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International Karting Industry Buyer's Guide |
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| CONCESSION CORNER | |||||||||||||
| THE
REAL WORLD and FECs – FULFILLING YOUR DREAM
By Peter F. Olesen P.E. Part One of Two The family entertainment industry is currently one of the most appealing areas for small business entrepreneurs. Development of new Family Entertainment Centers (FECs) around the country has taken many forms. Some will experience immense success and unfortunately, some will fail. The majority will fall somewhere in between. These are ventures that can be undertaken with reasonable investment of capital and heavy investments of personal devotion. The returns will usually reflect the commitment of time and efforts put into the individual project, assuming proper initial steps have been taken to assure that the market is there and the location will support the facility. Having provided consulting services to clients around the country for a number of years, and having talked to countless other individuals in the industry, we have formed opinions pertaining to the direction the industry is taking, the approach of new players in the industry and the publics acceptance of many of the elements currently being incorporated into family entertainment facilities. In this 2-part article, we would like to cover some of our perceptions and opinions with respect to issues that face people who wish to enter the field at this time. There are many elements and issues that some people never consider. We have observed many people making major investments of the money and time without taking the time to fully access their concepts and potential or success. The most successful FECs to-date center around the owner-manager concept. Absentee ownership has not proven to be successful in all instances. This does not mean that corporate operations, involving either directly owned of franchised facilities, cannot be successful. We see large corporations being successful in both the direct ownership and management of facilities and in franchising sites in the higher exposure areas. To accomplish their success requires a greater and more structured investment in management, personnel, money and marketing. As a result, these facilities must target larger markets and seek to locate on more expensive parcels with high visibility and exception access. As facilities developed
under the corporate or franchise concepts usually involve greater investment
and larger markets to survive, they have evolved their individual formats
and philosophies of operation. For many individuals, this type of operation
provides a greater feeling of security as they are working with an established
product in terms of public familiarity and the organization’s marketing
expertise. Some may feel that this reduces their personal risk. At the
same time, they must recognize that the corporation for the effort put
forth will share their personal rewards. These operations also involve
a reduction of control in terms of making changes, handling personnel and
addressing local situations.
CONSULTANT SELECTION
1. Expertise: The consultant should have experience in developing projects similar to yours. If you are not familiar with his or her work, check with references. 2. Availability: Everyone is busy, but when you discuss your needs, establish the time frame under which the required work will be completed. Your agenda may be different. Be certain that you receive what you need when you need it. (Assuming your schedule is reasonable) 3. Flexibility: Attempt to establish whether the consultant recognizes your needs, budget, and site constraints. Some consultants may have pre-conceived ideas that conflict with yours. Will the consultant give your ideas serious consideration before making final recommendations? 4. Compatibility: Try to ascertain whether your styles of communication and approach to the project are similar. Being able to easily communicate with one another in an easy and open manner is very important to the ultimate success of your project. 5. Knowledge: Be certain the consultant has a clear understanding of the services you are requesting and the specific circumstances surrounding the project. 6. Fee Structure: Consultants are like everyone else. They are working for a living and require payment for services. Some only provide their services on a lump-sum format, while others will work on an hourly basis, if this is more to your liking. The work required, providing you with meaningful information, workable concepts and sound design, may appear to be expensive if you consider only the cost of the service. The purpose of engaging the services of a consultant is to improve your opportunities for success and to make better use of your available finances. A good consultant will save you the fee costs many times over. Do not assume that a concept that works in one community will be successful in another. The elements that work vary with the demographics, local interests, percentage of the market derived from tourism, individual management and marketing styles, the economy and location of the given facility. Far from attempting to make negative statements about the industry, we are asking that any individual serious about entering the FEC business, take off the rose-colored glasses and seriously review both the positive and negative aspects of operating a facility before making any commitments. To be successful, you will have to commit not only money to the project, but also a great part of yourself. This is not a 9:00 to 5:00 business. During your operating season, the long day will be the norm as will the seven-day week. This will be especially true during the early days of your operation. As you proceed from developing concepts, selecting a site, overcoming any possible zoning problems, you will find yourself involved with ordering specific products, working with contractors and establishing the management procedures that you will incorporate into your operation. This is also the period during which you will begin to establish the staff that will join you in operating the facility. There are many rules, regulations and guidelines governing not only the design and construction of the FEC itself, but also the employment of staff, methods of operation, treatment of guests and inter-relationships with adjacent property owners. Our advice to individuals following the process from dream to reality is to be willing to engage the services of consultants for those areas in which you are not personally experienced. The benefits of having advisors that can stand back and make realistic observations, rather than reflecting your personal ideas and desires, can well save much grief and economic pain. You should keep in mind that someone advising you on the benefits of incorporating their individual attraction or product may not have the same agenda you do. This is not to say that they do not have valuable experience and expertise pertaining to their product, but rather that you remember that they have a product to sell. We have seen projections of revenues for given products that would lead people to think they could be successful in almost situation. We would be surprised if people would advise you that their project might not be your best choice if there is any change that it could be successful. Projected revenues are usually based on rather ambitious market penetration and repeat sales. You, as the owner, will bear the fruits of any faulty selections and decisions. Do not act in haste and repent in leisure. Be as certain as possible that your concept is feasible, has a realistic concept, can be upgraded or revised to meet reality and is competitive with the existing industry in your area. NEXT MONTH – Part 2: Development
of sound FEC elements and more.
END
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Kart Marketing Group, Inc. Post Office Box 101 Wheaton, IL 60189 USA Telephone: 630-653-7368 Fax: 630-653-2637 Email: karting@msn.com |
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| Neatconcept, Inc | |||||||||||||
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