As you progress on your journey to opening an Indoor Play Centre, you will need to record your ideas in an organized format as your Research will ultimately become your Business Plan.
This process is a critical part of developing a successful business. Although it is normally a process that is approached with nervousness and fear it should be seen as an opportunity to explore the potential of your business and your ideas, a well written business plan should help you to achieve your dream of becoming a, Indoor Play Operator.
Therefore, any potential indoor play operator needs to give serious consideration to their business plan and take the time and effort needed to write a document that is as comprehensive as they need it to be. This document provides some helpful insights into how to prepare your business plan and outlines some of the key questions to ask yourself.
STEP 1; Who are you writing the Business Plan for?
How you write your plan will depend on its purpose and intended audience; you need to tailor the content, style and basic language to suit the particular reader . For example a Bank Manager will have a different perspective than a potential investor in the business; the latter may be more interested in your 5 year plan and growth potential than how the business can afford to pay back a loan over the first 3 years of operation. This may mean producing several drafts of the business plan, with slight amendments to reflect the needs of the Stakeholder.
STEP 2; What help do you need?
Depending on your background and previous experience, you will either be comfortable writing a business plan from scratch, or not have a clue where to start. Either way, you will need to consider if you need hands on assistance from a Professional (e.g. A Soft Play Consultant or an Accountant) which will involve parting with money or if you just need templates and examples to help you on your way.. Visit Business Link for helpful guides on business plan writing and other useful advice or The Institute of Chartered Accountants to find a list of chartered accountants in your area. You may also want to talk to friends and family, as they may be able to offer help or recommend a good professional you could use.
STEP 3; Understanding your own business
Before you can start to write in detail about your indoor play centre to inform others of your aspirations, you need to have a clear understanding of your own plans. Have you decided where the business will be located (read our How to Choose a Building guide) what sort of facilities will be on offer, how much it will cost to set up, how you will fund the business? (read our How to Secure Asset Finance guide). Although some of these fundamentals may change or become clearer as you write your plan, it is important for you to have a clear vision to help guide you. Allow your self some proper thinking time to work out the basics of the business. This will help you to think things through methodically and to check it all fits into place in terms of the direction of the business.
STEP 4; The Plan itself
Once you have established who the reader is, how you’re going to write it and have a clear vision for your business, you can start to formulate the basics of a business plan for your soft play centre. The following pages provide a template for how to structure your business plan, and some key points to consider for each section:
This appears at the front of your business plan and is normally easier to write once you have finished the business plan. The Executive Summary is possibly the most important two or three pages in your plan as it concisely conveys your vision and the fundamentals of your business. It is an overview of the whole plan and provides highlights from each section so the reader can quickly understand your soft play business and the opportunities. Many readers of business plans will only read the Executive Summary to start with and make a decision whether to read on based on those few pages. It is therefore important that you provide the right type of detail, make the Summary interesting to read and attempt to grab the readers attention, without over playing it.
- Organisation and Management Team
This section provides the reader with an overview of the people undertaking the project e.g. you and your partners, and their skills and experiences. It is often worth considering including your CV’s in this section as that provides a clear and concise background to each person. It is also important to talk through the roles that each of you will adopt within the operation of the indoor play centre and the reasons behind those decisions. Do not be afraid to sell your skills and abilities and talk up the experiences you have had, but be sure to be 100% accurate, as any discrepancies will almost certainly result in your plan being consigned to the scrap heap.
This section should also provide an insight into the professional organisations you’ll be working with during your venture such as planning experts, accountants and solicitors. A brief description of each is all that is needed to show that you have done your homework and taken professional advice where required.
Finally this section should also give the reader an indication of how your indoor play business will be set up from a legal entity point of view. You have three options in terms of how you set your business up; As a sole trader, partnership or Limited Company, and your own particular situation will dictate which one is right for you. Each has positives and negatives and it is advisable to seek professional advice from an accountant before deciding. Outlining your decision and the reasons behind it in this section will show a good level of understanding on your behalf.
Here you get a chance to talk through all your exciting plans for your soft play centre, your location, the activities and facilities you will have on offer, and an idea of your sales forecasts.
