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How to Start an Amusement Park (A)
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How to Start an Amusement Park (A)

Views: 287     Author: Bettaplay -Silvia     Publish Time: 2018-01-26      Origin: Site Inquire

How to Start an Amusement Park (A)


The amusement park industry has shown steady attendance and revenue growth over the past twenty years.But not all parks are a success. While a well-planned amusement park can generate steady revenues and enormous amounts of capital, a poorly planned one can be a money-pit. To make sure your amusement park is a success, both with your guests and your investors, you will need to plan carefully, gather an experienced team to oversee the design and construction, and carefully train your staff to ensure a smooth opening.


Planning Your Park and Attracting Capital


1, Pick the type of amusement park you will open. You will need to do market research to determine the size of the market and the competitors in your area. If there is already a well-established park in the area, it will be easier to break into the market if your park offers a substantially different experience, whether in terms of rides or theme. The two major types of park are water parks and thrill-based parks involving roller-coasters and other types of rides. There are seven major types of theme, though many parks combine several of them:


● Adventure – Thrill rides, mystery, action.

● Futurism – Discovery, exploration, science, robotics, science fiction.

● International – Flavors of the world, areas with national themes.

● Nature – Animals, gardens, natural wonders.

● Fantasy – Cartoon characters, magic, myths and legends.

● History and Culture – Historical ambiance, areas with period themes.

● Movies – Rides based on films, stunt shows, behind the scenes.


2, Decide between franchising or starting a new park. Though starting your own park will allow you more control over the attractions offered and the style of the park, it also entails greater risk. Starting a franchise will give you more support and a proven brand that will aid in raising capital. For a first time business owner, it is a safer option.


3, Hire an experienced group to perform a feasibility study. Amusement parks require a lot of capital to start, and there is no sense in wasting time and effort if there is no market for your park. A feasibility study will take into account potential sites, your park concept, the local market and tourist market, and industry trends and local competition in order to estimate costs, revenues, and how many first-year guests you can expect. This last number is hugely important, as the number of first-year guests expected will determine the amount you need to spend to build a park that can accommodate them. Estimate too low, and your park will be overcrowded. Estimate too high, and your park will fail due to inability to recoup construction costs.


4, Write a business plan. To attract investors and efficiently run your business, you will need to develop a strategic plan, which you will base on the analysis performed in the feasibility study. You can find more details about how to write a plan here, but broadly, you will want to include:


● Your business concept: what sort of park you are creating, your strengths and weaknesses, long term goals, and performance indicators, beyond the bottom line, which will let you know you are succeeding or failing.


● Market research: the nature of the amusement park industry, the size of the market and how much of it you must capture to show a profit, who are your customers, who are your local competitors, how will you advertise your park.

● A marketing plan: how you will communicate with customers and grow your customer base.

● An operations plan: identify the individual projects that will lead to completing your larger goals. To begin with, these might include steps to build the park like finding a favorable location, deciding the type of park to build, and hiring an architect, or steps to run the park like hiring experienced managers, deciding on the number of staff needed and their pay, placing ads, and hiring staff.

● Financial projections: the first thing potential investors will look at, they include: start-up costs such as purchasing land, construction and equipment; operating costs including staff, insurance, utilities, and supplies; marketing costs; and revenue projections from ticket sales, concession sales, games, gift shops, and other sources. Project costs and revenues for at least the first five years.

● You can find a sample business plans for an amusement park here.


5, Hire an experienced firm to design your amusement park. Before going to potential investors, you will need an attractive mock-up of your park that both features the attractions and takes into account zoning, safety, and traffic flow. Designing a theme park requires a variety of specialized skills from drawing to understanding ride engineering and safety to managing traffic flow. To make a convincing presentation to potential investors, it is best to hire a firm that has a successful track record in park design.


6, Create a scripted pitch for investors. Your pitch should be designed to quickly capture potential investors’ attention, impress them with the thoroughness of your financials, and show them how they will make money. Be sure to include:

● A one minute “elevator pitch” – This pitch should be practiced until you have it down cold. It tells a story that explains the opportunity in the marketplace and how you intend to exploit it, and should make investors want to know more. You will use it both at chance meetings – cocktail parties, elevators – and to start off formal pitches.

● A compelling PowerPoint presentation – The key here is to keep it short and simple. A good presentation should take less than 15 minutes, meaning 12 to 15 slides that summarize the content of your business plan.

● An exit strategy – Make sure your PowerPoint presentation discusses how investments will be monetized, whether that means paying dividends, recapitalizing (borrowing money to buy out investors), going public, or selling to another operator.


7, Pitch your park to potential investors. Amusement parks are expensive. The average cost of construction per expected first-year guest is $109.61, meaning that if you hope to attract a million guests in year one, you will need to raise approximately $109,610,000. Approach banks, venture capitalists, and angel investors (wealthy individuals).

● In addition to your business plan and design, you will need to write an investor proposal letter. Send it out very judiciously, usually after you have already attracted some investment.

● Amusement parks can be a tough sell. To improve your odds, start with people who have invested in amusement parks or entertainment in the past.

● Investors receive hundreds of unsolicited proposals, most of which never go read. Your best bet is to use connections who can recommend you to potential investors.

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To be continued...


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