Start-up | |
Requirements | |
Start-up Expenses | |
Legal | $800 |
Stationery etc. | $800 |
Marketing materials and Advertising | $1,200 |
Insurance (8 months) | $1,400 |
Rent (8 months) | $2,700 |
Counter/kitchen retrofit | $2,000 |
Sound and Projection Equipment | $500 |
Theatre repairs | $12,000 |
Other | $500 |
Total Start-up Expenses | $21,900 |
Start-up Assets | |
Cash Required | $12,400 |
Start-up Inventory | $700 |
Other Current Assets | $0 |
Long-term Assets | $10,000 |
Total Assets | $23,100 |
Total Requirements | $45,000 |
The Falls River Theatre will provide comfortable seating for its customers to view high quality, second run movies. The theatre’s management will be aided in movie selection by being able to see how movies have fared in their initial run, especially those that have shown success in the theatre’s two target markets: families and young adults. With two theatres in which to show movies, both markets can be targeted at the same time with minimal cannibalization.
A variety of quality, reasonably priced snack items and beverages will keep customers satisfied during their movie experience. The founders understand that the entire experience can be jeopardized by poor customer service and will seek to hire only the most customer service oriented personnel.
The Falls River Theatre is located in downtown Falls River, the shopping and entertainment center of town. This provides easy access for every resident of Falls River and a viable entertainment option any night of the week. The local business community has shown great support for a theatre since it would keep residents, and their spending dollars, in the community instead of one of the surrounding communities. A typical family (there are about 2,300 on Falls River) can expect to save approximately $48 for a night out at the movies by coming to a local theatre. This savings, along with quality movie selection, should keep people coming back regularly.
Market Analysis | |||||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |||
Potential Customers | Growth | CAGR | |||||
Family | 4% | 8,000 | 8,320 | 8,653 | 8,999 | 9,359 | 4.00% |
Young adult | 4% | 4,000 | 4,160 | 4,326 | 4,499 | 4,679 | 4.00% |
Other | 0% | 0 | 0 | 0 | 0 | 0 | 0.00% |
Total | 4.00% | 12,000 | 12,480 | 12,979 | 13,498 | 14,038 | 4.00% |
The Falls River community has been in need of a local movie house since the closure of its only theatre eleven years ago. With the closest movie complex located 45 miles away, movie goers options are limited – either a round trip drive of over 90 miles or in home rentals. For people who enjoy the big screen, neither offers a satisfying experience. The Falls River Theatre can satisfy those needs with quality movies in a comfortable, old-style movie theatre.
These two market segments, families and young adults, are targeted specifically because they comprise the two largest segments of Falls River’s population. The Falls River Theatre is determined to be a community-oriented business and seeks to serve as much of the population as possible. With a small college in town, there is an ample student market, consumers who often have limited transportation options.
The strategy is simple: provide fair-priced, quality entertainment close to home for the two markets that comprise the bulk of Falls River’s population.
Falls River Theatre has a distinct competitive edge in that it is the only movie theatre within 45 miles of Falls River. There are no plans at this time to build a theatre complex in the town and, since the theatre will occupy the town’s only building capable of effectively housing a theatre, there is limited direct competition. Competition will come mainly from several multi-plex theatres located in Madison, the closest being 45 miles from Falls River.
To ensure that Falls River residents are pleased with the products offered, the theatre will rely on the expertise of Samantha, who has seven years of successful theatre management experience. Since she began managing the theatre in Madison ticket sales have grown at a consistent 4% annually. This is in part due to her skills in movie selection and her emphasis on customer service. Once the theatre is up and running, her time will be devoted to movie selection, staff hiring and supervision, theatre marketing, and ordering for the snack bar.
Samantha has also developed strong relationships with several movie booking agents serving the Wisconsin area and has already negotiated an agreement. The agreement has the booking agents collecting 60% of the first year’s admission revenues. Each year after that the percentage will be reduced by 1.5% through year 5 when it stabilizes at 54%.
Steve has strong construction skills and is considered a craftsman by his peers. Initially his talents will be used to restore the theatre from its current state of slight disrepair into the town’s main attraction for evening entertainment. Once the restoration is complete, Steve will transition into a part-time role, maintaining the facility and equipment, working the counter and ticket booth, and eventually, ordering concession items.
Falls River is a small enough town that word gets around quickly. We anticipate that a buzz will be created once the renovations begin. Excitement will build as the grand opening approaches. To encourage that excitement, we will have a countdown to opening on the building’s marquee. Concurrently, advertisements in both the local newspaper and the college’s daily will promote the opening with coupons for free items from the snack bar. Since a large share of profits will come from concessions, we want to let people know about our tasty snacks. Finally, we will use our website to keep our customers, especially the more web salvy college students, updated on the movie selection, which will change every two weeks.
The Falls River Theatre will appeal to two segments of the market:
The main sales strategy is to provide recent successful movie releases that appeal to both audiences. With two theatres, we will be able to target both segments simultaneously.
Ticket prices will be $5 for adults and $3 for children under 12.
Sales will increase among both target segments as word spreads around town and to the surrounding communities. The increase in concession sales reflects the increased attendance. Concession sales are based on an average of $2.50 spent per ticket purchase.
Sales Forecast | |||
Year 1 | Year 2 | Year 3 | |
Sales | |||
Family movies | $86,661 | $129,992 | $194,988 |
Young adult movies | $30,331 | $45,497 | $68,246 |
Concessions | $70,196 | $105,293 | $157,940 |
Total Sales | $187,188 | $280,782 | $421,173 |
Direct Cost of Sales | Year 1 | Year 2 | Year 3 |
Movies | $70,196 | $105,293 | $157,940 |
Concessions | $21,059 | $31,588 | $47,382 |
Subtotal Direct Cost of Sales | $91,254 | $136,881 | $205,322 |
Steve will begin the theatre’s restoration in mid-January. Samantha will still be working with the theatre in Madison but will be able to contribute as-needed. Steve’s work will start inside, repairing and upgrading the facility as necessary. The main theatre’s balcony needs reinforcement. Repairs and upgrades to the concession area are also necessary. Painting will put the finishing touches on the interior of the structure. Finally, the interior should be fully restored by mid-March, once the upholstery repairs are finished.
By that time Samantha will have more time to begin work on the website, marketing materials and film selection. The weather should be turning better which will allow Steve to move outdoors to work on the front of the building. Minor repairs are needed on the marquee. A fresh coat of paint will prepare the building for customers. Samantha will also order any equipment for the concession area (some equipment is already in place and is useable), begin the hiring process and start the marketing. Finally, Steve will install the projection equipment and prepare for the grand opening.
Milestones | |||||
Milestone | Start Date | End Date | Budget | Manager | Department |
Repairs and painting of interior | 1/18/2003 | 2/15/2003 | $11,000 | Steve | Marketing |
Reupholstering theatre furniture | 2/25/2003 | 3/15/2003 | $5,000 | Steve | Marketing |
Website design | 3/20/2003 | 3/25/2003 | $0 | Samantha | Marketing |
Marketing materials design | 3/20/2003 | 3/25/2003 | $0 | Samantha | Web |
Repairs and painting of exterior | 3/20/2003 | 3/25/2003 | $6,000 | Steve | Web |
Set up projection equipment | 3/28/2003 | 4/2/2003 | $15,000 | Steve | Department |
Film selection and scheduling | 3/28/2003 | 4/2/2003 | $250 | Samantha | Department |
Concession equipment ordering | 4/5/2003 | 4/10/2003 | $4,000 | Samantha | Department |
Staff hiring and scheduling | 4/5/2003 | 4/15/2003 | $200 | Samantha | Department |
Initial marketing | 4/5/2003 | 4/20/2003 | $500 | Samantha | Department |
Grand opening | 4/20/2003 | 4/20/2003 | $1,000 | Both | Department |
Totals | $42,950 |
The website will be very simple. Its main purpose is to communicate to our customers what movies are showing at what times with links to each movie’s website and reviews. The design will feature an image of the theatre along with the a list of current movies and those that are coming soon and will be small enough to quickly load on most home computers. Since the movies will change every other week, maintenance should be fairly straight-forward. Arrangements have been made with both the local and college newspapers for links to our web site from theirs.
