Bowling is an entertainment industry in Anytown with a customer base that has diminished over the past few decades. Today’s senior citizens were once avid bowlers. As the Baby-Boomers questioned their elders, they also turned away from bowling. Eventually, without innovation, bowling lost popularity as America’s favorite athletic events.
However, Anytown needs no replacement for the athletic and social event bowling once offered, it simply needs innovation! Sally Strike, the owner and manager of Bowl Weevil, understands the trend of revitalization in bowling cultures from her youthful participation and work in the Professional Bowling Association. Sally has experience as a bowler in the local community and as a marketing and business analyst for the Professional Bowling Association. Sally will also access her contacts within the Professional Bowling and Skating Associations to stimulate tournaments and competitions.
Sally has done the research necessary to plan and implement designs for a new bowling alley in the historic Miller building downtown. Bowl Weevil will take advantage of the building’s nostalgic feel to create a unique atmosphere, attracting after-school kids looking for entertainment and a snack, families seeking inexpensive entertainment, seniors looking for activities, and local bowlers seeking league competition in their own neighborhoods. We will offer family and group rates and theme nights with live music.
Sally is committing $60,000 of her own money to the project and is requesting a seven-year loan of $163,900 to complete start-up funding for this new venture. The loan will be secured with the owner’s home equity. Based on our market research in Anytown, we conservatively project sales over $500,000 in year one, with a strong net profit in year three and a staff of nine.
Mission:
The mission of Bowl Weevil is to provide the highest form of entertainment in the Anytown community. We offer the best bowling and overall entertainment for the entire family!
Objectives:
1. Sales of $523,000 in year one and $608,000 by year three.
2. Gross margin higher than 65%.
3. Net income more than 2.7% of sales by the third year.
Keys to Success:
1. Excellence in entertainment.
2. Developing a community of regulars.
3. Group rates.
4. A good value for sport lessons and entertainment.
Company Summary
Bowl Weevil is a classic bowling alley owned by Sally Strike. It specializes in league bowling and parties. Bowl Weevil will be located in the old Miller building, creating an ambience of nostalgic fun.
2.1 Company Ownership
Bowl Weevil is a C Corporation owned by Sally Strike. It is incorporated in Kentucky and operates in King County.
2.2 Start-up Summary
Bowl Weevil’s start-up costs will include equipment for the bowling alley, restaurant, inventory, and daily bank to cover pull-tab winnings.
The start-up expenses primarily consist of the bowling alley lanes and restaurant equipment. These long-term assets include 16 hardwood bowling lanes, 180 pins, 8 electronic scoring terminals, a commercial range and oven, a walk-in refrigerator, video games, pull tab equipment, a sink, and dishwasher.
Rent during renovation, construction costs, and advertising make up the remaining start-up expenses. We will use both television ads and fliers, as well as place an ad in the Yellow Pages, available in June when the new phone book is delivered.
Start-up Requirements:
Legal Costs: $500
Consulting: $500
Construction: $20,000
Advertising: $3,000
Rent during renovation: $40,000
Total Start-up Expenses: $64,000
Start-up Assets:
Cash Required: $40,000
Start-up Inventory: $7,000
Other Current Assets: $35,000
Long-term Assets: $77,900
Total Assets: $159,900
Total Requirements: $223,900
Start-up Funding:
Start-up Expenses to Fund: $64,000
Start-up Assets to Fund: $159,900
Total Funding Required: $223,900
Assets:
Non-cash Assets from Start-up: $119,900
Cash Requirements from Start-up: $40,000
Additional Cash Raised: $0
Cash Balance on Starting Date: $40,000
Total Assets: $159,900
Liabilities and Capital:
Liabilities:
Current Borrowing: $0
Long-term Liabilities: $163,900
Accounts Payable (Outstanding Bills): $0
Other Current Liabilities (interest-free): $0
Total Liabilities: $163,900
Capital:
Planned Investment:
Owner: $60,000
Investor: $0
Additional Investment Requirement: $0
Total Planned Investment: $60,000
Loss at Start-up (Start-up Expenses): ($64,000)
Total Capital: ($4,000)
Total Capital and Liabilities: $159,900
Total Funding: $223,900
Products and Services:
Bowl Weevil will be open Wednesday through Sunday, from 12 noon-11pm.
General Bowling:
Customers can rent shoes and buy games. We will keep a full selection of adult and children’s shoes in stock, in a variety of styles. We will offer prizes for the high scorers in each 2-hour period, and children under 12 get a prize for hitting more than 8 pins. Bowl Weevil will also introduce the bowling league experience to youths through its Saturday morning teen leagues. Families can pay a family rate to cover parents and up to 5 children.
Bowling for leagues, with league fees:
We will sponsor local leagues, and our league manager will coordinate the league bowling nights. Several local groups currently travel 10 miles to go bowling and compete. They have all expressed an interest in a closer locale that would give them special services. We are currently working with some of these groups to brainstorm league-building activities.
