The Company

Double Decker Tours of Washington, LLC (DDTOW), located in the city of Washington, DC is a new sightseeing company in its formative stages. The company was established to fill a need in the local sightseeing tourism market. This gap exists in high-quality, reasonably-priced sightseeing tours in the nation’s capital far from the city center. It suggests that a new company could capture a substantial portion of the existing sightseeing tour market.

The Company’s Mission

Double Decker Tours of Washington’s mission is to provide safe, reliable and fun sightseeing tours to the visitors of Washington, DC using London-style double-decker buses. There will be nine buses with open tops on sunny, warm and beautiful days. Three will be closed for inclement or cold weather.

Product and Services

DDTOW offers charter and sightseeing services throughout Washington, DC. We will inspect the White House (Capitol Building), Supreme Court, Senate Office Buildings/House Office Buildings, Museums/Library of Congress, Adams Morgan, Catholic University, House Office Buildings, and many other areas that make up DC.

Marketing and sales strategy

DDTOW is going to spread the message that travelling with us can be fun. Comcast Cable System will help us launch our message in Washington. Additionally, we will host parties for decision makers from tour associations and media. Pre-opening marketing budget is $80,000 We plan to spend approximately 1% of our gross revenue on marketing and advertisement as we grow our profits. To assess our strengths and weaknesses, we will distribute surveys cards.

The Competitor

The following are our main competitors on the Washington sightseeing market:

1. Tourmobile – Tourmobile is based in East Potomac Park. They are authorized by the National Park Service, to conduct sightseeing tours along Arlington National Cemetary. Tourmobile operates a shuttle service that uses 85-passenger trams on the Mall and 120-passenger trolleys in Arlington. They have been in operation for more than 25 years. Tourmobile was started in 1969 as a subsidiary of Universal Studios to provide interpretive services along the National Mall. Tourmobile, Inc. was established in Washington DC by Tom Mack, who bought it in 1981. Tourmobile employs over 42 employees and serves approximately 2 million riders annually.
2. Historic Tours of America – HTA operates in Washington, DC as the Old Town Trolley (DC Ducks) and the Old Town Trolley (DC). HTA is a national company with outlets across the country. HTA, like Tourmobile, uses a shuttle system for its passengers and they use 35- to 60-passenger trolleys.
3. Grayline International: Grayline International, a global company with offices around the globe, is Grayline International. Grayline offers its services to local bus operators and operates multiple tours. Grayline provides Washington’s Lil Red Trolley.
4. Zohery Tours – Zohery Tours operates 15-passenger vans for hire and 45-passenger coaches buses for hire. Zohery tours last about three hours.

Target Market

The Washington Convention and Tourism Corporation recently released figures that showed 17.6 million visitors to Washington, DC spent over $10 billion and $4 billion on tourism and sightseeing activities. Although overnight leisure travel increased significantly while day-trip volume was down, the good news was that average trip expenditures increased to levels of $480 per day per trip. Many of the trips that were made to the city centered around visiting historical places and museums (36%) and shopping (24%). While 36% of tourists were solo travellers, compared with 80% of business travelers, 23% of leisure travelers traveled with children as opposed to 6% for business travelers. Also many of our visitors to the city have income of over $75K, were married, had no children, were in the 35-54 age group, and had an advanced degree. While foreign tourists visited Washington by 19% and 14% respectively, they ranked it 8th out of the top 10 destinations in America by foreign visitors.

Management

Michael Frank Coleman* will serve as member manager. He is now the member manager.

Experience in Washington sightseeing, including working for Tourmobile and leading walking tours. Coleman has a gift for recognizing opportunities, and developing staff members to make the most of them. Coleman will create a team made up of tour professionals who can oversee the operation and market our services.

Paul F. Williams* brings over 30 years’ experience in business development, both private and international. He will serve as DDTOW’s business manager.

*Confidential and proprietary resume data has been omitted from this sample plan.

Operations

The MCI Center, 601 F Street in Northwest Washington, will be the place where tickets can be purchased and buses boarded. This location is a great place to have foot traffic, ample parking, and easy access to public transportation. Peter Pan Bus Service will store the buses and provide service in Tuxedo. This will allow us to reduce staff costs while still providing top-notch services for our customers. Administrative offices will be located at a small office on Third Street, Northeast Washington.

