1.0 Executive Summary
The purpose of this business plan is to secure $1.5 million of investment capital for the development of a golf simulation facility that will feature full food service as well as beverage service. Deutsch Golf Station LLC (“the Company”) was founded this year with the intention of providing access to state-of-the-art golf simulation machines in Las Vegas, Nevada. Full scale revenue generating operations are expected to commence in the fourth quarter of this year.
Operations
Primarily, Deutsch Golf Station will generate its revenue from ongoing access to its state-of-the-art golf simulators. The Company intends to charge $60 per hour for access. Individuals will be able to properly fine tune their golf swing at the location. In order to provide a comprehensive experience, the Company will also have a number of golf pros on site that can provide ongoing training in tandem with use of the simulation equipment.
Beyond providing access on a per hour basis, the business will also establish a membership driven program that will allow individuals to use the facilities at a substantially discounted rate. This will create highly recurring reams of revenue that will further contribute to the ongoing economic stability of Deutsch Golf Station.
Ultimately, the business is striving to not only provide an exceptional golf simulation experience, but a social experience as well. To that end, the Company will offer full food and beverage service at the location. This will produce substantial contribution margins while also creating a significant competitive advantage for the business.
The third section of this golf simulation facility business plan will further discuss the operations.
The Financing
As noted above, the Company is currently seeking $1.5 million as a private investment in order to establish operations. These funds will be primarily be used for the following:
• Location development in Las Vegas
• Golf simulation equipment
• Initial marketing
• Working capital
Moving forward, Deutsch Golf Station could easily acquire additional capital in the event that additional golf simulation facilities are to be developed. As the Company will generate recurring reams of revenue from its membership operations, the business would also be a strong candidate for a working capital line of credit in order to properly manage cash flow.
Market Overview
The Future
Most importantly, the business will make ongoing reinvestment regarding the scope of its marketing campaigns so it becomes the premier golf simulation facility within Las Vegas. After the fifth year of operation, the Company may use its retained earnings to establish additional facilities in other economically viable markets such as Henderson.
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The funds discussed in the executive summary will be allocated as follows:
2.2 Management and Investor Equity
On a preliminary basis, management intends to sell a 60% ownership interest in the business in exchange for the capital sought in this document.
2.3 Exit Strategies
As Deutsch Golf Station will have multiple high margin revenue streams, there would be a significant demand for this type of business. As Las Vegas is a wealthy and highly tourist trafficked area, the Company could easily divest this business to a third-party. It is expected that the value of the business would be four times EBITDA. The sale of the business is not expected to occur for a significant period of time, and a potential funding source should expect that their capital investment will be made with a commitment of ten years.
3.0 Operations
As noted in the executive summary, Deutsch Golf Station will be actively involved with providing a wide range of exciting golf entertainment from its state-of-the-art facilities in Las Vegas. The Company has already begun to source the simulation equipment that will be used during the course of business operations. The business anticipates contribution margins of 95% on all simulator use. This includes both the fees associated with accepting payment as well as the ongoing maintenance of these machines.
Food and beverage service will be a major component of the Company success. As noted earlier, Management is taking a socially driven approach to the development of this business in Las Vegas. The business will hire an executive chef that will create a unique menu of popular sports-focused foods using premium ingredients. The business will also provide full beverage service.
Membership operations are also extremely important part of Deutsch Golf Station’s operations as this will produce recurring shrooms of revenue that will allow for ongoing reinvestment into new marketing campaigns as well as contributing to the ongoing economic stability of the business.
4.0 Overview of the Organization
4.1 Registered Name
Deutsch Golf Station LLC. The Company is registered as a limited liability company in the sSate of Nevada.
4.2 Commencement of Operations
The Company intends to launch operations in the fourth quarter of this year.
4.3 Mission Statement
To provide an exceptional golf simulation experience for customers within the greater Las Vegas metropolitan area.
4.4 Vision Statement
Management expects that the business will generate $1.79 million of revenue by the fifth year of operation while operating is the preeminent golf simulation facility within the target market radius.
4.5 Organizational Objectives
• Properly secure the capital sought in this document as well as securing a high visibility location in Las Vegas.
• Adhere to all frameworks regarding providing retail entertainment services as well as food and beverage service to the general public.
• Use multiple forms of online marketing to drive substantial interest in the business during the development phase.
