Executive Summary
SEC Adventures is a start-up company that will compete in the adventure tourism industry. In the present business climate, the industry’s leader, Mountain Travel Sobek, or MTS is the benchmark when it comes to business operations. However, SEC Adventures sees opportunities in niche marketing, specifically with focused target markets involving baby boomers and millennials.
The initial goal is to offer travel packages that are significantly cheaper than those offered by MTS. This is possible by scaling down the operation and offering less dangerous and less rigorous travel packages. Also, the company does not plan on hiring professional guides, instead of doing that, SEC Adventures will hire qualified personnel with the added advantage of providing personalized services for the clients, especially for a generation that requires access to the Internet and the need to engage in social media platforms.
Business Description
This business plan was created in response to a perceived need. It is the entrepreneur’s responsibility to scan the socio-economic landscape to figure out the needs of the people. In this case, the proponent of the business plan is responding to the clamor for a safe and reliable adventure tourism company. It is a known fact to business leaders all over the world that the driving force of the global economy is the baby boomers and the members of the millennial generation.
Baby boomers were born in the aftermath of the Second World War, on the other hand, the members of the millennial generation are comprised of young men and women who came to this world in the decade of the 1980s and 1990s. Both groups are responsible for heightening the demand for adventure tourism. Those in the older generation group are asking for services and products associated with the adventure tourism industry because they want to enjoy their retirement years.
The members of the millennial generation on the other hand are sophisticated consumers and they want more than the usual vacation packages or travels to tourist destinations. In light of these requirements and demographics, the proponent of the business plan attempts to create from the ground up an adventure tourism company called SEC. Adventures. SEC is an acronym for key terms: safe, easy, and challenge. As the name suggests, the company offers more than the customary travel packages, because added into the mix are activities like hiking, trekking, spelunking, kayaking, bird watching, safari, cultural immersions, and tasting exotic foods.
SEC Adventures offers three major value propositions: safety, innovation, and ease of travel and adventure. Potential investors and customers are going to appreciate the aforementioned value propositions if they compare SEC Adventures’ business model to the industry standard which is none other than the travel agency and tourist destination framework. In the old paradigm, the client engages with a travel agent or a representative of a travel agency.
After making up his or her mind regarding a specific travel destination, the client works with a travel agency to handle a major part of the travel requirements. In the traditional framework, the travel agency takes care of the transportation or air travel aspect of the trip. Travel agencies are also responsible for hotel reservations. This is a good system because travel agencies have established business relationships or partnerships with counterparts from the airline and hotel industry. As a result, the client benefits from potential savings due to this type of transaction and partnership.
However, after considering the old paradigm, one notices that the travel agencies do not have anything to offer other than flying the tourists to their expected destinations and provide appropriate accommodations for them. Once the clients reach the Bahamas, Saigon, London, or Miami they are left on their own. The best that they can offer is a tour of the city or island hopping, but the travel agency has relatively little control over these events or activities.
As a result, travel agencies are unable to provide the type of “adventure” that baby boomers and millennials are cravings for. From a practical standpoint, it is not prudent for travel agencies to overextend their reach. They are already making a great deal of revenue with the traditional business model that they are using. As the saying goes, there is no incentive to fix something that is not broken.
Although SEC Adventures understands the advantage of the old business model employed by conventional travel agencies, the entrepreneurial spirit of the CEO and founder, Xueyao Wang, enables her to see the perceived need. In this regard, she is also able to see the market niche that has not yet been explored in a more significant manner by other business leaders. In this case, there is a demand for more exciting activities as compared to the travel agency’s staider offerings.
Members of the millennial generation are not going to celebrate their success and enjoy their free time by going through traditional vacation routes. They are different from the older generation of travelers that are easily contented with the fact that they can spend from two to three weeks of vacation time away from the office or their hometown. The mere fact that they were able to visit Hawaii and did not have to worry about their jobs at home is already a gratifying experience. However, it is a different deal from the perspective of the millennials they want something more than just sunbathing or taking pictures of Mt. Fuji from the comfort of a tourist bus.
Although there is an age gap between the baby boomers and the millennials, there are those that are eager to take the less-traveled path. Baby boomers have the money to pay for extra excitement in the form of safaris, trekking, and bird watching. This group of people is not going to enjoy the traditional route either. Nevertheless, due to certain restraints, the SEC Adventures created a business model that offers only safe and controllable adventure activities. SEC Adventures does not cater to clients seeking for activities related to extreme sports.
