Indoor Playground Business Plan
If you want to start an indoor playground business or expand your current business, you need a business plan.
The following business plan template and example gives you the key elements to include in a winning business plan for your indoor playground business.
Indoor Playground Business Plan Example
I. Executive Summary
Business Overview
[Company name] is [Location]’s first indoor playground for children ages 4-12. The facility resembles a little town with a firehouse, post office, car garage, grocery store and a tiny house perfect for tea parties. In addition, the facility has a large room with a jumping pad and a huge play structure with slides and obstacles.
The location will also feature a selection of adventure options including zip lining, ninja course and trampolines.
While kids enjoy playing, parents can enjoy coffee and snacks from the cafe.
Products Served
Below is [Company Name]’s initial offerings:
- Children Play
- Inflatables
- Ball pool
- Soft play
- Adventure Play
- Ninja course
- Trampoline park
- Zip lines
Customer Focus
[Company Name] will primarily serve the residents who live within a 10-mile radius of our facility. The demographics of these customers are as follows:
- 97,827 residents
- 31,987 children
- Average income of $94,000
- 66% married
- 51% in Management/Professional occupations
- Median age: 39 years
Management Team
[Company Name] is led by [Founder’s Name] who has been in the daycare business for 20 years. While [Founder] has never run an indoor playground himself, he was a manager at two local children’s gyms. As such [Founder] has an in-depth knowledge of indoor playground businesses.
Success Factors
[Company Name] is uniquely qualified to succeed for the following reasons:
- There is currently no other indoor playground in the community we are entering and there is a need for this due to the high family population in the area.
- Our location is in a high-volume area with little direct traffic, and will thus be highly convenient to significant numbers of passersby each day.
- The management team has a track record of success in the business.
- Indoor playgrounds are proving to be a successful business concept in the U.S.
Financial Highlights
[Company Name] is currently seeking $460,000 to launch. Specifically, these funds will be used as follows:
- Facility design/build: $170,000
- Working capital: $290,000 to pay for marketing, salaries, and land costs until [Company Name] reaches break-even.
Top line projections over the next three years are as follows:
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $738,000 | $1,716,272 | $2,007,297 | $2,331,125 | $2,694,524 |
| Total Expenses | $639,595 | $1,021,515 | $1,110,127 | $1,190,308 | $1,273,715 |
| EBITDA | $98,405 | $694,757 | $897,169 | $1,140,817 | $1,420,809 |
| Depreciation | $16,560 | $16,560 | $16,560 | $16,560 | $16,560 |
| EBIT | $81,845 | $678,197 | $880,609 | $1,124,257 | $1,404,249 |
| Interest | $18,554 | $16,235 | $13,916 | $11,596 | $9,277 |
| Pre Tax Income | $63,291 | $661,962 | $866,694 | $1,112,661 | $1,394,972 |
| Income Tax Expense | $22,152 | $231,687 | $303,343 | $389,431 | $488,240 |
| Net Income | $41,139 | $430,276 | $563,351 | $723,230 | $906,732 |
| Number of locations | 1 | 1 | 1 | 1 | 1 |
| Avg customers/day | 100 | 150 | 200 | 250 | 300 |
II. Company Overview
Who is [Company Name]?
[Company name] is [Location]’s first indoor playground for children ages 4-12. The facility resembles a little town with a firehouse, post office, car garage, grocery store and a tiny house perfect for tea parties. In addition, the facility has a large room with a jumping pad and a huge play structure with slides and obstacles.
The location will also feature a selection of adventure options including zip lining, ninja course and trampolines.
While kids enjoy playing, parents can enjoy coffee and snacks from the cafe.
[Company Name]’s History
[Company name] was founded in [year] by [Founder’s name]. It will be only one of two indoor playground facilities in the area.
[Founder’s name] first saw the business opportunity in the indoor playground industry when he realized after almost two decades of working in daycares and children’s gyms, that as the population increased, the need for children’s facilities also increased.
