mt. blackstrap business plan - comm 447 ... painter/businessplans... · web viewmt. blackstrap...

Prepared By: Brandon Peters & Brett Polanik

December 7, 2011

2 Mt. Blackstrap Business Plan - COMM 447: Entrepreneurship and Small Business Management

1.0 EXECUTIVE SUMMARY

Mount Blackstrap is a new twist on an old business. Taking advantage of the current selection

of outdoor entertainment, an already established skiing resort, and the pride that lies inside of

Saskatchewan, Mount Blackstrap offers a year-round resort for all people to enjoy. Mount

Blackstrap is located approximately 30 minutes south of Saskatoon, Saskatchewan and is

operated by Brandon Peters and Brett Polanik. As unfortunate circumstances previously closed

the old ski resort at Blackstrap, Mount Blackstrap has been given an opportunity to create the

perfect skiing resort that Saskatchewan residence strive for.

Mount Blackstrap will be given a complete revival, with new lifts, magic carpet, and best of all, a

million dollar chalet. These improvements will make every trip to the “Mount” a memorable

one. To ensure that our customers remain as pleased as possible, a detailed staffing schedule

has been set up and properly trained instructors are present on the hill at all times. With these

improvements there will be light poles added, along with quality speakers. The light poles and

speakers will allow us to offer night time skiing, drawing in the night scene and allowing for a

longer operational season (more hours per day). Our brand new chalet will offer a space for

business retreats as well as a venue for all aspects of a wedding. Our summer offerings include,

mounting biking, hiking and nature walks.

It is important for Mount Blackstrap to focus efforts on creating a great atmosphere and a place

that has value in the hearts of our consumers. An initially aggressive marketing campaign will

be implemented to gain awareness of our location/services and to establish a sense of pride in

Saskatchewan and the outcomes that spending time skiing could have on their family values. In

essence we want to sell the experience and value that skiing can have on an individual and

family.

To fund Mount Blackstrap, a loan of $1,377,000 from the Government of Saskatchewan will be

acquired by leveraging the 5% royalties. Our funding will be 100% debt financed, thus,

combining with other factors, will give us a required rate of return of 50%.

2 | P a g eBy Brandon Peters and Brett Polanik


Mount Blackstrap has one major variable that determines its success; customers. Without

gaining the customer base that we require Mount Blackstrap will not be able to operate

effectively. With proper management and the right customer response, we are confident that

Mount Blackstrap will remain a staple in outdoor entertainment in Saskatchewan.



TABLE OF CONTENTS

1.0 Executive Summary.............................................................................................................2

2.0. Business Overview..............................................................................................................2

2.1 Introduction......................................................................................................................... 2

2.2 Industry Overview................................................................................................................2

2.3 Goals.................................................................................................................................... 2

3.0. Operations Plan.................................................................................................................. 2

3.1. Capital Budget (found in financials).................................................................................2

3.1.2. The Chalet................................................................................................................2

3.1.3. Ski lift........................................................................................................................2

3.1.4. Rental Equipment....................................................................................................2

3.1.5. Other Equipment.....................................................................................................2

3.2. Operations.......................................................................................................................2

4.0. Human Resource Plan.........................................................................................................2

4.1. Staff requirements..........................................................................................................2

4.2. Hierarchy.........................................................................................................................2

4.3. Cost of Labour (in financials)...........................................................................................2

4.4.1 Requirements....................................................................................................................2

4.4.2 Scheduling.........................................................................................................................2

4.5. Training........................................................................................................................... 2

4.6. Job Descriptions..............................................................................................................2

4.6.1 Equipment Personnel...............................................................................................2

4.6.2. Cashiers....................................................................................................................2

4.6.3. Lesson Instructors....................................................................................................2



4.6.4. On-Hill Workers........................................................................................................2

5.0. Marketing Plan........................................................................................................................2

5.1. Product................................................................................................................................2

Tangible Products.......................................................................................................................2

