Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

The Tower: Senior Capstone Project

380 views

Published on

Business plan presentation for The Tower, created for Oklahoma City University's senior capstone business class.

  • Be the first to comment

  • Be the first to like this

The Tower: Senior Capstone Project

  1. 1.  Centrally located venue for diverse entertainment  Housed in the iconic Tower Theatre in Uptown 23rd  The focal point of a district with high potential growth
  2. 2. • The Tower will host… – Live Theatre – Comedy – Nationally and Regionally Known Musicians – Film Premiers – Private Events • Elixir 37 • A unique and inclusive experience for our guests
  3. 3. • Mid-sized entertainment venues that specialize in diverse entertainment • Industry grew by 8.8% in 2014, second only to construction • More entertainment options available
  4. 4. • Primary market is defined by regular attendees • Broader target market for national acts • Young professionals with a disposable income living in downtown, midtown, and uptown OK • Advocates for the “keep it local” movement, want to be involved in the community, interested in the arts, history, and the preservation of the tower theater • Market share: 9.7% of the market share in seats in entertainment venues based on capacity. • Will increase because of competitive advantage
  5. 5. • Direct Competition- event venues, movie theaters, music venues, and bars in the Oklahoma city area • Closest competition in size- Rose State Performing Arts Center, Gaylord Performing Arts Center, OCU Kirkpatrick Auditorium, Riverwind Casino, and the Diamond Ballroom • Their competitive advantage: long-time established and loyal fan followings • Our competitive advantage: Centrally located in OKC and the historic nature of the theater • Our competition based on capacity is located in Appendix A
  6. 6. • Values – Experiences – More than profit-centers – Fitting in with peers • Communication – High social media use – Word of mouth is invaluable
  7. 7. • Centralized Location • Unique History & Experience
  8. 8. • Established market; must pull customers from competitors by creating a unique experience • Art-Deco with a Modern Twist – Art movement from the early 1900’s associated with luxury and decoration – Directly associated with the theatre’s history • Creates a unique, memorable entertainment space
  9. 9. • More than a profit center • Partnerships with other arts related businesses and non-profits – Oklahoma Film & Music Office – Oklahoma City University
  10. 10. • High value placed on peers – WOM becomes very important • Main efforts to increase brand awareness – Social Media – Limited print and news advertisements
  11. 11. • Research shows this is the best way to reach the age range of 18-35 • Focus on: – Facebook – Twitter – Instagram • Use of “Influencers”
  12. 12. • Board of Directors consisting of Regan, Brandon, Carsen, Whitney and any investor • CEO- Regan Shorter • CFO- Brandon LaFluer • Manager of Operations- Carsen Moon • Theater Director- Whitney Reinke
  13. 13. Item Amount Theater Equipment $200,000 Bar and Concession Equipment $25,000 Office Conversion $20,000 Extension of Backstage $100,000 Project Manager $20,000 Total $365,000
  14. 14. • Penetration Pricing: starting low and gradually rising to meet competition • Assumption grounded in theory: – Price elasticity of demand for live entertainment is relatively inelastic Event Prices (Weighted Average) Year 1 Year 2 Year 3 Year 4 Year 5 National Music $ 23.00 $ 25.00 $ 26.00 $ 28.00 $ 30.00
  15. 15. • Simple formula for venue demand in Oklahoma City: Dn= S*Pn*Target Population*(1+g)n Dn=Demand in Year n S =Share of seats in Oklahoma City Pn =Participation rate for activity g= Average growth rate of Oklahoma City population • Calculated annually for each type of event • Adjusted for growing market share
