Professional Documents
Culture Documents
BUSINESS PLAN
The Seven Elms Resort outlines how it will provide quality hospitality services, cost-effectively, in a popular
northern U.S. lake resort environment. This plan successfully raised capital for property acquisition,
renovation, and company start-up related costs.
EXECUTIVE SUMMARY
COMPANY SUMMARY
HOTEL & LOUNGE OVERVIEW
MARKET ANALYSIS
COMPETITIVE ENVIRONMENT
STRATEGY & IMPLEMENTATION
PROMOTION STRATEGY
FINANCIAL PLAN
RESUME
EXECUTIVE SUMMARY
We seek funds for the acquisition and renovation of Seven Elms Resort, an adult-marketed, 17-room "boutique
style" hotel specializing in a couples' "getaway" to provide relaxation and recreation in Benzie County, a popular
tourism spot located next to the state of Michigan's Lake Michigan. Moderately priced between the high-line
hotel properties and the older motel strips, Seven Elms Resort shall fill an affordability niche not presently
available in Benzie County.
Combined with an on-site lounge, grill, poolside beverage service, and morning continental breakfast bar, we
are seeking investment funds to renovate the hotel building, build-out a piano bar/lounge area with dance
floor, and construct an outdoor pool adjacent to the indoor pool. With this refurbishment and other new
amenities, Seven Elms Resort will form the basis of a highly profitable hotel venture. We are seeking funds to
develop and expand the business in a phased approach, as highlighted within this document.
Seven Elms Resort's owner, Steve M. Blackburn, has an extensive business background, including over 14 years
of experience developing a variety of businesses. Mr. Blackburn received his B.A. in Business Economics, and
currently is an M.B.A. candidate at the University of Michigan. Desiring to return to his own business, he wishes
to establish Seven Elms Resort, Inc. in 1999.
The foundation for the plan is a combination of primary and secondary research, upon which the marketing
strategies are built. Discussions and interviews were held with a variety of individuals involved with other
similar businesses to develop the proforma data, review the market potential, and competitive situation.
Renovation in the Prairie Style period, our hotel's design elements and furniture will reflect this "organic"
approach and provide an overall comfortable experience. Seven Elms Resort shall specialize in meeting an
individual or couple's needs. As growth warrants, the 10-acre site would allow for future expansion of the
lodging portion of the resort (Phase II).
Introduction
In today's highly competitive environment, formal business planning is an essential element in achieving
business success. A well-written business plan is primarily a communication tool used to obtain financing. In
certain instances, particularly with our early stage company, this business plan also serves as a strategic plan.
Considering that lenders are inundated by numerous investment opportunities from which they choose only a
few, this business plan describes our story and how we intend to grow. Seven Elms Resort, Inc. management
team has made an in-depth analysis of its opportunities and weaknesses and it has concluded that the company
has an excellent chance to succeed.
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integration of these disciplines results in extensive and innovative services, set in a unique Prairie Style
surrounding for our prospective guests.
Mission Statement
Seven Elms Resort, Inc.'s mission is to provide quality hospitality services to our guests in a comprehensive and
cost competitive manner, providing the finest accommodations in Benzie County, Michigan.
COMPANY SUMMARY
Company Ownership
Mr. Steve Blackburn founded Seven Elms Resort, Inc. hotel and lounge in 1998 as a Michigan Subchapter "S"
Corporation. Since 1985, Steve has had extensive experience in creating and managing organizations for
environmental and economic development-oriented companies involved in nationwide projects.
Steve consults with area businesses in development-related issues, including finance, and is a United States SBA
counselor at the Small Business Development Center at the University of Michigan. Past SBA clients include
service and manufacturing organizations. He is a certified SBA Fast Track program instructor, a Michigan
licensed loan solicitor, with a specialty in commercial finance, and a guest lecturer at U-M for Business Plan
Writing Workshops. He has started previous business and corporate subsidiaries and looks forward to managing
Seven Elms Resort on a daily basis.
Currently, Steve is an M.B.A. candidate at U-M and holds a Bachelor of Arts degree in Business Economics with a
minor in chemistry from Notre Dame University.
