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Executive Summary.......................................................................................................................... 2
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Executive Summary
The Opportunity
Summit County, Colorado, attracts millions of visitors each year with scenic vistas and popular
ski resorts. While many of these visitors treasure the picturesque towns, luxurious hotels and
comforting amenities, about 25% are hardcore skiers and riders that care little about luxurious
amenities. These hardcore-types are looking for an inexpensive place to crash until they return
to the slopes. CrashPads, LLC, provides this demographic a comfortable yet inexpensive bed in
prime locations.
The transient population of Summit County exceeds 124,000 people during peak periods.
CrashPads estimates target market potential during these periods to be $5.5 million in Summit
County alone. Few low-cost lodging alternatives exist for adventurers making multiple overnight
trips per year, and Summit County is rapidly approaching the build-out of developable land,
forcing lodging prices to go up drastically during periods of peak demand. With projected
increases in international and domestic travel, along with projected growth in the hostel
industry, CrashPads must enter the market now and gain market share to establish brand
recognition, industry relationships, and operating standards.
The CrashPads Concept
CrashPads is a mobile lodging service that provides clean, safe, and convenient accommodations
at affordable prices in locations with high temporary demand. CrashPads provides the
opportunity to pay less and play more in a prime location with low cost and transportable
containers as lodging space. CrashPads utilizes unused spaces near popular destinations (such as
parking lots) and provides space for overnight belongings, security, Wi-Fi, and an easy to use
reservation system. CrashPads reduces the variability of demand by moving beds to nearly any
location with the greatest temporary demand.
Competitive Advantage
CrashPads provides cheap lodging in prime locations, with minimal overhead in an industry
burdened with huge real estate costs. A head start will entrench CrashPads in the market and
provide pristine opportunities to coordinate working agreements with resorts, concert
producers, and race organizers, while also cementing future working relationships. Rapidly
approaching build-out of developable land, there is little risk CrashPads will be outcompeted by
a traditional hostel facility in Summit County.
Target Market and Marketing Approach
The CrashPads target market earns $50,000 or less, travels by themselves or in small groups of
two or three, and takes overnight trips near resort communities in Summit County. The target
market has active lifestyles, are mostly between the ages of 16 and 45, and view lodging as a
necessity only to enjoy their primary activity. The target market within Summit County during
the peak winter period represents a $5.5 million opportunity and is estimated to grow at 6% per
year. Initial consumer awareness will come from an aggressive mobile advertising campaign
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utilizing the side of CrashPads trucks (future revenue from outside advertisers), a search-engine
friendly website, and a comprehensive media relations strategy.
Technology and Operational Issues
CrashPads will employ expandable lodging units manufactured by Berg Corporation to provide
mobile lodging solutions. CrashPads will also utilize the design expertise of Roberto Gil to design
and produce foldable bunk beds that meet CrashPads specifications and the needs of CrashPads
customers.
The CrashPads Team
The CrashPads team will include CEO John Doe, CFO Jane Doe, COO Roger Doe, and CMO Peter
Doe. John has 14 years of product development experience, Jane has 25 years of accounting and
finance experience, Roger has 10 years of operations experience, and Peter has 21 years of
communications and marketing experience.
Economics
The CrashPads economic model consists of medium margins (30% to 103%), high volume (80%
occupancy), medium operating leverage, and two revenue drivers (lodging and advertising) with
flexible pricing. Fixed costs are less than half of the total costs under conservative estimates.
Once proven in Summit County, CrashPads will aggressively market the business model
throughout the country in areas with temporary periods of high lodging demand.
Financials
Using the startup cost for six 60-bed standard setups, at 15% vacancy and $45 per bed,
CrashPads will breakeven with approximately 643 nights of operation. This includes land costs,
the purchase of all units and trucks, and no advertising revenue. With the addition of
advertising revenue, mitigation of land costs and secured leases, breakeven quickly drops to 156
nights of operation. Breakeven continues to decrease with additional setups. Under
conservative assumptions, positive cash flow is achieved in Month 8 with a projected cash
balance of over $24 million in Year 10.
Financial Needs
Each founder will appoint an angel investor to the board. In exchange for a $750,000
investment (each), investors receive a 12.5% share of the company. Under conservative
estimates, the investors should see a ROI of 30% after five years, which will continue to grow
with the company. As growth continues, CrashPads will either seek a second round of financing,
secure loans with manufacturing companies for additional equipment, or sell the CrashPads to a
hotel chain such as Choice Hotels International, Inc.
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I.
The Industry
As a form of accommodation, CrashPads falls under the subset of the Accommodations and
Food Services sector and it belongs to the Other Traveler Accommodations industry under
NAICS code 72119. This industry comprises establishments that are primarily engaged in
providing short-term lodging with the exception of hotels, motels, and casino hotels. Industry
examples include bed and breakfast inns, housekeeping cabins, housekeeping cottages,
guesthouses, hostels, tourist homes, and youth hostels (IBIS World, 2013, p. 2).
Structure
With no major players, the Other Traveler Accommodations industry is highly fragmented. Most
operators are small business owner-operators who either generate additional income by
offering bed and breakfast (B&B) services in their home or operate full time and generate their
primary income from these services. Industry concentration is low, with most B&B
establishments being owner-occupied and having only eight rooms. In 2013, the top four
industry players earn well under 5.0% of total industry revenue. Due to the nature of the
industry and the maintenance of high levels of personal hospitality, few operators run more
than one establishment. 87% of establishments are small-business operators with nine or fewer
employees. There are no operators that employ more than 250 people (IBIS World, 2013, p. 18).
Hostelling International USA is the largest player with an estimated market share of 1.4%. The
nonprofit organization is an affiliate of the International Youth Hostel Federation, which has a
network of more than 4,000 hostels across 90 countries. The association hosts about one million
nights annually in the United States. Internationally, there are more than four million members.
Guests have to be members of the association to use the hostel and its facilities. In the United
States, HI-USA directly operates more than 125 hostels that meet the international
requirements. Since the 1980s, major hostels have opened in central city locations. HI-USA
generated $21.7 million in industry-relevant revenue in 2012. In 2013, revenue is expected to
reach $24.9 million. Hostelling International does not currently have any hostels in the state of
Colorado, or any other states in the central US. Additionally, prospective hostel organizations
such as CrashPads should consider matching the standards set by Hostelling International
members, and even incorporation into the Hostelling International network and reservation
system (IBIS World, 2013, p. 22).
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Given the owner operator nature of this business, and its generally small scale, there are few
barriers to entry. Start-up costs are generally relatively low. There are also no qualifications
required for operators to enter this industry. However, operators do have to meet all local
building and health regulations (IBIS World, 2013, p. 21).
Value-added Chain
The Value-added chain diagram for the accommodations industry (See Appendix A, Exhibit #1)
depicts the processes of research, service production, service providing, and marketing to
achieve product value. Most businesses in the Other Traveler Accommodations Industry are
small business owner-operators, and they perform nearly all of the processes in the value-added
chain without outside assistance.
Key Trends
Increase in Domestic and International Travel
The economic recession and an increase in unemployment caused consumers to spend less
money on nonessential travel in 2009. Travel plummeted as households worried about finances.
The industry was hurt by falling international arrivals into the United States, which declined
5.2% in 2009. As the economy improved from 2010, consumers began spending on trips and
overnight stays in bed and breakfast and hostel accommodations. For the next five years, there
is a forecasted increase in domestic travel, GDP, and international travelers. Thus, over the fiveyear period to 2018, industry revenue is forecast to increase at an average annual rate of 1.3%
to $1.8 billion. Industry profit margins are anticipated to grow over the next few years due to
the increase in demand for travel accommodations.
Expansion of the Hostel Segment
The hostel component is expected to expand, particularly in large cities. This will lead to growth
in the number of quality facilities at reasonable cost and increase overall demand for hostels.
Establishments with offerings such as a prime location or a willingness to arrange excursions will
be poised for success.
The Internet
The industry has experienced high levels of technological change in recent years. The main use
of technology recently has been in the use of websites as a source of information and
reservations for guests. The reservation system typically incorporates additional operator
functions such as room management, accounting, and credit/debit card payments. Technology
in relation to client services includes wired and wireless internet access, often available at no
additional charge.
