Name: Curtis Stumbles
School: James Hargest High School
State: New Zealand
Name of Plan: Stumblesí Southern Sporting Tours
The idea for my proposed business idea came as I thought about fledgling support for the under-achieving Southland Stags rugby team. As I thought of the subject more and started thinking of Southland sport in general I made the conclusion that those teams that succeeded or consistently achieved high standards generally had a very active core support base. I then thought further about how this could be redeemed. The main idea behind our proposed business concept is providing weekend long excursions to Southland Stags NPC away games for groups of between 10-15 people. We explored this concept and found in this particular market there is a shortage of providers and most certainly room for competition.
The prime function of the business is the provision of sporting tours for Southland sports supporters to events in various New Zealand destinations.
The original ownership structure of the business will be that of a partnership. I have decided to go into business with my father. Each of us will provide $12,500 start-up capital. We can both share our skills and expertise also our deep understanding in the Southland rugby and sporting scene. This structure also has the added advantage of the risk is spread over both of us instead of myself, personally taking on 100% of the risk had I chosen to be a sole trader. Being in partnership of course does have the advantage of having unlimited liability however if the business is managed and run wisely it therefore wonít become an issue. Also, in the future if any party shows an interest in the business there is the option of taking on more partners or to become an unlisted company.
The central location for the business shall be Invercargill. This location has the obvious advantages of being central to our target market of SOUTHLANDERS. The exact site of the business will not be as important as it possibly is the other products as we are not targetting window shoppers or browsers. People we are looking to target will come to us with specific queries after seeing us in other forms of promotion. So I have decided to set up our business from a home headquarters so to decrease unnecessary costs. However, when the business is well established there is potential to move into a significant Southland sporting venue like Stadium Southland or the SBS Sports House where the sporting community congregate.
The main aim of "STUMBLESí SOUTHERN SPORTING TOURS" is to provide active supporters of Southland Sport with an avenue to vocally support their teams away from Southland in a group atmosphere where everyone has a common interest at heart. Seeing Southlanders succeed.
It is envisaged that only 1 staff member need to be employed, myself. I will have a wide range of responsibilities from general handling of queries to book-keeping and money handling. I will also act as a liaison to the customer. For myself to fill this role I will have to develop good computing, accounting and customer servicing skills. Other tasks or duties that need to be taken on by myself as a full-time owner/operator are marketing and promotion, liaison with suppliers (eg: airlines and hotels-motels) and organisations (eg: Rugby Southland Supporters Club). Also coordinating the tours themselves will be my responsibility. I believe I can complete these tasks with my good understanding of the business environment and my passion for rugby. This role in the business origin will only be seasonal as there will not be major work to be done during summer (the rugby off-season). But during rugby season myself, as owner/operator will have to develop a wide range of skills to cover the 3 major roles of management: interpersonal, infomational and decisional. I will be the figurehead of the business and, as the leader must liaise with various outside bodies to establish a network of relationships outside the business notably in rugby circles around Southland i.e. the clubs. I will also be the spokesperson for the business and make our service known to the rugby and general public also must be answerable to positive and/or negative feedback and monitor that information. I must also identify various opportunities for and threats against the business and react to these accordingly. As owner/operator I must sustain the right mix of analytical, networking, and technical work while always retaining a good knowledge of the Southland Sporting scene. If the case arises where I happen to fall ill my father, as co-owner/operator, will come in on a short term basis to cover my tasks.
The target market for our service can be identified through separating it into four different factors. Geographic, Demographic, Psycho graphic and Benefits. The location of our target market will be of course Southlanders. 99.9% of our customers will turn out to be Southland born and bred. Generally those that come to us will be males (rugby has been known to be a predominantly male game) who are middle-aged that have a high disposable income who are career people that can obtain time off easily. Those that go on our tours will be able to be characterised as committed supporters of Southland rugby and sport who attend home Stags games and have a commitment to the game beyond the top level down to the grass roots. For customers of "STUMBLESí SOUTHERN SPORTING TOURS" the benefits of going on our tour is they will have the advantage of being able to follow and support their team wherever they go.
Strengths: The major strength of the business is that the service enables customers to support their team 100% of the time. It fulfils a need for an avenue for supporters to travel with their team. No similar services are currently offered.
Weaknesses: The main weakness of "STUMBLESí SOUTHERN SPORTING TOURS" centres around the fact that it is a new business and there is no established market share and no current image or reputation. Also a large amount of capital will be needed for start-up. Also each service will cost a fair amount and therefore the price to the consumer will be expensive and that will limit our market.
Opportunities: One of the major opportunities involves the possibility of diversifying into other sports like netball or basketball. Another is the chance that local club rugby teams could use our service for end of season social trips. Also as Southlanders love their rugby and to support their teams it should prove popular.
Threats: The major threat the business has is that another business will enter the market with a similar concept and under-cut our prices. Reducing our market share. Also if we keep to tours following only one sport, rugby, the market could become saturated. Also there is a risk involved when dealing with long term bookings with airlines. If an airline were to fall over we as a business would be left with difficulties.
There are limited competitors in the market. But there are businessí that offer a related service. Generally these are not group tours that are sold as individual packages or tours that follow bigger overseas events.
In the future we will hope to cut away from current competitors , who generally offer one-off promotions compared to us for which supporters tours are a speciality, by under-cutting there prices and establishing goodwill.
