College of Business

Western Governors University

Appendix A: Business Plan Template

Promotions Management
December 8th, 2008

Kimberly Lykins, President 1633 Centaur Circle Lafayette, CO 80026 (303) 707-1714 kimlykins@yahoo.com

Capstone Course of Study Plan 3/20/2008

College of Business

Western Governors University

Table of Contents

Capstone Course of Study Plan 3/20/2008

College of Business

Western Governors University

A. Executive Summary-(1-2 pages) - A brief synopsis highlighting the key facts, issues, and conclusions. A1. Business Identification: Include the business name and location, a brief summary of the business concepts and the purpose of the business plan. A2. Mission, Goals and Objectives: Explain the goals and objectives you have outlined for your company. A3. Keys to Success: Include what you think will be your 3 main keys to success in the new operation. B- Company Summary-(4-6 pages). Describe the history of the origins of your business. B1. Industry History: Describe the industry in which the business will operate. The amusement entertainment industry consists of manufacturers, suppliers and owner-operators of coin-operated arcade and redemption games, jukeboxes, pool tables, and more. The amusement industry began developing about one hundred years ago with the creation of coin-operated vending equipment, jukeboxes, and pinball machines. The industry continued to grow over the years, and in 1971 students at Stanford created the first coin-operated video gamed called Galaxy Game (Wikipedia, 2009). During the late 1970s and early 1980s, video game arcades became the rage and appeared in malls, restaurants, bars, movie theaters and even grocery stores all across the United States. Arcades have become something of the past since high-tech home video consoles came out in the late 1990s; however, the amusement industry still exists and the typical amusement operator is a company that owns and maintains all games, jukeboxes and vending equipment in area businesses such as restaurants, taverns, and family entertainment centers. Usually, the operator owns the games, and shares a portion of the weekly revenue with the location owner. Over the past decade, the internet has brought the industry new and exciting ways to create revenue and reignite interest in gaming. Jukeboxes can now be online and have access to millions of songs, rather than just what the CD capacity was. In 2004, manufacturer Incredible Technologies came out with a live version of their popular Golden Tee Golf game. Players have the option of choosing to compete live against other video golfers in the
Capstone Course of Study Plan 3/20/2008

College of Business

Western Governors University

country. Other games have followed suit, and have the ability to be connected to the internet, creating the opportunity for contests and tournaments that were not known before. Presently, the industry continues to move towards promotions and national accounts. The internet provides the means to communicate and manage from afar, and the sky is the limit.

B2. Legal Form of Ownership: Describe the ownership and legal establishment of the company, (i.e. specifying whether your company is a corporation, partnership, sole proprietorship, limited liability partnership, etc.). Promotions Management will be a limited liability company (LLC). I will be the sole owner, and will file the Articles of Organization with the Colorado Secretary of State. B3. Location and Facilities: Describe the geographic location of your business including where the products/services will be produced. Identify any regulatory or legal Issues your company needs to consider now or in the future in reference to the location and/or facilities. Promotions Management will have an office located in Lafayette, Colorado. Since my company will be service-based, there should not be any regulatory or legal issues that pertain to the geographical location. B4: Management Structure: Include the key personnel and positions. Promotions Management will initially be operated solely by me, the owner. I will carry out all responsibilities until there comes a time when additional help is needed. B5. Products and Services- Explain the primary product(s) and/or service(s) your company produces and any unique attributes they may have. The primary service Promotions Management will offer is the organization an implementation of online gaming promotions for amusement operating companies throughout the U.S. I will set up and run their in-house contests, including providing promotional materials, posting regular leaderboards, and prize distribution. C. Market Analysis (3-5 pages)- The market analysis section of your business plan should demonstrate that you know your customers. C1: Target Market- Describe the current market for your companys product. The current market for our service is the mid to large sized amusement operator. The operator will have a minimum of five connected games of the same series. C2: Industry Analysis - Discuss the characteristics of this industry such as growth trends, units sold, or employment.