In a nutshell, SEC Adventures is a hybrid travel agency company that also facilitates adventure tourism. In other words, the company functions like a conventional travel agency, such as booking flights and making hotel reservations. However, in addition to moving clients from Point A to Point B, the company determines the adventure activities appropriate or available in a given area. If the chosen location is an island or beach resort the range of activities includes diving, kayaking, fishing, and other water-related sports.
If the location is in a high altitude area, the company offers trekking, bird watching, and survival boot camps. If the location is in a city, the company offers a unique type of adventure called hunting and tasting exotic foods. The package also includes tours to locations that are not oftentimes reflected in the average travel guide.
Without a doubt, other travel agencies may offer this kind of service. However, the major difference is that the adventure aspect is just an afterthought. In other words, they do not provide excellent and dedicated services to satisfy the needs of the customers and to bring them home safely.
The key difference is safety, and the competitive advantage of the company is the deployment of a dedicated safety and events coordinator who understands the layout of the area and the inner workings of the proposed activity like the back of his hand so to speak. For example, the said safety and events coordinator understands the type of boat that the clients are using and the brand of the life vest that was made ready for safety purposes.
The safety and events coordinator memorizes details like the time required for the hikers to reach a particular spot in the trail or the number that he or she needs to call if there is an emergency. The safety and events coordinator also carries with him a portable electronic device with a rugged design, such as water resistance and shock-proof capability. The said electronic device contains the pertinent medical information of each client, and this includes allergies, blood type, and family history of hypertension, heart disease, vertigo, seizures, and related types of information.
About the legal structure of the business, SEC Adventures is a privately held company. Thus, the public does not have access to the organization’s financial statements. Therefore, the financing requirements are going to come from selected investors and other business partners.
Market and Competitors
The target clients are baby boomers longing for something more adventurous than sunbathing or going to museums. However, this type of clientele also requires attention to safety and possible medical requirements when enjoying activities like island hopping, diving, kayaking, or spelunking.
The members of the millennial generation are going to appreciate the availability of the safety and events coordinator. However, they also require Internet connectivity, Wi-Fi, and related technology, so that they can engage in social media platforms even if they are enjoying adventures like bird watching, fishing, and hunting for exotic foods. It is difficult to please the millennials if the company does not provide a way to document the events, and more importantly if there is no ability to share the experience via Facebook and Instagram.
In other words, it is not enough to target adventurous millennials and baby boomers, it is also important to provide key requirements. In this regard, SEC Adventures has another competitive advantage over the competition, and it is the use of apps that enable the clients to purchase specific items needed for a specific type of adventure in a low-price scheme, and an online marketing framework so that the items reach them on time before they embark on their respective trips.
There are two types of competitors in this kind of business. First, SEC Adventures is going to contend with travel agencies that are also offering adventure type of activities like kayaking, diving, and trekking. However, as mentioned earlier, travel agencies are not going to be able to compete with SEC Adventures’ business model, because they are not geared to handle the requirements of a niche market. Also, the bulk of the revenue for traditional travel agencies are coming from travelers or tourists that are going to conferences and are contented with conventional leisure activities like spending a great deal of time with ordinary beach activities or city tours.
The real challenge comes from companies primarily designed to offer adventure tourism. For example, if one will scour the Internet, the company called Mountain Travel Sobek or MTS offers the same type of activities that SEC Adventures’ target market is demanding to experience. Also, MTS is a pioneer in this kind of business. For example, MTS provides expert guides and travel professionals to provide an exhilarating experience for clients.
Although MTS is the leading company in this type of industry, SEC Adventures is going to exploit certain weaknesses of MTS’s business model. For example, MTS does not endorse a travel package if less than four people are signing up for it. SEC Adventures are going to provide the same type of service even if only three people are going to sign up for trekking or kayaking in a specific travel destination.
Aside from inclusivity allowing a greater number of individuals to enjoy this unique experience called adventure tourism, the company’s competitive advantage is the deployment of a safety and events coordinator. An overview of MTS’ website reveals that they employ expert guides.
It is hard to compete with that kind of overhead cost. However, SEC Adventures will cater to less demanding activities. It will take a long time before SEC Adventures starts to offer trips that enable clients to cross the Gobi Desert. Thus, it has been made clear that MTS also focuses its attention on a niche market, specifically clients that are more adventurous than the rest of the population. SEC Adventures are not going to compete in this category.
