Cluster PM101 Team 4 P2 final

“Actively keeping you active”

PM101 Team 4:

Eric BraccoDomenico J DonofrioBrad HosmerDavid LaneSteven Turner

April 10th, 2016

Paul BenedictJamie LambertLori Marchese

Scott Wright

Memo of Transmittal

To Copeland Associates

From: PM101 Team 4Eric BraccoDomenico DonofrioBrad HosmerDavid LaneSteven Turner

Date: April 10, 2016Subject: Final Deliverable

King County Sports Zone was written for the PM 101 Cohort Managers. The purpose of this transmittal document is to present the managers with our business concept. From doing weeks of research and analysis Team 4 of PM 101 has determined that our concept of King County Sports Zone will not be feasible.

The business concept’s feasibility was formulated by:The potentials customer we may get with an Indoor Sports Facility.How much it would cost to operate our business.Our NPV, IRR and payback period.

During our research, we:Researched the demand for an indoor sports complex in Washington.Determined the competitors in the Kirkland, Washington and Seattle, Washington area.Determined the feasibility of starting an indoor sports complex.

In conclusion, King County Sports Zone is not a feasible project in the given requirements but this project could have potential to work in the future. If given a longer time frame King County Sports Zone would have received enough business in 5+ years to be a successful project. With a negative NVP and IRR less than the WACC, the project should not be accepted at this time.

We would like to thank all of the Copeland Associates that were able to help us on this project. We have truly enjoyed researching and learning about this industry, and would be more than willing to discuss our report further or answer any questions that may come about. Furthermore, we would like to thank you for this excellent opportunity and for your time and we hope you enjoy the final report.

Sincerely,Team 4Eric BraccoDomenico DonofrioBrad HosmerDavid LaneSteven Turner

Intro BusinessConcept

Location Demand Forecast

Marketing Operations MIS Financials Conclusion Ref. &Appen

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Executive SummaryThe purpose of this report is to research and analyze the feasibility of an indoor sports complex in Kirkland, Washington. The youth sports and general sports participation in Kirkland is very promising for a start up company such as King County Sports Zone.

Main Focus

The team began the project by looking into the indoor sports complex industry. From research the team concluded that the sports complex industry has high potential with the amount of people in the United States who play sports. Second, we looked into the economic and demographic factors of different cities in the U.S. From the research we determined that Kirkland, Washington would be a logical location for this project due to the high youth population, high disposable income, and high interest in sports in the area. The main reason our team believed that King County Sports Zone could be successful is the growth rate of youth sports participation, with projected industry growth of 4% (First Research 2016).

King County Sports Zone is an indoor sports complex that can offer children a place to play multiple sports in one complex.

The facility will offer rental of fields and courts, and allow customers to see when the facility can be rented or is not available to rent. All rentals will be booked on our website and will allow people to

get an in-depth look at what our facility offers.

Our location is Kirkland is very critical to the success of King County Sports Zone with many AA

Basketball and Youth Soccer leagues in the area, much of our revenue could come from these organizations hosting tournaments in our facility. Kirkland is located one hour Northwest of Seattle. The location in Kirkland allows people who do not want to have to drive to Seattle for sports, an opportunity to do so closer to home.

To further our research on the feasibility of an indoor sports complex in Kirkland, we created demand scenarios for our basketball courts, field turfs, and summer camps to predict King County Sports Zone’s yearly revenues. These scenarios came from calling comparable indoor sports complexes that had basketball court and field turfs. An additional demand scenarios we created from Facebook Analytics to determine our potential reach in the Kirkland area.

Based off the weighted averages from comparing 4 other businesses we have determined that KingCounty Sports Zone can expect 23 basketball court rentals per week, 33 fieldturf rentals per week, and 196 campers per week during our 8 weeks of summer camps.

Kirkland, Washington was also a very logical location based off the limited number of competitors in the area. Within an hour of Kirkland, we have determined there are only 2 true competitors. From this we have determined that we will have a projected market share of 33%.

Conclusion

We have come to the conclusion that King County Sports Zone will not be feasible in the time frame given by Copeland Associates, however given more time the project could be feasible. After figuring our financial statements, we found that our net present value is $-572,289, the IRR is less than the WACC and the payback period is 5+ years. King County Sports Zone is not feasible due to the extremely high startup costs of running an indoor sports complex.




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Table of ContentsIntroduction Page 1

Business Concept Page 2-4

Location Page 5

Demand Forecast Page 6-10

Marketing Page 11-14

Operational Assumption/Needs Page 15

MIS Page 16

Financials Page 17-18

Conclusion Page 19

Appendix A : Pestle and Porters 5 Forces Page I

Appendix B : Youth Soccer Leagues Page II

Appendix C : Youth Basketball Participation Page III

Appendix D : Concept Page IV

Appendix E : Floor Plan Page V

Appendix G : Location Page VII-IX

Appendix H : Local Competitors Page X-XII

Appendix I : Local Market Analysis Page XIII-XV

Appendix J : Demand Charts Page XVI-XVII

Appendix K : National Competitors Page XVIII-XIX

Appendix L : Competitor Comparables Page XX-XXIV




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References Page 20-23

Appendix F : Business Model Canvas Page VI

Appendix M : Promotional Materials Page XXV-XXVII

Table of Contents

Appendix N : Online Presence Page XXIX

Appendix O : Job Description Page XXX-XXXI

Appendix P : Interview Questions Page XXXII

Appendix Q : Visio Business Process Model for Field and Court Rentals Page XXXIII-XXXIV




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Appendix R : MIS Triangle Page XXXV

Appendix S : Financials Page XXXVI-XLI

List of Figures and ImagesFigure 1 - Youth Sports Participation Page 1

Figure 2 - Participation in Sports Page 1

Figure 3 - Basketball Courts Page 3

Figure 4 - Turf Fields Page 3

Figure 5 - Kirkland Satellite View Page 5

Figure 6 - Kirkland, Washington Page 5

Figure 7 - Basketball and Volleyball Court Demand Page 6

Figure 8 - Turf Field Demands Page 6

Figure 9 - Summer Camp Demands Page 6

Figure 10 - Total Projected Demand from Rentals Page 6

Figure 11 - Current Demand Page 7

Figure 12 - Scaled Back Demand Page 7

Figure 13 - Facebook Analytics Page 9

Figure 14 - Demand Based off Facebook Page 9

Figure 15 - Weighted Demand Forecast Page 10

Figure 16 - Marketing Mix Page 11

Figure 18 - Snapchat Tools Page 12

Figure 19 - Website Rentals Page 13

Figure 20 - Marketing Cost Year 1 Page 14

Figure 21 - Marketing Breakdown Page 14

Figure 22 - Marketing Cost after Year 1 Page 14




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Figure 17 - King County Sports Zone Facebook Page Page 12

Figure 23 - Cost of MIS Software and Uses of Software Page 16

Figure 24 - Key Performance Indicators Page 16

Figure 25 - Total Expenses Page 17

Figure 26 - Key Financial Numbers Page 17

Figure 27 - Revenue Growth Page 17

Figure 28 - Net Income for First Year Page 18

Figure 29 - Return on Equity Page 18

Figure 30 - Net Profit Margin Page 18

Figure 31 - Return on Assets Page 18

Figure 32 - Youth Soccer Page II

Figure 33 - Youth Soccer Population Page II

Figure 34 - Team Sports Participation Page III

Figure 35 - Basketball Participation Page III

Figure 36 - Time Spent on Leisure and Sports Page IV

Figure 37 - Industry Growth Page IV

Figure 38 - Facility Floor Plan Page V

Figure 39 - Map of Schools Close to Our Location Page VII

Figure 40 - Number of Population 6-11 Years Page VIII

Figure 41 - Number of Population 12-17 Page VIII

Figure 42 - Number of Households with Income between $100,000-$124,999 Page VIII

Figure 43 - Kirkland Sports Participation Page VIII

Figure 44 - Kirkland Female Population Page IX




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List of Figures and Images

Figure 45 - Kirkland Male Population Page IX

Figure 46 - Kirkland Population by Race Page IX

Figure 47 - Local Competitor Competition Page XI

Figure 48 - Local Competitors Page XII

Figure 49 - Distance from Local Competition Page XII

Figure 50 - Family Income Distribution in Kirkland, WA Page XIII

Figure 51 - Household Income and Participation Among Sports Page XIII

Figure 52 - Kirkland Area Outdoor Parks Page XIV




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Figure 53 - Kirkland Family Income Segments Page XV

Figure 54 - Court Demand Page XVI

Figure 55 - Turf Field Demand Page XVI

Figure 56 - Summer Camp Demand Page XVII

Figure 57 - Square Footage and Population Page XVIII

Figure 58 - National Competitor Competition Page XIX

Figure 59 - Competitor Comparables Page XX

Figure 60 - Competitor Comparables #2 Page XI

Figure 61 - Competitor Prices Page XXII

Figure 62 - Incrediplex Page XXIII

Figure 63 - Insports Page XXIII

Figure 64 - Body Zone Sports Page XXIII

Figure 65 - Legends Sports Complex Page XXIV

Figure 66 - Rochester Sports Gardens Page XXIV

Figure 67 - Sporsplex Page XXIV

Figure 68 - Promotional Design Page XXV

Figure 69 - Flyer Comparison Page XXV

Figure 70 - Brochure Model Page XXVI

Figure 71 - Facebook Header Page XXVII

Figure 72 - Banner Page XXVII

Figure 73 - Homepage ½ Page XXIX

Figure 74- Homepage 2/2 Page XXIX




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Figure 75 - About US Page XXIX

Figure 76 - Gallery Page XXIX

Figure 77 - Contact Us Page XXIX

Figure 78 - Facility Manager Page XXX

Figure 79 - Front Desk Receptionist Page XXX

Figure 80 - Floor Team Page XXX

Figure 81 - Custodian Page XXXI

Figure 82 - Summer Camp Counselor Page XXXI

Figure 83 - Business Process Model Part 1 Page XXXIII

Figure 84 - Business Process Model Part 2 Page XXXIV

Figure 85 - MIS Triangle Page XXXV

Figure 86 - MaxGalaxy Startup Price Page XXXV

Figure 87 - Loan Amortization Schedule Page XXXVI

Figure 88 - Long-Term Asset Depreciation Table Page XXXVI

Figure 89 - Year One Income Statement Part 1 Page XXXVII

Figure 90 - Year One Income Statement Part 2 Page XXXVIII

Figure 91 – Year 1 Cash Flows Page XXXVIII

Figure 92 – 5 Year Income Statement Page XXXIX

Figure 93 – Corporate Tax Rates Page XXXIX

Figure 94 – Capital Budget Analysis Page XL




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Figure 95 – Balance Sheet Page XL1

IntroductionWith all the new technology and video games, todays parents are worried that children do not get enough exercise and spend too much time indoors. About one in three U.S. children and teens are overweight or obese, which is triple the rate of the previous generation (First Research 2016).

Our indoor sports complex will attract sports teams and young kids that want to play and be active. With kids being active at an early age, the need to stay active will stay with kids as they grow up.

Following the success of the World Cup, soccers popularity is on the rise in the U.S. Youth participation has increased tremendously over the last 40 years. There were 103,432 children registered to play soccer in the U.S. in 1974, 1.6 million children registered to play in 1990, and more than 3 million registered to play in 2014 (Reddy, 2015). This is a 34% increase over that period of time.

Kirkland, Washington will be the location of King County Sports Zone. Located in the suburbs of Seattle, Kirkland is a community with a high disposable income, with the average household income in Kirkland being $90,611. In addition, 46 schools are located within 10 miles of our facility making it a very attractive location for our indoor sports complex. With so many schools being in close proximity, it will be easy for kids to get transportation.

The biggest advantage that Kirkland has over many cities comes in the $200,000+ income bracket. Kirkland more than doubles the national average among 3 and 4 person married families, and holds a significant lead over the averages in 5 person married families. Kirkland also triples the national average among 3 and 4 person single families (Simply Map, 2016).