The question of "how much will we sell this service for?" will be answered while trying still to attain a profit (profit maximization) and keeping sales beyond our targets (sales maximization) the 2 major aims of our business. The price we set will be high because of the extended range of services we offer. But as our service is unique it will not affect our share of the market. Product price will be dependent upon the cost there will be a different price for each destination more generally these can be lumped into 3 categories. Upper North Island, Lower North Island and South Island. We believe our high prices will not affect sales as our target market will be people with high disposable incomes therefore they can and will expect to pay (the high end of the market). Within our price we will aim to maintain a comfortable profit margin. At various stages prices may differ, as supplies of services are limited i.e. tickets to an event may be limited or accommodation at a particular time may be limited.
As the service we offer will be largely unheard of in the market place extensive marketing will be required to make our target market aware of our product. As our service is particularly aimed at Southlanders we must use policies that will reach that target market. Our marketing must show potential customers the virtues of our service i.e. it enables you to follow the Stags all the time and make them think that this is a necessity while improving awareness. We have decided to make a first-off payment of $500 to make 1000 brochures to distribute through rugby channels (eg: Supporters club and local rugby clubs) and at Southland sporting venues (eg: Stadium Southland, Sport Southland and rugby Park). As well as community groups like Rotary or Lion. These can also be sent directly to our target market through the mailing list of the Rugby Southland Supporters Club. Our Service also has the advantage as it is very localised, we can justify putting advertisement in or on local newspapers (Southland Times), radio (Foveaux FM) and TV (Mercury TV). Other minor forms of marketing will include ads in rugby publications i.e. game programmes and the establishment of a web page.
To entice the potential customer to partake in our tours we will market our product as unique, different experience that is only offered by us. We will look to make it for Stags Supporters we are the only way to go to support our team. In marketing we will look at using plenty of phrases that link this to us and also use photos showing expressions of excitement and exhilaration at being able to see memorable moments live. And of the friendly atmosphere created by being amongst peers with a similar love. We will also look for opportunities for publicity in local publications with wider readership locally upon establishment that will increase service awareness.
As outlined previously at our disposal we have $12,500 start-up capital. We have maintained a policy of trying to keep all establishment costs to an absolute minimum. Evidence of this is the decision to not purchase premises and work from home and we have ultimately decided to not purchase a vehicle but instead rent a van and trailer for our weekend excursions to save the original outlay and continuing ongoing costs. But inevitably there are some establishing costs mainly for equipment for organisational needs i.e a computer, phone and fax plus a phone line and cell phone for round the clock access. Other costs include the cost to furnish a office at home, these are minimal, but a total of $5,250 has been set aside as shown below:
Computer $ 3,000
Fax $ 550
Phone $ 100
Phone Line $ 500
Cell-Phone $ 100
They will be financed from our original start-up capital.
Own cash available:
T Stumbles $12,500
C Stumbles $12,500
The costs incurred to put our packages together is attained by adding the cost of all the components together. Such costs are airfares, accommodation, tickets and associated costs such as meals and entertainment. These are summarised below:
Airfares and/or travel expenses Upper NI $200
Lower NI $150
Accommodation (2 nights) $200
Game tickets $ 50
Pre &Post match function $ 50
Van rental (inc petrol) $ 30 pp
PRODUCT COST Upper NI $530
Lower NI $480
To attain the price at which we will sell the package to the public we have worked in 50% profit margin, this will put our service at the high end of the market, but we are confident that customers will be satisfied with what they get. Final prices are:
Upper North Island tours $ 1060 (inc GST)
Lower North Island tours $ 960 (inc GST)
South Island tours $ 860 (inc GST)
NOTE: All figures are approximate
Although the establishment costs are minimal as stated above there is still a large amount of costs that are ongoing costs (a summary of these included below) these are things such as postage, marketing phone tolls, travel expenses, salaries etc.
To attain how many seats we would provide in a single tour we would decide upon 12. This is because it is a number where we can still keep tabs on, we keep a personal, familiar touch and still provides us with a high enough sales income.
2 (South Island Tours) *12 @ $860 = $20,640
2 (Lower Island Tours) *12 @ $960 = $23,040
2 (Upper North Island Tours) *12 @$1060 = $25,440
TOTAL SALES INCOME (Inc GST) $69,120
(ex GST) $61,440
Note: As tours must be pre-booked and to avoid not being able to spread costs over the full 12 people, if 8 bookings are not made the tour will be cancelled.
The future outlook for the business proves promising in its current state, at current market prices and at in our current structure we will be able to remain viable for a long while, however I see us being able to long term expand upon this viability and turn the business into a real profitable venture.
There are several things that can be done to do this. The most defiantly is the opportunity to extend our market by diversifying into offering tours in other sports and activities and with the new and exciting sporting franchises being set up in the south those opportunities are plentiful eg: the new NBL basketball franchise the "Southern Sharks" will have 10 away matches this year and the current netball franchise the "Southern Sting" playing in the National Bank Cup. There are always going to be people interested in following these teams. Also we could extend into offering tours which enable the customer to complete like weekend ski packages, or weeklong golf tours of an area (another interest of mine). In the future there is also the possibility of making our service more "up market" (for which we can charge more) by purchasing corporate boxes (this could effectively spread our costs) and purchase a bus to conduct tours in and furnish it to suit our needs. Even further down the line there is the opportunity to move away from the local market into the even more premium market of international tours to sporting events like the Olympics, Commonwealth Games, Soccer and Rugby World Cups etc. So in conclusion the out look for the future "STUMBLESí SOUTHERN SPORTING TOURS" looks promising and there is huge potential to extend our market.
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