Thus, there is no need to hire an expert that knows how to navigate the Saharan desert using camel or yaks. As a result, the company can hire travel guides with minimal expertise. The competitive advantage comes in the way these guides perform dual roles because as a safety and events coordinator they provide a personalized service ensuring the safety of the customers. Also, the safety and events coordinator is mindful of the requirements of the millennial generation. They have the skill to set up a mobile platform that enables the clients to access the World Wide Web even if they are vacationing in one of the islands in the Caribbean.
Also, the company utilizes a proprietary app or computer apps that synch with mobile tablets and smartphones that enable the customer to pre-order the requirements of a particular trip. For example, a trip in the Bahamas or Hawaii may require the need for a wetsuit or snorkeling equipment. The clients can order these things online using a scheme that allows them to choose the products from different suppliers. Due to the ability to compare prices, clients are assured of getting the best value from their money.
The company will be located in Miami, Florida. It is prudent to establish a corporate presence in this area because it is relatively closer to the Caribbean and Mexico. If the company establishes its presence in New York, the high rental cost and other constraints will make it difficult to get a break-even in the first two years of operation.
Marketing and Sales
The target market is executives that are going on business trips. They are baby boomers and millennials working in the corporate world. In a financial year, they may attend two or more conferences or they may leave town to go on business-related trips. During the conference or the business trip, the clients may find time to explore the city or the island. They may also find time to explore nearby tourist destinations if they happen to be in Miami.
When there is this kind of opportunity, the marketing arm of the company will exhaust all available opportunities to let them know that they do not need to get stuck in the hotel waiting for their flights. They are not supposed to spend their time in a coffee shop if they have several hours to spare. SEC Adventures will allow them to engage in some exciting activities.
The initial foray into marketing targets executives that are going on business trips or conferences. However, from this group or the first wave of clients, the company can build customer relations. The company also hopes to get word-of-mouth advertising after providing a service that exceeded the expectations of the clients.
The company’s pricing structure depends on the outcome of a feasibility study. A major component of the feasibility study is the outcome of a research or exploratory scheme involving MTS. As mentioned earlier, MTS is the company’s main competitor. In the course of the feasibility study that will be discussed in more detail later, a team will be deployed to test or investigate the MTS’ product offerings. This activity enables the company to accomplish two goals. First, to have a thorough understanding of the rival company’s business operations. Second, to understand the rival company’s pricing scheme. After factoring out these insights and ideas, SEC Adventures will figure out a way to offer a travel package that is 20 percent lower than the one offered by MTS.
In an ideal situation, the company must strive to offer a travel package that is 50 percent lower than what MTS is charging. For example, MTS offers a kayaking adventure tourism type of business in the Bahamas. This is a type of activity that SEC Adventures believes must become part of its portfolio of travel packages. However, the company offers half the price. It is possible to make this kind of offer because the company does not employ expert guides that are qualified to work for National Geographic.
Aside from scaling down the danger level and the excitement level of the travel packages, the company can lower overhead costs by scaling down the growth of the company. In other words, there is no plan for aggressive expansion to overtake MTS. There is no long-term goal of vanquishing MTS because SEC Adventures are going to provide services to people that cannot afford the travel packages offered by MTS. Thus, the company is not going to offer adventure tourism all over the planet. The attempt must start from controlled business environments in Miami, the Caribbean, Mexico, and New York.
After spending money on websites and apps, the savings will be utilized to pay travel bloggers to blog or discuss an alternative travel adventure company that is cheaper and more personal compared to MTS. This is the primary way of selling or marketing the company.
Financial Projections
To simplify the process of financial management the start-up company uses financial units worth $10,000 each. For this particular endeavor, there are at least five financial units or expenditures. The first one is on the website. The second one is the creation of the appropriate apps. The third one is the use of social media platforms. The fourth one is the expenditure on bloggers that are going to spread the company’s message to the outside world. Finally, the last major source of expenditure is the video creation and video editing component.
The five financial units require initial funding of $50,000. To lower the cost of the start-up the company will use freelance sites like ODesk and Freelancer to hire experts that are going to develop the websites, the apps, the content, videos, and search for bloggers that are going to write positive remarks about the company. Freelance sites like the ODesk are populated by freelancing experts.
The company describes the requirements of the website and the apps and website developers and app developers are going to make their pitch and bid to work on the said project. The company will make the declaration that the website design is worth $7000 and the same project cost goes for the app development. The freelancers will make a bid. The lowest bidder with the highest level of technical capability will be chosen for the said task. The process uses an escrow-type of management scheme so that the consultants and experts get paid for every milestone that they can accomplish. The reason for the $3000 in reserve is in anticipation of less than stellar work.