The internet has become the main advertising platform for small providers, and those with a
superior online presence are more likely to succeed over the next five years. The industry is
likely to benefit from increased internet penetration rates over the next five years, and
establishments that can best take advantage of this trend will witness the strongest growth (IBIS
World, 2013, p. 6).
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II.
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Advertising
Lodging Container
Bathroom Container
Truck
Website
Partnerships
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Primary Uses
Low Cost Lodging Provider
Customers will primarily use CrashPads as a low-cost lodging alternative to traditional hotels,
motels, and condominiums in high-priced and high-demand areas. These customers will use
CrashPads to stay as close to the action (skiing, concerts, conventions, festivals, bike races, etc.)
as possible without paying the location premium. CrashPads users will spend most of their
waking moments away from their lodging enjoying the activities of their choice with little need
for luxurious in-room amenities.
Walking Distance
Just walking distance from the ski lift, the stage, the competition, the start line, and the
downtown bars and shops, CrashPads eliminates the customers dependency on transportation
during their stay. With CrashPads primarily located in large parking lots, customers can usually
park next to the CrashPads truck and remain there for the duration of their stay.
Comfortable and Secure Bed
While customers are in the climate-controlled CrashPads facility, they will have a comfortable
bed with a privacy curtain, a locker for overnight items (locks not included, but provided) and
access to a bathroom with a shower. Each bunk will have a reading light and an outlet to charge
personal electronic devices. With a single keycard entry door and an active surveillance system,
CrashPads will also provide a secure environment for its users. For an additional fee, users can
also access CrashPads wireless internet at hourly or daily rates. While CrashPads expects mutual
respect and courtesy from customers in a hostel-like environment, CrashPads management will
reiterate the expectation of silence and privacy while within the CrashPads unit during customer
check-in. Management will also convey an eviction policy for those customers who do not
respect the CrashPads rules.
Social Interaction
Outside of their CrashPads unit, customers will have the opportunity to interact with likeminded
skiers, snowboarders, music lovers, hikers, and bike racers. CrashPads will initially invite popular
mobile food trucks to the premises so customers can purchase breakfast or dinner, along with
the beverages of their choice (CrashPads will reassess future opportunities to supply their own
mobile food truck, the CrashBar). Customers can then enjoy their food and spirits in CrashPads
outdoor lounge area. In the company of other CrashPadders, customers can meet new fellow
adventurers, recount their feats from the day, and plot tomorrows exploits with some
newfound friends.
No Coordination Required
Condominiums provide ultra-cheap lodging if the cost is split between many friends (usually
four). But how many weekends a year can four friends match schedules? With CrashPads,
people can adventure on their own, or assemble small groups of two or three friends.
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Secondary Uses
Drawbacks
Sleeping in a Cargo Container
The CrashPads concept is not for everyone, even within the target market segment. The greatest
challenge to CrashPads will be to convince consumers to sleep in the back of a crowded tractortrailer in the middle of a parking lot.
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CrashPads must maintain a high density of beds within the modules in order to stay profitable.
However, CrashPads will mitigate the risks of consumer claustrophobia by utilizing industry
standard privacy bunk beds. These bunk beds will incorporate comfortable, full thickness
mattresses, a privacy curtain, and a reading light with an outlet for the charging of personal
devices. Thus, even when the CrashPads module is at full capacity, customers can rest in a quiet,
private, and comfortable space.
Highly Variable and Seasonal Demand
Success of the CrashPads concept depends almost entirely upon acceptance of the concept by
the hard-core skier market segment. Demand from this segment is primarily on weekends
during the ski season. This demand also depends on weather conditions, specifically on the
amount of recent snowfall.
CrashPads will send pow-pow email alerts when significant snowfall is expected and flex its
operations to accommodate unexpected demand (especially in the middle of the week when
people ditch work to go ski, and when people coordinate early arrivals at the lifts to attain
critical first tracks). CrashPads will only launch such nights when predicting an 80% occupancy
rate. In order to exploit high-demand periods and events that appeal to the target market, the
CrashPads event location planner will coordinate future CrashPads locations 6-18 months in
advance. Finally, the CrashPads website will invite customers to add future locations and events
to the CrashPads calendar and allow them to reserve beds at that event. If enough reservations
accumulate for that event (80%), then CrashPads will collect reservation payments and arrive at
the event.
Parking Lot Coordination
The CrashPads concept relies on the attainment of adequate real estate within a parking lot that
is walking distance to the action. A large majority of operations will require the CrashPads truck
to relocate from the parking lot, to the staging area, and back to the parking lot, all while cars
continually enter and exit the parking lot in use. CrashPads will reduce these location risks by
assigning a parking lot coordinator (initially the COO) to maintain a daily relationship with
parking lot managers and parking attendants. It is through these relationships that CrashPads
will attain the prime parking lot real estate necessary for ideal operations.
Ease of Imitability and Competition
The CrashPads concept can be imitated, but getting started requires months of thorough
planning, coordination, capital, and a staging area. A head start will achieve an entrenched
position, as CrashPads will be the first to coordinate working agreements with ski resorts,
concert producers, and race organizers, cementing solid working relationships for the future.
Additionally, Summit County is rapidly approaching 100% build out of developable land, so there
is little risk CrashPads will be outcompeted by a large, traditional hostel facility.
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CrashPads envisions the creation of two additional CrashPads hubs within five years: one on the
West Coast and one in the Midwest or the East Coast. Scheduling centers in these hubs will
allow CrashPads to access nearly every geographical market in the United States with the
mobility-lodging concept.
Barriers to Entry
The CrashPads concept requires a minimal amount of capital to start up compared with
traditional lodging concepts that require the purchase and development of real estate. Thus,
capital requirements provide a very low barrier to entry for new entrants. In order to mitigate
this risk, CrashPads plans to expand market share as rapidly as possible. This will create
CrashPads brand name recognition among consumers and set the standard for mobile lodging.
Additionally, elevated consumer switching costs through heavily promoted discounted 10-night
vouchers will discourage Crashers from using other lodging sources with remaining stays on
their voucher. Finally, additional discounts for customers who complete satisfaction surveys
following their stay will promote retention and the surveys will help to maintain and improve
customer satisfaction.
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III.
Relevant Market
The CrashPads target B2C market earns $50,000 or less, travels by themselves or in small groups
of two or three, takes overnight trips, and stays in hotels, hostels, campers, campsites, or
personal vehicles near the mountain resort communities in Summit County, Colorado. The
market does not include consumers that travel with four or more friends or family members.
The users of the CrashPads facilities affectionately known as Crashers have active
lifestyles, are mostly between the ages of 16 and 45, and view lodging as a necessity only to
enjoy their primary activity.
The target B2B market includes events of 10,000 people or more occurring in areas with ample
space and either little on-site lodging capacity or high-priced on-site lodging capacity. These
events draw a large number of people who need lodging for at least one night, but the area
does not ordinarily have enough traffic to demand permanent lodging facilities.
Other potential markets include lodging for natural disaster relief workers, large and remote
construction projects such as oil wells and factories.
Crashers and firms that want to contract CrashPads services for their customers or employees
desire convenience, safety, affordability, cleanliness, and security.
Total
Destination Spent on
Spending
Accommodations
Ratio
$ 14,791.0
$ 2,838.0
19.2%
$ 3,216.0
$ 1,039.0
32.3%
$ 642.6
$ 165.5
25.7%
The total amount spent on lodging in Summit County was estimated by using statewide and
regional ratios of lodging expenses to total destination spending. This results in a conservative
average ratio of 25.7%, or $165.5M in annual lodging revenues for Summit County.
CrashPads is focused on those who earn less than $50,000 per year, travel in groups of three or
less and who are 18 to 45 years old. Applying these limitations (International, 2012), the
estimated market potential is as follows:
$165.5M * 57% under age 45 * 44% earn less than $50,000 * 20% travel in groups of 3 or fewer
= $8.3M (Relevant market revenue)
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In Summit County, the high-demand season for lodging is the winter ski season, which accounts
for roughly two-thirds of the annual demand. That means about $5.5M exists in prime season
relevant market revenue for CrashPads to focus on, assuming the rates are competitive with
current inventory and that average weather provides normal ski season attendance. CrashPads
also hopes to grow the market by attracting people who currently sleep in their cars or drive
home.
