05 Mar Sightseeing Bus Tours Business Plan

The Company

Double Decker Tours of Washington, LLC, located in Washington, DC, is a young sightseeing company. The company is trying to fill a gap in the local sightseeing tours market. There is a gap in quality and reasonably priced sightseeing tours that depart from the capital, which could indicate that a new tour company could take advantage of this market.

The Company’s Mission

Double Decker Tours Washington has the mission to offer safe, reliable, and enjoyable sightseeing tours to Washington, DC. The buses are double-decker buses from London. Nine of the buses will be open top for sunny warm and beautiful days and three will be closed for cold and inclement weather.

Products and Services

DDTOW will provide daily sightseeing tours and charter services in Washington, DC. We will be visiting the White House and Capitol Buildings, Supreme Court, Senate Office Buildings as well as House Office Buildings as well as Museums, Library of Congress, Adams Morgan and other locations that make up the city.

Sales and Marketing Strategy

DDTOW is going to spread the message that travelling with us can be fun. Comcast Cable System, Washington will be our platform to promote our message. We also host parties and events for key decision makers in tour associations and media. Pre-opening marketing budget is $80,000 As we earn, we will spend 1% of our gross revenues on marketing and advertising. Survey cards will be distributed to help us assess and correct any mistakes.

The Competition

Our main competitors are:

1. Tourmobile: Tourmobile’s headquarters is at East Potomac Park. The National Park Service has granted Tourmobile permission to take tourists on sightseeing tours in Arlington National Cemetary and along the National Mall. Tourmobile uses a shuttle service employing 85-passenger trams along the Mall and 120-passenger trams in Arlington. They’ve been in business for more 25 years. Tourmobile was founded as a Universal Studios affiliate in 1969 to provide interpretive service along the National Mall. Tourmobile, Inc., was founded by Tom Mack and became a Washington DC owned company. Tourmobile is home to over 42 vehicles, and it serves close to 2 million riders annually.
2. Historic Tours of America (HTA) operates in Washington under the Old Town Trolley, DC Ducks and as the Old Town Trolley. HTA is a nationwide company that has outlets all over the country. HTA, just like Tourmobile uses a shuttle to transport its passengers. They use 35-60-passenger trolleys.
3. Grayline International – Grayline International is a global business with offices and tours throughout the world. Grayline contracts out its services to local bus lines and runs multiple tours. Grayline provides Washington’s Lil Red Trolley.
4. Zohery Tours. Zohery Tours is an local company that operates vans with 15 passengers and coach buses with 45 passengers. Zohery tours take approximately three hours.

Target Market

Recent Washington Convention and Tourism Corporation statistics showed that 17.6 Million people visited Washington, DC and spent over $10 Billion dollars. $4 billion of this was on sightseeing and other tourism-related activities. Although overnight leisure travel increased significantly while day-trip volume was down, the good news was that average trip expenditures increased to levels of $480 per day per trip. Many of the trips that were made to the city centered around visiting historical places and museums (36%) and shopping (24%). As a result, 36% were solo travelers, compared to 88% of business travelers. 23% of leisure travellers came with their children, as opposed to 6% in business travel. Many of our visitors were over 75K in income, married, had no kids, and held advanced degrees. The number of foreign tourists visiting Washington fell by 19% in 2003 and 14% in 2002, respectively. However, Washington is now ranked 8th among US destinations for foreign tourists.

Management

Michael Frank Coleman* serves as member manager. He is a member manager.

Extensive experience in Washington’s sightseeing industry. He worked for Tourmobile as well as leading walking tours. Mr. Coleman has a knack for recognizing opportunities and developing staff members to take advantage of those situations. Coleman will create a team made up of tour professionals who can oversee the operation and market our services.

Paul F. Williams*, a business development manager for DDTOW, has more than 30 years of experience in international and privately-owned business development.

*Confidential and proprietary resume data has been omitted from this sample plan.

Operation

Tickets sales and boarding of buses will be done at the MCI Center at 601 F Street. This site gives us great foot traffic in the heart of the entertainment district as well as ample parking and public transportation access. The buses will be stored and serviced by Peter Pan Bus Service in Tuxedo, Maryland thereby reducing staff cost and insuring top notch services for our customers. Administrative offices will be located at a small office on Third Street, Northeast Washington.

Financial

Double Decker Tours of Washington, LLC, which is based on research and projections, has revenues of more than $14 million in its first year of operation. It uses 15 double-decker buses in London and select routes throughout the city. These sales figures represent 453,000 potential customers out of a potential 22 million customer base. With additional advertising and expanded tours, second year revenues are expected exceed $17million to serve over 500,000 customers. DDTOW has the potential to grow faster due to new memorials and other venues opening in Washington. The demand for tours in DDTOW’s target market will be sufficient to support DDTOW’s expected market share. These sales levels will yield net profits totalling $13 million in DDTOW’s first operational year, and $15 millions in year 2. Net profits in year one will be over 60% of sales and will maintain that level in year two. The due diligence package includes a company’s long term plan. Cash will be burned the first few months of operation (see the Start up table in this document). Revenue can then begin. This is due in part to the regulatory and organizational requirements of new tour operators, but aggressive marketing can make up for it.