Capstone Course of Study Plan 3/20/2008

College of Business

Western Governors University

As it can be expected, the industry began to suffer when home video games were originally released, and improved, over the years. Companies in the industry had to be innovative and find new outlets for revenue. The connection of certain games to the internet provided a whole new way of gaming, and players across the country began competing against one another virtually. The current trend is a growth in this direction. There will be more connected games made, and more ways to drive customers to their local establishment to play. Sales and purchases of coin-op games declined in 2009 due to the economic downtown, but the industry continues to move forward, growing and adapting to the more competitive video game environment. C3: Competitive Analysis- Describe your companys current competition. The current competition for Promotions Management is the amusement operator itself. The amusement operation sometimes hires a league and promotions coordinator who job is to create and handle all game promotions. Most operators do not have a promotions coordinator, and others in the company will handle the responsibility. Many operators do not organize promotions at all. They may not know how to use contests and tournaments to promote play, or simply do not have the time to invest in it. This provides an excellent opportunity for Promotions Management to fill in this hole by providing this service, and helping the operator increase revenue through promotions. D. Market Strategy (3-6 pages)- Describe how product, price, place and promotion related to the products/services offered by the business. D1: 4Ps. Discuss the pricing, product, promotion and distribution of your product Pricing, Product, Promotion, Distribution Promotions Management will meet with the operator to discuss the type of online games they operate and customize a plan to its needs. PM will help the operator establish a budget for the prizes players will receive at the end of the contests. The operator will decide whether to choose the prizes themselves, or may opt to have PM determine what the prizes will be. Timelines will be determined, and a plan will be put in place. PM will create marketing material, posters and ad screens for the games, and will forward these to the operator. The operator will hang the posters and install ad screens on the games. Once this is done, the operators job is done until the end of the contest. During the contest, PM will monitor the leaderboards and post them for the players. Generating regularly scheduled leaderboards will help increase play. Once the contest has ended, PM will post final results, and the operator will pay PM a predetermined amount to fund prizes and pay for the management service. The contest winners will claim their prizes directly from PM. PM will verify the winner, and send the prize. D2: Price List- Develop a price list for the products/services offered. Pricing for our service will be $3 per week per machine. This includes contest creation, promotional material, management of the live event, and prize distribution. The operator will also pay for prize funds, depending upon their budget for that particular game type. D3: Selling Strategy- Develop a selling strategy with goals, milestones and deliverables. My selling strategy will begin with attending the AMOA Show/Fun Expo

Capstone Course of Study Plan 3/20/2008

College of Business

Western Governors University

Join AMOA $275 The selling strategy I will use will be combination o Ads Networking Trade Show
Sales 50 machines 100 machines 150 machines 200 machines 250 machines Timeframe Within 3 months Within 5 months Within 7 months Within 9 months Within 1 year Date by Mar 31 by May 31 by Jul 31 by Sep 30 by Dec 31 Action Sign up 50 machines Sign up 50 more machines Sign up 50 more machines Sign up 50 more machines Sign up 50 more machines Deliver Contests begin May 1 Contests begin Jul 1 Contests begin Sep 1 Contests begin Nov 1 Contests begin Feb 1

D4: Sales Forecast- Develop a Sales forecast based on expected market conditions.
Year 1 Sales Forecast
4000 Dollars 3000 2000 1000 0 1 3 5 7 9 11 Month Series1 Series2

E. Implementation Strategy (3-6 pages)- Outline how you will launch the business and evaluate the businesss success of failures E1. Overall Strategy- Summarize your overall strategy for successfully launching the business. My strategy for successfully launching the business is to start off with a booth at the largest and most-attended industry tradeshow in March. There I plan to visit with operators from all over the country, explaining how my service can help increase their revenue. Since I have worked in this industry for awhile, and know many of these operators personally, I believe I have an advantage and will be able to land a couple accounts during the show. After the show I will follow up with everyone I met with a letter and follow-up summary of my service. Within a month of the show, I will place an ad in the most popular industry trade magazine to remind the operators of my service, and catch the attention of operators I have not met yet.