Tourism growth is expected as the country recovers from the 2009 economic downturn
(International, 2012). With little new lodging inventory being added in Summit County due to
the build out of developable land, CrashPads can help meet demand during busy seasons,
particularly around winter weekends and holidays. The large resorts have added attractions to
increase demand during the offseason, but there is not enough permanent demand during this
period to warrant CrashPads units at ski resorts. Instead, CrashPads will focus on bike races,
music festivals, special events, rodeos, industrial clients, and other sporting events throughout
Colorado to fill demand during the warmer months (See Appendix C, Exhibits #1 and #2).
Buyer Behavior
Like most hotel customers, Crashers will fall into two basic categories those who reserve in
advance and those who walk-in.
Reservations these customers will search online for a room months in advance right
up until arrival; online demand will be based on finding the CrashPads website using
online search functions, requiring promotional dollars to influence.
Walk-ins these customers are overflow from other properties, or someone who saw or
heard about CrashPads and decided it sounded better than sleeping in their car.
CrashPads will increase this demand through direct low-cost marketing at the event or
destinations (signage will be key).
Crashers will be influenced by personal experience. For someone upgrading from the backseat
of their two-door coupe, CrashPads will have a physiological advantage compared to those who
are downgrading from a standard hotel. Initially, CrashPads will place great emphasis on
guerrilla marketing tactics that push word of mouth referrals. In targeting groups of two or
three who are travelling together and possibly sharing expenses, CrashPads must convince all
members of the group that CrashPads are a viable option.
Although CrashPads will likely experience lower customer ratings than full-service hotels, the
goal is still to provide a product, price, and experience that solicits positive feedback, future
purchases, and promotion to others. The CrashPads customer buying process follows:
1. Realize the need Crashers decide they need to pay for a place to sleep/shower.
2. Search for information Customers ask friends/family where to stay, search online,
recall advertising/promotions, walk-in.
3. Consider options Users consider quality, price, convenience, safety, availability.
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4. Make purchase Customers assess overall value and decide where to stay.
5. Evaluate decision Crashers assess cleanliness, safety, price/value, customer service.
To ensure CrashPads is meeting its customer expectations, Crashers will be asked the ultimate
question, Would you recommend CrashPads to your friends/family? with a simple 1-10 scale
as they check out and various incentives for completing the survey. This data will be available
daily to the COO. Crashers that rate CrashPads at less than a 9 will be contacted within 48 hours
to find out how the experience could be improved.
CrashPads sells a value proposition in two directions: consumers can get a bed and a shower for
$45 where the action is happening; and there is no reason to pay up to five times as much for a
bed and a shower when consumers are not utilizing the high cost amenities. Of course,
CrashPads also put Crashers close to the action, so they can pay less and play more.
Choosing a hotel is a medium-involvement purchase: there is a little research and some price
shopping. The CrashPads price point will attract the primary target segment. It will be important
that the website accurately reflect CrashPads spaces. While there is no need to portray
CrashPads as luxury suites, the website must convey convenient lodging services, just absent
many unnecessary amenities.
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2015
$45
720
80.00%
40
23,040
$1,040,000
17.59%
2016
$45
1440
80.00%
40
46,080
$2,070,000
33.19%
Initially, Crashers will be interested in both the why not pricing and the convenience of
location. Because this market segment tends to be price sensitive, CrashPads will use
promotional pricing to drive toward the goal of 80% occupancy. Over time, mainstream
customers will appreciate the overall value of affordability, safety, and convenience.
Appendix C, Exhibit #5 shows anticipated Colorado market share over the first three years. This
data reflects year-round growth potential. The Selective Demand represents the portion of the
existing overnight-trips market from which CrashPads expects to convert customers. The
CrashPads percentage of overall Colorado market is relatively small with 2% of the market in
three years. The industry as a whole will barely recognize CrashPads existence, however, in
years two and three, CrashPads begins to take a noticeable chunk of the low-end customer
market in Summit County. Also worth noting, because CrashPads is charging less per night than
industry standard, the percent of lodging revenue is lower than the percent of nights captured.
Assumptions
Year 1
Year 2
Year 3
Market
Growth
6%
6%
6%
Events
Weekend only, 80% target occupancy
Begin 3-4 day events, 80% target occupancy
Begin weekly events (5-7 nights), 80% target
occupancy
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Explanation of Assumptions
The overall trip industry in Colorado has had a stable growth rate of 2% over the past 10 years.
However, Summit County, which is CrashPads initial market area, has had a higher growth rate
due to the rising popularity and accessibility to ski resorts during wintertime. CrashPads has
chosen to keep this rate steady at 6%, which is slightly conservative given higher rates (7.1% and
6.3%) in the past few years and an anticipated increase in domestic travel over the next few
years. In effect, CrashPads will benefit if the market as a whole does better than our prediction.
In terms of average utilization rate, the success of CrashPads will be predicated upon the ability
to predict demand. Initially there are two problems with CrashPads target of 80%:
1. Because this is a new offering, the market awareness will be low. However, while
Summit County certainly has the ideal environment to reach 80% demand, the market
will need to become aware of the offering. This means CrashPads will sometimes
operate at a lower than expected occupancy rate. At the very least, this sub-optimal
deployment will act as self-promotion (i.e. a marketing promotion expense).
2. CrashPads has little ability to predict demand accurately on any given night. A large pool
of potential customers in Summit County is favorable, but other important factors
include which days of the week have more people, what events make areas of the
county more popular on a given night, and what spots in those areas provide the best
location for customers to access CrashPads offerings.
Over time, CrashPads will improve its ability to predict demand, meaning higher usage rates and
more profit. Additionally, better predictability will lead to more profit opportunities, allowing
CrashPads to expand its footprint, growing at a 100% rate for year 2 and year 3. These growth
numbers reflect the rapid expansion of a new product creating a new market space. CrashPads
expects a steeper growth curve compared to the existing mature lodging solutions.
Furthermore, CrashPads intends to increase the number of operating nights per year by working
with events that need lodging for 3 to 7 nights. This will require more units because some will be
less mobile at a given time, which is another reason to grow at a faster rate. Year 2 assumes
changes in operations to handle 3 to 4 night events, while Year 3 assumes the ability to
implement a 7-night event.
Booking experience: Was it easy to book a bed in advance and/or on-site at the last
minute? Was it easy to pay? Was it easy to check in/out?
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Appearance: Did CrashPads look like it should? How does appearance affect future
visits?
Safety and security: Does the premise need different safety measures (more cameras,
more people, etc.)? Did you feel your articles of possession were stored securely while
sleeping?
Comfort: Should the mattress be thicker? Was it too hot or cold? Did you have enough
space?
Convenience: Was the lodging close enough to the action? Were the right amenities
there to support your activities during the day and at night?
Locations & Events: What events does the customer want CrashPads to attend?
CrashPads will collect this type of information both formally through surveys and informally via
employee interactions. This feedback will help shape the evolution of the overall product and
service experience. Some feedback may invoke immediate attention (such as creature
comforts), while other changes may take time and long range planning (such as new locations).
Reception and feedback may cause a shift in strategic direction, as secondary events and
markets may surprisingly become the core focus. These types of changes could affect product
layout (e.g. three rooms with 10 beds versus one room with 30 beds) or cause logistical changes
(short truck movements versus long truck movements).
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IV.
CrashPads Economics
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CrashPads earn a profit if units achieve at least three nights with less than 10% vacancy and $40
per bed. $50 per bed allows up to 25% vacancy for the same three-night period.
Start Up Costs
Design and Engineering costs involve the funding required to create the expandable units and
bathroom units to CrashPads specifications. Marketing costs will focus on areas prone to
overfilling of hotels, such as the Summit County ski resorts, as well as those in charge of
organizing large festivals and sporting events, such as the USA Pro Cycling Challenge. Training
costs will ensure all initial hires understand how to operate and maintain the units. See
Appendix D, Exhibit #3.
