Go Karting Business Plan 61306f

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Business Analysis Go Karting in association with a Family Entertainment Centre is a highly profitable industry that has been growing rapidly over the past few years in India. We plan to open a Go Karting Circuit along with a Cafe and a Family Entertainment Centre in the city of Kolkata. Due to the current lack of a proper Go Karting Course in the city, we feel that the time is ripe and the city is ready to experience the pleasures of ‘Kart County’. We will primarily provide two kinds of Go-Karting services in the form of Pro Karts Family Karts while we will have a fully operational Cafe to cater to all of the refreshment needs of our customers and a Family Entertainment Centre to ensure our customers have a good time outside the Karting Circuit. We believe that the amalgamation of the thrill of the Go Karts, the delight of our Family Entertainment Centre and the culinary delicacies of our Cafe will ensure our customers will keep coming back for more.

Market Analysis

The Go-Karting industry in India has taken off in the last 8 years with multiple Go-Karting Circuits opening up over 13 cities across the country. Kolkata has lacked a Go-Karting Circuit for the last five years and we hope that ‘Kart County’ can satiate the demand. The Target Market for our venture will range from teenagers to adults but we will primarily try to attract individuals between the ages of 15-35. The only direct competition we face in regard to the services we provide is the Go-Karting Circuit at Nicco Park but we believe that ‘Kart County’ will strive regardless of our competition due to the holistic experience we provide as a business. There are also various Family Entertainment Centres like Smaash, Super Bowl and Nicco Park that provide ancillary competition and coupled with the services ‘Kart County’ will provide we believe that the entire family entertainment industry will grow as a whole. Cross marketing with any or all of these businesses in Kolkata is not only very likely, but extremely desirable. The city’s development as a family destination for an enjoyable day outing will only benefit from the addition of a top-notch Go-Karting Circuit like ‘Kart County’.

Operating Plan ‘Kart County’ will be located in an unused factory in Tangra which is located before ITC Sonar and Science City.‘Suraj Constructions’ has been contracted to provide design and construction management expertise. In this capacity, they will be responsible for the overall site plan, including parking design, clubhouse architecture, landscaping, septic and drainage issues, and presentation of the site plan for the Planning Board, Government of WB, they will bring together the experts they need in order to develop a well-integrated plan that allows for future growth potential. ‘Suraj Constructions’ is working closely with Premier Amusement Developers on placement and requirements of the go-kart track in the overall site plan. Once Planning Board Approval is received, ‘Suraj Constructions’ will begin the construction phase of the project. They will be responsible for the coordination of all subcontractors on the project and ensuring that the project remains on schedule and on budget. Regular reviews of the project during the design and construction phases will be conducted. We will purchase Insurance to mitigate the risk of any damages that may occur in the future. In addition to this we will initiate a mandatory rule for all participants of Go Karting that they must sign a consent form and a liability waiver before they partake in the Go Karting course. The operation will run for 12 hours per day on weekends and holidays while for weekdays it will run for 10 hours per day. Timings will be altered to suit the demand on special occasions and holidays. The following is a summary of our Operations and Maintenance Schedule for the Go Karts: Daily: a) Check the lubrication oil in the sump. Tap up necessary. Keep the fuel tank full. The tank should be fitted in completely with clean petrol at the end of the day’s work. b) Check the tyre pressure. The pressure must be at least 18 psi. c) Clean the engine at the end of day’s work, if there are any leakages, dust will collect at the leaky spots during next day work. Such leakages should be attended properly. Every 50 kms: a) Inspect fuel lines, throttle operation, brake shoe, wheels and tyres, etc. b) Adjust throttle operation, carburetor, valve clearance, etc. c) Clean the carburetor, air cleaner, spark plug, etc.

Every 250 kms a)

Lubricate the braking system.

b)

Check all bolts and nuts.

Every 500 kms: Replace fuel filter Every 750 kms: Thoroughly clean out the fuel tank and refill fresh fuel. Knock out soot from the exhaust silencer.
 Remove the cylinder head and de-carbonize. Every 1000 kms: Adjust carburetor Replace spark plug.

The following table compares various Go Karting businesses throughout India and shows us how Kart County will be uber competitive in regard to it prices: Kart County

SMAAASH (Mumbai)

Hydrabad Go Karting

Grips Go Karting (Bangalore)

Guargoan Go Karting

WEEKDAY CHARGES

350

600

500

540

500

WEEKEND CHARGES

500

800

600

BASIS OF DISTINCTI ON

600

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The above circuit is a prospective model of the circuit we intend on having for Kart County.

Marketing Plan

Children (below 13) Adults (18 & Above)

Teenagers (13-18)

13%

25% ! 63%

‘Pongo’ is a mascot that will be part of much of the marketing of the facility. He will appear on the sign, ments, website, shirts, and company literature. Pongo our mascot will be the centrepiece for our marketing campaign. Marketing for ‘Kart County’ can be thought of broadly in three segments: 1. Awareness of the facility. 2. Special Events and Promotions. 3. Social Media Promotions.

