Business Plan
   
Las Vegas is not just for gamblers anymore. The casinos have spawned nightclubs, ultralounges, elaborate production shows, and world class restaurants on and off the Strip. From the legions of young singles who seek thrills to the countless couples in search of romance, Las Vegas promises something for everyone.

    Disco Dice offers much more than the typical dance floors and candlelit tables of other clubs. To begin, consider the structure itself: a humongous pair of dice atop one of the city's tallest properties. Simultaneously serving as an architectural marvel and a stunning self-promotion, consumers will sense its outstanding view of the skyline and dominance of the city's venues virtually from the airport. At night, lit up in the desert sky, Disco Dice commands the attention of every person on the Strip.

    Next, imagine the view. A live snapshot of Las Vegas from hundreds of feet in the air is a worthy tourist destination in and of itself. Patrons arrive to behold the likes of Paris Las Vegas, Bellagio, Mandalay Bay, MGM Grand - virtually the entire city - without spending a dime in any of those places. Rather, Disco Dice gives them the skyline, and in return they give Disco Dice their business. People remember landmarks, and Las Vegas has needed such an institution for years.

    Finally, Disco Dice will be the hippest and coolest nightclub near the Strip. The mere altitude differentiates it from any other venue in Las Vegas. Add music, dancing, and a world-class series of events, it becomes unlike anything in the world.

    Seeing is believing.

Concept/Business Description

    Disco Dice is a pair of huge glass-walled cubes - 65 foot by 65 foot - with electrified red dots that appear to be tumbling onto the roof.

    The North Die is Disco Fabulous. It references the decade of glitter with glamorous, updated authenticity. Like the great clubs of the seventies, bright lights and mirror dice flash and spin to the rhythm of a customized audio system. A multi-level version of the dance floor from Saturday Night Fever fills one third of the room, next to the superior vista of Las Vegas. A long, narrow bar borders the opposite wall. Glass tables and plush chairs fill the middle area. The DJ booth hangs over the dance floor. The DJ spins disco and 70’s rock - Donna Summer, Blondie, Funkadelic, KC and the Sunshine Band, The Jackson Five - mixed with a dose of Prince, Beastie Boys, RUN- DMC, Duran Duran and the like. Original 70’s artifacts, neon signs, concert and movie posters subtly decorate the room.

    The South Die is the Djibouti Room. It indulges in today’s hippest ambience, design and music with well- informed, deliberate scrutiny. Like the dynamic taste of Generation Y, the club’s interior scheme changes regularly. The structure holds very few permanent installations beyond a state of the art sound system, an old-school stage and a streamlined aluminum bar. Promoters, event managers, and booking agents transform the remaining raw space into temporary extravaganzas that last anywhere from one night to several weeks. Summer Solstice, the Olympics, The Day of The Dead, and a host of other traditional celebrations bring magic to the space on a regular basis. DJ’s with proven following from the various international metropolises mix the likes of Outkast, Eminem, 50 Cent, Electric Six, and the White Stripes into progressive, hip-hop, and ambient tracks. Emerging bands play feature nights for the intimate live stage on special occasions.

    Uxmal Ultralounge occupies 900 square feet of the elevator lobby between the dice. It is a room of intimate chill warmed over by lively conversation and toasting martinis. The attitude is casual and will offer bottle service for an upscale clientele. The couches are cushy. The music is relaxing.

        Brands carried and promoted by Disco Dice reflect the club’s commitment to define and celebrate classic and emerging culture. Co-equity event marketing happens only for time-tested, proven brands. Although virtually every type of shot and specialty drink can be prepared by the bartenders, house specialties include only one recipe: the Martini, available in either Gin or Vodka.

