Dive Shop Business Plan
Essay Preview: Dive Shop Business Plan
Report this essay
1 Executive Summary
Frogman Dive Shop will serve tourists to the Pattaya area in addition to local population. Our intention is to certify new divers and subsequently sell them equipment and offer ongoing dive excursions. Advanced and professional level instruction will also be available.
Frogman Dive Shop expects to make a minimal profit in the 1st year of operation however, after completion of the first year we expect to have a solid customer base. As student numbers increase, instructors will be added as necessary. Future instructors and divemasters will be recruited from our students to maintain our standard of training and expectations.
Owners Quincy Berman and Paul Huesman together have extensive experience in recreational diving, nautical skills, marketing and education. We understand the needs and wants of current and future divers, realize that flexibility is necessary in instruction and new adventures in dives can be had while maintaining safety.
With all of the current dive shops in operation, we believe there is still a demand for more competition. We intend to provide superior service to our customers in addition to top-notch instruction; this will ensure a long term customer base which is essential success. Industry experience, marketing background, well trained loyal employees set in Pattaya, an ideal dive destination, is a well balanced mix for a successful dive shop.
2 Situation Analysis
Pattaya has many dive shops; most are small operators doing little business. The main competition here is Mermaids Dive Center; this is the largest in the area doing the most business. They have a large following of customers and this should continue into the foreseeable future. They have been in business in Pattaya since 1990 and are the first shop in the area to be rated as a PADI Career Development Center (CDC). Mermaids tends to push the students through and not offer the personal attention some students require. This lack of attention also shows with their retail customers and pax on the dive trips. Divers are typically loyal to their dive shop and this lack of attention potentially will drive away some of their customers.
Aquanauts is another major competitor in the area. This shop has been in business since 1996 and is also rated as a PADI CDC providing instruction from beginner to instructor level. Aquanauts has sponsored the Pattaya Dive Festival which involved Over 500 divers from Bangkok/Pattaya area promoting the dive scene and focusing on environment awareness of coral reefs. This is the most expensive dive shop for all products, instruction, equipment purchase and dive trips.
Seaduction currently is a top competitor however their future is bleak. In addition to dive trips they offer deep-sea fishing and spear fishing excursions. The management team of Seaduction has fallen apart with one partner losing interest and the remaining partner lacks concern for the business success. Whether Seaduction remains to be future competition is dependent upon who buys the business and their plan for the future.
Adventure Divers is a small but solid business operating in Pattaya for 12 years. They have the nicest and most well equipped dive boat in the area attracting customers to dive with them. The family atmosphere and “friend for life” attitude keeps the customers loyal and returning year after year. Continued future success is expected.
3 SWOT Analysis
Strengths
Management has solid background in dive industry, the diversity of experience will bring new ideas to an existing market.
Management experienced in marketing.
The use of contracted instructors and independent boat operators will minimize overhead increasing net profit.
Family atmosphere builds a solid long term customer base which is essential for referral customers.
Weaknesses
As a startup business, Frogman Dive shop will have to build a name amongst the local completion which has a strong foothold.
Initial debt from loan for startup capital mitigates positive cash flow.
Contracted instructors may create less stability in the atmosphere of the shop.
Initial staff will require training to become familiar with the products offered.
Technicians limited on certifications decrease the equipment brands able to be serviced.
Opportunities
Location is in a popular tourist area, much of the tourist population is from destinations where scuba diving is common.
With much of the world focused on preserving nature, scuba diving offers a chance to. observe the sea in its natural state and lend a hand to beach and underwater cleanup activities.
Although most dive spots have been located there is still the possibility of discovering new locations. Additionally ships may be strategically sunk to create artificial reefs.
Locations outside Pattaya offer good dive spots. Expansion to these areas are possible with limited instruction and equipment sales however dive trips to these areas could be arranged.
Threats
Tourism is seasonal based on local weather conditions and weather conditions of the homes of the tourist population.
The current situation with strengthening baht and weakening world currencies result in less tourism.
Current political unrest deters many tourists from choosing Thailand as a holiday destination.
Agreements with dive boat operators could change to circumstances beyond our control.
4.1 Financial Resources
For the dive shop to begin operations, it is estimated that 2,800,000 ฿ will be required. This figure includes start-up costs of 2,250,000 ฿. The start-up costs include starting inventory of scuba equipment and related gear, air compressor for filling tanks and commercial space remodeling. Capital will also be required to cover work permits and other government fees for establishing the business. Since the primary operations will be taking customers scuba diving insurance is also required. Additionally, 6 months operating expenses and a petty cash fund on hand totaling 450,000 ฿ will be required.
Frogman Dive Shop will be established