Key Numbers for your Adventure Business – Break Even

 Business Planning  Comments Off on Key Numbers for your Adventure Business – Break Even
Sep 222016
 

As you grow your business, there are several metrics you should be tracking to see how your business is doing. Here is one that is important to know:

Break Even

Break Even is the point where your business begins to make a profit. In the adventure business world, we typically use the number of visitors as the defining break even point. In other words, we need X number of people to come to our aerial park before we start making a profit. Here is an example of a break even chart and graph.

break-even-example

There are three elements to calculating your break even number. The first is your fixed cost. Fixed cost is the money you spend per year whether you are open for business or not and includes things like management salaries, utilities, marketing, and so forth. The number used is the yearly total of all of your fixed costs.

The second number is your variable costs. These are the costs that fluctuate as you get more guests. These can include liability insurance, guide or monitor pay, credit card service fees, etc. Variable costs are represented as the total cost per visitor.

The last number is the unit price. This is the average price you are charging for each participant. Be sure to calculate any discounts or childrens ticket prices into your figure.

As you look at the graph above, the point at which you start making a profit is where the revenue line (green) crosses the fixed plus variable cost line (blue). So in this example, with an average ticket price of $47, we would need about 13,000 visitors to break even.

Break Even is an important number to know for any Feasibility Study or Business Plan!

 

How feasible is your new adventure business?

 Adventure Parks, Business Planning, Zip Lines  Comments Off on How feasible is your new adventure business?
Aug 182014
 

2014-06-26 11.13.27

One of the most common questions that we get from prospective clients is whether or not their new business will be profitable. Most potential business owners want us to come to their site, evaluate their business model, check out the land, scope out the competition, crunch some numbers and give them a 100% thumbs up or thumbs down.

Easy, right?

Well…it’s not always that simple. There are a variety of factors that we take into account, any of which could be a make-or-break for the business. What we have done is devise a point-based system that will help determine the success of your business (and no, no one has ever scored a perfect 100%!)

Here are some of the factors that we look at, and questions that any new business owner, whether it is a zip line tour, aerial adventure park, climbing gym, or some other type of adventure business should be asking:

  • How far away is your land from the nearest population or tourist center?
  • How much space does the land have for your proposed attraction, and for future expansion?
  • Is the land currently zoned for commercial use?
  • Does your management team have adventure business management experience? What about other business management experience?
  • Who else do you plan to have on your team, and how much relevant experience do they have?
  • Is your project already capitalized or do you need investors? If so, are the investors already in place?
  • How much of a financial cushion does the business owner have? Are you able to go several months without generating revenue?
  • Who is your target market and where are they coming from?
  • Who are your competitors, and how high-quality are their services compared to your projected business?

If you see a question that you are not sure how to answer, or if you want to know your feasibility score, contact us at (888) 553-0167 or email us at info@strategic-adventures.com to learn more.

We look forward to hearing about your new projects!

http://www.strategic-adventures.com/content/feasibility-studies

If you build it…

 Marketing  Comments Off on If you build it…
Aug 122013
 

The phrase “If you build it, they will come” seems to be the mindset of many adventure operators. Perhaps it’s only true if you’re building a baseball diamond in a cornfield, because it sure doesn’t work for most other ventures. Marketing tends to be one of the first items to be cut when money starts running short, either at the construction phase or during the first year of operations usually.  And it will cripple your business.

So how much should you be spending on your marketing efforts? Financially speaking, 10-15% of your annual operating budget. Minimum! Time wise you should be spending 40-50% of your work day on marketing efforts. That includes testing and measuring the results of your current marketing tactics. If you see a positive return on your investment for a particular tactic, do more of it. If you don’t, do less of it or stop it all together.

Your marketing budget should be an untouchable amount as you grow your business. Unless you decide to do more of it…

Facilitated Growth

 Business Planning, Marketing  Comments Off on Facilitated Growth
Apr 082013
 

My wife Michelle and I have put together a unique training opportunity that we are hosting in Golden , Colorado April 18th and 19th and we would love for you to join us! Here’s what we’ve put together:

The Business Development Track by Paul Cummings includes:

1. Marketing the Experience – We all know that marketing is important, but how do we find the time for it amidst everything else that we have going on? This session will explore tools and techniques to help you communicate your message more effectively, and to the right people. The techniques that you learn will ultimately help save you time and money by spending those valuable marketing dollars in the best way possible.

2. Selling the Experience – If you run a business, chances are you already have some sales experience. Do you have a process in place, or are you just “winging it?” Come learn how to develop a real sales process that yields long-term clients, and find out what is the most common “make or break” for businesses.

3. Starting your own Business – What does it take to start your own business? What are the common pitfalls and less known obstacles to creating a successful venture? I’ll show you!

4. Growing your Business – Whether you are running a successful operation or struggling to make a profit, chances are your business could use a bit of fine-tuning. This interactive discussion will target the areas of your business that most need adjusting so that you leave feeling well-equipped to make the changes you need, and take your business to the next level.

Maximum of 20 people in each session.