Phase I
This phase involves preparation and development of Seven Elms Resort. Until the ideal property is acquired,
Seven Elms Resort, Inc. offices will be housed at the home of Mr. Steve Blackburn, its founder. The property
will establish its own Prairie Style identity, management directives, and capital. Incorporating a total quality
management approach and a guest appreciation program, Seven Elms Resort will develop key repeat guests and
lounge patrons. Through word of mouth and advertising, our reputation as an affordable "boutique style" resort
shall grow.
Property renovation will include the makeover of 18 to 17 rooms (with 3 suites) and the conversion of the
present onsite property manager's house to lounge gathering space. New construction includes a bar room
addition, extra parking lot build-out, and an outdoor pool. [Phase I capital (start-up) funds are documented
later on in this business plan.] It is anticipated that the funding and transfer of this property will happen in
spring 1999. Operation "as is" of the facility would continue through the summer and fall. The hotel will close
for the winter months for its build-out and renovation.
Phase II
Continue implementation of sales, advertising, and marketing strategies developed in Phase I. Identify and
pursue additional guest markets, i.e. Internet room guarantee services. Seven Elms Resort shall evaluate its
room occupancy position to determine if a facility expansion is warranted. Seven Elms Resort anticipates
additional support staff would be needed at the proper time (Phase II). This Plan does not contain funding
needs for this Phase.
Competitive Advantage
Strengths of Seven Elms Resort, Inc. include Steve Blackburn's broad base of experience in managing different
types of companies. He has extensive development experience and a track record of hiring the right people and
training them. Blackburn understands the service sector business, has traveled extensively frequenting
numerous lodging establishments, and has gained invaluable experience in organizational management.
Currently, a mid-size "boutique" resort niche is vacant in the Lake Michigan market, with present lodging on the
high end, averaging $225 per night (and up) down to older motel properties of $79 per night. Several B&B
establishments may fall into the middle, however, Seven Elms, as a resort-style property, will serve its niche by
itself.
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MARKET ANALYSIS
Seven Elms Resort, Inc. like all businesses, is affected by forces and trends in the market environment. These
include economic, geographical, competitive, legal/political, and technical.
Economic Environment
Positive forces include the generally prosperous economy that is currently in place, full employment, rising
wages, and low inflation, leading more people to be able and willing to spend money and to get away for some
time. The close locality of Lake Michigan offers an affordable alternative to a flyaway destination.
Geographical/Competitive Environment
Located just two blocks from Lake Michigan and downtown Lakegrove, the area has several golf courses, two
ski hills, water recreation activities, numerous dining establishments, various retail and specialty shops, art
galleries, theatre entertainment venues, and the beauty and serenity of Lake Michigan, which has made this
county a famous Midwest tourist destination. Traverse City began to prosper in the 1870s, becoming a desirable
resort area. Many homes and estates date back to this era and several enormous "summer cottages" were built
on the lakeshore and are still in evidence today.
Seven Elms Resort shall fill a niche not presently available, namely a moderately priced (under $130 per night),
resort-type establishment. Combined with an on-site lounge, a grilled food service, an indoor and outdoor pool
bar, and a morning continental breakfast offering, we shall differentiate ourselves by becoming a "boutique
style" resort versus simply another motel.
Our Prairie Style surroundings will attract and retain guests who appreciate such refined environments.
Legal/Political Environment
Seven Elms Resort management will not move the project forward until it has obtained an option to acquire
one of the 19 Benzie County, Michigan, liquor licenses. As faced by all businesses, the proper insurance needs
shall be met and all operations and policy manuals shall be reviewed by appropriate legal experts. The facility
will obtain all the necessary building permits prior to construction. Present facility zoning allows for this
proposed use, including a bar, cabaret, grill, and dance floor space.
Technology Environment
Computer programs greatly simplify the financial recordkeeping for today's businesses. As a small business,
Seven Elms Resort will need to watch its expenses closely. By utilizing the existing software packages available
in the hotel industry, including: room and facility management database, controlled bar and inventory
measuring systems, and room key cards that allow patrons to charge directly to their room account, this
technology shall assist management in controlling costs, reducing cash management, and maximizing revenue.
Seven Elms Resort shall attract the resources necessary to train and operate the system in order to generate
the reports and manage the inventory.