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STARTUP COSTS
Land costs, unit costs, and truck costs are expected to be lower, significantly decreasing
fixed costs.
AD REVENUE ESTIMATES
CrashPads will sell advertising on the side of its units and offer discount pricing to
advertisers making longer commitments. The cost per thousand impressions, known in the
advertising industry as CPM, is typically very low in outdoor advertising especially in semitruck advertising. Between the vehicle traffic where the CrashPads vehicles travel and
where the units are parked, potential advertisers are looking at a CPM between $4 and $10.
Our benefit to advertisers is that we can get them visibility near the events where a specific
demographic is already gathered. The Denver media market (which Summit County is a part
of) is the 18th largest in the United States, but most of our events are in lower traffic areas
within the county. CrashPads is delivering advertisements to very targeted crowds of
people, whereas a traditional truck advertisement in a city is hitting the entire market with
random variations of market segments. In essence, CrashPads can connect advertisers with
the right set of eyeballs albeit a smaller total.
CrashPads initially assumes that the difference here is negligible, although optimistically,
CrashPads believes that it can offer much more targeted advertising to vendors that sponsor
events or activities that CrashPads is servicing. Furthermore, CrashPads believes it will have
seasonal advertising contracts during winter and summer with multiple monthly contracts
for fairs, festivals, and events. CrashPads estimated $1,000 per month per truck, which is
conservative given that many of the contract rates should fall closer to the $3,000 range.
Given this, CrashPads believes a $2,000 per month rate is a realistic price.
AVAILABLE UNITS
This analysis includes six standard set-ups (e.g. two expandable units and a bathroom unit).
As the concept proves successful, additional units will accelerate the breakeven point.
CrashPads does not expect to breakeven in the first year, or even in the first two years. As
the market initially becomes aware of this new option for lodging, CrashPads expects to
book more than just the weekend nights with events such as the Colorado State Fair and the
USA Pro Cycling Challenge. CrashPads will purchase additional standard set-ups to meet
increasing demand before the first set-ups have completely covered start-up costs.
Relationship management with existing hotel and resort owners as well as event organizers
will overcome the challenges to reach breakeven as quickly as possible.
If further discussion with these leaders highlights additional interest, a larger initial purchase
of units will lower the breakeven point. Additional markets such as construction companies
or other work groups in austere locations may prove to be more lucrative than initially
thought. CrashPads may also discover that the intended market is not as price sensitive as
feared and raise prices.
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Profit Durability
CrashPads expects a solid profit stream from this venture. Once it has overcome the American
aversion to hostel-like sleep arrangements, the market potential will grow appreciably. The
current economic situation favors cheaper accommodations that allow the active traveler the
opportunity to venture out without crushing budgets. The familiarity and business relationships
formed will add a layer of protection, as will superior customer service and loyalty programs.
Additionally, many potential competitors will wait to see how the market responds before
entering. This will give CrashPads a substantial market lead-time to build brand awareness and
create Crasher loyalty.
23 | P a g e
V.
Marketing Plan
Pricing
CrashPads aims to provide low cost lodging. The price will be substantially lower than those
available through hotels and condominiums will for a single person, or even for parties of two or
24 | P a g e
three. CrashPads is also trying to set the price attractive enough to expand the market to
include those who may have, in the past, chosen to sleep in their cars or to make a long drive
home at the end of the day.
By keeping the units mobile, CrashPads avoids the high cost of land ownership in prime
locations. Therefore, the low price still provides profits to the owner and investors while
providing superior value to Crashers.
A hotel room on a peak weekend in Summit County snow season will easily run upwards of $100
per night if it is even remotely close to the slopes. Such a room might provide a private
bathroom, a mini fridge, a closet, a TV, and room service. CrashPads offer just the basics: a bed
and a shower. By keeping the facilities clean, comfortable, and secure and the staff friendly and
courteous, CrashPads provides everything the avid skier needs without demanding extra money
for undesired or unneeded amenities.
CrashPads will strive to price in accordance with demand. Discounts will be provided for those
who purchase in bulk, whether it is a single Crasher buying a block of 10 nights or an event
organizer paying to house staff for the duration of a week-long event.
Aware
Know
Like
Prefer
Purchase
In launching a new brand, CrashPads will need to create a connection between potential
customers and the product by taking them through the stages identified above. The first step
will be creating the marketing materials and sales tools needed. This will require content
including photos, videos, and text to use in promotional flyers, trade show displays, the website,
social media, and advertising concepts.
Initial awareness will come from an aggressive mobile advertising campaign utilizing the side of
the trucks (which later become revenue streams from other advertisers) and a comprehensive
media relations strategy focused on Colorado television, radio, and newspaper editors as well as
some key trade publications. This effort will coincide with a strategic public relations campaign
targeted at festivals and events where large numbers of potential customers typically attend.
This will include a full-sized replica of one of the CrashPads trucks so people can see and touch
the product, which will push on the know/like/prefer portion of the cycle. In addition to the buzz
this will create, the sales consultants who staff these events will have two main goals: book
rooms for the following season and develop an e-mail database. CrashPads will also provide
incentive pricing to anyone who purchases a 10-night stay voucher on location.
25 | P a g e
Sales Tactics
More than 57 percent of all lodging reservations are made online (statisticbrain, 2013) (and
likely higher in the CrashPads demographic), so CrashPads will need to partner with an
experienced hotel industry software developer to build the reservation system, website, and
online booking engine with an ongoing digital marketing platform to serve as the primary sales
tool. This subscription-based service will include content, development, photography and video,
ongoing maintenance, and fully integrated digital, social, and mobile platforms. CrashPads will
also utilize this contractor to provide around-the-clock telephone support for booking issues.
Some of the key components of this strategy include:
Hotel website design CrashPads will use responsive design to allow for easy viewing in
desktop, mobile, and tablet formats
Online travel agency build and management to make the rooms visible and
competitive through OTAs including Expedia, Travelocity, and Priceline
Search engine optimization this is more complicated than it used to be so CrashPads
needs to have engaging content, acceptable download speeds, and relevant local links
to have CrashPads appear on the first two pages of Google, Yahoo, and Bing search
results
Search engine marketing with a solid SEO strategy in place, CrashPads can have a
greater return on the dollars devoted to SEM
Social media marketing primary customers will want to find CrashPads on social, local,
and mobile applications such as FourSquare, Facebook Nearby, and Google+
Online reputation management CrashPads needs to respond to negative online
customer reviews
Customer relationship management its the perfect time to develop an electronic CRM
that can be used to communicate directly to Crashers
After the initial blitz, the sales force will be charged with identifying locations where CrashPads
could expect sufficient demand to book at least 80 percent of delivered rooms. See Appendix E,
Exhibit #1.
Once the sales force has identified and booked a location, the details will become available on
the website and the room nights released for promotion and booking. CrashPads will also allow
customers to suggest locations where a CrashPads unit is needed and start a waiting list while
the location is secured. In addition to this primary role, the sales team will also be responsible
for selling the advertising space on the side of the trailers and establishing partnerships with key
destinations.
26 | P a g e
COST
$10,000 for design and printing
TIMELINE
July 2014
MEASUREMENTS
*Deadline met
Website launch
$1,000 development
$600 monthly
July 2014
*Deadline met
*Web analytics
July 2014
*Deadline met
*CPM estimates
Summer
2014
*Event sales
*Mailing list
signups
Digital marketing
Summer
2014
*Conversion
analysis
*Organic and
local rankings
*Pay-per-click
reporting
Media relations
Ongoing
*Successful
placements in
traditional and
industry
publications
*Ad value
comparison
27 | P a g e
VI.
The Energy Efficient ESS is essentially a basic version of the Hard-sided ESS, as it does not have
any of the utility capabilities, but its junction box can easily hook-up with an adjacent powerproducing unit.