Indoor sports facilities are a growing industry with more and more children playing AAU and travel sports. Because of this, there is more of a need for facilities like the King County Sports Zone to host tournaments and events (IBISWorld, 2016).

For more information on Pestle and Porter's 5 Forces, see Appendix A

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Figure 1: Youth Sports ParticipationSource: ESPN.com

Figure 1 Summary: The youth sports industry can be very profitable, with over 21.5 M children playing on a sports team between the ages of 6-17. This doesn’t take into account younger kids who started team sports at a earlier age. With our indoor sports complex we hope that youth participation in sports will continue to increase.

Figure 2: Participation in SportsSource: IBISworld

Figure 2 Summary: The graph above shows the participation in sports. The percentage of those who play sports is projected to increase for the next 4 years and beyond. This is key because in order to be a successful business we need people that are interested in sports. Although, this percentage is not only youth we also need the parents support.

For more information on Youth Sports Participation please view Appendix B : Youth Soccer Leagues and Appendix C : Youth Basketball Participation




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Concept

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We chose the colors red, blue and yellow for our logo. The reason we chose red is because it shows energy, passion, and action. The color blue shows integrity and loyalty. Lastly, we chose yellow because it stimulates happiness and cheerfulness (Understanding the Meaning of Colors in Psychology n.d.).

The main target of King County Sports Zone is children ages 6-14. Individual people that the complex will be target includes AAU teams and the local soccer league, Lake Washington Youth Soccer Association. These two organization have very close ties to the Kirkland community and hosting them in King County Sports Zone would be a great addition.

● Allows children to learn new sports and how to play them safely

● Builds friendships with kids the same age interested in the same sports

● Allow children to learn a variety of sports● Keeps children active in hopes to reduce childhood

obesity ● Promotes the growth of sports in the Northwest region

Benefits to Children

Main Target

Logo

Color Pallet

Features include● Soccer field(s)

○ Can be repurposed into indoor football or lacrosse field

● Basketball court(s)○ Can be repurposed into volleyball court.

The full facility will have air conditioning and heating

Indoor Sports Complex

Vision Statement

To provide the people in the greater Kirkland, Washington area with a central location where they can participate and spectate their favorite sports year round in the comfort of our indoor facility.

Why an Indoor Sports Complex

Currently in the Seattle area, a lack of basketball courts exists to host AAU and other basketball tournaments. The Seattle area AAU is the WESCO AAU in North Puget Sound which is an hour south of Kirkland. The WESCO AAU currently only has one gym. This facility, Arlington High School in Arlington, Washington is used for team practices and to host tournaments. This is where King County Sports Zone files the void of court shortages. With the addition of King County Sports Zone we hope to increase the amount of gyms that WESCO AAU has available to them (WESCO AAU , n.d.). From doing further research, the Seattle area has many gyms available but they are mainly for one on one instruction.


For more indepth information on our Concept potential please refer to Appendix D : Industry Analysis.

Mission Statement

Utilize our facility to provide exceptional service in the indoor sports industry. To provide our community with fun and memorable experiences whilst ensuring only the highest level of safety.




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Concept cont.

The turf field will be host camps, leagues, and tournaments. The turf field can be used for flag football, soccer, and lacrosse. These fields can also be rented for practices and birthday parties. The versatility of the turf field makes it easy to switch between the different sports, by only switching the goals. During the offseason for soccer, there will be tournaments and leagues so players can stay in shape. When you rent a turf field, the footballs, soccer balls and lacrosse equipment will be provided. We do not allow metal spikes on these fields so please do not wear them. Soft spikes only.

Rental Price for Turf Fields : $166 an hour

3

Figure 3: Basketball Courts Source: Sportsplex

Figure 4: Turf Fields Source: Nova Field House

Court Rentals

Turf Rentals




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At King County Sports Zone we plan to have 4 high school sized basketball courts, and 2 indoor turfs fields. The basketball courts will be used to host basketball camps, basketball leagues, volleyball, and possibly AAU tournaments for the people of Kirkland and the surrounding areas. The basketball courts can be repurposed into volleyball courts by inserting two volleyball poles and a net into the floor. The courts can also be rented out for birthday parties or for team practices throughout the year. Basketballs will be provided to those that need them. An example of our basketball court setup can be seen on the right.

Rental Price for Courts: $55 an hour

Figure 3 and 4 Summary: Figures 3 and 4 show examples of what the fields and courts would look like in our facility.

For information about the floor plan, see Appendix E: Floor Plan

Concept cont

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Leagues

Various sports leagues will be offered during the different seasons. In the fall, we will offer basketball leagues for teams looking to get a head start on the season that is upcoming. In the summer, we will be hosting leagues for all sports, basketball leagues for those looking to just play more games, volleyball leagues for those looking to get ready for the season, soccer leagues for those teams also looking to get ready for the season. During winter break and spring break, we will offer flag football leagues for kids to learn how to play football in a safe way.Camps

Camps will be offered for all ages. These camps will mainly occur during the summer months when kids have ample time and are on summer break. Another good time for kids camps would be during winter break when the kids are also looking for something to do. The main camps that will be offered are basketball, volleyball and soccer. In the summer, we will have 8 weeks of camps offered, with them lasting 5 hours a day.

One on One Instruction

One on One instruction will be offered for all ages, genders and for all sports. These one on one instruction will be for those who are more advanced in sports and or for those looking to improve their game on a daily basis. Various trainers will work with athletes to improve skills such as footwork, strength, and skills needed to compete well in each sport.

Economic Benefits

The concept could also help the city of Kirkland. Since the complex will have multiple turf fields and basketball courts, it has the opportunity to host many tournaments. The tournaments in hope would increase exposure for the city and further help the Kirkland’s economy. If multiple out of town teams are playing in Kirkland many local hotels and restaurants would receive business from the teams and their families.

Air Conditioning

The best part of our facility is that is has full air conditioning. This means that the courts won’t have condensation on them from warm humid temperatures. Many indoor sports complexes around the country do not have air conditioning. With our full air conditioning in our facility you will not dread coming to the gym and playing a game of basketball during the summer months.

Peak Hours

Over the course of the day our peak hours with kids will be from 4 pm-9 pm, once the kids are done with school. During this time is when we expect a lot of practices and field rentals to occur. On the weekend, we expect to have people at our facility as soon as we open. Some will be for practices, others for one on one instruction. During the school year, the hope is that some adults will take a lunch break at our facility and play some basketball with co-workers.

Tournaments

Kirkland, Washington also has a high amount of youth AAU basketball teams, and has three youth soccer leagues in the area. With the addition of 4 basketball courts and 2 turf fields, we will be looking to host tournaments for these organizations. With the ample space in our facility, we have the capability to host 2 separate tournaments at the same time.

Prices

Rental Basketball Court : $55 per hourRental Turf Field : $166 per hourSummer Camps : $137 per week

For more on our business please refer to Appendix F: Business Canvas Model.




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Location

Population : 85,763 (United States Census Bureau 2016).

Median Household Income: $90,611 as of 2014 (United States Census Bureau 2016).

Why Kirkland: Kirkland is like a very logical location for our indoor sports complex because of the high population of youth in the area as well as a high population of sports interest in the area (Simply Map, 2016). For more locational information, please refer to Appendix G: Location.

The location in Kirkland is located near 46 schools and also very close to a mall this is a good area and a high volume area for children.

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Figure 6: Kirkland, Washington Source: Google Maps

Figure 5: Kirkland Satellite View Source: Google Maps

Figure 5 Summary: This figure is a satellite view of our targeted location. The warehouse that we have selected is circled in blue. As you can see in the figure, the facility is located just seconds from interstate 405 and also backs ups to a large residential area, and is just 8 minutes from nearby Juanita High School. The location is also very close to Totem Lake Mall (also circled in blue) and several restaurants; these nearby businesses could help to increase foot traffic around our location.

12521 128th Lane NE, Kirkland, WA, 98034

63,746 square feet

Rent: $63,746. $1 a square foot.

30 foot ceilings

212 parking spaces

Easy access from the 405 - the major highway in Washington

Located on a main road with easy in and out access (loopnet.com, n.d.).

46 schools within 10 miles of the location including 24 early childhood and elementary schools and 12 middle/junior high schools (Google Maps, 2016).

The Facility

Kirkland, Washington 98033

For more information on the location and the facility please view Appendix H : Local Competitors and Appendix I: Local Market.

Local Mall

Our Facility




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Figure 6 Summary: From research, the team felt as though Kirkland, Washington would be a great location for an indoor sports complex. Kirkland is a suburb of Seattle which has a very large population of youth looking to play sports. The area is booming with high amounts of AAU teams and Youth Soccer tea. With the addition of the Indoor Sports Complex we hope to provide that opportunity to the youth.

Demand Forecast #1

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Figure 8: Turf Field Demands

Figure 7: Basketball and Volleyball Court Demands

Figure 9: Summer Camp Demands

King County Sports Zone

Square Footage

Population 6-17 Population

Projected Sales Per Quarter

Kirkland, WA 63,746 85,763 4,304 $101,309

Figure 10: Total Projected Demand from Rentals

For more information please view Appendix J: Demand Charts, Appendix K : National Competitors, and Appendix L: Competitor Comparables


Square footage Population

6-17 Population

Projected Rentals

Per Week

Projected Rental

Price Per Hour

ProjectedSales Per

Week


Kirkland, WA

63,746 85,763 4,304 27 $55 $1,485 $19,305



6-17 Population

Projected Rentals

Per Week

Projected Rental

Price Per Hour

ProjectedSales Per

Week


Kirkland, WA

63,746 85,763 4,304 38 $166 $6,308 $82,004



6-17 Population

Projected Rentals

Per Week

Projected Rental

Price Per Hour

ProjectedSales Per

Week

Projected Sales Per 8 Weeks

Kirkland, WA

63,746 85,763 4,304 226 $137 $30,962 $247,696

*Please note that in our finances these numbers will not be included until the 2nd and 3rd quarters. ⅓ of the profits from the summer camps will be in the 2nd quarter revenues and the remaining ⅔ will be in the 3rd quarter revenues. These camps are only run in the months of June, July and August.




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Scaled-Back Demand

7

Sports Current Weekly Demand

Basketball Courts 27

Turf Fields 38

Summer Camp Demand 226

Figure 11: Current Demand

Sports Current Weekly Demand Scaled BackRounded to nearest full person

Basketball Courts 27/1.15 = 23

Turf Fields 38/1.15 = 33

Summer Camp Demand 226/1.15 = 196

Figure 11 Summary: From doing a sizable amount of primary research we know that the potential for a high demand is out there. Being we are a start-up business, we understand that the demand will likely be much less. On average a start up business like ours makes 2-3 times less than the established businesses we have been calling (Ugor, n.d.). An indoor sports complex is an established industry but King County Sports Zone is not established.

Figure 12: Scaled Back Demand

Figure 12 Summary: According to an article by Michal Ugor, startups make 2-3 times less than established businesses and that is part of the reason a lot of startups fail (Ugor n.d.). King County Sports Zone is in an area with high disposable income, the teams feel as though scaling our demand back by 1.15 is the most appropriate thing to do in this case. The original numbers are some that the company could potentially expect in year 3 or 4, not in year one. The team felt that 1.15 was a good number to use because of the fact we are an established industry but we are also a new business that might take some time to grow.




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8

Demand Forecast #1 cont. Price Equation

Rental Equation

Legend Sports and Incrediplex seem to be the most similar to us when it comes to field rentals. Indianapolis and The Woodlands are very high income areas, and have high populations of kids aged 6-17.

On the other hand Sportsplex is the least like us. They are located in Dallas which has a very high level of competition, and the weather is nice enough most days out of the year to play in grass outside.

Wilson’s fitness center in Columbia, MO is the middle of pack when it comes to turf fields. The price for the Columbia, MO location was also odd that it was set at 1.5 hours per rental.

