How to finance and indoor area project ?

How much does an indoor play area cost and how do you finance this project?

Play In Business, specialist in indoor play areas for over 25 years, will answer both these questions in this article. 

Contents :

• The development budget
• The importance of a business plan
• Composition of the business plan
• Personal contribution

The development budget: how do you estimate it?

Calculating the budget for the building is difficult because it depends on its condition and composition: whether it has been fitted out or not, whether it is to be built, etc.

When it comes to furnishings, everything depends on the surface area of the indoor playground.

For example, you should expect to pay around €100,000 (excluding VAT) for a modular play structure with a surface area of 700 to 1,000 m², to which you can add trampolines, a climbing wall, a laser corridor and a go-kart track to make the most of your indoor play area.

And don’t forget the tables and chairs, the furniture for the birthday party rooms, the computers, the sound system, the decorations, the offices, the locker rooms, the kitchen equipment, the mascot, the outdoor signage…

Of course, you’ll also need to factor in ancillary costs such as any rental agreement, notary fees, legal fees, architect fees, engineering fees, inspection laboratory fees, etc.

Once you’ve estimated the budget you’ll need, it’s time to start working on your business plan, which is an essential document for obtaining finance.

The business plan for your indoor play area: why ?

The business plan is one of the essential stages in opening a leisure centre.

It will enable you to clarify all your ideas. But above all, it is the essential document if your bank is agree to finance your project of opening an indoor playground.

It defines your strategy and objectives. It must answer the questions that investors have and be particularly explicit, since financiers are not necessarily familiar with the characteristics of an indoor play area.

Never lose sight of the fact that the ultimate aim of the business plan is to convince your bank or any other investor that your project is viable and will be profitable.

The business plan: what does it consist of?

The Business Plan is the key element of every business start-up. It differs in content, since every company and every project is different, but it has a common form and content: 

• The presentation of the service offering: this explains the concept of your project, the nature of the market, the need it meets, the sources of income, etc.

• Project development stage;

• Market research: estimates, possible changes, regulations, customer and competitor research

• Strategies: origin of the project, planned development, pricing policy applied, communication plan, physical and financial requirements in terms of equipment and facilities, partnerships, suppliers, state of progress of the project;

• The development plan: operating schedule, market share, forecast sales, profitability;

• Human resources: role and skills of members;

• Legal structure: legal form chosen, amount and distribution of capital, changes in share capital;

• Financing requirements;

• Financial data: calculation of projected turnover, projected annual income statement, monthly cash flow plan for the first 12 months;

• Exit procedures for potential shareholders;

• Appendices: to supplement or corroborate the information provided.

Indoor play area – Personal contribution: how much start-up capital do you need?

The amount of capital required depends on the type of company you choose.

The Sarl, Eurl, SNC and SAS do not have a minimum capital requirement, unlike the SA, for which the minimum is 37,000 euros.

However, even if 1 euro is sufficient for most of the forms of company mentioned, the initial capital must be consistent with the investments. It is therefore inevitable that cash flow should cover working capital requirements. That’s why you’ll need to put up at least 25% to finance your indoor play area.

Think about interest-free loans, business start-up loans, subsidies from your region and department, and those offered by BPI France.

Don’t hesitate to contact Play In Business for any further information, particularly about the dedicated training we offer.