Intangible Products....................................................................................................................2

5.2. Segmentation, Targeting, and Positioning..............................................................................2

5.2.1. Segmentation...................................................................................................................2

5.2.2. Targeting.......................................................................................................................... 2

5.2.3. Positioning........................................................................................................................2

5.2.4 Position Statement............................................................................................................2

5.3 Competition.............................................................................................................................2

5.4 Marketing Expenses.................................................................................................................2

6.0 Financial Plan (in financials)................................................................................................2

6.1 Financial Structure...............................................................................................................2

6.3 Financial Analysis................................................................................................................. 2

6.4 Risk Analysis.........................................................................................................................2

6.5 Economic Forecast...............................................................................................................2

6.6 Break Even Analysis..............................................................................................................2

7.0 Summary..................................................................................................................................2

Appendix A: Location.....................................................................................................................2

Appendix B: Chalet........................................................................................................................ 2

Appendix C: Competitor Map........................................................................................................2



2.0. BUSINESS OVERVIEW

2.1 INTRODUCTION

Mount Blackstrap holds a great opportunity to supply Saskatoon, and area with great outdoor

entertainment. A picture of the location can be found in Appendix A. Rather than purely focusing on just

the skiing opportunity, operators/owners Brandon Peters and Brett Polanik are striving to create a hot

spot for year-round entertainment. Brandon and Brett both have various experience in the outdoor

entertainment industry and posses their Bachelor of Commerce degree. By combining their previous

experience with their learnt knowledge of computer systems, operational flow, marketing and

management, Mount Blackstrap is sure to become the place to be in the outdoors.

2.2 INDUSTRY OVERVIEW

As skiing is a reasonable saturated market in Saskatchewan, there is still room for offering a more

convenient location. Currently skiers have no options close to Saskatoon and often find that driving

interferes with their ski time. As our business will operate year round and offer retreat and wedding

service we have a great competitive advantage in the market. There are currently other halls and venues

available but none with the outdoor view that we can offer.

The biggest players in the industry are large mountains to the west of Canada but are an inconvenience

and take a great deal of travel time. Mount Blackstrap is at a perfect opportunity to enter into this

growing industry and expand it beyond its traditional means.

2.3 GOALS

Mount Blackstrap would like to:

Secure repeat customers

Establish itself as a summer activity

Be host to numerous different retreats and weddings

Offer high class ski and snowboard training

Ensure adequate revenues for future growth



3.0. OPERATIONS PLAN

3.1. CAPITAL BUDGET (FOUND IN FINANCIALS)

Our operations plan consists of many relatively large capital purchases in the first year with the

need for a new chalet, ski lift, ski and snowboard equipment, as well as machinery to run the

hill. These are the purchases that we require:

- Chalet

- Ski lift

- Ski’s and boards

- Bobcat

- Snow machines

- Groomers

- Snow mobiles

- Outdoor speakers

3.1.2. THE CHALET

The chalet is vital to the success of our business. The reason for this is because of the ability for it to

attract people back to Blackstrap. In a study done about blackstrap (insert reference) the reason for

many people not wanting to return to blackstrap has been the lack of adequate facilities. A new chalet

will show people that changes are being made and that the rebuilding of this attraction will be far better

than it ever was.

There are many uses for the chalet. Of course, the obvious being to hold visitors as well as hold

equipment to be rented, but there are other sources of revenue that can be captured with the chalet.

There will be food served in the form of the traditional foods that are presented at a ski lodge such as

(what are we all going to have?). Although we are not planning on taking on this operation ourselves we

are planning on leasing the space out to someone else because it is beyond the scope of our business

plan. Another reason to have a chalet like we chose was to attract people in the summer time. With the

way the wedding market is growing there fewer places available to get married and the cost of renting a

place is on the rise. We hope to capture some of that market in providing a building that can be suitable



for weddings and receptions to take place. Only being located half an hour from the city is a huge draw

because it is still close but also secluded so the wedding won’t be bothered. (Pictures on appendix B)

3.1.3. SKI LIFT

A ski lift is required because the old lift that was previously there has been torn down. The lift that we

will purchase is used but still suitable to take care of our needs for the hill. A used one from runs at

about $50,000 (Boneyard). This would not include installation and setup so that will be put on top of

that price which is included in the financial section. The lift will be sufficient enough to manage the

capacity of our chalet and the expected customer turnout.