Benchmarking for Turf Fields

Price = (price per hour per each business * weighted average of each business)

Do for all companies and then add themtogether to get our prices for rentals

Benchmarking for Courts

Sportsplex in Dallas, Texas has the most competition among our comparables. If you do a google search for indoor sports complexes in Dallas, Texas almost 40 different complexes are in the area. This would be why the Dallas location we have found demand for doesn’t have very many rentals during the week and the square footage of the facility isn’t very big.

Our facility may be big but when looking at other options in Kirkland, the smaller facilities were actually more expensive. The rentable space available in our building is 121,912 square feet (Jerue, April 5). We chose to rent 63,746 square feet because of the cost to install the courts and fields.

Total Sports Experience is a good comparable in this case because of the square footage being similar. Rochester, NY is also an area with very high disposable income. Body Zone and Wellness is also very comparable to our location because the square footage and population are very similar as well.

The prices are all about the same when it comes to renting basketball courts. Sportsplex in Dallas may have slightly higher numbers because they have so much competition in the area.

Benchmarking for Summer Camps

Legends and Insports were very similar to each other for summer camps, and also the most similar to us. Both areas have very high disposable income just like Kirkland, WA. With these areas being similar to us, we think it is feasible to get similar camper numbers to that of the two locations.

Wilson’s and Pinnacle are the least like us when its comes to summer camps. Both locations have issues attracting people to their summer camps hence the high cost.

Overall

At the end of the day, the demand numbers we found are very encouraging. As a start up we realize that our demand is going to less than the established businesses we have contacted, but the room for growth is definitely there.




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Rental = (rental per week per each business * weighted average of each business)

Do for all companies and then add themtogether to get our expected number of rentals

Demand Forecast # 2

9

Facebook Analytics

Data: Facebook Analytics, .n.d.

Potential Customers on Facebook / 67% of people on Facebook worldwide = # of people in Kirkland, WA meeting our demographic and interest search

9,000 /.67 = 13,433

Number of people in Kirkland meeting our demographic search / Number of Competitors (including us) = Market share

13,433/3 = 4,478

Average Price of Rentals * Market Share = Sales

Figure 14: Demand Based off Facebook Source: Facebook Analytics

Potential Customers

on Facebook

Percentage of

Population on

Facebook

Number of People in Kirkland

Meeting our Demographic

Search

Number of Competitors

Market Share

Average Price of Rentals

Sales

9,000 67% 13,433 2 4,478 or 33%

$84 $376,152

Equations

Facebook Summary

Facebook analytics is a helpful tool to determine demand. Although, not every American is on Facebook roughly 67% of the population is on Facebook according to Paul Benedict.

In our area we do not have that many true competitors, the only competitors we need to worry about is Starfire Sports, located in Seattle. The distance may help us take away from some of their market share but Starfire Sports may also have loyal customers who might want to stay with Starfire Sports even if King County Sports Zone is a closer location.

From the analytics our reach is potentially 13,433 people. We understand that not everyone is on facebook so that number is a ballpark range. This number could be greater or less depending on the number of people using facebook in the area.




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Figure 13: Facebook Analytics Source: Facebook

Weighted Demand Forecasts

10

Figure 15 Summary : Our primary research came from seven multi-sport complexes already in the industry. The seven multiple sports complexes we were able to get data from is Insports Centers, Incrediplex, Wilson’s Fitness Center, Body Zone Sports and Wellness, Pinnacle, Legends Sports Complex, Sportsplex, Rochester Sports Garden, and Total Sport Experience. All of these facilities have been around for many years and have been very successful. We rated our primary data at a very high mark, 80%. The primary data we have been receiving from these businesses have been very good and from hearing from multiple businesses this was the way to go when it comes to predicting demand.

Our secondary research came from Facebook Analytics. We ranked our secondary research at a much smaller mark, 20%. The numbers from Facebook are very good secondary data but just because people have a Facebook and like these sports does not mean they will come to our facility. Over 9,000 people ages 18-65 had an interest in at least one of the sports we offer. Although, the number from our secondary demand seemed higher for rentals, which is mostly due to our reach being bigger the demand we are more likely to see is what our competitors told us if not a little less being we are a start up. An additional reason our secondary data is weighted much less than our primary data is most of the users of Facebook are not in the 6-14 age range that we have will be targeting with our business.

# of Rentals per week

Weight Weighted Average # of Rentals per week

Primary Demand 65 80% 52

Secondary Demand Forecast 86 20% 17

Total 151 100% 69

Figure 15: Weighted Demand Forecast




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Marketing

11

Product

Place

The product offered from King County Sports Zone is the facility itself. The business is not selling a product, but rather, selling our space for rentals and usage. That space includes two 200 X 85 foot borderless turf fields and four basketball 84 X 50 courts. Each will be available for rental in several different capacities with varying prices. Those include walk in/independent rentals, team and/or league rentals through contracts, birthday party rentals, and tournament rentals.

The King County Sports Zone will be located in Kirkland Washington. Kirkland is northeast from Seattle, about an hour drive. Kirkland is an ideal place for the King County Sports Zone because it’s heavily populated with children that participate in sports. The city is populated with 48,157 residents with around 16,000 are under the age of 18 (United States Census Bureau). Also another reason we put King County Sports Zone in this area because it is has high disposable income per household. The median income in our selected area per household is $90,611. Our location is also ideal for King County Sports Zone because it is surrounded by 46 schools in a 10 mile (Google Maps). These schools will need facilities for their sports teams to practice and play on. King County Sports Zone hopes to help provide services for these schools and other local independent teams.

Price

Promotion

The King County Sports Zone will promote itself through different advertisements and sponsorships. There are many local schools around the area that King County Sports Zone will be located. These schools’ booster clubs offer to advertise our business for a affordable price. These advertisements include banners or posters posted around the football stadium and basketball court. They also include flyers that can be distributed at the games and at the school. King County Sports Zone will also offer sponsorships that local businesses can buy. These sponsorships are not costly and will help generate a little extra revenue. Also with more sponsorships with these local businesses they can help with promoting brand recognition. With more sponsorships more people will know what King County Sports Zone is.

Prices have been determined after researching and contacting multiple and comparable businesses like King County Sports Zone. Rental Basketball Court : $55 per hour. Rental Turf Field : $166 per hour. Summer Camps : $137 per week.

Advertisements

To market to the local residents of Kirkland, King County Sports Zone will create several different types of advertisements. Specifically King County Sports Zone can create flyers and brochures that can be distributed by local businesses and schools. They can be distributed at their sporting events or at the school itself. King County Sports Zone will also offer local businesses the opportunity to advertise inside our facility and become one of our sponsors. Also, the facility can offer these businesses around $500 to put their advertisements on our courts or turf fields. Additionally, the facility can offer around $750 to put their advertisements around the main lobby. The size of these advertisements will be around 6 ft x 4 ft.

Example of the Flyers and Brochures can be found in Appendix M: Promotional Materials.




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Figure 16: Marketing Mix Source: http://kimberlycrossland.com/

Marketing cont.

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Social Media

Facebook Page

Social media presence is a must for a business of any size and industry, in some form, in this day and age. Social media represents a free source of advertising, marketing, and customer engagement and outreach. 92% of marketers agreed that social media is important for business (Hubspot 2014). Marketers feel that social media is important is because it creates many benefits and opportunities. These benefits and opportunities can help market Kings County Sports Zone. Some benefits and opportunities that come from social media are increased brand recognition, improved customer insights, and decreased marketing costs (Forbes 2014).

Facebook represents a “quick, easy and free way to potentially reach tons of people” (Forbes 2013) and is a form of social media that our research has found can be most beneficial to King County Sports Zone. This is especially pertinent to the relevant ones, or those who will increase your local involvement through online engagement. A Facebook page also offers an unlimited friend count, the ability to advertise, and the usage of Facebook Insights (Forbes 2013). Facebook Insights is a tool unique to the Facebook Page format which allows admins of the page to view “...page likes, or a number of fans, daily active users, like sources, demographics, page views as well as unique page views, tab views, external referrers, and media consumption” (Mashable 2010). The only downside of Facebook Insights, which should not pose a problem, is that Insights requires a minimum of 30 likes in order to access the data it is collecting. An example being a page’s growing fan base as measured by likes per month as seen in Figure 17 (Mashable 2010).

And while Facebook may not be a monetary investment, a company will be investing it’s time when using a social media outlet such as a Facebook Page. That time is about engagement, or how the company is using the page to interact and communicate with customers. It’s about investing time into “conversations and connections that recognize you and reciprocate the interaction” (Forbes 2013). The intention is to use the Facebook Page as a direct line of communication, along with the website to some degree (SEE Appendix M: Promotional Materials), using it as a medium in which customers can ask questions, post about their experiences, and share photos. Ultimately, it helps King County Sports Zone connect and integrate itself with the surrounding communities.

Snapchat

Snapchat is a very popular mobile app that allows users to send a picture to other users. That picture will only be available to view for a set amount of time and once the user opens it the picture cannot be viewed again. Snapchat also has a feature called story mode where the user can post a picture or video for 24 hours for all followers to view. The app is very popular with a target audience age 13-25 and logs over 400 million messages every day. With snapchat you can also have unlimited friends. The more people we are able to reach with our snapchat the more potential customers we are reaching. (SocialMediaExaminer 2014). King County Sports Zone can create a snapchat account free of cost. With the snapchat account we can take our followers behind the scenes at King County Sports Zone and promote upcoming special events. It will also give us the opportunity to allow guests to see if our courts are available for potential pickup soccer or basketball games.

Figure 17: King County Sports Zone Facebook PageSource: Facebook




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Figure 18: Snapchat Tools Source: Snapsr.com

Marketing cont.

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TV Commercials

Stadium AdsLocal high schools can contribute to the marketing of King County Sports Zone through stadium advertisements. The plan is to reach out to the respective school’s booster clubs, or “organizations that is formed to support (e.g. coordinate events, raise money, etc.) an associated club, sports team, or organization” (Wikipedia 2016). In collaboration with these booster clubs, we can put up advertisements around their football stadiums, basketball courts, gymnasiums, etc. These advertisements are typically posters and banners. The pricing for creating and installing banners can be found in Appendix M: Promotional Materials.

Flyers & Brochures

Flyers will be posted at all of the 46 local schools in the area. Our flyer will display our location, phone number, the sports we offer and the services we have available. Flyers were chosen as one of our main sources of promotion as we start our business for a bevy of reasons. They are “flexible and handheld”, something people can physically touch and interact with. They also aid in word of mouth which still ranks a powerful source of promotion. Flyers also represent an inexpensive and cost-effective source of marketing (Creative Overflow 2013). Additionally, King County Sports will distribute a brochure specifically for the kids camp programs we will have available, listing dates and prices. Prices and additional details can be found in Appendix M: Promotional Materials.

Future Developments

In the future at King County Sports Zone we plan to add a few features. Within the next few years, plan on partnering with a local food business (ex. pizza shop, sub shop, etc.) as an added feature for our customers. A percent of sales from said restaurant will be used as a sort of “lease” payment on a monthly basis. The second feature that will be added to King County Sports Zone along the way is a Kids Zone. The Kids Zone is mainly for kids ages 0-5 and will be a small room that has mini soccer goals, basketball hoops and WII equipment that younger kids can enjoy while their older sibling is using our facility. A third feature we plan to offer is more niche sport tournaments. These will include nerf wars on our turf fields and dodgeball tournaments also on the turf fields.

Website

An important part of our marketing strategy, as well as establishing our brand is the development of a website for King County Sports Zone. All of the other companies we reached out to and researched had, in varying degrees, a functionally website. Once operational and published, our website will be easy to navigate and use. It will feature a tab to view the prices for rentals, as well as inquire about rental contracts, availabilities, and schedule demands (See Figure 19) . The site also features an about tab that allows you to read our mission and vision as well as view staff profiles. There will be a specific place to contact our company, with Google Maps there to help find our location. There will also be a tab on the site that shows the services we offer or intend to offer in the future. This includes summer camps, leagues, and birthdays. There is also a gallery where we implore customers to send their own pictures that may be featured on that page as well as the Facebook Page. The page is very interactive with plans for videos and live streams to be featured on the homepage, as well the page having links to King County Sports Zone’s other social medias (Facebook Page, Yelp, etc.). The link to the site, as well as screenshots from the site, are featured in Appendix N: Online Presence.

