Film-Tech Forum ARCHIVE: drive-in business plan

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Posted by Dave Ganoe (Member # 53) on 04-25-2006, 07:10 PM:

Anyone have a business plan that they did to acquire a drive-in? I know that one plan does not fit all but it would be nice to have a guide line that would be business specific. I'm in a pretty good position to get a twin and does great business, I ran it for 9 years and now its up for sale. I know the business end as my 9 years turned the place around but the business plan stuff is not my thing. Any help is greatly appreciated.

Posted by Dennis Benjamin (Member # 1137) on 04-26-2006, 06:27 AM:

http://www.crossroadsdrivein.com/build/

Although I have been told that the amount given in his business plan is way off concerning grating the land for the rows.

Posted by Barry Floyd (Member # 385) on 04-26-2006, 09:21 AM:

I have the one I created for the business loans / banking and financing needs for the construction of our place.. however because of the length of time I spent preparing it, I won't send a copy of it to anyone... too much work involved in it.

I worked with the local SCORE reps here in town and they gave me some basic guidelines to cover in our plan, but they will NOT write the plan for you.

I had never written a business plan before in my life, and I took ours to several banks before I found one I didn't get laughed out of. The business plan we developed helped us secure a $400k loan within 4 days of meeting with the banker.

Here is the TABLE OF CONTENTS for our business plan, maybe it will point you in the right direction.

Table of Contents

Executive Summary

THE TEAM

MANAGEMENT TEAM PROFILES AND OWNERSHIP STRUCTURE Compensation
ADVISORS
HUMAN RESOURCES REQUIREMENTS

THE BUSINESS ENVIROMENT

BUSINESS SUMMARY, HISTORY & INDUSTRY OVERVIEW

OPERATIONAL SCHEDULE AND SEASONAL FACTORS

Consumer Trends
POSITION IN THE INDUSTRY
Competition
MARKETING ANALYSIS AND PRICING STRATEGY

THE TARGET MARKET
SERVICES
PRICING STRATEGY
ADVERTISING AND PROMOTIONS PLAN
OPERATIONS
STAGE OF DEVELOPMENT
Progress to Date
Risks

Contingency Plan
Association Membership
FINANCE
Projected Income Statement
Projected Cash Flow Analysis

Appendices (See separate Appendices Binder)
• Projected Income Statements (2003, 2004, 2005, 2006) – Appendix A
• Cash Flow Analysis, (2003, 2004, 2005, 2006) – Appendix B
• Principal’s Tax Returns (1999, 2000,2001) – Appendix C
• Principals Personal Financial Statement – Appendix D
• Industry Statistics – Appendix E
• Location Map for Proposed Theatre – Appendix F
• Site Plan – Appendix G
• Concession & Projection Building Architectural Plans and Elevations – Appendix H
• Screen Tower Architectural Elevations – Appendix I
• Ticket Booth / Box Office Architectural Plans & Elevations – Appendix J
• Capital Equipment Inventory – Appendix K
• Land Purchase Correspondence – Appendix L
• Construction Cost Estimate – Appendix M
• Media Coverage - Appendix N

On another note. I received a copy of the Crossroads book mentioned above for Fathers Day several years ago. I'll completely agree with Dennis, lots of mis-information. The construction methods described in the book will not even come close to passing building codes in our area.

Pulling the financial numbers together was the hardest thing we had to do. I spent MANY nights in front of the computer with an Excel spreadsheet... and still got the projected income wrong.

In the last 3 years since we've been in operation we have consistantly averaged 2.3 patrons per vehicle, each vehicle spends an average total of $30.00 +/- (combined boxofice + concessions), and each vehicle spends an average of $14.60 +/- in the concession stand on food.

Friday & Saturday nights are your bread & butter... everything else is barely worth being open for.

Hope this helps.....

Posted by Jack Ondracek (Member # 1466) on 04-26-2006, 10:28 PM:

Barry's post is spot-on.

I would add however, that there will be regional differences in local support.

In my area, for example, the demos are predominately blue-collar and military... LOTS of young families connected to the ships and submarines that are based here and in the area.

As such, it is worth it to be open on Sundays here. After School lets out, even the slowest weekday is like a Friday or Saturday during our fringe season.

