Indoor Sports Facility (Feasibility Study)

A successful real estate developer engaged Ground Floor Partners to conduct a thorough feasibility study. He had purchased a 2.5 acre parcel of land, originally for residential property, but then decided it may be better location for a large indoor sports facility. The developer had already prepared detailed financial projections based on a proven business model with one main revenue stream: hourly use fees. However, the developer and his prospective investors were concerned that the market demand might not be enough to make their projected revenue numbers. The developer also wanted to make sure he had not overlooked any other risk factors which could negatively impact the business.

Results:

Ground Floor Partners completed a thorough feasibility study to understand:

  • The Market landscape (size, trends, opportunities, competition, risks, etc.)
  • Demographic analysis (neighborhoods, transportation times, etc.)
  • Estimated staffing & operations costs
  • Strategies other indoor sports complexes have used to maximize revenue
  • Sensitivity analysis to weigh various pricing levels and usage rates against operational costs

Our study involved extensive secondary market research, site visits to similar area establishments, as well as a number of in-depth interviews with amateur sports enthusiasts who might use the facility. Although we clearly identified a number of risks, we concluded that there was enough demand to make this a highly profitable venture, so we recommended proceeding with the project.

About Andrew Clarke

Andrew Clarke is President of Ground Floor Partners. Over the past twenty years he has advised hundreds of small businesses on strategy, marketing, real estate and finance. He is passionate about small business, social and environmental justice, and is a proud member of the American Sustainable Business Council, Food and Water Watch, Green America, Food Consultants Group, and the American Planning Association.

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