Ice Skating Training Facilities

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Business Plan for Ice Facility
& Recreational Complex


Introduction
      The following document is provided to serve as an example and the financial numbers and other information have been used just to illustrate what a proposal might look like. Ultimate Recreational and Fitness Center, Inc. does not represent a genuine and lawful business prospectus.

      The information is used only to illustrate the various elements that would be included and what a completed business plan would look like when assembled. Its purpose is to point out questions that need to be asked and answered to develop any business business plan. Promoters should spend as much time attempting to anticipate potential problems and the proving ways to eliminate, solve, or mitigate the possibility of events that could cause the project to fail or suffer serious financial obstacles.

      Meet with professionals in the field of land development, ice rink and recreational development, and facility design, combined with input from a management and marketing consultants, plus use financial, legal, and securities experts to craft the legal documents to develop and market your business plan.

Variety of Financial Tools Available
      There are many different financial tools that can be used to raise the money to acquire the land, construct the facility, and perform the business operations.

      Among the possibilities are a quasi public and private effort to accomplish such a project.  The ability of a public entity to issue bonds provides and excellent avenue to develop public land with a large sports and recreation center. A Park and Recreation Department, local school district, or a management corporation can operate the facility.

      The private sector can acquire land, raise the necessary funds, and operate the facility for stop by customers and membership groups/organizations that contract for use of the facility.

      The follow materials are provided to illustrate the type of analysis to accomplish the task of planning to design, construct, and operate a sports and recreational complex that will serve the needs of the community in which it is located.

Executive Summary

The purpose of this business plan is to raise $10,000,000 for the development of an ice skating facility at a site in Southern California. The organization will be known as the Ultimate Recreational and Fitness Center, Inc. and the expectation is to register as a Nevada or Delaware corporation because of favorable business regulations and taxes. 

The General Partner of the corporation is an experienced, well known, and widely respected member of the skating community with experience in developing skating rink facilities, food concessions, and hosting of events in the targeted market. The Ultimate Recreational and Fitness Center, Inc. was founded on July 20, 2010.

The General Partner is engaged in efforts to secure a minor league hockey franchise and plans a charter school on site as part of the business proposal.

Amenities and Services

The primary service offered by Ultimate Recreational and Fitness Center, Inc. is the design, construction, and management of the Ultimate Recreational and Fitness Center, Inc.. Within the complex there will be an Olympic size ice surface with planned seating for 5,000 spectators with six fully equipped "wet" locker rooms with showers for hockey and other events, plus six "dry" dressing rooms without showers, but equipped with sinks and toilets. Additional rest room facilities will be strategically located for visitors, spectators, and public skaters. Separate staff rest rooms and a lounge will be provided. All public and private areas of the facility will be will be assessable with ramps and elevators to meet the Americans for Disabled Persons Act regulations.

The Ultimate Recreational and Fitness Center, Inc. will provide skate rentals, public skating sessions, group/individual lessons, birthday/event hosting, and management services to promote curling, speed, hockey, and figure skating training for elite athletes. Additionally, the business will maintain a food court with a menu service including tacos, pizza, hot dogs, hamburgers, hot and cold sandwiches, soups, fruit and green salads, desserts, etc., plus an assortment of hot and cold beverages.

The food concessions are very important because it will provide an additional stream of revenue for the business while concurrently allowing parents of children to stay at the facility longer. Finally, the business will generate revenue streams from hosting birthday parties and to spectators who attend events in the arena and within the sports and recreation complex. The Amenities and Services section of the business plan describes in greater detail the services proposed in the facility master plan.

Financing

There are several methods of raising the necessary funds to acquire the land, construct the buildings, and operate the facility. These include for profit or nonprofit corporations and various General and Limited Partnerships. Legal advice should be obtained as to what financial tools constitutes a security and must be registered as such.

