Embed Size (px)
Citation preview
April 10, 2016 To: Copeland Associates
Professor BenedictProfessor LambertProfessor MarcheseProfessor Wright
From: PM 101 Team 6
Chandler McKinneyCarly ThomasNick StoneAllison SynekAlyssa Wulker
Dear Copeland Associates, Subject: Cheesehead Sports Indoor Sports Complex This report includes an overview of the following:•A macro and micro environmental analysis•An overview of the business concept including location, tech and target market of the business•Marketing plan for the business•An analysis of the companies financial position This information is relevant to support the idea that our business is a profitable endeavor. It was determined through a financial analysis that this project is feasible due to its positive present value, high IRR, and short pay back period. Given this information, it is determined that Cheesehead Sports will be a profitable business, and will continue to grow. This report includes an environmental analysis of the industry, as well as information about similar companies operating within the industry. Within the report are financial forecasts for the first five years of business, as well as a detailed business concept and marketing plan. It was determined through primary and secondary research that Cheesehead sports can expect 243 teams every month for the first year of business. If there are any further questions about Cheesehead Indoor Sports facility, do not hesitate to reach out at 234-380-7299. Thank you, Chandler McKinneyCarly ThomasNick StoneAllison SynekAlyssa Wulker
Prepared By: PM 101 Team 6
Chandler McKinney Alyssa Wulker
Nick StoneAllison SynekCarly Thomas
Prepared For: Copeland Associates
Professor BenedictProfessor Marchese
Professor WrightProfessor Lambert
Cheesehead Sports Complex
Team 6 was first asked to perform an in-depth analysis of the indoor athletic facility industry, including a micro and macro analysis of the environment. Team 6 decided to open an indoor athletic facility for kids located in the Green Bay, Wisconsin area. This location was chosen due to the high per capita income, large number of kids, and high participation of sports. This report includes an in-depth explanation of our business concept, marketing strategy, demand scenarios, and financial position of the company.
Industry OverviewThe indoor sports facility industry is dependent upon high amounts of disposable income, high participation in sports, and the climate in which it operates. Industry revenue is expected to increase at an annual rate of 2.3% over the next 5 years. The percentage of US residents who participate in sports has risen by 0.4%, and is expected to continue to rise in coming years.
Business ConceptWith the growing obesity rates in the US, and the harsh winters of Wisconsin, Team 6 saw the opportunity to create Cheesehead Sports, an indoor space for kids to come and practice sports. We are located in Green Bay, Wisconsin, which is the 3rd largest city in Wisconsin.
DemandsIn order to forecast how many teams Cheesehead Sports would see on a monthly basis, we conducted both primary and secondary research. The primary research was conducted based on similar companies in the area. The secondary research was found based on industry trends, and national statistics. The two demand scenarios were then weighted, and it was found that Cheesehead Sports would see 343 teams per day.
MarketingOur main forms of marketing are through the use of social media and public advertisement. We created a company Facebook, Twitter, and a website. We chose these forms of social media because they are most popular amongst the audience we wish to draw into our sports facility. We also decided to utilize the local newspaper in Green Bay, the Green Bay Press Gazette. Lastly, we also decided to advertise our sports complex on a billboard located about 2 miles away.FinancialsThis report contains an analysis of the Statement of Operations, Statement of Financial Position, Capital Budgeting analysis and Weighted Average Cost of Capital. It was determined through the capital budgeting analysis that Cheesehead Sports is a feasible project due to its positive NPV, high IRR, and low payback period.
ConclusionIn the future, Cheesehead Sports hopes to expand the number of services and sports that they offer. They hope to add a concession stand for kids and parents and offer a sports ball rental for convenience. Based on the industry growth expectation, demand, and financials projections, Cheesehead Sports will continue to operate and grow.
Executive Summary:
Table of Contents Introduction…………………………………………………………………………………………………………………………… 1Overview……………………………………………………………………………………………………………………………………. 1Brand …………………………………………………………………………………………………………………………………………. 1
Macro Environment Analysis…………………………………………………………………………………………………… 2Overview……………………………………………………………………………………………………………………………………… 2Opportunities……………………………………………………………………………………………………………………………… 2Threats………………………………………………………………………………………………………………………………... …….. 2
Micro Environment Analysis…………………………………………………………………………………………………… 3Overview……………………………………………………………………………………………………………………………………. 3Demographics…………………………………………………………………………………………………………………………… 3Market Analysis………………………………………………………………………………………………………………………… 4Competitors……………………………………………………………………………………………………………………………… 4
Business Concept………………………………………………………………………………………………………………… 5Overview…………………………………………………………………………………………………………………………………. 5Target Market ………………………………………………………………………………………………………………………… 5Location………………………………………………………………………………………………………………………………… 5-6Mission Statement…………………………………………………………………………………………………………………… 5Competitor Analysis ……………………………………………………………………………………………………………….. 7Consumer A and B …………………………………………………………………………………………………………………. 8Employees……………………………………………………………………………………………………………………………… 8
Demand Scenario 1……………………………………………………………………………………………………………… 9Overview………………………………………………………………………………………………………………………………… 9Ratings ………………………………………………………………………………………………………………………............ 9
Demand Scenario 2…………………………………………………………………………………………………………… 10Overview……………………………………………………………………………………………………………………………… 10
Demand Forecast Matrix………………………………………………………………………………………............ 11Overview…………………………………………………………………………………………………………………………… 11
Marketing CampaignProduct Price Place Promotion…………………………………………………………………………………………. 12Social Media……………………………………………………………………………………………………………………… 13Facebook………………………………………………………………………………………………………………………….. 13
Twitter…………………………………………………………………………………………………………………………………Website………………………………………………………………………………………………………………………………..Billboard ………………………………………………………………………………………………………………………………Newspaper ………………………………………………………………………………………………………………………….
Management Information Systems …………………………………………………………………………………..Business Process Management ……………………………………………………………………………………….Dashboard ……………………………………………………………………………………………………………………….Customer Relationship Management ..…………………………………………………………………………….
Financial Analysis……………………………………………………………………………………………………………..Statement of Financial Position…………………………………………………………………………………………Statement of Operations……………………………………………………………………………………………………Capital Budget Analysis……………………………………………………………………………………………………..Feasibility of Cheesehead………………………………………………………………………………………………..Conclusion……………………………………………………………………………………………………………………….
Appendix A.: SWOT Analysis …………………………………………………………………………………………....Appendix B. Employees…………………………………………………………………………………………………….Appendix C.: Promotion Schedule……………………………………………………………………………………Appendix D: Business Model Canvas………………………………………………………………………………….Appendix E: Layout…………………………………………………………………………………………………………..Appendix F: Location……………………………………………………………………………………………………….Appendix G: Twitter ………………………………………………………………………………………………………..Appendix H: Facebook……………………………………………………………………………………………………..Appendix I: Website…………………………………………………………………………………………………………Appendix J: CRM Considerations…………………………………………………………………………………….Appendix K: Dashboard………………………………………………………………………………………………….Appendix L.: Balance Sheet……………………………………………………………………………………………..Appendix M: Financial Cost………………………………………………………………………………………………Appendix N: Income Statement ………………………………………………………………………………………Appendix O: Capital Budgeting Analysis …………………………………………………………………………..Appendix P:Cash Flows ……………………………………………………………………………………………………..Appendix Q: Loan Amortization Schedule …………………………………………………………………………References…………………………………………………………………………………………………………………………
Table of Contents 14141515
16161617
181818181920
21222324-2526272829-3031323334353637383940-43
Figure 1……………………………………………………………………………………………………..
Figure 2…………………………………………………………………………………………………….
Figure 3…………………………………………………………………………………………………….
Figure 4………………………………………………………………………………………………………
Figure 5………………………………………………………………………………………………………
Figure 6………………………………………………………………………………………………………
Figure 7………………………………………………………………………………………………………
Figure 8………………………………………………………………………………………………………
Figure 9………………………………………………………………………………………………………
Figure 10……………………………………………………………………………………………………
Figure 11……………………………………………………………………………………………………
Figure 12…………………………………………………………………………………………………….
Figure 13…………………………………………………………………………………………………….
Figure 14…………………………………………………………………………………………………..
Figure 15…………………………………………………………………………………………………..
Figure 16……………………………………………………………………………………………………
Figure 17…………………………………………………………………………………………………..
Figure 18…………………………………………………………………………………………………..
Figure 19…………………………………………………………………………………………………..
Figure 20…………………………………………………………………………………………………..
Figure 21………………………………………………………………………………………………….
