2) Why do play centres fail? - The Play Providers Association

Considerations to avoid being
another business failure statistic
in the Indoor Play Market
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Session Outcomes
1) The failure facts
2) Why do play centres fail?
3) What makes a successful play centre?
Top ten steps to getting it right!!!
4) How do new operators reduce the risks
associate with a new business start up
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1) The failure facts
Only 50% of PPA members* are showing a profit
(other 50% are reporting a net loss, break even or didn’t
reply to the particular question in the SOTI survey)
New employer businesses have a 50/50 chance of
surviving for five years or more
(Small Business Association)
No set failure pattern- large and small sites, premium and
mass market, various locations and business models…
Lots of Pitfalls to avoid
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2) Why do play centres fail?
- Poor Management
- You start your business for the wrong reasons
- Lack of Planning
- Insufficient Capital
- Bad Luck - external factors
-Poor Management
Owners without the necessary business skills to run a business… need to be knowledgeable
in finance, business planning, HR, marketing, sales, branding…the list goes on - Above all
else an entrepreneurial. If you don’t have these skills, employ people who do.
-You start your business for the wrong reasons
If you want to open a play centre today you need to have drive and vision, you must really want
to do it, to realise it will take over your life as a 24 hours, 7 days per week commitment, and
you need to plan properly in order to be better placed for success.
-Lack of Planning
Be sure of the numbers of children around and plan to spend the appropriate amount on your
business. Obtain population figures from the local councils where your centre may be located.
It is vital to remember that you cannot manufacture populations where they don’t exist, and
over-ambition linked with overspend can be one of the main reasons for business failure,
unless your centre is sufficiently different and appealing to be able to attract people from much
further afield
-Insufficient Capital
-Bad Luck
Examples include… Competition setting up in the same area – not enough customers for
both businesses. Council putting double yellow lines outside the site to stop parking,
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Perceptions
• “I’ve had this great idea to open a play centre”
• “We want to do something where we can
spend more time with our kids”
• “The play centre down the road closed, there
is obviously a need for one”
•“Play centre X – was turning them away from
the door during half term - what a license to
print money!!’
“I’ve had this great idea to open a play centre”
Thousands of people have had the same good idea and more than likely also
in your area. There are examples of sites next to each other, towns which are
saturated with centres
“We want to do something where we can spend more time with our kids”
Running a play centre especially during the first year is a 24- 7 job.
“The play centre down the road closed, there is obviously a need for one”
Not necessarily – think why it closed. Perhaps the customer numbers are
sufficient, building is not a suitable size,
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Perceptions
• “All play centre owners must be rich- its
always so busy in there”
• “I’m thinking of opening a play centre – I’ve
found a suitable building – planning to open in
a month”
• “We have put everything on the line to start
this business”
“All play centre owners must be rich- its always so busy in there”
People that think this generally visit on a wet October half term where indeed it
should be busy. However the play centre industry is very up and down and
very much driven by the weather. When planning your business visit play
centres on a term time morning, or a sunny day then do the various head
counts. Is it sometimes not worth centres being open – costs are very high.
“I’m thinking of opening a play centre – I’ve found a suitable building –
planning to open in a month”
Hang On- If your start up is less than 3 months start to finish- it is probably that
you have not done sufficient research. Many PPA members have been years
in the planning stage and various obstacles such as planning, finance are big
obstacles to overcome.
“We have put everything on the line to start this business”
Don’t start a business if you cannot afford to do so… There are a lot of people
who have lost money from the indoor play sector- whose to say you wont be
part of these statistics
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3) What makes a successful
play centre? Top ten…
1) Business Planning – Do it yourself!!
No two sites are the same… Don’t rely on figures supplied by
manufacturers to base your business plan on
2) Don’t just build another play centre… build an attraction where
people want to spend time and therefore money at. Be innovative, Be
unique and above all else be different.
3) Costs- Be Realistic and Consistent
- People always over estimate their number of visitors and under
estimate the costs of running a centre
- Even in your start up stage invest in your brand and keep
everything consistent.