King County Sports Zone has plans to develop a commercial and put it on a local news station in Kirkland, Washington called King5. It will cost around $200.00 for a 30 second commercial depending on what time slot we pick. (Wagner, n.d.). The commercial will show off the finished facility as well as the amenities King County Sports Zone has to offer. Our commercial will mainly air during the afternoon hours. The afternoon hours are more affordable than the evening. Afternoon ads will cost around $150-$300 while evening hours can cost up to $1,500 (Entrepreneur, n.d.). This constitutes prime time as for our clientele as both parents and their kids are home from work and school respectively.

Figure 19: Website RentalsSource: KC Sports Zone Website




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Marketing cont.

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Financial Breakdown

For the first year King County Sports Zone’s marketing budget will consist of 10% of our first year sales. The location King County Sports Zone will be is surrounded by little to no competitors. King County Sports Zone is a new business for this area but it is not a new concept. For the first year our main focus is to get our name out and create brand recognition. Most on our budget will be spent on 225 thirty-second commercial ads that will air between 12:00 pm - 4:00 pm in the Kirkland area. The 225 ads will be aired and spread throughout the whole entire year. Our second highest expense will go towards the banners Fast Signs will create for us. These banners are a one time expense. After our name is out we can cut back on marketing. Other indoor sports facilities do little to no marketing after the first year. For the next 4 years we will cut our marketing budget down to $5,000 per year. This money will be spent on repaying specific booster clubs we want to keep on banners up, creating flyers and more commercials. As mentioned earlier, the indoor sports is already an established industry, so beyond the initial need to create excitement and awareness of our business, the goal should be stay relevant and consistent from there on. Our business, following the initial year or so of heavy advertising, should see the company gather a strong customer base that will likely be repeat clients.

Figure 21 Summary: The pie chart above shows where our advertising was spent in year 1. A majority of advertising was spent on commercials. Since we are a new business we have to work hard to promote ourselves. When we talked to many comparable indoor sports complexes they said that they currently do not do much marketing. So, it was difficult for us to find ways to market but the team felt advertising via commercials was the best way to get out our name.

Figure 21: Marketing Breakdown

Figure 20: Marketing Costs Year 1

Next 4 YearsAd Price Quantity TotalFlyers $0.08 1250 $100.00Commercials $200.00 17 $3,400.00Stadium Ads $100.00 15 $1,500.00

Final Amount $5,000.00

Figure 22 Summary: As seen above, the market budget has been scaled down significantly following the first year of operation. With an established and growing customer base, the focus will be on being consistent with our marketing endeavors, with more money planned to be poured into the facility itself as time goes on. Additionally, focus will be put on King County Sports Zone online presences, with our receptionist team in charge of the content and management of those mediums. As part of the responsibility of the receptionist position, 15% of their $10.00 an hour wages are attributed to time spent doing this work. The online channels will be the primary focus of retention and promoting of the facility and corresponding events.

Figure 22: Marketing Costs after Year 1

First YearAd Price Quantity TotalBanners $247.00 30 $7,410.00Flyers $0.08 5000 $388.83Commercials $200.00 225 $45,000.00Stadium Ads $100.00 30 $3,000.00

Final Amount $55,798.83

Figure 20 Summary: Above is a breakdown of the marketing budget for the first year. As seen above our budget is much larger in the first year than it will be in the years after (See Figure 22). With our budget we are trying to established customer base and create brand recognition for King County Sports Zone.

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Operational Assumptions/NeedsInventory Control

For King County Sports Zone, we will not deal with inventory control much as other businesses due to our business's’ nature as a service provider. The only inventory that our business will require will be small sports equipment (ex. balls, bats, cones, etc.), larger sports equipment (ex. basketball hoops, soccer goals, volleyball nets etc.), computers, and office supplies. Outside of office supplies, our other supplies will be replaced very infrequently and therefore our business will not deal with inventory control very often. Small equipment items, such as balls, will be included with rentals as a luxury for our customers.

Supply Chain Management

For our business, we will not require investment into a SCM system as the process of ordering new or replacement sports equipment will be infrequent and easily handled by a manager or subordinate during their normal daily tasks.

For more information please view Appendix O: Job Description & Appendix P: Interview Questions.

Human Resource Projections

King County Sports Zone plans to hire fifteen people. There will be four receptionists, two on hand at all times per working hours. They will take an additional responsibility in handling the website content and social media pages. We will be looking to hire four people to help run children's camps. In addition, we will hire two managers who will split various responsibilities including finances and human resources amongst them. The people working the counter and the camps will be paid minimum wage. During the summer months, we will have to hire an additional fifteen people to help run the summer camps. The people we will be hiring need to be outgoing and good with kids and they will be dealing with children all day and they will be doing so for 8 weeks. These summer camp worker will be paid at a higher rate, they will be paid $13.00 an hour.One custodian will be working 40 hours a week, 6 days a week at facility. They will be paid $11 an hour to clean the facility. Customer Service

At King County Sports Zone we plan to have very interactive customer service. Our camp instructors will have to be very upbeat to keep the attention of the children and our individual trainers will also have to be very upbeat to ensure these athletes keep wanting to get better and better and will return to use the facility.Another thing that King County Sports Zone needs to do to ensure great customer service is make sure the rental process on the website goes as planned. If there is a mistake on the website and a court gets doubled booked (it shouldn’t because we have an MIS system for it), give the people a free rental on the day of their choice. Everyone makes mistakes we just need to own up to them in a situation like that. During the summer, the camp counselors need to display excellent customer service to ensure campers and parents want to come back. These people have to be funny but yet down to earth to keep the attention span of children. Something that is very hard to do.

Hours

Pay Grade

The school year in the state of Washington begins September 1st and ends June 15th. During this time, the hours of operation will be 2:00 pm-11:00 pm (Lake Washington School District, 2016). After contacting other indoor sports facilities such as Incrediplex and InSports, it was clear that, while school is in session, there is very little reason to be open. 2:00 pm represents an early enough time for some of the younger customers who are getting out of school and staying open till 11:00 pm is beneficial for fitting in more groups of older kids who may have practices. With an eye at hosting tournaments, competitive matches, as well as birthdays, weekends, the facility will be open from 8:00 am-8:00 pm. During the summer months which begin the end of June (planned to begin June 15th) through the end of August, the facility will be open from 8:00 am-10:00 pm. This is focused around satisfying leagues, competitive matches, tournaments, and also for hosting our summer camps and programs.Our peak time for rentals during the school year will be in the between of 6:00 pm-10:00 pm. During this time, many teams or individuals will come after school to our facility to practice for the sport in season.

Many of our employees will be payed minimum wage since mostly they will be sitting behind the counter taking money or making sure rentals go as planned. The minimum wage in Washington is $9.47 an hour (Washington State Department of Labor and Industries, 2016). There will be two managers making $70,000. Since we are such a small company we do not plan to offer benefits to our employees up front. If things are a success at King County Sports Zone then in the future, we would certainly offer benefits to our employees. However, at this time it is not a viable option to offer benefits to our employees.




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Management Information Systems

MaxGalaxy is a cloud based system that allows sport complexes to manage rentals, memberships and registrations, and billing options for customers. The company that provides the software is Maximum Solutions Inc., which has been in business since 1994. “This cloud-based solution provides the advantages of minimizing upfront software/hardware investments, decreases overall deployment time, and best of all allows its users the freedom and security of not having to invest in expensive server hardware” (Maximum Solutions Inc.).

The features that King County Sports Zone will need from the MaxGalaxy software are: memberships, reservations, league and camp registrations, billing, and website compatibility. Maximum Solutions Inc. has quoted the startup costs to be $10,000. This is the cost to build the system and to train our employees how to use the system. The monthly charge after the startup cost is $500 per month, which is $6,000 per year. This monthly charge will allow three company employees to access the MaxGalaxy cloud to transfer information into Intuit QuickBooks. MaxGalaxy also has a call center located in Minnesota that is dedicated to helping customers sort through problems. This is a major reason why we went with MaxGalaxy over other softwares that have similar features.

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MaxGalaxy Facebook Page and Website

King County Sports Zone will have a fully functioning facebook page that will be updated daily. The information that will be included in the facebook page will be our current hours of operations for that season, information about the size of the facility, what the facility offers, league standings, company website link, and much more.

Our website will include information about our company, services and amenities that we offer, a photo gallery of the sports complex, the rental costs for our fields and courts, and our contact information, which includes our phone number and address.

Technology

Since the MaxGalaxy system that we are implementing is cloud based, computers are the only hardware that we need to purchase. The computers don’t need any other expensive hardware to access the MaxGalaxy system, website or facebook page. We will need to have a total of 4 computers in the whole facility.

Key Performance Indicators

Reporting injuries

Making sure rentals don’t overlap

Customer Engagement

Non slip courts and quality turf

Payroll and Accounting

For the payroll and accounting, we will use Intuit Quickbooks Payroll. The package that King County Sports Zone needs is the Enhanced Payroll and Quickbooks. Together, this software will allow us to run all of our payroll and accounting without hiring an accountant. The software for 15 employees costs $25.97 a month for the first 6 months, plus $1.50 per employee. After the first 6 months, the software package will cost $51.95, plus $1.50 per employee, which is $74.45 per month.

System Costs per Year Uses

MaxGalaxy $6,000 Memberships, billing, rentals, prevents double booking

Intuit Quickbooks

$893.40 Payroll and Accounting

For the Visio business process diagram integrating MaxGalaxy and Intuit QuickBooks, see Appendix Q.

For price breakdowns for MaxGalaxy and Intuit QuickBooks, see Appendix R.

King County Sports Zone will have one full time manager. Part of the job will be to using the MaxGalaxy system and Intuit QuickBooks. This full time manager will also be responsible for updating the website and facebook page.

Employees

Figure 23: Cost of MIS Software and Uses of SoftwareSource(s): Intuit and MaxGalaxy Websites




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Figure 24: Key Performance Indicators

Financials

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Net Present Value $-572,289

IRR -1.19%

Payback Period 5 Plus

Figure 26: Key Financial Numbers Source: Financials

Figure 27: Revenue Growth Source: Financials

Figure 27 Summary: The chart above shows the revenue growth over the 5 year period that the team has control of the business. Sales in our first year we based on demand received from comparable businesses. After that the team determined that growth would start at 10%, then 7.5% followed by 5% in 2019 and 2020. These numbers were growth percentages were determined by trends that comparable businesses told us were common in the industry.

Figure 25: Total Expenses Source: Financials

Figure 25 Summary: The chart above shows the total expenses over 5 year period that the team has control of the business. Running an indoor sports complex has a high amount of expenses. Much of which are due to start up costs. The increase in expenses is due to a 2% salary increase per year as an incentive to stay with the company.

Figure 26 Summary: The chart above shows our NPV, IRR and Payback Period. With our NPV and IRR being negative that is not a good sign for our business. From these unfortunately numbers this is a sign that our business will not be feasible in the time frame we have been given by Copeland Associates.

For a more in-depth analysis of our financials please view Appendix S: Financials.

Income Taxes

Being our company never actually broke even. We never actually paid an income tax. Therefore our income tax expense during this project would be $0.00. If you aren’t making money you can’t be taxed.

Net Present Value

Our Net Present Value for this project is $-572,289. Since this number is negative we are not feasible for this project. The team did not expect it to so expensive to run a multisport indoor sports complex.

IRR

The internal rate of return is a tool used to determine if an investment’s return was greater than the required return. If our IRR was positive then it would be more appealing for investors to investor in our business but being ours is negative this is not a good risk for investors to take at this time.

Payback Period

The payback period for King County Sports is 5+ years. If the payback period is less than 5 years then the project would be feasible. But since it is not our project is not feasible.

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Financials cont.Insurance Cost

The insurance cost for King County Sports Complex is $12,000 per year. The team received this information from insurance agent (Shinstrom, S , 2016).