It is often an idea to open this section with a general overview of the soft play industry as a whole and mention that it is a growing industry that is yet to reach its full potential. Explain the types of age groups soft play centres cater for, the role parents play in supervising and examples of well known national or local play centres that the reader may have heard of.
In regard to your location, you will need to provide details of the building you will be using, its size, car parking and the planning situation (see our How to Submit Planning for a Soft Play Area guide). It is also crucial to provide details of any agreement you have in place with the landlord, as it will prove very difficult to get any funding without a firm commitment on the building. Remember to include all the positive features about your location and how they compare favourably to other indoor play centres you have visited.
Finally provide an overview of all the different activities that your soft play centre will offer and an outline of the likely pricing levels and revenue stream from each one. The reader may have no concept of what an indoor play centre is or how it makes its money, so provide clear and concise details about your play equipment, cafeteria, parties and any other activities you’ll be incorporating.
The Operational Plan explains the normal operating procedures of your soft play area including, the type and number of staff involved, your opening hours and general health and safety / security systems that will be in place. This section provides the reader with a complete understanding of how your indoor play centre will operate on a day to day basis, and should show them that you will be running a very tight ship.
Most soft play centres open 7 days a week and 364 days a year. The majority of their income is generated on a Saturday and Sunday and also during after school periods, particularly on Thursdays and Fridays. Opening hours vary but would normally include being open between 10am and 6pm, with extended hours at weekends. You will need to consider what will work best in your particular local area, and may have to be prepared to make adjustments after you have opened. Outline your hours in your business plan and your reasons behind them.
Staffing levels are always very difficult to predict, and it is not uncommon for indoor play centres to be heavily under or over staffed depending on the weather. The number of staff you’ll need will depend on the size of your centre and how successful you are. As a minimum you should expect to employ 2 or 3 full time employees, including yourself, who will be responsible for managing the soft play centre, and another 6 or 7 part time employees, mainly used during busy weekend periods. In this section you will need to outline the different roles that will be undertaken by the staff employed, the hours they will work and how you hope to recruit these staff in the first place.
Of great concern when operating or investing in an indoor play centre is the health and safety of the children and parents using the facility. Your business plan will need to demonstrate to the reader that your soft play area will be operated with the correct health and safety systems and security measures in place. Providing details of your signing in and out systems, fire evacuation procedures and a health and safety statement, are not essential at this stage, but will provide evidence of your expertise in this area and help show the reader that you have done your homework. It is important to remember that these documents and processes should be used in the every day operation of the facility, and not just to look good in your Business Plan; they will constantly require amending so as not to become outdated.
It is important to consider where your business will be beyond its first year of operation, and as such you will need to consider how you intend to expand the business in the years that follow. This should be a summary of some of the plans you have in mind which could include; setting up further soft play centres; expanding the activities within your centre such as adding a ceramic studio
, an interactive area
or coin operated machines
; increasing your party rooms to offer a wider range of parties; working more closely with local schools, community groups etc.
The possibilities are almost endless so it is important to be realistic with your plans, and provide an overview of your reasons for wanting to expand in a particular direction, the level of investment that may be involved and how long it will take to implement the changes.
Before entering into any business it is vitally important to conduct comprehensive market research to understand all the factors that could contribute to your business’s success or failure. There are many forms of market research that you can undertake in relation to setting up a soft play centre, and the reader of your Business Plan will need to see that the research you have conducted is relevant, timely and complete. Remember undertaking comprehensive market research will not only give you vital information on which to base your business, but will also help sell the concept, and you as a person, to anyone reading your Business Plan. The type of market research you complete could include:
Establish the local area demographics
Although there is no magic formula that will tell you how many people need to live within a certain distance of your business, it goes without saying that for a soft play centre to be sustainable you will need a certain number of people living in and around the local area to make the business a success. Whilst it is common place for parents to drive up to 30 minutes to visit a soft play centre, having a good percentage of your target market living within 20 minutes of your business will be beneficial.