1) Business planning is essential
It is a map of your direction, It is a method of confirming what you want to do and what you
need to do to achieve it
It is integral to clarifying the viability of your business, It assists in setting budgets and financial
forecasts
Its ongoing… a work in progress business plan needs to be adaptable (ie- credit crunch)
It is your business, your future, and your responsibility so it needs to be your plan
2) Don’t just build another play centre
The vast majority of PPA members have sites which are more than a building with a standard
play frame in. This traditional play centre model is very outdated- things have moved on in the
past 5 years… not go back! Think about play experiences, technology, new products, classes,
parties…
Build a centre that is a pleasant environment for parents … They are paying … encourage
them to interact with their kids
3) Costs- Be Realistic and Consistent
Being underfinanced means you will struggle to build up the business in the way you would like
right from day 1. You need a cushion for the first few months of operation while customers and
party bookings build up… But at the same time unless you are setting up a premium site in an
affluent area- don’t over spend on your fit out.
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4) What makes a successful
play centre? Top ten…
4) RESEARCH, RESEARCH, RESEARCH
Speak to customers, local influencers, search the internet, visit other
attractions and centres, look abroad for inspiration? Get your model
5) LOCATION, LOCATION, LOCATION
Don’t settle for anything but the building that fits your plan.
Does it have room for growth and change? Outdoor space, parking, transport
links
6) Get the scale right!
Match your local population to centre size. A big empty site is a big
cost
4) RESEARCH, RESEARCH, RESEARCH
First of all you must decide what sort of business you would like it to be; that decision
determines the space it will need and the budget required to achieve it.
Think about what you want your business to achieve – its business goals and objectives
Look around at similar businesses for ideas and to see what they are doing (the internet is a
brilliant tool for researching other operators via their web sites).
Pick plenty of attractions to go and visit in person, not just play centres, and observe in detail
the layouts, the visitor experience, the staffing levels, what works and what doesn’t work.
Watch how children react to events.
5) LOCATION, LOCATION, LOCATION
Will it suit the business you have in mind? Many people look for long periods of time for the
right building, and many (in desperation) in the end pick a building that does not suit just
because it is available and affordable. If the building does not suit the business that you want
to run, it could seriously affect the results. It is a hard but crucial part of your business success
to find the right location.
6) Get the scale right!
Be as sure as you can be that your business is of the right scale for the sector, the location, the
local markets’ needs and demographics by doing the research
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5) What makes a successful
play centre? Top ten…
7) New idea’s keep them coming
8) Know your market- match your brand
9) Competition – You have been warned!
Competition comes not just from other play centres, but other leisure
attractions such as swimming, bowling, the cinema.
10) The bar is raised- Invest and raise it further or fail
7) New idea’s keep them coming
Keep the new ideas coming- change party packages, food offerings, freshen up the site, add new pieces of
equipment, run campaigns and entry offers… anything to attract and retain customers.
8) Know your market- match your brand
Which socio economic groups are you aiming for? Less affluent- infrequent visitors, yummy mummies,
age range of kids??? Toddlers and pre schoolers or more of a visitor attraction for older kids. Think about
opportunities with schools and clubs. Don’t locate a million pound play centre in deprived areas… It sounds sensible
but it has been done and lost the operators in question – hundreds of thousands of pounds.
9) Competition – You have been warned!
Competition is the main reason why sites fail… Don’t open where there are other local sites or leisure / entertainment
venues ! Simples
What other attractions are there around which will take the leisure customer away from your centre? Look for
swimming pools, many of which are now free of charge to children, cinemas, bowling, and leisure parks. What else
do parents have available to spend their leisure pound on during term time and during holidays?
Many people automatically look for a building in their local area when setting up, convinced that they can do a better
job than existing play centres around them. However, often that just dilutes customers to all play centres so that, in
the end, no-one thrives. Look further afield as well.
What other attractions are there around which will take the leisure customer away from your centre? Look for
swimming pools, many of which are now free of charge to children, cinemas, bowling, and leisure parks. What else
do parents have available to spend their leisure pound on during term time and during holidays? Competition comes
in many forms
10) The bar is raised…
Many play centre owners have become more professional in their approach, with regard for branding, marketing and
differentiating their centres from other competitor businesses; they take it seriously, and in doing so, create improved
opportunities for success. Match and exceed these new levels or face failure
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7) New idea’s keep them coming
Keep the new ideas coming- change party packages, food offerings, freshen up the site, add new pieces of
equipment, run campaigns and entry offers… anything to attract and retain customers.