If this happens, the remaining funds will be used to hire experts to rectify the problem. However, if everything went well, there are more than enough funds to hire bloggers that can create a different kind of marketing salvo for the company.
The same approach will be used for the creation of website content, videos, and messages that are needed for the Facebook posts, YouTube video, and the pictures for Instagram. Freelancers are also going to handle the video creation and video editing requirements of the start-up project.
After handling the requirements of the marketing and social media aspect of the start-up, the company will require an additional $20,000 for setting up the office in Miami. The first ten thousand dollars will be used to spruce up the office and to purchase computers and pay for service providers like the Internet, telephone, etc. The rest of the funds will be utilized to hire five employees. Thus, there is a need to pay local newspapers and hiring firms to secure the services of five qualified and talented workers.
Breakeven analysis and profit and loss measures are going to be handled by an accountant that the company will hire once the investors and core business leaders have made the final decision in setting up an office in Miami, Florida. Nevertheless, it is important to figure out the total cost of salaries and wages. It is also important to figure out the cost of training the workers and the cost of partnering with local travel agencies.
It is also imperative to figure out the expenditures required for partnering with local businesses, such as the owners of the kayaks, and the groups maintaining the trekking trails or the bird watching spots. These expenditures, inducing travel, and accommodations must be deducted from the fees that clients paid to enjoy the said services. These values are computed in consideration with the standby fund and cash reserves for the business operations. Thus, the break-even analysis must allow the company to know the expenditure level and the income level needed to keep the company afloat.
The profit and loss statements are also dependent on income projections. In this case, it is best to have at least 100 travel packages for a single financial year. The company must develop the appropriate marketing scheme, pricing structure, and austerity measures to come up with a profitable solution.
Operations
To lower the cost of operations even further, the first two years of operations requires a partnership with a travel agency located in Miami, Florida. The initial foray into this business limits the company to travel destinations and tourist attractions in Miami and the Caribbean. This will be expanded to include New York and Mexico after twelve months of operation. Thus, in the corporate office in Miami, there are five staff members.
Three of them serves dual roles as an office worker and at the same time the designated safety and events coordinator. The fourth and fifth employee handles the social media aspect of marketing. The fifth employee mans the phones and handles the other aspects of the business. The accounting and other financial aspects of the business are going to be outsourced to a third-party provider.
In the first two years of operations, the safety and events coordinator is going to learn everything they could about tourist attractions and adventure activities within the aforementioned scope of business operations.
The workers and employees are going to be hired locally so that there is an easier process for absorbing critical information regarding travel requirements and adventure tourism requirements.
Advertising
The professional video creators and editors are going to create a YouTube channel for the company. In the initial posting of videos, the consultants will use promotional videos that they created. However, after six to twelve months of operations, the company will work with satisfied clients to use their videos and images. The clients will accept the offer in exchange for discounts and the chance to become endorsers for a fledgling company.
The consultants will also work with bloggers to develop the appropriate messages in favor of the company. They will create links on Facebook that leads to the company’s website or the blogs of the bloggers that are going to talk about positive things about the company. This is how they are going to promote the company using social media platforms.
The first 30 days will be used to post the project on freelancing sites like ODesk and Freelancer. After hiring consultants and professionals, the next 30 days will be used to upload the videos created by the professionals on the YouTube channel they created beforehand. The blogger will begin to write about the new adventure tourism company. His or her blog will be about adventure tourism or activities related to safaris, kayaking, trekking, spelunking, and diving. At the end of the blog, there is a link to the company’s website.
In the next 30 days or the 90th day of the marketing campaign, a Facebook page will be created on behalf of the company. The CEO will contact sales and marketing representatives at Facebook to create some form of an advertising scheme. So when Facebook users post pictures of travel experiences that include images of sand, sea, and mountains, the advertising content describing SEC Adventures will be seen in a corner of the Facebook page.
The advertising content says that if the Facebook user visits the Facebook page or presses the “like” button, he or she can use her Facebook account to avail of a 10 percent discount. The CEO will also contact the sales and marketing arm of Google, and when users of the said search engine enter keywords related to adventure tourism, MTS, Miami, Caribbean, guided tour and related terms, the name of SEC Adventures appears in the search results as a paid advertisement.