Indoor Playground Business Plan for Starting Your Own Business

Do you want to open up a child recreational center such as an indoor playground? Providing an opportunity for children to play and grow in a healthy and safe environment is no doubt a business which being profitable is interesting too. Though the business doesn’t require any specific knowledge or skillset, however, the importance of having good management skills can’t be disregarded. If you think you responsible enough to run a challenging business like this, you must start making your kids indoor playground business plan. To help you we are providing here a sample business plan indoor playground for a child recreational center startup named, PlayLand.

Executive Summary

2.1 The Business

PlayLand will be a modern indoor center for children to enjoy different activities. The center will be based in Dallas and will be owned by a lady, Kate Dench. PlayLand will be providing several opportunities to children and teens to enhance their mental and physical capability under the supervision of highly trained staff.

2.2 Management of Indoor Playground

Managing a child playing center is no doubt a time-consuming job, that’s why Kate has decided to hire a general manager to help her in running the business. Following a stepwise approach, she has decided to make a business plan first before jumping in the preparations. Though many business plans for indoor playgrounds are available on the web, Kate will seek the services of experts to help her in making a modern indoor playground business plan.

2.3 Customers of Indoor Playground

Instead of thinking about how to start indoor playground business, researching on who will be your customers can be a much better idea. Knowing your customers can help you in deciding many things related to your startup such as your services, your product pricing, and your advertisement strategy. As for PlayLand, the customers will mostly be the parents. But, since the center will be providing some games for teens too, we expect that some youngsters will also be coming to our place.

2.4 Business Target

Defining targets can help one in thriving in the business area with even more enthusiasm. In this sample spreadsheet for indoor playground business plan we are mentioning a few business targets of PlayLand. The center aims at balancing the startup costs with the profits earned by the end of the two years of the launch while earning a profit margin of $10k per month by the end of the startup year.

Indoor Playground Business Plan - 3 Years Profit Forecast

Indoor Playground Business Plan Sample 1
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Company Summary

3.1 Company Owner

Kate Dench will be the owner of PlayLand. Kate has done bachelors in Sociology from Stanford University and has been teaching in a high school for a year. Kate is a hardworking person and strongly believes that loyalty with the customers and work is the only way that can lead her business to the topmost position.

3.2 Why the indoor playground business is being started

Kate wanted to secure her future by investing her money in establishing a business that can benefit her for a long time. So, following her graduation, she thought upon all her interests and decided to start an indoor playground business. She has several ideas about how to make a kids play area that’s why she can do this in a much better way than anybody else.

3.3 How the indoor playground business will be started

Following a stepwise approach, Kate has decided to hire a business plan writer to make a business plan for her. She has already rented a building with 4 rooms and a large lounge along with a playing field. Now, she will have to convert it in a modern indoor play area by installing different games and playthings.

Kate wants to get each and everything settled on time that’s why she has started to invest her several hours on work from now. She has even contacted the store owners from whom she will be purchasing the required equipment. Kate will also be hiring the required staff one week before the launch. In this sample business plan on how to start indoor playground business, we’ll later be listing the exact number of employees with their job descriptions.

The costs for of startup are as follows:

Indoor Playground Business Plan - Startup Cost

 

The startup requirements are as follows:

Start-up Expenses 
Legal$110 600
Consultants$0
Insurance$65 500
Rent$65 000
Research and Development$65 500
Expensed Equipment$65 500
Signs$2 500
TOTAL START-UP EXPENSES$374 600
Start-up Assets$441 750
Cash Required$665 000
Start-up Inventory$65 250
Other Current Assets$465 000
Long-term Assets$470 000
TOTAL ASSETS$2 107 000
Total Requirements$2 481 600
START-UP FUNDING 
Start-up Expenses to Fund$374 600
Start-up Assets to Fund$2 107 000
TOTAL FUNDING REQUIRED$2 481 600
Assets 
Non-cash Assets from Start-up$911 750
Cash Requirements from Start-up$665 000
Additional Cash Raised$37 500
Cash Balance on Starting Date$43 750
TOTAL ASSETS$1 658 000
Liabilities and Capital 
Liabilities$34 000
Current Borrowing$0
Long-term Liabilities$0
Accounts Payable (Outstanding Bills)$50 000
Other Current Liabilities (interest-free)$0
TOTAL LIABILITIES$84 000
Capital 
Planned Investment$2 481 600
Investor 1$0
Investor 2$0
Other$0
Additional Investment Requirement$0
TOTAL PLANNED INVESTMENT$2 481 600
Loss at Start-up (Start-up Expenses)($907 600)
TOTAL CAPITAL$1 574 000
TOTAL CAPITAL AND LIABILITIES$1 658 000
Total Funding$2 481 600