The Group Experience Track by Michelle Cummings includes:

1. Awesome Icebreakers & Energizers- Come prepared to play and learn a ton of interactive activities in this action packed workshop. The adventure based activities are suitable to share with groups ages 12 and above and group sizes of 4 to 50+ participants. Activities that keep your group meaningfully active and engaged throughout their experience. They can be used together or to break up the day. Build your bag of tricks in this action packed workshop.

2. Effective Debriefing Tools and Techniques- Are you good at the games but not so good at the debrief? Do you ask questions and get blank stares from your participants? This workshop will focus on 10+ effective debriefing tools that are simple and easy to use. We will discuss nine different techniques for processing to help liven up your debriefing circles. Learn simple and effective ways to process experiences so they relate to real life and future learning. In this interactive workshop participants will experiment with an interesting array of prop based methods that lead to metaphorically rich reflection. These tools from the book “A Teachable Moment” are easy to duplicate or make on your own.

3. Conflict Resolution/Bullying Prevention- Walk out of this workshop with a variety of tools and techniques for dealing with conflict, bullying and discipline issues. Apply your learning immediately to help your participants understand that through collaboration, encouragement and an appreciation of differences in one another’s lives we can defuse tense situations and de-escalate conflict.

4. Best Problems Solving & Communication Activities- Michelle’s most favorite activities and new ideas!

Maximum of 80 people per session.

Specifics can be found on the Training Wheels site at the following link: Facilitated Growth

We hope you can join us!

 

Paul

 

The Importance of a Business Model

 Adventure Parks, Business Planning, Value, Zip Lines  Comments Off on The Importance of a Business Model
Mar 202013
 

It’s no secret that one of my favorite shows on television is Shark Tank. My other favorite is Hell’s Kitchen, but that’s a different blog post… On Shark Tank, business owners present their companies and ideas to a panel of successful investors by doing a quick 3 minute presentation before the “Sharks” start asking questions.

The first question is almost always “what are your sales so far?” In other words, are people buying what you are selling? If the answer to that question is a very low number, the sharks ask why no one is buying yet. If the answer is a large number, the sharks will wonder why the business owner is seeking more funding. What they are really trying to discover is what business model the owners are using. How is the business engaging clients and making money?

A business model as several key components that you must consider whether you are starting a new business or looking to grow an existing one. They include:

  • Your Target Market
  • Your Value Proposition
  • Sales Channels
  • Client Engagement Strategies
  • Key Activities of the Business
  • Key Partnerships
  • Key Resources
  • The Cost Structure
  • and Revenue Streams

If one of these components are missing from your business plan or strategic plan, you are not going to be as successful as you could be. One recent contestant on the show recently stated to the sharks when they asked about her business model “We don’t have a business model, we’re making this up as we go!” It should be very telling that all of the sharks lost interest the second that came out of her mouth.

What is your business model? Could you explain it to someone in a few minutes?

Paul

(My 10 year old typically watches the show with me. Last week I had missed the intro of one of the presentations and I asked him what was going on with the proposal. He replied “He’s been in business for six weeks, has $10,000 in sales and is giving his company a valuation of $500,000. I think he’s going home disappointed.” That’s my boy!)

http://www.strategic-adventures.com/content/business-plans

4 things investors want to see in your zip line business plan

 Adventure Parks, Business Planning, Zip Lines  Comments Off on 4 things investors want to see in your zip line business plan
Jan 222013
 

When you are writing your business plan, or having someone write it for you there are four key elements that you want to be sure are detailed in your plan. If investors don’t see all four of these elements, your chances of being funded are greatly diminished.
1. Detailed Financials – This should go without saying, and yet it is surprising how many plans we see here at Strategic Adventures that have minimal financial data. You need at minimum a Profit and Loss Statement, a Balance Sheet, Cash Flow Statement, industry related Business Ratios, and a detailed Start Up Cost Analysis. You should also be prepared to have your personal financial statements and tax returns reviewed.
2. A Business System – Investors also want to see that you have a well thought out method of operating. How are you going to run the day to day business? What marketing tools will you be implementing? Who is responsible for doing what in your business?
3. Experience – You need to show that you and/or your partners have experience in either running a business or in the industry you’ll be operating, preferably both. It may be time to brush up that resume!
4. Skin in the game – What level of financial commitment are you personally making in the new business? Investors don’t want to be in the position of holding all of the responsibility if the business hits a rough patch. They want to be sure that you won’t just walk away!

So as you’re preparing to make your plan or if you think you are ready to present a plan you’ve written, be sure you are covering the above points in as much detail as possible.

Paul

P.S. Are you getting a bit overwhelmed with writing a plan on your own? We can help! Call our office today at 1-888-553-0167 for a no cost consultation.

http://www.strategic-adventures.com/content/business-plans

Dec 052012
 

Every day, I see marketing for the biggest, fastest, longest, blah blah blah zip line tour. And it’s all crap.

Why? Because that’s why people come the first time, but has zero relevance on whether they come back. If you want a zip line tour that is successful for the long term, you NEED people to come back and what gets them back is your quality of service coupled with how accurately your tour is presented in your marketing.