Figure 28: Net Income for First YearSource: Financials

Figure 28 Summary: The chart above shows the net incomes from King County Sports Zone first year in business. As you can see, we are only making money in the 3rd quarter. This is due to the summer camps that we will be hosting. Summer camps are very profitable and very popular among the youth population.

Figure 30: Net Profit MarginSource: Financials

Figure 30 Summary: The chart above shows the net profit margins from King County Sports Zone year after year. As you can see, King County Sports Zone will not have positive profit margins until midway through year 2018. This is due, to the high startup costs of running an indoor sports complex. Originally the plan was to just put down turf for our indoor turf but the team was told we needed a drainage system that costs $486,540.

Figure 29: Return on EquitySource: Financials

Figure 31: Return on AssetsSource: Financials

Figure 29 Summary: The graph above shows the Return on Equity for King County Sports Zone 5 years of business. Our return on equity starts out negative but then becomes positive in the middle of the 3rd years. This is because we are finally making money in the 3rd year.

Figure 31 Summary: The graph above shows the Return on Assets for King County Sports Zone for 5 years of business. Our return on assets starts at just under -15%, and breaks even between 2018-2019. This is because of our large investment for our courts and turfs.

The Kirkland, Washington area has a need for an indoor multisport complex. Of the complexes present in the Seattle area most only have soccer. This limits the amount of sports the youth can play. The hope is to bring an indoor multisport complex that offers basketball, volleyball, and other turf related sports the youth in the suburbs of Seattle can enjoy. The limited competition made Kirkland a logical location for our indoor multisport complex.

Kirkland also has a lack of indoor basketball courts that sports teams could use. This is a great opportunity for our business to fill the void within the area. Putting the complex in Kirkland could also boost the economy. If regional or national tournaments are hosted at the facility many out of town teams coming to play. The teams and their families will need multiple hotel rooms, places to eat, and things to do when not playing in the tournament. If you host a big national basketball tournament in Kirkland it would increase the exposure to the city and also make people spend more money in the city.

Kirkland has a very large youth population with children ages 0-14, which makes up 16% of the total population. The facility on 12521 128th Lane NE is located within 10 miles of 46 schools making this market very attractive to gaining the attention of youth sports teams. Kirkland also has a median household income of $90,611 as of 2014 (United States Census Bureau 2016). The typical family has a median household income of only $53,657 (Luhby 2015). Residents of Kirkland have a greater disposable income than a typical American Family by 1.69%. This makes Kirkland a very attractive location for our indoor sports complex.

In 2013, it was reported that over 21M youth ages 6-17 played on a sports team. This is a very large number and does not even consider the amount of kids who got their start before the age of 6. With childhood obesity such a big factor in today’s world, it is a very good idea to invest an indoor sports complex to help restore this standard that the youth population has started.

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When the project started, the team felt good about the project and felt it had a chance to be feasible. Until, we called a turf company about the cost of putting in turf fields. The team asked if since we were buying a warehouse could we just put some padding down and then add turf. We were told that in order to install indoor turf a drainage system would needed. The drainage system costs $486,540, this was an unplanned expense and really hurt the feasibility in the long run.

Another reason why the project isn’t feasible is the team didn’t not realize how expensive it was to run a business in Washington. Rent is very high in Washington and we had trouble finding a facility that was suitable for our needs. Another factor we did not consider is the lack of places available to make a facility like this. The facility we found was the only one of it’s type available.

Kirkland could be a good place to put a Indoor sports complex, because it met all the demographics the team was looking at. Kirkland has a high number of youth interested in sports and high number of families in the area. Unexpected high costs of doing business in the area and additional unplanned costs to renovate our facility made the team realize this project is a lot more complicated than originally planned. Given the parameters of our project, due to a negative NPV of (-572,289), the project is a no go.





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Conclusion

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Retrieved from ESPN on March 18, 2016.




22

References cont.




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23

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Appendix A: Pestle and Porter’s 5 Forces

Kirkland, Washington has a median household income of $90,611 as of 2014 (United States Census Bureau 2016). The typical family has a median household income of only $53,657 (Luhby 2015). Residents of Kirkland have much more disposable income than a typical American Family by 1.69 times. When it comes to running a facility like the one we are attempting to run people with high disposable incomes are the one of the many targets. Kirkland also has a much higher number of high income families. Kirkland has a distinct advantage over the national average when it comes to wealthy 3 and 4 person families with single or married parents (SimplyMap, 2016). These advantages in wealthy families make Kirkland a great location for a facility like ours as studies have shown that families with higher income levels tend to have higher participation rates in sports than those families with lower incomes (Lee, 2015). This increased participation rates will certainly help to boost our business as we will likely have a high number of target customers that also have high amounts of disposable income and interest in sports.

I

Competition in this industry can be described as medium. The point of an indoor sports complex is for people to spend their leisure time playing sports. There are many ways people could spend their leisure time other than exercising, they could be playing video games, go bowling and going golfing just to list a few (IBISWorld 2016). Our specific competitors to the industry in Kirkland, Washington are the YMCA located in Seattle, Columbia Athletic Club in Juanita Bay and Starfire Sports in Seattle.

Technology

Economic

Social

About one in three US children and teens are overweight or obese, triple the rate of the previous generation. This is concerning because the children are the future of this world (First Research 2016). If many are overweight or obese this could limit the lifespan of our younger population. Sometimes if you are overweight or obese you are not as socially accepted and people may look at this indoor sports complex to be socially accepted.

In recent years, there has been action from both state and federal legislators creating laws and regulations intended to help fight the childhood obesity epidemic. Such actions consist of required BMI and diabetes tests at schools and taxes on sugary beverages and snacks. These such laws will help to get kids more healthy and active which will help businesses like ours grow their customer base.

Political

Technology often does not play a major role in the indoor-sports industry. Although this is true, technology is becoming more prevalent by the day and more and more indoor facilities are pushing to integrate technology more into their services in an attempt to make it easier for the customer to stay connected and involved in the facility and therefore more likely to return as a customer. Some ways that businesses are incorporating these new technologies are increased prevalence of televisions throughout the facility, free Wi-Fi for guests, fitness testing equipment such as timers and possibly even newer technologies like FitBit bands, and incorporation of website and app services. Increased incorporation of new technologies like those listed above could help our business to bring in new customers and become more likely to retain them as repeat customers.

In order to make sure customers enjoy their experience at our facility we plan to have the best basketball and soccer fields possible. As well as the best equipment possible that goes along with each sport. On average, about 30% to 40% of fitness club members don't renew memberships, making revenue uncertain and requiring high marketing costs to get new members (First Research 2016).

Suppliers & Customers

Competition

Threat of New Entry

Substitute Products

In Kirkland, Washington it was difficult to find land at a good price that fit our need. This would make it difficult for others to find a place to compete with us making the threat of new entry very difficult.

Customers could potentially go to Starfire Sports. These competitors mainly focus on soccer as soccer is a big thing in Seattle. But most of these places do not offer basketball or volleyball. A customer could even decide to go to just a regular gym if they decide the sports we have to offer are not what they are looking for.




Appendix B: Youth Soccer Leagues

II

Figure 32 : Youth SoccerSource: Lake Washington Youth Soccer Association

Recently Closed

Figure 32 Summary: With the recent closure of 60 acres in Redmond, Washington. The Lake Washington Youth Soccer Association has one less place to play now. With the addition of King County Sports Zone, the LWYSA now can hold weekend soccer games at our location.

In the Kirkland area there are 3 main groups of soccer teams. The Recreational Club, Crossfire Select Club, Crossfire Premier Club. The Crossfire Premier Club runs ages 9-18 and is for both boys and girls and has 18 teams (Crossfire Soccer, 2016). The Recreational Club runs both fall and spring. They offer about 14 teams for both boys and girls and even offer a coed team. Recreational Club runs from ages 7-18 (Lake Washington Youth Soccer Association). The Crossfire Select is mainly for ages 10-19. This league also offers both girls and boys teams. This league is the biggest of them all offering 60+ teams between the boys and girls teams (Crossfire Select, 2016).

Figure 33: Youth Soccer Participation Source: USyouthsoccer.org

Figure 33 Summary: The graph above shows the 10 states with the highest number of youth participating in organized soccer. As you can Washington state is ranked number 9 in the nation in youth soccer participation. This means that there will likely be a large number of youth active in soccer in the area surrounding our location.

The 60 acres facility that was closed is in close proximity to our location in Kirkland. The hope is that the league will consider our complex to fill the void that was left by the 60 acres facility. 60 acres had almost 20 soccer fields, (Lake Washington Youth Soccer Association, 2016). But the 2 turf fields we plan to offer could help out the Lake Washington Youth Soccer Association.

Kirkland has also been working on a Pee Wee soccer league for young kids ages 3-6. According to the Kirkland government page, Over the last three years the program has increased in popularity and participation, from 80 children to over 200, which is a 40% increase (City of Kirkland, 2016). This is a good sign to see because the participation is certainly on the rise amongst the youth. The bad things about the Pee Wee Soccer league is that they play outdoors. A disclaimer on the website says games will be played in the rain if the field is in good condition. The policy is, if the field conditions are poor, putting safety in jeopardy, the games for the day will be canceled and rescheduled. On-site staff is required to evaluate the fields when they arrive to determine the field conditions. If they deem the situation unsafe, they will begin calling all coaches to notify them of the cancellation (City of Kirkland, 2016). Many parents may not want their children to get sick if they play in the rain. With our indoor sports complex being inside maybe some of the youth games could be played at our complex to keep the young kids out of the elements.




Appendix C: Youth Basketball Participation

The Wesco AAU in North Puget Sound, WA is for 5th - 8th graders. Typically 5th to 8th graders range from ages 11-14, perfect for the demographic we are trying to reach. In the Wesco AAU, there is 17 area teams. Wesco also only has one facility they use Arlington High School. Surely, they could use our facility for practices and tournaments (WESCO AAU , n.d.).

III

Wesco AAURich Basketball History

Kirkland Youth Basketball

Northshore Youth Basketball

Figure 35: Basketball ParticipationSource: Simply Map

Figure 34 Summary : The chart above shows that basketball is the high team sport for children ages 7-17. Although, the numbers are on the decline there are still enough children involved in team where a facility like ours can still serve good use. After doing a sizable research on the amount of teams in Kirkland, we believe that there is enough of a team presence that we will have a very high rental demand.

The Northshore Youth Basketball association is ran out of the Northshore School District located 12 minutes from our location in Kirkland. They offer teams for boys and girls between the 3rd and 6th grade and offer boys and girls junior high team and high school teams. Although, they are operated out of a school they do not use that facility to practice. They have one practice facility located at Cotton Lake. That may be an issue because the league currently has 74 boys teams and 50 girls teams. With a combined 124 teams, this league has a demand to find new places to place and host tournaments. The league plays 10 weeks of games but my question for this organization is where do you play all of your games if you have a connection with one gym (Northshore Youth Basketball, 2016).

This league focuses on basketball skill development, teamwork, and having fun as well as broadens "winning" to include enjoyment of the sport, creating friendships, and the learning of new skills. This league is for grades 3rd - 6th, meaning this league is primarily for kids ages 9-12. During this season you play 8 games through the months January, February and March. These teams also practice twice a week in November and December leading up to the games (City of Kirkland, 2016). Surely, with the amount of games that these teams play and the amount of times they practice they could use our facility. The best part about it is most games are playing on the weekends and during the season when high school is in season so getting court time should not be a problem.

Many NBA players have been produced in the Seattle area. Back to Back NBA Slam Dunk Champion Zach Lavine was a member of the Friends of Hoops in Seattle during his younger years. Other notable NBA players that have come through Seattle include Boston Celtics point guard Isaiah Thomas, Los Angeles Clippers shooting guard Jamal Crawford and another former NBA slam dunk champion Nate Robinson (Friends of Hoops, n.d.).