Services for Customers

If you are thinking about how to open a kids indoor playground, you must first decide which services you will be able to provide. Because if you don’t have enough capital to support basic activities in your playhouse, you won’t be able to earn a big name. So, before starting your own childrens indoor playhouse, it is wise to think whether you can provide the desired services or not.

Though Kate is not starting her business at a very large scale, she has decided to provide the following services:

  • Active Play: There will be playrooms for children of ages 3 to 10. The rooms will be beautifully decorated and will contain various toys, books and things like tricycles to be used by the children.
  • Art Classes: Children will be provided simple art classes in which they could enjoy music, learn to sing and dance, learn drawing, learn to paint and enjoy playing the musical instruments.
  • Craft Hour: In craft hour children will be asked to complete a given project such as weaving a butterfly. This class will serve for two purposes – to engage children in a healthy activity and to enhance their creativity.
  • Group Activities: Under strict supervision, children will be given a chance to enjoy group activities such as racing tricycles, playing carrom board, playing badminton or play on the see-saw with each other.
  • Activities for Teens: Teens will be allowed to play table tennis and badminton in the center. Moreover, they will be given a well-decorated area to celebrate their birthdays or to hold any parties.
  • Eatables: There will be a snack bar from where the children could get sandwiches, snacks, juices, and tea.

Business Plan for Investors

Marketing Analysis of Indoor Playground Business

Before taking an indoor playground startup, you must search for a market which has the potential to bear this type of startup. Exploring different markets before starting your business is essential because no one will acquire your services if they have already been availing the services of a similar and more stable business. So, it is very important to carry out a research on the market in which you will be going to serve. Reading several business plans for indoor playground can help you in knowing about different markets as well as to know what others are doing in this business.

In the case of PlayLand, Kate has leased a building which has almost no other child recreational center in the vicinity, so she can attract a wider audience easily.

Strategic/Operational Business Plan

5.1 Market Trends

The indoor playgrounds have a high demand at the places where the population of children is high. If you are selecting the location for your business wisely, you will not be at loss as opening a child recreational center provides many opportunities to grow.

5.2 Marketing Segmentation

Knowing your customers and their demands is the first step to take if you want to succeed in any domain. The market segmentation done for PlayLand is general and is given here for anyone who wants to get a notion of which sort of people they will have to face.

 

The detailed marketing segmentation of our target audience is as follows:

Indoor Playground Business Plan - Marketing Segmentation

5.2.1 Working Class

The first group of our customers will be the parents who have to go to their jobs or have to do certain works in the evening. We are sure that the parents if getting satisfied with our performance, will come to us again and again. And we expect their children to say themselves that they want to stay with us and play and enjoy with their age-mates.

5.2.2 Children of ages 10-14

The children of this age group will also be our target customers as they will be coming to us to play physical and mental games with their friends. They will also be availing our services to held parties.

5.2.3 Teens

The last category includes teens who will come to our center either with a sibling or to celebrate some event with their friends. We will soon be providing more physical activities for teens so that they have very much tasks awaiting them in PlayLand.

Market Analysis       
Potential CustomersGrowthYear 1Year 2Year 3Year 4Year 5CAGR
Working Class19%22 86626 68833 10637 49041 09010%
Children58%44 66864 68887 330105 088132 86410%
Teens33%25 73428 86631 99835 13038 26210%
Total100%93 268120 242152 434177 708212 21610%

5.3 Business Target

Kate’s target is to make her indoor PlayLand, the best playground in her vicinity. While providing reliable and honest service, Kate wants to set up her business and all matters in the first year so that she can move forward to make her children play center’s name a brand name. She also wants to add activities for children by the end of the first year. And she also aims at renting out a neighboring building to provide a similar facility for teens who will need a greater space and proper ground to enjoy themselves.

