For a rather brief period twenty years ago, I was a major investor in a marine park similar to the famous Sea Worlds. Our park was about to celebrate its twenty-fifth year in business when we purchased it from the original owners.
Since the marine park came with about thirty acres that were undeveloped, we had envisioned adding as many as four hotels plus some other entertainment attractions.
However, we quickly discovered something we hadn't expected and from that we learned a valuable business lesson. Our marine park was self-liquidating, and we hadn't realized it when we bought it.
While revenues at the park had increased most years since it opened, in reality the five or so years before we bought it, those increases had not been the result of more visits, but of raising ticket prices. In reality, the public was liquidating our investment for us because they weren't coming.
The reason was a simple one: Entertainment attractions have to rely, to a big part, on return visits, return visits year after year. The easiest example of this? The carnival has to add a new ride.
And the only way that number of return visitors can be quantified and kept is to offer new attractions and continually monitor the results. Who are your customers?
The prior owners of our marine park had chosen to not make any significant changes throughout their ownership. And we weren't knowledgeable enough at that point to know what to add. It was the perfect set-up for us to crash and burn.
So what's my point?
It's that lack of attention to the "Add a New Ride" rule is taking its toll on several businesses you know -- businesses that are not all appealing to entertainment. And the owners/corporate management obviously are or were not prepared to meet the challenge:
- The Sharper Image
- Six Flags
- Linens 'n Things
- Zales
- Pier 1
- Burger Chef
- MCI
- Montgomery Ward
- Lionel Trains
- F.W. Woolworth
- E.F. Hutton
- RCA Victor
- Compaq
- Any number of national theme-restaurants
Everyone who depends on a business to achieve good net income, whether it be as an owner, stockholder or employee, should be cognizant of the business' adherence to the Add a New Ride Rule.
BILL CHERRY, REALTORS
Dallas
214 503-8563
Copyright 2008 - William S. Cherry
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