Table of Content

    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

    Indoor Sports Complex Proposal Plan - 3 Years Profit Forecast

    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.

    Indoor Sports Complex Proposal Plan - Startup Cost

    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.

    Indoor Sports Complex Proposal Plan - Market Segmentation

    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.

    Indoor Sports Complex Proposal Plan - Unit Sales

    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.

    Indoor Sports Complex Proposal Plan - Brake-even Analysis

     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

    Indoor Sports Complex Proposal Plan - PROFIT MONTHLY

    8.3.2 Yearly Profit

    Indoor Sports Complex Proposal Plan - PROFIT YEARLY

    8.3.3 Monthly Gross Margin

    Indoor Sports Complex Proposal Plan - GROSS MARGIN MONTHLY

    8.3.4 Yearly Gross Margin

    See the analysis of Profit and Loss in the table below.

    Indoor Sports Complex Proposal Plan - GROSS MARGIN YEARLY

    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.

    Indoor Sports Complex Proposal Plan - Projected Cash Flow

     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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