Figure 34: Team Sports ParticipationSource: NSGA Research Newsletter




Appendix D: Concept - Industry Analysis

The indoor sports complex industry is a $910.9 million industry. An increase in public health awareness and dieting trends, along with the growing public awareness of the benefits of physical activity, helped drive changes in adult lifestyles that boosted demand for indoor sports facilities (IBIS World, 2016).

In the indoor sports complex industry there are not any national competitors. At the most an owner may have multiple locations but that is also not very common. From doing research, many of these indoor sports complexes are common in the Northeast and Midwest. A key part of running a good indoor sports facility, like the one we plan to offer, is to have it in an area with a high disposable income. According to a Pew Study, there is a direct correlation between disposable income and the amount of money that parents spend on sports (Pew Research Center, 2015).

Industry growth is something that is expected to occur within the next 4 years and occur until at least 2020. With one and three children suffering from childhood obesity, more and more parents are pushing children to be active (First Research, 2016). With multiple sports being offered in our facility there is no reason children can’t come to our facility and be active.

The indoor sports industry is an industry that holds promising opportunity. According to the most recent research by the Sports and Fitness Industry Association, there were 4.6 million indoor soccer participants in the United States in 2012 (IBIS World, 2016). Sports like basketball are also very popular due to the wide variety of opportunities available.

From talking to many indoor sports complexes, the team has determined that the peak hours for these types of facilities are 4-9pm. These are the hours after children get out of school and come for practices or individual instruction.

IV

Figure 36: Time Spent on Leisure and SportsSource: IBIS world

Figure 36 Summary : The graph above shows the amount of leisure time that people spend on sports. With the average person spending about 5 hours on leisure time, this is important to us because maybe they will spend their leisure time at King County Sports Zone.

Figure 37: Industry Growth Source: NSGA Research Newsletter

Figure 37 Summary: The bar graph above shows the industry growth for indoors sports centers. There is a projected 4% annual growth rate between 2016 - 2020 which is good for the future of our business.




Appendix E: Floor Plan

Figure 38 Summary: The entire building 171,841 square feet. The portion that we are renting is going to be 63,746. The portion of the building we are renting has office space that takes up 2,329 square feet. So after office space, we have 61,417 square feet available for our sports complex. We are planning to have 2 turf fields that measure 200 x 85 feet, and 4 basketball courts that measure 94 x 60. The basketball courts have an extra 10 feet on all sides to eliminate any hazards such as running into a wall. With all of this, we have a remaining square feet total of 4,857. This additional space will serve as hallways in between the courts and fields, as well as a lobby and viewing/sitting area for parents and spectators. There is a wall dividing us from the other company, as well as in between us and the not rented portion.

Figure 38: Facility Floor Plan Source: Jerue, P

Square Footage Breakdown63,746 – 2,329 = 61,417 SF after offices61,417 – 34,000 = 27,417 SF after 2 turf fields27,417 – 22,560 = 4,857 SF after 4 basketball courts

Court and Field Dimensions2 Turf Fields: (200 x 85) 2 = 34,000 SF4 Basketball Courts: (94 x 60) 4 = 22560 SF




V

Data: Jeure,P. Broderick Group. Retrieved from personal communication on April 05, 2016.

39

Key Partners Key Activities

Key Resources

● Basketball courts

● Soccer Fields

● Balls for all sports

Value Propositions

Customer Relationships

Channels

● Word of mouth

● Social Media

● Website

● Magazine

Customer Segments

● 6-14 years ● $75,000+● Families with

kids interested in sports

● AAU Teams● Soccer

Leagues

.

Cost Structure

● Cost of maintaining the courts and turfs

● Cost of electricity

● Cost of gas heating

Revenue Streams

● Rentals

● Birthday Parties

● Concessions/Rentals from Concession space

● Hosting Tournaments

● Sponsorship

Appendix F: Business Model Canvas

● AAU Teams ● Youth Soccer

Leagues● Local Schools

VI

● Renting out turfs and courts

● Hosting Birthday

● Tournaments● Summer

Camps● Leagues

● Offering multiple sports in one location

● No longer have to play sports in the elements

● Facebook Page and Snapchat,so customers can interact with the company

● Camp leaders very involved with campers




Appendix G: Location

Our Location

Our Location

Figure 39 Summary : The maps above show the amount of schools near our location. Most of these within a 5 mile radius. This is key for being successful because many of these schools have teams and need places to play. King County Sports Zone hopes to fill that void.

Figure 39: Map of Schools Close to Our Location Source: Google Earth




VII

Appendix G cont: Location

Figures 40 and 41 Summary: One of the variables that we looked into when deciding whether to pick Kirkland, Washington was how many kids lived within the surrounding area that were 6-14 years of age. As shown in Figures 12 and 13, Kirkland and the surrounding areas all have high numbers of kids that live within the area ages 6-17. According to the United States Census Bureau there are roughly 16,000 kids under the age of 18 that live in Kirkland alone. This is crucial to our business because kids who are of the ages of 6-14 are the focus target market for the King County Sports Zone.

Figure 40: Number of the Population 6-11 Years Source Simply Map

Figure

Figure 41: Number of Population 12-17 Years

Figures 42 and 43 Summary: The next factor in deciding the location for our indoor sports complex was household income. We were looking for areas with higher levels of household income to support our business. Figure 15 show that, Basketball has the largest participation percentage at 11.28%. Baseball and Soccer follow at 6.93% and 6.56% respectively. These numbers may seem low, but they are taking into account all the people that live within Kirkland, not just the youth.

Figure 42: Number of Households with Income between $100,000-$124,999

Figure 43: Kirkland Sports Participation

All Data Retrieved from SimplyMap, 2016.




VIII

Appendix G cont: Location

The focus is on children ages 6-14 who are beginning or already involved in some sort of youth sports program and/or team.

IX

Kirkland has a very high number of people who are interested in higher education. Within 15 miles of Kirkland are 15 colleges and universities. Many people in Kirkland are also interested in recreation. This is mainly due to the closeness of Lake Washington. In addition to Lake Washington, there are many outdoor parks located in Kirkland that people can take their children to do such as swim and play at the playground (City of Kirkland, 2016).

In addition, Kirkland is a younger city with a median age of 38.4 years. This is important to know because we now understand that the people we are marketing to are fairly young. Kirkland is also 100% urban, meaning that the city is fairly complex (City Data 2016).

The people of Kirkland are also very wealthy. With the average household income in Kirkland being $90,611 as of 2014, the people can live a more affluent lifestyle (United States Census Bureau, 2016).

Figure Summary: Kirkland also has high numbers among males ages 0-14. Kirkland also has large numbers of potential and current male parents ages 25-39 living within the area meaning that our business will have an already large, already established customer base that is continuing to grow.

Figure 44: Kirkland Female Population Source: Suburbanstats.org

Figure 44 Summary: Kirkland has high numbers of female children ages 0-14. This coupled with the fact that Kirkland also has high numbers of potential and current female parents ages 25-39 living within the area means that our business will have a large, already established customer base that is continuing to grow.

Figure 45: Kirkland Male Population Source: Suburbanstats.org

Figure 46 Summary: A very large part of the Kirkland, Washington population is White. The next largest race in Kirkland is Asian followed by Latino. This demographic information will help us better determine how to market to potential customers

Figure 46: Kirkland Population by Race Source: Suburbanstats.org

Psychographics




Target Market

Appendix H: Local Competitors

Local Competitor SummaryAlthough the Kirkland area has some competitors to our business, most of them require memberships to use their facilities. This means that sports teams can’t rent out the facilities from these competitors. This leaves a void that can be filled by the King County Sports Zone.

X




Columbia Athletic Club- Location: 11450 98th Ave NE, Kirkland, WA 98033- 2.6 miles from our location, or a 8 minute drive- Offers swimming, tennis, and youth camps. Membership is required to use the facilities- This facility doesn’t offer indoor turf fields, basketball courts, or batting cages (Business

After Hour, 2016).

YMCA- Location: 909 Fourth Ave Seattle, WA 98104 - 15.8 mile from our location or a 24 minute drive- Offers kids camps, swimming, childcare, basketball/volleyball courts, and racquetball

courts- Membership is required through the YMCA to gain access to these offerings- Do not have indoor turf field or batting cages (YMCA 2016).

Starfire Sports - Main Competition of King County Sports Zone- Location: 222 East 26th St., Suite 202 Tacoma, WA 98421- 41.7 miles from our location, or a 49 minute drive- Offers 12 outdoor fields, and 2 indoor turf fields, world class athletic center, restaurant,

sports performance center and physical therapy- All fields are designated for soccer only- Used to host adult leagues, as well as games for the FC Sounders soccer team- Doesn’t include any basketball courts, batting cages, or youth center- Only used for soccer (Starfire Sports 2016).

Sandbox Sports- Location: 5955 Airport Way S, Seattle, Wa- 21 miles from our location, or a 30 minute drive- Offers 2 indoor sand volleyball courts, a baby court for kids, and rooms for party rentals- Has no turf fields or hardwood courts (Sandbox Sports 2016).

LA Fitness- Located: 12321 120TH Place NE, Kirkland, WA 98034- .6 miles from our location or a 3 minute drive- LA Fitness is a club with relatively high membership fees. The company targets people

who are 18-40 (Colon, 2014). “Each club offers a variety of exercise equipment, a swimming pool, spa, sauna, basketball and racquetball courts, and group exercise classes” (PrivCo 2016).

- Even though L.A. Fitness does have basketball and racquetball courts, they are not in direct competition with our business. Their target market is significantly older, and their facilities can not be rented out by a team.

- L.A. Fitness does offer a kids klub but this is more of a babysitting option while the adults workout.

Appendix H cont: Local Competitors

XI

Name High Competition Low Competition

Columbia Athletic Center ✓

YMCA ✓

Starfire Sports ✓

Sandbox Sports ✓

LA Fitness ✓

Figure 47: Local Competitor Competition Source: Company Sites

Figure 47 Summary:

LA Fitness the closest to our location. But to be honest, they are not that much of a competitor. They have one basketball court, not enough to host basketball tournaments and are mainly a gym. They are close to the facility but we do not have to worry about them much.

Starfire Sports is another competitor we must watch out for when it comes to soccer by they are located 50 minutes from our location so we actually hope to take some of their competition. Maybe some of their customers who drive the 50 minute commute from Kirkland will now come to our location instead of Starfire. But Starfire Sports is the closest competitor we have in the area due to their ability to host soccer tournaments and camps.

Columbia Athletic Centers is also only 3.6 miles from our location but also we do not think of them as much of a competitor. They are more of gym that offers kids services such as swimming and tennis lessons. The big concern with Columbia Athletic Centers is that the people of Kirkland would rather spend their time swimming and playing tennis rather than sports we offer like volleyball, basketball, soccer and flag football.

YMCA is another competitor we must consider but the YMCA also limited in how they can compete with us because the only thing we share in common is basketball courts. The YMCA is located about 25 minutes from our location, so the location is not too far but not too close but close enough that we have to compete against

Sandbox Sports is the competitor we fear the least. Sandbox Sports is strictly for outdoor volleyball and has nothing for indoor facilities. Most volleyball tournaments are located indoors as that’s where most high school and middle school volleyball is played so we should be able to do just fine in that aspect and not have to worry about Sandbox Sports




XII

Figure 48: Local Competitors Source: Google Maps

Our Location

Starfire Sports

LA Fitness

YMCA

Columbia Athletic

Sandbox Sports

Figure 48 Summary : From the google map above, you can see that Columbia Athletic Club and LA Fitness are the closest local competitors. Starfire sports is likely our closest competitor but they are located all the way in Tacoma almost an hour away.

Name Distance from location Time from location

LA Fitness .6 miles 3 minutes

Columbia Athletic Club 2.6 miles 8 minutes

YMCA 15.8 miles 24 minutes

Sandbox Sports 21 miles 30 minutes

Starfire Sports 41.7 miles 49 minutes

Appendix H cont: Local Competitors - Map




Figure 49: Distance from Local Competition Source: Google Maps

Appendix I: Local Market Analysis

XIII

Figure 50: Family Income Distribution in Kirkland, Washington Source: Simply Map

Figure Summary: This figure shows the different sizes of both married and single families ranging from 3-7+ people in size segmented by their household income for a year. As seen on the figure, there is a high number of 3-4 person families throughout all of the income segments but has the highest concentration in the upper income segments ($125,000-$200,000+). This will help us market our consumers because the main people we are targeting are likely to have 3 or more people in the family.

