Table of Content

    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 for business plan. 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

    Immigration Business Plan
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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 Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
    Working Class 19% 22 866 26 688 33 106 37 490 41 090 10%
    Children 58% 44 668 64 688 87 330 105 088 132 864 10%
    Teens 33% 25 734 28 866 31 998 35 130 38 262 10%
    Total 100% 93 268 120 242 152 434 177 708 212 216 10%

    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 Sales Year 1 Year 2 Year 3
    Active Play & Art Classes 21 460 25 240 29 760
    Craft Hour & Group Activities 8 860 9 260 9 700
    Activities for Teens 6 640 7 400 6 020
    Eatables 4 900 6 580 7 840
    TOTAL UNIT SALES 41 860 48 480 53 320
    Unit Prices Year 1 Year 2 Year 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 Costs Year 1 Year 2 Year 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 1 Year 2 Year 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 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 10,00% 11,00% 12,00%
    Long-term Interest Rate 10,00% 10,00% 10,00%
    Tax Rate 26,42% 27,76% 28,12%
    Other 0 0 0

    8.2 Brake-even Analysis

    Indoor Playground Business Plan - Brake-even Analysis

     

     Brake-Even Analysis
    Monthly Units Break-even 5530
    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 1 Year 2 Year 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/Sales 1,97% 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 Received Year 1 Year 2 Year 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
    Expenditures Year 1 Year 2 Year 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
    Assets Year 1 Year 2 Year 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 Capital Year 1 Year 2 Year 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 1 Year 2 Year 3 INDUSTRY PROFILE
    Sales Growth 4,35% 30,82% 63,29% 4,00%
    Percent of Total Assets
    Accounts Receivable 5,61% 4,71% 3,81% 9,70%
    Inventory 1,85% 1,82% 1,79% 9,80%
    Other Current Assets 1,75% 2,02% 2,29% 27,40%
    Total Current Assets 138,53% 150,99% 163,45% 54,60%
    Long-term Assets -9,47% -21,01% -32,55% 58,40%
    TOTAL ASSETS 100,00% 100,00% 100,00% 100,00%
    Current Liabilities 4,68% 3,04% 2,76% 27,30%
    Long-term Liabilities 0,00% 0,00% 0,00% 25,80%
    Total Liabilities 4,68% 3,04% 2,76% 54,10%
    NET WORTH 99,32% 101,04% 102,76% 44,90%
    Percent of Sales
    Sales 100,00% 100,00% 100,00% 100,00%
    Gross Margin 94,18% 93,85% 93,52% 0,00%
    Selling, General & Administrative Expenses 74,29% 71,83% 69,37% 65,20%
    Advertising Expenses 2,06% 1,11% 0,28% 1,40%
    Profit Before Interest and Taxes 26,47% 29,30% 32,13% 2,86%
    Main Ratios
    Current 25,86 29,39 32,92 1,63
    Quick 25,4 28,88 32,36 0,84
    Total Debt to Total Assets 2,68% 1,04% 0,76% 67,10%
    Pre-tax Return on Net Worth 66,83% 71,26% 75,69% 4,40%
    Pre-tax Return on Assets 64,88% 69,75% 74,62% 9,00%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 19,20% 21,16% 23,12% N.A.
    Return on Equity 47,79% 50,53% 53,27% N.A.
    Activity Ratios
    Accounts Receivable Turnover 4,56 4,56 4,56 N.A.
    Collection Days 92 99 106 N.A.
    Inventory Turnover 19,7 22,55 25,4 N.A.
    Accounts Payable Turnover 14,17 14,67 15,17 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 1,84 1,55 1,26 N.A.
    Debt Ratios
    Debt to Net Worth 0 -0,02 -0,04 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $120 943 $140 664 $160 385 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0,45 0,48 0,51 N.A.
    Current Debt/Total Assets 4% 3% 2% N.A.
    Acid Test 23,66 27,01 30,36 N.A.
    Sales/Net Worth 1,68 1,29 0,9 N.A.
    Dividend Payout 0 0 0 N.A.

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