INTRODUCTION
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 pro posed 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 pro posed business, and (6) a personnel plan for the proposed busi ness. Additionally, an estimate is presented of the start up cash which will be required.
The motivations of the entrepreneur for starting the pro posed business are a personal interest in prerecorded video cassettes, and the relatively low barriers to entry which char acterize the video cassette rental industry. For the entrepre neur, 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 cas sette 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 viewers. Distributors, in turn, sell the prerecorded video cassettes to retailers, who both sell and rent the cassettes to consumers. At the retail level, prerecorded video cassette revenues approximated $10 billion in 1989 (Savitz, 1989). At the retail level, sales of prerecorded video tapes account for approximately 16 percent of total reve nues, with the remainder derived from tape rentals (Savitz, 1989).
The disparity between tape sales and rentals is due pri marily to pricing differences. The reta...