Another Washington drive-in is located near a Naval air station. Except for December, it's open year-round... very unusual, given the climate. They augment their income with a large video arcade and a go-cart track.

On the other hand, there's a drive-in here that runs Thursday - Sunday, with a season that lasts only during the Summer months.

Posted by David Kilderry (Member # 142) on 04-27-2006, 04:41 AM:

I'll jump on the bandwagon here.......what Barry and Jack have said mirror our operation too. We open every night of the year given the weather here.

We average 2.3 per car. Friday and Saturday are best by far, Sunday can be good and next is Thursday.

We also did a very comprehensive business plan. We actually undershot our lowest admissions forecast in the first year, yet found the profitability was better on those numbers and this was after years of crunching them. We have lifted since year two by growing admits rather than prices.

The groundwork for roadways, asphalt and drainage are your biggest cost. Make sure you can secure film supply, or have assurances it will continue in your proposed location. You will need multiple screens for first run, what is run there now Dave?

Quality food is essential, but keep the menu simple. Provide what your customers want, not what you think they want. We are surrounded by multiplexes, but survive due to our point of difference i.e. being a drive-in. Make sure you sell this to your investors and customers alike. Good luck.

David

Posted by Andrew McCrea (Member # 674) on 04-27-2006, 07:12 PM:

Barry,

Just out of curiousity: What was your down payment/investment prior to getting a $400K loan?

Posted by Dennis Benjamin (Member # 1137) on 04-28-2006, 08:53 AM:

Yeah, actually now that I think about it: $400K isn't that much money. I have written both a indoor theatre business plan and an outdoor thetare business plan. How much more money was used? Just curious - because if I could have opened a theatre on 400K - it would already have been open.

[ 04-28-2006, 11:37 AM: Message edited by: Dennis Benjamin ]

Posted by Barry Floyd (Member # 385) on 04-28-2006, 09:13 AM:

Andrew, we had to come up with 17% of the $400k in cash for our portion of the "cash injection/equity" in the project. Dennis is right... $400k was our estimated cost of construction... by the time we got the doors open and a picture on the screen it ended up being like $670k.

Our theatre was litterally carved out of a rock, and more than half of the original $400k was used just for blasting and grading. If we would have had only dirt to move, the price would have been somewhere closer to $90k for the grading.

Funny thing though... last summer(2005)when we added the second screen, our total investment for all of the grading, gravel, screen construction, and booth equipment only totalled around $35k... and we paid for all of that in cash.

Here's a couple of photos of the finished project taken from the top of the hydraullic lift we rented for the construction of Screen 2 last summer.

Posted by John Pytlak (Member # 331) on 04-28-2006, 10:29 AM:

Barry: That power pole is right in my line of sight if I want to watch the other movie from the back of my car! [Big Grin]

Have you ever had a situation where different people in the same carload watch different screens, or stay parked and watch the first showing on one screen, and second showing of the other feature on the other screen?

Posted by Barry Floyd (Member # 385) on 04-28-2006, 11:09 AM:

They try.. oh do they try.

We had printed up a "Twin Screen Policy" insert that is included in the informational brochure & menu that is handed out to each car at the boxoffice as they enter the theatre.

Copied from our website:

"Your ticket purchase provides you with admission to one double-feature presentation on one screen only - please do not ask or attempt to change screens at intermission without purchasing an additional admission ticket for that screen. We are bound by licensing agreements to prevent field to field movement; the same policy as all indoor theatres with multiple screens. This policy is in effect to protect our "Double-Feature Discount" pricing structure. This works by allowing us to book features as a unit for a set price, benefiting YOU the customer - a service we are proud to provide and strive to protect, to give you the most for your dollar. We feel however, that it is worth the sacrifice to run affordable double features. You are welcomed to purchase an additional ticket the same night for a second feature if you wish. Any guests who switch screens or attempt to view a movie without possession of the proper tickets will forfeit their right to remain on the premises."

Posted by John Pytlak (Member # 331) on 04-28-2006, 11:13 AM:

Gotta feed those tiny trees between the lots some fertilizer! [Big Grin]

Posted by Barry Floyd (Member # 385) on 04-28-2006, 11:36 AM:

Part of those trees are getting ready to be relocated.

We just bought a 20 foot Pace American "Midway" concessions trailer to use as the new "Stardust Express" satelite concessions sales.

