This presentation will look at my
business venture, the Zodiac cinema.
The cinema that I am looking to open on
Great Yarmouth seafront , the whole purpose of my business is to bring a cinema
back to Great Yarmouth. This presentation looks at all the different aspects I have
to
consider when starting my cinema.
I will cover my businesses current state,
my vision & mission Statement, my business Values, what my product is, the
staff I will need, my market and marketing methods, the industry and my
competition. As well as my operations, A SWOT analysis for my business and the
finance and funding.
Currently my business only exists on
paper. Because of the nature of my business its not something I have been able
to start.
In order to start my business though I
will have to contact the owners of The royalty on Marine parade and discuss
renting the building for business. If I don’t get the building, then I will
need to rethink my business plan completely because it relies on the royalty
building which is already equipped as a cinema. Without that building I will
have to think about the other buildings I could use as well as the different
aspects that will be needed in order to turn an empty building into a cinema.
If I do get permission to rent the
building for business, then my next step will be marketing and the acquiring of
any extra equipment that will be needed. After this I will also then have to
look at hiring staff and giving them the relevant training where necessary,
acquiring the films to show and getting the relevant confectionary to sell. As
well as these things I will also have to ensure I have the relevant insurance
and the right licences in order to begin trading.
My Vision statements is “To make it
easier for people to experience films on the big screen and encourage them to
do it more often.” By bringing a cinema to Great Yarmouth I am already
fulfilling part of vision statement as I am making it mare accessible for
people in Great Yarmouth to visit the cinema. The second part of my Vision
statement states that I am looking to encourage people to visit the cinema more
often. To this this I am going to be introducing a couple of marketing methods
that will be explained later on in this presentation.
My mission Statement is to “Provide
people in Great Yarmouth with a local and cost-effective cinema and increase
the number of people visiting the cinema throughout the year.”
By opening my cinema I am already fulfilling part of my mission statement, ‘to
provide people in Great Yarmouth with a cinema’. As for the cost-effective part
of my mission statements, I have kept my costs as low as possible and only
added the essentials to start with in order to kept ticket prices low for
customers. Again to increase the number of people visiting the cinema I will be
using my Marketing methods which will be explained later.
As cinema that is really focused on
the local community, we are also looking to ensure we help local amateur film
makers when it comes to showcasing their work. Therefore, we will be providing
our cinema as a location for film makers to show their work to their friends
and family as well as others from the school or college. By doing this we build
strong relations with the surrounding schools and colleges, but also help
provide for the community.
I came up with five
values for my business that focus on the customers, quality of our product,
suppliers, the community and our staff. These values are not only important to
my business, but they are also very important to customers. Customers like to
know a business values because it helps them decide whether they will use that
business or one of their competitors.
My first values is ‘Our customers ensure
our business operates, so we stand to ensure that every customer receives a
good quality service that makes them want to return.’ This focuses of the
important of the service customers receive. Customers like to know that they
will receive good customer service and that it will be the same every time they
visit my business.
My second value reads ‘We promise to
ensure our equipment is regularly maintained so we can guarantee the quality of
our films is never compromised.’ This value looks at the standard of the
product that the customers are receiving. To ensure customers return it’s
important for all
of the
equipment used to show a film, the projector, surround sound, etc, is all
working properly. With it all working correctly means that the film with be of
the best quality, which is what customers are expecting. Nobody will return to
a cinema where the quality of the film was compromised due to equipment
failure.
Next is ‘We are going to help local
business by purchasing local supplies where possible.’ This value help show
other business around the community that we are looking to provide our service
as well as do our bit for other local business.
Then it’s ‘We are going to show our
support to the local amateur film makers by offering them our cinema in order
to premier their work.’ This Value will be very important to local schools and
colleges because it gives them a professional setting for their amateur film
makes to show of their work. There is no doubt that schools and colleges will
make the most of this offer, however it may only happen between May & July
when the students are finishing up their projects for the end of the school
year.
And my final value is ‘We understand the
importance of our staff, so we promise to ensure they are properly trained and
are rewarded for good work.’ This value is important to potential staff because
it assures them that if they join my business then they will be well looked
after and rewarded for their hard work. It help keep staff moral up and
encourages them to work to the best of their abilities.
The main product that I will be proving
guests with is the opportunity to see new release films on the big screen in
2D. My secondary product is the confectionary that customers are
able to
purchase when they visit. These services pretty much sum up my business.
However, as the business progresses there
is the possibility of introducing 3D films and also to help expand my market even further, I
am looking to offer my cinema to local amateur film makers as a place for them
to show their work to their friends and family.
A cinema isn’t the sort of business I
would be able to run on my own so I would therefore need to hire some staff.
After some though I found that I needed to hire ten members of staff in order
to run my business effectively.
