Running Head: BACKCOUNTRY SKIING FEASIBILITY STUDY

The topics highlighted below are the

sections I did for this project
Commercial Recreation and Tourism
RCLS 455
Ulfa Hall
Kirby Grubaugh
Halaina Clymer
Nathan Meyer
2-15-2015
BACKCOUNTRY SKIING FEASIBILITY STUDY
Eastern Washington University

BACKCOUNTRY SKIING FEASIBILITY STUDY

Chapter One: Description of Business

The Business Concept
WAPOWG (Washington Powder Guide) Backcountry Skiing will offer experiential
backcountry skiing lessons, guiding practice, necessary safety techniques, as well as convenient
rental opportunities for equipment. There is a need for a backcountry skiing guide service in the
Northwest area, especially one that offers on site ski rentals. Our target population is the outdoor
sporting public. In just the year 2014, 56.49 million U.S. citizens took part in ski and snowboard
sporting,(Statista)1 with 633 million dollars in just snow equipment sales.(Statista)2 Our team is
comprised of four members who have all had a lifetime of ski racing in the Pacific Northwest.
We have all achieved a recreation degree at Eastern Washington University. We have experience
in backcountry skiing as well as in sales and marketing.

Established Market / Life Cycle

Our business will serve an established market, since skiing has been a very successful
industry. Skiing has been a form of recreation since twenty-two thousand years ago, when the
Cro-Magnon man first attached two sticks to his feet (BBC Travel).3 Backcountry skiing offers a
more thrilling and natural environment for the customers. There are two backcountry ski guide
companies in our area (Peregrine Expeditions, Mt. Baker Backcountry Ski Guide), indicating a
high demand for this type of business. From the year 2000 until now, the number of skiers and
snowboarders in the U.S. have stayed at a steady number of approximately 58 million.(Statista)4
With our location being at the popular location of Mt. Baker, we have many advantages:
phenomenal expert terrain in-bounds, and plenty more gems to be found in the backcountry; lots

BACKCOUNTRY SKIING FEASIBILITY STUDY

of powder days and big snow volumes; and with the exception of weekend powder days, Mt
Baker is generally not very crowded, making it a desired destination (Powder Hounds).5

Competitive Differentiation / Market Platform

What makes our business different than the others? We offer the opportunity of one site
equipment rentals, while the competition does not. This is fantastic for first time backcountry
skiers as well as people who arent sure if they want to purchase permanent equipment. Our
prices offered are lower than the other Mt. Baker backcountry ski guides, at their going rate of
$175.00 a person , and $325.00 private (Mount Baker)6, we offer them a deal of $160.00 a person
and $290.00 private. With our rentals bringing in cash, and our prices appealing to customers,
we will catch the customers eye. Another difference in our service is that we are a learning
experiential service. Our customers will not only learn how to enjoy backcountry skiing but they
will also learn basic safety techniques and protocols. Overall we offer guiding lessons, special
safety, on site rentals and lower prices than competitors. With a highly experienced staff who put
passion in their skiing, our business will be highly differentiated from the others.

Legal Entity
We plan to form our business as a Limited Liability Company, We choose this to protect
all members from any personal liabilities risk of debt and obligations.

BACKCOUNTRY SKIING FEASIBILITY STUDY

Chapter Two: Regulatory and Risk Analysis

Regulations and Special Licenses
Professional Licenses
Certified Ski Guide7
Terrain Description: AMGA Ski Mountaineering Guide
AMGA Ski Mountaineering Guide certification is designed for guiding either ski tours or
ski ascents/descents, on Nordic, alpine touring or snow board equipment.
Ski Mountaineering Guides are permitted to conduct their profession on all terrains
which:

includes as the main objective, either ski touring, off-piste and/or mechanized
skiing/snow boarding.
are on slopes 50 degrees or steeper.
may employ use of short-roping techniques with the use of ice axe and crampons.
requires travel on crevassed glaciers.
have significant avalanche hazard.
involve multi-pitch ice or rock.

