Businnes Plan

Sightseeing Bus Tours Business Plan


Sightseeing Bus Tours Business Plan



The Company

Double Decker Tours of Washington, LLC, (DDTOW) is a brand new sightseeing company that has just begun its operations. The company is trying to fill a gap in the local sightseeing tours market. The gap exists in high quality, reasonably-priced sightseeing trips in the nation&#8217s capital, away from the center of the city. This indicates that a new entrant to the market could be expected.


The Company’s Mission

Double Decker Tours of Washington’s mission is to provide safe, reliable and fun sightseeing tours to the visitors of Washington, DC using London-style double-decker buses. Three of the buses are closed to inclement and cold weather. Nine of the buses will open their tops for sunny and warm days.


Product and Services

DDTOW will offer daily sightseeing tours and charter service in Washington DC. We will visit the White House, Capitol Building and Supreme Court, Senate Office Buildings, House Office Buildings and Museums, Library of Congress, Adams Morgan, Catholic University, and other important sites in the city.


Sales and Marketing Strategy

DDTOW is going to spread the message that travelling with us can be fun. Comcast Cable System is our first platform for promoting our message. In the Washington region, we also plan to host parties for tour association decision makers as well as media. We expect to spend $80,000 on marketing before the opening. As we earn, we will spend 1% of our gross revenues on marketing and advertising. We will also distribute survey cards to assess what we are doing right and identify what we are doing wrong.


The Competition

We are the main competitor in Washington’s sightseeing market.

  1. Tourmobile: Tourmobile is located at East Potomac Park. It is authorized to offer sightseeing tours along Arlington National Cemetary’s National Mall. Tourmobile has a shuttle service which uses 120-passenger trams in Arlington and 85-passenger Trams on the Mall. They’ve been in business for more 25 years. Tourmobile, Inc. was founded in 1969 by Universal Studios as a subsidiary. They provide interpretive services along National Mall. Tourmobile, Inc., a Washington DC-based company, was purchased by Tom Mack in 1981. Tourmobile has over 42 vehicles and serves upwards of 2 million riders annually.
  2. Historic Tours of America: HTA operates in Washington as the Old Town Trolley and DC Ducks. HTA operates in all 50 states. HTA is similar to Tourmobile and uses a shuttle for passengers. The trolleys can carry 35-60 people.
  3. Grayline International: Grayline International has offices and tours worldwide. Grayline contracts out its services to local bus lines and runs multiple tours. Grayline runs the Lil Red Trolley as its service in Washington.
  4. Zohery Tours: Zohery Tours, a local company, operates 15-passenger vans as well as 45-passenger coach busses. Zohery tours take approximately three hours.


Target Market

In recent Washington Convention and Tourism Corporation figures, it showed that 17.6 million people came to visit Washington, DC, spending over $10 billion dollars; $4 billion of that on sightseeing and 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%). Leisure travel saw 36% more solo travelers than 80%, and 23% more leisure travelers brought their children than 6%. Many of our visitors were over 75K in income, married, had no kids, and held advanced degrees. Visitors from abroad fell by 19% three years ago and by 14% two year ago. But, Washington was visited by over 1,000,000 foreign tourists, ranking it 8th among US destinations by foreigners.


Management

Michael Frank Coleman* will serve as member manager. He is now the member manager.

A wealth of experience in Washington sightseeing. This includes working with Tourmobile and leading walking tours. Mr. Coleman has a knack for recognizing opportunities and developing staff members to take advantage of those situations. Coleman will hire a team consisting of experienced professionals to run operations and market the services.

Paul F. Williams* has more than 30 year experience in international business development. He will now act as DDTOW&#8217’s business development director.

This sample plan excludes confidential and proprietary data.


Operation

The MCI Center, 601 F Street in Northwest Washington, will be the place where tickets can be purchased and buses boarded. This location is a great place to have foot traffic, ample parking, and easy access to public transportation. 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. As administrative offices, a small office will be situated on Third Street in Northeast Washington.