The website address will be printed on tickets and it will be prominently placed on advertisements that we will run in the local paper.
Development requirements are minimal, since the site will only be a few pages. The site will be built by a local website development firm. Once it has been created, the founders will be responsible for updating it with the latest movie listing each week. It is expected that this will take no longer than 1 -2 hours each week.
Steve’s main responsibility will be to manage and execute the theatre’s restoration. Once that task is complete and the theatre is open for business, Steve will manage the maintenance of the building and work part-time in customer service (selling concessions) and ordering.
We believe that the key to customer service is happy employees. We will invest in a good team by compensating our part-time employees fairly.
Personnel Plan | |||
Year 1 | Year 2 | Year 3 | |
Samantha Farmer | $33,600 | $35,280 | $37,044 |
Steve Brinksman | $35,200 | $36,960 | $38,808 |
Customer Service (4 part-time employees) | $9,350 | $9,818 | $10,308 |
Other | $0 | $0 | $0 |
Total People | 6 | 6 | 6 |
Total Payroll | $78,150 | $82,058 | $86,160 |
The following sections outline the financial analysis for Falls River Theatre.
The following shows the important General Assumptions for Falls River Theatre.
General Assumptions | |||
Year 1 | Year 2 | Year 3 | |
Plan Month | 1 | 2 | 3 |
Current Interest Rate | 10.00% | 10.00% | 10.00% |
Long-term Interest Rate | 10.00% | 10.00% | 10.00% |
Tax Rate | 30.00% | 30.00% | 30.00% |
Other | 0 | 0 | 0 |
The following Break-even Analysis shows the monthly break-even point.
Break-even Analysis | |
Monthly Revenue Break-even | $23,758 |
Assumptions: | |
Average Percent Variable Cost | 49% |
Estimated Monthly Fixed Cost | $12,176 |
The following table and charts show the Projected Profit and Loss for Falls River Theatre.
Pro Forma Profit and Loss | |||
Year 1 | Year 2 | Year 3 | |
Sales | $187,188 | $280,782 | $421,173 |
Direct Cost of Sales | $91,254 | $136,881 | $205,322 |
Other Costs of Sales | $0 | $0 | $0 |
Total Cost of Sales | $91,254 | $136,881 | $205,322 |
Gross Margin | $95,934 | $143,901 | $215,851 |
Gross Margin % | 51.25% | 51.25% | 51.25% |
Expenses | |||
Payroll | $78,150 | $82,058 | $86,160 |
Sales and Marketing and Other Expenses | $3,300 | $0 | $400 |
Depreciation | $1,992 | $0 | $0 |
Rent | $10,800 | $0 | $900 |
Utilities | $30,000 | $0 | $2,750 |
Insurance | $10,150 | $0 | $1,100 |
Payroll Taxes | $11,723 | $0 | $1,138 |
Other | $0 | $0 | $0 |
Total Operating Expenses | $146,115 | $82,058 | $92,448 |
Profit Before Interest and Taxes | ($50,181) | $61,843 | $123,403 |
EBITDA | ($48,189) | $61,843 | $123,403 |
Interest Expense | $0 | $0 | $0 |
Taxes Incurred | $0 | $18,553 | $37,021 |
Net Profit | ($50,181) | $43,290 | $86,382 |
Net Profit/Sales | -26.81% | 15.42% | 20.51% |
The two founders will be the sole investors. Samantha Farmer and Steve Brinksman will invest, both in early January.
Pro Forma Cash Flow | |||
Year 1 | Year 2 | Year 3 | |
Cash Received | |||
Cash from Operations | |||
Cash Sales | $187,188 | $280,782 | $421,173 |
Subtotal Cash from Operations | $187,188 | $280,782 | $421,173 |
Additional Cash Received | |||
Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
New Current Borrowing | $0 | $0 | $0 |
New Other Liabilities (interest-free) | $0 | $0 | $0 |
New Long-term Liabilities | $0 | $0 | $0 |
Sales of Other Current Assets | $0 | $0 | $0 |
Sales of Long-term Assets | $0 | $0 | $0 |
New Investment Received | $60,000 | $0 | $0 |
Subtotal Cash Received | $247,188 | $280,782 | $421,173 |
Expenditures | Year 1 | Year 2 | Year 3 |
Expenditures from Operations | |||
Cash Spending | $78,150 | $82,058 | $86,160 |
Bill Payments | $152,553 | $178,262 | $256,786 |
Subtotal Spent on Operations | $230,703 | $260,320 | $342,946 |
Additional Cash Spent | |||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
Principal Repayment of Current Borrowing | $0 | $0 | $0 |
Other Liabilities Principal Repayment | $0 | $0 | $0 |
Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
Purchase Other Current Assets | $0 | $0 | $0 |
Purchase Long-term Assets | $0 | $0 | $0 |
Dividends | $0 | $0 | $0 |
Subtotal Cash Spent | $230,703 | $260,320 | $342,946 |
Net Cash Flow | $16,485 | $20,462 | $78,227 |
Cash Balance | $28,885 | $49,347 | $127,574 |
The following table illustrates Falls River Theatre’s Projected Balance Sheet.
Pro Forma Balance Sheet | |||
Year 1 | Year 2 | Year 3 | |
Assets | |||
Current Assets | |||
Cash | $28,885 | $49,347 | $127,574 |
Inventory | $21,681 | $32,521 | $48,782 |
Other Current Assets | $0 | $0 | $0 |
Total Current Assets | $50,565 | $81,868 | $176,356 |
Long-term Assets | |||
Long-term Assets | $10,000 | $10,000 | $10,000 |
Accumulated Depreciation | $1,992 | $1,992 | $1,992 |
Total Long-term Assets | $8,008 | $8,008 | $8,008 |
Total Assets | $58,573 | $89,876 | $184,364 |
Liabilities and Capital | Year 1 | Year 2 | Year 3 |
Current Liabilities | |||
Accounts Payable | $25,654 | $13,666 | $21,772 |
Current Borrowing | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 |
Subtotal Current Liabilities | $25,654 | $13,666 | $21,772 |
Long-term Liabilities | $0 | $0 | $0 |
Total Liabilities | $25,654 | $13,666 | $21,772 |
Paid-in Capital | $105,000 | $105,000 | $105,000 |
Retained Earnings | ($21,900) | ($72,081) | ($28,790) |
Earnings | ($50,181) | $43,290 | $86,382 |
Total Capital | $32,919 | $76,210 | $162,592 |
Total Liabilities and Capital | $58,573 | $89,876 | $184,364 |
Net Worth | $32,919 | $76,210 | $162,592 |
Business ratios for the years of this plan are shown below. Industry profile ratios are based on the Standard Industrial Classification (SIC) code 7832, [motion picture theatres, except drive-ins].
