesses New venture No prior experience in this field Budget Limitations Time constraints Lack of focus on advertising Situational AnalysisSWOT Analysis
Opportunities Development of other tourist attractions nearby Recent development of nearby boat rental company Word of mouth from past renters Fishing Derby on Long Lake Other events/activities in nearby towns Fermata (Strategic Plan for Economic Development through Nature Tourism) Threats Competition from other rental companies Regulatory threats for lake use or for rental businesses The local population is declining Poor economic conditions in local area (threat of mill closing)
MOA Analysis Demand Analysis Nature-based tourism is a vital component of Maine’s economy and there is a big demand for renting in this type of location. KLC Lakeside Rentals knows that they have quite a bit of demand and competition but their goal is to stand out above the rest by the quality of their service. Basically anyone who owns land can rent property, but there are not many which are ideally located, which can accommodate so many people and the difference is how KLC Lakeside Rental accommodates people. “The FERMATA study has determined that the number of lodging facilities in each of the three study regions (Washington County, Maine Highlands, Western Mountains) is adequate for the number of new visits anticipated; however, the quality of existing lodging facilities is not up to the level expected by the targeted "experiential" traveler.”   http://www.mainewoodscoalition.com/pcnews/10.html
Segment Analysis The customers of KLC Lakeside Rentals include anyone who is looking for a vacation and a piece of heaven while not having to sacrifice the amenities of being away from home. KLC Lakeside Rentals does not offer you a camp like setting; it offers you a home away from home in the serene Northern Maine. We can accommodate large crowds because of the space we have and it is the perfect place for gatherings. • Family gatherings • Wedding receptions • Reunions • Hunting/Fishing/Snowmobiling trips with large crowds
Market Demographics Geographics • People with family ties to the region • People who have previously lived in this area or an area similar to it • People who have previously visited the area • Demographic Characteristics • People of any age, sex, or race • On average more men rent in general especially is large crowds (hunting, fishing, and snowmobiling crews) • Most people have a moderate to higher income levels • Psychographics • People who are big spenders • People who want to have fun or relax without giving up their normal commodities that they have at home • People who love or enjoy the outdoors (fishermen, hunters, snowmobile riders, ATV riders)
Supply (competition) Analysis • The current competition is large for such a small area. • Many people rent out their own camps for a few weeks out of the year to generate a profit to cover the expense of owning it. • Some people make a living out of fixing and renting out lakeshore property. • There is such strong competition that people will undercut other business’s prices to attract their customers • That is why it is crucial to differentiate and market KLC Lakeside Rentals from the rest.
Product Strategy Competitive Advantage Setting our company and our service from the rest is crucial. It is also crucial to keep our customers happy because there is plenty of competition. One way to have a competitive advantage is through the use of the internet. Many rental companies in this area are not using the internet and other technology to get the word out. If our business uses the internet and other technology for our advantage then we can be one step ahead of the game.
Location, Location, Location! • Another competitive advantage is its location: • Next door to golf course • Next door to year round restaurant/bar • Access to lake/snowmobile/fourwheeler trails
Features of the Rental Some features of the rentals: • Large parking lot • Storage on site • Two docks for use • Large lawn • Swing set on back lawn • Comfortably fits a dozen or more people • Dishwasher • Washer/dryer • Satellite television • Unlimited long distance phone • Multiple bedrooms/bathrooms • Many different sizes of beds to choose from • Stainless steel appliance • Newly remolded • Towels and bedding are furnished
Goals It is necessary for the company as a whole to have financial as well as non-financial goals. • The main goal is to look for opportunities and expand when deemed necessary • By 2020 pay off the major expense of the mortgage and construction • Increase advertising • Future expansion after major expenses have been paid off • Steady increase of rentals at least 10% per year • Finish new addition by Spring 2008 • Once new addition is finished increase rentals to a minimum of 40 yearly by 2009
E-Marketing As KLC Lakeside Rentals expands it is necessary for their advertising and marketing to also expand and to focus more on e-marketing. Current advertising/marketing: • Online through free advertising and listing websites that is solely for the state of Maine • Business cards have been placed at many local businesses that attract tourists • Word of mouth from past renters • Non-interactive website which is mainly for pictures
Future marketing/advertising: • Advertising on ATV, snowmobiling, hunting, and fishing magazines and websites to attract that demographic to our website • New website that is interactive • List the many amenities and features that set KLC Lakeside Rentals from the rest • Detailed pictures of the inside and outside • A form to directly send an email to the host if they have any questions or special requests • An interactive map in which they see exactly where KLC Lakeside Rentals is located and to get directions • A guestbook for people who have stayed at the rental to tell others about their experience • People who have posted on the guestbook will get a 10% discount off their next rental
The website will include a feature for customers to pay their deposit right on the website to reserve their week • When customers use this feature it will automatically send them an email thanking them for their business. In that email it will also send them an electronic receipt so they can keep it for their records. • Include a calendar to show what weeks are available for renting • Calendar of special events that are taking place in nearby towns (fishing derby, acadian festival, etc) • Detailed information on the pricing • It will have dynamic pricing. Some seasons and months vary in demand so for the months with the decreased demand the price will be lower to attract people to rent.
Implementation Plan KLC Lakeside Rentals hopes to achieve these significant milestones in the next few years which are outlined below: • Finalize pricing strategy Fall 2007 • Create a professional looking website Winter 2007 • Create brochures/ business card to direct customers to website Winter 2007 • Expand advertising to target markets (snowmobile, fishing, hunting magazines and websites) Winter 2007 • Finish construction by Spring 2008 • Advertise before/during Fishing Derby on Long Lake Winter 2008
Budget • Major costs include the cost of acquiring the initial building and property and the expansion and construction of the new rental unit • Operational expenses include the general upkeep which includes the electricity, oil, toilet paper, etc. • Satellite television, internet, and telephone cost a couple hundred dollars monthly but it was the result of customer requests and to set our service apart from the rest • Although it increased the overhead cost to transform the garage into a new rental unit the total costs of acquiring the property and the construction is paid off in a much shorter period of time.
Monthly Budget • Mortgage $1300 • Insurance 60 • Taxes 240 • Heating 200 • Electricity 110 • Maintenance & etc. 75 • Trash removal 40 • Lawn care/snow removal 100 • Satellite Tv 60 • Telephone 110 • Internet 40 • Supplies 60 • Advertising 50 • Website 50 • Total monthly expense $2495
The breakdown of the monthly expenses reveals that to break even we would need to rent on three different occasions at the cost of $850 per week in a month or 35 times within a year. These results would not seem as promising but since the new construction we are able to rent twice as much as before although it costs more up front. Once the cost of the mortgage and construction is paid off ($1300 monthly) then the costs per month will be cut in half and there will be an increased net profit.
Evaluation Plan • The best way to evaluate the company and how it is doing is by getting the answers straight from the customers. • Through the advice of previous renters we have added and changed a few things • Another way of evaluating the company as a whole is to keep track of the number of rentals by month and by year to see how the company is doing. • The company plans on being flexible to the needs of customers to better serve them.