Long-Term Development & Exit Plan

Goals

With the help of double-decker buses and new routes, we will be able to expand over the next five decades into a major regional player. Our goal is to establish a reputation of safety, quality and enjoyment that will make us the top-rated tour operator in Washington.

Milestones

We will closely monitor sales and profit after our service begins. We will continue to look for new markets, if we achieve our goals by year two.

Risk Evaluation

Risk is inherent in any new venture. Our success depends on how well our new buses and tours are received. After year one, we anticipate a lot from the established tour operators joining forces against us.

Exit Strategy

DDTOW would love to expand its reach into the Baltimore and Richmond markets, Atlanta, Miami, and Atlanta over the next ten-years. We may consider buying out a larger Sightseeing/Tour operator, or selling to a new buyer.

Funds Sought and Utilization

DDTOW seeks financing in the form a 5-year loan of $800,000. In decreasing value, most of the expected start-up cost are allocated to these areas:

1. You can purchase twelve double-decker London-style, 70-passenger sightseeing buses. Nine of the open-top sightseeing buses are for sunny days or nights. Three of them are for cold weather.
2. Provisions for sufficient cash reserves to cover the operating costs of the buses within the first 3 months.
3. Costs associated with recruiting, training, and paying operational crews.

The following chart shows highlights of our first three year business plan.

1.1 Objectives

Double Decker Tours Washington’s primary objectives will include the following:

• A new tour company to be established and operated that tours the monuments, memorials and museums of the capital as well as historic neighborhoods far from the city centre.
• To develop an organizational and marketing plan that will achieve a load per bus of 65 to 85 percent depending on season. Then, increase it to 75 percent-100 percent. This will maximize revenue and return-on-investment while reducing risks.
• To generate revenues of around $14 million within our first year of operation, and more than $20 million by the end of our third year. Also to expand into newer markets in the Baltimore-Washington corridor.
• To realize net operating profits between 60-70% within the first twelve months of tour operations, and steady growth that allows for rational expansion.
• To achieve these results, twelve 70-passenger London Doubledecker buses were purchased in Washington to serve the touring public. As demand grows, the fleet was gradually expanded.
• To gear operations and present professionalism, serenity, and growth-oriented images from the outset. This will set up the conditions for a rational, planned expansion.
• As an element critical to achieving DDTOW’s other key objectives, to identify and develop strategic alliances through the DC Chamber of Commerce, the Greater Washington Board of Trade, the Washington Convention and Tourism Corporation and other Washington associations and tourism groups.

1.2 Keys to Success

In descending order of importance, the five critical keys to success for Double Decker Tours of Washington are:

• The use of a highly qualified, experienced management team that combines vision and realism with financial ability; solid knowledge about Washington’s tourism/sightseeing market; familiarity in and belief regarding the benefits and utilization of the most recent computer information technologies; the realization of the vital importance of personnel for an organization’s success; and a total commitment towards the overall mission and objectives of Double Decker Tours.
• Marketing that is intelligent, proactive, and aggressive identifies the company’s unique brand as a different player. A company that is sharper, smarter, and has a higher operational standard and professional level than is typical in the Washington area. Concentration on safety, with highly trained, dedicated, and professional personnel, caring for the customer and the customer’s needs and straightforward, understandable fare pricing will form key pillars of the marketing strategy.
• Through thorough market research, identification of unseen or underserved routes in the area that may be of value to our customers will help us create high load factors for profitable operations and increase revenue.
• You will have the opportunity to use a fleet London-style doubledecker coaches that provide a panoramic view of the city and offer high levels of comfort and safety.
• Information technology can be used to reduce operational costs and staffing, expand the market base, capture sales opportunities quickly, and improve customer convenience and satisfaction.

1.3 Mission

Double Decker Tours of Washington, LLC aims to offer safe, professional, and affordable sightseeing services to all of its customers. We aim to fill a gap in Washington’s sightseeing market. Our goal is to show the most popular sites and highlight those that are well-known to millions of tourists. We will operate and maintain the best fleet of buses available and we will never skimp on safety or customer service. We will continue to promote and offer fun tours

so that when the customer leaves us, they will remember the good time they had and recommend us to a friend or relative. From the moment we meet until the time they leave, we will offer friendly and courteous service.

DDTOW will be leading other companies and setting the bar high with clean buses, courteous and informative driver guides, and outstanding customer service.