Industry Overview 3

Contents

INTRODUCTION 3

Industry Overview 3

Mission Statement 4

Goals and Objectives 4

Operations Plan 4

Site Plan 4

Flow of Organization 7

Organizational Tasks 7

Staff 9

Capital Budget 10

Capital Budget Overview 11

Working Capital 12

Human Resource Plan 12

Organizational Structure: Private Corporation 12

Job Descriptions and Qualifications 13

Manager 13

Guides 14

Human Resources Strategy 15

Shareholder’s Agreement 15

Marketing 15

Target Market 15

Product Mix 16

Pricing 16

Promotion 17

Advertising 18

Location 19

Competitive Analysis 20

Marketing Expenses 22

Financial Plan 22

Capital Requirements 22

Summary of Projected Income Statement 23

Summary of Projected Balance Sheet 23

Critical Variables 24

Contingency Plan 24

Economic Forecast 24

Break Even Analysis 24

Net Present Value 25

Internal Rate of Return 25

Summary 25

References 26

INTRODUCTION

Industry Overview

British Columbia is a very successful area in regards to the ski and snowboard industry. As Costello (2004) states “British Columbia is uniquely poised to take advantage of the evolving future of skiing. The province’s growth trends have beaten American and Canadian statistics consistently over the last twenty-five years. Skier visits have grown from less than a million per year to more than six million per year.” (p. 1). This statistic alone illustrates how well this industry is performing in BC.

Guided backcountry ski and snowboard tours have been growing in popularity over the course of time. A ski resort with boundaries and rules, not to mention lift lines, is beginning to fall short of the demands of many outdoor thrill seekers. Operations that offer guided Heli-skiing tours and Cat tours have been doing very well and are in high demand, in fact many are unable to keep up with current demands and are booked 75% of capacity before any snow is even on the ground.

A new form of guided tours has recently been increasing in popularity, Snowmobile skiing and snowboarding. This form of touring combines the thrill of back country riding with the use of a snowmobile as a ski lift. This type of tour provides all the thrill of big mountain back country skiing at a fraction of the cost when compared to the prices of Heli-skiing and Cat-skiing.

Fresh-Trax is an operation that focuses on the advantages of this form of backcountry tours. By providing a memorable backcountry experience at a reasonable price, we feel that we can fill a large portion of this demand for guided tours and even expand the market to individuals who seek this big-mountain experience but don’t want to spend the money a Heli or Cat tour would require.

Mission Statement

“Offering an unforgettable big-mountain riding experience to the extreme sports and active outdoor living enthusiast, at a reasonable price.”

Goals and Objectives

Fresh-Trax has a number of goals and objectives that we seek to obtain over the course of operations, here are some of the more important ones:

·  Establish and maintain operations in the Friendly Mountain Village of Fernie

·  Book 2,311 Tour hours in year one

·  Penetrate a growing market in the BC Ski industry

·  Maintain a booking growth of at least 10% for 5 years

·  Get a 10-15% return on equity

·  Gain a national identity and become the reason for visiting Fernie instead of just an added bonus

Operations Plan

Site Plan

Considering that this is a business venture based around guided tours, customers are going to want to be exposed to breath-taking views, Snorkel deep powder as far as the eye can see, and an experience that they will not soon forget. Location is a major key success factor for this venture.

The location that I have decided to set up shop is in the world renowned mountain village of Fernie, British Columbia. As a Ski destination, Fernie is rated top 10 in numerous magazines not only in North America but internationally as well. With average annual snowfalls of 29 feet and vertical heights upwards of 2,800 feet how could someone go wrong? The map below provides a better understanding of where operations will be located.

As mentioned above, Fernie has large amounts of visitors or tourists who come to ski or snowboard because of its well known reputation for some of the deepest powder around. Due to the high levels of traffic and the opportunity that is available to penetrate a saturated market this is an ideal site for operations.

In Fernie Fresh-Trax was able to locate a great property that would work perfect for business operations. This property consists of two buildings, one being the main building, which is an 800 square foot rebuilt home. This building would be where all of the office and administrative activities would take place, such as:

·  bookings

·  customer transactions

·  staging area before tours

·  a great place for customers to come and relax after a tour

The second building is a large 1,800 square foot heated garage. This will provide plenty of room to store the different equipment required for Fresh Trax to operate. Snowmobiles and rental equipment will need to be well taken care of to insure safety for customers as well as extend the useful life of equipment for the business. This space would also provide a workshop for minor maintenance and care of equipment to be preformed. There is also a loft above the garage that could possibly be used as an employee incentive or benefit, or rental property to act as another form of revenue for Fresh-Trax.

This location will only be a base for operations Fresh-Trax will be operating in various different locations in the mountains around Fernie. Based on customer preferences for riding our highly trained tour guides will select the best location for a quality back country tour.

Flow of Organization

In regards to the organizational flow of the business it is fairly straight forward. Bookings are made by customers on a first come first serve basis through our website or over the phone. Bookings are then tracked in the company computer to avoid double booking. Once customers arrive at our facilities required paperwork will be filled out. This will consist of disclaimer forms and payment information. Other information such as emergency contacts and food allergies are also required, considering we will be providing meals, and any other important information the customer feels we should have.