A magic carpet will also be purchased and installed as part of the ski lift budget. They run for about

$12,00 and can be installed for about $5,000. (Boneyard)

3.1.4. RENTAL EQUIPMENT

Ski’s and snowboards, as well as bindings, boots, and helmets will be purchased from Denver Ski’s.

Numbers were gathered from a salesperson of the business. They will be gently used skis and boards

and the reason for this is the general savings in cost. It is a huge leap to buy new rather than used

equipment and the expected life for all used equipment from them is about 4 years. In the future we are

also planning on having a used equipment buy back from customers who want to upgrade.

3.1.5. OTHER EQUIPMENT

A bobcat is needed for general snow clean up in areas such as the parking lot and around the chalet. We

chose to buy a used one rather than rent one because we believe that this will save us costs in the long

run. Snow machines are also needed for producing snow during times when natural snowfall is not

sufficient. (not for covering the whole hill?) Snow groomers are used on a daily basis for maintenance of

the hill and keeping the runs smooth. We will also be purchasing outdoor speakers and light poles.

These will be used mainly for night skiing. They will give a better atmosphere for the younger crowd that

we are trying to attract with night skiing.



3.2. OPERATIONS

Daily

Daily activities will include maintenance and checking of lifts and equipment. Before the day starts the

manager will check the lift and make sure that it is operational, as well as check the chairs to see that

nothing has been damaged and everything is in working order. The lifts will run for a while before being

used to make sure that things are fully operational. Start-up activities are minor because most duties will

be finished at the end of the night. Hill maintenance will also take place in the morning in order to

groom the snow for the rest of the day and to reshape any parts of the hill or jumps that aren’t

satisfactory.

While equipment is returned it will have to be entered into an inventory system in order to be sure that

there is no missing equipment. A check will be done at the end of every day to find missing equipment.

Closing activities include many cleaning duties. After equipment is returned it should be inspected for

any defects and if any are found they are to be reported to the equipment manager. As well as taking

the equipment it should be wiped off in order to be ready to use the next day. Garbage cans will be

taken out when full on a regular basis throughout the day but also all of them will have to be emptied at

the end of the day.

Monthly

Service checks will have to be conducted monthly on the lifts in order to be able to ensure safety of the

users. A monthly meeting with the staff will take place in order to discuss what went well and what

didn’t go well in the previous month. This meeting will also cover any school or other types of bookings

at the place in order to prepare for the increase in demand for those days.

Yearly

On a yearly basis there will have to be in depth inspections of the lifts. People will be hired in order to

properly inspect the lifts to make sure they are in good condition. The marketing strategy will have to be

looked at in detail in order to see what worked and what didn’t work in terms of who we target and if

we’re missing any markets that we need to target more. Financially we will entertain the new ideas that

we intend to incorporate into the hill like the BMX terrain park and the possibility of a paintball area.

Other expansions will be taken into consideration at this time.



4.0. HUMAN RESOURCE PLAN

4.1. STAFF REQUIREMENTS

We will need to employ about 25 people. The breakdown of this is mainly part time workers because of

the weekly fluctuation of skiers on the weekends and during the weekdays. There will be 1 manager

who will oversee operations and will be paid on a salary basis which will work out to approximately $25

per hour for full time work. There will be three supervisors; one will be the equipment manager, one for

supervising the hill, and one for coordinating lessons and stepping in for the other two when needed.

