1.0 Executive Summary
The purpose of this business plan is to secure $85,000 of debt capital for the development of a batting cages facility based in Osage County, Oklahoma. Batting Cages LLC (“the Company”) was founded this year with the intention of providing access to state-of-the-art automated batting cages as well as providing a social outlet for people that have a love of baseball.
Operations
The primary revenue center for the Company will come from the ongoing use of its batting cage facilities. At the onset of operations, the Company intends to have 10 bays where people can practice their swing as well as receive ongoing training from baseball coaches that will be on staff. The Company intends to charge $20 to $30 per hour of access depending on the time and day.
The secondary revenue center will come from the sale of concessions. The business will have a number of packaged food items and pack and bottled beverages on site for sale. This will produce significant contribution origins.
The third section of this batting cages business plan will further document the operations of the business.
The Financing
At this time, the Company is seeking $85,000 of capital to launch the full-scale operations of his business. This document assumes that the Company will receive a 10-year loan carrying a 7.5% interest rate.
Moving forward, the Company could easily secure additional rounds of capital to further the growth objectives of the business in the event that a second location is to be established in Oklahoma. This document assumes that the Company will use its retained earnings to finance its growth over the next three years.
The Future
The Company will continue expand the scope of its marketing operations said it becomes the preeminent batting cages facility within the target market (Osage County) of Oklahoma. After the third year of operation, management may develop additional facilities at least 20 miles away from the original rotation.
Market Overview
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The funds discussed in the executive summary will be allocated as follows:
2.2 Management and Investor Equity
The Founder retains a 100% ownership interest in Batting Cages.
2.3 Exit Strategies
As this business is relatively easy to operate and has streamlined operations, there would be a significant demand among third-party entrepreneurs to acquire the batting cages facility. In this event, a qualified business broker would be hired in order to manage the sale.
3.0 Operations
As noted in the executive summary, Batting Cages will be actively engaged in providing a wide range of baseball entertainment from its facilities in Oklahoma. The Company will generate substantial contribution margins from the ongoing use of these facilities, which will be open seven days per week. The Company will price services affordably, so that any individual that has a love of baseball can participate in the programs offered on site.
The Company will also produce substantial secondary revenues from the sale of food and beverages. All products will be packaged or bottled. The Company will produce contribution margins of 70% on these sales.
4.0 Overview of the Organization
4.1 Registered Name
Batting Cages LLC. The Company is registered as a limited liability company in the State of Oklahoma.
4.2 Commencement of Operations
Revenue generating operations will commence towards the end of this year.
4.3 Mission Statement
To provide an exceptional and cost-effective batting cage experience to its customers.
4.4 Vision Statement
To operate is a widely respected batting cages and sports facility within Oklahoma.
4.5 Organizational Objectives
• Leverage multiple forms of online marketing during the development phase in order to create significant interest.
• Implement proper protocols in order to ensure that the risk of on-site injury is limited.
• Conduct extensive direct outreached with baseball coaches within the area that will recommend that their players use the facility for training.
• Use search engine optimization for the Company’s website.
• Established referral relationships at schools in the target market area.
• Host on site events that will further increase brand visibility in the coming years.
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section of batting cages business plan will discuss the industry, the customer profile, the competition, and the current economic climate.
At this time, the economic climate with the United States is moderate. As a result of changing economic policy, there has been a significant increase in the rate in inflation over the past twelve months.
It should be noted that the revenue of the batting cage facility will be relatively immune from negative changes in the economy given that this is a low-cost form of entertainment. Additionally, baseball is popular in Oklahoma and the Company will be able to receive an influx of ongoing users on a highly predictable basis.
5.2 Industry Analysis
As of this year, there are 8,700 locations that provide access to batting cages. These businesses collectively generate $1.5 billion a year. This is a mature industry, and its future growth rate will remain similar to that as the economy as a whole.
5.3 Customer Profile
Any person has a love of baseball as a potential user of the Company’s location. Generally, it is expected that most people will be under the age of 35 and we have a household income of $50,000 to $100,000.
5.4 Competitive Analysis
The ongoing competition at the business will face in this market is relatively modest. There are only a handful of facilities that provide access to batting cages in a standalone facility. The Company’s abilities provide on-site training will provide a further differentiating factor.
6.0 Key Strategic Issues
6.1 Sustainable Operations
The Batting Cages will have sustainable operations as a result of the following:
• Highly recurring teams of revenue from the ongoing use of the batting cage facility.