These 10 people are then split into 2
teams that will work morning and evening shifts. Each day there will be four
people on shift, two people on the counter and two people cleaning. The fifth
person on the team will have a day off.
As you can see from the staff rota, each
person will work 5 days a week but that means that on Monday, Tuesday and
Wednesday there are only three people working. Because these are quiet days
though as the owner I will step in on the floor if need be during the quiet
months. However, during the busier months or school holidays I might need to
hire a couple more people to ensure there is plenty of staff to cover all
areas. On the busier days, Thursday, Friday, Saturday and Sunday, there are
four people scheduled to be working, which should be enough to ensure a smooth
running of the business.
Using the rota I put together I have been
able to work out what a standard month's wages will cost the business. Standard
payrolls cover a 28
day period which is 4 weeks. Of the 28 days each person will work 20 days, a 7 hour
shift each day. On minimum wage that’s 61 pounds and 4 pence a week for each
employer, which is 1,220 pounds and 80 pence a month. Times that by 10 members
of staff is 9,766 pounds forty per month. This can be seen
on my Cashflow Forecast.
These numbers are done my minimum wage
for 25 years and over for everyone. However, a line manager would receive more
that the other staff and as the business grows the staff wages might go up to.
I have split my market into 4 categories,
Local, tourism, local filmmakers and local businesses.
The local market is people who live in
and around the Great Yarmouth area and will therefore visit my cinema as often
as they like. In the Great Yarmouth District there was 99 thousand, 3 hundred
and 70 people. And the tourism market is the people who visit Great Yarmouth on
holiday and will therefore only visit once on a rainy day. Around 5 million
people visit Great Yarmouth each year, of that number around 3.9 million are
day visitors. This rules them out, however, there are still 1.1 million people staying
in Great Yarmouth for their holiday each year.
These are two completely different
markets. With the local market I am looking to ensure that they return to my
cinema instead of one of my competitor, whereas the tourism market I am just
looking to visit once while they are in Great Yarmouth.
The advertising for a film does a lot of
the advertising work for my business however when people what to go to the
cinema I am looking to get them thinking of coming to mine rather than any
other. Therefore there are a couple marketing methods I can use to encourage
people to visit and continue to return to my cinema.
Another market for my business is the
amateur film makers. As one of my values states I am looking to open
up to
both individual film makers and those from schools and colleges. My aim is to
provide them with a professional setting for them to showcase their work. These
viewing would be open to the public, which would mean normal ticket prices will
have to be paid. However, a percentage would go to the school or college for
providing the film in the first place.
The final market for my business would be
local businesses looking for a location to put on a formal presentation of
such. This would mean that companies could hire out one of my cinema screens
for presentation purposes. In some of the screens there is a stage at the front
with plenty of room for multiple people.
These methods include Loyalty cards, Gift
Cards and the Star sign Discount.
The loyalty card aims to encourage people
to continue to return to my cinema because after visiting 10 time they get a
free ticket.
Gift cards encourage people to invite
friends and family to visit because it has been found that only around 6% of
gift cards are never used. Which is 94% of them being used. 70% of which are
used within 6 month of receiving them.
Finally the Star sign discount is
something I can up with to encourage people to visit the cinema more during
their star sign. Offering a discount has proven to be effective. In a global
survey that was done in 2018 people said they were more likely to make
purchases they were originally planning if there was a discount provided.
Therefore my aim is to stop people form thing they will just wait for a film to
come out on DVD and actually
got to
the cinema to watch it.
Over the pass few years there has been a
lot of speculation regarding the cinema industry and whether
or not it’s
dying because of streaming services like Netflix and Disney plus. However the
increasing numbers of UK households subscribing to Netflix isn’t affecting the
UK cinema industry too much.
As of 2017 there were 4 thousand, 2
hundred and sixty-four cinema screens in the UK and over the course of 2019
over 1 hundred and seventy-six million people visited a cinema to watch a
movie. This number is down slightly from the year before but is still higher
than the 2014 drop that saw only 1 hundred and fifty-seven point 5 million
people visit the cinema. A real low for the UK’s Cinema Industry. The average
cinema ticket price also dropped in 2019 to £7.11 from £7.22 in 2018.
Premises
The premises I am looking to use for my
business is the Royalty on Great Yarmouth seafront. As it is already owned, I
would have to rent the building. While completing research I was unable to find
a figure on how much it would be to rent the Royalty building, so taking into
consideration is size I estimated around £5,000 a month for the rent of the
building. I know this figure may be either to high or too low, but it’s a
ballpark figure to get me started.
Supplies
My main suppliers are going to be Film
distributors, such as Universal, Warner Bros, 20th
Century Fox, Walt Disney pictures, Lionsgate and Sony Pictures. These companies
will provide the films that I show at my cinema.
