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Do you want to start a roller rink business?
Are you planning to open a roller rink business? This is an awesome business to invest in since many people nowadays love the roller skating culture. From adults to children, the numbers of people looking for roller skating services have tremendously increased over the years. Roller skating is not only a great exercise to engage in with your family, but it’s also fun. So, at the end of the day you will be bonding and improving the health of your loved ones at the same time. The startup capital required may be on the high side but with proper planning and funding for you will recover your costs within a few years of business.
Executive Summary
2.1 The Business
The roller rink business shall be registered under the name Smooth Slide Rink, and will be situated in Enos Park, Springfield Illinois. The business will be owned and managed by Samantha Davis an experienced and award winning skating professional.
2.2 Management Team
Samantha Davis is a skating instructor who has been in the roll skating industry for over twelve years. Before opening a roller skating rink business, Samantha worked for many schools and popular fitness brands across United States and Canada training adults and students the art of skating thus gaining impressive knowledge and experience.
2.3 Customer Focus
Smooth Slide Rink intends to offer a modern, spacious and well equipped facility for all potential customers across the city of Springfield.
2.4 Business Target
Since it will be the first roller rink business in the neighborhood, the whole community and residents of Springfield will highly benefiting from a well-managed and equipped facility.
Company Summary
3.1 Company Owner
Samantha Davis is a skating instructor who has worked with top USA skating schools such as U.S. Figure Skating. She also worked as a skating instructor at The Mariposa School of Skating in Canada for more than 10 years. She has greatly contributed to ensure the growth of the roller skating industry by working in the course of her career.
3.2 Aim of Starting the Business
To open a roller skating rink business, it requires an expert who understands the art of skating and handling the business to properly identify priorities and set goals. Samantha has previously managed roller skating and therefore, comprehends the nitty-gritty details of managing a roller rink skating facility.
3.3 How the Business will be Started
As a professional skating instructor, Samantha understands what it entails to begin this venture and to make it successful. To actualize her plan, she has hired professional to come up with an impressive financial roadmap to guide the business. The following is the ultimate financial data for Smooth Slide Rink.
| Start-up Expenses | |
| Legal | $3,000 |
| Consultants | $2,500 |
| Insurance | $8,000 |
| Rent | $20,000 |
| Research and Development | $10,000 |
| Expensed Equipment | $20,000 |
| Signs | $3,000 |
| TOTAL START-UP EXPENSES | $66,000 |
| Start-up Assets | $0 |
| Cash Required | $120,000 |
| Start-up Inventory | $30,000 |
| Other Current Assets | $15,000 |
| Long-term Assets | $5,000 |
| TOTAL ASSETS | $25,000 |
| Total Requirements | $30,000 |
| START-UP FUNDING | $0 |
| START-UP FUNDING | $80,000 |
| Start-up Expenses to Fund | $40,000 |
| Start-up Assets to Fund | $30,000 |
| TOTAL FUNDING REQUIRED | $0 |
| Assets | $12,000 |
| Non-cash Assets from Start-up | $15,000 |
| Cash Requirements from Start-up | $0 |
| Additional Cash Raised | $50,000 |
| Cash Balance on Starting Date | $20,000 |
| 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 | $22,000 |
| Investor 2 | $20,000 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $120,000 |
| Loss at Start-up (Start-up Expenses) | $40,000 |
| TOTAL CAPITAL | $45,000 |
| TOTAL CAPITAL AND LIABILITIES | $40,000 |
| Total Funding | $100,000 |
Services for Customers
Smooth Slide Rink is keen to offer top notch and modern roller skating facilities for potential customers. Since Samantha already has an idea of how to open a roller skating rink business, the venture will focus on building a healthy and long lasting client relationships as it offers the following services.
- Offer indoor roller skating expeditions.
- Provide video arcade and redemption counter.
- Small restaurant to offer snacks and refreshments.
- Hosting Parties and fundraising
Marketing Analysis for Roller Rink Business
For Smooth Slide Rink to meet its market goals, a well-researched market analysis to find out market trends was started to assist the business effectively tap into the market. This roller rink business plan has showed the strategy the business intends to focus on to meet its obligations.
Note
With the fast growth and popularity of roller skating in Springfield, there is a huge potential for Smooth Slide Rink to take advantage of. Taking into consideration the location of the business, demographic stats and available competition, it is guaranteed the skating facility will enjoy a high number of customers.
5.1 Market Segmentation
With a good roller skating rink business plan, this will act as good foundation to start a strong and marketable business. Smooth Slide Rink therefore has the best opportunity to engage in intensive marketing campaigns to command a larger market share. One doesn’t need to have prior experience roller skating to visit the facility to have a good time. Based on market findings, the skating facility intends to target the following groups of customers.