Capstone Course of Study Plan 3/20/2008

College of Business

Western Governors University

E2. Implementation.- Outline your target dates for implementation along with your goals and objectives. Deadline Jan 15 Jan 31 Jan 31 Feb 15 Feb 28 Feb 28 Mar 10-12 Mar 30 Mar 30 Apr 15 Apr 20 Apr 25 May 1 Action Reserve space at AMOA Show to get early bird discount Acquire all equipment needs for the office Set up office phone, email & business contacts Acquire all software needs for the office Find local poster printer that will drop shop Email all operator contacts and provide AMOA Show booth number AMOA Show Meet with first customer and determine contest criteria and budget Collect payment for first contest Send out posters & Adwiz screens for first contest Set up contest in FACTS program Perform test run on leaderboards for first contest First contest begins

E3. Control Plan- Develop a control plan to be used to evaluate the success of the company in meeting milestones. The owners of Promotions Management will carefully follow the implementation schedule, and reflect on progress, or lack of progress made. In addition, timed reviews of the business operations will provide the information needed to stay on track and keep the business going. Not only will the owner be reflecting on the implementation goals and timeline, she will be reinforcing relationships with clients, asking for feedback, and making beneficial adjustments. After the first year, fewer major changes will be necessary, and reviews will be performed on a quarterly basis.

F. Financial Statements and Projections (3-5 pages) Develop projected financial

statements for the first year of business. You may use the Business Plan Financials Template to prepare this section (see Appendix B) or you may create your own template. F1. Revenue and Cost Estimate- This is the first part of the profit and loss statement. You will estimate the revenue (sales) and expenses for the first 12 months of your business

F2. Forecasted Profit and Loss Statement (Month by month for 1st 12 months) Here you will consider the sales forecast, the operating expenses, and the profits. Take the month-by-month revenue estimates of sales and expenses from the revenue and cost estimate (F1) and include interest expense to obtain a profit projection for your first year

Capstone Course of Study Plan 3/20/2008

College of Business

Western Governors University

of operations. It will reveal net profit (obtained from subtracting the interest expense from the profit before interest). The profit before interest is calculated by subtracting total expenses from total revenue. Examples of expenses may include:
Salary expenses Payroll expenses General and administrative Repairs and maintenance Marketing and Advertising Accounting and legal Utilities Insurance Taxes (real estate, etc.) Selling Expenses Other expenses (specify)

F3. Forecasted Balance Sheet- This statement deals with cash and income and also with assets, liabilities, and capital. The balance should result in the debit and credit balances ending up equal. G1. Financial Projections (1-2 pages)- Summarize the financial projections and the assumption used in estimating the projections in section F. G1a- Breakeven Point- Include an estimate of income and expenses. It determines whether or not your business will bring in enough money to meet its costs. This method is used to determine the exact point at which the business makes neither takes a loss nor makes a profit. It is calculated at a point where sales have grown at a greater rate than costs and the two lines cross.

Capstone Course of Study Plan 3/20/2008

College of Business

Western Governors University

G1b-Financial Position: Include the estimated financial position of the company at the end of the first year and the estimated capital/investment needs. Make sure to include any assumptions you used in estimating this information. G1c-Capital/Investment Needs: Estimate the capital and investment needs for your company. Be sure to discuss any equity contributions your company will need along with other start up costs required. References AMOA (2005, December 12). Amoa history. Retrieved from https://amoa.com/joomla/content/view/14/29/ Wikipedia (2009, November 17). Arcade game. Retrieved from http://en.wikipedia.org/w/index.php?title=Arcade_game&oldid=326314612

Capstone Course of Study Plan 3/20/2008