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Do you want to start an indoor sport complex business
Are you thinking about how to open an indoor sports facility? This is no doubt one of the best and most lucrative ventures you can ever think of. Given the popularity and global recognition of sports, the demand modern and sophisticated indoor sports facilities has drastically increased. Nowadays, people are keen to access a fully equipped indoor facility that allows them to participate in a wide array of sporting activities. Setting up an indoor sports facility is a huge investment so you need to be adequately prepared. However, you can be sure you will recover all your initial investment within a few years of starting the business.
Executive Summary
2.1 The Business
The indoor sports facility will be registered under the name BJ Sports Hub, and will be situated in Brookland, Washington. BJ Sports Hub will be owned and managed by Zack Phil who is famous Baseball Coach. The sports facility is intended to offer a unique, unforgettable, entertaining and welcoming ambience for guests.
2.2 Management Team
BJ Sports Hub will be managed by Zack Phil who is a Baseball Coach with cumulative experience that spans over two decades. His passion for sports is the main reason why he has decided to invest in an exclusive indoor sports facility building.
2.3 Customer Focus
BJ Sports Hub will aims to offer a nice, spacious and well equipped sporting facility for both residents, corporates and sports stakeholders including teams. The business will attract customers of various ages, social and cultural backgrounds.
2.4 Business Target
The business plans to invest heavily in modern facilities to create an impressive sports recreation facility that offers customers value for their money
Company Summary
3.1 Company Owner
Zack Phil is an experienced, well-respected and award winning baseball coach who has steered several teams he has coached to victory. During his career, Zack has had the privilege to coach some of the most popular baseball teams in the United States.
3.2 Aim of Starting the Business
Because of his passion for sports, Zack always envisioned having starting a sports complex business where he could offer an affordable and the perfect environment to facilitate various kinds of sports. Even though Brookland has many similar facilities, Phil knew his approach was innovative and different.
3.3 How the Business will be Started
To ensure BJ Sports Hub becomes a household name and trendsetter, Zack with the help of experts well versed in business startups has formulated a sound business plan to drive success. Key financial data pertaining to the sports facility is show below.
| Start-up Expenses | |
| Legal | $4,000 |
| Consultants | $8,000 |
| Insurance | $30,000 |
| Rent | $70,000 |
| Research and Development | $20,000 |
| Expensed Equipment | $500,000 |
| Signs | $10,000 |
| TOTAL START-UP EXPENSES | $700,000 |
| Start-up Assets | $0 |
| Cash Required | $800,000 |
| Start-up Inventory | $500,000 |
| Other Current Assets | $100,000 |
| Long-term Assets | $40,000 |
| TOTAL ASSETS | $120,000 |
| Total Requirements | $250,000 |
| START-UP FUNDING | $0 |
| START-UP FUNDING | $500,000 |
| Start-up Expenses to Fund | $200,000 |
| Start-up Assets to Fund | $220,000 |
| TOTAL FUNDING REQUIRED | $0 |
| Assets | $120,000 |
| Non-cash Assets from Start-up | $70,000 |
| Cash Requirements from Start-up | $0 |
| Additional Cash Raised | $300,000 |
| Cash Balance on Starting Date | $100,000 |
| TOTAL ASSETS | $0 |
| Liabilities and Capital | $0 |
| Liabilities | $0 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $0 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $0 |
| Capital | $0 |
| Planned Investment | $0 |
| Investor 1 | $80,000 |
| Investor 2 | $50,000 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $700,000 |
| Loss at Start-up (Start-up Expenses) | $500,000 |
| TOTAL CAPITAL | $900,000 |
| TOTAL CAPITAL AND LIABILITIES | $400,000 |
| Total Funding | $1,400,000 |
Services for Customers
BJ Sports Hub is a large, fully serviced and diverse indoor sports facility that will avail numerous services for customers which include:
- Fully equipped weight and fitness center with state-of-the art aerobic equipment
- Different courts for games such as basketball, volleyball, badminton, tennis and indoor soccer
- Massage parlor center
- Dancing and yoga rooms
- Food and beverage restaurant
- Modern conferencing facilities
With these amazing facilities, Zack has managed to figure out how to start an indoor sports facility that offers a wide range of tailored services to clientele.
Marketing Analysis of an Indoor Sports Complex
For BJ Sports Hub to meet its targets; customer satisfaction and financial targets, a detailed market analysis was researched and documented. This indoor sports complex business plan has put in place a systematic strategic business plan that will be incorporated into the sports complex to help it achieve its mandate. The business has identified an action plan to follow once operations commence.
5.1 Market Segmentation
Findings of the market research revealed the following customers as the main targets for BJ Sports hub.