Ratio Analysis | ||||
Year 1 | Year 2 | Year 3 | Industry Profile | |
Sales Growth | 0.00% | 50.00% | 50.00% | 4.18% |
Percent of Total Assets | ||||
Inventory | 37.01% | 36.18% | 26.46% | 0.54% |
Other Current Assets | 0.00% | 0.00% | 0.00% | 27.25% |
Total Current Assets | 86.33% | 91.09% | 95.66% | 32.96% |
Long-term Assets | 13.67% | 8.91% | 4.34% | 67.04% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 43.80% | 15.21% | 11.81% | 23.77% |
Long-term Liabilities | 0.00% | 0.00% | 0.00% | 30.06% |
Total Liabilities | 43.80% | 15.21% | 11.81% | 53.83% |
Net Worth | 56.20% | 84.79% | 88.19% | 46.17% |
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 51.25% | 51.25% | 51.25% | 100.00% |
Selling, General & Administrative Expenses | 76.99% | 0.00% | 40.59% | 76.64% |
Advertising Expenses | 0.00% | 0.00% | 0.00% | 3.12% |
Profit Before Interest and Taxes | -26.81% | 22.03% | 29.30% | 2.78% |
Main Ratios | ||||
Current | 1.97 | 5.99 | 8.10 | 0.93 |
Quick | 1.13 | 3.61 | 5.86 | 0.63 |
Total Debt to Total Assets | 43.80% | 15.21% | 11.81% | 2.70% |
Pre-tax Return on Net Worth | -152.43% | 81.15% | 75.90% | 61.15% |
Pre-tax Return on Assets | -85.67% | 68.81% | 66.93% | 6.94% |
Additional Ratios | Year 1 | Year 2 | Year 3 | |
Net Profit Margin | -26.81% | 15.42% | 20.51% | n.a |
Return on Equity | -152.43% | 56.80% | 53.13% | n.a |
Activity Ratios | ||||
Inventory Turnover | 10.40 | 5.05 | 5.05 | n.a |
Accounts Payable Turnover | 6.95 | 12.17 | 12.17 | n.a |
Payment Days | 27 | 43 | 24 | n.a |
Total Asset Turnover | 3.20 | 3.12 | 2.28 | n.a |
Debt Ratios | ||||
Debt to Net Worth | 0.78 | 0.18 | 0.13 | n.a |
Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
Liquidity Ratios | ||||
Net Working Capital | $24,911 | $68,202 | $154,584 | n.a |
Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
Additional Ratios | ||||
Assets to Sales | 0.31 | 0.32 | 0.44 | n.a |
Current Debt/Total Assets | 44% | 15% | 12% | n.a |
Acid Test | 1.13 | 3.61 | 5.86 | n.a |
Sales/Net Worth | 5.69 | 3.68 | 2.59 | n.a |
Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
Sales Forecast | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Sales | |||||||||||||
Family movies | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $16,000 | $16,640 | $17,306 | $17,998 | $18,718 |
Young adult movies | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $5,600 | $5,824 | $6,057 | $6,299 | $6,551 |
Concessions | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $12,960 | $13,478 | $14,018 | $14,578 | $15,161 |
Total Sales | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $34,560 | $35,942 | $37,380 | $38,875 | $40,430 | |
Direct Cost of Sales | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Movies | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $12,960 | $13,478 | $14,018 | $14,578 | $15,161 | |
Concessions | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $3,888 | $4,044 | $4,205 | $4,373 | $4,548 | |
Subtotal Direct Cost of Sales | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $16,848 | $17,522 | $18,223 | $18,952 | $19,710 |
Personnel Plan | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Samantha Farmer | 0% | $1,600 | $1,600 | $1,600 | $3,200 | $3,200 | $3,200 | $3,200 | $3,200 | $3,200 | $3,200 | $3,200 | $3,200 |
Steve Brinksman | 0% | $3,200 | $3,200 | $3,200 | $3,200 | $3,200 | $3,200 | $3,200 | $3,200 | $2,400 | $2,400 | $2,400 | $2,400 |
Customer Service (4 part-time employees) | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $850 | $1,700 | $1,700 | $1,700 | $1,700 | $1,700 |
Other | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total People | 2 | 2 | 2 | 2 | 2 | 2 | 4 | 6 | 6 | 6 | 6 | 6 | |
Total Payroll | $4,800 | $4,800 | $4,800 | $6,400 | $6,400 | $6,400 | $7,250 | $8,100 | $7,300 | $7,300 | $7,300 | $7,300 |
General Assumptions | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Plan Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |
Current Interest Rate | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |
Long-term Interest Rate | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |
Tax Rate | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | |
Other | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Pro Forma Profit and Loss | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Sales | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $34,560 | $35,942 | $37,380 | $38,875 | $40,430 | |
Direct Cost of Sales | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $16,848 | $17,522 | $18,223 | $18,952 | $19,710 | |
Other Costs of Sales | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Cost of Sales | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $16,848 | $17,522 | $18,223 | $18,952 | $19,710 | |
Gross Margin | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $17,712 | $18,420 | $19,157 | $19,924 | $20,721 | |
Gross Margin % | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 51.25% | 51.25% | 51.25% | 51.25% | 51.25% | |
Expenses | |||||||||||||
Payroll | $4,800 | $4,800 | $4,800 | $6,400 | $6,400 | $6,400 | $7,250 | $8,100 | $7,300 | $7,300 | $7,300 | $7,300 | |
Sales and Marketing and Other Expenses | $0 | $0 | $0 | $0 | $0 | $0 | $600 | $1,100 | $400 | $400 | $400 | $400 | |
Depreciation | $166 | $166 | $166 | $166 | $166 | $166 | $166 | $166 | $166 | $166 | $166 | $166 | |
Rent | $900 | $900 | $900 | $900 | $900 | $900 | $900 | $900 | $900 | $900 | $900 | $900 | |
Utilities | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | |
Insurance | $700 | $700 | $700 | $700 | $700 | $700 | $700 | $850 | $1,100 | $1,100 | $1,100 | $1,100 | |
Payroll Taxes | 15% | $720 | $720 | $720 | $960 | $960 | $960 | $1,088 | $1,215 | $1,095 | $1,095 | $1,095 | $1,095 |
Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Operating Expenses | $9,786 | $9,786 | $9,786 | $11,626 | $11,626 | $11,626 | $13,204 | $14,831 | $13,461 | $13,461 | $13,461 | $13,461 | |
Profit Before Interest and Taxes | ($9,786) | ($9,786) | ($9,786) | ($11,626) | ($11,626) | ($11,626) | ($13,204) | $2,881 | $4,959 | $5,696 | $6,463 | $7,260 | |
EBITDA | ($9,620) | ($9,620) | ($9,620) | ($11,460) | ($11,460) | ($11,460) | ($13,038) | $3,047 | $5,125 | $5,862 | $6,629 | $7,426 | |
Interest Expense | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Taxes Incurred | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Net Profit | ($9,786) | ($9,786) | ($9,786) | ($11,626) | ($11,626) | ($11,626) | ($13,204) | $2,881 | $4,959 | $5,696 | $6,463 | $7,260 | |
Net Profit/Sales | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 8.34% | 13.80% | 15.24% | 16.62% | 17.96% |
Pro Forma Cash Flow | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Cash Received | |||||||||||||
Cash from Operations | |||||||||||||
Cash Sales | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $34,560 | $35,942 | $37,380 | $38,875 | $40,430 | |
Subtotal Cash from Operations | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $34,560 | $35,942 | $37,380 | $38,875 | $40,430 | |
Additional Cash Received | |||||||||||||
Sales Tax, VAT, HST/GST Received | 0.00% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
New Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Other Liabilities (interest-free) | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Investment Received | $60,000 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Received | $60,000 | $0 | $0 | $0 | $0 | $0 | $0 | $34,560 | $35,942 | $37,380 | $38,875 | $40,430 | |