A company called A1 Equipment will
provide me with everything for the popcorn I need. However they only provide
equipment for the popcorn so I will have to use Bookers, a wholesalers for
small businesses, to provide drinks and bagged chocolate and sweets. I have
to use
them to start with because I was unable to find a bulk supplier for these
items. As time goes on, I will continue to look for another supplier though.
I am also looking to have a pick and mix
stand at my cinema and am looking to get a local sweet shop called Sweet dreams
to supply the sweets. I was unable to talk to them about the costs though
because of the lockdown.
Tools & Equipment
Because the building I am looking to rent
was a cinema previously a lot of the equipment will already be there which
means I won’t need to purchase everything for my cinema. A couple of things I
will need to get though like new tills and card machines.
Delivery & Transport
Because customers have to come to my
premises to view the product I am
selling its unlikely that I will need any transport for my business. Supplies
such as the popcorn and drinks can be delivered, so its no necessary at all for
me to have transport.
Security & Insurance
Once again for Insurance and security I wasn’t
able to find
a specific figure because it’s done depending on the building and what its
being used for. So I went with a ballpark figure of £1000. once again this
could be too high or too low but it’s a figure that can be adjusted.
Legal
I am looking to be a limited
company, which means that I personally won’t be liable for anything that
happens to the business.
The table shown here is the SWOT analysis
for my business model. The table has made me take a deeper look into my
business and ensure that I understand the different aspects of my business.
While looking at the strengths I found
that there was a definite gap in the markets for cinemas in Great Yarmouth
which therefore made the market strong because of the number of people living
in Great Yarmouth. I have also realised that the building I am looking to rent
for my business is in a prime location on the Great Yarmouth seafront which
therefore means that it is easily accessible for both my markets, both the local
residents and
the people visiting on holiday. Finally it made me think about my marketing
method and how it will help encourage people to visit my cinema over others.
However when thinking about my marketing
method it is also a weakness because it is offering special offers and
discounts to people, meaning that it could end up costing me more than I have
anticipated. The other weakness for my business is the competition and the
possibility of an over estimated market meaning I don’t receive as much
business as I predicted. The is also the possibility of underestimated costs
and unexpected costs which would affect my Cashflow Forecast which would
therefore affect whether I end up in debt or not.
Opportunities that have arisen though
from feedback from peer's I’d the possibility of introducing 3D films at a
later date and
also catering for local amateur film makes by having local film shown at my
cinema. As business progresses, I would also look into updating the décor in the building but
would have to get permission from the building owners before going ahead with
that.
Finally, any threats to my business.
Brexit has had a big impact on the imports and exports for industries across
the world, but for the film industry it hasn’t been stated on how it will
affect cinemas getting films from foreign distributors. There is a possibility
that the cost of films from film distributors could go up, which means a small
business like mine wouldn’t be able to cope and would therefore go under.
Current circumstances like the COVID-19
lockdown has put a lot of filming on hold which therefore means there are going
to be major delays in film release dates because many are being pushed back to
a later date. This could mean both good business and bad because there could be
a lot of good films coming out at once meaning many people will be wanting to
see them in the cinema. but it could also mean that there is a delay in film
production meaning cinemas struggle to get hold of new films to show. It also
has to be taken into consideration that because many people have had to take
pay cuts and even lost their jobs their wont be many people who have the money to
visit the cinemas because the simply wont have the money. Which also ,means
business will struggle to stay afloat if nobody is paying for their products of
services.
Shown here is the cashflow forecast for
my first year. I have also passed one around to each of you. The main point of
my cashflow forecast is to show that my income is larger than my expenditure,
and therefore means that by business model is viable.
My business income will come from the
ticket purchases and confectionary sales and the expenditure includes the
building rent, paying film distributors, confectionary orders, paying staff
wages, as well as the smaller things like the insurance, advertising, heating
and electric bills, etc.
To start my business I need twenty-three
thousand pounds. This covers the costs that need to be paid at the beginning of
a month such as, the rent for the building, the costs for technology, the cost
of the first confectionary order and also the costs for staring my website and the
advertising in need. The other costs such as Staff wages, the percentage that has
to be
paid to film distributors and the heating and electric bill are all paid at the
end of the month when I have made some money from the ticket and confectionary
sales.
A lot of the costs in my expenditure is
fixed, such as the building rent and staff wages, however there is a bit that
is variable, meaning that from month to moth could change, such as the
confectionary order and the amount of money that has to be paid to the
distributor.
My cashflow forecast is done bases on a
good year for business and doesn’t take into consideration for unforeseen
circumstances such as the current COVID-19 lockdown. However, given these
circumstances and my desire to take my studies further I wouldn’t be starting
this business for the next five years or so, which means that everything would
have settled down and be as back to normal as possible. Meaning starting my
business would be a good idea.
