The indoor playground has become extremely popular as a concept for leisure activities in Germany. Once rare, today around 400 Family Entertainment Centers (FEC) present their offerings. This makes the indoor playground an integral part of leisure activities for families. After all, children at a playground that is inside are not dependent on the weather. No matter if it’s storming or snowing. The little ones still have fun. And still at manageable costs.
But the market is growing. So, founders have to give their own indoor playground a lot of thoughts. Contigo has been supporting this since 2005. We have compiled our thoughts and experiences for the planned self-employment with an indoor playground here:
FOUNDING AN INDOOR PLAYGROUND. THE BUSINESS MODEL
The indoor playground is usually found in large halls like former tennis halls, storage areas or old factories. Then there is of course much more than the typical playground equipment that one can find in conventional playgrounds. Finally, an indoor playground charges admission. The attractions range from bouncy castles to trampolines, from climbing frames to electronic playground equipment karts or slides.
To be successful with your own indoor playground it needs a convincing concept. Accordingly, the right choice of business models is important. Contigo offers support here as well. In the independent implementation or the possibility of founding an indoor playground as a franchise.
Starting an indoor playground as a franchise
Anyone who opens an indoor playground is on their own for the time being. This brings advantages as well as disadvantages. One big advantage is the independency. In this there can be a disadvantage as well: The future concept first needs to establish itself. There is no empirical value yet. The risk is not insignificant. But the founder has full entrepreneurial freedom.
The situation is different when founding a company with a franchise. Although one makes oneself self-employed with an indoor playground, but the risk is distributed. The biggest advantage is having an experienced partner by your side who has already successfully built up several indoor playgrounds. Such a franchisor knows what matters and what is especially important in the following areas:
- Business plan specifically for the indoor playground
- Concept with complete equipment
- Choice of location
- Structural precautions
As franchisee you benefit from the relationships that the franchisor has with suppliers and partner companies. This helps with the equipment of the indoor playground as well as with the equipment in the gastronomic area. Usually, these advantages are paid for by an admission fee and a fixed share of your turnover to the franchise headquarters.
Take over an indoor playground
Often there is also the possibility to take over an already existing indoor playground. Sometimes this may even be better than starting your own indoor playground. This has many advantages:
- You don’t start from scratch in the planning. Nevertheless, you can then expand or convert the indoor playground according to your own ideas.
- You save yourself from possibly lengthy authority courses.
- Also, the experiences and turnover figures of your predecessor are valuable.
- Discernible financial securities for a future financing.
- Customers are already existent as well as a team that is working well together and suppliers.
However, it is often difficult to acquire a good indoor playground. If the numbers of the last years were alright, the purchase price won’t be insignificant either. After all, why sell an indoor playground when business is good?
The right financing for the indoor playground
The right concept for the indoor playground is just the beginning. Now it is necessary to finance the suitable building, the playground equipment and also the equipment for the gastronomy. A total investment of around 500 thousand Euro is not uncommon here.
This requires a strategy for financing the future indoor playground. Attention must be paid to the following costs:
- Costs for the purchase or rental of the hall
- Possible conversion costs
- Investment in playground equipment and furnishing
- Marketing and founding costs
- Personnel costs
- Future operating costs and insurances
- Your own cost of living
So, in addition to the initial investment, the running costs of the first few months after the founding must also be financed. After all, the indoor playground will not sell out from day one. Equity capital is also important. This should amount to about 20% of the total investment. Otherwise, it will be difficult even with the external financing.
The classic financing here is of course the bank loan. Depending on the concept and risk, banks and savings banks support such start-up projects. Often, these can be supplemented by promotional loans as well as guarantees. The alternative is a possible investor or shareholder sensibly, who perhaps enters the project. These do not demand the money back together with interest but expect a participation in the conversion. They thus share the economic risk.
The right concept for the indoor playground
Anyone who decides to start an indoor playground should do extensive research. Here it is important to know the competition and comparable offers. A few questions can help:
- Who is the competitor?
- What is the focus of that indoor playground?
- What is particularly well liked?
- How can it be done differently or better?
Of course, adults are important, too. After all, parents are always there. So what do other indoor playgrounds offer to help parents to pass the time as well? How about a parents lounge? Or a special gastronomy?
And ultimately, the goal is not to copy other indoor playgrounds. Rather, it’s more about bringing together the best ideas. This is the only way to create a truly functioning concept for the indoor playground. The target group is important. Maybe you can get into conversation with parents during the competitive analysis. Perhaps the operators are also open to a conversation.
Open the indoor playground
Before the indoor playground can get started, of course, some requirements must be met. Only then you should think about building, buying or renting the indoor playground. For example, a business must be registered. In addition, the building must comply with the current fire protection and safety regulations. Furthermore, it must be ensured that an indoor playground is permitted at the chosen location in the first place. For this purpose, information can be obtained in advance from one’s own district administration or municipality.
Future safety is also an important issue. Along with high quality standards of the playground equipment, one’s own security must also be taken into account. So, in addition to special insurance policies, the general terms and conditions are also important. Some indoor playgrounds even explicitly point out a possible risk of injury.
The business plan for the indoor playground
Anyone who wants to open an indoor playground first faces high investment costs. Thus, in most cases, financing for the indoor playground is necessary.
In order to convince banks and saving banks, but also investors, it requires a solid business plan. After all, this business plan will show future financiers whether the business idea and the business model are coherent. When is it likely to make money? And how profitable can the future company be?
Important elements for the indoor playground business plan are:
The Property of the indoor playground
Is the hall suitable? Is there a height of 6 meters? Is the floor space sufficient for playground equipment and the gastronomy? In addition to the size, it is important that there are enough parking facilities. A direct bus and train connection can also be valuable.
Just as important as accessibility is the catchment area. Do enough children live there? Are there perhaps other attractions such as zoos or parks in the area? This can actually be positive and might provide an influx of visitors with families. The nearest indoor playground is also important. Direct competition is not always wise.
The offer and the equipment in the indoor playground
It’s not enough to just put some playground equipment in a room and hope the kids will come on their own. If you want to start your own indoor playground, you need the right concept and the right equipment. Among other things, this also depends on the intended target group. For example, should children of all ages be addressed? Or perhaps a concept for the very young is the most suitable? The average age here is 3 to 14 years. But even beyond that, children still like to play. Here, instead of the ball pool, climbing walls or the high ropes course would be more suitable. Or special events provide the corresponding audience. Almost anything is possible.
In any case, quality is important. Corresponding certificates should be available. Here, the TÜV is an important partner.
Advertising and marketing for the indoor playground
Future advertising or proper marketing for the indoor playground is also part of a good business plan. Besides a well thought-out and appealing website, direct contact with the target group is also important. Here, flyers are just as useful as addressing them through facebook and Instagram. Contact with schools, daycare centers or the tourism association is also very valuable. And finally, the regional media also provides a lot of attention. It is therefore important to put together a good mix and incorporate it into the business plan.
Contigo – Concept for the indoor playground
Contigo offers a comprehensive range of services for founding an indoor playground. As the only German provider we deliver the business plan, the concept, the equipment and also the special marketing for the indoor playground. A cash register system especially developed for the indoor playground and the trampoline park completes the service portfolio.