Growth is expected to occur in Kirkland each year and projected that way until at least 2035. Kirkland is expecting a growth spurt to accommodate 8,361 new housing units and 22,435 new jobs by 2035, which averages out to about 363 housing units per year and 975 jobs per year. The city gained about 1,500 units for the six-year period or around 250 units per year (City of Kirkland, 2016).

According to a study done by the Pew Research Center, 84% of children with parents having an income over $75,000 have participated in sports or athletic activities in the last 12 months. Parents with a higher income are likely to be our customers in the future. Leagues, camps and court rentals are not cheap (Pew Research Center, 2015). Kirkland as previously stated is an area with very high disposable income. From the Pew Study, this helps to figure out who are consumers will be and yet another reason why Kirkland, Washington is a logical location for King County Sports Zone.

TODAY’S LOCAL CUSTOMERS

$75,000-$99,999 $100,000-$124,999 $125,000-$149,999 $150,000-$199,999

$200,000 or more

TOTALS

3 Person 248 245 239 323 520 1,575

4 Person 228 287 298 361 690 1,864

5 Person 85 78 87 121 193 564

6 Person 30 22 23 23 42 140

7+ Person 15 14 7 19 10 65

TOTALS 606 646 654 847 1,455 4,208

Tomorrow’s Local Customers Figure 51: Household Income and Participation Among Sports

Source: The Aspen Institute

Figure 51 Summary: According to the Aspen Institute, higher household income leads to higher youth participation in sports. This along with $90,611 being the median household income in Kirkland, Washington shows emerging opportunities (United States Census Bureau,2016).




Appendix I cont: Local Market Analysis

XIV

Park Amenities

Name Distance Baseball/Softball Basketball Soccer Volleyball Playground

132nd Square Park .7 miles ✓ ✓ ✓

Mark Twain Park 2.2 miles ✓ ✓

North Kirkland Park

2.3 miles ✓ ✓

Everest Park 3.4 miles ✓ ✓ ✓ ✓

Juanita Beach Park

3.6 miles ✓ ✓

Highlands Park 4.3 miles ✓ ✓

Van Aalst Park 4.5 miles ✓ ✓

Crestwoods Park 4.5 miles ✓ ✓ ✓ ✓

Forbes Creek Park 4.6 miles ✓ ✓

South Rose Hill Park

5.1 miles ✓ ✓

Terrace Park 5.4 miles ✓ ✓ ✓

Big Finn Hill Park 5.4 miles ✓ ✓ ✓

Houghton Beach Park

8.6 miles ✓ ✓

Figure 52 Summary : Based on the offerings listed on the Kirkland Online Parks Guide we found that there are 13 local parks within 10 miles of our prospected location. These parks offer some kind of sports service that our business offers but of course in an outdoor setting. Although 13 parks nearby may seem like a high number we feel that many of these parks only offer grass fields as well as blacktop basketball courts which could be rendered unusable during rainy conditions, which Kirkland experiences frequently. Another key point regarding these parks is that almost all of the parks have a basketball court but this is an outdoor court which means that teams will not rent it out for practices and games and through our research we found that team rentals are often the main source of revenue for indoor sports facilities like ours. Also basketball is the most popular sport in the Kirkland region with 11.28% of residents reporting that they have played in the last 12 months so we can assume that there are a large number of kids in the Kirkland area looking to play basketball (Simply Map, 2016).

Figure 52: Kirkland Area Outdoor Parks Source: Kirkland Online Parks Guide




Appendix I cont: Local Market Analysis

XV

Family Type Income Segment Kirkland Percentage National Average

Married, 3 Person $125,000-$149,999 .82% .52%

Married, 4 Person $125,000-$149,999 1.10% .88%

Single, 3 Person $125,000-$149,999 .18% .09%

Single, 4 Person $125,000-$149,999 .14% .07%

Married, 3 Person $150,000-$199,999 1.15% .52%

Married, 4 Person $150,000-$199,999 1.38% .88%

Single, 3 Person $150,000-$199,999 .20% .07%

Single, 4 Person $150,000-$199,999 .12% .06%

Married, 3 Person $200,000+ 1.94% .62%

Married, 4 Person $200,000+ 2.74% 1.09%

Single, 3 Person $200,000+ .22% .06%

Single, 4 Person $200,000+ .12% .04%

Figure 53 Summary: In this figure, you can see the percentage of Kirkland’s population that is made of 3 and 4 person families with single and married parents throughout the higher household income segments. As you can see on the table, Kirkland has a fairly substantial advantage over the national average in all of the income segments with the most convincing advantage coming in the $200,000+ income segment where Kirkland’s population percentages are over or close to 3 times higher than the national average for that income segment.

This information is important because high disposable income is an important economic driver when it comes to improving and maintaining revenue in the sports facility industry (IBISworld, 2016). The fact that Kirkland has higher percentages than the national average in each of income segments and family categories will likely be an advantage for our business as studies have shown a link between low socio-economic standing leading to a high BMI in children which often leads to a more sedentary and lethargic lifestyle (Drenowatz, Eisenmann, Pfeiffer, Welk, Heelan, Gentile, Walsh, 2010).

A study done by the BMC Public Health group in 2010 found that children in lower socio-economic standing tend to have a lower rate of physical activity compared to children in higher socio-economic standing (Drenowatz, Eisenmann, Pfeiffer, Welk, Heelan, Gentile, Walsh, 2010). This decreased rate of physical activity is expected to be a result of a higher average BMI or body mass index which is a measurement based on the child’s height and weight. This increased level of BMI in lower socio-economic groups is expected to be a result of healthier foods often being higher price than less nutritious food meaning that families with lower disposable income are more likely to purchase these cheaper, but often less nutritious, foods therefore leading to higher BMI’s in the children of these lower income families.

Figure 53: Kirkland Family Income Segments Source: Simply Maps




Appendix J: Demand Charts

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Incrediplex Sportsplex Total Sports Experience

Body Zone Sports and Wellness

City Indianapolis, IN Dallas, TX Rochester, NY Reading, PA

Square Feet 177,000 61,000 127,500 160,000

Total Population 848,788 1,281,047 210,358 87,812

Child Population 6-17 131,607 4,432 32,405 16,834

Average Rentals per week 35 24 20 15

Price Per Hour $50 $75 $55 $50

Weight 45% 15% 20% 20%

Figure 54: Court Demand

Legends Sportsplex Incrediplex Wilson’s Fitness Center

City The Woodlands, TX Dallas, TX Indianapolis, IN Columbia, MO

Square Feet 100,000 61,000 177,000 62,000

Total Population 109,679 1,281,047 848,788 115,276


Average Rentals per week 55 45 25 30

Price Per Hour $200 $85 $160 $160 (1.5 hours)

Weight 35% 10% 35% 20%

Figure 55: Turf Field Demand




Appendix J cont: Demand Charts

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Wilson’s Fitness Center Legends Pinnacle Sports InSports

City Columbia, MO Woodlands, TX Medina, OH Trumbull, CT

Square Feet 62,000 100,000 140,000 108,000

Total Population 115,276 109,679 27,248 37,032


Average Campers per week

45 250 35 350

Price Per Week $145 $75 $192 $125

Weight 20% 35% 20% 35%

Figure 56: Summer Camp Demand




Appendix K: National Competitors

Incrediplex - Indianapolis, IN (Incrediplex Sports, 2016)

- Offering Basketball, Volleyball, Lacrosse, Football, Soccer, Baseball and Softball.

- Also offers personal instruction, leagues and camps.

Insports Centers - Trumbull, CT (Insports Centers, 2016)

- Offering Basketball, Volleyball, Lacrosse, Football, Soccer, Baseball, Softball, Dodgeball, Field Hockey and Rugby

Body Zone Sports and Wellness - Wyomissing, PA/Reading, PA (Body Zone Sports and Wellness, 2016)

- Offering Basketball, Volleyball, Soccer, Field Hockey, Flag Football, Softball and Baseball

Nova Field House - Chantilly, VA (Nova Field House, 2016)

- Offering Basketball, Volleyball, Soccer, Lacrosse, Field Hockey and Football

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Summary: Although all of these complexes are located on the other side of the country they offer very similar services to what King County Sports Zone has to offer. These locations can be used to compare information to our location. These competitors can serve as a benchmark for our location to see how demand we may have for our service.

Insports Centers in Trumbull, CT is what we feel our business will closely resemble. They have multiple basketball courts and soccer fields but the population is much less than Kirkland.

Incrediplex is a company that we could strive to be like in the future. They offer the same services that we do but also have an arcade and have inflatables for the younger kids. If our business becomes successful this is a route we could potentially go.

Figure 57: Square Footage & Population Sources: Company Sites and U.S. Census

Figure 57 Summary: The chart above compares the square footage of our main national competitors. To make sure our space isn’t too big we felt it was necessary to compare the different in sizes amongst the top companies. From the information you can tell that the facility we have found is in the middle compared to our competitors and is a good size place to open our business.

Name Square Feet Population

Incrediplex 177,000 848,788

Insports 108,000 36,018

Body Zone 160,000 87,812

Nova 62,560 23,039

King County 147,040 85,763




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Figure 58: National Competitor Competition Source: Company Sites

Appendix K cont: National Competitors

Name High Competition Low Competition

Incrediplex ✓

Nova ✓

Body Zone ✓

Insports ✓

Figure 58 Summary : Incrediplex is the company most like the vision we have for King County Sports Zone. Incrediplex has multiple soccer fields, multiple basketball courts, young children area with bounce houses and a restaurant. Incrediplex is on a lot bigger scale then we plan to be. Their location in Indianapolis, is a good spot for them due to the high population in Indianapolis. Although, Indianapolis, Indiana and Kirkland Washington are very far apart in location the standard that Incrediplex has set is what we want to live up to.

Nova is a business that we can consider to be on the low end of competition. Nova only has two turf fields and one NBA sized basketball court. The NBA court is not repurposed into a volleyball court and the turf fields are strictly used for lacrosse. Nova is located in a much smaller area than King County Sports Zone. The population of Kirkland is almost four times the size of Chantilly, VA the location of Nova sports.

Body Zone is yet another national competitor we should consider. Body Zone has the same concept as King County Sports Zone but also offers much more like swimming and a full exercise gym. The population of Reading where Body Zone is located is very similar to Kirkland and the size of the facility is very similar to the facility we have been looking into. The big difference between King County Sports Zone and Body Zone is that a professional hockey team rents out their ice arena and plays there. We have no plans for an ice arena, so we will never host a professional hockey team.

Insports is the final national competitor we have to consider. Insports has a very large facility in Trumbull, CT but the population in Trumbull is almost less than half that of Kirkland. They have a very similar plan to what King County Sports Zone plans to offer while offering slightly more on the turf fields then we plan to.

Overall, Body Zone, Insports, Nova and Incrediplex are national competitors that we have to consider but since they are on the other side of the country we aren’t directly competing against them.




