OVERVIEW
Wailele Estates Lavender Farm & Campground will be an off the grid farm and Campground on Oahu's North Shore. We will be purchasing 8 acres of beautiful mountain river valley and building out the property in phases over 5 years to become Oahu's ONLY campground on private land. Our plan is to focus initially on our core business of bungalow and campsite rentals. This revenue will allow us to slowly build up farm production. The farm will initially be structured to provide as much synergy to the campground as possibly. Eg: Lavender field, stocked fish pond, petting zoo, etc.
Estimated Phase 1
-10 bungalows/10 campsite capacity
-Restroom facility and showers
-Alternative access road build
-Tilapia Pond
-Small Lavender crop
-Sample assorted crops
Estimated Phase 2
-Additional 1.25 acre purchase
-5 additional bungalows
-Full size Lavender crop
-Bee Hive
Estimated Phase 3
-5 additional bungalows
-Additional renewable power source
(20kv windmill possibly)
-Waterfall and swimming pool
-Petting zoo
-Mushroom barn
-Aquaponics greenhouse
(aquaponics will harvest tilapia and assorted greens requested by local restaurants and retailers)
Estimated Phase 4
-Additional renewable power source
-Expanded aquaponics capacity
-Expanded crop capacity
(intending to grow tea, ginger, macadamia, assorted citrus, coffee, cacao)
SUMMARY
Industry Overview
Oahu receives 2,000,000 visitors each year from our target market of U.S.A, Canada, and Australia. Collectively they spend 2,700,000,000 on Oahu each year.
Due to Covid19 the current market trend is negative. The Australian market has fallen to zero and visitors from the U.S mainland will be slow to return. As visitors do begin to return, I predict visitors will favor us over hotels for the following reasons:
-More affordable
-Spaced out bungalows and campsites encourage social distancing
Business Goals and Objectives
Short Term:
-10 bungalows/10 campsite capacity
-Restroom facility and showers
-Alternative access road build
-Tilapia Pond
-Small Lavender crop
-Sample assorted crops
Long Term:
-Profitable self sustaining farm
-20 bungalows/10 tent sites
-Become a popular destination considered by most visitors to Oahu as an alternative to Waikiki, Ko'olina, and turtle Bay
MARKETING SUMMARY
Target Markets
Wailele Estate's major target markets are as follows:
Our target market are visitors from Australia, Canada, and U.S.A mainland. Camping is popular within these groups and we have an already established connection through our operating tour company. Within this market we will have products for all demographics. Tent sites will likely attract younger couples. We will provide larger bungalows to attract families looking for a hotel substitute. The amenities we provide will be intended to draw families.
Our target market is 2,000,000 visitors out of the total 3,000,000 visitors Oahu receives each year.
Pricing Strategy
Wailele Estate's has completed an analysis of its competitors pricing. We are the only fully private campsite on Oahu, and our product is unique from any competitors. We have decided on the following pricing:
-4 person bungalows ($150)
-2 person bungalows ($100)
tent sites ($30 for 2 people)
-Crops will be sold at market price
Promotional Strategy
Wailele Estates will promote sales using the following methods:
-Facebook
-Website
-Yelp
-Word of Mouth
We have a connection to our target market primarily through various Facebook groups. This will be our primary source of customers initially. Since we will be building up our capacity in phases we expect that organic growth through word of mouth will keep up with our growth in capacity.
SWOT Analysis
Strengths
-Identifying what customers want
We have a proven track record of identifying the needs of our customers. This has led to a very successful operation in Seattle, and a small but devoted clientele for our Hawaii based tour company.
-We are the most secure campground in a limited field of competitors
Most campgrounds on Oahu are unsecure and on government land. This can lead to occasional difficulties with homeless and local populations. Our business is isolated enough that there should be no difficulties with either groups. We will be staffed 24hrs per day.
-There are many synergies that will be developed to help each business succeed
The revenues generated through camping rentals will fund the development of our agricultural business. Our agricultural business will provide some demand for our sites through aesthetics and tour potential.
Weaknesses
-Isolated from main roads
Currently the road accessing the property has two unbridged water crossings and 4 gates. This is not practical long term and is really only suited for 4x4 vehicles. We will need to develop an alternate access road. There is an easement that allows for this.
-Our lack of agricultural experience will likely create some waste and slow our ability to generate profits from our agricultural operation
Our core business of bungalow and camp rentals will generate enough income that we will be profitable without any agricultural development. Initial crops will be planted to provide aesthetics and recreational opportunities for our campers. However, we will be looking to hire staff that will help us with agricultural development and sales.
Opportunities
-Push for green energy should provide some government support for our operation
-Consumers desire for social distancing could lead to the preference for camping over hotels
-Market trends favor eating organic local food
-Due to state wide ban on vacation rentals we will be the only fully private campground on the island
Threats
-Government regulations
These should be overcome before we purchase the property. If the permit required for bungalow rentals is denied any investor money will be refunded at 100percent
-Unknown regulations pertaining to the production and delivery of food could delay profits from our agricultural business
Due diligence and continued profit from our camping business will allow us to overcome any unforeseen obstacles.
-Community opposition
If our initial request for development is approved by our community we don't expect much future involvement by the community. We are an isolated property and will make an effort to make little impact on surrounding houses. Initial research suggests this will not be an issue.
-Resurgence of Covid19
In time we will have a diversified revenue stream. As market trends vary one business could make up for the other.
The worst case scenario is if we purchase the property and Hawaii stays locked down for much longer than anticipated. In such a scenario we would delay some of our phase one build out and instead invest in agricultural development. My other incomes generate enough cash flow to cover this this properties expenses with 0 revenues indefinitely.
Our current projections use a 50 percent occupancy rate for our first year in business.
Competition
We rate the competition in our industries as moderate. We have a unique product on an island where vacation rentals are prohibited in most areas. Despite no direct competition visitors can instead choose from campgrounds on public lands or hotels.
-Malaekahana Beach Campground
Our closest competitor is a privately owned campground operating on public lands. Its a relatively flat and crowded, but offers ocean front property. We expect they will attract a younger demographic.'
-Public Campgrounds
These offer the cheapest rates on the island, but they are unsecured. Most popular with a young demographic.
FINANCIAL PLAN
Purchase Price: $1,100,000
Phase 1 build cost: $300,000
We will be applying for a permit to use the land how we intend at our own expense. The purchase of this land is conditional upon approval of the permit. If the permit is denied any investor funding will be refunded at 100 percent.
12-Month Profit and Loss Projection
Figures based on the following:
-50 percent occupancy on 10 bungalows and 10 tent sites
-Negligible agricultural revenue (Tilapia will be only mature harvest)
-$400,000 raised through equity
-$200,000 raised through presale (kickstarter, indigogo)
-$200,000 cash
-$500,000 debt at 5.5%
-3 employees ($16/hr, 40hrs/week)
-$1,000 monthly advertising charges
Monthly expense for salaries and overhead:
(projected): $11,060
Revenue and sales for first year of business:
(projected): $282,875
Gross profit for first year of business:
(projected): $150,155
5 year outlook
In year 5 we will have 20 bungalows and 10 campsites which at full capacity grosses $1,022,000 annually.
Additional services may add 20 percent to this revenue. Eg: variety store, jeep rentals, tour sales.
Our crops will be matured and contracts will be in place with local restaurants and grocery stores. which should double our bungalow revenue.
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