A casino can be a particularly tricky business to operate, because you must stay on top of the legalities of gambling, as well as the explosion of online gambling sites. Casinos must also be wary of economic cycles, as slowdowns mean customers have less available disposable income.
A written business plan is absolutely essential for any casino to navigate an ever-changing landscape. In addition, investors and lenders depend on the business plan to decide whether your casino is an acceptable risk.
The Objective of Your Business Plan
Your business plan provides a quick snapshot of your casino today, and it lays out a road map for the next three to five years. With clearly defined goals, identified challenges, and strategies for success, your business plan is a living document that will grow and change alongside your casino.
The executive summary is the first section of the business plan, but is normally the last section written. The first page of the executive summary is what will convince lenders or investors to read on, so it is important to capture their attention right away. Provide a concise description of your casino, a market analysis that proves the sustainability of your concept, and an explanation of your unique qualifications to fulfill an identified need.
The company analysis sums up your casino’s past and present. Describe its founding, current stage of business, and legal structure. Talk about past accomplishments, such as securing key funding or partnering with a dealer school to hire new graduates. Explain your unique qualifications in detail, such as a patented new automation technology.
This section focuses on how your casino fits into the existing landscape. It is important to identify your relative market, or the particular niche of the gambling industry that your casino will target. Will you have an attached hotel? Offer a cheap buffet? Focus on penny slots or high dollar table games? Explore the industry to decide where your casino fits, and then research the current trends and market projections for your part of the market. Explain your solutions for any challenges that you find.
For this section, decide exactly who your customers are. Do you want to target high rollers? Run a small casino for local residents? Are your customers buying a fantasy experience or do they want down and dirty no-frills gambling? Identify their demographics and specific needs, and then explain how your casino will meet those needs.
Who are your direct and indirect competitors? Direct competitors are casinos that fulfill the same need for the same target market. Indirect competitors fulfill a different need for the same market, or the same need for a different market. Talk about each of your direct competitors individually, focusing on what makes your casino different from theirs. Combine your indirect competitors into a group and discuss them as a whole.
Your marketing plan should be based on the four P’s: Product, Price, Place, and Promotion. In the product section, describe each of your games individually, along with anything else you sell such as food, liquor, or hotel nights. Price requires a list of what you will charge for each element, along with your reasoning for choosing those price points. Place is your casino’s physical location along with any web presence. Promotion is what you will do to convince customers to come to your casino. Finally, Customer retention is your method of building brand loyalty.
While the previous sections focused on outlining your goals, the operations plan explains how you will meet them. Everyday short-term processes are the individual tasks involved in running your casino, from maintaining the machines to making change for customers. Long-term processes are your plans for reaching business goals such as opening new casinos, adding a hotel, or hitting a specified profit margin.
The management team section of your business plan shows lenders and investors that your casino has the business chops to make it in a complicated marketplace. Identify your key management team members and highlight the things in their backgrounds that prove their ability to build a company. If there are weaknesses, a strong advisory board can help, but you need to show how board members will actively contribute to your casino’s growth.
A casino is a complex institution that handles a great deal of money on any given day. While the financial plan is the most scrutinized element of any business plan, it is especially critical for your casino. Yet it can also be extremely difficult to write. You are expected to break down all current and future revenue streams according to their relative importance and implementation timeline, disclose all projected sources of outside funding, and summarize both your past and future Income Statements, Balance Sheets, and Cash Flow Statements based on key assumptions that must be both reasonable and verifiable. You also need a strong exit strategy that shows your understanding of the market and eagerness to capitalize on the casino’s profitability.
In the appendix, attach documentation to prove the claims made throughout the business plan. Full financial projections, patents, letters from potential partners, and other paperwork can help make your case for funding.
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