Since incorporation, the Company has achieved the following milestones:
- Found location site and signed lease
- Developed the company’s name, logo and website located at [website]
- Determined equipment and facility requirements
- Begun recruiting key employees
[Company Name]’s Products/Services
Below is [Company Name]’s initial offerings:
- Children Play
- Inflatables
- Ball pool
- Soft play
- Adventure Play
- Ninja course
- Trampoline park
- Zip lines
III. Industry Analysis
The Indoor Playground industry has fared well over the past five years, driven by rising per capita disposable income and growing awareness of child fitness and wellness.
Over the next five years, industry revenue is forecast to grow at an annualized rate of 1.1%. During the outlook period, the industry is slated to benefit from a strong macroeconomic climate and positive demographic trends. Anticipated growth in disposable income throughout the period will deepen parents’ pockets and enable them to splurge on fitness programs for their children.
Furthermore, 0.4% annualized growth in the industry’s primary consumer base, children aged nine and younger, will bolster revenue gains moving forward. In response to strong demand, some children’s fitness center franchises will focus on expanding their class selection and number of classes per age group, keeping children and parents satisfied with class variety and convenience
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve the residents of [company location] and the immediately surrounding areas.
The precise demographics of the town in which our retail location resides is as follows:
| Total | Male | Female | |
|---|---|---|---|
| Total population | 1,644,518 | 778,476 | 866,042 |
| AGE | |||
| Under 5 years | 5.20% | 5.60% | 4.80% |
| 15 to 19 years | 4.30% | 4.20% | 4.40% |
| 20 to 24 years | 7.20% | 7.00% | 7.30% |
| 25 to 29 years | 12.10% | 11.90% | 12.40% |
| 30 to 34 years | 10.60% | 10.90% | 10.30% |
| 35 to 39 years | 8.00% | 8.30% | 7.60% |
| 40 to 44 years | 6.70% | 7.00% | 6.30% |
Customer Segmentation
We will primarily target the following customer segments:
- Parents: The business will attract parents looking for an option to keep their children active and entertained, even in the winter months.
- Schools: There are several pre-school and elementary schools in the area that the company will target to gain access to their parent/student population
V. Competitive Analysis
Direct & Indirect Competitors
The following businesses are located within a 5-mile radius of [Company Name], thus providing either direct or indirect competition for customers:
Indoor Kids
Indoor Kids offers little ones the chance to run, jump and play. This aptly named company offers fitness and development programs for kids aged four months to 12-years-old. The programs are designed to build motor skills and foster social interaction in a fun, non-competitive environment. Instructors teach activities such as gymnastics, karate, music, and dance. The company also offers an overnight camp on select Fridays and Saturdays for member children.
Founded in 1976 Indoor Kids operates about 300 franchises throughout the U.S. This location was opened in 2003, and offers open play, dance classes, sport classes, party rentals and camps.
Little Monkeys
Little Monkeys is an indoor play area and birthday party place for children 8 and under. The company also provides a cozy cafe and coffee bar for the adults. The play area is divided into two sections: one for children aged 3 and younger to play in a safe environment, and the other for the older children (up to age 8). The play area consists of a jungle of fun with inflatable jumps, slides and obstacle courses.
The company offers open play, private rental and birthday parties.
Jungle Jim’s
Jungle Jim’s is a children’s indoor play center for children age up to 14. Jungle Jim’s offers unique, fun, safe, dynamic, interactive activities, with a toddler play area separate from the big kids’ area. Jungle Jim’s offers open play, as well as parties and events. Play areas and activities include: Soft Play Toddler Area, Ball Cannon Arena, Play Structure, Tiny Town, Interactive Dance Floor, Inflatables, Glow In The Dark Play and Interactive Games and Technology.