Supervisors will have to have a few years experience working on a ski hill in order to be able to properly

direct operations and as such will be making $18 an hour. We will hire 8 full time workers in order to

take care of things such as equipment rental, and running the ski lift during the week, and then we will

hire part time employees to cover evenings and weekends.

Equipment Cashier Lessons Hill

Weekday 1 supervisor

2 workers

2 workers 1 supervisor

(more if booked in

advance)

1 supervisor

4 workers

Weekend 1 supervisor

6 workers


4 instructors

1 supervisor

5 workers



4.2. HIERARCHY

4.3. COST OF LABOUR (IN FINANCIALS)

Labour costs are the highest expense of any Ski Resort. At Blackstrap we will be no different. Our

manager will only be working about half the year or 21 weeks. There are on average about 19 skiable

weeks in a year and we will have an extra 2 weeks for the start-up and shut-down times of the year. The

manager will be making $25 an hour on average, which seems small when looking at total for the year,

but this is because they are only working half of the year. Supervisors will be making $18 an hour

because of their degree of responsibility. They should have had previous experience managing people as

well as experience working on a ski hill. The supervisors will be capable of managing employees as well

as dealing with any problems that could occur, so that they don’t have to always be brought to the

manager.

4.4. Scheduling

In the case of supervisors they will be required to work all the weekends and some weekdays. On

weekdays equipment supervisors and ski hill supervisors will rotate and the lessons supervisor will be on

call. The main workforce will be made up of part time employees because of the increase in demand on

the weekends. It will be mainly full time during the week and part time to cover the weekends. There is


Manager

Equipment Supervisor

Full Time Workers

Part Time Workers

Hill Supervisor

Full Time Workers

Part Time Workers

Lesson Supervisor

Ski Instructors


also a spot for evenings that will have to be filled depending on when or if we will be offering night

skiing.

4.4.1 REQUIREMENTS

Equipment Cashier Lessons Hill

Weekday 1 supervisor

2 workers


(more if booked in

advance)

1 supervisor

4 workers

Weekend 1 supervisor

6 workers


4 instructors

1 supervisor

5 workers

4.4.2 SCHEDULING

Weekday

Time Equipment Cashier Lessons Hill

9:00a.m. –

11:00a.m.

Supervisor

1 part time

2 full time

2 full time Supervisor / Lead

Instructor

Supervisor

4 full time

11:00a.m. –

12:00p.m.

1 full time

1 part time

1 full time Supervisor / Lead

Instructor

Supervisor

2 full time

12:00p.m. –

1:00p.m.

1 full time

1 part time

1 full time None Eq. Supervisor

2 full time

1:00p.m. – 6p.m. 2 full time 2 full time Supervisor / Lead

Instructor

Supervisor

4 full time

6p.m. – 9p.m. None



Weekend

Time Equipment Cashier Lessons Hill

9:00a.m. –

11:00a.m.

Supervisor

6 part time

4 full time Supervisor

4 instructors

Supervisor

4 full time

11:00a.m. –

12:00p.m.

Supervisor

3 part time

2 full time Supervisor

4 instructors

Supervisor

2 full time

12:00p.m. –

1:00p.m.

3 part time 2 full time None Eq. Supervisor

2 full time

1:00p.m. – 6p.m. 3 part time 4 full time Supervisor

4 instructors

Supervisor

4 full time

6p.m. – 9p.m. None

4.5. TRAINING

All personnel will receive on the job training. This training will be job specific and relate purely to Mount

Blackstrap’s operations. The only exception to our training program will be our ski instructors. Our ski

Instructors will receive level II training from the Canadian Ski Instructors Association. The level II training

will certify our skiing instructors to instruct our customers on skiing up to the intermediate parallel skiing

level. We felt that this would be adequate for our instructors as any more advance instruction would

have to be done on a hill that is equipped with different skiing options than we posses.