These ESS units can be manufactured to meet the specific needs for CrashPads. CrashPads
intends to place one Hard-sided ESS, equipped with two full bathrooms, adjacent to one Energy
28 | P a g e
Efficient ESS on one 40 cargo truck chassis. This chassis, of course, will be transported to nearly
any site of CrashPads choice by a semi-truck. The resulting mobile lodging unit will contain up to
30 bunks, two full bathrooms, a generator, climate control, a water heater, a water tank, a grey
water tank, a black water tank, and lockers, as depicted below.
29 | P a g e
Costs
Hard-sided ESS:
Energy Efficient ESS:
Berg Engineering Costs:
Bunk bed:
Roberto Gil Bed Design Services:
Mobile Bathroom trailer:
40 chassis:
1-ton truck:
Semi-truck:
Proprietary Issues
While the CrashPads concept provides temporary lodging in a unique and innovative fashion,
there is nothing groundbreaking or difficult to imitate about CrashPads technology. With the
exception of registering a trademark on the CrashPads name and purchasing the CrashPads.com
domain name, there is little incentive for CrashPads to patent the mobile lodging technology.
31 | P a g e
VII.
Operations Plan
CrashPads allows customers and staff of other activities, such as ski resorts, festivals, and
sporting events, to stay closer to the action in a clean and safe environment at an affordable
price. These mutual customers can enjoy the activities they want more because they have less
travel time from their more-affordable sleeping quarters. Therefore, Crashers have more time
and money to enjoy their primary activity over permanent lodging options.
CrashPads is negotiating with the Colorado State Fair and with locations along the route of the
USA Pro Cycling Challenge for August engagements. CrashPads is also negotiating with several
landowners and municipalities in Summit County to rent parking lot space for the winter season.
Operations Strategy
CrashPads will schedule and deliver standard setups (60 beds) to locations as needed.
Drivers will be trained in house to use the equipment, drive the trucks, and set up the units
safely and efficiently. Hosts/hostesses will be trained to use the equipment, set up the units
safely and efficiently, and clean the units, including gathering the used linens and placing clean
sheets and towels. Both drivers and hosts/hostesses will be trained in customer service,
ensuring that our front stage operations with Crashers are always pleasant.
For operations in Summit County, CrashPads will outsource laundry functions with Belick
Laundry in Breckenridge. These services will be contracted in bulk at a per item rate (for
example, $1 per sheet set, $.50 per towel set, etc.). Maintenance for the trucks, units, and
generators will be contracted with Summit Mobile Service out of Silverthorne. Fuel supply will
be contracted through A-B Petroleum, based out of Denver. Each of these companies is small
and will benefit from a contract with CrashPads. As CrashPads expands into other locations,
similar contracts will be created.
Both sets of employees can be trained by CrashPads to accomplish their necessary tasks;
however, drivers with a commercial drivers license (CDL) will be preferred. Initially, these jobs
will not be full time. Therefore, the positions will most likely be filled by labor desiring extra
work on weekends or full-time college students looking for extra funds.
CrashPads will focus on low cost and friendly service. Crashers should always get a safe, clean,
convenient, and hassle-free place to refresh themselves for another day hard at play.
32 | P a g e
Geographic Location
CrashPads will be based out of Eagle County, Colorado, just west of Summit County. Currently,
several plots of acreage are listed that are suitable for CrashPads storage, including 40 acres for
$89,900.
Office space will be rented, initially in the Summit County area. Currently, several listings are
appealing, including one 1,100 square foot space available for a 12-month lease at $19 per
square foot, or $21,109.
An office in Breckenridge will give CrashPads a central location to build rapport with business
partners. Non-unionized labor is available with minimum wage increasing to $8 per hour on
January 1, 2014. CrashPads intends to pay workers at a rate above minimum wage.
Taxes vary greatly with location. Colorado has a state sales tax of 2.9% (Sales Tax). Summit
County requires a 2% sales tax and a Mass Transit District tax of 0.75%. Breckenridge requires a
3.4% accommodation tax on top of a 2.5% sales tax as well as an Accommodation Unit License
($175 for units with 4 or more bedrooms). Therefore, sales in Breckenridge will require
collection of 11.55% for taxes. In the town of Silverthorne (Keystone Resort), the town sales tax
is 2% as is the accommodation tax, so the amount of taxes to be collected is 9.65%. CrashPads
33 | P a g e
will need to work closely with local governments to ensure tax laws are properly followed
(Taxes).
Equipment Requirements
CrashPads will require expandable bed units, bathroom units, semi-tractors, one-ton trucks,
trailers, foldable bunk beds, and linens (bedding and towels).
34 | P a g e
dollar parts budget as the operations manager for General Electrics locomotive repair
facility. She currently oversees the local execution of a $1.1 billion government contract
for Lockheed Martins Aircrew Training and Rehearsal System.
COO
Roger Doe will fill the Chief Operations Officer role. He has the responsibility of running
the front and backend operations. This person ensures that the day-to-day work goes
off without a hitch. Furthermore, this person oversees product improvements that will
meet its target market demands when CrashPads moves toward geographic expansion.
The COO will work with both B2C (e.g. people staying in the units) and B2B (e.g. event
planners needing units, firms needing advertisements) to understand ways to better
serve the target markets. This includes developing future improvements to the product
and service. Prior to launch, this person will be highly involved with turning the product
concept into reality by working with vendors to source all the hardware necessary.
His knowledge of the surrounding area, and ability to bring in expert advisors based on
family contacts, will be critical in surmounting the regulatory and competitive pressures.
Roger understands the lodging industry and the product/service expectations based on
his family history. Roger has acted as Operational Test Director (Program Manager) on
many high-tech Navy acquisition programs. As both a Naval Aviator and a Naval Officer,
his previous positions as Department Head, Division Officer, and Operations Officer over
ten years have prepared him well to take on this demanding management and
operations position.
CMO
Peter Doe will fill the Chief Marketing Officer role. He has the responsibility of building
the companys business through the successful development and execution of a
strategic marketing plan, including oversight of the website, reservation system, public
relations and advertising. The CMO is also responsible for the business development
strategy of the company, providing recommendations for expansion markets and
growth tactics. In the early stages of the company, the CMO will serve as the primary
sales force.
His 14 years of consumer marketing experience will help CrashPads focus its efforts in
the right advertising space and meet the needs of customers. He has successfully built
demand for products and services in saturated markets by connecting customers with
the information they need to make an informed decision. He works closely with
operations to ensure that the customer experience mirrors what is being sold, leading to
high customer satisfaction and loyalty.
36 | P a g e
Board of Directors
CrashPads CEO will lead the Board of Directors. Each owner will have a seat with the remaining
seats distributed proportionally to other equity investors. Any member may call a board
meeting with a two-week notice.
The initial Board of Directors will include:
Fred Fritz Lindner Jr. is a retired successful culvert and equipment business owner
and CEO with extensive financial, project management and international business
negotiation experience. His son-in-law Peter Doe will appoint Fritz to this board.
Tom Doe is an established real estate developer in Colorado. He has dealt with
regulatory and compliance for many years, especially in Summit County where
CrashPads will launch its operation. Toms son Roger will appoint him to this board.
Larry Good owns a highly successful bar in Tallahassee. He has succeeded in the
hospitality industry when conditions were less than hospitable. Jane Doe will appoint
Larry to this board.
38 | P a g e
39 | P a g e
40 | P a g e
Critical Risks
The most critical risk to CrashPads success is market acceptance. Americans have an aversion to
hostel-like accommodations, but the hostel industry is predicted to grow with increases in both
international and domestic travel. Additionally, CrashPads is mitigating this risk by providing
extreme value to the customer (see Section II, The Company and the Concept), designing
innovative privacy bunk beds (see Section VIII, Design and Development ), implementing a
creative marketing plan with price promotions (see Section V, Marketing Plan), and providing
41 | P a g e
lodging services in the most appealing locations to our target market (see Appendix E,
Marketing).
Another critical risk to CrashPads operations is the approval of local governments and resorts to
allow CrashPads to operate within city and resort parking lots. CrashPads is mitigating this risk
by assigning the COO (and future event planning coordinators) the primary task of managing
these relationships and planning alternative CrashPads locations that still provide value to the
customer.