Commercial Licenses
Temporary Commercial Permit from the USDA Forrest Service

Insurance Needs
Insurance aggregate $2 million

Risk Management
We split our risk management into two areas: business risk management, allowing the business to
continue operations in the event of WAPOWG, and operation risk management, having plans to
protect the well-being of employees and customers in the backcountry.

BACKCOUNTRY SKIING FEASIBILITY STUDY

Business Risk Management

For business risk management, we will carry three insurance policies:

Two million dollar liability insurance to protect business assets in case someone sues the
company.
Business personal insurance to cover replacement costs of equipment critical to the
business.
Auto insurance to cover replacement costs of transportation bus and the liability of
operating the bus.

Operation Risk Management 8

To protect our guides, customers, and the public while skiing in the backcountry, we will follow
the protocol:

Read the avalanche forecast daily to determine which areas and routes are safe.

Find out when the department of transportation, local resorts, forest service, and/or ski
patrol will be triggering avalanches. We don't want to be in the area when this occurs.

Plan alternate climbing and descent routes to avoid contact with others. This will help
avoid the possibility of causing our groups or other parties to be caught in an avalanche.

Have all guides and customers carry beacons. Guides should also carry cell phones, and
if the terrain call for it satellite phones, and portable CB radios to be able to contact local
rescue teams.

Use portable CB radios to communicate with other groups. This will help our guides stay
informed about possibly dangerous areas.

Before having a group access a potentially dangerous slope, have the guide perform
mitigation by performing a ski cut, cutting a cornice, or other appropriate measure in
order to gain information about the risk of avalanche or other emergency situation.

Ski with people spread out. This way, if an avalanche does occur, the fewest people will
be caught in the avalanche. This will allow more people to help with rescue efforts.

BACKCOUNTRY SKIING FEASIBILITY STUDY

Chapter Three: Location Analysis

Bellingham
The business will be in located in Bellingham Washington (U.S. Census Department) 9
Population:

82,631(2013) 80,885(2010)

Growth:

2.2% Since 2010 to 2013

Income:

Average income $37,990

Cultural backgrounds (U.S. Census Department) 10

The racial makeup of the city was 84.9% White, 1.3% African American, 1.3% Native American
5.1% Asian, 0.3% Pacific Islander, 2.8% from other races, and 4.3% from two or more
races. Hispanic or Latino of any race were 7.0% of the population.
Age - The median age in the city was 31.3 years. 15.6% of residents were under the age of 18;
23.5% were between the ages of 18 and 24; 25.9% were from 25 to 44; 22% were from 45 to 64;
and 12.8% were 65 years of age or older. The gender makeup of the city was 48.8% male and
51.2% female.
Education 3 public high schools, 4 public middle schools, 4 private schools, Western
Washington University as 16,000 students.

BACKCOUNTRY SKIING FEASIBILITY STUDY

Community Environment
Employee availability
Bellingham has a large proportion of outdoor enthusiasts; who enjoy skiing and snowboarding. We plan
on providing guiding services ourselves. As the business grows and expands, finding guides will be easy.

Competition
There are two well established business that will be our competitors. They are Mt Baker Guides and
Peregrine Expedition.

Transportation availability 11
The City of Bellingham has a good public transportation system. It also has an international airport.
Bellingham is located on the I-5 allowing easy accessibility from the Seattle and Vancouver, BC areas.

Community character
The community of Bellingham is a very active bike friendly city that is more conscious about their
carbon footprint then most cities in the U.S. The city offers areas of recreation right in town as well as a
couple miles outside of town. The city of Bellingham has parks and sports opportunities for all ages,
community events, as well as various classes and activities.