Market Analysis

    In 2007 39.2 million tourists visited Las Vegas. In 2007 $41.6 billion was the amount of money spent in Las Vegas; $8.4 billion of it went to gambling. Shows, hotels rooms, restaurants, nightclubs and shops accounted for the rest.1 In 2007 6.2 million conventioneers contributed $8.4 billion to the local economy. Studies appearing in the Las Vegas Business Press attest that a large number of visitors see Las Vegas as an entertainment destination rather than a gaming venue . This trend is reflected in the words of Rob Powers of the Las Vegas Convention and Visitors Authority. "We’re more of a complete resort destination," he says, adding, "we are able to go after every prospective leisure traveler."

    These leisure travelers have impacted the city’s nightclub scene dramatically. It has been referred to as "one of the most important scenes in the world so large and important to the tourist industry that Vegas clubs are starting to create the trends rather than working off of what works in other parts of the world." The world, in turn, pays attention. Las Vegas is "the scene with the most exposure that is visited by more people from so many walks of life. After all, Las Vegas is the entertainment capital of the world; there should be no reason it isn’t the club capital as well." 2

    Rio’s Club Rio opened in June 1995. Luxor and MGM launched Ra and Studio 54 in December 1997. Since then, some 40 clubs, ultralounges, and mega-clubs have set up on or near the strip. "The profit margins in these clubs is enormous," said Anthony Curtis, Las Vegas Advisor President, who has watched strip developments for years as a publisher of consumer and gaming advice. "There's a huge, moneyed group of younger people who are coming to Vegas now, and casinos are reacting to it."3

    The statistics below reflect an even greater shift in discretionary spending for entertainment over the last five years from 2002 to 2007. The amount of time spent gambling has dropped about 10% even though the gambling budget has increased about 10% since 2002. The amount being spent on food and drink has risen around 25% since 2002.


EXPENDITURES PER VISITOR



2002 2003 2004 2005 2006 2007
Food and Drink $193 $209 $238 $248 $261 $254
Gambling Budget $503 $491 $545 $627 $652 $556
Daily Hours Gambled 3.7 3.6 3.3 3.6 3.3 3.4

Based on an average stay of 3.5 nights
Source: Las Vegas Convention and Visitors Authority


    Since 1998 roughly 30,000 hotel rooms and suites have been added to Las Vegas for over $10 billion dollars. 4 The construction will continue through 2008 and beyond.

Industry Trends

    Las Vegas nightclubs are incubators of massive popular culture. They nourish trends in fashion, music, and entertainment before millions on national television. It is "a favorite topic for the Travel Channel and E!’s Wild On" television shows regarding Las Vegas. There are also numerous poker shows on cable television witch feature Las Vegas. The amount of media attention through television that Las Vegas is getting has a positive impact on visitation.

    There is no subtlety in boasting Vegas style. Venues mix movie star sensationalism with dance floor sensuality to generate and maintain national exposure. Sexy guests in hop couture writhe and slither to pulsating rhythms of exotic dance mixes. Club goers expect to hear, see, and wear superior status with intense pleasure.

    "In Las Vegas it seems like every major resort wants to have a super club attached to its property," says Michael Carr, a publisher of Vegas magazine. "The kind of money being spent to develop these nightclubs is off the charts. The expectation when people come to Las Vegas is you gotta be larger than life." Casinos and management groups have seemingly limitless funds to develop the hottest new concept club, especially compared what is spent opening a night club in New York, Los Angeles, or Miami. 5

    The nightclubs on the Las Vegas Strip are about catering to the masses, and Vegas' economy is built on that. Clubs are generally crowded and playlists are conservative, designed for the two main classes of people who come to the clubs: VIP's with money to burn, and everybody else. Everybody else pays the door charge because they: a) like to dance, b) want to feel part of the glam and glitz of the Vegas scene, c) are tourists, d) think standing in line outside is evidence of a good time inside, and/or e) hope to hook up. 6

    Steve Wynn, who owns the $2.7 billion dollar Wynn Las Vegas, says revenue for Las Vegas nightclubs is between $400 million and $500 million dollars per year. 7

    There is a nightclub opening in March in the Stratosphere Hotel and Casino called Polly Esther's. This is similar to Disco Dice Nightclub because Polly Esther's wants to cater to a wide demographic of customers ranging from 21-50 years old. Polly Esther's is a 26,000 square-foot nightclub that will have four separate rooms: a 70's disco room; Culture Club, playing 80's music; Club Nerve Ana, with 90's tunes; and Suite 2000, an upscale, ultra-dance lounge playing Hip Hop and House Music.