Studying the latest census figures will give you exact figures for the area in which your soft play centre will be located, including telling you what percentage are children and what percentage are adults. Although any decision cannot be made on studying figures alone, and you will need to spend time in the vicinity of your location to monitor the volume of traffic etc, they will give you a good basis to work from and should help to indicate the level of need for a soft play centre in that area.SWOT analysis
A SWOT Analysis can be a very useful tool for all businesses to provide a snapshot of areas in which improvements may need to be made, and other areas in which their strengths lie. Some good examples of what a SWOT analysis involves can be found at Quick MBA
and further information can also be found at Business Balls.com
SWOT stands for Strengths, Weaknesses, Opportunities and Threats. In principle the strengths and weaknesses are seen as areas that are internal to the organisation and relate to aspects relating to the people and management in the business, the brand, internal processes and procedures etc. Opportunities and threats are seen as external to the business and can include areas such as market conditions, locations, competition etc.
Most SWOT Analysis’ are presented in the form of a diagram. This makes it very easy for the reader to gauge exactly what stage the business is at and where assistance may be needed. It is important to be honest in your appraisal as you should then use the outcomes to try and improve on weaknesses, counteract and prepare for any threats and take advantage of any opportunities identified.Pricing
The prices you charge within your soft play centre will be a factor in determining the long term success of your business. Although there are many other aspects that will have as big an impact, if not more, such as the quality of service from staff, the level of cleanliness and the overall offering provided, it is important that you set your pricing at the right level for the market you are targeting.
The main pricing levels to consider will be what to charge for admission, parties and food and drink. In regard to admission prices, many centres have different levels depending on the age group of the child, the time of day or the day of the week of entry, and often offer special rates for groups, schools, toddler groups and as part of a loyalty scheme. Very often the price is for 1 hour or 1 and ½ hours play, although many soft play centres allow children and parents to stay longer, to try and increase their secondary spend. Traditionally any offers are restricted to weekday admissions, and the weekend prices remain constant. Certain indoor play centres also charge for parents accompanying children, with mixed success, which can affect the level of secondary spend on café items as a result.
Parties are normally priced per head, and this includes the play time, food, staff and sometimes party bags as well as use of a party room or party area. Some centres operate a minimum number that have to attend to have a party, and quite often offer reduced prices for parties during weekdays. Weekend party slots are by far the most popular, and often soft play centres will offer a variety of party options to suit the different needs of the market. Parties can be a highly lucrative part of the business, but it is very important to offer real value and a positive lasting impression on the parents and children, as it is difficult to run a successful play centre without a good volume of parties.
The price of food and drink and the range on offer varies from centre to centre. Before you can set your pricing levels, you need to understand what your target market will be prepared to pay, what items they will be looking to buy and the level of quality they are used too from competitors. Shop around in terms of finding the right suppliers, and use your financial forecasts to work out what profit margins you’re hoping to achieve, before committing to any suppliers. Check out the quality of their food and service to ensure they match your customers expectations. Overall you should be aiming to make a 50% Gross Profit on your café takings, but be careful not to price yourself out of the market.Direct competition
This would include any other soft play centres within the local area, and it is very wise to understand their pricing levels in relation to their proposition. This will give you an idea of what the market is prepared to pay and therefore what is an acceptable level for you to charge. It is very dangerous to get into a price war with local indoor play centre competitors, as this normally leads to prices being dropped dramatically by all concerned, and means everyone but the consumer loses. Instead it makes more sense to understand each competitors offering, their target market and the quality of service they provide, and then compare your own business to that. From this comparison you should be able to establish what the right pricing levels are for your business based on what you are offering and what the market is prepared to spend.
In addition, consider how your Indoor Play Centre can offer something different and yet valuable to prospective customers. Differentiation can be achieved in many ways including a varied soft play experience, after-school clubs, ceramic cafes and your own ideas of what is missing from Indoor Play Centres that you visit.Non-direct competition
This includes any other activity a parent and child could be doing instead of visiting your soft play centre. Operators often focus too heavily on direct competition and ignore the other business/activities that will also have a dramatic impact on their levels of business. These can include the more obvious organisations such as sport clubs, bowling alleys, leisure centres, swimming pools, through to often less considered activities such as the local school, the local park and satellite TV. All of these will significantly impact how busy your centre is on any given day, and therefore it would be very prudent to understand all of your non-direct competition. Aside from finding out what some of these organisations charge and what they offer, you will also need to establish what events they have planned that will target your customers and respond accordingly e.g. you may link up with your local school to offer special price sessions throughout the year in return for having a stall promoting your soft play centre at the school fete.