COMPETITIVE ENVIRONMENT
A listing of the hotel and motel properties in Benzie County, Michigan (sourced through Midwest and the
Ameritech Directories) is as follows. (Note: Other properties on Lake Michigan, but outside the city limits, are
not included):
High Line ($139-$750 per night, depending upon season)
The Cove of Lake Michigan ($145-$225)
Grand Michigan Resort and Spa ($139-$750)
The Harbor's Edge ($139-$199)
Market Research
A hypothetical behavior sequence model for a new customer (future guest) contemplating using a hotel and
lounge service for the first time might look something like the following (based on discussions and interviews
with potential guests):
Individual or couple decided to getaway for a few days. This may happen as a result of a need for a change of
pace, vacation, or a celebration purpose. The need can arise anytime year round. Even in the late fall and
winter months people are thinking "getaway" to break the weather doldrums.
Individual or couple investigates hotel services. In most cases, this means the they will consider first any
recommendations that they are knowledgeable of through prior association (relative, friend, or social group). If
the individual or couple is new to the area or otherwise has not made any close connections with people,
he/she would look in the Yellow Pages for a listing, or perhaps look in a newspaper for advertising.
Acting on the advice of friends (or own knowledge), the individual or couple will call the recommended
property to obtain information that will help him/her decide if this place is the best for them. Criteria for
selection include: (1) amenities (pool, on-site food service, nonsmoking rooms, bar lounge area, etc.); (2)
reputation (what kind of persons usually stay here?);(3) physical plant (how recent the renovation, upkeep,
etc?); (4) courtesy (professional and attentive staff?); and (5) pricing (is the place affordable?).
Based on the information received, the individual or couple makes a decision and either schedules an
appointment to view the property or makes a reservation.
The individual's satisfaction with his/her decision and with the service itself is largely a function of their
interaction with the staff during their stay. Everyone associated with Seven Elms Resort will do everything
possible to ensure a satisfactory experience for the guest, so that future business (and a future referral) is not
at risk.
Marketing strategies will build on this model, taking advantage of precipitating events, fostering word-ofmouth recommendations, and creating satisfaction through interacting with the future or present guests.
Marketing Strategies
Target MarketsGeographical: The major cities within a three-hour drive of the property.
Couples
For its guests, Seven Elms Resort will be positioned as a new, beautifully landscaped, nature-filled, unique
atmosphere hotel with a bar lounge service that fits an adult "getaway" market niche. A full range of referral
services (i.e. restaurant recommendations, shopping, taxis, area attractions) will be made available and
tailored to the needs of the particular guest.
Business services range from room phones that are Internet jack ready and telephone answering message
service for each room to on-site fax services and meeting room space (lounge sitting area and cabaret room).
Seven Elms Resort will aim to attract business guests and their partners needing to hold planning or strategy
sessions away from the office in a new and comfortable surrounding, in order to even out revenues throughout
the week.
Distribution Strategy
Unlike products that are produced, then distributed, and sold, hotel and lounge services are produced and
consumed simultaneously in a real-time environment. Thus, distribution issues center on making the services
available in a convenient manner to the greatest number of potential guests. Seven Elms Resort will maintain a
front office staff member throughout the night so guests are able to get answers to any question or service
when they need it. This flexibility is especially attractive to the business traveler. Clients will be able to
contact Seven Elms Resort by telephone, fax, and e-mail.
Pricing Strategy
Rooms per night fees have been developed. The fee schedule takes into account seasonal rates that are
common in the area. For businesses and other large group functions, pricing can be discounted depending upon
the number of rooms reserved.
Example lounge pricing and grill food offerings are also noted.
Example fees:
Room Fees
Winter Rates (November through April):
Regular Rooms
Suites
Summer Rates (May through October):
Regular Rooms
Suites
(Includes Continental Breakfast, use of indoor and outdoor pools, and exercise equipment
Fax Service (per page, outgoing)
Telephone Rates (set at going company rate)
Hotel Safe Storage Fee (per day)
$109.00
$149.00
$129.00
$179.00
room.)