Business Environment
The City of Bellingham is supportive of small businesses. It provides a wide range of services for small
businesses on how to open and maintain a small business.
There is a wide range of options for low cost real estate. Two examples that we found are:

A 550 sq. ft. office in downtown Bellingham on Main Street for $490.00 a month. 12

BACKCOUNTRY SKIING FEASIBILITY STUDY

A 169 sq. ft. office on Main Street that is fully furnished, includes telephone, internet, secretarial
services as well as other services. 13

Chapter Four: Management Implications

Organization
Major areas of responsibility in operating the project:

Marketing
Scheduling
Human Resources which would include validating guide certifications
Office manager
Budget
Local events/Fundraisers

Management responsibility:

One guide: answering emails, phone calls, organizing scheduling, buyers

Guides: staying up to date on certifications, phone calls to local avalanche center,
taking clients out, working in shop to repair equipment

Secondary level tasks and duties that must be accomplished in order to carry out the business

Transportation

Number and types of personnel to accomplish the work of the business.

There will be 3 guides and an office manager

Staff
Specific skills, expertise, and certifications required of the various personnel throughout the
system

Office managers: Microsoft office, great customer service, scheduling,

communications, email
Guides: IMGA certifications, avalanche courses, ski shop tech expertise,
customer service

BACKCOUNTRY SKIING FEASIBILITY STUDY

Availability of such personnel in the local labor force.

Guides are readily available in area.
Compensation and benefits required to draw good personnel

Salary of $2500/ mo
Living out your passion
Wholesale deals for industry equipment

Employee housing or transportation

Employees provide their own housing and transportation.
Orientation and training programs
Our guides will be IMGA certified.

Major Operational Considerations

Service philosophy:
To provide the highest quality mountaineering and snow travel instruction in North America. To
train our clients to become competent backcountry skiers and snowboards and educate them to be
great stewards of the environment. To provide meaningful employment for our guides who are the
core of (OUR COMPANIES NAME HERE) and to preserve and protect the mountain
environment we all enjoy now and into the future.

Special equipment: 14

Skis 20@$300
Bindings 20@$300
Boots 20@$300
Skins 20@$75
Poles 20@$30
Beacon 20@$150
Probe 20@$30

BACKCOUNTRY SKIING FEASIBILITY STUDY

10

Shovel 20@$30
Bus $25,000
Shop Equipment $300:
o Wax
o Iron
o Edge tool
o Scraper
o Vices
o Table

Maintenance scheduling
Shop is cleaned every night, along with preventative maintenance on equipment

Web site development

Hire a Western Washington University student to do it for us and give him a free guided day in
the backcountry.

Legal and accounting services

Our office manager will take care of accounting with Quick books, and when necessary will find
legal services on the web.

Chapter Five: Market Analysis

Target Market
For WAPOWG we will have two sets of customers. For the guided backcountry trips will
have an age minimum of 14 for safety reasons. Then for the rental side we will have equipment
that can fit any size of customer.

BACKCOUNTRY SKIING FEASIBILITY STUDY

11

Customers could be renting equipment from WAPOWG or customers will be wanting to

learn the knowledge of backcountry skiing and that is what we will supply them with.
Customers can rent our ski and snowboard equipment whenever they wants as long as we
have the size they need in stock. Customers will be able to purchase backcountry trips
throughout the whole season as long as the snow conditions allow us to take people out with
minimal hazard risk.

Competitors
One of our competitors will be the Mt. Baker Mountain Guides. This company provides
almost the same service as we will. However, one key difference is that they do not rent out
equipment from their facility. They give customers an equipment list and tell the customer to
purchase or rent all the items needed (Mt. Baker guides) 15. The other competitor that is the
closest to our company is the Peregrine Expeditions. This company has the experiential
education component to taking people in the backcountry as well. But again, Peregrine
Expeditions does not include equipment rental part as part of their business. They may have
some of the backcountry equipment, but the web site does not show a rental side. (Peregrine
Expeditions) 16
We have the rental side, we have the experiential learning aspect and the learning sessions
in the classrooms as well. This gives us an advantage over these existing companies which will
allow us to capture a large portion of the market just through the ease of being able to do
everything at our place of business.