• Higher golf professionals that will provide ongoing training services to people seeking to refine their golf game.
• Provide staff with stable employment opportunities that they can rely on for years to come, which are also upwardly mobile.
• Potentially develop additional Deutsch Golf Station locations which would not occur until after the fifth of operation.
• Implement proper financial controls of the business is able to remain profitable even during a challenging economic climate.
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section of the business plan will discuss the golf simulation in industry, the current state of the economy, the customer profile, and the ongoing competition at the business will face.
At this time, the economic climate within the United States is challenging. As a result of significantly altered trade policies, the rate of inflation has increased. Additionally, issues with geopolitical tensions are causing energy prices to spike. It should be noted that the Federal Reserve is taking the appropriate measures to ensure that the economy will continue to grow by properly.
It should be noted that these issues will only have a modest impact on Deutsch Golf Station’s ability to operate at a profit. This is primarily due to the fact that the business is operating in Las Vegas, which receives millions of visitors on the yearly basis. The Company is finding an appropriate location that will allow for many tourists to come to the location on an ongoing basis. All revenue centers of business are high margin in nature, which will further contribute to the economic stability of the business.
5.2 Industry Analysis
As of this year, there are 1,600 golf simulation businesses aggregately produce $1 billion of revenue per year of providing employment for 26,000 people. In regards to the industry, it is expected that it will achieve a compounded annual growth rate of 8.2%. Golf simulation equipment has become extremely popular over the past 15 years as its price has decreased. Deutsch Golf Station will be able to capitalize out on this trend in the coming years.
5.3 Customer Profile
Any individual that has any individual that has a love of golf is a potential customer for the business. In regards to the core target users of the facility, is expected that most guests will have an annual household income of $75,000 or more and will have deep enjoyment for the sport of golf. The ongoing competition that Deutsch Golf Station will face as it develops its operations is moderate.
5.4 Competitive Analysis
There are only a handful of locations within the greater Las Vegas Metropolitan area. They provide access to the same level of state-of-the-art equipment has that of the business. The business, by providing food and beverage service, will maintain any extensive differentiating factor. The socially driven nature of the location will also provide a competitive advantage.
6.0 Key Strategic Issues
6.1 Sustainable Operations
Deutsch Golf Station will have sustainable operations as a result of the following:
• Moderate operating cost is a function of the anticipated revenue.
• Strong demand in Las Vegas for access to golf simulation equipment at a cost-effective price.
• The significant population density and tourism of Las Vegas will contribute to the economic stability of the business.
• The Founder has years of experience operating retail driven entertainment facilities.
6.2 Basis of Growth
The Company will expand via the following methods:
• Continued expansion of the Company’s marketing campaigns to target both residents and tourists within Las Vegas.
• Integration of new simulation equipment in order to retain a competitive advantage.
• Continued expansion of the Company’s membership program as it produces recurring streams of revenue.
• Development of additional locations in economically viable markets in Nevada with a focus on Henderson as the secondary market.
7.0 Marketing Plan
7.1 Marketing Objectives
• Use multiple forms of online marketing during the buildout phase in order to make the general public aware of Deutsch Golf Station.
• Established ongoing relationships with golf professionals that will provide training services on site.
• Conduct direct outreach with the numerous hospitality businesses in Las Vegas for referrals.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• The business will launch its golf simulation facilities in the fourth quarter of this year.
• Revenue will reach $1.3 million.
Year 2
• Management will expand its marketing operations substantially by targeting hospitality business.
• Revenue will reach $1.4 million.
Years 3-5
• In Year 5, Deutsch Golf Station’s revenue will reach $1.79 million.
• Gross profits will reach $1.53 million.
7.4 Marketing Strategies
Most importantly, a substantial amount of the Company’s initial marketing will occur during the development phase of Deutsch Golf Station. Given the large-scale nature of the facility, management intends to use both online as well as traditional marketing strategies to create brand visibility during this phase. This will ultimately reduce the marketing risks of the business given that many residents of Las Vegas will be familiar with the location prior to its grand opening.
In regards to referrals, the Company intends to work with numerous hospitality enterprises throughout the greater Las Vegas area. This will include hospitality businesses that are operated by individuals through online booking platforms. As many people that travel Las Vegas ask for recommendations for entertainment activities, Management sees a significant opportunity to foster these relationships.