Expenditures | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Expenditures from Operations | |||||||||||||
Cash Spending | $4,800 | $4,800 | $4,800 | $6,400 | $6,400 | $6,400 | $7,250 | $8,100 | $7,300 | $7,300 | $7,300 | $7,300 | |
Bill Payments | $161 | $4,820 | $4,820 | $4,828 | $5,060 | $5,060 | $5,084 | $6,969 | $40,680 | $24,283 | $25,014 | $25,775 | |
Subtotal Spent on Operations | $4,961 | $9,620 | $9,620 | $11,228 | $11,460 | $11,460 | $12,334 | $15,069 | $47,980 | $31,583 | $32,314 | $33,075 | |
Additional Cash Spent | |||||||||||||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Principal Repayment of Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Other Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Long-term Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Purchase Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Purchase Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Dividends | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Spent | $4,961 | $9,620 | $9,620 | $11,228 | $11,460 | $11,460 | $12,334 | $15,069 | $47,980 | $31,583 | $32,314 | $33,075 | |
Net Cash Flow | $55,039 | ($9,620) | ($9,620) | ($11,228) | ($11,460) | ($11,460) | ($12,334) | $19,491 | ($12,037) | $5,798 | $6,561 | $7,355 | |
Cash Balance | $67,439 | $57,819 | $48,199 | $36,971 | $25,511 | $14,051 | $1,717 | $21,208 | $9,170 | $14,968 | $21,529 | $28,885 |
Pro Forma Balance Sheet | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Assets | Starting Balances | ||||||||||||
Current Assets | |||||||||||||
Cash | $12,400 | $67,439 | $57,819 | $48,199 | $36,971 | $25,511 | $14,051 | $1,717 | $21,208 | $9,170 | $14,968 | $21,529 | $28,885 |
Inventory | $700 | $700 | $700 | $700 | $700 | $700 | $700 | $700 | $18,533 | $19,274 | $20,045 | $20,847 | $21,681 |
Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Current Assets | $13,100 | $68,139 | $58,519 | $48,899 | $37,671 | $26,211 | $14,751 | $2,417 | $39,740 | $28,445 | $35,013 | $42,376 | $50,565 |
Long-term Assets | |||||||||||||
Long-term Assets | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 |
Accumulated Depreciation | $0 | $166 | $332 | $498 | $664 | $830 | $996 | $1,162 | $1,328 | $1,494 | $1,660 | $1,826 | $1,992 |
Total Long-term Assets | $10,000 | $9,834 | $9,668 | $9,502 | $9,336 | $9,170 | $9,004 | $8,838 | $8,672 | $8,506 | $8,340 | $8,174 | $8,008 |
Total Assets | $23,100 | $77,973 | $68,187 | $58,401 | $47,007 | $35,381 | $23,755 | $11,255 | $48,412 | $36,951 | $43,353 | $50,550 | $58,573 |
Liabilities and Capital | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Current Liabilities | |||||||||||||
Accounts Payable | $0 | $4,659 | $4,659 | $4,659 | $4,891 | $4,891 | $4,891 | $5,595 | $39,871 | $23,450 | $24,156 | $24,890 | $25,654 |
Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Subtotal Current Liabilities | $0 | $4,659 | $4,659 | $4,659 | $4,891 | $4,891 | $4,891 | $5,595 | $39,871 | $23,450 | $24,156 | $24,890 | $25,654 |
Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Liabilities | $0 | $4,659 | $4,659 | $4,659 | $4,891 | $4,891 | $4,891 | $5,595 | $39,871 | $23,450 | $24,156 | $24,890 | $25,654 |
Paid-in Capital | $45,000 | $105,000 | $105,000 | $105,000 | $105,000 | $105,000 | $105,000 | $105,000 | $105,000 | $105,000 | $105,000 | $105,000 | $105,000 |
Retained Earnings | ($21,900) | ($21,900) | ($21,900) | ($21,900) | ($21,900) | ($21,900) | ($21,900) | ($21,900) | ($21,900) | ($21,900) | ($21,900) | ($21,900) | ($21,900) |
Earnings | $0 | ($9,786) | ($19,572) | ($29,358) | ($40,984) | ($52,610) | ($64,236) | ($77,440) | ($74,559) | ($69,599) | ($63,903) | ($57,440) | ($50,181) |
Total Capital | $23,100 | $73,314 | $63,528 | $53,742 | $42,116 | $30,490 | $18,864 | $5,661 | $8,542 | $13,501 | $19,197 | $25,660 | $32,919 |
Total Liabilities and Capital | $23,100 | $77,973 | $68,187 | $58,401 | $47,007 | $35,381 | $23,755 | $11,255 | $48,412 | $36,951 | $43,353 | $50,550 | $58,573 |
Net Worth | $23,100 | $73,314 | $63,528 | $53,742 | $42,116 | $30,490 | $18,864 | $5,660 | $8,542 | $13,501 | $19,197 | $25,660 | $32,919 |
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Introduction.
Outdoor cinema is becoming an increasingly popular way to enjoy films. According to a recent study, outdoor cinema attendance has exploded over the past decade, with a 500% increase in the number of screenings across the United States. Many people enjoy the experience of watching a movie outdoors, surrounded by nature and fresh air, in a unique and relaxed atmosphere.
If you're interested in starting your outdoor cinema business, there are several one-time costs to consider. These expenses will allow you to launch your business and entertain your customers while, at the same time, providing quality service and an unforgettable experience.
In this blog post, we provide you with a detailed look at the costs associated with opening an outdoor cinema. From initial equipment expenses to staffing costs, we will help you understand the different factors that need to be considered before starting this business.
Whether you're planning to host events in a specific location or spread them across the city, this post will give you a better understanding of the expenses you will need to cover in order to launch your outdoor cinema business successfully. We will provide you with a comprehensive list of one-time expenses to help you budget accordingly and maximize your profits.
Stay with us as we delve deep into each of these costs in the following sections to give you an accurate picture of what is required to bring your outdoor cinema business to fruition.
Starting an outdoor cinema business requires initial investment and startup costs that are necessary to set up the business and get it off the ground. Below are the estimated startup costs for an outdoor cinema business:
Startup Costs | Average Amount Range (USD) |
---|---|
Outdoor screen and projection equipment | $10,000 - $20,000 |
Sound equipment and speakers | $5,000 - $10,000 |
Initial inventory of seating and decor | $5,000 - $10,000 |
Licensing and permits for events | $500 - $2,000 |
Initial marketing and advertising expenses | $3,000 - $5,000 |
Transportation and storage costs for equipment | $2,000 - $4,000 |
Event insurance | $1,000 - $2,000 |
Website and ticketing platform development | $2,000 - $5,000 |
Staff and personnel expenses for event setup and management | $2,000 - $3,000 per event |
While these costs may seem high, outdoor cinema businesses have the potential to be profitable if managed properly. Ensuring that all startup costs are accounted for and building a solid plan for ongoing expenses and revenue will increase the chances of success.
When opening an outdoor cinema, the most basic requirement is, obviously, the screen and projection equipment. A high-quality outdoor movie screen provides an authentic cinematic experience and enhances viewers' enjoyment. However, the cost of outdoor screen and projection equipment varies based on the size and quality required.
According to recent statistics, outdoor movie screens' cost ranges from $2,000 to $50,000 . This depends on factors such as the type of screen, size, and quality of picture playback. For example, an affordable open-air cinema screen with a diagonal measurement of 20 feet can cost less than $4,000. On the other hand, larger and more high-end movie screens, such as those measuring over 40 feet diagonally, can cost over $50,000.