5.1.1 Children
A lot of roller skating facilities earn a lot of money and profits from children related activities. Smooth Slide Rink plans to have a wide option of children’s programs that will make the facility attractive for children. Springfield has a wide population of children between ages of five to seventeen which is key revenue potential for business. Nowadays, parents are open to the idea of having their children take part in fun and recreation activities in order to encourage healthy living. With a roller skating facility in the community, the most lucrative customers for the business will be children.
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5.1.2 Adults (Age 18-44)
As roller skating activity popularity is increasing each single day, and adults too are over the moon to try skating for fun. This roller skating rink startup sample business plan also includes adults since the business plans to put in place awesome activities that will appeal to the adult between 18-44 years. Since most of this age group are working and in active activities, they will most likely have to pay for membership which will generate a more steady income for the skating facility.
5.1.3 Schools and College Students
Roller skating is a major trend in many educational institution. In this case, many schools once in a while always organize indoor roller skating competitions. Smooth Slide Rink stands a great chance to gain as these schools and their students will need a professionally managed and well equipped facility where they can compete and have a fun. With the high number of high schools and vocational schools in Springfield, the business will definitely flourish. Smooth Slide Rink plans to widely market its services to this target group to maximize on profits.
5.1.4 Churches and Religious Centers
The neighborhood has a great number of religious institutions and churches that periodically organize recreation activities for the congregations. Thanks to Smooth Slide Rink, they will be able to have fun and engaging religious activities at the facility.
| Market Analysis | |||||||||
| Potential Customers | Growth | YEAR 1 | YEAR 2 | YEAR 3 | YEAR 4 | YEAR 5 | CAGR | ||
| Adults | 30% | 23,000 | 26,000 | 29,000 | 32,000 | 35,000 | 10.00% | ||
| Children | 35% | 20,000 | 23,000 | 26,000 | 29,000 | 31,000 | 12.00% | ||
| Schools and College Students | 19% | 18,000 | 21,000 | 24,000 | 27,000 | 30,000 | 14.00% | ||
| Churches and Reigious Centers | 16% | 15,000 | 18,000 | 21,000 | 24,000 | 27,000 | 9.00% | ||
| Total | 100% | 76,000 | 88,000 100,000 | 112,000 | 123,000 | 11.00% | |||
5.2 Business Target
Smooth Slide Facility is ready to start operations in an easily accessible location where there is limited to no competition. The high population in Springfield is a great source of market for the skating facility. When allocating the roller skating rink start up costs, the business knows it will be expensive to open the facility and therefore, enough plans are needed to recover the initial investment. Smooth Slide Rink hopes to make fully recovery of the startup cost investment in two years. The skating facility has predicted a 30-40% annual increase in sales.
5.3 Product Pricing
A good roller skating business plan should be carefully thought through and accurate prices indicated to lay a perfect foundation for the business. Although there is no competition, Smooth Slide Rink has come up with affordable prices to attract and retain customers.
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Strategy
If you are wondering how to open a skating rink business that will be successful from launching, you need to come up with a comprehensive and realistic strategy. Samantha Davis has worked with skating experts to come up with a personalized roller skating rink business strategy that will be the backbone of attracting business revenue. The following is Smooth Slide Rink sales strategy.
6.1 Competitive Analysis
Smooth Slide Rink is located in an accessible location with a huge population of the market target. Furthermore, this is the first skating rink business in the area, so there will be a high demand.
6.2 Sales Strategy
To make sure Smooth Slide Rink reaches its intended customers, these helpful strategies will be used to boost sales.
- The business will use word of mouth marketing to market the facilities.
- The skating facility will use local advertising methods such as churches, religious institutions, print media, radio, Television, schools and vocation institutions.
- Plan a publicized grand opening party to create awareness about the new roller rink skating facility.
- Use digital media platforms such as Twitter, Instagram and Facebook to advertise.
- Offer an introductory reduced fee for the first members.
- Organize numerous children activities such as birthday parties.
6.3 Sales Forecast
Smooth Slide Rink is focused on offering a wide variety of sales strategies to its targets.