The financial targets, however, are as follows:

  • Balancing startup costs and investments within the first year of launch
  • Earning a profit margin of $10k by the end of the second year and increasing the profit margin by almost 200 percent by the end of the third year

5.4 Product Pricing

The prices of PlayLand will neither be very low nor too high. Kate has decided to take reasonable charges in exchange for her services because she thought that if one has to compromise on money – one will automatically be compromising somewhere on quality. As Kate has a great competitive aspect due to her location, she doesn’t need to keep her prices low to attract the customers.

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Strategy

After you have explored various indoor playground business ideas and have succeeded in planning and creating play spaces, you have almost done what was required to start your indoor playhouse. Now the next step is a little difficult and includes the implementation of wise techniques to bring your customers to your doorstep. In this business development plan for an indoor playground, the ways adopted by Kate to be different and popular are given here.

6.1 Competitive Analysis

PlayLand will be just one of its type in the neighboring vicinity, which makes it easier for us to attract the target customers. Our biggest competitive advantage is our reliable service. We will be treating your kids like our kids. We will offer just physical games because parents usually don’t want their kids to associate their enjoyment with television and the internet. Moreover, children will be under a kind but strict supervision, and they will never get a chance to fight or quarrel with each other.

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Lastly, we will be having exceptional customer service, Kate herself will be interacting and coordinating with parents to satisfy them that their kids are treated under love and care.

6.2 Sales Strategy

To advertise our services, we will:

  • Share the pictures of our services on our center’s website and social sites
  • Distribute our pamphlets in our neighboring areas
  • Provide 20% discount for the first month of our launch
  • Provide 15% discount to our regular customers
  • Provide free eatables to children for the first week of our launch

6.3 Sales Monthly

Indoor Playground Business Plan - Sales Monthly

 

6.4 Sales Yearly

Indoor Playground Business Plan - Sales Yearly

 

6.5 Sales Forecast

Our sales are forecasted in the following column charts:
Indoor Playground Business Plan - Unit Sales
The detailed information about the sales forecast is given in the following table:

Sales Forecast   
Unit SalesYear 1Year 2Year 3
Active Play & Art Classes21 46025 24029 760
Craft Hour & Group Activities8 8609 2609 700
Activities for Teens6 6407 4006 020
Eatables4 9006 5807 840
TOTAL UNIT SALES41 86048 48053 320
Unit PricesYear 1Year 2Year 3
Active Play & Art Classes$40,00$40,00$40,00
Craft Hour & Group Activities$49,00$49,00$49,00
Activities for Teens$60,00$60,00$60,00
Eatables$73,00$73,00$73,00
Sales   
Active Play & Art Classes$858 400,00$1 009 600,00$1 190 400,00
Craft Hour & Group Activities$434 140,00$453 740,00$475 300,00
Activities for Teens$398 400,00$444 000,00$361 200,00
Eatables$357 700,00$480 340,00$572 320,00
TOTAL SALES$2 048 640,00$2 387 680,00$2 599 220,00
Direct Unit CostsYear 1Year 2Year 3
Active Play & Art Classes$30,00$30,00$30,00
Craft Hour & Group Activities$36,75$36,75$36,75
Activities for Teens$45,00$45,00$45,00
Eatables$54,75$54,75$54,75
Direct Cost of Sales   
Active Play & Art Classes$643 800,00$757 200,00$892 800,00
Craft Hour & Group Activities$325 605,00$340 305,00$356 475,00
Activities for Teens$298 800,00$333 000,00$270 900,00
Eatables$268 275,00$360 255,00$429 240,00
Subtotal Direct Cost of Sales$1 536 480,00$1 790 760,00$1 949 415,00

Note

If you are planning to open an indoor baby play area but are worried about the costs of playroom equipment, be at ease.

Personnel plan

As child recreational center is a sort of business which can be started without a huge investment, you can start it with limited indoor playground equipment. You will require children soft play equipment as the kids of ages between 3 to 7 are more inclined towards gaming with soft indoor play equipment.

However, for teens and for children of the age group 8 to 12, you will have to buy somewhat sports material like rackets, balls and an indoor playground net.

