Professional Documents
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Opportunity Plan - Clow
Opportunity Plan - Clow
Tarmac!
Opportunity Plan 2015
Written by: Kaitlyn Clow
p. 1-705-434-TUTT
f. 1-705-890-TUTT
kaitclow@tutt.com
Tearupthetarmac.com
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Table of Contents
I.
II.
III.
IV.
V.
VI.
VII.
Legal .......................................................................................................................................... 20
Legal Ownership Structure
Laws and Regulations
Risk Management
References ................................................................................................................................. 25
Executive Summary
This document is an in-depth Opportunity Report for the childrens team oriented obstacle course race
company Tear up the Tarmac (TUTT.) This report includes detailed information about the company and its
objectives, background information on the industry, the current competition, various strategies to approach the
market, location details, detailed financial statements, projections and the legal requirements for this company to run
successfully.
Adventure Races and outdoor obstacle course races are one of the fastest growing sectors in outdoor
activities since 2012. With the growing popularity it came as a surprise that there is no large scale adventure races
offered for children. It was immediately recognized an opportunity in the market that could be filled if promoted
and executed properly.
TUTT is an educational program marketed through elementary schools; in conjunction with the school
board. TUTT inspires and encourages youth to accept adventure, live a healthy active lifestyle and work as a team.
TUTT should inspire the students, teachers and the community; volunteers will be essential for these races to run
safely and so they can grow across Canada.
This report shows a small start-up school board called Simcoe County. This school board is located in
central Ontario it has 87 elementary schools with a student population of approximately 50,000. I chose this school
board because I am very familiar with it (it is where I; the owner Kaitlyn Clow grew up), many of the schools in the
area have large school yards that will be a perfect location to host Tear up the Tarmac!
Children are growing up in the most connected society ever known to man; the connection with oneself is not present even though it is far more
important than the connection with hundreds of profiles online. Kaitlyn Clow Owner of TUTT
History
Testing ones physical and mental strength has been popular since the 1970s by running marathons and
triathlons; the 2000s have brought a new way to race to the adventure market by introducing Adventure Races and
obstacle races that tests wits, brawn and bravery. Races like Tough Mudder, Mud Hero, Warrior dash and
Spartan race have started gaining a large following recently because they excite, intrigue and inspire the
participants. Obstacle courses were first used for military training as a way to prepare for combat and get into shape;
however now they are incorporated in many adventure races as a skill testing sequence.
Business Model
The concept of TUTT is to target schools; they will promote to the students within the school. The low cost
of the event will allow students from various financial situations to participate. TUTT wants to capture the entire
school; teachers, students and parents.
Office
Administration/Social
Media (1 employee)
Organizers (2 employees)
Parent/Teacher
voulenteers
TUTT is owned as a sole-proprietorship by Kaitlyn Clow; she employs four full-time staff as well as
manages many event volunteers. By being a sole-proprietorship it allows for smaller start-up costs, the owner will
take on many risks and responsibilities during the first few years of business however she will maintain control and
have the ability to make business decisions on her own.
Product Summary
TUTT is selling an early start to a healthy and active life for students. TUTT provides a three day adventure
race event for students; multiple age specific courses will be set-up to ensure safety and fun for the students. The
event includes two days of active and adventurous recess; during their recess obstacles will be set up and supervised
in the playground this will allow students to practice and play on the equipment. Day three is a full day of fun, it is a
full on team challenge race set up for the students and teacher (optional), parents will be invited to come watch and
cheer on their children. Prizes and awards will be given to every participant to promote equality and teamwork.
TUTT is providing a service to the schools who host the events, it is a safe, active, educational and fun event for all
students.
Industry Background
Industry Overview and Analysis
Adventure Race VS. Team-Oriented Obstacle Challenges
The name adventure race has been thrown around the racing world to describe a variety of races over the
past decade. What is a true adventure race and what are these other races called? Adventure racing made its worldwide debut in the 1980 Alpine Ironman race in New Zealand it challenged racers to climb up and ski down
mountains and paddle through long river sections using their orienteering skills to avoid getting lost. The following
year Alpine Ironman creator Robin Judkins started the infamous coast to coast race this race incorporated many
of the popular adventure race activities including: trail running, climbing, biking and paddling. Adventure races
cover hundreds of kilometers of terrain involving various outdoor elements. Real adventure races are for the
supremely fit and adventurous; this is a very niche market in the overall racing industry. If the market is so small
why has there been such a huge influx in the market?
Races like Tough Mudder, Spartan Race, Mud Hero and many more have been rapidly growing across
North America. They market extreme outdoor races that involve using their mind and body in a team challenge.
