Just as when you enter any new business, a market research up front will help you make reasonable financial projection, find the best strategy, and invest in your play center with confidence.
Your market research will help you answer the following questions:
What is the market need and potential in your area;
How is the competition;
What are your opportunities;
1) The market need and potential in your area:
The market need for indoor playground is real and substantial, which is proven by tens of thousands of indoor playground and family entertainment centers that exist in mature markets like the United States, UK, and China. To find out how big the market is in your area, this is what you can do:
The target customer of indoor playground is children with age range from 2 to 12 (depending on what sections you will have), a simple way to find out the number of your target customers is the demographic data provided by your local government. For example if the data shows that there are 10,000 children with age between 2-12 in your town or district, you can expect 2,500 to 4,000 of them will eventually become your customer.
If such data is not available or if you want to have first-hand data, you can calculate how many children there are in the pre-schools, daycare centers, and elementary schools in your area.
The number of children related business in your area can also be a good reference, such as toys stores, early learning centers, shops of mother and baby products.
2) How is the competition in your area:
If there is no any indoor playground or family fun center in your area, then congratulations, you have a great chance of taking the market by storm; if there are already competitors in your area, you should observe them and analyze their strength and weakness, and think about your strategy:
The first thing you want to find out is how successful their business is, this can be done by checking out their prices, and do a head count of customers, because the visitors number fluctuates much by days, you should visit them on both week days and weekend days, and count the total visitors of the entire opening hours.
Then you should observe the competitors for their strength and weakness, such as, how attractive their play equipment is, what other services they offer except for playground, how helpful their staff is, what marketing activities they do, how is their playground maintained. By finding out the competitor’s weakness you will know how to differentiate your own play center and beat them.
If the competitor’s business is not good, do not be deterred yet, it may be the result of a variety of reasons, for example, old and outdated play equipment, bad location, cost is too high, or limited revenue source, Funlandia offers you the newest play equipments at the manufacturer’s price, diverse revenue sources, and support in every step of setting up an indoor playground business, so the failure of the other play centers may be actually your opportunities.
3) What are your opportunities:
Indoor play center can include a number of different sections and come in different forms, it can be fully customized to fit with the various market opportunities you’ve discovered in your area.
For example, if there are already too many soft contained play centers that target children 2-5 years old, you can consider open a ball-o-city ball blaster playground that targets children from 5-15 years old; if the other play centers have very limited options of party supplies, your play center can be the no.1 party venue by having the coolest party products; if you do not have sufficient capital for opening an indoor playground, you can cooperate with local stores and install a few kiddie rides. The opportunities in children play business is limitless, you just need to find the one that best suits your market.
After you complete your market research, the data and information you have collected will help you complete your financial analysis, and devise a good market strategy.