BOKEN Rentals Video Rental Store - PowerPoint by eddie22

VIEWS: 115 PAGES: 28

									BOKEN Rentals
Video Rental Store
Hoboken, NJ
Amol Waishampayan Andrew Codner Drew Pratko Garrick Todechine Christy King Andrew Pafitis

Presented: December 7, 2005

Company Overview
►

Boken Rentals is a new venture that will be up and coming in the spring of ’06. It will be located on Washington St. for easy access to the residents of Hoboken. The goal of this business is to create an alternative to the people of Hoboken among their video renting prospects. As of current, the only opportunity for a movie or video game rentals in Hoboken is from either Hollywood Video, Blockbuster, Netflix or MovieLink. While Hoboken Rentals will stock all genres of tape and game play, the target market will be that of early teens to late 40-50’s. The business is owned by six recent graduates of Stevens Institute of Technology, Andrew Codner, Christy King, Andrew Pafitis, Drew Pratko, Garrick Todechi, Christian VonUffell, and Amol Waishampayan.

►

►

►

Executive Summary
►

Boken Rentals is a video and game rental business that will be located on Washington Street in Hoboken, New Jersey. The store will be owned and operated by six recent graduates of Stevens Institute of Technology; Andrew Codner, Christy King, Andrew Pafitis, Drew Pratko, Garrick Todechi, Christian VonUffell, and Amol Waishamapayan. Currently, there are only two video/game rental stores in Hoboken—Blockbuster Video and Hollywood Video. Both are operated by large corporations. Our store will offer customers the comfort of a small business, with an even better movie and game rental selection than the existing large companies. Boken Rentals will be able to compete successfully within the industry. When it comes to movie rentals, the market is limitless. All types of people watch movies, regardless of sex, race, age, or any other distinguishing factor you can conceive. In light of this fact, the target market for our business includes all people living in Hoboken capable of viewing movies or playing video games. Any person or child from the age of 2 years on is capable of desiring to watch a movie, as well as viewing the movie. Boken Rentals will offer the most popular products from all genres of videos and games. Our business will even offer some genres not generally available to rent from the large companies. This includes such types as independent films and foreign language films. These genres are sure to attract customers who are not generally interested in renting movies from Blockbuster and/or Hollywood Video. We have projected that Boken Rentals will require approximately $178,000.00 to start up. By the fourth year, however, we have projected about $50,000 in profits. Our projections also show this profit to increase continually as years go on. From all aspects, Boken Rentals appears to be a certain success.

►

►

►

►

Company Overview
Key Objectives
► Our

primary objective of Boken Rentals is to add variety in choices and to take away from the advantage given to Blockbuster and Hollywood Video. ► We have projected that after the immediate startup of Hoboken rentals we will experience losses, however, based on our research, that Hoboken is in desire for a change, we feel that Boken Rentals will be able to turn a profit coming out of the 1st year of operation.

Company Overview
Competitive Advantage
► While

Hoboken is a very up and coming city it is still well known to still hold true to traditional values. The mom and pop shops as well as bigger businesses both have places in this city. ► However if you look at the overall motif of the city you can see it’s still very small business orientated. This provides Hoboken rentals with what we call the “old fashioned” advantage. ► People will see Boken rentals as a part of their town from the beginning. The large corporate names such as Blockbuster cannot capture this effect

Company Overview
Location
► Boken

Rentals is located at on 7th and Washington St. in Hoboken, New Jersey. The shop takes up 800sq ft with room to spare.

Industry Overview
2005, an estimated 15,000 households will convert to DVDs every day. ► Since 2001, the movie rental industry has shrunk 19%. ► In the early 1990s, there were about 70,000 stores around the country that rented movies; today, there are about 18,000.
► For

Industry Overview (continued)
reported its subscriber count grew 53% in one fiscal year. ► Last year Blockbuster was at risk of bankruptcy, then ventured into the online market as well. ► Amazon.com has also entered the online video rental market in the UK and Germany.
► Netflix

Management & Staffing
Ownership and Management Team by an extremely qualified staff ► Owned by six recent graduates of Stevens Institute of Technology ► All owners have acquired some experience in retail since graduation, and are eager to use this experience to run a successful video rental store. ► All six owners have worked in retail over the past few years, and some have even received certificates or Master’s degrees in Retail Management.
► Managed

Management & Staffing
Human Resources Needs
Will use part-time employees to work at our business, as we can save money on benefits such as health insurance. ► Video rental store employees need little to no experience to begin working. ► Estimate they will need approximately 3-4 days of training with one of the managers (or a veteran employee as time goes on) ► We will require about 10-12 employees for the business to operate smoothly. ► Paid average of $7.00 per hour. ► Will work anywhere from 3-6 days per week, for about 4-7 hours per day..
►

Competitive Analysis
Competitors
►

Blockbuster is the world's largest video rental chain, with about 9,100 company-owned or franchised stores throughout the world. Blockbuster’s net income in 2004 was over $1.25 billion. Hollywood Entertainment Corporation, operator of Hollywood Video, is the 2nd largest video rental chain in the United States behind Blockbuster. It runs over 2,000 Hollywood video store in the United States. In 2004, Hollywood Video had a net income of approximately $71.3 million. Netflix, Inc. is a company who provide movie rental services online via the mail. Blockbuster has entered this market recently as well Movielink, LLC. Is a websites that allows people to download movies for a low fee. The users keep these downloads for a certain period of time. 24-hours after the user plays the movie, they are unable to view it anymore.

