Federicos Gondolas Inc.

Business Plan

www.federicos.ca

and

www.gondolas.ca

October 29, 2001
Executive Summary

The canal network within Ottawa and in Hull/Gatineau/Lac Leamy and Lac de la Carrière areas provide a unique business opportunity within the gondola industry.

The gondola business is an entertainment business. The product is a romantic experience. Clients enjoy a leisurely gondola ride with a person who plays the part of an authentic Italian gondolier at the helm. Food and beverages are also served.

Revenue sources include: fares, advertising and sponsorships, merchandise, food and beverages and special occasions.

Two separate business models exist in Ottawa/Hull/Gatineau. In Ottawa, a pre-booking model aimed at couples and special occasions will make up the bulk of the business. The business will run along the Reideau Canal from Dows Lake to the Chateau Laurier.

Brown’s Inlet on the Rideau Canal

In Hull/Gatineau, a first come first served model aimed at Casino customers will be the basis for this part of the business. This is not dissimilar to the successful business model used by Gondola operators along the strip in Las Vegas. The business will run on Lac Leamy and Lac de la Carrière surrounding Casino d’Hull/Gatineau.

Casino d’Hull Waterways

Objectives

The objective of this business plan is to create a successful gondola business within the Ottawa, Canada region and off-season in Florida. Expansion to the waterfront in Toronto and other areas is contemplated.

This will be achieved by:

· Creating a financing strategy to start the business

· Purchasing two authentic looking gondolas with all required safety and other amenities

· Creating strategic partnerships with industry players

· Landing advertisers and sponsors

· Hiring and training qualified gondoliers

· Holding a press launch for the initial voyage

· Implementing a marketing plan

· Launching an e-business website

Mission

To provide the most authentic, romantic, Italian gondola experience outside of Venice, Italy.

Keys to Success

1. The gondola experience must be tier “A” in terms of quality. The industry segment is a niche catering to the extravagant customer. Therefore, the service must be of the highest quality in all regards.

2. Strategic partnerships must be reached with key hotels, restaurants, travel agencies, the Casino de Hull/Gatineau, and party planners.

3. An informative and e-business website to reverse out the work of scheduling and payment.

4. An effective and thorough marketing strategy must be implemented to ensure market maximization.

Company Summary

The company has three principle investors, Mr. Darcy L. McRae, B. Comm., M. H. Milford Holdings Inc. and Mr. Federico M. Carmosino, B. Comm. The business is incorporated. Mr. McRae is the controlling shareholder. Other shareholders will be brought in to the company as appropriate.

Services

The main service of the gondola business is to provide a romantic experience. The gondolier will be acting the part of an authentic Italian gondolier. The gondola will have a sound system to play soft music. The gondola will also have a canopy to shield the passengers from the weather and sun. Gondoliers will always be in costume.

The Ottawa service will be to provide a one-way or two-way trip through the Rideau Canal from Dows Lake to the Chateau Laurier. The voyage is six kilometres one-way. The boat will hold up to four adults or 2 adults and 4 children and will last one hour for a round trip. Food and beverage will be available. The beverages will be juices, pop and water, while the food will be elegant hors d'oeuvres. Alcohol may be served if appropriate and if it meets regulatory requirements.

The Hull/Gatineau service will provide a short trip around Lac Leamy and Lac de la Carrière. The voyage will be two kilometres and last 15 minutes. Food and beverage will be available.

The business will be run from May to October. In the months of May, September and October, the business will be run for 6 hours (noon to 6pm) a day for Friday, Saturday and Sunday or by appointment. In the months of June, July and August the business will be run for 10 hours (10am to sundown) per day for 7 days per week.

Competitive Comparison

There are no direct competitors in Ottawa. However there are indirect competitors. The biggest indirect competitors in the Ottawa area are other romantic entertainment opportunities that include theatres, cinemas, restaurants, mini-putt, limousine rental, hotels, tour buses, tour boats and amphibious tours.

From the Yellow Pages directory, a total of 179 were found not including restaurants.

· Theatres: 16

· Cinemas: 11

· Restaurants: many

· Mini-putts: 10

· Limousine rentals: 45

· Hotels: 78

· Tour Buses: 12

· Tour Boats: 4

· Amphibious Tours: 2

Of the indirect businesses listed above, two can be partnered with (Restaurants and Hotels), while the others have the potential to be partnered with.

Market Analysis

The core market for this business is the population of the Ottawa area and the greater region together with tourist traffic to the Canada’s capital City. The Ottawa area consists of approximately 1,009,000 people while the greater Ottawa area consists of over 1,500,000 people within a one-hour drive radius of the Parliamentary Precinct.