$0.75
$2.50
$4.75 - $7.50
$4.50 - $5.75
$4.25
$3.75
$3.25
$2.75
$2.50
$7.99
$5.99
$5.99
$5.99
$4.99 - $8.99
$4.99 - $6.99
$4.99
$6.99 - $8.99
PROMOTION STRATEGY
Promotion strategies will vary depending on the target market segments. Given the importance of word-ofmouth referrals among all market segments when choosing a "getaway" hotel or small business meeting
location, our efforts are designed to create awareness and build referrals. A cost-effective campaignfocused
on direct marketing, publicity, our frequent guest reward program, and advertisingis being proposed.
Marketing Plan
(Chicago, IL) and is compiled from tax records (by upper-income geographical areas, Secretary of State
incorporation registrations, business license applications, and announcements from newspaper clippings).
The brochure and letter introduces Seven Elms Resort, stresses the importance of having a good time in
comfortable surroundings, provides information on our resort services, and describes what sets us apart from
other area hotel and lounge properties. The initial mailing may contain a promotional offer: the opportunity to
receive a 10% discount on the first night's room rate.
Approximately two months after the mailing, an additional letter shall be sent. The potential guest would be
asked to address any questions and the follow-up would remind them to drop in for a property tour on their
next trip to Lake Michigan. Additionally, new businesses will be targeted and sent information.
The cycle would repeat itself with new target communities and select businesses and would continue through
the first year. After that, additional mailings would be conducted, as needed, based upon occupancy goals.
Seven Elms Resort, Inc. will also consider developing a one-page newsletter to be mailed quarterly to past
guests and prospects in the database. The newsletter can be used to update clients on hotel and lounge and
area-related developments, but also serves as a reminder of what sets Seven Elms Resort apart. The newsletter
can be produced in-house and for the cost of paper and a stamp creates a lot of goodwill among guests and
business prospects.
Advertising
Advertising is utilized primarily to attract new guests and serves to build awareness and name recognition of
the resort in general, which is important for word-of-mouth referrals ("Oh yes, I've seen that resort's ads
before.")
Periodic advertising in target market area newspapers will afford Seven Elms Resort, Inc. name
recognition benefits. From quarter page ads announcing its entertainment line-up to business card-sized logo
ads.
Yellow PagesAmeritech PagesPlus, Greater Benzie County Telephone Directory. Research indicated
that new visitors or people who don't have many personal acquaintances to ask about hotel and lounge
services will look to the Yellow Pages to establish a list of potential hotel and lounge services to call. Even a
small 2" 2" boxed ad can create awareness and attract the desired target client, above and beyond the
ability of a simple listing. Ameritech Yellow Pages covers the relevant market area, delivering over 30,000
copies to residents and business. Midwest Directories covers Greater Benzie County but is considered a
second-tier directory to Ameritech.
Telephone Book Cover. A business card-like ad on the plastic cover which is placed over any telephone
book enables the business name/logo to be seen virtually 24 hours a day, 365 days a year. Covers are
distributed bi-annually free of charge to residents and businesses in Benzie County.
Additional places to post flyers/business cards or for a business card ad include bulletin boards in
public buildings (grocery stores, senior centers), and playbills for local theater groups.
$750
$250
$750
$500
$500
$5,000
$2,000
$250
$10,000
FINANCIAL PLAN
Here is the Project Funding Summary for Seven Elms Resort:
$881,000
$353,739
$116,000
$49,261
$1,400,000
Classification: Cost
Liquor License
Architect Fees
Accounting
Marketing, PR & Advertising
Engineering & Permitting
Office Expense
Founders Draw (Gen. Contractor)
Legal
Total
$71,000
$7,500
$1,500
$10,000
$5,000
$2,000
$16,000
$3,000
$116,000
The development of Seven Elms Resort, Inc. will require the full-time talents of Steve Blackburn. Phase II
growth amounts will be developed and sought at a later date, based upon needs to be determined at that time.
Room Occupancy Rate at 57%, G & A overhead and operations costs are calculated on an annual basis.
Property manager and founder's salary is based on a fixed salary expense basis.
All fixed and variable labor costs should rise annually at 2.5% per year.
All revenues are figured to rise annually at five percent. Fixed annual, administrative, and office
expenses rise at an annual rate of one half of one percent.