7.1 Company Staff

To meet the standards, Kate has set for her business, she herself will be coordinating with the parents. However, she will be hiring the following people for other tasks:

  • 1 General Manager to manage the overall operations
  • 2 Accountants to maintain financial records
  • 1 Sales Executive responsible for marketing
  • 5 Female Workers to supervise the children
  • 2 Cleaners to ensure a hygienic environment
  • 1 General Assistant for day-to-day work
  • 1 Manager to operate the store
  • 2 Security Guards
  • 1 Web Developer to manage the center’s websites

7.2 Average Salary of Employees

 Personnel Plan   
 Year 1Year 2Year 3
General Manager$40 000$44 000$48 400
Accountants$25 000$27 500$30 250
Sales Executives$30 000$33 000$36 300
Female Workers$20 000$22 000$24 200
Cleaners$15 000$16 500$18 150
General Assistant$20 000$22 000$24 200
Manager$35 000$38 500$42 350
Security Guards$25 000$27 500$30 250
Web Developer$50 000$55 000$60 500
Total Salaries$260 000$286 000$314 600

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Financial Plan

The last thing which you must have to do is to get written a proper financial plan that can demonstrate how much do playgrounds cost and how you will be able to afford that. If you are worried about how much does playground equipment cost or how much do indoor playgrounds make, just seek help from a financial advisor. A financial expert can help you figure out where to invest and how to earn a profit despite providing discounts and packages to the customers. A financial expert also provides you a plan to recover loss if you somehow get your business stuck in a crisis or if you are failed in making desired profits.

In case, you have a little know-how of a financial plan and you want to make it by yourself, you must first read other’s business plans available on the web. The <strong>sample startup budget for child care center<strong> and a recreational lot that is PlayLand is given here totally free for your help.

8.1 Important Assumptions

 General Assumptions   
 Year 1Year 2Year 3
Plan Month123
Current Interest Rate10,00%11,00%12,00%
Long-term Interest Rate10,00%10,00%10,00%
Tax Rate26,42%27,76%28,12%
Other000

8.2 Brake-even Analysis

Indoor Playground Business Plan - Brake-even Analysis

 

 Brake-Even Analysis 
Monthly Units Break-even5530
Monthly Revenue Break-even$159 740
Assumptions: 
Average Per-Unit Revenue$260,87
Average Per-Unit Variable Cost$0,89
Estimated Monthly Fixed Cost$196 410

8.3 Projected Profit and Loss

 Pro Forma Profit And Loss   
 Year 1Year 2Year 3
Sales$2 048 640$2 387 680$2 599 220
Direct Cost of Sales$1 536 480$1 790 760$1 949 415
Other$0$0$0
TOTAL COST OF SALES$1 536 480$1 790 760$1 949 415
Gross Margin$512 160$596 920$649 805
Gross Margin %25,00%25,00%25,00%
Expenses   
Payroll$260 000$286 000$314 600
Sales and Marketing and Other Expenses$1 850$2 000$2 150
Depreciation$2 070$2 070$2 070
Leased Equipment$0$0$0
Utilities$4 000$4 250$4 500
Insurance$1 800$1 800$1 800
Rent$6 500$7 000$7 500
Payroll Taxes$34 510$40 726$46 942
Other$0$0$0
Total Operating Expenses$310 730$343 846$379 562
Profit Before Interest and Taxes$201 430$253 074$270 243
EBITDA$201 430$253 074$270 243
Interest Expense$0$0$0
Taxes Incurred$161 144$202 459$216 194
Net Profit$40 286$50 615$54 049
Net Profit/Sales1,97%2,12%2,08%

8.3.1 Profit Monthly

Indoor Playground Business Plan - Profit Monthly

 

8.3.2 Profit Yearly

Indoor Playground Business Plan - Profit Yearly

 

8.3.3 Gross Margin Monthly

Indoor Playground Business Plan - Gross Margin Monthly

 

8.3.4 Gross Margin Yearly

Indoor Playground Business Plan - Gross Margin Yearly

 

8.4 Projected Cash Flow

Indoor Playground Business Plan - Projected Cash Flow

 