Figure 22………………………………………………………………………………………………….
List of Figures
1
1
2
3
4
5
6
8
9
10
11
12
13
13
14
15
15
16
17
17
18
19
Page Number
Introduction
Copeland Associated Team has looked in the feasibility of an indoor sports facility to see if our project would succeed in the real world. This report will give the Copeland management team an idea of the tangible and intangible aspects of running an indoor sports facility. Also we will give the management team a clear analysis of the indoor sports facility market currently and in the future.
The goal of Cheesehead Sports Complex is to create an environment for children that will allow them to train for their sport but also allow them to live a healthy lifestyle for the future. We want children to feel safe and allow them to perform their best when playing the sports they love.
After competing in depth research in the child market we have concluded that an indoor sports facility located in Green Bay, Wisconsin would give us the maximum amount of return on our investment and we would be able to market our facility to the greatest amount of children. The target market is children 8-14 who are currently playing sports or have an interest in playing sports. We have chosen sports such as basketball, soccer, lacrosse, volleyball, flag football, and baseball to appeal to a variety of children. With rising obesity rates and health concerns sweeping the nation we have concluded that indoor sports facilities are making a slam dunk in fitness industry and is here to say.
Overview
Brand
Intro | Analysis | Concept | Demand Scenarios | Marketing | MIS | Financials | Conclusion
Figure 1 (Soccersurface)
Figure 21
Macro-Environment Analysis
The indoor sports complex is a rising industry throughout the United States. Demand for indoor sports facilities is highly localized and dependent on the weather, the type of facilities, and the cost of recreational space, as well as external competitors like gyms and health clubs. Industry growth was partially dampened because of the increased competition for consumer leisure time from these gyms and health and fitness clubs over the past five years. As a result, industry demand fluctuates with changes in consumer disposable income and consumer sentiment. Although the industry suffered a setback during the recession, demand has recovered moderately as economic growth picked up. Because consumers increasingly perceive team sport services as a necessary health and social expense, indoor sports facilities rebounded quickly from the recession. (See Figure 3) As a result, IBISWorld expects industry revenue to grow at an average annual rate of 2.3%. (IBIS 2015).
Today, more than 26 million children ages 6 to 17 played team sports in 2014, down 4 percent from 2009, according to a widely cited survey by the Sports and Fitness Industry Association. (Rosenwald, 2015) Still, many kids and adults are going to these sports facilities in their free time to participate in increasingly popular sports like indoor soccer, flag football, lacrosse, and basketball. Participation in youth lacrosse in the US from 2008-12 was up 158 percent according to the SFIA/Physical Activity Council Survey. (Gaio, 2014) According to the NCAA, the overall % of high school males to play college lacrosse was 11.9%, which is the highest among male sports. For females, 12.6% of high school lacrosse players go on to play at the collegiate level, only second behind ice hockey. By providing a facility where youth lacrosse players can come and train, we see this as an opportunity to increase revenue, bring more people through the doors, and help players succeed and possibly gain college athletic scholarships. (Ncaa, 2015)
In a survey done by the American College of Sports Medicine (ACSM), more than 85 percent of parents listed safety as the biggest concern in sports. Concussions are the main concern in sports they top the list of fears among parents. In fact, one-quarter of the parents surveyed have considered keeping their children from playing a sport because of fears of a concussion or other head injury. Technology and gaming popularity is increasing among America’s adolescents, which is concerning because the percentage of inactive 6-12 year old youths involved in no physical activities over a 12-month period rose to near 20 percent in 2012 from 16 percent in 2007, according to the SFIA/Physical Activity Council survey. (Gaio, 2014)
Figure 3 (IBIS)
Overview
Opportunities
Threats
Intro | Analysis | Concept | Demand Scenarios | Marketing | MIS | Financials | Conclusion
2
Micro-Environment Analysis
The market that is being focused on is indoor athletic facilities for children. While indoor sports facilities suffered due to the recession in 2008, going into 2015 the industry revenue is expected to grow to 910.0 million. In particular, the industry has benefited from positive economic conditions, higher sports participation, and increased awareness of health and wellness (IBIS, 2015). The percentage of US residents participating in sports has increased at an average annual rate of 0.4%. With disposable income and health awareness expecting to rise of the next couple of years, the industry has a positive outlook for years to come (IBIS, 2015). Child obesity and inactivity levels are rising which will prevent the industry from creating a market with youth. However, steady revenue growth will attract new firms to enter the market causing the number of businesses to rise an average of 1.8% a year to 2,587 (IBIS, 2015).
Indoor athletic facilities success is dependent upon how successfully they attract and retain their customers. Key economic drivers for this industry to succeed include participation in sports, time spent on leisure sports and per capita disposable income (IBIS, 2015). Household disposable income is especially relevant to the industry as this will determine how much households will spend on athletic facilities. (See Figure 4) Disposable income is expected to increase at an average of 2.5% per year for the next five years, causing more firms to enter to market in coming years. Green Bay, Wisconsin median family income is higher than the U.S average with Green Bay coming in at $66, 654 in 2014 and the U.S average being $65,910 (Number depot, 2015). With income being higher than the average in Wisconsin, families will have a larger portion to spend on leisure activities and additional sporting practice for their children.
Figure 4 (Trading Economics)
Overview
Demographics
Intro | Analysis | Concept | Demand Scenarios | Marketing | MIS | Financials | Conclusion
3
The current state of the industry is looking positive as it continues to recover from setbacks caused by the recession. Demand has continued to steadily increase as economic growth has picked up (IBIS, 2015). The demand for indoor sports facilities is highly dependent upon the city, weather, type of facility, and competition from for-profit and nonprofit industry operators (IBIS, 2015). Consumers aged 24 and younger make up the second largest segment for this industry and account for 34.1% of revenue. Our mission is to offer an entertainment facility for kids aged 8-14. In order to located a successful region for our indoor sports facility, and targeting families with children aged 8-14 we narrowed the location down to Green Bay Wisconsin through an extensive search. Copeland Associates looked at locations with a high amount of income per person (See Figure 5), a large amount of families with kids, high participation in sports and harsher climate during the winter months. Green Bay was chosen where 5,100 families live within 15 miles of the city and have children that participate in sports.
Firms in the industry compete on the basis of price and quality of facility (IBIS, 2015). The recession over the last couple of years has forced consumers to evaluate their discretionary spending, and as a result there has been more emphasis placed on admission fees for indoor athletic facilities (IBIS, 2015). The quality of facility has also been an influence in attracting new customers. Firms are also experiencing external competition from exercise facilities and the amenities offered by exercise studios, country clubs, weight loss center and the home-fitness equipment business (IBIS, 2015). The threat of new entry that PackerLand would face in Green Bay is low given the number of similar competitors in the area. The biggest competition that PackerLand would face is the 4 YMCA’s that are in the surrounding areas. PackerLand also faces competition from two other local athletic facilities Sports Emporium and Synergy Sports Performance located in the Green Bay area. We will go more in depth with our competitors late in the report.
Figure 5 (Department of Numbers)
Market Analysis
Competitors
Intro | Analysis | Concept | Demand Scenarios | Marketing | MIS | Financials | Conclusion
4
Business Concept
Children love to play sports, but sometimes do not have the available resources or proper environment to engage in sports with family or friends. A problem we have all had growing up was not having an area to engage in sports with children our own age. In today’s society, the rise in obesity rates and increased leisure time amongst children has led America to become one of the countries with the biggest health problems among children. With this, we want to provide children with a sports athletic complex that would provide an appropriate setting to play, train, and participate in a variety of sports with children their own age.
Our target audience is children 8-14 that are currently involved in sports or are interested in playing sports. We would appeal to children with sports such as soccer, basketball, flag football, volleyball, lacrosse, baseball, and a toddler open play. Our facility would be open year round and accessible to anyone regardless of weather conditions in the area. This would allow children to always have a place to play and develop their skills before, during, and after the season.
This is one of the most important factors when it comes to indoor sports facilities. Customers need to be have easy access to the facility along with accessible parking. This can give you a competitive advantage in the industry and allow you to gain more customers. We have chosen Green Bay, Wisconsin as our location for our business location. With our research we have seen that the total population of Green Bay is 104,891 (Census 2014) which is the 3rd largest in Wisconsin. We will talk about our location later in the report.
Our mission is to provide the children of Green Bay, Wisconsin with the necessary resources to train, participate and meet their various sports and fitness needs in order to live healthy lifestyle. Our complex will provide an unmatched sports atmosphere, dedicated to the community to prosper and grow.
