Top 10 reasons why Indoor Play Centres Fail

Last year, I received complaints from suppliers of Soft Play Equipment after an industry figure posted the following comments on Twitter:

“Sad day, another new playcentre has gone! A fantastic dream, in the hands of a liquidator. Sad news! Once again, sold by a certain manufacturer knowing they were building another a few miles down the road! I want their heads on a plate!!!”

“Please don't think about starting a playcentre without talking to the xxx first, certain manufacturers will give you incorrect advice!”

After these comments were once again referred to in a recent conversation, I started thinking about why it had upset so many people (is it the emotion, the tarring of all play suppliers or the use of the situation to try and build business / credibility for this organisation?) and perhaps more importantly, how inaccurate the comments are in identifying the reasons why play centres fail (do you blame a kitchen supplier when a restaurant ceases trading)?

It is without doubt tragic and sad to see Entrepreneurs suffer financial and emotional hardship, I say this from personal experience of starting several companies. Unfortunately, it is a fact of life that businesses of all sizes and in all markets occasionally fail; the rate of failure for play centres is actually lower than for other businesses.

In reality, you could argue that the indoor play market has not suffered enough creative destruction, that as an industry, we haven't failed enough, learnt from and innovated upon the lessons of the past enabling a thousand flowers to bloom, the business model has not evolved to become more resilient and offer better value to the end customer; perhaps this is partly because it is all too easy to blame play suppliers (and others) for our failings.

So here it is, based on over fifteen years in the market, my top ten reasons why Indoor Play Centres fail:

1. Poor Management and / or Leadership
2. Ill-informed Business Plan / Business Model
3. Failure to achieve sales targets / over reliance on traditional sources of income
4. Lack of Experience
5. Lack of Cash / Finance and / or incorrectly structured debt
6. Loss of interest / passion by the owners
7. Location / too much competition
8. Overspending at the start of the project
9. Limited value in the offering / nothing unique to differentiate one play centre from another
10. Bad luck or timing

If your Soft Play Equipment collapses (that should never ever happen), the supplier goes out of business with your deposit or they just don’t show up, they would then make my list of top twenty reasons but other than that, sorry, they are not to blame.

I will begin to post details of how you can mitigate the risk of the above; after all, the entire industry should want every play centre to be a success.

PS. Choosing a Soft Play Supplier is an important part of your start-up process, this guide (How to Choose a Soft Play Equipment Supplier) will help you select the right supplier for you. Of all the criteria you use to make your choice, I suggest you don’t worry about whether they supplied a local play centre (indeed, to many it is seen as sign of a good supplier).

Emotion may mean that you want to stop them from supplying anyone else locally, that just doesn’t make sense. The play equipment will be a component of your success (or otherwise,) it simply won’t be the determining factor; you should want your supplier to be successful as well so that they can innovate and help you grow.

ShareAndComparePlay.com is the Indoor Play Supplier Comparison Website that Saves Play Operators £10,000s. The only source of independent reviews on every Supplier to the Play Industry, ShareAndComparePlay.com works to revolutionise the Play Experience for Children and to enable Businesses to profitably understand and meet the future needs of Families.

What Play can learn from (Bikram) Yoga...

I am a Yoga devotee, or more accurately, I was until a prolapsed disc meant “Downward Facing Dog’s” were replaced by MRI’s; my Yoga days were numbered unless I fancied risking the Surgeon’s knife.

However, a few months ago I rolled out my mat to try “Bikram Yoga” (aka Hot Yoga) after reading it could help serious back issues.

Although my personal fitness may not be of interest, the “business model” of Bikram should be; it makes for an interesting case study for the indoor play industry and anyone designing a scalable business model.

Yoga has been around for thousands of years, the UK market for “teachers / classes” is very fragmented and “studios” include gyms and school halls; although a large market, it was predominantly a “cottage industry,” a larger version of the indoor play market.

In contrast, Bikram Yoga is a multi-million dollar global business and it is interesting to reflect how this has been achieved, here is a brief summary:

• Bikram is an entire “business system” that delivers a consistent and reliable experience; it has been described as the McDonald’s of Yoga, in the context of scalability, this is a great compliment.

In contrast, most indoor play centres are not system based and the only Design that occurs involves the Soft Play Equipment. As a consequence, play centres are mostly operated by passionate and hard-working Entrepreneurs who work in the business, customers typically don’t see any difference between each centre and the perceived value is low. Simply, this has proven difficult to scale which in turn limits investment, recognition and innovation.

• The Bikram Yoga practice (a ninety minute series of postures and breathing practices done in the same order every time in a room heated to 110F) is designed to deliver exceptional health benefits in a safe and challenging manner; their marketing strategies encourage you to trial the service, they are so confident that once you try, enough people feel the benefit and want to continue

Imagine a play centre capable of improving the health and happiness of children and adults; how much would you pay to use it? We know that play is critically important to Child (and Adult) Wellbeing and yet I have never seen an Indoor Play Experience / System designed to achieve desirable and holistic outcomes for which Parents (or Government) will pay a premium.

• The “process” of Bikram Yoga has been patented, thus forming a “barrier to entry” and providing income from intellectual property in the form of Franchising, Books etc…

With many Towns having several play centres and Barriers to starting a play Centre relatively low, the market represents an open goal for Entrepreneurs able to develop valuable concepts and accompanying Business Models. Now is a great time to invest in unique (think protectable) Brands, Concepts, Systems, Technology and Relationships that provide compelling reasons to visit.

• Bikram has introduced Yoga to new markets

In the last six months, I have introduced Bikram to friends and friends of friends that would never have previously considered yoga, it has now replaced their gym schedule and they drive hours out of their way to attend.

Think, what new markets can you cater for in a unique way? Children with special needs? Children between 10 and 14 years old? Schools needing Play Space or classes? Children wanting to get fit? Child Wellbeing rather than just Play?

• Payment in advance means not only is each business cash rich but the pricing strategy is designed to motivate specific behaviour before credits expire. The expiration of credit is a little annoying but it means I go more often, increasing the likelihood that I will feel the benefits and continue attending

Ryanair, Easyjet, Health Clubs, Insurance, Amazon, Google et al…each demonstrates how we can use pricing strategies to create / manage demand, generate cash and establish alternative revenue streams. Think carefully about your pricing strategy; not solely in terms of how much you should charge but how you want it to influence behaviour and help achieve your business objectives

• Real estate is precious, “sweat the asset”

It is perhaps apt to talk of sweating the asset but each studio is located in expensive areas for real estate, there are black dots on the floor to indicate where you can place your mat, thus maximising revenue per square foot. I am not sure if soft play operators think about maximising revenue per sq/ft but this is a good reminder of how every inch of space matters, you are paying for it, after all.

Here are a few steps to consider when designing your business model:

1. Develop unique added-value concepts and experiences that deliver exceptional benefits (protect your ideas if possible / valuable enough)

2. Design a Business System (everything from the IT System to hosting a party) that delivers consistent results and an opportunity to scale (i.e. design one centre as though you are going to build a 1000)

3. Allocate at least 10% of your project value to design services; engage a design firm that is capable of exploring your entire concept and creating a business system rather than just “designing” your soft play equipment

4. Implement, test and share knowledge rapidly to increase sales, reduce costs and most importantly, keep customers happy.

Please let me know your thoughts or any stories in play where people are doing the above.

ShareAndComparePlay.com is the Indoor Play Supplier Comparison Website that Saves Play Operators £10,000s. The only source of independent reviews on every Supplier to the Play Industry, ShareAndComparePlay.com works to revolutionise the Play Experience for Children and to enable Businesses to profitably understand and meet the future needs of Families.

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