 Pro Forma Cash Flow   
Cash ReceivedYear 1Year 2Year 3
Cash from Operations   
Cash Sales$40 124$45 046$50 068
Cash from Receivables$7 023$8 610$9 297
SUBTOTAL CASH FROM OPERATIONS$47 143$53 651$59 359
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$47 143$53 651$55 359
ExpendituresYear 1Year 2Year 3
Expenditures from Operations   
Cash Spending$21 647$24 204$26 951
Bill Payments$13 539$15 385$170 631
SUBTOTAL SPENT ON OPERATIONS$35 296$39 549$43 582
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$35 296$35 489$43 882
Net Cash Flow$11 551$13 167$15 683
Cash Balance$21 823$22 381$28 239

8.5 Projected Balance Sheet

 Pro Forma Balance Sheet   
AssetsYear 1Year 2Year 3
Current Assets   
Cash$184 666$218 525$252 384
Accounts Receivable$12 613$14 493$16 373
Inventory$2 980$3 450$3 920
Other Current Assets$1 000$1 000$1 000
TOTAL CURRENT ASSETS$201 259$237 468$273 677
Long-term Assets   
Long-term Assets$10 000$10 000$10 000
Accumulated Depreciation$12 420$14 490$16 560
TOTAL LONG-TERM ASSETS$980$610$240
TOTAL ASSETS$198 839$232 978$267 117
Liabilities and CapitalYear 1Year 2Year 3
Current Liabilities   
Accounts Payable$9 482$10 792$12 102
Current Borrowing$0$0$0
Other Current Liabilities$0$0$0
SUBTOTAL CURRENT LIABILITIES$9 482$10 792$12 102
Long-term Liabilities$0$0$0
TOTAL LIABILITIES$9 482$10 792$12 102
Paid-in Capital$30 000$30 000$30 000
Retained Earnings$48 651$72 636$96 621
Earnings$100 709$119 555$138 401
TOTAL CAPITAL$189 360$222 190$255 020
TOTAL LIABILITIES AND CAPITAL$198 839$232 978$267 117
Net Worth$182 060$226 240$270 420

8.6 Business Ratios

 Ratio Analysis    
 Year 1Year 2Year 3INDUSTRY PROFILE
Sales Growth4,35%30,82%63,29%4,00%
Percent of Total Assets    
Accounts Receivable5,61%4,71%3,81%9,70%
Inventory1,85%1,82%1,79%9,80%
Other Current Assets1,75%2,02%2,29%27,40%
Total Current Assets138,53%150,99%163,45%54,60%
Long-term Assets-9,47%-21,01%-32,55%58,40%
TOTAL ASSETS100,00%100,00%100,00%100,00%
Current Liabilities4,68%3,04%2,76%27,30%
Long-term Liabilities0,00%0,00%0,00%25,80%
Total Liabilities4,68%3,04%2,76%54,10%
NET WORTH99,32%101,04%102,76%44,90%
Percent of Sales    
Sales100,00%100,00%100,00%100,00%
Gross Margin94,18%93,85%93,52%0,00%
Selling, General & Administrative Expenses74,29%71,83%69,37%65,20%
Advertising Expenses2,06%1,11%0,28%1,40%
Profit Before Interest and Taxes26,47%29,30%32,13%2,86%
Main Ratios    
Current25,8629,3932,921,63
Quick25,428,8832,360,84
Total Debt to Total Assets2,68%1,04%0,76%67,10%
Pre-tax Return on Net Worth66,83%71,26%75,69%4,40%
Pre-tax Return on Assets64,88%69,75%74,62%9,00%
Additional RatiosYear 1Year 2Year 3 
Net Profit Margin19,20%21,16%23,12%N.A.
Return on Equity47,79%50,53%53,27%N.A.
Activity Ratios    
Accounts Receivable Turnover4,564,564,56N.A.
Collection Days9299106N.A.
Inventory Turnover19,722,5525,4N.A.
Accounts Payable Turnover14,1714,6715,17N.A.
Payment Days272727N.A.
Total Asset Turnover1,841,551,26N.A.
Debt Ratios    
Debt to Net Worth0-0,02-0,04N.A.
Current Liab. to Liab.111N.A.
Liquidity Ratios    
Net Working Capital$120 943$140 664$160 385N.A.
Interest Coverage000N.A.
Additional Ratios    
Assets to Sales0,450,480,51N.A.
Current Debt/Total Assets4%3%2%N.A.
Acid Test23,6627,0130,36N.A.
Sales/Net Worth1,681,290,9N.A.
Dividend Payout000N.A.

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