Figure 6
Overview
Target Market
Location
Mission Statement
Intro | Analysis | Concept | Demand Scenarios | Marketing | MIS | Financials | Conclusion
5
Business Concept: Location
The location we have chosen for Cheesehead Indoor Sports Complex is Green Bay, Wisconsin. After completing our extensive research, we have concluded that Green Bay will offer an area with high disposable income and a large child population. Green Bay has an average disposable income of $45,585 and in Green Bay 13.62% of the population is ages 5-14. (BestPlaces-GreenBay). Another reason we picked this specific location is because of the lack of indoor sports facilities in the region. After researching the area and calling local competitors we found that there is only two main indoor sports facilities in city. Synergy Sports offers only sports training for a variety of sports and Sports Emporium offers only soccer to kids. This will allow Cheesehead Sports Complex to come into the city and begin to offer a variety of sports other than just soccer to draw new customers. For more location facts and maps please see Appendix F for more information why we chose this location.
After researching the area we looked into buying a warehouse that would allow us to be in the middle of Green Bay, and allow us to draw customers from all over the city. We have found a location at 929 Cedar Street Green Bay, Wisconsin 54302. With its location directly in downtown Green Bay it will allow 20,000 cars to pass the location a day which will give us the exposure we need to start our business. The warehouse is 44,100 square feet and costs $799,900 to buy. LoopNet also gives demographics of customers within 1-5 miles of the location. With this we found that within five miles of this location there are 18,102 children ages 5-14 which is close to our target market. The warehouse will allow Cheesehead Complex the right of amount of space to offer all the sports the community is looking to play in a convenient downtown location.
= Local Indoor Sports Competitors
= Local YMCA= Our Location
Figure 7 (Google Maps)
Overview
Property
Intro | Analysis | Concept | Demand Scenarios | Marketing | MIS | Financials | Conclusion
6
Please see Appendix E for a layout of our facility
Business Concept: Competitor Analysis
A local indoor soccer facility. They consist of a couple indoor soccer fields as well as an outdoor field used for soccer and flag football. They also have a new indoor state of the art golf simulator. Leagues usually cost around $80 per player. According to their Facebook, over 2600 people have been there and gave them a 4.6/5 rating. Their competitive advantage is they’re the only indoor soccer complex in the area. When we called the Sports Emporium they said they have been in business for over thirty years and this is because of the lack of competition in the area. They are a community oriented business that does a great job finding new customers in the area as well as keeping existing ones. Their golf simulator brings in a different market segment of older men and women who come to play and enjoy the game without the cold Green Bay weather. They tailor their complex to kids 4-18, but market to parents 26-35 and have been successful in keeping their complex up to date and offering concessions to feed the players and parents. The Sports Emporium owns 42,000 square feet of warehouse space and brings in around 1,000 customers per day according to their manager.
Green Bay is a small town flooding with sports facilities because of the such high demand. Synergy Sports business plan is to train athletes and get them in shape for the season. They do this by offering the best trainers and coaches in the area so the kids can get a leg up on other competition. Their target market is kids 8-18 but they train college athletes and adults according to their owner. There competitive advantage is offering an area like no other that can train athletes for all sports. No place in Green Bay can offer this and this has allowed them to stay in business. Synergy Sports even allows customers to rent their fields for practices or training, This allows them to generate more revenue when athletes aren’t training. Their rates are $150 dollars an hour for a field, $50 dollars for per training session.
There are 4 YMCA’s all around the Green Bay area and offer a variety of facilities that include basketball courts, pools, gymnastic areas, aerobics, track, and weight rooms. This along with the two facilities above will be our biggest competitors. The YMCA was established in 1844 and has seen millions of customers come in and out of its doors. Since it is established we need to show customers that our facility is better than the YMCA.
Sports Emporium
Synergy Sports Performance
YMCA
Intro | Analysis | Concept | Demand Scenarios | Marketing | MIS | Financials | Conclusion
7
Business Concept
Tommy is a 12 year old boy who just started the 7th grade at Washington Middle School in Green Bay, Wis. He enjoys playing sports and hanging out with friends. In the summer, he played baseball with his summer team the Brewers, coached by his dad, and Tommy led the team to the championship. His dad wants him to focus on baseball over the winter, but he is looking forward to the upcoming basketball season. During basketball tryouts, Tommy’s coach told him about a multisport complex that just opened up a mile away from his house. Coach thinks it’d be a good idea for Tommy to play in a couple youth leagues to really improve his skills on the basketball court. When Tommy gets home, he goes straight to the computer to check out this new Cheesehead Sports complex. He tells his dad how much fun this sounds and how it would really improve his game. Tommy and his dad make an agreement to letting Tommy play in a basketball league as long as two times a week he uses the batting cages at the facility to work on his hitting.
Sally is an 8 year old girl living in Green Bay, Wisconsin. Her parents enrolled her in soccer at the age of 3 but at that time she had other interests. When she started third grade, she realized a lot of her classmates were playing soccer at this new indoor sports complex, Cheesehead Sports. Sally immediately ran home and excitingly told her mother all about this new complex. Sally’s mother was thrilled her daughter wanted to start playing soccer again. She always hoped her daughter would take up the sport, because she grew up playing it when she was younger. The only concern Sally’s mother had was that she did not know what to do with Sally’s younger brother, Sam, who is not the biggest fan of soccer. Luckily, Cheesehead Sports not only offers soccer, but basketball, baseball, flag football, lacrosse, and volleyball. Sam loves football and his mother thinks flag football would be a good starter for him. The three of them immediately drove to Cheesehead Sports and signed up for the upcoming soccer and flag football leagues.
Consumer Profile A Consumer Profile B
Hours/Week Pay/Hour Pay/Week Weeks/Year Pay Total Employee Cost
Part Time Employees
Front Desk (1) 35 $ 9.77 $ 341.95 52 $17,781.40 $ 17.781.40
Front Desk (2) 35 $ 9.77 $ 341. 95 52 $17,781.40 $ 17.781.40
Full Time Employees
Manager (1) 40 $14.42 $ 576.92 52 $30,000 $ 30,000
Assistant Manager (1) 40 $14.42 $ 576.92 52 $30,000 $ 30,000
Skills Trainer (1) 40 $18.75 $750 52 $ 39,000 $ 39,000
Skills Trainer (2) 40 $18.75 $750 52 $ 39,000 $ 39,000
$ 173,562.80
Employees See Appendix B for information on employees
Intro | Analysis | Concept | Demand Scenarios | Marketing | MIS | Financials | Conclusion
Figure 8 8
Demand Scenario: Primary Data
Location: Frisco, TX Danber, MA Palmyra, PA
Company: Field House USA Danber Sports In the Net
Avg. Teams per day 30 38 42
Avg players/ team (11) 330 418 462
Weight 45% 30% 25%
Weighted Customers 148 125 115
For out first demand scenario we used three companies to average how many teams Cheesehead Sports Complex will get. We used information from Fieldhouse USA, Danber Sports, and In the Net Sports to benchmark our company off of. Most sports facilities have parents coming through their doors as customers even if they do not purchase anything. What we decided to do was look at teams that these indoor sports facilities bring in on a daily basis. This would allow Cheesehead Sports to see how many average teams we could expect on a daily basis, along with seeing how many customers would come through our doors. We took the average amount of players per team (11) to get the average amount of players coming through our facility per day and weighted those numbers accordingly.
Our team began by calling different sports facilities around the United States to find out how many customers would come through Cheesehead Sports Complex doors on a daily basis. We first received information from Field House USA to find out how many teams came through their doors in two months. They have 123 teams that play soccer, basketball, volleyball, lacrosse, and flag football in two months. We weighted this the highest because Field House USA was exactly like our facility. It was very kid orientated, and offered the same sports that Cheesehead Sports would offer to its customers. Next, Danber Sports located in Massachusetts was weighted at 30% because it is located in a cold region that has inclement weather. Its facilities are more fit for kids and adults. Finally we ranked In the Net at a 25% because they were the least like our facility and owned the largest warehouse. They mostly offer their sports to older kids and adults. Overall, since Cheesehead Sports will make most of its revenue off of leagues, we decided this was the best way to see how many teams we would receive in a two month period. After calculating the numbers, we have found out that on average Cheesehead should receive 388 customers per day. This means that in one year Cheesehead Sports will look to bring in 137,7740 teams through its doors.