Competitive Pricing
| Indoor Kids | Little Monkeys | Jungle Jim's | |
|---|---|---|---|
| Daily Pass | $14/kid | $17/kid | $19/kid |
| Monthly Pass | $75/kid | $85/kid | $95/kid |
| Party Rentals | $250 | $350 | $375 |
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Location: [Company Name]’s location is near the center of town, giving us access to commuters going to and leaving the train station, local office workers, and city traffic. We also offer adequate parking making it easy for customers to patronize us.
- Great service at an affordable price: The services offered by [Company Name] are similar in quality to its most premium positioned competitor. [Company Name] will offer these services at a much more affordable price.
- Management: Our management team has years of business and marketing experience that allows us to market to and serve customers in a much more sophisticated manner than our competitors.
- Relationships: Having lived in the community for 25 years, [Founder’s Name] knows all the local leaders, newspapers and other influences. As such, it will be relatively easy for [Company Name] to build brand awareness and an initial customer base.
VI. Marketing Plan
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
- Convenient location
- Family-friendly activities and equipment
- Significant personal attention
- Moderate price point
- Comfortable, clean, customer-focused environment
Promotions Strategy
[Company Name] expects its target market to be individuals living within a 10-mile radius of its playground. The Company’s promotions strategy to reach these individuals includes:
Direct Mail
[Company Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will offer discounts and/or provide other inducements for people to visit the playground.
Public Relations
We will contact all local and area newspapers and television stations and send them a press release describing the opening and unique value proposition of [Company Name].
Advertising
[Company Name] will initially advertise in local newspapers and sponsor community events in order to gain awareness.
Ongoing Customer Communications
[Company Name] will maintain a website and publish a monthly email newsletter to tell customers about new events, products, and more.
Pre-Opening Events
Before opening the playground, [Company Name] will organize pre-opening events designed for local merchants and press contacts to create buzz and awareness for [Company Name].
Pricing Strategy
[Company Name]’s pricing will be moderate, so customers feel they receive great value when patronizing the facility. The anticipated price point for a membership will be comparable to the surrounding area indoor facilities.
VII. Operations Plan
Functional Roles
In order to execute on [Company Name]’s business model, the Company needs to perform many functions including the following:
Service Functions
- Facility Managers
- Sales manager
- Maintenance personnel
Administrative Functions
- General & administrative functions including legal, marketing, bookkeeping, etc.
- Hiring and training staff
- Customer service/front desk functions
Milestones
[Company Name] expects to achieve the following milestones in the following [] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] facility |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Launch [Company Name] |
| [Date 5] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is led by [Founder’s Name] who has been in the daycare business for 20 years. While [Founder] has never run an indoor playground himself, he was a manager at two local children’s gyms. As such [Founder] has an in-depth knowledge of indoor playground businesses.
[Founder] graduated from the University of ABC where he majored in Early Childhood Education.
Hiring Plan
[Founder] will serve as the manager. In order to launch, we need to hire the following personnel:
- Facility Managers
- Salespeople (3 to start)
- Part-Time Bookkeeper (will manage accounts payable, create statements, and execute other administrative functions)
- Maintenance crew (will keep all the equipment and overall facility clean and up to health code standards)
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come from playground admissions, as well as food and beverage from the cafe.
The major costs for the company will be the cost of goods sold, staff salaries, and rent for a prime location. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.
Capital Requirements and Use of Funds
[Company Name] is seeking a total funding of $460,000 to launch its location. The capital will be used for funding capital expenditures, manpower costs, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Location design/build: approximately $170,000
- Working capital: approximately $290,000 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions
Below please find the key assumptions that went into the financial forecast and a summary of the financial projections over the next five years.
| Number of customers per day | Per location |
|---|---|
| FY 1 | 50 |
| FY 2 | 75 |
| FY 3 | 100 |
| FY 4 | 125 |
| FY 5 | 150 |
| Average transaction | $19.00 |
| Annual increase in order price | 5.00% |
| Annual Lease (per location) | $60,000 |
| Yearly Lease Increase % | 2.50% |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