►

►

►

Competitive Analysis
Analysis
►

Overall we are not extremely concerned with the competition afforded by companies such as Netflix and Movielink. There are still a great deal of people who want to be able to walk into a store, browse the merchandise, choose the movie/game they wish to rent, and walk out of the store with it. Blockbuster and Hollywood Video will be the main source of competition for Hoboken Rentals. We feel, however, that we will be able to succeed in the market, due to our strategy, as well as the success of small video/game rental businesses in cities with a similar market environment as Hoboken

►

►

Operating Plan
Products
►

Our videos will be obtained directly through the distribution companies (The major movie production companies.) We will provide for VHS, DVD and video game rentals The main concern that is pressing in terms of our product is the initial cost we will face in the startup months when the store is new in the market. It may take some time for us to regain the money we spend on the videos. After the initial start up the fee we pay to the distribution companies should be easily covered by the individual charge we place on each rental.

►

Location and Floor Plan

Operating Plan

store front for rent between seventh and Washington is around 800sq-ft which is plenty of space for the store we are opening. ► The cost is $3,500 rent per month.

►A

Location and Floor Plan

Operating Plan

Location and Floor Plan
► With

Operating Plan

21 shelving fixtures we will have the maximum capacity to stock approximately 9500 videos/DVDs. is much more than the initial start up space that we will need, and therefore allows for expansion in the future. It is also important to consider that we do not want the store to look junky and that it is therefore important to have “breathing room” between the videos/DVDs on the shelves

► This

Operating Requirements
Item 2 POS Systems 11 Wall Fixtures (360 Spots each) 10 Island Fixtures (550 Spots each) Wrap Counter with Ledge 48”L Counter corner filler Wrap Counter 48”L Quartet Total Erase Board 4’x3’ (4 included) color Security Dome Cameras w/15” Monitor Security Safe 2 Anti Fatigue Mats 2’x 3’ Entry alert system Entry alert system adaptor Checkpoint Security System 40 Security Locking Clips Video Drop Slot 4x New Release Labels Receipt Tape 50 rolls & 6 Ribbons Security ZenithPac Key x2 TimeClock Software Desktop Computer 3x Bags Price (Before Shipping) $497.00 each $514.36 each $459.25 each $526.00 $216.66 $456.00 $125.99 $799.95 $139.99 $12.99 $16.60 $15.00 $1,599.00 $60.00/100 $149.00 $4.95/250 $59.00 $35.00 each $195.00 $500.00 $19.00/1500 Total (Before Shipping) $994.00 $5,657.96 $4,876.40 $526.00 $216.66 $456.00 $125.99 $799.95 $139.99 $25.98 $16.60 $15.00 $1,599.00 $2,400.00 $149.00 $19.80 $59.00 $70.00 $195.00 $500.00 $57.00

Operating Plan

Total Fixed Expenses 

$18,899.33

Internal Operations
► ►

Operating Plan

►

The store will remain open all year round apart from Christmas day The store will be open from 10:00 am to 11:00pm (Note: The employee hours will run from anywhere between 9:30 am and 12:00am to compensate for the time needed to open and close the store). Inventory will be kept through the computer system and any time something is checked out or brought back the system will update automatically) Wages:
► ► ►

►

Part-time Employees  $6.50/hr Part-time Assistant Managers  $8.00/hr Store Manager  $35,000/year

Marketing Strategy
Target Market
► Those

who have always enjoyed watching movies with friends and family. ► Will offer people of all ages not only fun and excitement of watching movies, but we will also offer video game rentals and snacks as well. ► People of all ages are always looking for a fun and inexpensive activities to do in their spare time and what better to do than watch movies and/or play video games.

Marketing Strategy
Description of Key Competitors
► Hollywood

Video and Blockbuster, are very big companies and competition wise they are the best movie rental companies in the nation. The companies are devoted to movie and video game rentals and they have hundreds of titles all over their stores. These stores carry movie and video game titles from horror to educational purposes, so all ages will not be left out.

Marketing Strategy
Pricing Strategy
► Movie

and video game rentals will be sold at the suggested price or similar (however, slightly less) to the prices of Hollywood Video and Blockbuster. The only exception for not paying the regular price would be the occasional sales events and clearance.

Marketing Strategy
Promotion Strategy
► To

kick the start of the movie and video game rental company, we will have a grand opening which would basically promote itself. ► We will advertise through local newspapers and radio stations. ► Hopefully, through these advertising techniques word of mouth will also play a part in promoting our company.