148 + 125 + 115 = 388 Avg. customers per day
Overview
Ratings
Intro | Analysis | Concept | Demand Scenarios | Marketing | MIS | Financials | Conclusion
Figure 9
9
Demand Scenario: Secondary Research
We determined how many customers would utilize Cheesehead Sports Complex is by completing secondary research from information found online. We first started by finding how many kids participate in sports across the United States and found that number to be 65%. Next we found out the number of people that go and play sports at indoor sports facilities and found that number to be 22%. We multiplied these numbers and got 14.3% of kids that participate in sports at indoor sports facilities. Next we used this number and multiplied it by 61,842, which is the child population that lives within in 20 miles of Green Bay. The total of this equation is kids in Green Bay that go to indoor sports facilities. These are the kids that we would target and want to bring into our facility to play and use our services. After that, we took how many sports we offer which are soccer, basketball, volleyball, lacrosse, flag football, and baseball (6) and multiplied that by how many local competitors there are in the area, which is also 7 including our facility. This totaled up equals 42 and we took that number and divided it by 8,843 to get an average of 211 kids that would come through our facility on a daily basis. Overall, this number is a very reliable piece of data because it represents how many kids in Green Bay, WI would actually come into our facility on a daily basis.
Overview
Intro | Analysis | Concept | Demand Scenarios | Marketing | MIS | Financials | Conclusion
% of kids that participate in sports X 65%
% of people that participate in indoor sports X 22%
Kids in target market (8-14) that live in 20 miles of Green Bay 61,842
Sports we offer ÷ 6
Local Competitors ÷ 7
Average Customers/ Day = 211 Figure 10
10
Customers Weight Weighted Customers
Demand Scenario 1 388 75% 291
Demand Scenario 2 211 25% 52
Total Customers Per Day
100% 343
Demand Scenario: Matrix After getting our primary data and our secondary data, we decided to weight the customers to get a
better sense of how many people Cheesehead Sports Complex would receive on a daily basis. Our first demand scenario was calling local competitors and other indoor sports facilities to get an average number of teams those business receive on a daily basis. Then we applied it to our facility to get 388 customers coming through our doors on a each day. We weighted this number at 75% because the information was more accurate and relevant to how many customers Cheesehead Sports Complex would receive. Since we called real businesses and spoke to real managers about teams coming into their facility. Our second demand scenario was finding how many kids lived in Green Bay, WI and finding out how many kids would come through our doors on a daily basis. We found out that 211 customers would come through our doors and we gave this a weight of 25%. We did this because the information was less accurate and not as relevant as demand scenario one. Overall we have concluded that 343 customers will come through Cheesehead Sports Complex everyday.
343 X $ 500 = $ 171,500
Weighted Customers Average team price Sales/ Two Months
Or $ 2,858
Daily Sales
Overview
Intro | Analysis | Concept | Demand Scenarios | Marketing | MIS | Financials | Conclusion
Figure 11
11
Marketing Campaign
Product
Place
Price
Promotion
Product- A state of the art multi sport complex providing the youth of Green Bay basketball courts, soccer fields, and cages for various popular team sports. Some of the sports we offer are basketball, baseball, soccer, volleyball, lacrosse, and flag football.Price - After much research and reviews of other companies, we conducted that our prices are a lot lower than competitors. With the average competitor price per team entry being around $700-$1,000, we are offering teams an entry fee of $500 which is more affordable for families and will get more customers in our doors.Place- Our location is in the heart of Green Bay. It provides a close destination to more than 17 thousand kids in the area. We are also located downtown, in an area with very little competition. Because we are so close to the highway, more than 20,000 cars will drive past our facility each day. Also located within 1 mile of our facility is Sullivan Elementary School and Washington Middle School. This will allow is us to promote to kids in the elementary school and middle school who are interested in sports. In the future Cheesehead Sports could make a collaboration with these schools to use our facilities during the winter season. Promotion- We have decided to promote our sports complex through different means of social media, as well as billboards and local newspapers located in the Green Bay area. The social media platforms we chose to utilize were Facebook, Twitter and a website we designed. We are advertising our billboard year round off Interstate 43, located approximately 2 miles from where our sports facility is located. We are also advertising Cheesehead Sports in the local newspaper, Green Bay Press Gazette. The Green Bay Press Gazette has 55, 000 readers. We decided to post our advertisement in the sports section. We chose this section not only because we are a sports complex, but because according to statistics, males that range in age from 18 to 48 mostly read the sports section of the newspaper. Also with the Green Bay Packers being a huge draw to the area many people will read the newspaper to get the latest updates on the Packers and see our sports facility.
Intro | Analysis | Concept | Demand Scenarios | Marketing | MIS | Financials | Conclusion
Figure 12 12
Marketing CampaignThe use of social media has greatly increased over the past few years. According to Statista, in 2012 61% of people that ranged in age from 18 to 24 said they were weekly users of social media, as well as 58% of people who were ages 25 to 34. Facebook and Twitter are two of the most popular social media sites. (See Figure 13) The graph shows that 50 million people had signed up and created a Twitter in only 9 months. Facebook, who is now close to reaching one billion users, only needed one year to reach the 50 million users milestone (Statista, 2012). Because of their growing popularity, we decided to utilize these two social media sites to advertise our business, Cheesehead Sports.
See Appendix H for photos, comments, and information on our Facebook Facebook is an online social media site that allows people to share with friends, family and colleagues. As of January 2014, Facebook has 1.23 billion monthly active users, while 757 million of these people check their Facebook daily. In Green Bay, Wisconsin, there are 53,000 parents who are on Facebook and have a child ages 6 to 18 that is interested in sports. We chose to promote Cheesehead Sports on Facebook because there are so many users in the area that we could easily reach out to through this platform. Information is neatly organized, making it easy for users to look anything up. Due to the increasing number of users, it is easy to reach such a wide audience. When creating a company advertisement or business campaign, Facebook easily allows you to tailor to a specific audience you wish or hope to see this advertisement. With this option available, a company can choose who views their ad by picking a specific location, age range, and specific interests or hobbies. Facebook is also a great way to advertise companies because with the increase in mobile technology, people can easily access the page from their phone anywhere. More than 700 people visit Facebook from their phone or tablet each day (Facebook.com) This also makes it convenient for customers to pull up Cheesehead Sports Facebook page and get directions to our facility on the go. To run our Facebook ad for one whole year, it would cost just a total of $365, just one dollar a day!
Social Media
Intro | Analysis | Concept | Demand Scenarios | Marketing | MIS | Financials | Conclusion
Figure 13 (Statista 2016) Figure 14 (Statista 2012)
13
Marketing CampaignSee Appendix G to check out our Twitter pageTwitter is another social media platform we chose to utilize to advertise Cheesehead Sports. In 2015, a little over 22% of Twitter users were between ages 25 - 34. If you look at the figure, you can see this is the age range majority of users fall under, with people 35 - 44 years old being the second most popular with 20% of users (See Figure 15). The children we are tailoring our facility to cannot drive themselves, therefore our target age group for parents with children in grades third through eighth grade are parents that range from age 25 to 44 years old. Cheesehead Sports will be utilizing Twitter and using it to our advantage to send out daily reminders, coupons, giveaways and more to anyone who follows our account. One way to promote our Twitter account and use it to our full advantage is by using the Facebook page, as well as different advertising techniques in our warehouse, to get people to follow or retweet a certain tweet in order to receive a special giveaway, such as a membership discount or sporting good. People are able to tweet at us directly and ask specific questions, possibly about different league games or if things are cancelled for a certain game. Also Twitter can be used to send out daily reminders about special upcoming events or if hours were to change for some reason. With the large amount of people that use this social media website, we can benefit a lot from this tool to promote our company, Cheesehead Sports.
The website will give potential customers more information about Cheesehead Sports such as prices, hours and what activities we offer. Customers can send us a message to join our facility, contact us for more information, or leave us a comment about their experience. There are also links to our Twitter and Facebook on the website so customers can get involved and chat with us. A website is one of the most effective ways to get new customers and encourage older customers to keep using our services. Here is the link to our website http://ct945914.wix.com/cheeseheadsports
Website
Check out Appendix I to get more information on our website.Indoor sports facilities mostly use a website to gain new customers and have kids sign up for leagues, classes, and parties. Cheesehead Sports has a personalized website to give out our contact information along with the different prices we charge for our services. Also our Twitter and Facebook have a link to our website.