Plan A
The General Partner raises 10,000,000 from limited partners to acquire the land. The General partner arranges a 25,000,000  loan secured by the property for the construction. The interest rate and loan agreement are to be finalized prior to the start of the construction of the project. The business plan assumes that the business will receive a 20 year loan with a 7% fixed interest rate.

Plan B
The General Partner raises 10,000,000 from limited partners to acquire the land. An additional 25,000,000 is secured by personal notes from the limited partners for the construction of facilities.
There are tax implications for the limited partners if they are at risk if the venture defaults and they are responsible for debts incurred.

Plan C
The General Partner raises 10,000,000 from limited partners to acquire the land. Additional limited partnerships are created to finance three construction phases of the complex which will be leased to another Business entity to maintain and operate the facility.

Mission Statement

The goal is to provide school children, college students and young adults, working adults, parents, and seniors with comprehensive package of sport, recreation, and spectator activities with an emphasis on ice activities held in the arena and at two full size, year round Olympic ice surfaces, swimming, ballroom, square and round dancing, a full fitness center, handball and badminton courts, table tennis, gymnastics, ballet and Irish dancing in adjacent rooms to the complex's center core. The Hall of Champions, Inc. is committed to responsible marketing and business management services to earn a profit.

Management Team

The General Partner has more than 10 years of experience in the management of retail businesses. As a result of this expertise, he/she will be able to guide the operation and management of the business to a point of breaking even within its first year of operations.  

Note: specific expertise in the field a recreational and park management, especially in ice rink management, should be stressed in the selection of the management team.

Projected Revenues

A strong use of the ice facilities is anticipated from the general public. This interest by new skaters will be encouraged to channel their participation in programs such as curling, speed skating, hockey, and figure skating with an emphasis on showcase, synchronized skating, and Theater on Ice teams.

The plan is to support existing sports clubs, organizations, and leagues to host local, regional, and national meetings and competitions that would utilize the arena seating. These organizations will contract for weekly ice time and the rink will sponsor additional sessions to stimulate interest in ice dancing, curling, and speed skating by offering group classes. It is expected that the growth of these activities will take a year or longer (up to three years) to achieve critical mass.

The opening of the second and third ice sheets would be phased in rather than simultaneously opened to reduce the amount of under utilized ice. Optimum ice usage will require a program to provide figure skaters with an independent study plan that allows the athletes to use the relatively empty ice time during the week from 9:00 am to 2:00 pm from Monday through Friday.

It is the intention of the General partner to acquire a minor league hockey franchise that will use the weekday ice time from 9:00 am until 2:00 pm of one ice surface.

Projected Projected Revenues


1st Year
2nd Year
3rd Year
Revenues



Sports Shop



Hockey Skates - Stock



Hockey Skates - Custom Fit



Figure Skates - boots & Blades



Figure Boots - stock boots



Figure Boots - Blades



Speed Skating - boots & blades



Skate Sharpening



Hockey equipment - uniforms, sticks, pads, etc.



Figure Skating Apparel



Curling Equipment - shoes, brooms, etc.







Food Service



Public Session admissions and prepaid passes



Skate Rentals







Contracted Ice



Hockey



Curling



Speed Skating



Figure Skating







Group Classes



Elementary



Middle School



High School



College/Young Adults



Families



Older Adults







Fees for Coaching privileges







Special Events



Rental for ice tests



Ice Carnivals



Competitions



Speed Skating Meets



Hockey League Games



 Curling Meets



To generate reliable revenue figures it is necessary to actually work from a weekly activity schedule and estimate the numbers of people and the fees that would be charged with consideration of any discounts for purchasing a 20 or 40 pass card or advertised promotions that would include a package deal for admission and skate rental, or discounts for renewing a group class contract.

There will be various markups for sport shop and food service items so that sales can be realistically projected by an itemized stock inventory and percentage of sales based on the volume of customer traffic to the sessions.

Staffing for public sessions will be much greater than for contracted ice sessions. Obviously someone must be available for all open hours to Zamboni the ice, secure the facilities, and check to see the rest rooms are clean and stocked with supplies.