BACKCOUNTRY SKIING FEASIBILITY STUDY

12

Demand for Service

The demand for backcountry skiing is growing bigger and bigger. Professional skiers continually
have new movies and videos coming out showing them having amazing powder turns, inspiring
people to search for waist deep powder. One of the most difficult things for skiers and
snowboarders is getting the resources to learn proper safety techniques for going into the
backcountry. A lot of people avoid going into the backcountry based solely on the fact they are
not educated on backcountry safety. That is where our company will come in; we will give them
the knowledge along with the resources to learn. Since we will be based out of Bellingham we
make ourselves very accessible to a large population. Seattle and Vancouver, BC are both only
about an hour and a half away.

2014 SIA Snow Sports Fact Sheet

Total Number of Snow Sports Participants 17
Season

Alpine

Snowboarding

Cross Country

2012/2013

8,243,000

7,351,000

3,307,000

2011/2012

10,201,000

7,579,000

4,318,000

2010/2011

11,504,000

8,196,000

4,530,000

2009/2010

10,919,000

7,421,000

4,157,000

Source: Physical Activity Council 2012/2013 SIA SnowSports Participation Report. These
figures represent participants who are 6+ years old and participated in a sport at least once during
the given season.

BACKCOUNTRY SKIING FEASIBILITY STUDY

13

Gender of Skiers and Snowboarders 2012/13 Season 18

Gender

Alpine

Snowboard

Cross Country

Male

60%

67%

60%

Female

40%

33%

40%

Source: Physical Activity Council 2012/13 SIA SnowSports Participation Report.

Total Number of U.S. Skier-Visits (In Millions) 19
Season

Northeast

Southeast

Midwest

Rockies

Pacific

Total

2012/13

13.3

5.2

7.1

19.5

11.6

56.6

2011/12

11.0

4.4

6.4

19.1

10.0

51.0

2010/11

13.9

5.8

7.8

20.9

12.2

60.5

2009/10

13.4

6.0

7.7

20.4

12.3

59.8

The data above shows that there are a lot of people who participate in snow sport
activities. In 2012 and 2013 the Pacific region had 11.6 million people participating in snow
sport activities. The demand does vary, but overall is remaining rather steady. The yearly
snowfall is the largest influence on the number people participating.
Based only on being able to provide guided backcountry experiences, our market share
should be about 33%. However, since we have all amenities available at our business, we expect
to grab a larger portion of the market.

BACKCOUNTRY SKIING FEASIBILITY STUDY

Chapter Six: Financial Analysis

Start-up Costs
Business Initiation: $65400
Capital Expenses: $50350
Pre-opening operations: $564

Operation Costs
$ 80,940.00/yr.

Revenue Projections
$97,500

14

BACKCOUNTRY SKIING FEASIBILITY STUDY

15

Financial Pro-Formas
Pro-Forma Profit and Loss Statement:
Revenue
Gross Receipts
Total Revenus

97500
97500

Operation Costs
Office
Business personal
Insurance
Liability Insurance
Salary
Sat Phone
Web Site
gasoline for Van
auto storage
auto insurance
auto maintenance

800
1500
40000
1560
360
2916
1200
1050
1000

Total Opreating
Expenses

52906

Pre-Tax income
Federal Taxes:
WA State Taxes:

44594
6689.1
172.68

Net Income

37732.
22

2520

BACKCOUNTRY SKIING FEASIBILITY STUDY

16

Pro-Forma Cash Flow Statement:

Novembe
r
Net Revenues
Expenses
Monthly cash flow
Cumulative cash flow
Cash at beginning of
month
Cash position at end of
month