They carefully never use the words Adventure and Race together in the same sentence however they have
managed to generate a huge market of racers who believe they are participating in an Adventure Race however in
actuality Tough Mudder; one of the most popular of these races, describes itself as a Team-Oriented Obstacle
Challenge. These team races have had a huge boom in the 2000s, the idea of a survival of the fittest challenge with
friends is a fun way to get active and adventurous outdoors. These races boast about their 15+km long course with
world class obstacles; a race of that length is an attainable goal for the average active person to train for. The
obstacle challenge races are held in outdoorsy locations close to central hubs; for example the ski hill Mount St.
Louis Moonstone hosts the Mud Run, this ski hill is less than two hours from Toronto. By doing this it gives the
impression of wilderness while still being convenient for competitors to drive to.
Target Market
Listed are the demographic and psychographic differences between the two racer styles.
Adventure Racer
-
Male
- 25-45
- Annual Income $50,000
- Spends 7 days a week doing something active
Allocentric traveler
- Not married/no children
- independent/introvert
Outdoor hobbies (i.e. mountain biking, white water kayaking, backcountry camping/activities)
Strong willed
- Thrives on challenge
Male/Female
- 20-35
- Annual Income $15,000+
- Spends 4+ days per week in gym
Mid/Allocentric traveler - In a relationship/no children
- large friend circle/extravert
Active hobbies (i.e. yoga, running, swimming, biking, front country camping/activities)
Participation Analysis
The common confusion of the proper name for adventure races vs. adventurous races makes it difficult to
see where the true increase in participation really is. However in the chart below you can see an increase in the
entire racing industry. Between the years 2009-2012 there is 40% increase in off-road triathlons, 35% increase in
adventure races and 30% increase in traditional triathlons (TAMS, 2010.)
This large increase in participation is largely contributed by the fit lifestyle campaign companies are
promoting; companies like Mountain Equipment Co-op, have introduced more running, biking and yoga soft goods
into their stores, Reebok promotes Cross Fit through their be more human slogan and even social media
promotes women to get fit, not skinny. In the new age of muscle gain, hobby sports are on a decline while
competition and endurance sports are on the rise.
(TAMS, 2010)
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Price
Participation
Student Interest
Parent Interest
School Teams
Recess
Electives
Charity Events
Adventure Races
School Interest
Extracurricular Activities
There are very few active opportunities that allow the entire student body to participate on an even playing field;
adventure races has the highest score on the activity strategy canvas this proves there is a gap in the active
opportunities provided for students.
According to a study done by the World Health Organization (WHO) in 2007 over 1.6 million children
between the ages of 5-17 were considered overweight or obese in Canada; this number continues to rise. Obesity
has been linked to insulin resistance, heart disease, type two diabetes and a diminished social well-being. Proper
nutrition and exercise and play large role in why there is such a high obesity rate along with the increase in screen
time this is the amount of time children spend sitting inside on electronics like computers, phones, tablets, game
consoles etc. TUTT wants to do its part to educate youth by promoting active lifestyles through their events.
TEAR UP THE TARMAC! - MARCH 2015
Market Approach
Target Market
TUTT has three main target demographics; the students, the parents and the schools. The schools have to
be contacted first by TUTT to make the event available to the students. Once the school has bought into the idea of
the event; TUTT will promote the event to the students. Once the students are excited about the event they will
bring home information (i.e. waiver, permission forms, event info) to their parents. The parents are who we are
truly selling to because they will fund this experience for their kids however promoting through the schools to the
children is the only way to gain the parents interest.
Targeting the schools is done on a school board level; TUTT will make a sales pitch to the school board
proving the learning opportunities, event safety precautions and school benefits. TUTT will target rural schools
with a large school yard which makes hosting a successful event more possible. Hosting events at schools with a
population of approximately 650 students will allow the company to break even at the end of the year at a 40%
running capacity. The Simcoe County District School Board was chosen as the sample school board for this report
because it meets all of the target school criteria. Any school board across Ontario that meets this criteria would be
a perfect board to start up the company.
The students targeted by TUTT are ages 7-15 (grades 1-8). TUTT will host a school wide presentation; this
presentation will occur one week before the event. It will show an exciting promotional video, a short educative
lesson about healthy active living and interactive obstacle course demo with student volunteers. Students will receive
their information package to bring home; TUTT hopes to fill the kids with excitement that will help persuade their
parents.
Once students have brought home information for the parents; the real target comes into play. TUTT needs
the parents to pay the $15 event cost in order for the students to participate. The target parent demographic and
psychographic are as follows:
-
Age 30-45
- Female
- Tech Savvy (Facebook/twitter account)
Annual Income $30,000+ - OR stay at home with spousal income of $50,000+ - Mid-centric/Allocentric traveler
Married with Children
- Lives an active and healthy lifestyle
- Involved with children (i.e. sports, clubs, camping)
Product Offering
TUTT is a third party company that provides safe events for elementary students. They educate students
about healthy active living through experimental learning in the form of an inclusive adventure race. The product is
delivered on a school board level; then is presented to the students who deliver information to their parents; parents
will pay for the event and are invited to volunteer and spectate.