Someone in management must be on the premises for all public sessions.  Multiple skate guards must be supervising the ice activities.

Instructors for group classes must be available for all classes and be able to talk to parents before and after the on ice classes.

Coaches of specific sports, must be available for all rink sponsored sessions in the field such as curling, speed, hockey, and figure skating.

Most administrative activities will occur during traditional 8:00 am to 5:00 pm Monday through Friday.

Expansion Plan

The Company expects that the business will expand during the first three years of operation and eventually requiring 20 hours of daily operation.  Implementing a marketing campaign that will target individuals within the community for public skating; however, the demand for specialized skating activities are expected to extend far beyond the city boundaries. The fact that multiple ice surfaces will be available will allow adult skaters to participate at reasonable hours (7:00 to 8:45 pm and 9:00 to 10:45 pm. and 11:00 to 1:00 am) even after allowing for the traffic and extended work commute.

Example of a dual rink facility

Financing Summary

The major part of the expense of the skating complex is the free span part of the structure than allows for a clear view of the ice activity from the sides of the ice surface.

The cost of constructing an ice rink varies according to design and construction costs in various geographic regions. 

International Hockey Federation Handbook sports & recreational building design. Vol.  1 - 5
Guidelines covers all aspects of plan, financing, and constructing ice rinks and swimming pools. ...

Ice Rink Technical Guidelines Summary of Ice Rink Design Considerations

Solar Paneled Integrated Roof System  at Florissant Civic Center Ice Rink. July 23, 2010.

Flushing Meadows Pool and Ice Rink   In February 2009, this new, premier pool and NHL-sized ice rink in Flushing ... the building's cable supported roof system allows for future expansion

Registered Name and Corporate Structure

Ultimate Recreational and Fitness Center, Inc. (The Company) will be registered as a corporation in the State of Nevada or Delaware for tax advantages.

Required Startup Funding

At this time, the Company requires $25,000,000 of additional funding from loans, sale of stock, or additional Limited Partnerships. Below is a breakdown of how these funds will be used:

Startup Funding
 

   
 
Organization   Phase
       Construction
Stage Rink 1
       Construction
Stage Rink 2

Construction
Arena
Initial Capitalization $35,000,000 $33,570,000
$16,015,000 $13,295,000





Overhead



Legal Expenses
$250,000
$50,000
$50,000
$50,000
Marketing Limited Partnerships
$250,000
$0 $0 $0
Public Relations
$75,000
$25,000
$25,000 $25,000
Office Expenses




Office Lease
$35,000
$35,000 $0 $0
Office Staff
$250,000
$250,000 $250,000 $450,000
Phone, Internet
$25,000
$25,000 $25,000 $50,000
Office Supplies
$25,000
$25,000 $25,000 $50,000
Federal and State Tax preparation and filing
$20,000
$20,000 $20,000 $50,000
subtotal
$930,000 $430,000
$395,000
$645,000





Available Capital
$34,070,000
$33,140,000
$15,620,000
$12,650,000
Land Acquisition
$1,000,000
$9,000,000
$0 $0
Zoning Permits, Environmental Studies

$50,000
$0 $0
Special taxes and assessments such as Mello-Roos Districts
$25,000
$25,000 $25,000
Property Taxes

$50,000
$50,000
$50,000





Construction Funds

$6,500,000 $1,500,000 $11,825,000
Architectural Site plan, Building Design, Renderings, & Project model
$500,000
$1,500,000
$750,000
$750,000





Working Capital
$33,570,000
$16,015,000 $13,295,000 $0

The assumption is that the complex will be constructed in three stages. The exact number of months for phase of the project is not specified. The administrative offices for Rink 1 and Rink 2 would be in Rink 1. 

If the Arena is constructed as part of a joint venture with a hotel, the administrative responsibilities for non skating activities would be in the arena/hotel as part of its trade show and conference scheduling for open dates not used for various ice events - shows, figure skating competitions, curling meets, hockey games, and speed skating races.