When it comes to projection equipment, many outdoor cinema providers use digital projectors. Typically, digital projectors have a brightness range between 2,000 and 11,000 lumens and can cost between $800 and $8,000 .
It's also worth noting that audio equipment is equally important as video equipment. Quality sound is crucial to the overall outdoor cinema experience. Audio equipment includes speakers, amplifiers, microphones, and mixers. The cost of audio equipment heavily depends on various factors such as the number and power of the speakers. Generally, audio equipment costs from $1,500 to $15,000 or more .
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When it comes to setting up an outdoor cinema, sound equipment and speakers are critical to ensure an exceptional movie-watching experience. A high-quality sound system can make a big difference in the overall satisfaction of the attendees. The cost of sound equipment and speakers can vary depending on the equipment's quality and the size of the area you are covering.
The average cost of a professional outdoor speaker can range from $500 to $2000 per unit. If you opt for a surround sound system, the cost can go up to $5000 for a complete setup. This price range includes the cost of equipment and installation fees. If you decide to invest in higher-end speakers, the cost could increase even further - up to $10,000 or more for a full setup, depending on the brand.
Additionally, the cost of a sound mixer and amplifiers could run between $800 and $2500. These costs depend on the sound quality that is desired for your cinema. For example, if your events are in a large outdoor area, a more powerful amplifier may be necessary to cover the venue.
It is important to note that sound expenses don't stop at purchasing the equipment. Additional costs can include cables, wiring, and labor fees for installation. These expenses can quickly add up, particularly for larger setups or events.
To minimize the costs, there are alternate options. Renting sound equipment is a viable option for those who do not want to invest in permanent setups. The cost to rent sound equipment can vary from $200 to $2000 per event, depending on the size and quality of the rented equipment.
If you are operating on a tighter budget, low to mid-range speakers could be a viable option. Although not as high-end as the premium options, certain lower-cost equipment still offer above-average sound quality which is still suitable for outdoor events.
The initial inventory of seating and decor is an important aspect of opening an outdoor cinema business. It helps to create a comfortable and memorable experience for attendees. Depending on the size of the business, the cost of the initial inventory can vary greatly. According to recent statistical information, the estimated cost of initial seating and decor inventory for a small outdoor cinema business is around $5,000-$10,000 USD .
The seating inventory can range from basic folding chairs to more luxurious options like bean bag chairs or loungers. The cost of seating can vary based on the materials, design, and quantity. As per the statistical analysis, the estimated cost of seating inventory for a small outdoor cinema business is around $2,000-$5,000 USD .
The decor inventory includes items like screens, projectors, and sound systems. The quality of these items can greatly affect the overall experience and success of the business. According to current research, the estimated cost of decor inventory including screens, projectors, and sound systems for a small outdoor cinema business can range from $3,000-$7,000 USD .
In addition to the cost of seating and decor inventory, there may also be additional costs such as storage and transportation. Renting storage space or trailers to transport the inventory to event locations may be necessary. The estimated cost of storage and transportation for a small outdoor cinema business is around $500-$1,000 USD per month.
One way to reduce the cost of the initial inventory is to utilize second-hand items or to rent equipment instead of purchasing it outright. Additionally, partnering with local organizations or venues may allow for shared resources and lower costs.
As with any event, outdoor cinema screenings require various licenses and permits to ensure compliance with local laws and regulations. The cost of obtaining these licenses and permits varies based on location and the type of event being hosted.
In general, the cost of obtaining a film exhibition license for an outdoor cinema event can range from $500 to $1,500 USD depending on the location and length of the screening. This license is required to legally screen films in a public space and is typically obtained from a film distribution company or studio.
Additionally, a permit may be required from the local government to host an outdoor event. The cost of this permit can vary widely depending on the location and type of event. In some cases, permits may be free, while in others they could range from $50 to $500 USD.
Other permits may be required depending on the specific details of the event, such as selling food and beverages. In some cases, vendors may need to obtain a separate permit to sell food and alcohol, which can cost anywhere from $50 to $500 USD.
It's important to research and budget for the necessary licenses and permits well in advance of hosting an outdoor cinema event. Failure to obtain the proper permits and licenses can result in fines and legal issues that can be much more expensive than the cost of obtaining them.
Starting a successful outdoor cinema business requires investing in marketing and advertising to build brand awareness and attract customers. The initial marketing and advertising expenses will vary depending on the size and scope of the business, but it is important to allocate a sufficient budget for these expenses.
A study conducted by the Small Business Administration found that small businesses spend an average of $7,000 per month on marketing and advertising. However, for a new outdoor cinema business, the costs may be higher initially to establish the brand and attract customers.
Social media advertising: Social media advertising is a cost-effective way to reach potential customers for an outdoor cinema business. Creating targeted ads can cost anywhere from $0.50 to $2.00 per click and a typical campaign can range from $1,000 to $3,000 per month, depending on the goals and target audience.
Email marketing: Email marketing is another effective way to advertise an outdoor cinema business. Email marketing services like Mailchimp or Constant Contact can cost anywhere from $20 to $100 per month depending on the number of subscribers and frequency of emails sent.
Print advertising: Print advertising can be an effective way to reach local customers. However, it can be more costly than digital advertising. A small ad in a local newspaper or magazine can cost anywhere from $500 to $2,000 depending on the size and placement of the ad.
Event sponsorships: Partnering with local organizations or businesses to sponsor an event can help reduce marketing and advertising expenses. However, it is important to make sure the sponsorship aligns with the brand and values of the outdoor cinema business. Sponsorship packages can range from $500 to $5,000 depending on the size of the event and the benefits offered to sponsors.
Marketing materials: Creating marketing materials such as flyers, posters, and banners can help build brand awareness and attract customers. The cost of promotional materials depends on the size and quantity of the materials. For example, 500 flyers can cost anywhere from $50 to $300 depending on the quality and design of the flyer.
In conclusion, setting aside a sufficient budget for marketing and advertising is important for the success of an outdoor cinema business. The initial expenses may vary depending on the size and target audience of the business, but a well-planned marketing strategy can help attract new customers and ultimately lead to higher profitability.
Transportation and storage costs for outdoor cinema equipment can vary depending on factors such as distance, equipment size, and storage requirements. According to industry reports, the average transportation costs for outdoor cinema equipment in the US range from $500 to $1,500 per event.
In addition to transportation costs, storage costs can also add up. The average storage costs for outdoor cinema equipment range from $100 to $300 per month depending on the equipment size and storage location.
It's important to consider these costs when budgeting for an outdoor cinema business. In some cases, it may be more cost-effective to rent equipment rather than purchasing and storing it long-term. This option eliminates transportation and storage costs, but it may limit the flexibility and customization of the screenings.
Overall, transportation and storage costs are an important consideration for any outdoor cinema business. It's important to research and budget for these expenses to ensure the profitability and success of the business.
Event insurance is an important aspect of any outdoor cinema business. It provides coverage in case of unforeseen circumstances such as bad weather, property damage, or accidents. The cost of event insurance can vary depending on several factors such as the location, type of event, and number of attendees.
In the United States, the average cost of event insurance can range from $100 to $1,000 or more depending on the level of coverage needed. For instance, basic liability insurance may only cover property damage and bodily injury, while more comprehensive policies may also include coverage for cancellations, acts of terrorism, or loss of income due to unforeseen circumstances.
It is important to note that the cost of event insurance can also depend on the level of risk associated with the event. For example, if the event is being held in a high-risk area such as a flood zone or a location prone to natural disasters, the insurance premium may be higher.
Event insurance is usually purchased on a per-event basis, meaning that the cost of insurance will need to be factored into the overall budget of the outdoor cinema business for each event. In some cases, it may be possible to purchase an annual policy depending on the frequency of events and the level of coverage required.