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Comparative Advantage/Competition
The idea of hosting fun and active events at school is not a new idea however the way Tear up the Tarmac! Is
presented puts an educative spin on the classic school event while keeping the activity inclusive and adventurous
and that is our simple value proposition that puts TUTT a step about other events.
TUTT has two main types of competitors; third party companies who provide events for students and in-school
events ran by the school. The Active School Activities Strategy Canvas shown in the Opportunity and Proof
section shows a canvas of the various in-school and third party events and how they rank compared to Adventure
Races such as TUTT.
Three companies that are the largest players in the school event industry are: The Terry Fox Run, Jump Rope for
Heart and Jungle Sports. Below is a chart comparing what those companies offer to TUTTs event offering.
Competition Comparison
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6
5
4
3
2
1
0
Price
Participation
TUTT
Prizes
Variety of
Activity
Charitable
Cause
Educative
Experience
Based
Inclusive
Junglesports
As you can see from the chart above Jump Rope for Heart and the Terry Fox Run are comparable because
they are both charitable organizations raising funds for a cause; charitable events are hosted at schools annually to
promote a school wide sense of caring and educating students on the importance of charities. TUTT and Jungle
Sports do not donate their proceeds however they both rank high in experience, variety of activities and
inclusiveness. After analyzing this chart it is clear that Junglesports is the biggest competition to TUTT.
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Price
To set a fair price many things were considered; value, comparison to average field trip/school activity
prices, yearly earning of the parent demographic. A survey was conducted about TUTT; the question what is a
reasonable price for a school sanctioned adventure race? Depicted in the chart below, you can see over 40% of
people believed that the event should cost $15+. The survey results were a great way to finalize the event price at
$15 per student participant.
REASONABLE PRICE
Free
$5
$10
13%
$15+
8%
Other
6%
29%
44%
Distribution/Purchasing Model
TUTTs purchasing model is a three step process called Pitch, Sell, Fund. Once the event has been
successfully pitched to the school, the school will sell the event to the students. The schools send home permission
forms and waivers to each student to bring home to their parents. Parents fund this amazing experience for their
kids and are invited to watch the final race and volunteer with the event at their childs school.
Promotional Strategy
There is a specific promotion strategy for each target market. Promoting for the schools will heavily focus
on the education, low cost and simplicity of the event for the schools to take on. When targeting the students the
focus is put on the adventure, prizes and life changing fun. Parents are targeted by promoting the low cost of the
event, healthy active lifestyle lessons and safe new adventures.
In the appendix you will find a sample website front-page, brochure and poster. The website is designed
clearly so students can easily navigate it; there are sub-areas designated for each target. This allows the front page to
be clear of unnecessary information and keeps it a simple place briefly describing TUTT with pictures and text. The
brochure will be included in the information package that the students will bring home for their parents; it includes
many FAQ, safety information and the values of TUTT. The poster will be placed in the school; this is an exciting
reminder designed in a simple manner using bright colours, small words and kid friendly text for the students to
read. It will create playground conversations and give the minimal necessary information the students need to know
about the event.
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(DMG, 2012)
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Start-up Costs
Stating up the business requires the investment of; personal assets, working capital and additional variable
costs. Below is a chart which overviews these costs in detail; these costs are viable and attainable start-up costs. A
financial buffer is included to account for changing costs seen in the market due to inflation, taxes and hidden costs.
Asset or Item
Cost $
$5000
$2500
$5000
Promotion Campaign
$3000
Unforeseen costs
$1000
$16,500
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Income Statement
The income statements below show a direct correlation between profit increase and cost
increase. From year one to two you can see that the variable expenses have increased. Much of this
is due to hiring two more staff members; the extra employees were necessary in for the company
with 30% growth in just one year. The fixed expenses shrank because many of the obstacles needed
for events were built in year one; and are now a much lower monthly fixed expense and the initial
start-up cost debt has diminished.