42 | P a g e
43 | P a g e
6) Equipment costs are estimated higher than detailed in Section VI to allow for possible
financing, shipping costs, and any unexpected expenses. Projections will be adjusted as initial
purchases are completed.
44 | P a g e
As the mobile accommodations segment becomes more accepted in the U.S. and demand
grows, CrashPads anticipates seeking an initial public offering, or being bought out by a large
hotelier such as Choice Hotels International, Inc., to add to its portfolio of properties. CrashPads
estimates this occurring somewhere around Year 5 to Year 7.
If the business fails, assets will be sold off to pay off debt with the owners splitting the
remaining proceeds or splitting the loss (if less than $300,000 original investment).
Offering
Each owner will receive 25 percent ownership for the initial investment and will be eligible for
profit sharing for meeting established goals. The company will set aside 20 percent in a stock
option pool for future employees.
As investors join, the ownership percentage will decrease but the value will increase. Likewise,
the angel investors will receive higher returns as the business grows. See Appendix I, Exhibit #1.
All original owners will have the first right of refusal to buy out any of the other owners looking
to leave the company. If more than one owner is interested, the buyout and shares will be split
equally.
45 | P a g e
XIII. Appendices
APPENDIX A.
Industry
Exhibit #2. Standard Financial Ratios for the Other Traveler Accommodations Industry
46 | P a g e
47 | P a g e
Exhibit #3. Business Locations for the Other Traveler Accommodations Industry
48 | P a g e
APPENDIX B.
Company
49 | P a g e
APPENDIX C.
Market Analysis
2010
Actual
2011
585.9
N/A
615.2
5.0%
2012
Projected
2013
2014
2015
642.6
4.5%
673.1
4.8%
738.6
4.8%
705.1
4.8%
Projected
2012
Accommodation
spending $M
(Summit County
only)
2013
2014
2015
$165.47
$175.40
$185.92
$197.08
% growth
RevPAR
(Colorado
Resorts overall)
(DestiMetrics,
2013)
6.3%
6.0%
6.0%
6.0%
$ 140
$ 151
$ 163
$ 176
% growth
11.1%
8.0%
8.0%
8.0%
Description
Slumberwheels
% of Sales Potential
sales
80
High they wish the
rest of the world
hadnt discovered
what they know:
Summit County has
some of the most
beautiful country in
the world; sick of
driving back and forth
to avoid high lodging
costs; they currently
take day trips to
avoid spending the
50 | P a g e
Worker bees
COST
$90+
Economy hotels
$100+
Bed-and-breakfasts
Fireside Inn
$90+
RV, Campground
Free$65+
1012
8-10
<1
cash to stay
overnight
Medium-high every
minute not spent
commuting back and
forth to the lodge
means more minutes
for skiing; just the
thought of being the
first in line is worth
the slight
inconvenience of
sharing a bathroom
Low-medium in ski
season this is most
likely to be a parttime worker who
bartends Friday and
Saturday nights and
doesnt want to
spend entire jar of
tips on a room
Low while there are
theme weeks at the
resorts, its pretty
unlikely that
CrashPads will be
invited to the parties;
more likely in the
non-ski months
STRENGTHS
Service, loyalty,
cost, ownership,
local knowledge
Marketing, cost,
economies of scale
Service, amenities,
loyalty, ownership
Cost, simplicity
WEAKNESSES
Marketing,
location,
amenities
Location,
amenities, staff
turnover
Capacity,
marketing
Amenities,
service, location
51 | P a g e
2014
360
80.0%
80
2015
720
80.0%
120
N/A
7,253,280
1,819,123
176,455
23,040
7,688,477
1,928,270
187,042
69,120
8,149,785
2,043,966
198,265
N/A
N/A
N/A
0.3%
1.2%
12.3%
0.8%
3.4%
34.9%
2016
1440
80.0%
160
184,320
8,638,773
2,166,604
210,161
2.1%
8.5%
87.7%
52 | P a g e
APPENDIX D.
CrashPads Economics
60
57
54
51
48
45
42
39
$30
22%
16%
10%
4%
-2%
-8%
-15%
-21%
$35
42%
35%
28%
21%
14%
7%
0%
-7%
Price/bed
$40
63%
55%
46%
38%
30%
22%
14%
6%
$45
83%
74%
65%
56%
46%
37%
28%
19%
$50
103%
93%
83%
73%
63%
53%
42%
32%
100%
95%
90%
85%
80%
75%
70%
65%
%
Total
10.9%
0.4%
9.5%
1.4%
3.4%
1.2%
4.4%
1.4%
8.5%
6.8%
47.9%
VARIABLE*
Cost/Yr.
Driver
$37,440.00
Cleaning/Hosting
$44,928.00
Laundry
$28,080.00
Dumping/Fill Water
$3,120.00
Fuel
Generators
$14,976.00
Movement
$14,976.00
Maintenance
$4,680.00
Supplies/Miscellaneous
$2,080.00
Parking Fees
$3,120.00
Total Variable $153,400.00
$294,200.00
104
53 | P a g e
%
Total
12.7%
15.3%
9.5%
1.1%
5.1%
5.1%
1.6%
0.7%
1.1%
52.1%
12
12
12
6
6
12
12
6
$25,000.00
$960,000.00
$36,000.00
$840,000.00
$120,000.00
$300,000.00
$50,000.00
$20,000.00
$500,000.00
$21,600.00
$25,000.00
$78,000.00
$24,000.00
$162,000.00
$3,161,600.00
54 | P a g e
Total Costs
Revenue (beds)
Total Costs
Total Revenue
55 | P a g e
APPENDIX E.
Marketing
4th of July Weekend Fireworks over Lake Dillon, Copper Mountain, and Keystone
USA Pro Cycling Challenge weeklong event with stops in seven Colorado cities
Greeley Blues Jam weekend music festival in Greeley in mid-April
Golden Music Festival weekend music festival in Golden in early June
Country Jam USA 4-day music festival in Grand Junction in late June
NSRA Street Rod Nationals 4-day sporting event in Pueblo in late June
Cowboys Roundup Days weeklong festival and rodeo in Steamboat Springs in early
July
Ride Festival weekend festival in Telluride in early July
Bobstock weekend music festival in Fort Morgan in mid-July
Colorado State Fair 10-day fair in Pueblo in early August
Ride the Rockies June 8-15 bike race from Telluride to Colorado Springs (stopping in a
different town each night)
Oktoberfest weekend in September
Run the Rockies Frisco
Warrior Dash Copper Mountain
56 | P a g e
APPENDIX F.
Management
CEO / Owner
John Doe
CMO / Owner
Peter Doe
CFO / Owner
Jane Doe
COO / Owner
Roger Doe
General Manager
TBD
Pool of 20 hosts
TBD
Driver / Attendant
57 | P a g e
0.0
0.0
(867.4)
2.8
358.0
1.4
358.0
(374.8)
362.8
2.0
2.0
(183.0)
(12.0)
(6.0)
0.0
0.0
12.0
(12.0)
0.0
6.0
(6.0)
861.4
0.0
May
1
183.0
0.0
0.0
April
Total Expenses
0.0
0.0
March
500.0
108.0
25.0
50.0
0.0
0.0
February
(749.6)
725.6
5.6
716.0
4.0
(24.0)
0.0
24.0
(24.0)
(724.0)
803.6
15.0
13.5
25.0
4.0
21.6
8.5
716.0
194.4
132.8
61.7
18.0
79.7
August
6
(2.5)
41.0
8.5
4.0
15.0
13.5
64.8
44.3
20.6
18.0
38.6
September
6
(2.5)
41.0
8.5
4.0
15.0
13.5
64.8
44.3
20.6
18.0
38.6
October
6
13.9
37.0
8.5
15.0
13.5
103.7
70.8
32.9
18.0
50.9
42.7
37.0
8.5
15.0
13.5
194.4
132.8
61.7
18.0
79.7
November December
6
6
APPENDIX G.