Outdoor cinema businesses may also want to consider working with an insurance broker to help them find the right policy at the best price. Brokers have access to a variety of insurance providers and can help businesses navigate the complex world of insurance to find the policy that best fits their needs.
Additionally, event insurance can also provide peace of mind for event organizers and attendees alike. Knowing that an event is covered by insurance can help ensure the safety and well-being of everyone involved, and can also help protect the financial investment of the business.
The website and ticketing platform for an outdoor cinema business are crucial for attracting and managing the sales of tickets for the events. The cost of website and ticketing platform development can vary depending on the complexity of the site and the features that are needed. However, the average cost for building an e-commerce website can range from $8,000 to $20,000 in the US.
The cost of website development is one of the most significant expenses to consider when starting an outdoor cinema business. This includes designing the site, developing the code, and integrating relevant third-party tools and software. The website should be mobile responsive and user-friendly, with a clear layout and easy navigation. Additionally, integrating social media platforms and including a contact form are essential features for a successful site.
The ticketing platform is another critical component to consider when launching an outdoor cinema business as it helps manage the sales of tickets and streamline the event experience for attendees. The cost for ticketing platforms can vary depending on the features needed and the number of events hosted annually. Popular options include Eventbrite, Ticketleap, and Brown Paper Tickets. These platforms offer a range of features such as online ticket sales, day-of-event check-in, and customizable ticket options. The cost for these platforms can range from $0.99 to $2.50 per ticket sold, with additional fees for premium features.
Integrating the website and ticketing platform is a must-have feature for a successful outdoor cinema business. It allows for a seamless transition from browsing the site to buying tickets and attending the event. For example, Eventbrite offers integration with popular website builders like WordPress and Squarespace. Additionally, the chosen ticketing platform should allow for easy management of ticket sales and tracking of attendees.
When considering the cost of opening an outdoor cinema, it is important to factor in the expenses associated with staff and personnel for event setup and management. Depending on the size of the event and the number of attendees, this can be a significant cost for the business.
According to recent statistics, the average hourly wage for an event manager in the US ranges from $18 to $50 per hour. In addition to the event manager, outdoor cinema businesses may also need to hire event coordinators, security personnel, ushers, ticket takers, and cleaning staff. The cost for each of these positions can vary, but businesses should plan for at least $15 to $20 per hour.
For example, if an outdoor cinema business is hosting a screening for 200 attendees and requires a full staff of six people for setup, management, and cleanup, the cost for personnel expenses alone could range from $1,800 to $6,000 for a four-hour event.
In addition to hourly wages, businesses may also need to provide additional compensation for staff, such as meals and transportation. It is important to factor in these costs when budgeting for a new outdoor cinema business.
Another way to manage personnel costs is to partner with local organizations or schools and utilize volunteers to assist with event management. This can help reduce the costs associated with hiring additional staff, but it is important to provide training and clear instructions to ensure the event runs smoothly and safely.
Starting an outdoor cinema business is an exciting venture that can be both profitable and enjoyable. However, it requires careful planning and budgeting to ensure your success. By understanding the one-time expenses associated with launching an outdoor cinema, you can identify potential costs that need to be covered to successfully launch your business.
As a quick recap, your initial expenses will include buying outdoor screen and projection equipment, sound equipment and speakers, initial inventory of seating and decor, licensing and permits for events, initial marketing and advertising expenses, transportation and storage costs for equipment, event insurance, website and ticketing platform development, and staff and personnel expenses for event setup and management.
To give you an idea of just how much money you will need, here is an overview of the estimated expense ranges:
It's important to note that these expenses are just estimates and will vary based on your specific needs and location. Conducting market research and seeking advice from industry professionals can help you create a more accurate budget.
We hope this blog post has provided you with valuable insights into the costs associated with starting an outdoor cinema business. With a solid plan and the right resources, you can start hosting unforgettable events that will enchant your customers and generate you a strong revenue stream.
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Advice & Support
A guide for anyone interested in starting a cinema in the UK.
How to start a cinema is a guide for anyone who is interested in starting a cinema or showing films in their village, town or city in the UK. You may not know what you need to know but this guide aims to cover it all. It goes through all of the aspects you need to consider from suitable buildings to technical considerations, to costs, programming, marketing, staffing and finding an audience.
It also includes a number of case studies, from very large to very small venues, where you can hear the personal experiences, tips and insights of people who have actually done it. It may sound complicated but this aims to be a comprehensive guide to everything you need to consider with a series of easy-to-use chapter headings and summaries for each section.
One of the UK's top filmmakers gives a rousing call to arms for more independent cinemas and why they matter
This chapter looks at some of the fundamental choices you will have to make about your cinema before you start to raise funds or think about the programme.
The hard work begins. The proper planning of a cinema can take months, even years, and like any other business, involves a range of tried and tested planning tools explained here.
The key to making a cinema successful is having a strong feel for the range of audiences that it might attract: who are they, what do they want to see and how do you communicate with them?
There are different organisational structures that a cinema can adopt according to its purpose. This chapter provides a run through of the most common models.
Local cinemas come in all shapes and sizes, in converted old buildings, new purpose built designs or re-claimed former cinemas. This chapter explores the plethora of ownership, licensing and regulatory issues which relate to managing a venue.
For audiences, the style and design of a cinema can be as important as the programme in making a cinema visit an unforgettable experience. Cinema has very specific design requirements and getting these right is an essential part of developing a facility that audiences will enjoy.
What are technical choices open to new cinema organisers, and how do these determine what you can show in your cinema?
What are the key elements of your capital funds and how do you set about raising the money?
What are the key income streams and costs that need to be managed effectively to make a cinema viable?
From understanding film classification, to running a successful marketing campaign, there are a host of basic operational matters that local cinemas have to deal with on a day-to-day basis.
Appendix 2: sample sensitivity analysis for one screen, appendix 3: sample risk assessment, appendix 4: cinema audience research, further reading, what licences do i need.
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Published Mar.20, 2019
Updated Apr.23, 2024
By: Jakub Babkins
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Table of Content
A movie theater is a business in which you make contact with the film distributors, buy their movies and play them on a big screen for your audience in a comfortable and enjoyable environment. This business requires continuous serious work, money and time investment, resulting in the production of huge profit.
If you are looking for a complete guide on how to open a movie theater , thoroughly read this sample business plan for movie theater including financial and marketing analysis, written for a movie theater startup named, ‘The Arena’.
2.1 the business.
The Arena will be a registered and insured movie theater company located in El Paso, Texas. Business will be owned by a husband and wife, Zac Martin and Enna Martin. All type of movies such as second run and first released will be played in The Arena.
To open a movie theater and run it successfully, one should either have strong management skills or should hire an efficient manager. From the distribution of tickets to the proper seating of the audience in the hall, it’s all about management.
Zac will be responsible for upgrading the building, managing finances of the business, and supervision. However, Enna will manage stuff like the selection of the movie, hiring staff, theater marketing, and snacks. For managing day to day tasks efficiently they have decided to hire a general manager to help them run the business.
After a busy and a hectic day, everyone resorts to some entertainment place to spend their evenings. So every young and adult, child and old living near to our theater will fall into the category of our customers.
The company aims at balancing the startup costs by earned profits within just three months of the launch and generate huge profits afterward by providing the best film, best food, and best drink all in one seat.
3.1 company owner.
Zac and Enna, a husband and wife who were previously acting as managers in a multiplex company, will be the owners of The Arena. They both are graduates in management regarding domains from the same university and are skilled in their respective domains.