Physical Amenities


Rink 1
Rink 2
Arena
Ice Surface
Olympic size 100 x 200
Olympic size 100 x 200 Olympic size 100 x 200
Seating
1500
0
5000
Dressing rooms
4
2
6
Locker rooms
4
4
6
Food court
yes
Shared with Rink 1
yes
Sit down Restaurant
yes
Shared with Rink 1 yes
Beer & Wine
yes
Shared with Rink 1 yes
Off-ice Training Facilities
yes Shared with Rink 1 yes
Meeting rooms
yes Shared with Rink 1 yes
Sports Shop
yes Shared with Rink 1 Shared with Rink 1
Skate Sharpening/Repair
yes Shared with Rink 1 Shared with Rink 1
Skate Rental
yes Shared with Rink 1 no


The floors for all ice surfaces would be multi-purpose concrete with air and humidity controlled for spectator comfort.  Green construction will be used with solar and photo voltaic panels installed for local power generation. Recycled heat from compressors would be used to heat hot water circulated throughout the complex.

Investor Equity

The initial funds to purchase the property will be raised from a Limited Partnership offering to acquire the land which will act as security for raising the additional funds to construct the complex.

Constructing the project in three stages will provide revenue generation starting with Rink 1 and growing as the skating demand develops and will need expanded ice time to accommodate the growing population of skaters training to improve their skills.

Management Equity

Ultimate Recreational and Fitness Center, Inc. will own the facilities. It may also operate and manage all or parts of the facilities.  Areas such as a charter school, hotel and conference, banquet, sit-down restaurant(s) serving wine/beer, a sports bar, sport shop, building custodial services may be leased of contracted because of the specific operation and management skills and resources associated with staffing, operating, and marketing these parts of the complex.

Exit Strategy

If the business is very successful, Ultimate Recreational and Fitness Center, Inc. may seek to sell the business to a third party for a significant earnings multiple. The services of qualified business broker would be engaged to sell the business on behalf of Ultimate Recreational and Fitness Center, Inc. Based on historical numbers, the business could fetch a sales premium of up to 4 times earnings.

Products and Services Description of the services offered by Ultimate Recreational and Fitness Center, Inc.

Ice Rink Usage

The primary revenue center for the business is expected to be the direct usage of the facility's ice rink. Through this area of the facility, Ultimate Recreational and Fitness Center, Inc. provides public skating, skating lessons, and hockey league programs, as well as birthday party/event hosting. The business generates substantial gross margins from the usage of the facility. Within the facility, people of all ages are free to enjoy public skating times, which are held regularly on a daily basis. Ultimate Recreational and Fitness Center, Inc. will also provides rental and sales of hockey and skating equipment. 

Food and Beverage Service

Ultimate Recreation and Fitness Center, Inc. practice courts there will be a food and beverage court where users of the facility and spectators can consume non-alcoholic beverages, snacks, or sandwiches and light meals.

On the upper level there would be a viewing area providing a climate controlled bird's-eye view of the happenings on the practice courts, ice rink, and indoor pool. This level would provide a separate full service food that would allow adults to enjoy beer and wine. Some sites may also include a sports bar with food services and a dance floor.

Included in all food service areas will be various big screen TVs that will show either sporting events, sports news, or appropriate programs that users wish to watch. This aspect of the facility will be crucial in providing the desired atmosphere designed to create a family atmosphere.

A qualified food service manager will be hired to run this aspect of the facility. He/she will have the responsibility to meet necessary standards and to report to, and work directly with the general partners or board of directors of the Ultimate Recreation and Fitness Center, Inc. to make sure the needs of the users in this area are met. If additional staff are required, this person will hire and train those people in accordance with the Ultimate Recreation and Fitness Center, Inc. policies.

The food service department would be available to host banquets and conferences for members and non-members.