Awareness of the Facility Evenings and weekends, when the utilization of the facility will be at its highest (often at 100% utilization) is the purpose of this marketing effort. This is the time that will be largely filled by people coming in with families to enjoy an hour of quality family time, and to get outdoors. In order to drive up utilization during these hours, the direct population in the city and must be aware of its existence. This will primarily be accomplished through newspaper ments in local papers. In addition, radio ments and the distribution of pamphlets will also be used. This will be most important during the first season. Once people know of the existence of the center, this advertising will turn into a reminder that the center is available and what activities are offered. In addition to the targeted advertising, other campaigns will include money off coupons that will be made readily available through a number of outlets: cross marketing with area

businesses and attractions, newspaper coupons, restaurants, cafe’s, internet websites like coupondunya.com, etc. A Grand Opening event is part of the package that ‘Kart County’ provides. This event is specifically designed to raise awareness of the facility immediately. Once again, this marketing program is intended to maximize the course utilization during the hours that will normally be very busy: weekday evenings and weekends. Most of the money for this type of marketing will be spend during the early part of the season and taper down over the length of the season.

Special Events and Promotions

The truly successful businesses know that the key is to maximize the utilization of the facility during the normally slower periods. This is essential Monday through Friday from 10am until 4pm (tourist markets will have different peak and slow periods). The amount of utilization during these 30 hours per week can be the difference between a nicely profitable business and a tremendously profitable business. The industry experiences about a 35% utilization over a full season and many operators do not promote these slower period hours as much as they should. ‘Kart County’ marketing will look extensively at increasing the course utilization during these key hours. While awareness and reminders that the facility exists is important, it becomes less so as time goes on. This type of marketing, on the other hand, will always be very important. We are planning a number of segments to this marketing. We will carefully observe the effectiveness of each program and change or replace as necessary. Some of the initial concepts are: • Birthday Parties: Busy parents have little time to organize parties for their children, but there is a great deal of peer-pressure to have fun, exciting parties. ‘Kart County’ will offer an all-inclusive party package that will relieve the parents of this burden while making a special day for their child and friends. A Party Coordinator will ensure that all the children have fun and the event proceeds smoothly. • Corporate outings: Many companies have summer outings for their employees to show their appreciation. While large companies tend to do large events, like renting out an amusement park for a day, small and mid-sized companies have fewer options. ‘Kart County’ will do a direct mail campaign to area businesses and offer the facility for such occasions. These will be worked out on a case-by-case basis, but will essentially allow a company to have full use of the facility for a Thursday afternoon

outing. They would have exclusive use of it from noon until 4pm. The party may be catered. We would work out a flat-fee arrangement with the company for such an event. • Cross-marketing with area businesses: There are several businesses in the immediate area that offer additional target market oriented products and services. It is believed that ‘Kart County’ will not steal sales from these businesses, but in fact will enhance them. The area will become a target market destination, where people can spend a full day enjoying the outdoors. We will look to work with these other businesses and provide cross-marketing opportunities; free games, dollar-off coupons and the like. • Special Events: From time to time, a special event may be held. One such event already planned is Christmas in July. For a 10-day period in July, ‘Kart County’ will be all decked out in Christmas decorations and lights. This will make enough of a difference that people will be interested in playing again if they had already played earlier in the season. Repeat business is important, and events such as this will help ensure that.

Social Media Promotions We will utilize various tools from Social Media to promote ‘Kart County’. Marketing campaigns will be conducted through Facebook, Twitter and Instagram to entice people to come and try out the next big thing in the City. We will also have quizzes on facebook and Twitter where we shall give out vouchers which can be used at ‘Kart County’ to the winners of the quiz. We will initiate a tie up with Red Bull and the Budh International Circuit to promote our venture on their social media sites. It is believed that these types of promotions will help increase the utilization of the facility during the normally slower periods. If even marginally successful, ‘Kart County’ should enjoy a very high average season utilization.

Financial Summary

The total investment required to start ‘Kart County and run it for a year is approximately 1,74,25,000. This includes site purchase, site design and construction, Go-Karting course design and build, equipment purchase, and working capital. The financing for the initial startup costs will come from Private Investors (20%) and from commercial bank financing

(loan 80%). A new worth and collateral statement that will be offered by the ‘Kart County’ to secure the bank financing will be explained in the detailed summary. The projected Return on Investment (ROI) of more than 27% during each of the first three years clearly warrants this level of overall investment. Additional activities in subsequent years will be financed from operations.

SWOT Analysis Strengths – Our strengths lie in practically having no direct competition in the go karting market. Having our circuit centrally located ensures that it is feasible for people from all parts of the city to come and enjoy the pleasures of ‘Kart County’. Our maintenance costs over the long term will be minimal while our Return on Investment (ROI) will be substancial over the long term and will cover our initial investment in the next 8-12 years depending on the popularity of our venture. Weaknesses – The only major stumbling block is the heavy initial investment expenditure but with an innovative business model we believe that we can end making this venture successful in the years to come. Opportunities – With the substantial growth of our local environment with the coming up of new projects like the JW Marriott Hotel and ITC Sonar II will ensure that due to our location we will have a head start in comparison to our direct and ancillary competition. We can also strike at the underutilized market for family entertainment in the city to ensure that this market grows in the future. Threats – Our biggest threat is the practical experience and brand value of a well established company like ‘Smaash’ which has recently opened an outlet in the city for family entertainment and is looking to expand its business operations with the inclusion of GoKarting.