Expenses
Salaries
Rent - Office
Marketing
Training
Linens
Insurance
Equipment (units & trucks)
Design & Engineering
Land
CrashPads, LLC
2014
(all numbers $000)
June
July
2
4
Financials
58 | P a g e
59 | P a g e
3.1
Total Expenses
(2.8)
0.1
0.1
0.1
0.0
0.0
0.1
2.3
0.0
0.5
Expenses
Salaries
Rent - Office
Marketing
Training
Linens
Insurance
Equipment (units & trucks)
Design & Engineering
Land
0.6
0.5
0.2
0.1
0.2
2014
6
16.7
63.0
15.0
13.5
25.0
1.0
0.0
8.5
0.0
194.4
132.8
61.7
18.0
79.7
January
6
(78.7)
146.0
15.0
13.5
0.0
1.0
0.0
8.5
108.0
155.5
106.2
49.3
18.0
67.3
February
6
29.3
38.0
15.0
13.5
0.0
1.0
0.0
8.5
0.0
155.5
106.2
49.3
18.0
67.3
March
6
29.3
38.0
15.0
13.5
0.0
1.0
0.0
8.5
0.0
155.5
106.2
49.3
18.0
67.3
April
6
0.5
38.0
15.0
13.5
0.0
1.0
0.0
8.5
0.0
64.8
44.3
20.6
18.0
38.6
May
6
(3.6)
38.0
15.0
13.5
0.0
1.0
0.0
8.5
0.0
51.8
35.4
16.4
18.0
34.4
(3.6)
38.0
15.0
13.5
0.0
1.0
0.0
8.5
0.0
51.8
35.4
16.4
18.0
34.4
CrashPads, LLC
2015
(all numbers $000)
June
July
6
6
(2078.4)
2237.7
15.0
13.5
0.0
1.0
43.2
17.0
2148.0
388.8
265.5
123.3
36.0
159.3
August
12
47.0
46.5
15.0
13.5
0.0
1.0
0.0
17.0
0.0
181.4
123.9
57.5
36.0
93.5
September
12
47.0
46.5
15.0
13.5
0.0
1.0
0.0
17.0
0.0
181.4
123.9
57.5
36.0
93.5
October
12
72.7
45.5
15.0
13.5
0.0
0.0
0.0
17.0
0.0
259.2
177.0
82.2
36.0
118.2
138.5
45.5
15.0
13.5
0.0
0.0
0.0
17.0
0.0
466.6
318.6
148.0
36.0
184.0
November December
12
12
60 | P a g e
Total Expenses
Expenses
Salaries
Rent - Office
Marketing
Training
Linens
Insurance
Equipment (units & trucks)
Design & Engineering
Land
5246.4
180.0
25.0
25.0
10.0
86.4
408.0
4512.0
7776.0
5310.0
2466.0
72.0
2538.0
2016
(2708.4)
24
2017
(946.8)
5493.6
180.0
25.0
25.0
10.0
129.6
612.0
4512.0
13996.8
9558.0
4438.8
108.0
4546.8
36
1308.0
5740.8
180.0
25.0
25.0
10.0
172.8
816.0
4512.0
21772.8
14868.0
6904.8
144.0
7048.8
3175.2
5864.4
180.0
25.0
25.0
10.0
194.4
918.0
4512.0
27993.6
19116.0
8877.6
162.0
9039.6
CrashPads, LLC
2016-2023
(all numbers in $000)
2018
2019
48
54
2020
4467.0
5988.0
180.0
25.0
25.0
10.0
216.0
1020.0
4512.0
32400.0
22125.0
10275.0
180.0
10455.0
60
2021
3585.0
8367.6
180.0
25.0
25.0
10.0
237.6
1122.0
6768.0
37065.6
25311.0
11754.6
198.0
11952.6
66
2022
5041.2
8491.2
180.0
25.0
25.0
10.0
259.2
1224.0
6768.0
41990.4
28674.0
13316.4
216.0
13532.4
72
2023
6579.6
8614.8
180.0
25.0
25.0
10.0
280.8
1326.0
6768.0
47174.4
32214.0
14960.4
234.0
15194.4
78
$3,296
$624
$924
($4)
$296
$5,000
$5,000
$300
$3,000
$3,000
LIABILITIES
Current Liabilities
Long-term Liabilities
Total Liabilities
$5,924
$300
$3,296
TOTAL ASSETS
$500
$4,512
$912
2015
SHAREHOLDERS' EQUITY
Owner's Equity
Capital Stock
Retained Earnings
Total Shareholders' Equity
$500
$2,256
$540
2014
ASSETS
Current Assets
Cash
$10,746
$2,446
$2,746
$300
$8,000
$8,000
$10,746
$500
$9,024
$1,222
2016
$14,371
$6,071
$6,371
$300
$8,000
$8,000
$14,371
$500
$13,536
$335
$20,251
$11,951
$12,251
$300
$8,000
$8,000
$20,251
$500
$18,048
$1,703
CrashPads, LLC
2014-2023
(all numbers in $000)
2017
2018
$25,742
$17,442
$17,742
$300
$8,000
$8,000
$25,742
$500
$20,304
$4,938
2019
$32,525
$24,225
$24,525
$300
$8,000
$8,000
$32,525
$500
$22,560
$9,465
2020
$38,426
$30,126
$30,426
$300
$8,000
$8,000
$38,426
$500
$24,816
$13,110
2021
$45,783
$37,483
$37,783
$300
$8,000
$8,000
$45,783
$500
$27,072
$18,211
2022
$54,679
$46,379
$46,679
$300
$8,000
$8,000
$54,679
$500
$29,328
$24,851
2023
61 | P a g e
$25,000
$183,000
$0
$0
$867,400 $374,800 $749,600
$117,000
$0
$0
$2,132,600 ($374,800) ($749,600)
$0 $117,000 $117,000 $117,000 $2,249,600 $1,874,800
$117,000 $117,000 $117,000 $2,249,600 $1,874,800 $1,125,200
Total Payments
Cashflow Surplus/Deficit
Opening Cash Balance
Closing Cash Balance
$288,000
$12,000
$280,000
$36,000
$100,000
$5,600
$4,000
$24,000
$0
$12,000
$500,000
$144,000
$6,000
$140,000
$18,000
$50,000
$144,000
$6,000
$140,000
$18,000
$50,000
$2,800
$1,400
$96,000
$2,000
$12,000
$2,000
$50,000
$6,000
$0
Expenses
COGS (Variable Costs)
Salaries (Mgmt)
Rent - Office
Marketing
Training
Linens
Insurance
$0
May
$3,000,000
$300,000
$0
April
Bed Sales:
Net Bed Sales:
Ad Revenue:
Total Receipts:
March
$3,000,000
1
February
$300,000
Founder's Investment
Loan Received
Total Standard Setups
$908,850
($696,450)
$1,125,200
$428,750
$288,000
$12,000
$280,000
$36,000
$100,000
$4,000
$21,600
$8,500
$132,750
$13,500
$12,500
$194,400
$61,650
$18,000
$212,400
$8,500
$4,000
$44,250
$13,500
$8,500
$70,800
$13,500
$8,500
$132,750
$13,500
$8,500
$4,000
$44,250
$13,500
$64,800
$20,550
$18,000
$82,800
CrashPads, LLC
2014
June
July
August September October November December
62 | P a g e
63 | P a g e
Total Payments
Cashflow Surplus/Deficit
Opening Cash Balance
Closing Cash Balance
Expenses
COGS (Variable Costs)
Salaries (Mgmt)
Rent - Office
Marketing
Training
Linens
Insurance
Bed Sales:
Net Bed Sales:
Ad Revenue:
Total Receipts:
Founder's Investment
Loan Received
Total Standard Setups
$205,750
$6,650
$540,380
$547,030
$8,500
$8,500
$237,200
($63,680)
$547,030
$483,350
$12,000
$96,000
$1,000
$1,000
$129,200
$44,320
$483,350
$527,670
$8,500
$106,200
$13,500
$155,520
$49,320
$18,000
$173,520
March
$106,200
$13,500
$155,520
$49,320
$18,000
$173,520
February
$132,750
$13,500
$25,000
$25,000
$1,000
$194,400
$61,650
$18,000
$212,400
January
$129,200
$44,320
$527,670
$571,990
$8,500
$1,000
$106,200
$13,500
$155,520
$49,320
$18,000
$173,520
April
$67,250
$15,550
$571,990