Strategic Market Analysis

The strategic decisions of what to build is based upon specific research and analysis tools that include, but is not limited to a market analysis of the local and nearby communities to determine what public and private sports and recreational opportunities exist:

Economic Outlook

This section of the analysis should detail the economic climate, the ice rink industry, the customer profile, and the competition that the business will face as it progresses through its business operations.

Currently, the economic market condition in the United States is in recession. This slowdown in the economy has also greatly impacted real estate sales, which has halted to historical lows. Many economists expect that this recession will continue through 2011 and into 2012, at which point the economy will begin a slow, but steady prolonged recovery period.

Industry Analysis

The objective of the National Rink Industry Survey was to identify and to ... the study analyzed other basic information, including surface characteristics. ... "While regulation size NHL ice rinks serve the needs of most communities,"

In the United States, there are 443 ice rinks currently in operation. Each year, these businesses aggregate generate more than $419 million dollars of revenue and provide $114 million dollars of payrolls for 11,500 Americans. The ice rink industry is mature. The expected continued growth of these businesses is expected to mirror the general population growth plus the rate of inflation.

One of the common trends within the industry is for facilities to integrate secondary forms of entertainment into their businesses. These additional revenue streams income arcade machines, billiard tables, Table tennis tables, and other forms of secondary entertainment. Management may introduce other entertainment items such as arcade games to compliment the entertainment nature of the Ice Skating Rink.

Customer Profile

Profile the type of customer you are seeking to acquire. List income size, type of occupation; how far away from the rink site are customers (use radius ranging from one to 20 miles), and what the customer is looking for. Insert demographic information about your target market including population size, income demographics, level of education, etc.

Demand Analysis   A Jackson Square ice rink would be the newest, most modern facility of its type within a. 10 mile radius.

People want a rink, indoor turf | Jamaica Plain Gazette  Aug. 13, 2010 ... A recently completed Urban Edge commissioned analysis,

Competitive Analysis

List local competition of facilities that exist which will provide alternatives to the project. Compare how the Ultimate Recreational and Fitness Center, Inc. will provide customers with a superior line of services and products and that the new facility will be competitively priced or less expensive than your competition.

Marketing Plan

Ultimate Recreational and Fitness Center, Inc. intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. List the marketing strategies and objectives of the Ice Skating Rink, indoor pool, and other sports.

Marketing Analysis Summary

Offering Custom Ice Conditions for each specific ice sport.

 Marketing Objectives
  • Develop an online presence by developing a web site showcasing the Ultimate Recreational and Fitness Center, Inc. name and provide contact information with online directories, construction photos, detailed progress report, and discounts for memberships sold prior to Grand Opening of the facility.

  • Implement a local campaign with the Ultimate Recreational and Fitness Center, Inc. targeted market via the use of flyers, local newspaper advertisements, TV ads, blogging, tweeting, a web presence, and word of mouth advertising.

Marketing Strategies

Management intends to use a broad based advertising campaign that will raise the awareness of the retail location among the targeted young child and adolescent demographic. To that end, Management will place a number of advertisements in locally based newspapers and advertisements from the onset of operations which may include discount coupons or coupons for free admission.

This will create an immediate draw to the rink location. Management also expects that the business will generate significant word of mouth advertising as the Ultimate Recreational and Fitness Center, Inc. hosts events for children's birthday parties. As more and more children are invited to Ultimate Recreational and Fitness Center, Inc. ice rink for hosted birthday parties, these youngsters may have their parents host their next birthday party at the ice rink facility.

Ultimate Recreational and Fitness Center, Inc. anticipates that this type of advertising will take three to six months to become effective. The General Manager will use an internet based marketing strategy. This is very important as many people seeking local services, such as local entertainment, now the Internet to conduct their preliminary searches. The facility will be registered  with online portals so that potential customers can easily reach the business and also develop its own online web site.

Pricing

In this section, describe the pricing of your services and products. You should provide as much information as possible about your pricing as possible in this section. However, if you have hundreds of items, condense your product list categorically. This section of the business plan should not span more than 1 page.