Food and Drinks:
Our kitchen will be open from 3pm to 10pm, offering retro diner foods like hamburgs and milkshakes, as well as healthier options, from pasta to eggplant parmesan. Our town has a significant vegetarian populace, and we want them to be able to enjoy bowling and snacking as much as any other customer. Starting at 5pm, we will also have a bartender to serve beer and wine and to make a limited selection of mixed drinks. Our combination nostalgic/upscale/modern menu will help make Bowl Weevil a destination spot, and our experienced chef has a number of ideas for seasonal specials using local ingredients.
Videogames:
We will also have a rotating stock of Arcade games. We will keep track of which kinds of games (1st person shooters, driving games, strategy games) seem to be the most popular, and adjust our offerings to maximize revenue. These games will be another way for families to entertain all their children, while some family members bowl.
Pull-tabs:
Pull-tabs are two-ply laminated paper tickets that contain perforated windows which conceal various game symbols, numbers, etc. These tickets have either three (3) or five (5) windows and various game themes. They are sold only at establishments that hold a Class C liquor license and are licensed by the state lottery to sell pull-tab tickets (we have such a license).
Parties and Special Events:
Bowl Weevil will be available for birthday parties and special events. On the first Friday of every month, we will have a DJ or live band and a theme night aimed at local teens. We will also offer group rates and special events for local churches, community organizations, and companies.
Market Analysis Summary:
Bowling has declined as the family activity of choice over the last 30 years. While the image of bowling has changed during this decline, the sport itself still offers good exercise, fun competition, and a game of skill. If the image and experience of bowling can be updated with a more attractive look and feel, there is no reason it could not rebound.
Bowling is a family activity and one that people can continue well into their old age. It is a game of skill, which allows players to better their scores with practice, and it can be a team sport. Bowling alleys get their clients from the local area, usually within a 10-mile radius. They are therefore more subject to local trends and events than are bigger entertainment producers, like movies or theme parks. However, this also means that bowling alleys can be more integral to their community and more involved in community-building, which generates customer loyalty.
In some local families, the appeal of bowling is self-evident – it is a family activity they have always done together, enjoyed, and will continue playing all of their lives. For some, bowling is completely foreign – they have heard of it, but never done it. And for some younger people, bowling is an “old folks” thing, like bell bottomed jeans – they may occasionally indulge in it, and have a good time, but with the same sense of irony and self-mockery that infuses today’s fashion trends.
Bowl Weevil customers can be divided into four groups: bowling leaguers, families with young children, youths, and seniors.
Bowling Leaguers:
New customers are likely to be introduced to Bowl Weevil by friends or through a community organization which decides to sponsor a team.
Families with Young Children:
This group is seeking inexpensive fun for the whole family, where age and experience (or lack thereof) are not hurdles to enjoying the outing. Bowling in a safe, clean, family-friendly environment will be infinitely preferable for these families to sitting through yet another Winnie-the-Pooh video or going to an unkempt local park.
Youths:
This segment will be interested in finding a fun place where they can spend time outside of the house with people their age. We are located only four blocks from the local high school, and our kitchen will open at 3pm, to offer these growing kids satisfying after-school snacks in a safe, supervised activity of which their parents will approve.
Seniors:
These clients are on a limited income and will come to Bowl Weevil for the prices. Senior discounts will play a large role in our marketing to seniors.
Market Segmentation:
The following table and chart show our market analysis. We have included analysis for each of the four market segments we will target: bowling leaguers, families with children, youths, and seniors.
Bowling Leaguers:
There are currently 3,000 local residents who have participated in some form of league bowling in the last five years (Anytown newspaper, November 2004). The 25% growth rate is projected based on the expressed interest of local league bowlers, their claims that their friends would join the league if they didn’t have to travel so far for games, and our aggressive planned marketing campaigns.
Families with Young Children:
There are currently around 6,000 families in Anytown with children under 12; that population is expected to grow at a 5% rate for the next ten years (U.S. Census, 2000). Altogether, these families include roughly 24,000 people, but our special family rates make it more reasonable for us to treat them here as individual family units, rather than independent residents.
Youths:
We define youths as customers between the ages of 13 and 20, old enough to have some spending money and to bowl without parental supervision, but not old enough to be admitted to the bar section. This target market segment is growing at the same rate as young families, at 5% per year.
Seniors:
We define this group as sixty-two years or older. This group is currently growing faster than the general population, at 6% per year, and their concerns and interests are already modifying what entertainment and education is offered in Anytown. They will contribute a consistent customer base to the bowling league, as well as coming in on their own to practice.
Market Analysis:
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Bowling Leaguers 25% 3,000 3,750 4,688 5,860 7,325 25.00%
Families with young children 5% 6,000 6,300 6,615 6,946 7,293 5.00%
Youths 5% 10,000 10,500 11,025 11,576 12,155 5.00%
Seniors 6% 13,000 13,780 14,607 15,483 16,412 6.00%
Total 7.78% 32,000 34,330 36,935 39,865 43,185 7.78%
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