Deciding how best to market your business is not always easy as there are many strategies you can employ to get your message across. Within your Business Plan you will need to outline the marketing strategy you are going to employ for both the launch of your business and on an ongoing basis; you will need to outline approximate costs and your reasons for selecting this method.
It is very common for soft play centres to spend large sums of money on there launch marketing and then budget very little for their ongoing marketing to try and increase business throughout the year. Often operators believe the key principle is to make people aware of your brand during the pre launch stage and then once they have visited you once, you don’t need to worry about marketing to those customers again. Whilst it is very important to raise the profile of your brand pre launch to make people aware of where you are and what you do, it is even more important to continue to market to them on an ongoing basis to increase the number of times they visit you every month. Keeping in touch with existing customers is often a much more effective way to increase business than trying to advertise to new customers, so be sure to take down the details of those customers who come through your door every day and to reward them for their loyalty on a regular basis. Social Media such as Facebook and Twitter is an increasingly popular way to manage customers relationships, it is also Free!Offline Marketing
This very often consists of the traditional methods you would expect, with the aim of raising awareness of your business. Leaflet drops, radio advertising and newspaper adverts, are all very common practices for soft play centres during the launch marketing phase or during seasonal times such as Christmas. All of these can be effective, but be sure to check out every supplier and ensure you are getting real value for money from your chosen partner. Be sure that the marketing is reaching your target market, and don’t be afraid to double check circulation or listenership figures to make sure you are not being mislead in anyway. Adverts in the newspaper or on the radio need to reach your target market and stand out from the crowd, so placement and timing of your advert is critical, along with the message you are trying to get across. Also be sure you have a way to monitor the success of any particular campaign against another, so you can see which is a more effective medium moving forward. You can do this by making the campaigns interactive, to get your customers involved and communicating with you.Online Marketing
Your online presence can be just as effective as some of the off-line marketing, but can very often be a lot more cost effective, up to date and flexible. There are a host of social marketing applications that all soft play centres should be utilising to advertise their business, all of which are free to use. These include sites such as Twitter
and can provide the operators with a direct and up to date line of communication with their customers, so they can begin to influence their decisions in a positive manner (see our slide show of How Play Operators can use Social Marketing as a Tool
). These are quite straightforward to set up and operate once you understand them, and operators will need to dedicate a small amount of time each week to ensure they receive the maximum benefit from each application (example of how a social media can be used in practice can be found at Deakin University News website
In addition to these sites, ensuring that you have your own website is very important for all indoor play centres, as more and more customers want to understand your business before coming to see you. This need not cost a great deal of money. There are many applications out there that will enable you to put your own website together without needing to be a technical wizard, or there are organisations that will do the job for you and not make you pay over the odds. Remember to tell people where you are (Google Maps does a good job) and include contact details and easy ways for them to contact you e.g. email addresses, links to Twitter and Facebook accounts etc. Also be sure to keep your site up to date so all information is relevant at any point in time, so a content managed website or blog is often advisable. It is also important that your customers can find your website, and software such as Google Adwords and Google Local can be very useful in this regard.
- Financial requirements and forecasts
The final section of your Business Plan will be the financial requirements and forecasts. This section will give the reader an overview of how much money you need to get the project set up, where you expect to get that money from, and how you are expecting your business to perform over the first 3 years of operation.