• Substantial contributions margins from the sale of concessions.
• Access the batting coaches will provide a significant differentiating factor for the business.
• Limited competition within the target market radius.
6.2 Basis of Growth
The Company will expand via the following methods:
• Integration of a membership program that would produce monthly revenue.
• Continued expansion of Company’s marketing campaigns.
• Retaining baseball coaches that can render services on site.
7.0 Marketing Plan
7.1 Marketing Objectives
• Conducted outreach with schools within target market range.
• Maintain an expansive online presence that uses both search engine optimization and targeted social media.
• Maintain relationships with amateur baseball leagues throughout the target market area of Oklahoma.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• First year revenue will reach $296,000.
• Gross profits will reach $267,000.
Year 2
• Revenue will reach $323,000.
• Total income will increase by 8%.
Years 3-5
• By year three, revenue will reach $352,000.
• Gross profits will reach $318,000.
7.4 Marketing Strategies
Management intends to use numerous marking strategies to create significant awareness for Batting Cages in the coming years. Most importantly, the Company will conduct directive extent outreach with athletic directors and baseball coaches throughout the target market in order to familiarize them with the location and its offerings. It is fully expected that the Company will receive a large number of referrals from these individuals in order to have their players refine their skills.
The Company will maintain an expansive online presence they will include the use of search engine optimization and targeted social media to drive brand visibility. The website will have e-commerce functionality so that reservations for batting cage usage be made on site.
In regards to social media, the Company will maintain a presence among all major platforms. Ongoing promotions, discounts, and deals with frequently disseminated for these platforms. The business will also frequently upload images and videos of people using the facilities.
The Company will also provide ongoing contributions to regional baseball teams and leagues in order to further position the business as a community minded enterprise.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
9.0 Financial Plan
9.1 Underlying Assumptions
• This batting cages business plan assumes that the Company will achieve a compounded annual growth rate of 8%.
• Management will contribute $15,000 towards the business.
• The Company will acquire $85,000 a debt to establish these operations.
9.2 Financial Highlights
• Contribution margins of 95% on batting cage usage.
• The business will achieve gross margins of 70% on product sales.
9.3 Sensitivity Analysis
The Company’s revenues are only modestly sensitive to negative changes in the economy. Use of batting cages in a low-cost form of entertainment and many active baseball players will use these facilities to improve their skills. As noted throughout this document, the Company will produce substantial contribution margins on all services rendered.
9.4 Source of Funds
9.5 Financial Proformas
A) Profit and Loss Statement
B) Common Size Income Statement
C) Cash Flow Analysis
D) Balance Sheet
9.6 Breakeven Analysis
9.7 Business Ratios
Appendix A – SWOT Analysis
Strengths
• The Company will have control will operating overhead costs as a function of revenue.
• Limited competition among entities that operate within a 10-mile radius of the facility.
• Strong demand among baseball players for cost-effective solutions for improving their skills.
Weaknesses
• This business has relatively low barriers entry.
• Moderately high cost related to marketing.
Opportunities
• Potential development of additional batting cage locations.
• Integration of a membership program.
• Hiring of coaches that will provide instruction on site.
Threats
• Ongoing issues with inflation could cause the cost of revenue to increase.
Appendix B – Risk Analysis
Development Risk – Low
Management has already sourced the location that will be used during the course of business operations. The primary matter that needs to be addressed to securing the funding sought in this document.
Financing Risk – Low/Moderate
The $85,000 of capital that is being sought will be principal used for the build out of locations in batting cages equipment. The risk related to his financing or offset by the high margin income is generated from use of the facilities as well as concession sales.
Marketing Risk – Low
Direct outreach, as well as the use of online marketing strategies or main is the cornerstone of the batting cage facility’s marketing plan. Given a strong demand in this market, the Company will find a significant audience quickly.
Management Risk – Low
The founder is a highly experienced baseball coach that will be able to properly establish these operations to profitability. He has extensive experience operating similar entrepreneurial ventures.
Valuation Risk – Low
The valuation risk is offset by:
• Relatively low cost as a function of revenue.
• A significant amount of tangible assets will be acquired with the funding.
• Substantial contribution margins on all services and product sales.
Exit Risk – Low
As noted earlier, there would be a significant demand for this type of business given its highly predictable income. A formal valuation would be complete completed prior to marketing a Company for sale.