Video Rental Business Plan

This research develops a business plan for a prerecorded video cassette vending rental business. The elements of the plan are (1) a statement of the reasons for starting the proposed business, (2) a description of the business concept, (3) an identification of the target market, (4) a description of the business to be started, (5) a promotional plan for the proposed business, and (6) a personnel plan for the proposed business. Additionally, an estimate is presented of the startup cash which will be required.

The motivations of the entrepreneur for starting the proposed business are a personal interest in prerecorded video cassettes, and the relatively low barriers to entry which characterize the video cassette rental industry. For the entrepreneur, the most significant of the relatively low barriers to entry are capital requirements, and an absence of large firm industry dominance in most markets.

Feature length films, musical presentations, and other performances are prerecorded on video cassette tapes for

1 2viewing on home television sets through the use of a video cassette recorder (VCR). The video cassette tapes are distributed to home viewers through both the sale of the tapes and through rental of the tapes.

Motion picture producers, recording studios, and other program producers sell their products to distributors for further distribution to home

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r site location costs. Savings in these areas are partially offset by (1) vending machine acquisition costs, and (2) machine maintenance costs. The maximum number of video cassette tapes which can be stocked in a vending machine is 384 (Lazare, 1987). The tape holding capacity, however, is not synonomous with the title holding capacity, because up to five tapes of the most popular titles must often be carried in each vending machine to satisfy consumer demand (Martin, 1987). Remote site locations must be able to generate approxi mately 80 rentals per day, at a per tape rental of $1.50, in order to produce an operating income of 50.0 percent of revenues. Most published projections claim that about 40 rentals per day will produce a 50.0 percent operating income; however, these projections are based on an unrealistic per day rental price of 5$3.00 (Audio Video World, 1989). The depreciation or lease costs on the vending machine, along with sales and administrative expenses, interest, and taxes, must be deducted from the operating income. Thus, the remote site locations must be particularly good ones, if a video vending venture is to suc ceed. Lastly, the vending machines must function with little maintenance, and w
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Some common words found in the essay are:
PROMOTIONAL PLAN, CONCEPT Feature, Video World, BUSINESS STARTED, CONSUMER DESCRIPTION, Needed||| Salary, Amount| Fixtures, , STARTING BUSINESS, Video Store, prerecorded video, video cassette, vending machine, 3 |, video vending, prerecorded video cassette, vending machines, cassette tapes, video cassette tapes, video vending machines, | 50|, video tape, machine concept, vending machine concept, prerecorded video tape,
Approximate Word count = 1914
Approximate Pages = 8 (250 words per page)