After a three-year valuable experience in management, Zac and Enna have decided to start a movie theater of their own to serve the audience in the best way they have explored and of course to avail the opportunity of running their own company.
Zac and Enna will work in coordination with each other, however, they have decided to have a clear work division to avoid any sort of mismanagement. The Arena will be a movie theater comprising of four movie halls with a capacity of at least 250 people in each hall.
A building which previously was a marriage hall, will be restored to its fullest glory and upgraded to fulfill a theater requirement. And lastly, highly customer care-oriented staff will be hired for undertaking day to day chores.
The detailed start-up requirements as included in The Arena’s movie theater business plan is given here:
Legal | $55,300 |
Consultants | $0 |
Insurance | $32,750 |
Rent | $32,500 |
Research and Development | $32,750 |
Expensed Equipment | $32,750 |
Signs | $1,250 |
TOTAL START-UP EXPENSES | $187,300 |
Start-up Assets | $0 |
Cash Required | $332,500 |
Start-up Inventory | $32,625 |
Other Current Assets | $232,500 |
Long-term Assets | $235,000 |
TOTAL ASSETS | $121,875 |
Total Requirements | $245,000 |
$0 | |
START-UP FUNDING | $273,125 |
Start-up Expenses to Fund | $11,875 |
Start-up Assets to Fund | $15,000 |
TOTAL FUNDING REQUIRED | $0 |
Assets | $23,125 |
Non-cash Assets from Start-up | $18,750 |
Cash Requirements from Start-up | $0 |
Additional Cash Raised | $18,750 |
Cash Balance on Starting Date | $21,875 |
TOTAL ASSETS | $0 |
Liabilities and Capital | $0 |
Liabilities | $0 |
Current Borrowing | $0 |
Long-term Liabilities | $0 |
Accounts Payable (Outstanding Bills) | $0 |
Other Current Liabilities (interest-free) | $0 |
TOTAL LIABILITIES | $0 |
Capital | $0 |
Planned Investment | $0 |
Investor 1 | $332,500 |
Investor 2 | $0 |
Other | $0 |
Additional Investment Requirement | $0 |
TOTAL PLANNED INVESTMENT | $695,000 |
Loss at Start-up (Start-up Expenses) | $313,125 |
TOTAL CAPITAL | $251,875 |
TOTAL CAPITAL AND LIABILITIES | $251,875 |
To provide the services in a way you actually want to provide, you need to map their implementation even before researching on how to run a movie theater busines . Knowing the importance of preplanning Zac and Enna have enlisted their services with a little detail in their business plan for a movie theater as given here:
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After you have decided to run a movie theater business , the next step is to do its accurate and detailed marketing analysis. Before opening a movie theater , you have to make sure whether you are selecting the convenient location or not. Or whether you have to opt for a drive in theater business plan or a movie theater business plan for an auditorium. In either case, this sample on starting a movie theater business plan will be a great help for you.
Despite a large competition, movie theater business has been growing since the past few years by the annual growth rate of 3.1 percent and is expected to follow even a faster growth rate in the future. According to IBISWorld, movie theaters have generated a revenue of $18 billion in 2018, employing more than 155,400 people in the United States.
The business has its scope around the year in any climate or in any economic conditions, indicating that you won’t be at loss provided that you plan it successfully.
Before thinking about how to start your own movie theater business , you must be very clear about who will be your audience. Zac and Enna had divided their customers into three groups to focus on the demands of each group separately as given here:
5.2.1 Families: As The Arena will mainly be a second run released movie theater so its main target group will be the families who want a light entertainment within a walking distance or a short drive from their homes. People who seek family-oriented entertainment experience usually don’t care about watching a movie on the very first run. They just want quality and inexpensive entertainment.
5.2.2 Young & Adults: The second category which we look up as our customers will be the young and adults who want entertainment for a slight break in their daily routines, or as a good chance to enjoy with their friends and mates.
5.2.3 Children & Teens: The children and teens who want to have experience of watching movies in the cinemas like the other members of their families will also be our target customers. We’ll play our collection of animated and children movies for them.
The detailed market analysis of our potential customers is given in the following table:
Potential Customers | Growth | ||||||
Families | 32% | 11,433 | 13,344 | 16,553 | 18,745 | 20,545 | 13.43% |
Young & Adults | 48% | 22,334 | 32,344 | 43,665 | 52,544 | 66,432 | 10.00% |
Children & Teens | 20% | 12,867 | 14,433 | 15,999 | 17,565 | 19,131 | 15.32% |
Total | 100% | 46,634 | 60,121 | 76,217 | 88,854 | 106,108 | 9.54% |
In the initial stages, we’ll price our tickets and snacks a little less than our competitors to get introduced to a wide audience. However, the prices may vary depending on the seat allocated and the price of movies.
After identifying the market trends, the market demand, and the potential customers of the startup, the next thing to cater in movie theater business plan is to develop a strategy to attract those customers toward us.
In all out research about how to start a cinema theater , Zac and Enna have thoroughly analyzed the market and the competitive edges they have to come up with, also given here for your help if you are formulating your home theater business plan .
Our biggest competitive advantage is that we are starting our business in an excellent locality in El Paso, as rest of the cinemas are very far from us, and several people would prefer to have a good entertainment near to their homes and offices. We’ll have excellent management, comforting environment, and good quality snacks to serve our customers.
Lastly, we have come up with a competitive edge which most of the others in the same business lacks. We will develop a website for our theater not for just looking at the schedule of movies but also for buying tickets and making reservations through online payment. We will make a poll every week, in which people could vote for the movie they want to see, the movie with the largest votes will be shown on every Sunday.
Sales strategy is the plan of how you will introduce your new business to your target customers. Considering the importance of advertisements, Zac and Enna had also included advertisements’ costs in their movie theater startup costs .
To advertise ourselves:
Considering our competitive advantages, our lower rates, and the quality of our services, our sales pattern is expected to increase with years. Our sales forecast on a yearly basis are summarized in the column charts.
The detailed information about sales forecast, total unit sales, total sales is given in the following table:
In your movie theater business plan selection, distribution of tickets, proper seating arrangements and selling of delicious snacks have great importance. What’s more important is the dedicated and customer care oriented staff which will ensure the smooth running of your business for you.
Zac and Enna have decided to initially hire the following people for the startup:
To ensure the best quality service, all employees will be selected through vigorous testing and will be trained for a month before starting their jobs.
The following table shows the forecasted data about employees and their salaries for the next three years.
Accountants | $85,000 | $95,000 | $105,000 |
Sales Executives | $152,000 | $159,000 | $166,000 |
Assistants | $240,000 | $270,000 | $300,000 |
Cleaners | $210,000 | $240,000 | $270,000 |
Inventory Manager | $50,000 | $54,000 | $57,000 |
Front Desk Officer | $41,000 | $50,000 | $54,000 |
Security Officers | $145,000 | $152,000 | $159,000 |
Total Salaries | $260,000 | $294,000 | $327,000 |
After you have decided each and everything about your business, the last step is to estimate start up cost for a movie theater and make a detailed financial plan. Your financial plan should depict how much does it cost to open a movie theater, what are your investment group for business plan , how you will be able to balance your investments with the earned profits and much more.
The detailed financial plan for The Arena is given here for a rough estimate.
8.2 brake-even analysis.
8.3.1 profit monthly.
8.6 business ratios.
Download Movie Theater Business Plan Sample in pdf
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Project initators:
“ Cultural Planning will help to ensure the Perm region will remain distinctive and unique” , Mr. Protasevich said. “It will mean planning ways to support and preserve our heritage, developing appealing opportunities for artists and musicians regardless of age, and generating education and employment. It will mean building a creative community with a buzz.”
