Business GCSE / National 5: The challenge of running a theme park

STEPH MCGOVERN:Hello, I'm Steph McGovern, and I report for the BBC on all sorts of issues and news to do with business, the economy and money. Now because of my job I get to spend a lot of time visiting really cool places like this, this incredible car factory, to look at how businesses work and how things are going for them.

STEPH MCGOVERN:Now running a business is tough and if things aren't going well, well you can quickly run out of money. That's often down to something called overheads, which can include things like the money you have to pay out for staff wages, the rent for your shop or office or factory, and buying the things that you actually then want to sell.

STEPH MCGOVERN:Now making sure there's more money coming in than going out is a big challenge. And here's a report that illustrates all of that really well, so let's join Declan Curry at a pleasure resort, that here we find is causing a lot of pain for its owner.

DECLAN CURRY:'It's the start of a new holiday season 'for the seaside resort of Cleethorpes 'and for the Pleasure Island Theme Park.' This is my first stop on a journey through a year of British business. I want to see for myself what it's like battling to turn a profit in a faltering economy.

MELANIE WOOD:Good morning, welcome to Pleasure Island.

DECLAN CURRY:Morning. 'The current boss is Melanie Wood.' Tell me a bit about the place.

MELANIE WOOD:Pleasure Island opened in 1993, my dad opened it then, so this year we're just about to celebrate our 20th anniversary. So that should be an enormous year for us, we're very excited. Got a lot planned and yeah, just very much looking forward to it.

DECLAN CURRY:'Today the park is closed, 'but tomorrow it's the first day of this year's season, 'and the start of the Easter holidays. 'There's a lot to do, 'but I'm keen to find out just what it takes to keep this place going.'

MELANIE WOOD:My running costs for the year are in the region of just under £2 million.

DECLAN CURRY:Gosh that's an awful lot of money.

MELANIE WOOD:It is.

DECLAN CURRY:What do you spend it on?

MELANIE WOOD:£900,000 approximately goes on wages. 'Also just to keep the rides operating, 'the maintenance bill over the winter is in the region of £250-300,000.' £40-45,000 on paint alone. 'We know there is massive outgoings.'

DECLAN CURRY:How many people do you need coming through the gates when you're open to cover those costs?

MELANIE WOOD:I need about 150,000 people through the gates to cover my costs.

DECLAN CURRY:And you're getting?

MELANIE WOOD:Last year we got 135,000.

DECLAN CURRY:So there's a bit of a gap, a shortfall. How are you covering that shortfall?

MELANIE WOOD:My husband and I are personally funding the shortfall.

DECLAN CURRY:Just from your…

MELANIE WOOD:Personal savings, yes.

DECLAN CURRY:'Melanie has a lot invested in this business, 'and in an attempt to turn the fortunes of Pleasure Island around, 'she's always looking for ways to bring in extra customers.'

MELANIE WOOD:This is a new children's farm. Obviously brand new this year. Half a million pound project, and very, very nervous because a lot of time and obviously money has gone into this. So you just hope and pray that you've made the right decision.

DECLAN CURRY:'A new attraction means new staff, 'and every year Melanie employs around 200 seasonal workers.'

REBECCA:This is Rosie the lamb.

DECLAN CURRY:Hello Rosie. Oh she's lovely. Who are you?

I'm Rebecca [LAUGHS].

DECLAN CURRY:And what's it like working here? How important is that to you?

REBECCA:It's a great opportunity for me, especially for somebody my age. And there's nothing round here like this at all, so it's perfect for me.

DECLAN CURRY:'With unemployment a real issue in this region, 'Pleasure Island is a vital part of the local economy.'

MELANIE WOOD:'Without Pleasure Island, will the caravan parks exist? 'How will it affect the amusement arcades? 'How will it affectthe donkey man on the beach? 'I do feel pressure.'

DECLAN CURRY:'Melanie has invested over £300,000 of her own money 'into the miniature farm.

DECLAN CURRY:'But with the grand opening only hours away, 'there's still so much to do.'

MELANIE WOOD:Thank you. Bye.

DECLAN CURRY:Now are you sure this place is going to be ready? Last minute phone calls, guys still welding over there. You've only got 24 hours or less to go.

MELANIE WOOD:Yeah. I'm looking around, I can see jobs as I'm walking to be honest,

MELANIE WOOD:but we'll be fine. We'll get there.

DECLAN CURRY:Fingers crossed.

MELANIE WOOD:Yeah. The weather hasn't helped, I must be honest.

DECLAN CURRY:And of course the weather makes a huge difference as to whether people actually come here or not.

MELANIE WOOD:That's right. People watch the forecast, they plan accordingly, and if it's a bad forecast they don't come.

