Baseball Batting Cages Business Plan

1.1 Mission

Barney’s Bullpen will provide a quality indoor baseball training environment for both the serious and the recreation-minded. The primary goal for the Barney’s Bullpen staff is to promote baseball fundamentals of offense and defense for all ages. By focusing on our primary goal, Barney’s Bullpen will provide a service to the local youth, that will in turn generate a positive revenue stream for continued growth.

1.2 Objectives

1. Barney’s Bullpen will commence operation in the spring.
2. In the first year of operation, we expect a conservative 20% usage.
3. For the second year we project a growth rate of 25%.
4. For the third year we expect to match the community growth rate of 15%.

1.3 Keys to Success

1. Our great location.

1. High quality customer service.

1. Contracts with skilled local baseball instructors.

1. So many options under one roof – customers never get bored!

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Barney’s Bullpen will be a for-profit North Dakota corporation. We will lease an approximately 15,000 square/ft. facility where we will offer a central, indoor location for guests to learn and practice their baseball and softball skills. The facility will include batting cages, pitching areas, team skills areas, meeting area, equipment rental, & rest area. In addition to the facilities, Barney’s Bullpen will offer specialized group coaching clinics and one-on-one skills training, and will facilitate youth league board meetings.

Youth baseball and softball programs have exploded in popularity over the past 10 years.  Informal surveys indicate that facilities offering similar amenities draw guests from up to 40 miles away, if the facilities can provide a safe, clean, state-of-the-art facility for honing baseball and softball skills.  Within a 20 mile radius of the proposed facility, there are 4,000+ children in little league baseball, 2000+  in girls softball, 2500+ in adult softball, 300+ in High school Baseball/Softball, and 4 colleges. All of these are potentially regular customers for Barney’s Bullpen.

Parents are looking to give their children an advantage over other children in organized sports activities.  Group coaching is simply not enough to give children the proper skills required to play at an above average level in baseball and softball.  Private coaches and skill trainers are fully booked by eager parents looking for one-on-one training for their child.  “Select” baseball and softball leagues are increasing in popularity and advanced skills training is an absolute requirement for participants in these activities.  This indoor facility will cater to the increasing need of individualized skills training on a year-round basis.

Barney’s Bullpen currently has little to no competition within the service area.  There is one outdoor batting cage facility located in Cedar Hill, approximately 10 miles away from the proposed location.  This facility is closed during inclement weather and has limited utilization during the hot summer months.  The next closest facility is in Euless, 20 miles from Duncanville and 40 miles from Waxahatchie. This business was opened in two years ago by two youth league coaches who saw a need for this type of facility. Through personal experience, we found that a two-hour wait was common on winter weekends if you did not have reservations. Weeknights did not require reservations for the batting cages, but one-hour waits were common. The team skills areas require reservations. The indoor competition is open for 53 hours a week while the outdoor facility has a potential of 50 plus hours a week, depending on weather.

Barney’s Bullpen will provide a quality indoor baseball training environment for serious athletes and amateur enthusiasts. We project a conservative facility usage of 20% for the first year and a 25% growth rate for the second year. Barney’s Bullpen is a business that will flourish in the growing sports environment of the Best Southwest area of Dallas county.

1.1 Mission

Barney’s Bullpen will provide a quality indoor baseball training environment for both the serious and the recreation-minded. The primary goal for the Barney’s Bullpen staff is to promote baseball fundamentals of offense and defense for all ages. By focusing on our primary goal, Barney’s Bullpen will provide a service to the local youth, that will in turn generate a positive revenue stream for continued growth.

1.2 Objectives

1. Barney’s Bullpen will commence operation in the spring.
2. In the first year of operation, we expect a conservative 20% usage.
3. For the second year we project a growth rate of 25%.
4. For the third year we expect to match the community growth rate of 15%.

1.3 Keys to Success

1. Our great location.

1. High quality customer service.

1. Contracts with skilled local baseball instructors.

1. So many options under one roof – customers never get bored!

2.1 Start-up Summary

We need less than $80,000 of start-up funding to cover the costs associated with opening our business. We will finance these start-up costs through investment and an SBA loan. The details are shown in the following table and chart.

2.2 Company Ownership

Barney’s Bullpen has been created as a Limited Liability Corporation based in North Dakota, owned by Barney and Jen Crouch. The legal name is listed as Barney’s Bullpen, LLC.

4.1 Market Segmentation

High School Baseball/Softball Teams:These teams need indoor practice space since their seasons start in late February. Most of the high school programs now start at the beginning of the school year, and most of the players participate in fall leagues that last until the end of October. Practice is limited to school gyms during the winter months.

Youth Leagueswill be the mainstay of this business.