Marketing Strategy
Distribution Strategy
► All

our major titles of movies and video games will be distributed to our store by companies like Twentieth Century Fox and Sega of America. ► Twentieth Century Fox is just one of the major movie distributors ► Sega of America is one of the major video game distributors. ► We will also deal with other businesses like these to get other titles we may need to allow our company to do very well in sales.

Income Statement/Sales Forecast
Income Statement Item Description Revenues: Gross Sales Less Sales Returns Net Sales Cost of Goods Sold Materials Labor Other Direct Expenses Indirect Expenses Cost of Goods Sold Gross Profit Expenses Salaries and Wages Payroll Taxes Employee Taxes Professional Services Advertising Marketing Telephone Office Supplies Postage Insurance Rent Electricity, Gas, Utilities Maintenance Bad Debts Bank Charges Total Expenses Start-up Period Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 totals 20,824 80 20,744 20,824 80 20,744 20,824 80 20,744 20,824 80 20,744 20,824 80 20,744 20,824 80 20,744 20,824 80 20,744 20,824 80 20,744 20,824 80 20,744 20,824 80 20,744 20,824 80 20,744 20,824 80 20,744 249,888 960 248,928

Financials

60,000 10,000 6000 76,000 -76,000 0 0

100

100

100

100

100

100

100

100

100

100

100

100

61,200 10,000 6,000 77,200 171,728

100 20,644

100 20,644

100 20,644

100 20,644

100 20,644

100 20,644

100 20,644

100 20,644

100 20,644

100 20,644

100 20,644

100 20,644

0 0 0 1000 100 100 500 0 2000 7000 0 0 0 2500 13200

9442

9442

9442

9442

9442

9442

9442

9442

9442

9442

9442

9442

113,304

50 40 50 10 150 100 80 750 10 10682

50 40 50 10 150 100 80 750 10 10682

50 40 50 10 150 3500 100 80 750 10 14182

50 40 50 10 150 3500 100 80 750 10 14182

50 40 50 10 150 3500 100 80 750 10 14182

50 40 50 10 150 3500 100 80 750 10 14182

50 40 50 10 150 3500 100 80 750 10 14182

50 40 50 10 150 3500 100 80 750 10 14182

50 40 50 10 150 3500 100 80 750 10 14182

50 40 50 10 150 3500 100 80 750 10 14182

50 40 50 10 150 3500 100 80 750 10 14182

50 40 50 10 150 3500 100 80 750 10 14182

1,000 700 580 1,100 120 3,800 42,000 1,200 960 9,000 2,620 0 176,384

F i n a n c i a l s

Item Description Revenues: Gross Sales Less Sales Returns Net Sales Cost of Goods Sold Materials Labor Other Direct Expenses Indirect Expenses Cost of Goods Sold Gross Profit Expenses Salaries and Wages Payroll Taxes Employee Taxes Professional Services Advertising Marketing Telephone Office Supplies Postage Insurance Rent Electricity, Gas, Utilities Maintenance Bad Debts Bank Charges Delivery Expenses Total Expenses

Year 1

Year 2*

Year 3*

Year 4*

249,888 299865.6 359838.72 960 1152 1382.4 248,928 298714 358456.8

400,000 1500 398,500

61,200 10,000 6,000 0 77,200 171,728

73,440 12,000 7,200 0 92,640 206,074

88128 12,000 7,200 0 107328 251128.8

90,000 12,000 7,200 0 120,000 278,500

4 Y e a r

113,304 0 1,000 700 1,060 1,100 120 0 3,800 42,000 960 9,000 2,620 0 0 176,864

135,964 0 1,000 0 400 1,100 120 0 3,800 42,000 960 9,000 3,144 0 0 197488

163156.8 0 1,000 0 400 1,100 120 0 3,800 42,000 960 9,000 3772.8

170,000 0 1,000 0 400 1,100 120 0 3,800 42,000 960 9,000 4000

P l a n

225309.6

232,380

Liabilities and Assets

Balance Sheet

Startup ASSETS Current Assets: Cash Accounts Receivable Inventory Other Assets Total Current Assets Fixed Assets: Fixed Assets Accumulated Depreciation Total Fixed Assets TOTAL ASSETS LIABILITIES & OWNER’S EQUITY Liabilities: Accounts Payable Taxes Payable Operating Loans Payable Term Loans & Mortgages Total Liabilities Owner’s Equity: Paid-in Capital Retained Earnings Total Owners Equity TOTAL LIABILITIES & OWNER’S EQUITY

Year End

5,000 3,800 0 176,864 60,000 61,200 0 0 5,000 246,864

5,000 0 5,000

23,899 500 4,500

70,000 265,733

0 0 0 0 0

176,864 N/A 0 0 176,864

70,000 89,899 0 0 70,000 70,000

70,000 265,733

Resources Used
Source Premier ► Hoovers Company Records ► www.irs.gov
► Business


								
To top