8) Know your market- match your brand
Which socio economic groups are you aiming for? Less affluent- infrequent visitors, yummy mummies,
age range of kids??? Toddlers and pre schoolers or more of a visitor attraction for older kids. Think about
opportunities with schools and clubs. Don’t locate a million pound play centre in deprived areas… It sounds sensible
but it has been done and lost the operators in question – hundreds of thousands of pounds.
9) Competition – You have been warned!
Competition is the main reason why sites fail… Don’t open where there are other local sites or leisure / entertainment
venues ! Simples
What other attractions are there around which will take the leisure customer away from your centre? Look for
swimming pools, many of which are now free of charge to children, cinemas, bowling, and leisure parks. What else
do parents have available to spend their leisure pound on during term time and during holidays?
Many people automatically look for a building in their local area when setting up, convinced that they can do a better
job than existing play centres around them. However, often that just dilutes customers to all play centres so that, in
the end, no-one thrives. Look further afield as well.
What other attractions are there around which will take the leisure customer away from your centre? Look for
swimming pools, many of which are now free of charge to children, cinemas, bowling, and leisure parks. What else
do parents have available to spend their leisure pound on during term time and during holidays? Competition comes
in many forms
10) The bar is raised…
Many play centre owners have become more professional in their approach, with regard for branding, marketing and
differentiating their centres from other competitor businesses; they take it seriously, and in doing so, create improved
opportunities for success. Match and exceed these new levels or face failure
10
7) New idea’s keep them coming
Keep the new ideas coming- change party packages, food offerings, freshen up the site, add new pieces of
equipment, run campaigns and entry offers… anything to attract and retain customers.
8) Know your market- match your brand
Which socio economic groups are you aiming for? Less affluent- infrequent visitors, yummy mummies,
age range of kids??? Toddlers and pre schoolers or more of a visitor attraction for older kids. Think about
opportunities with schools and clubs. Don’t locate a million pound play centre in deprived areas… It sounds sensible
but it has been done and lost the operators in question – hundreds of thousands of pounds.
9) Competition – You have been warned!
Competition is the main reason why sites fail… Don’t open where there are other local sites or leisure / entertainment
venues ! Simples
What other attractions are there around which will take the leisure customer away from your centre? Look for
swimming pools, many of which are now free of charge to children, cinemas, bowling, and leisure parks. What else
do parents have available to spend their leisure pound on during term time and during holidays?
Many people automatically look for a building in their local area when setting up, convinced that they can do a better
job than existing play centres around them. However, often that just dilutes customers to all play centres so that, in
the end, no-one thrives. Look further afield as well.
What other attractions are there around which will take the leisure customer away from your centre? Look for
swimming pools, many of which are now free of charge to children, cinemas, bowling, and leisure parks. What else
do parents have available to spend their leisure pound on during term time and during holidays? Competition comes
in many forms
10) The bar is raised…
Many play centre owners have become more professional in their approach, with regard for branding, marketing and
differentiating their centres from other competitor businesses; they take it seriously, and in doing so, create improved
opportunities for success. Match and exceed these new levels or face failure
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6) How can you reduce the
risks of a start up
- Get as much information as possible
- Spend time and effort drawing up YOUR
business plan
- Be INNOVATIVE and different
- Join the PPA as an associate member
- PPA Start up guide
The key thing to remember is that this is your business, you are the key
personnel and it is your responsibility to create and manage the business plan.
It is your decision how big the play centre should be, it is your decision to set
the costs, and it is your future. There is plenty of advice available, and many
PPA members and API member suppliers will be willing to assist in all aspects
of your business planning, but you should be the one to create the business
plan that will develop your business. Play centres vary in results, even if they
are similar in size, for many different reasons (including the skills of the
operator), so any figures that suppliers and operators give are just guidelines.
Use their experience in your planning, but stay realistic and remember what
sort of business you want to run.
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