5.1.1 Fitness Lovers
Many people these days want to keep fit and for this reason, the demand for fitness facilities has gone up. This group includes those looking for a well-established workout facility they can visit in the morning, evening or on weekends. This target group is wide and covers different ages such as working class adults and seniors.
5.1.2 Sport Clubs
Sports clubs include team involved in various disciplines such as soccer teams, tennis teams and athletics teams among others. This is a lucrative market segment in an indoor sports facility business plan. Since these teams always need somewhere to train and have their tournaments, BJ Sports Hub is set to benefit a great deal.
5.1.3 Sports Men and Women
Sports professionals always require a nice and well-equipped facility where they can train and prepare themselves for various competitions. Washington D.C. is known to host many sports personalities creating a ready market for the indoor sports complex.
5.1.4 Business Travellers and Tourists
Washington D.C. is the state capital and therefore, receives a lot of visitors from around the world. Business travellers and tourists will be attracted to BJ Sports Hub to enjoy the various facilities such as gyms without having to sign up for resident membership. The size and unique appearance of the venue is expected to attract a sizeable number of tourists.
5.1.5 Religious Groups and Schools
A successful indoor sports facility business plan includes religious organization who at times, need to book an indoor sports facility to hold religious events such as crusades. In addition, schools will also be targeted by the business as they frequently look for venues to host their school games and championships.
| Market Analysis | |||||||||
| Potential Customers | Growth | YEAR 1 | YEAR 2 | YEAR 3 | YEAR 4 | YEAR 5 | CAGR | ||
| Fitness lovers | 30% | 400,000 | 420,000 | 440,000 | 480,000 | 520,000 | 14.00% | ||
| Sports clubs | 30% | 300,000 | 320,000 | 340,000 | 360,000 | 400,000 | 12.00% | ||
| Sports men and women | 15% | 350000 | 370,000 | 390,000 | 410,000 | 430,000 | 14.00% | ||
| Religious groups and schools | 10% | 250000 | 270,000 | 290,000 | 310,000 | 330,000 | 10.00% | ||
| Business travellers and tourists | 15% | 150000 | 170,000 | 190,000 | 210,000 | 230,000 | 9.00% | ||
| Total | 100% | 1,200,000 | 1,550,000 1,650,000 | 1,770,00 | 1,910,000 | 20.00% | |||
5.2 Business Target
BJ Sports Hub targets to offer a unique, well-equipped and social facility in Brookland, Washington D.C. Even though the initial capital is high, the business hopes to recover its capital within the first three years of operations. It is expected the indoor sports complex sales will grow between 20-25% annually.
5.3 Product Pricing
Pricing included in this indoor sports arena business plan have been done after carefully evaluating what other competitors are offering their customers. The idea is to keep prices at the standard market rate but offer unique membership packages with added benefits.
Strategy
Zack has worked closely with experts to formulate a comprehensive market oriented sales strategy to assist in growing customer numbers and boosting sales revenue. After taking into account the cost of building an indoor sports complex, the following sales strategy has been identified to support the business.
6.1 Competitive Analysis
The facility’s strategic location, large size, modern state-of-the-art equipment, customized membership packages and nearness to public transport facilities will give the facility a competitive advantage.
6.2 Sales Strategy
In order to attract more customers to the indoor sports complex, the following sales strategies will be implemented.
- Reach out to both established and upcoming sportsmen and women looking for a well-equipped and easily accessible training facility.
- Offer customized and attractive membership packages with exciting features.
- Roll out intensive marketing campaigns on both local as well as digital platforms.
- Incorporate cutting-edge technologies and modern equipment to satisfy customer needs.
- Utilize the business central location to attract walk- in customer
- Offer personalized and exemplary customer service.
6.3 Sales Forecast
BJ Sports Hub intends to focus on implement its sales strategies and keenly monitor its financial books to grow annual sales. A basic representation of what is expected is shown below.
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Weight & Fitness Center | 500,000 | 540,000 | 580,000 |
| Court Games | 400,000 | 450,000 | 500,000 |
| Modern conferencing facility | 150,000 | 200,000 | 250,000 |
| Dancing and yoga center | 500,000 | 550,000 | 600,000 |
| TOTAL UNIT SALES | 1,550,000 | 1,750,000 | 1,850,000 |
| Weight & Fitness Center | Year 1 | Year 2 | Year 3 |
| Court Games | $100.00 | $120.00 | $130.00 |
| Dancing and yoga center | $120.00 | $140.00 | $160.00 |
| Modern conferencing facility | $300.00 | $320.00 | $350.00 |
| Sales | |||
| Weight & Fitness Center | $450,000 | $200,000 | $300,000 |
| Court Games | $300,000 | $120,000 | $200,000 |
| Dancing and yoga center | $100,000 | $150,000 | $210,000 |
| Modern conferencing facility | $150,000 | $180,000 | $230,000 |
| TOTAL SALES | Year 1 | Year 2 | Year 3 |
| Weight & Fitness Center | $0.80 | $0.70 | $0.65 |
| Court Games | $0.60 | $0.70 | $0.80 |
| Dancing and yoga center | $0.30 | $0.40 | $0.50 |
| Modern conferencing facility | $0.40 | $0.47 | $0.55 |
| Direct Cost of Sales | |||
| Weight & Fitness Center | $800,000 | $1,000,00 | $1,500,00 |
| Court Games | $450,000 | $700,000 | $1,050,00 |
| Dancing and yoga center | $250,000 | $280,000 | $320,000 |
| Modern conferencing facility | $300,000 | $330,000 | $360,000 |
| Subtotal Direct Cost of Sales | $1,540,000 | $2,310,000 | $3,652,000 |
Personnel Plan
BJ Sports Hubs is a large facility that will have diverse personnel with various backgrounds. The business intends to hire the following staff to offer business support.