  16. 16. Number of Tickets Sold (projected) Year 1 Year 2 Year 3 Year 4 Year 5 230,883 236,197 285,383 317,838 352,825 Product Purchases Year 1 Year 2 Year 3 Year 4 Year 5 Facility Rental 36 36 36 36 36 Bar Purchases 92,353 94,479 114,153 127,135 141,130 Concession Purchases 92,353 94,479 114,153 127,135 141,130
  17. 17. Year 1 Year 2 Year 3 Year 4 Year 5 National Live Plays 1,746,211$ 1,767,166$ 2,337,206$ 2,858,014$ 3,626,162$ National Music 1,268,772$ 1,442,171$ 1,790,650$ 2,264,084$ 2,810,339$ National Dance 147,914$ 149,689$ 240,453$ 355,883$ 400,171$ Misc. 549,000$ 555,588$ 562,255$ 569,002$ 575,830$ Movies (Including Premiers) 38,400$ 40,800$ 40,800$ 43,200$ 43,200$ Local/Regional Music 218,008$ 253,309$ 354,000$ 389,400$ 424,800$ Local/Regional Plays 245,369$ 248,314$ 306,000$ 324,000$ 324,000$ Local/Regional Dance 32,000$ 32,000$ 35,200$ 38,400$ 41,600$ 4,245,674$ 4,489,036$ 5,666,565$ 6,841,983$ 8,246,101$ Year 1 Year 2 Year 3 Year 4 Year 5 Facility Rental 2,000.00$ 72,000$ 72,000$ 72,000$ 72,000$ 72,000$ Bar Purchases 6.00$ 554,119$ 566,873$ 684,920$ 762,811$ 846,779$ Concession Purchases 4.00$ 369,413$ 377,915$ 456,613$ 508,541$ 564,520$ 5,241,206$ 5,505,824$ 6,880,099$ 8,185,335$ 9,729,400$Total Revenues Event Product Price Revenues Revenues Revenues from Ticket Sales Average Price Varies based on 5-year price schedule
  18. 18. The Tower, LLC 2016 2017 2018 2019 2020 Sales Tickets $4,245,674.42 $4,489,036 $5,666,565 $6,841,983 $8,246,101 Bar $554,119.00 $566,873 $684,920 $762,881 $846,779 Concessions $369,413.00 $377,915 $456,613 $508,541 $564,520 Rentals $72,000.00 $72,000.00 $72,000.00 $72,000.00 $72,000.00 Total $5,241,206.42 $5,505,824 $6,880,098.77 $8,185,334.95 $9,729,400.14 Less: COGS $184706.40 $188,957.60 $228,306.71 $254,270.44 $282,259.82 Gross Profit $5,056,500.02 $5,316,866.40 6,651,792.06 $7,931,064.51 $9,447,140.32 %Increase 9% 21% 19% 19% Operating Expenses $5,150,197.65 $5,278,257.00 $5,926,053.49 $6,552,697.85 $7,296,741.07 Less: Startup $365,000 Net Income ($458,698) $38,609 $725,739 $1,378,367 $2,150,399 %Increase 108% 1780% 90% 56%
  19. 19. 2016 2017 2018 2019 2020 Return On Investment (1.17) .09 .63 .54 .46 Return On Assets (1.15 .09 .90 .74 .59 Working Capital $26,802.37 $65,911.77 $792,150.34 $2,171,017.00 $4,321,916.24 Profit Margin % (.09) .01 .11 .17 .22
  20. 20. 2016 2017 2018 2019 2020 Rent $2,220,000 $2,220,000 $2,220,000 $2,220,000 $2,220,000 Property Taxes $42,931 $42,931 $42,931 $42,931 $42,931 Local Acts $346,201.50 $368,296 $ 467,130.00 $496,620.00 $515,920.00 National Acts $2,053,695.15 $2,159,660 $2,708,622.67 $3,305,777.03 $4,030,520.25 Utilities $26,010 $26,010 $26,010 $26,010 $26,010
  21. 21. • We request $850,000 from Angel Investors for 40% ownership of The Tower. • Formula for Finding 40% – Vpostmoney,Salevalue = $21,503,992 – Vpostmoney,Year1 = $2,150,399 – Vpre-money,beginning =$1,300,399 • 1,300,399/2,150,399 =60% • 850,000/2,150,399=40%
  22. 22. • Expansion of business idea to other venues • 5-year Valuation for The Tower Vpostmoney, sale value = Net Income Year 5 * Earnings Multiplier = $21,503,992 Investors’ Cash Exit Value = Sale Value * Investors’ Ownership = $8,500,000 Investors’ Return Multiple = Cash Exit Value/ Initial Funding = 10 Investors’ Annualized Return = 58%
  23. 23. • Competition – Growth of Oklahoma City could bring potential competitors • Oklahoma Economy – Reliant on oil markets, with potential to stunt growth • Inexperience
  24. 24. • The Tower will be a unique venue with an optimistic future – Attendance: 52% growth – Net Income: 82% growth – 58% annualized return for our investors • Unique opportunity to invest in Oklahoma City’s renaissance

×