    Clubs must consistently prove that they are the place to be, that they are purveyors of the latest and greatest in sensory fulfillment. This is nothing new. In Las Vegas, however, that proof is broadcast worldwide and backed by recognizable events and personalities.

Marketing Strategy

    "The most valuable commodity in the gaming and entertainment industry will always be the human imagination. It's all about entertainment that engages the customer in a profound way."8 These words, uttered by Alex Yemenidjian, former president of MGM Grand Inc. and former chairman and chief executive of filmmaking giant Metro-Goldwyn-Mayer Inc., provide the cornerstone for Disco Dice's marketing strategy. Disco Dice must create highly visible specters of popular culture, attracting all that is sexy and popular.

    A number of media channels and public relations vehicles must be utilized to gain the proper level of exposure, including the "what's hot" type columns in popular music and culture magazines. In the words of Adam Ward, entertainment and promotions director for the former C2K club, "To be the number 1 club, it's not revolving around music anymore, or what would be considered a true nightclub scene, its how much you put into marketing." Indeed, his club is viewed as one that rewrote the rules on Vegas nightlife. "Nightclubs are spending in excess of $60,000 to $70,000 just to be noticed," he continues, "fliers these days are almost useless compared to a few years ago. Now you need numerous $10,000 billboards, full page ads, radio and anything else big money buys."

    Getting noticed requires major events, celebrity endorsement and maximum exposure. This can be accomplished through any number of industry players and entertainment reps, all readily available in Las Vegas. To increase exposure without sliding into cheesy ubiquity, Disco Dice will turn to the internet, where the most popular destinations generally fall into one of three categories: beauty, music, or popular culture. Disco Dice has all three, all the time. The site will feature up to ten video clips, each three minutes in length, that highlight the weekly happenings, personalities and glamour of the club. An e-mail newsletter - delivered to an extremely selective clientele, perhaps 500 people- will summarize and drive consumers to the site. It will be created and maintained by designers and filmmakers of rock star quality. As word of the site spreads, so does the success of Disco Dice.

    Disco Dice will target the ideal 21-50 year old demographic in two separate but related gigantic chambers. The North Die's devotion to disco, 70's dance, funk, rock, and early 80's synth pop will attract 36-50 year olds who currently do not have a large number of nightlife options in Las Vegas, where most clubs cater to consumers from 21-35 years old. It is nostalgia, and people enjoy reliving the good times of their youth. Witness the massive retro-culture influence in advertising: the music of Led Zeppelin and Iggy Pop have been used in automobile commercials.

   In turn, North Die's popularity will flow into South Die, where twenty-somethings of Generation X and Y, who thrive on anything retro and ironic, will celebrate the source of their popular music. Young bands like Detroit's Electric 6 and Tennessee's Kings of Leon are compared to The Village People and Lynyrd Skynyrd, respectively. The Electroclash music trend deconstructs 80's pop in a post millennium kind of way. With young and hungry promoters, booking agents, interior designers, and event managers making the scene just to break into the scene, South Die will not have to commit to any extended scheme or budget. The flexibility and change will trademark a unique entertainment experience. Worldwide sensations such as Beyonce and Britney will be deliberately ignored. But they'll hear about it. And they'll seek the place out.