$587,540
$8,500
$1,000
$44,250
$13,500
$64,800
$20,550
$18,000
$82,800
May
$58,400
$11,440
$587,540
$598,980
$8,500
$1,000
$35,400
$13,500
$51,840
$16,440
$18,000
$69,840
$58,400
$11,440
$598,980
$610,420
$8,500
$1,000
$35,400
$13,500
$51,840
$16,440
$18,000
$69,840
CrashPads, LLC
2015
June
July
$2,488,200
($63,400)
$610,420
$547,020
$864,000
$36,000
$840,000
$108,000
$300,000
$1,000
$43,200
$17,000
$265,500
$13,500
$388,800
$123,300
$36,000
$2,424,800
$2,000,000
12
August
$155,400
$62,040
$547,020
$609,060
$17,000
$1,000
$123,900
$13,500
$181,440
$57,540
$36,000
$217,440
12
$155,400
$62,040
$609,060
$671,100
$17,000
$1,000
$123,900
$13,500
$181,440
$57,540
$36,000
$217,440
12
September October
$207,500
$87,700
$671,100
$758,800
$17,000
$177,000
$13,500
$259,200
$82,200
$36,000
$295,200
12
$349,100
$153,460
$758,800
$912,260
$17,000
$318,600
$13,500
$466,560
$147,960
$36,000
$502,560
12
November December
64 | P a g e
$1,920,000
$72,000
$1,680,000
$240,000
$600,000
Total Payments
Cashflow Surplus/Deficit
Opening Cash Balance
Closing Cash Balance
$10,538,400
$309,600
$912,260
$1,221,860
$5,310,000
$162,000
$25,000
$25,000
$10,000
$86,400
$408,000
Expenses
COGS (Variable Costs)
Salaries (Mgmt)
Rent - Office
Marketing
Training
Linens
Insurance
$7,776,000
$2,466,000
$72,000
$10,848,000
$3,000,000
24
2016
Bed Sales:
Net Bed Sales:
Ad Revenue:
Total Receipts:
Founder's Investment
Loan Received
Total Standard Setups
$14,991,600
($886,800)
$1,221,860
$335,060
$20,548,800
$1,368,000
$335,060
$1,703,060
$1,920,000
$72,000
$1,680,000
$240,000
$600,000
$172,800
$816,000
$129,600
$612,000
$1,920,000
$72,000
$1,680,000
$240,000
$600,000
$14,868,000
$180,000
$21,772,800
$6,904,800
$144,000
$21,916,800
48
2018
$9,558,000
$180,000
$13,996,800
$4,438,800
$108,000
$14,104,800
36
2017
$24,920,400
$3,235,200
$1,703,060
$4,938,260
$1,920,000
$72,000
$1,680,000
$240,000
$600,000
$194,400
$918,000
$19,116,000
$180,000
$27,993,600
$8,877,600
$162,000
$28,155,600
54
$28,053,000
$4,527,000
$4,938,260
$9,465,260
$1,920,000
$72,000
$1,680,000
$240,000
$600,000
$216,000
$1,020,000
$22,125,000
$180,000
$32,400,000
$10,275,000
$180,000
$32,580,000
60
CrashPads, Inc.
2016-2023
2019
2020
$33,618,600
$3,645,000
$9,465,260
$13,110,260
$2,880,000
$108,000
$2,520,000
$360,000
$900,000
$237,600
$1,122,000
$25,311,000
$180,000
$37,065,600
$11,754,600
$198,000
$37,263,600
66
2021
$37,105,200
$5,101,200
$13,110,260
$18,211,460
$2,880,000
$108,000
$2,520,000
$360,000
$900,000
$259,200
$1,224,000
$28,674,000
$180,000
$41,990,400
$13,316,400
$216,000
$42,206,400
72
2022
$40,768,800
$6,639,600
$18,211,460
$24,851,060
$2,880,000
$108,000
$2,520,000
$360,000
$900,000
$280,800
$1,326,000
$32,214,000
$180,000
$47,174,400
$14,960,400
$234,000
$47,408,400
78
2023
Appendix H.
Overall Schedule
Start Date
End Date
Responsible
Form LLC
1/6/2014
1/6/2014
CEO
1/6/2014
5/2/2014
CEO/CFO
1/6/2014
1/31/2014
CFO
1/13/2014
1/13/2014
CEO/CFO/COO/CMO
2/1/2014
2/1/2014
COO
2/3/2014
5/2/2014
CEO/CFO
4/1/2014
4/1/2014
CEO/CFO/COO/CMO
4/1/2014
5/2/2014
CMO
5/5/2014
5/13/2014
CFO
5/5/2014
5/19/2014
COO
Receive/set up 2 units
5/19/2014
5/26/2014
COO
6/1/2014
6/30/2014
COO
6/1/2014
6/30/2014
CMO
Receive/set up 2 units
6/19/2014
6/26/2014
COO
7/1/2014
10/31/2014
COO
7/1/2014
7/1/2014
CMO
7/1/2014
9/30/2014
CMO
Digital Marketing
7/1/2014
10/31/2014
CMO
Media Relations
7/1/2014
12/31/2014
CEO/CMO
Receive 6 units
7/19/2014
7/26/2014
COO
8/1/2014
8/31/2014
COO
8/1/2014
8/1/2014
COO/CMO
8/18/2014
8/24/2014
ALL
Official Launch
11/26/2014
11/26/2014
CEO/CFO/COO/CMO
11/26/2014
4/30/2014
General Manager
12/1/2014
2/1/2015
CEO/CMO
12/1/2014
2/1/2015
CEO/CMO
1/1/2015
3/1/2015
COO/CMO
1/15/2015
2/28/2015
CMO
2/1/2015
5/30/2015
CEO/CFO
2/1/2015
2/1/2015
COO
3/1/2015
5/31/2015
COO
5/1/2015
9/30/2015
COO/General Manager
6/1/2015
6/15/2015
CFO
6/15/2015
6/15/2015
COO
10/1/2015
4/30/2016
COO/General Manager
11/1/2015
2/1/2016
CEO/CMO/CFO
1/1/2016
5/31/2016
CMO/COO
2/1/2016
5/30/2016
CEO/CFO
5/1/2016
9/30/2016
COO/General Manager
10/1/2016
4/30/2017
COO/General Manager
65 | P a g e
Tax
Rate
30%
Assumed
Discount
Prob. Of
Rate
Failure
30.0%
40%
Growth
3.0%
Discount Rate
Risk Free =
Risk Premium =
Beta =
Discount Rate:
1.50%
1.54
10.7%
6%
2.28
15.2%
2.5
16.5%
1.54
13.8%
8%
2.28
19.7%
2.5
21.5%
66 | P a g e
References
Accomodation Unit Licenses. (n.d.). Retrieved January 2, 2014, from Town of Breckenridge:
http://www.townofbreckenridge.com/index.aspx?page=479
Dean Runyan Associates. (2013). Colorado Travel Impacts 1996-2012. Denver, CO: Colorado
Tourism Office.
DestiMetrics. (2013, May). Destination Lodging Reservations Activity. Retrieved November 27,
2013, from Town of Breckenridge:
http://www.townofbreckenridge.com/Modules/ShowDocument.aspx?documentid=369
5
IBIS World. (2013). Bed & Breakfast & Hostel Accommodations in the US. IBISWorld Inc.
International, L. (2012). Colorado Travel Year 2012. Longwoods International.
Sales Tax. (n.d.). Retrieved January 2, 2014, from Silverthorne, CO:
http://www.silverthorne.org/index.aspx?page=114
statisticbrain. (2013, June 18). Internet Travel Hotel Booking Statistics. Retrieved December 6,
2013, from statisticbrain.com: http://www.statisticbrain.com/internet-travel-hotelbooking-statistics/
Taxes. (n.d.). Retrieved January 2, 2014, from Town of Breckenridge:
http://www.townofbreckenridge.com/index.aspx?page=146
67 | P a g e