“Some of the identified objectives of “Perm krai international:young journalists@school” project include facilitating greater communication and cooperation among young community and official organizations in Perm krai”, said the Vice-Minister of Perm krai.
“Perm Krai International: young journalistes@school”
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The international children festival of theatre arts “Long Break”
What is the international child festival of theatre arts “Long Break”? It is a real holiday for young spectators and their parents. The international child festival of theatre arts “Long Break” will be hold from the 30th of April to the 5th of May. It will be in Perm and Lysva. It will be hold under the aegis of the Ministry of Culture of the Russian Federation and the Ministry of Culture, Youth Politics and Mass Communications of Perm Krai. The program of the festival is prepared by Russian and foreign experts of child theatre. There are the most interesting for children events of the world arts. The “Long Break” familiarizes children with actual artists. It is the platform where people communicate with people using the language of modern arts which is understandable for a new generation.
The festival “The White Nights in Perm”
The IX International festival “Heavenly Fair of Ural”
From the 26th to the 3rd of July the IX International festival “Heavenly Fair of Ural” takes place in Kungur. There will be a fight for the I Privolzhski Federal Disctrict Cup for aerostatics and the VII Perm Krai Open Cup for aerostatics.This year Kungur won’t hold rating competitions which results are taking into general account of the pilots. They counted on creating entertainment activities “Air battles over Kungur”. There will be the representatives of sub-units of ultralight aviation, detachment of parachute troops and water means. All the battles will take place straight over the city. And natives will take part in the festival too.According to initial data 15 aeronauts and about 50 ultralight aviation pilots expressed willingness to take part at the festival. And a dirigible pilot confirmed his participation.Ultralight aviation pilots will take part in the “Air games” within the festival. As last year a campsite of ultralight aviation will base in an area near a village Milniki.
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Step 5: Develop a compelling marketing and branding strategy to attract and engage your target audience. Step 6: Create a comprehensive budget and financial projections to ensure you have a solid financial plan in place. Step 7: Secure funding or capital to cover the initial costs and ongoing expenses of your outdoor cinema business.
Procure and set up the required audiovisual equipment for outdoor showings. 1 month. 5,000 - 20,000. Food and Beverage Coordination. Coordinate with local food vendors or set up in-house services to provide food and drinks at the events. 1 month. 500 - 5,000. Feedback and Improvement.
Starting an outdoor movies business can be an enchanting venture for those with a passion for films and a love for creating magical community events. You'll need creativity, dedication, and a keen sense for what your audience craves. Securing high-quality equipment is essential--think robust projectors, crisp screens, and clear audio systems ...
Let's go through the content of each section in more detail! 1. The executive summary. The first section of your cinema's business plan is the executive summary which provides, as its name suggests, an enticing summary of your plan which should hook the reader and make them want to know more about your business.
Click the button, choose your package, fill in the form, upload your images and you're good to go! And don't worry, you can actually preview your listing before you commit…. because we all know commitment can be scary. It's easy to start your own outdoor cinema business. Passion, creativity and the right equipment and you will be ready to ...
Software Licenses: In order to run your cinema smoothly, you will need to invest in software for ticketing, concession sales, and possibly accounting. These licenses will need to be renewed periodically. Banking Fees: You will need to have a business bank account to handle all of your financial transactions.
Estimate that the average monthly rent for an outdoor cinema venue is around $500-$1,000, compared to $5,000-$20,000 or more for a traditional indoor cinema space.; Factor in additional cost savings on utilities, maintenance, and staffing, which are typically much lower for an open-air cinema setup.; Consider the flexibility to operate the outdoor movie theater on a seasonal basis, further ...
Steps to organising the perfect outdoor cinema event. Set your budget and the scale of the event. Pull in professional help if you need to. Choose a location and a date for your event. Get your licences in order. Research and hire your outdoor cinema equipment. Choose a ticketing platform and create an online presence.
Outdoor Movies Company with Open Air Cinema With Open Air Cinema's outdoor cinema equipment, you can start your own outdoor movies event production and rental company. We have a large network of outdoor movie producers around the country who are using our outdoor theater equipment and who run very successful businesses. In this post we'll discuss a few of the possibilities of business with ...
The cost for remodeling the facility and constructing a standard movie theater - $250,000. Other start-up expenses including stationery ($500) and phone and utility (gas, sewer, water and electric) deposits ($6,500). The operational cost for the first 3 months (salaries of employees, payments of bills et al) - $60,000.
The key to unlocking this magical realm begins with meticulous planning and a clear understanding of your target audience. Aspiring entrepreneurs must delve deep into market research, ensuring that their chosen location resonates with the movie-going public's preferences. A well-thought-out business plan is crucial, outlining your vision for a ...
The silver screen awaits under an open sky, beckoning entrepreneurs to step into the limelight with their own drive-in theater creation. Imagine cars rolling in as dusk settles, headlights dimming while smiles light up--the air buzzing with anticipation. Crafting this scene involves meticulous attention to state-of-the-art visual and audio ...
Movie Theater Business Plan. Over the past 20+ years, we have helped over 1,000 entrepreneurs and business owners create business plans to start and grow their movie theaters. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a movie theater business ...
Company Summary. The Falls River Theatre, a movie house with two screens and a capacity of 400, is located on Main Street in downtown Falls River, Wisconsin. Falls River, population 12,000, has been without a local movie theatre since 1992 when the old theatre, The Kinnick, closed down due to the death of its long time owner and the lack of an ...
Choosing an appropriate film for your audience is an important step in the outdoor movie planning process.В Of course, make sure your film is age appropriate, but also choose a flick that is relevant to your community.В Screening Twilight at your local rest home won't be as effective or enjoyable as say, Singing in the Rain, or the Maltese ...
According to recent statistics, outdoor movie screens' cost ranges from $2,000 to $50,000. This depends on factors such as the type of screen, size, and quality of picture playback. For example, an affordable open-air cinema screen with a diagonal measurement of 20 feet can cost less than $4,000.
The hard work begins. The proper planning of a cinema can take months, even years, and like any other business, involves a range of tried and tested planning tools explained here. The key to making a cinema successful is having a strong feel for the range of audiences that it might attract: who are they, what do they want to see and how do you ...
2.1 The Business. The Arena will be a registered and insured movie theater company located in El Paso, Texas. Business will be owned by a husband and wife, Zac Martin and Enna Martin. All type of movies such as second run and first released will be played in The Arena. Start your Business Plan Now.
Outdoor theaters. In this category there are dwg files useful for planning: open-air theaters, outdoor theaters of various types and sizes, steps for small shows, street theater and meetings between young people. Wide choice of files for all the designer's needs.
Answered: Starting from November 14, some departures of the trains #83/#84 (Северный Урал) and #11/#12 (Ямал) will skip all stops from Perm-2 to Chusovskaya. These trains offer the best times to arrive in Perm from Nizhny Novgorod. May I ask what are the...
Project initators: Alexandre Protasevich is a Minister for Culture and Youth of Perm krai with 20 years institutional experience at all levels within the cultural project management. He works at the Ministry of Culture since 2008 and has worked in cultural field in the public sector for 15 years in Russia. Mr Protasevich is now…
In his captivating journey into the heart of the space industry, James Roland Jones masterfully blends his rich background in engineering and journalism to bring an enlightening perspective on what propels companies like SpaceX and Blue Origin into the stratosphere of innovation.
Perm (Krai) Perm Region (Krai) is located on the western slopes of the Urals and is home to the Russian salt mining industry. Locals got the funny nickname 'salt ears', because the workers ...