Intro | Analysis | Concept | Demand Scenarios | Marketing | MIS | Financials | Conclusion
Figure 15 (Statista 2015)
14
Marketing CampaignAnother way we chose to promote Cheesehead Sports is through the use of a billboard located in Green Bay, Wisconsin. According to Lamar Advertising Company, in this location our billboard would be scene by 154,600 times in the span of 4 weeks. This means in over one year, over 2 million people will have seen our company name on this billboard. We chose a location right off the highway approximately 2 miles from Cheesehead Sports, making our advertisement visible by many people. Because the location of our indoor sports complex is located in downtown Green Bay, Wisconsin, over 20,000 cars will drive past this location each day. With our billboard located so close to the highway, our exposure rate will be extremely high. To run our company advertisement on this billboard for one full year, our total costs would be $11,700.
Aside from the billboard, we have decided to also utilize the local newspaper, the Green Bay Press Gazette. The Gazette has 55,000 subscribers in the area. Because this is such a high number, we find it crucial to reach out to the community this way. With the increases in technology, the newspaper is now available in print, as well as online. We are posting our ad weekly in the sports section of the newspaper. It is said that 69% of males between the ages 18 and 48 prefer to read the sports section over any other section (Beaujon, 2013). Since we are located in Green Bay, Wisconsin, the Green Bay Packers are extremely popular in this area. A lot of readers are going to go to the sports section to read about the local sports teams, therefore they will see our advertisement and become interested about our company. To print our advertisement in the local newspaper once a week, our total costs for a whole year would be $3,700.
Billboard
Newspaper
Intro | Analysis | Concept | Demand Scenarios | Marketing | MIS | Financials | Conclusion
Figure 16 Figure 17
15
Management Information Systems This business process helps to enable the overall business concept by providing an organized method
to create a better experience and more satisfaction for customers. This would lead to an advancement of the business. The customer BPM for Cheesehead Sports involves the customer receiving information from the employee about what is offered and then choosing an option, such as a league or class and then paying for it. The employee will then process the payment and create the customer's member ID. The payment will be processed in accounting and the member ID will be activated. After this, the customer can use their ID to attend the facility. After this, they may evaluate their experience and management will use those evaluations to better future customer experiences.
See Appendix K for Dashboard information. The key performance indicators dashboard measures sales by segment, customers per week, company ratings, employee ratings, and sales per month in order to evaluate how well the business process is operating. This information is presented in a business intelligence dashboard to display the key performance indicators in a functional, consolidated format so that the owners and managers can make adjustments to our business based off of the consolidated data.Sales by segment displays the amount of sales we have for each particular segment. These can be compared to the other segments to see what is generating the most revenue. Sales per month will compare each month’s sales in order to see which months generate the most sales, so that we can analyze what causes changes and amount of sales. Customers per week will compare each week's’ amount of customers who come into the facility in order to analyze the company's growth. Company ratings will show our ratings so that we can see how satisfied customers are. Employee ratings will show ratings of individual employees so that the employee and managers can become more aware of their performance.
Dashboard
Intro | Analysis | Concept | Demand Scenarios | Marketing | MIS | Financials | Conclusion
Business Process Management
Figure 18 16
Please See Figure 18
Management Information Systems
A CRM system would be implemented for our business to better our sales and tailor to our customers’ preferences. Salesforce is the best CRM for us because it has everything we need in one place. It is an easy to use cloud-based system with a mobile app available. It also has a functional, organized layout. (Angeles, 2015)
Salesforce includes features that will benefit our business such as:- dashboards of how your customers and sales are doing- your employees’ performance- contact information of your customers that can be used for marketing emails- tips for selling more- customers’ past purchase
Salesforce costs $80 per user per month. Since we are a small business we would only purchase this for one user. This cost will be accounted for as depreciation.. Salesforce comes with 10 apps per user. The user can choose which salesforce compatible apps they need for their company. The apps we would use would include Dashero and Sage Live. Dashero is a free app that connects with social media and tracks KPIs to create dashboards. We will also use social media to track website clicks and analyze what increases our views using Dashero. Clicks can be tracked on Facebook and on our website using Stat Counter. Sage is an accounting and payroll software that has partnered with salesforce to create the app Sage Live. We would use this app to pay our employees and allocate our money for operating expenses. The app is $30 per month. We will use a Square Reader to accept credit cards and enter the information into the accounting app. We will process member IDs through the free app Scan Fizz. This app processes the barcodes into salesforce. We will also make money on concessions but we will manually enter this information into the accounting app because we will only be selling a few items and it is not a major part of our business. (Salesforce, 2016).
Customer Relationship Management
Intro | Analysis | Concept | Demand Scenarios | Marketing | MIS | Financials | Conclusion
Figure 19 (Salesforce) Figure 2017
See Appendix J for CRM considerations
Financial Analysis Pro Forma Statement of Financial Position
The initial investment for Cheesehead Sports is 1,120,156. Each of the business partners will invest $39,600 of their own money for a total of 198,000. More information about start up costs can be found in Appendix O. 30% of this total amount is paid for by issuing long term debt, and the other 70% is paid in equity capital. The building was bought and owned by Cheesehead Sports and will be depreciated over 37 years. The equipment is also owned by Cheesehead Sports and will be depreciated over 5 years. There are no accounts payable or receivable at this time.
Pro Forma Statement of Operations
The demand scenarios indicate that 343 customers will play at Cheesehead Sports every month and will pay a $500 membership fee based on an average transaction price from benchmark companies. Based on these projections, Cheesehead Sports is expected to have an annual revenue of $1,086,000 at the end of year 5.There is is a sales tax of 5% for the state of Wisconsin which is shown on the income statement as a direct store expense. (See figure 21) Corporate income tax for the state of Wisconsin was found to be 7.2% and federal income tax is 35%. More information about operating expenses and direct store expenses can be found in Appendix P.
Cheesehead Sports Pro Forma Income Statement
Year 1 Year 2 Year 3 Year 4 Year 5
Sales (a) $1,029,000 $1,044,000 $1,056,000 $1,071,000 $1,086,000
Occupancy Costs (b) 131,670 131,670 131,670 131,670 131,670
General and administrative expenses (c) 311,024 311,024 272,609 272,609 272,609
Pre-opening expenses (d) 7,358 - - - - Operating income 578,948 601,306 651,721 666,721 681,721
Interest expense 24,314 21,102 17,626 13,863 9,789
Income before income taxes 554,634 580,203 634,096 652,859 671,932
Provision for income taxes 232,345 243,315 272,026 280,075 288,258
Net income $322,289 $336,888 $362,070 $372,784 $383,674
Figure 21
Intro | Analysis | Concept | Demand Scenarios | Marketing | MIS | Financials | Conclusion
18
Financial Analysis Capital Budgeting Analysis Feasibility of Cheesehead Sports
The capital budgeting analysis starts out by determining EBIT and subtracting taxes to find the operating profit after tax. Depreciation is then added back due to the fact that depreciation is a non cash expense. This number results in the operating cash flow. We continued our capital budgeting analysis by determining the weighted average cost of capital, which was found to be 7.04% (figure 22). The feasibility of the project was done by determining NPV, IRR, and payback period (22).
After reaching a demand of 348 customers per month in year 2, demand is expected to rise by 5 teams a year going into year 5. These demand projections are based off of market data, and benchmark data from similar companies in the industry. Cheesehead Sports will generate operating revenue of $681,721 in year 5 and the horizon value is $2,726,885 based on a market multiple of 4. The net present value for Cheesehead Sports is 589,113. The internal rate of return is 25.10% with a payback period of 2.83 years. With the IRR being higher than the weighted average cost of capital, it means that this is a profitable business, and should be invested in. The small payback period indicates that they will see a return on their investment in a short amount of time.
Conclusion: Based on a positive net present value, high IRR and short payback period, Cheesehead Sports is a GO, and should be accepted as an investment.
Figure 22
Decision-Making Criteria
Net present value = 589,113
Internal rate of return = 25.10%
Payback period = 2.83
Required Rate of Return
Weighted average cost of capital (WACC):
Capital x Cost of x After-Tax = WACCStructure Capital Adjustment
Debt 30% x 8% x 60.0% = 1.44%
Equity 70% x 8% na = 5.60%
7.04%
Intro | Analysis | Concept | Demand Scenarios | Marketing | MIS | Financials | Conclusion
19
Conclusion Intro | Analysis | Concept | Demand Scenarios | Marketing | MIS | Financials | Conclusion
Copeland Associates has created an indoor sports facility located in Green Bay, Wisconsin with the target market being for kids 8-14. Our competitive advantage in the industry is locating our business in an area with little competition from other facilities. Our location is also located within one mile of a local elementary school and middle school which fits right into our target market. Our competitive advantage reaches beyond just our location since we don’t offer strictly soccer, or basketball courts but offer a variety of sports such as volleyball or lacrosse for interested youths to be exposed to new sports. Our business model is to provide the city of Green Bay with an outstanding facility with cheaper prices than other competitors to allow their children to prosper and grow through sports.