• Recreational Baseball:These players typically start practicing in late April when weather allows them to venture outside. This season usually runs for 5 months.
• Classic Baseball:These players will play games for 8 to 9 months out of the year and most will practice or attend private instruction year-round. 75% to 80% of these players attend weekly hitting and pitching instructions from October to February. A smaller percentage will seek year-round instruction.
• Girls’ Softball:Girls’ softball is similar to the classic leagues in that games are played 8 to 9 months a year. A smaller volume, 25% to 30%, seek off season training.

Adult Softball Leagues:These leagues consist of men, women, and co-ed divisions. These leagues play almost year round combined with tournaments and league play. We expect to draw mostly from the competitive divisions.

Other potential customers are the youth groups at local churches and team building events for area businesses.

4.2 Target Market Segment Strategy

We will focus on the Classic or Select baseball players and high school players to start. Although we will make a profit with these customers, we will expand our focus to include all areas of baseball and softball as the facility will allow. By focusing on the classic player, we can maximize the advantages of our indoor facility, by catering to their desire to keep up and improve their skills all year. However, the high school and collegiate teams will provide a stable repeat customer base.

4.2.1 Market Needs

Parents are looking to give their children an advantage over other children in organized sports activities. Group coaching is simply not enough to give children the proper skills required to play at an above average level in baseball and softball. Private coaches and skill trainers are fully booked by eager parents looking for one-on-one training for their child. “Select” baseball and softball leagues are increasing in popularity and advanced skills training is an absolute requirement for participants in these activities. This indoor facility will cater to the increasing need for individualized skills training on a year-round basis.

4.3 Service Business Analysis

Barney’s Bullpen is a service oriented business; it also has tendencies of a entertainment business. Some of the customers will be looking for a place to go for an evening’s entertainment or even stress relief, while others will be looking for a facility to train seriously. Players, parents, and coaches have comfort zones that can be difficult to work with at times. One of the challenges for the staff at Barney’s Bullpen is to be alert to the varied needs of the customers.

Leagues need places to conduct meetings during the off season, coaches want access to a variety of facilities at a moment’s notice, and parents want private lessons for their children. Other areas that may need to be evaluated are theme events for church or business groups, dedicated time slots to local professional athletes, or sponsor a tournament.

Because batting cage facilities can host so many different kinds of customers, and fulfill so many different market needs, the most important initial step for many is deciding on a focus and following through with appropriate advertising, hours of operation, and customer service. Having distinct nights or sections of the facility set aside for different age groups or interests will prevent skilled players from getting frustrated waiting for amateurs to finish “playing,” while keeping customers who are just out for fun from feeling condescended to by more serious players or employees.

4.3.1 Competition and Buying Patterns

The current direct competition for this business is an outdoor-only facility in City F that has 6 hitting lanes. The only indoor facility with comparable services is 20 to 40 miles away, depending on what part of the service area customers come from. While competition is limited, we must still work hard at providing convenient hours of operation, quality service, and fair prices to grow the business and encourage repeat customers.

Our location is a key competitive edge – we are located only 1 mile south of the high school and is 1 block off a major intersection, making us easily accessible to high schoolers and parents dropping off or picking up children. In addition, this facility is 2 blocks from 40 acres of vacant land owned by the City. The city officials are investigating the possibility of building a 12 field baseball/softball complex at this location. This would bring thousands of players to the city on a yearly basis for week-long tournaments.

We are, of course, also competing with after-school programs, other athletic events and team activities, and other unrelated entertainment choices. The choice for committed baseball fans and players will be easy, but our challenge is to convince children, their parents, and other local residents that Barney’s Bullpen is the best way they could spend an evening or afternoon. We are more healthy (and more fun) than watching TV or going to a movie; for a large family, we are more affordable than going to a movie or a mini-golf range, since rates are per lane, not per player; we are more convenient than driving to City F.

Our success depends on establishing a loyal repeat clientele who bring their families, friends, colleagues and peers to Barney’s Bullpen. Our website will help get the word out, but monetary sponsorship for the local leagues and word-of-mouth will be more relevant to local residents, who expect local businesses to be involved in community life.

5.1 Competitive Edge

Barney’s Bullpen will start with a critical competitive edge: there is no competitor we know of within a 20-mile radius of the targeted area that has a facility of our type. The management also has a 9-year relationship with the targeted youth leagues, as well as the high schools and colleges. In addition to these attributes, the management at Barney’s Bullpen has an extreme love of the sport and enjoys teaching baseball skills to all levels.

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5.2 Marketing Strategy

Marketing for the Barney’s Bullpen will differ throughout the year, depending upon demand for the facility. During the winter, when weather restricts outdoor activity and leagues are not playing, we will not need to do as much marketing or advertising. However, during late spring and early summer, we will need to make sure we remain in front of our customers.

Startup Marketing:

• E-mail notification to 75+ local classic coaches in the target area. The e-mail database has already been compiled.
• Flyers distributed to the high school and college coaches in the target area.
• Advertisements at local sports businesses and facilities.
• Advertisements in local papers.
• Word-of-mouth.
• Barney’s Bullpen website.