As with the rest of the Business Plan, the details you submit need to be as accurate and realistic as possible, as they will also act as blueprint for you as you go through the process of setting up, as well as being of use to the reader.Set up costs
Here you will outline every significant cost you are likely to incur when setting up your soft play centre, to provide the reader with a summary of the total project set up cost. Set up costs could include:
Play Equipment – This includes not only the soft play equipment, but also items such as interactive equipment, ceramic studios, battery go karts, free play areas, kids fitness equipment etc. it will take up a large part of your overall budget (anything from £20,000 to £200,000 depending on the size of your centre), but be careful to get the right mix of products and do not think that just by building the biggest soft play area, you will be offering the best solution for your customers.
Building works – This includes any alterations, internal or external you will be making to the building, and having to pay for yourself. For a soft play centre it is quite likely this will include interior work such as building toilet blocks, reception areas, kitchen/café area (link to kitchen article), party rooms and decoration. It should also include any external work related to signage or car parking.
Marketing – This includes all marketing that you will be completing during your pre-launch stage, both on and offline, but should not include your ongoing marketing costs.
Planning/Architect/Building Reg fees – This includes everyone involved with submitting a change of use planning application
(see our guide on planning permission
) and complying with local authority building regulations.
Working Capital – This includes money you will need to keep the business afloat, normally during the first 3 months of operation. This should be enough to cover your fixed and variable costs during this period to allow for the fact that the business may take time to build up.
Fixture and fittings – This includes all items that are required to get your soft play centre operational. For a soft play centre this could include; tables and chairs, party furniture, kitchen equipment (link to kitchen article), carpet/flooring, tills, heating systems and air conditioning systems.
Security deposit – This includes any deposit required by your landlord to secure your building. Quite often this can be the equivalent of 3 months rent, so it is important to allow for this significant cost when setting up.
On this page you will outline to the reader exactly how you propose to fund the project. Here you should detail your reasons for needing the amount of money requested, how much of your own funds you are willing to invest and where you expect to get any additional funding required.
It is highly unlikely that you will be able to secure funding for your project if you do not have any of your own funds to invest, and is properly not advisable to set up this type of business on that basis. Ideally you will be borrowing no more than 50 to 60% of your total project set up cost, with the rest being provided by you, family and friends or other business partners/shareholders. The amount you actually borrow will have a dramatic affect on your monthly repayments, and as such the cashflow of your business. Any potential investor or bank manager will take this into consideration before investing in your business or lending money to you.
In terms of borrowing money, the 2 most traditional methods are Asset Finance (compare sample financial forecast will provide you with a more in depth look at this section and the items to consider when compiling your forecasts.
This section of the Business Plan should consist of a 3 year Cashflow Forecast and a 3 year Profit and Loss Account. As the titles indicate, the Cashflow Forecast is looking purely at the cash situation of the business at any given time, and the Profit and Loss Account provides details of the overall profit or loss of the business each year.
It is often advisable to work with a professional organisation or person (compare Soft Play Consultants) when compiling forecasts to ensure every little detail is covered, and that the figures are above all realistic. This is possibly the most important section of your Business Plan, and you will need to have a good understanding of your figures when you meet with potential investors or Bank Managers.
The following links will provide you with more sample templates and guidelines to compiling each forecast:
STEP 5; ConclusionPlease note:
The aim of this document was to provide an overview of the process involved in compiling a Business Plan specifically for those looking to set up a soft play centre. As you can see there is a large amount of work involved in putting together such a Plan, but this should not deter those entrepreneurs with the drive, ambition and determination to establish a successful and profitable indoor play centre.
The Business Plan should be seen as a very useful tool for all would be operators, as it provides a blueprint for your soft play centre and how it will function and operate to achieve the results you desire. It will help to provide a clear picture of areas in which you need to build upon and make improvements, and also highlight areas in which you are particularly strong and can use as a selling point for your business. We would strongly advise anyone looking to establish a soft play centre to compile a Business Plan, as not to do so could seriously impact the success and profitability of your play centre moving forward.
Each individual’s situation will be different during the set up process of a soft play centre, and as such there may be items that are not included in this document which may be important in your case, and equally we may have talked about certain aspects that will not apply which you may choose to ignore. This version of “How to Write a Business Plan for a Soft Play centre” will be updated as we receive feedback from our users as they use this document in real life situations, so we can help to increase the accuracy and relevance of its contents.