A problem our team has faced when we were younger was not having an area to play, train, and participate in sports with kids our own age. We wanted to bring an indoor sports facility to the town of Green Bay that has great potential with little competitors in the area. An indoor sports facility is not just about playing a sport but it is also the intangible aspects kids learn from a young age that will help them for the rest of their lives. Confidence and teamwork are just a few of the things that kids can learn from taking part in sports. With so much potential in Green Bay an indoor sports facility would not only be a feasible option and not only succeed but thrive.
Copeland Associates Team used demand scenarios to show that starting an indoor sports facility is an achievable goal .Our primary research included calling local businesses across the nation to get an idea how many teams of kids ages 8-14 came through its doors on a daily basis. This would give us a benchmark to see how many teams would come through Cheesehead Sports doors on an average day. This came out to be 388 customers or 35 teams per day with an average of 11 players per team. Next, we did secondary research to take national averages of children playing sports, specifically indoor sports, paired with how many kids 8-14 who live within 20 miles of Green Bay. These statistics led us to get 211 average customers per day. We then did a decision matrix and got an average of 343 customers coming through Cheesehead Sports Complex on a daily basis.
Overall, Copeland Associated team has learned that it is not easy to start a business. Small things such as heating and cost of enterprise systems need to be taken into account. Extensive research needs to be done to test the feasibility of the project, but it can be done in todays world. The internet has allowed us to never step foot in Green Bay but find loads of information about competitors, pricing, and local markets. With such little competition in Green Bay and high prices of existing sports facilities, Cheesehead Sports will have a competitive advantage that not other sports facilities could model in the area. This would allow us to have a growing customer base along with becoming a part of the community for years to come.
Summary
20
Appendix
Appendix A: SWOT AnalysisStrength: Multiple Courts - Cheesehead Indoor Sports Complex will have soccer fields, basketball courts and baseball cages. This will allow children who play different sports to be able to play their sport with kids their own age.Personalized training- dedicated to each sport where we will have a skills trainer to train kids in their individual sport. Location - 20,000 cars pass this location a day along with having a location with poor weather will allow us to have many kids come to our facility when it is raining or snowing.
Weakness:Brand Recognition – We are a new indoor sports complex so we would not be as recognized as other facilities in the areaLack of space- Our facility is 44,100 SQ feet of space but there is little to no room to expand which will prohibit us from adding more fields and courts if our business grows.
Opportunity:Soccer and lacrosse - are growing sports across the United States and we would offer a facility that would allow kids to play both.Kids- Parents are always kids and sports will always be apart of the American culture. This means that sports will always be apart of kids lives in one way or another.
Threat: Kids playing video games and staying indoors - With nice weather people will more likely go outside to play sports than stay indoors.Lower priced indoor sports facilities- These facilities would draw the attention of more customers because they have lower costs. Also local gyms, YMCA’s, or fitness centers will steal customers since some have basketball courts and leagues.
Cheesehead Sports Complex is a new indoor sports facility located in Green Bay with the intentions of becoming part of the community. Since Green Bay has historically bad weather this is a great spot to open a facility that will allow children to play sports even when the weather is cold or snowy out. We are going to set ourselves apart having multiple different sports surfaces such as basketball courts, soccer turf, and baseball cages to appeal to all children. With the rise in sports participation and parents continuing to have children this will be a huge opportunity for Cheesehead Sports to continue to grow.
Summary
21
Appendix B: Employees
Hours/Week Pay/Hour Pay/Week Weeks/Year Pay Total Employee Cost
Part Time Employees
Front Desk (1) 35 $ 9.77 $ 341.95 52 $17,781.40 $ 17.781.40
Front Desk (2) 35 $ 9.77 $ 341. 95 52 $17,781.40 $ 17.781.40
Full Time Employees
Manager (1) 40 $14.42 $ 576.92 52 $30,000 $ 30,000
Assistant Manager (1) 40 $14.42 $ 576.92 52 $30,000 $ 30,000
Skills Trainer (1) 40 $18.75 $750 52 $ 39,000 $ 39,000
Skills Trainer (2) 40 $18.75 $750 52 $ 39,000 $ 39,000
$ 173,562.80
Cheesehead Sports would hire 6 total employees to run the day to day activities of the facility. These employees would include two front desk workers to take money from paying customers, take calls asking about hours of operations and how the facility works. He/she would need be to knowledgeable in how the facility operates, schedule of when games/events are planned for the day or week and how to speak to customers over the phone. Next, we would have one main manager to oversee the day to day operations of the facility. The manager would be in charge or scheduling when games are and making sure the games, are running smoothly. Also the manager would be in charge of interacting with fans and players to make sure they are enjoying the atmosphere and experience of the facility. With competition nearby the manager would be in charge of visiting other indoor sports facilities to look into quality, and prices of out competition. Under the manager would be an assistant manager to train staff if we begin to expand and add other employees. Also the assistant would be in charge of running the day to day operations when the manager is out looking at other facilities. Our skills trainer would coach classes in sports such as basketball to help kids gain new skills like better shooting, dribbling, and passing. The skills trainer are an integral part of our indoor sports facility because every kids wants to get better at their sports and our skills trainer would take their skills to the next level.
Summary
22
Appendix C: Promotion Schedule
Media Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.
SocialMedia
X X X X X X X
Billboard
X X X X X X X
NewsPaperAd
X X X X X X X
Website
X X X X X X X
**Note- We would be running all forms of advertisements year round. X is the indication of when we will increase advertisements.
We created a promotion schedule to show when Cheesehead Sports would increase its advertisements in the Green Bay area. We would increase awareness and advertisements of our brand in the fall and winter because of the national football season. Since Green Bay’s only professional sports team is the Green Bay Packers look forward to the upcoming season and read articles in the newspaper. Being in Green Bay, many people are going to the sports section to check out news on the Packers. This is why Cheesehead sports will be very successful promoting during these months because the weather is getting worse and kids are looking for somewhere to play sports and get active. Getting the word out in April and May would be effective as kids are winding down their school year and looking for things to do in the summer.
Summary
23
Key Partners: Key Activities:
Key Resources:
Value Propositions: Customer Segments:
Appendix D: Business Model Canvas
Cheesehead Sports would partner with brands such as the Green Bay Packers, and local business to promote each other. In the future we would want to partner with brands such as Dick’s Sporting Goods.
CheeseHead Sports currently works to provide indoor sports complex to children 8-14
Warehouse located at 929 Cedar Street, Green Bay Wisconsin along with equipment
We offer a name brand sports complex that will allow children to train, participate and enjoy a variety of sports. In the future we want to offer weight training classes and events for parents and kids to come and enjoy the festivities.
Cheesehead Sports encourages a variety of members to come to our facility and participate in all the sports we provide. Friends, and family are welcomed with opening arms and will be able to enjoy the fun that sports provide.
24
Cost Structure:
Revenue Streams: $
Customer Relationships: Channels:
Appendix D: Business Model Canvas Continued
Cheesehead Sports needs to have great relationships with customers. We want to part of the Green Bay community and market to those customers who enjoy sports.
We will channels that will bring supplies for the concession stand and equipment for the sports.
Cheesehead Sports will generate revenue by putting together tournaments, hosting classes, doing skills training, and renting our courts to members for their own use.
Cheesehead Sports will be one of the only indoor sports facilities in Green Bay which will give us a wide range of prices to charge customers. We will however though stay consistent with industry averages.
Summary
Cheesehead Sports did a business Model Canvas to see what our business had in terms of finances, assets, customers, and infrastructure. We looked in our revenue and cots which showed us how we were generating money and also how we would spend money based on other competitors. Also since we appeal to a variety of customers we needed to see our customer segments and relationships to see what customers are looking for in an indoor sports facility and live up to those expectations.
25
Appendix E: Cheesehead Sports Layout
What Copeland Associated decided to do was to build a layout of the complex to get a better view of our facility along with where our turfs and courts would be positioned. The software we were using for this layout did not allow us to have space in between our fields or turf fields but in between would be stands for fans or spectators to be able to sit and watch the kids play sports. In the future we would also like to create a concession stand that would serve foods and beverages for players, parents, and friends. We believe this would increase revenue because during a game players or fans will get hungry or thirsty and we could provide food and drinks to accommodate them. With this view we could see where customers would be sitting, and where they would come in and pay for our services. Overall, the layout allowed us to get a sense of what Cheesehead Sports would look like if we actually built the facility
Summary
26
Appendix F: Location
Within 1.1 miles of our location is Washington Middle School, as well as Sullivan Elementary School and East Green Bay High School close by.