Customers will then be outfitted with riding gear and equipment if necessary. A training session will need to take place before the tour begins. Proper operation of snow machines, rental equipment, and avalanche beacons will need to be gone over by the tour guides. Depending on the tour destination, tours can leave directly from our location or the snowmobiles can be loaded on trailers to allow for easy access to other departure areas. Once tours are completed customers will return to our facility where they can relax by the fire indoors or take advantage of our hot tub.

Organizational Tasks

Considering that this business will only be open on a seasonal basis, being available the entire winter season is important to success. Tours will be available 7 days a week during the winter months. Tours will be able to start at 8am so employees will need to begin the day at around 7am to ensure the facility is ready once customers arrive.

Daily Tasks will consist of:

·  Preparing the facility for the day

·  Preparing meals for full day tours

·  Checking equipment prior to tours leaving

·  Providing every customer with a mountain tour they will not forget

·  Fuel machines and end of day checks to make sure equipment will be ready for next tour

·  Shut down operations at the end of day after all tours are in and customers have left

Weekly orders will also need to take place in order to maintain inventory levels. This will include restocking groceries for meals that are provided for customers, making sure that on site fueling station has enough fuel to continue operations for the next week. Office supplies will also need to be checked on a weekly basis. Minor equipment maintenance will also take place.

Monthly operations will require a number of major tasks. Monthly bills will need to be paid. This will involve bank debt payments, utilities bills, and employee wages. Employee wages are going to be paid on a monthly basis to make it easier for management. If this is not working for employees options such as cash advances or bi-weekly payments will be explored. Marketing efforts will also need to be reviewed and adjusted if necessary. In the first year market penetration will be a key to success so a large amount of time will need to be dedicated to this portion of business operations. Major repairs on equipment will also need to take place on a monthly basis to make sure equipment is running properly to ensure that customers are going to be given the best experience possible.

At year end annual financial statements will need to be prepared. This will include a balance sheet, income statement, statement of cash flows and income taxes will also need to be calculated. Employee T4 slips will need to be prepared so that employees can submit their taxes. New budgets will also need to be drawn up and reviewed for next year. Having a planned budget for future operations will give the business a target to operate within. It will also communicate if the business is operating more successful or if there are adjustments that need to be made if we are falling short of budgeted numbers. At year end marketing strategies can also be overhauled. More money can be put into areas that are more successful and taken out of ones that are not generating the number expected. A competitive industry analysis can also be done at year end to help identify new opportunities and barriers in the industry.

Staff

Fresh-Trax staff will consist of three individuals who are available for work over the course of the entire winter season. Work schedules will be adjusted based on the bookings we receive. Staff will need to be increased depending on demand. Current staff should be able to handle demand over the 5 year projections, but considering the growth that is being seen in the industry this could change.

I personally will own and manage the business, and will double as a guide and office administrator. Two tour guides will also be hired initially. Depending on difficulty of managing bookings a part-time administrative assistant may be hired. This will be a small friendly workforce that will enjoy providing the tours a much as clients enjoy being on them.

The only services that will be out sourced are major mechanical work.

Capital Budget

With the proposed capital budget for start up operations of Fresh-Trax and current staff maximum capacity of operations are 14,000 tour hours. This number was obtained by taking the total days of the season (140), multiplying that by operating 10 hours per day, and running all of the 10 machines available. For year one projection of 1,750 tour hours were projected. This is not exactly ideal since the break even number of tour hours is 2,311. I felt that the year one projections were more realistic though so I still used them for this business plan.

The majority of the capital costs are derived from the building and land purchase, and the rest is equipment required for operations. These numbers are illustrated in the table provided below. Credit will also not be extended to customers and payment will be required before the tour leaves. Bills and expenses will be paid when they are realized so no accounts payable will be required, other than the payable in regards to bank debt.

Capital Budget Overview

Description / Quantity / Unit Cost / Total Cost
Building / 1 / $424,900.00 / $424,900.00
Truck / 2 / $44,155.00 / $88,310.00
Sled Decks / 2 / $3,575.00 / $7,150.00
Trailers / 2 / $1,500.00 / $3,000.00
Snowmobiles / 10 / $15,899.00 / $158,990.00
Rental - Skis / 3 / $850.00 / $2,550.00
Rental - Snowboards / 3 / $850.00 / $2,550.00
Rental - Helmets / 10 / $120.00 / $1,200.00
Avalanche Beacons / 10 / $200.00 / $2,000.00
Rental - Outer wear / 10 / $800.00 / $8,000.00
Fuel Station / 1 / $2,200.00 / $2,200.00
Office Equipment / $2,500.00
Total Capital Investment / $703,350.00

Working Capital

The initial investment and bank debt on start up allow for some extra cash to cover start-up operations. Once business begins generating revenues these funds will then be allocated to operating expenses. Since Fresh-Trax has no inventories, accounts payable, or accounts receivable these working capital amounts are irrelevant. In regards to payment for tours a down payment will be required to secure a customer’s booking, then payment in full will be received before the tour leaves the facilities. All bills and expenses will be paid in full when they are realized.

Human Resource Plan

Organizational Structure: Private Corporation

Fresh-Trax will incorporate in the first year of operations. The main reason for this is the limited liability aspect provided by a corporation. Considering the nature of the business if an accident were to occur this would separate owners from any liabilities that may follow.