Tear up the Tarmac! Income statement 2015 50% of capacity
Revenue:
Sales revenue
$249,000
Operating Expenses
(Variable):
$98,347
Cost of fuel
$16,050
Wages
$43,500
Prizes
$33,200
U-Haul
$5,597
Fixed Expenses:
Total op expense
Net income (before taxes)
$73,275
$171,622
$77,378
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Tear up the Tarmac! Income statement 2016 (30% participant increase from 2015)
Revenue:
Sales revenue
$323,700
Operating Expenses
(Variable):
$163,132
Cost of fuel
$27,138
Wages
$85,500
Prizes
$43,160
U-Haul
$7,334
Fixed Expenses:
Total op expense
Net income (before taxes)
$63,325
$161,672
$87,328
Break-even Analysis
This break even analysis is based on TUTT will break even at the end of June in the first
year of business. The total number of participants required to break even is 8075; this will result in a
revenue of $121,116. Once this is made the company will break even on profit minus the variable
and fixed expenses.
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Future Projections
A horizontal analysis was done between year one and two to project growth for year three.
This projection is a good tool to predict year three however there are some variances that will affect
the actual outcome; between year one and two there was a decrease in fixed expenses which is very
uncommon and is now forecasted for years to come. This happened in year two because obstacle
production was slowed to accommodate the growth in the business. Another consideration is it
cannot be guaranteed that the company will grow at the same rate from year to year. By analyzing
this report I will be able to prepare for more growth by hiring more staff; this might involve leasing
office space as well TUTT will need to purchase personal trailers to transport obstacles to different
locations.
Account
Year One
Year Two
Difference %
Year Three
Projection
Revenue
$249,000
$323,700
30%
$420,810
Fixed Expense
$73,275
$63,325
-14%
N/A
Variable Expense
$98,347
$163,132
40%
$228,384.80
Net Profit
$77,378
$87,328
13%
$98,680.64
Legal
Legal Ownership Structure
TUTT is a sole proprietorship; with one legal owner, Kaitlyn Clow. She pays personal
income taxes on profits and is personally responsible for the companys debts. Once the business
expands outside of Simcoe County it is very likely that TUTT will become a corporation; by doing
so the company would gain government liability protection and tax deductions and the owner would
be safer from company debt.
Risk Management
To manage and mitigate risk while students participate in the adventure race it will be
mandatory that all students wear a proper fitting helmet, harness (when necessary) and be
supervised throughout the entire race. This will require volunteers to be placed at each obstacle to
ensure students completely them safely.
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Appendix
Example Webpage
(Mentioned in Promotional Strategy section)
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Example Poster
(Mentioned in Promotional Strategy section)
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Example Brochure
(Mentioned in Promotional Strategy section)
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References
Adventure Racing History. (n.d.). Retrieved March 4, 2015, from
http://www.adventuresportsonline.com/history.htm
Adventure Racing Participation Report 2014. (2014, January 1). Retrieved March 5, 2015, from
https://www.sfia.org/reports/14_Adventure-Racing-Participation-Report-2014
Hey Kids! Jump. (n.d.). Retrieved March 3, 2015, from http://jumpropeforheart.ca/JumpHomePage.html
Market Structure: Monopoly, Oligopoly, Monopolistic and Perfect Competition. (n.d.). Retrieved March 5,
2015, from http://fintowin.com/2011/07/market-structure-monopoly-oligopoly-monopolistic-and-perfectcompetition/
MEC (n.d.). Retrieved March 2, 2015, from http://www.mec.ca/Main/home.jsp
Party Liability. (n.d.). Retrieved March 3, 2015, from https://www.palcanada.com/en/
Police Record Check Services. (n.d.). Retrieved March 4, 2015, from http://www.oesccseo.org/english/about.html
Reebok Cross Fit | Reebok Canada. (n.d.). Retrieved March 4, 2015, from http://www.reebok.ca/en/crossfit
Simcoe County District School Board. (n.d.). Retrieved March 3, 2015, from
http://en.wikipedia.org/wiki/Simcoe_County_District_School_Board
Simcoe County District Schools. (n.d.). Retrieved March 4, 2015, from
https://www.scdsb.on.ca/Schools/Pages/Schools.aspx
Stats Can. (n.d.). Retrieved March 2, 2015, from http://www.statcan.gc.ca/pub/82-003x/2012003/article/11706-eng.h
TAMS. (2010, January 1). Retrieved March 4, 2015, from
http://www23.statcan.gc.ca/imdb/p2SV.pl?Function=getSurvey&SDDS=4439
The Ontario Safe Schools Act: School discipline and discrimination. (n.d.). Retrieved March 5, 2015, from
http://www.ohrc.on.ca/en/ontario-safe-schools-act-school-discipline-and-discrimination
The Terry Fox Run. (n.d.). Retrieved March 4, 2015, from http://www.terryfox.org/Run/
Travel Survey Summaries. (n.d.). Retrieved March 4, 2015, from:
http://www.dmg.utoronto.ca/transportationtomorrowsurvey/2006/regional_travel_summaries.html
U-Haul Quotes. (n.d.). Retrieved March 4, 2015, from http://www.uhaul.com/Trucks/3
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