In a 5 mile radius there are:
-18,102 kids ages 5-14
-59,153 households
-An average household income of $60,599
-20,000 cars passing daily on N Webster Ave(Tschantz, 2016)
27
Appendix G: Twitter
28
Appendix H: Facebook
29
Appendix H: Facebook Continued
30
Appendix I: Website
We have created an operational website using the content management system, Wix. The website can be visited here. Our Twitter and Facebook have a link to our website. The website will give potential customers more information about Cheesehead Sports such as prices, hours and what activities we offer. Customers can send us a message to join our facility, contact us for more information, or leave us a comment about their experience. There are also links to our Twitter and Facebook on the website so customers can get involved.
Management Information Systems
31
Appendix J: CRM Considerations
Marketo is much more expensive with prices ranging from $1995 per month to $7195 per month. It does not provide the variety of apps that Salesforce does. There is not an accounting service, a way to scan IDs and it does not integrate social media. The website is not as well laid out as Salesforce and seems complicated to use. Marketo is web-based but can integrate with cloud based systems such as Salesforce.
Five9 has more to offer than Marketo but not as much as Salesforce. It is an outdated system that uses Java and it’s reviews emphasize that it is complicated to use. It cost more than Salesforce at $175 per person per month. Five9 does not integrate with social media, it does not have an accounting system, and does not have the ability to scan bar codes.
Summary
As you can see by the chart below Salesforce was the obvious choice for Cheesehead Sports to accomplish its CRM goals. Five9 and Marketo as can be seen by the graph are expensive platforms that don’t integrate social media which is our main form of marketing for customers. Also Salesforce was rated to be #1 for small businesses which Cheesehead Sports is but if we expand we may have to begin to look at other systems beyond Salesforce to accomplish all the goals we have set.
32
Appendix K: MIS Dashboard
33
(a) Property and equipment, net:
Building $799,900 $799,900 $799,900 $799,900 $799,900 $799,900
Fixtures and equipment 121,116 121,116 121,116 121,116 121,116 121,116
Computer hardware and software 1,140 1,140 1,140 1,140 1,140 1,140
[Modify, delete, or insert items]
Less: Accumulated depr and amort (46,069) (92,138) (138,207) (184,276) (230,345)
Property and equipment, net $922,156 $876,087 $830,018 $783,949 $737,880 $691,811
(b) Retained earnings:
Balance, beginning of year $- $322,289 $322,289 $659,177 $1,021,246 $1,394,030
Net income 322,289 322,289 336,888 362,070 372,784 383,674
Less: Distribution to owner -
Balance, end of year $322,289 $322,289 $659,177 $1,021,246 $1,394,030 $1,777,704
Cheesehead Sports Pro Forma Balance Sheet
Start-Up Year 1 Year 2 Year 3 Year 4 Year 5
Cash $198,000 $498,360 $838,350 $1,199,976 $1,568,477 $1,943,714 Prepaid Insurance 2,000 2,000 2,000 2,000 2,000 2,000
Total current assets 200,000 500,360 840,350 1,201,976 1,570,477 1,945,714 Property and equipment, net (a) 922,156 876,087 830,018 783,949 737,880 691,811 Intangible assets, net 500 450 400 350 300 250 Total assets $1,122,656 $1,376,897 $1,670,768 $1,986,275 $2,308,657 $2,637,775
Current portion of long-term debt 67,548 43,017 46,563 50,401 54,556 59,053 Total current liabilities 67,548 43,017 46,563 50,401 54,556 59,053
Long-term debt 269,099 226,082 179,519 129,118 74,562 15,509 Total liabilities 336,647 269,099 226,082 179,519 129,118 74,562
Paid-in equity capital 785,509 785,509 785,509 785,509 785,509 785,509 Retained earnings (b) - 322,289 659,177 1,021,246 1,394,030 1,777,704
Total equity 785,509 1,107,798 1,444,686 1,806,756 2,179,539 2,563,213 Total liabilities and equity $1,122,156 $1,376,897 $1,670,768 $1,986,275 $2,308,657 $2,637,775
Appendix L: Financial Balance Sheet
34
Appendix M: Financial Cost
Investment Cost
Building$799,900
Basketball Courts 75,000
Turf 42,312
Lacrosse Goals 318
Soccer Goals 498
Batting Cages 1,988
CRM System 1,140
Cash 198,000
Total 1,120,156
Break Even Point Analysis: Fixed Costs/ Contribution margin per unit457,979/500-300= 2,289 unitsCheesehead sports will have to sell 2,289 units to cover its fixed and variable costs.
35
Appendix N: Financial Income Statement
Cheesehead Sports Pro Forma Income Statement
Year 1 Year 2 Year 3 Year 4 Year 5
Sales (a) $1,029,000 $1,044,000 $1,056,000 $1,071,000 $1,086,000 Occupancy Costs (b) 131,670 131,670 131,670 131,670 131,670
General and administrative expenses (c) 311,024 311,024 272,609 272,609 272,609
Pre-opening expenses (d) 7,358 - - - -
Operating income 578,948 601,306 651,721 666,721 681,721 Interest expense 24,314 21,102 17,626 13,863 9,789
Income before income taxes 554,634 580,203 634,096 652,859 671,932
Provision for income taxes 232,345 243,315 272,026 280,075 288,258
Net income $322,289 $336,888 $362,070 $372,784 $383,674
(a) Sales:Number of teams per month 343 348 352 357 362
x Average transaction value 500 500 500 500 500 Sales every two months 171,500 174,000 176,000 178,500 181,000
x Months a year 6 6 6 6 6 Sales 1,029,000 1,044,000 1,056,000 1,071,000 1,086,000
(b) Cost of goods sold and occupancy costs:Utilities
Electric 84,000 84,000 84,000 84,000 84,000 Gas 42,000 42,000 42,000 42,000 42,000 Water 5,000 5,000 5,000 5,000 5,000Phone 250 250 250 250 250 Internet 420 420 420 420 420
Cost of goods sold and occupancy costs $131,670 $131,670 $131,670 $131,670 $131,670
(c) Direct store expenses:Store payroll $173,562 $185,670 $185,670 $185,670 $185,670 Benefits $10,600 $10,600 $10,600 $10,600 $10,600 Payroll Taxes $13,277 $14,204 $14,204 $14,204 $14,204 Store supplies 300 300 300 300 300 Depreciation and amortization 46,070 46,070 46,070 46,070 46,070 Advertising 15,765 15,765 15,765 15,765 15,765 Sales Tax 51,450 52,200 52,800 53,550 54,300
Direct store expenses $311,024 $272,609 $272,609 $272,609 $272,609
(d) Preopening ExpensesBleechers 4,882 Square 99 Receipt Printer 300 Receipt Paper 27 Website Domain 1,000 DBA License 50 General Business License 500 Trademark License 500 Total 7,358
36
Appendix O: Financial Capital Budgeting Analysis
Cheesehead Sports Capital Budgeting Analysis
Project Cash Flows
0 1 2 3 4 5
EBITDA $ 578,948 $ 601,306 $ 651,721 $ 666,721 $ 681,721 - Depreciation and amortization (46,069) (92,138) (138,207) (184,276) (230,345)
EBIT 532,879 509,168 513,514 482,445 451,376 - Taxes 0.6000 0.6000 0.6000 0.6000 0.6000
Operating profit after tax 319,727 305,501 308,109 289,467 270,826 + Depreciation and amortization 46,069 92,138 138,207 184,276 230,345
Operating cash flow $ (1,120,156) $ 365,796 $ 397,639 $ 446,316 $ 473,743 $ 501,171 Free cash flow $ 365,796 $ 397,639 $ 446,316 $ 473,743 $ 501,171
+ Horizon value (end of year 5) 2,726,885 Project cash flow $ 3,228,056
EBITDA (year 5) $ 681,721 x Market multiple 4.0
Horizon value (end of year 5) $ 2,726,885
Required Rate of Return
Weighted average cost of capital (WACC):
Capital Cost of After-Tax= WACC
Structure Capital Adjustment
Debt 30% 8% 60.0% = 1.44%
Equity 70% 8% na = 5.60%
7.04%
Decision-Making Criteria
Net present value = 589,113
