How to Start an Indoor Playground & Party Center for Kids

Indoor party centers provide lifelong memories for children.

You should never take a decision to start your own business lightly. As the old joke says, the best way to have a million dollars in the bank is to start with 10 million and open your own business. But since the Federal Interagency Forum on Child and Family Statistics estimates that by 2020 there will be 80 million American children who will represent 24 percent of the U.S. population, if you create a viable business plan and execute it carefully your playground and party center can be an immense success.

Things You'll Need

• Start-up capital

Instructions

1. Conduct a comprehensive market analysis to evaluate the viability of your idea. Gather objective data to understand the behavior of your target consumers before you invest sizable start-up capital and energy. Conduct demographic research on the population of your party center's intended geographic location. Take into consideration statistics like how many children live in a 10 to 30 mile radius, and their parent's median income. Research potential competitors, including both free and paid options parents already have. For example, many fast food restaurants already offer indoor playgrounds and special party packages for children on their birthday.

2. Evaluate your competitors as their customer to understand their advantages, then determine how to differentiate your business in the minds of consumers by creating a unique product or through unique marketing strategies. Create a business plan that incorporates the results of your market research and competitive analysis. Include the niche concept for your indoor playground in your business plan. According to New York Magazine, the party center marketplace is filled with niche providers that offer children special themed parties that range from cooking and make-over parties to ice-skating, rock-climbing, soccer and arts-and-crafts parties.

3. Include specific information about your revenue model and intended marketing strategies in your business plan. Party centers make money by renting space, selling party supplies and offering on-site party catering. Consider innovative profit centers like offering professional photography to parents for parties, and selling toys or customized story-books to the kids. In addition to traditional advertising, party centers acquire new customers through referrals and by having conspicuous signage that parents see while commuting, which requires being centrally located in a high-traffic area. Also include a detailed analysis of your projected costs including facility rental or purchase, playground equipment costs, insurance and marketing costs.

4. Implement your business plan. Rent a facility and refurbish it to the specifications of your theme, ensuring your facilities comply with local regulations on children's playgrounds, as well as industry best practices. Create a logo and trade dress for your brand so that it can be prominently featured in your facility and on outside signage. Hire staff to provide the services you decided on as profit centers for your business; this could include catering staff, bakers and cake decorators, photographers, children's entertainers and concession cashiers. Ensure you have the permits and business licenses you need to operate.

5. Begin marketing your services. You will determine what party packages and pricing to offer based on your market research and competitive analysis. Launch an advertising campaign on radio, television, newspapers, billboards and other media where you can reach your target consumer. Consider marketing initiatives like an open house for local children, a free play hour, community events and targeting local schools and kid's sports leagues. Remember to market to both the kids as well as the adults.

Tips & Warnings

• Decide your party center's legal structure based on the way you finance your start-up costs. If you are taking on partners, consider a limited partnership or limited liability company. If you are self-funding or taking out loans, consider forming a corporation.

• Offer services that are aligned with the cultural demographics for your area such as quinceañera parties to consumers with Hispanic heritage, and bar mitzvahs or bat mitzvahs to consumers with Jewish heritage.

• Consult a lawyer on how to structure your business, negotiate real estate lease and equipment rental contracts, create parental waivers and design programs to reduce liability against things like allergic reactions and injuries.

References

• "New York Magazine Family Guide"; The Party Lines; Susan Avery; Fall 2003
• "Entrepreneur Magazine"; How to Research Your Business Idea; Karen E. Spaeder
• "Kiplinger's Personal Finance"; Six Steps to Starting Your Own Business; Elizabeth Kountze; 2006
• Small Business Association: Follow These Steps to Starting a Business
• StartupBizHub.com: Kids Birthday Party Place Business
• "Entrepreneur Magazine"; How to Start a Kid-Focused Business; February 2008

Resources

• Read this Article in Spanish
• ChuckECheese.com: Franchising
• "New York Magazine Family Guide"; The Party Lines; Susan Avery; Fall 2003
• SmallBizBooks.com: Kid-Focused Businesses Start-up Guide
• "The Small Business Start-Up Kit: A Step-by-Step Legal Guide"; Peri H. Pakroo J.D.; 2010
• "Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers"; Alexander Osterwalder, et al.; 2010