Carl Jansen is considering opening a canoe rental business in his home town of Banff, Canada. Banff is a popular tourist spot in the summertime, with many hotels, golf and other recreation activities. There are a number of lakes in the area, including a streamfed lake on the very edge of town. Carl has discussed the idea of paying the city for the exclusive right to locate a canoe rental facility on the stream for $200$ days per year. The facility would consist of a portable office $($a trailer$),$ a covered deck with chairs for customers to sit, a floating pontoon deck for launching the canoes and a rack for storing the canoes overnight or when not in use. Carl has worked several summers in a similar facility on Lake Louise, a popular tourist location some $40$ miles away, where he noticed the strong demand for canoe rentals during the short Canadian summers.

The operation would require two workers during the $10$ hours of daily operation: one to rent the canoes, take the security deposits and or money and answer the phone, and a second to launch the canoes and instruct the customers on safety and paddling technique. The business would be open $7$ days per week. Carl estimates $20$ canoes would be sufficient for the business. Rental would cost $$20$ per hour. Employees would be paid $$10$ per hour. He anticipates that there would be no shortage of job applicants since thousands of college students flock to Banff every year to enjoy the summers, while working in the many tourist oriented businesses. Canoes cost $$500$ each, the trailer$/$office would cost $$5,000,$ paddles cost $$30$ and life preservers cost $$20,$ and he would need $40$ of each. The site lease would cost $$10,000$ per year and the covered deck, launching deck and storage rack would cost $$3,000.$ Security would cost $$20$ per night and off season storage for the fixed assets would run $$2,000.$ Carl will depreciate the fixed assets over $5$ years. He intends to finance the operation out of personal funds, and wants to start off with $$5,000$ in working capital and begin years $2$ and $3$ with $$5,000.$ He also wants to recover his startup cost investment in year $2$ plus draw the maximum from the business in years $2$ and $3.$

Advertising would consist of an ad in the local Banff tourist brochure, and a sign on the building. The location is adjacent to a busy road with good exposure to everyone entering town from the west side.

Operations would involve rental at the front desk $($requiring a $$200$ cash deposit or a credit card$),$ the customer would receive a map of scenic spots $($an eagle's nest, a beaver dam, etc.$),$ rules and basic instruction on how to paddle, turn and board the canoe.

Required:

Estimate the profitability per day $($and per year$)$ of this business assuming $20$ one hour rentals per day in year $1,30$ in year $2,$ and $40$ in year $3.$

Estimate the startup costs and cash flows from the business for years $1,2$ and $3.$

How many canoes per day must be rented to breakeven?

Write a business plan for Carl including an executive summary and sections for marketing, operations, human resources and finance.