7.1 Personnel Plan
BJ Sports Hub is owned by Zack Phil who will be the sports complex manager. In this indoor sports business plan, the business will also have a manager, an administrator, three training assistants, three fitness instructors, two marketing officers, four cleaners, one cashier and two customer care executives. Comprehensive training will be done before staff resumes duty.
7.2 Average Staff Salaries
In the first three years, BJ Sports Hub intends to pay staff the following salaries.
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Manager | $70,000 | $75,000 | $80,000 |
| Administrator | $45,000 | $48,000 | $52,000 |
| 3 Training Instructors | $300,000 | $350,000 | $370,000 |
| 2 Sales and Marketing Executives | $105,000 | $130,000 | $140,000 |
| 3 Fitness Instructors | $300,000 | $350,000 | $370,000 |
| 1 Cashier | $30,000 | $40,000 | $50,000 |
| 4 Cleaners | $100,000 | $120,000 | $140,000 |
| 2 Customers care executives | $150,000 | $155,000 | $160,000 |
| Total Salaries | $500,000 | $598,300 | $665,500 |
Financial Plan
BJ Sports Hub has a detailed financial plan that will steer the business towards the path of financial success. The indoor sports complex will be financed by Zack Phil and two investors. The available funding is expected to meet the cost to build an indoor sports facility, but an addition loan will be required to supplement funding. The following is a breakdown that computes various financial parameters for the business.
8.1 Important Assumptions
BJ Sports Hub has calculated its financial expectations based on the assumptions below.
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 15.00% | 17.00% | 19.00% |
| Long-term Interest Rate | 10.00% | 10.00% | 10.00% |
| Tax Rate | 25.00% | 22.00% | 20.00% |
| Other | 0 | 0 | 0 |
8.2 Brake-even Analysis
The graph below shows Brake-even Analysis for the indoor sports complex.
| Brake-Even Analysis | |
| Monthly Units Break-even | 60000 |
| Monthly Revenue Break-even | $400,000 |
| Assumptions: | |
| Average Per-Unit Revenue | $400.20 |
| Average Per-Unit Variable Cost | $1.20 |
| Estimated Monthly Fixed Cost | $520,000 |
8.3 Projected Profit and Loss
See below the Profit and Loss data for BJ Sports Hub calculated on an annual and monthly basis.
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $800,000 | $850,000 | $910,000 |
| Direct Cost of Sales | $450,000 | $500,000 | $600,000 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $450,000 | $500,000 | $600,000 |
| Gross Margin | $320,000 | $370,000 | $410,000 |
| Gross Margin % | 70.00% | 74.00% | 78.00% |
| Expenses | |||
| Payroll | $510,000 | $620,000 | $730,000 |
| Sales and Marketing and Other Expenses | $20,000 | $40,000 | $60,000 |
| Depreciation | $10,000 | $20,000 | $30,000 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $30,000 | $50,000 | $70,000 |
| Insurance | $10,000 | $15,000 | $17,000 |
| Rent | $50,000 | $60,000 | $70,000 |
| Payroll Taxes | $20,000 | $15,000 | $10,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $170,000 | $220,000 | $270,000 |
| Profit Before Interest and Taxes | $21,000 | $25,000 | $30,000 |
| EBITDA | $10,000 | $15,000 | $20,000 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $22,000 | $25,000 | $28,000 |
| Net Profit | $160,000 | $175,000 | $190,000 |
| Net Profit/Sales | 40.00% | 430.00% | 46.00% |
8.3.1 Monthly Profit
8.3.2 Yearly Profit
8.3.3 Monthly Gross Margin
8.3.4 Yearly Gross Margin
See the analysis of Profit and Loss in the table below.
8.4 Projected Cash Flow
Diagram below shows pro forma cash flow, subtotal cash received, subtotal cash from operations, subtotal cash spent on operations and subtotal cash spent.
