Analysis of The Document: Premiere Courts Sports and Recreation Center

Executive Summary

The Premiere Courts will be a full-service multi-sport complex situated along Greensprings Highway in Birmingham, Alabama. There are currently no other sports facilities like this one anywhere in the Birmingham area. This plan will be used to define the scope of our services, as well as a means of gaining the necessary investments to open the facility. It will also be used on a continual basis in the evaluation of The Premiere Courts' mission, goals, and objectives.

The keys to success for The Premiere Courts are our ability to market effectively, creating an unmatched "cool" atmosphere where people will like to be, and hiring qualified/certified and knowledgeable staff to aid in the running of our programs and leagues.

The sports and fitness club industry is a booming business that according to research, produced over $10.6 billion last year and is expected to continue its current trend. The Premiere Courts is conservatively projecting a $65,000+ net profit in it's first year of operation with this number increasing to over $280,000 by the end of year three.

Objectives

The main objectives for The Premiere Courts are as follows:

1. Sell 750 memberships in year one, 1,000 by the end of year two, and 1,500 by the end of year three.
2. Organize and develop various sports leagues and make an effort to fill them to capacity (i.e. six different sports leagues running twice a year with 12 -16 teams per league).
3. Sponsor and support community events in our first year of operation.
4. Show a decent return to investors in the first year of operation.

Keys to Success

The Keys to Success for The Premiere Courts are as follows:

Marketing: Our objective is to make The Premiere Courts a common name in the Birmingham area and creatively market our services to each segment in our market.

Location and atmosphere of facility: By creating an unmatched atmosphere in The Premiere Courts through the use of first class equipment, floors, colors, and big screen TVs, people will want to frequent our facility often and our ability to retain members will be greatly enhanced.

Knowledgeable/qualified staff and management: By providing the users of the facility with knowledgeable and qualified staff who show genuine concern for the patrons, people will feel comfortable and confident that The Premiere Courts can meet all of their sport and fitness needs.

The Premiere Courts is a new multi-sport complex that will provide members and guests with an opportunity to participate in a variety of sports programs and activities.

The Premiere Courts will be a Limited Partnership corporation that will be privately owned. Kerry Heavens and Rodney Griggs will own 35% of the company each, while 10 other limited partners will each own 3%.

Our start-up requirements (based on professional estimates) come to $2,500,000. Included in these costs is the land, building, all development costs, equipment, and start-up capital. Total assets add up to be $337,000. Total investment amount is $1,250,000 and the total loan amount is also $1,250,000. The assumptions are shown in the following chart.

*refer to PowerPoint slide

Services

The Premiere Courts will be a multi-sport complex that provides its users with various services. A state-of-the-art fitness center, professional sized basketball courts that can also accommodate many other sports, a food and beverage, a massage therapy clinic and other useful amenities such as offices, a conference room, a childcare center, and full-service locker rooms will all be available in the facility. Also, the Premiere Courts will provide its users with qualified and knowledgeable people to make sure all of their sport and fitness needs are met.

Weights and Fitness

The Premiere Courts will house a large fitness and lifestyle center that will match or exceed any other in the city. This fitness and lifestyle center will include top-of-the-line equipment in free weights, machine weights, and aerobic machines. The majority of the lifestyle center will be located on the upper level of the complex that will surround the three basketball courts. This will allow the users the option of watching the activities going on down below, or to watch one of the many TVs that will be set up for their enjoyment.

This aspect of the facility will be run by a certified strength and conditioning specialist, who will hire and train staff to meet the demands of the members. This person will report to and work directly with the general partners of The Premiere Courts and his/her duties will include, but will not be limited to, general supervision, personalized training for members, program development for camps and clinics, and aiding in the marketing and promotional aspects of the facility.

Courts

Three full-size basketball courts and volleyball courts will highlight the main floor of The Premiere Courts. Along with these two sports, the floors will be able to accommodate badminton, indoor soccer, indoor field hockey, touch football, gymnastics, dance, aerobics, and more. These hardwood courts will be manufactured and installed by the industry leader, Robbins Sport Surfaces, and will be the premier sports floors in all of Henderson. With the added attraction of world class portable basketball systems from Schelde North America or BPI, The Premiere Courts will quickly become known as the place to be for leagues, camps, or pick-up games.

With his education and vast experience in this area, the scheduling of events and activities on these floors will be done by Rich Bohne, one of the general partners of The Premiere Courts. The development of sports leagues, camps, and clinics, along with other various day-to-day operations of the facility will also be Rich's responsibility

Three full-size basketball courts and six volleyball courts will highlight the main floor of The Premiere Courts. Along with these two sports, the floors will be able to accommodate badminton, indoor soccer, indoor field hockey, touch football, gymnastics, dance, aerobics, and more.

Food Services

On the upper level surrounding the courts there will be a food and beverage area where users can relax of the facility can replenish their bodies. This area has been placed on the upper level so the users may have an overhead view of the courts while enjoying their favorite drinks and snacks. Included in this area will be big screen TVs that will show sporting events, sports news, or other related programs. This aspect of the facility will be helpful in providing the atmosphere that The Premiere Courts hopes to create.

A qualified, experienced person will be hired to run this aspect of the facility. He/she will have the responsibility to meet necessary standards and to report to, and work directly with the general partners of The Premiere Courts to make sure the needs of the users in this area are met. If additional staff is required, this person will hire and train those people in accordance with The Premiere Courts policies.