Internal rate of return = 25.10%
Payback period = 2.83
37
Appendix P: Financial Cash Flows
Pro Forma 1st Yr Income Statement Q1, Q2, Q3, Q4
Q1 Q2 Q3 Q4
Sales (a) $257,250 $257,250 $257,250 $257,250 Occupancy Costs (b) $32,918 $32,918 $32,918 $32,918 Direct store expenses (c) 74,864 74,864 74,864 74,864 Pre-opening expenses 1,840 1,840 1,840 1,840
Operating income 147,629 147,629 147,629 147,629 Interest expense 6,079 6,079 6,079 6,079
Income before income taxes 141,550 141,550 141,550 141,550 Provision for income taxes 54,140 54,140 54,140 54,140
Net income $87,410 $87,410 $87,410 $87,410
Year One Cash Flows
Q1 Q2 Q3 Q4
EBITDA $ 147,629 $ 147,629 $ 147,629 $ 147,629 - Depreciation and amortization 11,517 11,517 11,517 11,517
EBIT 136,112 136,112 136,112 136,112 - Taxes 0.6000 0.6000 0.6000 0.6000
Operating profit after tax 81,667 81,667 81,667 81,667 + Depreciation and amortization 11,517 11,517 11,517 11,517
Operating cash flow $ 93,184 $ 93,184 $ 93,184 $ 93,184 - Change in Net Working Capital- Capital Spending
Free cash flow $ 93,184 $ 93,184 $ 93,184 $ 93,184
38
Appendix Q: Financial Loan Amortization Schedule
39
References10 Data Points That Prove That Soccer Has Finally Made it in America. (2015, August 18). Retrieved
March 22, 2016, from https://www.umbel.com/blog/sports/10-data-points-prove-soccer-has-made-it-in-america/
Angeles, Sara. (2015, march 15). “Salesforce review: best CRM software for small business” Retrieved March 14, 2016, from http://www.businessnewsdaily.com/7840-best-crm-software-small-business.html
Beaujon, A. (2013). Report: Sports fans like print newspapers. Retrieved April 05, 2016, from http://www.poynter.org/2013/report-sports-fans-like-print-newspapers/206693/
Bizminer. (2015, December). Competitive Market Analysis. Retrieved from http://www.bizminer.com.proxy.library.ohiou.edu/reports/cma_report.php?id=1372876&format=html&zips=&cma_file=1
BpPlans. (2016). Indoor soccer facility. Retrieved from https://docs.google.com/presentation/d/1CktRGuOp_mpZPOMbK-dQHAWUPlfSYS-pREGhS7ZVHIc/edit#slide=id.g128abfb097_3_2
Chicago Business. (2013). The new luxe amenity: home basketball courts. Retrieved from http://
www.chicagobusiness.com/article/20130427/ISSUE03/304279989/the-new-luxe-amenity-home-basketball-courts
Cost Helper Activities. (2015). How much do bleachers cost. Retrived from http://activities.costhelper.com/bleacher.html
Department of Numbers. (2014). Wisconsin household income. Retrieved March 18, 2016 from http://www.deptofnumbers.com/income/wisconsin/
Executionists. (2016). How much does a small business website cost. Retrieved from ://executionists.com/cost-to-build-websites-2014/
Facebook Ads. (n.d.). Retrieved April 04, 2016, from https://www.facebook.com/business/products/ads
40
ReferencesFacts. (2011). Retrieved March 14, 2016, from http://www.franklincountyohio.gov/LetsMove/facts/
Gaio, Michael. "Youth Participation in Sports on the Decline." AthleticBusiness. Feb. 2014. Web. 18 Mar. 2016.
Glass Door. (2016). Salaries. Retrieved from https://www.glassdoor.com/Salaries/assistant-facilities-manager-salary-SRCH_KO0,28.htm
Ibis World. (2015, March). Indoor Sports Facilities Management. Retrieved March 14, 2016, from http://clients1.ibisworld.com.proxy.library.ohiou.edu/reports/us/industry/default.aspx?entid=4647
Infographic: The Rapid Rise of Social Media. (n.d.). Retrieved April 03, 2016, from https://www.statista.com/chart/521/the-rapid-rise-of-social-media/
Insurance Quotes. (2016). Get free insurance quotes. Retrieved from http://www.insurancequotes.com/
Kelley, B., & Carchia, C. (2013, July 16). "Hey, data data -- swing!" Retrieved March 14, 2016, from http://espn.go.com/espn/story/_/id/9469252/hidden-demographics-youth-sports-espn-magazine
KPMG. (2016). Tax tools and resources. Retrieved from https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources.html
Lamar Advertising Company. (n.d.). Retrieved April 08, 2016, from http://www.lamar.com/InventoryBrowser
Lee, A. (2015, February 24). 7 Charts that Show the State of Youth Sports in the US and Why it Matters. Retrieved March 14, 2016, from http://www.aspeninstitute.org/about/blog/7-charts-that-show-the-state-of-youth-sports-in-the-us-and-why-it-matters
Legal Zoom. (2015). Trademark pricing package. Retrieved from https://www.legalzoom.com/business/intellectual-property/trademark-registration-pricing.htmlNCAA. "Estimated Probability of Competing in College Athletics." NCAA.org. 25 Feb. 2015. Retrieved March 21, 2016.
41
On Deck Sports. (2016). Indoor facilities. Retrieved from http://www.ondecksports.com/Products/Batting-Cages
Per capita personal income in Wisconsin from 1990 to 2014 (in current U.S. dollars). In Statista - The Statistics Portal. Retrieved March 22, 2016.
Population estimates, July 1, 2015, (V2015). (n.d.). Retrieved March 14, 2016, from http://www.census.gov/quickfacts/table/PST045215/39049,42101,26163,36047
Richter, F. (n.d.). Infographic: The Rise of Social Networking in the United States. Retrieved April 03, 2016, from https://www.statista.com/chart/913/the-rise-of-social-networking-in-the-united-states/
References
Rosenwald, Michael S. "Are Parents Ruining Youth Sports? Fewer Kids Play amid Pressure." Washington Post. The Washington Post, 4 Oct. 2015. Web. 22 Mar. 2016.
Salesforce. (2016). Retrieved March 14, 2016, from https://www.salesforce.com
Small Business. (2016). Cost of a small business license. Retrieved from https://www.google.com/webhp?sourceid=chrome-instant&rlz=1C5CHFA_enUS551US559&ion=1&ie=UTF-8&rct=j#q=cost+of+a+business+license
Smart Asset. (2016). Wisconsin income tax calculator. Retrieved from https://smartasset.com/taxes/wisconsin-tax-calculator
Staples. (2016). Receipt printers. Retrieved from http://www.staples.com/Star-Thermal-Receipt-Printer/product_301973?cid=PS:GooglePLAs:301973&ci_src=17588969&ci_sku=301973&KPID=301973&gclid=CjwKEAjw86e4BRCnzuWGlpjLoUcSJACaHG55HPnwQesImuv-DvlfF1hEkKhaGxwyFWk7pNEqvCiFXRoChDrw_wcB
Tax Rates. (2016). Wisconsin sales tax rates. Retrived from http://www.taxrates.com/state-rates/wisconsin/
Time Warner. (2016) Phone plan. Retrieved from http://www.timewarnercable.com/en/residential.html
42
Trading Economics. (2016). US disposable Personal Income. Retrieved March 18, 2016 from http://www.tradingeconomics.com/united-states/disposable-personal-income
Tschantz, J. (16, January 28). 929 Cedar St, Green Bay, WI 54302. Retrieved April 03, 2016, from http://www.loopnet.com/Listing/18453951/929-Cedar-St-Green-Bay-WI/
Twitter: U.S. user age distribution 2015 | Statistic. (n.d.). Retrieved April 04, 2016, from http://www.statista.com/statistics/192703/age-distribution-of-users-on-twitter-in-the- united-states/
What is Facebook? - Definition from WhatIs.com. (n.d.). Retrieved April 03, 2016, from http://whatis.techtarget.com/definition/Facebook
Whitehead, James R. "Safety in Youth Sports: Parents Have Spoken, We Have Listened, Now It's Time to Act." The Huffington Post. TheHuffingtonPost.com, 28 Oct. 2014. Web. 20 Mar. 2016.
Wisconsin Department of Revenue. (2015). Tax rates. Retrieved from https://www.revenue.wi.gov/faqs/pcs/taxrates.html
Xfinity. (2016). High speed internet plans. Retrieved from http://www.xfinity.com/internet-service.html
References
43