1. Las Vegas Convention and Visitors Authority, www.lvcva.com, Press and Research.

2. Las Vegas Weekly, www.lvweekly.com, The Scene, The Music, The Fashion, December 25th, 2003.

3. Las Vegas Sun, www.lasvegassun.com, Business Section, Beyond the velvet rope, December 30th 2005.

4. Bellagio, October 1998, 3000 rooms at a cost of $1.6 billion dollars. Mandalay Bay, March 1999, 3000 rooms at a cost of $1 billion dollars. The Venetian, May of 1999, 3000 rooms at a cost of $1.5 billion dollars. Paris Las Vegas, September 1999, 3000 rooms at a cost of $760 million dollars. The Aladdin(recently bought by Planet Hollywood for $635 million dollars), August 2000, 2500 rooms at a cost of $1 billion dollars. The Palms, November 2001, 450 rooms at a cost of $265 million dollars. The Venetian Towers, fall of 2003, 1000 suites. The Hotel at Mandalay Bay, December 2003, 1100 suites. Bellagio Tower, late 2004, 900 suites. Wynn Las Vegas, April 2005, 2700 rooms at a cost of $2.7 billion dollars.

5. San Francisco Chronicle, www.sfgate.com, Club Vegas, July 17th, 2005

6. Las Vegas CityLife, www.lvcitylife.com Fear and Lounging, January 27th 2005.

7. Las Vegas Sun, www.lasvegassun.com, John Katsilometes talks about Monte Python's Spamalot, January 23rd, 2007.

8. Las Vegas sun, www.lasvegassun.com, Business Section, Studio CEO: Imagination Key to Gaming, Movie Success, October 4th 2001.

 Financial Report 
INCOME      
     Sales - Beverage $13,104,000   60.00% 
     Sales - Admission/Other 8,736,000 40.00% 
Gross Sales   $21,840,000 100.00% 
COST OF GOODS SOLD      
     Cost of Goods Sold - Beverage $2,620,800   20.00% 
     Total Cost of Goods Sold   $2,620,800 12.00% 
Gross Margin   $19,219,200 88.00% 
 OPERATING EXPENSES      
          Advertising and Promotion $1,092,000   5.00%
          China, Silver, Glassware      873,600   4.00%
           Credit Card Commission 273,000   1.25%
           Equipment Rental 327,600 1.50%
           Insurance 436,800   2.00%
           Janitorial 273,000   1.25%
           Licenses & Permits 29,120   1.17%
           Linens/Uniforms 218,400   1.00%
           Management Salaries 1,092,000   5.00%
           Miscellaneous 109,200   .50%
           Music and Entertainment 873,600   4.00%
           Payroll taxes  327,600   1.50%
           Professional Fees 218,400   1.00%
           Rent 840,000   4.80%
           Repairs & Maintenance 131,040   0.60%  
          Supplies 87,360   0.40%
          Telephone 145,600   0.83%
           Utilities  291,200   1.67%
          Wages and benefits 3,712,800   17.00%
     Total Operating Expenses   $11,352,320 53.47%
Net Income  

$7,866,880

 34.53%
     Long-Term Debt Service   $1,090,740 6.24%
Net Annual Cash Flow   $6,776,140 28.28%
 
Long-Term Debt Service is based on $7,000,000 at 9% over 10 years 
BREAKDOWN
Cover Charge: $10 for women, $20 for men
Attendance: 40% women, 60% men                     $16 per customer
3 drinks per person X $8 per drink                 $24 per customer
                                  TOTAL:           $40 per customer

1500 customers a day X $40 per customer            $60,000 a day
                                                         7 days a week
                                                  $420,000 a week
                                                        52 weeks a year
                                  TOTAL:       $21,840,000 gross sales a year


CUSTOMER BREAKDOWN PER NIGHT
Thurs-Sat: 2000 customers a night X 3                  6000  
Sun-Wed:   1125 customers a night X 4                  4500
                                  TOTAL:             10,500 customers a week

Design Patents for sale: United States Design Patents US D476, 424 S and US D476, 425 S.

If you are interested please contact Paul Shanahan.

cell phone       773-704-2616 home         Jrmh44@aol.com
home phone    773-784-5527 work         paul@vailsys.com