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Indoor Roller Skating Expedition | 400,000 | 420,000 | 440,000 |
| Video arcade and redemtion center | 250,000 | 300,000 | 350,000 |
| Hosting parties and fundraising | 200,000 | 250,000 | 300,000 |
| Small restaurant for snacks &refreshments | 150,000 | 200,000 | 250,000 |
| TOTAL UNIT SALES | 1,150,000 | 1,550,000 | 1,970,000 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Indoor Roller Skating Expedition | $200.00 | $220.00 | $240.00 |
| Video arcade and redemtion center | $170.00 | $200.00 | $230.00 |
| Hosting parties and fundraising | $150.00 | $180.00 | $210.00 |
| Small restaurant for snacks &refreshments | $130.00 | $160.00 | $190.00 |
| Sales | |||
| Indoor Roller Skating Expedition | $200,000 | $230,000 | $260,000 |
| Video arcade and redemtion center | $180,000 | $200,000 | $230,000 |
| Hosting parties and fundraising | $150,000 | $180,000 | $210,000 |
| Small restaurant for snacks &refreshments | $100,000 | $130,000 | $160,000 |
| TOTAL SALES | |||
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Indoor Roller Skating Expedition | $3.20 | $4.20 | $5.20 |
| Video arcade and redemtion center | $2.00 | $3.00 | $4.00 |
| Hosting parties and fundraising | $1.60 | $2.60 | $3.00 |
| Small restaurant for snacks &refreshments | $1.50 | $2.50 | $3.50 |
| Direct Cost of Sales | |||
| Indoor Roller Skating Expedition | $120,000 | $140,000 | $160,000 |
| Video arcade and redemtion center | $100,000 | $120,000 | $140,000 |
| Hosting parties and fundraising | $80,000 | $100,000 | $120,000 |
| Small restaurant for snacks &refreshments | $50,000 | $70,000 | $90,000 |
| Subtotal Direct Cost of Sales | $350,000 | $430,000 | $510,000 |
Personnel Plan
Smooth Slide Rink offers various services to maximize on the profits. How the business intends to pay salaries is well indicated in this roller skating rink business plan.
7.1 Personnel Plan
Smooth Slide Rink is owned by Samantha Davis, who understands how to start a roller skating rink business. She will be also the operating manager of business. Other people to be hired include.
- Business Manager
- Assistant Manager
- Administrator
- Three Instructors
- Two Marketing Executives
- One Cashier
7.2 Average Staff Salaries
Smoot Slide Rink plans to spend the following amounts on staff salaries for the first three years.
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Manager | $50,000 | $70,000 | $90,000 |
| Cashier | $20,000 | $23,000 | $26,000 |
| Administrator | $25,000 | $35,000 | $40,000 |
| 2 Sales and Marketing Executive | $40,000 | $60,000 | $80,000 |
| 3 Skating Instructors | $105,000 | $120,000 | $129,000 |
| Assitant Manager | $30,000 | $33,000 | $36,000 |
| Total Salaries | $270,000 | $341,000 | $401,000 |
Financial Plan
Smooth Slide Rink has a steady financial plan that will guide the business to run smoothly and achieve success. Starting a skating rink business will be facilitated by Samantha’s personal savings and business plan for angel investors. Key financial information for the business has been shown in the sections below.
8.1 Important Assumptions
Financial forecasts of Smooth Slide Rink will be based on these assumptions.
| 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 | 5.00% | 5.00% | 5.00% |
| Tax Rate | 14.00% | 17.00% | 20.00% |
| Other | 0 | 0 | 0 |
8.2 Brake-even Analysis
Smooth Slide Rink Brake-even Analysis is show in the graph below.
| Brake-Even Analysis | |
| Monthly Units Break-even | 10000 |
| Monthly Revenue Break-even | $250,000 |
| Assumptions: | |
| Average Per-Unit Revenue | $200.00 |
| Average Per-Unit Variable Cost | $2.00 |
| Estimated Monthly Fixed Cost | $400,000 |
8.3 Projected Profit and Loss
Profit and Loss information for Smooth Slide Rink computed on an annual and monthly basis is as shown below.
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $400,000 | $420,000 | $440,000 |
| Direct Cost of Sales | $40,000 | $60,000 | $80,000 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $40,000 | $60,000 | $80,000 |
| Gross Margin | $200,000 | $250,000 | $300,000 |
| Gross Margin % | 60.00% | 65.00% | 70.00% |
| Expenses | |||
| Payroll | $300,000 | $310,000 | $330,000 |
| Sales and Marketing and Other Expenses | $10,000 | $14,000 | $16,000 |
| Depreciation | $4,000 | $6,000 | $8,000 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $5,000 | $8,000 | $11,000 |
| Insurance | $2,400 | $3,400 | $4,400 |
| Rent | $12,000 | $14,000 | $16,000 |
| Payroll Taxes | $40,000 | $42,000 | $44,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $300,000 | $320,000 | $350,000 |
| Profit Before Interest and Taxes | $40,000 | $45,000 | $50,000 |
| EBITDA | $20,000 | $30,000 | $50,000 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $18,000 | $21,000 | $24,000 |
| Net Profit | $150,000 | $170,000 | $190,000 |
| Net Profit/Sales | 50.00% | 60.00% | 70.00% |
8.3.1 Monthly Profit
8.3.2 Yearly Profit
8.3.3 Monthly Gross Margin
8.3.4 Yearly Gross Margin
8.4 Projected Cash Flow
The diagram below summarizes projected cash flow.