Spring and Summer Marketing:

• Make donations to area youth leagues in the form of registration forms with attached discount coupons. This will in turn have us listed on the website of each league as a league sponsor.
• Spring break and school holiday specials.
• Attend league coaches’ meetings.
• Summer programs: hitting leagues, June – August discounted summer pass, and clinics.

Fall and Winter Marketing:

• Advertise in local papers.
• Word-of-mouth.
• Barney’s Bullpen website.

5.3 Sales Strategy

We will direct our sales efforts and funds to the primary customer base. Coaches, parents, and players will be informed of the facility and services through e-mail and direct contact. Sales efforts during the start-up phase will be direct and beneficial for the customers. Continuous sales efforts will vary depending on the time of year.

Startup Sales Strategy for the first month:

• Monday through Thursday – 2 for 1 batting tokens.
• First 100 customers receive a Barney’s Bullpen shirt.
• A discount coupon received for each utility lane rental.
• Door prizes for weekend customers (i.e., Rangers’ tickets, summer passes, and gift cards)

Sales Strategy:

• Discount membership packages.
• Yearly league donations.
• Spring break and school holiday discounts.
• Trophies for Fall, Winter, Spring, and Summer hitting champions.
• Tournament specials. Discount coupons given to league officials to pass out to teams attending local tournaments.

5.3.1 Sales Forecast

We expect sales to peak October through March; the rest of the year will be slower but could be higher than forecasted due to weather conditions for the local area. In 2005 and 2006, we expect 10% to 20% sales growth as we add new services and the customer base grows. We will do sales on credit only for businesses and large groups with whom we want to establish long-term relationships. We are estimating 10% of sales will be on credit.

Our direct Cost of Sales are limited to the fees that we pay to individual Instructors and Skills & Drills League prizes. We keep 20% of instructor fees as a facilities usage fee, and pay the other 80% to our independently-contracted Instructors within the same month that sales are recorded. We estimate that about 50% of the registration fees collected for the Skills & Drills League will be used toward the prizes awarded to the best three contestants.

The operating costs for maintenance, repair, and replacement of equipment as it becomes worn out, broken or lost are reflected in our Profit and Loss table

5.4 Milestones

The following milestones are to be used as a roadmap to the success of Barney’s Bullpen. The marketing milestones will be ongoing. While the Internet site will be a useful tool in marketing, it is not critical that it be launched on opening day. The dates given for the Web milestones are optimistic. All other milestones will need to be followed as closely as possible.

6.1 Development Requirements

The website will be initially developed with few technical resources. A simple hosting provider, such as Yahoo! Web services, will host the site and provide the technical back end.

The website, logo, and graphics will be developed over a period of the first year. The home page with critical data will be up before the start date. Maintenance of the site will be performed by the Barney’s Bullpen administrator.

7.1 Personnel Plan

The following table is a projection of personnel. The only full-time employee is Barney Crouch; Jen will work part-time as our bookkeeper and fill in as a supervisor when needed. We will hire up to two part-time employees to help with cleaning and cage reset, but at least one of these positions will be largely seasonal. We expect to draw our part-time employees from boys we know on the local high-school baseball team.

Our instructors are independent contractors; their fees are listed as direct cost of sales in the Sales Forecast table.

8.1 Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the following table as annual assumptions. The monthly assumptions are included in the appendices. From the beginning, we recognize that repeat business, weather, economic conditions, and growth of youth sports will determine our success. These reasons are why we have chosen a conservative revenue stream.

Two of the more important underlying assumptions are:

• We assume a strong economy, without major recession.
• We assume, of course, that there are no unforeseen changes in the growth of classic baseball participation to make our services immediately obsolete.

8.2 Break-even Analysis

The following chart and table summarize our break-even analysis. This projection is based on very conservative estimates of revenue.

8.3 Projected Profit and Loss

Our projected profit and loss is shown on the following table, with sales increasing from more than $200K the first year to more than $300K the third year. We show a profit in the first year with a relatively low sales forecast.

We are projecting very conservatively. The detailed monthly projections are included in the appendices.

8.4 Projected Cash Flow

The following section shows the cash flow projections for Barney’s Bullpen for the first three years. These include repayment of the principal on a 5-year $70,000 SBA loan in equal monthly payments of $1,167, which we start repaying after the first three months of operations.

Cash flow projections are critical to our success. Our cash balance will reach its minimum in mid-2004, during a low season in the first year of operations. We believe that if we manage our cash wisely during this critical period, the following months’ cash flows should be sufficient to cover all our expenses.

The annual cash flow figures are included here and the more important detailed monthly numbers are included in the appendices.

8.5 Projected Balance Sheet

The balance sheet in the following table shows conservative growth of net worth, and a sufficiently healthy financial position. The monthly estimates are included in the appendices.

8.6 Business Ratios

The following table shows the projected businesses ratios along with comparisons for our industry, baseball batting cages (SIC Code 7999.9903). We expect to maintain healthy ratios for profitability, risk, and return.