Appendix L: Competitor Comparable

XX

Name Comparable

Incrediplex SportsIndianapolis, IN

Incrediplex offers a wide variety sports such as we do. They offer basketball, soccer, volleyball, lacrosse and football. In addition, they offer children camps, league play, birthday parties and court rentals all of which we plan to have at our facility.4 Basketball Courts4 Sports Turfs

Insports CentersTrumbull, CT

Insports also offers many of the same sports that we plan to offer. They also offer basketball, soccer, volleyball, lacrosse and football. Insports also offers children camps, league play, birthday parties and court rentals. 2 Indoor Sized Turf Field1 Full Sized Turf Field3 Basketball Courts

Nova Field House Wyomissing, PA/Reading, PA

Nova also offers many of the same sports that we plan to offer. They also offer basketball, soccer, volleyball, lacrosse and football. Nova also offers children camps, court rentals and league play.2 Sports Turfs1 Basketball Court

Body Zone Sports and WellnessChantilly, VA

Body Zone also offers many of the same sports that we plan to offer. They also offer basketball, soccer, volleyball, lacrosse and football. Body Zone also offers children camps, league play, birthday parties and court rentals. 2 Full Sized Sports Turfs1 Basketball Court

Figure 59: Competitor Comparables Source(s): Company Websites




XXI

Appendix L cont: Competitor ComparableFigure 60: Competitor Comparables #2 Source(s): Company Websites




Name Comparable

Legends Sports ComplexThe Woodlands, TX

Legends offers many of the same sports that we plan to offer. They also offer basketball, soccer, volleyball and football. Legends only offers kids birthday parties.3 Basketball courts1 Full Sized Turf Field

SportsplexDallas, TX

Sportsplex also offers many of the same sports as King County Sports Zone. They offer Basketball, Volleyball and Soccer. In addition, they offer kids camp as well as birthday parties for kids of all ages. 3 Full sized High School Basketball Courts5 Volleyball Courts*Volleyball Courts and Basketball Courts are different from each other.

Total Sports ExperienceRochester, NY

Total Sports Experience offers a wide variety of sports such as soccer, basketball, lacrosse, flag football, baseball and softball. In addition, they offer field rentals, leagues, birthday parties and camps for the youth.1 Basketball Court2 Soccer Turfs

Wilson Fitness CenterColumbia, MO

Wilson Fitness Centers also offers a wide variety of sports activity. The sports they offer are soccer and basketball but they do offer additional services like swimming. They offer camps, birthday parties, individual instruction and many league throughout the year.2 Basketball Courts2 Soccer Fields

Rochester Sports GardenRochester, NY

Rochester sports gardens offers lacrosse, basketball and soccer. In addition, they have youth league, camps, field rentals and birthday parties. 3 Basketball Courts2 Indoor Turf Fields

Appendix L cont: Competitor Comparable - PricesFigure 61: Competitor Prices Source(s): Company Websites




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Appendix L cont: Comparable Competitors - Images Figure 62: Incrediplex Source: Incrediplex.com

XXIII

Figure 63: Insports Source: Insportscenters.com

Figure 64: Body Zone Sports Source: Bodyzonesports.com




XXIV

Appendix L cont: Comparable Competitors - Images Figure 65: Legends Sports Complex Source: thelegendsportscomplex.com

Figure 66: Rochester Sports Garden Source: rocsportsgarden.com

Figure 67: Sportsplex Source: sportsplexvv.com




Appendix M: Promotional Materials

XXV

Figure 68: Promotional Design is the general design for all of King County Sports Zone’s promotional materials. It will be altered based on size and format and used for mass distribution to local sports events (ex. high school games, local sports teams, etc.), and to sports related stores (ex. Dicks Sporting Goods). Currently is is a double sided 8.5 X 5.5 inch flyer, with a glossed finish. King County Sports Zone decided to go with a purchase of 5,000 of these flyers for distribution, with a price of $383.11 from our chosen provider, Fedex. We compared Fedex Kirkland with its closest competition, Minutemen Press Kirkland, and as seen in Figure 69: Flyer Price Comparison, Fedex provided our company with a much cheaper option and was thus selected. Quality should not be an issue as it meets all of our requirements.

Figure 68: Promotional Design

Figure 69: Flyer Price Comparison Source(s): Calls to Vendors




XXVI

Appendix M cont: Promotional Materials

Figure 70: Brochure Model Source: Microsoft Word

Figure 70 Summary : This brochure will be used to promote our summer camps. The brochure can be found at all local schools and grocery stores in the area. Camps begin June 20th, so get your child signed up early!




Appendix M cont: Promotional Materials

XXVII




Figure 71: Facebook Header Source: Facebook

To help promote King County Sports Zone we can pay Fast Signs in Kirkland Washington to create banners. Fast Signs is a local company that creates posters and banners for businesses at an affordable cost. Their most common banner they have to offer is 3 X 8 feet for $247 before taxes. We expect to buy between 25-50 banners and will contact local booster clubs for schools around the Kirkland area as we mentioned earlier. These booster clubs will give us permission to hang up these banners in the school’s stadiums or gymnasiums. The booster clubs contacted quoted a average price of $100.00 to have banners hung up at their high school stadiums.

An example banner is located on the right in Figure 72: Banner.

Figure _ Summary: Our Facebook Page will be used very frequently to reach out to our customers. The team will display deals on courts and turf rentals. Also, have information about how to set up your birthday party or your special event at our facility.

Banners

“Actively keeping you active”Call us today for all your indoor sports needs: (585) 794-****

Figure 72: Banner

Appendix N: Online Presence

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Website

The link is to the King County Sports Official Website.

http://goldshanker.wix.com/kingcountysportszone

Figure 75: About Us

Figure 76: Gallery

Figure 77: Contact Us

Figure 73: Homepage 1/2

Figure 74: Homepage 2/2

XXX




Facility Manager

Front Desk Receptionist

Duties:● Answers phone calls and routes phone calls to necessary

offices● Schedules rentals and manages time slots for games,

practices, etc● Perform other receptionist duties such as filing,

photocopying, monetary transactions, etc● Edits and posts on website and social media accounts

Requirements:● High school degree● Strong organizational skills● Strong communication skills

Floor Team

Duties:● Manages field and court conditions; changing the layout

when needed ● Works face-to-face with customers, assisting in their

respective needs ● Handles the distribution and usage of equipment ● Help in maintenance of the facility

Requirements:● High school degree● CPR and other health certificates achieved ● Referee experience (optional)

Position Hours per Week

Days per Week

Facility Manager

40 6


Days per Week

Front Desk Receptionist

20 5


Days per Week

Floor Team 20 7

Appendix O: Job Descriptions

Duties:● Overseeing the cleaning and maintenance of the facility ● Running general administrative services● Supervising teams of staff including coaching, floor team

and custodial workers● Managing a budget● Team building (recruiting, interviewing, selecting, and

managing a team of college students & teachers)● Hiring new employees

Requirements● Bachelor’s Degree● 5 + years management experience, preferably in education,

business or the hospitality industry

Figure 78: Facility Manager

Figure 79: Front Desk Receptionist

Figure 80 : Floor Team

XXXI




Duties:● Cleaning and maintenance of the facility ● Overseeing the facility meets the required health and

safety standards ● Works with any technical or mechanical problems the site

may have Requirements:

● High school degree● Able to lift up heavy objects ● Mechanical and technical background

Custodian

Duties:● Overseeing 15-20 campers● Teaching, coaching, and interacting with campers ● Provides opportunities for campers so that each

individual experiences success during campRequirements:

● 18+ years of age● Leadership skills

Summer Camp Counselor


Days per Week

Custodian 40 6

Position Hours per Day

Days per Week

Summer Camp Counselor

5 5

Appendix O cont: Job DescriptionsFigure 81: Custodian

Figure 82: Summer Camp Counselor

Appendix P: Interview Questions- Tell me about yourself?

- Tell me a little bit about your past experience?

- What do you look for in a company?

- What are your biggest strengths?

- What are your biggest weaknesses?

- Where do you see yourself five years from now?

- Why did you leave your last job?

- Why are you interested in this job?

- Why do you think you fit in with our company?

- What is your greatest failure and how did you learn from it?

- Describe your work style?

- Do you work well with others?

- Do you enjoy working with children?

- What do you see yourself doing after your first 30 days on the job?

- Are you willing to accept this job knowing it is only minimum wage?

- What are your future plans?

- Have you ever played sports in the past?

- Do you have enough patience to deal with kids?

- What hours are you looking to work?

- What is your availability?

- Have you dealt with money in the past?

- What kind of educational background do you have?

- Describe a tough situation and how you worked out of it?

- Please tell us about the job that benefited you the most.

- Do you consider yourself a leader or a follower?

- When was a time when you displayed leadership?

- Are you okay working on your own?

- What qualities do you feel you would bring to the workplace?

- Are you an upbeat person?

- How long do you expect to stay with this company?

XXXII




The questions shown above represent a list of potential interview questions designated for our future employees. They consist mostly of behavioral questions considering most positions at King County Sports, besides the manager, will be wage based and require little background or expertise in a specific field. Those interested in a position can inquire via phone or apply online through the King County Sports Zone website. The interview process will be streamlined, their will not be phone interview, rather, the receptionshipt or the facility manager, will contact the person and schedule a time for them to come in for a face-to-face interview with the questions from above.

Interview Process

Appendix Q: Visio Business Process Model for Field and Court Rentals

XXXIII

Figure 83: Business Process Model Part 1Source: Visio

The customer would go to the website, and find the MaxGalaxy court and field rental link,. The customer would then choose which fields or courts they wanted to reserve, and the dates and times desired. The MaxGalaxy system would then bring the customer to a payment page where the customer would fill out payment and billing information. The customer would then choose if they want a paper or emailed receipt.

From there, the MaxGalaxy system would start the order processing by confirming the order. The system would then put the information of the order in the correct tables and charts.




XXXIV

Appendix Q cont: Visio Business Process Model for Field and Court Rentals

Figure 84: Business Process Model Part 2Source: Visio

If the customer wanted an emailed receipt, the MaxGalaxy system would then send it via email, and the customer would receive it.

The employee designated for the MaxGalaxy system would then start transferring the information into Intuit QuickBooks. From there QuickBooks would run the payroll and accounting for that transaction.

The customer would then show up to the facility to check in before going to the court or field. If the Customer wanted a paper receipt, the receptionist would print it out and hand it to them. The receptionist would then tell the customer what field or court to go to. Finally the receptionist would make sure that the customer doesn’t exceed the time payed for, and the customer leaves after their time is up.




Appendix R: MIS Triangle

XXXV

Process The way customers go about reserving, registering, or purchasing memberships is by visiting our website. There will be a MaxGalaxy link that will take the customer into the software. Once in the cloud, customers can fill their order out, and proceed to checkout. At the check out, the customer puts in their payment option, billing information, and how they would like their receipt.

ITOnce the orders are placed, the software puts all the required information into the corresponding applications. For example, if there was an order for 1 court, the software would book that court for the specified date and time, as well as log that customers reservation history.

PeopleThe MaxGalaxy system makes the customer rental and membership process much easier. With the cloud based system, the customer can access the rental page and the membership page from anywhere. This means that the customer doesn’t have to be present in the facility to rent a court/field or purchase a membership.

Components for Cost Cost of Components

1 time setup fee $2,500

1 time management fee

$2,500

1 week of training fee $5,000

Total $10,000

Figure 86: MaxGalaxy Startup Price

Intuit QuickBooks Monthly CostFor first 6 months with Promotional Offer for 15 Employees

$25.97 + $1.50 (15) = $48.47 per month6 Month Total:

$48.47 (6) = $290.82

After first 6 months without promotional Offer for 15 Employees.

$51.95 + $1.50(15) = $74.45 per monthYearly Cost

$74.45(12) = $893.40

MaxGalaxy Monthly CostThe monthly cost for MaxGalaxy after the setup fees and training is $500 a month.

$500(12) = $6,000

Figure 85: MIS Triangle Source: Clipart




Appendix S: Financials

XXXVI




Figure 87: Loan Amortization Table Source: Financials

Figure 88: Long-Term Asset Depreciation Tables Source: Financials

Appendix S cont: Financials

XXXVII




Figure 89: Year One Income Statement Part 1Source: Financials

XXXVIII





Figure 90: Year One Income Statement Part 2Source: Financials

Figure 91: Year One Cash Flows Source: Financials


XXXIX




Figure 92: 5 Year Income Statement Source: Financials

Figure 93: Corporate Tax RatesSource: Financials


XL




Figure 94: Capital Budget Analysis Source: Financials


XLI




Figure 95: Balance Sheet Source: Financials

Documents

Cluster PM101 Team 4 P2 final