4.6. JOB DESCRIPTIONS

4.6.1 EQUIPMENT PERSONNEL

- The supervisor oversees equipment rental process helping where needed and proceeding with

other activities with his/her workers such as:

o Receiving and checking rental slips

o Making sure people get the right size of equipment

o Getting equipment from shelves to customers

o Assisting customers to help try on equipment



4.6.2. CASHIERS

- Cashiers will:

o Receive and check over permission slips and waivers

o Process payment

o Give out rental slips

4.6.3. LESSON INSTRUCTORS

A head supervisor will give out lessons during the weekdays for anyone who wants them. Preferably this

person knows how to do lessons for skiing and snowboarding. This person also coordinates group

lessons. This person also coordinates group lessons. This instructor will also be in charge of taking care

of grooming and shaping the hill in the morning before people get to the hill. Our instructors will:

o Have a range of teaching levels to cover all levels of abilities

o Be kind and patient with those taking lessons

o Experienced and highly professional

4.6.4. ON-HILL WORKERS

- A general supervisor will be constantly skiing the hill in order to provide assistance and maintain

safety on the hill.

- We will have 2 workers working the chair lift, one at the bottom of the hill and one at the top

watching people get on and off. They will also be able to turn off the lift if anybody slips or falls

on entry or exit of the lift. Another 2 will be skiing/snowboarding the hill for safety purposes.



5.0. MARKETING PLAN

5.1. PRODUCT

Mount Blackstrap is comprised of two types of products:

TANGIBLE PRODUCTS

The Blackstap ski hill offers year round facilities at an affordable price and a convenient location. Based

on demand found from a government issued survey, (Ministry of Tourism) the new Mount Blackstrap

will provide skiing, snowboarding, winter tubing, hiking, mountain biking courses, wedding rentals, and

completely new facilities.

INTANGIBLE PRODUCTS

Aside from offering tangible products, Mount Blackstrap will provide a fun, safe atmosphere for the

whole family to enjoy. Supporting family values, outdoor education, a sense of adventure and

entertainment is a crucial part of Mount Blackstrap’s daily operations.

5.2. SEGMENTATION, TARGETING, AND POSITIONING

5.2.1. SEGMENTATION

Mount Blackstrap’s market is comprised of individuals that are aged 13 – 65 and are primarily from

Saskatoon and rural areas within 30 minutes. Saskatoon has an ever growing population and a specific

interest in outdoor activities. As school involvement in the hill increases so will younger generations and

their parents.

5.2.2. TARGETING

Mount Blackstrap primary target market is families with at least one child. This demographic is rather

large in nature and can generate good revenues because of the increased likely hood of child pressure

on their parents and with the connection to supporting family values. The secondary market is the self

sustaining teenager. They are aged 16-35, enjoy outdoor activities and have the expendable income to

make weekly trips up to the mountain with their friends.



5.2.3. POSITIONING

Mount Blackstrap will be positioned as the close place to ski and snowboard without sacrificing quality

or entertainment. Our customer will feel a sense of pride in their province every time they ski down this

amazing man made mountain. Our efforts will be to provide a sense of accomplishment from the

provinces endeavor and a sense of family values each and every time that they take their family down

Mount Blackstrap’s slopes.

5.2.4 POSITION STATEMENT

“…. To provide Saskatoon and area with the highest quality outdoor enjoyment and service that they

would expect in their own backyard – Mount Blackstrap – because there is no place like home”

5.3 COMPETITION

There is no nearby direct completion, but by expanding to areas that are obtainable within a 250KM

radius, our direct competition would be:

Table Mountain

Wapiti Ski Valley

Mission Ridge Winter Park

Ski Timber Ridge

PWT Snow Park

These other ski resorts offer similar services during the winter, at the same price point. See Appendix C

for our closest competitors on a competitor map. During the summer months however our services

differ greatly from our competitors. Our competitors currently close operations during the summer and

only re-open in the winter months. Mount Blackstrap’s advantage will be yearlong advertisements and

customer base.