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $600,000 | $650,000 | $700,000 |
| Cash from Receivables | $50,000 | $70,000 | $90,000 |
| SUBTOTAL CASH FROM OPERATIONS | $350,000 | $420,000 | $490,000 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $350,000 | $420,000 | $490,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $150,000 | $170,000 | $190,000 |
| Bill Payments | $120,000 | $200,000 | $350,000 |
| SUBTOTAL SPENT ON OPERATIONS | $270,000 | $370,000 | $540,000 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $280,000 | $400,000 | $560,000 |
| Net Cash Flow | $100,000 | $140,000 | $160,000 |
| Cash Balance | $180,000 | $200,000 | $220,000 |
8.5 Projected Balance Sheet
This projected balance sheet shows BJ Sports Hub capital, assets, liabilities, long-term assets and current liabilities.
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $400,000 | $440,000 | $480,000 |
| Accounts Receivable | $100,000 | $110,000 | $140,000 |
| Inventory | $150,000 | $300,000 | $450,000 |
| Other Current Assets | $200,000 | $200,000 | $210,000 |
| TOTAL CURRENT ASSETS | $870,000 | $1,050,000 | $1,280,000 |
| Long-term Assets | |||
| Long-term Assets | $80,000 | $100,000 | $120,000 |
| Accumulated Depreciation | $110,000 | $130,000 | $150,000 |
| TOTAL LONG-TERM ASSETS | $100,000 | $50,000 | $30,000 |
| TOTAL ASSETS | $250,000 | $280,000 | $310,000 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $100,000 | $120,000 | $140,000 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $100,000 | $120,000 | $140,000 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $100,000 | $120,000 | $140,000 |
| Paid-in Capital | $205,000 | $210,000 | $220,000 |
| Retained Earnings | $250,000 | $500,000 | $750,000 |
| Earnings | $130,000 | $140,000 | $150,000 |
| TOTAL CAPITAL | $160,000 | $205,000 | $190,000 |
| TOTAL LIABILITIES AND CAPITAL | $160,000 | $205,000 | $190,000 |
| Net Worth | $490,000 | $521,000 | $550,000 |
8.6 Business Ratios
Business net worth, business ratios and ratio analysis for BJ Sports Hub are indicated in the table below.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 10.00% | 25.00% | 35.00% | 4.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 6.00% | 5.00% | 4.00% | 7.00% |
| Inventory | 3.00% | 2.00% | 1.00% | 8.00% |
| Other Current Assets | 1.50% | 2.20% | 3.00% | 15.00% |
| Total Current Assets | 90.20% | 100.10% | 120.25% | 34.00% |
| Long-term Assets | -6.00% | -15.00% | -17.30% | 30.40% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 5.00% | 4.00% | 3.20% | 21.70% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 19.50% |
| Total Liabilities | 5.10% | 3.00% | 2.50% | 40.10% |
| NET WORTH | 70.00% | 80.00% | 90.70% | 25.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 70.10% | 62.00% | 54.00% | 0.00% |
| Selling, General & Administrative Expenses | 63.00% | 60.00% | 55.00% | 72.00% |
| Advertising Expenses | 3.00% | 2.00% | 1.20% | 2.20% |
| Profit Before Interest and Taxes | 20.00% | 23.00% | 26.00% | 2.50% |
| Main Ratios | ||||
| Current | 8.2 | 10 | 15 | 0.7 |
| Quick | 20 | 23.1 | 26.4 | 0.5 |
| Total Debt to Total Assets | 3.20% | 2.00% | 0.55% | 5.00% |
| Pre-tax Return on Net Worth | 50.00% | 60.00% | 62.20% | 3.20% |
| Pre-tax Return on Assets | 4420.00% | 50.00% | 56.00% | 4.00% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 14.20% | 17.60% | 23.00% | N.A. |
| Return on Equity | 30.00% | 33.00% | 36.00% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 1 | 2 | 3 | N.A. |
| Collection Days | 70 | 77 | 78 | N.A. |
| Inventory Turnover | 13 | 17 | 21 | N.A. |
| Accounts Payable Turnover | 12.1 | 14.4 | 16.1 | N.A. |
| Payment Days | 18 | 18 | 18 | N.A. |
| Total Asset Turnover | 1.7 | 1.5 | 1 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | 0 | -0.05 | -0.04 | N.A. |
| Current Liab. to Liab. | 0 | 0 | 0 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $300,000 | $320,000 | $340,000 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.25 | 0.28 | 0.31 | N.A. |
| Current Debt/Total Assets | 4% | 3% | 200% | N.A. |
| Acid Test | 15 | 19 | 23 | N.A. |
| Sales/Net Worth | 2.3 | 1.8 | 0.7 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
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