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $150,000 | $155,000 | $160,000 |
| Cash from Receivables | $10,000 | $15,000 | $20,000 |
| SUBTOTAL CASH FROM OPERATIONS | $160,000 | $170,000 | $180,000 |
| 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 | $160,000 | $170,000 | $180,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $30,000 | $32,000 | $34,000 |
| Bill Payments | $10,000 | $13,000 | $16,000 |
| SUBTOTAL SPENT ON OPERATIONS | $30,000 | $42,000 | $50,000 |
| 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 | $40,000 | $520,000 | $60,000 |
| Net Cash Flow | $22,000 | $25,000 | $28,000 |
| Cash Balance | $33,000 | $38,000 | $43,000 |
8.5 Projected Balance Sheet
Illustrated below is the Projected Balance Sheet for Smooth Slide Rink.
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $200,000 | $230,000 | $260,000 |
| Accounts Receivable | $6,000 | $10,000 | $14,000 |
| Inventory | $5,000 | $7,500 | $10,000 |
| Other Current Assets | $4,000 | $4,000 | $4,000 |
| TOTAL CURRENT ASSETS | $215,000 | $254,500 | $288,000 |
| Long-term Assets | |||
| Long-term Assets | $12,000 | $14,000 | $16,000 |
| Accumulated Depreciation | $14,000 | $17,000 | $20,000 |
| TOTAL LONG-TERM ASSETS | $3,000 | $2,000 | $1,500 |
| TOTAL ASSETS | $234,000 | $284,500 | $365,500 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $25,000 | $28,000 | $31,000 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $25,000 | $28,000 | $31,000 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $25,000 | $28,000 | $31,000 |
| Paid-in Capital | $20,000 | $20,000 | $20,000 |
| Retained Earnings | $30,000 | $45,000 | $60,000 |
| Earnings | $130,000 | $150,000 | $170,000 |
| TOTAL CAPITAL | $350,000 | $380,000 | $410,000 |
| TOTAL LIABILITIES AND CAPITAL | $350,000 | $380,000 | $410,000 |
| Net Worth | $420,000 | $450,000 | $480,000 |
8.6 Business Ratios
Smooth Slide Rink Ration Analysis, Business New Worth and Business Ratios are shown below.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 10.00% | 23.00% | 35.00% | 5.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 5.00% | 4.00% | 3.00% | 6.00% |
| Inventory | 6.00% | 4% | 3.00% | 8.00% |
| Other Current Assets | 4.00% | 3.00% | 2.00% | 20.00% |
| Total Current Assets | 90.00% | 95.00% | 105.00% | 40.10% |
| Long-term Assets | -7.00% | -14.00% | -21.00% | 30.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 6.00% | 5.00% | 3.00% | 20.00% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 18.00% |
| Total Liabilities | 4.00% | 2.00% | 1.00% | 38.00% |
| NET WORTH | 80.00% | 100.00% | 110.00% | 30.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 80.00% | 70.00% | 60.00% | 1.00% |
| Selling, General & Administrative Expenses | 70.00% | 77.00% | 72.00% | 60.00% |
| Advertising Expenses | 4.00% | 3.00% | 2.00% | 3.00% |
| Profit Before Interest and Taxes | 20.00% | 24.00% | 30.00% | 2.50% |
| Main Ratios | ||||
| Current | 12 | 15 | 20 | 2.3 |
| Quick | 20 | 23 | 30 | 2.5 |
| Total Debt to Total Assets | 4.00% | 3.75% | 2.10% | 66.00% |
| Pre-tax Return on Net Worth | 85.00% | 95.00% | 5.00% | 5.00% |
| Pre-tax Return on Assets | 54.00% | 64.00% | 76.00% | 8.00% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 14.00% | 17.00% | 25.00% | N.A. |
| Return on Equity | 62.00% | 65.00% | 72.00% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7 | 9 | 12 | N.A. |
| Collection Days | 100 | 110 | 120 | N.A. |
| Inventory Turnover | 23 | 26 | 29 | N.A. |
| Accounts Payable Turnover | 15 | 18 | 21 | N.A. |
| Payment Days | 15 | 15 | 15 | N.A. |
| Total Asset Turnover | 3.5 | 3 | 2.5 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | 0 | -0.14 | -0.1 | N.A. |
| Current Liab. to Liab. | 0 | 0 | 0 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $160,000 | $180,000 | $20,000 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 1.4 | 2.48 | 3.32 | N.A. |
| Current Debt/Total Assets | 6% | 4% | 2% | N.A. |
| Acid Test | 30 | 33 | 36 | N.A. |
| Sales/Net Worth | 3.3 | 3 | 2.5 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
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