5.4 MARKETING EXPENSES

Our Marketing Budget is as follows:

Billboards: Billboard advertisements will be presented for six months of the year. They will be placed in

high traffic areas and on routes that are on their way outside of the southern side of Saskatoon. Placing

billboard advertisements in these locations will gain awareness to the consumers who already have to

commute to the south side of the city.

Radio: Our on-air advertisements will run for a total of 6 weeks. There will be approximately twenty

plugs per day and will be aired on Wired 96.3 and C95 as they target our audience the most

appropriately.

Facebook: An allotment of 10,000 clicks will be purchased yearly to advertise the changes and prices of

Mount Blackstrap. The advertisements will be geared towards the early twenties to the early thirties.

Website: As part of our online presence, a new modern website will be created. This website will

contain user submitted photos of the hill, prices, directions, and the hours of operation. In later years

the website will also allow for online rental booking and will contain any information regarding

contests/promotions.

Newspaper: The news paper advertisement will run for six weeks a year. The ad will be two columns

and 20 lines big. It will not run the entire six weeks consecutively rather it will run in three two week

bursts. This advertisement will be geared to the target demographic of customers over the age of thirty

five.



6.0 FINANCIAL PLAN (IN FINANCIALS)

6.1 FINANCIAL STRUCTURE

For Mount Blackstrap to re-open $1,377,000 in funds are needed at year one. To obtain this initial

financing we would like to leverage the 5% yearly Canadian government royalty in order to gain a loan

from them. The funds required will therefore be provided through 100% debt financing.

6.3 FINANCIAL ANALYSIS

With 100% debt financing and a required rate of return of 50%, Mount Blackstrap will have a net

present value of $1,284,020 and an internal rate of return of 47.3%. Although the realized rate of return

is below the required rate of return Mount Blackstrap will still be profitable.

6.4 RISK ANALYSIS

Mount Blackstrap’s critical variables are as follows:

Amount of skiers

Type of financing

The amount of skiers per day will determine our expected revenue. Since our initial capital costs are so

high and our daily operating costs are relatively low, it is important that we get as much of the market as

possible to dilute the initial start up costs. It is projected approximately 30,000 skiers will attend Mount

Blackstrap. The projection is based off of a slight increase from its last operating season, which had

25,000 skiers attend.

The type of financing has an impact on Mount Blackstraps over all financial performance. Debt

repayment, particularly the interest payments, absorbs a good portion of Mount Blackstrap’s cash flows.

6.5 ECONOMIC FORECAST

Since Mount Blackstrap operates inside of the ski resort market, its inflation rate will differ than that of

other markets. A large change in Mount Blackstrap’s prices would take away competitive advantage and

make a significant difference in the quantity of customers. To combat this volatility a lower inflation rate

of 2% has been suggested. This rate, lower than the country average, takes into account what



competitors are doing and allows Mount Blackstrap to stay in line with the industry. An interest rate for

our loan would have to be negotiated when the loan is presented.

6.6 BREAK EVEN ANALYSIS

For Mount Blackstrap, the break even analysis focuses on the amount of skiers that are needed per day.

To break even Blackstrap would require 104 skiers per day for the first year. As the years progress the

break even volume needed decreases. The large gap that is represented in the diagram shows that there

is room for a change in a critical variable such as a decrease in actual skiers and that we can still be

profitable below our predicted outcome.

7.0 SUMMARY

Mount Blackstrap was a vital attraction for the people of Saskatchewan for many years, but due to

internal factors it was forced to stop its services in 2007. As some years have passed and the availability

of necessary equipment has become more readily available and cost effective, Mount Blackstrap could

potentially be revived. Mount Blackstrap has the potential to offer the same services as their

competitors but at a much more convenient location. However due to the high risk involvement and the

high initial investment needed at this time Mount Blackstrap is not feasible. In the near future, and

assuming a partnership with the Government of Saskatchewan, Mount Blackstrap could reopen.



APPENDICES



APPENDIX A: LOCATION



APPENDIX B: CHALET



APPENDIX C: COMPETITOR MAP


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