$0.00
$14,774.
37
$14,774.
37
$14,774.
37
$16,000.
00
$1,225.6
3

Decemb
er
$32,500.
00
$15,916.
37

January
$32,500.
00
$18,203.
63

February
$32,500.
00
$18,203.
63

$16,583.
63

$14,296.
37

$1,809.2
6
$1,225.6
3
$17,809.
26

$16,105.
63
$17,809.
26
$32,105.
63

March

April

May

June

July

August

$14,296.
37

$0.00
$3,731.6
3
$3,731.6
3

$0.00
$1,444.3
7
$1,444.3
7

$0.00
$1,444.3
7
$1,444.3
7

$0.00
$1,444.3
7
$1,444.3
7

$0.00
$1,444.3
7
$1,444.3
7

$0.00
$1,444.3
7
$1,444.3
7

$30,402.
00
$32,105.
63
$46,402.
00

$26,670.
37
$46,402.
00
$42,670.
37

$25,226.
00
$42,670.
37
$41,226.
00

$23,781.
63
$41,226.
00
$39,781.
63

$22,337.
26
$39,781.
63
$38,337.
26

$20,892.
89
$38,337.
26
$36,892.
89

$19,448.
52
$36,892.
89
$35,448.
52

Septembe
r

October

$0.00

$0.00

$1,444.37

$1,444.37

$1,444.37

-$1,444.37

$18,004.1
5
$35,448.5
2
$34,004.1
5

$16,559.78
$34,004.15
$32,559.78

BACKCOUNTRY SKIING FEASIBILITY STUDY

17

Balance Sheet:
Balance Sheet
October 2016
(End of First Year)
Assets
Cas
h
Accounts Receivable
Total current assets

Outdoor equipment
Office equipment
Transportation Bus
Total fixed assets
Less accumulated
depreciation
Net fixed assets
Total
Asset
s

Liabilities and Net Worth

$32,559.78
$0.00
$32,559.78

$24,400.00
$950.00
$25,000.00
$50,350.00
-$9,063.00

Accounts
payable
Taxes payable
Total
current
liabilities
Bank loan
balance
Total longterm
liabilities
Total liabilities
Total net worth

$180.00
$0.00
$180.00

$53,837.01

$53,837.01
$54,017.01
$19,829.77

$41,287.00

$73,846.78

Total liabilities
+ net worth

$73,846.78

BACKCOUNTRY SKIING FEASIBILITY STUDY

18

Break- Even Analysis:

Assuming we start on November 1, 2015, we will break even January 2019. We will dip
into negative territory in November 2019 for only one month. From that point on we will remain
in positive territory.

Chart Title
600000

500000

400000

300000

200000

100000

10

20
Fixed Cost

30
Total Cost

40

50
Total Revenue

60

70

BACKCOUNTRY SKIING FEASIBILITY STUDY

19

Chapter Seven: Feasibility Recommendation

We have concluded that we need to amend the project and conduct a new feasibility study. The
reason we decided this was because of the fact that our breakeven point is four years away based
on optimistic conditions. Our business is only seasonal and we will need to find other work
during all other seasons. Due to these concerns, we feel that we will not be able to dedicate
ourselves fully to our business. Therefore, we will be taking more time in designing a project
that proves more feasible in terms of both revenue and for us as employees.

BACKCOUNTRY SKIING FEASIBILITY STUDY

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2: Number of skiers/snowboarders: Number of people who went snow skiing or snowboarding within
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BACKCOUNTRY SKIING FEASIBILITY STUDY

13: Gateway Centre Executive Suites/ 1313 E. Maple Street #236. (n.d.). Retrieved February 13,
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14: Outdoor Prolink. (n.d.). Retrieved February 10, 2015, from https://www.outdoorprolink.com/
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http://peregrineexpeditions.com/mt-baker-ski-tours-and-courses/
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http://www.snowsports.org/Retailers/Research/SnowSportsFactSheet
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http://www.snowsports.org/Retailers/Research/SnowSportsFactSheet
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http://www.snowsports.org/Retailers/Research/SnowSportsFactSheet

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