Organizational Plan and Personnel Summary

Job Descriptions

Corporate Organization

 Chairman of a Board of Directors,
President of a Corporation or
General Partner of a Partnership


          
Director Human Resources Treasurer
Operations Manager Corporation Secretary
Director Program Development

Director of
 Class Programs


Event Scheduling


Risk Management
Officer
Director of Figure Skating Programs
Food Services Manager
Director of
Marketing
Director of Synchronized Team Skating
Sports Shop Manager
Director of
Community Relations
Director of Theater On Ice Programs
Maintenance
Supervisor

   
Volunteer Coordinator
Director of Hockey Programs
Night Shift
Manager

  
Web Master
Director of Speed Skating Programs
Weekend Shift
Manager

Charter School
Program
Director of Curling Programs


 Market Sports Complex to Community & Schools

Organizational Budget

The business budget can be organized into two structural components Administrative and Operations. The types of personnel can be divided into salaried, hourly (full and part time), and independent contractors.

Essential jobs are define and described in Rink Job Descriptions
Salaried and full time hourly employees require funds to be set aside for 401k retirement accounts, health insurance, disability insurance, social security contributions, sick pay, vacation pay, and profit participation.

Management Biographies

Provide a brief two to four paragraph biography about work experience, education, and specific skills for Corporate CEO, President, Manager, or key management position.

Management Summary

Financial Plan

The projections of revenue and expenses are based upon specific research and analysis tools that include, but is not limited to:

Underlying Assumptions

  • The Ultimate Recreational and Fitness Center, Inc. will have an annual revenue growth rate of 10% per year for the ten years after completing its final phase of opening the initial stage of construction.

  • The Owner will secure $25,000,000 additional funds in the form of a construction loan to develop the business. Indebtedness will total $35,000,000.

  • The construction loan will be converted into a long term load for the developed property. The Revenue generation will cover the loan payments, taxes, and all operational expenses. 

  • Positive cash flow will be calculated separately for the investors in phases 1, 2, and 3 who will have separate leases and management contracts.

Awareness of Community's Sensitive to local issues

The Ultimate Recreational and Fitness Center, Inc. revenues are moderately sensitive to changes in the general economy. Ice skating is not an essential life activity, and as such, severe economic pullbacks may hamper Ultimate Recreational and Fitness Center, Inc. ability to continually increase top line income. However, the pricing structure that Management will use for its ice rink services will allow almost all residents to afford the skating, hockey, public session, and snack bar products offered on a year round basis.

Source of Funds

The General Partner will advance the necessary funds to launch and market the initial offering to purchase property worth up to $10,000,000.  Having secured the title to the land, the property would be used to secure a construction loan for the project that will be built out in three phases. The construction funding will be converted into a long term loan.

The general partner will lease each phase of the project to individuals who will sign long term leases to manage what will be essentially turn-key operations without equity in the land and buildings.

General Assumptions

Investors in the venture are sophisticated in such financial matters and have performed their own due diligence by engaging professionals to review the prospectus and recommend it to their clients.

Profit and Loss Statements

The General Partner will prepare an economic analysis based on the specific land and construction costs of the project for each of the three development stages.

Cash Flow Analysis

The General Partner will prepare a cash flow analysis for each of the three projects that will be leased to independent parties for a period not to exceed the length of the loan on the land and improvements.

Balance Sheet

The Profit and Loss statements will depend on he investors financial participation. The General Partner will prepare state and federal documents and send copies to the investor's tax advisor.

Recommended Reading:

Ice Skating Rink Index

Ice Skating Disciplines

   
Starting An Ice Skating Rink

References:

Facility Ownership Models

 
The Ultimate Ice Skating Facility

Resources:

The following internet links have been gleaned from personal communications
combined with information from public institutions and athletic organizations/
associations that have a web presence with information concerning team and
individual sports programs:

    

A Business Plan for an Ice Facility Complex

All materials are copy protected. 
The limited use of the materials for education purposes is allowed providing
credit is given for the source of the materials.


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