Financial

Double Decker Tours of Washington, LLC, after analyzing the market and making projections, reported that there is enough demand for sightseeing tours around Washington. In its first year of operations, Double Decker Tours of Washington, LLC generated over $14 million in revenues. They use 15 London-style double-decker touring buses and select routes in the city. These sales figures represent 453,000 potential customers out of a potential 22 million customer base. Revenues are expected to rise to $17 million in the second year, with more advertising and expanded tours serving over 500,000 clients. DDTOW has the potential to grow faster due to new memorials and other venues opening in Washington. DDTOW&#8217’s market share will increase by more than the demand for tours in the target market. These sales levels will yield net profits totalling $13 million in DDTOW’s first operational year, and $15 millions in year 2. In year one, net profit will exceed 60% and will stay at the same level in year 2. The company’s long term plan is part of the due diligence package. Cash will be burned the first few months of operation (see the Start up table in this document). Revenue can then begin. This is due to the organizational and regulatory obligations of a new tour operator but aggressive marketing and promotion will readily make up for the slow start.

Long-Term Development & Exit Plan

Goals

Along with double-decker buses that travel new routes within the city, our tours will help us grow to become a major player over the next five year. Our goal: To be the leading company in Washington area sightseeing/tours.

Milestones

We will monitor profit and sales closely after the service has begun. We will seek to expand into new markets if our service is on track by the end year two.

Risk Evaluation

Risk is inherent in any new venture. The success of our project hinges on the strength of acceptance of our new tours and buses. We anticipate that we will face stiff competition from established tour companies after year 1.

Exit Strategy

DDTOW would prefer to expand into the Baltimore Richmond, Atlanta, Miami and Atlanta markets in the next ten years. We may consider buying out a larger Sightseeing/Tour operator, or selling to a new buyer.

Funds Awarded and Utilized

DDTOW seeks funding in the shape of a five year loan for $800,000. The majority of the startup costs will be attributed to the following areas, with a declining value:

1. Twelve double-decker London-style sightseeing buses that can carry 70 people.
2. Provisions for sufficient cash reserves to cover the operating costs of the buses within the first 3 months.
3. Costs associated with recruiting, training, and paying operational crews.

The following chart shows the highlights from our business plans over the past three years.

1.1 Objectives

Double Decker Tours Washington has the following elements in its primary objectives:

• Establishing and operating a new tour agency whose mission is to visit the monuments and memorials of the capital and the surrounding historic neighborhoods.
• To implement an organizational and marketing strategy that will, beginning in the first months of operation, achieve an average load per bus of 65-85 percent depending on season and increasing thereafter to 75-100 percent, thereby maximizing revenues and return on investment while reducing risk.
• Our first year of operation saw revenues of approximately $14 million. By our third year, we have exceeded $20 million. Expanding into new markets in the Baltimore-Washington corridor.
• To realize net operating profits between 60-70% within the first twelve months of tour operations, and steady growth that allows for rational expansion.
• The following steps will be taken to achieve the desired results: Purchase twelve double-decker buses in London-style, 70-passenger configurations for the Washington touring public. Continue expanding the fleet incrementally as the demand increases.
• To gear operations, and present a professional, serious, growth-oriented image from the outset, that will set the stage for a reasoned, planned expansion, mirroring growth rates projected for the first years of operations.
• To achieve DDTOW’s other objectives, it is crucial to develop and identify strategic alliances through the DC Chamber of Commerce and the Greater Washington Board of Trade.

1.2 Keys to Success

In decreasing order of importance the following five key factors are crucial to Double Decker Tours’ success in Washington:

• Employing an experienced, highly professional management team that combines vision; realism; financial ability; solid knowledge of the Washington tour/sightseeing market; familiarity with, and belief in, the utilization and benefits of the latest computer informational technologies; realization of the crucial importance of an organization personnel to its success; and a total commitment to the overall mission and goals of Double Decker Tours of Washington.
• Intelligent, progressive, and aggressive marketing that identifies the company as a different kind of player, one that is sharper and smarter, with a higher level of professionalism and operational standard than is the norm in the Washington region. Marketing strategy will focus on safety. The company’s staff is highly skilled, professional, and dedicated to customer care. Simple, easy-to-understand pricing will also be key pillars.
• Identification, through careful market research, of unserved or under-served routes in the city that may be of interest to our customers and enable high load factors and profitable operations.
• You can use a fleet London-style doubledecker buses to get a clear view of the city. They offer a high level comfort, safety, fuel efficiency, and fuel efficiency.
• Information technology is being used to cut down on staffing and other operational expenses, expand the potential market, capture sales opportunities more quickly, and increase customer convenience.

1.3 Mission

Double Decker Tours of Washington, LLC aims to offer safe, professional, and affordable sightseeing services to all of its customers. We aim to fill a gap in Washington’s sightseeing market. Our goal is to show the most popular sites and highlight those that are well-known to millions of tourists. We will have and keep the best bus fleet available. We won’t compromise on safety or customer care. We will continue to promote and offer fun tours

We want our customers to remember their experience with us and recommend us as a referral to family or friends. From the moment they meet us, to the moment they leave, we provide courteous and friendly service.

With a combination of clean buses, friendly and informative and helpful driver guides along with outstanding customer service, DDTOW intends to lead the other companies and make our standards their ambition.