DECLAN CURRY:What was the weather like last year?

MELANIE WOOD:We opened on April 1st and that's when the heavens opened, and they didn't stop for seven months. And it was a massive blow to us. You know, we've managed to survive one bad year, but I wouldn't like to make any predictions at this point, but to survive two years like that would be very, very difficult.

DECLAN CURRY:'There are clearly tough times ahead for Pleasure Island, 'and the next 12 months could be make or break for Melanie. 'It's 9 AM, the first day of the season and Good Friday. 'The sun may be out, 'but there's only a handful of people waiting at the gates.'

MELANIE WOOD:You can always tell by your queues on a morning as to how busy the day is going to be, and I know from the queue outside that it's not going to be busy.

DECLAN CURRY:'And as the day draws to a close, 'it's the moment of truth for Melanie, 'as she finds out how many visitors turned up. 'She would normally expect around 2,000 people through the gates.'

MELANIE WOOD:Final figure today was 323, which is very disappointing, and a long way from where it needed to be. Not a good start. Not getting too despondent at the moment because we do still have timeto make that up. But, you know, something needs to change quickly.

STEPH MCGOVERN:Well things were looking bad, so what happened when Declan went back? Had Pleasure Island started deserving its name?

DECLAN CURRY:'Every year the theme park finishes with a big firework display. 'In our last film, it was clear Pleasure Island was in trouble. '£120,000 down on where the business should have been.

DECLAN CURRY:'The park's future was really touch and go.'Have fortunes changed over the summer? 'Will there be anything for owner Melanie Wood 'and her staff to celebrate? 'Or is this the last big bang for Pleasure Island?'

POLICE OFFICER:It's a big thing for the local economy, definitely. It brings jobs, money to people and it makes people happy.

STAFF MEMBER:I've been coming here since I was little. The park means a lot to me and I'm really happy that I can work here.

DECLAN CURRY:'It's the morning after the fireworks.' I hear today is D-Day.

MELANIE WOOD:Yes it is.

DECLAN CURRY:'Melanie has decided to call a meeting with her managers. 'She's got something important to tell them 'about the future of Pleasure Island.

DECLAN CURRY:'For her employees, 'this meeting could have serious implications for their future.'

STAFF MEMBER TWO:We're the biggest seasonal employer of the area, so I know if Pleasure Island wasn't here all the people that would need jobs for the summer, where would they go?

STAFF MEMBER THREE:I've been here just over 20 years, and it's just like part of my family here. So if it went, it would be missed.

MELANIE WOOD:Things were looking pretty bleak for a long time, right up until the end of July.

MELANIE WOOD:But I just wanted to give you some good news to let you know that August has been particularly good.

MELANIE WOOD:Saved our bacon, so to speak, and the future is looking a lot more positive. It's been tough, it's been stressful but we got there.

DECLAN CURRY:So some great news in there and everyone will be relieved for you. You must be pretty relieved yourself.

MELANIE WOOD:It's very good news. We had four weeks of consecutive good weather. People could plan and we got the numbers. We had good secondary spend, you know, people seemed to be buying drinks, ice creams, you know, all that contributes towards a better year. And all in all, far more positive than I could ever have hoped for.

DECLAN CURRY:And of course this place isn't cheap to run.

MELANIE WOOD:No, not by any stretch of imagination. Just under £2 million are my running costs per annum.

DECLAN CURRY:We talked before about how much personal money you were having to pour in to keep the business going, I think it was about £300,000 last year alone, are you getting any of that back?

MELANIE WOOD:Yes, there is some good news on that score. I'm able to pay myself £100,000 back this year, which is a step in the right direction.

DECLAN CURRY:But still not paying yourself a salary?

MELANIE WOOD:We're not at that point yet, no.

DECLAN CURRY:'Melanie can't safely say when she can start paying herself a wage, 'but in the short-term at least, things are looking much better 'than they did at the beginning of the season. 'With the business safe for another year at least, 'there's lots of work to be done over the winter.

DECLAN CURRY:'Many of the rides are put into storage 'to protect them from the worst of the weather, 'and there's time to carry out some running repairs.' I think you've got to admire Melanie.

DECLAN CURRY:This place has given her such sleepless nights and it's cost her hundreds of thousands of pounds of her own money but she keeps it going. Out of loyalty to herself, for her family and the whole town of Cleethorpes. And you've really got to hope that she carries on succeeding.

STEPH MCGOVERN:Despite those rays of hope brought on by the sunny weather, sadly falling visitor numbers meant Pleasure Island did have to close up for good at the end of 2016, which just goes to show that even with real commitment and investment the business world is a tough one.