In regards to the Company’s online platform, this will be a state-of-the-art website that allows individuals to book sessions at the golf simulation facility while also enrolling as a member. The platform will feature media rich content, including video walk-through of the facility. As noted above, the Company intends to establish it online marketing operations during the buildout phase in order to familiarize the Las Vegas market with the location.
In addition to the proprietary website, the Company will maintain a presence among all major social media platforms, which will start during the development timeframe and will carry on through the life of the business. The Company will frequently upload images of people enjoying use of the golf simulation facility as well as videos. The Company will also announce frequent deals on membership, additions to the menu, as well as the installation of new state-of-the-art golf simulation equipment.
The business will also establish ongoing relationship with professionals throughout the Las Vegas metropolitan area that will provide ongoing referrals to their clients among people seeking to refine their skills in an indoor facility. The Company will have several golf professionals on retainer in order render services on site. These individuals are expected provide ongoing referrals as well.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
9.0 Financial Plan
9.1 Underlying Assumptions
• Deutsch Golf Station will achieve a compounded annual growth rate of 8%.
• The Company will acquire $1.5 million of investment to launch operations.
9.2 Financial Highlights
• The business will achieve contribution margins of 95% on golf simulator usage.
• Food and beverage service will carry contribution margins of 70%.
• Membership driven operations will produce gross profits of 98%.
9.3 Sensitivity Analysis
The Company’s revenues are only modestly sensitive to negative changes in the economy. As Las Vegas is a highly trafficked tourist area, the business will receive an ongoing influx of guests on a daily basis. The significant population of this market will further contribute to economic stability. The Company will continue to have highly controlled operating costs coupled with significant contribution margins, which will ensure that the facility is able to remain profitable even during a challenging economic climate.
9.4 Source of Funds
9.5 Financial Proformas
A) Profit and Loss Statement
B) Common Size Income Statement
C) Cash Flow Analysis
D) Balance Sheet
9.6 Breakeven Analysis
9.7 Business Ratios
Appendix A – SWOT Analysis
Strengths
• Strong demand within the Las Vegas market for golf simulation facilities.
• The membership driven operations will significantly contribute to economic stability while boosting value.
• Limited competition in the great Las Vegas metropolitan area among locations that operate in a similar capacity.
• The Company can easily source additional capital of further scale operations.
• Food and beverage service will provide substantial contribution margins.
Weaknesses
• Moderately high cost related to payroll.
• The barriers to entry for this type of business is moderate.
Opportunities
• Continued development of additional golf simulation locations within Nevada.
• Expansion of membership, driven operations to include new amenities that will further on-board individuals as members.
• Continued growth to the Company’s, marketing campaigns with a focus on direct outreach, search engine optimization, and referrals from hospitality businesses.
Threats
• Continues to increases in inflation may abate demand for travel to Las Vegas.
Appendix B – Risk Analysis
Development Risk – Low
The Company has already begun a source the location it will be used to house Deutsch Golf Station‘s operations. The primary matter that needs to be addressed is sourcing the capital discussed in this document.
Financing Risk – Low
The vast majority of the $1.5 million needed to establish operations will be specifically used for the acquisition of golf simulation, equipment, and the build out of the location. The risks related to this investment are offset by the multiple high margin revenue streams as well as recurring income for membership.
Marketing Risk – Low to Moderate
The Company will continue to use an expand upon the marketing strategies discussed earlier with a focus on initially acquiring referral relationship relationships with hospitality enterprises. The pre-launch marketing campaigns significantly reduce the Company’s marketing risks.
Management Risk – Low
The Founder is a highly experienced entrepreneur that has developed numerous golf simulation facilities over the past five years. He will be able to quickly bring the operations of Deutsch Golf Station to profitability while marketing it as the preeminent golf simulation facility in Las Vegas.
Valuation Risk – Low
The valuation risk is offset by:
• Significant demand for businesses that operate across numerous high margin revenue centers in major metropolitan areas.
• Recurring income for membership will cover most operating cost by the fourth year of operation.
• Deutsch Golf Station can easily scale to include numerous locations throughout Nevada in the Southwestern United States.
Exit Risk – Very Low
There are no long-term plans to sell the business to a third-party. However, there would be a significant demand for this type of enterprise, as a result of its profitability, as well as its ability to produce recurring income. A formal valuation would be conducted prior to the sale.