Financial

Our research and projections indicate that the demand for sightseeing tours in and around Washington is sufficient to provide Double Decker Tours of Washington, LLC with revenues of over $14 million dollars in its first full year of operations, utilizing 15 used London-style double-decker tour buses and selected routes throughout the city. These sales figures were based on 453,000 customers from a potential customer base that could reach 22 million. With additional advertising and expanded tours, second year revenues are expected exceed $17million to serve over 500,000 customers. DDTOW’s plans could lead to a greater growth rate, in part due to the opening of new memorials in Washington and other venues. DDTOW&#8217’s market share will increase by more than the demand for tours in the target market. These sales figures will result in net profits of $13million dollars in the first year and $15million in the second year. The net profits for year one will exceed 60% of sales, and they will remain at that level in the second year. The due diligence package includes a company’s long term plan. The initial months of formative operation are costly. (See the Start-up table at the end of this document) Revenue will not be possible until then. This is due to new tour operators’ regulatory and organizational obligations. However, aggressive marketing and promotion can easily make up the slow start.


Long-Term Development & Exit Plan


Goals

We will continue to expand our presence in the area through the use of double-decker buses and tours that target new routes. 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. The success of the project depends on the acceptance of our new tours or buses. We anticipate that we will face stiff competition from established tour companies after year 1.


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 will be open to the possibility of being bought out by larger Sightseeing/Tour operators or to selling to a new owner.


Funds Needed and Used

DDTOW is looking for financing in the amount of $800,000. This will be in the form of five-year loans. In decreasing value, most of the expected start-up cost are allocated to these areas:

  1. Purchasing twelve 70-passenger London-style double-decker sightseeing buses, nine of which are open top for beautiful days and nights and three closed top for cold or inclement weather.
  2. Provisions of a sufficient cash reserve to assure timely payment of operating costs of the buses for the first three months.
  3. Costs of recruiting, training, as well as paying operational crews.
  • Marketing, advertising, public relations, including costs for setting up a website that can offer tour information, make online sales, and reserve tours, as well conventional print and broadcast advertising and public relations activities.
  • Administrative and legal expenses incurred for the establishment of the business and tour operations.
  • A reserve is a fund that covers all operating costs (except bus operating costs) for the minimum three months of operation.

    • 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:

    • To create and manage a tour company that will focus on touring the monuments, museums, and government buildings in the capital city, as well the historic neighborhoods beyond the city.
    • Implementing an organizational and marketing strategy to achieve an average load per bus between 65-85 percent and 75-100% depending on the season. This will maximize revenues and return on investments while reducing risk.
    • Our first year of operations saw us earn approximately $14 million in revenue. We hope to reach $20 million our third year. Expanding into new markets within the Baltimore-Washington corridor.
    • To achieve net operating profits of 60-70 percent within the first 12 months of tour operations and steady growth enabling rational expansion of the company thereafter.
    • 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.
    • In order to realize DDTOW&#8217’s other main objectives, it is important to establish and maintain strategic alliances through Washington Convention and Tourism Corporation, Greater Washington Board of Trade and other Washington associations and groups.

    Success Keys 1.2

    In decreasing order of importance the following five key factors are crucial to Double Decker Tours’ success in Washington:

    • Experienced, highly professional management team who combine vision; realism and financial ability; solid know-how of Washington’s sightseeing market; familiarity, and belief, in the utilization and benefits computer information technologies. Realization of the critical importance to success of an organization personnel; total commitment to the overall goals and mission of Double Decker Tours Washington.
    • A company that uses intelligent, innovative and aggressive marketing to identify itself as a different type of player. This is a company that is smarter and more professional than what is expected in Washington. Key pillars of the strategy’s marketing strategy are safety and professionalism. They will also care about the customer’s needs and provide straightforward pricing.
    • Identification, through careful market research, of unserved or under-served routes in the city that may be of interest to our customers and enable high load factors and profitable operations.
    • Use of a fleet of London-style doubledecker buses that offer an unobstructed view of the city from the top deck and offers a high level of comfort, safety, and fuel and operational efficiency.
    • Information technology can be used for reducing staffing and other operational costs; expanding the potential market base; capturing sales opportunities easily; and improving customer convenience.

    1.3 Mission

    Double Decker Tours of Washington, LLC, has the goal to provide affordable, professional, and safe sightseeing services to 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 always have and promote fun tours

    So that the customer will be able to recall the great experience and refer us to friends or family when they leave us. From the moment they meet us, to the moment they leave, we provide courteous and friendly service.

    With a combination of clean buses, friendly and informative and helpful driver guides along with outstanding customer service, DDTOW intends to lead the other companies and make our standards their ambition.