Of this population, 45% are married or in common-law arrangements and have an average household income of more than $70,000. There are also 70,000 people in the age range of 20-24. This gives a total target market population in the immediate area of over 300,000.

Furthermore, the tourist industry will produce a significant portion of the business. There are more than 5,500,000 annual tourist visits to Canada’s Capital City.

The target market consists of couples, fun seekers, and special occasions.

Along the canal, passengers will see the historic centre of Ottawa, the University of Ottawa, the Glebe, Brown’s Inlet, the Canal Ritz, Lansdowne Park, Carleton University, the canal locks, Dows Lake, the arboretum, the Central Experimental farm and the Dows Lake Pavilion. They will also have access to Preston Street, the centre of the Italian community.

The Chateau Laurier

The market segments that the Hull/Gatineau business will target are couples, gamblers and sightseers.

Darcy McRae at the Casino d’Hull/Gatineau

The customer needs for this business rely on a top quality service and product. This business is a tier “A” product and nothing less. Couples require a relaxing romantic voyage with all the amenities of a dream date. This would include top quality food and beverage, music and service from the gondolier.

Sightseeing customers require a knowledgeable gondolier to show them the sights and sounds of Ottawa/Hull/Gatineau in a very entertaining manner. This type of customer is interested in the entertainment factor of the gondola service and therefore the gondolier would play the part of the entertainer.

Special occasion customers would require the gondola service in coordination with a larger event, for example: weddings, anniversaries or proms. Each special occasion customer would have their voyage tailored to their needs.

Implementation

Purchasing two quality gondolas is the first objective. The next step is to create strategic partnerships with hotels, restaurants, travel agencies, the Casino de Hull or the Rideau Carleton Raceway and Slots and party planners. The business will then hire qualified personnel with an arts and theatre background (as well as life saving training) to pilot the gondolas. Next, the business will launch its marketing strategy. Lastly, the business will build on the key factors for maximum growth.

Two gondolas must be purchased so that one is servicing the Rideau Canal and the other is servicing Lac Leamy and Lac de la Carrière. This also creates a system where if a gondola is out of service, the business still produces revenues. The gondolas must be very authentic in looks. The gondolas need a stereo system for entertainment. There must be storage space for food and beverages. There must also be a canopy for protection from the weather. Seating capacity should be for four adults to accommodate two couples or two adults with four children. The gondolas must be powered by an electric motor with a traveling speed of six to eight knots.

Strategic partnerships are very important for synergy with other organizations to produce benefits for both parties. Hotels are very important since they are strongly linked to the tourism industry. The Chateau Laurier and the Westin Hotel are the two most important because they are located on the Canal and they are large with a prestigious client base. Gondola rides can be incorporated into hotel packages and the concierge can distribute pamphlets from the hotel.

Restaurants are important as well—they work in a highly competitive environment. By partnering with key restaurants (Canal Ritz, Mexicali Rosas, the Royal Oak, Hartwell’s and the Elephant Castle) they can get a competitive edge by adding a gondola ride to their menu.

Travel agencies are also an important to link so that visitors from outside the Ottawa area can learn about the business.

The Casino de Hull can also play a key role in the launch of Federicos.

Party planners will also help Federicos create business in the special occasion segment of the market.

Sponsors can also acquire advertising up and down the canal and complementary rides too for their clients and customers. Gondoliers are a very important part of the business due to their close relation to the customer. They must be entertainers and showpersons. The position is to be filled with flamboyant individuals who like the dramatic arts. The gondoliers must also have training in CPR, and water rescue techniques in the event of a mishap. The gondoliers will be college and university students looking for a summer job and are old enough to serve alcohol.

The marketing strategy involves four avenues. First would be a press launch of the business to attract television coverage. After the launch there would be advertisement at the partnership organizations’ locations. The business will cooperate with existing booth operators set up downtown Ottawa and at the Casino de Hull to catch the passer-by. A website would be used to facilitate online advertisement and order fulfilment including ride payment, purchase of gift certificates, merchandise sales, etc. Also, company spokespersons will sell tickets at Confederation Square and at the Casino de Hull. Lastly, pamphlets and advertisements in the local papers and the Yellow Pages will be used.

After the launch of the business the key success factor will be to focus on revenue growth. Growth will come from high quality service, strategic partnerships and an effective website and advertising campaign.

Financials (See attached budget.)

Conclusion

This is an exciting opportunity to create a new entrant into the booming tourist market in Ottawa and in Florida. Recent events notwithstanding, people still want to be entertained. Indeed, the golden era of the film industry was the 1930s—numbers still unsurpassed to this day. Federicos is all about spending quality time with loved ones in a unique setting and unique craft—far more intimate and rewarding for personal relationships or even deal making than the current alternatives.