Case in point: I was developing a feasibility study for a client and had to go ride the competing tours in the area. I know, I suffer for my craft… Anyway, the first tour I visit said on their web site that they had the only tour in the area with zero hand braking. Intrigued, I booked my tour. Upon arriving at their office I signed my liability waiver. As I handed it to the check in person they loudly proclaimed “First to sign, first to die!” I was stunned. If I hadn’t been “undercover” I would have let loose on this unsuspecting individual. However, I kept quiet and waited for the rest of our tour group to finish signing their lives away.

On to the course! As with most tours, we start on a short training line to get everyone ready to tackle the longer lines. Now, guess what they show us how to do… Hand Brake! And not only do they show us how, they proceed to tell us that it is required for every single one of their 12 lines. Major disappointment.

From there I witness many other gaffes:

  • Guides not clipping in on platforms
  • Duct tape being used to finish cable ends
  • More jokes about safety and the impending doom of each rider
  • and many others…
  • All told, one of the worst experiences I’ve had on a zip line/canopy tour. Now hopefully I’m not describing your course! However, take a look at your marketing and see how it compares to the actual experience. It may be worthwhile to hire a secret shopper or two and get some solid feedback to see how your business is or isn’t attracting repeat business.

    Paul

    Perspective

     Photography, Project Management, Zip Lines  Comments Off on Perspective
    Nov 192012
     

    I was having a wonderful conversation with a fellow photographer the other day and we were discussing how our perception of our surroundings have changed since we started our journeys as photographers. How we notice the changes of color in the clouds as the sun rises and sets in the sky, and know how long the color will last (20 minutes at most…) How the right angle can make a rather boring scene more interesting. How leaving an element out of a photograph can have more impact than having it in.

    I was brought back to this conversation this morning as I was reviewing some financials for a client. They have been struggling a bit with their profitability and hired us to do some investigative work for them to see what might be the cause. Just as I was getting ready to close the file, a number hit me as out of place. There it was, just like the moment when the lighting is just right for a photograph, I knew I found what I was looking for.

    Just as a rock climber cannot look at a cliff without trying to figure out a route, or a cyclist cannot drive up a hill without imagining the ride, you have a unique perspective in your work and your hobbies. That perspective helps you do whatever it is that you do better. How has your perspective changed as a result of your experience?

    Paul

    Jun 272012
     

    Recently I guest wrote a newsletter article for the Training Wheels newsletter and offered to answer some business questions from their readers. The response was so good that I want to offer the same thing to our readers here. Here was the first question I received:

    Hi Paul,
    For the last 5 years we’ve being focusing a service and we’ve done pretty well, but I feel we might be missing something. What different strategies should we consider when selling a service versus selling a product?
     -Graham
    Graham, that’s a great question!
    The first thing to know is that a service sale typically has a longer sales process than a product sale does, unless you are needing to have a plumber come and fix a leek or some other emergency service. It is important to be able to talk to the individual who is looking at your service. Most services aren’t purchased with the click of a mouse! Which means you have to have a way to get him to contact you, such as a website with copy written to get the prospective client interested enough to call or email you.
    Often the biggest mistake that a service provider will make is not being descriptive enough about the service in their marketing material. If the phrase “custom designed” is on your webpage and you aren’t selling furniture, odds are that you aren’t selling much of your service either.
    So now readers, what else do you see as the difference between products and services? Comment away!
    Also if you have a business question for us, shoot me an email! paul@strategic-adventures.com
    Paul

    The 4 things every business owner must know – Parts 3 & 4

     Marketing, Value  Comments Off on The 4 things every business owner must know – Parts 3 & 4
    Jun 142012
     

    #3

    You must communicate the idea of an Ideal Client Relationship. What is an Ideal Client Relationship (ICR)? Well, it’s different for everybody. It consists of a series of behaviors that you want your best clients to exhibit in their relationship with you. Think of the way that your very best clients interact with you. These interactions are the basis of ICR.

    Here is our ICR behavior list for Strategic Adventures:

    • They see the value of a long term engagement with us
    • They provide us with a testimonial
    • They follow our advice and recommendations
    • They experience a measurable outcome
    • They use us multiple times for different services
    • They respond to proposals in a timely manner
    • And they refer others to us

    Now, I have yet to have a client fall into my lap that did all of these automatically. It would be nice if the world worked that way. So how do we get clients to start behaving this way? We let them know that this kind of relationship is possible.

    Ultimately, the responsibility is on you. You have to make the relationship happen, it is a two way street after all. Let use the our second ICR characteristic as an example: They provide us with a testimonial. In order to get a testimonial you have to do at least two things.

    1. You have to do great work for your client that is worthy of a testimonial

    2. And you have to ask your clients for the testimonial.

    You have to do the work to get ICR’s.

    #4

    You must communicate the possibility of an ICR with the Qualified Prospects we identified in #2. That’s all there is to it!

     

    What are your ICR characteristics and how are you communicating them?

     

    Paul

    http://www.strategic-adventures.com/content/business-plans

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