Massage Therapy

An area for a massage therapy clinic will be located on the main floor of the facility. This service will be available to both the general public and users of the facility at a cost reflective of the industry standard. This amenity will be an added bonus to the users of The Premiere Courts as it will be conveniently located right inside the complex.

At this time, The Premiere Courts is deciding on whether to hire their own massage therapists or to lease out the space to an already established massage therapy practice.

Market Analysis Summary

The Premiere Courts will be the only multi-sport complex of its kind in all of the Birmingham area. Some aspects of the facility will cater mainly to the City of Birmingham residents. Other aspects however, will appeal to everyone in the state.

Because of the diversity in the activities and programs available in The Premiere Courts, our market segments vary from dedicated workout junkies to people who just want a few hours of fun and recreation.

Target Market Segment Strategy

Due to the size and convenient location of our facility, many people will be attracted to The Premiere Courts to see what we have to offer. However, we will not be content to just wait for customers to come to us. Instead, we will focus our marketing strategies on those market segments which match our offerings. The great thing about marketing The Premiere Courts is that each market segment relates, in certain ways, to all the others.

Our main objective with our early marketing strategy will be to get people into our facility. Once people see what we have to offer, and feel the atmosphere that will be created, they will want to return and participate in the many activities and programs that will be available to them.

Some of the ways The Premiere Courts will get people into the facility include:

1. Offering tours to junior and senior high schools during the building and early completion stages of the facility.
2. Having a large promotional event to open the facility that will be free to everyone.
3. Hosting and/or supporting various community events that will bring in many people who otherwise would not come.
4. Mailing out free day passes to all of the surrounding area.

Following the opening of The Premiere Courts, print and radio media will be used to promote both the facility and the programs that are being offered to attract new people from all over the Birmingham metropolitan area.

Service Business Analysis

The sport and fitness business is a booming industry, with total revenues over $10.6 billion. Because of this, fitness clubs are emerging everywhere. The size and scope of these clubs vary from small, individually owned workout facilities, to very elaborate, publicly owned franchises. One of The Premiere Courts challenges is to establish itself as a legitimate sport and fitness club that is appealing to each of its market segments, and position itself as a great deal for members and guests.

Competition and Buying Patterns

The competition for The Premiere Courts in Birmingham includes local YMCAs and other fitness centers. At all of these clubs, various types of memberships are available. Some require long-term commitments while other have a minimum commitment of at least one full month.

Potential fitness club members will usually compare clubs and find the one that fits their specific needs, or has the amenities that he/she wants. Value is usually very important to these potential members, as most people want to get the best value for their dollar.

Strategy and Implementation Summary

The Premiere Courts has a very large potential market. Because of the small number of recreation and fitness facilities in Birmingham, we feel that we will become the number one sports and fitness complex in a short period of time. This will be accomplished by actively and continuously promoting The Premiere Courts through radio and media advertisements as well as through hosting and supporting various community events.

Competitive Edge

The Premiere Courts' competitive edge is two fold. First, The Premiere Courts is the only multi-sport complex that offers three full-size basketball courts that are available for the members and the community to use and/or rent. On top of this, the scope and variation of the programs that will be run from this facility are unmatched by any other club in the area. The second part of our competitive edge is the location, size, and appearance of the facility that will attract many people into the complex.

By maintaining our focus in our strategy, marketing, program development, and fulfillment, The Premiere Courts will be known as the top sports and fitness club in Alabama. We should be aware, however, that our competitive edge may be diluted if we become complacent in our program development and implementation. It will be important for The Premiere Courts to keep up with the current trends in both sport and fitness programs.

Sales in the sport and fitness club business are based on the services and amenities provided by the facility. The "something for everyone" slogan fits perfectly with The Premiere Courts. All of the users of our facility must feel like they are getting the best possible value for their money. If there is a better value, for equal services, The Premiere Courts will match or beat that value for our customers.

The following chart gives a run-down on forecasted sales for each of our sources of revenue.

*refer to PowerPoint slide number 6

The accompanying table lists important program milestones, with dates and managers in charge, and budgets for each. The milestone schedule indicates our emphasis on planning for implementation.

Management Summary

The initial management team for The Premiere Courts depends mainly on the general partners. Kerry Heavens and Rodney Griggs will stay within their expertise in running the day-to-day operations of the facility such as scheduling, marketing, and promotions, along with running and developing various leagues and programs for the community. Back-up for the general partners will include staff members who will compensate for the founders lack of experience in each area. For example, qualified personnel will be hired for the food and beverage, massage therapy, and fitness areas. General help staff will be hired on a need basis as the users of the facility increase. There will also be a janitor hired for basic cleanliness and maintenance of the complex.

The Premiere Courts will have a total staff of 13 people in the first year of operation. It is projected that an additional three people will be added each year for the next two years.

Personnel Plan

*refer to PowerPoint slide number 8

Financial Plan

As discussed previously, we are assuming start-up capital of $337,000 and a long-term bank loan of $1,250,000. The remainder of the necessary financing will come through investors.

Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the following table as annual assumptions. The monthly assumptions are included in the appendices. From the beginning, we recognize that collection days are critical, but not a factor we can influence easily. At least we are planning on the problem, and dealing with it. Interest rates, tax rates, and personnel burden are based on conservative assumptions.

Some of the more important underlying assumptions are:

We assume a strong economy, without major recession.

We assume the rate of growth for the number of sport and fitness club memberships will continue.

In conclusion, the founders of Premiere Courts feel that we have provided sufficient information to support our assumption that this will be a very successful and profitable business venture.