We're going to relocate about 3 of those small trees, pour a 30 foot square concrete pad in the grassy where the trees are to park the trailer, and run a 50 amp electrical service out to the pad for the trailer.

On the post above about the "Twin Screen Policy", we got the wording for that from the new "Galaxy Drive-In in Ennis, Texas. I've yet to visit the place, but it sure looks like they've got their act together out there.

Posted by Scott Norwood (Member # 30) on 04-28-2006, 11:47 AM:

Barry--what is your booking policy? First-run? Second-run? A mix of the two? And do you charge by the person or by the carload?

Posted by Barry Floyd (Member # 385) on 04-28-2006, 01:21 PM:

Scott, we are first run... opening RV tonight, paired up with Benchwarmers, and holding Scary Movie 4 paired up with our second week of Silent Hill. We try to open a new movie each week.

We charge "per person". $6.00 each for ages 12 & over, $3.00 each for ages 6-11, and 5 & under is free. You'd be surprised how many 11 year olds there are!! [Big Grin]

Another drive-in about a hour from us does carload pricing, and he's found that some of the studios won't give him product on the break because of it.

So far this year we've broke... (one each week)

Shaggy Dog
The Hills Have Eyes
Ice Age 2
Benchwarmers
Scary Movie 4
Silent Hill
R.V.

Posted by Caleb Johnstone-Cowan (Member # 3710) on 04-28-2006, 07:47 PM:

Are there speakers by the car then, otherwise how do you operate a twin drive-thru can't you hear both films?

Posted by David Kilderry (Member # 142) on 04-28-2006, 10:55 PM:

Hi Caleb, we recently had a cinema tour group from the UK through our drive-in and many similar questions were asked!

These days drive-ins use FM stereo transmitters, each field has a different frequency to tune into, and the car system is tuned to that station. The visitors were freaked out that they could see three screens running simultaneously.

We do have broadcast speakers on two of our fields for atmosphere, neither interferes with the other due to the distance between the fields and the orientation. We are on 18 acres. The sound for one field is also piped into the cafe and restrooms; you don't want to miss any of the show when you got to go!

David

[ 04-29-2006, 02:24 AM: Message edited by: David Kilderry ]

Posted by Matt Kerekes (Member # 2777) on 04-29-2006, 08:28 AM:

It may be a rare thing, but what if someone comes in a car without a radio? Do drive-ins have anything available for them to hear the show in their car in that case? Like a rental radio or something?

Posted by Dennis Benjamin (Member # 1137) on 04-29-2006, 12:51 PM:

I know a guy, who knows a guy, who knows another guy who owns a Drive-In in Cincy, Ohio. Yeah - that particular location has portable FM radios that they rent out to those unfortunate souls who have no radio in thier car. They rent them out quite often to people who like to drive their vintage autos to the Drive-In and don't have a working radio.

Posted by Caleb Johnstone-Cowan (Member # 3710) on 04-29-2006, 01:35 PM:

Never thought of that, pretty cool. Don't think you can do that in the UK without a license.

Posted by Jonathan M. Crist (Member # 413) on 04-29-2006, 05:09 PM:

In my area many of the Amish and Mennonites come to the drive-in in their horse drawn buggies (there is specfic parking area for them) and they listen to the sound on battery powered portable radios that they bring along.

Posted by Barry Floyd (Member # 385) on 05-01-2006, 01:23 PM:

We too have "loaner radios" for patrons whose car radios don't work. We don't rent them, but do ask them to leave their drivers license at the concession stand as a guarantee that we'll get the radio back. The radios we loan out are not expensive... we bought them at the local Dollar General store for $3.00 each. In fact, the batteries to run them cost more than the radio does.

We don't rent the radios, but we have entertained the idea of renting out lawn chairs, however right now we don't have a place to store 40-50 lawn chairs.

Posted by David Kilderry (Member # 142) on 05-02-2006, 08:04 PM:

Yep, same. We loan radios free of charge and require a drivers licence or $20 deposit. We do have some leaving out of date or even in date licences and stealing the radios! Ours are a larger mantle style radio similar in size to the old Blue Cine-Fi ones and cost us about $20.

We have some classic cars without FM and also have some Japanese grey import Nisan Skylines and their FM frequency does not go high enough to suit Australian FM and our three field freequencies, so they need the loaners too!

David